Exhibit 2(a)
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ASSET PURCHASE AGREEMENT
between
TRANSAMERICA LEASING INC.
TRANS OCEAN TANK SERVICES CORPORATION
and
WORLDWIDE CONTAINERS, INC.
[INTERMODAL TANK CONTAINERS]
Dated as of July 11, 2000
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS............................................................................ 1
ARTICLE II SALE OF ASSETS; ASSUMPTION OF LIABILITY; PURCHASE PRICE................................ 7
2.1 Sale and Purchase of Assets............................................................ 7
2.2 Excluded Assets........................................................................ 8
2.3 Assumption of Liabilities.............................................................. 8
2.4 Excluded Liabilities................................................................... 10
2.5 Subsequent Assumed Liabilities......................................................... 11
2.6 Consideration.......................................................................... 11
2.7 Equipment Adjustment................................................................... 11
2.8 Net Assets (Excluding Equipment) Adjustment............................................ 13
2.9 Cash Management After the Cut-Off Date................................................. 15
ARTICLE III CLOSING................................................................................ 17
3.1 Closing................................................................................ 17
3.2 Closing Deliveries..................................................................... 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS.............................................. 18
4.1 Organization, Power.................................................................... 18
4.2 Authority Relative to Agreement........................................................ 18
4.3 Non-Contravention...................................................................... 18
4.4 Consents............................................................................... 19
4.5 Statement of Net Assets (Excluding Equipment) and Preliminary Report................... 19
4.6 Litigation............................................................................. 19
4.7 Compliance with Laws; Permits and Licenses............................................. 20
4.8 Absence of Certain Changes or Events................................................... 20
4.9 Employees.............................................................................. 20
4.10 Taxes.................................................................................. 21
4.11 Material Contracts..................................................................... 21
4.12 Title to Assets; Absence of Encumbrances; Assets....................................... 22
4.13 Leases of Real Property................................................................ 22
4.14 Environmental.......................................................................... 23
4.15 Intellectual Property.................................................................. 23
4.16 Brokers................................................................................ 23
4.17 No Regulatory Impediment............................................................... 23
4.18 Limitation on Representations and Warranties........................................... 24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................ 24
5.1 Organization........................................................................... 24
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5.2 Authority Relative to Agreement....................................................... 24
5.3 Non-Contravention..................................................................... 24
5.4 Consents.............................................................................. 25
5.5 Brokers............................................................................... 25
5.6 Available Funds....................................................................... 25
5.7 Access................................................................................ 25
5.8 No Regulatory Impediment.............................................................. 25
ARTICLE VI COVENANTS............................................................................. 26
6.1 Conduct of Business................................................................... 26
6.2 Access; Confidentiality; Post Cut-Off Date Matters.................................... 26
6.3 Taking of Necessary Action; Funding................................................... 27
6.4 Release of Sellers from Assumed Liabilities........................................... 28
6.5 Insurance; Risk of Loss............................................................... 28
6.6 Assumption of Proceedings............................................................. 29
6.7 Mail; Payments........................................................................ 29
6.8 License of Name....................................................................... 29
6.9 Post-Closing Accounting Cooperation................................................... 31
6.10 Assigned Contracts.................................................................... 31
6.11 Bulk Sales Waiver..................................................................... 31
6.12 Public Announcements.................................................................. 31
6.13 Information Technology................................................................ 32
6.14 Notice of Developments................................................................ 32
6.15 Further Assurances.................................................................... 32
ARTICLE VII EMPLOYEE MATTERS...................................................................... 32
7.1 Business Employees.................................................................... 32
7.2 Employment............................................................................ 33
7.3 Employee Benefits..................................................................... 34
7.4 Assumption of Liabilities............................................................. 34
7.5 Retirement Plan for Salaried Business Employees....................................... 35
7.6 401(k) Plan........................................................................... 35
7.7 TARRP................................................................................. 36
7.8 Worker's Compensation................................................................. 37
7.9 Vacation Pay.......................................................................... 37
7.10 Welfare Plans......................................................................... 37
7.11 Bonuses............................................................................... 38
7.12 Plant Closing Laws.................................................................... 38
7.13 Employee Communications............................................................... 38
ARTICLE VIII CONDITIONS TO THE CLOSING............................................................. 39
8.1 Conditions of Obligation of Each Party................................................ 39
8.2 Additional Conditions to the Obligations of Purchaser................................. 39
8.3 Additional Conditions to the Obligations of Sellers................................... 40
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER..................................................... 41
9.1 Termination........................................................................... 41
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9.2 Effect of Termination................................................................. 41
ARTICLE X TAX MATTERS........................................................................... 42
10.1 Post-Closing Tax and Accounting Matters............................................... 42
10.2 Allocation of Consideration........................................................... 42
ARTICLE XI INDEMNIFICATION....................................................................... 43
11.1 By Sellers............................................................................ 43
11.2 By Purchaser.......................................................................... 44
11.3 Indemnification Procedure............................................................. 45
11.4 Survival.............................................................................. 45
11.5 Exclusivity........................................................................... 46
ARTICLE XII MISCELLANEOUS......................................................................... 46
12.1 Amendment and Modification; Waiver of Provisions...................................... 46
12.2 Expenses.............................................................................. 46
12.3 Successors and Assigns; Assignments................................................... 47
12.4 No Third Parties Benefited............................................................ 47
12.5 Notices............................................................................... 47
12.6 Law Governing......................................................................... 48
12.7 Counterparts.......................................................................... 48
12.8 Entire Agreement...................................................................... 48
12.9 Choice of Forum; Waiver of Jury Trial................................................. 49
12.10 Union Tank Car Company Guarantee...................................................... 49
Exhibit A Agreed Values
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of July 11, 2000 ("this
Agreement"), between TRANSAMERICA LEASING INC., a Delaware corporation, and
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TRANS OCEAN TANK SERVICES CORPORATION, a Delaware corporation (each, a "Seller,"
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and collectively, "Sellers"), and WORLDWIDE CONTAINERS, INC., a Delaware
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corporation ("Purchaser").
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WITNESSETH
WHEREAS, Sellers own certain assets and properties used in the conduct
of the Business (as hereinafter defined);
WHEREAS, Sellers and Purchaser desire to enter into this Agreement
pursuant to which Sellers agree to sell to Purchaser and Purchaser agrees to
purchase from Sellers substantially all of the assets, properties, rights and
business of and to assume certain liabilities relating to the Business.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
The following terms when used in this Agreement shall have the
following meanings:
"Accounting Firm" has the meaning set forth in Section 10.2.
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"Accounts Receivable" means each and all trade accounts, notes and
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other receivables of Sellers and their Subsidiaries in respect of the Business,
and all claims relating thereto or arising therefrom, as reflected on the
Statement of Net Assets (Excluding Equipment).
"Affiliate" means, with respect to any Person, any other Person
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controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" (including with correlative meaning, the
terms "controlled by" and "under common control with") as used with respect to
any Person shall mean (a) the ownership of 50% or more of the voting securities
or other voting interests of such Person or (b) the possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies of such Person, whether through ownership of voting securities, by
contract or otherwise.
"Agreed Value" means the value of the applicable owned, managed and
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leased-in Tank Containers and Tank Chassis set forth in Exhibit A.
"Agreement" has the meaning set forth in the introductory paragraph
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hereof.
"Allocation Agreement" has the meaning set forth in Section 10.2.
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"Applicable Law" has the meaning set forth in Section 4.3 (b)(i).
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"Assets" has the meaning set forth in Section 2.1.
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"Assumed Liabilities" has the meaning set forth in Section 2.3.
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"Benefit Plan" has the meaning set forth in Section 4.9(b).
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"Business" means Sellers' Tank Container Business, comprised of Tank
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Container and Tank Chassis rental, operating leasing and management businesses.
"Business Claims" has the meaning set forth in Section 6.5(b)(ii).
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"Business Day" means any day which is not a Saturday, Sunday or a day
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on which banks in New York City are authorized or obligated by law or executive
order to be closed.
"Business Employees" has the meaning set forth in Section 7.1.
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"Business Employment Agreements" has the meaning set forth in Section
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7.3(c).
"Business Liabilities" has the meaning set forth in Section 6.5(b)(i).
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"Cash Management Schedule" has the meaning set forth in Section
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2.9(a)(ii).
"Closing" has the meaning set forth in Section 3.1.
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"Closing Date" has the meaning set forth in Section 3.1.
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"Closing Net Assets (Excluding Equipment)" has the meaning set forth
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in Section 2.8(b).
"Closing Report" has the meaning set forth in Section 2.7(a)(ii).
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"Closing Statement of Net Assets (Excluding Equipment)" has the
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meaning set forth in Section 2.8(b).
"COBRA" has the meaning set forth in Section 7.10(b).
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"Code" means the Internal Revenue Code of 1986, as amended, and the
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rules and regulations promulgated thereunder.
"Confidentiality Agreement" means the Confidentiality Agreement, dated
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March 13, 2000, between Parent and Purchaser.
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"Contract" has the meaning set forth in Section 4.3.
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"Cut-Off Date" has the meaning set forth in Section 3.1.
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"Disputed Amount" has the meaning set forth in Section 2.7(a)(iii).
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"Disputed Cash Management Items" has the meaning set forth in Section
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2.9(b)(i).
"Disputed Net Asset Items (Excluding Equipment)" has the meaning set
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forth in Section 2.8(c)(i).
"Encumbrances" means the mortgages, claims, liens, charges,
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encumbrances, imperfections of or other matters affecting title, and any rights
of third parties whatsoever.
"Environmental Laws" means any and all U.S. federal, state and local
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and foreign statutes, laws, judicial, administrative and regulatory decisions,
regulations, ordinances, codes, licenses, authorizations and approvals which
relate to the protection of the environment or to emissions, discharges,
releases or spills of Hazardous Substances into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended.
"Excluded Assets" has the meaning set forth in Section 2.2.
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"Excluded Liabilities" has the meaning set forth in Section 2.4.
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"Final Net Assets (Excluding Equipment)" has the meaning set forth in
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Section 2.8(c)(ii).
"GAAP" means United States generally accepted accounting principles as
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of the date hereof.
"Governmental Authority" has the meaning set forth in Section 4.3(b).
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"Hazardous Substances" means any toxic, radioactive, chemical or other
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otherwise hazardous substance, pollutant, contaminant, waste, genetically
modified organism, petroleum or petroleum product and any substances that are
defined or listed in or otherwise classified pursuant to any Environmental Law.
"HSR Act" has the meaning set forth in Section 8.1(b).
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"Indemnified Costs" has the meaning set forth in Section 11.1(a).
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"Instruments of Transfer" means warranty deeds, bills of sale,
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assignments, endorsements of certificates of title and other instruments and
documents.
"Intellectual Property" has the meaning set forth in Section 4.15.
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"Interest Rate" has the meaning set forth in Section 2.6.
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"IRS" means the Internal Revenue Service of the United States of
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America or any successor agency or authority.
"Lease" has the meaning set forth in Section 4.13.
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"Leased Premises" has the meaning set forth in Section 4.13.
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"Liabilities" has the meaning set forth in Section 2.3.
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"License" has the meaning set forth in Section 6.8(a).
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"License Term" has the meaning set forth in Section 6.8(a).
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"LTIP" means the Transamerica Finance Corporation Long-Term Incentive
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Plan.
"Material Adverse Effect" means any change or event that, individually
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or when taken together with all other such changes or events, is materially
adverse to the financial condition, ongoing operations or business of the
Business or Assets, taken as a whole (other than (a) as a result of changes (i)
in prevailing interest rates or financial market conditions, (ii) in general
economic conditions affecting any industry in which the Business operates or
which it serves, (iii) in law or applicable regulations or the official
interpretations thereof or (iv) in GAAP or (b) as a result of the announcement
or expectation of the consummation of the transactions contemplated hereby).
"Material Contract" has the meaning set forth in Section 4.11.
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"Names" has the meaning set forth in Section 6.8(b).
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"Net Assets (Excluding Equipment)" means the sum of the assets minus
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the sum of the liabilities as determined in accordance with Section 2.8 of the
Seller Disclosure Schedule.
"Parent" means Transamerica Corporation.
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"PBGC" means the Pension Benefit Guaranty Corporation.
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"Permits" means permits, certificates, licenses, approvals and other
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authorizations of Governmental Authorities.
"Permitted Encumbrances" means (a) the lien of current Taxes not yet
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due and payable or which are being contested in good faith, (b) lease Contracts
relating to Tank Containers and Tank Chassis owned or leased by any Seller or
any of its Subsidiaries, (c) operating lease-in and management Contracts
relating to Tank Containers and Tank Chassis owned by third parties, (d)
Encumbrances disclosed in Section 1.1(c) of the Seller Disclosure Schedule and
(e) such imperfections of title and other Encumbrances, if any, which,
individually or in the aggregate, do not materially impair the use of the
relevant Asset in the ordinary course of business consistent with past
practices.
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"Person" means any individual, corporation, partnership, joint
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venture, association, joint stock company, limited liability company or other
form of entity, trust, unincorporated organization or government or any agency
or political subdivision thereof.
"Prefix" has the meaning set forth in Section 6.8(b)(ii).
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"Preliminary Net Assets (Excluding Equipment)" has the meaning set
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forth in Section 2.8(d).
"Preliminary Report" has the meaning set forth in Section 2.7(a)(i).
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"Proposed Allocation" has the meaning set forth in Section 10.2.
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"Purchase Price" has the meaning set forth in Section 2.6.
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"Purchaser" has the meaning set forth in the introductory paragraph
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hereof.
"Purchaser DC Plan" has the meaning set forth in Section 7.6(a).
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"Purchaser Disclosure Schedule" means the disclosure schedule
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delivered by Purchaser to Sellers at the time of execution hereof.
"Retirement Plan" means the Retirement Plan for Salaried U.S.
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Employees of Parent and its Affiliates.
"Seller" or "Sellers" has the meaning set forth in the introductory
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paragraph hereof.
"Seller Bonus Plan" has the meaning set forth in Section 7.11.
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"Seller Disclosure Schedule" means the disclosure schedule delivered
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by Sellers to Purchaser at the time of execution hereof.
"Seller 401(k) Plan" has the meaning set forth in Section 7.6(a).
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"Seller Management" means Xxxxxx X. Xxxx, Xxxx X. Xxxxxxxx, Xxxxxx
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Bergbaum and Xxxxxx Xxxxx.
"Seller's Insurance Policies" has the meaning set forth in Section
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6.5(b)(i).
"Separation Pay Plan" means the Transamerica Separation Pay Plan as in
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effect on March 31, 2000.
"Statement of Net Assets (Excluding Equipment)" has the meaning set
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forth in Section 2.8(a).
"Status" has the meaning set forth in Section 2.7(a)(i).
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"Subsequent Assumed Liabilities" has the meaning set forth in Section
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2.5.
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"Subsidiary" means, with respect to any entity, a corporation or other
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legal entity of which the outstanding shares of stock or other equity interests
having ordinary voting power to elect a majority of the board of directors (or
comparable body) of such corporation or other entity are owned, directly or
indirectly through one or more intermediaries, by such entity.
"Tank Chassis" means any and all drop frame tank chassis owned,
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managed or leased-in by any Seller or any of its Subsidiaries and used or held
for use in connection with the Business.
"Tank Container" means any and all tank containers and road tanks
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owned, managed or leased-in by any Seller or any of its Subsidiaries and used or
held for use in connection with the Business.
"TARRP" has the meaning set forth in Section 7.7(a)
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"TARRP Payment" has the meaning set forth in Section 7.7.
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"TARRP/TRP Continuation Period" has the meaning set forth in Section
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7.7(a)
"Taxes" means any and all U.S. federal, state, county, provincial and
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local, and foreign and other taxes, including, without limitation, all net
income, gross income, gross receipts, premium, estimated, sales, use, ad
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valorem, property, transfer, franchise, profits, license, withholding, payroll,
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employment, excise, severance, VAT, GST, consumption, stamp and occupation taxes
and customs duties, together with any interest, additions to tax or interest,
and penalties with respect thereto imposed by any Taxing Authority with respect
to the Business or the Assets.
"Taxing Authority" means any Governmental Authority having
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jurisdiction over the assessment, determination, collection or other imposition
of Taxes.
"Third Party Consents" has the meaning set forth in Section 4.4.
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"Trademarks" has the meaning set forth in Section 6.8(a).
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"Transferred Employees" has the meaning set forth in Section 7.2(a).
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"TRP" has the meaning set forth in Section 7.7(a)
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"TRP Payment" has the meaning set forth in Section 7.7.
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"2000 Incentive Bonus" has the meaning set forth in Section 7.11.
