EXHIBIT 2.1
CONFORMED EXECUTION COPY
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STOCK AND ASSET PURCHASE AGREEMENT
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AMONG
TRANSAMERICA FINANCE CORPORATION,
A DELAWARE CORPORATION,
TRANSAMERICA COMMERCIAL FINANCE CORPORATION, I,
A DELAWARE CORPORATION,
TRANSAMERICA COMMERCIAL HOLDINGS LIMITED,
A COMPANY ORGANIZED UNDER THE LAWS OF ENGLAND,
TRANSAMERICA LEASING INC.,
A DELAWARE CORPORATION,
TRANSAMERICA GMBH, INC.,
A DELAWARE CORPORATION,
BWAC TWENTY-ONE, INC.,
A DELAWARE CORPORATION,
AEGON U.S. CORPORATION,
AN IOWA CORPORATION,
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
A DELAWARE CORPORATION
DATED AS OF AUGUST 4, 2003
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TABLE OF EXHIBITS
Exhibit 1.01(a) Accounting Principles
Exhibit 1.01(b) Special Adjustments
Exhibit 1.01(e) Other Excluded Assets
Exhibit 1.01(g) Other Excluded Liabilities
Exhibit 1.01(h) Excluded Subsidiaries
Exhibit 1.01(i) Included Liabilities
Exhibit 1.01(l) Seller's Knowledge
Exhibit 1.01(m) Purchased Entities
Exhibit 1.01(n) Form of Indemnity Agreement
Exhibit 1.01(o) Form of Loss Protection Agreement
Exhibit 1.01(p) Sample Calculation of Adjusted Shareholders' Equity;
Sample Calculation of Adjusted Acquired ISF Asset Amount
Exhibit 1.01(q) Form of Transition Services Agreement
Exhibit 1.01(r) Other Acquired Business Assets
Exhibit 1.01(s) Portfolio Information
Exhibit 2.01(f)(i) Acquired ISF Assets
Exhibit 2.01(f)(ii) Assumed ISF Liabilities
Exhibit 2.04(a)(vi) Form of Xxxx of Sale
Exhibit 5.03(e) Election Under Section 338(h)(10)
Exhibit 5.03(e)(ii) Other 338 Entities
Exhibit 5.04(d)(iv) Certain Instruments
Exhibit 5.10(a) Letters of Credit
Exhibit 5.10(b) Guarantees
Exhibit 7.05(b) U.K. Pension Scheme
DISCLOSURE SCHEDULE
Section 3.02(b) Qualifications of the Purchased Entities
Section 3.04(a) Ownership and Organization of the Purchased Entities
Section 3.04(b) Equity Interests of the Purchased Entities
Section 3.06 Authorizations of the Selling Entities
Section 3.08 Certain Liabilities of the Purchased Entities
Section 3.09(a) Changes in Conduct of the Acquired Businesses
Section 3.09(b) Conduct of the Acquired Businesses
Section 3.09(c) Changes in Credit Approval Processes
Section 3.11(b) Compliance with Law
Section 3.12(a) Material Contracts
Section 3.12(b) Material Contracts not in Full Force and Effect;
Defaults under Material Contracts
Section 3.13(a) Owned Property; Leased Property
Section 3.13(c) Lease Consents
Section 3.14(a) Assets
Section 3.15(a) Company Benefit Plans; Company Benefit Arrangements
Section 3.15(b) Employee Benefit Plans
Section 3.15(c) Foreign Benefit Plans
Section 3.15(d) Foreign Employee Labor Organizations
Section 3.15(e) Labor Issues
Section 3.16 Taxes
Section 3.16(e) Canadian Purchased Entities
Section 3.17 Derivative Instruments
Section 3.18 Insurance
Section 3.19(a) Owned Intellectual Property
Section 3.19(b) Licensed Intellectual Property
Section 3.19(c) Infringement of Intellectual Property
Section 3.20(a) Actions under any Environmental Law
Section 3.20(c) Environmental Assessment Reports
Section 3.21(a) Validity of Financing Contracts, Credit Enhancements
and Loan Documents
Section 3.21(b) Status of Financing Contracts, Credit Enhancements
and Loan Documents
Section 3.21(c) Subordination of Rights in Financing Contracts
Section 3.21(d) Credit Enhancements
Section 3.21(f)(ii) U.S. Government Obligors
Section 3.22(a) Portfolio Property
Section 3.22(b) Portfolio Property not in Compliance with Law;
Insurance of Portfolio Property
Section 3.23 Mortgage Loan Schedule
Section 3.23(a) Cross Collateralized Mortgage Loans
Section 3.23(a)(ii) Mortgages Due on Sale
Section 3.23(c)(iii) Encumbrances on Mortgaged Property
Section 3.23(g)(i) Condition of Mortgaged Property
Section 3.23(g)(ii) Certain Mortgage Loans
Section 3.23(h) Claims and Impairment of Title Policies
Section 3.23(l) Participations
Section 3.23(m) Ground Leases
Section 3.23(q) Other Mortgage Loans
Section 5.01 Restrictions on Purchased Entities
Section 5.01(b) Certain Relationships of the Purchased Entities
Section 5.01(d)(ix) Indebtedness of the Purchased Entities
Section 5.07(d) Intercompany Obligations
Section 5.08 Securitizations
Section 7.05(a) Assumed Benefit Plans and Assumed Benefit Arrangements
Section 7.06 Assumed Benefit Arrangements
STOCK AND ASSET PURCHASE AGREEMENT, dated as of August 4, 2003, by and
among TRANSAMERICA FINANCE CORPORATION, a Delaware corporation (the "Parent"),
TRANSAMERICA COMMERCIAL FINANCE CORPORATION, I, a Delaware corporation (the
"Seller"), TRANSAMERICA COMMERCIAL HOLDINGS LIMITED, a company organized under
the Laws of England ("TCHL"), TRANSAMERICA GmbH INC., a Delaware corporation
("TGI"), BWAC TWENTY-ONE, INC., a Delaware corporation ("BWAC 21"), TRANSAMERICA
LEASING INC., a Delaware corporation ("TLI"), the Affiliates of Parent owning
Acquired ISF Assets which are named on the signature pages hereof or become
parties hereto in accordance with this Agreement (such Affiliates together with
TLI, the "Asset Sellers"), AEGON U.S. CORPORATION, an Iowa corporation
("Aegon"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (the
"Purchaser").
WHEREAS, the Seller owns all the issued and outstanding shares (the
"Shares") of common stock, par value $1.00 per share, of Transamerica Commercial
Finance Corporation, II, a Delaware corporation (the "Company");
WHEREAS, on the terms and subject to the conditions set forth herein,
at Closing, the Seller shall sell to the Purchaser (or the applicable Acquiring
Subsidiary) and the Purchaser (or the applicable Acquiring Subsidiary) shall
purchase from Seller, the Shares;
WHEREAS, prior to the consummation of the purchase and sale of the
Shares contemplated hereby, on the terms and subject to the conditions set forth
herein, (i) each of the Parent and the Seller shall and shall cause each of
their respective Subsidiaries and Affiliates (other than any Purchased Entity)
to transfer all assets and properties owned by it or such Subsidiaries and
Affiliates and used in connection with the conduct or operation of the Acquired
Businesses (other than ISF Excluded Assets), consistent with their respective
past practices, to be transferred to one or more Purchased Entities; and (ii)
the Seller shall cause the Purchased Entities to transfer the Excluded Assets,
Excluded Liabilities and Excluded Employees to the Seller or its designee (which
shall not be a Purchased Entity);
WHEREAS, simultaneous with the consummation of the purchase and sale of
the Shares and the other transactions contemplated hereby, on the terms and
subject to the conditions set forth herein, at Closing, TLI and the Parent
shall, and shall cause any other of their applicable Subsidiaries or Affiliates
to, sell, transfer, assign and delegate to the Purchaser (or one or more
Acquiring Subsidiaries), and the Purchaser (or the applicable Acquiring
Subsidiaries) shall purchase, accept and assume from TLI, the Parent and their
applicable Subsidiaries and Affiliates, the Acquired ISF Assets and the Assumed
ISF Liabilities;
WHEREAS, the Parent and the Seller together own 71% of the issued and
outstanding Capital Stock of Transamerica Public Finance LLC, a Delaware limited
liability company ("Public Finance");
WHEREAS, simultaneous with the consummation of the purchase and sale of
the Shares and the other transactions contemplated hereby, on the terms and
subject to the conditions set forth herein, at Closing, the Parent and the
Seller shall sell to the Purchaser (or one or more Acquiring Subsidiaries) and
the Purchaser (or the applicable Acquiring Subsidiaries) shall purchase from the
Parent and the Seller, all of the Public Finance Interests owned by them;
WHEREAS, TCHL owns all of the issued and outstanding Capital Stock
("TCFL Shares") of Transamerica Commercial Finance Limited, a corporation
existing under the Laws of England ("TCFL");
WHEREAS, simultaneous with the consummation of the purchase and sale of
the Shares and the other transactions contemplated hereby, on the terms and
subject to the conditions set forth herein, at Closing, TCHL shall sell to the
U.K. Purchaser and the U.K. Purchaser shall purchase from TCHL, all of the TCFL
Shares;
WHEREAS, TGI owns all of the issued and outstanding Capital Stock
("TFBV Shares") of Transamerica Financieringsmaatschappij B.V., a private
company with limited liability existing under the Laws of the Netherlands, with
its registered office in Amsterdam ("TFBV");
WHEREAS, simultaneous with the consummation of the purchase and sale of
the Shares and the other transactions contemplated hereby, on the terms and
subject to the conditions set forth herein, at Closing, TGI shall sell to the
Purchaser (or one or more Acquiring Subsidiaries) and the Purchaser (or the
applicable Acquiring Subsidiaries) shall purchase from TGI, all of the TFBV
Shares;
WHEREAS, TGI and BWAC 21 own all of the issued and outstanding Capital
Stock ("TGMBH Shares") of Transamerica GmbH, a company existing under the Laws
of Germany, with its registered office in Frankfurt ("TGMBH");
WHEREAS, simultaneous with the consummation of the purchase and sale of
the Shares and the other transactions contemplated hereby, on the terms and
subject to the conditions set forth herein, at Closing, TGI and BWAC 21 shall
sell to the Purchaser (or one or more Acquiring Subsidiaries) and the Purchaser
(or the applicable Acquiring Subsidiaries) shall purchase from TGI and BWAC 21,
all of the TGMBH Shares; and
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants herein contained, and intending to be legally bound
hereby, the Purchaser, each of the Selling Entities and Aegon hereby agree as
follows:
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ARTICLE I
DEFINITIONS
.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Accounting Principles" means the accounting principles (including
accounting methods, practices and procedures) set forth on Exhibit 1.01(a). When
the accounting principles (including accounting methods, practices and
procedures) set forth on Exhibit 1.01(a) do not specifically address a
particular matter necessary to prepare the Cut-Off Date Balance Sheet of the
Company, Public Finance, TCFL, TFBV or TGMBH or the Cut-Off Date Statement of
Acquired ISF Assets and Liabilities, then the accounting principles (including
accounting methods, practices and procedures) set forth on Exhibit 1.01(a) shall
be supplemented in accordance with Applicable GAAP applied consistently with the
past practices and procedures of the Company, Public Finance, TCFL, TFBV or
TGMBH or the Asset Sellers (as applicable) but only to the extent necessary to
address such matter. To the extent that an accounting principle, method,
practice or procedure set forth on Exhibit 1.01(a) is not in accordance with
Applicable GAAP as consistently applied by the Company, Public Finance, TCFL or
the Asset Sellers, as applicable, such accounting principle, method, practice or
procedure set forth on Exhibit 1.01(a) shall be disregarded for purposes of
preparing the applicable Cut-Off Date Balance Sheet or the Cut-Off Date
Statement of Acquired ISF Assets and Liabilities but shall be treated as a
Special Adjustment and shall be set forth on Exhibit 1.01(b).
"Acquired Business Asset Transferor" has the meaning set forth in
Section 5.12(a).
"Acquired Businesses" means (a) all of the businesses, operations and
activities conducted by the Purchased Entities, (b) the Other Acquired Business
Assets and (c) the Acquired International Structured Finance Business, but shall
not mean, in any case, any Excluded Assets or any Excluded Liabilities.
"Acquired International Structured Finance Business" means all of the
business, assets, operations and activities conducted by the International
Structured Finance division of TLI, other than the business, assets, operations
and activities related to the ISF Excluded Assets.
"Acquired ISF Assets" means each of the assets described on Exhibit
2.01(f)(i).
"Acquiring Subsidiary" means any Affiliate of the Purchaser designated
by the Purchaser to acquire any of the Shares, the Public Finance Interests, the
TCFL Shares, the TFBV Shares, the TGMBH Shares or the Acquired ISF Assets.
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"Acquisition" means the sale of (a) the Shares by the Seller to the
Purchaser or the relevant Acquiring Subsidiary, (b) the Public Finance Interests
by the Parent and the Seller to the Purchaser or the relevant Acquiring
Subsidiary, (c) the TCFL Shares by TCHL to the Purchaser or the relevant
Acquiring Subsidiary, (d) the TFBV Shares by TGI to Purchaser or the relevant
Acquiring Subsidiary, (e) the TGMBH Shares by TGI and BWAC 21 to Purchaser or
the relevant Acquiring Subsidiary, (f) the Acquired ISF Assets by the Asset
Sellers to Purchaser or the relevant Acquiring Subsidiary and (g) the
consummation of the other transactions contemplated by this Agreement and the
Related Agreements.
"Action" means any civil, criminal or administrative claim, action,
suit, arbitration, hearing, investigation, inquiry or proceeding by or before
any Governmental Authority.
"Additional Duty" has the meaning set forth in Section 5.03(a)(xi).
"Adjusted Acquired ISF Assets Amount" means the excess of the aggregate
amount of the Acquired ISF Assets over the aggregate amount of the Assumed ISF
Liabilities, in each case, as reflected on the Adjusted Cut-Off Date Acquired
ISF Assets and Liabilities Pricing Schedule. Solely for purposes of providing an
example, an illustration of the calculation of the Adjusted Acquired ISF Assets
Amount, based upon a hypothetical Cut-Off Date and hypothetical component values
thereof is attached hereto as Exhibit 1.01(p).
"Adjusted Cut-Off Date Acquired ISF Assets and Liabilities Pricing
Schedule" means the schedule of Acquired ISF Assets and Assumed ISF Liabilities
prepared by adjusting the Cut-Off Date Statement of Acquired ISF Assets and
Liabilities in accordance with the provisions of Section 5.05(b)(vi) and Section
5.05(b)(vii), including those pertaining to the resolutions of disputes with
respect thereto. Solely for illustrative purposes, a form of the Adjusted
Cut-Off Date Acquired ISF Assets and Liabilities Pricing Schedule is attached as
Exhibit 1.01(p).
"Adjusted Cut-Off Date Pricing Schedule" means a schedule prepared by
consolidating each of the Cut-Off Date Balance Sheets of the Company, Public
Finance, TCFL, TFBV and TGMBH into a consolidated balance sheet of the Company
in accordance with the Accounting Principles and the provisions of Section
5.05(a)(vi) and Section 5.05 (a)(vii), including those pertaining to the
resolutions of disputes with respect thereto. Solely for illustrative purposes,
a form of the Adjusted Cut-Off Date Pricing Schedule is attached as Exhibit
1.01(p).
"Adjusted Pro-Forma Shareholders' Equity of the Company" means the
amount reflected on the Adjusted Cut-Off Date Pricing Schedule as the adjusted
consolidated shareholders' equity of the Company. Solely for the purposes of
providing an example, an illustration of the calculation of the Adjusted Pro
Forma Shareholders' Equity of the Company, based upon a hypothetical Cut-Off
Date and hypothetical values
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of the components of such adjusted shareholders' equity is attached hereto as
Exhibit 1.01(p).
"Adverse Environmental Condition" means the following: (a) the
existence, or the continuation of the existence, of a Release or threatened
Release (including sudden or non-sudden, accidental or non-accidental Releases)
into or onto the indoor or outdoor environment (including the air, ground or
subsurface water) at, in, by, from or related to the assets, properties,
business or operations of any Purchased Entity, any Asset Seller or any of their
respective current or former Affiliates, including any damage of or injury to
any Person or to the environment in connection with the generation, handling,
transportation, storage, treatment or disposal of Hazardous Materials in
connection with the operation of any of the Acquired Businesses, the business of
any Purchased Entity, any Asset Seller or any of their respective current or
former Affiliates, or (b) any violation under any Environmental Law, or any
violation of permits or licenses of or from any Governmental Authority relating
to environmental matters (including any penalties associated with any such
violations), by, at or attributed to any assets, properties, business or
operations of any of the Acquired Businesses, any Purchased Entity, any Asset
Seller or any of their respective current or former Affiliates.
