AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INTERNATIONAL LOGISTICS LIMITED,
TRASUB, INC.,
THE BEKINS COMPANY,
IMR GENERAL, INC.
AND
IMR FUND, L.P.,
Dated as of: April 10, 1996
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I.
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II.
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1 Approval of the Transactions . . . . . . . . . . . . . . . . . 16
2.2 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.3 Effect of the Merger . . . . . . . . . . . . . . . . . . . . . 17
2.4 Dissenting Shares. . . . . . . . . . . . . . . . . . . . . . . 18
2.5 Surrender and Payment. . . . . . . . . . . . . . . . . . . . . 18
2.6 Charter Documents; Directors; Officers . . . . . . . . . . . . 20
ARTICLE III.
PURCHASE PRICE ADJUSTMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.1 Purchase Price Adjustment. . . . . . . . . . . . . . . . . . . 20
3.2 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV.
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.2 Deliveries at Closing. . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF TBC, IMR AND IMR GENERAL . . . . . . . . . 22
5.1 Organization, Qualification and Corporate Power. . . . . . . . 23
5.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 23
5.3 Authorization of TBC . . . . . . . . . . . . . . . . . . . . . 23
5.4 Authorization of IMR and IMR General . . . . . . . . . . . . . 24
5.5 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . 24
5.6 Permits, Consents and Approvals. . . . . . . . . . . . . . . . 25
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5.7 Financial Statements . . . . . . . . . . . . . . . . . . . . . 25
5.8 Brokers' Fees. . . . . . . . . . . . . . . . . . . . . . . . . 26
5.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.10 Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . 27
5.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.12 Employment Matters . . . . . . . . . . . . . . . . . . . . . . 30
5.13 Labor Agreements and Actions . . . . . . . . . . . . . . . . . 33
5.14 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 33
5.15 Books and Records. . . . . . . . . . . . . . . . . . . . . . . 36
5.16 Personal Property and Encumbrances; Assets . . . . . . . . . . 36
5.17 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 37
5.18 Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.19 Material Contracts . . . . . . . . . . . . . . . . . . . . . . 40
5.20 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.21 Interests in Customers, Suppliers, etc . . . . . . . . . . . . 43
5.22 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 43
5.23 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . 45
5.24 No Other Agreements to Sell Assets or Capital Stock of TBC or
the TBC Subsidiaries . . . . . . . . . . . . . . . . . . . . . 45
5.25 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . 45
5.26 Purchase Commitments and Outstanding Bids. . . . . . . . . . . 45
5.27 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.28 Bank Accounts, Powers of Attorney. . . . . . . . . . . . . . . 46
5.29 Compensation of Employees. . . . . . . . . . . . . . . . . . . 46
5.30 Customer and Agent Relations . . . . . . . . . . . . . . . . . 46
5.31 Information Provided . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE
TRANSITORY SUBSIDIARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.1 Organization. . . . . . . . . . . . . . . . . . . . . . . . . 47
6.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 47
6.3 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . 47
6.4 Brokers' Fees. . . . . . . . . . . . . . . . . . . . . . . . . 48
6.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.6 Capitalization of Buyer and TBC and Fraudulent Conveyance . . 48
ARTICLE VII.
ADDITIONAL AGREEMENTS AND COVENANTS OF TBC,
THE TRANSITORY SUBSIDIARY AND THE BUYER. . . . . . . . . . . . . . . . . . . 49
7.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 49
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7.2 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . 50
7.3 Notice of Developments . . . . . . . . . . . . . . . . . . . . 50
7.4 Full Access. . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.5 Operation of Business. . . . . . . . . . . . . . . . . . . . . 51
7.6 Voting of TBC Common Stock . . . . . . . . . . . . . . . . . . 54
7.7 Filing of Tax Returns. . . . . . . . . . . . . . . . . . . . . 54
7.8 Establishment of Reserve for Central States Pension Fund
Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.9 Establishment of Reserve for Non-Core Assets . . . . . . . . . 55
ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF TBC, IMR, IMR GENERAL,
THE BUYER AND THE TRANSITORY SUBSIDIARY. . . . . . . . . . . . . . . . . . . 55
8.1 Conditions to the Obligation of the Buyer and the Transitory
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.2 Conditions to Obligation of TBC, IMR and IMR General . . . . . 58
ARTICLE IX.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATIONS . . . . . . . . 60
9.1 Survival of Representations, Warranties and Agreements . . . . 60
9.2 Agreement to Defend and Indemnify. . . . . . . . . . . . . . . 60
ARTICLE X.
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.4 Entire Agreement; Amendments; Extensions and Waivers.. . . . . 68
10.5 Multiple Counterparts. . . . . . . . . . . . . . . . . . . . . 68
10.6 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.7 Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.8 Press Releases and Public Announcements. . . . . . . . . . . . 69
10.9 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 69
10.10 Cumulative Remedies. . . . . . . . . . . . . . . . . . . . . . 70
10.11 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . 70
10.12 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 71
10.13 No Solicitation of Employees or Agents . . . . . . . . . . . . 71
10.14 No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . 71
10.15 Construction . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.16 Supplementation of Schedules . . . . . . . . . . . . . . . . . 71
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10.17 Actions and Obligations of the Payment Agent . . . . . . . . . 72
10.18 Incorporation of Exhibits and Schedules. . . . . . . . . . . . 72
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of this 10th day of April,
1996 (this "AGREEMENT"), is entered into by and among INTERNATIONAL LOGISTICS
LIMITED, a Delaware corporation (the "BUYER"), TRASUB, INC., a Delaware
corporation and a wholly owned subsidiary of the Buyer (the "TRANSITORY
SUBSIDIARY"), THE BEKINS COMPANY, a Delaware corporation ("TBC"), IMR FUND,
L.P., a Delaware limited partnership and the majority stockholder of TBC ("IMR")
and IMR GENERAL, INC., a Delaware corporation and the general partner of IMR
Management Partners, L.P., the general partner of IMR ("IMR GENERAL"). The
Buyer, the Transitory Subsidiary, TBC, IMR and IMR General are each referred to
herein individually as a "PARTY" and collectively as the "PARTIES."
RECITALS
A. The respective Boards of Directors, or the applicable governing
bodies, of the Buyer, the Transitory Subsidiary, IMR and TBC have approved the
acquisition of TBC pursuant to the terms of this Agreement.
B. In furtherance of such acquisition, the respective Boards of
Directors of the Buyer, the Transitory Subsidiary, IMR and TBC have approved the
merger of the Transitory Subsidiary with and into TBC (the "MERGER"), in
accordance with the General Corporation Law of the State of Delaware (the
"DELAWARE LAW"), pursuant to which TBC will be the surviving corporation in the
Merger.
C. Pursuant to the Merger, each TBC Share (as defined below) set
forth in SCHEDULE 5.2 shall be converted into the right to receive the Merger
Consideration (as defined below), subject to adjustment, specified in Section
2.3 hereof.
D. The Board of Directors of TBC has resolved to recommend the
Merger to holders of TBC Common Stock (as defined below), and IMR, which
beneficially and legally owns a majority of the outstanding shares of such TBC
Common Stock, has agreed to vote for and to take all steps within its power to
consummate the Merger, subject to the terms, conditions and agreements set forth
hereinafter.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties hereto agree as follows:
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ARTICLE I.
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the terms below shall have the
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference.
"ACCOUNTING FIRM" shall have the meaning set forth in Section 3.1(a)
hereof.
"ACTION" shall mean any action, claim, suit, litigation, arbitration,
proceeding, labor dispute, governmental audit, criminal prosecution or unfair
labor practice charge or complaint.
"AFFILIATE" shall have the meaning set forth in the Exchange Act;
PROVIDED, HOWEVER, the following Persons (i) shall not be deemed Affiliates of
TBC or any of the TBC Subsidiaries: (a) Buyer and its Affiliates, (b) Household
Goods Business agents, (c) HVP Business agents, and (d) any driver, and (ii)
shall be deemed Affiliates of IMR and IMR General: (a) Xxxxxx Management
Corporation, (b) Xxxxxx Investors, Inc., and (c) IMR Management Partners, L.P..
"AGREEMENT" shall mean this Agreement and Plan of Merger.
"ASSETS" shall mean any and all right, title and interest of TBC or
any of the TBC Subsidiaries in and to the business, properties, assets and
rights of any kind, whether tangible or intangible, real or personal and
constituting, or used or useful in connection with, or related to, TBC or any of
the TBC Subsidiaries or in which TBC or any such TBC Subsidiary has any
interest, including without limitation any right, title and interest of each of
TBC and each TBC Subsidiary in and to the following:
(a) accounts and notes receivable (whether current or non-current),
refunds, deposits, prepayments or prepaid expenses (including without limitation
any prepaid insurance premiums) of such Person;
(b) Contract Rights of such Person;
(c) Leases of such Person;
(d) Leasehold Estates of such Person;
(e) Leasehold Improvements of such Person;
(f) Fixtures and Equipment of such Person;
(g) Inventory of such Person;
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(h) Books and Records of such Person;
(i) Intellectual Property of such Person;
(j) Permits of such Person;
(k) computers and software of such Person;
(l) Insurance Policies of such Person;
(m) available supplies, sales literature, promotional literature,
customer, supplier and distributor lists, art work, display units, telephone and
fax numbers and purchasing records of such Person;
(n) rights under or pursuant to all warranties, representations and
guarantees made by suppliers in connection with the Assets or services furnished
to such Person pertaining to the Business or affecting the Assets;
(o) deposits and prepaid expenses of such Person;
(p) claims, causes of action, choses in action, rights of recovery
and rights of set-off of any kind of such Person, against any Person or entity,
including without limitation any liens, security interests, pledges or other
rights to payment or to enforce payment in connection with products delivered by
such Person on or prior to the Effective Time; and
(q) goodwill related to the Business.
Notwithstanding the foregoing, Assets shall not include any Action or
right of Action against any current or former director, officer or shareholder
of TBC or any TBC Subsidiary, including without limitation IMR, IMR General and
IMR's general and limited partners, and Xxxxx X. Xxxxxx or any Affiliate of the
foregoing; except, however, those Actions that may arise from or in connection
with the Transactions.
"BECOM 2000" shall mean the upgrade to the existing BECOM Information
Technology platform for high value products to effect real-time updating of
information through the use of radio frequency/bar code technology.
"BENEFIT ARRANGEMENT" shall mean any employment, consulting, severance
or other similar contract, arrangement or policy and each plan, arrangement
(written or oral), program, agreement or commitment providing for insurance
coverage (including any self-insured arrangements), supplemental unemployment
benefits, retirement benefits, life, health, disability or accident benefits
(including, without limitation, any "voluntary employees' beneficiary
association" as defined in Section 501(c)(9) of the Code providing for the same
or other benefits) or for deferred compensation, profit-sharing bonuses, stock
options, stock appreciation rights, stock purchases or other forms of incentive
compensation or post-retirement insurance,
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compensation or benefits which (i) is not a Welfare Plan, Pension Plan or
Multiemployer Plan, (ii) is entered into, maintained, contributed to or
required to be contributed to, as the case may be, by TBC or an ERISA Affiliate
or under which TBC or any ERISA Affiliate may incur any liability, and (iii)
covers any employee or former employee of TBC or any ERISA Affiliate (with
respect to their employment relationship with such entities).
"BMS" shall mean the following TBC moving and storage operating
subsidiary entities: A-1, M.R.W., Inc., a Virginia corporation, Bekins Moving &
Storage Co., an Arizona corporation, Bekins Moving & Storage Co., a California
corporation, Bekins Moving & Storage Co., a Florida corporation, Bekins Moving &
Storage Co., a Georgia corporation, Bekins Moving & Storage, Co., a Missouri
corporation, Bekins Moving & Storage Co., a Nevada corporation, Bekins Moving &
Storage Co., a Texas corporation, Bekins Moving & Storage Co. of Hawaii, Inc., a
California corporation, and Bekins Moving & Storage Co., Inc., a New Mexico
corporation.
"BOOKS AND RECORDS" shall mean (a) records and lists of TBC and each
TBC Subsidiary pertaining to the Assets, (b) records and lists pertaining to the
Business or customers, agents, suppliers or Personnel of TBC and each of the TBC
Subsidiaries, (c) product, business and marketing plans of TBC and each of the
TBC Subsidiaries, and (d) books, ledgers, files, reports, plans, drawings and
operating records of every kind maintained by TBC and each of the TBC
Subsidiaries.
"BUSINESS" shall mean TBC's and the TBC Subsidiaries' Household Goods
Business and HVP Business.
"BUYER" shall mean International Logistics Limited, a Delaware
corporation.
"BUYER INDEMNIFIED PARTIES" shall have the meaning set forth in
Section 9.2(a) hereof.
"CERTIFICATE OF MERGER" shall mean that certain Certificate of Merger
dated as of the Effective Date, consistent with the terms of the Agreement,
containing customary terms and provisions, and otherwise in form mutually
satisfactory to the Parties.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 ET SEQ.).
"CERTIFICATES" shall have the meaning set forth in Section 2.5 hereof.
"CLAIM" shall have the meaning set forth in Section 9.2(e) hereof.
"CLAIM NOTICE" shall have the meaning set forth in Section 9.2(e)
hereof.
"CLOSING" shall mean the closing of the Transactions on the Effective
Date at and as of the Effective Time.
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"CLOSING BALANCE SHEET" shall have the meaning set forth in Section
3.1(a) hereof.
"CLOSING BALANCE SHEET DATE" shall mean March 31, 1996.
"CLOSING FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 3.1(a) hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder.
"COMPANY PROPERTY" shall mean, collectively, the Facilities and other
present operating locations of TBC and the TBC Subsidiaries.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section
10.9(b) hereof.
"CONSTITUENT CORPORATIONS" shall have the meaning set forth in Section
2.2 hereof.
"CONTRACT" shall mean any agreement, contract, note, loan, evidence of
indebtedness, purchase, order, letter of credit, indenture, security or pledge
agreement, franchise agreement, covenant not to compete, employment agreement,
license, instrument, obligation or commitment to which TBC or any of the TBC
Subsidiaries is a party or is bound or to which any of the Assets are subject,
whether oral or written, express or implied, but excluding all Leases.
"CONTRACT RIGHTS" shall mean all of the rights and obligations under
the Contracts of TBC or any of the TBC Subsidiaries.
"COPYRIGHTS" shall mean registered copyrights, copyright applications
and unregistered copyrights.
"COURT ORDER" shall mean any judgment, award, decision, consent
decree, injunction, ruling, writ or order of any federal, state or local court
or governmental agency, department or authority that is binding on any Person or
its property under applicable law.
"DAMAGES" shall have the meaning set forth in Section 9.2(a) hereof.
"DEDUCTIBLE" shall have the meaning as set forth in Section 9.2(g)(ii)
hereof.
"DEFAULT" shall mean (i) a breach of or default under any Contract or
Lease, (ii) the occurrence of an event that with the passage of time or the
giving of notice or both would constitute a breach of or default under any
Contract or Lease, or (iii) the occurrence of an event that with or without the
passage of time or the giving of notice or both would give rise to a right of
termination, renegotiation or acceleration under any Contract or Lease.
"DELAWARE LAW" shall have the meaning set forth in Recital B.
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"DELIVERY DATE" shall have the meaning set forth in Section 10.16
hereof.
"DELOITTE" shall have the meaning set forth in Section 3.1(a) hereof.
"DISCLOSURE SCHEDULE" shall mean (i) the schedule prepared and
delivered by TBC and IMR to the Buyer and the Transitory Subsidiary and dated as
of the date hereof, and (ii) the Supplement (if accepted, as described in
Section 10.16 below), both of which set forth the exceptions to the
representations and warranties contained in Article V hereof and certain other
information called for by this Agreement. Unless otherwise specified each
reference in this Agreement to any numbered schedule is a reference to that
numbered schedule which is included in the Disclosure Schedule. As provided in
Section 10.16 hereof, no later than two (2) full calendar days prior to the
scheduled date of Closing, TBC, IMR and IMR General may deliver a Supplement to
the Disclosure Schedule so delivered, and if, and only if, such Supplement is
accepted by the Buyer and the Transitory Subsidiary as provided in such Section
10.16, the phrase the "Disclosure Schedule" shall be deemed to refer to the
initial Disclosure Schedule, as so supplemented.
"DISSENTING SHARES" shall mean TBC Shares held by any TBC Stockholder
who becomes entitled to the payment of the fair value for his TBC Shares under
the Delaware Law if the Delaware Law provides for such payment in connection
with the Merger.
"DRIVER CONTRACTS" shall mean independent operator agreements of TBC
and the TBC Subsidiaries with individuals for one or more tractor or
tractor-trailer units utilized in the transport of household or high value
products.
"EFFECTIVE DATE" shall have the meaning set forth in Section 2.2
hereof.
"EFFECTIVE TIME" shall have the meaning set forth in Section 2.2
hereof.
"ENCUMBRANCE" shall mean any claim, lien, pledge, option, charge,
easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, building or use restriction, conditional sales agreement,
encumbrance or other right of third parties, whether voluntarily incurred or
arising by operation of law, and includes, without limitation, any agreement to
give any of the foregoing in the future, and any contingent sale or other title
retention agreement or lease in the nature thereof. Notwithstanding the
foregoing, the possession of an Asset by an independent agent of TBC or a Person
who is a party to a Driver Contract in the ordinary course of business shall not
be an Encumbrance to be separately disclosed (as an Encumbrance) under this
Agreement.
"ENVIRONMENTAL CLAIMS" shall mean administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings, consent decrees,
judgments, administrative orders or agreements relating in any way to any
Environmental Law or any permit issued under any such Law, including
(i) Environmental Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable
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Environmental Law, and (ii) Environmental Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL CONDITIONS" shall mean the introduction into the
environment of any pollution, including without limitation any contaminant,
irritant or other Hazardous Materials as a result of which TBC or any TBC
Subsidiary has or may become liable to any Person or by reason of which the
Company Property or any of the Assets may suffer or be subjected to any lien.
"ENVIRONMENTAL LAW" shall mean any applicable federal, state or local
statute, law, rule, regulation, ordinance, code, policy or rule of common law in
effect and in each case as amended as of the Effective Time, and any judicial or
administrative interpretation thereof as of the Effective Time, including any
judicial or administrative order, consent decree or judgment, which (i)
regulates or relates to the protection or clean-up of the environment; the use,
treatment, storage, transportation, handling, disposal or Release of Hazardous
Materials, the preservation or protection of waterways, groundwater, drinking
water, air, wildlife, plants or other natural resources; or the health and
safety of Persons or property, including without limitation protection of the
health and safety of employees; or (ii) imposes liability with respect to any of
the foregoing, including without limitation CERCLA; RCRA; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Clean Air Act, 42
U.S.C. Section 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section 300f
ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 ET SEQ.; the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section 651 ET
SEQ.; or any other similar federal, state or local law of similar effect, each
as amended.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, and the rules and regulations promulgated thereunder, as amended.
"ERISA AFFILIATE" shall mean any entity which is (or at any relevant
time was) a member of a "controlled group of corporations" with, or under
"common control" with, or a member of an "affiliated service group" with, TBC or
any TBC Subsidiary, as defined in Section 414(b), (c) or (m) of the Code.
"ESTOCLET AGREEMENT" shall have the meaning set forth in Section
8.1(j) hereof.
"EXAMINATION PERIOD" shall have the meaning set forth in Section
9.2(e)(ii) hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"FACILITIES" shall mean all of the plants, offices, manufacturing
facilities, stores, warehouses, improvements, administration buildings, and all
real property and related facilities of TBC or any of the TBC Subsidiaries as
identified or listed on SCHEDULE 5.18.
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"FACILITY LEASES" shall mean all of the leases of Facilities listed on
SCHEDULE 5.18.
"FINANCIAL STATEMENTS" shall have the meaning set forth in SECTION 5.7
hereof.
"FIXTURES AND EQUIPMENT" shall mean all of the furniture, fixtures,
furnishings, machinery, automobiles, tractors, trailers, spare parts, supplies,
equipment, tooling, molds, patterns, dies and other tangible personal property
owned by TBC or any of the TBC Subsidiaries, wherever located and including any
such Fixtures and Equipment in the possession of any supplier or agent of TBC or
any of the TBC Subsidiaries, including all warranty rights with respect thereto.
"FOREIGN SUBSIDIARY" shall mean any TBC Subsidiary organized under the
laws of or doing business in any country other than the United States.
"FORMER FACILITY" shall mean each plant, office, manufacturing
facility, store, warehouse, improvement, administrative building and all real
property and related facilities which was owned, leased or operated by TBC or
any of the TBC Subsidiaries at any time prior to the date hereof, but excluding
any Facilities.
"FORMER HOLDERS" shall mean all holders of TBC Shares, excluding
Dissenting Shares.
"FUNDS" shall have the meaning set forth in Section 2.5(a) hereof.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, applied on a basis consistent with the basis on which
the Year End Financial Statements and other financial statements referred to in
Section 5.7 were prepared. The Parties acknowledge and agree, however, that the
following shall not be considered departures from GAAP for purposes of this
Agreement: (i) TBC's calculations of insurance reserves and cargo claim
reserves have been refined, but not changed, and Buyer has concurred with such
refinement and TBC's methods of such calculation (including the actuarial
casualty reserve rules and methods for establishing reserves and the computation
methodology for cargo claims as set forth on SCHEDULE 5.7), and (ii) Liabilities
for income Taxes as reflected on the Financial Statements do not include any
accruals for any audit assessment arising or resulting from the audit presently
being conducted by the IRS and any resulting state income tax adjustments.
"HAZARDOUS MATERIALS" shall mean (i) any petroleum or petroleum
products, radioactive materials, asbestos in any form, urea formaldehyde foam
insulation, polychlorinated biphenyls, and radon gas; (ii) any radioactive,
toxic, infectious, reactive, corrosive, ignitible or flammable chemical or
chemical compound; and (iii) any chemicals, materials or substances defined as
or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," or words of similar import,
under any applicable Environmental Law, whether solid, liquid or gas.
8
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
"HOUSEHOLD GOODS BUSINESS" shall mean the business of TBC and the TBC
Subsidiaries of providing over-the-road transportation, packing, loading and
storage services of household and similar goods for individuals, corporations,
the United States military and other Persons.
"HVP BUSINESS" shall mean the business of TBC and the TBC Subsidiaries
of providing over-the-road transportation, warehousing, inventory management,
assembly, delivery and installation services of high value commercial and
consumer products for major commercial and consumer products manufacturers and
direct response marketing companies.
"IMR" shall mean IMR Fund, L.P., a Delaware limited partnership.
"IMR'S ACCOUNTANTS" shall have the meaning set forth in Section 3.1(a)
hereof.
"IMR ACQUISITION" shall mean the transactions effected pursuant to
that certain Stock Purchase Agreement dated as of July 22, 1992 by and among
Minstar, Inc., IMR and IJ Holdings Corp.
"IMR GENERAL" shall mean IMR General, Inc., a Delaware corporation.
"IMR SHARES" shall have the meaning set forth in Section 7.6 hereof.
"INSURANCE POLICIES" shall mean the insurance policies related to TBC
or any of the TBC Subsidiaries or the Assets as described in Section 5.20.
"INTELLECTUAL PROPERTY" shall mean all of the Copyrights, Patents,
Trademarks, technology rights and licenses, computer software (including without
limitation any source or object codes therefor or documentation relating
thereto), trade secrets, franchises, know-how, inventions, designs,
specifications, plans, drawings and intellectual property rights of each of TBC
or any of the TBC Subsidiaries.
"INVENTORY" shall mean (a) all of the inventories of TBC or any of the
TBC Subsidiaries within the Facilities of TBC or any of the TBC Subsidiaries
held for resale or lease in the ordinary course of the Business to the customers
of such Person, (b) all office supplies and similar materials of TBC or any of
the TBC Subsidiaries or any of their respective Affiliates located in the
Facilities of such Person, and (c) all of the raw materials, work in process,
spare parts, finished products, wrapping, supply and packaging items, employee
uniforms and similar items of TBC or any of the TBC Subsidiaries, in the
Facilities of such Person or wherever otherwise located.
"IRS" means the Internal Revenue Service of the United States Treasury
Department.
