Form SC 13D Atlas Corp. Filed by: SOKOL DAVID L

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

 

Under the Securities Exchange Act of 1934
(Amendment No.  )

 

Atlas Corp.

(Name of Issuer)

 

Common shares, par value $0.01 per share
(Title of Class of Securities)

 

Y0436Q109

(CUSIP Number)

 

David L. Sokol
2400 Del Lago Drive

Fort Lauderdale FL 33316
(313) 465-7000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

 

with a copy to:

Tracy Larsen
Honigman LLP
300 Ottawa Avenue NW

Suite 400
Grand Rapids, MI 49503
(616) 649-1900

 

August 4, 2022

(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 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 Rule 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).

 

 

 

CUSIP No. Y0436Q109

 

1	NAMES OF REPORTING PERSONS
	David L. Sokol
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) ¨     (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)
	PF
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States

 

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER
		7,000,000
	8	SHARED VOTING POWER
		0
	9	SOLE DISPOSITIVE POWER
		7,000,000
	10	SHARED DISPOSITIVE POWER
		0

 

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	7,000,000
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
	x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	2.5%*
14	TYPE OF REPORTING PERSON (See Instructions)
	IN

 

*

This calculation are based on a total of 276,861,620 common shares of Atlas Corp. (the “Issuer”) that were issued and outstanding as of March 31, 2022, as reported in the Issuer’s Form 6-K filed with the Securities and Exchange Commission on May 16, 2022 and including 25,000,000 Shares issued to Fairfax Financial Holdings Limited pursuant to an exercise of warrants.

 

 

ITEM 1. SECURITY AND ISSUER

 

The securities covered by this Schedule 13D are common shares, par value $0.01 per share (the “Shares”), of Atlas Corp., a Marshall Islands corporation (the “Issuer”). The address of the Issuer’s principal executive offices is 23 Berkeley Square, London, United Kingdom, W1J 6HE.

 

ITEM 2. IDENTITY AND BACKGROUND

 

(a) The person filing this Schedule 13D (the “Reporting Person”) is David L. Sokol.

 

(b) The address of the Reporting Person is 2400 Del Lago Drive, Fort Lauderdale, FL 33316.

 

(c) The present principal occupation of Mr. Sokol is Chief Executive Officer of Teton Capital, LLC and the principal business address where Mr. Sokol conducts his occupation is 2400 Del Lago Drive, Fort Lauderdale, FL 33316.

 

(d) and (e) During the past five years, the Reporting Person has not been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

(f) The Reporting Person is a citizen of the United States.

 

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

 

Of the 7,000,000 Shares reported herein, 2,000,000 Shares were acquired by the Reporting Person in the open market using personal funds and 5,000,000 Shares were issued to the Reporting Person as compensation for service on the board of directors of the Issuer.

 

ITEM 4. PURPOSE OF TRANSACTION

 

On August 4, 2022, Poseidon Acquisition Corp., a Marshall Islands entity (“Bidco”), an entity formed by the Reporting Person, together with certain affiliates of Fairfax Financial Holdings Limited (collectively, “FF”), Deep Water Holdings, LLC (“Deep Water”), The Kyle Roy Washington 2014 Trust, Kyle Roy Washington 2005 Irrevocable Trust u/a/d July 15, 2005, and The Kevin Lee Washington 2014 Trust (collectively with Deep Water, “Washington Family Holdings”) and Ocean Network Express Pte. Ltd. (“ONE”) and certain of their respective affiliates (the “Consortium”), delivered a non-binding proposal (the “Proposal”) to the Board of Directors of the Issuer (the “Board”) in respect of a potential offer by the Consortium to acquire all of the outstanding Shares of the Issuer not presently owned by FF, Washington Family Holdings, the Reporting Person and certain executive management at a price per Share equal to $14.45 (the “Proposed Transaction”). The Consortium also issued a press release publicly disclosing the Proposal. The Consortium has not proposed any specific structure for the Proposed Transaction nor has it received any feedback from the Issuer.

 

The Proposal is non-binding in nature and does not obligate in any way the Consortium, the members thereof, or the Issuer to negotiate or enter into definitive documentation with respect to a transaction or otherwise complete the Proposed Transaction. The Proposal states that the members of the Consortium are only interested in acquiring the outstanding Shares of the Issuer that they do not already own, and are not interested in selling their Shares to another party. In addition, the Consortium has stated that any transaction, once structured and agreed upon, would be conditioned upon, among other things, the (x) approval of the transaction by a properly constituted special committee of independent directors of the Issuer, authorized and empowered to select and retain its own independent legal and financial advisors and (y) approval of the holders of a majority of the Shares not held by members of the Consortium or their affiliates. As the Reporting Person, FF and Washington Family Holdings, on an aggregated basis, own or control approximately 68% of the Shares on a fully-diluted basis, the Proposal would not result in a change of control of the Issuer.

 

 

The foregoing description of the Proposal does not purport to be complete and is qualified in its entirety by reference to the full text of the Proposal, which is filed herewith as Exhibit 99.1 and incorporated herein by reference. The press release issued by the Consortium publicly disclosing the Proposal is filed herewith as Exhibit 99.2.

 

The disclosure in Item 6 regarding the Joint Bidding Agreement and Equity Commitment Letters (as defined below) is incorporated by reference herein.

 

Neither the Proposal nor this Schedule 13D is meant to be, nor should be construed as, an offer to buy or the solicitation of an offer to sell any of the Issuer’s securities.

 

The Reporting Person intends to review his investment in the Issuer on a continuing basis and may from time to time and at any time in the future depending on various factors, including, without limitation, the outcome of any discussions referenced in this Schedule 13D, as may be amended from time to time, and any limitations imposed by the Joint Bidding Agreement (as defined below), the Issuer’s financial position and strategic direction, actions taken by the Board, price levels of the Issuer’s securities, other investment opportunities available to the Reporting Person, conditions in the securities market and general economic and industry conditions, take such actions with respect to the investment in the Issuer as they deem appropriate. These actions may include, subject to limitations imposed by the Joint Bidding Agreement: (i) acquiring additional Shares and/or other equity, debt, notes, other securities, or derivative or other instruments that are based upon or relate to the value of securities of the Issuer (collectively, “Securities”) in the open market or otherwise; (ii) disposing of any or all of their Securities in the open market or otherwise; (iii) engaging in any hedging or similar transactions with respect to the Securities; or (iv) proposing or considering one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D.

 

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER

 

(a) Aggregate number of Shares beneficially owned by the Reporting Person: 7,000,000, and percentage of class: 2.5%

 

(b)

(1) Sole power to vote or direct vote: 7,000,000

 

(2) Shared power to vote or direct vote: 0

 

(3) Sole power to dispose or direct the disposition: 7,000,000

 

(4) Shared power to dispose or direct the disposition: 0

 

As a result of the execution and delivery of the Joint Bidding Agreement, the Reporting Person may be deemed to have formed a “group” as such term is used in Regulation 13D under the Act with each of member of the Consortium that beneficially owns Shares of the Issuer. The Reporting Person disclaims any membership in a group with FF and Washington Family Holdings. Each of FF and Washington Family Holdings is separately filing an amended Schedule 13D reporting its respective beneficial ownership of Shares. The beneficial ownership of the Reporting Person does not include any Shares which may be beneficially owned by any of the other members of the Consortium and the Reporting Person disclaims beneficial ownership over any such Shares.

 

(c) There have been no transactions in securities of the Issuer by the Reporting Person within the last 60 days.

 

 

(d) No other person is known by the Reporting Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares reported as beneficially owned by the Reporting Person in this Schedule 13D.

 

(e) Not applicable.

 

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

 

On August 4, 2022, the members of the Consortium entered into a Joint Bidding Agreement (the “Joint Bidding Agreement”), which sets out the terms upon which the parties thereto would make the Proposal. A copy of the Joint Bidding Agreement is filed herewith as Exhibit 99.3 and is incorporated by reference into this Item 6. The Joint Bidding Agreement specifies, among other things, that members of the Consortium will cooperate in good faith and work exclusively regarding the Proposed Transaction and provides, under certain circumstances, for certain parties to reimburse the other parties for their expenses. The Joint Bidding Agreement further contemplates (i) the equity commitments referenced below, and (ii) the rollover of the Shares currently owned by each of FF, Washington Family Holdings and the Reporting Person into Bidco in connection with the Proposed Transaction. The summary of the Joint Bidding Agreement above is qualified in its entirety by reference to the Joint Bidding Agreement attached as Exhibit 99.3 and is incorporated by reference into this Item 6.

 

In addition, also on August 4, 2022, each of Deep Water, ONE, and the Reporting Person entered into equity commitment letters with Bidco (the “Equity Commitment Letters”) pursuant to which each such investor has agreed to provide, or cause to be provided, equity financing to Bidco in connection with the Proposed Transaction in an amount sufficient to fund the Proposal. The summary of the Equity Commitment Letters above is qualified in its entirety by reference to the Equity Commitment Letters attached as Exhibits 99.4, 99.5 and 99.6 hereto and are incorporated by reference into this Item 6.

 

Other than as set forth above in Item 4 or Item 6 of this Schedule 13D and with respect to the agreements described in this Schedule 13D, to the knowledge of the Consortium, there are no contracts, arrangements, understandings or relationships (legal or otherwise) involving the Consortium, with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, including any securities pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities other than standard default and similar provisions contained in loan agreements.

 

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS

 

Exhibit 99.1: Proposal to the Board of Directors

 

Exhibit 99.2: Press Release

 

Exhibit 99.3: Joint Bidding Agreement

 

Exhibit 99.4: ONE Equity Commitment Letter

 

Exhibit 99.5: Deep Water Equity Commitment Letter

 

Exhibit 99.6: David L. Sokol Equity Commitment Letter

 

 

Signature

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated as of August 5, 2022

 

By:	/s/ David L. Sokol
Name:	David L. Sokol

 

Exhibit 99.1

 

POSEIDON ACQUISITION CORP.

 

CONFIDENTIAL

 

August 4, 2022

 

Atlas Corp.

23 Berkeley Square

London, United Kingdom WIJ 6HE

 

Attn: Board of Directors

 

Re: Non-Binding “Go-Private” Proposal

 

To Board of Directors (the “Board”):

 

On behalf of an entity (“Bidco”) formed by certain affiliates of Fairfax Financial Holdings Limited (collectively, “FF”), Deep Water Holdings, LLC, The Kyle Roy Washington 2014 Trust, Kyle Roy Washington 2005 Irrevocable Trust u/a/d July 15, 2005, and The Kevin Lee Washington 2014 Trust (collectively, “Washington Family Holdings”), David L. Sokol (“DS”) and Ocean Network Express Pte. Ltd. and certain of their respective affiliates (the “Consortium”), I am writing to outline our proposal to acquire all of the outstanding common shares of Atlas Corp. (the “Company”) not presently owned by FF, Washington Family Holdings, DS and certain executive officers of the Company. FF, Washington Family Holdings and DS, together with their respective affiliates, as applicable, collectively own approximately 68% of the Company’s outstanding common shares on a fully diluted basis. Our proposal does not contemplate the acquisition of any publicly traded Company preferred shares.

 

We believe that the shipping industry will go through significant changes over the next several years as global trade reacts to the supply chain issues of the past two years, and that the global economy and financial markets are in a period of transition, in part due to the effects of the global COVID pandemic. We believe that it will be essential for the Company to make timely decisions, many of which could impact short-term results, and that those decisions cannot be made as efficiently as a public company.

 

We therefore believe that, as a private company, the Company would best be able to achieve long-term value and enhance its competitive position in the global marketplace. We further believe that Bidco’s intended offer to acquire all of the common shares of the Company not already owned by Consortium members and certain executive officers of the Company (the “Transaction”) at a price equal to $14.45 per share will provide a positive result for the holders of the Company’s common shares. This price represents a premium of approximately 32.1% to the average closing price of the Company’s common shares over the last 30 days and a premium of 28.8% to the average closing price over the last 60 days.

 

We will require a very limited 10-day due diligence period and can fully finance the Transaction with Consortium members’ available cash on hand (pursuant to equity commitment letters delivered to and accepted by Bidco). Because the Transaction does not constitute a change of control, it is our understanding that none of the Company’s material outstanding debt will need to be refinanced and no material lender consent will be required. Accordingly, there will be no financing condition. We are prepared to immediately begin negotiating definitive documentation for the Transaction (the “Transaction Agreement”) once counsel to the Special Committee has been engaged, with the goal of entering into a binding definitive agreement within two to three weeks.

 

The proposed Transaction will be subject to certain non-waivable conditions: First, we require that the Board establish a special committee of independent directors (the “Special Committee”) fully-empowered to review and accept or reject this proposal or any other proposal we may make, in conjunction with independent legal and financial advisors selected and engaged by the Special Committee, to determine whether it is in the best interests of the Company and its shareholders (other than Consortium members) and to negotiate definitive agreements with Bidco to effect the Transaction. We will not move forward with any Transaction unless it is approved and recommended by the Special Committee. Second, the definitive agreement governing the Transaction, whether resulting from this or any other proposal that we may make, will include a non-waivable condition that, in addition to any other shareholder vote necessary to approve the Transaction, the Transaction must also be approved by the holders of a majority of the Company’s common shares not owned by Consortium members.

 

 

Members of the Consortium, in their capacity as shareholders of the Company, are only interested in acquiring the outstanding common shares of the Company that they do not already own; they are not interested in selling their Company common shares to another party and have no intention to vote in their capacity as shareholders of the Company in favor of any such transaction. Nevertheless, we can assure you that, if a Transaction does not occur, whether because (1) we do not make a binding definitive proposal, (2) the Special Committee, after consulting with its advisors, does not approve any proposal we make or (3) the requisite “majority of minority” vote is not obtained, the relationship among the Consortium members and the Company will not be adversely affected, and FF, TWC and DS, and their respective affiliates, as applicable, presently intend to remain as long-term shareholders of the Company.

 

This proposal constitutes an expression of interest only, and we reserve the right to withdraw or modify it in any manner. This letter does not include or constitute a binding offer to acquire the Company or any securities or assets of the Company, or a proposal of definitive terms for any transaction. Please be advised that applicable Consortium members will be filing amended Schedules 13D today.

 

We look forward to working constructively with the Special Committee, with the goal of consummating a successful transaction with value, speed and certainty. We will await your expeditious reply.

 

	Sincerely,
	Poseidon Acquisition Corp.
	By:	/s/ David L. Sokol
		Name: David L. Sokol
		Its: Chairman

 

Exhibit 99.2

 

CHAIRMAN OF ATLAS CORP., FAIRFAX FINANCIAL HOLDINGS LIMITED AND THE WASHINGTON FAMILY PARTNER WITH Ocean Network Express PTE. LTD. TO JOINTLY PROPOSE ACQUIRING ALL COMMON SHARES OF ATLAS CORP. NOT CONTROLLED BY ITS MAJORITY SHAREHOLDERS FOR $14.45 PER SHARE IN CASH

 

London and Toronto, August 4, 2022 — A consortium composed of David L. Sokol, Chairman of the Board of Directors of Atlas Corp. (NYSE: ATCO) (“Atlas” or the “Company”), certain affiliates of Fairfax Financial Holdings Limited (collectively, “Fairfax”)(TSX: FFH and FFH.U), the Washington Family, and Ocean Network Express Pte. Ltd. (the “Consortium”), a global container, transportation and shipping company, announced today that they have jointly proposed to acquire all of the outstanding common shares of Atlas that the Consortium does not already own or control for $14.45 per share in cash, which represents a 32.1% and 28.8% premium over the 30 day and 60 day average closing prices of the Company’s common shares of $10.94 and $11.22, respectively. The non-binding proposal was conveyed on August 4, 2022 in a letter to Atlas’ Board of Directors.