"Aegon" has the meaning set forth in the Preamble.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"Agreement" means this Stock and Asset Purchase Agreement, dated as of
August 4, 2003 (as may be amended, modified or supplemented from time to time in
accordance with the terms and provisions hereof), by and among the Selling
Entities, Aegon and the Purchaser (including all Exhibits and the Disclosure
Schedule).
"Aircraft Finance Business" means all of the business, assets and
operations and activities conducted by any of the Excluded Subsidiaries related
to the provision of leasing of, and financing for, commercial aircraft, aircraft
engines and related equipment.
"Applicable GAAP" means (a) with respect to the Company and Public
Finance, GAAP, (b) with respect to TCFL, United Kingdom generally accepted
accounting principles and practices, (c) with respect to TFBV, Netherlands
generally accepted accounting principles and practices and (d) with respect to
TGMBH, Germany generally accepted accounting principles, in each case, as in
effect from time to time.
"Asset Sellers" has the meaning set forth in the Preamble.
"Assets" has the meaning set forth in Section 3.14.
"Assumed Benefit Arrangements" means those Company Benefit Arrangements
which are identified in Section 7.05(a) of the Disclosure Schedule and will
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be continued by a Purchased Entity and/or assumed by the Purchaser or its
Affiliates on the Closing Date.
"Assumed Benefit Plan" means those Company Benefit Plans which are
identified in Section 7.05 of the Disclosure Schedule and will be continued by a
Purchased Entity and/or assumed by the Purchaser or its Affiliates on the
Closing Date.
"Assumed ISF Liabilities" means each of the liabilities and obligations
set forth on Exhibit 2.01(f)(ii).
"Authorization" means any consent, license, permit, grant,
authorization or approval of any Governmental Authority.
"Backlog" means any commitment made or extended by any Asset Seller (in
respect of the Acquired International Structured Finance Business) or any
Purchased Entity, or by the Seller or any of its other Subsidiaries or
Affiliates on behalf of any Purchased Entity or in respect of the Acquired
International Structured Finance Business to enter into a financing, leasing or
other transaction, which transaction (a) has not been entered into on or prior
to the Closing Date and (b) would, had it been entered into on or prior to the
Closing Date, have constituted a Financing Contract.
"Bankruptcy Exception" means in respect of any agreement, contract or
commitment, any limitation thereon imposed by any bankruptcy, insolvency,
CONCURSO MERCANTIL, fraudulent conveyance, reorganization, moratorium or similar
Law affecting creditors' rights and remedies generally and, with respect to the
enforceability of any agreement, contract or commitment, by general principles
of equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at law
or in equity).
"Xxxx of Sale" has the meaning set forth in Section 2.04(a)(vi).
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by Law to be closed in the city of
New York.
"Business Line" means each of the distribution finance, technology
finance, business capital, commercial real estate finance and equipment finance
business lines of the Seller and its Subsidiaries and the International
Structured Finance division of TLI.
"BWAC 21" has the meaning set forth in the Preamble.
"CAA" means the United Kingdom Capital Allowances Xxx 0000, as amended,
modified or supplemented through the Closing Date.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent
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ownership interests in a Person (other than a corporation) and any and all
warrants or options to purchase any of the foregoing.
"Category A Representations" means those representations and warranties
of the Selling Entities that are (a) set forth in Section 3.19(a), (b) set forth
in Section 3.21(b)(ii), 3.21(b)(vii), 3.21(e) or 3.21(f) or (c) set forth in
Section 3.22(a)(iii), 3.22(b) or 3.22(c) or (d) not Category B Representations
or any of the representations and warranties referred to in clauses (a) through
(c) above; provided, however, that the representations and warranties set forth
in Section 3.16 shall not be either Category A Representations or Category B
Representations.
"Category B Representations" means those representations and warranties
of the Selling Entities set forth in (a) Section 3.03, 3.04, 3.14(b) or 3.25 (b)
Section 3.10, 3.11, 3.15; provided, however, that for purposes of Section
5.04(b), Section 3.15 shall not be deemed to be a Category B Representation) or
3.24, (c) Section 3.21(a), 3.21(b)(i), 3.21(b)(iii), 3.21(b)(v), 3.21(b)(vi),
3.21(b)(viii), 3.21(b)(ix), 3.21(c), 3.21(d) or 3.21(g), (d) Section 3.22(a)(i),
3.22(a)(ii), 3.22(a)(iv), or 3.23 or (e) Section 3.19(b).
"Closing" means the effective time of consummation of the Acquisition
pursuant to the terms and conditions of this Agreement, which, as to any
jurisdiction in which a Purchased Entity has its principal place of business,
shall be 11:59 P.M. local time in the capital city of such jurisdiction or in
the case of the Acquired ISF Assets, 11:59 P.M. New York City time, on the
calendar day which is the Closing Date.
"Closing Date" has the meaning set forth in Section 2.03.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, modified or supplemented through the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended, modified or
supplemented through the Closing Date.
"Collateral File" means the files maintained by any Purchased Entity
relating to any Mortgaged Property or to any other Portfolio Property.
"Company" has the meaning set forth in the Recitals.
"Company Benefit Arrangement" means any benefit arrangement,
obligation, custom or practice, whether or not legally enforceable, to provide
benefits, other than salary, as compensation for services rendered, to present
or former directors, officers, employees, or agents, including employment
agreements, severance agreements, compensation arrangements, (including stock
options or other equity-based compensation, incentive programs or arrangements,
sick leave, vacation pay, salary continuation for disability, severance pay
policies or other compensation arrangements) workers compensation, retirement,
deferred compensation, bonus, hospitalization, medical insurance, life
insurance, tuition reimbursement, employee discounts, any plans subject to
Section 125 of the Code and any plans providing benefits or payments in the
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event of a change of control, change in ownership or sale of a substantial
portion (including all or substantially all) of the assets of any business or
part thereof, in each case provided or maintained by the Seller, the Purchased
Entities or any of their Affiliates for the benefit of Company Employees or
former employees, directors or agents of the Purchased Entities; provided,
however, that (a) any Company Benefit Plan, and (b) any employment agreements
that would, by their terms, terminate at or prior to the Closing shall not be
considered to be a "Company Benefit Arrangement" for these purposes.
"Company Benefit Plan" means an "employee benefit plan" within the
meaning of Section 3(3) of ERISA, including any pension, welfare or savings plan
or arrangement, or any employee stock purchase, severance, long-term disability
or insurance plan provided or maintained by the Seller, the Purchased Entities
or any of their Affiliates to Company Employees or former employees of the
Purchased Entities; provided, however, that any plan or program requiring the
mandatory payment of social insurance taxes or similar contributions to a fund
established, sponsored or administered by a Governmental Authority with respect
to the wages of any employee shall not be considered to be a "Company Benefit
Plan" for these purposes.
"Company Claims" has the meaning set forth in Section 5.07(b).
"Company Employees" has the meaning set forth in Section 7.02(a).
"Company Intellectual Property" means, collectively, the Owned
Intellectual Property and the Licensed Intellectual Property.
"Company Liabilities" has the meaning set forth in Section 5.07(b).
"Confidentiality Agreement" means the letter agreement, dated as of
December 12, 2002, between Transamerica Corporation and the Purchaser.
"Consent Solicitation" has the meaning set forth in Section 5.13.
"Consents" has the meaning set forth in Section 5.13.
"Consolidated Tax Return" has the meaning set forth in Section
3.16(a)(iii).
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor or by agreement, including the ownership, directly or indirectly, of
securities having the power to elect a majority of the board of directors or
similar body governing the affairs of such Person.
"Credit Enhancement" means any Property, including any account, Capital
Stock, deposit, certificate of deposit, instrument, letter of credit, credit
agreement,
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security agreement, repurchase agreement, agreement of indemnity, guarantee (or
similar agreement) or bond or debenture, in each case with respect to items
listed above, pledged, assigned, mortgaged, made, delivered or transferred as
security for the performance of any obligation under or with respect to any
Financing Contract, Vendor Program Agreement, Factoring Account or Receivable.
"Credit Tenant Leases" means leases of Mortgaged Property under which
an Obligor under the related Mortgage Loan is the lessor or landlord and another
Person is the lessee or tenant, and the lease or other payments to be made by
such lessee or tenant pursuant to such lease is viewed by a Purchased Entity (as
reflected in the applicable investment or credit approval) as the primary source
of repayment for such Mortgage Loan.
"Cut-Off Date" means (a) if the Closing occurs on any day other than
the last day of a calendar month, the last day of the month immediately
preceding the month in which the Closing occurs and (b) otherwise, the Closing
Date.
"Cut-Off Date Acquired ISF Assets Portfolio Tape" means the computer
disk, computer tape or other computer format delivered to the Purchaser pursuant
to Section 5.17(b) setting forth, as of the Cut-Off Time, the Portfolio
Information for each Acquired ISF Asset that is a Financing Contract.
"Cut-Off Date Adjustment Amount" means $12,500,000.
"Cut-Off Date Balance Sheet" means, with respect to the Company, Public
Finance, TCFL, TFBV or TGMBH, the consolidated balance sheet of the Company, the
balance sheet of Public Finance, the balance sheet of TCFL, the balance sheet of
TFBV or the balance sheet of TGMBH (as applicable) as of the time immediately
prior to the Closing and the notes and schedules, if any, thereto prepared in
accordance with the provisions of Section 5.05(a), including those pertaining to
the resolutions of disputes with respect thereto and certified by the Seller's
Accountants.
"Cut-Off Date Portfolio Tape" means the computer disk, computer tape or
other computer format delivered to the Purchaser pursuant to Section 5.17(b)
setting forth, as of the Cut-Off Time, the Portfolio Information for each
Financing Contract owned or held by any Purchased Entity.
"Cut-Off Date Statement of Acquired ISF Assets and Liabilities" means
the schedule of assets acquired and liabilities assumed by the Purchaser or the
applicable Acquiring Subsidiaries from the Asset Sellers reflecting the Acquired
ISF Assets and Assumed ISF Liabilities and the respective amounts thereof, in
each case determined as the time immediately prior to the Cut-Off Time and the
notes and schedules, if any, thereto prepared in accordance with the provisions
of Section 5.05(b), including those pertaining to the resolution of the disputes
with respect thereto, and certified by the Seller's Accountants.
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"Cut-Off Date Tax Return" shall have the meaning set forth in Section
5.03(b)(v).
"Cut-Off Time" means, as to any jurisdiction in which a Purchased
Entity has its principal place of business, 11:59 PM local time in the capital
city of such jurisdiction or, in the case of the Acquired ISF Assets, 11:59 P.M.
New York City time, on the calendar day which is the Cut-Off Date.
"Dealer" means an Obligor under a Financing Contract held by the
distribution finance Business Line.
"Dealer Policies" mean those insurance policies maintained by the
Purchased Entities which cover inventory being financed by the distribution
finance Business Line.
"Derivative Instruments" has the meaning set forth in Section 3.17.
"Disclosure Schedule" means the Disclosure Schedule attached hereto,
dated as of the date hereof, and forming a part of this Agreement, as may be
supplemented pursuant to the terms of Section 5.17(a).
"Document" means any book, record, file, paper, computer tape, computer
disk, microfilm or any information storage device of any type.
"Documentation" means forms of financing agreements, dealer agreements,
vendor agreements, merchant agreements, program agreements, factoring
agreements, repurchase agreements, remarketing agreements, subordination
agreements, intercreditor agreements, certificates of deposit, deeds of trust,
mortgages, lock box agreements, leases, conditional sales contracts, notes,
security agreements, guarantees, financing statements and other documents or
instruments necessary for, or used in connection with, the conduct of any of the
Acquired Businesses.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Employee Benefit Plan" has the meaning ascribed to such term by
Section 3(3) of ERISA.
"Employee Pension Benefit Plan" shall have the meaning ascribed to such
term by Section 3(2) of ERISA.
"Encumbrance" means (a) with respect to any Property (other than any
Mortgage Loan, Mortgaged Property or other Portfolio Property subject to a
Mortgage) any title defect, conflicting or adverse claim of ownership, mortgage,
security interest, lien, pledge, claim, charge, lease, order, judgment,
stipulation, settlement, attachment, or any other encumbrance, in each case,
whether or not perfected, and (b) with respect to any Mortgage Loan or Mortgaged
Property or Portfolio Property subject to a Mortgage, any
10
title defect, conflicting or adverse claim of ownership, mortgage, security
interest, lien, pledge, claim, right of first refusal, option, charge, deed
restriction, reservation, lease, order, judgment, stipulation, settlement,
attachment or any other encumbrance, in each case, whether or not perfected.
"Environmental Law" means any domestic or foreign, federal, state,
provincial or local Law (including common law rights of action, including those
under theories of nuisance, trespass, strict liability, personal injury or
property damage ) pertaining to the protection of human health and safety or of
the environment or natural resources (including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. ss. 1801 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Clean Air Act
(42 U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss.
2601 et seq.) and the Occupational Safety and Health Act (29 U.S.C. ss. 651 et
seq.) (to the extent it regulates occupational exposure to Hazardous Materials))
and the regulations promulgated pursuant thereto, and judicial interpretations
thereof, in each case, as amended, modified or supplemented from time to time,
including by succession of comparable successor Laws.
"Environmental Loss" means any (a) loss, cost, damage, liability,
deficiency, fine, penalty or expense (including reasonable attorneys' fees,
engineering, and other professional or expert fees), (b) cost of any Remedial
Action (voluntarily or involuntarily incurred) and (c) damage to Property, cost
associated with obtaining substantially similar replacement Property or decrease
in value of any Property of any of the Purchased Entities or of any Acquired ISF
Asset (other than any Excluded Asset), in each case, arising out of, resulting
from, based on or related to any Adverse Environmental Condition and which
occurred, or was determined to have occurred, on or prior to the Closing.
"Environmental Loss" shall not include Special Losses (other than any Special
Losses required to be paid by a Purchaser Indemnitee or a Seller Indemnitee to
any Person (other than to a party to this Agreement or any of their respective
Affiliates) arising out of, based upon, relating to or resulting from an Action
by such Person, which Special Losses shall be deemed to be direct losses of the
Person required to pay such Special Losses).
"Environmental Loss (Portfolio Property)" means with respect to any
Financing Contract in respect of which (a) an Adverse Environmental Condition
occurred or was determined to have occurred on or prior to the Closing with
respect to the Portfolio Property subject to such Financing Contract, and (b)
there shall have occurred an actual monetary or material non-monetary default
thereunder, the sum of (i) the lesser of (A) the estimates (or if performed,
actual) cost and expense of any Remedial Action (voluntary or involuntary) in
respect of such Portfolio Property and (B) the Net Finance Receivables Balance
of such Financing Contract plus (ii) all Losses required to be paid to any
Person (other than a party to this Agreement or any of their respective
Affiliates) arising out of, based upon, relating to or resulting from, such
Adverse Environmental Condition. "Environmental Loss (Portfolio Property)" shall
not include Special Losses
11
(other than any Special Losses required to be paid by a Purchaser Indemnitee or
a Seller Indemnitee to any Person (other than to a party to this Agreement or
any of their respective Affiliates) arising out of, based upon, relating to or
resulting from an Action by such Person, which Special Losses shall be deemed to
be direct losses of the Person required to pay such Special Losses).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, modified or supplemented through the Closing Date.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is under common control or treated as a single employer,
with any Purchased Entity or Asset Seller under Section 414(b), (c), (m) or (o)
of the Code.
"Excluded Asset" means each of (a) the Aircraft Finance Business, (b)
the SBA Business, (c) the ISF Excluded Assets, (d) [intentionally omitted], (e)
the Excluded Subsidiaries, (f) all Owned Property and (g) all of the business,
assets and operations and activities conducted by the Excluded Subsidiaries
(except, in the case of any Asset Seller, the Acquired ISF Assets or, in the
case of any Acquired Business Asset Transferor, the Other Acquired Business
Assets).
