1
EXHIBIT 99(b)
EXECUTION COPY
STOCK PURCHASE AGREEMENT
between
GATX RAIL CORPORATION
("RAIL"),
GATX TERMINALS HOLDING CORPORATION
("HOLDINGS")
and
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
("PURCHASER")
November 30, 2000
2
TABLE OF CONTENTS
PAGE
ARTICLE 1 PURCHASE AND SALE..........................................................................1
1.1 Purchase and Sale of Stock.....................................................................1
1.2 Payment at Closing.............................................................................1
1.3 Determination of Working Capital Adjustment and Debt Adjustment................................1
1.4 Purchase Price Allocation......................................................................4
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER...................................................4
2.1 Authority of Seller............................................................................4
2.2 Capitalization; Seller's Ownership of Terminals Companies......................................5
2.3 Organization...................................................................................5
2.4 Consents and Approvals.........................................................................5
2.5 Personal Property..............................................................................6
2.6 Real Property..................................................................................6
2.7 Leased Real Property...........................................................................6
2.8 Intellectual Property..........................................................................6
2.9 Financial Statements...........................................................................7
2.10 No Material Adverse Change.....................................................................7
2.11 Tax Matters....................................................................................8
2.12 Laws and Regulations; Litigation...............................................................9
2.13 ERISA and Related Matters.....................................................................10
2.14 Material Contracts............................................................................12
2.15 Brokers, Etc..................................................................................13
2.16 Insurance.....................................................................................13
2.17 Employees.....................................................................................13
2.18 Environmental.................................................................................14
2.19 Environmental Permits.........................................................................15
2.20 Affiliate Transactions........................................................................15
2.21 Licenses; Permits.............................................................................15
2.22 Hedging.......................................................................................15
2.23 Bankruptcy....................................................................................15
2.24 Other Disclosures.............................................................................15
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER...............................................15
3.1 Authority of Purchaser........................................................................15
3.2 Brokers, Etc..................................................................................16
3.3 Securities....................................................................................16
3.4 Financing.....................................................................................16
3.5 Independent Investigation.....................................................................16
ARTICLE 4 COVENANTS OF SELLER.......................................................................17
4.1 Corporate and Other Actions...................................................................17
4.2 Full Access...................................................................................17
4.3 Ordinary Course of Business...................................................................17
4.4 HSR Filings...................................................................................18
4.5 [Intentionally omitted].......................................................................18
4.6 Registration Statements and Periodic Reports..................................................18
4.7 Intercompany Accounts and Contracts...........................................................18
4.8 Conversion into Single-Member Limited Liability Companies.....................................18
4.9 No Solicitations..............................................................................19
4.10 Confidentiality...............................................................................19
4.11 Insurance.....................................................................................19
4.12 Excluded Companies............................................................................20
4.13 No Solicitation of Transferred Employees......................................................20
4.14 Consents......................................................................................20
4.15 Argo Lease....................................................................................21
ARTICLE 5 COVENANTS OF PURCHASER....................................................................21
5.1 Corporate and Other Actions...................................................................21
5.2 Confidentiality...............................................................................21
5.3 Employees and Benefit Plans...................................................................21
5.4 Full Access...................................................................................26
5.5 HSR Filings...................................................................................26
5.6 Directors' and Officers' Indemnification......................................................27
5.7 Use of GATX Name..............................................................................27
5.8 Assumption of Obligations.....................................................................27
4
TABLE OF CONTENTS
(CONTINUED)
PAGE
5.9 Services to Terminal de Productos Especializados S.A. de C.V.; Other
Services......................................................................................27
5.10 License Agreement with KTSB...................................................................27
5.11 Agreement with Nippon GATX Company Limited....................................................27
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER..........................................28
6.1 Warranties True as of Both Present Date and Closing Date......................................28
6.2 Compliance with Agreements and Covenants......................................................28
6.3 Competition Law Approvals.....................................................................28
6.4 Injunctions; Consents.........................................................................28
6.5 Deliveries by Seller..........................................................................29
ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.............................................29
7.1 Warranties True as of Both Present Date and Closing Date......................................29
7.2 Compliance with Agreements and Covenants......................................................29
7.3 Competition Law Approvals.....................................................................29
7.4 Injunctions; Consents.........................................................................29
7.5 Deliveries by Purchaser.......................................................................29
ARTICLE 8 CLOSING...................................................................................30
8.1 Closing.......................................................................................30
8.2 Seller's Deliveries...........................................................................30
8.3 Purchaser's Deliveries........................................................................30
8.4 Termination...................................................................................31
ARTICLE 9 SURVIVAL AND INDEMNIFICATION..............................................................31
9.1 Survival......................................................................................31
9.2 Indemnification by Seller.....................................................................31
9.3 Indemnification by Purchaser..................................................................32
9.4 Limitations on Liability of Seller............................................................34
9.5 Claims........................................................................................35
9.6 Notice of Third Party Claims; Assumption of Defense...........................................35
9.7 Settlement or Compromise......................................................................36
9.8 Time Limits...................................................................................36
5
TABLE OF CONTENTS
(CONTINUED)
PAGE
9.9 Net Losses and Subrogation....................................................................36
9.10 Purchase Price Adjustments....................................................................37
9.11 Schedule 9.2(a) Matters.......................................................................37
9.12 Limitations on Liability of Purchaser.........................................................38
ARTICLE 10 TAX MATTERS...............................................................................38
10.1 Liability for Taxes...........................................................................38
10.2 Tax Returns...................................................................................39
10.3 Cooperation on Tax Matters....................................................................41
10.4 Carrybacks and Refunds........................................................................42
10.5 Survival......................................................................................42
10.6 Conflict......................................................................................42
ARTICLE 11 MISCELLANEOUS.............................................................................42
11.1 Expenses......................................................................................42
11.2 Amendment.....................................................................................42
11.3 Notices.......................................................................................42
11.4 Waivers.......................................................................................44
11.5 Counterparts..................................................................................44
11.6 Headings......................................................................................44
11.7 Applicable Law................................................................................44
11.8 Assignment....................................................................................44
11.9 No Third Party Beneficiaries..................................................................44
11.10 Forum; Waiver of Jury Trial...................................................................44
11.11 Schedules.....................................................................................45
11.12 Incorporation.................................................................................45
11.13 Complete Agreement............................................................................45
11.14 Disclaimer....................................................................................45
11.15 Knowledge Defined.............................................................................45
11.16 Public Announcements..........................................................................46
11.17 Defined Terms.................................................................................46
11.18 Currency......................................................................................46
6
TABLE OF CONTENTS
(CONTINUED)
PAGE
11.19 Terminals Companies...........................................................................46
APPENDIX I 1
DEFINITIONS 1
Acquisition Proposal....................................................................................1
Adjustments.............................................................................................1
Affiliate...............................................................................................1
Aggregate Non-Current Balance Sheet Liability...........................................................1
Agreement...............................................................................................1
Arbitrating Accounting Firm.............................................................................1
Asset Allocation........................................................................................1
Bargaining Agreements...................................................................................1
Benefit Plans...........................................................................................1
Bonus Plans.............................................................................................1
CERCLA..................................................................................................2
Closing.................................................................................................2
Closing Balance Sheet...................................................................................2
Closing Date............................................................................................2
Code....................................................................................................2
Company Competing Transaction...........................................................................2
Confidentiality Agreement...............................................................................2
Contracts...............................................................................................2
Debt Adjustment.........................................................................................2
Designated Approvals....................................................................................2
DOJ.....................................................................................................2
Environmental Laws......................................................................................2
Environmental Permits...................................................................................2
Environmental Warranty..................................................................................2
ERISA...................................................................................................3
ERISA Affiliate.........................................................................................3
Excluded Companies......................................................................................3
7
TABLE OF CONTENTS
(CONTINUED)
PAGE
FTC.....................................................................................................3
GAAP....................................................................................................3
GATX Non-Qualified Plan.................................................................................3
GATX Qualified Plans....................................................................................3
Governmental Authority..................................................................................3
GPS.....................................................................................................3
Hazardous Substances....................................................................................3
Holdings................................................................................................3
HSR Act.................................................................................................3
Indemnified Person......................................................................................3
Indemnifying Person.....................................................................................4
Insurance Policies......................................................................................4
Insurance Premium.......................................................................................4
Insurer.................................................................................................4
Intellectual Property...................................................................................4
IRS.....................................................................................................4
Judicial Action.........................................................................................4
Law.....................................................................................................4
Leased Real Property....................................................................................4
Lien....................................................................................................4
Limited Partnership Agreement...........................................................................4
Loss or Losses..........................................................................................4
Maintenance Capital Expenditure.........................................................................5
Material Adverse Effect.................................................................................5
Material Contracts......................................................................................5
Parent Group............................................................................................5
Permitted Liens.........................................................................................5
Person..................................................................................................5
Pre-Closing Date Periods................................................................................5
Prime Interest Rate.....................................................................................5
8
TABLE OF CONTENTS
(CONTINUED)
PAGE
Purchase Price..........................................................................................5
Purchaser...............................................................................................5
Purchaser Indemnified Parties...........................................................................5
Purchaser Plans.........................................................................................5
Purchaser Savings Plan..................................................................................5
Purchaser Welfare Benefits Plan.........................................................................5
Rail....................................................................................................5
Real Property...........................................................................................6
Regulations.............................................................................................6
Related Agreement.......................................................................................6
Release.................................................................................................6
Schedule 9.2(a) Matters.................................................................................6
Securities Act..........................................................................................6
Seller..................................................................................................6
Seller Indemnified Parties..............................................................................6
Seller Pension Plan.....................................................................................6
Seller Savings Plan.....................................................................................6
Seller's Tax............................................................................................6
Seller Welfare Benefit Plans............................................................................6
September 30th Balance Sheet............................................................................6
Stock...................................................................................................6
Subsidiary Plan.........................................................................................6
Tax or Taxes............................................................................................6
Tax Items...............................................................................................7
Tax Losses..............................................................................................7
Tax Period or Taxable Period............................................................................7
Tax Return..............................................................................................7
Tax Statute of Limitations Date.........................................................................7
Tax Warranty............................................................................................7
Terminals...............................................................................................7
9
TABLE OF CONTENTS
(CONTINUED)
PAGE
Terminals Companies Plans...............................................................................7
Terminals Facilities....................................................................................7
Terminals Financial Statements..........................................................................7
Terminals Companies September 30, 2000 Financial Statements.............................................7
Title and Authorization Warranty........................................................................7
TPE.....................................................................................................7
Transaction Taxes.......................................................................................7
Treasury Regulations....................................................................................8
WARN....................................................................................................8
Working Capital.........................................................................................8
Working Capital Adjustment..............................................................................8
10
EXHIBITS
Exhibit A - Confidentiality Agreement
Exhibit B - Services Agreement
SCHEDULES
1.4 Asset Allocation
2.2 Capitalization; Ownership
2.3 Organization
2.4 Consents and Approvals
2.5 Liens on Personal Property
2.6 Real Property
2.7 Real Property Leases
2.8 Intellectual Property
2.9(a) Financial Statements
2.9(b) Terminals Companies September 30, 2000 Financial
Statements
2.9(d) Bonds, Deposits, Financial Assurance and Insurance
Coverage
2.10 No Material Adverse Change
2.11 Tax Matters
2.12(a) No Violations of Law
2.12(b) Litigation
2.13 ERISA Matters
2.14 Material Contracts
2.16 Insurance Policies
2.17 Employee Matters
2.18 Environmental Matters
2.19 Environmental Permits
2.20 Affiliate Transactions
2.21 Licenses, Permits and Authorizations
2.24 Banks
3.4 Purchaser's Financial Resources
4.3 Ordinary Course
4.7 Intercompany Payables and Agreements
4.13 Environmental Insurance
5.8 Parental Guarantees
6.4(b) Additional Consents Required for Closing
9.2(a) Special Indemnification Matters
11.15(a) Knowledge of Seller
11.15(b) Knowledge of Purchaser
11
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into on the 30th day of
November, 2000, between GATX RAIL CORPORATION, a corporation organized under the
laws of New York ("Rail"), GATX TERMINALS HOLDING CORPORATION, a Delaware
corporation and a wholly-owned subsidiary of Rail ("Holdings" and, together with
Rail, "Seller") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P., a Delaware limited
partnership ("Purchaser").
WHEREAS, subject to the terms and conditions set forth herein, Seller
desires to sell, assign and transfer to Purchaser, and Purchaser desires to
purchase and take assignment and delivery from Seller of, all of the issued and
outstanding shares of capital stock of GATX Terminals Corporation, a Delaware
corporation, which shall be converted into a single-member limited liability
company prior to the Closing Date ("Terminals").
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, Purchaser and Seller agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase and Sale of Stock. Subject to the terms and conditions
hereof, at the Closing (as defined below), Seller shall sell, assign and deliver
to Purchaser, and Purchaser shall purchase and take assignment and delivery of,
all of the issued and outstanding shares of capital stock, such capital stock
having been converted into a limited liability company membership interest prior
to the Closing Date, of Terminals (the "Stock").
1.2 Payment at Closing. Subject to the terms and conditions hereof, at
the closing of the transactions contemplated hereby (the "Closing"), Purchaser
shall pay, by wire transfer of same-day funds, the amount of $1,169,000,000 less
the Aggregate Non-Current Balance Sheet Liability reflected on the September
30th Balance Sheet to be delivered to Purchaser prior to Closing pursuant to
Section 2.9(b) hereof (the "Purchase Price"). The Purchase Price shall be
payable to Seller to such accounts as Seller may direct in advance of Closing.
The Purchase Price is subject to adjustment pursuant to Section 1.3 below.
1.3 Determination of Working Capital Adjustment and Debt Adjustment.
(a) Closing Balance Sheet. In order to determine the Working Capital Adjustment
and the Debt Adjustment, Seller shall prepare and deliver to Purchaser, within
sixty (60) days following the Closing Date, the Closing Balance Sheet. The
Closing Balance Sheet shall be prepared by Seller at its own expense with the
assistance of personnel of the Terminals Companies as may be reasonably
requested by Seller. The Closing Balance Sheet shall be prepared using
accounting principles and significant estimates in accordance with GAAP and
consistent with those used in the preparation of the September 30th Balance
Sheet and shall take into account the Adjustments. During and after preparation
of the Closing Balance Sheet, Seller shall permit Purchaser's accountants
reasonable access (i) to Seller's accountants and (ii) to review all work papers
and other pertinent information requested from time to time and used in
connection with the preparation of the Closing Balance Sheet.
12
(b) Working Capital Adjustment. If Working Capital as shown on the Closing
Balance Sheet is less than the Working Capital as shown on the September 30th
Balance Sheet, then Seller shall remit to Purchaser the Working Capital
Adjustment. Seller shall remit the undisputed portion of such amount, together
with interest thereon at the prime interest rate as reported in The Wall Street
Journal on the Closing Date (the "Prime Interest Rate") plus 2%, calculated on
an annual basis (based on a 365-day year) but prorated for the actual number of
days for which interest is to be paid (i.e., the number of days from the Closing
Date to the date of payment), by wire transfer of same-day funds, not later than
the fifteenth (15th) business day after delivery to Purchaser of the Closing
Balance Sheet, to an account that Purchaser shall designate to Seller. Seller
shall retain the disputed portion of such amount until the dispute is resolved
pursuant to the procedures set forth in Section 1.3(d) below. If Working Capital
as shown on the Closing Balance Sheet is greater than the Working Capital as
shown on the September 30th Balance Sheet, then Purchaser shall remit to Seller
the Working Capital Adjustment. Purchaser shall remit the undisputed portion of
such amount, together with interest thereon at the Prime Interest Rate plus 2%
calculated on an annual basis (based on a 365-day year) but prorated for the
actual number of days for which interest is to be paid (i.e., the number of days
from the Closing Date to the date of payment), by wire transfer of same-day
funds, not later than the fifteenth (15th) business day after delivery to
Purchaser of the Closing Balance Sheet, to an account that Seller shall
designate to Purchaser. Purchaser shall retain the disputed portion of such
amount until the dispute is resolved pursuant to Section 1.3(d) below.
(c) Debt Adjustment. If the Aggregate Non-Current Balance Sheet Liability as
shown on the Closing Balance Sheet is greater than the Aggregate Non-Current
Balance Sheet Liability as shown on the September 30th Balance Sheet, then
Seller shall remit to Purchaser the Debt Adjustment. Seller shall remit the
undisputed portion of such amount, together with interest thereon at the Prime
Interest Rate plus 2%, calculated on an annual basis (based on a 365-day year)
but prorated for the actual number of days for which interest is to be paid
(i.e., the number of days from the Closing Date to the date of payment), by wire
transfer of same-day funds, not later than the fifteenth (15th) business day
after delivery to Purchaser of the Closing Balance Sheet, to an account that
Purchaser shall designate to Seller. Seller shall retain the disputed portion of
such amount until the dispute is resolved pursuant to the procedures set forth
in Section 1.3(d) below. If the Aggregate Non-Current Balance Sheet Liability as
shown on the Closing Balance Sheet is less than the Aggregate Non-Current
Balance Sheet Liability as shown on the September 30th Balance Sheet, then
Purchaser shall remit to Seller the Debt Adjustment. Purchaser shall remit the
undisputed portion of such amount, together with interest thereon at the Prime
Interest Rate plus 2% calculated on an annual basis (based on a 365-day year)
but prorated for the actual number of days for which interest is to be paid
(i.e., the number of days from the Closing Date to the date of payment), by wire
transfer of same-day funds, not later than fifteenth (15th) business day after
delivery to Purchaser of the Closing Balance Sheet, to an account that Seller
shall designate to Purchaser. Purchaser shall retain the disputed portion of
such amount until the dispute is resolved pursuant to the procedures set forth
in Section 1.3(d).
(d) Disputes. If Purchaser notifies Seller in writing within fifteen (15)
business days after receipt of the Closing Balance Sheet that Purchaser
disagrees with the determination of Working Capital or Aggregate Non-Current
Balance Sheet Liability, in each case as shown on the Closing Balance Sheet, for
the reason that the determination does not meet the criteria set forth in
Section 2.9(b) ("Dispute Notice") and such Dispute Notice (i) states with
reasonable specificity the basis
2
13
for such disagreement and quantifies such dispute and (ii) with respect to
Working Capital, seeks an adjustment to the Working Capital reflected on the
Closing Balance Sheet of at least $500,000, Seller and Purchaser shall attempt
in good faith to resolve such dispute as soon as possible. If the parties are
unable to resolve such dispute within fifteen (15) days after Seller's receipt
of such Dispute Notice, Seller and Purchaser shall as soon as reasonably
practicable thereafter jointly submit such dispute for arbitration to an
independent certified public accounting firm mutually acceptable to Seller and
Purchaser (or, if the parties cannot agree within one week on such an
arbitrating accounting firm, to the Chicago office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (the
"Arbitrating Accounting Firm")) for the purpose of resolving the dispute set
forth in such Dispute Notice. The review performed by the Arbitrating Accounting
Firm shall be limited to the unresolved issues identified in the Dispute Notice,
which issues shall relate only to the accounting determinations specified in the
first sentence of this Section 1.3(d). The Arbitrating Accounting Firm shall
review and decide the issue or issues that are the subject of such dispute as
specified in such Dispute Notice within thirty (30) days after such submission.