 

Fairfax, the Washington Family, and David L. Sokol own or control approximately 68% of the fully-diluted outstanding common shares of Atlas and would continue their ownership in Atlas as part of the Consortium. Accordingly, the Proposal would not result in a change in control of the Company. Consortium members have committed to fully fund the cash component of the Proposal. It is contemplated that all Atlas preferred shares would remain outstanding following the proposed transaction.

 

David L. Sokol, Chairman of the Board of Directors and member of the Consortium stated: “The Consortium believes the proposed transaction will provide Atlas’s common shareholders with immediate liquidity and certainty of value at a significant premium to the current share price, while allowing Atlas to focus on the long term without the emphasis on short-term results and providing Atlas with an ideal strategic partner to support its future growth.”

 

The Consortium’s proposal provides that Atlas’s board of directors would form a special committee of independent directors fully-empowered to review and accept or reject the proposed transaction and to consider and negotiate the terms of the proposed transaction on behalf of the Atlas board of directors, and that the special committee will select and retain independent legal and financial advisors to assist in its review of the proposed transaction.

 

The Consortium’s proposal further provides that the proposed transaction will be subject to a non-waivable condition requiring approval by holders of a majority of Atlas common shares not owned or controlled by the Consortium, senior management or their respective affiliates.

 

In its proposal letter, the Consortium informed the Atlas board of directors that the members of the Consortium who are currently shareholders of Atlas are interested only in acquiring the remaining common shares of Atlas that they do not currently own or control, and have no interest in selling any of the shares they own or control, nor would they expect, in their capacity as shareholders, to vote in favor of any alternative sale, merger or similar transaction involving Atlas. If the special committee does not approve, or the other common shareholders of Atlas do not approve, the proposed transaction, Fairfax, the Washington Family and David L. Sokol presently intend to continue as long-term shareholders of Atlas.

 

Additional Information and Where to Find It

 

An agreement in respect of the proposed transaction described in this press release has not yet been executed, and this press release is not an offer to purchase or a solicitation of an offer to sell any securities. Any solicitation or offer will only be made through materials filed with the Securities and Exchange Commission (the “SEC”). Atlas shareholders and other interested parties are urged to read these materials if and when they become available because they will contain important information. Atlas shareholders will be able to obtain such documents (when available) free of charge at the SEC’s web site, www.sec.gov.

 

 

Forward-Looking Statements

 

This press release contains statements regarding the proposed transaction that may be deemed to be “forward-looking statements” within the meaning of applicable securities laws and members of the Consortium may make related oral, forward-looking statements on or following the date hereof. Forward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that could cause actual results to differ materially from the results projected. Many of these risks and uncertainties cannot be controlled by the Consortium and include the possibility that discussions with the special committee of the Atlas board of directors may not be successful and the possibility that the proposed transaction may not be entered into or completed on the terms described in this press release or at all, including as a result of changes in the business or prospects of Atlas. Any forward-looking statements in this press release are made only as of the date of this press release. No member of the Consortium assumes any obligation to publicly update any forward-looking statements except as required by law. No information contained on any website referenced in this press release is incorporated by reference herein.

 

About Fairfax Financial Holdings Limited

 

Fairfax Financial Holdings Limited is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management.

 

Contacts:

 

Consortium: David L. Sokol

[email protected]

 

Fairfax: John Varnell, Vice President, Corporate Development - +1-416-367-4941

 

Exhibit 99.3

 

JOINT BIDDING AGREEMENT

 

THIS JOINT BIDDING AGREEMENT (the “Agreement”) is entered into and effective as of August 4, 2022 by and among:

 

(1)           Each of the entities set forth on Schedule 2 (collectively, “FF”);

 

(2)           Deep Water Holdings, LLC (“Deep Water”), The Kyle Roy Washington 2014 Trust, Kyle Roy Washington 2005 Irrevocable Trust u/a/d July 15, 2005, and The Kevin Lee Washington 2014 Trust (on behalf of each entity and each as a signatory hereto, collectively “Washington Family Holdings”);

 

(3)           Ocean Network Express Pte. Ltd. (“ONE”); and

 

(4)           David L. Sokol (“DS”)

 

(together, the “Investors”).

 

RECITALS

 

(A)

The Investors wish to form a consortium (the “Consortium”) for the purposes of evaluating and potentially implementing a transaction which would result in an entity established by the Consortium (“Bidco”) acquiring Atlas Corp. (the “Company” and, together with its subsidiaries, the “Target” and such transaction, the “Proposed Transaction”).

 

(B)

The Investors wish to agree upon certain terms and conditions that will govern the actions of the Investors and the treatment of certain fees, expenses and obligations incurred by the Investors in connection with their evaluation of one or more of their Affiliates participating in, negotiating and/or consummating the Proposed Transaction through Bidco or another Holding Vehicle. The Investors agree to work together on an exclusive basis (as set out in Section 4 of this Agreement) to pursue the Proposed Transaction under the terms of this Agreement.

 

(C)

ONE has, on the date hereof, executed an equity financing commitment letter in favor of Bidco (as amended or modified from time to time in compliance with this Agreement, the “ONE ECL”) in which ONE has agreed, subject to the terms and conditions set forth therein, to fund an equity contribution to Bidco as a subscription for common shares in Bidco (“Bidco Common Shares”) in an amount as set forth therein and subject to adjustment as set forth therein and in Section 2.4 herein (the “ONE Commitment”).

 

(D)

Deep Water has, on the date hereof, executed an equity financing commitment letter in favor of Bidco (as amended or modified from time to time in compliance with this Agreement, the “Washington Family Holdings ECL”) in which Washington Family Holdings has agreed, subject to the terms and conditions set forth therein, to fund an equity contribution to Bidco as a subscription for Bidco Common Shares in an amount as set forth therein and subject to adjustment as set forth therein and in Section 2.4 herein (the “Washington Family Holdings Commitment”).

 

(E)

DS has, on the date hereof, executed an equity financing commitment letter in favor of Bidco (as amended or modified from time to time in compliance with this Agreement, the “DS ECL”) in which DS has agreed, subject to the terms and conditions set forth therein, to fund an equity contribution to Bidco as a subscription for Bidco Common Shares in an amount as set forth therein and subject to adjustment as set forth therein and in Section 2.4 herein (the “DS Commitment”).

 

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.

DEFINITIONS AND OTHER INTERPRETATIONAL MATTERS

 

1.1

In this Agreement, the following terms shall have the following meanings:

 

“Adverse Regulatory Condition” has the meaning given in Section 5;

 

“Affiliate” with respect to a person, means any other person, whether now in existence or hereafter created, directly or indirectly Controlling, Controlled by or under common Control with such person;

 

“Agreement” has the meaning given in the Preamble;

 

“Alternative Acquisition Agreement” has the meaning given in Section 10.3;

 

“Alternative Holdback Shares” has the meaning given in Section 2.2;

 

“Alternative Proposal” has the meaning given in Section 4.1(b);

 

“APR Agreement” has the meaning given in Section 2.2;

 

“Bidco” has the meaning given in the Recitals;

 

“Bidco Common Shares” has the meaning given in the Recitals;

 

“Breaching Party” has the meaning given in Section 10.2;

 

“Breaching Party Payments” has the meaning given in Section 10.2;

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks in New York, New York, Singapore and London, United Kingdom are open for ordinary banking business;

 

“Change of Recommendation” has the meaning given in Section 10.3;

 

“Closing” means the closing of the Proposed Transaction;

 

“Closing Conditions” has the meaning given in Section 2.1;

 

“Confidential Information” has the meaning given in Section 7.1;

 

“Company” has the meaning given in the Recitals;

 

“Company Board” has the meaning given in Section 10.3;

 

“Company Common Shares” means the common shares of the Company;

 

“Consortium” has the meaning given in the Recitals;

 

“Consortium Advisors” has the meaning given in Section 3.2;

 

 

“Consortium Expenses” has the meaning given in Section 3.2;

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise, and “controlled” and “controls” shall have correlative meanings;

 

“Deep Water” has the meaning given in the Preamble;

 

“Definitive Transaction Documents” has the meaning given in Section 9.4(c);

 

“Draft Merger Agreement” has the meaning given in Section 10.6;

 

“DS” has the meaning given in the Recitals;

 

“DS Commitment” has the meaning given in the Recitals;

 

“DS ECL” has the meaning given in the Recitals;

 

“ECL” means the ONE ECL, the Washington Family Holdings ECL and/or the DS ECL;

 

“FF” has the meaning given in the Preamble;

 

“FF Warrants” has the meaning given in Section 2.2;

 

“Holding Vehicles” means one or more newly incorporated special purpose vehicles or entities incorporated by the Consortium to effect the acquisition of the Target pursuant to the Proposed Transaction, including Bidco;

 

“Investors” has the meaning given in the Preamble; provided that, for purposes of any approval or voting rights under this Agreement, including with respect to the enforcement of ECLs, “Investor” shall not include any party that is in material breach of its obligations under this Agreement or its ECL so long as (1) written notice of such breach (containing specific details of such breach) has been delivered to such Investor in accordance with Section 13.13, and (2) such breach can be cured and has not been reasonably cured within 48 hours of delivery of the foregoing notice;

 

“Investor Expenses” has the meaning given in Section 3.1;

 

“Joint Bid” has the meaning given in Section 9.1;

 

“Majority Investors” means collectively FF, Washington Family Holdings and ONE;

 

“Merger Agreement” means a definitive written agreement entered into between Bidco (and/or an Affiliate thereof) and the Target in connection with the Proposed Transaction;

 

“ONE” has the meaning given in the Preamble;

 

“ONE Commitment” has the meaning given in the Recitals;

 

“ONE ECL” has the meaning given in the Recitals;

 

“Outside Date” has the meaning given in Section 12.1(b);

 

 

“Proposed Transaction” has the meaning given in the Recitals;

 

“Regulatory Laws” has the meaning given in Section 5;

 

“Relevant Percentage” shall mean, with respect to each Investor, a percentage, with (x) the numerator equal to the amount of cash to be paid by such Investor for purposes of funding the payments to the holders of Company Common Shares and other equity securities of the Company under the Merger Agreement in accordance with such Investor’s ECL, as applicable, plus the cash value of such Investor’s Rollover Equity (based on the price per Company Common Share payable pursuant to the Merger Agreement), if applicable, and (y) the denominator equal to the aggregate amount of cash to be paid for purposes of funding the payments to the holders of Company Common Shares and other equity securities of the Company under the Merger Agreement pursuant to all ECLs plus the cash value of all Rollover Equity (based on the price per Company Common Share payable pursuant to the Merger Agreement), as may be adjusted from time to time (if necessary) in accordance with the provisions of this Agreement; provided, that in the event Relevant Percentage is required to be calculated prior to such time as such amounts are calculable by reference to the Merger Agreement, the Relevant Percentages shall be estimated in good faith based on the price per Company Common Share specified in the most recent offer presented to the Company by the Consortium;

 

“Representative” has the meaning given in Section 4.2;

 

“Revised Proposal” has the meaning given in Section 10.4;

 

“Rollover Agreements” has the meaning given in Section 2.2;

 

“Rollover Equity” has the meaning given in Section 2.2;

 

“RTF” has the meaning given in Section 10.2;

 

“Special Committee” has the meaning given in Section 10.3;

 

“Stockholder Agreement Documents” has the meaning given in Section 10.1;

 

“Surviving Provisions” means Section 3 (Advisors); Section 7 (Confidentiality); Section 10.2 (RTF); Section 10.6 (Termination Fee); Section 11 (Limitation of Liability); Section 12.2 (Termination Date); and Section 13 (Other Terms), and in each case Section 1 to the extent applicable to such other Sections;

 

“Target” has the meaning given in the Recitals;

 

“Target Expenses” has the meaning given in Section 3.2;

 

“Termination Date” has the meaning given in Section 12.1;

 

“Total Commitment” means the sum of the ONE Commitment, the Washington Family Holdings Commitment and the DS Commitment;

 

“Transaction Structure” has the meaning given in Section 9.3;

 

“Washington Family Holdings” has the meaning given in the Preamble;

 

 

“Washington Family Holdings Commitment” has the meaning given in Section 2.1; and

 

“Washington Family Holdings ECL” has the meaning given in Section 2.1.

 

1.2

Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neutral genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.

 

1.3

When used herein:

 

(a)

the word “or” is not exclusive unless the context clearly requires otherwise;

 

(b)

the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

 

(c)

the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

 

(d)

all section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex and schedule references not attributed to a particular document shall be references to such exhibits, annexes and schedules to this Agreement.

 

1.4

This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

 

1.5

Any references to any consent required by FF as an Investor, Majority Investor or otherwise in this Agreement or any ECL shall require the consent only of Hamblin Watsa Investment Counsel Ltd., in its capacity as investment manager and/or authorized power of attorney in respect of the Covered Shares (as defined below) held by the entities listed on Schedule 2 hereto.

 

2.

EQUITY AND ROLLOVER COMMITMENTS

 

2.1

Each of ONE, Deep Water and DS hereby affirms and agrees that it is bound by the provisions set forth in its respective ECL. Each Investor hereby affirms and agrees that Bidco, acting at the direction of any Investor, shall be entitled to enforce the provisions of the ECLs in accordance with this Agreement and the terms thereof, as the case may be, but only if either (a) the Majority Investors have unanimously determined that all conditions to the Closing set forth in the Merger Agreement (the “Closing Conditions”) have been satisfied (other than those conditions that by their nature are to be satisfied at the Closing and which are capable of being satisfied at the Closing) or have unanimously determined to waive all unsatisfied Closing Conditions and shall have obtained any necessary governmental or regulatory approvals for the consummation of the Proposed Transactions (other than regulatory approvals which, if not obtained. would not adversely affect the ability of the Investors and the Company to consummate the Proposed Transaction) and without the imposition of any Adverse Regulatory Condition (as defined below), on a Majority Investor, in each case, as reasonably determined in good faith by such Majority Investor; provided, however, that any Investor’s obligations under its respective ECL can only be waived by the Majority Investors other than the Majority Investor to which such ECL relates, if applicable, or (b) the Company is permitted to cause Bidco or an Affiliate thereof to enforce the provisions of the ECLs under the specific circumstances and as specifically set forth therein and in the Merger Agreement and does in fact so cause Bidco or an Affiliate thereof to enforce such provisions. Bidco or an Affiliate thereof shall not attempt to enforce any ECL until the conditions set forth in this Section 2.1 have been satisfied. Subject to the foregoing provisions of this Section 2.1, Bidco shall have no right to enforce any ECL unless directed to do so by any Investor in accordance with this Section 2.1.