"Excluded Employees" means (a) employees of the Excluded Subsidiaries,
(b) those employees of the Purchased Entities listed in Section 7.01 of the
Disclosure Schedule who are primarily employed within the Seller's Aircraft
Finance Business, the Intermodal Leasing Business, the SBA Business, the Real
Estate Services Business, shared services or headquarters and (c) the Inactive
Employees; provided no such employee employed outside of the United States shall
be deemed an Excluded Employee unless permitted by applicable Law.
"Excluded Liabilities" means (a) any Liability arising before, on or
after the Closing Date to the extent arising out of, resulting from, based on or
relating to any Excluded Asset or Excluded Employee; provided that such
Liability is not an Assumed ISF Liability, (b) the liabilities of the Purchased
Entities set forth on Exhibit 1.01(g), and (c) all Indebtedness of the Purchased
Entities, other than (x) intercompany Indebtedness between or among the
Purchased Entities, the Selling Entities or any of their respective Affiliates
and (y) the Indebtedness set forth in Section 5.01(d)(ix) of the Disclosure
Schedule.
"Excluded Subsidiaries" means (a) any Subsidiary of the Parent that is
not a Purchased Entity, (b) each of the Persons set forth on Exhibit 1.01(h) and
(c) subject to Section 2.09(b), TCFC Canada, its Subsidiaries and all other
business, assets, operations and activities conducted by any Purchased Entity in
Canada.
"Exemption Certificate" means a form or statement from a customer of
any Acquired Business indicating that the transaction covered by a Financing
Contract is exempt from any sales, use or similar Tax.
12
"Existing Stock" has the meaning set forth in Section 5.18.
"Factoring Account" means any contract or agreement (including any
schedule, addendum or amendment thereto or assignment, assumption, renewal or
novation thereof) and any ancillary agreements, documents or instruments
relating thereto, pursuant to which a Person (i) agrees to acquire (whether
initially or as an assignee) or assume a risk of nonpayment for Receivables,
whether or not relating to the purchase of Receivables or the advancing of funds
in anticipation of payment of Receivables, or (ii) agrees to grant credit in
respect of Receivables which the Person has the right or obligation to acquire.
"Financial Statements" means, collectively, the Historical Financial
Statements, the Historical Management Statements, the Reconciliation Statements
and the Management Statements, each as defined in Section 3.07.
"Financing Contract" means any contract or agreement (including any
schedule, addendum or amendment thereto or any assignment, assumption, renewal
or novation thereof in existence on or prior to the Closing and any ancillary
agreements, documents or instruments relating thereto) in the form of (a) an
inventory, floorplan or distribution finance or similar agreement, an agreement
for wholesale financing, or a repurchase, remarketing or resale agreement, (b) a
sale contract (including an installment sale contract or conditional sale
agreement) arising out of the sale of Property, (c) a secured or unsecured
financing of Property, (d) a secured or unsecured loan (including any
participation therein), (e) a Factoring Account or (f) a lease of, or,
hire-purchase or rental agreement with respect to, Property, and in each case,
which with respect to the items described in clauses (a) through (f): (x) any
Purchased Entity or any Asset Seller (with respect to the Acquired International
Structured Finance Business) is the seller, lender, secured party, obligee,
owner (whether legal or beneficial), lessor or beneficiary, or participates in
any of the foregoing (whether initially or as an assignee), or (y) is between an
Obligor, on the one hand, and a seller, obligee, owner (whether legal or
beneficial), secured party, assignee, lessor or beneficiary of, or participant
in, any of the foregoing, on the other hand, and (1) which would be a Financing
Contract if any Purchased Entity or any Asset Seller (with respect to the
Acquired International Structured Finance Business) were the seller, obligee,
owner (whether legal or beneficial), secured party, assignee, lessor or
beneficiary of any of the foregoing, or participated in any of the foregoing and
(2) with respect to which any Purchased Entity or any Asset Seller (with respect
to the Acquired International Structured Finance Business) is or, after giving
effect to the provisions of Section 5.12, at Closing will be an assignee of, or
participant in, the revenues or claims with respect thereto.
"Foreign Plans" has the meaning set forth in Section 3.15(c).
"GAAP" means United States generally accepted accounting principles and
practices as in effect from time to time.
"GE Indemnity" has the meaning set forth in Section 5.10(b).
13
"Governmental Authority" means any domestic or foreign federal, state,
provincial or local government or any governmental, regulatory or administrative
authority, agency, department, bureau, instrumentality, commission or other
subdivision of any of the foregoing or any court, tribunal, judicial or arbitral
body.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"Ground Lease" has the meaning set forth in Section 3.23(m).
"Hazardous Materials" means any material or substance which is defined
as a "hazardous waste," "hazardous material," "hazardous substance," "solid
waste," "restricted hazardous waste," "industrial waste," "contaminant,"
"pollutant," "toxic waste" or "toxic substance" or words of similar meaning or
effect under any provision of any Environmental Law.
"Historical Financial Statements" has the meaning set forth in Section
3.07(a).
"Historical Management Statements" has the meaning set forth in Section
3.07(b).
"Xxxxxxx Estates Derivative" means the interest rate swap for the
synthetic lease on the real Property located at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxxx, documented in a Confirmation between Xxxxxxx Sachs Mitsui
Marine Derivative Products, L.P. and the Parent, with a trade date of September
15, 1998 (the "Underlying Swap") and the corresponding Confirmation with a trade
date of September 15, 1998 entered into between the Parent and Transamerica
Distribution Finance Corporation incorporating the same terms and conditions as
the Underlying Swap.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 and the rules and regulations promulgated thereunder, as amended, modified
or supplemented through the Closing Date.
"Hyundai" means Hyundai Merchant Marine Co. Ltd. and Hyundai Merchant
Marine (America) Inc.
"ICTA" means the United Kingdom Income and Corporation Taxes Xxx 0000.
"Inactive Employees" means, to the extent allowed by Law, those
employees of any Purchased Entity who are not Excluded Employees and who are
inactive as of the Closing Date due to short or long term disability leave or on
an approved leave of absence and who are not reasonably expected to return to
active employment with a Purchased Entity within ten (10) days following the
Closing Date; provided, however, that (i) no such employee who returns to active
employment with
14
Purchaser or its Affiliates within six months (or such later date as required by
Law (including the Uniformed Services and Reemployment Rights Act)) following
the Closing Date shall be considered an Inactive Employee following such return
to employment and (ii) no Company Employee employed outside the United States
shall be deemed an Inactive Employee unless permitted by applicable Law.
"Included Liabilities" means each of the liabilities and obligations
set forth on Exhibit 1.01(i).
"Indebtedness" means (a) indebtedness for borrowed money, (b)
obligations evidenced by notes, bonds, debentures or other similar instruments
or by letter of credit agreements, including purchase money obligations or other
obligations relating to the deferred purchase price of Property (other than
trade payables incurred in the ordinary course of business), (c) obligations
under direct or indirect guaranties in respect of indebtedness or obligations of
others of the kind referred to in clauses (a) and (b) above, (d) obligations
under deposit and collection and similar accounts and (e) accrued and unpaid
interest or fees, if any, on any of the foregoing.
"Indemnification Event" means any event, circumstance or Action for
which a Person is entitled to indemnification under this Agreement.
"Indemnitor" means a Person required to provide indemnification
pursuant to the provisions of Section 5.04 hereof. If TLI is no longer a
Subsidiary or Affiliate of Parent or Aegon, then TLI shall no longer be an
Indemnitor.
"Initial Acquired ISF Assets Payment" means $707,862,000.
"Initial Acquired ISF Assets Portfolio Tape" means, with respect to the
International Structured Finance Business Line, the following electronic files:
(a) "TEFS - ISF March 2003 reconciliation.xls ("Flexx_output" worksheet)", (b)
"Q) 134. ISF Tax Leases.xls", (c) "Q) 111. ISF Contracts with WHTax.xls" and (d)
"ISF.xls" as delivered by the Selling Entities on April 28, 2003.
"Initial Company Payment" means $577,227,000 unless TCFC Canada, its
Subsidiaries and the other business, assets, operations and activities of the
Purchased Entities located in Canada become Excluded Subsidiaries pursuant to
2.09(b), in which case it means $572,291,000.
"Initial Intercompany Debt Payment" means the Seller's reasonable, good
faith estimate of the amount of the Intercompany Debt as of the close of the
third Business Day prior to the Closing Date as certified in a written notice
delivered to the Purchaser not less than two (2) Business Days prior to the
Closing Date adjusted to give effect to whether TCFC Canada, its Subsidiaries
and the other business, assets, operations and activities of the Purchased
Entities located in Canada become Excluded Subsidiaries pursuant to 2.09(b).
15
"Initial Payment" means each of the Initial Acquired ISF Assets
Payment, the Initial Company Payment, the Initial Public Finance Payment, the
Initial TCFL Payment, the Initial TFBV Payment and the Initial TGMBH Payment.
"Initial Portfolio Tape" means (a) with respect to the equipment
finance Business Line, the following electronic files: (i)
"tefs_asset_extract_mar2003.xls", (ii) "Q) 119. decoder", (iii) "Q) 87.C.iii.
TEFS CASHFLOW Cash flow", (iv) "TEFS_March 2003_datafeed-1 (sheet 1)" and (v)
"TEFS_March 2003_cust_list-2", (b) with respect to the commercial real estate
finance Business Line, the following electronic files: (i) "Q)_19.xls and TCREF
Report For Acctg - 12-31-02.xls" and (ii) "Customer Listing 2003-03-31
v.0507.xls" and (c) with respect to the technology finance Business Line, the
following electronic file: "TTF Customer List as of Feb 2003.xls" as delivered
by the Selling Entities on April 16, 2003.
"Initial Public Finance Payment" means $26,454,000.
"Initial TCFL Payment" means (pound)18,214,000.
"Initial TFBV Payment" means $4,280,000.
"Initial TGMBH Payment" means $1,149,000.
"Intellectual Property" means any domestic or foreign: (a) patents,
patent applications and letter patents; (b) common law or other trademarks,
service marks, trade dress, internet domain names, logos and trade names, the
registrations and applications for registration thereof, and the goodwill of the
business symbolized thereby; (c) copyrights (including copyrights in computer
software and related manuals and documentation), the registrations and
applications for registration thereof and (d) confidential and proprietary
information, including trade secrets and know-how.
"Intercompany Debt" means, as of any particular date, an amount equal
to (a) the Indebtedness of each of the Purchased Entities to the Selling
Entities or any of their respective Affiliates (other than any other Purchased
Entity) outstanding as of such date plus (b) costs or premiums required to be
paid in connection with the repayment or prepayment of such Indebtedness, minus
(c) the Indebtedness owed to each of the Purchased Entities by any of their
respective Affiliates (other than any other Purchased Entity) outstanding as of
such date.
"Intermodal Leasing Business" means all of the business, assets and
operations and activities conducted by any of the Excluded Subsidiaries related
to the provision of leasing of, buying or selling of, or financing for, rail,
truck, trailer or marine container equipment (including cartage and dry storage
vans, trailers, containers, tank trailers, tank trucks and tank containers), but
shall not mean the business conducted under the "equipment finance" Business
Line or the Acquired International Structured Finance Business.
"IRS" means the Internal Revenue Service of the United States.
16
"ISF Excluded Assets" means each Financing Contract of the Asset
Sellers (in respect of the Acquired International Structured Finance Business)
in respect of which Hyundai is the Obligor.
"Knowledge" or any similar expression, as it applies to the Seller,
means the knowledge that any of the individuals listed on Exhibit 1.01(l) (or
their respective successors) has acquired in the prudent exercise of that
individual's duties.
"Law" means any domestic or foreign federal, state, provincial or local
statute, law, ordinance, regulation, rule, code or order, or any other
requirement or rule of law.
"Lease" means any lease, sublease or license for the possession of, or
any occupancy agreement affecting, all or any portion of any Mortgaged Property.
"Leased Property" has the meaning set forth in Section 3.13(a).
"Legal/Credit Files" means (a) with respect to any Financing Contract
that is an Acquired ISF Asset, collectively, the credit files and the legal
files of the Asset Sellers related to such Financing Contract and (b) with
respect to any Financing Contract owned or held by the Purchased Entities,
collectively, the credit files and the legal files of the Purchased Entities
related to such Financing Contract, and the information with respect to such
Financing Contract contained in the portfolio management system of the Purchased
Entities, in each case, together with any safes or secure cabinets located at
the Leased Properties used to store certain documents relating to such Financing
Contracts.
"Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including those arising under any Law, Action or
Governmental Order and those arising under any contract, agreement, arrangement,
commitment or undertaking.
"Licensed Intellectual Property" means the computer software licensed
to any Purchased Entity, other than commercial computer software licensed to any
Purchased Entity or any Asset Seller pursuant to shrink-wrap or click-through
licenses.
"Loan Documents" means with respect to each Mortgage Loan, all material
documents, agreements or instruments evidencing, securing or otherwise setting
forth the terms and conditions of such Mortgage Loan, including the related
Note, loan agreement, Mortgage, Ground Lease, Credit Tenant Lease and assignment
of leases and rents, or any assignment, restatement, extension, endorsement or
modification of any of the foregoing.
"Loss" means any loss, liability, judgment, settlement, award
(including back-pay awards), claim, cost, damage, deficiency, tax (other than
Taxes that are addressed by Section 5.03 hereof, whether or not indemnifiable
thereunder), penalty, fine or expense, whether or not arising out of third party
claims (including interest, penalties, reasonable attorneys' fees and expenses,
court costs and all reasonable out-of-pocket
17
amounts paid in investigation, defense or settlement of any of the foregoing and
enforcement of any rights of indemnification against any Indemnitor or with
respect to any appeal). "Losses" shall not include Special Losses (other than
any Special Losses required to be paid by a Purchaser Indemnitee or a Seller
Indemnitee to any Person (other than to a party to this Agreement or any of
their respective Affiliates) arising out of, based upon, relating to or
resulting from an indemnifiable Action by such Person, which Special Losses
shall be deemed to be direct losses of the Person required to pay such Special
Losses).
"Loss Protection Agreement" means the Loss Protection Agreement,
substantially in form attached hereto as Exhibit 1.01(o), to be entered into
between Aegon and the Purchaser at the Closing.
"Material Adverse Effect" means any circumstance, change in or effect
that is or would reasonably be expected to be materially adverse to the
business, results of operations or the financial condition of (a) the Purchased
Entities (after giving effect to the exclusion of the Excluded Assets and the
Excluded Liabilities and the inclusion of the Other Acquired Business Assets)
and (b) the Acquired ISF Assets, taken as a whole; provided, however, that
"Material Adverse Effect" shall not include any circumstance, change in or
effect to the extent caused by or resulting from (i) circumstances, changes or
effects that generally affect the industries in which the Acquired International
Structured Finance Business or any Purchased Entity operates or lends to, (ii)
any actions specifically permitted or required to be taken or omitted to be
taken pursuant to the terms of this Agreement or (iii) any effects arising out
of, relating to or resulting from the announcement of the transactions
contemplated by this Agreement.
"Material Contract" has the meaning set forth in Section 3.12(a).
"Mortgage" means a mortgage, deed of trust or other security instrument
that creates an Encumbrance upon Mortgaged Property (including fixtures)
described therein.
"Mortgage Loan" means a Financing Contract that is secured primarily or
solely by a mortgage, deed of trust or other security instrument that creates an
Encumbrance upon real Property.
"Mortgage Loan Holdbacks" has the meaning set forth in Section 3.23(k).
"Mortgage Loan Schedule" means (a) on the date hereof, Section 3.23 of
the Disclosure Schedule and (b) on the Closing Date, the Cut-Off Date Portfolio
Tape, to the extent relating to Financing Contracts which are Mortgage Loans.
"Mortgaged Property" means the real Property, including all buildings
and other improvements, fixtures, easements and other appurtenances located
thereon, securing a Mortgage Loan, including any Ground Leases or subleases, set
forth on the Mortgage Loan Schedule.
18
"Net Finance Receivables Balance" means with respect to any Financing
Contract (a) that is classified as a loan or a finance lease, the amount of the
net finance receivables balance of such Financing Contract and (b) with respect
to which the Portfolio Property subject thereto that is classified as "equipment
held for lease", the book value of such Portfolio Property, in each case,
calculated in accordance with the Accounting Principles.