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"Year" has the meaning set forth in Section 2.7(a)(i).
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ARTICLE II
SALE OF ASSETS; ASSUMPTION OF LIABILITY; PURCHASE PRICE
2.1 Sale and Purchase of Assets. At the Closing, Sellers shall sell,
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transfer, assign, convey and deliver to Purchaser, and Purchaser shall purchase
and acquire from Sellers, all right, title and interest of Sellers in and to all
of the assets, other than Excluded Assets, wherever located, which are set forth
below in this Section 2.1 (each and all of the foregoing items, the "Assets"):
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(a) all Tank Containers and Tank Chassis;
(b) all of the rights and benefits of any Seller under Contracts
primarily relating to the Business, including Leases with respect to the Leased
Premises (but not including Contracts relating to systems hardware, software and
other information technology or Contracts relating to Benefit Plans unless
expressly assumed elsewhere in this Agreement), including the Material Contracts
set forth in Section 4.11 of the Seller Disclosure Schedule;
(c) all books, records, files, documents, correspondence, drawings,
specifications, promotional materials, studies and reports of any Seller
primarily relating to the Assets and Assumed Liabilities;
(d) the Names, Trademarks and Prefixes, solely to the extent provided by
the license granted pursuant to Section 6.8(a);
(e) all personal computers primarily relating to the Business which are
set forth in Section 2.1(e) of the Seller Disclosure Schedule, and all
equipment, furniture, fixtures and other tangible personal property located at
the Leased Premises primarily relating to the Business;
(f) all Permits used or held for use primarily in connection with the
Business, to the extent such Permits are assignable;
(g) all Accounts Receivable; and
(h) all machinery, vehicles, tools, replacement and spare parts and
supplies owned by any Seller and used or held for use primarily in connection
with the Business.
To the extent any assets (other than the Excluded Assets), wherever
located, and coming within the descriptions of subsections (a) - (h) above are
owned, managed or leased-in by any Subsidiary or other Affiliate of any Seller,
(i) such items are included within the term "Assets," (ii) such Subsidiary is
deemed to be included within the term "Sellers" and (iii) Sellers shall cause
each such Subsidiary and other Affiliate, at the Closing, to convey such Assets
to Purchaser, or to Sellers for conveyance to Purchaser, in accordance with the
provisions hereof.
2.2 Excluded Assets. Notwithstanding the provisions of Section 2.1, the
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term "Assets" shall not include any property or assets of any Seller or any of
its Affiliates of any kind or nature, real or personal, tangible or intangible,
not expressly set forth in Section 2.1 (each and
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all of such items being herein referred to as "Excluded Assets"), including,
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without limitation, the following:
(a) all assets and property owned or leased by any Seller or any of its
Affiliates and located at Sellers' headquarters in Purchase, New York, other
than the items set forth in Section 2.1(e) of the Seller Disclosure Schedule;
(b) any cash or cash equivalent investments of any Seller or any of its
Affiliates;
(c) any assets and associated claims arising out of Excluded Assets or
Excluded Liabilities;
(d) Tax receivables and Tax refunds relating to the Business;
(e) the corporate and Tax records of any Seller;
(f) all systems hardware and software, except as specified in Section 2.1;
(g) Sellers' insolvency insurance policy with Royal Belge S.A.
d'Assurances covering bankrupt customers, and the Assets with respect to which
Sellers have put Royal Belge S.A. d'Assurances on notice of a claim or potential
claim under such policy prior to the Closing;
(h) Claims and actions set forth in Section 2.2(h) of the Seller
Disclosure Schedule;
(i) The Names, Trademarks and Prefixes, except to the extent of the
license granted pursuant to Section 6.8(a);
(j) all Leases of Sellers, other than with respect to the Leased Premises;
(k) all insurance policies held by any Seller; and
(l) all rights in the Benefit Plans, unless expressly assumed elsewhere in
this Agreement.
2.3 Assumption of Liabilities. Notwithstanding anything to the contrary
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herein, at the Closing, Purchaser shall assume and become liable for, and shall
pay, perform and discharge as and when due all of the following debts,
liabilities, claims, demands, expenses, commitments and obligations (whether
accrued or not, known or unknown, disclosed or undisclosed, fixed or contingent,
asserted or unasserted, liquidated or unliquidated, arising prior to, at or
after the Closing) (each, a "Liability" and collectively, "Liabilities") of
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Sellers (other than the Excluded Liabilities) (each and all of the foregoing
items, the "Assumed Liabilities"):
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(a) all Liabilities reflected on the Statement of Net Assets (Excluding
Equipment) to the extent not satisfied or discharged on or prior to the Cut-Off
Date;
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(b) all Liabilities to be reflected on the Closing Statement of Net
Assets (Excluding Equipment);
(c) all Liabilities arising from commitments (in the form of accepted
purchase orders or otherwise) or outstanding quotations, proposals or bids to
purchase or sell, lease or manage Tank Containers and/or Tank Chassis (which, to
the extent they are binding on the date hereof, are set forth in Section 2.3(c)
of the Seller Disclosure Schedule);
(d) all Liabilities arising from commitments (in the form of issued
purchase orders or otherwise), or outstanding quotations, proposals or bids, to
purchase or acquire components, machinery, vehicles, tools, tires, replacement
and spare parts, and/or other materials primarily in connection with the
Business (which, to the extent they are binding on the date hereof, are set
forth in Section 2.3(d) of the Seller Disclosure Schedule);
(e) all Liabilities under Contracts, Leases and Permits used or held for
use primarily in connection with the Business, and all Liabilities arising from
actual or potential disputes with lessees of Assets, depot owners or operators,
owners of managed equipment or other customers or recipients of services
provided by the Business (except as otherwise provided with respect to Trencor
in Section 4.6(c) of the Seller Disclosure Schedule);
(f) all Liabilities under Articles VII, X and XI that Purchaser has
expressly agreed to assume, pay for or be responsible for;
(g) all Liabilities of Sellers under any guaranties issued, granted or
provided primarily in connection with the Business to the extent such guaranties
are set forth in Section 2.3(g) of the Seller Disclosure Schedule or otherwise
incurred in accordance with this Agreement;
(h) all Liabilities with respect to any condition of or return, warranty,
or other similar Liabilities relating to Tank Containers, Tank Chassis and other
products or services of the Business; provided that liabilities in respect of
death, personal injury or other injury to persons or property, or liabilities
arising under Environmental Laws (including Permits under Environmental Laws),
in each case arising out of the condition of Assets on or prior to the Cut-Off
Date, shall not be deemed to be Assumed Liabilities;
(i) any retrospective premiums, reinsurance payments, payments under
reimbursement contracts or other adjustments under any insurance policy
maintained for the benefit of any Seller and/or any of its Affiliates or their
respective predecessors covering any Liability that is an Assumed Liability or
covering any period after the Cut-Off Date but only to the extent any such
insurance policy, if any, is assumed by Purchaser or any of its Affiliates; and
(j) subject to the provisions of Section 2.4(f) hereof, all other
Liabilities arising out of facts, events or occurrences after the Cut-Off Date
to the extent primarily relating, directly or indirectly, to the Business.
To the extent any Liabilities (other than Excluded Liabilities), wherever
located, relating to or arising out of the Business, are Liabilities of any
Subsidiary or other Affiliate of any Seller, (i) such Liabilities are included
within the term "Assumed Liabilities," (ii) such
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Subsidiary or other Affiliate is deemed to be included within the term "Sellers"
and (iii) Purchaser shall assume and indemnify and hold harmless Sellers, their
Affiliates, officers, directors, employees, agents, successors and assigns and
related entities from such Liabilities and such Liabilities shall be Assumed
Liabilities for purposes of this Agreement.
2.4 Excluded Liabilities. Notwithstanding Section 2.3, the term "Assumed
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Liabilities" shall not include any Liabilities not set forth in Section 2.3 (the
"Excluded Liabilities"), including, without limitation, the following:
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(a) all Liabilities to the extent arising out of the Excluded Assets;
(b) all Liabilities Sellers have expressly agreed to retain, pay for or be
responsible for pursuant to Articles X and XI;
(c) all Liabilities relating to any Benefit Plan with respect to which a
Seller or any of its Affiliates has any Liability which are not assumed by
Purchaser under Article VII;
(d) all Liabilities to the extent relating to or arising out of the
operations or businesses of Sellers or any of their Subsidiaries other than the
Business or the Assets;
(e) all Taxes to the extent arising out of facts, events or occurrences on
or prior to the Cut-Off Date (including without limitation deferred income
taxes) and Tax reserves relating to the Business to the extent arising out of
facts, events or occurrences on or prior to the Cut-Off Date;
(f) all foreign income Taxes required to be paid by Purchaser in respect
of income arising from Contracts executed and delivered by either Seller or any
of its Subsidiaries on or prior to the Cut-Off Date which Contracts are included
within the term "Assets," to the extent that such foreign income Taxes are
assessed against Purchaser resulting from a determination by a foreign tax
authority that either Seller maintained a permanent establishment on or prior to
the Cut-Off Date in the country which assesses such tax (it being understood
that, subject to compliance with applicable law, at the request and expense of
Sellers, Purchaser shall dispute in good faith any such tax assessment if and to
the extent (based upon the advice of counsel to Purchaser) it has a reasonable
basis for doing so); it being further understood that (i) a liability under this
Section 2.4(f) shall only be an Excluded Liability if it relates to income
arising during the term of a Contract as it existed as of the Cut-Off Date, and
(ii) if a Contract is modified or extended after the Cut-Off Date in a manner
which could reasonably be expected to increase Seller's obligations under this
Section 2.4(f), any increased liability resulting from such modification or
extension shall not be an Excluded Liability; and
(g) all other Liabilities not set forth in items (a) through (f) of this
Section 2.4, arising out of facts, events or occurrences on or prior to the Cut-
Off Date, other than a Liability which is an Assumed Liability (unless expressly
assumed elsewhere in this Agreement);
2.5 Subsequent Assumed Liabilities. Notwithstanding anything to the
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contrary herein, upon the third anniversary of the Closing Date, Purchaser shall
assume and become liable for, and shall pay, perform and discharge as and when
due all of the Liabilities of Sellers with respect to the Business which are
included in Section 2.4(g) including all Liabilities
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which would have been Assumed Liabilities but for the fact that such Liabilities
arose out of facts, events or occurrences on or prior to the Cut-Off Date (the
"Subsequent Assumed Liabilities"); provided that the foregoing Liabilities
------------------------------ --------
related to claims, demands or other obligations which have been asserted
against, or for which notice has been given to, any Seller prior to the third
anniversary of the Closing Date (either (i) by Purchaser in accordance with
Section 11.3 or (ii) by a third party claimant including reasonable specificity
and detail such as would have entitled Purchaser to claim under Section 11.3)
shall not constitute Subsequent Assumed Liabilities and shall remain Excluded
Liabilities after the third anniversary of the Closing Date.
2.6 Consideration. Subject to the terms and conditions of this Agreement,
-------------
in reliance on the representations, warranties, covenants and agreements of
Sellers contained herein and in consideration of the sale, assignment and
transfer of the Assets referred to in Section 2.1, at the Closing on the Closing
Date, Purchaser will assume the Assumed Liabilities and pay to Sellers by wire
transfer of immediately available funds in New York City which are denominated
in U.S. dollars, to such account or accounts as Sellers shall designate in
writing to Purchaser not less than at least one Business Day prior to the
Closing Date the amount of $263.7 million plus interest from the Cut-Off Date to
the Closing Date, inclusive, at an annual rate equal to (i) the daily closing
three-month London Interbank Offered Rate (LIBOR) as reported from time to time
on page C-1 of the "Money and Investing" section of The Wall Street Journal plus
-----------------------
(ii) 100 basis points (the "Interest Rate"), such interest to be calculated on
-------------
the basis of a year of 365 days (the "Purchase Price"), subject to adjustment as
--------------
provided herein; provided that if the Closing has not occurred by October 15,
--------
2000, the Interest Rate from and after October 15, 2000 shall be ten percent
(10%); and provided, further, that the purchase of the Assets and the assumption
-------- -------
of the Assumed Liabilities provided for in this Article II shall be deemed to
occur as of the Cut-Off Date.
2.7 Equipment Adjustment.
--------------------
(a) Delivery of Preliminary Report and Closing Report. (i) Attached
-------------------------------------------------
hereto as Section 2.7(a) of the Seller Disclosure Schedule is a Preliminary
Report (the "Preliminary Report") which contains information as of March 31,
------------------
2000. The Preliminary Report sets forth, in each case as of March 31, 2000, (A)
the number of the Tank Containers and Tank Chassis owned, managed and leased-in
by the Business at March 31, 2000, categorized by whether they are owned,
managed or leased-in by any Seller or any Subsidiary thereof (each of the
foregoing categories, a "Status"), and further listed by type and year of
------
manufacture or first acceptance by such Seller or any of its Subsidiaries or, if
applicable, predecessor owners into its fleet of equipment in the case of owned
Tank Containers and Tank Chassis and type and year of manufacture or first
acceptance by the current or, if applicable, predecessor owner into its fleet of
equipment in the case of managed or leased-in Tank Containers and Tank Chassis
(the applicable manufacture or acceptance year as such year is reflected in such
Seller's records,
-11-
"Year") and (B) the Agreed Value (as determined pursuant to Exhibit A) per
----
owned, managed or leased-in Tank Container and Tank Chassis listed by Year.A
(ii) As promptly as practicable, but in no event more than 30
Business Days after the Closing Date, Sellers shall prepare and deliver to
Purchaser a report (the "Closing Report") setting forth the information that had
--------------
been contained in the Preliminary Report with respect to the Tank Containers and
Tank Chassis owned, managed and leased-in by Sellers and their Subsidiaries as
of the Cut-Off Date. The Closing Report so delivered shall be accompanied by the
data on which such Closing Report was based.
(iii) Sellers shall provide Purchaser and its counsel,
accountants and other advisors full access to books, records and personnel of
the Business as reasonably requested by Purchaser in order to understand and
verify the accuracy of the Closing Report in accordance with the procedures of
Section 2.7(c)(i). During the 15 Business Days following delivery by Sellers of
the Closing Report, Purchaser shall be free to dispute any item reflected in the
Closing Report. At the end of the 15-Business Day period provided by this
Section 2.7(a)(iii), Purchaser and Sellers shall jointly prepare a report
listing the matters in dispute by item and valuing each disputed item based on
the Agreed Value per owned, managed or leased-in Tank Container and Tank Chassis
applicable to equipment within a particular Year, in each case in the relevant
amounts set forth in the Preliminary Report, and setting forth the aggregate
amount of all disputed items, as so valued (such aggregate amount, the "Disputed
--------
Amount"). Promptly following the conclusion of such 15-Business Day period and
------
completion of the report referred to in the preceding sentence, Sellers shall
pay to Purchaser or Purchaser shall pay to Sellers, as applicable, the amount of
the adjustments to be made pursuant to Sections 2.7(b)(i) and 2.7(b)(ii) which
have been resolved during such period.
(b) Purchase Price Adjustment and Post-Closing Adjustment for Number
----------------------------------------------------------------
of Units. (i) If the number of any type of Tank Containers or Tank Chassis
--------
within a particular Year set forth on the Closing Report shall be greater than
the number of such Tank Containers and Tank Chassis within that Year shown on
the Preliminary Report, Purchaser shall pay to Sellers an amount equal to the
product of (A) the number of Tank Containers and Tank Chassis set forth on the
Closing Report within the particular Year which were not also reflected in the
Preliminary Report times (B) the Agreed Values set forth on the Preliminary
-----
Report with respect to owned, managed or leased-in Tank Containers and Tank
Chassis, as the case may be, within that Year.
(ii) If the number of any type of Tank Containers or Tank
Chassis within a particular Year set forth on the Closing Report shall be less
than the number of such Tank Containers or Tank Chassis within that Year shown
on the Preliminary Report, Sellers shall pay to Purchaser an amount equal to the
product of (A) the number of Tank Containers and Tank Chassis within the
particular Year set forth on the Preliminary Report which were not also
reflected in the Closing Report times (B) the Agreed Values set forth on the
-----
Preliminary Report with respect to owned, managed or leased-in Tank Containers
and Tank Chassis, as the case may be, within that Year.
__________________
A New equipment acquired after March 31, 2000 is to be valued at Sellers'
cost.
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(c) Disagreements with Respect to Closing Report. (i) If after the 15-
--------------------------------------------
Business Day period provided in Section 2.7(a)(iii) there shall be a Disputed
Amount, Purchaser shall, within 15 Business Days following delivery of the
report contemplated by Section 2.7(a)(iii) with respect to disputed items and
the Disputed Amount, deliver a notice to Sellers setting forth in reasonable
detail Purchaser's disagreement with the Closing Report.