Seller and Purchaser hereby agree, and the Arbitrating Accounting Firm shall be
directed, that the Closing Balance Sheet estimates for reserves included in the
Aggregate Non-Current Balance Sheet Liability shall be conclusive unless it is
established that, based solely on information available at the Closing, there
was no reasonable basis for the change (if any) in such estimates from September
30, 2000 to Closing. The decision of the Arbitrating Accounting Firm shall be
set forth in writing and delivered to Seller and Purchaser. The decision of the
Arbitrating Accounting Firm shall be final and binding on Seller and Purchaser,
and the Working Capital and/or the Aggregate Non-Current Balance Sheet Liability
reflected on the Closing Balance Sheet, as adjusted to reflect the determination
of the Arbitrating Accounting Firm, shall constitute the final and binding
"Working Capital" for purposes of Section 1.3(b) and/or "Aggregate Non-Current
Balance Sheet Liability" for purposes of Section 1.3(c) (as applicable);
provided, that the Working Capital reflected on the Closing Balance Sheet shall
not be adjusted unless and until the decision of the Arbitrating Accounting Firm
would result in an adjustment to the Working Capital shown on the Closing
Balance Sheet submitted by Seller of at least $500,000. If the final and binding
Working Capital and/or Aggregate Non-Current Balance Sheet Liability as
determined by the Arbitrating Accounting Firm would result in a refund of
certain of the amounts paid by Purchaser to Seller with respect to the delivery
of the Closing Balance Sheet (the "Initial Payment"), then, not later than the
third (3rd) business day after delivery of the decision of the Arbitrating
Accounting Firm, Seller shall remit such refund, together with interest thereon
at the Prime Interest Rate plus 2% calculated on an annual basis (based on a
365-day year) but prorated for the actual number of days for which interest is
to be paid (i.e., the number of days from the date of Initial Payment to the
date of payment), by wire transfer of same-day funds to an account that
Purchaser shall designate to Seller. If the final and binding Working Capital
and/or Aggregate Non-Current Balance Sheet Liability as determined by the
Arbitrating Accounting Firm would result in an additional payment from Purchaser
to Seller, then, not later than the third (3rd) business day after delivery of
the decision of the Arbitrating Accounting Firm, Purchaser shall remit such
additional amount, together with interest thereon at the Prime Interest Rate
plus 2%, calculated on an annual basis (based on a 365-day year) but prorated
for the actual number of days for which interest is to be paid (i.e., the number
of days from the Closing Date to the date of payment), by wire transfer of
same-day funds to an account that Seller shall designate to Purchaser. The fees
and costs of the Arbitrating Accounting Firm shall be shared equally by
Purchaser and Seller.
3
14
(e) Adjustments Not Subject to Limitation. Any amounts paid to Purchaser as a
result of adjustments under this Section 1.3 shall not be subject to, or impact
in any way, any limitations, including without limitation any basket or cap,
contained in this Agreement. The Purchase Price shall be deemed adjusted
downwards or upwards, as the case may be, by the amounts, if any, remitted by
Seller or Purchaser under this Section 1.3. Notwithstanding anything to the
contrary contained in this Agreement, if and to the extent Seller pays a Working
Capital Adjustment or a Debt Adjustment to Purchaser, then Seller shall have no
additional liability to Purchaser whatsoever (pursuant to Section 2.9 or Section
9.2 hereof or otherwise) with respect to the Working Capital shortfall or the
incremental Aggregate Non-Current Balance Sheet Liability that resulted in a
reduction in the Purchase Price pursuant to this Section 1.3.
1.4 Purchase Price Allocation. Seller and Purchaser agree to allocate
the Purchase Price for the Terminals Companies' assets as set forth on Schedule
1.4 (the "Asset Allocation"). The Asset Allocation shall be revised after all
adjustments, if any, have been made to the Purchase Price in accordance with
Section 1.3. The Asset Allocation shall be completed in the manner required by
Section 1060 of the Code. Seller and Purchaser further agree to comply with all
filing, notice and reporting requirements described in Section 1060 of the Code
and the Treasury Regulations promulgated thereunder, including the timely
preparation and filing of Form 8594 based on the Asset Allocation. Seller and
Purchaser hereby agree that they will report the federal, state, foreign and
other tax consequences of the transactions contemplated by this Agreement in a
manner consistent with the Asset Allocation.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
Holdings and Rail jointly and severally represent and warrant to
Purchaser as follows (it being understood that, notwithstanding anything to the
contrary contained herein, Holdings and Rail are not making any representations
or warranties as to whether the conversion (whether by state law conversion or
merger) of the Terminals Companies into limited liability companies pursuant to
Section 4.8 hereof would result in a violation or breach of any of the matters
set forth in (i) the third sentence of Section 2.3, (ii) the first sentence of
Section 2.4, (iii) clause (b) of the second sentence of Section 2.7, (iv)
Section 2.9(c), (v) Section 2.10, (vi) Section 2.12(a) (solely as it relates to
foreign qualifications), (vii) Section 2.12(b), (viii) Section 2.13, (ix)
Section 2.14(c), (x) Section 2.16, (xi) Section 2.18(b), (xii) Section 2.19 or
(xiii) Section 2.21):
2.1 Authority of Seller. Each of Rail and Holdings is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of New York and Delaware (as applicable) and has all requisite corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated herein. Terminals is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and upon conversion into a single-member limited liability company shall be a
duly organized and validly existing limited liability company in good standing
under the laws of the State of Delaware. The execution, delivery and performance
of this Agreement by Rail and Holdings has been duly authorized by all necessary
corporate action. This Agreement has been duly and validly executed and
delivered by Rail and Holdings and constitutes the legal, valid and binding
obligation of Rail and Holdings, enforceable against Rail and Holdings in
accordance with its
4
15
terms, except as may be limited by (a) applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws from time to time in effect which
affect creditors' rights generally or (b) legal and equitable limitations on the
availability of specific remedies.
2.2 Capitalization; Seller's Ownership of Terminals Companies.
(a) Schedule 2.2 sets forth each Person, other than the Excluded Companies, of
which Terminals, directly or indirectly, (i) owns all of the capital stock and
(ii) upon conversion of such Persons into single-member limited liability
companies prior to Closing, will own all of the membership interests (all such
Persons, both prior to and after having been converted into single-member
limited liability companies, together with Terminals, being referred to as the
"Terminals Companies" and each individually as a "Terminals Company"). The
authorized, issued and outstanding capital stock of each of the Terminals
Companies is as set forth on Schedule 2.2 and the issued and outstanding capital
stock of each of the Terminals Companies is duly authorized, fully paid and
nonassessable. Upon conversion into single-member limited liability companies
and at Closing, the membership interests of each of the Terminals Companies will
be fully paid and nonassessable, owned beneficially and of record by Holdings,
with respect to Terminals, and, directly or indirectly, by Terminals, with
respect to the Terminals Companies other than Terminals.
(b) There are no outstanding options, rights, warrants, contracts or commitments
for the issuance or sale by Seller or any of the Terminals Companies of, or any
securities of any of the Terminals Companies convertible into or exchangeable
for, any shares of capital stock of any of the Terminals Companies (whether
treasury or issued and outstanding), and there is no agreement or arrangement
not yet fully performed which would result in the creation of any of the
foregoing.
(c) Holdings owns and has, and at the Closing shall transfer to Purchaser, good
and valid title to the Stock, free and clear of all Liens. The Stock constitutes
all the issued and outstanding capital stock of Terminals.
2.3 Organization. Each of the Terminals Companies is a corporation or
other business entity validly existing under the laws of the jurisdiction of its
organization. Schedule 2.3 sets forth the jurisdictions in which each of the
Terminals Companies is incorporated and is duly licensed or qualified to do
business as a foreign corporation. Each of the Terminals Companies has all
requisite corporate power to own, lease and operate its properties and to carry
on its business as now being conducted, is duly qualified to do business and is
in good standing in each jurisdiction where the conduct of its business or
ownership of its properties requires such qualification, except where the
failure to qualify would not reasonably be expected to have a Material Adverse
Effect.
2.4 Consents and Approvals. The execution and delivery of this
Agreement by Rail and Holdings does not, and the consummation of the
transactions contemplated by Section 1.1 hereof and performance by Rail and
Holdings of their obligations hereunder, assuming the receipt of the consents,
approvals and waivers listed on Schedule 2.4, will not: (a) violate or
constitute a default under any term, condition or provision of (i) the charter,
by-laws or analogous organizational documents of Rail, Holdings or any of the
Terminals Companies; or (ii)
5
16
any Contract, lease, collective bargaining agreement (or agreements relating
thereto), instrument, mortgage, permit, Governmental authorization, license or
franchise to which Rail, Holdings or any of the Terminals Companies is a party
or by which any of their respective properties are bound; (b) result in the
creation of any Lien upon any of the Terminals Companies' respective stock,
securities, membership interests or properties or give to others any interest or
right in any of the Terminals Companies' respective stock, securities,
membership interests or properties, including, but not limited to, a right to
purchase any of such stock, securities, membership interests or properties; (c)
require any consent, Governmental authorization or approval under any Law or any
judicial, administrative or arbitration order, award, judgment, writ, injunction
or decree applicable to Rail, Holdings or any of the Terminals Companies; or (d)
result in the suspension, modification, revocation or nonrenewal of any license,
permit or Governmental authorization issued or granted to any of the Terminals
Companies by Governmental Authorities that are necessary for the conduct of the
business of the Terminals Companies, except, with respect of each of clauses
(a)(ii)-(d), for matters that are not reasonably expected to have a Material
Adverse Effect. Except as set forth on Schedule 2.4, the failure of any Person
not a party hereto to authorize or approve this Agreement will not give any
Person the right to enjoin, rescind or otherwise prevent or impede the sale of
the Stock to Purchaser in accordance with the terms of this Agreement or to
reach in any fashion the Stock in the hands of the Purchaser following the
Closing or to obtain damages from, or any other judicial relief against,
Purchaser as a result of the transactions carried out in accordance with the
provisions of this Agreement.
2.5 Personal Property. The Terminals Companies have good and valid
title to their material respective personal properties reflected in the
Terminals Companies September 30, 2000 Financial Statements or acquired after
the date thereof (except for properties sold or otherwise disposed of since the
date thereof in the ordinary course of business) free and clear of all Liens,
except for Permitted Liens.
2.6 Real Property. Schedule 2.6 contains a true and correct list of all
Real Property that is owned by the Terminals Companies. Except as set forth on
Schedule 2.6, to Seller's knowledge, the Real Property is owned by a Terminals
Company free and clear of all Liens, except for: (a) Liens reflected in the
Terminals Companies September 30, 2000 Financial Statements, (b) Liens arising
by operation of Law for taxes not yet due and payable, (c) imperfections or
irregularities of title and other Liens that would not reasonably be expected to
have a Material Adverse Effect and (d) zoning, planning and other restrictions
of record.
2.7 Leased Real Property. Schedule 2.7 contains a true and correct list
of all Leased Real Property that is held by the Terminals Companies under valid
and subsisting leases. Except as set forth on Schedule 2.7, (a) during the
twelve (12) months prior to the date hereof, none of the Terminals Companies has
received any notice of default under any lease pertaining to any Leased Real
Property and (b) to Seller's knowledge, there are no uncured defaults under any
lease without regard to when notice may have been given that would give the
lessor the right to terminate the lease, in each that would reasonably be
expected to result in a Material Adverse Effect.
2.8 Intellectual Property. Set forth on Schedule 2.8 is a list of all
Intellectual Property owned by any of the Terminals Companies. The Terminals
Companies own all right, title and interest in and to, or have a valid right to
use, all of their Intellectual Property. Except as set
6
17
forth on Schedule 2.8, and other than those matters that would not reasonably be
expected to have a Material Adverse Effect, (a) no claim adverse to the
interests of the Terminals Companies in the Intellectual Property is pending or,
to Seller's knowledge, has been threatened; (b) none of the Terminals Companies
has received notice of any infringement or other violation of such party's right
in any of the Intellectual Property; and (c) no litigation is pending or, to
Seller's knowledge, threatened wherein the Intellectual Property is alleged to
infringe or violate the right of any third party.
2.9 Financial Statements.
(a) The Terminals Financial Statements, as set forth in Schedule 2.9(a), fairly
present, in accordance with GAAP consistently applied (except as noted therein),
the consolidated financial condition of Terminals as and at the date thereof and
the results of its operations and cash flows for the periods covered thereby.
(b) The Terminals Companies September 30, 2000 Financial Statements, as set
forth in Schedule 2.9(b), (i) were derived from the books and records of
Terminals, (ii) fairly present in all material respects, in accordance with GAAP
consistently applied (except for the absence of footnotes and other normal
presentation items and subject to the Adjustments), the consolidated financial
condition of the Terminals Companies as and at the date thereof and the results
of its operations and cash flows for the periods covered thereby, (iii) are
unaudited, (iv) include all adjustments consistent with GAAP (which such
adjustments shall consist only of normal recurring items which management
reasonably considers necessary for a fair statement of the consolidated
financial position for the applicable period) and (v) reflect the Adjustments.
At least 15 days prior to the Closing, Seller shall deliver to Purchaser the
audited September 30th Balance Sheet which such audited September 30th Balance
Sheet shall be prepared in a manner consistent with items (i), (ii) (solely as
it relates to the financial condition of the Terminals Companies), (iv) and (v)
above. From and after the delivery of the audited September 30th Balance Sheet
pursuant to the preceding sentence, any reference in this Agreement to the
September 30th Balance Sheet shall be deemed to be a reference to the audited
September 30th Balance Sheet. The parties acknowledge and agree that differences
between the Terminals Companies September 30, 2000 Financial Statements and the
audited September 30th Balance Sheet shall not give rise to an indemnification
obligation of Seller to Purchaser pursuant to Section 9.2 hereof on account of a
breach of this Section 2.9(b).
(c) To Seller's knowledge, no event has occurred which either entitles, or
would, upon notice or lapse of time or both, entitle the holder of any
indebtedness for borrowed money affecting the Terminals Companies to accelerate,
or which does accelerate, the maturity of any indebtedness affecting the
Terminals Companies.
(d) Schedule 2.9(d) contains a true and complete list and description of all
bonds, deposits, financial assurance requirements and insurance coverage
required to be submitted to regulatory authorities for the continued ownership
and operation of the assets and properties of the Terminals Companies and for
their continued business operations.
2.10 No Material Adverse Change. Except (i) as set forth on Schedule
2.10 and (ii) for the transfer of the Excluded Companies, since September 30,
2000 (and giving effect to the
7
18
matters described in Section 1.1) there has not occurred: (a) any change in the
consolidated financial condition or results of operations of the Terminals
Companies that constitutes a Material Adverse Effect; (b) any loss of or damage
to any of the properties of the Terminals Companies which is reasonably
anticipated to cost more than $1,000,000 to repair or replace; (c) any Lien
placed on any of the properties of the Terminals Companies, except as would be
permitted by Section 2.5 or Section 2.6; (d) any amendment to or change in the
charter, by-laws or analogous organizational documents of any of the Terminals
Companies (other than pursuant to the terms of this Agreement); (e) any change
in the accounting methods or practices used by any of the Terminals Companies;
(f) any material strike or work stoppage or material slowdown, or any known
threat of the foregoing, by employees of any of the Terminals Companies; or (g)
any change in the assets or liabilities of the Terminals Companies that
constitutes a Material Adverse Effect.
2.11 Tax Matters. Except as set forth in Schedule 2.11:
(a) all Tax Returns required to be filed by or with respect to each of the
Terminals Companies and any affiliated, consolidated, combined, unitary or
similar group of which any of the Terminals Companies is or was a member have
been duly filed on a timely basis (taking into account all extensions of due
dates) and such Tax Returns are true, complete and correct except for such
matters that would not have a Material Adverse Effect;
(b) all Taxes owed by any of the Terminals Companies and any affiliated,
consolidated, combined, unitary or similar group of which any of the Terminals
Companies is or was a member which are or have become due have been timely paid
in full (whether or not shown on or reportable on such Tax Returns), except
where the failure to pay such Taxes would not have a Material Adverse Effect,
and except for the portion of such Taxes being contested in good faith;
(c) the amount of the Terminals Companies' liability for unpaid Taxes for all
periods ending on or before the date of the Terminals Companies September 30,
2000 Financial Statements does not exceed the amount of the current liability
accruals for Taxes (excluding reserves for deferred Taxes) reflected on the
Terminals Companies September 30, 2000 Financial Statements and the amount of
the Terminals Companies' liability for unpaid Taxes for all periods ending on or
before the Closing Date will not exceed the amount of the current liability
accruals for Taxes (excluding reserves for deferred Taxes) as such accruals are
reflected on the Closing Balance Sheet;
(d) there have been no waivers or extensions of any statute of limitations filed
with any Governmental Authority responsible for assessing or collecting Taxes in
respect to any Tax Return of, or which includes, the Terminals Companies;
(e) all material Taxes which the Terminals Companies have been required to
collect or withhold have been duly collected or withheld and, to the extent
required when due, have been or will be duly paid to the proper Governmental
Authority;
(f) there is no material action, suit, proceeding, investigation, audit, claim
or assessment pending or to Seller's knowledge proposed with respect to any
liability for Tax or with respect to any Tax Return for which the Terminals
Companies could be liable;
8
19
(g) all Tax sharing agreements to which any of the Terminals Companies are
subject will terminate as of the Closing Date; no payments under any such
agreements will become due by any of the Terminals Companies upon such
termination at Closing or thereafter; and the Terminals Companies are not party
to any similar arrangement with any other party and have no current contractual
obligation to indemnify any other person or entity with respect to Tax;
(h) no Governmental Authority in a jurisdiction where any of the Terminals
Companies or any affiliated, consolidated, combined, unitary or similar group of
which any of the Terminals Companies is or was a member have not filed Tax
Returns has made any material claim, assertion or threat that the Terminals
Companies are or may be subject to taxation by such jurisdiction, except for
such claims, assertions or threats that would not reasonably be expected to have
a Material Adverse Effect;
(i) no Terminals Company has been a member of an affiliated group filing
consolidated Tax Returns other than a group the common parent of which is GATX
Corporation;
(j) none of the property of the Terminals Companies is subject to a safe-harbor
lease (pursuant to section 168(f)(8) of the Internal Revenue Code of 1954 as in
effect after the Economic Recovery Tax Act of 1981 and before the Tax Reform Act
of 1986) or is "tax-exempt use property" (within the meaning of section 168(h)
of the Code) or "tax-exempt bond financed property" (within the meaning of
section 168(g)(5)) of the Code; and
(k) no Terminals Company is required to make any adjustment under Section 481(a)
of the Code by reason of a change in accounting method or otherwise.
2.12 Laws and Regulations; Litigation.
(a) Except as set forth on Schedule 2.12(a), to Seller's knowledge, none of the
Terminals Companies is in violation of or in default under any Law (other than
any Environmental Law as matters related to Environmental Laws are addressed by
Sections 2.18 and 2.19 hereof) or any order of any court or federal, state,
municipal or Governmental Authority applicable to them that would reasonably be
expected to have a Material Adverse Effect.
(b) Except as set forth on Schedule 2.12(b), there is no demand, claim, suit,
fine, investigation, charge, complaint, grievance, action, arbitration or legal,
administrative or other proceeding pending or, to Seller's knowledge, threatened
against or affecting the Terminals Companies or any of their respective
officers, directors, employees, assets, properties or businesses and relating to
the businesses or properties of the Terminals Companies (other than matters
related to Environmental Laws as matters related to Environmental Laws are
addressed by Sections 2.18 and 2.19 hereof) that would reasonably be expected to
have a Material Adverse Effect.
(c) With respect to the Terminals Companies that own or operate regulated common
carriers, (i) such Terminals Companies have obtained from Governmental
Authorities requisite approval of all tariffs and rates (which such tariffs and
rates are currently in effect) and (ii) to Seller's knowledge, there is no
complaint, protest or investigation pending or threatened with respect to such
Terminals Companies' tariffs or rates.