 

 

2.2

Each of FF, Washington Family Holdings and DS hereby affirms and agrees that he or it shall enter into customary rollover agreements with Bidco and its Affiliates, in form and substance reasonably satisfactory to such Investor, ONE and the other Investors and to be agreed at the earlier of (x) 30 days from the date hereof and (y) entry into the Merger Agreement (the “Rollover Agreements”) (and that each Investor shall be a third party beneficiary thereof to cause Bidco or an Affiliate thereof to enforce the provisions thereof upon the satisfaction or waiver of the Closing Conditions) simultaneously with the execution and delivery of the Merger Agreement, pursuant to which each of FF, Washington Family Holdings and DS will agree that its Company Common Shares set forth on Schedule 1 (which in the case of FF shall include the 6,000,000 Company Common Shares to be issued upon exercise of the warrants held by FF (the “FF Warrants”)) (the “Rollover Equity”) shall not be exchanged in the Proposed Transaction for the consideration set forth in the Merger Agreement, but instead shall be contributed to, converted into or exchanged for Bidco Common Shares as set forth in Section 2.3, subject to the provisions of Section 2.4. Each of FF, Washington Family Holdings and DS hereby represent and warrant (in the case of FF, as indicated on Fairfax Financial Holdings Limited’s Schedule 13D on file with the Securities Exchange Commission, as amended through the date hereof and the Company’s most recent Form 20-F) to ONE and each other that (i) he or it owns and holds good and valid title to all of the Rollover Equity set forth opposite his or its name on Schedule 1, free and clear of any liens or other restrictions on title that would prevent it from entering into this Agreement or its Rollover Agreement and consummating the Proposed Transactions, (ii) he or it has sole voting power, power of disposition, and power to issue instructions with respect to the Rollover Equity set forth opposite his or its name on Schedule 1 and power to agree to all of the matters applicable to such Investor set forth in this Agreement and its Rollover Agreement, in each case, over all of the Rollover Equity set forth opposite his or its name on Schedule 1, and (iii) he or it owns no other securities (including debt securities) of the Target or any of its subsidiaries or securities that are convertible, exercisable or exchangeable for such securities other than the Rollover Equity (other than, in the case of FF, Target’s Series J Preferred Shares). FF hereby represents and warrants that it is not entitled to any further Holdback Shares (as defined in that certain Acquisition Agreement (the “APR Agreement”), dated November 20, 2019, by and among the sellers party thereto, Apple Bidco Limited, Seaspan Corporation, the Company and Fairfax Financial Holdings Limited, as the seller representative, as amended) other than the 493,076 Holdback Shares currently reserved for issuance, but not yet issued, relating to the Unit Unavailability Indemnity Reserved Shares (as that term is defined in the APR Agreement). As part of the Definitive Transaction Documents, the Investors will agree upon a mechanism pursuant to which the Company’s obligation to issue Holdback Shares following the Merger will instead be satisfied, to the extent issuable pursuant to the APR Agreement, by the issuance by Bidco of the number of Bidco Common Shares that such Holdback Shares would have converted into or been exchanged for had they been “Rollover Equity” at the Closing (“Alternative Holdback Shares”) in lieu of the Holdback Shares. Prior to the Closing, FF will exercise all of the FF Warrants.

 

2.3

Each Investor agrees to vote, if applicable, all of its direct and indirect equity interests in Bidco, including Bidco Common Shares, to cause Bidco to (i) create the Bidco Common Shares (if not already created) and to cause that to be the sole class of outstanding equity of Bidco at the Closing and (ii) issue and sell or exchange (as the case may be) such Bidco Common Shares to the Investors in accordance with the Merger Agreement, the ECLs, the Rollover Agreements and this Agreement at the same price per Bidco Common Share as paid per Company Common Share pursuant to the Merger Agreement. All such Bidco Common Shares issued by Bidco at the Closing shall be issued to the Investors (including with respect to the Rollover Equity) such that each Investor shall own its Relevant Percentage of such Bidco Common Shares at the Closing, other than any securities issued to directors, officers or employees pursuant to the Merger Agreement or in transactions contemplated by Section 9.4(j). The value per share of Rollover Equity for purposes of the exchange will be equal to the price paid per Company Common Share pursuant to the Merger Agreement. Prior to the Closing, no Investor shall transfer or assign, directly or indirectly, its equity interests in Bidco or its obligations and rights under any ECL, without the prior unanimous written consent of the Investors.

 

 

2.4

In the event that the Majority Investors unanimously determine that the aggregate equity capital necessary for Bidco and its Affiliates to effect the consummation of the Proposed Transaction contemplated by the Merger Agreement is less than the Total Commitment, the amount of such reduction shall be allocated pro rata amongst the Investors who have entered into ECLs based on the amount of cash committed in such ECLs, and each Investor’s Relevant Percentage shall be adjusted accordingly for all purposes of this Agreement.

 

3.

ADVISORS

 

3.1

Each Investor shall bear, or shall procure that one of its Affiliates bears, all costs and expenses incurred directly by that Investor in connection with the Proposed Transaction (including any advice from its advisors and counsel) (“Investor Expenses”). For the avoidance of doubt, each Investor shall be solely responsible for its Investor Expenses; provided, however, that notwithstanding the foregoing, (i) upon execution of this Agreement, all of the costs and expenses incurred or committed by DS shall be reimbursed by FF and Washington Family Holdings, and (ii) upon Closing, the costs and expenses incurred or committed by DS in furtherance of the Proposed Transaction shall be assumed and paid by the Company and all expenses theretofore reimbursed by FF and Washington Family Holdings shall be repaid to them by the Company; provided that such amounts assumed, paid and repaid pursuant to this clause (ii) by the Company to DS, FF and Washington Family Holdings shall not exceed $5 million in the aggregate.

 

3.2

The Consortium may appoint advisors on behalf of the Consortium or Bidco (“Consortium Advisors”), if the Majority Investors each consent to such arrangement. At the Closing, the Investors will cause the Target to pay all of the costs, fees and out-of-pocket expenses of such Consortium Advisors pursuant to the relevant engagement or retainer agreements (“Consortium Expenses”); provided that to the extent the Target does not have sufficient funds to pay the Consortium Expenses in full, then each Majority Investor shall be responsible for and pay its pro rata portion (based on its Relevant Percentage) of such unpaid Consortium Expenses with funds, which will not be funded pursuant to any Investor’s ECL. At the Closing, the Investors will cause the Target to pay all of the costs, fees and out-of-pocket expenses incurred by the Target in connection with the Proposed Transaction (“Target Expenses”); provided that to the extent the Target does not have sufficient funds to pay the Target Expenses in full, then each Majority Investor shall be responsible for and pay its pro rata portion (based on its Relevant Percentage) of such unpaid Target Expenses with funds, which will not be funded pursuant to any Investor’s ECL and no equity will be issued in connection with any payments of such Target Expenses by any Investor.

 

 

4.

EXCLUSIVITY

 

4.1

In consideration of the Investors committing time and expense to considering and evaluating the Proposed Transaction, each Investor undertakes that until the Termination Date (as defined in Section 12 (Termination)):

 

(a)

in connection with the Proposed Transaction, it will, and will ensure that each of its Representatives will, work exclusively with the Consortium and the other Investors;

 

(b)

other than as part of the Holding Vehicles and as contemplated by this Agreement, it will not, and will procure that none of its Representatives will, directly or indirectly, initiate, enter into, encourage or continue discussions or negotiations in respect of any transaction, or provide any information to or enter into an agreement with any third party (other than actual and prospective equity providers of the Investor in connection with their investment in the Proposed Transaction as part of the Consortium) who may be interested in making an offer, or entering into an agreement in respect of any transaction, for the acquisition of all or any of the shares or assets of the Target or any transaction designed to achieve a similar outcome (an “Alternative Proposal”);

 

(c)

other than as part of the Consortium and as contemplated by this Agreement, it will not, and will procure that none of its Representatives will, directly or indirectly, pursue the Proposed Transaction or any Alternative Proposal; and

 

(d)

it will not, and will procure that none of its Representatives will, directly or indirectly solicit, encourage or otherwise facilitate any enquiries or the making of any offer or proposal by a third party or any Investor with respect to an Alternative Proposal;

 

except as agreed in writing unanimously by each of the Investors.

 

4.2

For the purposes of this Agreement, “Representative” means any Affiliate of an Investor (other than Target) and the respective directors, officers, employees, equityholders, counsel or advisors of an Investor or of any of its Affiliates, but excluding for purposes of this Section 4 any person that serves as a director of the Company solely to the extent acting in his or her capacity as such.

 

5.

REGULATORY LAWS

 

The Investors will work together in good faith to determine the filings that are required by applicable antitrust, competition, foreign investment, fair trade, “know your customer”, anti-money laundering or anti-bribery laws or regulations or other applicable laws or regulations relating to or in connection with the transactions contemplated hereby and in the ECLs and the Rollover Agreements, as well as the acquisition of Target under the Merger Agreement (“Regulatory Laws”). Subject to appropriate confidentiality undertakings, each Investor undertakes to provide all information reasonably requested by the Majority Investors in relation to the Proposed Transaction and such Investor’s investment, including but not limited to in connection with any filings, notifications or other written materials provided under, or relating to, any Regulatory Laws. Notwithstanding the foregoing, in no event will any Majority Investor or any of its subsidiaries or Affiliates have any obligation to propose, negotiate, commit to or effect, by consent decree, hold separate orders, or otherwise, (1) the sale, transfer, divestiture, disposition, or license of any material assets, properties, products, product lines, services, businesses, or rights of such Majority Investor or any of its subsidiaries or Affiliates, or (2) implementing any changes (including through a licensing agreement), or any material restrictions on or other impairment of, such Majority Investor’s, its subsidiaries’ or Affiliates’ ability to use, own, operate or take any other actions with respect to any material assets of such Majority Investor or any of its subsidiaries or Affiliates or Bidco or the Target (each, an “Adverse Regulatory Condition”). Each Investor hereby represents, warrants and covenants to the other Investors that any information that has been or will be supplied on its behalf in connection with Regulatory Laws will be accurate and complete in all material respects (subject to redaction of confidential business information, personal information and privileged information) and will be provided promptly upon request.

 

 

6.

ACQUISITION OF TARGET SECURITIES

 

6.1

Unless approved in advance in writing by each of the Majority Investors or provided for pursuant to the Merger Agreement, each Investor agrees that neither it, nor any of its Affiliates and Representatives acting on its behalf, will, during the term of this Agreement, directly or indirectly:

 

(a)

make any proposal to the board of directors of Target or Target’s Representatives regarding, or make any public announcement, proposal or offer with respect to, or otherwise solicit, seek or offer to effect (including indirectly by means of communication with the press or media):

 

(i)

any business combination, amalgamation, merger, tender offer, exchange offer or similar transaction involving the Target;

 

(ii)

any restructuring, recapitalization, liquidation or similar transaction involving the Target; or

 

(iii)

any acquisition of:

 

(A)

loans, debt securities or equity securities of the Target (other than in the case of FF, the exercise of the FF Warrants and receipt of any Alternative Holdback Shares);

 

(B)

rights or options to acquire interests in loans, debt securities or equity securities of the Target; or

 

(C)

a material portion of the assets of the Target;

 

(b)

knowingly instigate, initiate, encourage or assist any third party to do, or enter into any discussions or agreements (including any non-disclosure agreement) with any third party with respect to, any of the actions set forth in Section 6.1(a) above;

 

(c)

take any action which would reasonably be expected to require the Target to make a public announcement regarding any of the actions set forth in Section 6.1(a) above;

 

(d)

otherwise act, alone or in concert with others, to seek representation on the board of directors of the Target or otherwise seek to control or substantially influence the management, board of directors or policies of the Target;

 

(e)

publicly request or propose any waiver, amendment or termination of this Section 6.1; or

 

 

(f)

acquire, legally or beneficially, by purchase or otherwise:

 

(i)

any loans, debt securities or equity securities of the Target (other than in the case of FF, the exercise of the FF Warrants and receipt of any Alternative Holdback Shares);

 

(ii)

any rights or options to acquire interests in loans, debt securities or equity securities of the Target; or

 

(iii)

a material portion of the assets of the Target.

 

6.2

Nothing in this Agreement shall prevent any Investor and its Affiliates from holding the securities issued by the Target, or any debt or debt securities in the Target, that they hold as at the date of this Agreement, from having a related person on the board of directors of the Target that is serving on that board as of the date of this Agreement, or from that person serving on the board performing his duties as a member of the board.

 

6.3

Each Investor acknowledges that applicable securities laws prohibit any person who has material non-public information about a company from purchasing or selling securities of such company, and each Investor agrees to comply, and to cause its Representatives acting on its behalf to comply, with such prohibitions.

 

7.

CONFIDENTIALITY

 

7.1

Each Investor shall keep confidential and not disclose to any third party without the prior written consent of each of the other Investors the existence and terms of this Agreement and any other transaction documentation, the proposed terms of the Proposed Transaction, its participation in the Proposed Transaction, the fact that discussions are taking or have taken place and any information disclosed by or on behalf of an Investor in respect of its, or any of its Affiliates’, business or operations (including, without limitation, business plans, financial models or otherwise) (and any document that contains, is based on or utilizes such information) (“Confidential Information”).

 

7.2

Notwithstanding the above, an Investor may disclose Confidential Information:

 

(a)

where required by any applicable laws, rules or regulations or competent government or regulatory authorities, or requested by such government or regulatory authorities;

 

(b)

to its Affiliates or family members of such Affiliates or any shareholder holding more than 30% of the equity interests in such Investor (directly or indirectly);

 

(c)

to any provider of equity finance to it (including any current or prospective limited partners or underlying investor in any fund or entity managed or advised by it or its Affiliates);

 

(d)

in a press release approved by each of the Investors; and

 

(e)

to the employees, consultants, professional advisors, and lenders of it or any person in clauses (a) to (c),

 

in each case, on a need-to-know basis for the purpose of the Proposed Transaction and provided that any such person: (i) is made aware that they are receiving Confidential Information and is subject to a duty of confidentiality with respect to such Confidential Information; or (ii) has otherwise undertaken to observe these confidentiality obligations.

 

 

7.3

Each Investor shall remain liable for any breaches by any person listed in Sections 7.2(b), 7.2(c) and 7.2(e) above (as applicable) to whom it (or any such listed person) has disclosed Confidential Information.

 

7.4

To the extent reasonably practicable and permitted by applicable law, each Investor will notify the other Investors at least twenty four (24) hours before making any disclosure pursuant to Section 7.2(a) above (including, for the avoidance of doubt, any filings with the Securities and Exchange Commission) and shall consider in good faith any comments made by the other Investors to prevent or restrict disclosure, or on the content of the disclosure.

 

7.5

Except as required by applicable law or regulation, each Investor shall not make any public announcement or media release in respect of the Proposed Transaction without the prior written approval of each of the Majority Investors; except that, following such an announcement or release by the Company, each Investor may make an announcement or release that contains substantially similar information as that of the Company’s prior announcements or releases. As soon as practicable following execution of this Agreement, the Investors and Bidco shall issue a press release in the form approved by each Investor.

 

8.

SHARING OF INFORMATION

 

Each Investor agrees to promptly communicate to the other Investors any information it becomes aware of which is material or would reasonably be expected to be material in the context of the Proposed Transaction and the due diligence being conducted in connection therewith, provided that each Investor shall not be required to communicate such information where it is not permitted to disclose such information as a result of any fiduciary or similar duties or any confidentiality obligation owed to any third party that is not an Affiliate.

 

9.

BID CONDUCT

 

9.1

Pursuant to the terms of this Agreement, the Investors agree to work together, in good faith, to explore the possibility of submitting an offer to the Target for the Proposed Transaction (the “Joint Bid”).