(ii) If a notice of disagreement shall be delivered pursuant to
Section 2.7(c)(i), the parties shall, during the 15-Business Days following
delivery of the notice that sets forth Purchaser's disagreement, use reasonable
efforts to reach agreement on the disputed items or the Disputed Amount. If,
during such period, the parties are unable to reach such agreement, then they
shall promptly thereafter pursue binding arbitration by an independent
arbitrator reasonably satisfactory to Purchaser and Sellers (who shall not have
any material relationship with Purchaser or Sellers) who shall deliver to
Sellers and Purchasers, as promptly as practicable, a report setting forth the
resolution of the Disputed Amount. Such arbitration shall be final, conclusive
and binding upon the parties hereto. The cost of such arbitration shall be
borne equally by Purchaser on the one hand and Sellers on the other hand.
(iii) Any payment resulting from the adjustment to be made pursuant to
Section 2.7(b) shall be paid by wire transfer of immediately available funds in
New York City which are denominated in U.S. dollars, to such account or accounts
as Sellers or Purchaser, as the case may be, shall designate in writing to the
other party hereto at least two Business Days prior to the time such payment is
required pursuant to this Section 2.7(c)(iii) and shall be paid (i) within five
Business Days after expiration of the time for delivery of a notice of
disagreement pursuant to Section 2.7(c)(i) if no such notice of disagreement is
delivered pursuant to said Section 2.7(c)(i), or (ii) if a notice of
disagreement is delivered pursuant to Section 2.7(c)(i), then within five
Business Days after the earlier of (A) agreement between the parties pursuant to
Section 2.7(c)(ii) with respect to the Disputed Amount and (B) the report of the
independent arbitrator referred to in Section 2.7(c)(ii).
2.8 Net Assets (Excluding Equipment) Adjustment.
-------------------------------------------
(a) Statement of Net Assets (Excluding Equipment). Attached hereto as
---------------------------------------------
Section 2.8 of the Seller Disclosure Schedule is a Statement of Net Assets
(Excluding Equipment) (the "Statement of Net Assets (Excluding Equipment)")
---------------------------------------------
which contains information as of March 31, 2000, and which contains a
description of the methodology utilized to prepare such Statement including,
without limitation, how the accrual for repairs is determined.
(b) Closing Statement of Net Assets (Excluding Equipment). As promptly
-----------------------------------------------------
as practicable, but in no event more than 30 Business Days after the Closing
Date, Sellers shall prepare and deliver to Purchaser a statement (the "Closing
-------
Statement of Net Assets (Excluding Equipment)") of Net Assets (Excluding
---------------------------------------------
Equipment) (the "Closing Net Assets (Excluding Equipment)") as of the Cut-Off
----------------------------------------
Date, which shall be prepared in good faith based on the books and records of
Sellers and their Subsidiaries and shall be complete and correct in all material
respects in accordance with the methodologies set forth in Section 2.8 of the
Seller Disclosure Schedule.
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(c) Determination of Post-Closing Adjustments; Dispute Resolution. (i)
-------------------------------------------------------------
Sellers shall provide Purchaser and its counsel, accountants and other advisers
reasonable access to books, records and personnel of the Business as reasonably
requested by Purchaser in order to understand and verify the accuracy of the
Closing Statement of Net Assets (Excluding Equipment). During the 15 Business
Days following delivery by Sellers of the Closing Statement of Net Assets
(Excluding Equipment), Purchaser shall be free to dispute any item on the
Statement. At the end of the 15 Business Day period provided by this Section
2.8(c)(i), Purchaser and Sellers shall jointly prepare a report listing the
items in dispute by item (the "Disputed Net Asset Items (Excluding Equipment)").
----------------------------------------------
Promptly following the conclusion of such 15 Business Day period and completion
of the report referred to in the preceding sentence, Sellers shall pay to
Purchaser or Purchaser shall pay to Sellers, as applicable, the amount of the
adjustments to be made pursuant to Section 2.8(d) which have been resolved
during such period.
(ii) If after the 15-Business Day period provided in Section
2.8(c)(i) there shall be Disputed Net Asset Items (Excluding Equipment),
Purchaser shall, within 15 Business Days following delivery of the jointly
prepared report with respect to Disputed Net Asset Items (Excluding Equipment),
deliver a notice to Sellers setting forth in reasonable detail Purchaser's
disagreement with the Closing Statement of Net Assets (Excluding Equipment). If
a notice of disagreement shall be delivered pursuant to the previous sentence of
this Section 2.8(c)(ii), the parties shall, during the 15 Business Days
following delivery of the notice that sets forth Purchaser's disagreement, use
reasonable efforts to reach agreement on the Disputed Asset Items (Excluding
Equipment). If, during such period, the parties are unable to reach such
agreement, then they shall promptly thereafter pursue binding arbitration by an
independent arbitrator reasonably satisfactory to both Sellers and Purchaser
(who shall not have any material relationship with Sellers or Purchaser) who
shall deliver to Sellers and Purchaser, as promptly as practicable, a report
setting forth the resolution of the Disputed Asset Items (Excluding Equipment)
and thus the resulting calculation of the Net Assets (Excluding Equipment). Such
arbitration shall be final, conclusive and binding upon the parties hereto. The
cost of such arbitration shall be borne equally by Purchaser on the one hand and
Sellers on the other hand. The resulting calculation of Net Assets (Excluding
Equipment) which is finally determined pursuant to this Section 2.8(c) either by
agreement of the parties or as a result of determination by independent
arbitrator (or, if there is no dispute, then the calculation of Closing Net
Assets (Excluding Equipment) derived therefrom) shall be referred to herein as
the "Final Net Assets (Excluding Equipment)."
-------------------------------------
(d) Adjustments of Purchase Price. (i) If the Final Net Assets
-----------------------------
(Excluding Equipment) are lower than the Net Assets (Excluding Equipment) as
reflected on the Statement of Net Assets (Excluding Equipment) ("Preliminary Net
---------------
Assets (Excluding Equipment)") (either because Final Net Assets (Excluding
----------------------------
Equipment) is a negative number where Preliminary Net Assets (Excluding
Equipment) is a positive number or a smaller positive number than the positive
number constituting Preliminary Net Assets (Excluding Equipment)), Sellers shall
pay to Purchaser the amount by which (i) the Preliminary Net Assets (Excluding
Equipment) exceeds (ii) the Final Net Assets (Excluding Equipment). If Final
Net Assets (Excluding Equipment) is greater than Preliminary Net Assets
(Excluding Equipment) (because Final Net Assets (Excluding Equipment) is a
larger positive number than the positive number constituting Preliminary Net
Assets (Excluding Equipment)), Purchaser shall pay to Sellers the amount by
-14-
which (i) the Final Net Assets (Excluding Equipment) exceeds (ii) the
Preliminary Net Assets (Excluding Equipment).
(ii) Any payment resulting from the adjustment to be made
pursuant to Section 2.8(d) shall be paid by wire transfer of immediately
available funds in New York City which are denominated in U.S. dollars, to such
account or accounts as Sellers or Purchaser, as the case may be, shall designate
in writing to the other party hereto at least two Business Days prior to the
time such payment is required pursuant to this Section 2.8(d)(ii) and shall be
paid (i) within five Business Days after expiration of the time for delivery of
a notice of disagreement pursuant to Section 2.8(c)(ii) if no such notice of
disagreement is delivered pursuant to said Section 2.8(c)(ii), or (ii) if a
notice of disagreement is delivered pursuant to Section 2.8(c)(ii), then within
five Business Days after the earlier of (A) agreement between the parties
pursuant to Section 2.8(c)(ii) with respect to the Disputed Net Asset Items
(Excluding Equipment) and (B) the report of the independent arbitrator referred
to in Section 2.8(c)(ii).
2.9 Cash Management After the Cut-Off Date.
--------------------------------------
(a) Cash Management Schedule. (i) From the day after the Cut-Off
---------------------
Date until the Closing, (A) any payments in the ordinary course of Business
consistent with past practice by any Seller or any other Affiliate of Parent for
the benefit of the Business (including, without limitation, for wages, salaries
and other employee benefits or otherwise with respect to any individuals who
would be Business Employees assuming that the Closing had occurred on the Cut-
Off Date, but excluding bonus payments to be made by the Sellers pursuant to
Section 7.11, any payments of Excluded Liabilities, or with respect to which
Purchaser is indemnified by Sellers hereunder) shall be treated as a payable to
Sellers from the Business; (B) any goods or services provided by any Seller or
any other Affiliate of Parent in the ordinary course of Business consistent with
past practice for the benefit of the Business shall be treated as a payable to
Sellers from the Business and the amounts which are so treated (including,
without limitation, all charges for corporate shared services, allocations and
amortization/depreciation of shared systems and software) shall be in accordance
with the prior practice for intercompany transactions between Sellers or any
other Affiliate of Parent and the Business; and (C) all receipts of the Business
after the Cut-Off Date (including without limitation, in respect of sales of
Tank Containers and/or Tank Chassis) which are transferred to Sellers or any
other Affiliate of Parent shall be treated as a payable to the Business from
Sellers, and the amounts which are so treated shall be in accordance with the
prior practice for intercompany transactions between Sellers or any other
Affiliate of Parent and the Business.
(ii) The net balance as of the Closing Date due to the Sellers
or the Business, as the case may be, in respect of the aggregate amounts
described in clauses (A) through (C) of Section 2.9(a)(i), as reflected in a
schedule of such amounts (the "Cash Management Schedule") which shall be
------------------------
attached to the Closing Statement of Net Assets (Excluding Equipment) shall be
paid by Purchaser to Sellers (if a net balance is due to Sellers) or Sellers to
Purchaser (if a net balance is due to the Business), within five Business Days
following delivery of the Closing Statement of Net Assets (Excluding Equipment)
to Purchaser together with interest thereon at an annual rate equal to the
Interest Rate, such interest to be calculated on the basis of a year of 365
days, calculated with respect to each separate item included in the
-15-
calculation of such net balance from the date such item accrued or arose to the
date immediately preceding the date of payment.
(b) Disagreements with Respect to Cash Management Schedule. (i)
------------------------------------------------------
Sellers shall provide Purchaser and its counsel, accountants and other advisors
full access to books, records and personnel of the Business as reasonably
requested by Purchaser in order to understand and verify the accuracy of the
Cash Management Schedule. During the 15 Business Days following delivery by
Sellers of the Cash Management Schedule, Purchaser shall be free to dispute any
item reflected in the Cash Management Schedule. At the end of the 15 Business
Day period provided by this Section 2.9(b)(i), Purchaser and Sellers shall
jointly prepare a report listing the matters in dispute by item (the "Disputed
--------
Cash Management Items"). Promptly following the conclusion of such 15 Business
---------------------
Day period and completion of the report referred to in the preceding sentence,
Sellers shall pay to Purchaser or Purchaser shall pay to Sellers, as applicable,
the amount of the adjustments to be made pursuant to this Section 2.9(b) which
have been resolved during such period.
(ii) If after the 15-Business Day period provided in Section
2.9(b)(i) there shall be Disputed Cash Management Items, Purchaser shall, within
15 Business Days following delivery of the report contemplated by Section
2.9(b)(i) with respect to Disputed Cash Management Items, deliver a notice to
Sellers setting forth in reasonable detail Purchaser's disagreement with the
Cash Management Schedule.
(iii) If a notice of disagreement shall be delivered pursuant to
Section 2.9(b)(ii), the parties shall, during the 15 Business Days following
delivery of the notice that sets forth Purchaser's disagreement, use reasonable
efforts to reach agreement on the Disputed Cash Management Items. If, during
such period, the parties are unable to reach such agreement, then they shall
promptly thereafter pursue binding arbitration by an independent arbitrator
reasonably satisfactory to Purchaser and Sellers (who shall not have any
material relationship with Purchaser or Sellers) who shall deliver to Sellers
and Purchaser, as promptly as practicable, a report setting forth the resolution
of the Disputed Cash Management Items. Such arbitration shall be final,
conclusive and binding upon the parties hereto. The cost of such arbitration
shall be borne equally by Purchaser on the one hand and Sellers on the other
hand.
(iv) Any payment resulting from the adjustment to be made
pursuant to Section 2.9(b) shall be paid by wire transfer of immediately
available funds in New York City which are denominated in U.S. dollars, to such
account or accounts as Sellers or Purchaser, as the case may be, shall designate
in writing to the other party hereto at least two Business Days prior to the
time such payment is required pursuant to this Section 2.9(b)(iv) and shall be
paid (i) within five Business Days after expiration of the time for delivery of
a notice of disagreement pursuant to Section 2.9(b)(ii) if no such notice of
disagreement is delivered pursuant to said Section 2.9(b)(ii), or (ii) if a
notice of disagreement is delivered pursuant to Section 2.9(b)(ii), then within
five Business Days after the earlier of (A) agreement between the parties
pursuant to Section 2.9(b)(iii) with respect to the Disputed Cash Management
Items and (B) the report of the independent arbitrator referred to in Section
2.9(b)(iii).
-16-
ARTICLE III
CLOSING
3.1 Closing. Unless this Agreement shall have been terminated and
-------
the transactions herein abandoned pursuant to Article IX, subject to the
provisions of Article VIII, the closing (the "Closing") of the purchase of the
-------
Assets and the assumption of the Assumed Liabilities provided for in Article II
shall take place at the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., New York City time, on the third
business day following the satisfaction or waiver of the conditions set forth in
Article VIII, but in no event earlier than the tenth business day of a calendar
month and in no event later than November 30, 2000, or at such other place and
time and on such other date as the parties may agree. The date on which the
Closing occurs is herein called the "Closing Date"; provided that the purchase
------------
of the Assets and the assumption of the Assumed Liabilities provided for in
Article II shall be deemed to occur as of the close of business on the earlier
to occur of (i) the last calendar day of the month immediately preceding the
month in which the Closing Date occurs and (ii) September 30, 2000 (the earlier
of such events, the "Cut-Off Date"), and the Closing Report provided for in
------------
Section 2.6(a) (including any post-closing adjustments arising therefrom), the
Closing Statement of Net Assets (Excluding Equipment) and the Closing Net Assets
(Excluding Equipment) (including any post-closing adjustments arising therefrom)
shall present the information to be required therein as of the Cut-Off Date.
3.2 Closing Deliveries. (a) At the Closing, Sellers will deliver or
------------------
cause to be delivered to Purchaser:
(i) duly executed counterparts of the Instruments of
Transfer;
(ii) the books and records constituting Assets, including
inspection certificates and certifications;
(iii) a duly executed counterpart of an assumption of Assumed
Liabilities;
(iv) all such other deeds, documents, certificates,
assignments, agreements and other instruments as, in the reasonable opinion of
Purchaser, are necessary to vest in Purchaser legal and beneficial title to the
Assets; and
(v) all other previously undelivered agreements,
instruments, certificates and documents required hereunder to be delivered by
Sellers to Purchaser at or prior to the Closing in connection with the
transactions contemplated hereby.
(b) At the Closing, Purchaser will deliver to Sellers:
(i) the Purchase Price to be delivered at the Closing in
accordance with Article II hereof;
(ii) a duly executed counterpart of an assumption of Assumed
Liabilities;
-17-
(iii) a duly executed counterpart of the Instruments of
Transfer; and
(iv) all other previously undelivered agreements, instruments,
certificates and documents required hereunder to be delivered by Purchaser to
Sellers at or prior to the Closing in connection with the transactions
contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, represent and warrant to Purchaser
that, except as set forth in the Seller Disclosure Schedule by specific
reference to the applicable Section of this Agreement (provided that if a
reasonable person would consider a disclosure in the Seller Disclosure Schedule
to be applicable to other sections of this Agreement, then each such Section of
this Agreement shall be deemed to be so qualified):
4.1 Organization, Power. Each Seller is a corporation duly
-------------------
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Each Seller and its Subsidiaries, as applicable, have full power
and authority to own all of the Assets and to carry on the Business as it is now
being conducted, and, where applicable, is duly qualified or licensed to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the nature of the Business or Assets makes such qualification or
license necessary, except where failure to be so incorporated, existing,
qualified, licensed or in good standing would not have a Material Adverse
Effect.
4.2 Authority Relative to Agreement. Each Seller has the requisite
-------------------------------
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by
each Seller of this Agreement and the consummation by such Seller of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. This Agreement constitutes a valid and legally binding
agreement of each Seller enforceable against such Seller in accordance with its
terms.