9
"XXXXXX DEBT" shall mean any and all amounts owing by TBC or any of
the TBC Subsidiaries in connection with the outstanding promissory note payable
to Xxxxx X. Xxxxxx, which, as of the Effective Date, will not exceed $1,250,000
(plus accrued interest).
"KNOWLEDGE" shall mean, and an individual shall be deemed to have
"Knowledge" if, (a) such individual is actually aware of a particular fact or
other matter, or (b) a prudent individual could be expected in the ordinary
course of business to discover or otherwise become aware of such fact or matter
in the course of conducting a reasonably diligent review concerning the
existence of such fact or matter. A Person (other than an individual) will be
deemed to have "Knowledge" of a particular fact or other matter if any
individual who is serving as a director, executive officer, partner, executor or
trustee of such Person (or in any similar capacity) has, or at any time had,
Knowledge of such fact or matter.
"KNOWLEDGE OF BUYER" shall mean the actual knowledge of a breach under
this Agreement or the other Transaction Documents, based upon a reasonably
diligent review of disclosures made in the Disclosure Schedules, of Xxxxxxx
Xxxxx, Jr., Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxxx.
"KNOWLEDGE OF TBC" or other similar phrase shall mean the Knowledge of
Xxxxxx Xxxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxxxx, Xxxx
Xxxxx, Xxxxx Xxxxxxxx, XX and, solely with respect to matters related to income
tax and insurance, Xxxxxx Xxxxxx and the actual knowledge of any other executive
officers and directors of TBC and each of the TBC Subsidiaries.
"LEASED REAL PROPERTY" shall mean all leased property described in the
Facility Leases.
"LEASEHOLD ESTATES" shall mean all of the rights and obligations of
TBC or any of the TBC Subsidiaries as lessee under the Leases listed on SCHEDULE
5.18.
"LEASEHOLD IMPROVEMENTS" shall mean all leasehold improvements
situated in or on the Leased Real Property leased under the Leases.
"LEASES" shall mean all of the existing leases with respect to the
personal or real property of TBC or any of the TBC Subsidiaries described in
Section 5.18 and all other leases relating to the Assets.
"LIABILITY" shall mean any direct or indirect liability, indebtedness,
obligation, commitment, expense, claim, deficiency, guaranty or endorsement of
or by any Person of any type, whether accrued, absolute, contingent, matured or
unmatured.
"LOAN AGREEMENT" shall mean the Amended and Restated Loan Agreement
dated as of April 30, 1993, by and among TBC, as successor in interest to The
Bekins Company, a California corporation, Banque Paribas, Chicago Branch
(individually and as agent), First Bank
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National Association, Bank of Ireland, Grand Cayman Branch, Norwest Bank
Minnesota, N.A., as amended.
"MATERIAL AGENT" shall have the meaning set forth in Section 5.30.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" shall mean (a)
any significant and substantial adverse effect or change in (i) the condition
(financial or other), Business, results of operations, Assets, Liabilities or
operations of TBC and the TBC Subsidiaries, taken as a whole OR (ii) the ability
of TBC or IMR to consummate the Transactions (excluding actions of Dissenting
Shareholders exercising rights as such), OR (b) any event or condition which
would, with reasonable certainty upon the passage of time, constitute a
"Material Adverse Effect" or "Material Adverse Change."
"MATERIAL CONTRACT" shall have the meaning set forth in Section 5.19
hereof.
"MATERIAL CUSTOMER" shall have the meaning set forth in Section 5.30
hereof.
"MATERIAL LEASE" shall have the meaning set forth in Section 5.18
hereof.
"MATERIAL PERMITS" shall have the meaning set forth in Section 5.6
hereof.
"MERGER CONSIDERATION" shall have the meaning set forth in Section
2.3(a) hereof and shall be subject to the Purchase Price Adjustment.
"MERGER" shall have the meaning set forth in Recital B.
"MORTGAGES" shall mean all deeds of trust, mortgages or other debt
encumbrances on Owned Real Property.
"MOST RECENT FISCAL QUARTER END FINANCIAL STATEMENTS" shall have the
meaning set forth in Section 5.7 hereof.
"MOST RECENT MONTH END FINANCIAL STATEMENTS" shall have the meaning
set forth in Section 5.7 hereof.
"MULTIEMPLOYER PLAN" shall mean any "multiemployer plan," as defined
in Section 4001(a)(3) or 3(37) of ERISA, (i) which TBC or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or,
after September 25, 1980, maintained, administered, contributed to or was
required to contribute to, or under which TBC or any ERISA Affiliate may incur
any liability and (ii) which covers or has covered any employee or former
employee of TBC or any ERISA Affiliate (with respect to their employment
relationship with such entities). The term "Multiemployer Plan" shall exclude
any "Pension Plan" and, except to the extent provided otherwise by Section
5.12(b)(iii), any "Welfare Plan."
"NON-CORE ASSETS" shall have the meaning set forth in Section 5.24
hereof.
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"ORDINARY COURSE OF BUSINESS" or "ORDINARY COURSE" or any similar
phrase shall mean the ordinary course of the Business and consistent with the
past practice of TBC and the TBC Subsidiaries.
"OSHA" shall mean the Federal Occupational Safety & Health Act.
"OWNED REAL PROPERTY" shall mean all real property owned in fee by TBC
or any of the TBC Subsidiaries, including without limitation all rights,
easements and privileges appertaining or relating thereto, all buildings,
fixtures and improvements located thereon and all Facilities thereon, if any.
"OWNERSHIP PERIOD" shall mean the period commencing on the date of the
IMR Acquisition and continuing through and until the Effective Time.
"PARIBAS OPTION" shall mean that certain Stock Purchase Option
pursuant to which Paribas North America, Inc., or its registered assign, has
been given the right to purchase from TBC an aggregate of 6,192 shares of TBC
Common Stock at the exercise price or prices set forth in such Stock Purchase
Option.
"PARTY" or "PARTIES" shall mean, in the singular, each of the Buyer,
the Transitory Subsidiary, TBC, IMR and IMR General in the plural, collectively,
the Buyer, the Transitory Subsidiary, TBC, IMR and IMR General.
"PATENTS" shall mean all patents and patent applications and
registered design and registered design applications.
"PAYMENT AGENT" shall mean IMR General in its role as the agent of the
TBC Stockholders for the purposes of exchanging Certificates for Merger
Consideration as provided in Section 2.5(g) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PENSION PLAN" shall mean any "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) (i) which TBC
or any ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or, within the five years prior to the Effective Time,
maintained, administered, contributed to or was required to contribute to, or
under which TBC or any ERISA Affiliate may incur any liability and (ii) which
covers or has covered any employee or former employee of TBC or any ERISA
Affiliate (with respect to their employment relationship with such entities).
"PERMITS" shall mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, or any other Person,
necessary for the conduct of or the operation of the Business.
"PERMITTED ENCUMBRANCE" shall have the meaning set forth in Section
5.16 hereof.
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"PERSON" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PERSONNEL" shall have the meaning set forth in Section 5.14(c)
hereof.
"PRE-CLOSING TAX PERIOD" shall have the meaning set forth in Section
9.2(a)(iii) hereof.
"PROPOSED ACQUISITION TRANSACTION" shall have the meaning set forth in
Section 7.2 hereof.
"PURCHASE PRICE" shall have the meaning set forth in Section 2.3(a)
hereof.
"PURCHASE PRICE ADJUSTMENT" shall mean the Stockholders' Equity
Adjustment.
"PURCHASED INTERESTS" shall have the meaning set forth in Section
2.3(b) hereof.
"RCRA" shall mean the Resource Conservation & Recovery Act (42
U.S.C. Section 6901 ET SEQ.).
"REGULATIONS" shall mean any laws, statutes, ordinances, code,
regulations, rules, court decisions and orders of any foreign, federal, state or
local government and any other governmental department or agency, including
without limitation Environmental Laws, energy, motor vehicle safety, public
utility, zoning, building and health codes, occupational safety and health and
laws respecting employment practices.
"RELEASE" shall mean and include any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, migrating within the environment or disposing into the environment or
the work-place of any Hazardous Material, and otherwise as defined in any
Environmental Law.
"RELEASED OBLIGATIONS" shall have the meaning set forth in Section
8.2(l) hereof.
"REPRESENTATIVE" shall mean any officer, director, principal,
attorney, agent, employee or other representative.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"SELLERS' TRANSACTIONAL EXPENSES" shall mean, collectively, the costs
and expenses or other authorized deductions or expenditures incurred by or on
behalf of the Payment Agent, TBC and the TBC Stockholders (in their respective
capacities as such) and arising out of or related to this Agreement, the other
Transaction Documents and the consummation of the Transactions, including,
without limitation, (i) any amounts payable as a Purchase Price Adjustment, (ii)
13
attorneys', accounting, consulting and other professional fees incurred by such
Persons in connection with this Agreement, the other Transaction Documents and
the consummation of the Transactions, (iii) fees of financial advisors incurred
in connection therewith, (iv) any charges imposed by accountants, attorneys or
other agents (v) stock transfer taxes payable pursuant to Section 3.2 hereof,
(vi) the unpaid exercise or purchase price of any TBC Stock Option, (vii) any
amounts otherwise incurred, payable, anticipated or compromised by the Payment
Agent in connection with the purchase of equity interests of TBC, (viii)
one-half of any fees and out-of-pocket expenditures incurred in connection with
obtaining the Solvency Opinion, and (ix) all amounts incurred or payable which
arise from, in connection with or pursuant to Section 9.2 hereof. The Sellers'
Transactional Expenses shall not include the following expenses of TBC: (i)
preparation and copying of documents and schedules by TBC in connection with the
Transactions, (ii) travel, lodging and meals of executives and other employees
of TBC related to the Transactions, and (iii) other costs related to the rental
of equipment, the use of TBC facilities and equipment and the time expended by
TBC executives and other employees in connection with the Transactions.
"SOLVENCY OPINION" shall have the meaning set forth in Section 8.1(r)
hereof.
"STOCKHOLDER INDEMNIFIED PARTIES" shall have the meaning set forth in
Section 9.2(b) hereof.
"STOCKHOLDERS' AGREEMENT" shall mean that certain agreement dated as
of the Effective Date by and among the Buyer, an Affiliate of Xxxxxxx X. Xxxxx &
Sons, LLC, TCW Special Credits Fund V -- The Principal Fund and certain managers
of TBC and the Buyer.
"STOCKHOLDERS' EQUITY ADJUSTMENT" shall have the meaning set forth in
Section 3.1(b) hereof.
"STOCKHOLDERS' CONSENT" shall have the meaning set forth in Section
2.1 hereof.
"SUBSIDIARY" shall mean (a) any corporation in an unbroken chain of
corporations beginning with TBC if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain, (b) any partnership in which TBC or any of the TBC
Subsidiaries is a general partner, or (c) any partnership in which TBC or any of
the TBC Subsidiaries possesses a 50% or greater interest in the total capital or
total income of such partnership.
"SUPPLEMENT" shall have the meaning set forth in Section 10.16 hereof.
"SURVIVING CORPORATION" shall have the meaning set forth in Section
2.2 hereof.
"TAX" or "TAXES" shall mean, except where the usage or context
otherwise dictates, any federal, state, local, foreign or other tax, levy,
impost, fee, assessment or other government charge, including without limitation
income, estimated income, business, occupation, franchise,
14
property, payroll, personal property, sales, transfer, use, employment,
commercial rent, occupancy, franchise or withholding taxes, and any premium,
including without limitation interest, penalties and additions in connection
therewith for which TBC or any of the TBC Subsidiaries may by liable.
"TAX ACCOUNTING FIRM" shall have the meaning set forth in Section 7.7
hereof.
"TAX AUDIT ADJUSTMENT" shall mean any adjustment to establish or
increase a reserve on the Closing Balance Sheet for any audit assessment arising
or resulting from the audit presently being conducted by the IRS and any
resulting state income tax adjustments.
"TAX RETURNS" shall mean and include, unless the usage or context
otherwise dictates, any federal, state, local and foreign tax returns,
declarations, elections, reports and information returns or the refiling of any
such Tax Returns previously filed.
"TBC" shall mean The Bekins Company, a Delaware corporation.
"TBC 1993 STOCK OPTION PLAN" shall mean that certain 1993 Stock Option
Plan of TBC, as the successor in interest to Bekins Holding Company, adopted as
of April 13, 1993.
"TBC COMMON STOCK" shall mean the Common Stock, par value $.01 per
share, of TBC.
"TBC EMPLOYEE STOCK OPTION PLANS" shall mean, collectively, the TBC
1993 Stock Option Plan and the various other employee stock option plans of TBC
and/or any TBC Subsidiary, as in effect from time to time, granting options to
purchase shares of TBC Common Stock.
"TBC OUTSIDE DIRECTORS' RESTRICTED STOCK PLAN" shall mean that certain
Outside Directors' Restricted Stock Plan of TBC adopted as of April 1, 1994.
"TBC PLANS" shall mean all Benefit Arrangements, Multiemployer Plans,
Pension Plans and Welfare Plans.
"TBC SHARES" shall mean all of the shares of TBC Common Stock issued
and outstanding immediately prior to the Effective Time.
"TBC STOCKHOLDER" shall mean any Person who or which holds (without
duplication) shares of TBC Common Stock (including restricted stock awarded
under the TBC Outside Directors' Restricted Stock Plan) or any TBC Stock Option
or Options; a list of the TBC Stockholders and the shares of TBC Common Stock
and TBC Stock Options owned by each is attached as Exhibit B hereto.
"TBC STOCK OPTIONS" shall mean, collectively, (a) the Paribas Option,
(b) the options to purchase shares of TBC Common Stock granted pursuant the TBC
Employee Stock
15
Option Plans and (c) any other outstanding options, warrants or rights to
purchase or subscribe for shares of TBC Common Stock.
"TBC SUBSIDIARIES" shall mean, collectively, the Subsidiaries of
TBC, each of which is set forth on Exhibit C hereof.
"TRADEMARKS" shall mean registered trademarks, registered service
marks, trademark and service xxxx applications and unregistered trademarks
and service marks.
"TRANSACTION DOCUMENTS" shall mean this Agreement and the ancillary
agreements and instruments executed, filed or otherwise prepared, exchanged
or delivered in accordance with this Agreement.
"TRANSACTIONS" shall mean the Merger and the other transactions
contemplated by the Transaction Documents.
"TRANSITORY SUBSIDIARY" shall mean Trasub, Inc., a Delaware
corporation.
"TRANSITORY SUBSIDIARY COMMON STOCK" shall mean the Common Stock,
$.01 par value per share, of the Transitory Subsidiary.
"WELFARE PLAN" shall mean any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA, (i) which TBC or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or
under which TBC or any ERISA Affiliate may incur any Liability and (ii) which
covers or has covered any employee or former employee of TBC or any ERISA
Affiliate (with respect to their employment relationship with such entities),
but excluding any Multiemployer Plan.
"YEAR END BALANCE SHEET" shall mean the consolidated balance sheet
of TBC and the TBC Subsidiaries, dated the Year End Balance Sheet Date,
together with notes thereon, prepared in accordance with GAAP and previously
delivered to the Buyer and attached hereto as SCHEDULE 1.1.
"YEAR END BALANCE SHEET DATE" shall mean March 31, 1995.
"YEAR END FINANCIAL STATEMENTS" shall mean the Year End Balance
Sheets and the audited consolidated statements of operations and income,
changes in stockholders' equity and cash flow of TBC and the TBC Subsidiaries
for the period ended on the Year End Balance Sheet Date, prepared in
accordance with GAAP and previously delivered to the Buyer and attached
hereto as SCHEDULE 1.1.
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ARTICLE II.
THE MERGER
2.1 APPROVAL OF THE TRANSACTIONS. The Transactions and the Transaction
Documents shall be submitted for adoption and approval of the holders of TBC
Shares as set forth in SCHEDULE 5.2 in a manner allowed under the Delaware
law (the "STOCKHOLDERS' CONSENT"). The Buyer, the Transitory Subsidiary, IMR
and TBC shall coordinate and cooperate with respect to the timing of such
Stockholders' Consent. The Board of Directors of TBC shall recommend that
the holders of TBC Shares approve this Agreement, the other Transaction
Documents and the Transactions.
2.2 THE MERGER. As soon as is practicable after the satisfaction or
waiver of the conditions contained herein, the Parties hereto will cause the
Merger to be consummated by filing with the Secretary of State of the State
of Delaware the Certificate of Merger (the time of such filing being the
"EFFECTIVE TIME," and the date upon which the Effective Time occurs, the
"EFFECTIVE DATE"). At the Effective Time, in accordance with this Agreement
and the Delaware Law, the Transitory Subsidiary shall be merged with and into
TBC, the separate existence of the Transitory Subsidiary (except as may be
continued by operation of law) shall cease, and TBC shall continue as the
surviving corporation under the corporate name it possesses immediately prior
to the Effective Time. The Transitory Subsidiary and TBC are sometimes
referred to herein as the "CONSTITUENT CORPORATIONS," and TBC is sometimes
referred to herein as the "SURVIVING CORPORATION."
2.3 EFFECT OF THE MERGER.
(a) Except for Dissenting Shares, each TBC Share shall
automatically be converted into the right to receive an amount in cash equal
to (i) Thirty-Two Million One Hundred and Ninety-Five Thousand Three Hundred
and Four ($32,195,304), less the amount of TBC's tax withholding obligations
with respect to the Purchased Interests (as defined in Section 2.3(b) below)
as set forth in an Exhibit to this Agreement to be completed prior to the
Closing (the "PURCHASE PRICE") divided by (ii) the aggregate number of TBC
Shares described in SCHEDULE 5.2 (the per TBC Share consideration shall be
referred to herein as the "MERGER CONSIDERATION"). The Merger Consideration
shall be subject to the Stockholders' Equity Adjustment, and the Merger
Consideration payable to each holder of TBC Shares will be reduced by such
holder of TBC Shares' pro-rata share of the Sellers' Transactional Expenses
as computed by the Payment Agent.
(b) Prior to the Effective Time, the Payment Agent will purchase
all outstanding TBC Common Stock and TBC Stock Options (with the exception of
TBC Common Stock owned by IMR, Bank of America, Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxxxx and the Buyer) (collectively, the
"PURCHASED INTERESTS") at a per share price agreed upon by the Payment Agent
and such TBC Stockholder. Such purchases will be Sellers' Transactional
Expenses. All such Purchased Interests shall then be contributed to TBC and
held in treasury by TBC or cancelled, retired or otherwise extinguished.
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(c) Each TBC Share held in treasury by TBC or owned by the
Transitory Subsidiary, the Buyer or any direct or indirect subsidiary of the
Transitory Subsidiary, the Buyer or TBC, shall be cancelled and retired, and
no payment shall be made with respect thereto.
(d) Each share of Transitory Subsidiary Common Stock issued and
outstanding immediately prior to the Effective Time shall be converted into
and become one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation.
(e) At and after the Effective Date, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises of a public
as well as of a private nature, and be subject to all the restrictions,
disabilities and duties of each of the Constituent Corporations; and all
singular rights, privileges, powers and franchises of each of the Constituent
Corporations, and all property, real, personal and mixed, and all debts due
to either the Constituent Corporations on whatever account, as well as for
stock subscriptions and all other things in action or belonging to each of
the Constituent Corporations, shall be vested in the Surviving Corporation,
and all property, rights, privileges, powers and franchises, and all and
every other interest shall be thereafter the property of the Surviving
Corporation as they were of the Constituent Corporations, and the title to
any real estate vested by deed or otherwise, in either of the Constituent
Corporations, shall not revert or be in any way impaired; but all rights of
creditors and all liens upon any property of either of the Constituent
Corporations shall be preserved unimpaired, and all debts, liabilities and
duties of the Constituent Corporations shall thenceforth attach to the
Surviving Corporation, and may be enforced against it to the same extent as
if said debts and liabilities had been incurred by it.
2.4 DISSENTING SHARES. Notwithstanding anything in this Agreement to
the contrary, Dissenting Shares shall not be converted into the right to
receive the Merger Consideration, but holders of such shares shall be
entitled to receive payment of the appraised value of such shares in
accordance with the provisions of Section 262 of the Delaware Law, except
that any Dissenting Shares held by a stockholder who shall thereafter
withdraw such demand for appraisal of such shares, or shall lose the right to
appraisal as provided in such Section 262, shall thereupon be deemed to have
been converted at the Effective Time into the right to receive the Merger
Consideration, without interest thereon. The Payment Agent shall direct, at
its own cost and expense with such cost and expenses considered part of the
Sellers' Transactional Expenses, all negotiations and proceedings with
respect to demands for appraisals under the Delaware Law and shall be
responsible for paying any and all amounts required to be paid to holders of
Dissenting Shares thereunder and any other amounts due to the Dissenting
Stockholders as a result of this Agreement and the consummation of the
Transactions.
2.5 SURRENDER AND PAYMENT.
(a) Prior to the Effective Time, the holders of TBC Shares shall
appoint IMR General to act as the Payment Agent for the purpose of exchanging
certificates representing TBC Shares that are not Dissenting Shares
("CERTIFICATES") for the Merger Consideration. At the Effective Time, the
Buyer shall deposit or cause to be deposited with the Payment Agent funds in
the amount of the Purchase Price (the "FUNDS"). The Payment Agent will send
to each holder
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of TBC Shares a letter of transmittal (or other appropriate notification and
transmittal document) for use in such exchange (which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the Certificates to the Payment Agent). The Payment Agent
shall instruct TBC to cancel all such Certificates and shall promptly deliver
them to the Surviving Corporation at the Closing against delivery of the
Funds.
(b) Each holder of TBC Shares that have been converted into the
Merger Consideration, upon surrender to the Payment Agent of a Certificate or
Certificates representing such shares, together with a properly completed
letter of transmittal or other appropriate document covering such shares,
will be entitled, subject to Section 2.5(g) below, to receive the Merger
Consideration payable in respect of such TBC Shares, without interest. Until
so surrendered, each such Certificate shall after the Effective Time
represent for all purposes only the right to receive such Merger
Consideration from the Payment Agent as provided herein.
(c) If any portion of the Merger Consideration is to be paid other
than to the registered holder of the TBC Shares represented by the
Certificate or Certificates surrendered in exchange therefor, it shall be a
condition to such payment that the Certificate or Certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and
that the Person requesting such payment shall pay to the Surviving
Corporation any transfer or other taxes required as a result of such payment
or establish to the satisfaction of the Surviving Corporation that such tax
has been paid or is not payable.
(d) After the Effective Time, there shall be no further
registration or transfers of shares of TBC Common Stock on the stock transfer
books of TBC. If, after the Effective Time, certificates representing shares
of TBC Common Stock are presented to the Surviving Corporation, they shall be
cancelled and exchanged for the Merger Consideration, without interest
thereon, in accordance with the procedures set forth in this Article II.
(e) If, on or after the date of this Agreement and prior to the
Effective Time, the outstanding shares of TBC Common Stock shall have been
changed into a different number of shares or a different class by reason of
any reclassification, recapitalization, split-up, combination, exchange or
shares or readjustment, or a stock dividend or other extraordinary dividend
or distribution thereon shall be declared with a record date within said
period, the amount of the Merger Consideration shall be correspondingly
adjusted.
(f) The right of any TBC Stockholder to receive the Merger
Consideration or, in the case of the Purchased Interests, other
consideration, shall be subject to and reduced by any required tax
withholding obligation.