9
20
2.13 ERISA and Related Matters.
(a) Set forth on Schedule 2.13 is a list of all Benefit Plans that are
maintained, contributed to or participated in by any of the Terminals Companies
or with respect to which any of the Terminals Companies is a party (the
"Terminals Companies Plans") on the date hereof. Any Terminals Companies Plan
which covers only employees or former employees of the Terminals Companies (or
any of them) is indicated on Schedule 2.13 and is referred to herein as a
"Subsidiary Plan."
(b) With respect to all Terminals Companies Plans (other than a multiemployer
plan as defined in Section 3(37) of ERISA), Seller has supplied to Purchaser a
true and correct copy of each such plan and, to the extent applicable, all
applicable related trusts and amendments thereto, the most recent summary plan
descriptions and favorable determination letters and the annual reports most
recently filed for the Subsidiary Plans.
(c) All the Terminals Companies Plans comply in form and operation in all
material respects with their terms and all applicable requirements of Law;
provided, however, that as to multiemployer plans, this representation is made
as to Seller's knowledge.
(d) All Terminals Companies Plans which are employee pension benefit plans as
defined in Section 3(2) of ERISA and which are intended to comply with Section
401(a) of the Code are the subject of a favorable determination letter from the
IRS, and nothing has occurred since the date of the last such determination
letter which resulted or is likely to result in the revocation of such
determination; provided, however, that as to any such plans that are
multiemployer plans, this representation is made as to Seller's knowledge.
(e) To Seller's knowledge, there have been no "prohibited transactions" (as
described in Section 406 of ERISA or Section 4975 of the Code) with respect to
any of the Terminals Companies Plans.
(f) Except as set forth on Schedule 2.13, all accrued obligations of the
Terminals Companies, whether arising by operation of Law, by contract or by past
custom, for compensation, including bonuses, to its officers, directors,
employees, consultants or agents, for Taxes and other obligations to any
Governmental Authority payable by any of the Terminals Companies in connection
with such compensation, and for payments with respect to any Terminals Companies
Plan, have been paid, or adequate accruals for such obligations have been and
are being made by the Terminals Companies, and will be reflected on the Closing
Balance Sheet.
(g) There are no actions, suits or claims pending or, to Seller's knowledge,
threatened, other than routine claims for benefits and qualified domestic
relations, medical or child support orders involving any Terminals Companies
Plans; provided, however, that with respect to any multiemployer plan, this
representation is made to Seller's knowledge.
(h) Except as set forth on Schedule 2.13, none of the Terminals Companies Plans
are multiemployer plans (as defined in Section 3(37) of ERISA). To Seller's
knowledge based on the information described in Schedule 2.13, the withdrawal
liability with respect to the multiemployer plans listed on Schedule 2.13 is as
set forth in that schedule.
10
21
(i) No Terminals Company has received any claim or demand for withdrawal
liability (within the meaning of Section 4201 of ERISA) from any multiemployer
plan, the liability for which has not been satisfied.
(j) No termination or partial termination of any existing Terminals Companies
Plan which is an employee pension benefit plan as defined in Section 3(2) of
ERISA has occurred, nor has a notice of intent to terminate any such existing
Terminals Companies Plan been issued by Seller or any of the Terminals
Companies. The Pension Benefit Guaranty Corporation has not instituted, and is
not expected to institute, any proceedings to terminate any Terminals Companies
Plan.
(k) No Terminals Companies Plan that is a pension plan (with the meaning of
Section 3(2) of ERISA) and that is not a multiemployer plan has suffered any
"accumulated funding deficiency," within the meaning of Section 302 of ERISA and
Section 412 of the Code, whether or not waived, and if any such Terminals
Companies Plan were terminated on the Closing Date, none of the Terminals
Companies would have any liability to any participants or beneficiaries as a
result of the termination except to the extent of funds set aside for such
purpose or reflected as reserved for such purpose on the Closing Balance Sheet.
(l) No termination liability to the Pension Benefit Guaranty has been or is
expected to be incurred if any Terminals Companies Plan were terminated on the
Closing Date. There has been no "reportable event," as defined in Section 4043
of ERISA, with respect to any Terminals Companies Plan that is not a
multiemployer plan, for which notice has not been waived.
(m) None of the Terminals Companies has received notice that it is liable for
any funding taxes under Sections 413(b)(6) or 4971 of the Code on account of an
accumulated funding deficiency of any multiemployer plan to which any Terminals
Company or ERISA Affiliate has contributed or is required to contribute.
(n) Except as specifically described on Schedule 2.13 (including Schedule
2.13(a)) or as required by Section 411(d)(3) of the Code, the consummation of
the transactions contemplated hereby will not accelerate or increase any
liability under any Terminals Companies Plan because of an acceleration or
increase of any of the rights or benefits to which employees may be entitled
thereunder.
(o) No breach or violation of or default under any Terminals Companies Plan
which is not sponsored or maintained by any of the Terminals Companies (other
than a multiemployer plan) will subject Purchaser or any of the Terminals
Companies to any Taxes, Liens, encumbrances, penalties or any other liabilities.
(p) Except as specifically described on Schedule 2.13 (including Schedule
2.13(a)) or as required by law, no Terminals Companies Plan provides health or
welfare benefits for any retired or former employee, and no Terminals Company is
obligated to provide health or welfare benefits to any active employee following
such employee's retirement or other termination of service. To the extent that
such obligations exist, such obligations (except with respect to (i) health and
life insurance applicable to employees who terminate employment other than on
account of retirement and (ii) severance benefits) are fully funded or
adequately reserved for by
11
22
the Terminals Companies. Other than pursuant to a collective bargaining
agreement, no Terminals Company has adopted or distributed a formal plan, policy
or program representing, promising or affirming any employees or former
employees the duration of retiree health or welfare benefits.
2.14 Material Contracts.
(a) Schedule 2.14 contains a complete and accurate list of all Contracts of the
following categories to which any of the Terminals Companies is a party or by
which any of them is bound as of the date of this Agreement (the "Material
Contracts"):
(i) (1) continuing contracts for the purchase of materials,
supplies, or equipment (other than purchase contracts and orders for inventory
in the ordinary course of business consistent with past practice), (2)
management, service, consulting, or other similar types of contracts or (3)
advertising agreements or arrangements, in any such case that have an aggregate
committed future liability to any Person (other than the applicable Terminals
Company) in excess of $1,000,000 and that is not terminable by the applicable
Terminals Company by notice of not more than 60 days for a cost of less than
$1,000,000;
(ii) material Intellectual Property licenses (including any
license or other agreement under which the applicable Terminals Company is
licensee or licensor of any such Intellectual Property);
(iii) agreements under which any of the Terminals Companies
has directly or indirectly guaranteed indebtedness of any Person in the
principal amount individually in excess of $1,000,000;
(iv) agreements under which any of the Terminals Companies is
obligated to advance, loan, extend credit, or make a capital contribution to, or
other investment in, any Person (other than any of the Terminals Companies), in
any such case that, individually, is in excess of $1,000,000;
(v) all Contracts, leases or easements involving annual rental
payments or receipts in excess of $1,000,000;
(vi) all promissory notes, loans, agreements, indentures,
evidences of indebtedness or other instruments providing for the lending of
money, whether as borrower or lender, in excess of $1,000,000 and all related
security agreements or similar agreements associated therewith;
(vii) Contracts which limit the freedom of any of the
Terminals Companies to compete with any Person or operate at any location,
including, without limitation, any preferential rights granted to third parties
to purchase or lease such location;
(viii) any Contract for a pending or completed acquisition or
disposition (by merger or otherwise) of all or substantially all of the assets
(other than inventory) or capital stock of any Person (including, without
limitation, the Terminals Companies) under which any of the
12
23
Terminals Companies currently has (or in the case of a pending acquisition or
disposition may have) any liability;
(ix) Contracts between the Terminals Companies, on one hand,
and Seller or any Affiliate of Seller (or any current or former officer,
director or employee of Seller or any Affiliate of Seller) on the other hand;
(x) all Contracts pertaining to the operation or maintenance
of any and all facilities of any Terminals Company under which such Terminals
Company has a committed aggregate liability of at least $1,000,000; and
(xi) to the extent not otherwise listed on Schedule 2.14, any
Contract under which any of the Terminals Companies is obligated to indemnify or
otherwise make whole any Person for any obligation or liability in liquidated
amount in excess of $1,000,000.
(b) True copies of the Material Contracts, and accurate written summaries of the
oral Material Contracts, identified on Schedule 2.14 have been made available to
Purchaser.
(c) Except as set forth on Schedule 2.14, to Seller's knowledge, no party to a
Material Contract identified in Schedule 2.14 is in default under, or in breach
or violation of (and no event has occurred which, with notice or the lapse of
time or both, would constitute a default under, or a breach or violation or
lapse of) any term, condition or provision of such Material Contract except for
defaults, breaches, violations or events which, individually or in the
aggregate, would not have a Material Adverse Effect.
2.15 Brokers, Etc. Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and ▇.▇. ▇▇▇▇▇▇
& Co. Incorporated, the fees and expenses of which shall be the responsibility
of Seller, no broker or investment banker acting on behalf of Seller or any of
the Terminals Companies or under the authority of any of them is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
directly or indirectly from Seller or any of the Terminals Companies in
connection with any of the transactions contemplated herein.
2.16 Insurance. To Seller's knowledge, the Insurance Policies are valid
and binding in accordance with their terms, are in full force and effect and
insure against risks and liabilities to an extent and in a manner customary in
the industry in which the Terminals Companies operate. To Seller's knowledge, no
Terminals Company is in default with respect to any provision contained in any
Insurance Policy or has failed to give any notice of or present any claim
reasonably anticipated to exceed Terminals' self-insurance retention under any
Insurance Policy in due and timely fashion.
2.17 Employees. Except as set forth on Schedule 2.17, (a) no Terminals
Company is a party to a collective bargaining agreement, currently negotiating
any such agreement, or, to Seller's knowledge, the subject of any proceeding or
organizing activity seeking to compel it to bargain with any labor unions or the
subject of any pending or threatened arbitration, strike, labor dispute, work
slowdown or work stoppage; and (b) no charge of discrimination, grievance,
unfair labor practice, consent decree, conciliation agreement, settlement
agreement or other complaint against any Terminals Company is currently pending
or, to Seller's knowledge, threatened before the National Labor Relations Board,
the Equal Employment Opportunity
13
24
Commission or any other Governmental Authority. Seller has provided Purchaser
with access to true and correct copies of (i) any written material relating to
the material personnel policies of any of the Terminals Companies and (ii) any
agreement of any employee of the Terminals Companies who is paid or entitled to
payment by any Terminals Company in an amount exceeding, in the aggregate,
$100,000 for fiscal year 1999, or expected to exceed, in the aggregate, $100,000
for fiscal year 2000.
2.18 Environmental.
(a) To Seller's knowledge, except as set forth on Schedule 2.18, there is no
uncured violation of any Environmental Law that (i) has given rise to a current
obligation of any of the Terminals Companies to undertake a "Response Action" or
a "Removal Action" (as such terms are defined pursuant to CERCLA) and (ii) would
reasonably be expected to have a Material Adverse Effect at any site or facility
currently owned or operated by any of the Terminals Companies. Except as set
forth on Schedule 2.18 and other than those matters that would not reasonably be
expected to have a Material Adverse Effect, during the last five years, to
Seller's knowledge, there have been no notices or complaints received by any of
the Terminals Companies alleging a violation of an Environmental Law at any
current or former site or facility that was at any time owned or operated by the
Terminals Companies.
(b) To Seller's knowledge, the Terminals Companies have timely filed all reports
and notifications, and have generated and maintained all records and data
concerning their operations as are required under applicable Environmental Laws,
except where the failure to so file, generate or maintain would not reasonably
be expected to have a Material Adverse Effect.
(c) Except as set forth on Schedule 2.18, there is no civil, criminal or
administrative action, suit, demand, claim, notice of violation, investigation
or proceeding pending or, to Seller's knowledge, threatened against the
Terminals Companies in connection with the conduct of their business relating to
or arising under any Environmental Laws.
(d) Except as disclosed on Schedule 2.18, since January 1, 1990, the Terminals
Companies have not owned, leased or operated a site that (i) pursuant to CERCLA
or any similar state or foreign law, has been placed or is proposed to be placed
by any Governmental Authority on the "National Priorities List" or similar state
or foreign list, as in effect as of the Closing Date, or (ii) is involved with
any voluntary cleanup program sponsored by a Governmental Authority.
(e) Except as disclosed on Schedule 2.18 and except as would not reasonably be
expected to have a Material Adverse Effect, since January 1, 1990, none of the
Terminals Companies has been identified by any Governmental Authority as a
potentially responsible party under CERCLA or any similar state or foreign law
with respect to any site, and no Hazardous Substances generated, transported or
disposed of by or on behalf of the Terminals Companies have been found at any
site where a Person has made written demand on any Terminals Company to conduct
or pay for a remedial investigation, removal or other response action pursuant
to any Environmental Law.
(f) Except as set forth on Schedule 2.18 and except as would not reasonably be
expected to have a Material Adverse Effect, there is no provision of any lease,
purchase agreement, sale
14
25
agreement, joint venture or any similar agreement by or under which any of the
Terminals Companies is currently bound to conduct or pay for a remedial
investigation, removal or other response action pursuant to any Environmental
Law.
2.19 Environmental Permits. To Seller's knowledge, except as set forth
on Schedule 2.19, the Terminals Companies are in possession of all permits,
licenses, registrations and government authorizations ("Environmental Permits")
required under Environmental Laws for the current operation of their business
and are in compliance with the requirements and limitations included in such
Environmental Permits, except where the failure to so possess or comply would
not reasonably be expected to have a Material Adverse Effect.
2.20 Affiliate Transactions. Set forth on Schedule 2.20 is a list of
each written agreement pursuant to which (a) Rail, Holdings or any of their
Affiliates provides services to any of the Terminals Companies or (b) any of the
Terminals Companies provides services to Rail, Holdings or any of their
Affiliates.
2.21 Licenses; Permits. Set forth on Schedule 2.21 is a true and
complete list of all material licenses, permits and authorizations issued or
granted to any of the Terminals Companies by Governmental Authorities that are
necessary for the conduct of the business of the Terminals Companies.
2.22 Hedging. No Terminals Company engages in any futures or options
trading or is a party to any price swaps, ▇▇▇▇▇▇, futures or similar
instruments.
2.23 Bankruptcy. There are no bankruptcy, reorganization or arrangement
proceedings pending against, being contemplated by, or to Seller's knowledge,
threatened against Rail, Holdings or the Terminals Companies.
2.24 Other Disclosures. Set forth on Schedule 2.24 is a list of each
bank in which any of the Terminals Companies has an account, and the identity of
each such account, and each bank in which any of the Terminals Companies has a
safe deposit box, together with the names of all persons authorized to draw
thereon and have access thereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
3.1 Authority of Purchaser. Purchaser is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with all requisite limited partnership power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. Purchaser has all requisite limited partnership power to enter into
this Agreement and to carry out its obligations under this Agreement. The
execution, delivery and performance of this Agreement by Purchaser has been duly
authorized by all necessary limited partnership action. This Agreement has been
duly and validly executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms, except as may be limited by (a) applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws from time to
time
15
26
in effect that affect creditors' rights generally or (b) legal and equitable
limitations on the availability of specific remedies. The execution and delivery
of this Agreement by Purchaser does not, and the consummation of the
transactions contemplated hereby and performance by Purchaser of its obligations
hereunder will not, violate or conflict with any provision of: (i) the
certificate of limited partnership or the Limited Partnership Agreement of
Purchaser; (ii) any material agreement, lease, instrument, mortgage, license or
franchise to which Purchaser is a party or by which any of its properties is
bound; or (iii) any Law applicable to Purchaser and which violation or conflict
would reasonably be expected to have a material adverse effect on the financial
condition of Purchaser. The failure of any Person not a party hereto to
authorize or approve this Agreement or the transactions contemplated hereby will
not give any Person the right to enjoin, rescind or otherwise prevent or impede
the purchase of the Stock by Purchaser in accordance with the terms of this
Agreement or to obtain damages from, or any other judicial relief against,
Seller or Purchaser as a result of any transactions carried out in accordance
with the provisions of this Agreement.
3.2 Brokers, Etc. Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., the fees and expenses
of which shall be the responsibility of Purchaser, no broker or investment
banker acting on behalf of Purchaser is or will be entitled to any broker's or
finder's fee or any other commission or similar fee directly or indirectly in
connection with any of the transactions contemplated hereby.
3.3 Securities. Purchaser hereby acknowledges that the Stock is not
registered under the Securities Act or registered or qualified for sale under
any applicable securities Law of the United States or any state or province of
the United States and cannot be resold without registration thereunder or
exemption therefrom. Purchaser is acquiring such Stock for its own account as
principal, for investment and has no present intention to dispose of the Stock,
in whole or in part, or of any interest in the Stock to any other person.
Purchaser has sufficient knowledge and experience in financial and business
matters to enable it to evaluate the risks of investment in such Stock and has
the ability to bear the economic risks of such investment.
3.4 Financing. Purchaser has all necessary financial resources (which
resources are listed on Schedule 3.4) available in connection with the
acquisition of the Stock to consummate the transactions contemplated hereby. The
financial statements of Purchaser as of December 31, 1999 and for the period
then ended, which have been previously delivered to Seller, fairly present the
financial condition and results of operations of Purchaser as of the date and
for the period then ended in accordance with GAAP.
3.5 Independent Investigation. In making the decision to enter into
this Agreement and the Related Agreements and to consummate the transactions
contemplated hereby and thereby, other than reliance on the representations,
warranties, covenants, obligations and indemnities of Seller set forth in this
Agreement and in Seller's Related Agreements, Purchaser has performed its own
independent investigation, analysis and evaluation of the Terminals Companies
(including Purchaser's own estimate and appraisal of the value of the business,
financial condition, assets, operations and prospects of the Terminals
Companies). Purchaser confirms to Seller that Purchaser is sophisticated and
knowledgeable in the business of the Terminals Companies and is capable of
evaluating the matters set forth above.
16
27
ARTICLE 4
COVENANTS OF SELLER
Seller hereby covenants to and agrees with Purchaser as follows:
4.1 Corporate and Other Actions. Prior to the Closing Date, Seller
shall use all commercially reasonable efforts to fulfill its obligations under
this Agreement and to consummate the transactions contemplated hereby.
4.2 Full Access. Prior to the Closing Date, Seller shall cause the
Terminals Companies to afford Purchaser and its counsel, accountants and other
authorized representatives, with reasonable prior notice, reasonable access
during normal business hours (when accompanied by an authorized representative
of the Terminals Companies) to the respective premises, properties, personnel,
books and records of the Terminals Companies and any other assets or information
that Purchaser reasonably deems necessary and shall furnish Purchaser with such
financial and operating data concerning the Terminals Companies as Purchaser
shall reasonably request; provided, however, that Purchaser shall not be
entitled to the access contemplated by this Section 4.2 until such time as
Purchaser delivers to Seller a duly executed amended Confidentiality Agreement
as required by Section 5.2 hereof.