4.3 Non-Contravention. The execution and delivery of this Agreement
-----------------
by each Seller does not, and the consummation by such Seller of the transactions
contemplated hereby and the performance by such Seller of the obligations which
it is obligated to perform hereunder will not, (a) violate any provision of the
certificate of incorporation or by-laws or other organizational documents of
such Seller or (b) assuming that all consents, authorizations, orders or
approvals of, filings or registrations with, and notices to, each United States
federal, state, local and foreign (including European Community) governmental
entity, commission, board or other regulatory authority or agency ("Governmental
------------
Authority") listed in Section 4.4(a) of the Seller Disclosure Schedule and all
---------
Third Party Consents listed in Section 4.4(b) of the Seller Disclosure Schedule
have been obtained or made, (i) violate any law, regulation, rule, order,
judgment or decree to which such Seller or any of its Subsidiaries is subject
("Applicable Law") or (ii) violate, result in the termination or the
--------------
acceleration of, or conflict with or constitute a default under, or result in
the creation or imposition of any Encumbrance, other than Permitted
Encumbrances, upon any of the Assets pursuant to any agreement, mortgage,
indenture, lease,
-18-
franchise, Permit or other instrument (each, a "Contract") to which such Seller
--------
or any of its Subsidiaries is a party primarily relating to the Business or by
which any of the Assets is bound, except, in the case of clauses (b)(i) and
(b)(ii), for such violations, terminations, accelerations, conflicts, defaults,
or losses of licenses or other contractual rights as would not have a Material
Adverse Effect, and for Encumbrances (other than Permitted Encumbrances) as
would not be materially adverse to the Business.
4.4 Consents. (a) Except as described in Section 4.4(a) of the
--------
Seller Disclosure Schedule, no consent, authorization, order or approval of,
filing or registration with, or notice to, any Governmental Authority and (b)
except as described in Section 4.4(b) of the Seller Disclosure Schedule, no
consent, authorization, order or approval of, filing or registration with, or
notice to, any party to any Contract (collectively, "Third Party Consents") to
--------------------
which any Seller or any of its Subsidiaries is a party primarily relating to the
Business or by which any of the Assets is bound is required for the execution
and delivery of this Agreement by such Seller and the consummation by such
Seller of the transactions contemplated hereby, except for such consents,
authorizations, orders, approvals, filings, registrations, notices or Third
Party Consents (i) which are required solely by reason of the specific
regulatory status of Purchaser or any Affiliate thereof or (ii) the failure of
which to be obtained or made would not have a Material Adverse Effect or
prohibit the consummation by such Seller of the transactions contemplated
hereby.
4.5 Statement of Net Assets (Excluding Equipment) and Preliminary
-------------------------------------------------------------
Report. Each of the Statement of Net Assets (Excluding Equipment) and the
------
Preliminary Report has been prepared in good faith, is based on the books and
records of Sellers and their Subsidiaries and is complete and correct in all
material respects in accordance with the methodologies set forth in Section 2.8
of the Seller Disclosure Schedule as of the date as of which it speaks. All
Accounts Receivable have arisen in the ordinary course of the Business for
valuable consideration.
4.6 Litigation. Except as set forth in Section 4.6(a) of the Seller
----------
Disclosure Schedule and except for Excluded Liabilities, there is no material
action, suit or proceeding pending or, to the knowledge of Sellers, threatened
against any Seller or any of its Subsidiaries primarily relating to or arising
out of the Business or the Assets before any court, arbitrator or Governmental
Authority to which any Seller or Subsidiary is a party with respect to the
Business or by which the Business or any Assets are bound. Section 4.6(b) of the
Seller Disclosure Schedule sets forth each action, suit or proceeding known to
Seller Management as of the date hereof which is pending against Seller or any
of its Subsidiaries with respect to the Business or by which the Business or any
Assets are bound. Except as set forth on Section 4.6 of the Seller Disclosure
Schedule, there are no material orders, judgments, injunctions or decrees to
which any Seller or Subsidiary is a party with respect to the Business or by
which the Business or any Assets are bound.
Section 4.6(c) of the Seller Disclosure Schedule sets forth a brief
description of actual disputes and potential disputes with lessees of Assets,
depot owners, owners of managed equipment or other customers in each case known
to Seller Management as of the date hereof that would reasonably be expected to
give rise to financial detriment to the Business (i) in the amount of $50,000 or
more, in any such case or (ii) in the amount of $100,000 in the aggregate with
respect to individual actual disputes or potential disputes in an amount of
$20,000 or more
-19-
with the same counterparty or Persons who are known to Seller Management as of
the date hereof to be Affiliates of such counterparty.
4.7 Compliance with Laws; Permits and Licenses. (a) Except as set
------------------------------------------
forth in Section 4.7(a) of the Seller Disclosure Schedule, the Business is being
conducted in compliance with all Applicable Laws, except where the failure to so
comply would not have a Material Adverse Effect. Except as set forth in Section
4.7(a) of the Seller Disclosure Schedule, Seller has not received any written
notice since June 1, 1998 with respect to the material failure of the Business
to be conducted in compliance with all Applicable Laws.
(b) Except as would not have a Material Adverse Effect, each
Seller, its Subsidiaries, and/or the Business holds all Permits necessary for
the operation of the Business as presently conducted. All such Permits are in
full force and effect and no proceedings are pending or, to the knowledge of
Sellers, threatened by a Governmental Authority for the suspension, revocation
or termination of any such Permits, except where such failures to be in full
force and effect and such proceedings would not have a Material Adverse Effect.
Section 4.7(b) of the Seller Disclosure Schedule sets forth all such Permits
that are material to the Business. Sellers have heretofore made available for
inspection by, or furnished to, Purchaser true and complete copies of all such
material Permits.
(c) To the knowledge of Seller Management as of the date hereof,
there are no pending or currently proposed new laws or regulations or changes in
laws or regulations, which, if adopted, would have a Material Adverse Effect.
4.8 Absence of Certain Changes or Events. Since March 31, 2000, (a)
------------------------------------
there has not been any change or development in or affecting the Business or
Assets that has had a Material Adverse Effect and (b) the Business has been
operated in the ordinary course of business consistent with past practices.
4.9 Employees. (a) Sellers and their Subsidiaries are not party to
---------
or subject to any collective bargaining agreements with any union representing
any of the Business Employees (other than for Business Employees providing
services in a jurisdiction outside of the United States to the extent required
by Applicable Law) and, except as set forth in Section 4.9(a) of the Seller
Disclosure Schedule, have no written contracts of employment with any of the
Business Employees.
(b) Except as set forth in Section 4.9(b) of the Seller Disclosure
Schedule, Sellers and their Subsidiaries do not maintain with respect to the
Business Employees any "employee benefit plan" (within the meaning of Section
3(3) of ERISA), or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, excess benefit, stock, stock option, severance,
termination pay, change in control, fringe benefit, voluntary employee
beneficiary association or other employee benefit plans, programs or
arrangements, including, but not limited to, those providing medical, dental,
vision, disability, life insurance and vacation, sick leave, holidays and other
paid time off benefits, qualified or unqualified, funded or unfunded or any
comparable plans subject to the laws of foreign jurisdictions (each, a "Benefit
-------
Plan" and collectively "Benefit Plans") or related trust agreement that relate
---- -------------
solely to the Business Employees.
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(c) Except as disclosed in Article VII of this Agreement, no
Business Employee will become entitled to any retirement, severance or similar
benefit or enhanced or accelerated benefit solely as a result of the
transactions contemplated hereby that will be an Assumed Liability of Purchaser.
No amount required to be paid or payable to or with respect to any Business
Employee in connection with the transactions contemplated hereby (either solely
as a result thereof or as a result of such transactions in conjunction with any
other event) will be an "excess parachute payment" within the meaning of Section
280G of the Code.
(d) Neither Seller nor any of its Affiliates has sponsored,
maintained or contributed to, during the six years prior to the date hereof, a
"multiemployer plan" as defined in Code Section 414(f) or ERISA Sections 3(37)
or 4001(a)(31) which may result in any Liability to the Purchaser.
(e) No assets of the Business are subject to any lien under ERISA
Section 302(f) or Code Section 412(n).
4.10 Taxes. (a) Sellers have paid all Taxes payable with respect to
-----
the Assets or the Business, the non-payment of which would result in a lien on
any of the Assets (other than Permitted Encumbrances) or would result in
Purchaser becoming liable or responsible therefor.
Sellers have not to their knowledge maintained any permanent
establishment outside of the United States with respect to the Business in the
past 6 years or received any written notification to the contrary from any
foreign tax authority, nor are there any facts, events or occurrences which
would reasonably lead Sellers to believe that they have maintained any permanent
establishment outside of the United States with respect to the Business during
such period. Sellers have not incurred Liabilities for foreign income taxes
with respect to the Business in excess of $2 million per year in any of the past
6 years.
4.11 Material Contracts. Section 4.11 of the Seller Disclosure
------------------
Schedule sets forth a list of each Contract in effect on the date hereof to
which any Seller or any of its Subsidiaries is a party or by which any of the
Assets is bound and, in each case, which, either individually or together with
all other contracts with the same counterparty (or Persons who are known to
Seller Management as of the date hereof to be Affiliates of such counterparty),
is material to the Business (each a "Material Contract"). With respect to each
-----------------
Material Contract, except as set forth in Section 4.11 of the Seller Disclosure
Schedule, (a) such Material Contract is a legal, valid and binding agreement of
the Seller party thereto, enforceable against such Seller in accordance with its
terms and in full force and effect as of the date hereof, (b) no Seller is in
breach or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default by any Seller or permit any third party to
terminate, modify or accelerate such Material Contract and (c) no Seller has
repudiated any such Material Contract except in the case of clauses (a)-(c) as
would not be material to the Business. Except as set forth on Section 4.11 of
the Seller Disclosure Schedule, no Material Contract contains any covenant that
would be an Assumed Liability not to compete in any line of business or with any
person or entity.
4.12 Title to Assets; Absence of Encumbrances; Assets. (a) Except as
------------------------------------------------
set forth in Section 4.12(a) of the Seller Disclosure Schedule, Sellers have
good and valid title to the Assets, in each case free and clear of all
Encumbrances other than Permitted Encumbrances. As
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of the Closing, there will be no Encumbrances relating to any of the Assets
other than Permitted Encumbrances.
(b) Upon consummation of the transactions contemplated hereby
including all agreements entered into in connection with this Agreement,
Purchaser shall acquire the Assets, other than Excluded Assets, necessary for
the continuing conduct of the Business substantially as conducted by Sellers
immediately prior to the date of this Agreement.
(c) Except as set forth in Section 4.12(c) of the Seller Disclosure
Schedule or pursuant to this Agreement, there does not exist any right, option
or agreement granting any Person the right to purchase or otherwise acquire any
of the Tank Containers and Tank Chassis.
(d) Except as set forth in Section 4.12(d) of the Seller Disclosure
Schedule, the Tank Containers and Tank Chassis that are off-hire as of the date
of the Statement of Net Assets (Excluding Equipment) have been maintained in all
material respects in good operating condition (or an accrual has been made and
reflected on the Statement of Net Assets (Excluding Equipment) to the extent
that such Tank Containers and Tank Chassis have not been so maintained) and
(after giving effect to all applicable accruals reflected on the Statement of
Net Assets (Excluding Equipment)) are or would reasonably be expected to be
suitable and adequate in all material respects for their currently intended use.
The Tank Containers and Tank Chassis that are on-hire as of the date hereof are
in all material respects, subject to leases which provide for the lessee to
maintain such Tank Container or Tank Chassis, as applicable, in good operating
condition, normal wear and tear excepted and are suitable and adequate in all
material respects for their current use.
(e) Section 4.12(d) of the Seller Disclosure Schedule sets forth,
as of the date hereof, a list of the Tank Containers and Tank Chassis that are
currently held for sale.
4.13 Leases of Real Property. The only real estate leased, as of the
-----------------------
date hereof, by any Seller or any of its Subsidiaries, in each case as lessee,
which is used or held for use primarily in connection with the Business are
those properties located in Houston, Texas and Tokyo, Japan (the "Leased
------
Premises"). Each real property lease (a "Lease") with respect to the Leased
-------- -----
Premises is a legal, valid and binding obligation of a Seller or a Subsidiary
thereof which is a lessee thereof and, to Sellers' knowledge, is in full force
and effect and enforceable in accordance with its terms. Sellers and their
Subsidiaries do not own any real property (other than real property acquired in
satisfaction of debts previously contracted in good faith) used primarily in
connection with the Business. With respect to each Lease relating to the Leased
Premises, except as set forth in Section 4.13 of the Seller Disclosure Schedule,
(a) no Seller is in breach or default, and no event has occurred which with
notice or lapse of time would constitute a breach or default by any Seller or
permit any third party to terminate such Lease, and (b) to the knowledge of the
Seller Management, (i) no third party lessor is in breach or default, and (ii)
no event has occurred which with notice or lapse of time would constitute a
breach or default by such third party lessor or permit any Seller to terminate
such Lease. Sellers have heretofore made available for inspection by, or
furnished to, Purchaser or its counsel true and complete copies of each Lease
related to the Leased Premises.
-22-
4.14 Environmental. Except as set forth in Section 4.14 of the
-------------
Seller Disclosure Schedule, except for Excluded Liabilities, and except as would
not be material, no notice, demand, request for information, citation, claim,
action, proceeding, summons or complaint has been received by any Seller or any
of its Subsidiaries, and no penalty has been assessed or, to Sellers' knowledge,
threatened against any Seller or any of its Subsidiaries, nor, to Sellers'
knowledge, is an investigation pending, by any Governmental Authority with
respect to any (a) alleged violation by any Seller or any of its Subsidiaries of
any Environmental Law with respect to the Assets, the conduct of the Business or
the leased or owned real property used or held for use primarily in connection
with the Business, (b) alleged failure by any Seller or any of its Subsidiaries
to have any Permit required under any Environmental Law in connection with the
conduct of the Business or (c) release, disposal, transportation or storage of
any Hazardous Substance by any Seller or any of its Subsidiaries in connection
with the conduct of the Business or at, upon, or under the leased real property
used or held for use primarily in the Business.
4.15 Intellectual Property. Except as would not have a Material
---------------------
Adverse Effect, the trademarks, trade names and service marks listed in Section
6.8 (the "Intellectual Property") are owned free and clear of all Encumbrances
---------------------
by, or validly licensed to, a Seller or its Subsidiaries, as applicable. Except
as would not have a Material Adverse Effect and except as set forth in Section
4.15 of the Seller Disclosure Schedule, each Seller and its Affiliates owns or
possesses, and has taken all actions appropriate to record, reserve and protect,
adequate and enforceable long-term licenses or other rights to use all such
Intellectual Property.
4.16 Brokers. No broker, investment banker, financial advisor or
-------
other Person, other than Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. and Xxxxxxxxx Lufkin
and Xxxxxxxx, the fees and expenses of which will be paid by a Seller or an
Affiliate thereof, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of any Seller or
any Affiliate of any Seller.
4.17 No Regulatory Impediment. Sellers are not aware of any fact
------------------------
relating to their business, operations, financial condition or legal status that
might impair their ability to obtain, on a timely basis, all consents,
authorizations, orders, approvals and Permits from, and make all necessary
filing and registrations with and all notices to, Governmental Authorities
necessary for the consummation of the transactions contemplated hereby.
4.18 Limitation on Representations and Warranties. Except as
--------------------------------------------
otherwise set forth herein, Sellers make no representations or warranties as to
the Assets or the Business, which are being transferred to Purchaser "AS IS,"
"WHERE IS" and with all defects at the Closing Date. Without limiting the
generality of the foregoing, Sellers make no representation or warranty to
Purchaser with respect to (a) any projections, estimates or budgets heretofore
delivered to or made available to Purchaser of future revenues, expenses or
expenditures, future results of operations (or any component thereof), future
cash flows or future financial condition (or any component thereof) of the
Assets or the Business (including, without limitation, any information included
in or omitted from the Confidential Offering Memorandum previously furnished to
Purchaser) or (b) any other information or documents made available to Purchaser
or its counsel, accountants, advisors or other representatives with respect to
the Assets or the
-23-
Business, except as expressly covered by a representation and warranty contained
in Sections 4.1 through 4.16.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to each Seller that, except as
otherwise set forth in the Purchaser Disclosure Schedule by specific reference
to the applicable Section of this Agreement (provided that if a reasonable
--------
person would consider a disclosure in the Seller Disclosure Schedule to be
applicable to other sections of this Agreement, then each such Section of this
Agreement shall be deemed to be so qualified):
5.1 Organization. Purchaser is a corporation duly incorporated,
------------
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
5.2 Authority Relative to Agreement. Purchaser has the requisite
-------------------------------
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by
Purchaser of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby have been and prior to Closing the consummation
by Purchaser of the transactions contemplated hereby will be duly authorized by
all necessary corporate action. This Agreement constitutes a valid and legally
binding agreement of Purchaser enforceable against Purchaser in accordance with
its terms.