 

9.2

The Investors will coordinate regarding the submission of all bid materials, the material components of the timetable and steps required to submit the Joint Bid and the negotiations with the Target and its advisors regarding the Definitive Transaction Documents.

 

9.3

Each Investor agrees to act reasonably with respect to determining and implementing the Proposed Transaction acquisition structure (the “Transaction Structure”) (including with respect to changes to such Transaction Structure) as may be required to satisfy any legal or regulatory requirements, or as may be necessary to achieve greater tax or other efficiencies for the other Investors. It is the intent of the Investors and a condition to the Proposed Transaction that the Proposed Transaction shall be structured so as to qualify as a tax free/tax deferred transaction with respect to the Rollover Equity. The Majority Investors shall work together in good faith to unanimously agree upon terms of the Definitive Transaction Documents that maintain such tax free/tax deferred status for each Investor party to a Rollover Agreement (including that Investors that must file a gain recognition agreement on IRS Form 8838 to qualify for such tax free treatment will have appropriate notice and veto rights over any transaction or transactions that would reasonably be expected to constitute a “triggering event” with respect to such gain recognition agreement), in each case as is unanimously agreed upon by the Majority Investors. For the avoidance of doubt, (a) the Transaction Structure and terms of the Definitive Transaction Documents shall be finally determined by the unanimous written approval of the Majority Investors pursuant to Section 9.4, and (b) no Majority Investor will have any obligation to approve any Transaction Structure or Definitive Transaction Document that would reasonably be likely to have any adverse tax consequences for itself or for any of its investors.

 

 

9.4

Notwithstanding anything to the contrary contained herein (except that, to the extent contemplated by Section 10.4, only ONE’s consent shall be required to (w) raise the price to be paid per Company Common Share, (x) execute any amendments to the Definitive Transaction Documents (as defined below), (y) increase the size of the ONE Commitment and the resulting increase in the Total Commitment, and (z) approve each of the foregoing on behalf of Bidco, in each of the clauses (x), (y) and (z), that solely effectuate an increase in the price to be paid per Company Common Share in accordance with Section 10.4 and do not otherwise implicate the following decisions) the following decisions will require the unanimous written approval of the Majority Investors:

 

(a)

admission of any other Investor to the Consortium and any related amendments to this Agreement to effectuate such admission;

 

(b)

the making of any proposals to the Target;

 

(c)

approval of any preliminary or final Joint Bid, Merger Agreement and ancillary documents (including any equity commitment letters (including the ECLs) or guaranties) to be provided to the Target and/or financing documentation to implement the Proposed Transaction (any of the foregoing, “Definitive Transaction Documents”);

 

(d)

the final bid price (or any change in the amount or form of consideration offered for the Proposed Transaction), and the Transaction Structure; provided that the Majority Investors shall negotiate in good faith to agree upon a Transaction Structure that qualifies as a tax free/tax deferred transaction for the Rollover Equity and is not reasonably likely to have any adverse tax consequence for any Investor prior to the earlier of (x) 30 days from the date hereof or (y) entry into the Merger Agreement;

 

(e)

a decision to proceed, or not to proceed, with executing any Definitive Transaction Documents;

 

(f)

any amendment or waiver of a right or condition precedent under any Definitive Transaction Document;

 

(g)

incurrence of any costs, fees or expenses on behalf of the Consortium, other than any Consortium Expenses;

 

(h)

the amounts of each of the ONE Commitment, the Washington Family Holdings Commitment, the DS Commitment (to the extent DS has approved such DS Commitment) and the Total Commitment;

 

(i)

the maximum price to be paid per Company Common Share pursuant to the Merger Agreement; and

 

(j)

the entry into definitive agreements with certain members of management of Target with respect to the terms of such management member’s employment, compensation, bonus and incentives, rollover equity and/or equity incentives at and following the Closing (it being acknowledged that existing arrangements will remain in place).

 

 

Each Majority Investor shall use good faith efforts to respond to any request for approval under this Section 9.4 within 48 hours after receipt of such request from Bidco or an Investor.

 

9.5

In the event the Consortium or Bidco enters into any Definitive Transaction Document, each Investor shall, and shall cause each of its Affiliates to, use commercially reasonable efforts to take, or cause to be taken in a reasonably prompt manner, all actions and do, or cause to be done, all things reasonably necessary, proper or advisable in order to enable and permit the Consortium and Bidco to fulfill its obligations under such Definitive Transaction Document; provided that in no event shall any Investor or its Affiliates (excluding Bidco and its subsidiaries) be required to (i) increase the amount of equity commitment under its ECL, or otherwise pay any amounts to Bidco in excess of such amount; or (ii) contribute or pay any amount to or on behalf of Bidco pursuant to this Section 9.5 other than (x) to the extent required by, and consistent with and subject to the terms of, any Stockholder Agreement Documents entered into by such Investor or such Affiliate and (y) out of pocket fees and expenses incurred by such Investor or its Affiliates in otherwise complying with Section 3.2 and this Section 9.5.

 

9.6

Each of the Investors agrees to use commercially reasonable efforts to ensure that all drafts of and comments on the Definitive Transaction Documents and other material proposals and developments in the bid process are generally shared with and communicated to all Investors simultaneously.

 

10.

BIDCO TERMS

 

10.1

From and after the date hereof, each Investor agrees to negotiate in good faith and enter into, prior to or concurrently with the Closing, a stockholders agreement consistent with the terms set forth in Exhibit A and, to the extent necessary, one or more other definitive agreements with respect to such matters as are set forth in Exhibit A, in each case, with such additional or modified terms as the Investors unanimously agree (the “Stockholder Agreement Documents”). In the event that the Stockholder Agreement Documents are not executed and delivered by the Investors prior to or at the Closing, (i) each Investor agrees to continue to negotiate in good faith and enter into such agreements as soon as possible following the Closing, in each case, consistent with the terms set forth in Exhibit A, with such additional or modified terms as the Investors unanimously agree and (ii) until such time as the Stockholder Agreement Documents may be executed and delivered by the Investors and Bidco, each Investor and Bidco agrees that the terms and provisions set forth in Exhibit A shall be binding on, and shall govern with respect to the matters set forth therein and that each of such parties will comply with all of the terms set forth on Exhibit A.

 

10.2

Any break fees, reverse termination fees or similar fees, expenses, losses or damages payable by a Holding Vehicle, the Consortium or any Investor or its Affiliates in connection with the Proposed Transaction (collectively, an “RTF”) shall be shared between each of the Investors proportionately based on their respective Relevant Percentage; provided that to the extent that any Investor’s failure to fund its equity commitment under its ECL or Rollover Agreement (such Investor, a “Breaching Party”) results in the obligation to pay any RTF, the Breaching Party shall be responsible for and pay and discharge the RTF and all Consortium Expenses and Investor Expenses in full (or contribute to the applicable Holding Vehicle an amount in cash equal to the RTF and all Consortium Expenses and Investor Expenses (the “Breaching Party Payments”) so that the applicable Holding Vehicle can pay and discharge the Breaching Party Payments, in each case, which such Holding Vehicle is responsible for), and each non-Breaching Party shall be entitled to enforce such obligation against the Breaching Party and be reimbursed by such Breaching Party to the extent such non-Breaching Party has funded any portion of the Breaching Party Payments for which the Breaching Party would otherwise be responsible for hereunder; provided that if there is more than one Breaching Party, then, subject to the provisions of Section 13.5, the obligations of the Breaching Parties shall be several and not joint, with each Breaching Party responsible for its pro rata share of the Breaching Party Payments (based on such Breaching Parties’ respective relative Relevant Percentage); provided, further, that if it is finally determined by a court of competent jurisdiction that there are multiple Breaching Parties and the Breaching Party Payments are due to the relative fault of such Breaching Parties in a proportion different than that contemplated by the immediately preceding proviso, then responsibility for such Breaching Party Payments shall be apportioned among such Breaching Parties based on such relative fault.

 

 

10.3

In the event that following the execution and delivery of the Merger Agreement, the Target provides Bidco, the Investors or their Affiliates notice pursuant to the Merger Agreement that the Target intends to terminate the Merger Agreement or enter into an agreement with respect to an Alternative Proposal in accordance with the terms of the Merger Agreement (“Alternative Acquisition Agreement”) or that the Board of Directors of the Company (the “Company Board”) or a Special Committee thereof (the “Special Committee”) intends to change its recommendation to the shareholders of the Company to approve and adopt the Merger Agreement and the transactions contemplated thereby (a “Change of Recommendation”), then: (i) the Investors shall promptly and in good faith discuss whether to make adjustments in (A) the terms and conditions of the Merger Agreement and/or (B) the price to be paid per Company Common Share and any related changes to the ECLs as would permit the Company and the Company Board or the Special Committee not to (x) effect a Change of Recommendation or (y) allow the Target to enter into any Alternative Acquisition Agreement with respect to such Alternative Proposal and (ii) to the extent that ONE desires to, the Investors shall cause Bidco to promptly and in good faith discuss and negotiate with the Company and its Representatives to make such adjustments.

 

10.4

In connection therewith, if, during or after such discussions and negotiations between and among the Investors and the Company, ONE informs the other Investors in writing that (A) ONE desires to make such adjustments as described in Section 10.3(i) (a “Revised Proposal”) (subject, in the case of adjustments pursuant to Section 10.3(i)(A) (other than those that solely relate to the price to be paid per Company Common Share), which shall require the consent of the Majority Investors pursuant to the provisions of Section 9.4, without reference to the exceptions in the lead in language to Section 9.4 (which exceptions shall only apply in respect of the actions set forth therein specifically related to an increase in the price to be paid per Company Common Share)), (B) ONE has, or has arranged, the necessary incremental equity financing to do so (including proposed amendments to the ONE ECL) (it being understood that the other Investors shall not be obligated to commit additional equity financing in connection therewith), and (C) the valuation of the Rollover Equity for purposes of the contribution of such Rollover Equity to Bidco for Bidco Common Shares is equal to the purchase price to be paid per share of Company Common Stock in such Revised Proposal, then Bidco and the Investors shall submit the Revised Proposal to the Company on such terms and, to the extent such Revised Proposal is accepted by the Company, enter into all necessary agreements to effect such Revised Proposal and the transactions contemplated thereby. In connection with any Revised Proposal, each of the other Investors may, but shall not be required to, increase its equity commitment in its ECL to maintain its Relevant Percentage and DS shall, to the extent he does not agree to the Revised Proposal, have the right to terminate the DS ECL. Each Investor acknowledges and agrees that (i) to the extent that any Investor does not increase its equity commitment in its ECL in connection with a Revised Proposal, and one or more of the other Investors do increase their equity commitments in their respective ECLs, then such non-increasing Investor’s Relevant Percentage will be diluted accordingly and (ii) all Bidco Common Shares acquired pursuant to all ECLs shall be acquired at a price per share equal to the price paid per share of the Company Common Stock in the Revised Proposal (and the valuation of the Rollover Equity for purposes of the contribution of such Rollover Equity to Bidco for Bidco Common Shares shall be deemed to equal the purchase price to be paid per share of Company Common Stock in such Revised Proposal).

 

 

10.5

The Investors (other than ONE) shall not enter into any agreement that prevents them, prior to termination of the Merger Agreement, from (i) entering into or conducting discussions or negotiations with ONE, (ii) modifying or changing their agreements, arrangements or understandings with Bidco and/or ONE or (iii) participating in any proposal to modify the terms of the Merger Agreement or agreeing to any such modification.

 

10.6

Any Termination Fee (as defined in the draft Merger Agreement, dated as of July 29, 2022, the “Draft Merger Agreement,” as such term may be amended, replaced or otherwise modified in any executed Merger Agreement) or similar payments received by any Holding Vehicle or any Investor in connection with the Proposed Transaction pursuant to Section 11.04(b) of the Draft Merger Agreement (as such provision may be amended, replaced, moved or otherwise modified, and giving effect to the same economic and legal substance thereto as provided in the Draft Merger Agreement), will be paid to ONE, unless otherwise agreed to in writing by ONE. Any expense reimbursement received by any Holding Vehicle or any Investor in connection with the Proposed Transaction pursuant to Section 11.04(a) of the Draft Merger Agreement (as such provision may be amended, replaced, moved or otherwise modified, and giving effect to the same economic and legal substance thereto as provided in the Draft Merger Agreement) shall be used first to pay any Consortium Expenses, and thereafter to reimburse any Investor, on a pro rata basis based on their respective Relevant Percentage, for any Consortium Expenses or Investor Expenses they have paid or owe.

 

10.7

Concurrently with the execution of a Merger Agreement, each of FF, Washington Family Holdings and DS will enter into a customary voting and support agreement with Bidco and ONE which shall be in effect until the earlier of the termination of the Merger Agreement or Closing.

 

10.8

In addition to any other stockholder approvals that may be required in connection with the Proposed Transaction, the consummation of the Proposed Transaction shall be conditioned on the approval of the holders of a majority of the Company Common Shares not held by the Investors.

 

11.

LIMITATION OF LIABILITY

 

11.1

The rights, obligations and liabilities of each of the Investors under this Agreement are assumed severally and not jointly or jointly and severally by each of them.

 

11.2

The Investors acknowledge and agree that damages may not be an adequate remedy for any breach or threatened breach of this Agreement and any Investor who is not in breach shall be entitled without proof of special damage to seek injunctive relief and other equitable remedies (including specific performance) and the Investor in breach will not oppose in such circumstances the granting of injunctive or equitable remedy in favor of the non-breaching Investor(s).

 

11.3

Nothing in this Agreement shall constitute an obligation on any Investor to make an investment in any of the Holding Vehicles or to participate in the Proposed Transaction except as agreed herein and in the ECLs and Rollover Agreements, subject to the terms and conditions herein and therein.

 

11.4

In no event shall any Investor, its Affiliates or Representatives be liable under this Agreement to the Consortium, any other Investor or any other third party for consequential, indirect, incidental, special, exemplary or punitive damages, or lost profits or diminution in value arising out of, relating to, or in connection with any breach of this Agreement, except to the extent such damages (except for any special, exemplary or punitive damages) were reasonably foreseeable as a result of such breach.

 

 

12.

TERMINATION

 

12.1

This Agreement shall apply until, and shall terminate automatically upon, the earliest to occur of the following events:

 

(a)

the Target stated in writing prior to entering into a Merger Agreement that it will not proceed with the Proposed Transaction and, in the unanimous opinion of the Investors, there being no reasonable prospect of the Proposed Transaction (or substantially similar transaction) being recommenced within three (3) months of such decision;

 

(b)

a Merger Agreement has not been fully executed and delivered by a Holding Vehicle and its applicable Affiliates, on the one hand, and the Target or an applicable Affiliate thereof, on the other hand, within three (3) months (or such other period as may be agreed in writing among the Investors) from the date of this Agreement (the “Outside Date”);

 

(c)

the Merger Agreement is terminated in accordance with its terms;

 

(d)

the date upon which (i) ONE delivers written notice that it is terminating the ONE ECL in accordance with the terms thereof or (ii) any Investor delivers written notice prior to the earlier of (x) 30 days from the date hereof and (y) entry into the Merger Agreement that it has determined, on the advice of its outside tax advisors, that it is not feasible to structure the Proposed Transaction so as to qualify for tax free or tax deferred treatment with respect to the Rollover Equity or so as to otherwise avoid material adverse tax consequences to that Investor;

 

(e)

the occurrence of the Closing; or

 

(f)

the Majority Investors unanimously agree in writing to terminate this Agreement;

 

(the “Termination Date”).