4.3 Ordinary Course of Business. Prior to the Closing Date, Seller
shall cause the Terminals Companies to be operated in the ordinary course of
business; provided, however, that Seller shall not be obligated to cause the
Terminals Companies to make any capital expenditures prior to Closing other than
Maintenance Capital Expenditures in the ordinary course of business. In
addition, prior to the Closing Date, other than as contemplated by this
Agreement (including, without limitation, Section 4.8 hereof), Seller shall not
permit any of the Terminals Companies to do any of the following without the
prior written consent of Purchaser (which shall not be unreasonably withheld):
(a) make any change in its authorized capital stock, certificate of
incorporation or by-laws; (b) other than with respect to intercompany
transactions, pay any stock dividends or make any reclassification with respect
to its outstanding stock; (c) issue or sell any shares of its capital stock or
securities convertible into or exchangeable for its capital stock; (d) purchase
or otherwise acquire for consideration any outstanding shares of its capital
stock; (e) other than with respect to (i) the Excluded Companies, (ii) the
Thorofare Terminal and (iii) certain real property fronting on ▇▇▇▇▇▇ Avenue in
Argo, Illinois, sell, transfer, convey or otherwise dispose of, or encumber with
any Lien (other than Permitted Liens), any asset except in the ordinary course
of business and consistent with past practice (provided that, other than with
respect to the sale or transfer of the Thorofare Terminal, the Excluded
Companies and the real property located in Argo, Illinois, the cash or other
proceeds received shall be retained in the respective Terminals Company and
shall not be distributed to Seller or its Affiliates); (f) make any material
changes in its accounting principles or practices; (g) other than with respect
to the transfer from Terminals to Rail (or an Affiliate of Rail) of any
indebtedness owing to Terminals from TPE or any other Excluded Company, enter
into any material transaction with Seller or any of its Affiliates; (h) make any
borrowings from parties other than Affiliates or incur any debt or lease
financing from parties other than Affiliates (other than borrowings in an
aggregate principal amount outstanding at any time not in excess of $15,000,000
and debt or lease financing incurred in the ordinary course of business and
consistent with past practice), or assume, guarantee, endorse (except for the
negotiation or collection of negotiable instruments in
17
28
the ordinary course of business and consistent with past practice) or otherwise
become liable for any material obligations of any other Person; (i) make any
loans, advances or capital contributions to, or investments in, any other Person
or (j) (i) except as set forth on Schedule 4.3, increase the compensation of any
officer or key employee other than in the ordinary course of business or as
required by any agreement or by-law in effect on the date of this Agreement,
(ii) adopt any new employee benefit plan or materially amend any existing
employee benefit plan other than to reflect changes in Law and plan
administration or other than in the ordinary course of business and consistent
with past practices or (iii) enter into any new employment or consulting
agreement for which the aggregate consideration to be paid is greater than
$100,000. Prior to the Closing Date, Seller shall, as soon as reasonably
practicable, provide written notice to Purchaser in the event any of the
Terminals Companies has made or is planning to make a capital expenditure that
is more than $500,000.
4.4 HSR Filings. As promptly as practicable, Seller shall (in
cooperation with Purchaser) (i) make all filings and submissions with the
Department of Justice ("DOJ") and the Federal Trade Commission ("FTC") under the
HSR Act and any applicable state or foreign laws or regulations as may be
reasonably required to be made with all other Governmental Authorities in
connection with the transactions contemplated by this Agreement, requesting
early termination of any waiting period thereunder, (ii) respond promptly to any
inquiries from the DOJ, the FTC or other Governmental Authorities in connection
with such filings and (iii) comply in all material respects with the
requirements of the HSR Act. Subject to regulatory constraints, Seller and
Purchaser shall each keep the other party fully advised with respect to any
requests from or communications with the DOJ, FTC or other Governmental
Authority and shall consult with the other party with respect to all filings and
responses thereto.
4.5 [Intentionally omitted].
4.6 Registration Statements and Periodic Reports. In connection with
the preparation and filing of any registration statement or periodic report of
Purchaser or its Affiliates pursuant to any rule or regulation promulgated under
the Securities Act and the Securities Exchange Act of 1934, as amended,
including, but not limited to, Regulation S-X, Seller shall use commercially
reasonable efforts to cooperate with Purchaser and its accountants in satisfying
Purchaser's financial reporting requirements with respect to this Agreement and
as otherwise may be required from time to time.
4.7 Intercompany Accounts and Contracts. Except as set forth on
Schedule 4.7, prior to or on the Closing Date (a) the Terminals Companies shall
pay or otherwise extinguish the outstanding payables owed to Seller or any of
its Affiliates and (b) Seller and any of its Affiliates shall pay or otherwise
extinguish the outstanding payables owed to the Terminals Companies. All
intercompany Contracts between Seller and/or its Affiliates, on the one hand,
and the Terminals Companies, on the other hand, shall terminate as of the
Closing with full releases of liability and obligation, except for those
Contracts listed on Schedule 4.7.
4.8 Conversion into Single-Member Limited Liability Companies. Prior to
the Closing Date, the Terminals Companies shall have been converted into
single-member limited liability companies (by state law conversions in the case
of Terminals Companies that are Delaware corporations and by mergers in the case
of Rahway River Land Company and
18
29
Southwest Florida Pipeline Company) with all related documents and instruments
to be in form and substance mutually satisfactory to Seller and Purchaser,
provided, however, that Seller shall not be deemed to have breached its
obligations under this Section 4.8 if the conversion of any Terminals Company
into a limited liability company (whether by state law conversion or by merger)
is or has been enjoined or restrained by a court of competent jurisdiction. Upon
the conversion of the Terminals Companies into single-member limited liability
companies and thereafter, neither Seller nor any of its Affiliates will make an
election or take any action resulting in any Terminals Company being treated as
anything other than an entity disregarded from its owner for federal income tax
purposes, and Seller and its Affiliates will file all federal income and
relevant state income Tax Returns in a manner consistent with the Terminals
Companies disregarded entity status. All references in this Agreement to the
Terminals Companies and their capital stock shall thereafter refer to the
Terminals Companies as limited liability companies and to their membership
interests, respectively.
4.9 No Solicitations. Seller will not take, nor will it permit the
Terminals Companies or any Affiliate of Seller (or authorize or permit any
investment banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of Seller, the Terminals Companies or any
such Affiliate) to take, directly or indirectly, any action to (i) solicit,
encourage, negotiate, assist or otherwise facilitate (including by furnishing
confidential information with respect to the Terminals Companies or permitting
access to the assets and properties and books and records of the Terminals
Companies) any offer or inquiry from any Person concerning an Acquisition
Proposal ("Company Competing Transaction") or (ii) enter into any agreement,
arrangement or understanding (a) which binds Seller, the Terminals Companies or
their Affiliates to a Company Competing Transaction or (b) requires them to
abandon, terminate or fail to consummate the transactions contemplated by this
Agreement. Seller, the Terminals Companies and their Affiliates will immediately
cease all existing activities, discussions and negotiations with any parties
conducted heretofore with respect to any Company Competing Transaction.
4.10 Confidentiality. After the Closing Date, Seller shall not,
directly or indirectly, use or provide to, and shall not permit any Affiliate,
directly or indirectly, to use or provide to any other Person any material
nonpublic information concerning the business or operations (financial or other)
of the Terminals Companies, except (a) as on the advice of counsel is required
in governmental filings or judicial, administrative or arbitration proceedings
and (b) as may be necessary or desirable for the sale or transfer of any
Excluded Company (so long as the recipient of such information is bound to a
commercially reasonable confidentiality agreement with respect to such
information).
4.11 Insurance. (a) From the date hereof to the Closing Date, Seller
shall cause the Terminals Companies to maintain in full force and effect all of
their respective Insurance Policies now in effect or renewals thereof covering
their assets, operations and employees. Upon the conversion or merger of each
Terminals Company into a limited liability company as required by Section 4.8
hereof, Seller shall notify the insurance carriers for such Terminals Company of
the change in the identity of such company as a result of such conversion or
merger.
(b) Before or after the Closing. Seller shall provide to Purchaser access to
(and, at Purchaser's expense, copies of) the insurance policies and related
records of Seller and its
19
30
Affiliates that relate to the business and properties now or previously owned,
leased and/or operated by any Terminals Company (including business or property
included in the General American Transportation Corporation prior to July 1,
1975) in order for Purchaser to assess whether claims for the benefit of any
Terminals Company can be made under any of the applicable insurance policies. If
Purchaser determines that any such claims can be made under any of the insurance
policies for the benefit of any of the Terminals Companies, then, at Purchaser's
expense, Seller shall (i) use commercially reasonable efforts to cooperate with
Purchaser and any Terminals Company in preparing and documenting any such claim
and (ii) on behalf of any Terminals Company, make, file and use commercially
reasonable efforts to pursue any such claim; provided, however, that (x) Seller
or its Affiliates will not be required to make, file or pursue those claims
which, if paid by the insurer, would result in a retroactive premium adjustment,
payment obligation (including self-insured retention or deductible) or other
charge-back to Seller or its Affiliates unless Purchaser agrees in writing to
reimburse Seller for such adjustment or charge-back, (y) in settling any such
claim with an insurer, Seller and its Affiliates will not be required to release
any rights, and Purchaser shall not cause the release of any rights, to make
claims under the insurance policy for matters that are not related to the claim
that is being settled for the Terminals Company and (z) Seller or its Affiliates
will not be required to commence litigation or to make any expenditure or
payment unless Purchaser agrees to fully indemnify Seller and its Affiliates for
any such expenditure or payment and also for any Losses incurred by Seller or
any of its Affiliates in connection with any such litigation (including, without
limitation, reasonable attorneys' fees). Notwithstanding the foregoing,
Purchaser agrees that no claim contemplated under this Section 4.11 shall be
made against Trail Ltd., a rail car leasing captive insurer partially owned by
GATX Corporation which provided insurance coverage during the periods in
question.
4.12 Excluded Companies. Prior to the Closing (or in the case of GPS,
no later than April 30, 2001), Seller shall cause the Excluded Companies and all
assets, Contracts and liabilities related thereto to be transferred outside of
Terminals such that, at the Closing, Terminals no longer owns or is responsible
for, directly or indirectly, the Excluded Companies or any assets, Contracts or
liabilities related thereto.
4.13 No Solicitation of Transferred Employees. Subsequent to the
Closing and for a period of one (1) year thereafter Seller shall not (and Seller
shall cause its Affiliates not to) solicit (i.e. initiate discussions with) for
hire any of the Continuing Employees so long as such Continuing Employees are
employed by the Terminals Companies, Purchaser or any Affiliate thereof.
Notwithstanding the foregoing, the provisions of this Section 4.13 shall in no
way prohibit Seller or its Affiliates from engaging in the general trade
solicitation of employees so long as such solicitation is not directed
specifically at Continuing Employees.
4.14 Consents. Prior to the Closing, as reasonably requested by
Purchaser, Seller shall, and shall cause the Terminals Companies to, use
commercially reasonable efforts to cooperate with and assist Purchaser in
Purchaser's efforts to secure all necessary consents, approvals, exemptions and
waivers from third parties (including Governmental Authorities) and to give all
required notices (collectively "Designated Approvals") as shall be required to
enable Seller to sell the Stock to Purchaser, consummate the transactions
required by this Agreement or to prevent the sale of Stock from causing a breach
of, or default under, or a termination of, any contract, lease license or other
agreement identified on any Schedule attached hereto. Nothing in
20
31
this Agreement shall require Seller or any of the Terminals Companies to
commence litigation or to make any expenditure or payment (other than reasonable
attorneys' fees) unless Purchaser agrees to fully indemnify Seller and the
Terminals Companies for any such expenditure or payment and also for any Losses
incurred by Seller or any Terminals Company in connection with any such
litigation (including, without limitation, reasonable attorneys' fees);
provided, however, that solely with respect to those Designated Approval listed
as items 1 (Philadelphia Water Department), 2 (City of Philadelphia), 3 (Tampa
Port Authority), 4 (Tampa Port Authority) and 12 (Port of Seattle) on Schedule
2.4 hereof, Seller shall be required to pay any reasonable costs necessary to
cure an existing condition at the facility in question if and only if (i) such
existing condition amounts to a failure of the facility in question to be in
compliance with the terms of the permit, license or agreement as to which the
Designated Approval is being sought and (ii) the curing of such existing
condition is required by the applicable Governmental Authority, based on the
terms of the applicable permit, license or agreement, as a prerequisite for
granting such Designated Approval.
4.15 Argo Lease. For a period of not more than two years from the
Closing Date, Seller shall, at the request of Purchaser and at no cost or
expense to Seller other than reasonable attorneys' fees, use commercially
reasonable efforts to assist Terminals in working with the Metropolitan Water
Reclamation District of Greater Chicago ("MWRD") in Terminals' effort to procure
a new lease for the MWRD property at the Argo terminal, including, without
limitation, waiving any potential conflict of interest so that the attorneys
currently representing Terminals in this effort may be available to continue to
do so. Notwithstanding the foregoing, nothing contained in this Section 4.15
shall require Seller to initiate or participate in any litigation unless
Purchaser agrees to fully indemnify Seller with respect to any Losses incurred
in connection therewith and to pay any and all costs (including, without
limitation, reasonable attorneys' fees) incurred in connection therewith.
ARTICLE 5
COVENANTS OF PURCHASER
Purchaser hereby covenants to and agrees with Seller as follows:
5.1 Corporate and Other Actions. Prior to the Closing Date, Purchaser
shall use all commercially reasonable efforts to fulfill its obligations under
this Agreement and to consummate the transactions contemplated hereby.
5.2 Confidentiality. Within two business days of the date of this
Agreement, Purchaser agrees to deliver to Terminals a duly executed amendment to
the Confidentiality Agreement providing that the term of the Confidentiality
Agreement shall not expire until the Closing Date.
5.3 Employees and Benefit Plans.
(a) Purchaser shall be entitled to determine, in its sole discretion, the
employee staffing that will be required for the Terminals Companies after the
Closing and shall make offers of continuing employment with the Terminals
Companies or with Purchaser or any of its other Affiliates, effective on the
Closing Date, to any or all Employees in its discretion; provided,
21
32
however, that Purchaser shall make offers of continuing employment to at least
600 Employees. As used herein, "Employees" means the employees of the Terminals
Companies as of the date hereof who will be full-time, active or regular
part-time employees on the Closing Date, including those on temporary leave for
jury duty, family or short-term medical leave or vacation. Schedule 5.3(a) lists
the Employees and sets forth, for each of the Employees, his or her job title
and, to the extent available, his or her current annual rate of base wages or
base salary. Any such offers of continuing employment shall be made at least 15
days prior to the Closing Date and shall specify the terms of such employment,
which terms shall be in accordance with the following provisions of this Section
5.3, and shall provide for a base salary no less favorable than the base salary
in effect on the Closing Date. Each Employee who remains employed by the
Terminals Companies or becomes employed by Purchaser or any of its Affiliates
pursuant to this Section 5.3(a) shall be referred to herein as a "Continuing
Employee." At least 15 days prior to the Closing Date, Purchaser shall provide
Seller with notice of those Employees to whom it has made an offer of continuing
employment. As soon as practicable after the Closing Date, Purchaser shall
furnish Seller with a list of all Employees who become Continuing Employees as
of the Closing Date. Effective as of the day immediately preceding the Closing
Date, Seller shall cause the Terminals Companies to transfer to one or more
Affiliates of Seller or terminate the employment of any employee of the
Terminals Companies on such preceding day who will not be a Continuing Employee
immediately following the Closing, including those employees on long-term
disability. Seller shall be solely responsible for any severance costs and all
benefits or other liabilities associated with any employee of the Terminals
Companies who does not become a Continuing Employee; provided, however, that
Purchaser shall be responsible for payment of all severance obligations
described in Section 5.3(h) and for the second installment of the stay bonus
under the individual stay bonus agreements to the Continuing Employees who are
eligible for such payments, the amount of such payments with respect to stay
bonuses not to exceed $1,100,000. At Closing, Seller shall provide Purchaser
with a list of those Continuing Employees who are entitled to receive stay
bonuses and the amount thereof. Purchaser shall be solely responsible for
compliance with and any and all liabilities in connection with the Worker
Adjustment Retraining and Notification Act ("WARN"). Purchaser and Seller shall
cooperate with each other in causing the appropriate entity to send WARN notices
to employees prior to the Closing Date in order to limit the WARN notice period.
(b) Effective as of the Closing Date, the Terminals Companies shall cease to be
participating employers in the GATX Non-Contributory Pension Plan for Salaried
Employees, Non-Contributory Pension Plan of GATX (Hourly Employees)
(collectively, the "Seller Pension Plans"), GATX Salaried Employees Retirement
Savings Plan and GATX Hourly Employees Retirement Savings Plan (individually a
"Seller Savings Plan" and, collectively, the "Seller Savings Plans") (all such
pension and savings plans being referred to, collectively, as the "GATX
Qualified Plans"), and as of such date all Continuing Employees shall cease to
be eligible to participate in the GATX Qualified Plans. Any service or
compensation earned by a Continuing Employee for any period after the Closing
Date shall be disregarded for all purposes of the GATX Qualified Plans. To the
extent allowed by applicable law, Seller shall cause all Continuing Employees to
be fully vested in their accrued benefits under the GATX Qualified Plans as of
the Closing Date. Purchaser shall have no obligation for any past, present or
future accrued liabilities under the GATX Qualified Plans.
22
33
(c) Effective as of the Closing Date, Purchaser shall take all action
necessary or appropriate (i) to extend coverage under one or more new or
existing defined contribution plans (the "Purchaser Savings Plan") qualified
under section 401(a) of the Code and meeting the requirements of section 401(k)
of the Code to Continuing Employees who have account balances under a Seller
Savings Plan as of the Closing Date and (ii) to permit such employees to roll
over such account balances (including any outstanding plan loans) to the
Purchaser Savings Plan as soon as practicable after the Closing Date to the
extent that Seller determines that distribution of such balances from the
Seller Savings Plans is permitted by applicable law. If Seller determines that
such distribution is not permitted, the account balance of each Continuing
Employee under a Seller Savings Plan shall be transferred (within the meaning
of section 414(l) of the Code) to the Purchaser Savings Plan, as soon as
practicable after the Closing Date, in a transfer conforming to the
requirements of section 411(d)(6) of the Code, but only to the extent that such
Continuing Employee elects such a transfer in accordance with procedures
established by Seller.
(d) Effective as of the Closing Date, the Terminals Companies shall cease
to be participating employers in the Terminals Companies Plans that are welfare
benefit plans as described in Section 3(1) of ERISA and that are not Subsidiary
Plans (the "Seller Welfare Benefit Plans"). Effective as of the Closing Date,
Purchaser shall take all actions necessary or appropriate to extend coverage to
Continuing Employees who are covered under the Seller Welfare Benefit Plans on
the Closing Date (and their covered dependents) under one or more new or
existing welfare benefit plans (the "Purchaser Welfare Benefit Plans")
providing medical, dental, prescription drug, vision, life insurance, accident
insurance, flexible spending account, short-term and long-term disability
benefits. Continuing Employees shall be eligible to participate in the
Purchaser Welfare Benefit Plans without regard to any eligibility period,
waiting period, evidence of insurability requirements (except for evidence of
insurability requirements applicable to Purchaser's supplemental life insurance
plan) or pre-existing condition limitations and shall be given credit under the
Purchaser Welfare Benefit Plans for amounts paid under a corresponding Seller
Welfare Benefit Plan or Subsidiary Plan during the same period for purposes of
applying deductibles, co-payments and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of the
applicable Purchaser Welfare Benefit Plan.