(g) IMR General, in its capacity as Payment Agent, shall have the
authority, without limitation, to determine the amount of the Sellers'
Transactional Expenses, shall determine, review, negotiate and pay all of
such expenses and other amounts determined, in its sole discretion, to be
necessary or desirable to disburse in connection with the Transactions, to
purchase equity (I.E., stock and option) interests on behalf of the TBC
Stockholders, to pursue or compromise indemnification liability by or on
behalf of one or more of the TBC Stockholders and
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to withhold reserves sufficient for, in its sole discretion, payment of all
other Liabilities related to the Transactions, including, without limitation,
the Purchase Price Adjustment requiring a payment to the Buyer. The Payment
Agent shall for all purposes be deemed the sole authorized agent of each TBC
Stockholder with respect to calculation and distributions of pro-rata amounts
delivered to it by the Buyer under this Article II, and each such TBC
Stockholder, in approving this Agreement, consents and approves such agency
and all actions taken by the Payment Agent pursuant to it. Any action or
failure to act so taken (or not taken) by the Payment Agent shall constitute
a decision of each TBC Stockholder, and shall be final, binding and
conclusive upon each TBC Stockholder. The Buyer, the Transitory Subsidiary
and, after the Effective Time, the Surviving Corporation may rely upon any
decision, act, consent or instruction of the Payment Agent as being the
decision, act, consent or instruction of each and all of the TBC
Stockholders. The Buyer, the Transitory Subsidiary and, after the Effective
Time, the Surviving Corporation are relieved from any Liability to any Person
for any acts done by them in accordance with any such decision, act, consent
or instruction. IMR agrees to indemnify and hold harmless the Buyer, its
Affiliates and, after the Effective Time, the Surviving Corporation from and
against any Liabilities any of them may incur as a result of or connected
with the actions or failures to act by the Payment Agent or its
Representatives or agents.
2.6 CHARTER DOCUMENTS; DIRECTORS; OFFICERS. After the Effective Time,
(i) the Certificate of Incorporation and the Bylaws of the Transitory
Subsidiary shall be the Certificate of Incorporation and Bylaws of the
Surviving Corporation, until thereafter amended as provided therein and under
the Delaware Law, (ii) the directors of the Transitory Subsidiary immediately
prior to the Effective Date will be the initial directors of the Surviving
Corporation, until their successors are elected and qualified, and (iii) the
officers of TBC immediately prior to the Effective Date will be the initial
officers of the Surviving Corporation, until their successors are elected and
qualified.
ARTICLE III.
PURCHASE PRICE ADJUSTMENT
3.1 PURCHASE PRICE ADJUSTMENT.
(a) CLOSING BALANCE SHEET. As promptly as practicable after the
Effective Time (but in no event more than 60 days after the Effective Time),
TBC will prepare and deliver to the Payment Agent and Buyer the fiscal 1996
audited consolidated financial statements for the fiscal year ended March 31,
1996 of TBC and the TBC Subsidiaries (the "CLOSING FINANCIAL STATEMENTS"),
prepared in accordance with GAAP, including notes thereto, and audited by
Xxxxxx Xxxxxxxx, LLP. The Closing Financial Statements shall be obtained at
the expense of TBC. The balance sheet contained in the Closing Financial
Statements shall be referred to herein as the "CLOSING BALANCE SHEET." The
Payment Agent and Buyer, and their respective firms of independent public
accountants (as designated by the Payment Agent ("IMR'S ACCOUNTANTS") and as
designated by Buyer ("DELOITTE")), if any, will be entitled to reasonable
access during normal business hours to the relevant records and working
papers of TBC and Xxxxxx Xxxxxxxx, LLP to
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aid in their review of the Closing Financial Statements. The Payment Agent
shall be responsible for all costs of IMR's Accountants. Buyer shall be
responsible for all costs of Deloitte. The Closing Financial Statements
shall be deemed to be accepted by IMR and Buyer and shall be conclusive for
the purposes of the Purchase Price Adjustment, except to the extent, if any,
that the Payment Agent or Buyer shall deliver, within thirty (30) days after
the date on which the Closing Financial Statements are delivered to the
Payment Agent and the Buyer, a written notice to TBC from either or both the
Payment Agent or Buyer, as applicable, with a copy to the other Party stating
each and every item to which the Payment Agent or Buyer takes exception as
not being in accordance with GAAP or as having computational errors,
specifying in detail the nature and extent of any such exception (it being
understood that any amounts not disputed shall be paid promptly). The change
item or items taken exception to by the Payment Agent or Buyer must include
all identified positive and negative improperly recorded or unrecorded
adjustments that individually are in excess of $65,000 and, in the aggregate,
result in a net reduction of stockholders' equity in excess of $65,000. If a
change proposed by IMR or Buyer is disputed by the other Party, then TBC, the
Payment Agent and Buyer shall negotiate in good faith to resolve such
dispute. If, after a period of thirty (30) days following the date on which
the Payment Agent or Buyer gives notice to TBC and the other Party of any
proposed change, any such proposed change still remains disputed, then the
Payment Agent and Buyer shall together choose an independent firm of public
accountants of nationally recognized standing (the "ACCOUNTING FIRM") to
resolve any remaining disputes. The Accounting Firm shall act as an
arbitrator to determine, applying its expertise and knowledge of both general
accounting principles and the industry in question, based on workpapers and
presentations by the Payment Agent and Buyer, and not by independent review
of facts, only those issues still in dispute. In reaching its decisions the
Accounting Firm shall use the lowest amount or amounts asserted by a Party as
a floor and the highest amount or amounts asserted by a Party as a ceiling in
the determination of all disputes. The Accounting Firm's decision shall fall
within the parameters set by those amounts and shall be final and binding and
shall be in accordance with the provisions of this Section 3.1. The fees and
expenses of the Accounting Firm, if any, shall be paid equally by the Payment
Agent and Buyer; PROVIDED, HOWEVER, that, if the Accounting Firm determines
that either Party's position is, in all material respects, correct, then the
other Party shall pay the fees charged by the Accounting Firm in connection
with any such determination. Interest on any unpaid portion of any Purchase
Price Adjustment shall be accrued at an annual rate of 10% from the date of
notice of such dispute through the date of payment of such unpaid amount.
Such interest shall be remitted by the Payment Agent together with the
amount, if any, of the portion of the adjustment described in this Section
3.1 remaining to be paid.
(b) STOCKHOLDERS' EQUITY ADJUSTMENT.
(i) In the event that there is a Stockholders' Equity Deficiency
(as defined below) with respect to TBC as determined solely by the Closing
Balance Sheet, the Payment Agent shall pay to the Buyer an amount equal to
the Stockholders' Equity Deficiency with respect to TBC. Any payments
required to be made by the Payment Agent pursuant to this Section 3.1(b) (a
"STOCKHOLDERS' EQUITY ADJUSTMENT") shall be made (without any contribution
or set-off) within ten days of the date of final determination of
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the Stockholders' Equity Deficiency by wire transfer of immediately
available funds to an account designated by the Buyer.
(ii) The term "STOCKHOLDERS' EQUITY DEFICIENCY" shall mean the
amount, if any, by which the sum of the consolidated stockholders' equity
of TBC and the TBC Subsidiaries on the Closing Balance Sheet plus the
amount of any Tax Audit Adjustment is less than $8,700,000. Any such
Stockholders' Equity Deficiency shall be payable by the Payment Agent to
Buyer on a dollar-for-dollar basis only, with interest thereon as set forth
in Section 3.1(a) above.
3.2 TRANSFER TAXES. The Payment Agent, on behalf of the Former Holders,
shall be responsible for any stock transfer taxes and any sales, use or other
taxes imposed by reason of the transfer of the capital stock of TBC to Buyer
as provided hereunder and any deficiency, interest or penalty asserted with
respect thereto.
ARTICLE IV.
CLOSING
4.1 CLOSING. Upon the terms and subject to the conditions set forth
herein, the Closing shall be held at 10:00 a.m. local time on the Effective
Date (or as soon thereafter on such date as is practicable) at the offices of
Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, unless the Parties hereto otherwise agree.
4.2 DELIVERIES AT CLOSING. At the Closing the following actions shall
be taken:
(a) DELIVERY OF PURCHASE PRICE. The Buyer will deliver to the
Payment Agent the Purchase Price by wire transfer of immediately available
funds to an account directed by the Payment Agent's written instructions
delivered to the Buyer at least two (2) days prior to the Closing Date.
(b) DELIVERY OF CERTIFICATES. The Payment Agent will deliver to
the Buyer all of the Certificates in the possession of the Payment Agent as
contemplated by Section 2.5(a).
(c) CERTIFICATE OF MERGER. The Certificate of Merger will be filed
with the Secretary of State of the State of Delaware.
(d) TBC CERTIFICATES; OPINIONS. TBC, IMR and IMR General will
deliver the certificates, opinions of counsel and other items described in
Section 8.1 or as otherwise reasonably required by the Transitory Subsidiary
and the Buyer and such other evidence of the performance of all the covenants
and the satisfaction of all conditions required of TBC, IMR and IMR General
by this Agreement and as the Transitory Subsidiary and the Buyer shall
reasonably require.
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(e) TRANSITORY SUBSIDIARY AND BUYER CERTIFICATES; OPINIONS. The
Transitory Subsidiary and the Buyer will deliver the certificates, opinions
of counsel and other items described in Section 8.2 or as otherwise
reasonably required by TBC, IMR and IMR General and such other evidence of
the performance of all the covenants and the satisfaction of all conditions
required of the Transitory Subsidiary and the Buyer by this Agreement and as
TBC, IMR and IMR General shall reasonably require.
(f) OTHER TRANSACTION DOCUMENTS. The Parties shall deliver such
other Transaction Documents as shall be reasonably necessary to consummate
the Transactions.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF TBC, IMR AND IMR GENERAL
TBC, IMR and, solely with respect to Section 5.4(b), IMR General
hereby, jointly and severally, represent and warrant to the Transitory
Subsidiary and the Buyer that, except as otherwise set forth on the
Disclosure Schedule (which Disclosure Schedule sets forth the Schedules
referred to in this Article V), the following representations and warranties
are, as of the date hereof, and will be, as of the Effective Date, true and
correct:
5.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. Each of TBC and
the TBC Subsidiaries is a corporation duly organized, validly existing, and
in good standing under the laws of its state of incorporation. TBC and each
of the TBC Subsidiaries is duly qualified to conduct business, properly
licensed and is in good standing under the laws of each jurisdiction where
such qualification and licensing is required, except where the failure to be
so qualified, licensed or in good standing would not have a Material Adverse
Effect. SCHEDULE 5.1 contains an accurate and complete list of all
jurisdictions in which TBC and each of the TBC Subsidiaries are qualified to
do business as foreign corporations. TBC and each of the TBC Subsidiaries
has full corporate power and authority to carry on the Business and to own,
lease and use the properties and Assets owned, leased and used by it. TBC
has previously delivered copies of the Articles (or Certificate) of
Incorporation and Bylaws of TBC and each of the TBC Subsidiaries, and all
amendments thereto, which are accurate and complete as of the date hereof.
5.2 CAPITALIZATION. The entire authorized capital stock of TBC consists
of one class of capital stock, which is TBC Common Stock and of which 114,118
shares will be issued and outstanding as of the Closing Date. All of the
issued and outstanding shares of such TBC Common Stock have been duly
authorized and are validly issued, fully paid, and nonassessable. TBC has
title free and clear of all Encumbrances to all of the outstanding shares of
capital stock of each TBC Subsidiary. Each holder of shares of such TBC
Common Stock has, or will have at Closing, title to the shares of such TBC
Common Stock set forth next to the name of such TBC Stockholder on SCHEDULE
5.2 hereto free and clear of all Encumbrances with full right, power and
authority to transfer such shares to the Buyer. As of the Closing Date,
there shall be no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require TBC or any of the
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TBC Subsidiaries to issue, sell, or otherwise cause to become outstanding any
of its capital stock, or any other commitments of any kind for the issuance
of additional shares of capital stock or other securities issued by TBC or
any of the TBC Subsidiaries. There are no other outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights
payable by TBC or any of the TBC Subsidiaries with respect to TBC or any of
the TBC Subsidiaries.
5.3 AUTHORIZATION OF TBC. TBC has full power and authority (including
full corporate power and authority), and has taken all corporate action
necessary, to own, lease and operate the Assets, to conduct the Business as
it is presently being conducted, to execute and deliver this Agreement and
the other Transaction Documents to which it is a party and to perform its
obligations hereunder and thereunder and consummate the Transactions. This
Agreement and the other Transaction Documents to which it is a party
constitute the valid and legally binding obligations of TBC and, assuming due
execution of this Agreement by the Buyer and the Transitory Subsidiary and of
such other Transaction Documents by the parties thereto, are enforceable
against TBC in accordance with their respective terms and conditions, except
to the extent that enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles, regardless of whether asserted in a proceeding in equity or at
law.
5.4 AUTHORIZATION OF IMR AND IMR GENERAL.
(a) IMR represents and warrants that it has the requisite power and
authority, and has taken all action necessary to execute and deliver this
Agreement and the other Transaction Documents to which it is a party and to
perform its obligations hereunder and thereunder. This Agreement and the
other Transaction Documents to which it is a party constitute the valid and
legally binding obligations of IMR and, assuming due execution of this
Agreement by the Buyer and the Transitory Subsidiary and of such other
Transaction Documents by the parties thereto, are enforceable against IMR in
accordance with their respective terms and conditions, except to the extent
that enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles, regardless
of whether asserted in a proceeding in equity or at law. IMR has approved
the terms of this Agreement and the Transactions.
(b) IMR General has full power and authority (including full
corporate power and authority), and has taken all corporate action necessary,
to execute and deliver this Agreement and the other Transaction Documents to
which it is a party and to perform its obligations hereunder and thereunder.
This Agreement and the other Transaction Documents to which it is a party
constitute the valid and legally binding obligations of IMR General and,
assuming due execution of this Agreement by the Buyer and the Transitory
Subsidiary and of such other Transaction Documents by the parties thereto,
are enforceable against IMR General in accordance with their respective terms
and conditions, except to the extent that enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles, regardless of whether asserted in a proceeding in
equity or at law.
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5.5 NONCONTRAVENTION. Except as set forth in SCHEDULE 5.5 and, except
in the cases of each of clauses (ii), (iii) and (iv) below where the
violation, conflict, breach, Default, acceleration, termination,
modification, cancellation, failure to give notice, or creation of
Encumbrance would not, either individually or in the aggregate, have a
Material Adverse Effect, none of the execution, delivery or performance of
this Agreement or the other Transaction Documents, nor the consummation of
the Transactions, will (i) violate or conflict with any provision of the
Certificate (or Articles) of Incorporation or Bylaws of TBC or any of the TBC
Subsidiaries, (ii) violate any Regulation (excluding notice requirements and
approvals of "change of control") or Court Order to which TBC or any of the
TBC Subsidiaries is subject, (iii) violate, conflict with, result in a breach
of, constitute a Default under, result in the acceleration or termination of,
create in any party the right to accelerate, terminate, modify, or cancel any
Material Contract listed in SCHEDULE 5.19, Material Lease listed in SCHEDULE
5.18, license or Material Permit listed in SCHEDULE 5.6, except to the extent
such Default is set forth in any such Schedule, or (iv) impose any
Encumbrance on the Assets or the Business.
5.6 PERMITS, CONSENTS AND APPROVALS. SCHEDULE 5.6 sets forth a complete
list of all material Permits used in the operation of the Business (or
otherwise held by TBC and any of the TBC Subsidiaries) for the purpose of (i)
inter- or intrastate transportation of goods via motor vehicles used in the
Business, and (ii) operation of the BMS Facilities (collectively (i) and (ii)
referred to as the "MATERIAL PERMITS" or individually as a "MATERIAL
PERMIT"). Except as set forth on SCHEDULE 5.6, each Material Permit is
valid, binding and in full force and effect. Except as set forth in SCHEDULE
5.6, TBC and each TBC Subsidiary has, and at all times during the Ownership
Period has had, all Material Permits required under Regulations pertaining
thereto and owns or possesses such Material Permits free and clear of all
Encumbrances. Except as set forth on SCHEDULE 5.6, to the Knowledge of TBC,
neither TBC nor any of the TBC Subsidiaries is in Default, nor has TBC or any
of the TBC Subsidiaries received any notice of any claim of Default, with
respect to any Material Permit listed on SCHEDULE 5.6. To the Knowledge of
TBC, no present or former stockholder, director, officer or employee of TBC
or any of the TBC Subsidiaries or any Affiliate thereof, or any other Person,
firm, corporation or other entity, owns or has any proprietary, financial or
other interest (direct or indirect) in any Material Permit which TBC or any
of the TBC Subsidiaries owns, possesses or uses. Other than in connection
with the provisions of the HSR Act, the Delaware Law, the Interstate Commerce
Commission (or other similar federal transportation authority, as applicable)
and any state authorities regulating the provision of transportation
services, and except as provided in SCHEDULE 5.6, TBC and the TBC
Subsidiaries need not give any notice to, make any declaration, filing or
registration with, or obtain any Material Permit from any government or
governmental agency in connection with the execution, delivery and
performance of this Agreement and the consummation of the Transactions,
except where the failure to give any notice, to make any filing, or to obtain
any Material Permit would not have a Material Adverse Effect.
5.7 FINANCIAL STATEMENTS. TBC has provided to Buyer (i) monthly
unaudited consolidated financial statements for each of the months beginning
at the Most Recent Fiscal Quarter End (as defined below) through and
including the month ended February 29, 1996 (the "MOST RECENT MONTH END
FINANCIAL STATEMENTS"), (ii) the unaudited consolidated financial statements
for the fiscal quarter ended December 31, 1995 (the "MOST RECENT FISCAL
QUARTER END
25
FINANCIAL STATEMENTS"), and (iii) the Year End Financial Statements (clauses
(i), (ii) and (iii) collectively referred to herein as the "FINANCIAL
STATEMENTS"). The Year End Financial Statements have been audited by Xxxxxx
Xxxxxxxx, LLP whose reports thereon are included therewith. The Year End
Financial Statements (i) are in accordance with the Books and Records of TBC,
(ii) have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby and (iii) present fairly the financial
condition, assets, liabilities (including all reserves), stockholders'
equity, cash flow and results of operations of TBC and the TBC Subsidiaries
as of the indicated dates and the results of operations and changes in cash
flows of TBC and the TBC Subsidiaries for the indicated periods. Except as
provided in SCHEDULE 5.7, the Financial Statements (i) are in accordance with
the Books and Records of TBC and (ii) present fairly the financial condition,
assets, liabilities (including all reserves), stockholders' equity, cash flow
and results of operations of TBC and the TBC Subsidiaries as of the indicated
dates and the results of operations and changes in cash flows of TBC and the
TBC Subsidiaries for the indicated periods (except, in the case of the Most
Recent Month End Financial Statements and the Most Recent Fiscal Quarter End
Financial Statements, for the absence of such normal and recurring
adjustments, which were not or are not expected to be material to such
financial statements taken as a whole, AND the absence of notes that, if
presented, would not differ materially from those included in the Year End
Financial Statements). In the event of an adverse determination of the audit
presently being conducted by the IRS, the sole indemnification remedy of
Buyer and the Transitory Subsidiary shall be indemnification as set forth in
Section 9.2(a)(iii) hereof, and any other claim for a breach of
representations or warranties with respect thereto shall be precluded. If a
reserve attributable to a particular category of insurance claims on any
Financial Statement is not adequate to meet the liability to be discharged
subsequent to the date of such Financial Statement, such deficiency shall not
be deemed to be a breach or violation of this representation and warranty to
the extent it is or can be offset by any excess reserve (current or
long-term) attributable to a separate category of insurance claims on such
Financial Statement.
5.8 BROKERS' FEES. TBC and the TBC Subsidiaries have no liability or
obligation to pay any fees or commissions to any broker or finder with
respect to the Transactions. None of Buyer, TBC, any TBC Subsidiary, the
Transitory Subsidiary or the Surviving Corporation will have any liability or
other obligation with respect to any Sellers' Transactional Expenses.
5.9 LITIGATION. Except as set forth in SCHEDULE 5.9, no Actions
(excluding auto or general liability claims for bodily injury, property
damage, product liability and workers' compensation claims described below),
individually or, if related to a single set of circumstances in the
aggregate, involving more than $50,000 are pending or, to the Knowledge of
TBC, threatened (a) against, related to or affecting (i) TBC, any of the TBC
Subsidiaries, their respective properties, the Business or the Assets, (ii)
any TBC Plan or any trust or other funding instrument, fiduciary or
administrator thereof as such, (iii) any officers or directors of TBC or any
of the TBC Subsidiaries as such, (iv) the TBC Stockholders as such, or (v)
the Transactions, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (b) that seeks to delay, limit or
enjoin the Transactions as contemplated herein, (c) that involve the risk of
criminal liability, or (d) in which TBC or any of the TBC Subsidiaries is a
plaintiff, including any derivative suits brought by or on behalf of TBC or
any of the TBC Subsidiaries. Except as set forth in SCHEDULE 5.9, to the
26
Knowledge of TBC neither TBC nor any of the TBC Subsidiaries is in default
with respect to or subject to any Court Order binding on TBC or its
Subsidiaries, and there are no unsatisfied judgments against TBC or any of
the TBC Subsidiaries, the Business or the Assets. Except as disclosed in
SCHEDULE 5.9, there are no Court Orders or agreements with, or to the
Knowledge of TBC liens by, any governmental authority or quasi-governmental
entity relating to any Environmental Law which regulate, obligate, bind or in
any material way affect TBC or any of the TBC Subsidiaries.
The auto or general liability claims for bodily injury, property damage,
product liability and workers' compensation claims against TBC and TBC
Subsidiaries have been or are managed by various third party administrators,
including Xxxxxxxx & Co., GAB, Alexsis and Hartford Insurance Co., each of
which provides periodic claim runs (the "CLAIM RUNS"). In addition, TBC and
the TBC Subsidiaries are also insured for workers' compensation by certain
insurance companies and state compensation funds that provide periodic claim
runs. TBC and the TBC Subsidiaries have made available to Buyer the most
recent Claim Runs and the workers' compensation insurance company and stock
compensation fund claim runs available as of March 31, 1996 relating to such
claims. As threats of litigation in connection with the Business are normal
and recurring on a day-to-day basis, no schedule of threatened litigation in
connection with such claims in excess of $50,000 will be provided to Buyer
unless such threat has been received in writing by TBC or any of the TBC
Subsidiaries. To TBC's Knowledge, there are no Actions exceeding $50,000
presently threatened in the manner set forth above, or otherwise pending,
which are not set forth on the Claim Runs or set forth on SCHEDULE 5.9 hereto.
5.10 UNDISCLOSED LIABILITIES. Except for Liabilities which are (i)
individually less than $50,000 and in the aggregate less than $1,000,000, or
(ii) reflected and reserved against in the Financial Statements, which have
not been paid or discharged since the date thereof, or (iii) disclosed in
SCHEDULE 5.10, neither TBC nor any of the TBC Subsidiaries has any
Liabilities of any nature, whether absolute, accrued, contingent, fixed or
otherwise, due or to become due.
5.11 TAXES.
(a) INCOME TAX RETURNS AND PAYMENTS. During the Ownership Period
TBC and each of the TBC Subsidiaries (and any affiliated, unitary or combined
group of which TBC or any of the TBC Subsidiaries is now or has been a
member) has duly filed all material federal, state or local income Tax
Returns required to be filed by it through the date hereof. Such income Tax
Returns and other information filed are complete and accurate in all material
respects and properly reflect the Liabilities in respect of income Taxes of
TBC and the TBC Subsidiaries. TBC and each of the TBC Subsidiaries have duly
paid or made adequate provision for payment of all such income Taxes which
are shown to be due and payable pursuant to such income Tax Returns or which
have been shown to have become due and payable pursuant to any assessment
with respect to such income Taxes. TBC and each of the TBC Subsidiaries have
duly paid all material estimated income Taxes required to be paid (for income
Tax Returns to be filed for the fiscal year ending March 31, 1996) prior to
the Effective Time. Except as specified in SCHEDULE 5.11, as of one day
prior to the Closing Date neither TBC or any TBC Subsidiary has requested any
extension of time which is presently in effect within which to file income
Tax Returns for any period within
27
the Ownership Period through March 31, 1996. TBC has delivered and Buyer
acknowledges receipt of complete and accurate copies of federal and state
income Tax Returns of TBC and each of the TBC Subsidiaries for the fiscal
years ending 1991, 1992, 1993, 1994 and 1995.
(b) NON-INCOME TAX RETURNS AND PAYMENTS. TBC and each of the TBC
Subsidiaries has duly filed all material non-income Tax Returns required to
be filed by it as of the date hereof, except where TBC or any of the TBC
Subsidiaries does not have Knowledge that such a non-income based Tax has or
may be imposed or where TBC or any TBC Subsidiary has a good faith basis to
believe that such a non-income based Tax is not applicable to its Business.