"Non-Assumable Claim" means any Action (a) in which one or more of the
following legal theories have been asserted: (a) violations of (1) any criminal
Law, (2) RICO or any state or federal Laws relating to securities, antitrust or
competition (or any comparable foreign Laws), or (3) any Environmental Law or
(b) fraud by any Purchaser Indemnitee, Purchased Entity or any Asset Seller
(with respect to the Acquired International Structured Finance Business) other
than allegations of fraud by an Obligor pursuant to a counterclaim against a
Purchased Entity or a Purchaser Indemnitee in litigation arising out of the
ordinary course of such Purchased Entity's or Purchaser Indemnitee's business,
(b) in which any Governmental Authority has instituted or asserted a claim
against a Purchaser Indemnitee, whether directly or indirectly (including by
counterclaim, cross-claim, interpleader or otherwise) (other than Tax claims)
and such Action could reasonably be expected to (i) interfere in any material
respect with the operation of any Purchaser Indemnitee's business in the
ordinary course, consistent with its past practices, (ii) result in any Loss,
forfeiture, fine, penalty or fee in excess of $200,000 or (iii) damage, in any
material respect, the reputation or public image of any Purchaser Indemnitee, or
(c) in connection with which injunctive relief is sought.
"Non-Surviving Tax Item" means any Tax Item of a Purchased Entity that
is attributable to any taxable period or portion thereof ending on or before the
Closing Date which, after the Acquisition, such Purchased Entity is not treated
as succeeding to, being liable for, bound by or being required to take into
account as a result of (i) an election under Section 338(g) or 338(h)(10) of the
Code (or any other comparable provision of state, local or other Law) with
respect to such Purchased Entity, (ii) in the case of a Purchased Entity that is
a partnership, an actual or constructive termination of such partnership
resulting from the Acquisition or (iii) any transaction, transfer or exchange
being treated for Tax purposes as an asset sale.
"Note" means, with respect to a Mortgage Loan, the originally executed
promissory note or notes or other evidence of Indebtedness with respect to such
Mortgage Loan.
"Obligor" means any Person that is an obligor, borrower or lessee under
any Financing Contract.
"Ordinary Course Asset Transaction" means, with respect to any
Purchased Entity or Asset Seller, any (a) acquisition of assets or other
Property pursuant to a foreclosure Action (or similar proceeding) or pursuant to
a restructuring, (b) acquisition of Receivables portfolios from manufacturers or
distributors in connection with entering into Vendor Program Agreements with
such Persons, (c) acquisition or
19
disposition of Financing Contracts (including participations and
securitizations), (d) acquisition of Receivables in connection with factoring
arrangements, (e) lease or conditional sale of Portfolio Property pursuant to
Financing Contracts, or (f) disposition of surplus, obsolete or foreclosed
Property, in each case, in the ordinary course of business of such Purchased
Entity or Asset Seller (as applicable), consistent with its past practices.
"Original Equipment Cost" means, with respect to any item of Portfolio
Property, the original cost of such Portfolio Property as recorded in the books
and records of the applicable Purchased Entity or Asset Seller (with respect to
any Acquired ISF Assets) at the inception of the Financing Contract relating
thereto, in accordance with GAAP as in effect on such date and consistently
applied in accordance with their respective past practices.
"Other Acquired Business Assets" means each of the assets set forth on
Exhibit 1.01(r).
"Owned Intellectual Property" means the Intellectual Property (other
than Transamerica Marks) used in the conduct or operation of any of the Acquired
Businesses (other than the Acquired International Structured Finance Business),
other than the Licensed Intellectual Property.
"Owned Property" means all real Property and interests in real Property
owned in fee by any Purchased Entity, including all buildings, structures or
other improvements located thereon.
"Parent" has the meaning set forth in the Preamble.
"Participation" has the meaning set forth in Section 3.23(1).
"Participation Agreement" has the meaning set forth in Section
3.23(l)(ii).
"Permitted Encumbrance" means (a) with respect to any Mortgaged
Property, (i) any Encumbrance for Taxes not yet due and payable or that are
being contested in good faith by a Purchased Entity in proper proceedings and
then only to the extent such Taxes have been reserved against on the Adjusted
Cut-Off Date Pricing Schedule, (ii) any other Encumbrance on the related
Obligor's interest in such Mortgaged Property which is specifically permitted in
accordance with the terms of the related Mortgage Loan and which does not
materially and adversely affect the value of such Mortgaged Property, (iii) any
Encumbrance created by any Law applicable to Properties including rights of way,
easements, sewer rights, zoning ordinances and other similar restrictions, (iv)
any mechanic's or materialmen's lien, which the Obligor under a Mortgage Loan is
required to remove and which are subordinate to the Encumbrance created by the
related Mortgage and (v) any Purchaser Encumbrances, and (b) in all other cases,
(i) any Encumbrance for Taxes not yet due and payable or that are being
contested in good faith by a Purchased Entity in proper proceedings and then
only to the extent such
20
Taxes have been reserved against on the Adjusted Cut-Off Date Pricing Schedule,
(ii) any mechanic's or materialmen's lien, which an Obligor under a Financing
Contract is required to remove, (iii) any Encumbrance created by any Law
applicable to Properties including rights of way, easements, sewer rights,
zoning ordinances and other similar restrictions, (iv) any other Encumbrance on
any Portfolio Property which is specifically permitted in accordance with the
terms of the related Financing Contract, (v) any Encumbrance on Portfolio
Property created by the related Financing Contract, (vi) any Encumbrance
perfected by a lessor filing a precautionary Uniform Commercial Code financing
statement in respect of property subject to a lease and (vii) any Purchaser
Encumbrances.
"Person" means any individual, partnership, firm, corporation, limited
liability company, association, trust, unincorporated organization or other
entity, as well as any syndicate or group that would be deemed to be a person
under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Portfolio Information" has the meaning set forth on Exhibit 1.01(s).
"Portfolio Property" means (a) Property (including Mortgaged Property)
with respect to which an Asset Seller or any Purchased Entity is (or, after
giving effect to the transfer of the Other Acquired Business Assets pursuant to
Section 5.12 will be) the seller, owner (whether legal or beneficial), secured
party, beneficiary, mortgagee or lessor, as the case may be, pursuant to the
terms of a Financing Contract (whether initially or as an assignee) or is a
participant in any of the foregoing interests, or (b) Property which is held by
an Asset Seller (to the extent such Property is an Acquired ISF Asset) or a
Purchased Entity for sale. "Premium" means Three Hundred Thirty-Seven Million
Five Hundred Thousand Dollars ($337,500,000).
"Property" means all property and assets of whatever nature, whether
real, personal, tangible or intangible and including all claims, rights and
choses in action.
"Provisional Duty" has the meaning ascribed to it in Section
5.03(a)(xi).
"Public Debt" has the meaning set forth in Section 5.13.
"Public Finance" has the meaning set forth in the Recitals.
"Public Finance Interests" means the issued and outstanding Capital
Stock of Public Finance.
"Purchase Price" has the meaning set forth in Section 2.02.
"Purchased Entities" means the Company and each of the other Persons
set forth on Exhibit 1.01(m).
21
"Purchaser" has the meaning set forth in the Preamble.
"Purchaser Encumbrances" means any Encumbrances created by the
Purchaser or any of its Affiliates and arising at or after Closing, other than
any Encumbrances created or granted by the Selling Entities, the Purchased
Entities or any of their Affiliates prior to the Closing in favor or for the
benefit of, the Purchaser or any of its Affiliates.
"Purchaser Indemnitees" has the meaning set forth in Section 5.04(a).
"Purchaser Related Documents" has the meaning set forth in Section
5.04(g).
"Purchaser Benefit Plans" has the meaning set forth in Section 7.03.
"Purchaser's Accountants" means KPMG LLP or any public accounting firm
with nationally recognized auditing expertise (other than the Seller's
Accountants), as selected by the Purchaser.
"Real Estate Services Business" means all of the business, assets and
operations and activities conducted by the Parent or any of its Subsidiaries
(including any of the Excluded Subsidiaries) related to the provision of
property tax payment and reporting, flood certification and other real estate
information services.
"Real Property" has the meaning set forth in Section 3.13(a).
"Real Property Lease" has the meaning set forth in Section 3.13(a).
"Receivable" means each and every benefit or purported benefit that is
reflected on the books and records of any Purchased Entity in the nature of the
benefit of any obligation to pay money or money's worth, and which any Purchased
Entity acquired or purported to acquire pursuant to, or which arose out of, a
Factoring Account.
"Regulatory Approvals" means (a) the notification requirements, if any,
under the HSR Act, and (b) approvals or notification requirements of
Governmental Authorities under the Laws of any of Germany, Mexico, Canada or
France or any other Law that is applicable to the Acquisition, if the failure to
comply with such Law or obtain any applicable consent, approval or other
authorization would constitute a violation of such Law.
"Related Agreements" means (a) the Transition Services Agreement, (b)
the Xxxx of Sale, (c) the Loss Protection Agreement and (d) the GE Indemnity.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal or leaching into the indoor
or outdoor environment of Hazardous Materials.
22
"Remedial Action" means any action required by any Governmental
Authority or applicable Environmental Law, or necessary to obtain compliance
with any applicable Environmental Law, to (a) clean up, remove, treat or
otherwise address any Hazardous Material; (b) prevent the Release of any
Hazardous Material so it does not endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment; or (c) perform pre-remedial
studies and investigations or post-remedial monitoring and care.
"Residual" means, with respect to any item of Portfolio Property, its
estimated value upon the expiration of the Financing Contract to which it is
subject (in accordance with its terms, including any early termination
contemplated by the terms of such Financing Contract) as determined by the
applicable Purchased Entity or Asset Seller (with respect to any Acquired ISF
Assets) and established on its respective books and records at the inception of
such Financing Contract.
"Retained Claim" has the meaning set forth in Section 5.04(i).
"SBA Business" means all of the business, assets and operations and
activities conducted by Transamerica Small Business Capital, Inc. and its
Subsidiaries related to the provision of financing within the Small Business
Association Section 7(a) guaranteed lending program and the Small Business
Administration Section 504 Community Development Corporation program.
"Securitization Facility" means each of (i) the U.S. RPA, (ii) the
Canadian RPA and (iii) the TEFS RPA.
"Selected Accounting Firm" means PriceWaterhouseCoopers, or if such
accounting firm refuses or is unable to act, another public accounting firm with
nationally recognized auditing expertise, which shall be selected by the
Purchaser's Accountants and the Seller's Accountants to resolve a dispute
arising pursuant to Section 5.05 hereof.
"Seller" has the meaning set forth in the Preamble.
"Seller Bank Account(s)" means a bank account or bank accounts to be
designated by the Seller in a written notice delivered to the Purchaser at least
five (5) Business Days before the Closing.
"Seller Indemnitees" has the meaning set forth in Section 5.04(g).
"Seller Indemnitors" means the Parent, the Seller, Aegon, TCHL, TGI,
BWAC 21 and, until such time as TLI is sold to an unaffiliated third party in
connection with the divestiture of its business by the Parent and Aegon, TLI.
"Seller Related Documents" has the meaning set forth in Section
5.04(a).
23
"Seller's Accountants" means Ernst & Young LLP or any public accounting
firm with nationally recognized auditing expertise (other than the Purchaser's
Accountants), as selected by the Seller.
"Seller's Insurance Policies" has the meaning set forth in Section
5.07(b).
"Selling Entities" means the Parent, the Seller, TCHL, BWAC 21 and TGI
and the Asset Sellers.
"Settlement Date" means the fifth (5th) Business Day following the date
after which each of the final Adjusted Cut-Off Date Pricing Schedule, the final
audited calculation of the Intercompany Debt Amount and the final Adjusted
Cut-Off Date Acquired ISF Assets and Liabilities Pricing Schedule have been
delivered as provided in Section 5.05(a)(vii) and Section 5.05(b)(vii).
"Settlement Rate" means, on any date, the "target" federal funds rate
reported in the "Money Rates" section of the Eastern Edition of The Wall Street
Journal published for such date (or, if the "target" federal funds rate is not
so reported on such date, on the immediately preceding date for which such
"target" federal funds rate was so reported). In the event the Eastern Edition
of The Wall Street Journal ceases publication of the "target" federal funds rate
or fails on any particular date to publish the "target" federal funds rate, the
"target" federal funds rate shall refer to the rate for the last transaction in
overnight federal funds arranged prior to such date by The Chase Manhattan Bank.
"Shares" has the meaning set forth in the Recitals.
"Special Adjustments" has the meaning set forth on Exhibit 1.01(b).
"Special Losses" means special, exemplary, consequential or punitive
losses or damages; provided, however, that "Special Losses" shall not include
any Losses relating to the failure of any Purchaser Indemnitee to receive the
amounts payable in accordance with the terms of any Financing Contract to the
extent such Losses relate to any breach of representation, warranty or covenant
in this Agreement or in any Seller Related Document.
"Specified Intellectual Property" means all Intellectual Property
rights in and to (i) the "MAX" and "IMAX" proprietary software, (ii) the "BIAS"
credit scoring software and other related proprietary underwriting software, and
(iii) the "Portfolio Control System" proprietary credit monitoring software, in
each case, licensed or owned by one or more Selling Entities, and all manuals
and documentation related thereto, all improvements and accessions thereto.
"Straddle Period" means any taxable period that begins before the
Cut-Off Date and that ends after the Cut-Off Date.
24
"Straddle Tax Return" shall have the meaning set forth in Section
5.03(b)(vi).
"Subsidiary" means, as to any Person, any other Person whose shares of
Capital Stock having ordinary voting power (other than Capital Stock having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or similar governing body of such other Person are owned,
or the management of which are otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such first Person.
"Syndicated Facility" means a Financing Contract (a) (i) that has been
syndicated to a group of Persons that each hold an interest therein as a seller,
obligee, owner (whether legal or beneficial), secured party, assignee, lessor or
beneficiary or participant in any of the foregoing and (ii) in respect of which
a Purchased Entity or an Asset Seller (with respect to the International
Structured Finance Business) does not have the duties or responsibilities of
administrative or collateral agent or trustee (or similar function), (b) in
which a Purchased Entity or an Asset Seller (with respect to the International
Structured Finance Business) holds only a participation interest or (c) in the
form of a bond, note or certificate held by Public Finance in the ordinary
course of its business, consistent with past practices, and in respect of which
a Person other than a Purchased Entity acts as the trustee or collateral agent
with duties or responsibilities relating to documentation and/or collateral
protection with respect to such Financing Contract.
"2002 Tax Return" shall have the meaning set forth in Section
5.03(b)(v).
"Tax" means any domestic or foreign, federal, state, local or
provincial taxes, charges, fees, levies, imposts, duties and governmental fees
(including penalties or other fees imposed for failure to file any Tax Return)
or other like assessments or charges of any kind whatsoever, together with any
interest or penalty, addition to tax or additional amount imposed thereon,
whether payable by reason of contract, assumption, transferee liability,
operation of law or otherwise (including any income, net income, gross income,
receipts, windfall profit, severance, property, production, sales, use, license,
excise, registration, franchise, employment, payroll, customs, equalization,
French social security (i.e., any social security contributions and any other
charges and liabilities relating to employment including contributions relating
to unemployment, medical costs, disability, death and retirement), withholding,
alternative or add-on minimum, intangibles, ad valorem, transfer, gains, stamp,
stamp duty reserve, VAT, insurance premium, estimated, transaction, title,
capital, paid-up capital, profits, occupation, premium, value added, recording,
real property, personal property, federal highway use, commercial rent or
environmental tax).
"Tax Item" means any Tax item or matter, including but not limited to
any item, items or matters concerning income, deductions, earnings, profits,
credits, elections, basis, carryovers, or exemptions.
25
"Tax Return" means any return, report or statement required to be filed
with respect to any Tax (including any attachments thereto, and any amendment
thereof) including any information return, claim for refund, amended return or
declaration of estimated Tax, and including, where permitted or required,
combined or consolidated returns for any group of entities that includes any
Purchased Entity or any Asset Seller.
"Tax Sharing Agreement" means any Tax allocation, indemnity, sharing or
similar contract or arrangement (whether or not written).
"TCFC Canada" means Transamerica Commercial Finance Corporation,
Canada, a Canada Corporation.
"TCFL" has the meaning set forth in the Recitals.
"TCFL Shares" has the meaning set forth in the Recitals.