(e) Effective as of the Closing Date, the Terminals Companies shall cease
to be participating employers in the GATX Excess Benefit Retirement Plan and
the GATX Supplemental Retirement Plan (individually a "GATX Non-Qualified Plan"
and, collectively, the "GATX Non-Qualified Plans"), and all Continuing
Employees shall cease to be eligible to participate in the GATX Non-Qualified
Plans. Any service or compensation earned by a Continuing Employee for any
period after the Closing Date shall be disregarded for all purposes of the GATX
Non-Qualified Plans. Purchaser shall have no obligation for any past, present
or future accrued liabilities under the GATX Non-Qualified Plans.
(f) One or more of the Terminals Companies is a party to and bound by the
terms of the collective bargaining agreements set forth in Schedule 2.17
("Bargaining Agreements"). Purchaser agrees that, subject to the following
provisions of this paragraph (f) or Purchaser's renegotiation of such
Bargaining Agreements in writing prior to the Closing Date, Purchaser shall (or
shall cause the Terminals Companies to) comply with and perform all obligations
under the Bargaining Agreements for periods after the Closing Date during which
the Bargaining
23
34
Agreements remain in effect and comply with and perform all obligations that
survive the expiration of the Bargaining Agreement under applicable law with
respect to Continuing Employees who are covered by such agreements (the
"Continuing Union Employees"), including without limitation obligations
relating to wages, vacation, holiday and severance pay, insurance,
post-retirement medical, life and pension benefits. Except as otherwise
specifically provided below in this paragraph (f), Purchaser shall take all
such actions (including, without limitation, establish or cause one or more
Terminals Companies to establish such mirror plans) as may be necessary or
appropriate to provide to Continuing Union Employees (and their eligible
dependents) for periods after the Closing Date during which the Bargaining
Agreements remain in effect the benefits set forth in the Bargaining
Agreements, including any such benefits that survive the expiration of the
Bargaining Agreements. For purposes of fulfilling the pension obligations under
certain Bargaining Agreements, on or as soon as practicable after the Closing
Date, Purchaser shall (or shall cause a Terminals Company to) extend coverage
to Continuing Union Employees under a qualified defined benefit pension plan
(the "Purchaser Hourly Pension Plan") which shall be identical in all material
respects to the Non-Contributory Pension Plan of GATX (the "Seller Hourly
Pension Plan") as in effect as of the Closing Date and shall credit the service
and pay credited to each Continuing Union Employee under the Seller Hourly
Pension Plan as of the Closing Date for all purposes under the Purchaser Hourly
Pension Plan, including eligibility, vesting, benefit accrual and eligibility
for subsidized benefits. The benefit (expressed as a single life annuity)
payable from the Purchaser Hourly Pension Plan with respect to each Continuing
Union Employee, determined as of the date as of which payment from the
Purchaser Hourly Pension Plan actually commences, shall be reduced by the
benefit (expressed as a single life annuity) payable with respect to such
individual from the Seller Hourly Pension Plan, based on such Continuing Union
Employee's accrued benefit under the Seller Hourly Pension Plan as of the
Closing Date and determined as follows: (i) if the Continuing Union Employee is
eligible to commence (or has commenced) payment from the Seller Hourly Pension
Plan at the date that payment from the Purchaser Hourly Pension Plan commences,
the benefit payable from the Seller Hourly Pension Plan shall be determined as
if payment of the Continuing Union Employee's pension from the Seller Hourly
Pension Plan commenced as of the same date that payment from the Purchaser
Hourly Pension Plan commences (without regard to the date as of which payment
from the Seller Hourly Pension Plan actually commences); and (ii) if the
Continuing Union Employee is not eligible to commence payment from the Seller
Hourly Pension Plan at the date that payment from the Purchaser Hourly Pension
Plan commences, the benefit payable from Purchaser Hourly Pension Plan shall be
reduced by the Continuing Union Employee's accrued benefit under the Seller
Hourly Pension Plan as of the Closing Date, actuarially reduced from (A) age 65
if the employee has less than 15 years of service under the Seller Hourly
Pension Plan, and (B) age 62 if the Continuing Union Employee has 15 or more
years of service under the Seller Hourly Pension Plan. The actuarial reduction
for this purpose shall reflect the actuarial basis for purposes of determining
early commencement of benefits as set forth in the Seller Hourly Pension Plan
as in effect on the Closing Date. In no event shall the benefit actually
payable from the Seller Hourly Pension Plan with respect to a Continuing Union
Employee be greater than the benefit to which such individual is entitled under
the terms of the Seller Hourly Pension Plan as in effect on the Closing Date,
determined as if the Continuing Union Employee terminated from the employ of
the Terminals Companies and all its Affiliates on the Closing Date. In no event
shall the benefit actually payable from the Purchaser Hourly Pension Plan with
respect to a Continuing Union Employee be greater than (i) the benefit to
24
35
which such individual would have been entitled under the Seller Hourly Pension
Plan had such individual continued participation under the Seller Hourly
Pension Plan after the Closing Date (under the terms of the Seller Hourly
Pension plan in effect as of the Closing Date but determined as though the
Seller Hourly Pension Plan were amended to take into account any pension
changes negotiated by Purchaser after the Closing Date) until the date as of
which such individual ceases accruing benefits under the Purchaser Hourly
Pension Plan, less (ii) the amount by which the benefit under the Purchaser
Hourly Pension Plan shall be reduced pursuant to this paragraph (f).
(g) For periods after the Closing Date, Purchaser shall ensure that (i)
Continuing Employees who are not Continuing Union Employees (and their eligible
dependents) shall participate in the employee benefit plans, policies, programs
and arrangements maintained from time to time by Purchaser (collectively, the
"Purchaser Plans") on terms and conditions which, subject to the following
provisions of this paragraph (g), are substantially the same as applied to
other similarly situated employees and former employees of Purchaser, (ii)
Continuing Employees shall be given credit under the Purchaser Plans (other
than plans qualified under Section 401(a) of the Code) and the Purchaser
Welfare Benefits Plans for their service with Seller and the Terminals
Companies and their predecessors for all purposes (including eligibility for
vacation, severance and post-retirement medical benefits) to the extent that
such service is taken into account under the corresponding Terminals Companies
Plan as of the Closing Date, (iii) Continuing Employees shall be given credit
under the Purchaser Plans that are qualified under Section 401(a) of the Code
for their service with Seller and the Terminals Companies and their
predecessors for purposes of eligibility and vesting.
(h) Purchaser shall provide severance and other benefits under the
Enhanced GATX Severance Pay Program and under any severance arrangements listed
on Schedule 2.13 (including Schedule 2.13(a)) to any Continuing Employee whose
employment terminates during the 12-month period beginning on the Closing Date;
provided, however, that to the extent that Purchaser is unable to provide
certain benefits under such arrangements, Purchaser shall substitute the cash
equivalent thereof.
(i) Purchaser shall pay and be responsible for the payment of all amounts
which may be or become due to Continuing Employees under Purchaser's bonus
plans for the calendar year in which the Closing Date occurs as if the
Continuing Employees became covered by such plans as of January 1 of such year.
The Closing Balance Sheet shall include an accrual for the amount of the bonus
accrued by Continuing Employees under the Seller's bonus plans for the period
from January 1 of the year in which the Closing Date occurs through the Closing
Date.
(j) Purchaser shall be responsible for the vacation time accrued by
Continuing Employees prior to the Closing Date. Purchaser shall recognize the
vacation time accrued by Continuing Employees on Seller's payroll records as of
the Closing Date. Purchaser shall not be required to make a cash payment to
Continuing Employees for such accrued vacation time except for payments of
accrued but unused vacation pay upon termination of a Continuing Employee's
employment. Purchaser shall have no obligation for any vacation time accrued
prior to the Closing Date by Employees who are not Continuing Employees.
25
36
(k) On or prior to the Closing Date, Seller shall, or shall cause the
Terminals Companies to, take such action as may be necessary or appropriate to
conform the Terminals Companies Plans to the provisions of this Section 5.3.
Unless specifically permitted by the terms of this Agreement, from the date
hereof until the Closing Date, to the extent that Continuing Employees would be
affected, Seller shall not (i) increase the rate of compensation payable or to
become payable to any Employee, (ii) enter into any new, or agree to any
increase in the benefits to be provided under any existing, individual
severance agreement, stay bonus agreement or employment agreement, (iii) amend
any Terminals Companies Plan to increase any benefits or rights thereunder, or
(iv) adopt any new plan, program, policy or arrangement which, if it existed as
of the Closing Date, would constitute a Terminals Companies Plan.
(l) The parties acknowledge and agree that all provisions contained in
this Agreement with respect to employee benefit plans or employee compensation
are included for the sole benefit of the respective parties hereto and shall
not create any right in any other Person, including, without limitation, any
employees of the Terminals Companies, any participant in any Terminals
Companies Plans or any beneficiary thereof.
(m) The corresponding reserve on the balance sheet having been removed,
Seller shall retain and discharge the workers compensation liability of
Terminals arising out of workers compensation accidents occurring prior to the
Closing Date.
5.4 Full Access. From and after the Closing Date, Purchaser shall
cause the Terminals Companies to afford Seller and its counsel, accountants and
other authorized representatives, with two days' prior notice, reasonable
access during normal business hours to the respective premises, properties,
personnel, books and records of the Terminals Companies and any other assets or
information that Seller reasonably deems necessary to prepare the Closing
Balance Sheet and any report or Tax Return required to be filed by Seller (but
so as not to unduly disrupt the normal course of operations of the Terminals
Companies), including, without limitation, preparing or defending any such Tax
Return and any interim or annual report or other accounting statements.
Personnel of the Terminals Companies shall be available to execute Tax statute
of limitation waivers and amended Tax Returns at Seller's request for the Tax
Returns for the Tax Period prior to the Closing Date. Personnel of the
Terminals Companies shall assist Seller in the preparation of the Closing
Balance Sheet and any Tax Returns which Seller is required to prepare pursuant
to Sections 10.2(a) and 10.2(b); however, Seller shall not be obligated to
compensate such personnel, Purchaser or the Terminals Companies for such
assistance.
5.5 HSR Filings. As promptly as practicable, Purchaser shall (in
cooperation with Seller) (i) make all filings and submissions with the DOJ and
the FTC under the HSR Act and any applicable state or foreign laws or
regulations as may be reasonably required to be made with Governmental
Authorities in connection with the transactions contemplated by this Agreement,
requesting early any termination of the waiting period thereunder, (ii) respond
promptly to any inquiries from the DOJ, the FTC or other Governmental
Authorities in connection with such filings and (iii) comply in all material
respects with the requirements of the HSR Act. Subject to regulatory
constraints, Seller and Purchaser shall each keep the other party fully advised
with respect to any requests from or communications with the DOJ, FTC or other
Governmental Authority and shall consult with the other party with respect to
all filings and responses thereto.
26
37
5.6 Directors' and Officers' Indemnification. For a period of six
years from the Closing Date, Purchaser agrees not to amend the certificate of
incorporation or by-laws of any of the Terminals Companies in any way to reduce
or eliminate the level of indemnification provided by the applicable Terminals
Company to the past and current officers and directors of such Terminals
Company.
5.7 Use of GATX Name. As promptly as reasonably practicable
subsequent to the Closing, Purchaser shall use its reasonable best efforts to
cause each of the Terminals Companies to cease using the GATX name or any
derivative thereof in any way. Without limiting the foregoing, as promptly as
reasonably practicable subsequent to the Closing, Purchaser shall use its
reasonable best efforts to cause the Terminals Companies to (a) change the name
of any Terminals Company that includes "GATX" and (b) remove the GATX name, any
derivative thereof and any logo related thereto from any tanks, trucks or other
objects on which such name appears. Notwithstanding the foregoing, within three
months of the Closing, the Terminals Companies shall not use the GATX name or
any derivative thereof in any way.
5.8 Assumption of Obligations. Effective as of the Closing,
Purchaser shall assume the guarantees and other obligations of Seller set forth
on Schedule 5.8 and shall use its reasonable best efforts to cause Seller to be
fully released and discharged from such obligations.
5.9 Services to Terminal de Productos Especializados S.A. de
C.V.; Other Services. Subsequent to the Closing and for so long as Seller or
any of its Affiliates has any beneficial ownership interest in Terminal de
Productos Especializados S.A. de C.V. ("TPE"), Purchaser shall cause the
Terminals Companies to provide certain services to TPE. Details regarding such
services, and the rates to be paid by TPE for such services shall be as set
forth in the Services Agreement attached hereto as Exhibit B. Representatives
of each of Purchaser and Seller shall meet on a monthly basis to review the
extent and adequacy of such services. The Services Agreement shall also provide
the terms and conditions pursuant to which Purchaser shall cause the Terminals
Companies to provide certain services to Seller subsequent to the Closing.
5.10 License Agreement with KTSB. Purchaser acknowledges and
agrees that nothing contained in this Agreement shall prevent Terminals from,
prior to Closing, executing a License Agreement with Kertih Terminals SBN BHD
relating to its GALAHAD software on substantially the same terms as have
previously been disclosed to Purchaser. In the event that Terminals does not
execute such License Agreement prior to Closing, Purchaser shall cause
Terminals to execute such License Agreement subsequent to Closing so long as
the terms thereof are substantially similar to the terms that have previously
been disclosed to Purchaser.
5.11 Agreement with Nippon GATX Company Limited. Purchaser
acknowledges and agrees that nothing contained in this Agreement shall prevent
Terminals from, prior to the Closing, transferring the Services Agreement
between Terminals and Nippon GATX Company Limited ("Nippon") to Rail or an
Affiliate of Rail. In the event that Terminals is not able to transfer such
agreement to Rail or an Affiliate of Rail, (i) Rail agrees to cause (at its
sole cost and expense) one or more employees of Seller or an Affiliate to
render any services to Nippon that
27
38
are requested by Nippon pursuant to the agreement and to indemnify Purchaser
for any and all Losses incurred by Purchaser related thereto and (ii) Purchaser
agrees to cause Terminals to remit to Rail any and all fees received by
Terminals subsequent to the Closing from Nippon pursuant to the said Services
Agreement.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PURCHASER
The obligation of Purchaser to purchase the Stock as provided herein
is, at the option of Purchaser, subject to satisfaction of each of the
following conditions precedent on or before the Closing Date:
6.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Seller contained herein qualified by a
reference to materiality or a Material Adverse Effect shall have been accurate,
true and correct in all respects, and those not so qualified shall have been
accurate, true and correct in all material respects, on and as of the date
hereof, and, except to the extent that any such representation or warranty
qualified by a reference to materiality or a Material Adverse Effect is made
solely as of the date hereof or as of another date earlier than the Closing
Date, shall also be accurate, true and correct in all respects, and those not
so qualified shall be accurate, true and correct in all material respects on
and as of the Closing Date with the same force and effect as though made by
Seller on and as of the Closing Date; provided, that if one or more of such
representations or warranties are not accurate, true and correct (or accurate,
true and correct in all material respects, as applicable) on and as of any such
date, the conditions precedent in this Section 6.1 shall nevertheless be deemed
satisfied unless the inaccuracy, falsity or incorrectness of all such
representations or warranties, taken together, would reasonably be expected to
have a Material Adverse Effect or a material adverse effect on the ability of
Purchaser to consummate the transaction described in Section 1.1 hereof.
6.2 Compliance with Agreements and Covenants. Seller shall have
performed and complied in all material respects with all of its covenants and
obligations contained in this Agreement to be performed and complied with by it
on or prior to the Closing Date.
6.3 Competition Law Approvals. All required notice and waiting
periods under the HSR Act and any other applicable competition laws shall have
expired or been waived.
6.4 Injunctions; Consents.
(a) All necessary filings with and consents of any Governmental Authority
or agency required for the consummation of the transaction described in Section
1.1 hereof shall have been made and obtained, all waiting periods with respect
to such filings shall have expired or been terminated, and no court or any
Governmental Agency shall have issued an injunction enjoining the transaction
described in Section 1.1 hereof nor shall any Governmental Authority have
instigated any formal proceeding seeking such an injunction. For purposes of
clarification, the closing condition set forth in the first clause of the
previous sentence shall apply only to those filings and consents where the
failure to make such filing or obtain such consent would prohibit the sale of
the Stock to Purchaser or make such sale illegal.
28
39
(b) Each of the consents set forth on Schedule 6.4(b) hereof shall have
been obtained. Notwithstanding anything in this Agreement to the contrary, with
respect to the condition to Closing set forth in this Section 6.4(b), if this
condition is not satisfied but Purchaser nevertheless elects to waive this
condition and close the transactions contemplated hereby, none of the Seller
Indemnified Parties shall have any liability pursuant to this Agreement as a
result of any breach of any representation, warranty, covenant or other
obligation hereunder relating to the waived condition and Purchaser shall
indemnify, defend and hold the Seller Indemnified Parties harmless from and
against any and all Losses incurred by the Seller Indemnified Parties as a
consequence for having failed to obtain the consent or consents that cause the
failure of the condition.
6.5 Deliveries by Seller. Seller shall have effected the
deliveries required pursuant to Section 8.2 below.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to sell the Stock as provided herein is, at
the option of Seller, subject to the satisfaction of each of the following
conditions precedent on or before the Closing Date:
7.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Purchaser contained herein qualified by a
reference to materiality or a Material Adverse Effect shall have been accurate,
true and correct in all respects, and those not so qualified shall have been
accurate, true and correct in all material respects on and as of the date
hereof, and shall also be accurate, true and correct in all respects, and those
not so qualified shall be accurate, true and correct in all material respects,
on and as of the Closing Date with the same force and effect as though made by
Purchaser on and as of the Closing Date.
7.2 Compliance with Agreements and Covenants. Purchaser shall
have performed and complied in all material respects with all of its covenants
and obligations contained in this Agreement to be performed and complied with
by it on or prior to the Closing Date.
7.3 Competition Law Approvals. All required notice and waiting
periods under the HSR Act and any other applicable competition laws shall have
expired or been waived.
7.4 Injunctions; Consents All necessary filings with and consents
of any Governmental Authority and agency required for the consummation of the
transactions described in Section 1.1 hereof shall have been made and obtained,
all waiting periods with respect to such filings shall have expired or been
terminated, and no court or any Governmental Authority shall have issued an
injunction enjoining the transactions described in Section 1.1 hereof nor shall
any Governmental Authority have instigated any formal proceeding seeking such
an injunction. For purposes of clarification, the closing condition set forth
in the first clause of the previous sentence shall apply only to those filings
and consents where the failure to make such filing or obtain such consent would
prohibit the sale of the Stock to Purchaser or make such sale illegal.
7.5 Deliveries by Purchaser. Purchaser shall have effected the
deliveries required pursuant to Section 8.3 below.
29
40
ARTICLE 8
CLOSING
8.1 Closing. The Closing shall take place at the offices of
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at
10:00 A.M. as soon as reasonably practicable after the date on which all
conditions precedent set forth in Articles 6 and 7 have been satisfied or
waived by the parties, or such other date as is mutually agreeable to Seller
and Purchaser (the "Closing Date").
8.2 Seller's Deliveries. At the Closing, Seller shall deliver to
Purchaser:
(a) a certificate, signed by an executive officer of Rail, certifying as
to the compliance by Seller with Sections 6.1 and 6.2 hereof;
(b) certificates evidencing the ownership of the membership interests of
the Terminals Companies and any applicable conveyance documents or other
evidence of transfer of the membership interests of the Terminals Companies in
form and substance reasonably satisfactory to Purchaser;
(c) the stock record book, minute book and seal (if any) of each of the
Terminals Companies;
(d) such resignations effective as of the Closing Date of any officer or
director of the Terminals Companies as may be requested by Purchaser;
(e) a certification of Holding's non-foreign status as set forth in
Treasury Regulation Section 1.1445-2(b);
(f) a duly executed copy of each Related Agreement (including, without
limitation, the Services Agreement contemplated by Section 5.9); and
(g) any other items required to be delivered by Seller under the terms and
provisions of this Agreement.