To the Knowledge of TBC, such non-income based Tax Returns and other
information filed are complete and accurate in all material respects and,
subject to periodic audits of federal, state and local authorities, properly
reflect the Liabilities in respect of such non-income Taxes of TBC and the
TBC Subsidiaries. TBC and each of the TBC Subsidiaries have duly paid
non-income based Taxes occurring in the ordinary course of business or made
adequate provision for payment of such non-income Taxes which are shown to be
due and payable in accordance with the customary accounting practices of TBC
and the TBC Subsidiaries.
(c) AUDITS, INVESTIGATIONS OR CLAIMS. Except as set forth in
SCHEDULE 5.11, the consolidated federal income Tax Returns of TBC and the TBC
Subsidiaries which were due as of the Effective Time have been filed with the
IRS, and except to the extent shown therein and except for the deficiencies
which may result from the audit presently being conducted by the IRS of the
consolidated federal income tax returns of TBC and the TBC Subsidiaries for
the fiscal year ended March 31, 1993 and any resulting federal or state
income Tax liabilities, no material unpaid deficiencies for Taxes have been
claimed, proposed or assessed by any taxing or other governmental authority
against TBC or any of the TBC Subsidiaries. Except as set forth in SCHEDULE
5.11 and excluding non-income Tax audits by state and local authorities
(which cannot be predicted, but are expected in the ordinary course of
business) and the effect of the present IRS audit and any resulting state
income tax effect, there are no pending or, to the Knowledge of TBC,
threatened audits, investigations or claims for or relating to any material
additional Liability in respect of income Taxes, and there are no matters
under discussion with any governmental authorities with respect to Taxes that
in the reasonable judgment of IMR or TBC are likely to result in a material
additional Liability for income Taxes. Except as set forth on SCHEDULE 5.11,
there have been no audits of Tax Returns (other than the present IRS audit)
by the relevant taxing authorities for any period for which an applicable
statute of limitations is open which are anticipated to exceed a present
potential Liability of $25,000 and, to the Knowledge of TBC except for
non-income Tax audits by state and local authorities and except as set forth
in SCHEDULE 5.11, neither TBC nor any of the TBC Subsidiaries has been
notified that any income taxing authority intends to audit a return for any
period. Except as set forth in SCHEDULE 5.11, no extension of a statute of
limitations relating to Taxes is in effect or has been requested by any
taxing authority with respect to TBC or any of the TBC Subsidiaries.
(d) DISCLOSURE OF UNDERSTATEMENT. Except as set forth in SCHEDULE
5.11, all transactions during the Ownership Period that could give rise to an
understatement of the federal income tax liability of TBC or any of the TBC
Subsidiaries within the meaning of Section 6662(d)
27
of the Code are adequately disclosed on the Tax Returns in accordance with
Section 6662(d)(2)(B) of the Code.
(e) CHANGE IN ACCOUNTING METHOD. Except as set forth in SCHEDULE
5.11, during the Ownership Period neither TBC nor any of the TBC Subsidiaries
have made any change in accounting methods for tax reporting purposes,
received a ruling from any taxing authority or signed an agreement with any
taxing authority that would have a Material Adverse Effect.
(f) NO TAX SHARING AGREEMENT. Except as set forth in SCHEDULE
5.11, during the Ownership Period neither TBC nor any of the TBC Subsidiaries
are parties to or are bound by or have any obligation under any tax sharing,
allocation or indemnity agreement or other similar contract or agreement.
(g) NO TAX CONSENTS. Except as set forth in SCHEDULE 5.11, during
the Ownership Period neither TBC nor any of the TBC Subsidiaries have with
respect to any Assets or property held, acquired or to be acquired, filed a
consent to the application of Section 341(f) of the Code, or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as such term is defined in Section 341(f)(4) of the Code) owned by TBC
or any of the TBC Subsidiaries.
(h) NO LIABILITIES OF ANY OTHER PERSON. Except as set forth in
SCHEDULE 5.11, during the Ownership Period neither TBC nor any of the TBC
Subsidiaries are subject to Liabilities for Taxes of any other Person,
including, without limitation, liability arising from the application of U.S.
Treasury Regulation Section 1.1502-6 or any analogous provision of Tax law.
(i) LIEN. To the Knowledge of TBC and except as set forth in
SCHEDULE 5.11, there are no liens for Taxes (other than for current Taxes not
yet due and payable) on the Assets.
(j) SAFE HARBOR LEASE PROPERTY. Except as set forth in SCHEDULE
5.11, none of the Assets is property that is required to be treated as being
owned by any other Person pursuant to the so-called safe harbor lease
provisions of former Section 168(f)(8) of the Code.
(k) SECURITY FOR TAX-EXEMPT OBLIGATIONS. Except as set forth in
SCHEDULE 5.11, none of the Assets directly or indirectly secures any debt the
interest on which is tax-exempt under Section 103(a) of the Code.
(l) TAX-EXEMPT USE PROPERTY. Except as set forth in SCHEDULE 5.11,
none of the Assets is "tax-exempt use property" within the meaning of Section
168(h) of the Code.
(m) FOREIGN PERSON. Except as set forth in SCHEDULE 5.11, neither
TBC nor any of the TBC Subsidiaries is a Person other than a United States
Person within the meaning of the Code.
29
(n) NO WITHHOLDING. Except as set forth in SCHEDULE 5.11, the
transaction contemplated herein is not subject to the federal income tax
withholding provisions of Section 3406 of the Code, or of Subchapter A of
Chapter 3 of the Code or of any other provision of law.
(o) CONSOLIDATED TAX RETURN. Except as set forth in SCHEDULE 5.11,
during the Ownership Period neither TBC nor any of the TBC Subsidiaries has
ever been a member of any other affiliated group of corporations, within the
meaning of Section 1504 of the Code.
(p) PARTNERSHIP. Except as set forth in SCHEDULE 5.11, neither TBC
nor any of the TBC Subsidiaries is a party to any joint venture, partnership,
or other arrangement or contract that could be treated as a partnership for
federal income tax purposes.
(q) PARACHUTE PAYMENTS. Neither TBC nor any of the TBC
Subsidiaries has or will have as a consequence of the Transactions any
liability for the payment of a non-deductible parachute payment as defined in
Section 280G of the Code.
5.12 EMPLOYMENT MATTERS.
(a) DISCLOSURE; DELIVERY OF COPIES OF RELEVANT DOCUMENTS AND OTHER
INFORMATION. SCHEDULE 5.12 contains a complete list of the TBC Plans which
cover any employees or former employees of TBC or any TBC Subsidiary. True
and complete copies of each of the following documents relating to TBC Plans
which cover any employees or former employees of TBC or any TBC Subsidiary
have been delivered by TBC to the Buyer: (i) each Welfare Plan, Pension Plan
(and, if applicable, related trust agreements) and all amendments thereto,
all written interpretations thereof and written descriptions thereof which
have been distributed by TBC or any TBC Subsidiary to employees and all
annuity contracts or other funding instruments, (ii) each Benefit Arrangement
including written interpretations and written descriptions thereof which have
been distributed by TBC or any TBC Subsidiary to employees (including
descriptions of the number and level of current employees covered thereby)
and a complete description of any such Benefit Arrangement which is not in
writing, (iii) the most recent determination letter issued by the Internal
Revenue Service for each Pension Plan, (iv) for the three most recent plan
years, Annual Reports on Form 5500 Series required to be filed with any
governmental agency for each Pension Plan or Welfare Plan, and (v) a
description setting forth the amount of any liability of TBC or any TBC
Subsidiary as of the Effective Time for payments more than thirty days past
due with respect to each Welfare Plan, Pension Plan and Multiemployer Plan
and (vi) the name and address of the Plan Administrator for each
Multiemployer Plan.
(b) REPRESENTATIONS. Except as set forth in SCHEDULE 5.12:
(i) PENSION PLANS.
(A) No Pension Plan is subject to Title IV of ERISA or
Section 412 of the Code. Each Pension Plan and each related trust
agreement, has been determined by the Internal Revenue Service to be
qualified and tax-exempt under the
30
provisions of Code Sections 401(a) and 501(a) and, to the Knowledge of TBC,
each Pension Plan has been so qualified during the period from its
adoption to date.
(B) Each Pension Plan and each related trust agreement
presently complies in all material respects and has been maintained in
material compliance with its terms and, both as to form and in operation,
with the requirements prescribed by any and all statutes, orders, rules and
regulations which are applicable to such plans, including but not limited
to ERISA and the Code.
(ii) MULTIEMPLOYER PLANS.
(A) Except as disclosed in SCHEDULE 5.12, TBC and its ERISA
Affiliates have not, at any time, withdrawn from a Multiemployer Plan in
what a Multiemployer Plan might claim to be a "complete withdrawal" or a
"partial withdrawal" as defined in Sections 4203 and 4205 of ERISA,
respectively, so as to result in a liability, contingent or otherwise
(including, but not limited to, the obligations pursuant to an agreement
entered into in accordance with Section 4204 of ERISA), to TBC or any ERISA
Affiliate.
(B) All contributions required under the terms of the
appropriate collective bargaining agreement or by the Plan to be made by
TBC and each TBC Subsidiary to each Multiemployer Plan have been made when
due.
(C) If, as of the Effective Time, TBC or any of its ERISA
Affiliates was to withdraw from all Multiemployer Plans to which it (or any
of them) has contributed or been obligated to contribute, it (and they)
would incur no liabilities to such plans under Title IV of ERISA not
otherwise reserved for on the Closing Balance Sheet in excess of $100,000.
(D) To Knowledge of TBC, with respect to each Multiemployer
Plan: (A) no such Multiemployer Plan has been terminated or has been in
reorganization under ERISA so as to result, directly or indirectly, in any
liability, contingent or otherwise, of TBC under Title IV of ERISA; (B) no
proceeding has been initiated by any Person (including the PBGC) to
terminate any Multiemployer Plan, and (C) TBC has no information which
would lead it to believe that any Multiemployer Plan will be terminated or
will be reorganized under ERISA.
(iii) WELFARE PLANS AND CERTAIN MULTIEMPLOYER PLANS.
(A) Each Welfare Plan which covers employees or former
employees of TBC or any TBC Subsidiary has been maintained in material
compliance with its terms and, both as to form and operation, with the
requirements prescribed by those statutes, orders, rules and regulations
which are applicable to such Welfare Plan, including but not limited to
ERISA and the Code.
31
(B) But for the grandfathered retiree medical and group
life insurance plans identified in SCHEDULE 5.12, neither TBC nor any
TBC Subsidiary nor any Welfare Plan has any present or future obligation
to make any payment to or with respect to any present or former employee
of TBC or any TBC Subsidiary pursuant to any retiree medical benefit
plan, or other retiree Welfare Plan, and no condition exists which would
prevent TBC or any TBC Subsidiary from amending or terminating any such
benefit plan or Welfare Plan.
(C) Each Welfare Plan which covers or has covered
employees or former employees of TBC or a Subsidiary and which is a
"group health plan," as defined in Section 607(1) of ERISA, has been
operated in material compliance with the provisions of Part 6 of Title I
of ERISA and Sections 162(k) and 4980B of the Code at all times during
the applicable statute of limitations period.
(iv) TBC and its ERISA Affiliates have not been assessed any
liability with respect to any Multiemployer Plan that is a "welfare
plan", as defined in Section 3(1) of ERISA, under the terms of such
Multiemployer Plan, any collective bargaining agreement or otherwise
resulting from any cessation of contribution, cessation of obligations
to make contributions or other form of withdrawal from such
Multiemployer Plan.
(v) If, as of the Effective Time, TBC or any of its ERISA
Affiliates were to have a cessation of contributions, cessation of
obligations to make contributions or other form of withdrawal from all
Multiemployer Plans that are "welfare plans", as defined in Section 3(1)
of ERISA, it (and they) would incur no liabilities not otherwise
reserved for on the Closing Balance Sheet with respect to any such
Multiemployer Plans under the terms of such Multiemployer Plans, any
collective bargaining agreement or otherwise in excess of $50,000.
(vi) UNRELATED BUSINESS TAXABLE INCOME. No TBC Plan (or
trust or other funding vehicle pursuant thereto), other than a
Multiemployer Plan, is subject to any tax under Code Section 511.
(vii) DEDUCTIBILITY OF PAYMENTS. There is no contract,
agreement, plan or arrangement covering any employee or former employee
of TBC or any TBC Subsidiary that, individually or collectively,
provides for the payment by TBC or any TBC Subsidiary of any amount (i)
that is not deductible under Section 162(a)(1) or 404 of the Code or
(ii) that is an "excess parachute payment" pursuant to Section 280G of
the Code.
(viii) FIDUCIARY DUTIES AND PROHIBITED TRANSACTIONS. Neither
TBC nor any TBC Subsidiary nor, to the Knowledge of TBC, any plan
fiduciary of any Welfare Plan or Pension Plan which covers or has
covered employees or former employees of TBC or any TBC Subsidiary, has
engaged in any transaction in violation of Sections 404 or 406 of ERISA
or any "prohibited transaction," as defined in Section 4975(c)(1) of the
Code, for which no exemption exists under Section 408 of ERISA or
Section 4975(c)(2) or (d) of the Code, or has otherwise violated the
provisions of Part 4 of Title I, Subtitle B of
32
ERISA. TBC and the TBC Subsidiaries have not knowingly participated in a
violation of Part 4 of Title I, Subtitle B of ERISA by any plan fiduciary
of any Welfare Plan or Pension Plan (or other employee benefit plan
subject to ERISA) and have not been assessed any civil penalty under
Section 502(l) of ERISA.
(ix) NO AMENDMENTS. TBC and the TBC Subsidiaries have no
announced plan or legally binding commitment to create any additional
TBC Plans which are intended to cover employees or former employees of
TBC or any TBC Subsidiary (with respect to their relationship with such
entities) or to amend or modify any existing TBC Plan which covers or
has covered employees or former employees of TBC or any TBC Subsidiary
(with respect to their employment relationship with such entities) in
any material way.
(x) THIS SECTION INTENTIONALLY OMITTED.
(xi) NO OTHER MATERIAL LIABILITY. No event has occurred in
connection with which TBC or any TBC Subsidiary or any TBC Plan,
directly or indirectly, could be subject to any material liability (A)
under any statute, regulation or governmental order relating to any TBC
Plans or (B) pursuant to any obligation of TBC or any TBC Subsidiary to
indemnify any Person against liability incurred under, any such statute,
regulation or order as they relate to any TBC Plan.
(xii) NO ACCELERATION OR CREATION OF RIGHTS. Neither the
execution and delivery of this Agreement nor the consummation of the
Transactions will result in the acceleration or creation of any rights
of any Person to benefits under any TBC Plan (including, without
limitation, the acceleration of the vesting or exercisability of any
stock options, the acceleration of the vesting of any restricted stock,
the acceleration of the accrual or vesting of any benefits under any
Pension Plan or the acceleration or creation of any rights under any
severance, parachute or change in control agreement).
(xiii) NO ERISA AFFILIATES. Except as set forth in SCHEDULE
5.12, neither TBC nor any of the TBC Subsidiaries is now or has ever
been a member of a "controlled group of corporations" with or under
"common control" with any other entity as defined in Section 414(b) or
(c) of the Code.
5.13 LABOR AGREEMENTS AND ACTIONS. SCHEDULE 5.13 contains a list of all
collective bargaining agreements to which TBC or any of the TBC Subsidiaries
is a party or which relate to TBC or any of the TBC Subsidiaries. During the
Ownership Period, neither TBC nor any of the TBC Subsidiaries has experienced
any new attempt by organized labor or its Representatives to make such party
conform to demands of organized labor relating to its employees or to enter
into a binding agreement with organized labor that would cover the employees
of such party. Except as listed in SCHEDULE 5.13, there is no labor strike
or labor disturbance pending or, to the Knowledge of TBC, threatened against
either TBC or any of the TBC Subsidiaries, there are no disputes or
grievances subject to any grievance procedure, unfair labor practice
proceedings, arbitration or litigation under such agreements, which have not
been finally resolved, settled or
33
otherwise disposed of and in the past five years neither TBC nor any of the
TBC Subsidiaries has experienced a work stoppage or other labor difficulty,
nor is there any default under any such agreements by TBC or any of the TBC
Subsidiaries, or, to the Knowledge of TBC, any other party thereto. Except
as set forth in SCHEDULE 5.13, TBC and each of the TBC Subsidiaries is in
compliance with all applicable laws respecting employment practices,
employment documentation, terms and conditions of employment and wages and
hours, except where the failure to be in compliance, individually or in the
aggregate, would not have a Material Adverse Effect and is not and has not
engaged in any unfair labor practice. There is no unfair labor practice
charge or complaint against either TBC or any of the TBC Subsidiaries pending
before the National Labor Relations Board or any other domestic or foreign
governmental agency and, to the Knowledge of TBC, there are no facts or
information which would give rise thereto.
5.14 ABSENCE OF CERTAIN CHANGES. Except as set forth in SCHEDULE 5.14,
since December 31, 1995, there has not been:
(a) any Material Adverse Change;
(b) (i) any declaration, setting aside or payment of any dividend
or other distribution by TBC in respect of the TBC Common Stock, or (ii) any
redemption, purchase or other acquisition of any shares of the capital stock
of TBC, or (iii) any bonus, fee or other payment to or on behalf of any TBC
Stockholder, any Affiliate of TBC or any Affiliate of any TBC Stockholder
(excluding payments to IMR, IMR General, Xxxxxx Management Corporation,
Xxxxxx Investors, Inc. or to Xxxxx X. Xxxxxx for fees, expenses and debts
owing of less than $140,000 in the aggregate), including, but not limited to,
any payment of principal of or interest on any debt owed to any TBC
Stockholder or Affiliate, or (iv) any payment of a bonus, fee or other
payment to any TBC Stockholder or Affiliate as an employee of TBC or any of
the TBC Subsidiaries of less than $160,000 in the aggregate;
(c) except events occurring in the ordinary course of business
(which shall include normal hiring of personnel, periodic performance reviews
and related compensation and benefit increases) (i) any increase in the rate
or terms of compensation or bonus payable or to become payable or benefits
due or to become due by TBC or any of the TBC Subsidiaries to their
respective current and former directors, officers, employees or agents
(collectively, "PERSONNEL"), (ii) adoption, creation or amendment of any TBC
Plan by TBC or any of the TBC Subsidiaries, (iii) employment agreement
(written or verbal) made by TBC to which TBC is a party, (iv) other change in
employment terms for any of the officers, employees or agents of TBC or any
of the TBC Subsidiaries;
(d) any issuance of or commitment to issue any shares of TBC Common
Stock or other capital stock of TBC, other than pursuant to stock options
outstanding as of December 31, 1995;
(e) any issuance of or commitment to issue any rights, options,
warrants or other securities exercisable into capital stock of TBC;
34
(f) any entry into any agreements or commitments of any character
relating to the issued or unissued capital stock or other securities of TBC
or any of the TBC Subsidiaries obligating TBC or any of the TBC Subsidiaries
to issue any securities;
(g) any sale, lease, assignment or transfer of any of the Assets,
other than to Persons that are not Affiliates of TBC, any of the TBC
Subsidiaries or any TBC Stockholders not for fair consideration and in the
ordinary course of business;
(h) any cancellation, compromise, waiver, forgiveness, termination
or release of any rights or claims (or series of related rights or claims) or
any obligation or Liability (i) involving an Affiliate of TBC or any of the
TBC Subsidiaries, (ii) involving more than $50,000, or (iii) outside the
ordinary course of business;
(i) any amendment, modification, acceleration, cancellation,
termination, or, to the Knowledge of TBC, any threatened cancellation or
termination of any Contract, license or other instrument (i) involving an
Affiliate of TBC or any of the TBC Subsidiaries, (ii) involving payments by
TBC or any of the TBC Subsidiaries in excess of $50,000 under any single
contract, license or other instrument, (iii) involving payments to TBC or any
of the TBC Subsidiaries in excess of $250,000 under any single contract,
license or other instrument, or (iv) that is outside of the ordinary course
of business;
(j) any capital expenditure or the execution of any Lease or
Contract (or series of related Contracts or Leases) or any incurring of
liability therefor (i) involving an Affiliate of TBC or any of the TBC
Subsidiaries, (ii) involving payments in excess of $100,000 in the aggregate,
or (iii) outside the ordinary course of business;
(k) any delay or failure to repay when due any obligation in excess
of $50,000 of TBC or any of the TBC Subsidiaries;
(l) any failure to operate the Business in the ordinary course so
as to use reasonable efforts to preserve the Business intact, to keep
available to TBC and the TBC Subsidiaries the services of Personnel, and to
preserve for TBC and the TBC Subsidiaries the goodwill of the suppliers,
customers, agents, distributors and others having business relations with TBC
and the TBC Subsidiaries (it being understood that TBC is in no way
guaranteeing that such Personnel and goodwill will actually be maintained);
(m) any entry into any agreement, commitment or transaction by TBC
or any of the TBC Subsidiaries which is material to TBC and the TBC
Subsidiaries, taken as a whole, or the HVP Business taken as a whole, except
agreements, commitments or transactions in the ordinary course of business;
(n) any change by TBC or any TBC Subsidiary in accounting methods,
principles or practices except as disclosed to Buyer herein, or on a
Disclosure Schedule or Supplement hereto;
35
(o) any revaluation by TBC or any TBC Subsidiary of any of the Assets
or Liabilities, including without limitation, writing off notes or accounts
receivable other than in the ordinary course of business;
(p) any material mortgage, pledge or other encumbrance of any of the
Assets, other than in the ordinary course of business;
(q) any indebtedness incurred by TBC or any TBC Subsidiary for
borrowed money or any commitment to borrow money entered into by TBC or any TBC
Subsidiary, or any loans or guarantees made or agreed to be made by TBC or any
TBC Subsidiary other than to non-Affiliates in the ordinary course of business;
(r) any incurrence of Liabilities involving $50,000 or more or
otherwise material to the Business, except for Liabilities arising in the
ordinary course of business, or any increase or change in any assumptions
underlying or methods of calculating any bad debt, contingency or other
reserves;
(s) any payment, discharge or satisfaction of any Liabilities, other
than such payment, discharge or satisfaction in the ordinary course of business;
(t) any capital investment in, loan to, or acquisition of the
securities or assets of any other Person (i) involving an Affiliate of TBC or
any of the TBC Subsidiaries, (ii) involving more than $50,000 in the aggregate,
or (iii) outside the ordinary course of business;
(u) any grant of any license or sublicense of any rights under or
with respect to any Intellectual Property of TBC or any of the TBC Subsidiaries
except in the ordinary course of business;
(v) any loan to, or other agreement with any Personnel outside the
ordinary course of business giving rise to any claim or right on its part
against the Person or on the part of the Person against it;
(w) any charitable or other capital contribution, individually or in
the aggregate in excess of $10,000, made or pledged by TBC or any TBC
Subsidiary;
(x) any payment by TBC or any TBC Subsidiary of any Sellers'
Transactional Expenses;
(y) any written or, to the Knowledge of TBC, oral agreement by TBC or
any TBC Subsidiary or any of their respective Personnel to do any of the
foregoing; or
(z) to the Knowledge of TBC, any other event or condition of any
character that individually or in the aggregate has a Material Adverse Effect.
36
5.15 BOOKS AND RECORDS. With respect to and during the Ownership
Period: (a) each of TBC and each of the TBC Subsidiaries has made and kept
Books and Records and accounts, which, in reasonable detail, fairly reflect the
activities of such party, (b) the minute books of TBC and each of the TBC
Subsidiaries, as previously made available to the Buyer and its Representatives,
contain materially accurate and adequate records of all meetings of, and
corporate actions taken by (including action taken by written consent), the
respective stockholders and Board of Directors of TBC and each of the TBC
Subsidiaries, (c) the copies of the stock book records of TBC and each of the
TBC Subsidiaries heretofore delivered to the Buyer properly reflect all material
transactions effected in the stock of TBC and each of the TBC Subsidiaries
during the Ownership Period, and (d) neither TBC nor any of the TBC Subsidiaries
has engaged in any transaction, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have been
and are reflected in the normally maintained Books and Records thereof. At
Closing, the Books and Records of TBC and the TBC Subsidiaries will be in the
possession of TBC, except for those records and reports prepared and retained by
Representatives of IMR and its Affiliates.