5.3 Non-Contravention. The execution and delivery of this Agreement
-----------------
by Purchaser do not, and the consummation by Purchaser of the transactions
contemplated hereby and the performance by Purchaser of the obligations which it
is obligated to perform hereunder will not, (a) violate any provision of the
certificate of incorporation or by-laws or other organizational documents of
Purchaser or (b) assuming that all consents, authorizations, orders or approvals
of, filings or registrations with, and notices to, each Governmental Authority
listed in Section 5.4(a) of the Purchaser Disclosure Schedule and all Third
Party Consents listed in Section 5.4 (b) of the Purchaser Disclosure Schedule
have been obtained or made, (i) violate any Applicable Law or (ii) violate,
result in the termination or the acceleration of, or conflict with or constitute
a default under, any Contract to which Purchaser is a party or by which any of
its properties are bound, except, in the case of clauses (b)(i) and (b)(ii), for
such violations, terminations, accelerations, conflicts or defaults as would not
prohibit, materially delay or otherwise materially impair Purchaser's ability to
consummate the transactions contemplated hereby.
5.4 Consents. (a) Except as described in Section 5.4(a) of the
--------
Purchaser Disclosure Schedule, no consent, authorization, order or approval of,
filing or registration with, or notice to, any Governmental Authority and (b)
except as described in Section 5.4(b) of the Purchaser Disclosure Schedule, no
Third Party Consent is required for the execution and delivery of this Agreement
by Purchaser and the consummation by Purchaser of the transactions contemplated
hereby, except for such consents, authorizations, orders, approvals, filings,
registrations, notices or Third Party Consents the failure of which to be
obtained or made would
-24-
not prohibit, materially delay or otherwise materially impair the consummation
by Purchaser of the transactions contemplated hereby.
5.5 Brokers. No broker, investment banker, financial advisor or other
-------
person, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Purchaser or any
Affiliate.
5.6 Available Funds. Purchaser has or has available to it all funds
---------------
necessary to satisfy all of its obligations hereunder and in connection with the
transactions contemplated hereby, including the obligation to purchase the
Assets and assume the Assumed Liabilities pursuant hereto on the terms and
conditions set forth herein, and its ability to consummate such transactions is
not dependent or conditional upon the receipt of financing (whether debt or
equity) from any third party (including any Affiliate).
5.7 Access. Purchaser acknowledges that it has been provided full and
------
complete access to the records, facilities and management personnel of Sellers
and their Affiliates with respect to the Business and the Assets, that it has
reviewed, to the extent it deemed necessary or appropriate, the books, records,
regulatory files, Contracts and other documents of Sellers and their Affiliates
relating to the Assets and the Business and that all of its questions regarding
the Business and the Assets have been answered to its satisfaction.
5.8 No Regulatory Impediment. Purchaser is not aware of any fact relating
------------------------
to its business, operations, financial condition or legal status that might
impair its ability to obtain, on a timely basis, all consents, authorizations,
orders, approvals and Permits from, and make all necessary filings and
registrations with and all notices to, Governmental Authorities necessary for
the consummation of the transactions contemplated hereby.
ARTICLE VI
COVENANTS
6.1 Conduct of Business. (a) Except to the extent that Purchaser shall
-------------------
otherwise consent in writing and except as contemplated by this Agreement,
between the date hereof and Closing, Sellers shall, and shall cause their
Subsidiaries to, (i) use commercially reasonable efforts to preserve the
Business' organization and goodwill intact, preserve and maintain the Business
licenses, and maintain satisfactory relationships with customers and (ii)
maintain the Assets in normal operating condition and repair, ordinary wear and
tear excepted, in accordance with the maintenance practices of Sellers in effect
on the date hereof.
(b) Sellers agree that, between the date hereof and Closing, except (A) as
expressly authorized under this Agreement or (B) as otherwise consented to by
Purchaser in writing, Sellers shall not, and shall cause their Subsidiaries not
to engage in any practice, take any action or enter into any transaction, in
each case relating to the Business, outside the ordinary course of business
consistent with past practice, except as hereinafter permitted. Without limiting
the generality of the foregoing Sellers shall not:
-25-
(i) other than in the ordinary course of business, enter into or
amend in any material respect any Material Contract or other transaction or
commitment which is material to the financial condition, ongoing operations or
business of the Business, taken as a whole;
(ii) except in the ordinary course of business, sell, lease or
otherwise dispose of any of the Assets;
(iii) create or suffer to exist any new Encumbrance on any of the
Assets, except for (A) Permitted Encumbrances and (B) leases on Tank Containers,
Tank Chassis and other equipment held for lease in connection with the Business;
(iv) purchase or acquire any asset or property for the Business (or
make any commitment with respect thereto), or incur any obligation (fixed or
contingent) or enter into any Contract with respect to the Business or the
Assets, except for purchases and commitments in the ordinary course of business
for not more than $2,500,000 in the aggregate;
(v) take any action which would have a Material Adverse Effect;
(vi) other than in the ordinary course of business, increase
compensation, fees, perquisites, benefits (other than with respect to employee
benefit plans that do not relate solely to the Business Employees) or other
amounts payable to any Business Employee from the amounts in effect on the date
of this Agreement; or
(vii) agree or commit to do any of the foregoing.
6.2 Access; Confidentiality; Post Cut-Off Date Matters. Sellers agree to
--------------------------------------------------
permit Purchaser and its accountants, counsel and other authorized
representatives (including Purchaser's potential lenders) to have, during the
period from the date hereof to the Closing Date, reasonable access to the
premises, Business Employees, books and records of Sellers and their
Subsidiaries that relate primarily to the Business or Assets during normal
business hours. Sellers agree to make available to Purchaser, upon reasonable
advance notice and during normal business hours, the officers of Sellers and
their Subsidiaries, as Purchaser may reasonably request; provided that such
--------
availability shall not unreasonably interfere with the normal operations of
Sellers and their Subsidiaries. Sellers shall furnish Purchaser with such
financial and operational data and other information with respect to the
Business and Assets as Purchaser shall from time to time reasonably request and
as are maintained by Sellers in the ordinary course of business. Notwithstanding
the foregoing, Sellers and their Subsidiaries shall not be required to permit
Purchaser and its representatives to have access to any documents, portions
thereof or other information which Sellers and/or its their Subsidiaries are
prohibited from disclosing due to confidentiality restrictions, and Sellers and
Purchaser hereby agree that until the Closing shall occur Purchaser shall have
no right to direct or control the Business or its operations. Any information
regarding the Business or Assets heretofore or hereafter obtained from Sellers
or their Subsidiaries by Purchaser or its representatives shall be subject to
the terms of the Confidentiality Agreement, and such information shall be held
by Purchaser and its representatives in accordance with the terms of the
Confidentiality Agreement. Notwithstanding the foregoing and subject to
applicable law, commencing on the date immediately following the Cut-Off Date,
Purchaser shall be permitted daily access to the premises of Sellers and the
-26-
Business Employees during normal business hours, subject to reasonable advance
notice and availability.
6.3 Taking of Necessary Action; Funding. (a) Each of the parties hereto
-----------------------------------
agrees to use its commercially reasonable efforts to take or cause to be taken
all action and promptly do or cause to be done all things necessary, proper or
advisable to consummate and make effective as soon as reasonably practicable the
transactions contemplated hereby.
(b) Each of Purchaser and Sellers shall (i) as soon as practicable after
the date hereof, file such applications, notices, registrations and requests as
may be required or advisable to be filed by it with any Governmental Authority
in connection with the transactions contemplated hereby, (ii) furnish each other
with copies of all documents and correspondence (A) prepared by or on behalf of
it for submission to any Governmental Authority and (B) received by or on behalf
of it from any Governmental Authority, in each case in connection with the
transactions contemplated hereby and (iii) consult with and keep each other
informed as to the status of such matters. To the extent that any application,
notice, registration or request so filed contains any significant information
relating to a party hereto or any of their Affiliates, prior to submitting such
application, notice, registration or request to any Governmental Authority, such
party will permit the other party hereto to review such information and will
consider in good faith the suggestions of such party with respect thereto. A
party hereto shall have the right to approve any such information that relates
to such party, its Affiliates, the Business or the Assets (which approval shall
not be unreasonably withheld).
(c) Each of Purchaser and Sellers shall cooperate with each other in the
preparation and filing of any applications, notices, registrations and responses
to requests for additional information from Governmental Authorities made by
Purchaser with any Governmental Authority in connection with the transactions
contemplated hereby, including providing such information as Purchaser may
reasonably request for inclusion in such applications, notices, registrations
and responses.
(d) Sellers shall cooperate, upon the reasonable request of Purchaser,
with Purchaser in its endeavors to enter into at the Closing long-term financing
arrangements in connection with the consummation of the transactions
contemplated by this Agreement by providing certificates and documents which are
ministerial in nature, it being understood that obtaining such financing
arrangements shall not be a condition to the obligation of Purchaser to
consummate the purchase of the Assets and the assumption of the Assumed
Liabilities.
6.4 Release of Sellers from Assumed Liabilities. In addition to assuming
-------------------------------------------
the Assumed Liabilities in accordance with Section 2.3, Purchaser agrees (with
Sellers' cooperation) to use its reasonable best efforts to cause Sellers or any
Affiliate of Sellers to be absolutely and unconditionally released on or prior
to the Closing Date from each Assumed Liability. In addition to assuming the
Assumed Liabilities in accordance with Section 2.3, Purchaser agrees (with
Sellers' cooperation) to continue to use its reasonable best efforts after the
Closing Date to relieve Sellers and such Affiliates of any Assumed Liabilities
that are not released or otherwise discharged prior to the Closing Date.
-27-
6.5 Insurance; Risk of Loss. (a) Effective as of the Closing Date (i)
-----------------------
Sellers will terminate or cause their Subsidiaries to terminate all coverage
relating to the Business and the Assets and current or former Business Employees
under the general corporate policies of insurance, cancelable surety bonds and
hold harmless agreements of Sellers for the benefit of all of their Subsidiaries
and (ii) from and after the Closing Date, Purchaser shall become solely
responsible for all insurance coverage and related risk of loss with respect to
the Business and Assets and current or former Business Employees.
(b) Notwithstanding Section 6.5(a), to the extent that (i) any insurance
policies (other than Sellers' insolvency insurance policies referred to in
Section 2.2(g)) controlled by any Seller and its Subsidiaries ("Seller's
--------
Insurance Policies") cover any Assumed Liability or Subsequent Assumed Liability
------------------
("Business Liabilities") arising out of occurrences, events or circumstances
--------------------
prior to the Closing Date and (ii) Seller's Insurance Policies continue after
the Closing to permit claims to be made thereunder with respect to Business
Liabilities arising out of occurrences, events or circumstances prior to the
Closing Date ("Business Claims"), each Seller shall cooperate and cause its
---------------
Subsidiaries to cooperate with Purchaser in submitting Business Claims (or
pursuing Business Claims previously made) on behalf of Purchaser under Seller's
Insurance Policies; provided that Sellers shall be under no obligation to
--------
commence or maintain litigation to enforce any Business Claim (except to the
extent that Purchaser agrees to hold Sellers harmless under terms reasonably
acceptable to Sellers in connection therewith) and that Purchaser shall
reimburse, indemnify and hold Sellers and their Subsidiaries harmless from all
Liabilities, losses, costs and expenses (including all present or future
premiums, deductibles, legal and administrative costs, attorneys' fees, overhead
and costs of compliance under Seller's Insurance Policies) of any nature
incurred by any Seller or any of its Subsidiaries as a result of Business Claims
made under Seller's Insurance Policies with respect to Assumed Liabilities or
Subsequent Assumed Liabilities. Upon the incurrence of any such Liability, loss,
cost or expense relating to Business Claims made under Seller's Insurance
Policies with respect to Assumed Liabilities or Subsequent Assumed Liabilities
and upon receipt from Sellers of a statement of the amount of such Liabilities,
losses, costs and expenses in reasonable detail, from time to time, Purchaser
shall make payment promptly to Sellers or their Subsidiaries of the amount
indicated in such statement.
6.6 Assumption of Proceedings. From and after the Closing Date, Purchaser
-------------------------
shall assume the defense of and indemnify and hold Sellers and their Affiliates
harmless from and against any and all actions, suits, claims and administrative
or other proceedings of every kind and nature instituted or pending against any
Seller or any of its Affiliates at any time before or after the Closing Date
that constitute Assumed Liabilities, whether relating to or arising out of
occurrences, events or circumstances existing prior to, at or after the Closing
Date. Purchaser shall have the right to assume and conduct the defense of any
such matters, and Sellers and their Subsidiaries shall cooperate in such defense
to the extent reasonably requested by Purchaser.
6.7 Mail; Payments. Sellers hereby authorize Purchaser after the Closing
--------------
to receive and open all mail and other communications received by the Business,
and to act with respect to such communications in such manner as Purchaser may
elect if such communications primarily relate to the Business, any of the Assets
or any of the Assumed Liabilities or Subsequent Assumed Liabilities, or, if such
communications do not so primarily relate, to forward the same promptly to
Sellers. After the Closing, Purchaser shall have the right and
-28-
authority to endorse, without recourse, the name of any Seller or any of its
Subsidiaries on any check or any other evidence of indebtedness received by
Purchaser on account of any of the Assets or the Business. Any payment received
by Sellers or any of their Subsidiaries after the Closing to the extent relating
to the Assets or Business shall be promptly remitted to Purchaser and any
payment received by Purchaser to the extent in respect of Excluded Assets or
Excluded Liabilities shall be promptly remitted to Sellers. A Seller or a
Subsidiary thereof shall promptly deliver to Purchaser the original of any mail
or other communication received by it after the Closing primarily relating to
the Assets or the Business and any moneys, checks or other instruments of
payment to which Purchaser is entitled.
6.8 License of Name. (a) Sellers hereby grant to Purchaser a fully-
---------------
paid, royalty-free and non-exclusive license to use the Names and the
corresponding trademarks (including other common law or statutory trademark
rights therein and derivations or stylizations thereof, "Trademarks") and the
----------
Prefixes, in connection with and as a part of the Business (the "License") for
-------
the relevant period of time from and after the Closing Date as set forth in the
following sentence (the "License Term"), and subject to the following provisions
------------
of this Section 6.8. The License granted to Purchaser hereunder authorizes
Purchaser to continue to use the Names, any corresponding Trademark and the
Prefixes that appear on a Tank Container or Tank Chassis as of the Closing Date,
on such Tank Container or Tank Chassis for the life of such Tank Container or
Tank Chassis without obligation to remove, cover or otherwise obscure the
appearance of the Name, Trademark or Prefix thereon; provided that if any Tank
--------
Container or Tank Chassis is refurbished or repainted or ceases, directly or
indirectly, to be both owned and operated by Purchaser or any Affiliate of
Purchaser, then in each case the License with respect to such Tank Container or
Tank Chassis (to the extent it relates to the Names and Trademarks) shall
terminate and Purchaser shall promptly remove or cause its Affiliate to remove
any Name or Trademark thereon; and provided, further, that if any Tank Container
-------- -------
or Tank Chassis is remanufactured or ceases, directly or indirectly, to be both
owed and operated by Purchaser, then the License with respect to such Tank
Container or Tank Chassis (to the extent it relates to any Prefix) shall
terminate and Purchaser shall promptly remove or cause Affiliate to remove any
Prefix thereon. In no event may Purchaser use the Names or any corresponding
Trademark on any Tank Container or Tank Chassis not acquired hereunder; provided
--------
that to the extent that a Prefix, Name or corresponding Trademark is imprinted
on a Tank Container or Tank Chassis acquired by Purchaser after the Closing
pursuant to an open purchase order placed prior to the Closing, the License
granted in this Section 6.8(a) shall include such Prefix, Name or corresponding
Trademark. At the expiration of the License Term, all such use of the Names, any
corresponding Trademarks and the Prefixes by Purchaser shall cease.
(b) (i) As used herein, "Names" means the terms "Transamerica,"
-----
"Transamerica Leasing," "Xxxxx Xxxxxxx Leasing Ltd," "Xxxxx Tank Containers
Limited," "Trans Ocean," "Tiphook," "Tiphook Container Rental" and "Columbiana"
and such other names that correspond to the Prefixes.