8.3 Purchaser's Deliveries. At the Closing, Purchaser shall
deliver to Seller:
(a) a certificate, signed by an executive officer of Purchaser, certifying
as to the compliance by Purchaser with Sections 7.1 and 7.2 hereof;
(b) confirmation of the wire transfer of same-day funds in the amount of
the Purchase Price, as required by Section 1.2;
(c) a duly executed copy of each Related Agreement (including, without
limitation, the Services Agreement contemplated by Section 5.9); and
(d) any other items (including bank guarantees) to be delivered by
Purchaser under the terms and provisions of this Agreement.
30
41
8.4 Termination. This Agreement shall terminate:
(a) upon the mutual agreement of Seller and Purchaser;
(b) upon written notice from Purchaser to Seller if each of the conditions
precedent set forth in Article 6 has not been satisfied on or before April 2,
2001; provided, however, if the consent of the Port of Tampa to the assignment
of any of the leases specified as a condition to Closing in Section 6.4(b) has
not been obtained by April 2, 2001, Seller may, upon notice to Purchaser given
no later than three business days prior to April 2, 2001, elect to extend the
date in this clause (b) to May 31, 2001; or
(c) upon written notice from Seller to Purchaser if each of the conditions
precedent set forth in Article 7 has not been satisfied on or before April 2,
2001.
If this Agreement is terminated pursuant to this Section, all further
obligations of the parties under this Agreement will terminate, except that (i)
the obligations in Section 11.1 will survive and (ii) if this Agreement is
terminated by a party because of the breach of the Agreement by the other party
or because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of the other party's failure
to comply with its obligations under this Agreement, the terminating party's
right to pursue all legal remedies will survive such termination unimpaired.
The obligations of the parties under the Confidentiality Agreement shall
survive, and continue in full force and effect after, termination of this
Agreement.
ARTICLE 9
SURVIVAL AND INDEMNIFICATION
9.1 Survival. The representations and warranties of the parties
hereto contained herein and in the Related Agreements shall survive the Closing
for a period of one (1) year, except that (i) Tax Warranties shall survive
until the Tax Statute of Limitations Date, (ii) the Environmental Warranty
shall survive the Closing for a period of eighteen (18) months, and (iii) Title
and Authorization Warranties and the representations and warranties set forth
in Sections 2.3, 2.4(a)(i), 2.15 and 2.23 shall survive forever. Any covenant
or obligation of the parties pursuant to this Agreement that requires action to
be taken prior to the Closing (other than such covenants contained in Sections
4.8 and Article 10 hereof) shall survive the Closing for a period of one (1)
year. Except where a shorter time period is specifically provided in this
Agreement, all other covenants and obligations of the parties pursuant to this
Agreement (including, without limitation, such covenants contained in Sections
4.8 and Article 10 hereof) shall survive the Closing forever. The Schedule
9.2(a) Matters shall survive the Closing forever. Neither Purchaser nor Seller
shall have any liability with respect to claims first asserted in connection
with any representation, warranty, covenant or obligation hereunder after the
survival period specified therefor in this Section 9.1.
9.2 Indemnification by Seller. Solely for the purpose of indemnification in
this Section 9.2, the representations and warranties of Seller in this
Agreement (other than the representations and warranties of Seller contained in
Section 2.10) shall be deemed to have been made without regard to any
materiality or Material Adverse Effect qualifiers. Subject to Section
31
42
9.4, Rail and Holdings, jointly and severally, agree to indemnify Purchaser,
its officers, directors, Affiliates, successors and assigns, including, for the
avoidance of doubt, the Terminals Companies after the Closing (the "Purchaser
Indemnified Parties") against, and agrees to hold the Purchaser Indemnified
Parties harmless from, any and all Losses incurred or suffered by any Purchaser
Indemnified Party arising out of any of the following:
(a) the matters set forth in Schedule 9.2(a) (the "Schedule 9.2(a)
Matters"), whether or not a breach of a representation, warranty, covenant or
agreement has occurred, it being further agreed that the limitations on
liability or survival of obligations of Seller set forth in this Agreement
shall in no way limit or apply to any indemnification under this Section
9.2(a);
(b) any breach of or any inaccuracy in any representation or warranty made
by Seller in Article 2 of this Agreement or any Related Agreement or any
document delivered by Seller at the Closing; provided, that Seller shall have
no liability under this Section 9.2(b) for any breach of or inaccuracy in any
representation or warranty unless (i) in the case of all representations and
warranties, except for Tax Warranties, the Environmental Warranty, Title and
Authorization Warranties, and the representations and warranties set forth in
Sections 2.3, 2.4(a)(i), 2.15 and 2.23, a notice of the Purchaser Indemnified
Party's claim is given to Seller not later than the close of business on the
first anniversary of the Closing Date, (ii) in the case of Tax Warranties, a
notice of the Purchaser Indemnified Party's claim is given to Seller not later
than the close of business on the Tax Statute of Limitations Date, and (iii) in
the case of the Environmental Warranty, a notice of the Purchaser Indemnified
Party's claim is given to Seller not later than the close of business on the
day which is eighteen (18) months after the Closing Date;
(c) any breach of or failure by Seller to perform any covenant, obligation
or other agreement of Seller set out in this Agreement or any Related Agreement
or any document delivered by Seller at the Closing; provided, that Seller shall
have no liability under this Section 9.2(c) for any breach or failure occurring
on or prior to the Closing Date unless a notice of the Purchaser Indemnified
Party's claim is given to Seller within the applicable time period set forth in
Section 9.1 hereof;
(d) incurred by any Purchaser Indemnified Party pursuant to the letter
agreement dated March 18, 1999 regarding the GATX Terminals Limited Pension
Scheme; or
(e) any post-employment welfare benefit payable under a Seller Welfare
Benefit Plan with respect to any individual who is an employee or former
employee of the Terminals Companies on the Closing Date (or the eligible
dependent of such an employee or former employee), excluding (i) severance
costs and continuation coverage (within the meaning of Code Section 4980(B)(f)
("COBRA") with respect to Continuing Employees and their qualified
beneficiaries, and (ii) post-retirement medical and life benefits with respect
to Continuing Union Employees (and their eligible dependents) who are not
eligible to commence receipt of an immediate pension benefit on or before the
Closing Date.
9.3 Indemnification by Purchaser. Solely for the purpose of
indemnification in this Section 9.3, the representations and warranties of
Purchaser in this Agreement shall be deemed to have been made without regard to
any materiality or Material Adverse Effect qualifiers. Subject to Section 9.12,
Purchaser agrees to indemnify Seller, its officers, directors, its Affiliates
32
43
after the Closing, successors and assigns (the "Seller Indemnified Parties")
against, and agrees to hold the Seller Indemnified Parties harmless from, any
and all Losses incurred or suffered by any Seller Indemnified Party arising out
of any of the following:
(a) any breach of or any inaccuracy in any representation or warranty made
by Purchaser in Article 3 of this Agreement or any Related Agreement or any
document delivered by Purchaser at the Closing; provided, that Purchaser shall
have no liability under this Section 9.3(a) for any breach of or inaccuracy in
any representation or warranty unless, in the case of all representations and
warranties, except for Title and Authorization Warranties and the
representation and warranty set forth in Section 3.2, a notice of the Seller
Indemnified Party's claim is given to Purchaser not later than the close of
business on the first anniversary of the Closing Date;
(b) any breach of or failure by Purchaser to perform any covenant,
obligation or other agreement of Purchaser set out in this Agreement or any
Related Agreement or any document delivered by Purchaser at the Closing;
(c) any occurrence, event, act or omission of any Terminals Company prior
or subsequent to the Closing, other than an occurrence, event, act or omission
which provides the basis for a right of Purchaser to indemnification under
Section 9.2;
(d) the termination of employment of any individual who, on or after the
Closing Date, is an employee of a Terminals Company, Purchaser or any Affiliate
of Purchaser, any employee matter relating to any such employee, and any
welfare benefit (including post-retirement health and life benefits) to be
provided with respect to any such employee under the terms of any collective
bargaining agreement to which any Terminals Company is a party on or after the
Closing Date (excluding any post-retirement health or life benefit with respect
to a Continuing Union Employee who is eligible to commence receipt of an
immediate pension benefit prior to or coincident with the Closing Date);
(e) the enforcement against Seller or any Seller Indemnified Party of any
of the guarantee or other obligations set forth on Schedule 5.8 and any and all
Losses related to environmental matters incurred by Seller pursuant to
contractual indemnification obligations of the Terminals Companies to third
parties related to previously divested assets or businesses, including, without
limitation, those indemnification obligations set forth on Appendix A to
Schedule 9.2(a) attached hereto;
(f) any occurrence, event, act or omission of or related to the business
of the Terminals Companies (which was conducted as a division of General
American Transportation Corporation) that occurred prior to July 1, 1975, other
than an occurrence, event, act or omission which provides the basis for a right
of Purchaser to indemnification under Section 9.2;
(g) shut-down benefits under any Seller Pension Plan subsequent to the
Closing triggered by the termination of an employee of any of the Terminals
Companies on or after the Closing Date and on or before the fifth anniversary
of the Closing Date; or
(h) any contamination of air, soil or ground water by any Terminals
Company (or any predecessor of a Terminals Company), or for which any Terminals
Company (or any predecessor
33
44
of a Terminals Company) is or may by law or contract become liable (including,
but not limited to, the remediation and other environmental indemnification
obligations of the Terminals Companies set forth on Appendix A to Schedule
9.2(a) attached hereto), or the violation of any applicable Environmental Law
by any Terminals Company (or any predecessor of a Terminals Company), including
but not limited to the failure of Purchaser to adequately fund or discharge the
remediation obligations of any Terminals Company (or any predecessor of a
Terminals Company) pursuant to any statute or regulations or any order or
directive issued by an agency under applicable Environmental Laws; provided,
however, that the indemnification provided by this paragraph 9.3(h) shall not
apply to any contamination that was required to be disclosed by Seller pursuant
to Section 2.18 but was not so disclosed.
9.4 Limitations on Liability of Seller. Notwithstanding any other
provision of this Agreement:
(a) Other than Title and Authorization Warranties and the representations
and warranties set forth in Sections 2.3, 2.4(a)(i), 2.15 and 2.23 to all of
which no limitation under this Section 9.4(a) shall apply, the Purchaser
Indemnified Parties shall have the right to payment by Seller under Section
9.2(b) only if, and only to the extent that, the Purchaser Indemnified Parties
shall have incurred (i) as to any particular inaccuracy or breach,
indemnifiable Losses in excess of $100,000 and (ii) as to all inaccuracies and
breaches, indemnifiable Losses (other than as excluded in clause (i)) in excess
of one percent (1.0%) of the Purchase Price (it being understood, for purposes
of clarification, that the basket and other thresholds set forth in this
sentence shall not apply to Section 9.2(a), Section 9.2(c), Section 9.4(d) and
Article 10). For purposes of calculating the $100,000 limitation in clause (i)
of the previous sentence, all claims arising out of a single or recurring
condition, event or circumstance shall be aggregated.
(b) Except as provided in Section 9.2(a) to which no limitation under this
Section 9.4(b) shall apply, Seller shall have no liability under or in
connection with this Agreement or the Related Agreements or the transactions
contemplated hereby or thereby (including under Section 9.2(b), Section 9.2(c)
or otherwise for any breach of or inaccuracy in any representation or warranty
or for any breach of any covenant or obligations or for any other reason) in
excess of (i) as to all representations and warranties other than Title and
Authorization Warranties, the Environmental Warranty and the representations
and warranties set forth in Sections 2.3, 2.4(a)(i), 2.15 and 2.23, ten percent
(10%) of the Purchase Price in the aggregate, (ii) as to the Environmental
Warranty, thirteen and one third percent (13.3%) of the Purchase Price in the
aggregate, and (iii) as to Title and Authorization Warranties, covenants and
obligations (including Section 4.15, Section 9.4(d) and Article 10), and the
representations and warranties set forth in Sections 2.3, 2.4(a)(i), 2.15 and
2.23, the Purchase Price in the aggregate; provided, that in no event shall
Seller's aggregate liability for any and all matters referred to in clauses (i)
and (ii) exceed thirteen and one third percent (13.3%) of the Purchase Price in
the aggregate and in no event shall Seller's aggregate liability for any and
all matters referred to in clauses (i), (ii) and (iii) exceed the Purchase
Price in the aggregate. Any indemnification for Losses pursuant to Section
9.2(a) shall in no way apply to, limit or be limited by Purchaser Indemnified
Parties' right to indemnification under this Article 9.
(c) The sole and exclusive liability and responsibility of Seller to the
Purchaser Indemnified Parties under or in connection with this Agreement or the
Related Agreements or the transactions
34
45
contemplated hereby or thereby (including for any breach of or inaccuracy in
any representation or warranty or for any breach of any covenant or obligation
or for any other reason), and the sole and exclusive remedy of the Purchaser
Indemnified Parties with respect to any of the foregoing, shall be as set forth
in Article 9 and in Article 10. To the extent that the Purchaser Indemnified
Parties have any Losses for which they may assert any other right to
indemnification, contribution or recovery from Seller (whether under this
Agreement or under any common law or any statute, including any Environmental
Law, or otherwise), Purchaser hereby waives, releases and agrees not to assert
such right, and Purchaser agrees to cause each of the Purchaser Indemnified
Parties to waive, release and agree not to assert such right.
(d) Except for matters for which the Purchaser Indemnified Parties are
entitled to indemnification pursuant to this Article 9, in no event shall
Seller have any liability for any health, dental, life, disability or
accidental death or dismemberment claim which is incurred on or after the
Closing Date by any Continuing Employees (or their eligible dependents) or any
Losses relating thereto. For purposes of this paragraph (d), a claim (other
than a workers' compensation claim) shall be considered incurred (i) in the
case of a health or dental claim, on the date on which the services giving rise
to the claim are rendered, (ii) in the case of a life insurance, death or
dismemberment claim, on the date of the death or injury giving rise to the
claim, (iii) in the case of a short-term disability claim, on the date for
which the short-term disability payment is made, and (iii) in the case of a
long-term disability ("LTD") claim, on the first day of the period for which
LTD benefits are payable. Notwithstanding the foregoing provisions of this
paragraph (d), Seller shall retain the liability for workers' compensation
claims (including claims for related health and dental services) with respect
to Continuing Employees, which claims arise out of workers compensation
accidents occurring prior to the Closing Date.
(e) Except for matters for which the Purchaser Indemnified Parties are
entitled to indemnification pursuant to this Article 9, in no event shall
Seller have any liability for any claims (or for any Losses relating thereto)
which are first made after the Closing and which arise out of or in connection
with any services provided at any time by Terminals.
9.5 Claims. As promptly as is reasonably practicable after
becoming aware of a claim for indemnification under this Agreement not
involving a claim, or the commencement of any suit, action or proceeding, of
the type described in Section 9.6, the Indemnified Person shall give notice to
the Indemnifying Person of such claim, which notice shall specify the facts
alleged to constitute the basis for such claim, the representations,
warranties, covenants and obligations alleged to have been breached and the
amount that the Indemnified Person seeks hereunder from the Indemnifying
Person, together with such information as may be necessary for the Indemnifying
Person to determine that the limitations in Section 9.4 have been satisfied or
do not apply.
9.6 Notice of Third Party Claims; Assumption of Defense. The
Indemnified Person shall give notice as promptly as is reasonably practicable
to the Indemnifying Person of the assertion of any claim, or the commencement
of any suit, action or proceeding, by any Person not a party hereto in respect
of which indemnity may be sought under this Agreement (which notice shall
specify in reasonable detail the nature and amount of such claim together with
such information as may be necessary for the Indemnifying Person to determine
that the limitations in Section 9.4 have been satisfied or do not apply). The
Indemnifying Person may, at its own
35
46
expense, (a) participate in the defense of any such claim, suit, action or
proceeding and (b) upon notice to the Indemnified Person, at any time during
the course of any such claim, suit, action or proceeding, assume the defense
thereof with counsel of its own choice and in the event of such assumption,
shall have the exclusive right, subject to clause (i) of Section 9.7, to settle
or compromise such claim, suit, action or proceeding. If the Indemnifying
Person assumes such defense, the Indemnified Person shall have the right (but
not the duty) to participate in the defense thereof and to employ counsel, at
its own expense, separate from the counsel employed by the Indemnifying Person.
Whether or not the Indemnifying Person chooses to defend or prosecute any such
claim, suit, action or proceeding, all of the parties hereto shall cooperate in
the defense or prosecution thereof.
9.7 Settlement or Compromise. Any settlement or compromise made
or caused to be made by the Indemnified Person (unless the Indemnifying Person
has the exclusive right to settle or compromise under clause (b) of Section
9.6) or the Indemnifying Person, as the case may be, of any such claim, suit,
action or proceeding of the kind referred to in Section 9.6 shall also be
binding upon the Indemnifying Person or the Indemnified Person, as the case may
be, in the same manner as if a final judgment or decree had been entered by a
court of competent jurisdiction in the amount of such settlement or compromise;
provided, that (i) no obligation, restriction or Loss shall be imposed on the
Indemnified Person as a result of such settlement or compromise without its
prior written consent, which consent shall not be unreasonably withheld, and
(ii) the Indemnified Person will not compromise or settle any claim, suit,
action or proceeding without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld.
9.8 Time Limits. Any right to indemnification or other recovery
under this Article 9 shall only apply to Losses with respect to which the
Indemnified Person shall have notified the Indemnifying Person within the
applicable time period set forth in Section 9.2 or 9.3, as the case may be. If
any claim for indemnification or other recovery is timely asserted under this
Article 9, the Indemnified Person shall have the right to bring an action, suit
or proceeding with respect to such claim within one year after first giving the
Indemnifying Person notice thereof, but may not bring any such action, suit or
proceeding thereafter.
9.9 Net Losses and Subrogation.
(a) Notwithstanding anything contained herein to the contrary, the amount
of any Losses incurred or suffered by an Indemnified Person shall be calculated
after giving effect to (i) any insurance proceeds received by the Indemnified
Person (or any of its Affiliates) with respect to such Losses, (ii) any Tax
benefit realized by the Indemnified Person (or any of its Affiliates; provided,
however, that for this purpose only the term "Affiliate" shall not include
upstream Affiliates of Purchaser) arising from the facts or circumstances
giving rise to such Losses and (iii) any recoveries obtained by the Indemnified
Person (or any of its Affiliates) from any other third party. Each Indemnified
Person shall exercise commercially reasonable efforts to obtain such proceeds,
benefits and recoveries. If any such proceeds, benefits or recoveries are
received by an Indemnified Person (or any of its Affiliates) with respect to
any Losses after an Indemnified Person has received indemnification from an
Indemnifying Person with respect thereto, the Indemnified Person (or such
Affiliate) shall pay to the Indemnifying Person the
36
47
amount of such proceeds, benefits or recoveries (up to the amount of the
Indemnifying Person's payment). Purchaser shall be obligated under this Section
9.9 notwithstanding Section 9.11(a).
(b) Upon making any payment to an Indemnified Person in respect of any
Losses, the Indemnifying Person will, to the extent of such payment, be
subrogated to all rights of the Indemnified Person (and its Affiliates) against
any third party in respect of the Losses to which such payment relates. Such
Indemnified Person (and its Affiliates) and Indemnifying Person will execute
upon request all instruments reasonably necessary to evidence or further
perfect such subrogation rights.
9.10 Purchase Price Adjustments. Any amounts payable under Section
9.2 or Section 9.3 shall be treated by Purchaser and Seller as an adjustment to
the Purchase Price except as to amounts previously included as income or
expense by Purchaser.