"TCFL Transfer" has the meaning ascribed to it in Section 5.03(a)(xi).
"TCGA" means the United Kingdom Taxation of Chargeable Gains Xxx 0000.
"TCHL" has the meaning set forth in the Preamble.
"Termination Date" means the date that is six (6) months after the date
of this Agreement, unless the Seller exercises its option under Section 9.01
hereof to extend such deadline for an additional 30 days.
"TFBV" has the meaning set forth in the Preamble.
"TFBV Shares" has the meaning set forth in the Recitals.
"TGI" has the meaning set forth in the Preamble.
"TGMBH" has the meaning set forth in the Preamble.
"TGMBH Shares" has the meaning set forth in the Recitals.
"Third Party Beneficiary" has the meaning set forth in Section 10.09.
"Title IV Plan" means any Employee Pension Benefit Plan, which is
subject to Title IV of ERISA or Section 412 of the Code, maintained by any
Selling Entity, the Company or any of their Subsidiaries or ERISA Affiliates or
to which any Selling Entity, the Company or any of their Subsidiaries or ERISA
Affiliates contributed or is or may be obligated to contribute thereunder.
"TLI" has the meaning set forth in the Preamble.
26
"Transamerica Marks" means (a) the word "Transamerica" or "AEGON," (b)
the stylized pyramid logo of Transamerica Corporation, (c) any representation or
likeness of the Transamerica Building located at 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx, (d) any trademark or service xxxx using or otherwise
incorporating the prefix "Trans," and (e) any trademark, trade name or service
xxxx using or otherwise incorporating the word "pyramid."
"Transfer Taxes" means any sales, use, stamp, stamp duty reserve,
documentary, filing, recording, transfer, real estate, stock transfer, gross
receipts, registration, duty, securities transactions or similar fees or Taxes
or governmental charges (together with any interest or penalty, addition to Tax
or additional amount imposed) as levied by any Governmental Authority in
connection with the transactions contemplated by this Agreement, but, for the
avoidance of doubt, shall not include any U.K. corporation tax on chargeable
gains arising in respect of the disposal of the TCFL shares.
"Transferee" has the meaning set forth in Section 5.11(a)(i).
"Transferred Employees" has the meaning set forth in Section 7.02(a).
"Transition Services Agreement" means the Transition Services
Agreement, substantially in the form attached hereto as Exhibit 1.01(q), to be
entered into among one or more Selling Entities or their respective Affiliates
and the Purchaser at the Closing.
"Treasury Regulations" means the Treasury Regulations (including
Temporary Regulations) promulgated by the United States Department of Treasury
with respect to the Code or other federal Tax statutes.
"U.K. Accounts" means the accounts of TCFL and any U.K. Subsidiary as
at the U.K. Accounts Date.
"U.K. Accounts Date" means, in respect of TCFL and any U.K. Subsidiary
December 31, 2002.
"U.K. GAAP" means United Kingdom generally accepted accounting
principles and practice as in effect from time to time.
"U.K. Purchaser" means, where applicable, the Purchaser, the Acquiring
Subsidiary purchasing the TCFL Shares under this Agreement, or any Affiliate of
the Purchaser to which the TCFL Shares are transferred after Closing.
"U.K. Subsidiary" means any Subsidiary of TCFL.
"VAT" means value added tax or other equivalent tax paid under EEC
Directive 77/388 or any procedure laid down by any member state pursuant
thereto.
27
"VATA" means the United Kingdom Value Added Tax Xxx 0000, as amended,
modified or supplemented through the Closing Date.
"VAT Legislation" means all enactments relating to VAT in any
jurisdiction and all regulations, orders, notices, provisions and conditions
made under those enactments.
"Vendor Program Agreement" means any agreement, contract or commitment
between an Asset Seller in respect of any Acquired ISF Assets or a Purchased
Entity, on the one hand, and any lessor, seller, supplier, vendor, franchisor,
manufacturer, distributor, dealer or contractor, on the other hand, pursuant to
which such lessor, seller, supplier, vendor, franchisor, manufacturer,
distributor, dealer or contractor agrees to provide services and support in
connection with any Financing Contracts or any Portfolio Property.
"WARN" means the Worker Adjustment and Retraining Notification Act, 29
U.S.C. ss.2101 et seq., and any comparable Law, as amended, modified or
supplemented through the Closing Date.
.2 Interpretation and Rules of Construction. In this Agreement, except
to the extent that the context otherwise requires:
(a) when a reference is made in this Agreement to an article, section,
exhibit or schedule, such reference is to an Article or Section of, or an
Exhibit or a Schedule to, this Agreement unless otherwise indicated;
(b) whenever the words "include", "includes" or "including" are used in
this Agreement, they are deemed to be followed by the words "without
limitation";
(c) the words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not
to any particular provision of this Agreement;
(d) any matter disclosed by the Selling Entities in any section of the
Disclosure Schedule or pursuant to that certain letter agreement dated the date
hereof from the Parent to the Purchaser attaching certain financial, employee
and litigation information shall be deemed disclosed for purposes of the other
sections of the Disclosure Schedule and such letter, so long as it is readily
apparent that such matter is applicable and responsive to any such other
section; and the definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms; and
(e) the definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms.
28
ARTICLE II
PURCHASE AND SALE
.1 Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date and effective as of the Cut-Off Time:
(a) The Seller shall transfer, assign and deliver to the Purchaser or
the applicable Acquiring Subsidiary, and the Purchaser shall purchase, acquire
and accept (or shall cause an Acquiring Subsidiary to purchase, acquire and
accept) from the Seller, the Shares, free and clear of all Encumbrances;
(b) TCHL shall sell to the U.K. Purchaser, and the U.K. Purchaser shall
purchase from TCHL the TCFL Shares, with full title guarantee, free and clear of
all Encumbrances;
(c) The Parent and the Seller shall transfer, assign and deliver to the
Purchaser or the applicable Acquiring Subsidiary, and the Purchaser shall
purchase, acquire and accept (or shall cause an Acquiring Subsidiary to
purchase, acquire and accept) from the Parent and the Seller, the Public Finance
Interests owned by each of them, free and clear of all Encumbrances;
(d) TGI shall transfer, assign and deliver to the Purchaser, and the
Purchaser shall purchase, acquire and accept from TGI, the TFBV Shares, free and
clear of all Encumbrances;
(e) TGI and BWAC 21 shall transfer, assign and deliver to the Purchaser
or the applicable Acquiring Subsidiary, and the Purchaser shall purchase,
acquire and accept (or shall cause an Acquiring Subsidiary to purchase, acquire
and accept) from TGI and BWAC 21, the TGMBH Shares, free and clear of all
Encumbrances;
(f)
(i) The Asset Sellers shall transfer, assign and deliver to the Purchaser
or the applicable Acquiring Subsidiary, and the Purchaser shall purchase,
acquire and accept (or shall cause an Acquiring Subsidiary to purchase,
acquire and accept) from Seller the Acquired ISF Assets, free and clear of
all Encumbrances, other than Permitted Encumbrances; provided, however, that
in no event shall the Acquired ISF Assets be deemed to include, and in no
event shall the Asset Sellers, the Parent or any of their Affiliates sell,
assign, transfer or convey to the Purchaser, and in no event shall the
Purchaser or any Acquiring Subsidiary purchase, acquire or accept any right,
title or interest in and to, any ISF Excluded Assets;
(ii) The Purchaser shall (or shall cause an Acquiring Subsidiary to)
assume and be obligated to pay, and perform and discharge, all of the Assumed
ISF Liabilities; provided, however, that in no event shall the Assumed ISF
Liabilities
29
be deemed to include, and in no event shall the Purchaser or any Acquiring
Subsidiary assume or otherwise become liable for, any Excluded Liabilities;
and
(iii) On or prior to the Closing Date and effective as of the time
immediately prior to the Cut-Off Time, the Parent shall, with respect to all
Acquired ISF Assets that are owned of record by any Person other than TLI,
exercise all rights, and take all such other actions, as may be necessary to
effect the conveyance of the Acquired ISF Assets, free and clear of all
Encumbrances other than Permitted Encumbrances, to the Purchaser or the
applicable Acquiring Subsidiaries on the Closing Date and as of the Cut-Off
Time. If any Acquired ISF Assets are owned of record by any Affiliate of the
Parent (other than TLI or any Purchased Entity), then the Parent shall cause
such Person to become a party to this Agreement and execute a counterpart
signature page to this Agreement as an Asset Seller hereunder.
.2 Purchase Price. The aggregate purchase price for the Shares, the
Public Finance Interests, the TCFL Shares, the TFBV Shares, the TGMBH Shares and
the Acquired ISF Assets shall be an amount equal to the Adjusted Pro Forma
Shareholders' Equity of the Company, (b) the Adjusted Acquired ISF Assets Amount
plus (c) the Premium plus (d) the Cut-Off Date Adjustment Amount, if applicable
(collectively, the "Purchase Price"). The Purchaser agrees to pay or cause to be
paid immediately following the Closing, in accordance with the terms of this
Agreement, the Initial Intercompany Debt Payment and shall make any payment
required to be made by it pursuant to the provisions of Section 2.06(f) in
accordance with that Section.
.3 Closing. Upon the terms and subject to the conditions of this
Agreement, the Closing of the Acquisition shall take place at the offices of
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
at 10:00 A.M. New York City time on the second Business Day following the
satisfaction or waiver of all conditions to the obligations of the parties set
forth in Article VIII or such other date as to which the parties hereto shall
agree (the day on which the Closing takes place being the "Closing Date").
.4 Deliveries by the Parent and the Seller. (a) At the Closing, the
Parent and the Seller shall deliver or cause to be delivered to the Purchaser or
its designee:
(i) stock certificates evidencing the Shares, duly endorsed in blank, or
accompanied by stock powers duly executed in blank (with any necessary stock
transfer tax stamps attached or provided for) so as to transfer and assign to
the Purchaser or the applicable Acquiring Subsidiaries at the Closing, good
and valid title to the Shares, free and clear of all Encumbrances, other than
any Purchaser Encumbrances, and to constitute the Purchaser and/or each
applicable Acquiring Subsidiary the sole beneficial and record owner thereof;
(ii) a true copy of the deed of transfer of the TFBV Shares by TGI to the
Purchaser, executed before a civil notary officiating in Amsterdam, the
00
Xxxxxxxxxxx on the Closing Date, together with a copy of the shareholders'
register of TFBV in which the transfer of the TFBV shares is registered, so
as to transfer and assign to the Purchaser at the Closing good and valid
title to the TFBV Shares, free and clear of all Encumbrances, other than
Purchaser Encumbrances, and to constitute the Purchaser the sole beneficial
and record owner thereof.
(iii) certificates evidencing all of the Public Finance Interests owned by
the Parent and the Seller, duly endorsed in blank, or accompanied by stock
powers duly executed in blank (with any necessary transfer tax stamps
attached or provided for) so as to transfer and assign to the Purchaser or
the applicable Acquiring Subsidiaries at the Closing good and valid title to
all of the issued and outstanding Public Finance Interests owned by the
Parent and the Seller (which shall not be less than 71% of all of the issued
and outstanding Public Finance Interests), free and clear of all
Encumbrances, other than any Purchaser Encumbrances, and to constitute the
Purchaser and/or each applicable Acquiring Subsidiary the sole beneficial and
record owner thereof;
(iv) share certificates evidencing all of the issued TCFL Shares, duly
executed stock transfer form(s) for the TCFL Shares in favor of the U.K.
Purchaser, any power of attorney or other authority under which any transfer
is executed on behalf of TCFL and an executed irrevocable power of attorney
in favor of the U.K. Purchaser empowering the U.K. Purchaser to exercise
TCHL's rights as a shareholder of TCFL pending stamping and registration of
the transfer of the TCFL Shares, so as to transfer to the U.K. Purchaser at
the Closing good and valid title to all of the allotted and issued TCFL
Shares as of the date hereof, with full title guarantee and free and clear of
all Encumbrances, other than any Purchaser Encumbrances and to constitute the
U.K. Purchaser the sole legal and beneficial owner thereof;
(v) a true copy of the deed of transfer of the TGMBH Shares by BWAC 21 and
TGI to the Purchaser or the relevant Acquiring Subsidiary, executed before a
civil law notary in accordance with German Law, so as to transfer and assign
to the Purchaser or the applicable Acquiring Subsidiary at the Closing, good
and valid title to the TGMBH Shares, free and clear of all Encumbrances other
than Purchaser Encumbrances, and to constitute the Purchaser or the
applicable Acquiring Subsidiary the sole beneficial and record owner thereof;
(vi) a xxxx of sale, assignment and assumption, substantially in the form
attached hereto as Exhibit 2.04(a)(vi) (the "Xxxx of Sale"), duly executed by
each of the Asset Sellers, transferring to the Purchaser and/or each
applicable Acquiring Subsidiary, free and clear of all Encumbrances other
than Permitted Encumbrances, the Acquired ISF Assets;
31
(vii) deeds of sale evidencing the transfer of all Owned Property from
each Purchased Entity that owns Owned Property, to one or more Persons (other
than another Purchased Entity);
(viii) a receipt or receipts for each Initial Payment, the Initial
Intercompany Debt Payment and the Premium; and
(ix) the certificates and other documents required to be delivered
pursuant to Section 8.02.
(b) On the Closing Date and immediately following the Closing the
Selling Entities shall deliver or cause to be delivered to the Purchaser or its
designee all promissory notes issued or executed by any Purchased Entity
evidencing Indebtedness of the Purchased Entities to the Selling Entities or any
of their Affiliates (other than any Purchased Entity) as of the time immediately
prior to the Closing marked "PAID IN FULL."
.5 Deliveries by the Purchaser.
(a) At the Closing, the Purchaser shall deliver or cause to be
delivered to the Seller or its designee:
(i) each Initial Payment and the Premium plus, (A) if the Closing occurs
(1) on any day other than the Cut-Off Date and (2) on or before the 15th day
of any month, interest on such amounts from (but not including) the Cut-Off
Date to and including the Closing Date at the Settlement Rate, as in effect
from time to time, calculated on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be, or (B) if the
Closing occurs (1) on any day other than the Cut-Off Date and (2) on or after
the 16th day of any month, the Cut-Off Date Adjustment Amount, in each case,
by wire transfer or transfers in immediately available funds to the Seller
Bank Account(s). In the event that the Purchaser is unable on the Closing
Date to make one or more wire transfers of any amounts comprising the Initial
TCFL Payment as a result of banking institutions in the United Kingdom at the
time such payments are to be made being closed, then the Purchaser shall make
each such payment on the next day that banking institutions are open for
business in the United Kingdom, and such payment shall be deemed, for
purposes of this Agreement, to have occurred on the Closing Date;
(ii) a Xxxx of Sale, duly executed by the Purchaser or the applicable
Acquiring Subsidiary; and
(iii) the certificates and other documents required to be delivered
pursuant to Section 8.01.
(b) On the Closing Date and immediately following the Closing, the
Purchaser shall deliver or cause to be delivered to the Seller Bank Account(s)
by wire transfer or transfers in immediately available funds, the Initial
Intercompany Debt
32
Payment. In the event that the Purchaser is unable on the Closing Date to make
one or more wire transfers of any amounts comprising the Initial Intercompany
Debt Payment in any currency other than United States dollars as a result of
banking institutions in jurisdictions outside the United States being closed at
the time such payments are to be made, then the Purchaser shall make each such
payment on the next day that banking institutions are open for business in the
jurisdiction in which the underlying obligation arose, and all such payments
shall be deemed, for purposes of this Agreement, to have occurred on the Closing
Date and immediately following the Closing. The payment of the Initial
Intercompany Debt Payment to the Seller or its designee pursuant to this Section
2.05(b), shall be treated, with respect to all Purchased Entities other than
TCFL, as a cancellation, release, discharge and satisfaction in full, and with
respect to TCFL, as discharge and satisfaction in full, of all Indebtedness of
any of the Purchased Entities to any of their Affiliates (other than another
Purchased Entity), but shall in no event be deemed to limit any rights or
obligations of any party hereto under Section 2.06.
.6 Purchase Price Adjustment.