(ii) "Prefix" shall mean all of the alphabetical prefixes imprinted
------
on, and used by any Seller to identify, the Tank Containers or Tank Chassis,
which shall include the following BIC-registered prefixes: "ICSU," "ICLU,"
"TRLU," "SISU," "TOLU," "TPTU," "XXXX," "XXXX," "XXXX," "XXXX," "XXXX," "CCRU,"
"CETU," "CTCU," "DCSU," "DLKU," "DPCU," "EBCU," "FTCU," "GPLU," "HAYU," "HPFU,"
"LGTU," "LIQU,"
-00-
"XXXX," "XXXX," "XXXX," "SCIU," "SCPO," "SCPU," "SCXO," "SCXU," "SECS," "SFTU,"
"SMDU," "SNIU," "TMLU," "TPTO," "UPUU," "UTCU," "UTTU," and "VTGU."
(c) Purchaser hereby waives and disclaims any right or interest in or
to ownership of the Names or any Trademarks that may arise under any Applicable
Law out of the use hereunder of the Names or any such Trademarks and
acknowledges that its right to use the Names, Trademarks and Prefixes is solely
to the extent provided in Section 6.8(a). No right to assign, transfer or
sublicense the Names or any corresponding Trademark is included herein, and such
rights to use the Names or any corresponding Trademark are expressly withheld,
except that Purchaser may assign or otherwise transfer its rights to use the
Names or any corresponding Trademark hereunder to its Subsidiaries or its
Affiliates; provided that in the event that such an Affiliate ceases to be an
--------
Affiliate, the rights hereunder assigned or otherwise transferred shall
terminate. Purchaser may not assign, sublicense or otherwise transfer, directly
or indirectly, the License (or any portion thereof) granted hereunder.
(d) Purchaser shall, as soon as reasonably practicable following the
Closing Date, make application for and effect a change in all of the
registrations and licenses with respect to the Tank Containers and Tank Chassis
from the applicable Seller or an Affiliate thereof to Purchaser. Seller shall
cooperate in this effort upon the reasonable request of Purchaser. Any
registration fees or charges associated with the registration and licensing of
Purchaser as owner of the Tank Containers and Tank Chassis shall be paid by
Purchaser and any refunds of such registration fees already paid by or on behalf
of any Seller or any Affiliate thereof shall be for Purchaser's account and, if
paid to a Seller or an Affiliate thereof, shall promptly be paid over by such
Seller to Purchaser.
(e) After the Closing, Purchaser shall not use any forms (including,
without limitation, forms of agreement), stationery, brochures or other similar
items that bear any Names or Prefixes or any current logos of Parent or any of
its Affiliates.
6.9 Post-Closing Accounting Cooperation. Purchaser agrees that
-----------------------------------
following the Closing, Sellers and/or their independent auditors shall have
reasonable access during normal business hours to the books and records of the
Business as they relate to the period prior to Closing and shall have the
reasonable assistance and cooperation of the appropriate personnel of Purchaser
and its Affiliates in the review of such books and records and in the
preparation of the Closing Report, the Closing Statement of Net Assets
(Excluding Equipment) and Cash Management Schedule; provided that such access
--------
shall not interfere with the normal operations of the Business.
6.10 Assigned Contracts. To the extent that the rights of Sellers or
------------------
any of their Subsidiaries under any Contract included in the Assets, or under
any other Asset to be assigned to Purchaser hereunder, may not be assigned
without the consent of another Person which has not been obtained prior to the
Closing, neither this Agreement nor any of the Instruments of Transfer shall
constitute an agreement to assign the same if an attempted assignment would be
unlawful or result in termination of such agreement. If any such consent has not
been obtained or if any attempted assignment would be ineffective or would
impair Purchaser's rights under the instrument in question so that Purchaser
would not acquire the benefit of all such rights, then a Seller or a Subsidiary
thereof, as applicable, to the maximum extent permitted by Applicable
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Law and the instrument, shall act as Purchaser's agent in order to obtain for
Purchaser the benefits thereunder and shall cooperate, to the maximum extent
permitted by Applicable Law and the instrument, with Purchaser in any other
reasonable arrangement designed to provide such benefits to Purchaser
(including, without limitation, by entering into an equivalent arrangement
between Seller and Purchaser).
6.11 Bulk Sales Waiver. Purchaser and Sellers hereby waive compliance
-----------------
with the terms and conditions of any applicable bulk sales or bulk transfer law
or similar laws that may be applicable to the sale or transfer of the Assets.
6.12 Public Announcements. Prior to the Closing Date, Sellers and
--------------------
Purchaser will use reasonable efforts to consult with each other about any
description of the transactions contemplated by this Agreement contained in any
press release or other public statements prior to the issuance thereof and
provide each other with the opportunity to review and comment upon any such
description, and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
law, court order or by obligations pursuant to any listing agreement with any
national securities exchange. The parties shall use reasonable efforts to agree
on the description of the transactions contemplated by this Agreement contained
in the initial press releases to be issued by the parties with respect to their
execution and delivery of this Agreement.
6.13 Information Technology. For up to six months after the Closing
----------------------
Date, Sellers shall provide Purchaser with the right to use all information
technology and computer software used by the Business in exchange for
consideration which is determined consistently with the methodology by which
direct and indirect costs are currently charged to the Business for such
services, provided that, promptly following the date hereof, Purchaser shall
engage in information technology conversion planning that would permit its
systems to be converted promptly following the Closing. Sellers shall license to
Tradeship as soon as reasonably practicable the computer software and programs
known as TERMS 2000 and shall use their reasonable efforts to facilitate the
entering into of a definitive agreement between Tradeship and Purchaser (on
terms reasonably satisfactory to Tradeship and Purchaser) regarding the use of
such computer software and programs and a billing system in connection with the
Business.
6.14 Notice of Developments. Each party hereto shall use commercially
----------------------
reasonable efforts to give prompt written notice to the other parties hereto
after becoming aware of any breach of any of the representations or warranties
of Sellers in Article IV which would cause the condition set forth in Section
8.2(a) not to be satisfied. Each party hereto shall use commercially reasonable
efforts to give prompt written notice to the other parties hereto after becoming
aware of any breach of any of the representations or warranties of Purchaser in
Article V which would cause the condition set forth in Section 8.3(a) not to be
satisfied.
6.15 Further Assurances. Each party shall cooperate with the other,
------------------
and execute and deliver, or use its commercially reasonable efforts to cause to
be executed and delivered, all such other instruments, including instruments of
conveyance, assignment and transfer, and to make all filings with and to obtain
all consents, approvals or authorizations of any Governmental Authority or other
regulatory authority or any other Person under any Permit, agreement, indenture
or other instrument, and take all such other actions as such party may
-31-
reasonably be requested to take by the other party hereto from time to time,
consistent with the terms of this Agreement, in order to effectuate the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
ARTICLE VII
EMPLOYEE MATTERS
7.1 Business Employees. "Business Employees" shall mean: (a) all
------------------ ------------------
persons employed by any Seller or any of its Affiliates in the Business
immediately before the Closing and (b) all employees of Sellers or any of their
Affiliates (i) who are absent from work with the Business on account of
sickness, vacation or leave of absence (including, without limitation, any
person on disability leave who is able to return to active employment with
Purchaser within six months following the Closing Date or any longer period
required by Applicable Law) or (ii) for whom an obligation to recall, rehire or
otherwise return to employment exists under Applicable Law or contract. Sellers
have provided Purchaser with a preliminary list of Business Employees, and
Sellers will provide Purchaser with a final list of Business Employees prior to
the Closing, based upon new employees hired by the Business and departures of
employees of the Business prior to Closing. Section 7.1 of the Seller Disclosure
Schedule sets forth all Business Employees and their current annual base
salaries as of the date hereof.
7.2 Employment. (a) Effective as of the Closing Date, Purchaser shall
----------
make an offer of employment to each Business Employee at the same or better base
salary and bonus opportunity, with substantially equivalent job duties and at
the same employment location, in each case as in effect immediately prior to the
Closing. Purchaser's employment of those Business Employees who accept offers of
employment shall be deemed to commence on the Closing Date. Those Business
Employees who accept such offers of employment shall be referred to herein as
the "Transferred Employees," and the parties hereto intend that the consummation
---------------------
of the transactions contemplated by this Agreement shall not, in and of itself,
cause such Business Employees to be entitled to benefits under TARRP or TRP
subject to Section 7.7(a). In addition to and not in contravention of the
foregoing, notwithstanding anything to the contrary contained herein, Purchaser
shall comply with Applicable Law in respect of the making of offers of
employment and hiring of Business Employees, and, with respect to Transferred
Employees employed in jurisdictions other than the United States, the provision
of benefits and the crediting of service to such Transferred Employees.
(b) Except as set forth in Section 7.7 with respect to TARRP
Payments, TRP Payments, the severance benefits under the Separation Pay Plan or
such other applicable separation pay plan, the outplacement benefits and the
payments under the LTIP, Sellers shall not be responsible for wages, salaries
and other employee benefits for Transferred Employees for the service of such
Transferred Employees with the Purchaser on or after the Closing Date. Purchaser
shall be responsible for paying or providing any wages, salaries and other
employee benefits (other than as provided in Section 7.7 with respect to TARRP
Payments, TRP Payments, the severance benefits under the Separation Pay Plan or
such other applicable separation pay plan, the outplacement benefits and the
payments under the LTIP and Section 7.4) to all Transferred Employees, for all
periods on or following the Closing Date. Notwithstanding
-32-
anything contained to the contrary in this Agreement, the payment by any Seller
or any of its Affiliates of salaries, wages and employee benefits (other than
with respect to TARRP Payments, TRP Payments, the severance benefits under
Separation Pay Plan or such other applicable separation pay plan, the
outplacement benefits, payments under the LTIP and any other employee benefits
under a Benefit Plan maintained by Seller or any of its Affiliates that is
enhanced, increased or accelerated as a result of consummation of the
transactions contemplated by this Agreement (other than those Liabilities under
the Business Employment Agreements assumed by Purchaser under Section 7.3(c) and
the Liability for 2000 Incentive Bonuses assumed by Purchaser under Section
7.11)) for the benefit of the Business for the period between the Cut-Off Date
and the Closing shall be reimbursed by Purchaser to Sellers in accordance with
Section 2.9(a) of this Agreement and any Seller's or its Affiliate's prior
practice for charging such payments to the Business, and Purchaser's obligation
to reimburse shall not be considered an "Excluded Liability" for purposes of
this Agreement.
7.3 Employee Benefits. (a) Subject to the other provisions of Article VII,
-----------------
Purchaser agrees that for a period of at least one year after the Closing Date
it will provide all Transferred Employees with the employee benefits set forth
in Section 7.3(a) of the Purchaser Disclosure Schedule, subject to Purchaser's
right to amend or terminate such benefits to the extent that Purchaser or its
Affiliates amend or terminate such benefits for their other employees, and
provide Transferred Employees with a wage and salary program no less favorable
than that in place at the Business immediately prior to the Closing Date.
Effective as of the Closing Date, Purchaser will count the service of each
Transferred Employee with Sellers and their Affiliates (and their predecessor
entities) for purposes of determining each Transferred Employee's eligibility to
participate in and eligibility for benefits (including, but not limited to,
vesting and eligibility for optional forms of benefit) under each of Purchaser's
or its Affiliate's employee benefit plans, programs or arrangements (whether or
not any such plan, program or arrangement is described in Section 3(3) of
ERISA). With respect to Transferred Employees, Purchaser's or its Affiliate's
medical and health plans shall take into account expenses incurred by
Transferred Employees (during the calendar year in which the Closing Date
occurs) under Sellers' medical and health plans for purposes of determining
deductibles and out-of-pocket limits under Purchaser's or its Affiliate's
medical and health plans for the remainder of the calendar year, and Purchaser's
welfare benefit plans shall waive all limitations as to pre-existing condition
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the Transferred Employees. With respect to vacation,
severance, service awards and other such benefits provided by Purchaser or its
Affiliates, the seniority or period of service of each Transferred Employee
shall include periods of service with the applicable Seller and its Affiliates
(and their predecessor entities). Except as set forth in Section 7.7 with
respect to TARRP Payments, TRP Payments, the severance benefits under the
Separation Play Plan or such other applicable Transamerica separation pay plan,
the outplacement benefits and the payments under LTIP, and except as set forth
in Section 7.4, from and after the Closing Date, Purchaser shall be solely
responsible for all termination and severance benefits, costs, charges and
Liabilities of any nature incurred with respect to a Transferred Employee after
the Cut-Off Date, including, without limitation, any claims arising out of or
relating to any plant closing, mass layoff, termination or similar event under
Applicable Law occurring on or after the Closing Date.
(b) As of the Closing Date, the Transferred Employees shall cease active
participation in each Benefit Plan of any Seller or its Affiliates and no
additional benefits shall be
-33-
accrued thereunder for the Transferred Employees, except as provided under
Section 7.7 with respect to TARRP Payments, TRP Payments, the severance benefits
under the Separation Pay Plan or such other applicable separation pay plan, the
outplacement benefits and the payments under the LTIP.
(c) Purchaser shall assume all employment agreements with the Transferred
Employees (the "Business Employment Agreements") and all Liabilities under each
------------------------------
such Business Employment Agreement except to the extent that the Business
Employment Agreements provide benefits under Benefit Plans of a Seller or its
Affiliates (other than the Benefit Plans to the extent expressly assumed by
Purchaser under this Agreement).
7.4 Assumption of Liabilities. Except as specifically provided
-------------------------
otherwise in this Article VII, Purchaser shall not assume any employee-related
Liabilities that are payable at or after the Cut-Off Date with respect to
Business Employees and their beneficiaries and dependents, which arise on or
prior to or are based upon services provided on or prior to the Cut-Off Date.
Purchaser shall not assume, and Sellers or their Affiliates shall remain
responsible for, any Liabilities that are payable prior to, at or after the
Closing with respect to any Benefit Plans that are maintained by any Seller or
its Affiliates (other than the Liabilities under the Business Employment
Agreements assumed by Purchaser under Section 7.3(c), the Liability for 2000
Incentive Bonuses assumed by Purchaser under Section 7.11 and the payments as
provided in Section 2.9(a) hereof between the Cut-off Date and the Closing), or
with respect to Business Employees who do not become Transferred Employees.
7.5 Retirement Plan for Salaried Business Employees. As of the
-----------------------------------------------
Closing, the Transferred Employees shall cease active participation in the
Retirement Plan, and no additional benefits shall accrue thereunder, except as
provided under Section 7.7 with respect to TARRP Payments. Effective as of the
Closing, Sellers shall fully vest the Transferred Employees in their accrued
retirement benefits under the Retirement Plan. Sellers and their Affiliates
shall retain all assets and Liabilities for accrued retirement benefits under
the Retirement Plan. In addition, Sellers shall fully vest the accrued
retirement benefits of the Transferred Employees under any defined benefit plan
that is subject to the laws of a foreign jurisdiction to the extent permitted by
Applicable Law.
7.6 401(k) Plan. (a) Effective as of the Closing, Purchaser shall
-----------
cause a defined contribution plan and trust to be established (or an existing
defined contribution plan to be amended) for Transferred Employees, which shall
be qualified under Sections 401 and 501 of the Code and shall provide for salary
reduction contributions, pursuant to Section 401(k) of the Code, effective no
later than the 60th day following the date hereof (but in no event prior to the
Closing Date) (the "Purchaser DC Plan"). Effective as of the Closing, Sellers
-----------------
shall fully vest the account balances of the Transferred Employees under the
Transamerica Corporation Employees Stock Savings Plan (the "Seller 401(k)
-------------
Plan"). The Purchaser DC Plan shall provide that each Transferred Employee
----
shall be given credit under the Purchaser DC Plan, for purposes of determining
eligibility to participate, eligibility for benefits, benefit calculations,
benefit forms and vesting, for the Transferred Employee's service with any
Seller or any of its Affiliates and each of their predecessor entities,
provided, however, that only a Transferred Employee's compensation from and
after the Closing Date shall be counted in determining such employee's share of
any employer contributions to the Purchaser DC Plan. On the Closing, Purchaser
shall
-34-
provide Sellers with evidence reasonably satisfactory to Seller that such
Purchaser DC Plan has been established and is qualified under Sections 401 and
501 of the Code.
(b) Sellers agree, to the extent permitted by Section 401(k)(10) of the
Code or such other applicable IRS regulations or revenue rulings, to take such
actions as may be necessary or desirable to make distributions to the
participants from the Seller 401(k) Plan. To the extent that such distributions
constitute eligible rollover distributions, as that term is defined in Section
401(a)(31) of the Code, and to the extent permitted by applicable law, Purchaser
agrees to cause the Purchaser DC Plan to allow the Transferred Employees, at
their option, to roll over such distributions into the Purchaser DC Plan in
accordance with the terms of such plan. The Purchaser DC Plan, as written,
permits the acceptance of eligible rollover distributions from the Seller 401(k)
Plan.