5.16 PERSONAL PROPERTY AND ENCUMBRANCES; ASSETS. SCHEDULE 5.16 identifies
all owned items of personal property and all capitalized leases for items of
personal property of TBC or any of the TBC Subsidiaries which individually have
a book value in excess of $50,000. Except as set forth in SCHEDULE 5.16, and
except for personal property which has been sold or otherwise disposed of in the
ordinary course of business, TBC or a TBC Subsidiary owns free and clear from
any Encumbrances (except for (i) Encumbrances reflected in the Financial
Statements, (ii) Encumbrances for current taxes, assessments or governmental
charges or levies on property not yet due and delinquent which, in the
aggregate, are not substantial in amount, do not materially detract from the
value of the assets subject thereto or interfere with the present use and have
not arisen other than in the ordinary course of business, (iii) Encumbrances
arising by operation of law which, in the aggregate, are not substantial in
amount, do not materially detract from the value of the assets subject thereto
or interfere with the present use and have not arisen other than in the ordinary
course of business and (iv) Encumbrances described on the Disclosure Schedule
(collectively, Encumbrances of the type described in clauses (i), (ii), (iii)
and (iv) above are hereinafter sometimes referred to as "PERMITTED
ENCUMBRANCES")) or as set forth on SCHEDULE 5.16, leases or has the right to
use, the personal property set forth on SCHEDULE 5.16. To the Knowledge of TBC,
the personal property listed on SCHEDULE 5.16 has been maintained in accordance
with normal industry practice, is in reasonable operating condition and repair
(except for normal replacement practices and ordinary wear and tear) and is
sufficient for the operation of the Business as currently conducted.
5.17 INTELLECTUAL PROPERTY.
(a) POSSESSION OF INTELLECTUAL PROPERTY. TBC and each of the TBC
Subsidiaries possess all Intellectual Property necessary for the ownership of
its properties and the conduct of the Business as presently conducted. All
Intellectual Property of TBC and each of the TBC Subsidiaries is set forth in
SCHEDULE 5.17. All of the rights of TBC and the TBC Subsidiaries in the
Intellectual Property are valid and enforceable rights of TBC or the applicable
TBC Subsidiary and will not cease to be valid and in full force and effect by
reason of the execution, delivery and
37
performance of this Agreement, the other Transaction Documents or the
consummation of the Transactions, except where the failure of such rights to
be valid and enforceable would not have a Material Adverse Effect. TBC and
each of the TBC Subsidiaries own or possess adequate and enforceable licenses
or otherwise have the right to use all of the Intellectual Property, except
where the failure to possess such licenses or have such right to use would
not have a Material Adverse Effect.
(b) NO PROCEEDINGS. Neither TBC nor any of the TBC Subsidiaries has
received any notice of any event, inquiry, investigation or proceeding
threatening the validity of any such Intellectual Property. TBC and the TBC
Subsidiaries have taken all reasonable and prudent steps to protect the
Intellectual Property listed on SCHEDULE 5.17 from infringement by any other
Person. No other Person (i) has, to the Knowledge of TBC, the right to use any
of the Trademarks or other such Intellectual Property on the goods and services
on which they are now being used either in identical form or in such near
resemblance thereto as to be likely, when applied to the goods of any such
Person, to cause confusion with such Trademarks or other Intellectual Property
or to cause a mistake or to deceive, (ii) has notified TBC or any of the TBC
Subsidiaries that it is claiming any ownership of or right to use such
Intellectual Property, or (iii) to the Knowledge of TBC, is infringing upon any
Intellectual Property in any way. The use of the Intellectual Property by TBC
and the TBC Subsidiaries does not conflict with, infringe upon or otherwise
violate the rights of any third party in or to such Intellectual Property, and
no Action has been instituted against or notices received by TBC or any of the
TBC Subsidiaries that are presently outstanding alleging that the use by TBC or
any TBC Subsidiary of the Intellectual Property infringes upon or otherwise
violates any rights of a third party in or to such Intellectual Property.
(c) PROPRIETARY RIGHTS. SCHEDULE 5.17 sets forth: (i) for each
Patent, the number, normal expiration date and subject matter for each country
in which such Patent has been issued, or, if applicable, the application number,
date of filing and subject matter for each country, (ii) for each Trademark, the
application serial number or registration number, the class of goods covered and
the expiration date for each country in which a Trademark has been registered,
(iii) for each Copyright, the number and date of filing for each country in
which a Copyright has been filed, and (iv) for each service xxxx, the service
xxxx serial number or the service xxxx registration number, the service xxxx
class of goods covered and the service xxxx expiration date for each country in
which a service xxxx has been registered. True and correct copies of all
Patents (including and all pending applications) owned, controlled, created or
used by or on behalf of TBC or any of the TBC Subsidiaries or in which TBC or
any of the TBC Subsidiaries has any interest have been provided to the Buyer.
Except for applications pending, all of the Patents, registered designs and
Trademarks listed on SCHEDULE 5.17 have been duly issued and, except as set
forth on SCHEDULE 5.17, all of the other Intellectual Property exist, is
registered and is subsisting. All of the pending Patent applications have been
duly filed.
5.18 FACILITIES AND LEASES.
(a) NO DEFAULT. SCHEDULE 5.18 contains a description of all Owned
Real Property of TBC and each of the TBC Subsidiaries and contains copies of any
preliminary or
38
other title reports, if any, covering all of the Owned Real Property.
SCHEDULE 5.18 contains (i) a description of all Leases or sub-leases to which
TBC or any of the TBC Subsidiaries is a party requiring an annual aggregate
payment of at least $50,000 (the "MATERIAL LEASES"), and (ii) specifically,
and by way of limitation, a general description of the leased property or
items, the specific leasing party, the term, the applicable rent, any and all
renewal options, and any requirements for the consent of third parties with
respect to any provisions thereto. Except as otherwise set forth in SCHEDULE
5.18, each Material Lease is valid, binding and enforceable in accordance
with its terms and is in full force and effect; all rents and additional
rents due to date to or from TBC or any of the TBC Subsidiaries on each such
Material Lease have been paid; neither TBC nor any of the TBC Subsidiaries
have received any notice of cancellation or termination under any option or
right reserved to the lessor; neither TBC nor any of the TBC Subsidiaries
have received notice that it is in material Default under any such Material
Lease; and to TBC's Knowledge there exists no event, occurrence, condition or
act (including the consummation of the Transactions) which, with the giving
of notice, the lapse of time or the happening of any further event or
condition, would become a material Default by either TBC or any of the TBC
Subsidiaries under such Material Lease or, to the Knowledge of TBC, by any
other party. TBC shall use best reasonable commercial efforts to obtain the
consent of third parties in accordance with Section 7.1 hereof, where such
consent is necessary to the consummation of the Transactions as they affect a
specific Material Lease (except where the failure to obtain such consent
would not have a Material Adverse Effect).
(b) OWNED REAL PROPERTY. Except as set forth in SCHEDULE 5.18, TBC
and each of the TBC Subsidiaries have good and marketable fee simple title to
all of their Owned Real Property, free and clear of all Encumbrances, except for
minor liens which in the aggregate are not substantial in amount, do not
materially detract from the value or transferability of the property or assets
subject thereto or interfere with the present use and have not arisen other than
in the ordinary course of business. TBC and each of the TBC Subsidiaries enjoys
peaceful and undisturbed possession of all their respective Owned Real Property.
(c) ACTIONS. Except as set forth in SCHEDULE 5.18, there are no
pending or, to the Knowledge of TBC, threatened condemnation proceedings,
administrative proceeding, or other Actions relating to any Leases or other
Facility.
(d) LEASES OR OTHER AGREEMENTS. Except as listed on SCHEDULE 5.18,
there are no leases, subleases, licenses, occupancy agreements, options, rights,
concessions or other agreements or arrangements, written or oral, granting to
any Person the right to purchase, use or occupy any Facility of TBC or any TBC
Subsidiary, or any real property.
(e) FACILITY LEASES AND LEASED REAL PROPERTY. Except as set forth in
SCHEDULE 5.18 or as contemplated by this Agreement and the Transactions, with
respect to each Facility Lease, TBC or the applicable TBC Subsidiary has an
unencumbered interest in the Leasehold Estate. TBC or the applicable TBC
Subsidiary enjoys peaceful and undisturbed possession of all the Leased Real
Property, subject to the rights of the fee owners, and TBC and each of the TBC
Subsidiaries has in all material respects performed all the obligations required
to be performed by it through the date hereof.
39
(f) CERTIFICATE OF OCCUPANCY. All Facilities have received all
required material approvals of governmental authorities (including without
limitation Permits and a certificate of occupancy or other similar certificate
permitting lawful occupancy of the Facilities) required in connection with the
operation thereof and have been operated and maintained in all material respects
in accordance with applicable Regulations, except where the failure to obtain
any such approvals or the failure to comply with any such Regulations would not
have a Material Adverse Effect.
(g) UTILITIES. To the Knowledge of TBC, all Facilities are supplied
with utilities (including without limitation water, sewage, disposal,
electricity, gas and telephone) and other services necessary for the operation
of such Facilities as currently operated, and there is no condition which, to
the Knowledge of TBC, would reasonably be expected to result in the termination
of the present access from any Facility to such utility services.
(h) IMPROVEMENTS, FIXTURES AND EQUIPMENT. To the Knowledge of TBC,
the improvements constructed on the Facilities, including without limitation all
Leasehold Improvements, and all Fixtures and Equipment and other tangible assets
owned, leased or used by TBC and each of the TBC Subsidiaries at the Facilities
are (i) structurally sound with no material defects, (ii) in good operating
condition and repair, subject to ordinary wear and tear, (iii) not in need of
maintenance, repair or correction except for ordinary routine maintenance and
repair, the cost of which would not be material, (iv) sufficient for the
operation of the Business as presently conducted, and (v) in conformity, in all
material respects, with all applicable Regulations, except where the failure to
conform with any such Regulation would not have a Material Adverse Effect. None
of the improvements is subject to any commitment or other arrangement for their
sale or use by any Affiliate of TBC or any TBC Subsidiary or any third parties.
(i) SUBLEASES. Except as set forth on SCHEDULE 5.18, there are no
subleases, licenses, options, rights, concessions or other agreements or
arrangements, written or, to the Knowledge of TBC, oral, granting to any Person
the right to use or occupy the property or any portion thereof or interest
therein, to which a Material Lease pertains.
(j) NO SPECIAL ASSESSMENT. None of IMR nor TBC nor any TBC
Subsidiary has received notice of any special assessment relating to any
Facility or any portion thereof and, to the Knowledge of TBC, there is no
pending or threatened special assessment.
5.19 MATERIAL CONTRACTS.
(a) CONTRACTS. Except for Contracts listed on SCHEDULE 5.19 and
except for: (A) Contracts made in the ordinary course of business, (B) Driver
Contracts, (C) customer and agent agreements not subject to disclosure pursuant
to Section 5.30, and (D) other Contracts expressly referenced in the Disclosure
Schedule in response to other disclosure requirements (including without
limitation Employment Matters under Section 5.12, Labor Agreements under Section
5.13, Personal Property under Section 5.16, Leases under Section 5.18, Insurance
under Section 5.20 and the Material Customer and Material Agent Agreements under
Section 5.30)),
40
neither TBC nor any TBC Subsidiary is a party to, or bound by, any Contract
of any kind to be performed after the Effective Time (i) pursuant to which
TBC or any TBC Subsidiary is obligated to expend more than $50,000 in any
twelve-month period and that is not subject to cancellation on not more than
30 days' notice by TBC or a TBC Subsidiary without penalty or increased cost,
or (ii) with any Personnel or other Affiliates of TBC or any Subsidiary
(collectively (i) and (ii) above are "MATERIAL CONTRACTS" and individually
each is referred to as a "MATERIAL CONTRACT"). Except as set forth in
SCHEDULE 5.19, neither TBC nor any of the TBC Subsidiaries is bound by any
other material Contract, agreement or other arrangement (and any amendment,
modification or supplement in respect thereof), including, without limitation:
(i) any Contract, guarantee, other contingent liability,
warranty, guaranty or similar undertaking not in the ordinary course of
business;
(ii) any written arrangement (or group of related written
arrangements), Contracts, commitments or other agreements for the purchase
or sale of supplies, trailers, on-board equipment (including, without
limitation, pads, beams and straps) or other equipment, materials or
property or for the furnishing or receipt of services, including, without
limitation, any customer or vendor contracts, or relating to capital
expenditures (including, without limitation, BECOM 2000) pursuant to which
TBC or any TBC Subsidiary is required to provide expenditures in excess of
$50,000;
(iii) license, commission, consulting, agency or advertising
contracts or arrangements related to the Assets or the Business providing
for payments by TBC or any TBC Subsidiary in excess of $50,000 in any
twelve-month period;
(iv) any agreement, indenture or other instrument which contains
restrictions with respect to payment of dividends or any other distribution
in respect of its capital stock;
(v) any agreement, indenture, promissory note, loan, evidence of
indebtedness, letter of credit, guarantee or other instrument relating to
indebtedness, liability for borrowed money or the deferred purchase price
of property (excluding trade payables in the ordinary course of business),
whether TBC or any TBC Subsidiary shall be the borrower, lender or
guarantor thereunder or whereby any Assets are pledged;
(vi) any loan or advance to, or investment in, any Person or any
agreement, contract or commitment relating to the making of any such loan,
advance or investment or any agreement, contract or commitment involving a
sharing of profits, any of which, individually or in the aggregate, is or
involves in excess of $25,000;
(vii) any management service, consulting (other than
employment related consulting arrangements) or any other similar type of
contract;
41
(viii) any agreement, contract or commitment limiting the
ability of TBC or any of the TBC Subsidiaries to engage in any line of
business or to compete with any Person;
(ix) any written arrangement (or group of related written
arrangements) concerning a partnership or joint venture with any other
Person;
(x) any oral contract, agreement or other arrangement with
respect to any of the matters referred to in the foregoing clauses (i)
through (ix) and any written proposal to enter into any contract, agreement
or other arrangement with respect to any of the matters referred to in the
foregoing clauses (i) through (ix).
TBC has made available to the Buyer true, correct and complete copies of all of
the Material Contracts listed on SCHEDULE 5.19, including all amendments and
supplements thereto and has included as part of SCHEDULE 5.19 a brief summary of
any such oral contracts, agreements or other arrangements and any written
proposals to enter into any such contracts, agreements or other arrangements.
(b) ABSENCE OF BREACHES AND DEFAULTS. Except as otherwise set
forth in SCHEDULE 5.19, each Contract or agreement set forth thereon is in
full force and effect and there exists no Default or event of default or, to
the Knowledge of TBC, event, occurrence, condition or act (including the
consummation of the Transactions) which, with the giving of notice, the lapse
of time or the happening of any other event or condition, would become a
Default or event of default thereunder, which Default would result, with
reasonable certainty, in a Material Adverse Effect. All of the Contracts set
forth on SCHEDULE 5.19 are valid, binding and enforceable in accordance with
their terms (except as such enforceability may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization and other similar laws affecting
creditor's rights generally and (ii) the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law). All of
the other Contracts and agreements to which TBC or any of the TBC
Subsidiaries is a party or by which it is bound or are valid, binding and
enforceable in accordance with their terms (except as such enforceability may
be limited by (i) bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting creditor's rights generally and (ii) the general
principles of equity, regardless of whether asserted in a proceeding in
equity or at law), except where the failure of any Contracts or Leases to be
binding, valid and enforceable would not, either individually or in the
aggregate, have a Material Adverse Effect. TBC and each of the TBC
Subsidiaries have fulfilled, or taken all action necessary to enable it to
fulfill when due, all of its obligations under each Contract and agreement by
which it is bound, except where the failure to fulfill or take such action
with respect to any Contracts or Leases, either individually or in the
aggregate, would not have a Material Adverse Effect. TBC and each of the TBC
Subsidiaries have and, to the Knowledge of TBC, all other parties to such
Contracts and agreements have, complied in all material respects with the
provisions thereof and no notice of any claim of Default has been given to
TBC or any of the TBC Subsidiaries. Except as set forth on SCHEDULE 5.19,
assuming the representations and warranties of the Buyer in Sections 6.2 and
6.3 are true in all material respects, none of the rights of TBC or any of
the TBC Subsidiaries in
42
the Material Contracts will cease to be enforceable by TBC or such TBC
Subsidiary as a result of the consummation of the Transactions.
(c) SERVICE WARRANTY. Except as set forth in SCHEDULE 5.19, to TBC's
Knowledge, neither TBC nor any of the TBC Subsidiaries has committed any act,
and there has been no omission, which may result in, and there has been no
occurrence which may give rise to, Liability for breach of warranty (whether
covered by insurance or not) on the part of TBC or any of the TBC Subsidiaries,
with respect to services rendered prior to the Effective Time which would have a
Material Adverse Effect.
5.20 INSURANCE. TBC has delivered to Buyer copies of all current
policies (including indemnity agreements disclosed in Section 5.19 hereof) of
property, fire and casualty, product liability, workers compensation and
other forms of insurance owned or held by TBC or any of the TBC Subsidiaries
on the Business, the Assets, or their respective employees. All insurance
coverage applicable to each of TBC, the TBC Subsidiaries, the Business and
the Assets is in full force and effect and, to the Knowledge of TBC, provides
coverage as may be required by applicable Regulation and by any and all
Material Contracts to which TBC and any of the TBC Subsidiaries is a party.
There is no default under any such coverage nor, to the Knowledge of TBC, has
there been any failure to give notice or present any claim under any such
coverage in a due and timely fashion at any time during the Ownership Period.
There are no outstanding unpaid premiums, except in the ordinary course of
business, and no notice of cancellation or non-renewal of any such coverage
has been received. Neither TBC nor any of the TBC Subsidiaries have received
notice of any retrospective premium adjustments which have not been paid or
for which adequate reserves have not been established. During the Ownership
Period, all auto liability, product liability, general liability and workers'
compensation insurance policies maintained by TBC or any of the TBC
Subsidiaries have been occurrence policies and not claims made policies.
Except as set forth in SCHEDULE 5.20 there are no outstanding performance
bonds covering or issued for the benefit of TBC or any of the TBC
Subsidiaries. Except as set forth in SCHEDULE 5.20, neither TBC nor any of
the TBC Subsidiaries have received (i) any notice of cancellation of any
Insurance Policy, refusal of coverage, increase of premiums or failure to
renew thereunder, (ii) any notice that any issuer of such policy has filed
for protection under applicable bankruptcy laws or is otherwise in the
process of liquidating or has been liquidated, or (iii) any other indication
that such policies are no longer in full force or effect or that the issuer
of any such policy is no longer willing or able to perform its obligations
thereunder. To TBC's Knowledge, all policies and binders are in full force
and effect on the date hereof and shall be kept in full force and effect
through the Effective Time.
5.21 INTERESTS IN CUSTOMERS, SUPPLIERS, ETC. Except as set forth in
SCHEDULE 5.21, none of TBC nor any TBC Subsidiary nor IMR nor any officer,
director or, to the Knowledge of TBC, employee of TBC or any of the TBC
Subsidiaries or any Affiliates of any of the foregoing (nor any member of any
such Person's immediate family) (i) possesses, directly or indirectly, any
material ownership interest in, or is a director, officer or employee of, any
Person which is a supplier, agent, customer, lessor, lessee, licensor,
developer, competitor or potential competitor of TBC or any of the TBC
Subsidiaries or (ii) is presently a party to any material transaction with TBC
or any of the TBC Subsidiaries, including without limitation, any contract,
agreement or
43
other arrangement otherwise requiring payments to (other than for services as
officers, directors or employees of TBC or any of the TBC Subsidiaries) any
such Person or corporation, partnership, trust or other entity in which any
such Person has an interest as a stockholder, officer, director, trustee or
partner. Notwithstanding the foregoing, the foregoing shall not apply to any
interest or holdings in a publicly registered or traded Person, investment in
stock by a pension, profit sharing or similar plan or the employment by a
Person in a non-key position of any spouse of a director, officer, or
employee.
5.22 ENVIRONMENTAL MATTERS. The representations and warranties made in
this Section 5.22: (i) are limited to the Knowledge of TBC, (ii) apply only to
the Company Property, and (iii) are limited in scope such that if the condition
described does exist, it, along with all such other conditions described, will
not, individually or in the aggregate, have a Material Adverse Effect. Subject
to the foregoing, and, except as set forth on SCHEDULE 5.22:
(a) HAZARDOUS MATERIALS. Hazardous Materials are not being handled,
transported, generated, used, treated or stored on or released or disposed on or
about any Company Property.
(b) FACILITIES. TBC and each of the TBC Subsidiaries and the Company
Property are in compliance with Environmental Laws and the requirements of
Permits issued under such Environmental Laws with respect to any Company
Property.
(c) PENDING ACTIONS. There have not been and are no pending or, to
the Knowledge of TBC, threatened Environmental Claims against TBC or any of the
TBC Subsidiaries or any Company Property.
(d) PERMITS. TBC and each of the TBC Subsidiaries have all Permits
required under any Environmental Law and each Company Property is in compliance
with all such Permits.
(e) PERMITS REQUIRED. The consummation of the Transactions will not
require an application for issuance, renewal, transfer or extension of, or any
other administrative action regarding, any Permit required under any
Environmental Law.
(f) ENVIRONMENTAL CONDITIONS. There are no present Environmental
Conditions in any way relating to the Business of TBC or any of the TBC
Subsidiaries, including the Company Property.
(g) CERCLA OR RCRA. No current use, generation, treatment,
transportation, storage, disposal or handling practice of TBC or any of the TBC
Subsidiaries with respect to any Hazardous Material has or will result in any
liability under CERCLA or RCRA (as in effect as of the date hereof and on the
Effective Date) or any state or local law of similar effect.
(h) STORAGE TANK OR PIPELINE. There is no underground or
above-ground storage tank or pipeline at any Company Property where the
installation, use, maintenance, repair, testing, closure or removal of such
tank or pipeline is not in compliance with all Environmental Laws and
44
there has been no Release from or rupture of any such tank or pipeline,
including without limitation any Release from or in connection with the
filling or emptying of such tank.
(i) ENVIRONMENTAL AUDITS OR ASSESSMENTS. True, complete and correct
copies of the written reports, and all parts thereof, including any drafts of
such reports if such drafts are in the possession or control of TBC or any of
the TBC Subsidiaries, of all environmental audits or assessments which have been
conducted at any Company Property within the past five years, either by TBC or
any of the TBC Subsidiaries or any attorney, environmental consultant or
engineer engaged for such purpose, have been delivered to the Buyer and a list
of all such reports, audits and assessments and any other similar report, audit
or assessment of which TBC or any of the TBC Subsidiaries have knowledge is
included on SCHEDULE 5.22.
(j) INDEMNIFICATION AGREEMENTS. Neither TBC nor any of the TBC
Subsidiaries are, singularly or collectively, a party, whether as a direct
signatory or as successor, assign or third party beneficiary, or otherwise
bound, to any lease or other contract under which TBC or any of the TBC
Subsidiaries are obligated by or entitled to the benefits of, directly or
indirectly, any representation, warranty, indemnification, covenant, restriction
or other undertaking concerning Environmental Conditions.
(k) RELEASES OR WAIVERS. During the Ownership Period, neither TBC
nor any of the TBC Subsidiaries have released any other Person from any claim
under any Environmental Law or waived any rights concerning any Environmental
Condition.
(l) NOTICES, WARNINGS AND RECORDS. During the Ownership Period, TBC
and each of the TBC Subsidiaries have given all notices and warnings, made all
reports, and have kept and maintained all records required by and in compliance
with all Environmental Laws.
5.23 COMPLIANCE WITH LAW. Except as otherwise disclosed on SCHEDULE 5.23,
neither TBC nor any of the TBC Subsidiaries nor the conduct of the Business has
violated or has failed or is failing to be in compliance with all Regulations
and Court Orders relating to the Assets or the Business or operations of TBC or
any of the TBC Subsidiaries, except where the violations or failure to comply,
individually or in the aggregate, would not have a Material Adverse Effect.