On the Settlement Date, the following amounts shall be paid:
(a) In the event that the sum of (i) the Initial Company Payment plus
(ii) the Initial Public Finance Payment plus (iii) the Initial TCFL Payment
(expressed in dollars, converting the Initial TCFL Payment amount from pounds
sterling to U.S. dollars at Barclays Bank plc's spot rate for the purchase of
U.S. dollars as of 11:00 am (local time) in New York, New York on the Cut-Off
Date) plus (iv) the Initial TGMBH Payment plus (v) the Initial TFBV Payment
exceeds the Adjusted Pro Forma Shareholders' Equity of the Company, the Parent
shall cause the Seller to pay the amount of such excess to the Purchaser or the
applicable Acquiring Subsidiaries by wire transfer in immediately available
funds to an account designated in writing by the recipient thereof;
(b) In the event that the Adjusted Pro Forma Shareholders' Equity of
the Company exceeds the sum of (i) the Initial Company Payment plus (ii) the
Initial Public Finance Payment plus (iii) the Initial TCFL Payment (expressed in
dollars, converting the Initial TCFL Payment amount from pounds sterling to U.S.
dollars at Barclays Bank plc's spot rate for the purchase of U.S. dollars as of
11:00 am (local time) in New York, New York or the Cut-Off Date) plus (iv) the
Initial TGMBH Payment plus (v) the Initial TFBV Payment, the Purchaser shall
pay, or shall cause the applicable Acquiring Subsidiary to pay, the amount of
such excess to the Seller by wire transfer in immediately available funds to an
account designated in writing by the Seller;
(c) In the event that the amount of the Initial Acquired ISF Assets
Payment exceeds the Adjusted Acquired ISF Assets Amount, the Parent shall pay
(or shall cause TLI to pay) the amount of such excess to the Purchaser or the
applicable Acquiring Subsidiaries by wire transfer in immediately available
funds to an account designated in writing by the recipient thereof;
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(d) In the event that the Adjusted Acquired ISF Assets Amount exceeds
the Initial Acquired ISF Assets Payment, the Purchaser shall pay, or shall cause
the applicable Acquiring Subsidiaries to pay, the amount of such excess to TLI
by wire transfer in immediately available funds to an account designated in
writing by TLI;
(e) In the event that the Initial Intercompany Debt Payment exceeds the
aggregate amount of the Intercompany Debt, determined in accordance with the
provisions of Section 5.05(a)(vii), the Seller shall pay the amount of such
excess to the Purchaser by wire transfer in immediately available funds to an
account designated in writing by the Purchaser (and to the extent that such
excess reflects an overpayment made in respect of Intercompany Debt owed by TCFL
or any U.K. Subsidiary, the Purchaser will receive such repayment as agent for
TCFL or any U.K. Subsidiary, as appropriate); and
(f) In the event that the aggregate amount of the Intercompany Debt, as
determined in accordance with the provisions of Section 5.05(a)(vii) exceeds the
Initial Intercompany Debt Payment, the Purchaser shall pay the amount of such
excess to Seller by wire transfer in immediately available funds to an account
designated in writing by the Seller (and to the extent that such excess reflects
an underpayment in respect of Intercompany Debt owed by TCFL or any U.K.
Subsidiary, the Purchaser will pay such amount as agent for TCFL or any U.K.
Subsidiary, as appropriate, and such payment will discharge and satisfy such
company's indebtedness to its Affiliates (other than another Purchased Entity)).
.7 Interest and Payments. Any payments required to be made pursuant to
Section 2.06(a) through (d) shall bear interest from the Cut-Off Date through
the date of payment at the Settlement Rate, as in effect from time to time,
calculated on a basis of the actual number of days elapsed in a year of three
hundred sixty-five (365) or three hundred sixty-six (366) days, as the case may
be. Any payments required to be made pursuant to Section 2.06(e) through (f)
shall bear interest from the Closing Date through the date of payment at the
Settlement Rate, as in effect from time to time, calculated on a basis of the
actual number of days elapsed in a year of three hundred sixty-five (365) or
three hundred sixty-six (366) days, as the case may be. Payments required to be
made pursuant to Section 2.05(a)(i) and Section 2.06(a) through Section 2.06(d)
shall be denominated in Dollars except that, unless otherwise specified by a
Selling Entity in a written notice delivered at least three (3) Business Days
prior to the Closing Date, payments in respect of the TCFL Shares shall be
denominated in pound sterling. Payments required to be made pursuant to Section
2.05(b) and Section 2.06(e) and Section 2.06(f) shall be determined and paid in
the currency in which Intercompany Debt is denominated. The making of any
payments in the manner and amounts set forth in this Article II shall constitute
a full discharge of the payment obligations of any such payor pursuant to this
Article II, and such Person shall not be obligated to inquire into the
distribution of any sums so paid.
.8 Post-Closing Amounts Received and Paid. (a) All amounts which are
received by the Selling Entities or any of their Affiliates (other than the
Purchased
34
Entities) in respect of the Acquired ISF Assets which are allocable to periods
after the Cut-Off Date, shall be received by such Person as agent, in trust for
and on behalf of the Purchaser, and following the Closing the Selling Entities
shall, on a weekly basis, pay, or cause to be paid, by wire transfer of
immediately available funds to the Purchaser all such amounts received by or
paid to any Selling Entity or any of its Affiliates and shall provide the
Purchaser information as to the nature and source of such payments, including
any invoice related thereto. All amounts included in the ISF Excluded Assets (or
which are paid in respect of the ISF Excluded Assets) and received by the
Purchaser or any Acquiring Entity following the Closing shall be received by the
Purchaser as agent, in trust for and on behalf of the applicable Asset Seller,
and the Purchaser shall, on a weekly basis, pay or cause to be paid all such
amounts over to the applicable Asset Seller by wire transfer of immediately
available funds and shall provide the applicable Asset Seller information as to
the nature and source of such payments, including any invoice relating thereto.
(b) At the Closing, the Asset Sellers shall transfer and assign to the
Purchaser good and marketable title, free and clear of all Encumbrances other
than Permitted Encumbrances, to all Property acquired, originated or entered
into by any Asset Seller in accordance with this Agreement during the period
commencing on the Cut-Off Date and ending on the Closing Date that would have
been Acquired ISF Assets if acquired, originated or entered into prior to the
Cut-Off Date.
.9 Deferred Closing. (a) If all of the conditions precedent to the
consummation of the Acquisition have been satisfied or waived other than one or
more Regulatory Approvals affecting one or more of the Purchased Entities or the
Acquired ISF Assets, then the parties agree that they will negotiate diligently
and in good faith the terms and conditions on which they would defer the closing
of the acquisition of such affected Persons or Property, including using their
respective commercially reasonable efforts to enter into appropriate amendments
to this Agreement.
(b) Without limiting the foregoing, if on any date (i) all of the
conditions precedent to the consummation of the Acquisition have been satisfied
or waived other than those Regulatory Approvals relating to the acquisition of
TCFC Canada and its Subsidiaries and any other business, assets, operations and
activities of the Purchased Entities that are located in Canada or (ii) any
Governmental Authority shall have issued an order, decree or ruling or shall
have taken any Action restraining, enjoining or otherwise prohibiting the
Acquisition, and such order, decree ruling or Action relates solely to the
acquisition of TCFC Canada, its Subsidiaries and any other business, assets,
operations and activities that are located in Canada, then if such date is on or
prior to the Termination Date, the Seller shall have the right to cause TCFC
Canada, and its Subsidiaries and other business, assets, operations or
activities in Canada to become Excluded Subsidiaries for the limited purpose of
closing the remainder of the transactions contemplated by this Agreement and if
such date is the Termination Date, Purchaser shall have the right to cause TCFC
Canada, and its Subsidiaries and other business, assets, operations or
activities in Canada to become Excluded Subsidiaries for the limited purpose of
closing the remainder of the transactions contemplated by this Agreement.
35
Upon delivery of written notice to the other parties hereto that, either the
Purchaser or the Seller has elected to proceed with the Closing of the other
transactions contemplated by this Agreement, the parties shall immediately take
all steps necessary or desirable to comply with clause (a) hereof including by
using commercially reasonable efforts to enter into such amendments to the
Transition Services Agreement as shall be necessary in order to provide to TCFC
Canada and its Subsidiaries, on market terms and conditions, access to such
systems, personnel and software as are owned by the Purchased Entities (other
than TCFC Canada and its Subsidiaries) and currently utilized by TCFC Canada and
its Subsidiaries in the conduct and operations of their respective businesses,
and, in the event of a failure to close the acquisition of TCFC Canada and its
Subsidiaries, a licensing of all applicable software, at reasonable, market
rates, subject to mutually acceptable licensing agreements. Upon delivery of
such notice, the Regulatory Approval relating to such acquisition shall no
longer constitute a condition precedent to the Acquisition.
.10 Consents; Administration Pending Consent. (a) Notwithstanding
anything in this Agreement to the contrary, this Agreement shall not constitute
an agreement to assign any Acquired ISF Asset or right that is included in the
Acquired ISF Assets but is not assignable or transferable without the consent of
any Person, other than the Purchaser or any of its Affiliates, or the Seller or
any of its Affiliates, or for which assignment without such consent would
constitute a breach or in any way adversely affect the rights of the Purchaser
thereunder to the extent that such consent shall not have been obtained prior to
the Closing; provided, however, that the Seller shall have the continuing
obligation after the Closing to use all reasonable efforts to endeavor to obtain
all necessary consents to the assignment thereof and, upon obtaining the
requisite third party consents thereto, such agreement, license or right, shall
be transferred and assigned to the Purchaser or an Acquiring Subsidiary
hereunder.
(b) With respect to any Acquired ISF Asset or right included in the
Acquired ISF Asset that is not assigned to the Purchaser at the Closing by
reason of Section 2.10(a) but in respect of which payment is made under Section
2.05, after the Closing and until the applicable requisite consents are obtained
and the foregoing sold and assigned to the Purchaser or the applicable Acquiring
Subsidiary, the Seller, TLI or any other applicable Asset Seller shall provide
to the Purchaser the benefits under each such Acquired ISF Asset or right (with
the Purchaser responsible for all liabilities and obligations thereunder to the
extent it would be liable under the applicable Acquired ISF Asset if the
requisite consent had been obtained and such Acquired ISF Asset has been
assigned to the Purchaser). In particular, in the event that any requisite
consent is not obtained prior to Closing, then the Purchaser and Selling
Entities shall enter into such arrangements (including sublicensing, subleasing
or subcontracting if permitted) to provide to the Purchaser or the applicable
Acquiring Subsidiary the economic and operational equivalent of obtaining such
requisite consent and assigning such Acquired ISF Asset or right, including
enforcement for the benefit of the Purchaser or the applicable Acquiring
Subsidiary of all claims or rights arising thereunder, and the performance by
the Purchaser or the applicable Acquiring Subsidiary of the obligations
thereunder. The Selling Entities shall take all actions reasonably requested by
the Purchased Entities or the Purchaser to enforce their rights under any such
Acquired ISF
36
Assets including the assertion and enforcement of any right, claim,
presentation, demand or draw under or with respect to any such Acquired ISF
Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this Agreement, except
as set forth in the Disclosure Schedule, the Selling Entities hereby jointly and
severally represent and warrant to the Purchaser as of the date hereof and as of
the Closing Date (or as of such other date as may be expressly provided in any
representation and warranty in this Article III) as follows:
.1 Organization, Authority and Qualification. Each Selling Entity is
duly organized and validly existing under the Laws of the state of its
incorporation or organization and has all necessary power and authority to enter
into this Agreement, the Related Agreements and any other documents, agreements
or instruments to be executed and delivered by it pursuant hereto and thereto,
to carry out its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement, the Related Agreements and any other documents, agreements or
instruments to be executed and delivered by any Selling Entity pursuant hereto
and thereto, the performance by any Selling Entity of its obligations hereunder
and thereunder and the consummation by each Selling Entity and its Affiliates of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite action on the part of such Selling Entity and its Affiliates. This
Agreement has been, and upon their execution, each of the Related Agreements and
any other document, agreement or instrument to be executed and delivered by any
Selling Entity pursuant hereto and thereto shall have been, duly executed and
delivered by each such Selling Entity party thereto, and (assuming due
authorization, execution and delivery by the Purchaser) this Agreement
constitutes, and upon their execution, each of the Related Agreements and any
other document, instrument or agreement to be executed and delivered by any
Selling Entity pursuant hereto and thereto will constitute, a legal, valid and
binding obligation of such Selling Entity, enforceable against it in accordance
with its terms, except as enforcement thereof may be limited by the Bankruptcy
Exception.
.2 Organization, Authority and Qualification of the Purchased Entities.
(a) Each Purchased Entity (i) is duly organized, validly existing and
in good standing under the Laws of its jurisdiction of incorporation or
organization, (ii) has all necessary power and authority to own, operate or
lease its Property and to carry on its business as it is now being conducted,
and (iii) is duly licensed or qualified to do business and is, and since January
1, 2000 has been, in good standing in each jurisdiction in which the Property
owned or leased by it or the operation of its business makes such licensing or
qualification necessary except, in the case of clause (ii) or (iii), where the
failure to be so authorized, licensed, qualified or in good standing has not had
and would not have a Material Adverse Effect.
37
(b) Section 3.02(b) of the Disclosure Schedule accurately sets forth
for each Purchased Entity, all of the jurisdictions in which such Purchased
Entity is licensed or qualified to do business, each license held by such
Purchased Entity and the jurisdiction in respect of which each such license is
held.
(c) True and correct copies of the articles of incorporation, by laws
and all equivalent constituent documents of each of the Purchased Entities,
including all amendments thereto through the date hereof, each as in effect on
the date hereof, have been delivered by the Seller to the Purchaser.
(d) The minute books of each of the Purchased Entities are held at one
or more of the Leased Properties or, to the Seller's Knowledge, at the offices
of legal counsel to the Purchased Entities, and are accurate and complete in all
material respects and reflect all material actions taken by the incorporators,
stock or other equity holders and board of directors or similar governing body
(including any committees thereof) of such Persons since their respective dates
of organization.
.3 Capital Stock of the Company, Public Finance, TCFL, TFBV and TGMBH;
Ownership of the Shares, the Public Finance Interests, the TCFL Shares, the TFBV
Shares and the TGMBH Shares.
(a) The authorized Capital Stock of the Company consists of 1,000
shares of common stock, par value $1.00 per share, of which 1,000 shares are
issued and outstanding. All of the Shares are duly authorized and validly
issued, fully paid and nonassessable and free of preemptive rights. There are no
outstanding or authorized options, warrants, convertible securities or other
rights, agreements, arrangements or commitments of any character relating to the
Capital Stock of the Company or obligating the Parent, the Seller or any of its
Affiliates (including the Company) to issue or sell any shares of Capital Stock
of, or any other interest in, the Company, except as specifically provided in
Section 2.01 of this Agreement. The Shares constitute all the issued and
outstanding Capital Stock of the Company and are owned of record and
beneficially solely by the Seller, free and clear of all Encumbrances. Upon
consummation of the Acquisition and registration of the Shares in the name of
the Purchaser or the relevant Acquiring Subsidiary in the stock records of the
Company, the Purchaser or the relevant Acquiring Subsidiary will own all the
issued and outstanding Capital Stock of the Company, free and clear of all
Encumbrances, other than Purchaser Encumbrances. There are no voting trusts,
stockholder agreements, proxies or other agreements or understandings with
respect to the voting or transfer of any of the Shares.
(b) The total contributed capital of Public Finance consists of a
capital contribution in an amount of $45,002,259 (not reflective of
undistributed profits and losses), of which (42%) was contributed by Parent,
(29%) was contributed by Seller and (29%) was contributed by the Company. The
total contributed capital constitutes all of the outstanding Capital Stock of
Public Finance. All of the Public Finance Interests are duly authorized and
validly issued, fully paid and nonassessable and free of preemptive rights.
There are no outstanding or authorized options, warrants, convertible securities
or
38
other rights, agreements, arrangements or commitments of any character relating
to the Capital Stock of Public Finance or obligating the Parent, the Seller, the
Company or any of their respective Affiliates (including Public Finance) to
issue or sell any shares of Capital Stock of, or any other interest in, Public
Finance, except as specifically provided in Section 2.01 of this Agreement. The
Public Finance Interests held by the Parent, the Seller and the Company
constitute all of the issued and outstanding Capital Stock of Public Finance and
are owned of record and beneficially solely by the Parent, the Seller and the
Company, free and clear of all Encumbrances. Upon consummation of the
Acquisition and registration of the Public Finance Interests in the name of the
Purchaser or the applicable Acquiring Subsidiaries in the books and records of
Public Finance, the Company and the Purchaser (or the applicable Acquiring
Subsidiaries), together, will own all the issued and outstanding Capital Stock
of Public Finance, free and clear of all Encumbrances, other than Purchaser
Encumbrances. There are no voting trusts, stockholder agreements, proxies or
other agreements or understandings with respect to the voting or transfer of any
of the Public Finance Interests.