9.11 Schedule 9.2(a) Matters.
(a) The parties acknowledge and agree that as of the Closing Date Seller
shall retain full and total responsibility for and control of the Schedule
9.2(a) Matters. After the Closing Date, Seller will have no claim against
Purchaser or any Purchaser Indemnified Party for any Loss which Seller may
incur due to any of the Schedule 9.2(a) Matters; provided, however, that (i)
Seller may recover from Purchaser for actual court costs and reasonable
attorneys' fees incurred to compel the reasonable cooperation described in this
Section 9.11 or otherwise incurred due to a breach by Purchaser of its
obligations under this Section 9.11. It is the parties' intent that all
responsibility for and control of the Schedule 9.2(a) Matters transfer to
Seller as of the Closing Date without further action on the part of the
parties, except for the obligation of reasonable cooperation as described
below.
(b) Subsequent to the Closing, Purchaser shall cause the Terminals
Companies to reasonably cooperate with and assist Seller in Seller's defense of
the Schedule 9.2(a) Matters. Such cooperation shall include, without
limitation, (i) retaining documents related to the Schedule 9.2(a) Matters as
Seller shall reasonably request and (ii) causing employees of the Terminals
Companies to be available to Seller and Seller's counsel, during business
hours, for interviews and depositions relating to the Schedule 9.2(a) Matters.
(c) In taking all of the actions permitted or required by this Section
9.11, Seller shall act, at Seller's expense, on behalf of the Terminals
Companies and shall have sole authority (including, without limitation,
settlement authority and the authority to approve and cause the filing of
pleadings, briefs and other documents on behalf of the Terminals Companies) and
responsibility for and exercise sole and complete control of the Schedule
9.2(a) Matters. Upon Seller's written request to Purchaser, Purchaser shall
cause the president or other executive officer of the relevant Terminals
Company to execute any document and agreement, including any settlement
agreement with respect to the Schedule 9.2(a) Matters as required by Seller.
Notwithstanding the foregoing, (i) Seller shall not be entitled to take or omit
to take action with respect to the Schedule 9.2(a) Matters, and (ii) Purchaser
will not be required to cause the relevant Terminals Company to execute any
document or agreement with respect to the Schedule 9.2(a) Matters, if, in
either case, such would result in a restriction on Purchaser, any Terminals
Company or any of their Affiliates.
37
48
(d) For purposes of this Section 9.11, in determining whether reasonable
cooperation has been exercised, no consideration shall be given to the fact of
Seller's indemnity in this Article 9 of Purchaser Indemnified Parties, and the
conduct of Purchaser shall be evaluated as if neither Purchaser nor the
Terminals Companies were indemnified by Seller on the Schedule 9.2(a) Matters.
9.12 Limitations on Liability of Purchaser.
(a) Other than Title and Authorization Warranties and the representation
and warranty set forth in Section 3.2 to all of which no limitation under this
Section 9.12(a) shall apply, the Seller Indemnified Parties shall have the
right to payment by Purchaser under Section 9.3(a) only if, and only to the
extent that, the Seller Indemnified Parties shall have incurred (i) as to any
particular inaccuracy or breach, indemnifiable Losses in excess of $100,000 and
(ii) as to all inaccuracies and breaches, indemnifiable Losses (other than as
excluded in clause (i)) in excess of one percent (1.0%) of the Purchase Price.
For purposes of calculating the $100,000 limitation in clause (i) of the
previous sentence, all claims arising out of a single or recurring condition,
event or circumstance shall be aggregated.
(b) Purchaser shall have no liability under or in connection with this
Agreement or the Related Agreements or the transactions contemplated hereby or
thereby (including under Section 9.3 or otherwise for any breach of or
inaccuracy in any representation or warranty or for any breach of any covenant
or obligations or for any other reason) in excess of (i) as to all
representations and warranties other than Title and Authorization Warranties
and the representation and warranty set forth in Section 3.2, ten percent (10%)
of the Purchase Price in the aggregate, and (ii) as to Title and Authorization
Warranties, covenants and obligations, and the representation and warranty set
forth in Section 3.2, the Purchase Price in the aggregate; provided, that in no
event shall Purchaser's aggregate liability for any and all matters referred to
in clauses (i) and (ii) exceed the Purchase Price in the aggregate.
ARTICLE 10
TAX MATTERS
10.1 Liability for Taxes.
(a) Seller shall be liable for, and shall indemnify and hold Purchaser,
the Terminals Companies and their respective Affiliates harmless from any
Taxes, together with any costs, expenses, losses or damages, including
reasonable expenses of investigation and attorneys' and accountants' fees and
expenses, arising out of or incident to the determination, assessment or
collection of such Taxes ("Tax Losses"), (i) imposed on or incurred by any of
the Terminals Companies by reason of the several liability of the Terminals
Companies pursuant to Treasury Regulations Section 1.1502-6 or any analogous
state, local or foreign law or regulation which is attributable to having been
a member of any consolidated, combined or unitary group on or prior to the
Closing Date, (ii) resulting from the Terminals Companies ceasing to be a
member of the affiliated group (within the meaning of Code Section 1504(a))
that includes Seller, (iii) imposed on or incurred by the Terminals Companies
with respect to any period (or portion thereof) prior to and including the
Closing Date (the "Pre-Closing Date Period"), (iv) attributable to any
discharge of indebtedness that may result from any capital contributions by
Seller (or an Affiliate
38
49
of Seller) to any of the Terminals Companies of any intercompany indebtedness
owed by any of the Terminals Companies to Seller (or an Affiliate of Seller),
(v) resulting from the actions taken under Section 4.12 of this Agreement, or
(vi) relating to all income Taxes arising as a result of the sale of the Stock
and the transactions contemplated by this Agreement; provided, however, that
Seller shall not be liable or offer an indemnification for any amount of
current liability accrual for Taxes to the extent reflected on the Closing
Balance Sheet.
(b) Purchaser shall be liable for, and shall indemnify and hold Seller and
its Affiliates harmless from any Tax Losses (i) imposed on or incurred by the
Terminals Companies with respect to the period after the Closing Date or (ii)
with respect to state and local Transaction Taxes incurred by Seller in
connection with converting any of the Terminals Companies into limited
liability companies pursuant to Section 4.8 hereof (provided, however, that the
indemnification by Purchaser pursuant to this clause (ii) shall be limited to
those Taxes in excess of the Transaction Taxes which would have arisen had the
Terminals Companies been sold as corporations and an election under Section
338(h)(10) of the Code had been made).
(c) Whenever it is necessary for purposes of this Article 10 to determine
the portion of any Taxes imposed on or incurred by the Terminals Companies for
a taxable period beginning before and ending after the Closing Date which is
allocable to the Pre-Closing Date Period, the determination shall be made, in
the case of property or ad valorem taxes or franchise taxes (which are measured
by, or based solely upon capital, debt or a combination of capital and debt),
on a per diem basis and, in the case of other Taxes, by assuming that the
Pre-Closing Date Period constitutes a separate taxable period of the Terminals
Companies and by taking into account the actual taxable events occurring during
such period (except that exemptions, allowances and deductions for a taxable
period beginning before and ending after the Closing Date that are calculated
on an annual or periodic basis, such as the deduction for depreciation, shall
be apportioned to the Pre-Closing Date Period ratably on a per diem basis).
Notwithstanding anything to the contrary herein, any franchise Tax paid or
payable with respect to any of the Terminals Companies shall be allocated to
the taxable period during which the income, operations, assets or capital
comprising the base of such Tax is measured, regardless of whether the right to
do business for another taxable period is obtained by the payment of such
franchise Tax.
(d) Purchaser agrees to pay to Seller any refund received after the
Closing Date by Purchaser or its Affiliates, including the Terminals Companies,
in respect of any Taxes for which Seller is liable under clause (a) of this
Section 10.1. Seller agrees to pay to Purchaser any refund received by Seller
or its Affiliates in respect of any Taxes for which Purchaser is liable under
clause (b) of this Section 10.1. The parties shall cooperate, each at its own
expense, in order to take all reasonably necessary steps to claim any such
refund. Any such refund received by a party or its Affiliate for the account of
the other party shall be paid to such other party within 90 days after such
refund is received.
(e) Purchaser and Seller agree not to make or cause any election
(including an election to ratably allocate items under Treasury Regulations
Section 1.1502-76(b)(2)(ii)) to allocate tax items in a manner inconsistent
with Section 10.1(c) hereof.
39
50
10.2 Tax Returns.
(a) Seller shall cause to be included in the consolidated federal income
Tax Returns (and the state income Tax Returns of any state that permits
consolidated, combined or unitary income Tax Returns, if any) of the Parent
Group (as defined herein) for all periods ending on or before the Closing Date
and for periods which include the Closing Date, all items of income, gain,
loss, deduction and credit ("Tax Items") of the Terminals Companies which are
required to be included therein, shall cause such Tax Returns to be timely
filed with the appropriate Government Authorities, and shall be responsible for
the timely payment of all Taxes due with respect to the periods covered by such
Tax Returns. For purposes of this Agreement, "Parent Group" (i) means the
affiliated group of corporations within the meaning of Section 1504 of the Code
which files a consolidated federal income Tax Return and as to which Seller is
a member, and (ii) in the case of any combined or unitary Tax Return, the group
of corporations filing such Tax Return that includes any of the Terminals
Companies.
(b) With respect to any Tax Return covering a taxable period ending on or
before the Closing Date that is required to be filed after the Closing Date
with respect to any of the Terminals Companies that is not described in
paragraph (a) above, Seller shall cause such Tax Return to be prepared, shall
cause to be included in such Tax Return all Tax Items required to be included
therein, shall cause such Tax Return to be filed timely with the appropriate
Government Authority, and shall be responsible for the timely payment of all
Taxes due with respect to the period covered by such Tax Return.
(c) With respect to any Tax Return covering a taxable period beginning on
or before the Closing Date and ending after the Closing Date that is required
to be filed after the Closing Date with respect to any of the Terminals
Companies, Purchaser shall cause such Tax Return to be prepared, shall cause to
be included in such Tax Return all Tax Items required to be included therein,
shall furnish a copy of such Tax Return to Seller, shall file timely such Tax
Return with the appropriate Government Authority, and shall be responsible for
the timely payment of all Taxes due with respect to the period covered by such
Tax Return. Purchaser shall determine, in accordance with the provisions of
Section 10.1(c) of the Agreement, the amount of Tax due with respect to the
Pre-Closing Date Period (the "Seller's Tax") and shall notify Seller of its
determination of the Seller's Tax. Seller shall pay to Purchaser an amount
equal to the Seller's Tax not later than five days after the filing of such Tax
Return. Any refund attributable to Tax Returns filed pursuant to this Section
10.2(c) shall be apportioned between Purchaser and Seller in a manner
consistent with the calculation of the Seller's Tax.
(d) Purchaser shall, with respect to any Tax Return which Purchaser is
responsible under Section 10.2(c) for preparing and filing, make such Tax
workpapers available for review by Seller if the Tax Return is with respect to
Taxes for which Seller may be liable (in whole or in part) hereunder or under
applicable law. Purchaser shall make such workpapers available for review no
later than twenty (20) days before the due date for filing such Tax Returns to
provide Seller with a meaningful opportunity to analyze and comment on such Tax
Returns and have such Tax Returns modified before filing, accepting the
position of Purchaser unless such position is contrary to the provisions of
Section 10.2(e) hereof. If, within ten (10) days of such delivery, Seller shall
deliver to Purchaser a written statement describing Seller's objections to such
Tax Return and all grounds therefor, and the parties are unable to resolve such
objections within the ten (10) day period prior to filing such Tax Return, such
Tax Return shall be filed as prepared by Purchaser, and any remaining disputes
shall be resolved by the Arbitrating Accounting Firm as
40
51
provided in Section 10.2(f). Seller will join in the execution of such Tax
Return and other documentation if required to do so by applicable Law.
(e) Any Tax Return which includes or is based on the operations,
ownership, assets or activities of the Terminals Companies for any taxable
period beginning before and ending after the Closing Date, and any Tax Return
in respect of any Taxes for which Seller may be liable (in whole or in part)
hereunder shall be prepared in accordance with past Tax accounting practices
used with respect to the Tax Returns in question (unless such past practices
are no longer permissible under the applicable law), and to the extent any
items are not covered by past practices (or in the event such past practices
are no longer permissible under the applicable tax law), in accordance with
reasonable tax accounting practices selected by the filing party with respect
to such Tax Return under this Agreement with the consent (not to be
unreasonably withheld or delayed) of the non-filing party.
(f) The Arbitrating Accounting Firm shall be instructed to resolve any
disputes referred to it pursuant to Section 10.2(d) within five (5) days after
such referral. The resolution of disputes by the Arbitrating Accounting Firm
shall be set forth in writing and shall be conclusive and binding upon all
parties and the parties shall join in the execution and cooperate in the filing
of any amended Tax Return as shall be necessary to implement such resolution.
The fees and expenses of the Arbitrating Accounting Firm shall be apportioned
by the Arbitrating Accounting Firm based on the degree to which each party's
claims were unsuccessful and shall be paid by the parties in accordance with
such determination. For example, if pursuant to this Section 10.2(f) Seller
submitted an objection affecting the amount of Tax due in the amount of
$100,000 and prevailed as to $45,000 of the amount, then Seller would bear 55%
of the fees and expenses of the Arbitrating Accounting Firm.
(g) Unless required by law, Purchaser shall not file an amended Tax Return
for any period ending on or prior to the Closing Date without the consent of
Seller.
(h) Subject to Section 10.1(b)(ii), all Transaction Taxes, whether levied
on Purchaser or Seller or their respective Affiliates, shall be borne 50% by
Seller and 50% by Purchaser, and Seller shall file all necessary documentation
with respect to, and make all payments of, such Transaction Taxes and fees on a
timely basis.
10.3 Cooperation on Tax Matters.
(a) Purchaser and the Terminals Companies and Seller shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to this Article 10 and any
audit, litigation or other proceeding with respect to Taxes although the party
responsible for filing the Tax Return pursuant to this Agreement shall control
any such audit, litigation or other proceeding, provided that the controlling
party may not, without the consent of the other party, agree to any settlement
which would result in an increase in the amount of Taxes for which any other
party is or may be liable. Such cooperation shall include the retention and
(upon the other party's request) the provision of records and information which
are reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Purchaser and
Seller agree (i) to retain all
41
52
books and records with respect to Tax matters pertinent to the Terminals
Companies relating to any Taxable Period beginning before the Closing Date
until the expiration of the applicable statute of limitations (and, to the
extent notified by Purchaser or Seller, any extensions thereof) of the
respective Taxable Periods, and to abide by all record retention agreements
entered into with any taxing authority and (ii) to give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if the other party so requests, the Terminals
Companies, as the case may be, shall allow the other party to take possession
of such books and records.
(b) Purchaser and Seller further agree, upon reasonable request by the
other party, to use all reasonable commercial efforts to obtain any certificate
or other document from any Governmental Authority or any other Person as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions contemplated
hereby).
10.4 Carrybacks and Refunds. Any required amended Tax Return
relating to a Pre-Closing Date Period and any refund claims relating to a
Pre-Closing Date Period shall be prepared by Seller. Neither Purchaser nor any
of its Affiliates shall file any Tax Return or any other document which
attempts to carry back to any Pre-Closing Date Period any item of income, loss,
deduction or credit (including, without limitation, any net operating loss)
incurred, created or sustained during any Tax period which ends after the
Closing Date.
10.5 Survival. Anything to the contrary in this Agreement
notwithstanding, the representations, warranties, covenants, agreements, rights
and obligations of the parties hereto with respect to any Tax matter covered by
this Agreement shall survive the Closing and shall not terminate until the Tax
Statute of Limitations Date.
10.6 Conflict. In the event of a conflict between the provisions
of this Article 10 and any other provisions of this Agreement, the provisions
of this Article 10 shall control.
ARTICLE 11
MISCELLANEOUS
11.1 Expenses. Each party hereto shall bear its own expenses with
respect to this transaction. Purchaser shall pay any HSR Act or similar filing
or reporting fee.
11.2 Amendment. This Agreement may be amended, modified or
supplemented only in writing signed by each of the parties hereto.
11.3 Notices. Any written notice to be given hereunder shall be
deemed given: (a) when received if given in person or by courier; (b) on the
date of transmission if sent by telex, telecopy or other wire transmission
(receipt confirmed); (c) three (3) days after being deposited in the U.S. mail,
certified or registered mail, postage prepaid; and (d) if sent by a nationally
recognized overnight delivery service, the day following the date given to such
overnight delivery service (specified for overnight delivery). All notices
shall be addressed as follows:
42
53
If to Seller, addressed as follows:
GATX Rail Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser, addressed as follows:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P.
One ▇▇▇▇▇ Center, Suite 1000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
43
54
with a copy to:
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
South Tower Pennzoil Place
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11.4 Waivers. The failure of a party to require performance of any
provision hereof shall not affect its right at a later time to enforce the
same. No waiver by a party of any term, covenant, representation or warranty
contained herein shall be effective unless in writing. No such waiver in any
one instance shall be deemed a further or continuing waiver of any such term,
covenant, representation or warranty in any other instance.
11.5 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11.6 Headings. The headings preceding the text of Articles and
Sections of this Agreement and the Schedules and Exhibits thereto are for
convenience only and shall not be deemed part of this Agreement.
11.7 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAWS
OF CONFLICTS, OF THE STATE OF NEW YORK.
11.8 Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns;
provided, that no assignment of either party's rights or obligations may be
made without the written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, further, that Purchaser, Rail or
Holdings may assign all of its rights, privileges and obligations hereunder to
any Affiliate of Purchaser, Rail or Holdings (as applicable) without such
consent. No assignment under this Section 11.8 shall relieve Purchaser, Rail or
Holdings (as applicable) of any of its obligations under this Agreement.
11.9 No Third Party Beneficiaries. This Agreement is solely for
the benefit of the parties hereto and those Persons (or categories of Persons)
specifically described herein, and, except as aforesaid, no provision of this
Agreement shall be deemed to confer any remedy, claim or right upon any third
party.
11.10 Forum; Waiver of Jury Trial. Each party agrees that any suit,
action or proceeding brought by such party against the other in connection with
or arising from this Agreement ("Judicial Action") shall be brought solely in
the Circuit Court of ▇▇▇▇ County or the United States District Court for the
Northern District of Illinois, and each party consents to the jurisdiction and
venue of each such court. EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY JUDICIAL ACTION.
44
55
11.11 Schedules. Purchaser agrees that any disclosure by Seller in
any Schedule attached hereto shall (a) constitute a disclosure under each other
Schedule referred to herein for all purposes of this Agreement, whether or not
such disclosure is specifically referenced within such other Schedule, and (b)
not establish any threshold of materiality. Seller may, from time to time prior
to or at the Closing, by notice in accordance with the terms of this Agreement,
supplement or amend any Schedule to disclose any matter hereafter arising
which, if existing, occurring or known at the date hereof would have been
required to be so disclosed. No such supplemental or amended Schedule shall be
deemed to cure any breach of any representation or warranty for purposes of
Section 6.1. If, however, the Closing occurs, any such supplement and amendment
will be effective to cure and correct for all other purposes any breach of any
representation, warranty, covenant or obligation which would have existed if
Seller had not made such supplement or amendment, and all references to any
Schedule hereto which is supplemented or amended as provided in this Section
11.11 shall for all purposes at and after the Closing be deemed to be a
reference to such Schedule as so supplemented or amended.