Each of TBC and the TBC Subsidiaries, in the conduct of the Business, is in
conformity with all energy, public utility, zoning, building and health codes,
regulations and ordinances, OSHA and Environmental Laws and all other foreign,
federal, state, and local governmental and regulatory requirements applicable to
the conduct of the Business, except where the failure to be in conformity,
either individually or in the aggregate, would not have a Material Adverse
Effect. To the Knowledge of TBC, neither TBC nor any of the TBC Subsidiaries
nor IMR has received any notice to the effect that, or otherwise been advised
that, such party is not in compliance with any such Regulations or Court Orders.
5.24 NO OTHER AGREEMENTS TO SELL ASSETS OR CAPITAL STOCK OF TBC OR THE TBC
SUBSIDIARIES. SCHEDULE 5.24 sets forth all of the non-core locations of BMS
(the "NON-CORE ASSETS"). Except for sales of Non-Core Assets, none of TBC, any
of the TBC Subsidiaries, any of the TBC Stockholders or any of their respective
officers, directors, stockholders or Affiliates
45
has any commitment or legal obligation, absolute or contingent, to any other
Person or firm, other than as contemplated by this Agreement, to sell,
assign, transfer or effect a sale of all or a material portion of the Assets,
to sell or effect a sale of any of the capital stock of TBC or any of the TBC
Subsidiaries, to effect any merger, consolidation, liquidation, dissolution
or other reorganization of TBC or any of the TBC Subsidiaries, or to enter
into any agreement or cause the entering into of an agreement with respect to
any of the foregoing.
5.25 ACCOUNTS RECEIVABLE. The accounts receivable reflected on the Year
End Balance Sheets, and all accounts receivable arising since the Year End
Balance Sheet Date, represent bona fide claims of TBC and the TBC Subsidiaries
against debtors for sales, services performed or other charges arising on or
before the date hereof, and, to the Knowledge of TBC, all the goods delivered
and services performed which gave rise to said accounts were delivered or
performed in accordance with the applicable orders, Contracts or customer
requirements.
5.26 PURCHASE COMMITMENTS AND OUTSTANDING BIDS. Except as set forth in
SCHEDULE 5.26, there is no outstanding bid, proposal, Contract or unfilled order
made by TBC or any of the TBC Subsidiaries, or, to the Knowledge of TBC, made by
BMS which relates to the Business which will or would, if accepted, have a
Material Adverse Effect.
5.27 PAYMENTS. TBC and the TBC Subsidiaries have not (i) directly or
indirectly, paid or delivered any fee, commission or other sum of money or item
or property, however characterized, to any finder, agent, client, customer,
supplier, government official or other party, in the United States or any other
country, which is in any manner related to the Business, Assets or operations of
TBC or any of the TBC Subsidiaries, which is, or may be with the passage of time
(excluding changes in law) or discovery, illegal under any present federal,
state or local laws of the United States (including without limitation the U.S.
Foreign Corrupt Practices Act) or any other country having jurisdiction, (ii)
participated, directly or indirectly, in any boycotts or other similar practices
affecting any of its actual or potential customers, or (iii) established or
maintained any unrecorded fund or asset for any purpose or made any false
entries on the Books and Records of TBC or any of the TBC Subsidiaries for any
reason.
5.28 BANK ACCOUNTS, POWERS OF ATTORNEY. Set forth in SCHEDULE 5.28 is an
accurate and complete list showing (i) the name and address of each bank in
which TBC or any of the TBC Subsidiaries has any account, safe deposit box,
borrowing arrangement or certificate of deposit, the number of any such account
or any such box and the names of all Persons authorized to draw thereon or to
have access thereto and (ii) the names of all Persons, if any, holding powers of
attorney from TBC.
5.29 COMPENSATION OF EMPLOYEES. Set forth in SCHEDULE 5.29 is an accurate
and complete list as of December 31, 1995 showing the names of all Persons
employed by TBC or any of the TBC Subsidiaries who are expected to receive more
than $90,000 annualized cash compensation in the calendar year 1996 from TBC or
any of the TBC Subsidiaries (including, without limitation, salary, commission
and bonus) and who are expected to be employed by TBC or any of TBC Subsidiaries
on the Effective Date.
46
5.30 CUSTOMER AND AGENT RELATIONS. SCHEDULE 5.30 sets forth a complete and
accurate list as of December 31, 1995 of (a) the names and addresses of the
fifteen largest (i) Household Goods Business customers and (ii) HVP Business
customers (collectively, clauses (i) and (ii) above, the "MATERIAL CUSTOMERS"),
showing as to each such Material Customer the approximate total sales in dollars
during calendar year 1995 and (b) the names of the fifteen largest (i) Household
Goods Business agents and (ii) HVP Business agents (collectively, clauses (i)
and (ii) above, the "MATERIAL AGENTS"), showing as to each such Material Agent
the approximate total revenue received in dollars by TBC or the applicable TBC
Subsidiary during calendar year 1995. Except as otherwise set forth in SCHEDULE
5.30, each Contract or agreement between TBC or any of the TBC Subsidiaries and
the Material Customers and Material Agents is in full force and effect and there
exists no Default or event of default or, to the Knowledge of TBC, event,
occurrence, condition or act (including the consummation of the Transactions)
which, with the giving of notice, the lapse of time or the happening of any
other event or condition, would become a Default or event or default thereunder,
which Default would, with reasonable certainty, have a Material Adverse Effect.
All of the Contracts between TBC or any of the TBC Subsidiaries and the Material
Customers and Material Agents are valid, binding and enforceable in accordance
with their terms (except as such enforceability may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization and other similar laws
affecting creditor's rights generally and (ii) the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law). Except as
set forth in SCHEDULE 5.30, to the Knowledge of TBC there has not been any
change in relations with customers or agents of TBC or any TBC Subsidiary as a
result of the Transactions which has resulted in a Material Adverse Change. To
TBC's Knowledge, neither TBC nor any of the TBC Subsidiaries has received any
communication from any Material Customer or Material Agent named on SCHEDULE
5.30 of any intention to terminate or materially reduce the business done with
TBC or any of the TBC Subsidiaries. Except as set forth on SCHEDULE 5.30,
neither TBC nor any of the TBC Subsidiaries has received any notice (oral or
written) that any relationship between TBC or any of the TBC Subsidiaries and
any agent of any such party is not a bona-fide independent contractor
relationship under applicable law. TBC has provided to, and Buyer acknowledges
receipt of, a complete listing of all Household Goods Business agents and HVP
Business agents prior to the execution of this Agreement.
5.31 INFORMATION PROVIDED. TBC and IMR represent and warrant that the
Agreement and Disclosure Schedule and all exhibits hereof and certificates
delivered pursuant hereto do not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be provided or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Between the date hereof and the
Effective Time, TBC and IMR agrees promptly to correct any information provided
by it to the extent that it shall have become false or misleading in any
material respect and to supplement such information for use by the Buyer in
order to make the information given to the Buyer, in light of the circumstances
under which they were made, not misleading.
47
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE
TRANSITORY SUBSIDIARY
The Transitory Subsidiary and the Buyer jointly and severally hereby
represent and warrant to TBC, IMR and IMR General that the following
representations and warranties are, as of the date hereof, and will be, as of
the Effective Date, true and correct:
6.1 ORGANIZATION. Each of the Buyer and the Transitory Subsidiary is (a)
a corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation, and (b) is duly qualified to conduct
business, properly licensed and in good standing under the laws of each
jurisdiction where such qualification and licensing is required, except where
the failure to be so qualified, licensed or in good standing would not have a
Material Adverse Effect.
6.2 AUTHORIZATION. Each of the Buyer and the Transitory Subsidiary has
full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and the other Transaction Documents to which
it is a party and to perform its obligations hereunder and thereunder and
consummate the Transactions. This Agreement and the other Transaction Documents
to which the Buyer and the Transitory Subsidiary is a party constitute the valid
and legally binding obligations of the Buyer and the Transitory Subsidiary,
enforceable against the Buyer and the Transitory Subsidiary in accordance with
their respective terms and conditions and, assuming due execution of this
Agreement by TBC and IMR and of such other Transaction Documents by the other
parties thereto, are enforceable in accordance with their respective terms and
conditions, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles, regardless of whether asserted in a proceeding in equity
or at law.
6.3 NONCONTRAVENTION. None of the execution, delivery or performance of
this Agreement and the other Transaction Documents, nor the consummation of the
Transactions, will (i) violate or conflict with any provision of the Certificate
of Incorporation or Bylaws of either the Buyer or the Transitory Subsidiary,
(ii) violate any Regulation (excluding notice requirements and approvals of
"change of control") or Court Order to which either the Buyer or the Transitory
Subsidiary is subject, (iii) violate, conflict with, result in a breach of,
constitute a default under, result in the acceleration or termination of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, Permit, indebtedness,
note, bond, indenture, security or pledge agreement, commitment, franchise,
instrument or other arrangement to which the Buyer or the Transitory Subsidiary
is a party or by which it is bound or to which any of its assets is subject,
except in the cases of each of clauses (ii) and (iii) above, where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation or failure to give notice would not, either individually or in the
aggregate, have a Material Adverse Effect. Other than in connection with the
provisions of the HSR Act, the Delaware Law, the Interstate Commerce Commission
(or other similar federal transportation authority, as applicable) and any state
authorities regulating the provision of
48
transportation services, neither the Buyer nor the Transitory Subsidiary must
give any notice to, make any declaration, filing or registration with, or
obtain any Permit from any government or governmental agency in connection
with the execution, delivery and performance of this Agreement and the other
Transaction Documents and the consummation of the Transactions, except where
the failure to give notice, to file, or to obtain any Permit would not have a
Material Adverse Effect.
6.4 BROKERS' FEES. Except for fees payable to Xxxxxxx X. Xxxxx & Sons,
L.L.C., and Xxxxxxx X. Xxxxx & Co., neither the Buyer nor the Transitory
Subsidiary has any liability or obligation to pay any fees or commissions to any
broker or finder with respect to the Transactions. None of TBC, IMR or IMR
General will have any liability or other obligation with respect to any fees or
costs of either the Buyer or the Transitory Subsidiary in respect of this
Agreement or the Transactions.
6.5 LITIGATION. There are no Actions in progress, pending or in effect
against or relating to Buyer or the Transitory Subsidiary arising from or in
connection with the Transactions and neither Buyer nor the Transitory Subsidiary
has knowledge of or has any reason to be aware of any basis for the same.
6.6 CAPITALIZATION OF BUYER AND TBC AND FRAUDULENT CONVEYANCE. On the
Closing Date, after giving effect to the Closing and the Transactions
contemplated hereby to occur on the Closing Date, Buyer and TBC will have the
long-term debt and equity capitalization within the range set forth on
Schedule 6.6. Buyer and the Transitory Subsidiary represent and warrant that
the Transactions will not be construed as a fraudulent conveyance or transfer
which may or could result in any liability on the part of IMR or the TBC
Stockholders. Notwithstanding any contrary provision contained in this
Agreement or any Transaction Document, this representation shall survive for
the statute of limitations period applicable to fraudulent transfers and
conveyances applicable under the Delaware Law, the law of the State of
Illinois or any applicable law of the jurisdiction in which such claim is or
may be brought, whichever last expires. Buyer and the Transitory Subsidiary
further represent and warrant that (i) they are entering into the
Transactions without the actual intent to hinder, delay or defraud any
creditor of TBC or the TBC Subsidiaries, (ii) IMR and the other TBC
Stockholders have, to Buyer's best knowledge, received reasonably equivalent
value for the TBC Shares, and (iii) the Surviving Corporation and its
Subsidiaries (a) are not about to engage in a business or transaction for
which the Assets of the Surviving Corporation or its Subsidiaries are
unreasonably small in relation to such business or transaction, (b) will not
incur debts beyond the ability of the Surviving Corporation or its
Subsidiaries to pay as they become due, and (c) will not be rendered
insolvent by the consummation of the Transactions contemplated by this
Agreement.
49
ARTICLE VII.
ADDITIONAL AGREEMENTS AND COVENANTS OF TBC,
THE TRANSITORY SUBSIDIARY AND THE BUYER
7.1 FURTHER ASSURANCES. Upon the terms and subject to the conditions
contained herein, each of the Parties hereto agrees (subject to the limitations
on IMR's authority and ability under law to do so), that both before and after
the Closing: (a) each of the Parties will use its best reasonable commercial
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable in order to consummate and make
effective the Transactions (including satisfaction, but not waiver, of the
Closing conditions set forth in Article VIII below); (b) each of the Parties
will execute any documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out the Transactions; and (c) each of
the Parties will cooperate with each other Party connection with the foregoing
clauses 7.1(a) and (b), including using their respective best reasonable
commercial efforts to: (i) give any notices (and cause any of the TBC
Subsidiaries to give any notices) to third parties and undertake to obtain (and
cause any of the TBC Subsidiaries to undertake to obtain) any required waivers,
consents and approvals from other parties to the Material Contracts,
Intellectual Property instruments and Material Leases; (ii) defend all Actions
challenging this Agreement or the consummation of the Transactions; (iii) lift
or rescind any injunction or restraining order or other Court Order adversely
affecting the ability of the Parties to consummate the Transactions; and (iv)
give any notices to, make any filings or registrations with (including, without
limitation, submission of information requested by governmental authorities),
and use its best reasonable commercial efforts to obtain any Material Permits
required under the Regulations. Without limiting the generality of the
foregoing: (A) TBC will undertake to obtain Stockholders' Consent as soon as
reasonably practicable in order that the TBC Stockholders may consider the
adoption of this Agreement in accordance with Delaware Law; (B) each of the
Parties will file any Notification and Report Forms and related material that it
may be required to file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the HSR Act (and Buyer
or the Surviving Corporation shall be obligated to remit all fees and costs to
third parties and authorities in connection therewith), will use its best
reasonable commercial efforts to obtain an early termination of the applicable
waiting period, and will make any further filings pursuant thereto that may be
necessary; (C) each of the Parties will make best reasonable commercial efforts
to file any notices, reports, forms and related materials that it may be
required to file with the Interstate Commerce Commission or other similar
federal transportation authority, as applicable, and the state transportation
regulatory authorities (and Buyer or the Surviving Corporation shall be
obligated to remit all fees and costs to third parties and authorities in
connection with any proceeding or filing required due to the Transactions). All
action required under clauses 7.1(c)(iii)(A) through (D) above shall be
commenced immediately upon execution of this Agreement; provided, however, that
the Parties acknowledge and agree that certain approvals, other than under the
HSR Act, may not be obtained prior to the Effective Date, and, except to the
extent that TBC or IMR has breached a specific representation or warranty as set
forth in Article V or this covenant pertaining to such an approval, no liability
to IMR shall accrue therefrom.
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7.2 NO SOLICITATION. From the date hereof through the Closing or the
earlier termination of this Agreement, none of IMR, IMR General, TBC, any TBC
Subsidiary, or any of their respective Affiliates shall, directly or indirectly
(whether on its own or through its Representatives), enter into, solicit,
initiate or continue any discussions or negotiations with, or encourage or
respond to any inquiries or proposals by, or participate in any negotiations
with, or provide any information to, or otherwise cooperate in any other way
with, any corporation, partnership, Person or other entity or group, other than
the Transitory Subsidiary, the Buyer and their respective Representatives,
concerning any sale of all or a material portion of the Assets or the Business
(other than in the ordinary course of business), or of any shares of capital
stock of TBC, or any merger, consolidation, liquidation, dissolution or similar
transaction involving TBC (each such transaction being referred to herein as a
"PROPOSED ACQUISITION TRANSACTION"). None of IMR, IMR General, TBC, any TBC
Subsidiary or any of their respective Affiliates shall, directly or indirectly,
through any Representative or otherwise, solicit, initiate or encourage the
submission of any proposal or offer from any Person (including, without
limitation, a "Person" as defined in Section 13(d)(3) of the Exchange Act) or
entity relating to any Proposed Acquisition Transaction or participate in any
negotiations regarding, or furnish to any other Person any information with
respect to TBC or any of the TBC Subsidiaries for the purposes of, or otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other Person to seek or effect a Proposed
Acquisition Transaction. Each of TBC and IMR hereby represents that neither it
nor any of its Affiliates is now engaged in negotiations with any party other
than the Transitory Subsidiary and the Buyer with respect to any of the
foregoing. Each of TBC and IMR shall notify the Transitory Subsidiary and the
Buyer promptly (orally and in writing) if any written offer, or any inquiry or
contact with any Person with respect to any Proposed Acquisition Transaction, is
made and shall provide the Transitory Subsidiary and the Buyer with a copy of
such offer and with the identity of the Person making such inquiry or contact.
TBC and the TBC Subsidiaries agree not to release any third party from, or waive
any provision of, any confidentiality or standstill agreement to which TBC or
any of the TBC Subsidiaries is a party.
7.3 NOTICE OF DEVELOPMENTS. From the date hereof through the Closing,
each Party will give prompt written notice to each other Party of (i) the
occurrence, or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty contained in this Agreement or
in any exhibit or schedule hereto or in the other Transaction Documents to be
untrue or inaccurate in any material respect and (ii) any material failure of
TBC, the Buyer, the Transitory Subsidiary, IMR or IMR General or any of their
respective Affiliates, or of any of their respective stockholders or
Representatives, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it under this Agreement or any exhibit or
schedule hereto or in the other Transaction Documents. Except as set forth in
Section 10.16 hereof, no disclosure by any party pursuant to this Section 7.3,
however, shall be deemed to prevent or cure any misrepresentation, breach of
warranty or breach of covenant or to satisfy any condition. Each of TBC, IMR
and the Buyer shall promptly notify the other Parties of any Default, the threat
or commencement of any Action, or any development that occurs before the Closing
that could in any way materially affect TBC or any of the TBC Subsidiaries, the
Assets or the Business.
51
7.4 FULL ACCESS. From the date hereof through the Effective Time the
Buyer intends to continue to conduct a review of the business and financial
condition of TBC and the TBC Subsidiaries. In connection with such review:
(a) TBC and its Representatives will (and will cause each of the TBC
Subsidiaries and their respective Representatives to) permit Representatives of
the Buyer to have full access at all reasonable times, and in a manner so as not
to interfere with the normal business operations of TBC and the TBC
Subsidiaries, to all the officers, employees, agents, attorneys, accountants,
properties, Books and Records and Contracts and other documents of or pertaining
to each of TBC and the TBC Subsidiaries, and shall furnish the Buyer and its
Representatives all financial, operating and other data and information as the
Buyer or its Affiliates, through their respective Representatives, may
reasonably request, including an unaudited balance sheet and the related
statements of income, retained earnings and cash flow for each month from the
date hereof through the Effective Time within 30 calendar days after the end of
each month, which financial statements shall meet the standards set forth in
Section 5.7 hereof.
(b) The Buyer will treat and hold as Confidential Information any
such information it receives from TBC or any of the TBC Subsidiaries in the
course of the reviews contemplated by this Section 7.4, will not use any such
information except in connection with the Transactions, and, if this Agreement
is terminated for any reason whatsoever, agrees to return to TBC all tangible
embodiments (and all copies) thereof which are in its or any of its Affiliates'
or Representatives' possession.
7.5 OPERATION OF BUSINESS. Except as contemplated by this Agreement, from
the date hereof through the Closing, TBC and IMR will not (and will not cause or
permit any of the TBC Subsidiaries to) engage in any practice, take any action,
operate the Business or enter into any transaction outside the ordinary course
or inconsistent with this Agreement without the written consent of Buyer.
Without limiting the generality of the foregoing, without such written consent:
(a) neither TBC nor any of the TBC Subsidiaries will authorize or
effect any change in their respective charters, articles of incorporation, or
bylaws;
(b) neither TBC nor any of the TBC Subsidiaries will fail to use its
best reasonable commercial efforts in the ordinary course of business to
(i) retain the employees of TBC or any of the TBC Subsidiaries, (ii) maintain
the Business so that such employees will remain available to the Surviving
Corporation and its Subsidiaries at and after the Effective Time, (iii) maintain
existing relationships with suppliers, agents, customers and others having
business dealings with TBC and the TBC Subsidiaries, and (iv) otherwise preserve
the goodwill of the Business so that such relationships and goodwill will be
preserved for the Surviving Corporation and its Subsidiaries at and after the
Effective Time;
(c) neither TBC nor any of the TBC Subsidiaries will enter into,
extend, materially modify, terminate or renew any Contract or Lease, except in
the ordinary course of business;
52
(d) neither TBC nor any of the TBC Subsidiaries will grant any
options, warrants, or other rights to purchase or obtain any of its respective
capital stock, except for those options previously scheduled to be granted in
connection with the TBC 1993 Employee Stock Option Plan, or issue, sell, or
otherwise dispose of any of its respective capital stock (except upon the
conversion or exercise of options, warrants, and other rights currently
outstanding);
(e) neither TBC nor any of the TBC Subsidiaries will declare, set
aside, make or pay any dividend or other distribution with respect to its
capital stock (whether in cash or in kind) or redeem, repurchase, or otherwise
acquire any of its respective capital stock, in either case outside the ordinary
course of business;
(f) neither TBC nor any of the TBC Subsidiaries will issue any note,
bond, or other debt security or create, incur, assume or guarantee any
indebtedness for borrowed money or capitalized lease obligation, incur any other
Liability, or indemnify others outside the ordinary course of business;
(g) except as to sales of Non-Core Assets, of which Buyer will be
advised prior to any such action, neither TBC nor any of the TBC Subsidiaries
will sell, assign, transfer, convey, lease, impose any Encumbrance upon or
otherwise dispose of or encumber any of the Assets, which sale, assignment,
transfer, conveyance, lease, imposition of Encumbrance or other disposition is,
individually or in the aggregate, in excess of $50,000;
(h) within the exercise of reasonable business judgment, neither TBC
nor any of the TBC Subsidiaries will fail to expend funds for budgeted capital
expenditures or commitments, including, without limitation, with respect to
BECOM 2000;
(i) neither TBC nor any of the TBC Subsidiaries will willingly allow
or permit to be done any act by which any of the Insurance Policies may be
suspended, impaired or canceled;
(j) neither TBC nor any of the TBC Subsidiaries will fail to pay its
accounts payable, or pay or discharge when due any Liabilities, or fail to
collect its accounts receivable in the ordinary course of business;
(k) neither TBC nor any of the TBC Subsidiaries will enter into,
renew, modify or revise any agreement or transaction with any of its Affiliates
other than for the transfer of cash in accordance with such Affiliates' ordinary
course cash management practices;
(l) neither TBC nor any of the TBC Subsidiaries will fail to
maintain the Assets in substantially their current state of repair, excepting
normal wear and tear, or fail to replace, consistent with past practice,
inoperable, worn-out or obsolete or destroyed Assets, except where the
failure to so maintain or replace the Assets would not, individually or in
the aggregate, have a Material Adverse Effect;
53
(m) neither TBC nor any of the TBC Subsidiaries will make any loans
or advances to any individual, partnership, firm or corporation, except for
expenses incurred in the ordinary course of business;
(n) neither TBC nor any of the TBC Subsidiaries will make any income
tax election or settlement or compromise with tax authorities that would
materially affect or impair the Business or the Assets, PROVIDED, HOWEVER, that
Buyer's consent shall not be unreasonably withheld, conditioned or delayed;
(o) neither TBC nor any of the TBC Subsidiaries will fail to comply
in any material respect with any material Regulations applicable to such Person,
the Assets (taken as a whole) or the Business;
(p) neither TBC nor any of the TBC Subsidiaries will intentionally do
any other act which would cause any representation or warranty of IMR or TBC in
this Agreement to be or become untrue in any material respect;
(q) neither TBC nor any of the TBC Subsidiaries will acquire by
merger or consolidation with, or merge or consolidate with, or make any capital
investment in, make any loan to, or acquire the securities or assets of any
other Person or division of any Person or otherwise acquire any material assets
or business of any Person outside the ordinary course of business;
(r) neither TBC nor any of the TBC Subsidiaries will take any action
with respect to the grant of any bonus, severance or termination pay (other than
pursuant to policies or agreements of TBC or such TBC Subsidiary in effect on
the date hereof that are described in the Disclosure Schedule) or with respect
to any increase of benefits payable under its severance or termination pay
policies or agreements in effect on the date hereof or increase in any manner
the compensation or fringe benefits of any employee or pay any benefit not
required by any existing TBC Plan or policy or otherwise make any change in
employment terms for any of its respective directors, officers, and employees
outside the ordinary course of business including, without limitation:
(i) making any change in the key management structure of TBC,
including, without limitation, the hiring of additional officers or the
termination of existing officers;
(ii) except in the ordinary course of business, adopting,
entering into or amending any TBC Plan, agreement (including without
limitation any collective bargaining or employment agreement), trust, fund
or other arrangement for the benefit or welfare of any employee, except for
any such amendment as may be required to comply with applicable
Regulations; or
(iii) failing to maintain all TBC Plans in accordance with
applicable Regulations;
54
(s) neither TBC nor any of the TBC Subsidiaries will make any payment
of any kind to or on behalf of any Affiliate or any officer or director of such
Affiliate, pursuant to any agreement between TBC or any of the TBC Subsidiaries
and such Affiliate or otherwise other than in the ordinary course of business;
and
(t) neither TBC nor any of the TBC Subsidiaries will commit, or
otherwise become obligated, to do any action prohibited hereunder.