(c) The authorized Capital Stock of TCFL consists of 5,000,000 ordinary
shares of (pound)1 each, of which 5,000,000 shares are validly allotted issued
and fully paid and are freely transferable. There are no outstanding or
authorized options, warrants, convertible securities or other rights,
agreements, arrangements or commitments of any character relating to the Capital
Stock of TCFL or obligating the Parent, the Seller or any of its Affiliates
(including TCFL) to issue or sell any shares of Capital Stock of, or any other
interest in, TCFL and no person has claimed or has the right to claim, any such
obligation, agreement, arrangement or commitment, except as specifically
provided in Section 2.01 of this Agreement. The TCFL Shares held by TCHL
constitute all of the issued and allotted Capital Stock of TCFL and are owned
legally and beneficially solely by the TCHL, free and clear of all Encumbrances.
Upon consummation of the Acquisition, stamping of the stock transfer forms and
registration of the TCFL Shares in the name of the Purchaser or the relevant
Acquiring Subsidiary in the company books of TCFL, the Purchaser or the relevant
Acquiring Subsidiary will own all the allotted and issued Capital Stock of TCFL,
and with full title guarantee free and clear of all Encumbrances, other than
Purchaser Encumbrances. There are no voting trusts, stockholder agreements,
proxies or other agreements or understandings with respect to the voting or
transfer of any of the TCFL Shares.
(d) The total authorized Capital Stock of TFBV consists of 15,000
ordinary shares, par value 1,000 guilders per share, of which 400 shares are
issued and outstanding. All of the TFBV Shares are duly authorized and validly
issued, fully paid and nonassessable and free of preemptive rights. There are no
outstanding or authorized options, warrants, convertible securities or other
rights, agreements, arrangements or commitments of any character relating to the
Capital Stock of TFBV or obligating the Parent, the Seller or any of its
Affiliates (including TFBV) to issue or sell any shares of Capital Stock of, or
any other interest in, TFBV, except as specifically provided in Section 2.01 of
this Agreement. The TFBV Shares held by TGI constitute all of the issued and
outstanding Capital Stock of TFBV and are owned of record and beneficially
solely by TGI, free and clear of all Encumbrances. Upon consummation of the
39
Acquisition by execution of a notarial deed of transfer before a civil law
notary (or his deputy) in the Netherlands and registration of the TFBV Shares in
the name of the Purchaser in the shareholders' register of TFBV, the Purchaser
or the relevant Acquiring Subsidiary will own all the issued and outstanding
Capital Stock of TFBV, free and clear of all Encumbrances, other than Purchaser
Encumbrances. There are no voting trusts, stockholder agreements, proxies or
other agreements or understandings with respect to the voting or transfer of any
of the TFBV Shares.
(e) The total authorized Capital Stock of TGMBH consists of 50,000
ordinary shares with a total capital of DM 50,000, of which 90% is owned by TGI
and 10% is owned by BWAC 21. All of the TGMBH Shares are duly authorized and
validly issued, fully paid and nonassessable and free of preemptive rights.
There are no outstanding or authorized options, warrants, convertible securities
or other rights, agreements, arrangements or commitments of any character
relating to the Capital Stock of TGMBH or obligating the Parent, the Seller or
any of its Affiliates (including TGMBH) to issue or sell any shares of Capital
Stock of, or any other interest in, TGMBH, except as specifically provided in
Section 2.01 of this Agreement. The TGMBH Shares held by TGI and BWAC 21
constitute all of the issued and outstanding Capital Stock of TGMBH and are
owned of record and beneficially solely by TGI and BWAC 21, free and clear of
all Encumbrances. Upon consummation of the Acquisition and the recording of a
deed of transfer and this Agreement by a civil law notary in accordance with
applicable Law, the Purchaser or the relevant Acquiring Subsidiary will own all
the issued and outstanding Capital Stock of TGMBH, free and clear of all
Encumbrances, other than Purchaser Encumbrances. There are no voting trusts,
stockholder agreements, proxies or other agreements or understandings with
respect to the voting or transfer of any of the TGMBH Shares.
.4 Purchased Entities.
(a) Section 3.04(a) of the Disclosure Schedule lists, for each
Purchased Entity (other than the Company, TCFL, TFBV, TGMBH and Public Finance),
its name, type of entity, jurisdiction and date of its incorporation or
organization, its authorized Capital Stock, the number and type of its issued
and outstanding shares of Capital Stock and the current ownership of such
Capital Stock. Except as disclosed in Section 3.04(a) of the Disclosure
Schedule, the Company owns (or, after giving effect to the provisions of Section
5.12, will own), directly or indirectly, all of the issued and outstanding
Capital Stock of each of the other Purchased Entities, free and clear of all
Encumbrances, and all such Capital Stock is (or will be at Closing) duly
authorized and validly issued, fully paid and nonassessable and free of
preemptive rights. There are no outstanding or authorized options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any character (including stock appreciation rights, phantom stock or similar
rights) relating to the Capital Stock of the Purchased Entities or obligating
the Parent, the Seller or any of its Affiliates (including the Purchased
Entities) to issue or sell any shares of Capital Stock of any of the Purchased
Entities. There are no voting trusts, stockholder agreements, proxies or other
agreements or understandings with respect to the voting or transfer of any of
the Capital Stock of any of the Purchased Entities.
40
(b) Except as disclosed in Section 3.04(b) of the Disclosure Schedule
and other than the Purchased Entities and the Excluded Subsidiaries, there are
no other Persons in which any Purchased Entity owns, of record or beneficially,
any direct or indirect equity or other ownership interest (including Capital
Stock) or possesses any right (contingent or otherwise) to acquire the same.
Except as set forth in Section 3.04(b) of the Disclosure Schedule, there are no
obligations of any Purchased Entity to (i) repurchase, redeem or otherwise
acquire any shares of Capital Stock of any other Person or (ii) make any equity
investment in or capital contribution to, any other Person. Except as disclosed
in Section 3.04(b) of the Disclosure Schedule and other than in respect of
another Purchased Entity, no Purchased Entity is a member of (nor is any part of
its business conducted through) any partnership, joint venture or similar
entity.
.5 No Conflict. Assuming that all consents, approvals, authorizations,
filings, notifications and other actions described in Section 3.06 of the
Disclosure Schedule and the Regulatory Approvals have been obtained, made or
taken, as applicable, the execution, delivery and performance of this Agreement,
the Related Agreements and any other document to be executed and delivered
hereto or thereto by each Selling Entity, the compliance by each Selling Entity
with the terms and provisions hereof or thereof and the consummation by each
Selling Entity of the transactions contemplated hereby or thereby will not (a)
violate, conflict with or result in the breach of any provision of the charter
or by laws (or similar organizational documents) of such Selling Entity, or any
Purchased Entity, (b) conflict with or violate any Law or Governmental Order
applicable to such Selling Entity, any Purchased Entity or any of their
respective assets, properties or businesses, (c) with respect to any material
note, bond, mortgage or indenture, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which a Selling
Entity or a Purchased Entity is a party or by which any of the Shares, the
Public Finance Interests, the TCFL Shares, the TFBV Shares, the TGMBH Shares or
the Acquired ISF Assets or any Selling Entity's or any Purchased Entity's assets
or properties is bound, (i) conflict with, result in any breach of, constitute a
default (or event which with the giving of notice or lapse of time, or both,
would become a default) under any of the foregoing, (ii) require any consent,
notice, report or other filing under any of the foregoing, (iii) give to others
any rights of termination, amendment, acceleration, suspension, revocation or
cancellation of any of the foregoing which would reasonably be expected to
interfere in any material respect with the operation of any Purchased Entity's
business in the ordinary course, or (iv) result in injunctive or equitable
relief being granted against any Purchased Entity that materially interferes
with the operation of its business in the ordinary course or (v) result in any
Loss, forfeiture, fine, penalty or fee in excess of $100,000, (d) result in the
creation of any Encumbrance on any of the Shares, the Public Finance Interest,
the TCFL Shares, the TFBV Shares, the TGMBH Shares, the Acquired ISF Assets or
on any of the assets or properties of any of the Purchased Entities, other than
any Purchaser Encumbrance, or (e) give rise to a right by a third party to
terminate the rights of a Purchased Entity to continue to use all of the Assets
(other than Financing Contracts) currently employed by such Purchased Entity
(or, after giving effect to the provisions of Section 5.12, to be employed by
such Purchased Entity) in the conduct of its business consistent with its past
practices.
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.6 Authorizations. Except as set forth in Section 3.06 of the
Disclosure Schedule and other than the Regulatory Approvals, no notices, reports
or other filings are required to be made by any Selling Entity with, nor are any
Authorizations required to be obtained from any Governmental Authority or any
other Person in connection with (i) the execution and delivery by any Selling
Entity of this Agreement, each of the Related Agreements or any other document,
agreement or instrument to be executed and delivered by any of them pursuant
hereto or thereto or (ii) the consummation by any Selling Entity of the
transactions contemplated hereby or thereby (including the assignment of
Excluded Assets and the assumption of Excluded Liabilities contemplated in
Section 5.11 and the assignment of the Other Acquired Business Assets
contemplated by Section 5.12) other than, in each case, those Authorizations the
failure to obtain which would not reasonably be expected to (i) materially
interfere with the operation of any Purchased Entity's business in the ordinary
course, (ii) result in any Loss, forfeiture, fine or penalty in excess of
$100,000, or (iii) result in injunctive or equitable relief being granted
against any Purchased Entity that interferes in any material respect with the
operation of any Purchased Entity's business in the ordinary course.
.7 Financial Information.
(a) The Seller has previously provided to the Purchaser true, complete
and correct copies of the audited consolidated balance sheet of the Parent and
its subsidiaries for each of the years ended December 31, 2000, December 31,
2001 and December 31, 2002 and the related consolidated audited statements of
income and cash flows, accompanied by the reports thereon of the Seller's
Accountants, and in each case, the notes, schedules and exhibits thereto (the
"Historical Financial Statements"). The Historical Financial Statements were
prepared from the books and records of the Parent and its subsidiaries, and the
balance sheets of the Parent and its subsidiaries included in the Historical
Financial Statements present fairly in all material respects the consolidated
financial condition and results of operations of the Parent and its subsidiaries
as of such dates or for the periods covered thereby, and the statements of
income and cash flows of the Parent and its subsidiaries included in the
Historical Financial Statements present fairly in all material respects the
results of income, and cash flows, as the case may be, of the Parent and its
subsidiaries for the periods set forth therein, in each case in accordance with
GAAP (as in effect on the dates of such statements) applied in a manner
consistent with the Accounting Principles (as in effect on the dates of such
statements).
(b) The Seller has previously provided to the Purchaser true, complete
and correct copies of the unaudited management statements for each of the
Business Lines for the year ended December 31, 2002 (the "Historical Management
Statement"). The Historical Management Statement was prepared from the books and
records of the Purchased Entities, the International Structured Finance
division, or the applicable Business Line and the information contained therein
is true, complete and accurate in all material respects as of December 31, 2002.
The Historical Management Statement was prepared in accordance with the
Accounting Principles (as in effect on the date of such statement).
42
(c) The Seller has previously provided to the Purchaser true, complete
and correct copies of (i) Seller management reports which set forth for each
Business Line, a reconciliation of net income from the Historical Financial
Statement for the year ended December 31, 2002 to the Historical Management
Statement of such Business Line for the corresponding period and (ii) Seller
management reports which set forth for each Business Line, a reconciliation of
total assets from the Historical Financial Statement for the year ended December
31, 2002 to the Historical Management Statement of such Business Line for the
corresponding period (the management reports referred to in clauses (i) and (ii)
collectively, the "Reconciliation Statements"). Each of the Reconciliation
Statements was prepared from the books and records of the Parent and the
Purchased Entities, the International Structured Finance division or the
applicable Business Line.
(d) The Seller has previously provided to the Purchaser true, complete
and correct copies of the unaudited management financial statements for each
Business Line for the six (6) month period ended June 30, 2003, and in each
case, the notes, schedules and exhibits thereto, if any (collectively, the
"Management Statements"). Each of the Management Statements was prepared from
the books and records of the Purchased Entities, the International Structured
Finance division or the Business Line, as applicable, and the information
contained therein is true, complete and accurate in all material respects as of
such dates or for the periods covered thereby, The Management Statements were
prepared in accordance with the Accounting Principles (as in effect on the dates
of such statements).
(e) All of the Portfolio Information and other data set forth in the
Initial Portfolio Tape and in the Initial Acquired ISF Assets Portfolio Tape is
true, correct, complete and accurate in all material respects.
(f) The letter agreement referred to in Section 1.02(d) has attached as
Schedule 3.07(f) thereto, true, complete and correct copies of various financial
reports prepared from the books and records of the Purchased Entities, and the
information contained therein is true, complete and accurate in all material
respects as of the periods covered thereby. Such financial reports were prepared
in accordance with the Accounting Principles (as in effect on the dates of such
statements).
(g) The letter agreement referred to in Section 1.02(d) has attached as
Schedule 3.07(g) thereto, true, complete and correct copies of management
reports which set forth for each Business Line, a balance sheet of the Purchased
Entities part of such Business Line at and for the six month period ended June
30, 2003 (collectively, the "Purchased Entity Statements"). Each Purchased
Entity Statement was prepared from the books and records of the Purchased
Entities and the information contained therein is true, complete and accurate in
all material respects as of June 30, 2003. The Purchased Entity Statements were
prepared in accordance with the Accounting Principles as in effect on June 30,
2003.
.8 No Undisclosed Liabilities. There are no Liabilities of any
Purchased Entity other than Liabilities (i) reflected or adequately reserved
against on the Historical
43
Management Statements dated as of December 31, 2002, (ii) incurred by the
Purchased Entities in the ordinary course of business of their business,
consistent with their respective past practices, but only to the extent that
such Liabilities either will be discharged or repaid on or prior to Cut-Off Date
or reflected in the Adjusted Cut-Off Date Pricing Schedule, (iii) incurred in
the ordinary course of business, consistent with its past practices, pursuant to
contracts for the receipt by such Purchased Entity of goods or services used or
useful in its business and operations, (iv) reflected on the Adjusted Cut-Off
Date Pricing Schedule, or (v) disclosed in Section 3.08 of the Disclosure
Schedule.
.9 Conduct in the Ordinary Course; Absence of Certain Changes, Events
and Conditions.
(a) Since December 31, 2002, except as described in Section 3.09(a) of
the Disclosure Schedule, the Acquired Businesses have been conducted in the
ordinary course and consistent with their respective past practices and no
Acquired Business has suffered any Material Adverse Effect. Without limiting the
foregoing, except as specifically contemplated by this Agreement or disclosed in
Section 3.09(a) of the Disclosure Schedule, since December 31, 2002, no
Purchased Entity and, with respect to clauses (iii), (vi) and (viii), no Asset
Seller (with respect to the Acquired International Structured Finance Business)
has:
(i) (A) merged with, entered into a consolidation with or acquired an
interest of 5% or more in any Person or acquired a substantial portion of the
business of any Person or any division or line of business thereof, or (B)
otherwise acquired any assets in excess of $10 Million individually or $50
Million in the aggregate, other than Ordinary Course Asset Transactions of
such Purchased Entity or Asset Seller (as applicable);
(ii) other than in the ordinary course of business, consistent with their
respective past practices with respect to salary and benefits matters,
entered into any agreement, arrangement or transaction with any of its
directors, officers, employees or shareholders (other than any other
Purchased Entity) or, to Seller's Knowledge, with any spouse or Affiliate of
such Person;
(iii) made any change in any method of accounting or accounting practice
or policy (including any changes to the equity accounts or intangible assets
reflected on the Historical Management Statement dated December 31, 2002
included in the Financial Statements);
(iv) except in the ordinary course of business consistent with its past
practice, (A) incurred any Indebtedness, other than Indebtedness with the
Seller or an Affiliate of the Seller or pursuant to one of the agreements set
forth in Section 5.01(d)(ix) of the Disclosure Schedule or (B) failed
promptly to pay and discharge current Liabilities, except in the case of such
Liabilities which are disputed in good faith and for which adequate reserves
are maintained by the applicable Purchased Entity;
44
(v) (A) other than in the ordinary course of business, consistent with its
past practices, granted any increase, or announced any increase, in the
wages, salaries, compensation, bonuses, incentives, pension or other benefits
payable to any Company Employees, including any increase or change pursuant
to any Company Benefit Plan or Company Benefit Arrangement, except as
required to be made by Law or (B) established, increased, decreased,
terminated or promised to increase, decrease or terminate any benefits under
any Company Benefit Plan or Company Benefit Arrangement, in either case,
except for changes as required to be made by Law or increases made in the
ordinary course of business consistent with its past practices or (C) entered
into any new, or modified any existing employment agreement, severance,
change in control or similar agreement with any Company Employee or made any
change in material employment terms for any Company Employee, in each case,
where the amount with respect to any (x) Foreign Plan or non-U.S. Company
Employee, exceeds $100,000 or (y) Company Benefit Plan, Company Benefit
Arrangement or Company Employee (other than a Foreign Plan or non-U.S.