11.12 Incorporation. The respective Schedules, Exhibits and
Appendices attached hereto and referred to herein are incorporated into and
form a part of this Agreement.
11.13 Complete Agreement. This Agreement and the Related Agreements
(if and when executed) constitute the complete agreement of the parties with
respect to the subject matter hereof and supersedes all prior discussions,
negotiations and understandings.
11.14 Disclaimer. Seller disclaims any representations or
warranties except as specifically set forth in this Agreement. In particular,
Seller disclaims any representation or warranty, and Purchaser agrees that
Seller shall have no liability, with respect to any information concerning the
Terminals Companies not expressly represented and warranted to in this
Agreement, including, without limitation, (a) the information set forth in the
Confidential Information Memorandum distributed by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
with respect to the Terminals Companies, (b) any information regarding the
Terminals Companies provided at any management presentation related to the
transactions contemplated by this Agreement, (c) any information communicated
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or made available through the data room process or (d)
any financial projection or forecast relating to any of the Terminals
Companies. With respect to any such projection or forecast delivered by or on
behalf of Seller to Purchaser, Purchaser acknowledges that (x) there are
significant uncertainties inherent in such projections and forecasts and (y)
Purchaser is familiar with such uncertainties and takes full responsibility for
making its own evaluation of the adequacy and accuracy of all such projections
and forecasts; provided, that Seller in no way limits the representations,
warranties, covenants or other agreements made by Seller hereunder. Purchaser
shall have no claim against Seller (or any of its officers, directors or
employees), and Seller shall have no liability to Purchaser, with respect to
any such disclaimed information, including, without limitation, the
Confidential Information Memorandum or any financial projection or forecast
relating to any of the Terminals Companies.
11.15 Knowledge Defined. For purposes of this Agreement, (a) the
term "knowledge of Seller" or variations thereof shall be limited to the actual
knowledge of the executive officers and directors of Seller set forth on
Schedule 11.15(a), and (b) the term "knowledge of Purchaser" or variations
thereof shall be limited to the actual knowledge of the executive officers and
directors of Purchaser set forth on Schedule 11.15(b).
45
56
11.16 Public Announcements. Seller and Purchaser each agree that
they and their Affiliates will not issue any press release or otherwise make
any public statement or respond to any media inquiry with respect to this
Agreement or the transactions contemplated hereby without the prior approval of
the other party, which shall not be unreasonably withheld, except as may be
required by Law or by any stock exchanges having jurisdiction over Seller,
Purchaser or their Affiliates.
11.17 Defined Terms. Certain capitalized terms used herein shall
have the meanings ascribed to such terms in Appendix I.
11.18 Currency. All references to "dollars" or "$" in this
Agreement shall mean United States Dollars.
11.19 Terminals Companies. Seller and Purchaser each agree that all
references in this Agreement to the stock, certificate of incorporation, bylaws
or other property or attribute related to the corporate form of each of the
Terminals Companies shall be deemed to refer to the analogous limited liability
company property or attribute upon the conversion of the Terminals Companies
into limited liability companies pursuant to the terms of this Agreement.
46
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered on November 30, 2000.
GATX RAIL CORPORATION
By:
-----------------------------------
Name:
Title:
GATX TERMINALS HOLDING
CORPORATION
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY
PARTNERS, L.P.
By Kinder ▇▇▇▇▇▇ ▇.▇., Inc.,
its general partner
By:
-----------------------------------
Name:
Title:
47
58
APPENDIX I
DEFINITIONS
The following terms shall have the following meanings:
"Acquisition Proposal" means any proposal for a merger or other
business combination to which the Terminals Companies are a party or the direct
or indirect acquisition of any equity interest in, or a substantial portion of
the assets of, the Terminals Companies, other than the transactions
contemplated by this Agreement.
"Adjustments" means, with respect to any financial statements
delivered by Seller to Purchaser hereunder, the following: (a) exclusion of the
assets, liabilities and results of operations of the Excluded Companies, (b)
exclusion of all intercompany balances with Seller and its Affiliates, (c)
exclusion of all cash balances and (d) exclusion of accruals for pension
liabilities, Other Post-Employment Benefits (other than with respect to the
Continuing Union Employees), workers compensation and long-term disability.
"Affiliate" means any Person controlling, controlled by or under
common control with another "Person"; for purposes of this definition (and for
such purposes only), "control" shall mean the ownership, directly or
indirectly, of 50% or more of the outstanding common stock of a Person.
"Aggregate Non-Current Balance Sheet Liability" means the aggregate of
all liabilities shown on the Closing Balance Sheet or the September 30th
Balance Sheet (as applicable) other than current liabilities; provided,
however, that a new liability set forth on the Closing Balance Sheet that was
not set forth on the September 30th Balance Sheet shall not be included in the
determination of Aggregate Non-Current Balance Sheet Liability as shown on the
Closing Balance Sheet to the extent that such liability was incurred to fund
the acquisition of a non-current asset which is reflected on the Closing
Balance Sheet in an amount at least equal to the related indebtedness.
"Agreement" means this Stock Purchase Agreement, including all
Appendices, Schedules and Exhibits hereto, as it may be amended from time to
time in accordance with its terms.
"Arbitrating Accounting Firm" shall have the meaning set forth in
Section 1.3(d).
"Asset Allocation" shall have the meaning set forth in Section 1.4.
"Bargaining Agreements" shall have the meaning set forth in Section
5.3(f).
"Benefit Plans" means an employee benefit plan, program, policy,
arrangement or agreement, including, but not limited to, employee welfare
benefit plans and employee pension benefit plans as defined in Sections 3(1)
and 3(2), respectively, of ERISA.
"Bonus Plans" means the (a) GATX Continuity Incentive Plan; (b) GATX
Safety Incentive Plan; (c) GATX Sales Retention Bonus Plan; (d) GATX Key
Manager Retention Plan;
A-1
59
(e) GATX Hot Skills Marketing Supplement Program; and (f) GATX Performance
Bonus Program (the Management Incentive Program).
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C.' 9601 et seq., as amended.
"Closing" shall have the meaning set forth in Section 1.2.
"Closing Balance Sheet" means the unaudited, pro forma consolidated
balance sheet of the Terminals Companies as of the Closing Date, prepared on a
basis consistent with the September 30th Balance Sheet (including, without
limitation, taking into account the Adjustments), which Closing Balance Sheet
shall not reflect any events subsequent to the Closing or related to the sale
of Terminals as contemplated herein.
"Closing Date" shall have the meaning set forth in Section 8.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Competing Transaction" shall have the meaning set forth in
Section 4.9.
"Confidentiality Agreement" means that certain Letter Agreement dated
July 21, 2000 between Terminals and Purchaser.
"Contracts" means all contracts (written or oral), plans,
undertakings, commitments or agreements (including, without limitation,
intercompany contracts).
"Debt Adjustment" means the difference between the Aggregate
Non-Current Balance Sheet Liability as shown on the September 30th Balance
Sheet and Aggregate Non-Current Balance Sheet Liability as shown on the Closing
Balance Sheet.
"Designated Approvals" shall have the meaning set forth in Section
4.14.
"DOJ" shall have the meaning set forth in Section 4.4.
"Environmental Laws" means all federal, state and local civil and
criminal laws, regulations, rules, ordinances, codes, decrees, judgments,
injunctions, directives or judicial or administrative orders relating to the
pollution, preservation or protection of the environment, natural resources or
human health and safety, including, without limitation, laws relating to
Releases or threatened Releases of Hazardous Substances (including, without
limitation, Releases to ambient air, surface water, groundwater, land, surface
and subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, transport, disposal or handling of
Hazardous Substances.
"Environmental Permits" shall have the meaning set forth in Section
2.19.
"Environmental Warranty" means a representation or warranty in Section
2.18 or Section 2.19.
A-2
60
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any Person which, together with another
Person, constitutes a single employer within the meaning of Section 414 of the
Code or a "controlled group" within the meaning of Section 4001(a)(14) of
ERISA."
"Excluded Companies" means GATX Terminals Antwerpen, N.V.; GATX Dutch
Holding Corporation B.V.; GATX Terminals Asia Private Limited; GATX Terminals
B.V.; GATX Terminals Limited; GATX Terminals Overseas Holding Corporation.;
Paktank Midland Storage Ltd.; Unitank Storage Co. Ltd.; GATX Terminals (Pulau
Busing) Limited; GATX Spanish Holding Corporation, S.L.; Corporacion Industrial
Portuaria S.A. de C.V.; GATX Siam Limited; GATX Terminals (Jurong) Pte. Ltd.;
Kertih Terminals SDN BHD; Manchester Jetline Limited; Nippon Chemical Handling
Co.; Nippon GATX Company Limited; Shandong Lanshan GATX Terminals Co., Ltd.;
Terminales Portuaria, S.A. (TEPSA), Wymondham Oil Storage Co. Limited, GATX
Thai Terminals, GATX Terminals de Argentina S.A., GATX Servicios S.A., GATX
Terminals Latin America Holding Corp., GATX Terminals de Mexico S.A. de C.V.,
Corporacion Industrial Portuaria S.A. de C.V., TPE, GPS and GATX SI, Inc.
"FTC" shall have the meaning set forth in Section 4.4.
"GAAP" means United States generally accepted accounting principles in
use from time to time as consistently applied by the Terminals Companies.
"GATX Non-Qualified Plan" shall have the meaning set forth in Section
5.3(e).
"GATX Qualified Plans" shall have the meaning set forth in Section
5.3(b).
"Governmental Authority" means any United States federal, state,
provincial or municipal entity, any foreign government and any political
subdivision or other executive, legislative, administrative, judicial,
quasi-judicial or other governmental department, commission, court, board,
bureau, agency or instrumentality, domestic or foreign.
"GPS" means, collectively, GATX Product Services, LP, a Delaware
limited partnership, and GATX Management Services, LLC, a Delaware limited
liability company.
"Hazardous Substances" means any pollutant, contaminant, petroleum or
petroleum product, dangerous or toxic substance, hazardous or extremely
hazardous substance or chemical, or otherwise hazardous material regulated
under Environmental Laws.
"Holdings" has the meaning specified in the preamble hereof.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Indemnified Person" means the Person or Persons entitled to, or
claiming a right to, indemnification under Article 9.
A-3
61
"Indemnifying Person" means the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article 9.
"Insurance Policies" means the policies or binders of fire, liability
and any other insurance listed on Schedule 2.16 held by or on behalf of the
Terminals Companies and covering their respective assets and operations which
in each case are material to the operation of the business of Terminals.
Schedule 2.16 accurately identifies the types, policy limits and coverage
amounts of such insurance coverage, including whether such policies of
liability insurance are "claims made" or "occurrence based."
"Insurance Premium" shall have the meaning set forth in Section 4.13.
"Insurer" shall have the meaning set forth in Section 4.13.
"Intellectual Property" means domestic and foreign: (a) registered and
unregistered trade names, trademarks and service marks; (b) patent
registrations and patent applications; and (c) copyright registrations and
copyright applications that, in each case, are material to the operation of the
business of the Terminals Companies.
"IRS" means the Internal Revenue Service.
"Judicial Action" shall have the meaning set forth in Section 11.10.
"Law" means any law, statute, regulation, ordinance, rule, order,
decree, judgment, consent decree, settlement agreement or governmental
requirement enacted, promulgated, entered into, agreed to or imposed by any
court or other governmental authority or body.
"Leased Real Property" means any real property that (a) is the subject
of a lease to which any Terminals Company is a party as lessee, (b) is material
to the conduct of the business of such Terminals Company as it is currently
being conducted and (c) requires aggregate annual rent payments from such
Terminals Company of $100,000 or more but shall not include any lease of any
pipeline interest.
"Lien" means any lien, security interest, charge, claim, mortgage,
deed of trust, option, lease or other encumbrance.
"Limited Partnership Agreement" means the Second Amended and Restated
Agreement of Limited Partnership of Purchaser dated as of January 14, 1998, and
effective as of February 14, 1997.
"Loss" or "Losses" means any and all damages, losses, actions,
proceedings, causes of action, obligations, liabilities, claims, encumbrances,
penalties, demands, assessments, judgments, costs and expenses including,
without limitation, court costs and reasonable attorneys' and consultants' fees
and costs of litigation but in any event shall exclude (a) any interest with
respect thereto or (b) consequential, punitive, special or incidental damages
or lost profits claimed, incurred or suffered by any Purchaser Indemnified
Party; provided, that the exclusion set forth in this clause (b) shall not
apply with respect to consequential, punitive, special or indirect damages or
lost profits otherwise subject to indemnity under Article 9 of this
A-5
62
Agreement and required to be paid by any Purchaser Indemnified Party to any
Person who is not an Affiliate (other than natural persons, including current
and former employees) of any Purchaser Indemnified Party.
"Maintenance Capital Expenditure" means the amount of a capital
expenditure necessary to replace or maintain assets due to obsolescence or wear
and tear; maintain or enhance the health of persons affected by the operation
of the business of the Terminals Companies; required due to government
regulation or regulatory order; or required for the protection of the
environment.
"Material Adverse Effect" means a material adverse effect on the
assets, operations or financial condition of the Terminals Companies taken as a
whole; provided, that, for purposes of this Agreement, a Material Adverse
Effect shall not include (a) changes to the industry or markets in which the
Terminals Companies operate that are not unique to the Terminals Companies and
(b) any change resulting from the announcement or disclosure of the
transactions contemplated herein.
"Material Contracts" shall have the meaning set forth in Section 2.14.
"Parent Group" shall have the meaning set forth in Section 10.2(a).
"Permitted Liens" means (a) Liens reflected in the Terminals Companies
September 30, 2000 Financial Statements; (b) Liens arising by operation of Law
for taxes not yet due and payable; (c) the rights of customers, suppliers and
subcontractors in the ordinary course of business under general principles of
commercial law; (d) Liens that would not reasonably be expected to have a
Material Adverse Effect; and (e) Liens noted on Schedule 2.5.
"Person" means any individual, corporation, partnership, association,
limited liability company, trust, governmental or quasi-governmental authority
or body or other entity or organization.
"Pre-Closing Date Periods" shall have the meaning set forth in Section
10.1.
"Prime Interest Rate" shall have the meaning set forth in Section
1.3(b).
"Purchase Price" shall have the meaning set forth in Section 1.2.
"Purchaser" shall have the meaning specified in the preamble hereof.
"Purchaser Indemnified Parties" shall have the meaning set forth in
Section 9.2.
"Purchaser Plans" shall have the meaning set forth in Section 5.3(f).
"Purchaser Savings Plan" shall have the meaning set forth in Section
5.3(c).
"Purchaser Welfare Benefits Plan" shall have the meaning set forth in
Section 5.3(d).
"Rail" shall have the meaning specified in the preamble hereof.
A-5
63
"Real Property" means any real property that (a) is owned in whole or
in part by any Terminals Company, (b) is material to the conduct of the
business of such Terminals Company as it is currently being conducted and (c)
has a market value of $1,000,000 or more.
"Regulations" means the Treasury Regulations promulgated under the
Code.
"Related Agreement" means any contract that is or is to be entered
into at the Closing or otherwise pursuant to this Agreement including, without
limitation, the Confidentiality Agreement and the Services Agreement. The
Related Agreements executed by a specified Person shall be referred to as "such
Person's Related Agreements," "its Related Agreements" or another similar
expression.
"Release" means any discharge, emission, spilling, leaking, pumping,
pouring, injecting, dumping, leaching, migrating or disposing into or through
the environment of any Hazardous Substance including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Substance.
"Schedule 9.2(a) Matters" shall have the meaning set forth in Section
9.2(a).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller" shall have the meaning specified in the preamble hereof.
"Seller Indemnified Parties" shall have the meaning set forth in
Section 9.3.
"Seller Pension Plan" shall have the meaning set forth in Section
5.3(b).
"Seller Savings Plan" shall have the meaning set forth in Section
5.3(b).
"Seller's Tax" shall have the meaning set forth in Section 10.2(c).
"Seller Welfare Benefit Plans" shall have the meaning set forth in
Section 5.3(d).
"September 30th Balance Sheet" means the balance sheet with respect to
the Terminals Companies included in the Terminals Companies September 30, 2000
Financial Statements (it being understood that, upon delivery of the audited
September 30th Balance Sheet to Purchaser pursuant to Section 2.9(b) hereof all
references to the "September 30th Balance Sheet" in this Agreement shall be
deemed to be to the audited September 30th Balance Sheet).
"Stock" shall have the meaning set forth in Section 1.1.
"Subsidiary Plan" shall have the meaning set forth in Section 2.13.
"Tax" or "Taxes" mean all taxes, charges, fees, duties, levies or
other assessments, including (without limitation) income, gross receipts,
capital stock, net proceeds, ad valorem, turnover, real, personal and other
property (tangible and intangible), sales, use, franchise, excise, value added,
stamp, leasing, lease, user, transfer, fuel, excess profits, occupational,
interest
A-6
64
equalization, windfall profits, unitary, severance and employees' income
withholding, unemployment and Social Security taxes, duties, assessments and
charges (including the recapture of any tax items such as investment tax
credits), which are imposed by the United States, or any Governmental
Authority, including, without limitation, any interest, penalties or additions
to tax related thereto imposed by any Governmental Authority (including any
interest or penalties with respect to such Taxes).
"Tax Items" shall have the meaning set forth in Section 10.2(a).
"Tax Losses" shall have the meaning set forth in Section 10.1(a).
"Tax Period" or "Taxable Period" means any period prescribed by any
Governmental Authority for which a Tax Return is required to be filed or a Tax
is required to be paid.
"Tax Return" means all returns and reports of or with respect to Taxes
required to be filed with any Governmental Authority or depository.
"Tax Statute of Limitations Date" means the close of business on the
45th day after the expiration of the applicable statute of limitations with
respect to Taxes, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).
"Tax Warranty" means a representation or warranty in Section 2.11.
"Terminals" shall have the meaning set forth in the preamble hereof.
"Terminals Companies Plans" shall have the meaning set forth in
Section 2.13.
"Terminals Facilities" shall have the meaning set forth in Section
4.13.
"Terminals Financial Statements" means the GATX Terminals Corporation
Consolidated Financial Statements for the Year-Ended December 31, 1999 attached
hereto as Schedule 2.9(a), with the Report of Independent Auditors.
"Terminals Companies September 30, 2000 Financial Statements" means
the unaudited (except for the September 30th Balance Sheet which shall be
audited as contemplated by this Agreement) consolidated financial statements of
the Terminals Companies as of September 30, 2000, attached hereto as Schedule
2.9(b), which Terminals Companies September 30, 2000 Financial Statements
reflect the Adjustments.
"Title and Authorization Warranty" means a representation or warranty
in Section 2.1, 2.2 or 3.1.
"TPE" shall have the meaning set forth in Section 5.9.
"Transaction Taxes" means all sales, use, transfer, filing,
recordation, registration and similar taxes and fees arising from or associated
with the transactions contemplated hereunder, but shall not include any taxes
based on income.
A-7
65
"Treasury Regulations" means the regulations promulgated from time to
time under the Code.
"WARN" shall have the meaning set forth in Section 5.3(a).
"Working Capital" means current assets of the Terminals Companies
minus current liabilities of the Terminals Companies, excluding (i) cash, (ii)
intercompany obligations between and among the Terminals Companies and Seller
or its Affiliates and (iii) the cash and other proceeds received by a Terminals
Company in connection with the divestiture of any asset between the date hereof
and the Closing pursuant to Section 4.3(e) hereof.
"Working Capital Adjustment" means the difference between Working
Capital as shown on the September 30th Balance Sheet and Working Capital as
shown on the Closing Balance Sheet.
A-8