 

12.2

If this Agreement is terminated in accordance with this Section 12, then the Surviving Provisions will survive such termination; provided, however, that if this Agreement is terminated pursuant to Section 12.1(e), only the last sentence of Section 2.2 and the terms of Section 3, Section 7, Section 10.1, Section 11 and this Section 12.2 (and any related definitions) shall survive in accordance with the terms of such Sections until fully performed. The termination of this Agreement shall not prejudice any rights, liabilities or obligations that have accrued prior to such termination. Following termination of this Agreement, no Investor, the Consortium or Bidco shall incur any further Investor Expenses or Consortium Expenses that any other Investor would be required to contribute to or reimburse.

 

 

13.

OTHER TERMS

 

13.1

Capacity. Each Investor represents and warrants to each other Investor that it has full power and authority and has obtained all necessary consents to enter into and perform the obligations expressed to be assumed by it under this Agreement, that the obligations expressed to be assumed by it under this Agreement are legal, valid and binding and enforceable against it in accordance with their terms and that the execution, delivery and performance by it of this Agreement and the performance of each such obligation will not:

 

(a)

result in a breach of, or constitute a default under, any agreement or arrangement to which it is a party or by which it is bound or under its constitutive documents; or

 

(b)

result in a breach of any law or order, judgment or decree of any court, governmental agency or regulatory body to which it is party or by which it is bound.

 

13.2

Governing law. This Agreement and all claims hereunder shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware without giving effect to any laws, provisions or rules (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 and without regard to any borrowing statute that would result in the application of the statutes of limitations or repose of any other jurisdiction. In furtherance of the foregoing, the laws of the State of Delaware will control even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive or procedural law of some other jurisdiction would ordinarily or necessarily apply. EACH PARTY HERETO ACKNOWLEDGES THAT ANY ACTION OR LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY CLAIM HEREUNDER IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION, LEGAL PROCEEDING OR CLAIM HEREUNDER. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) IT MAKES THIS WAIVER VOLUNTARILY; AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

13.3

Jurisdiction. Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware sitting in Wilmington, Delaware (or if such court declines to exercise such jurisdiction in any appropriate state or federal court in the State of Delaware sitting in Wilmington, Delaware) over all claims hereunder and the parties hereto hereby irrevocably agree that all claims hereunder shall be heard and determined in such court. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection that they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. The parties hereto agree that a final judgment with respect to any such claim hereunder shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law. Each of the parties hereto hereby consents to process being served by any party to this Agreement in any legal proceeding by the delivery of a copy thereof (other than by e-mail) in accordance with the provisions of Section 13.13.

 

13.4

No Partnership. Nothing in this Agreement shall be construed as constituting a general partnership or authorizing any Investor to act as an agent of any other Investor with power to bind such party.

 

 

13.5

No Recourse. This Agreement may only be enforced against, and any claim based upon, arising out of, or related to this Agreement, or the negotiation, execution, or performance of this Agreement, may only be brought against the Investors, and then only with respect to the specific obligations set forth herein with respect to such Investor. No past, present, or future director, officer, employee, incorporator, manager, member, partner, shareholder, Affiliate, agent, attorney, or other Representative of any Investor or of any Affiliate of any Investor, or any of their successors or permitted assigns, shall have any liability (whether in contract, tort, equity or otherwise) for any obligations or liabilities of any party under this Agreement or for any claim or action based on, in respect of or by reason of the transactions contemplated hereby. Without otherwise affecting the foregoing provisions, the entities that constitute Washington Family Holdings agree that they shall be jointly and severally liable for their obligations under this Agreement (but for avoidance of doubt, only the Washington Family Holdings entity or entities that provide the Washington Family Holdings ECL shall be liable for such obligations).

 

13.6

Rights and Remedies. No delay of or omission in the exercise of any right, power or remedy accruing to any Investor as a result of any breach or default by any other Investor 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 or waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after such waiver.

 

13.7

Third Party Rights. Nothing in this Agreement shall create or be deemed to create any third-party beneficiary rights in any person not a party to this Agreement.

 

13.8

Assignment. No rights or obligations under this Agreement may be assigned or transferred by an Investor without the prior unanimous written consent of the Investors; provided any of the rights or obligations of FF may be assigned to another Affiliate of Fairfax Financial Holdings Limited; provided that (i) such assignee agrees in writing to be bound by this Agreement as “FF” to the same extent applicable to the assignor and (ii) no such assignment shall release the assignor of its obligations hereunder.

 

13.9

Invalidity. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction: (a) the validity, legality and enforceability under the law of that jurisdiction of any other provision; and (b) the validity, legality and enforceability under the law of any other jurisdiction of that or any other provision, in each case shall not be affected or impaired in any way.

 

13.10

Waiver. A waiver of any term, provision or condition of, or consent granted under, this Agreement shall be effective only if given in writing and signed by the waiving or consenting Investor and then only in the instance and for the purpose for which it is given.

 

13.11

Amendment. This Agreement may be amended only by a document signed by each of the Investors.

 

13.12

Counterparts. This Agreement may be signed in counterparts, each of which shall constitute one and the same document.

 

 

13.13

Notices. All notices, requests, instruction, demands and other communications under this Agreement shall be in writing and shall be deemed given (i) when delivered personally by hand (with written confirmation of receipt), (ii) on the date sent by e-mail if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (iii) when received by the addressee if sent by nationally recognized overnight delivery service (with written confirmation of receipt), in each case, at the following addresses (or to such other address as a party may have specified by notice given to the other party pursuant to this provision):

 

(a)

If to FF, to:

 

Hamblin Watsa Investment Counsel Ltd.

95 Wellington Street West, Suite 802

Toronto, Ontario, Canada M5J 2N7

Attention:

General Counsel

Email:

[email protected]

 

with a copy to (which shall not constitute notice):

 

Torys LLP

114 Avenue of the Americas, 23^rd Floor

New York, NY 10036

Attention:

Michael Horwitz

Email:

[email protected]

 

(b)

If to Washington Family Holdings, to:

 

Washington Corporations
P.O. Box 16630
101 International Way
Missoula, MT 59808

Attention:

Jerry Lemon

Email:

[email protected]

 

with a copy to (which shall not constitute notice):

 

K&L Gates LLP

925 Fourth Avenue, Suite 2900

Seattle, WA 98104

Attention:

Stephan Coonrod and Christopher H. Cunningham

Email:

[email protected] and [email protected]

 

(c)

If to ONE, to:

 

Ocean Network Express Pte. Ltd.

7 Straits View,

#16-01 Marina One East Tower,

Singapore 018936

Attention:

Corporate Strategy & Sustainability

Email:

[email protected]

 

 

with a copy to (which shall not constitute notice):

 

Latham & Watkins LLP

1271 Avenue of the Americas

New York, NY 10020

Attention:

Christopher G. Cross; James C. Gorton; David Kurzweil

Email:

[email protected]; [email protected]; [email protected]

 

(d)

If to DS, to:

 

David L Sokol

2400 Del Lago Drive

Fort Lauderdale, FL 33316

Attention:

David L. Sokol

Email:

[email protected]

 

with a copy to (which shall not constitute notice):

 

Honigman LLP

2290 First National Building

600 Woodward Avenue

Detroit, MI 48226

Attention:

Tracy Larsen; Jeff Kuras; Barbara Kaye

Email:

[email protected]; [email protected]; [email protected]

 

or to such other address or addresses as the Parties may from time to time designate in writing.

 

13.14

Entire Agreement. This Agreement (together with ECLs, the Rollover Agreements and the Stockholder Agreement Documents) contains the entire agreement among the Investors with respect to the transactions contemplated hereby and supersedes all prior and contemporaneous agreements, discussions, negotiations, correspondence, communication, understandings, promises and representations, whether written or oral, among the Investors with respect to the subject matter hereof. Furthermore, the Investors each hereby acknowledge that this Agreement embodies the justifiable expectations of sophisticated parties derived from arm’s-length negotiations and the Investors specifically acknowledge that no party has any special relationship with another party that would justify any expectation beyond that of ordinary parties in an arm’s-length transaction.

 

 

IN WITNESS HEREOF, the parties have duly executed this Agreement as of the date first above written.

 

	DEEP WATER HOLDINGS, LLC
	By:	/s/ Lawrence R. Simkins
	Name: Lawrence R. Simkins
	Title: Manager
	THE KYLE ROY WASHINGTON 2014 TRUST
	By:	/s/ Christopher Hawks
	Name: Christopher Hawks
	Title: President, Copper Lion, Inc., Trustee
	KYLE ROY WASHINGTON 2005 IRREVOCABLE TRUST CREATED UNDER AGREEMENT DATED JULY 15, 2005, INCLUDING ALL SUBSEQUENT AMENDMENTS, MODIFICATIONS AND RESTATEMENTS
	By:	/s/ Christopher Hawks
	Name: Christopher Hawks
	Title: President, Copper Lion, Inc., Trustee
	THE KEVIN LEE WASHINGTON 2014 TRUST
	By:	/s/ Christopher Hawks
	Name: Christopher Hawks
	Title: President, Copper Lion, Inc., Trustee
	David L. Sokol
	/s/ David L. Sokol
	HAMBLIN WATSA INVESTMENT COUNSEL, LTD., in its capacity as investment manager and/or pursuant to a power of attorney on behalf of all entities set out on Schedule 2 hereto, other than The Second 810 Holdco Ltd. and The Sixty Three Foundation
	By:	/s/ Peter Clarke
	Name: Peter Clarke
	Title: Chief Risk Officer

 

 

	THE SECOND 810 HOLDCO LTD.
	By:	/s/ V. Prem Watsa
	Name: V. Prem Watsa
	Title: President
	THE SIXTY THREE FOUNDATION
	By:	/s/ V. Prem Watsa
	Name: V. Prem Watsa
	Title: President
	OCEAN NETWORK EXPRESS PTE. LTD.
	By:	/s/ Jeremy Nixon
	Name: Jeremy Nixon
	Title: Chief Executive Officer

 

 

Schedule 1

 

Rollover Equity

 

Investor	Number of Company Common Shares
FF	131,759,155 (125,759,155 Company Common Shares held by FF and 6,000,000 Company Common Shares underlying the FF Warrants)
Washington Family Holdings	63,583,731 (49,576,493 held by Deep Water Holdings, LLC, 5,390,233 held by The Kyle Roy Washington 2014 Trust, 1,795,034 held by Kyle Roy Washington 2005 Irrevocable Trust u/a/d July 15, 2005, and 6,821,971 held by The Kevin Lee Washington 2014 Trust)
DS	7,000,000
TOTAL

 

 

Schedule 2

 

Stockholders and Warrantholders Controlled by Fairfax Financial Holdings Limited

 

Allied World Assurance Company (Europe) dac

Allied World Assurance Company (U.S.) Inc.

Allied World Assurance Company, AG

Allied World Assurance Company, Ltd

Allied World Insurance Company

Allied World National Assurance Company

Allied World Specialty Insurance Company

Allied World Surplus Lines Insurance Company

Brit Reinsurance (Bermuda) Limited

Brit Syndicates Limited

Brit UW Limited

Fairfax (Barbados) International Corp.

Fairfax Financial Holdings Limited

Greystone Insurance Company

Hilltop Specialty Insurance Company

Hudson Excess Insurance Company

Hudson Insurance Company

HWIC Global Equity Fund

Newline Corporate Name Limited

Odyssey Group Holdings, Inc.

Odyssey Reinsurance Company

RiverStone Corporate Capital Limited

RiverStone Insurance (UK) Limited

The North River Insurance Company

The Second 810 Holdco Ltd.

The Sixty Three Foundation

TIG Insurance (Barbados) Limited

TIG Insurance Company

Trustees of Newline Syndicate 1218

United States Fire Insurance Company

Wentworth Insurance Company Ltd.

Zenith Insurance Company

 

 

Exhibit A

Stockholder Agreement Term Sheet

 

[attached]

 

Exhibit 99.4

 

August 4, 2022

 

Poseidon Acquisition Corp.

Attention: David L. Sokol
Email: [email protected]

 

Re:

ONE Equity Commitment Letter

 

Ladies and Gentlemen:

 

Reference is made to that certain Joint Bidding Agreement, dated and effective as of the date hereof (as it may be amended, supplemented or otherwise modified from time to time, the “Agreement”), by and among the entities set forth on Schedule 2 of the Agreement (collectively, “FF”), Deep Water Holdings, LLC, The Kyle Roy Washington 2014 Trust, Kyle Roy Washington 2005 Irrevocable Trust u/a/d July 15, 2005, and The Kevin Lee Washington 2014 Trust (collectively, “Washington Family Holdings”), Ocean Network Express Pte. Ltd. (“ONE”) and David L. Sokol (“DS”). Capitalized terms used but not defined herein have the meanings ascribed to them in the Agreement.

 

Subject to the conditions set forth in this letter agreement, ONE hereby agrees that at the Closing, it will contribute, or cause to be contributed, to Bidco $1,400,000,000 (such amount, the “ONE Commitment”), which amount shall be used by Bidco to fund (and fully discharge) a portion of the aggregate consideration to be paid by Bidco or a subsidiary thereof pursuant to the Merger Agreement in exchange for the equity interests in Atlas Corporation (the “Company”) (other than the Rollover Equity) (the “Bidco Payment Obligations); provided that (i)(A) the amount of the ONE Commitment to be funded by ONE under this letter agreement shall be reduced by the amount of the DS Commitment and the Washington Family Holdings Commitment and (B) to the extent that Bidco does not require the full amount of the Total Commitment to fund the Bidco Payment Obligations at the Closing, the ONE Commitment, the DS Commitment and the Washington Family Holdings Commitment shall be reduced on a pro rata basis and (ii) ONE shall not, under any circumstances, be obligated to contribute (or cause to be contributed) to Bidco more than the ONE Commitment. Upon the funding the ONE Commitment, ONE (or a wholly owned, direct or indirect, subsidiary thereof) will acquire Bidco Common Shares, which shall be the same class and type of equity interests of Bidco as FF, Washington Family Holdings and DS (together, the “Rollover Group”) acquire, and at the same price per Bidco Common Share paid, (1) pursuant to the DS ECL and the Washington Family Holdings ECL and (2) in exchange for their Rollover Equity (using the price paid per Company Common Share paid pursuant to the Merger Agreement as the value per share of Rollover Equity).