(c) In addition, Sellers shall fully vest the accrued benefits of the
Transferred Employees under any defined contribution plan that is subject to the
laws of a foreign jurisdiction to the extent permitted by Applicable Law.
7.7 TARRP. (a) For the period commencing on the Closing Date and
-----
ending on July 20, 2002, (the "TARRP/TRP Continuation Period") Sellers shall
-----------------------------
continue to provide Transferred Employees, whose employment with Purchaser is
terminated under circumstances that make them eligible for benefits under the
Transamerica Retention and Retirement Program ("TARRP") for Transferred
-----
Employees employed in the United States, or the Transamerica Retention Plan
("TRP") for Transferred Employees employed outside of the United States,
---
including a termination by the Transferred Employee due to Purchaser's failure
to provide a "Comparable Position" (as defined in TARRP or TRP), with the "TARRP
Payment" or the "TRP Payment" (each as defined in the respective plan as in
effect from time to time). For purposes of calculating the TARRP Payment or TRP
Payment of an eligible Transferred Employee, Sellers shall count such eligible
Transferred Employee's service with Purchaser and its Affiliates in addition to
prior service with Sellers and their Affiliates. To the extent a Transferred
Employee is not eligible for or does not elect TARRP or TRP benefits upon a
termination of employment from Purchaser (including a termination by the
Transferred Employee due to Purchaser's failure to provide a "Comparable
Position" as defined in TARRP or TRP) during the TARRP/TRP Continuation Period,
such employee shall be entitled to receive benefits under the Separation Pay
Plan or such other Transamerica separation pay practice applicable to the
Transferred Employee immediately prior to the Closing Date and outplacement
assistance (on the same basis as provided to terminated Transferred Employees
who are receiving TARRP Payments or TRP Payments), subject to the terms of such
plans and practices, and Sellers shall be solely liable for the payment of such
separation benefits and outplacement assistance. In addition, to the extent a
Transferred Employee is entitled to receive payments under the LTIP, Sellers
shall be solely liable for the payment of such amounts.
(b) Purchaser agrees (i) that only Transferred Employees whose
termination is a "bona fide" termination (as defined herein) will be reported as
terminated from Purchaser for purposes of TARRP Payments or TRP Payments, (ii)
that such terminated Transferred Employees may not be rehired by Purchaser or
any of its Affiliates within six months of their termination date, (iii) to
notify Sellers of a bona fide termination at least 75 days prior to the planned
termination date, (iv) to cooperate with Sellers in providing the TARRP or TRP
notice
-35-
to the Transferred Employees at least 60 days prior to the termination date, and
(v) to cooperate in fulfilling all other administrative requirements of TARRP
and TRP, provided, however, that in the event of Purchaser's failure to provide
a "Comparable Position" (as defined in TARRP or TRP) to a Transferred Employee,
Purchaser agrees to notify Sellers as soon as practicable of such failure and to
keep the Transferred Employee on Purchaser's payroll (without any decrease in
wages) until 75 days after Seller is notified of such failure unless the
Transferred Employee voluntarily terminates his or her employment at an earlier
date, but Seller shall be allowed, prior to the expiration of such 75-day
period, to change the Transferred Employee's job duties and title. A termination
of employment from the Purchaser for purposes of this Agreement will be
considered "bona fide" only if it constitutes a "retirement" (rather than a
termination permitting the distribution of just ancillary or incidental
benefits) under Treas. Regs. Section 1.401-1(b)(1) or a "severance of
employment" under Revenue Ruling 56-693 or is a termination by the Transferred
Employee due to Purchaser's failure to provide a "Comparable Position" as
defined in TARRP or TRP. Furthermore, a termination of employment will not be
considered "bona fide" for purposes of this Agreement if at the time of the
Transferred Employee's eligibility for TARRP or TRP, there is any express or
implied agreement or understanding that such employee will be rehired or will
provide services in the future in any capacity to Purchaser or any of its
Affiliates. Notwithstanding any other provision of this Section, the Purchaser
or any of its Affiliates can rehire or retain a Transferred Employee (whether
terminated or eligible to receive TARRP Payments or TRP Payments due to
Purchaser's failure to provide a "Comparable Position" as defined in TAARP or
TRP), if such Transferred Employee does not elect to receive TARRP Payments or
TRP Payments or is not otherwise making a claim for benefits under the
Separation Pay Plan or such other Transamerica separation pay practice
applicable to such Transferred Employee.
7.8 Worker's Compensation. Purchaser shall not assume any
---------------------
Liabilities for any claims under worker's compensation laws that are payable
after the Cut-Off Date with respect to Transferred Employees based upon events
that occur on or prior to the Cut-Off Date. Purchaser shall assume all
Liabilities for any claims under worker's compensation laws that are payable
after the Cut-Off Date with respect to Transferred Employees based upon events
that occur after the Cut-Off Date.
7.9 Vacation Pay. As soon as reasonably practicable following the
------------
Closing Date, Sellers shall pay all Liabilities for unpaid vacation pay earned,
banked or accrued by Transferred Employees prior to the Closing Date. After the
Closing, Sellers shall have no Liability for vacation pay earned, banked or
accrued by Transferred Employees on or after the Closing Date.
7.10 Welfare Plans. (a) Sellers shall be liable for and shall hold
-------------
Purchaser harmless from and against all claims for welfare benefits by Business
Employees that are incurred prior to the Closing Date, and Purchaser shall be
liable for and shall hold Sellers harmless from and against all claims for
welfare benefits by Transferred Employees under Purchaser's employee benefit
plans that are incurred on or after the Closing Date. For purposes of this
Agreement, the following claims shall be deemed to be incurred as follows: (i)
life, accidental death and dismemberment and business travel accident insurance
benefits, upon the death or accident giving rise to such benefits, (ii) health,
dental, vision and/or prescription drug
-36-
benefits, on the date such services, materials or supplies were provided and
(iii) disability income benefits, on the date of disability as determined by the
disability carrier for the individual.
(b) Purchaser shall be responsible for the administration of and
shall assume any and all obligations arising under the continuation coverage
requirements of Section 4980B of the Code and Part 6 of Title I of ERISA
("COBRA") or other Applicable Law with respect to the Transferred Employees and
-----
their beneficiaries who experience a "Qualifying Event" (as defined in COBRA)
after the Closing Date, except for the Qualifying Event which arises due to a
Business Employee's (including a Transferred Employee's) termination of
employment with the Sellers or their Affiliates. Seller shall be responsible
for the administration of and shall retain any and all obligations arising under
COBRA or other Applicable Law with respect to Business Employees (and their
respective beneficiaries) who experience a Qualifying Event, or who are already
receiving COBRA coverage on or before the Closing Date or who have a Qualifying
Event due to the termination of such Business Employees' employment with the
Sellers or their Affiliates on or prior to the Closing Date.
7.11 Bonuses. With respect to the payment of the annual bonuses
-------
earned by the Transferred Employees in respect of the 2000 calendar year (the
"2000 Incentive Bonus") under the applicable annual bonus plans of any Seller as
--------------------
in effect immediately prior to the Closing Date (the "Seller Bonus Plan"),
-----------------
Sellers shall pay and be solely liable for the proportionate share of the 2000
Incentive Bonus for the period commencing on January 1, 2000 and ending on the
Cut-Off Date, and Purchaser shall pay and be solely liable for the proportionate
share of the 2000 Incentive Bonus under the Seller Bonus Plan for the period
commencing on the day after the Cut-Off Date and ending on December 31, 2000 (or
such earlier date of termination of a Company Employee). The Sellers' portion
of a Transferred Employee's 2000 Incentive Bonus shall be determined in
accordance with the Exhibit to the Seller Bonus Plan entitled "Amounts Payable
from Incentive Compensation Plan if Changes in Employment Occur Pursuant to the
Plan General Provisions." The Purchaser's portion of a Transferred Employee's
2000 Incentive Bonus, whether paid or payable for the period ending on December
31, 2000 or, if earlier, the period ending on such Transferred Employee's
termination of employment from Purchaser, shall be determined based on the
Transferred Employee's target bonus percentage for the 2000 bonus year.
Purchaser's payment of bonuses for the 2000 calendar year pursuant to this
Section 7.11 shall not create any obligation for Purchaser to continue the
payment of bonuses pursuant to the terms of the Seller Bonus Plan or to
establish a bonus plan which is substantially similar to the Seller Bonus Plan
on or after January 1, 2001.
7.12 Plant Closing Laws. Seller shall be responsible for providing
------------------
any notice required pursuant to the United States Federal Worker Adjustment and
Retraining Act of 1988, any successor United States federal law, and any other
applicable plant closing notification law, including foreign laws or contractual
requirements, with respect to a layoff or plant closing relating to the Business
that arises prior to the Closing and Purchaser shall be responsible for
compliance with any obligation under said laws which arises on or after the
Closing. Any Liability arising from the failure to comply with any of the laws
identified immediately above shall be the responsibility of the party obligated
to provide notice, provided, however, that, notwithstanding the foregoing, it is
expressly understood and agreed to by the parties hereto that, to the extent
that Purchaser fails to comply with its obligations under Section 7.2, Purchaser
shall be solely liable for any Liability under such laws.
-37-
7.13 Employee Communications. Any communication proposed to be
-----------------------
delivered prior to the Closing by Purchaser to the Transferred Employees
regarding matters contained in or relating to the transactions contemplated
under this Agreement, or otherwise respecting any changes or potential changes
in employee benefit plans, practices, or procedures or employment that may or
will occur in connection with the transactions contemplated by this Agreement,
shall be subject to prior approval of Sellers, which approval shall not be
unreasonably withheld.
ARTICLE VIII
CONDITIONS TO THE CLOSING
8.1 Conditions of Obligation of Each Party. The respective
--------------------------------------
obligations of Purchaser and Sellers to consummate the purchase and sale of the
Assets and the assumption by Purchaser of the Assumed Liabilities contemplated
hereby are subject to the satisfaction, at or prior to the Closing Date, of each
of the following conditions:
(a) No Injunction. At the Closing Date, there shall be no
-------------
injunction, restraining order or decree of any nature of any court or
Governmental Authority of competent jurisdiction in effect that restrains
or prohibits the purchase of the Assets and/or assumption of the Assumed
Liabilities hereunder.
(b) Regulatory Authorizations. All consents, authorizations, orders
-------------------------
or approvals of each Governmental Authority listed in Sections 4.4(a) and
5.4(a) of the Seller Disclosure Schedule and the Purchaser Disclosure
Schedule, respectively, and which are indicated therein as being conditions
to consummation of such obligations, shall have been obtained and any
applicable waiting periods in respect thereof (including all applicable
waiting periods specified under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act")) shall have expired or
been terminated, except for such consents, authorizations, orders and
approvals the failure of which to have been obtained would not be material
to the Business and/or prohibit the purchase of the Assets or assumption of
the Assumed Liabilities hereunder.
8.2 Additional Conditions to the Obligations of Purchaser. The
-----------------------------------------------------
obligation of Purchaser to consummate the purchase of the Assets and assumption
of the Assumed Liabilities contemplated hereby is subject to the satisfaction,
at or prior to the Closing Date, of each of the following additional conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Sellers contained in Article IV that are qualified by
Material Adverse Effect shall be true and correct as of the Closing Date as
though made at and as of the Closing Date, except to the extent that any
representation and warranty is made as of a specified date other than the
Closing Date, in which case such representation and warranty shall be true
and correct as of such date; and the representations and warranties of
Sellers contained in Article IV (exclusive of the representations and
warranties contained in Section 4.10 which shall be true and correct as of
the Closing Date as though made on the Closing
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Date) that are not qualified by Material Adverse Effect shall be true and
correct as of the Closing Date as though made at and as of the Closing
Date, except (i) to the extent that any representation and warranty is made
as of a specified date other than the Closing Date, in which case such
representation and warranty shall be true and correct as of such date,
subject to the following clause (ii) and (ii) for failures of such
representations and warranties to be true and correct that would not in the
aggregate have a Material Adverse Effect. In determining whether this
condition is satisfied, any Excluded Liabilities (and any changes in
Excluded Liabilities) shall not be taken into account.
(b) Performance of Covenants. Sellers shall have performed in all
------------------------
material respects all obligations and agreements, and complied in all
material respects with all covenants, contained in this Agreement to be
performed or complied with by them prior to or at the Closing Date.
(c) Certificate. Purchaser shall have received a certificate of
-----------
each Seller, dated the Closing Date, executed by the Chief Executive
Officer or Chief Financial Officer of such Seller, to the effect that the
conditions specified in Sections 8.2(a) and 8.2(b) have been fulfilled.
8.3 Additional Conditions to the Obligations of Sellers. The
---------------------------------------------------
obligation of Sellers to consummate the sale of the Assets and assumption by
Purchaser of the Assumed Liabilities contemplated hereby is subject to the
satisfaction, at or prior to the Closing Date, of each of the following
additional conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Purchaser contained in Article V that are qualified by
Material Adverse Effect shall be true and correct as of the Closing Date as
though made at and as of the Closing Date, except to the extent that any
representation and warranty is made as of a specified date other than the
Closing Date, in which case such representation and warranty shall be true
and correct as of such date; and the representations and warranties of
Purchaser contained in Article V that are not qualified by Material Adverse
Effect shall be true and correct as of the Closing Date as though made at
and as of the Closing Date, except (i) to the extent that any
representation and warranty is made as of a specified date other than the
Closing Date, in which case such representation and warranty shall be true
and correct as of such date, subject to the following clause (ii) and (ii)
for failures of such representations and warranties to be true and correct
that would not in the aggregate have a Material Adverse Effect.
(b) Performance of Covenants. Purchaser shall have performed in all
------------------------
material respects all obligations and agreements, and complied in all
material respects with all covenants, contained in this Agreement to be
performed or complied with by it prior to or at the Closing Date.
(c) Certificate. Sellers shall have received a certificate of
-----------
Purchaser, dated the Closing Date, executed by the Chief Executive Officer
or Chief Financial Officer of Purchaser, to the effect that the conditions
specified in Sections 8.3(a) and 8.3(b) have been fulfilled.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the
-----------
transactions contemplated hereby abandoned at any time prior to the Closing
Date:
(a) By mutual written consent of Sellers and Purchaser;
(b) By either party upon written notice given to the other party in
the event of a breach or default in the performance by such other party of
any representation, warranty, covenant or agreement contained in this
Agreement which breach or default (i) would result in a failure of a
condition set forth in Section 8.1 or 8.2 (in the case of a breach by any
Seller) or Section 8.1 or 8.3 (in the case of a breach by Purchaser) to be
satisfied and (ii) has not been, or cannot be, cured within 60 days of
written notice of such breach or default which is given by the terminating
party to the breaching or defaulting party;
(c) By either party upon written notice to the other party in the
event that any Governmental Authority (including any court of competent
jurisdiction) the consent of which is necessary for the consummation of the
transactions contemplated hereby shall have issued an order, decree or
ruling enjoining or otherwise prohibiting the purchase of the Assets and/or
assumption of the Assumed Liabilities hereunder, and such order, decree or
ruling shall have become final and non-appealable; or
(d) By either party upon written notice given to the other party in
the event that the Closing shall not have taken place on or before November
30, 2000; provided that the failure of the Closing to occur on or before
--------
such date is not the result of a breach of any covenant, agreement,
representation or warranty hereunder by the party seeking such termination.
9.2 Effect of Termination. In the event of the termination of this
---------------------
Agreement as provided above, this Agreement (other than this Section 9.2) shall
become void and of no further force and effect and, other than in the event of a
termination pursuant to Section 9.1(b) as a result of a willful breach or
default of any covenant or agreement by the non-terminating party, there shall
be no duties, liabilities or obligations of any kind or nature whatsoever on the
part of either party hereto to the other party based either upon this Agreement
or the transactions contemplated hereby, except that the obligations of the
parties referred to in Sections 4.16, 4.17 and 5.5, the last sentence of Section
6.2 and Section 12.2 shall continue to apply following any such termination of
this Agreement.
ARTICLE X
TAX MATTERS
10.1 Post-Closing Tax and Accounting Matters. Each of Purchaser and
---------------------------------------
Sellers agree to treat, for U.S. federal income tax purposes, the closing of the
transactions contemplated
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by this Agreement as having occurred on the Cut-Off Date and shall not take any
action inconsistent with this agreement. Following the Closing, Purchaser will
furnish to Sellers such necessary and available information and access to the
personnel of Purchaser and its Affiliates as Sellers may reasonably request in
connection with Tax and accounting matters of Sellers relating to the Assets.