7.6 VOTING OF TBC COMMON STOCK. IMR acknowledges that IMR is the record
and beneficial owner of at least 90,000 shares of TBC Common Stock (the "IMR
SHARES"). IMR hereby agrees that during the period commencing on the date
hereof and continuing through the Effective Time that: (i) IMR will use its
best reasonable commercial efforts to obtain the Stockholders' Consent and the
consent of the board of directors of TBC, (ii) at any meeting of TBC
Stockholders or directors (whether annual or special and whether or not an
adjourned or postponed meeting), however called, or in connection with any
written consent of the TBC Stockholders, and, assuming no material breach hereof
by the Buyer or the Transitory Subsidiary, IMR shall vote (or cause to be voted)
the IMR Shares (a) in favor of the Transactions, the execution and delivery by
TBC of this Agreement and the other Transaction Documents and the approval and
adoption of the terms thereof and each of the other actions contemplated by the
Transaction Documents and any action required in furtherance thereof, and (b)
against any action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
TBC under the Transaction Documents, and (iii) IMR will not enter into any
agreement or understanding with any person or entity the effect of which would
be inconsistent or violative of the provisions and agreements contained in this
Section 7.6. In the event Buyer holds TBC Shares prior to the Effective Date,
Buyer agrees that it shall vote in favor of the consummation of the
Transactions.
7.7 FILING OF TAX RETURNS. The parties agree and acknowledge that the
Payment Agent shall have the right and obligation to prepare (and shall have the
power to file when due, after giving effect to any applicable extensions), the
federal and state income Tax Returns of TBC and the TBC Subsidiaries for the
fiscal year ended March 31, 1996 (the "1996 TAX RETURNS"), together with any
amendments to Tax Returns for prior years as a result thereof, and any
amendments of income Tax Returns filed prior to March 31, 1996. The reasonable
costs of such preparation shall be paid to the Payment Agent by the Surviving
Corporation. The Payment Agent agrees and acknowledges that in the preparation
of the 1996 Tax Returns, there shall be no changes to tax accounting methods or
in the tax elections from the methods and elections used in the preparation of
the respective Tax Returns for prior years except as may be required as a result
of federal or state audits of prior Tax Returns. In furtherance of the
foregoing, Buyer or the Surviving Corporation will engage, at its own expense,
an accounting firm to review the federal and state 1996 Tax Returns and any
amended income Tax Return prior to March 31, 1996 (the "TAX ACCOUNTING FIRM").
The level of such review shall be sufficient to allow the Tax Accounting Firm to
sign such Tax Returns as preparer. Assuming the Payment Agent's due delivery,
such Tax Returns shall be provided to the Tax Accounting Firm no later than 30
days prior to the applicable due date and the Tax Accounting Firm shall complete
its review and provide its comments to IMR not later than 15 days prior to the
due date and an appropriate officer of the
55
Surviving Corporation shall sign the Tax Returns prepared at the request of
the Payment Agent; PROVIDED, HOWEVER, that in no event shall IMR's liability
for Damages as a result of Taxes be limited in any way as a result of the
signing by the Tax Accounting Firm or the Surviving Corporation of the Tax
Returns prepared by the Payment Agent pursuant to this Section 7.7.
7.8 ESTABLISHMENT OF RESERVE FOR CENTRAL STATES PENSION FUND LIABILITIES.
Prior to the Closing, TBC shall reserve, and the Closing Balance Sheet shall
reflect, an aggregate of $89,000 for liabilities and expenses incurred prior to
or to be incurred after the Closing in connection with any "partial withdrawal"
or "complete withdrawal" (as defined in Sections 4203 and 4205, respectively, of
ERISA) of TBC, any TBC Subsidiary or any ERISA Affiliate from the Central
States, Southeast and Southwest Areas Pension Fund.
7.9 ESTABLISHMENT OF RESERVE FOR NON-CORE ASSETS. Prior to the Closing,
TBC shall reserve, and the Closing Balance Sheet shall reflect, any and all
amounts required under GAAP to account for liabilities and expenses incurred
prior to or to be incurred after the Closing in connection with any sale by TBC
or any TBC Subsidiary of any Non-Core Assets completed prior to the Closing.
ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF TBC, IMR, IMR GENERAL,
THE BUYER AND THE TRANSITORY SUBSIDIARY
8.1 CONDITIONS TO THE OBLIGATION OF THE BUYER AND THE TRANSITORY
SUBSIDIARY. The respective obligations of the Buyer and the Transitory
Subsidiary to consummate the Transactions are subject to satisfaction of the
following conditions:
(a) TBC STOCKHOLDER APPROVAL. This Agreement, the other Transaction
Documents and the Merger and the other Transactions shall have received the
approval of the TBC Stockholders;
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Article V above shall be true and correct in all
material respects on and as of the date of this Agreement and at and as of the
Effective Time, except and to the extent that the facts and conditions upon
which such representations and warranties are based are expressly required or
permitted to be changed by the terms hereof and except and to the extent Buyer
has waived inaccuracies pursuant to the procedure set forth in Section 10.16
hereof;
(c) PERFORMANCE. TBC, IMR and IMR General shall have performed and
complied with all of their respective agreements, covenants and obligations
hereunder in all material respects through the Closing;
(d) NO REGULATION OR COURT ORDER. There shall not be any Regulation
or Court Order in effect preventing or enjoining the consummation of any of the
Transactions;
56
(e) NO PROCEEDINGS OR LITIGATION. No Action by any governmental
authority or other Person shall have been instituted or threatened which
questions the validity or legality of the Transactions and which could
reasonably be expected to materially damage any Party hereto if the
Transactions are consummated, except to the extent that the institution or
threat of such Action is based solely on the act of the Party (or its
Affiliates or Representatives) seeking to avoid the Transactions;
(f) CERTIFICATES. TBC, IMR and IMR General shall have delivered to
the Buyer certificates of their respective officers and others to the effect
that each of the conditions specified in Sections 8.1(a)-(c) is satisfied in all
respects;
(g) FINANCING. The Buyer shall have (i) secured the financing
required to consummate the Merger and the other Transactions (including amounts
required to repay any and all amounts due under the Loan Agreement), upon terms
and subject to conditions reasonably satisfactory to it, and (ii) received
confirmation that the Xxxxxx Debt shall have been repaid by TBC;
(h) REGULATORY COMPLIANCE AND APPROVAL. All applicable waiting
periods (and any extensions thereof) under the HSR Act shall have expired or
otherwise been terminated and the Parties shall have in good faith undertaken or
have agreed to undertake to obtain all Permits, consents, waivers and approvals
of governmental authorities and shall have obtained all consents, waivers and
approvals of other Persons under the Material Contracts and Material Leases.
Each Party hereto shall be satisfied that all approvals required to be obtained
by any other Party hereto under any Regulations to carry out the Transactions
shall have been subject to a good faith undertaking to obtain by such other
Party and that each other Party hereto shall have complied with or undertaken to
comply with all Regulations applicable to the Transactions;
(i) OPINION. The Buyer and the Transitory Subsidiary shall have
received from the respective counsel to TBC, IMR and IMR General an opinion in
form and substance mutually satisfactory to the Parties and customary in
transactions of the type contemplated by this Agreement and the other
Transaction Documents, addressed to the Buyer and the Transitory Subsidiary, and
dated as of the Effective Date;
(j) OTHER AGREEMENTS. The following agreements shall have been
executed (or, if executed concurrently herewith, shall remain in full force and
effect) and delivered by each of the parties thereto in form reasonably
satisfactory to the Buyer and the Transitory Subsidiary in their sole
discretion: (i) the Stockholders' Agreement, and (ii) the employment agreement
dated as of the Effective Date between Xxxxxx Xxxxxxxx and TBC (the "ESTOCLET
AGREEMENT");
(k) NO NEW ELECTIONS. No new elections by TBC with respect to income
Taxes, or changes in current elections with respect to income Taxes, affecting
the Buyer shall have been made after the date of this Agreement without the
prior written consent of the Buyer;
(l) NO MATERIAL ADVERSE CHANGE. Since the date of the Most Recent
Fiscal Quarter End Financial Statements, there shall not have been any Material
Adverse Change;
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(m) REVIEW OF AGENCY AND CUSTOMER RELATIONSHIPS. The Parties shall
jointly cooperate in the notification of the Material Customers and Material
Agents concerning the Transactions contemplated herein. The manner, means and
method of communication with such Material Agents and Material Customers shall
be mutually determined by the Parties. Buyer shall have determined in good
faith but within its sole discretion that the responses to such communications
have been satisfactory;
(n) RESOLUTIONS. The Buyer and the Transitory Subsidiary shall have
received from each of TBC, IMR and IMR General resolutions adopted by the board
of directors and stockholders, as the case may be, of such Parties, approving
this Agreement, the other Transaction Documents and the Transactions, certified
by the corporate secretary of such other Parties, as applicable;
(o) SATISFACTORY TO BUYER. All actions to be taken by TBC, IMR and
IMR General in connection with consummation of the Transactions and all
certificates, opinions, instruments, and other documents required to effect the
Transactions shall have been reasonably satisfactory in form and substance to
the Buyer and the Transitory Subsidiary;
(p) REVIEW OF FORMERLY OWNED PROPERTIES. The Buyer shall have
completed a review of the Owned Real Property formerly owned by TBC and the TBC
Subsidiaries, which review shall be satisfactory to Buyer in its sole
discretion;
(q) PURCHASE OF PURCHASED INTERESTS. The Payment Agent shall have
purchased the Purchased Interests as described in Section 2.3(b) hereof and
prior to or at the Effective Time all such Purchased Interests shall have been
contributed to TBC, and held in treasury or cancelled, retired or otherwise
extinguished; and
(r) SOLVENCY OPINION. The Buyer and the Transitory Subsidiary shall
have received, from Xxxxxxxx Xxxxx Xxxxxx & Xxxxx, Inc. (or other nationally
recognized firm mutually acceptable to the Parties), a customary "solvency"
opinion in form and substance mutually satisfactory to the Parties (the
"SOLVENCY OPINION"). The Solvency Opinion shall be addressed to the Parties,
shall be dated as of the Effective Date, and shall include the rendering firm's
opinion as to whether (among such other matters as the Parties may establish by
mutual agreement) (i) the Surviving Corporation would be rendered insolvent by
the consummation of the transactions contemplated by the Agreement, (ii)
following the consummation of such Transactions, the Surviving Corporation's
assets would be unreasonably small in relation to its business or such
transactions, and (iii) following such consummation, the Surviving Corporation
would be able to pay its debts as they mature.
The Buyer may waive any condition specified in this Section 8.1 if it
executes a writing so stating at or prior to the Closing (except with respect to
Section 8.1(a) which shall apply according to its terms) or shall be deemed to
have waived any condition if, to the Knowledge of Buyer, a particular condition
is not met and Buyer elects, nonetheless, to proceed to Closing.
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8.2 CONDITIONS TO OBLIGATION OF TBC, IMR AND IMR GENERAL. The respective
obligations of TBC, IMR and IMR General to consummate the Transactions are
subject to satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Article VI above shall be true and correct in all
material respects on and as of the date of this Agreement and at and as of the
Effective Time, except and to the extent that the facts and conditions upon
which such representations and warranties are based are expressly required or
permitted to be changed by the terms hereof and except and to the extent TBC and
IMR have waived inaccuracies pursuant to the procedures set forth in
Section 10.16 hereof;
(b) PERFORMANCE. The Buyer and the Transitory Subsidiary shall have
performed and complied with all of their respective agreements, covenants and
obligations hereunder in all material respects through the Closing;
(c) NO REGULATION OR COURT ORDER. There shall not be any Regulation
or Court Order in effect preventing or enjoining the consummation of any of the
Transactions are consummated;
(d) NO PROCEEDINGS OR LITIGATION. No Action by any governmental
authority or other Person shall have been instituted or threatened which
questions the validity or legality of the Transactions and which could
reasonably be expected to materially damage any Party hereto if the Transactions
are consummated, except to the extent that the institution or threat of such
Action is based solely on the act of the Party (or its Affiliates or
Representatives) seeking to avoid the Transactions;
(e) CERTIFICATES. The Buyer and the Transitory Subsidiary shall have
delivered to TBC, IMR and IMR General certificates of their respective officers
and others to the effect that each of the conditions specified in Section 8.2(a)
and (b) is satisfied in all respects;
(f) REGULATORY COMPLIANCE AND APPROVAL. All applicable waiting
periods (and any extensions thereof) under the HSR Act shall have expired or
otherwise been terminated and the Parties shall have in good faith undertaken or
have agreed to undertake to obtain all Permits, consents, waivers and approvals
of governmental authorities and shall have obtained all consents, waivers and
approvals of other Persons under the Material Contracts and Material Leases.
Each Party hereto shall be satisfied that all approvals required to be obtained
by any other Party hereto under any Regulations to carry out the Transactions
shall have been subject to a good faith undertaking to obtain by such other
Party and that each other Party hereto shall have complied with or undertaken to
comply with all Regulations applicable to the Transactions;
(g) OPINIONS. TBC, IMR and IMR General shall have received from
counsel to the Buyer and the Transitory Subsidiary an opinion in form and
substance mutually agreeable to the Parties and customary in transactions of the
type contemplated by this Agreement and the other Transaction Documents,
addressed to TBC, IMR and IMR General, and dated as of the Effective Date;
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(h) RESOLUTIONS. TBC shall have received from the Buyer and the
Transitory Subsidiary resolutions adopted by the board of directors and
stockholders, as the case may be, of such Parties, approving this Agreement, the
other Transaction Documents and the Transactions, certified by the corporate
secretary of such other Parties, as applicable;
(i) SATISFACTORY TO TBC, IMR AND IMR GENERAL. All actions to be
taken by the Buyer and the Transitory Subsidiary in connection with consummation
of the Transactions and all certificates, opinions, instruments, and other
documents required to effect the Transactions shall have been reasonably
satisfactory in form and substance to TBC, IMR and IMR General;
(j) OTHER AGREEMENTS. The Estoclet Agreement and the Stockholders
Agreement shall have been executed (or, if executed concurrently herewith, shall
remain in full force and effect) and delivered by each of the parties thereto;
(k) PAYMENT OF XXXXX X. XXXXXX. Payment of the Xxxxxx Debt shall
have been remitted by TBC to Xx. Xxxxxx.
(l) RELEASE OF GUARANTEES AND OTHER OBLIGATIONS. Prior to Closing
any and all guarantees, letters of credit, contingent obligations and all other
obligations given to third parties which arise from or are associated with the
Business or financing of TBC or any of the TBC Subsidiaries, by IMR, Xxxxx X.
Xxxxxx or any Affiliate thereof (the "RELEASED OBLIGATIONS") shall have been
unconditionally released and extinguished, unless IMR has elected to waive such
condition, in which case the Surviving Corporation shall continue to diligently
pursue the release and extinguishment of the Released Obligations after the
Effective Date. To the extent the Released Obligations are not unconditionally
released and extinguished prior to or on the Effective Date, Buyer and the
Transitory Subsidiary shall defend, indemnify and hold harmless IMR, Xxxxx X.
Xxxxxx and any Affiliates thereof from and against any Damages (as hereinafter
defined) in respect of Released Obligations to the extent that such Damages
first arise after the Effective Date as a result of actions or inactions by
Buyer; and
(m) SOLVENCY OPINION. TBC, IMR and IMR General shall have received
the Solvency Opinion.
TBC, IMR and IMR General may waive any condition specified in this Section 8.2
if it executes a writing so stating at or prior to the Closing or shall be
deemed to have waived any condition if Xxxxx Xxxxxxxx, XX, Xxxx Xxxxxx or Xxxxxx
Xxxxxxxx has actual knowledge that such condition is not met and TBC, IMR and
IMR General elect, nonetheless, to proceed to Closing.
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ARTICLE IX.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATIONS
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
statements contained in the Disclosure Schedule, any Supplement or in any
certificate, schedule, exhibit or instrument of conveyance delivered by or on
behalf of the Parties pursuant to this Agreement or in connection with the
Transactions shall be deemed to be representations and warranties of such
Parties. Subject to the provisions of Section 10.1 of this Agreement, the
representations, warranties and agreements of the Parties hereto shall survive
the Closing as follows: (a) except as set forth in Section 9.1(c) below, the
representations and warranties (other than those set forth in Section 6.6) and
the agreements of Buyer and the Transitory Subsidiary shall survive the
Effective Time indefinitely, and the representations and warranties of the Buyer
and the Transitory Subsidiary set forth in Section 6.6 shall terminate when the
applicable statute of limitations with respect to the Liabilities in question
expire (giving effect to any extensions and waivers thereof), and (b) the
representations, warranties and agreements of IMR, IMR General and TBC shall
survive the Closing and shall terminate May 31, 1998; PROVIDED, HOWEVER, that
the representations and warranties of IMR and TBC contained in Sections 5.11 and
5.12 of this Agreement shall terminate when the applicable statute of
limitations with respect to the Liabilities in question expire (giving effect to
any extensions or waivers thereof), and (c) the agreements of the Parties set
forth in Articles II, III and X and, subject to Section 9.2(g), in this Article
IX shall survive the Effective Time indefinitely and those set forth in
Sections 10.9 and 10.11 shall survive termination pursuant to Section 10.1
indefinitely.
9.2 AGREEMENT TO DEFEND AND INDEMNIFY.
(a) BY IMR. IMR shall indemnify, save and hold harmless the Buyer,
the Transitory Subsidiary, the Surviving Corporation and their respective
Affiliates and Representatives (collectively, the "BUYER INDEMNIFIED PARTIES"),
from and against any and all costs, losses, Taxes, liabilities, obligations,
damages, lawsuits, deficiencies, claims, demands, and expenses (whether or not
arising out of third-party claims), including without limitation interest,
penalties, costs of mitigation, losses in connection with any Environmental Law
(including, without limitation, costs for any clean-up, remedial, corrective or
response action, costs of compliance activities, fines and penalties), and other
losses resulting from any shutdown or curtailment of operations (although each
Party hereto who is an indemnified party shall, and shall cause its Affiliates
and Representatives to, use commercially reasonable efforts to mitigate any such
losses), damages to the environment, reasonable attorneys' fees and all
reasonable amounts paid in investigation, defense or settlement (incurred solely
in accordance with the terms, conditions and agreements hereof, including
without limitation the provisions of Section 9.2(e)) of any of the foregoing
(herein, "DAMAGES"), incurred in connection with, arising out of, resulting from
or incident to (i) any breach or inaccuracy of any representation or warranty
made by IMR, IMR General or TBC in or pursuant to this Agreement or any of the
other Transaction Documents; (ii) any breach of any covenant or agreement made
by IMR, IMR General or TBC in or pursuant to this Agreement or any of the other
Transaction Documents; (iii) any Damages for Taxes of TBC or any of the TBC
Subsidiaries for any taxable periods ending at or before
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March 31, 1996 (the "PRE-CLOSING TAX PERIOD") whether or not paid or payable
at any time prior to or after the Pre-Closing Tax Period, except (a) to the
extent of any reserves for such Taxes (other than a Tax Audit Adjustment, as
to which indemnification shall be available) reserved on the Closing Balance
Sheet, and (b) Damages for disallowed deductions for TBC costs and expenses
incurred in connection with the Transactions; (iv) any Damages (as a result
of Treasury Regulation Section 1.1502-6(a) or otherwise) for Taxes of any
Person (other than TBC or any of the TBC Subsidiaries) with which TBC or any
of the TBC Subsidiaries is or has been Affiliated or has filed or has been
required to file a consolidated, combined or unitary Tax Return prior to the
Closing; (v) any Damages of any nature (absolute, accrued, contingent or
otherwise) of TBC or any of the TBC Subsidiaries or any ERISA Affiliate not
otherwise reserved for on the Closing Balance Sheet (A) arising under or
relating to any TBC Plan other than any Multiemployer Plan with respect to
any event, action, failure to act or period prior to the Closing, or (B)
arising under or relating to any Multiemployer Plan with respect to any
event, action, failure to act or period prior to or up to the end of the
fifth calendar year beginning after the Closing, including in connection with
any "complete withdrawal" or "partial withdrawal" from such Multiemployer
Plan as defined in Sections 4203 and 4205, respectively, of ERISA, but
excluding any damages or liabilities under any collective bargaining
agreements for breach of contract or unfair labor practice which occurs after
the Closing; PROVIDED, HOWEVER, that the Buyer Indemnified Parties shall be
indemnified for Damages pursuant to this Section 9.2(a)(v) only when the
aggregate amount of such Damages exceeds $100,000 and, thereafter, only to
the extent of such excess; (vi) any Damages in respect of Dissenting Shares
(including, without limitation, any costs of establishing fair value of such
Dissenting Shares under the Delaware Law, and all amounts payable as a result
of such valuation proceedings); (vii) any Damages in respect of Sellers'
Transactional Expenses; (viii) any Damages in respect of actions or failures
to act by IMR General or its Representatives or agents in it capacity as
Payment Agent for the TBC Stockholders; (ix) any Damages or obligations
arising out of CERCLA, any equivalent state statute or any other
Environmental Law or Environmental Claims not otherwise reserved for on the
Closing Balance Sheet, except to the extent that such Liability or obligation
is caused primarily by actions of Buyer or the Surviving Corporation
occurring after the Effective Time; and (x) any Damages in respect of the
Loan Agreement not otherwise reserved for on the Closing Balance Sheet.
(b) BY THE BUYER. The Buyer shall indemnify, save and hold harmless
the TBC Stockholders, IMR, IMR General, the Former Holders and their respective
Representatives and Affiliates (collectively, the "STOCKHOLDER INDEMNIFIED
PARTIES") from and against any and all Damages incurred in connection with,
arising out of, resulting from or incident to (i) any breach or inaccuracy of
any representation or warranty made by the Buyer or the Transitory Subsidiary in
or pursuant to this Agreement or any of the other Transaction Documents; or (ii)
any breach of any covenant or agreement made by the Buyer or the Transitory
Subsidiary in or pursuant to this Agreement or any of the other Transaction
Documents; or (iii) any Damages in respect of Released Obligations to the extent
that such Damages first arise after the Effective Date as a result of actions or
inactions by Buyer; and (iv) any Damages resulting from any assertion,
investigation, prosecution or judicial determination that the Transactions
constituted a fraudulent conveyance or fraudulent transfer or otherwise operated
to hinder or defraud creditors of TBC.
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(c) DAMAGES. The term "DAMAGES" as used in this Section 9.2 is not
limited to matters asserted by third parties against any indemnified party, but
includes Damages incurred or sustained by any indemnified party in the absence
of third party claims. Payments by any indemnified party of amounts for which
such indemnified party is indemnified hereunder shall not be a condition
precedent to recovery. Any indemnifying party's obligation to indemnify any
indemnified party shall not limit any other rights, including without limitation
rights of contribution, which either party may have under statute or common law.