 

 

ONE’s obligation to fund the ONE Commitment is subject to (a) the execution and delivery of the Merger Agreement by the Company and Bidco and/or one or more Affiliates of Bidco (the “Bidco Merger Parties”), (b) the satisfaction in full or waiver by the Bidco Merger Parties, on or before the Closing, of all of the conditions precedent to the Bidco Merger Parties’ obligations to consummate the Merger as set forth in the Merger Agreement (other than those conditions that by their terms are to be satisfied by the delivery of documents or taking of any other action at the Closing but which are capable of being satisfied at such time) as agreed by the Investors in accordance with the Agreement, provided that there shall not be imposed any Adverse Regulatory Condition with respect to ONE or its Affiliates, as shall be reasonably determined in good faith by ONE; it being understood that the funding of the ONE Commitment will occur contemporaneous with the Closing, (c) with respect to the Washington Family Holdings ECL and the DS ECL, the Washington Family Holdings Commitment and the DS Commitment (subject to the provisions of Section 10.4 of the Agreement) shall have been funded or will be funded at the Closing and the Rollover Equity shall have been contributed to Bidco in accordance with the Rollover Agreements at the Closing, in each case substantially concurrently with the ONE Commitment funding, (d) the price to be paid per Company Common Share pursuant to the Merger Agreement does not exceed the amount as agreed upon in writing by ONE, FF and Washington Family Holdings pursuant to Section 9.4 of the Agreement, and (e)(i) the substantially contemporaneous consummation of the Closing under the Merger Agreement, (ii) the obtaining by the Company of a final and non-appealable judgment requiring Bidco to specifically perform its obligations pursuant to the terms of the Merger Agreement or (iii) the obtaining by Bidco of a final and non-appealable judgment requiring ONE to specifically perform its obligations under this letter agreement.

 

ONE’s obligation to fund the ONE Commitment will terminate automatically and immediately upon the earliest to occur of (a) the valid termination of the Agreement in accordance with Section 12.1 of the Agreement (other than clause (e) thereof), (b) the Closing and the funding of the ONE Commitment hereunder, at which time the obligations hereunder shall be discharged, (c) commencement by Bidco, the Rollover Group, the Company or any of their respective Affiliates of a lawsuit or other proceeding asserting, in writing, directly or indirectly, any claim for payment under or in respect of the Agreement, this letter agreement, or the transactions contemplated hereby or thereby from ONE or its Affiliates, in each case other than a lawsuit or other proceeding against ONE pursuant to the Agreement or the confidentiality letter between the Company and ONE, dated as of March 7, 2022 (the “Confidentiality Letter”), or to specifically enforce the provisions of this letter agreement, the Agreement or the Confidentiality Letter or any other contractual agreement between or among the foregoing parties as permitted herein or therein, and (d) on or prior to August 14, 2022, ONE delivers written notice to Bidco terminating this letter agreement due to its inability to satisfactorily complete its confirmatory diligence, as determined by ONE in its sole discretion (the “ONE Diligence Condition”). Upon a valid termination of this letter agreement, neither ONE nor any of its Affiliates shall have any further obligations or liabilities hereunder.

 

Subject to the terms of the Agreement, ONE may assign all or a portion of its obligation to fund the ONE Commitment to an Affiliate with the consent of each of FF, Washington Family Holdings and DS; provided, however, that any such assignment shall not relieve ONE of its obligations under this letter agreement. The ONE Commitment shall not be assignable by Bidco without the prior written consent of ONE, and the granting of such consent in a given instance shall be solely in the discretion of ONE and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment. Except as expressly provided herein, this letter agreement shall not be assignable without the consent of the parties hereto, each of FF, Washington Family Holdings and DS and the Company.

 

 

This letter agreement shall be binding solely on the parties hereto and their successors and permitted assignees and inure solely to the benefit of Bidco, and nothing set forth in this letter agreement shall be construed to confer upon or give to any Person other than Bidco any benefits, rights or remedies under or by reason of, or any rights to enforce or cause Bidco to enforce, the ONE Commitment or any other provisions of this letter agreement; provided, however, that, subject to the terms and conditions set forth in Section 2.1 of the Agreement and in the Merger Agreement, each of FF, Washington Family Holdings, DS and the Company is hereby made a third-party beneficiary of the rights granted to Bidco hereby for the purpose of obtaining specific performance of Bidco’s right to cause the ONE Commitment to be funded pursuant to the terms and conditions hereunder, and for no other purpose (including, without limitation, any claim for monetary damages hereunder). ONE’s creditors shall have no right to enforce this letter agreement or to cause Bidco to enforce this letter agreement.

 

Notwithstanding anything to the contrary that may be expressed or implied in this letter agreement or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that ONE or any of its successors or permitted assignees may be a partnership, limited liability company or similar domestic or foreign entity, Bidco by its acceptance of the benefits of this letter agreement, covenants, agrees and acknowledges that no person other than ONE and its successors and permitted assignees shall have any obligation hereunder and that it has no rights of recovery against, and no recourse hereunder or under this letter agreement, the Merger Agreement or any documents or instruments delivered in connection herewith or therewith shall be had against, any former, current or future director, officer, agent, Affiliate, manager or employee of ONE (or any of its successors or assignees), against any former, current or future general or limited partner, manager, equityholder or member of ONE (or any of its successors or assignees) or any Affiliate thereof or against any former, current or future director, officer, agent, employee, Affiliate, assignee, general or limited partner, equityholder, manager or member of any of the foregoing (each, other than ONE and its successors and permitted assignees, an “ONE Affiliate”), whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of ONE against the ONE Affiliates, by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, or otherwise; provided that (and notwithstanding anything to the contrary provided herein or in any document or instrument delivered contemporaneously herewith), (A) nothing herein shall limit the rights of the Rollover Group against ONE under the Agreement pursuant to the terms and conditions of such Agreement, and (B) nothing herein shall limit the rights of FF, Washington Family Holdings, DS and the Company against ONE (or with respect to any assignee hereof) as a third-party beneficiary under this letter agreement pursuant to the terms and conditions hereof. The parties hereto expressly agree and acknowledge that no personal liability whatsoever shall attach to, be imposed on, or otherwise be incurred by any ONE Affiliate, as such, for any obligations of ONE under this letter agreement or the transactions contemplated hereby, under 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.

 

Bidco further agrees that neither it nor any of its Affiliates shall have any right of recovery against ONE or any of the ONE Affiliates, whether by piercing of the corporate veil, by a claim on behalf of Bidco or any of its equityholders against ONE or any of the ONE Affiliates, or otherwise, except for Bidco’s right to be capitalized by ONE with the ONE Commitment under and to the extent provided in this letter agreement and subject to the terms and conditions hereof. Bidco hereby covenants and agrees that it shall not institute, and shall cause its Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Agreement or the Merger Agreement against ONE or any of the ONE Affiliates, except for claims against ONE under this letter agreement or the Agreement.

 

 

This letter agreement shall be treated as confidential and is being provided to Bidco, the Rollover Group and the Company solely in connection with the Agreement and the Merger Agreement. This letter agreement may not be used, circulated, quoted or otherwise referred to in any document (other than the Agreement, the Merger Agreement, the Washington Family Holdings ECL and the DS ECL), except with the written consent of ONE; provided, that Bidco or the Company or any other Investor may disclose this letter agreement (a) to its officers, directors, advisors and other authorized representatives, (b) to the extent required by applicable Law or the applicable rules of any national securities exchange, including, without limitation, in connection with routine filings, submissions and any other similar documentation required or customary to comply with U.S. Securities and Exchange Commission filing requirements or in connection with any securities regulatory agency filings relating to the transactions contemplated under the Merger Agreement; provided that Bidco and the Company will, to the extent reasonably practicable and permitted by applicable law, notify ONE at least twenty four (24) hours before making any such disclosure and consider in good faith any comments made by ONE to prevent or restrict disclosure, or on the content of the disclosure, and (c) in connection with the enforcement by Bidco and/or the Company of their respective rights hereunder or under the Merger Agreement.

 

This letter agreement and all claims hereunder shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware without giving effect to any laws, provisions or rules (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 and without regard to any borrowing statute that would result in the application of the statutes of limitations or repose of any other jurisdiction. In furtherance of the foregoing, the laws of the State of Delaware will control even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive or procedural law of some other jurisdiction would ordinarily or necessarily apply.

 

Each of the parties hereto hereby irrevocably submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware sitting in Wilmington, Delaware (or if such court declines to exercise such jurisdiction in any appropriate state or federal court in the State of Delaware sitting in Wilmington, Delaware) over all claims hereunder and the parties hereto hereby irrevocably agree that all claims hereunder shall be heard and determined in such court. The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection that they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. The parties hereto agree that a final judgment with respect to any such claim hereunder shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.

 

 

Each of the parties hereto hereby consents to process being served by any party to this letter agreement in any legal proceeding by the delivery of a copy thereof (other than by e-mail) in accordance with the provisions of the immediately succeeding paragraph.

 

All notices, requests, instruction, demands and other communications under this letter agreement shall be in writing and shall be deemed given (i) when delivered personally by hand (with written confirmation of receipt), (ii) on the date sent by e-mail if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (iii) when received by the addressee if sent by nationally recognized overnight delivery service (with written confirmation of receipt), in each case, at the following addresses (or to such other address as a party may have specified by notice given to the other party pursuant to this provision):

 

If to ONE, to:

 

Ocean Network Express Pte. Ltd.

7 Straits View,

#16-01 Marina One East Tower,

Singapore 018936

Attention: Corporate Strategy & Sustainability

Email: [email protected]

 

with a copy to (which shall not constitute notice):

 

Latham & Watkins LLP

1271 Avenue of the Americas

New York, NY 10020

Attention:	Christopher G. Cross; James C. Gorton; David Kurzweil
Email:	[email protected]; [email protected]; [email protected]

 

If to Bidco, to:

 

Poseidon Acquisition Corp.

Attention:	David L. Sokol
Email:	[email protected]

 

with a copy to (which shall not constitute notice):

 

Honigman LLP

2290 First National Building

600 Woodward Avenue

Detroit, MI 48226

Attention:	Tracy Larsen; Jeff Kuras; Barbara Kaye
Email:	[email protected]; [email protected]; [email protected]

 

 

and with a copy to (which shall not constitute notice):

 

Torys LLP

114 Avenue of the Americas, 23rd Floor

New York, NY 10036

Attention:	Michael Horwitz
Email:	[email protected]

 

and with a copy to (which shall not constitute notice):

 

K&L Gates LLP

925 Fourth Avenue, Suite 2900

Seattle, WA 98104

Attention:	Stephan Coonrod and Christopher H. Cunningham
Email:	[email protected] and [email protected]

 

EACH PARTY HERETO ACKNOWLEDGES THAT ANY ACTION OR LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY, ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, THE SPECIFIED DOCUMENTS OR ANY CLAIM HEREUNDER IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION, LEGAL PROCEEDING OR CLAIM HEREUNDER. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) IT MAKES THIS WAIVER VOLUNTARILY; AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

 

This letter agreement and the Agreement contain the complete agreement between ONE and Bidco with respect to the subject matter hereof and thereof, and supersede all prior and contemporaneous agreements, discussions, negotiations, correspondence, communications, undertakings and understandings among the parties with respect to such subject matter.

 

This letter agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto and, following the execution of the Merger Agreement, the Company; provided, however, that ONE may amend this letter agreement to reflect any assignment as expressly permitted herein.

 

This letter agreement may be executed in one or more counterparts including by facsimile or other means of electronic transmission, such as by electronic mail in “.pdf” form, each of which shall be deemed to be an original copy of this letter agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

 

If any provision of this letter agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction: (a) the validity, legality and enforceability under the law of that jurisdiction of any other provision; and (b) the validity, legality and enforceability under the law of any other jurisdiction of that or any other provision, in each case shall not be affected or impaired in any way; provided, however, that this letter agreement may not be enforced without giving effect to the second paragraph, the third paragraph, the fourth paragraph, the seventh paragraph and to the cap on the ONE Commitment.

 

ONE hereby represents and warrants with respect to itself to Bidco that (a) it has all legal entity power and authority to execute, deliver, and perform the obligations under this letter agreement, (b) the execution, delivery, and performance of this letter agreement by ONE has been duly and validly authorized and approved by all necessary legal entity action by it, (c) this letter agreement has been duly and validly executed and delivered by it and constitutes a valid and legally binding obligation of it, enforceable against it in accordance with the terms of this letter agreement, except as enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights or by general equity principles, (d) the execution, delivery and performance of this letter agreement by ONE does not violate or result in a breach or default under (i) the organizational or governance documents of ONE, (ii) any material document or agreement to which ONE is a party or otherwise binding on ONE, or (iii) subject to obtaining any necessary regulatory approvals for the consummation of the funding of the ONE Commitment pursuant to this letter agreement and the Closing, any applicable Law unless the failure to receive such regulatory approval would not adversely affect the ability of ONE to consummate the funding of the ONE Commitment, and (e) it has the financial capacity, and will maintain such financial capacity through the termination hereof, to pay and perform its obligations under this letter agreement, and all funds necessary for ONE to fulfill the ONE Commitment shall be available to ONE for so long as this letter agreement shall remain in effect.

 

[Remainder of page intentionally left blank]

 

 

Very truly yours,

 

OCEAN NETWORK EXPRESS PTE. LTD.

 

By:

/s/ Jeremy Nixon

	Name: Jeremy Nixon
	Title: Chief Executive Officer

 

Accepted and Acknowledged as of

the date first written above:

 

POSEIDON ACQUISITION CORP.

 

By:

/s/ David L. Sokol

Name:	David L. Sokol
Title:	Chairman

 

 

Exhibit 99.5

 

August 4, 2022

 

Poseidon Acquisition Corp.

Attention: David L. Sokol
Email: [email protected]

 

Re:

Washington Family Holdings Equity Commitment Letter

 

Ladies and Gentlemen:

 

Reference is made to that certain Joint Bidding Agreement, dated and effective as of the date hereof (as it may be amended, supplemented or otherwise modified from time to time, the “Agreement”), by and among the entities set forth on Schedule 2 of the Agreement (collectively, “FF”), Deep Water Holdings, LLC, The Kyle Roy Washington 2014 Trust, Kyle Roy Washington 2005 Irrevocable Trust u/a/d July 15, 2005, and The Kevin Lee Washington 2014 Trust (collectively, “Washington Family Holdings”), Ocean Network Express, Pte. Ltd. (“ONE”) and David L. Sokol (“DS”). Capitalized terms used but not defined herein have the meanings ascribed to them in the Agreement.

 

Subject to the conditions set forth in this letter agreement, Deep Water Holdings, LLC (“Deep Water”) hereby agrees that at the Closing, it will contribute, or cause to be contributed, to Bidco $175,000,000 (such amount, the “Washington Family Holdings Commitment”), which amount shall be used by Bidco to fund (and fully discharge) a portion of the aggregate consideration to be paid by Bidco or a subsidiary thereof pursuant to the Merger Agreement in exchange for the equity interests in Atlas Corporation (the “Company”) (other than the Rollover Equity)(the “Bidco Payment Obligations”); provided that (i) to the extent that Bidco does not require the full amount of the Total Commitment to fund the Bidco Payment Obligations at the Closing, the Washington Family Holdings Commitment, the ONE Commitment and the DS Commitment shall be reduced on a pro rata basis and (ii) Deep Water shall not, under any circumstances, be obligated to contribute (or cause to be contributed) to Bidco more than the Washington Family Holdings Commitment. Upon the funding of the Washington Family Holdings Commitment, Deep Water (or a wholly owned, direct or indirect, subsidiary thereof) will acquire Bidco Common Shares, which shall be the same class and type of equity interests of Bidco as ONE acquires and FF and DS (together with Washington Family Holdings, the “Rollover Group”) acquire, and at the same price per Bidco Common Share paid, (1) pursuant to the ONE ECL and DS ECL and (2) with respect to the members of the Rollover Group, in exchange for their Rollover Equity (using the price paid per Company Common Share paid pursuant to the Merger Agreement as the value per share of Rollover Equity).