Purchaser will not destroy any information which is subject to this Section 10.1
for a period of 10 years after the Closing Date and thereafter shall not destroy
any such information without giving at least 60 days' written notice to Sellers,
and, if any Seller so requests within 60 days of receipt of such notice,
Purchaser shall deliver to such Seller or to its order, at such Seller's
expense, such information intended to be destroyed.
10.2 Allocation of Consideration. Sellers and Purchaser agree that
---------------------------
they shall use, and shall cause their respective Subsidiaries to use, their
reasonable best efforts to enter into an agreement (the "Allocation Agreement")
--------------------
as to the allocation of the Purchase Price (as adjusted pursuant to Article II)
and the Assumed Liabilities among the Assets acquired hereunder. Purchaser
shall initially prepare a draft of the Allocation Agreement (the "Proposed
--------
Allocation") and shall submit such Proposed Allocation to Sellers within 90 days
----------
after the Closing Date. If, within 60 days after Sellers' receipt of the
Proposed Allocation, Sellers shall not have objected in writing to such Proposed
Allocation, the Proposed Allocation shall become the Allocation Agreement. In
the event that Sellers object in writing within such 60-day period and Sellers
and Purchaser are unable to reach an agreement, the dispute shall be referred to
a nationally recognized accounting firm mutually acceptable to Sellers on the
one hand and Purchaser on the other hand (the "Accounting Firm") for resolution,
---------------
and the determination of the Accounting Firm shall be binding upon Sellers and
Purchaser and their respective Subsidiaries and shall constitute the Allocation
Agreement, with Sellers on the one hand and Purchaser on the other hand each
bearing one-half of the costs, fees and expenses of the Accounting Firm.
Sellers and Purchaser agree to act, and to cause their respective Subsidiaries
to act, in accordance with the allocations contained in the Allocation Agreement
determined pursuant to this Section 10.2. Purchaser shall initially prepare for
delivery to Sellers a completed set of Internal Revenue Service Form 8594,
including all additional information and materials required to be attached to
such Form 8594 pursuant to the Treasury Regulations under Section 1060 of the
Code. Such documents and forms shall be delivered to Sellers for review no
later than 60 days prior to the date any such forms are required to be filed.
For all purposes hereunder, any indemnification payments pursuant to Article XI
shall be treated as an adjustment to the Purchase Price.
ARTICLE XI
INDEMNIFICATION
11.1 By Sellers. (a) Subject to Sections 11.1(b) and 11.1(c),
----------
Sellers, jointly and severally, shall indemnify and hold harmless Purchaser, its
Affiliates, officers, directors, employees, agents, successors, and assigns and
related entities from, and reimburse them for any, loss, cost, expense
(including all reasonable legal and expert fees and expenses), damage (including
damages to Persons, property or the environment), liability, fines, penalties or
claims but not including consequential, punitive or special damages
(collectively, the "Indemnified Costs") arising out of or resulting from:
-----------------
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(i) any breach of any representation or warranty made by
Sellers in this Agreement or the failure of any such representation or warranty
to be true in all material respects as of the Closing Date;
(ii) Sellers' breach of or failure to perform any of its
covenants or agreements contained in or made pursuant to this Agreement (except
with respect to any Excluded Liability to which clause (iii) shall apply);
(iii) Sellers' or their Affiliates' failure to timely pay,
perform or discharge any Excluded Liability;
(iv) any Excluded Asset; and
(v) any failure to comply with the terms and conditions of any
applicable bulk sales or bulk transfer or similar laws that may be applicable to
the sale or transfer of the Assets, notwithstanding the waiver contained in
Section 6.11;
(b) Notwithstanding the foregoing, Sellers shall have no liability:
(i) to the extent of any insurance or other recovery received
by a Person entitled to indemnification under Section 11.1(a) in respect of an
Indemnified Cost; and
(ii) to the extent that Purchaser or any Affiliate thereof
obtains a Tax benefit with respect to such Indemnified Cost after taking into
account the Tax cost of the receipt of the related indemnification payment.
(c) Notwithstanding the foregoing, Sellers shall have no liability
for indemnification pursuant to this Section 11.1 unless the aggregate of all
Indemnified Costs under Section 11.1(a)(i) or 11.1(a)(ii) for which Sellers
would, but for this Section 11.1(c), be liable exceeds on a cumulative basis an
amount equal to $2.5 million (the "Post-Closing Basket"), in which case Sellers'
-------------------
liability shall be only for such excess; provided, however, that if there shall
-------- -------
be any breach of any representation or warranty made by Sellers in this
Agreement, which representation or warranty is not qualified by Material Adverse
Effect (each, a "Pre-Closing Breach"), and between the date of this Agreement
------------------
and the Closing, Purchaser notifies Sellers in writing (pursuant to the
procedures set forth in Section 11.3) of such breach, Sellers shall have
liability for indemnification pursuant to this Section 11.1 to the extent the
aggregate of all Indemnified Costs relating to Pre-Closing Breaches exceeds on a
cumulative basis an amount equal to $1 million, in which case Sellers' liability
shall be only for such excess. Notwithstanding anything in this Agreement to the
contrary, Sellers shall not be liable for any such Indemnified Costs that, when
added to the amounts that Sellers have otherwise paid pursuant to Section
11.1(a)(i) or 11.1(a)(ii), exceed the amount of $100 million. Any payments made
by Sellers hereunder for indemnification for any Pre-Closing Breaches shall not
be charged against the Post-Closing Basket, and Purchaser may not seek further
indemnification for any Pre-Closing Breaches notified by Purchaser hereunder.
Indemnified Costs under Section 11.1(a)(iii), 11.1(a)(iv) and 11.1(a)(v) shall
not be subject to the provisions of this Section 11.1(c).
11.2 By Purchaser. (a) Subject to Sections 11.2(b) and 11.2(c),
------------
Purchaser shall indemnify and hold Parent, Sellers, and their Affiliates,
officers, directors, employees, agents,
-42-
successors, and assigns, and related entities from, and reimburse them for,
Indemnified Costs arising or resulting from:
(i) any breach of any representation or warranty made by
Purchaser in this Agreement or the failure of any such representation or
warranty to be true in all material respects as of the Closing Date;
(ii) Purchaser's breach of or failure to perform any of its
covenants or agreements contained in or made pursuant to this Agreement (except
with respect to any Assumed Liability or Asset to which clauses (iii) and (iv),
respectively, shall apply);
(iii) Purchaser's failure to timely pay, perform or discharge
any Assumed Liability;
(iv) Purchaser's failure to timely pay, perform or discharge
any Subsequent Assumed Liability; and
(v) the ownership of the Assets or the operation or conduct of
the Business, in each case after the Cut-Off Date.
(b) Notwithstanding the foregoing, Purchaser shall have no liability
to the extent that Parent, Sellers or any Affiliate thereof obtains a Tax
benefit with respect to such Indemnified Cost, after taking into account the Tax
cost of the indemnification payment, or receives insurance or other recovery in
respect of an Indemnified Cost.
(c) Notwithstanding the foregoing, Purchaser shall have no liability
for indemnification pursuant to Section 11.2(a)(i) or 11.2(a)(ii) unless the
aggregate of all Indemnified Costs under Section 11.2(a)(i) or 11.2(a)(ii) for
which Purchaser would, but for this subsection (c), be liable exceeds on a
cumulative basis an amount equal to $2.5 million, in which case Purchaser's
liability shall be only for such excess, nor shall Purchaser be liable for any
such Indemnified Costs that, when added to the amounts that Purchaser has
otherwise paid pursuant to Section 11.2(a)(i) or 11.2(a)(ii), exceed the amount
of $100 million. Indemnified Costs under Section 11.2(a)(iii), 11.2(a)(iv) and
11.2(a)(v) shall not be subject to the provisions of this Section 11.2(c).
11.3 Indemnification Procedure. (a) Any Person claiming
-------------------------
indemnification pursuant to this Agreement shall promptly notify the
indemnifying party in writing of the occurrence of any event that such party
asserts is or may be an indemnifiable event pursuant to this Agreement and shall
describe in reasonable detail the facts, events and circumstances relating to
the subject matter of such claim and the amount (if reasonably calculable) of
the Indemnified Costs in connection therewith. If such event involves the claim
of any third party, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, assume control over (in which case the
indemnifying party shall assume all expense with respect to) the defense,
settlement, adjustment or compromise of such claim.
(b) The indemnified party shall have the right to employ separate
counsel in any action or claim and to participate in the defense thereof at the
expense of the indemnifying party only (i) if the retention of such counsel has
been specifically authorized by the
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indemnifying party or (ii) if the counsel is retained because the indemnifying
party does not notify the indemnified party within 60 days after receipt of a
claim notice that it elects to undertake the defense thereof.
(c) The indemnifying party shall obtain the prior written approval
of the indemnified party before entering into any settlement, adjustment, or
compromise of such claim or ceasing to defend against such claim that provides
for any relief other than the payment of monetary damages with respect to the
indemnified party .
(d) If the indemnifying party does not assume control over the
defense of such claim as provided in Section 11.3(a) within 60 days of receipt
of notice thereof, the indemnified party shall have the right to defend the
claim in such manner as it may deem appropriate and to settle, adjust, or
compromise such claim and shall not thereby waive any right to indemnification
hereunder.
(e) In the event that the indemnifying party reimburses the
indemnified party for any third party claim, the indemnified party shall remit
to the indemnifying party any reimbursement that the indemnified party
subsequently receives for such third party claim.
(f) Any matter as to which a claim has been asserted by written
notice in accordance with Section 11.3(a) to the indemnifying party that is
pending or unresolved at the end of any applicable survival period shall
continue, to the extent permitted by law, to be covered by this Article XI
notwithstanding any applicable statute of limitations (which the parties hereby
waive) or the expiration of such survival period until such matter is finally
terminated or otherwise resolved by the parties under this Agreement or by a
court of competent jurisdiction and any amounts payable hereunder are finally
determined and paid.
11.4 Survival. The representations and warranties made herein or in
--------
any other documentation delivered pursuant to this Agreement and the covenants
and agreements to be performed on or prior to the Closing Date shall survive
until the first anniversary of the Closing Date, except for Indemnified Costs
arising from a breach of the representation and warranty contained in Sections
4.10 and 4.12(a) which shall survive until the expiration of the applicable
statute of limitations for making a contract claim for breach of this Agreement
under Applicable Law; provided that (a) expiration of a representation,
--------
warranty, covenant or agreement shall not affect the obligations of a Party with
respect to claims for indemnification for which notice has been given to the
indemnifying Party in accordance with Section 11.3 prior to such expiration and
(b) all covenants, agreements and indemnification matters that contemplate or
may involve actions to be taken or obligations in effect after the Closing shall
survive until the third anniversary of the Closing Date unless otherwise
provided herein, except that the indemnification matters related to Excluded
Liabilities, Assumed Liabilities and Subsequent Assumed Liabilities shall
survive in perpetuity.
11.5 Exclusivity. The indemnification provided in this Article XI
-----------
shall be the exclusive remedy for a breach of any representation or warranty in
this Agreement.
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ARTICLE XII
MISCELLANEOUS
12.1 Amendment and Modification; Waiver of Provisions. This
------------------------------------------------
Agreement may be amended, modified or waived only by a written instrument
executed by all of the parties hereto. The failure of any party at any time or
times to require performance of any provision of this Agreement shall in no
manner affect the right of such party at a later date to enforce the same. No
waiver by any party of any condition or the breach of any provision, terms,
covenant, representation or warranty contained in this Agreement in any one or
more instances shall be deemed to be or construed as a further or continuing
waiver of any such condition or of the breach of any other provision, term,
covenant, representation or warranty of this Agreement.
12.2 Expenses. The parties agree that fees and out-of-pocket
--------
expenses shall be paid as follows:
(a) Fees and disbursements of counsel, consultants and accountants
shall be paid by the party retaining such Persons;
(b) Each party shall bear its own expenses incurred with respect to
filings under the HSR Act and obtaining all required consents, authorizations,
orders or approvals of, filings or registrations with, and notices to,
Governmental Authorities;
(c) Purchaser shall be solely responsible for any sales or transfer
Taxes arising from the transfer of the Assets to Purchaser or assumption of the
Assumed Liabilities by Purchaser;
(d) Sellers shall be solely responsible for the fees and expenses
of Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. and Xxxxxxxxx, Lufkin & Xxxxxxxx; and
(e) All other fees and out-of-pocket expenses incurred in
connection with the transactions contemplated hereby shall be paid by the party
incurring such expenses.
12.3 Successors and Assigns; Assignments. All terms and provisions
-----------------------------------
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective transferees, successors and assigns. No party hereto
may assign any of its rights or delegate any of its duties hereunder without the
prior written consent of the other parties, and any such attempted assignment or
delegation without such consent shall be null and void, except that Purchaser
may assign its rights and delegate its duties hereunder to any designee,
provided that in connection therewith, Purchaser guarantees the performance by
such designee of its obligations hereunder.
12.4 No Third Parties Benefited. This Agreement is made and entered
--------------------------
into for the protection and benefit of the parties hereto and their permitted
successors and assigns, and no other Person shall be a direct or indirect
beneficiary of or have any direct or indirect cause of action or claim in
connection with this Agreement or any of the documents executed in connection
herewith; provided, however, that those Persons expressly set forth in Article
-------- -------
VII are
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intended beneficiaries of Article VII and those Persons expressly set forth in
Sections 11.1 and 11.2 are intended beneficiaries of Article XI.
12.5 Notices. All notices, requests, demands and other
-------
communications hereunder shall be in writing and shall be delivered personally,
by courier, by telecopy or by mail (regular, certified or registered), postage
prepaid, addressed as follows:
If to a Seller:
Transamerica Leasing, Inc.
c/o Transamerica Corporation
The Transamerica Pyramid
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
(Telecopy: (000) 000-0000)
and to:
Transamerica Leasing, Inc.
000 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx
(Telecopy: (000) 000-0000)
and to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
(Telecopy: (000) 000-0000)
If to Purchaser:
c/x Xxxxxx Industrial LLC
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxx
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and to:
Xxxx, Xxxxxx & Xxxxxxxxx
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
or to such other address as a party may from time to time designate in writing
in accordance with this section. Each notice or other communication given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been received (a) on the Business Day it is sent, if sent by
personal delivery, or (b) on the first Business Day after sending, if sent by
overnight delivery, properly addressed and prepaid or (c) upon receipt, if sent
by mail (regular, certified or registered); provided, however, that notice of
-------- -------
change of address shall be effective only upon receipt.
12.6 Law Governing. This Agreement shall be governed by, construed
-------------
and enforced in accordance with the laws of the State of New York, without
giving effect to the choice of law provisions thereof.
12.7 Counterparts. This Agreement may be executed simultaneously in
------------
one or more counterparts, each of which shall be deemed an original, but all of
which shall constitute but one and the same instrument.
12.8 Entire Agreement. This Agreement and the Confidentiality
----------------
Agreement constitute the entire Agreement among the parties and supersede and
cancel any and all prior agreements, written or oral, among them relating to the
subject matter hereof.
12.9 Choice of Forum; Waiver of Jury Trial. Any judicial proceeding
-------------------------------------
brought against any of the parties hereto with respect to his Agreement shall be
brought in any court of competent jurisdiction in the Southern District of New
York irrespective of where such party may be located at the time of such
proceeding, and by execution and delivery of this Agreement, each of the parties
to this Agreement hereby consents to the exclusive jurisdiction of any such
court and waives any defense or opposition to such jurisdiction. To the extent
permitted by Applicable Law, the parties hereby irrevocably waive any and all
right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby.
12.10 Union Tank Car Company Guarantee. As an inducement to Sellers
--------------------------------
to enter into this Agreement, by executing this Agreement Union Tank Car Company
hereby unconditionally and irrevocably guarantees the due and punctual
performance of each of the obligations and undertakings of Purchaser under this
Agreement when and to the same extent the same are required to be performed and
subject to all of the terms and conditions hereof. The obligations of Union
Tank Car Company hereunder constitute a guarantee of performance and shall not
be conditioned upon any prior notice to or attempt to enforce performance by
Purchaser.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their duly authorized officers, as of the day and year first above
written.
TRANSAMERICA LEASING INC.
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
TRANS OCEAN TANK SERVICES
CORPORATION
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
WORLDWIDE CONTAINERS, INC.
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
UNION TANK CAR COMPANY
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
------------------------------
* Solely for purposes of Section 12.10 hereof.
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