(d) COOPERATION. Each indemnified party shall cooperate in good
faith and in all reasonable respects with each indemnifying party and its
Representatives (including without limitation its attorneys) in the
investigation, trial and defense of any lawsuit or action and any appeal arising
therefrom; PROVIDED, HOWEVER, that such indemnified party may, at its own cost,
participate (by observation and suggestion only) in negotiations, arbitrations
and the investigation, trial and defense of such lawsuit or action and any
appeal arising therefrom. The Parties shall cooperate with each other in any
notifications to insurers, and in the provision of information and
documentation, at no cost to the indemnifying party, including without
limitation, copies of documents, availability and cooperation of executives and
employees, use of the indemnified party's facilities and access to any and all
books and records. In furtherance of the foregoing, the indemnified party shall
fully cooperate with the indemnifying party and, at the request of the
indemnifying party, provide any required waivers, consents, powers of attorney
and approvals reasonably necessary, desirable or required for the indemnifying
party to properly, without limitation, investigate, review, negotiate, defend,
compromise or settle any matter the indemnified party has undertaken pursuant to
this Agreement, including those matters set forth in Section 9.2(e) hereof.
(e) DEFENSE OF CLAIMS.
(i) If a claim for Damages (a "CLAIM") is to be made by a party
entitled to indemnification hereunder against the indemnifying party, the party
claiming such indemnification shall, subject to Section 9.1, give written notice
(a "CLAIM NOTICE") to the indemnifying party as soon as practicable after the
party entitled to indemnification becomes aware of any fact, condition or event
which may give rise to Damages for which indemnification may be sought under
this Section 9.2. If any lawsuit or enforcement action is filed against any
party entitled to the benefit of indemnity hereunder, written notice thereof
shall be given to the indemnifying party as promptly as practicable (and in any
event within fifteen (15) calendar days after the service of the citation or
summons). The failure of any indemnified party to give timely notice hereunder
shall not affect rights to indemnification hereunder, except to the extent that
the indemnifying party demonstrates actual damage caused by such failure. After
such notice, if the indemnifying party shall acknowledge in writing to the
indemnified party that the indemnifying party shall be obligated under the terms
of its indemnity hereunder in connection with such lawsuit or enforcement
action, then the indemnifying party shall be entitled, if it so elects at its
own cost, risk and expense, (a) to take control of the defense and investigation
of such lawsuit or enforcement action, (b) to employ and engage attorneys of its
own choice to handle and defend the same unless the named parties to such action
or proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party, and, in the good faith
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determination of counsel to the indemnifying party, notice of which shall be
promptly delivered to the indemnified party, there is an actual conflict of
interest between the indemnified party and the indemnifying party recognized
under applicable Rules of Professional Responsibility (such determination not
to consider the Claim for Damages the indemnified party has asserted or may
ultimately assert against the indemnifying party), in which event the
indemnified party shall be entitled, at the indemnifying party's reasonable
cost, risk and expense, to separate counsel of its own choosing, and (c) to
compromise or settle such lawsuit or enforcement action, which compromise or
settlement shall be made only with the written consent of the indemnified
party, such consent not to be unreasonably withheld, delayed or conditioned.
If the indemnifying party fails to assume the defense of such lawsuit or
enforcement action within fifteen (15) calendar days after receipt of the
Claim Notice, the indemnified party against which such lawsuit or enforcement
action has been asserted will (upon delivering notice to such effect to the
indemnifying party) have the right to undertake, at the indemnifying party's
cost and expense, the defense, compromise or settlement of such lawsuit or
enforcement action on behalf of and for the account and risk of the
indemnifying party; PROVIDED, HOWEVER, that such lawsuit or enforcement
action shall not be compromised or settled without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld, delayed
or conditioned. In the event the indemnified party assumes the defense of
the lawsuit or enforcement action, the indemnified party will keep the
indemnifying party reasonably informed of the progress of any such defense,
compromise or settlement; PROVIDED, HOWEVER, that the indemnifying party may,
at its own cost, participate (by observation and suggestion only) in
negotiations, arbitrations and the investigation, trial and defense of any
such lawsuit or enforcement action and any appeal arising therefrom. The
indemnifying party shall be liable for any settlement of any lawsuit or
enforcement action effected pursuant to and in accordance with this Section
9.2 and for any final judgment (subject to any right of appeal), and the
indemnifying party agrees to indemnify and hold harmless an indemnified party
from and against any Damages by reason of such settlement or judgment.
(ii) In furtherance of the foregoing paragraph (i) above and
except for any lawsuits or enforcement actions (which are covered in paragraph
(e)(i) above), Buyer and the Surviving Corporation agree and acknowledge that
they shall make their respective best reasonable commercial efforts to advise
IMR as soon as practicable upon becoming aware of any fact, condition or event
or upon the receipt of notice of any Action, claim or other notice (whether
formal or otherwise) of any investigation, claim, audit, examination, review or
other matter (including without limitation all matters or issues pertaining to
Taxes, ERISA, Benefit Arrangements, or Environmental Matters) which may give
rise to a Claim under this Agreement or any Transaction Document. The failure
of the Buyer and/or the Surviving Corporation to give timely notice hereunder
shall not affect their rights to indemnification, except to the extent IMR
demonstrates actual damage caused by such failure. If, after the receipt of
such notice and prior to the expiration of the Examination Period (as defined
below), IMR acknowledges in writing to the Buyer Indemnified Parties that IMR
shall be obligated under the terms of its indemnity with respect to the matter
in question, IMR shall have the right under the terms hereof (a) to undertake,
at its own cost, risk and expense, the investigation, review and defense of any
existing or potential claim, audit, examination, review or other such event, (b)
to employ and engage attorneys, accountants and other professionals and
consultants of its own choice to review, investigate, negotiate and defend the
same unless the parties to such matter include both IMR and/or one of
64
its Affiliates and TBC and/or one of its Affiliates, and, in the good faith
determination of counsel to IMR, notice of which shall be promptly delivered
to TBC, there is an actual conflict of interest between such Persons
recognized under applicable Rules of Professional Responsibility (such
determination not to consider the Claim for Damages TBC and/or one of its
Affiliates has asserted or may ultimately assert against IMR and/or one of
its Affiliates), in which event TBC and/or such Affiliate shall be entitled,
at IMR's reasonable cost, risk and expense, to separate counsel of its own
choosing, and (c) to compromise or settle such claim, audit, examination,
review or other such matter, which compromise or settlement shall be made
only with the written consent of TBC, which consent shall not be unreasonably
withheld, delayed or conditioned. If IMR fails to so acknowledge such an
indemnification obligation with respect to such matter prior to the
expiration of the Examination Period, TBC shall have the right to undertake,
at IMR's expense, the investigation, review and defense of the existing or
potential claim, audit, examination, review or other such event (including
compromise and settlement) on behalf of and for the account and risk of IMR;
PROVIDED, HOWEVER, that the matter shall not be compromised or settled
without the written consent of IMR, which consent shall not be unreasonably
withheld, delayed or conditioned. In the event TBC assumes the defense of
the matter, TBC will keep IMR reasonably informed of the progress of any such
defense, compromise or settlement; PROVIDED, HOWEVER, that IMR may, at its
own cost, participate (by observation and suggestion only) in negotiations,
arbitrations and the investigation, trial and defense of any such matter and
any appeal arising therefrom. IMR shall be liable for any settlement of any
matter effected pursuant to and in accordance with this Section 9.2 and for
any final judgment (subject to any right of appeal), and IMR agrees to
indemnify and hold harmless TBC from and against any Damages by reason of
such settlement or judgment. The foregoing shall specifically apply to any
and all federal or state income or other Tax audit examinations, including
the present IRS audit (which shall continue to be undertaken by IMR, and,
further, is specifically subject to the provisions of 9.2(d) hereof). For
the purposes of this Agreement, "EXAMINATION PERIOD" shall mean the lesser of
(a) one-half of the remaining period of time in which TBC is required to
respond to any third party in respect of the circumstances contemplated by
this Section 9.2(e)(ii), giving effect to any extensions or waivers of such
period secured by IMR, and (b) 30 days following the date upon which IMR
receives the notice contemplated by the first sentence of this paragraph.
(f) REPRESENTATIVES. No individual Representative of any Party, or
their respective Affiliates, shall be personally liable for any Damages under
the provisions contained in this Section 9.2. Nothing herein shall relieve any
party of any Liability to make any payment expressly required to be made by such
party pursuant to this Agreement.
(g) OTHER MATTERS. Notwithstanding anything to the contrary
contained in this Agreement:
(i) IMR's liability under the indemnification provisions of
Section 9.2(a) hereof or otherwise under this Agreement shall be subject to
reduction in an amount equal to the value of any net tax benefit (giving effect
to the time value of money at a discounting rate of 10%) realized (by reason of
a tax deduction, basis adjustment, shifting of income, credits and/or deductions
or otherwise from one or more fiscal periods to another) or insurance benefit
realized
65
by Buyer in connection with the loss or damage suffered by Buyer which forms
the basis of IMR's liability hereunder;
(ii) in no event shall the Buyer Indemnified Parties seek
indemnification from IMR pursuant to Sections 9.2(a)(i) and 9.2(a)(ix) hereof
until the aggregate amount of Damages under Sections 9.2(a)(i) and 9.2(a)(ix)
for which the Buyer Indemnified Parties are seeking indemnification exceeds
$600,000 (the "DEDUCTIBLE");
(iii) the aggregate amount of liability for Damages of IMR
in respect of Section 9.2(a) (including but not limited to any and all
liabilities of IMR for costs, expenses and attorneys' fees paid or incurred in
connection therewith or in connection with the curing of any and all
misrepresentations or breaches of representations, warranties or covenants under
this Agreement) is limited to an amount which does not exceed the Purchase Price
actually paid to and received by the Payment Agent;
(iv) the indemnification obligations of IMR pursuant to Section
9.2(a)(i) (except with respect to the representations and warranties made in
Section 5.11 and 5.12 of this Agreement), 9.2(a)(vi) and 9.2(a)(ix) shall
survive until May 31, 1998. The indemnification obligations of IMR under
Section 9.2(a)(i) (solely with respect to the representations and warranties
made in Sections 5.11 and 5.12 of this Agreement), 9.2(a)(ii), 9.2(a)(iii),
9.2(a)(iv), 9.2(a)(v), 9.2(a)(vii), 9.2(a)(viii) and 9.2(a)(x) shall extend
until the termination of the applicable statute of limitations; PROVIDED,
HOWEVER, that, subject to the provisions of Section 9.2(g)(vii) below, (A) the
Buyer Indemnified Parties shall have the right to make a Claim hereunder prior
to the time at which the Deductible (if any) that is applicable to such Claim
has been surpassed for the purpose of asserting such Claim within the relevant
survival period of the applicable indemnification obligation, and (B) any such
Claim made within such period shall, to the extent such Deductible ultimately is
met, survive until its final resolution;
(v) it is specifically understood and agreed that in the event
a misrepresentation made herein or pursuant hereto or a breach of any
representation, warranty or covenant contained herein is discovered by Buyer and
asserted by it after the Closing, the remedy of Buyer shall be limited to
indemnification as set forth in Section 9.2(a) hereof (as limited by the
provisions set forth in this Section or elsewhere in this Agreement), and Buyer
shall not be entitled to the rescission of this Agreement, nor shall a
multiplier be used in the computation of Damages as the amount of a Claim;
(vi) neither (A) the termination of the representations,
warranties, covenants or agreements contained herein, nor (B) the expiration of
the indemnification obligations described above, will affect the rights of a
Party in respect of any Claim made by such Party in a writing conforming to the
provisions of Section 9.2(g)(vii) below received by an indemnifying Party prior
to the expiration of the applicable survival period provided herein; and
(vii) to the extent any Claim is made hereunder by any
indemnified party, such Claim shall include a written explanation of the nature
of and reason for the Claim,
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the dollar amount thereof and such other supporting detail as can be
reasonably provided by the indemnified party.
ARTICLE X.
MISCELLANEOUS
10.1 TERMINATION.
(a) TERMINATION OF AGREEMENT. This Agreement may be terminated any
time prior to the Closing:
(i) By the mutual written consent of the Buyer, the Transitory
Subsidiary, TBC, IMR and IMR General;
(ii) By the Buyer or the Transitory Subsidiary at any time prior
to the Effective Time (A) if TBC, IMR or IMR General has breached any
representation, warranty, or covenant contained in this Agreement or in any of
the other Transaction Documents in any material respect, or (B) if the Closing
shall not have occurred on or before April 30, 1996 by reason of the failure of
any condition set forth in Section 8.1 hereof (unless the failure results
primarily from the Buyer or the Transitory Subsidiary breaching any
representation, warranty, or covenant contained in this Agreement or any of the
other Transaction Documents);
(iii) By TBC, IMR or IMR General at any time prior to the
Effective Time (A) if the Buyer or the Transitory Subsidiary has breached any
representation, warranty, or covenant contained in this Agreement or in any
of the other Transaction Documents in any material respect, or (B) if the
Closing shall not have occurred on or before April 30, 1996 by reason of the
failure of any condition set forth in Section 8.2 hereof (unless the failure
results primarily from TBC, IMR or IMR General breaching any representation,
warranty, or covenant contained in this Agreement or any of the other
Transaction Documents); and
(iv) By any Party through the delivery or receipt of written
notice of objection to a Supplement to or from the other Party or Parties
pursuant to the procedures described in Section 10.16 hereof. In order to
terminate this Agreement, such Supplement shall be material (in the receiving
Party's sole and reasonable discretion) to the representation or warranty so
modified. No inadvertence or mistake on the part of a Party, which results in a
Supplement, will be deemed "willful."
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 10.1(a) above: (i) all rights and obligations of the
Parties hereunder shall terminate without any liability of any Party to any
other Party (except for any liability of any Party for wilful, as opposed to
inadvertent or mistaken, breach prior to the termination of this Agreement);
(ii) each Party will redeliver all documents, work papers and other material of
any other Party relating to the Transactions, whether so obtained before or
after the execution hereof, to the Party furnishing the same; and (iii) the
provisions of Section 10.9 shall continue in full force and effect.
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The foregoing provisions shall not limit or restrict the availability of
specific performance or other injunctive relief to the extent that specific
performance or such other relief would otherwise be available to a Party
hereunder.
10.2 ASSIGNMENT. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any Party without the prior written
consent of the other Parties; except that the Transitory Subsidiary or the Buyer
may, without such consent, assign all such rights and obligations to a
wholly-owned subsidiary (or a partnership controlled by the Transitory
Subsidiary or the Buyer) or Subsidiaries of the Transitory Subsidiary or the
Buyer or to a successor in interest to the Transitory Subsidiary or the Buyer
which shall assume all obligations of the Transitory Subsidiary or the Buyer, as
the case may be, under this Agreement. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the Parties hereto and their
respective successors and permitted assigns, and, except as otherwise provided
in Section 10.14 hereof, no other Person shall have any right, benefit or
obligation under this Agreement as a third party beneficiary or otherwise.
10.3 NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing
and shall be deemed to have been duly given when received if personally
delivered; when transmitted if transmitted by telecopy, electronic or digital
transmission method; the day after it is sent, if sent for next day delivery
to a domestic address by recognized overnight delivery service (E.G., Federal
Express); and upon receipt, if sent by certified or registered mail, return
receipt requested. In each case notice shall be sent to:
If to TBC or IMR, addressed to:
Xxxxx X. Xxxxxxxx, XX
Xxxxxx Investors, Inc.
Suite 2500
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx, Esq.
Xxxxxxx Xxxxxx, Esq.
Xxxxxx and Xxxxxx, P.A.
2400 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
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If to the Transitory Subsidiary or the Buyer, addressed to:
Xxxxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxx & Sons, LLC
Suite 1750
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
10.4 ENTIRE AGREEMENT; AMENDMENTS; EXTENSIONS AND WAIVERS. This Agreement
(including the other Transaction Documents and other documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof. The Parties may mutually amend any provision of this Agreement at any
time prior to the Effective Time; PROVIDED, HOWEVER, that any amendment effected
subsequent to the approval of the TBC Stockholders at the Stockholders Meeting
will be subject to the restrictions contained in Delaware Law. No amendment of
any provision of this Agreement shall be valid unless the same shall be in
writing and signed by all of the Parties. Without limitation of the provisions
of Section 10.16 hereof, no waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
10.5 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.6 INVALIDITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other instrument referred to herein.
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10.7 TITLES. The titles, captions or headings of the Articles and Sections
herein are for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
10.8 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party (or any Affiliate
thereof) shall issue any press release or make any public announcement (which
shall include making any announcements to, or conducting any discussions with,
the agents of any Party, except that any Party may conduct confidential
discussions with its own agents) relating to the subject matter of this
Agreement without the prior written approval of the other Parties; PROVIDED,
HOWEVER, that in the case of announcements, statements, acknowledgments or
revelations which any such Party is required by law to make, issue or release,
the making, issuing or releasing of any such announcement, statement,
acknowledgment or revelation by the Party so required to do so by law shall not
constitute a breach of this Agreement if such Party shall have given, to the
extent reasonably possible, not less than two (2) business days prior notice to
the other Parties, and shall have attempted, to the extent reasonably possible,
to clear such announcement, statement, acknowledgment or revelation with the
other Parties. Each Party hereto agrees that it will not unreasonably withhold
any such consent or clearance.
10.9 CONFIDENTIALITY.
(a) CONFIDENTIALITY AGREEMENT. Each Party hereto acknowledges that
the execution and delivery of that certain Confidentiality and Non-Disclosure
Agreement dated November 6, 1995, and the letter agreement dated December 21,
1995, binds the Parties with each of their respective terms and shall survive
the termination of any discussions or negotiations which are the subject of this
Agreement. Additionally, the Parties acknowledge that this Agreement and the
Transactions are of a confidential nature and will not be disclosed, except to
consultants, advisors and Affiliates, or as required by law.
(b) PRESERVATION OF CONFIDENTIALITY. In connection with the
negotiation of this Agreement, the preparation for the consummation of the
Transactions, and the performance of obligations hereunder, each of the
Parties acknowledges that it will have access to confidential information
relating to each of the other Parties hereto, including technical or
marketing information, ideas, methods, developments, inventions,
improvements, business plans, trade secrets, scientific or statistical data,
diagrams, drawings, specifications, customer, agent and supplier lists,
know-how or other proprietary information relating thereto, together with all
analyses, compilations, studies or other documents, records or data prepared
by such Party or their respective Representatives which contain or otherwise
reflect or are generated from such information ("CONFIDENTIAL INFORMATION").
The term "CONFIDENTIAL INFORMATION" does not include information received by
a Party in connection with the Transactions which (i) is or becomes generally
available to the public other than as a result of a disclosure by such Party
or its Representatives, (ii) was within such Party's possession prior to its
being furnished to such Party by or on behalf of the other Party in
connection with the Transactions; PROVIDED that the source of such
information was not known by such Party to be bound by a confidentiality
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the other Party or any other Person with respect to such
information or (iii) becomes available to such Party on a non-
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confidential basis from a source other than the other Party or any of their
respective Representatives; PROVIDED that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the other Party or any other Person with
respect to such information.
(c) NON-DISCLOSURE. Each Party shall treat all Confidential
Information of the other Parties as confidential, preserve the confidentiality
thereof and not disclose any such Confidential Information, except to its
Representatives and Affiliates who need to know such Confidential Information in
connection with the Transactions. Each Party shall use all reasonable efforts
to cause its Representatives to treat all such Confidential Information of the
other Parties as confidential, preserve the confidentiality thereof and not
disclose any such Confidential Information. Each Party shall be responsible for
any breach of this Agreement by any of its Representatives. If, however,
Confidential Information is disclosed, the Party responsible for such disclosure
shall immediately notify the other Parties in writing and take all reasonable
steps required to prevent further disclosure.
(d) LEGAL REQUEST FOR CONFIDENTIAL INFORMATION. If one Party or any
of its Representatives or Affiliates is requested or required (by oral
questions, interrogatories, requests for information or documents in legal
proceedings, subpoena, civil investigative demand or other similar process) or
is required by operation of law to disclose any Confidential Information, such
Party shall provide the other Parties with prompt written notice of such request
or requirement, which notice shall, if practicable, be at least 48 hours prior
to making such disclosure, so that the other Parties may seek a protective order
or other appropriate remedy and/or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or the
receipt of such a waiver, such Party or any of its Representatives are
nonetheless, in the opinion of counsel, legally compelled to disclose
Confidential Information, then such Party may disclose that portion of the
Confidential Information which such counsel advises is legally required to be
disclosed; PROVIDED that such Party uses its reasonable efforts to preserve the
confidentiality of the Confidential Information, whereupon such disclosure shall
not constitute a breach of this Agreement.
(e) RETURN OF CONFIDENTIAL INFORMATION. Until the Closing or the
termination of this Agreement, all Confidential Information will remain the
property of the Party who originally possessed such information. In the event
of the termination of this Agreement, each of the Parties shall, and shall cause
its Affiliates to, return promptly every document furnished to them by any other
Party in connection with the Transactions and any copies thereof which have been
made, and shall cause its Representatives to whom such documents were furnished
promptly to return such documents and any copies thereof any of them may have
made, other than documents which are otherwise publicly available.
10.10 CUMULATIVE REMEDIES. All rights and remedies of any Party hereto
are cumulative of each other and of every other right or remedy such party
may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
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10.11 FEES AND EXPENSES. Each Party shall bear its own fees and expenses
in connection with the Transactions, except in connection with fees and
out-of-pocket expenditures incurred in connection with obtaining the Solvency
Opinion, of which each of Buyer and IMR shall be responsible for one-half.
As noted in the definition of Sellers' Transactional Expenses, professional
fees and expenses incurred by or on behalf of TBC and the TBC Subsidiaries in
seeking to consummate the Transactions shall be considered "Sellers'
Transactional Expenses" and borne by the Former Holders.
10.12 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Delaware.
10.13 NO SOLICITATION OF EMPLOYEES OR AGENTS. For a period of two years
from the date hereof, neither any Party hereto nor any of their respective
Affiliates shall, directly or indirectly, solicit to employ any of the
current officers or employees of the other Parties (or the respective
Affiliates thereof) or solicit to engage any of the agents of the other
Parties, so long as they remain employed by or subject to an agency agreement
with the other Parties, without the other Party's written permission.
10.14 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns; PROVIDED, HOWEVER, that the
provisions in Section 9.2 above concerning insurance and indemnification are
intended for the benefit of the individuals specified therein and their
respective legal representatives.
10.15 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
otherwise requires. The word "including" shall mean including without
limitation.
10.16 SUPPLEMENTATION OF SCHEDULES. Any Party hereto may elect to
deliver a supplement (a "SUPPLEMENT") to one or more of the Disclosure
Schedules (or other disclosure schedules in the case of the Buyer and the
Transitory Subsidiary), contemplated by this Agreement and previously
delivered to the other Parties in accordance with the procedures set forth in
this Section 10.16. Any and all Supplements must be in writing and must be
delivered to the other Parties hereto before the date that is two (2) days
prior to the scheduled Effective Date (such date of delivery, the "DELIVERY
DATE"). The other Parties hereto shall be given the opportunity during the
two (2) business days following the Delivery Date to consider a proposed
Supplement, and if such Parties do not object to the contents thereof within
such period, the Schedules in question will be deemed amended by the
Supplement. If the other Party or Parties object to a proposed Supplement,
the
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sole remedy of such objecting Party or Parties shall be the termination of
this Agreement in accordance with Section 10.1(a)(iv) hereof.
10.17 ACTIONS AND OBLIGATIONS OF THE PAYMENT AGENT. Any actions or
obligations of the Payment Agent (in its capacity as such) or its Affiliates and
Representatives hereunder shall be conclusively deemed to be undertaken solely
for the benefit of the Former Holders and not for its personal account.
10.18 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first written above.
"TBC"
THE BEKINS COMPANY,
a Delaware corporation
By /s/ Xxxxx X. Xxxxxxxx, XX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx, XX
Title: Executive Vice President
"IMR"
IMR FUND, L.P.,
a Delaware limited partnership
By: IMR Management Partners, L.P.,
its general partner
By: IMR General, Inc.
By /s/ Xxxxx X. Xxxxxxxx, XX
------------------------------
Name: Xxxxx X. Xxxxxxxx, XX
Title: Vice President
"IMR GENERAL"
IMR GENERAL, INC.,
a Delaware corporation
By /s/ Xxxxx X. Xxxxxxxx, XX
------------------------------
Name: Xxxxx X. Xxxxxxxx, XX
Title: Vice President
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"TRANSITORY SUBSIDIARY"
TRASUB, INC.
a Delaware corporation
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
"BUYER"
INTERNATIONAL LOGISTICS LIMITED,
a Delaware corporation
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
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