 

 

Deep Water’s obligation to fund the Washington Family Holdings Commitment is subject to (a) the execution and delivery of the Merger Agreement by the Company and Bidco and/or one or more Affiliates of Bidco (the “Bidco Merger Parties”), (b) the satisfaction in full or waiver by the Bidco Merger Parties, on or before the Closing, of all of the conditions precedent to the Bidco Merger Parties’ obligations to consummate the Merger as set forth in the Merger Agreement (other than those conditions that by their terms are to be satisfied by the delivery of documents or taking of any other action at the Closing but which are capable of being satisfied at such time) as agreed by the Investors in accordance with the Agreement, provided that there shall not be imposed any Adverse Regulatory Condition with respect to Washington Family Holdings or its Affiliates, as shall be reasonably determined in good faith by Washington Family Holdings; it being understood that the funding of the Washington Family Holdings Commitment will occur contemporaneous with the Closing, (c) with respect to the ONE ECL and the DS ECL, the ONE Commitment and the DS Commitment (subject to the provisions of Section 10.4 of the Agreement) shall have been funded or will be funded at the Closing and the Rollover Equity shall have been contributed to Bidco by each of FF and DS in accordance with the applicable Rollover Agreements at the Closing, in each case substantially concurrently with the Washington Family Holdings Commitment funding, (d) the price to be paid per Company Common Share pursuant to the Merger Agreement does not exceed the amount as agreed upon in writing by ONE, TWC and FF pursuant to Section 9.4 of the Agreement, and (e)(i) the substantially contemporaneous consummation of the Closing under the Merger Agreement, (ii) the obtaining by the Company of a final and non-appealable judgment requiring Bidco to specifically perform its obligations pursuant to the terms of the Merger Agreement or (iii) the obtaining by Bidco of a final and non-appealable judgment requiring Deep Water to specifically perform its obligations under this letter agreement.

 

Deep Water’s obligation to fund the Washington Family Holdings Commitment will terminate automatically and immediately upon the earliest to occur of (a) the valid termination of the Agreement in accordance with Section 12.1 of the Agreement (other than clause (e) thereof), (b) the Closing and the funding of the Washington Family Holdings Commitment hereunder, at which time the obligations hereunder shall be discharged, and (c) commencement by Bidco, ONE, FF, DS, the Company or any of their respective Affiliates of a lawsuit or other proceeding asserting, in writing, directly or indirectly, any claim for payment under or in respect of the Agreement, this letter agreement, or the transactions contemplated hereby or thereby from Washington Family Holdings or its Affiliates, in each case other than a lawsuit or other proceeding against Washington Family Holdings pursuant to the Agreement or Washington Family Holdings’ Rollover Agreement or to specifically enforce the provisions of this letter agreement, the Agreement, Washington Family Holdings’ Rollover Agreement or any other contractual agreement between or among the foregoing parties as permitted herein or therein. Upon a valid termination of this letter agreement, neither Washington Family Holdings nor any of its Affiliates shall have any further obligations or liabilities hereunder.

 

Subject to the terms of the Agreement, Deep Water may assign all or a portion of its obligation to fund the Washington Family Holdings Commitment to another Washington Family Holdings party or to an Affiliate of any Washington Family Holdings party with the consent of each of ONE, FF and DS except in the case of assignment to another Washington Family Holdings party, which shall not require consent; provided, however, that any such assignment shall not relieve Deep Water of its obligations under this letter agreement. The Washington Family Holdings Commitment shall not be assignable by Bidco without the prior written consent of Deep Water, and the granting of such consent in a given instance shall be solely in the discretion of Deep Water and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment. Except as expressly provided herein, this letter agreement shall not be assignable without the consent of the parties hereto, each of ONE, FF and DS and the Company.

 

 

This letter agreement shall be binding solely on the parties hereto and their successors and permitted assignees and inure solely to the benefit of Bidco, and nothing set forth in this letter agreement shall be construed to confer upon or give to any Person other than Bidco any benefits, rights or remedies under or by reason of, or any rights to enforce or cause Bidco to enforce, the Washington Family Holdings Commitment or any other provisions of this letter agreement; provided, however, that, subject to the terms and conditions set forth in Section 2.1 of the Agreement and in the Merger Agreement, each of ONE, FF, DS and the Company is hereby made a third-party beneficiary of the rights granted to Bidco hereby for the purpose of obtaining specific performance of Bidco’s right to cause the Washington Family Holdings Commitment to be funded pursuant to the terms and conditions hereunder, and for no other purpose (including, without limitation, any claim for monetary damages hereunder). Washington Family Holdings’ creditors shall have no right to enforce this letter agreement or to cause Bidco to enforce this letter agreement.

 

Notwithstanding anything to the contrary that may be expressed or implied in this letter agreement or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that Washington Family Holdings or any of its successors or permitted assignees may be a partnership, limited liability company or similar domestic or foreign entity, Bidco by its acceptance of the benefits of this letter agreement, covenants, agrees and acknowledges that no person other than Deep Water and its successors and permitted assignees shall have any obligation hereunder and that it has no rights of recovery against, and no recourse hereunder or under this letter agreement, the Merger Agreement or any documents or instruments delivered in connection herewith or therewith shall be had against, any former, current or future director, officer, agent, Affiliate, manager or employee of Washington Family Holdings (or any of its successors or assignees), against any former, current or future general or limited partner, manager, equityholder or member of Washington Family Holdings (or any of its successors or assignees) or any Affiliate thereof or against any former, current or future director, officer, agent, employee, Affiliate, assignee, general or limited partner, equityholder, manager or member of any of the foregoing (each, other than Washington Family Holdings and its successors and permitted assignees, a “Washington Family Holdings Affiliate”), whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of Washington Family Holdings against the Washington Family Holdings Affiliates, by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, or otherwise; provided that (and notwithstanding anything to the contrary provided herein or in any document or instrument delivered contemporaneously herewith), (A) nothing herein shall limit the rights of ONE, FF and DS against Washington Family Holdings under the Agreement pursuant to the terms and conditions of such Agreement or Washington Family Holdings’ Rollover Agreement pursuant to the terms and conditions of such Rollover Agreement, and (B) nothing herein shall limit the rights of ONE, FF, DS and the Company against Deep Water (or with respect to any assignee hereof) as a third-party beneficiary under this letter agreement pursuant to the terms and conditions hereof. The parties hereto expressly agree and acknowledge that no personal liability whatsoever shall attach to, be imposed on, or otherwise be incurred by any Washington Family Holdings party (other than Deep Water) or any Affiliate thereof, as such, for any obligations of Deep Water under this letter agreement or the transactions contemplated hereby, under 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.

 

 

Bidco further agrees that neither it nor any of its Affiliates shall have any right of recovery against Washington Family Holdings or any of the Washington Family Holdings Affiliates, whether by piercing of the corporate veil, by a claim on behalf of Bidco or any of its equityholders against Washington Family Holdings or any of the Washington Family Holdings Affiliates, or otherwise, except for Bidco’s right to be capitalized by Deep Water with the Washington Family Holdings Commitment under and to the extent provided in this letter agreement and Washington Family Holdings’ Rollover Agreement and subject to the terms and conditions hereof and thereof. Bidco hereby covenants and agrees that it shall not institute, and shall cause its Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Agreement or the Merger Agreement against Washington Family Holdings or any of the Washington Family Holdings Affiliates, except for claims against Deep Water under this letter agreement or against Washington Family Holdings under the Agreement or Washington Family Holdings’ Rollover Agreement.

 

This letter agreement shall be treated as confidential and is being provided to Bidco, ONE, FF, DS and the Company solely in connection with the Agreement and the Merger Agreement. This letter agreement may not be used, circulated, quoted or otherwise referred to in any document (other than the Agreement, the Merger Agreement, the ONE ECL and the DS ECL), except with the written consent of Washington Family Holdings; provided, that Bidco or the Company or any other Investor may disclose this letter agreement (a) to its officers, directors, advisors and other authorized representatives, (b) to the extent required by applicable Law or the applicable rules of any national securities exchange, including, without limitation, in connection with routine filings, submissions and any other similar documentation required or customary to comply with U.S. Securities and Exchange Commission filing requirements or in connection with any securities regulatory agency filings relating to the transactions contemplated under the Merger Agreement; provided that Bidco and the Company will, to the extent reasonably practicable and permitted by applicable law, notify Washington Family Holdings at least twenty four (24) hours before making any such disclosure and consider in good faith any comments made by Washington Family Holdings to prevent or restrict disclosure, or on the content of the disclosure, and (c) in connection with the enforcement by Bidco and/or the Company of their respective rights hereunder or under the Merger Agreement or Washington Family Holdings’ Rollover Agreement.

 

This letter agreement and all claims hereunder shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware without giving effect to any laws, provisions or rules (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 and without regard to any borrowing statute that would result in the application of the statutes of limitations or repose of any other jurisdiction. In furtherance of the foregoing, the laws of the State of Delaware will control even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive or procedural law of some other jurisdiction would ordinarily or necessarily apply.

 

Each of the parties hereto hereby irrevocably submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware sitting in Wilmington, Delaware (or if such court declines to exercise such jurisdiction in any appropriate state or federal court in the State of Delaware sitting in Wilmington, Delaware) over all claims hereunder and the parties hereto hereby irrevocably agree that all claims hereunder shall be heard and determined in such court. The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection that they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. The parties hereto agree that a final judgment with respect to any such claim hereunder shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.

 

 

Each of the parties hereto hereby consents to process being served by any party to this letter agreement in any legal proceeding by the delivery of a copy thereof (other than by e-mail) in accordance with the provisions of the immediately succeeding paragraph.

 

All notices, requests, instruction, demands and other communications under this letter agreement shall be in writing and shall be deemed given (i) when delivered personally by hand (with written confirmation of receipt), (ii) on the date sent by e-mail if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (iii) when received by the addressee if sent by nationally recognized overnight delivery service (with written confirmation of receipt), in each case, at the following addresses (or to such other address as a party may have specified by notice given to the other party pursuant to this provision):

 

If to Deep Water, to:

 

Washington Corporations
P.O. Box 16630
101 International Way
Missoula, MT 59808

Attention:	Jerry Lemon
Email:	[email protected]

 

with a copy to (which shall not constitute notice):

 

K&L Gates LLP

925 Fourth Avenue, Suite 2900

Seattle, WA 98104

Attention:	Stephan Coonrod and Christopher H. Cunningham
Email:	[email protected] and [email protected]

 

If to Bidco, to:

 

Poseidon Acquisition Corp.

Attention:	David L. Sokol
Email:	[email protected]

 

 

with a copy to (which shall not constitute notice):

 

Honigman LLP

2290 First National Building

600 Woodward Avenue

Detroit, MI 48226

Attention:	Tracy Larsen; Jeff Kuras; Barbara Kaye
Email:	[email protected]; [email protected]; [email protected]

 

and with a copy to (which shall not constitute notice):

 

Latham & Watkins LLP

1271 Avenue of the Americas

New York, NY 10020

Attention:	Christopher G. Cross; James C. Gorton; David Kurzweil
Email:	[email protected]; [email protected]; [email protected]

 

and with a copy to (which shall not constitute notice):

 

Torys LLP

114 Avenue of the Americas, 23rd Floor

New York, NY 10036

Attention:	Michael Horwitz
Email:	[email protected]

 

EACH PARTY HERETO ACKNOWLEDGES THAT ANY ACTION OR LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY, ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, THE SPECIFIED DOCUMENTS OR ANY CLAIM HEREUNDER IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION, LEGAL PROCEEDING OR CLAIM HEREUNDER. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) IT MAKES THIS WAIVER VOLUNTARILY; AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

 

This letter agreement, the Agreement and Washington Family Holdings’ Rollover Agreement contain the complete agreement between Washington Family Holdings and Bidco with respect to the subject matter hereof and thereof, and supersede all prior and contemporaneous agreements, discussions, negotiations, correspondence, communications, undertakings and understandings among the parties with respect to such subject matter.

 

 

This letter agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto and, following the execution of the Merger Agreement, the Company; provided, however, that Deep Water may amend this letter agreement to reflect any assignment as expressly permitted herein.

 

This letter agreement may be executed in one or more counterparts including by facsimile or other means of electronic transmission, such as by electronic mail in “.pdf” form, each of which shall be deemed to be an original copy of this letter agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

If any provision of this letter agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction: (a) the validity, legality and enforceability under the law of that jurisdiction of any other provision; and (b) the validity, legality and enforceability under the law of any other jurisdiction of that or any other provision, in each case shall not be affected or impaired in any way; provided, however, that this letter agreement may not be enforced without giving effect to the second paragraph, the third paragraph, the fourth paragraph, and the seventh paragraph and to the cap on the Washington Family Holdings Commitment.

 

Deep Water hereby represents and warrants with respect to itself to Bidco that (a) it has all legal entity power and authority to execute, deliver, and perform the obligations under this letter agreement, (b) the execution, delivery, and performance of this letter agreement by Deep Water has been duly and validly authorized and approved by all necessary legal entity action by it, (c) this letter agreement has been duly and validly executed and delivered by it and constitutes a valid and legally binding obligation of it, enforceable against it in accordance with the terms of this letter agreement, except as enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights or by general equity principles, (d) the execution, delivery and performance of this letter agreement by Deep Water does not violate or result in a breach or default under (i) the organizational or governance documents of Deep Water, (ii) any material document or agreement to which Deep Water is a party or otherwise binding on Deep Water, or (iii) subject to obtaining any necessary regulatory approvals for the consummation of the funding of the Washington Family Holdings Commitment pursuant to this letter agreement and the Closing, any applicable Law unless the failure to receive such regulatory approval would not adversely affect the ability of Deep Water to consummate the funding of the Washington Family Holdings Commitment, and (e) it has the financial capacity, and will maintain such financial capacity through the termination hereof, to pay and perform its obligations under this letter agreement, and all funds necessary for Deep Water to fulfill the Washington Family Holdings Commitment shall be available to Deep Water for so long as this letter agreement shall remain in effect.

 

[Remainder of page intentionally left blank]

 

 

Very truly yours,

 

DEEP WATER HOLDINGS, LLC

 

By:

/s/ Lawrence R. Simkins

	Name: Lawrence R. Simkins
	Title: President

 

Accepted and Acknowledged as of

the date first written above:

 

POSEIDON ACQUISITION CORP.

 

By:

/s/ David L. Sokol

Name:	David L. Sokol
Title:	Chairman

 

 

Exhibit 99.6

 

August 4, 2022

 

Poseidon Acquisition Corp.

Attention: David L. Sokol
Email: [email protected]

 

Re:

DS Equity Commitment Letter

 

Ladies and Gentlemen:

 

Reference is made to that certain Joint Bidding Agreement, dated and effective as of the date hereof (as it may be amended, supplemented or otherwise modified from time to time, the “Agreement”), by and among the entities set forth on Schedule 2 of the Agreement (collectively, “FF”), Deep Water Holdings, LLC, The Kyle Roy Washington 2014 Trust, Kyle Roy Washington 2005 Irrevocable Trust u/a/d July 15, 2005, and The Kevin Lee Washington 2014 Trust (collectively, “Washington Family Holdings”), Ocean Network Express, Pte. Ltd. (“ONE”) and David L. Sokol (“DS”). Capitalized terms used but not defined herein have the meanings ascribed to them in the Agreement.

 

Subject to the conditions set forth in this letter agreement, DS hereby agrees that at the Closing, he will contribute, or cause to be contributed, to Bidco $30,000,000 (such amount, the “DS Commitment”), which amount shall be used by Bidco to fund (and fully discharge) a portion of the aggregate consideration to be paid by Bidco or a subsidiary thereof pursuant to the Merger Agreement in exchange for the equity interests in Atlas Corporation (the “Company”) (other than the Rollover Equity) (the “Bidco Payment Obligations”); provided that (i) to the extent that Bidco does not require the full amount of the Total Commitment to fund the Bidco Payment Obligations at the Closing, the DS Commitment, the ONE Commitment and the Washington Family Holdings Commitment shall be reduced on a pro rata basis and (ii) DS shall not, under any circumstances, be obligated to contribute (or cause to be contributed) to Bidco more than the DS Commitment. Upon the funding of the DS Commitment, DS (or his Affiliates) will acquire Bidco Common Shares, which shall be the same class and type of equity interests of Bidco as ONE acquires and FF and Washington Family Holdings (together with DS, the “Rollover Group”) acquire, and at the same price per Bidco Common Share paid, (1) pursuant to the ONE ECL and the Washington Family Holdings ECL and (2) with respect to the members of the Rollover Group in exchange for their Rollover Equity (using the price paid per Company Common Share paid pursuant to the Merger Agreement as the value per share of Rollover Equity).

 

 

DS’s obligation to fund the DS Commitment is subject to (a) the execution and delivery of the Merger Agreement by the Company and Bidco and/or one or more Affiliates of Bidco (the “Bidco Merger Parties”), (b) the satisfaction in full or waiver by the Bidco Merger Parties, on or before the Closing, of all of the conditions precedent to the Bidco Merger Parties’ obligations to consummate the Merger as set forth in the Merger Agreement (other than those conditions that by their terms are to be satisfied by the delivery of documents or taking of any other action at the Closing but which are capable of being satisfied at such time) as agreed by the Investors in accordance with the Agreement, provided that there shall not be imposed any Adverse Regulatory Condition with respect to DS or his Affiliates, as shall be reasonably determined in good faith by DS; it being understood that the funding of the DS Commitment will occur contemporaneous with the Closing, (c) with respect to the ONE ECL and the Washington Family Holdings ECL, the ONE Commitment and the Washington Family Holdings Commitment shall have been funded or will be funded at the Closing and the Rollover Equity shall have been contributed to Bidco by FF and Washington Family Holdings in accordance with the applicable Rollover Agreements at the Closing, in each case substantially concurrently with the DS Commitment funding, (d) the price to be paid per Company Common Share pursuant to the Merger Agreement does not exceed an amount as agreed upon in writing by ONE, FF and Washington Family Holdings pursuant to Section 9.4 of the Agreement and as further approved for this purpose by DS, and (e)(i) the substantially contemporaneous consummation of the Closing under the Merger Agreement, (ii) the obtaining by the Company of a final and non-appealable judgment requiring Bidco to specifically perform its obligations pursuant to the terms of the Merger Agreement or (iii) the obtaining by Bidco of a final and non-appealable judgment requiring DS to specifically perform its obligations under this letter agreement.

 

DS’s obligation to fund the DS Commitment will terminate automatically and immediately upon the earliest to occur of (a) the valid termination of the Agreement in accordance with Section 12.1 of the Agreement (other than clause (e) thereof), (b) the Closing and the funding of the DS Commitment hereunder, at which time the obligations hereunder shall be discharged, (c) commencement by Bidco, ONE, FF, Washington Family Holdings, the Company or any of their respective Affiliates of a lawsuit or other proceeding asserting, in writing, directly or indirectly, any claim for payment under or in respect of the Agreement, this letter agreement, or the transactions contemplated hereby or thereby from DS or his Affiliates, in each case other than a lawsuit or other proceeding against DS pursuant to the Agreement or DS’s Rollover Agreement or to specifically enforce the provisions of this letter agreement, the Agreement, DS’s Rollover Agreement or any other contractual agreement between or among the foregoing parties as permitted herein or therein; and (d) written notice by DS of a determination to terminate the ECL in accordance with Section 10.4 of the Agreement in the case of a Revised Proposal. Upon a valid termination of this letter agreement, neither DS nor any of his Affiliates shall have any further obligations or liabilities hereunder.

 

Subject to the terms of the Agreement, DS may assign all or a portion of his obligation to fund the DS Commitment to an Affiliate with the consent of each of ONE, FF and Washington Family Holdings except no consent shall be required in the case of assignment to Teton Capital, LLC; provided, however, that any such assignment shall not relieve DS of his obligations under this letter agreement. The DS Commitment shall not be assignable by Bidco without the prior written consent of DS, and the granting of such consent in a given instance shall be solely in the discretion of DS and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment. Except as expressly provided herein, this letter agreement shall not be assignable without the consent of the parties hereto, each of ONE, FF and Washington Family Holdings and the Company.

 

 

This letter agreement shall be binding solely on the parties hereto and their successors and permitted assignees and inure solely to the benefit of Bidco, and nothing set forth in this letter agreement shall be construed to confer upon or give to any Person other than Bidco any benefits, rights or remedies under or by reason of, or any rights to enforce or cause Bidco to enforce, the DS Commitment or any other provisions of this letter agreement; provided, however, that, subject to the terms and conditions set forth in Section 2.1 of the Agreement and in the Merger Agreement, each of ONE, FF, Washington Family Holdings and the Company is hereby made a third-party beneficiary of the rights granted to Bidco hereby for the purpose of obtaining specific performance of Bidco’s right to cause the DS Commitment to be funded pursuant to the terms and conditions hereunder, and for no other purpose (including, without limitation, any claim for monetary damages hereunder). DS’s creditors shall have no right to enforce this letter agreement or to cause Bidco to enforce this letter agreement.

 

Notwithstanding anything to the contrary that may be expressed or implied in this letter agreement or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that DS or any of his successors or permitted assignees may be a partnership, limited liability company or similar domestic or foreign entity, Bidco by its acceptance of the benefits of this letter agreement, covenants, agrees and acknowledges that no person other than DS and his successors and permitted assignees shall have any obligation hereunder and that it has no rights of recovery against, and no recourse hereunder or under this letter agreement, the Merger Agreement or any documents or instruments delivered in connection herewith or therewith shall be had against, any former, current or future director, officer, agent, Affiliate, manager or employee of DS (or any of his successors or assignees), against any former, current or future general or limited partner, manager, equityholder or member of DS (or any of his successors or assignees) or any Affiliate thereof or against any former, current or future director, officer, agent, employee, Affiliate, assignee, general or limited partner, equityholder, manager or member of any of the foregoing (each, other than DS and his successors and permitted assignees, a “DS Affiliate”), whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of DS against the DS Affiliates, by the enforcement of any assessment or by any legal or equitable proceeding, or any DS Affiliate by virtue of any statute, regulation or other applicable law, or otherwise; provided that (and notwithstanding anything to the contrary provided herein or in any document or instrument delivered contemporaneously herewith), (A) nothing herein shall limit the rights of ONE, FF and Washington Family Holdings against DS under the Agreement pursuant to the terms and conditions of such Agreement or DS’s Rollover Agreement pursuant to the terms and conditions of such Rollover Agreement, and (B) nothing herein shall limit the rights of ONE, FF, Washington Family Holdings and the Company against DS (or with respect to any assignee hereof) as a third-party beneficiary under this letter agreement pursuant to the terms and conditions hereof. The parties hereto expressly agree and acknowledge that no personal liability whatsoever shall attach to, be imposed on, or otherwise be incurred by any DS Affiliate, as such, for any obligations of DS under this letter agreement or the transactions contemplated hereby, under 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.

 

Bidco further agrees that neither it nor any of its Affiliates shall have any right of recovery against DS or any DS Affiliate, whether by piercing of the corporate veil, by a claim on behalf of Bidco or any of its equityholders against DS or any DS Affiliate, or otherwise, except for Bidco’s right to be capitalized by DS with the DS Commitment under and to the extent provided in this letter agreement and DS’s Rollover Agreement and subject to the terms and conditions hereof and thereof. Bidco hereby covenants and agrees that it shall not institute, and shall cause its Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Agreement or the Merger Agreement against DS or any DS Affiliate, except for claims against DS under this letter agreement, the Agreement or DS’s Rollover Agreement.

 

 

This letter agreement shall be treated as confidential and is being provided to Bidco, ONE, FF, Washington Family Holdings and the Company solely in connection with the Agreement and the Merger Agreement. This letter agreement may not be used, circulated, quoted or otherwise referred to in any document (other than the Agreement, the Merger Agreement, the ONE ECL and the Washington Family Holdings ECL), except with the written consent of DS; provided, that Bidco or the Company or any other Investor may disclose this letter agreement (a) to its officers, directors, advisors and other authorized representatives, (b) to the extent required by applicable Law or the applicable rules of any national securities exchange, including, without limitation, in connection with routine filings, submissions and any other similar documentation required or customary to comply with U.S. Securities and Exchange Commission filing requirements or in connection with any securities regulatory agency filings relating to the transactions contemplated under the Merger Agreement; provided that Bidco and the Company will, to the extent reasonably practicable and permitted by applicable law, notify DS at least twenty four (24) hours before making any such disclosure and consider in good faith any comments made by DS to prevent or restrict disclosure, or on the content of the disclosure, and (c) in connection with the enforcement by Bidco and/or the Company of their respective rights hereunder or under the Merger Agreement or DS’s Rollover Agreement.

 

This letter agreement and all claims hereunder shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware without giving effect to any laws, provisions or rules (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 and without regard to any borrowing statute that would result in the application of the statutes of limitations or repose of any other jurisdiction. In furtherance of the foregoing, the laws of the State of Delaware will control even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive or procedural law of some other jurisdiction would ordinarily or necessarily apply.

 

Each of the parties hereto hereby irrevocably submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware sitting in Wilmington, Delaware (or if such court declines to exercise such jurisdiction in any appropriate state or federal court in the State of Delaware sitting in Wilmington, Delaware) over all claims hereunder and the parties hereto hereby irrevocably agree that all claims hereunder shall be heard and determined in such court. The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection that they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. The parties hereto agree that a final judgment with respect to any such claim hereunder shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.

 

 

Each of the parties hereto hereby consents to process being served by any party to this letter agreement in any legal proceeding by the delivery of a copy thereof (other than by e-mail) in accordance with the provisions of the immediately succeeding paragraph.

 

All notices, requests, instruction, demands and other communications under this letter agreement shall be in writing and shall be deemed given (i) when delivered personally by hand (with written confirmation of receipt), (ii) on the date sent by e-mail if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (iii) when received by the addressee if sent by nationally recognized overnight delivery service (with written confirmation of receipt), in each case, at the following addresses (or to such other address as a party may have specified by notice given to the other party pursuant to this provision):

 

If to DS, to:

 

David L Sokol

2400 Del Lago Drive

Fort Lauderdale, FL 33316

Attention:	David L. Sokol
Email:	[email protected]

 

with a copy to (which shall not constitute notice):

 

Honigman LLP

2290 First National Building

600 Woodward Avenue

Detroit, MI 48226

Attention:	Tracy Larsen; Jeff Kuras; Barbara Kaye
Email:	[email protected]; [email protected]; [email protected]

 

If to Bidco, to:

 

Poseidon Acquisition Corp.

Attention:	David L. Sokol
Email:	[email protected]

 

with a copy to (which shall not constitute notice):

 

K&L Gates LLP

925 Fourth Avenue, Suite 2900

Seattle, WA 98104

Attention:	Stephan Coonrod and Christopher H. Cunningham
Email:	[email protected] and [email protected]

 

 

If to Bidco, to:

 

Poseidon Acquisition Corp.

Email:

[email protected]

 

with a copy to (which shall not constitute notice):

 

Honigman LLP

2290 First National Building

600 Woodward Avenue

Detroit, MI 48226

Attention:	Tracy Larsen; Jeff Kuras; Barbara Kaye
Email:	[email protected]; [email protected]; [email protected]

 

and with a copy to (which shall not constitute notice):

 

Latham & Watkins LLP

1271 Avenue of the Americas

New York, NY 10020

Attention:	Christopher G. Cross; James C. Gorton; David Kurzweil
Email:	[email protected]; [email protected]; [email protected]

 

and with a copy to (which shall not constitute notice):

 

Torys LLP

114 Avenue of the Americas, 23rd Floor

New York, NY 10036

Attention:	Michael Horwitz
Email:	[email protected]

 

EACH PARTY HERETO ACKNOWLEDGES THAT ANY ACTION OR LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY, ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, THE SPECIFIED DOCUMENTS OR ANY CLAIM HEREUNDER IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION, LEGAL PROCEEDING OR CLAIM HEREUNDER. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) IT MAKES THIS WAIVER VOLUNTARILY; AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

 

 

This letter agreement, the Agreement and DS’s Rollover Agreement contain the complete agreement between DS and Bidco with respect to the subject matter hereof and thereof, and supersede all prior and contemporaneous agreements, discussions, negotiations, correspondence, communications, undertakings and understandings among the parties with respect to such subject matter.

 

This letter agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto and, following the execution of the Merger Agreement, the Company; provided, however, that DS may amend this letter agreement to reflect any assignment as expressly permitted herein.

 

This letter agreement may be executed in one or more counterparts including by facsimile or other means of electronic transmission, such as by electronic mail in “.pdf” form, each of which shall be deemed to be an original copy of this letter agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

If any provision of this letter agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction: (a) the validity, legality and enforceability under the law of that jurisdiction of any other provision; and (b) the validity, legality and enforceability under the law of any other jurisdiction of that or any other provision, in each case shall not be affected or impaired in any way; provided, however, that this letter agreement may not be enforced without giving effect to the second paragraph, the third paragraph, the fourth paragraph, and the seventh paragraph and to the cap on the DS Commitment.

 

DS hereby represents and warrants with respect to itself to Bidco that (a) it has all legal entity power and authority to execute, deliver, and perform the obligations under this letter agreement, (b) the execution, delivery, and performance of this letter agreement by DS has been duly and validly authorized and approved by all necessary legal entity action by it, (c) this letter agreement has been duly and validly executed and delivered by it and constitutes a valid and legally binding obligation of it, enforceable against it in accordance with the terms of this letter agreement, except as enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights or by general equity principles, (d) the execution, delivery and performance of this letter agreement by DS does not violate or result in a breach or default under (i) the organizational or governance documents of DS, (ii) any material document or agreement to which DS is a party or otherwise binding on DS, or (iii) subject to obtaining any necessary regulatory approvals for the consummation of the funding of the DS Commitment pursuant to this letter agreement and the Closing, any applicable Law unless the failure to receive such regulatory approval would not adversely affect the ability of DS to consummate the funding of the DS Commitment, and (e) it has the financial capacity, and will maintain such financial capacity through the termination hereof, to pay and perform its obligations under this letter agreement, and all funds necessary for DS to fulfill the DS Commitment shall be available to DS for so long as this letter agreement shall remain in effect.

 

[Remainder of page intentionally left blank]

 

 

 

Very truly yours,

 

DAVID L. SOKOL

 

By:

/s/ David L. Sokol

Name: David L. Sokol

 

Accepted and Acknowledged as of

the date first written above:

 

POSEIDON ACQUISITION CORP.

 

By:

/s/ David L. Sokol

Name:	David L. Sokol
Title:	Chairman

 

 

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