Company Employee) is a material amount, and except for changes as required to
be made by Law;
(vi) directly or indirectly (A) in any way extended or otherwise
restructured the payment schedule, payment terms or any other material term
or condition of any Financing Contract or Vendor Program Agreement, other
than in the ordinary course of its business, consistent with its past
practices that, in each case, are accurately reflected, in all material
respects, in the Legal/Credit Files for such Financing Contract (subject to,
in the case of documentation in respect of Syndicated Facilities, the extent
provided by the applicable administrative or collateral agent, and otherwise
to ordinary course delays in receipt by the Purchased Entities of such
documents), (B) made any extension, novation, modification or other
accommodation to any Obligor or to any other Person under any Vendor Program
Agreement, other than extensions of the time to pay an amount due under a
Financing Contract or Vendor Program Agreement, novations, modifications or
other accommodations that were granted in the ordinary course of business by
a Purchased Entity or an Asset Seller consistent with its past practices and
that, in each case, are accurately reflected, in all material respects, in
the Legal/Credit Files for such Financing Contract (subject, in the case of
documentation in respect of Syndicated Facilities, to the extent provided by
the applicable administrative or collateral agent, and otherwise to ordinary
course delays in receipt by the Purchased Entities of such documents) or (C)
released any collateral or made any advance other than in the ordinary course
of its business, consistent with its past practices;
(vii) suffered any damage, destruction or casualty loss (other than with
respect to Portfolio Property), whether or not covered by insurance, in
excess of $250,000 in the case of any such individual Loss or $1 Million with
respect to the aggregate of all such Losses;
45
(viii) changed any of its existing credit, funding (including advance
rates or availability criteria), collateral monitoring, underwriting or
residual guidelines or policies, or changed, in any case, in any material
respect its Documentation, except for changes made in the ordinary course of
business consistent with its past practice;
(ix) sold, or disposed of, any of the assets or properties having a value
greater than $10 Million, other than (A) sales in the ordinary course of
business consistent in amounts with its past practice, of (1) any assets or
interests in any Property (including Financing Contracts) to securitization
vehicles, (2) participations in Financing Contracts in accordance with the
terms of the applicable credit underwriting, (3) surplus or obsolete Property
and (4) assets or Property owned by any Purchased Entity as a result of
judicial or non-judicial foreclosure or otherwise relating to the exercise of
creditor's rights and (B) pursuant to the provisions of (and to the extent
necessary to satisfy the obligations set forth in) Section 5.11; or
(x) agreed to take any of the actions specified in this Section 3.09.
(b) Except as set forth in Section 3.09(b) of the Disclosure Schedule,
since December 31, 2002, none of the Seller or any Purchased Entities have
discontinued any operation or line of business of the Acquired Businesses (other
than in connection with the provisions of (and only to the extent necessary to
satisfy the obligations set forth in) Section 5.08, Section 5.09 and Section
5.11). Except as set forth in Section 3.09(b) of the Disclosure Schedule, since
March 31, 2003, each of the Seller, the Purchased Entities and the Asset Sellers
have conducted their respective relationships with each Person having any
material commercial relationship with any Purchased Entity or any Asset Seller
(to the extent relating to any Acquired ISF Assets or Assumed ISF Liabilities)
in the ordinary course of business consistent with their respective past
practices. Except as set forth in Section 3.09(b) of the Disclosure Schedule,
since December 31, 2002, the Seller and its Affiliates (other than the Purchased
Entities) have conducted their respective business relationships with the
Purchased Entities and the Asset Sellers (to the extent relating to any Acquired
ISF Asset or any Assumed ISF Liability) only in the ordinary course of business
consistent with their respective past practice and have not dealt with or
entered into any contracts, commitments or arrangements with the Purchased
Entities and the Asset Sellers (to the extent relating to any Acquired ISF Asset
or any Assumed ISF Liability) on terms and conditions materially less favorable
to any Purchased Entity or Asset Seller than would be available in a comparable
transaction with a Person that is not an Affiliate of the Purchased Entities,
the Asset Sellers or the Seller.
(c) Except as set forth in Section 3.09(c) of the Disclosure Schedule,
since December 31, 2002, to the extent that any Purchased Entity or Asset Seller
has approved credit applications with respect to (i) financing transactions
constituting Backlog, which, as of the date of this Agreement or Closing (as
applicable), have not become Financing Contracts or (ii) Financing Contracts
entered into after December 31, 2002, but prior to the Closing, such Purchased
Entity or Asset Seller has complied with standards of
46
evaluating, originating, underwriting and funding new business in the ordinary
course of its business, which are consistent, in all material respects, with its
past practices.
.10 Litigation. Except as disclosed in the letter agreement described
in Section 1.02(d) to Purchaser on the date hereof:
(a) no Action by or against any of the Selling Entities or any
Purchased Entity is pending or, to the Seller's Knowledge, threatened, that (i)
contests the legality, validity or enforceability of this Agreement, the Related
Agreements or any Seller Related Document or (ii) seeks to delay or prevent the
consummation of, or that would be reasonably likely to materially and adversely
affect any Selling Entity's ability to consummate the transactions contemplated
by this Agreement, the Related Agreements and any other Seller Related Document;
(b) there are no Actions (i) pending (including any counterclaims) or,
to the Seller's Knowledge, threatened against any Purchased Entity or against
any Asset Seller with respect to any Acquired ISF Asset or any Assumed ISF
Liability (A) that seek damages, in the aggregate, in excess of $150,000 from
one or more Purchased Entity or Asset Seller, (B) that seek equitable or
injunctive relief against one or more Purchased Entity or Asset Seller (in
respect of any Acquired ISF Asset or Assumed ISF Liability), (C) that seek
Special Losses against one or more Purchased Entity or Asset Seller (in respect
of any Acquired ISF Asset or Assumed ISF Liability) or (D) that allege fraud or
bad faith by one or more Purchased Entity or Asset Seller (other than in
connection with ordinary course enforcement, foreclosure or collection
proceedings initiated by a Purchased Entity or an Asset Seller in the ordinary
course of its business), or (ii) in respect of which a Purchased Entity is the
plaintiff (other than ordinary course collection, foreclosure or enforcement
actions in respect of Financing Contracts); and
(c) no Purchased Entity and no Asset Seller (with respect to the
Acquired ISF Assets or Assumed ISF Liabilities) is or has been the subject of
any Action instituted or asserted by a Governmental Authority or any
Governmental Order nor to Seller's Knowledge have there been (i) any
investigations by or before any Governmental Authority, or (ii) to Seller's
knowledge any Governmental Orders threatened to be imposed on any Purchased
Entity or any Asset Seller (with respect to the Acquired International
Structured Finance Business), in either case, relating to the business practices
of such Purchased Entity or such Asset Seller from January 1, 2000 through the
Closing Date which, in each case, (A) have materially interfered (or which would
reasonably be expected to interfere, in the case of any such pending Action)
with the operation of any Acquired Business in the ordinary course of its
business, consistent with past practices, or (B) have required (or which would
reasonably be expected to require, in the case of any such pending Action)
material changes to the business practices of any Acquired Business, or (C) have
resulted in (or which would reasonably be expected to result in, in the case of
any such pending Action) any Loss, forfeiture, fine or penalty in excess of
$100,000.
47
.11 Compliance with Laws. Except as set forth in Section 3.11 of the
Disclosure Schedule:
(a) the Asset Sellers (with respect to the Acquired International
Structured Finance Business) and the Purchased Entities hold, and since January
1, 2002 have held, all Authorizations that are used in or may be necessary for
the ownership and leasing of their Properties and the conduct of their
respective businesses except for such Authorizations, the absence of which does
not or would not reasonably be expected to (i) interfere in any material respect
with the operation of any Acquired Business in the ordinary course of its
business, consistent with past practices or (ii) require material changes to the
business practices of any Acquired Business or (iii) result in any Loss,
forfeiture, fine or penalty in excess of $100,000. The Asset Sellers (with
respect to the Acquired International Structured Finance Business) and the
Purchased Entities currently comply, and at all times since January 1, 2002 have
complied, in all material respects with, and are not in default in any material
respect under, any Laws or Governmental Orders relating to any Asset Seller
(with respect to the Acquired International Structured Finance Business), any
Purchased Entity or any of their respective businesses (including any Law
pertaining to loan origination, usury, installment or conditional sales, sale
and/or marketing of insurance products, franchising, sales financing or the
billing, collection and enforcement of any Financing Contract or Credit
Enhancement); and
(b) no Selling Entity and no Purchased Entity has received any written
notice of a violation of any Law that is applicable to any Acquired Business
from any Governmental Authority except to the extent such notice or the
conditions, facts or circumstances described therein, would not reasonably be
expected to (i) materially interfere with the operation of its business
consistent with its past practices, (ii) require material changes to its
business practices, or (iii) result in any Loss, forfeiture, fine or penalty in
excess of $100,000.
.12 Material Contracts.
(a) Except as set forth in Section 3.12(a) of the Disclosure Schedule,
no Purchased Entity and no Asset Seller (in respect of the Acquired
International Structured Finance Business) is party to or bound by any
agreement, contract or commitment (other than any agreement or contract with
independent contractors which can be terminated with no more than 90 days' prior
notice without the payment of any fee, penalty or charge in excess of $250,000,
individually or $2.5 Million in the aggregate) of the following kinds: (i) any
employment or consulting agreement or contract providing for aggregate annual
payments or compensation (other than in respect of base salary and bonuses
payable pursuant to a Company Benefit Plan set forth in Section 3.15(a) of the
Disclosure Schedule) in excess of $250,000, (ii) any indebtedness (other than
(x) Intercompany Indebtedness and (y) the Indebtedness of the Purchased Entities
set forth in Section 5.01(d)(ix) of the Disclosure Schedule, true, correct and
complete copies of which have been delivered to the Purchaser), (iii) any
executory contract or agreement relating to the disposition or acquisition of
(A) any of the Capital Stock of any Person, other than the warrants or other
ownership interests set forth in Section 3.04(b) of the Disclosure
48
Schedule, (B) any assets or Property with an aggregate fair market value in
excess of $10 Million other than sales of assets or Property in connection with
Ordinary Course Asset Transactions which are accurately reflected on its
financial reporting records, or (C) pursuant to the provisions of (and to the
extent necessary to satisfy the obligations set forth in) Section 5.11, (iv) any
agreement or contract relating to capital expenditures and involving future
payments which, together with future payments under all other agreements or
contracts relating to the same capital project, exceed $7.5 Million, (v) any
guarantee or indemnification entered into by a Purchased Entity or an Asset
Seller on or before June 30, 2003 running to any Person which involves,
individually or in the aggregate, a contingent liability of $10 Million or more,
(vi) any agreement or contract providing for the collection, servicing or
administration of Financing Contracts or financial instruments of a similar type
or any Receivables related thereto by any Purchased Entity or Asset Seller (with
respect to the Acquired International Structured Finance Business) on behalf of
any other Person, other than any agreement or contract entered into by a
Purchased Entity or Asset Seller (with respect to the Acquired International
Structured Finance Business) in connection with (A) a securitization transaction
set forth in Section 5.08 of the Disclosure Schedule or (B) in connection with
any Syndicated Facility, or (C) any other such agreement or contract entered
into by a Purchased Entity or an Asset Seller in the ordinary course of its
business, in each case, consistent with such Purchased Entity's or Asset
Seller's past practices, (vii) any agreement or contract providing for the
administration by any Person of (A) any part of the Financing Contracts or
financial instruments of a similar type of any Purchased Entity or an Asset
Seller (with respect to the Acquired International Structured Finance Business)
or (B) any Acquired ISF Assets, other than, in each case, any such agreement or
contract entered into by a Purchased Entity or an Asset Seller (1) in the
ordinary course of the distribution finance Business Line, consistent with such
Purchased Entity's past practices or (2) in connection with any Syndicated
Facility, (viii) any agreement or contract by any Person to purchase Financing
Contracts, or any interests or participations therein, or any agreement or
contract to sell Financing Contracts, or any interests or participations
therein, other than purchases or sales by a Purchased Entity or an Asset Seller
(with respect to the Acquired International Structured Finance Business) of
interests or participations in Financing Contracts in the ordinary course of
business of such Purchased Entity or Asset Seller, consistent with its past
practices and which are accurately reflected on its financial reporting records,
including in respect of Syndicated Facilities (ix) any agreement or contract
containing any covenant or provision limiting the freedom of any Purchased
Entity or any of their Affiliates to engage in any line of business, compete
with any Person in any geographic area or solicit or hire employees of any other
Person that would interfere with the operation of the Acquired Business (other
than customary covenants contained in consulting agreements entered into by the
Purchased Entities in the ordinary course, which restrict the Purchased
Entities' ability to hire employees of such consultants), (x) any agreement or
contract which would, if performed in accordance with its terms, have a Material
Adverse Effect, (xi) any agreement or contract limiting the right of any
Purchased Entity to pay dividends or distributions to its shareholders, (xii)
except for those agreements described in Section 5.08 of the Disclosure
Schedule, any agreement or contract, arrangement with respect to
49
the securitization or other monetization of any assets of any Purchased Entity
or any Acquired ISF Assets, (xiii) any agreement or contract (other than a
Financing Contract) which calls for the payment, directly or indirectly, by any
Purchased Entity, of $10 Million or more, or the delivery, directly or
indirectly, by any Purchased Entity of goods or services with a fair market
value of $10 Million or more, or (xiv) any legally binding commitment to do any
of the foregoing (any such agreement, contract or commitment, a "Material
Contract").
(b) Each Material Contract constitutes the valid, legally binding
obligation of a Purchased Entity or an Asset Seller enforceable in accordance
with its terms, except to the extent the foregoing may be limited by the
Bankruptcy Exception and, except as otherwise noted in Section 3.12(b) of the
Disclosure Schedule, is in full force and effect without any default thereunder
by any Purchased Entity or Asset Seller party thereto or, to the Seller's
Knowledge, by any other party thereto which default could reasonably be expected
to give rise to any (i) fee, fine or penalty in excess of $150,000, (ii) right
by any party thereto to recover Losses from any Purchased Entity in excess of
$150,000, or (iii) grant of injunctive or equitable relief against any Purchased
Entity or with respect to any Acquired ISF Asset. No Purchased Entity and no
Asset Seller has received any written notice from or given any written notice to
any other party indicating that any Purchased Entity, any Asset Seller or such
other party, as the case may be, is presently in default under or in breach or
violation of any Material Contract which default, breach or violation could
reasonably be expected to give rise to any (i) fee, fine or penalty in excess of
$150,000, (ii) right by any party thereto to recover Losses in respect thereof
in excess of $150,000 or (iii) grant of injunctive or equitable relief against
any Purchased Entity.
(c) Except (i) as specifically contemplated by this Agreement, (ii) as
set forth in Section 3.12(c) of the Disclosure Schedule or (iii) as would not
reasonably be expected to result in a Material Adverse Effect the consummation
of the transactions contemplated hereby will not give rise to a right by a party
thereto to terminate or cancel any material provision of any of the Material
Contract, Vendor Program Agreements or Factoring Account.
.13 Real Property.
(a) Section 3.13(a) of the Disclosure Schedule sets forth a complete
list of: (i) (A) all real property and interests in real property owned in fee
by the Parent or the Seller and used in connection with the conduct or
operations of any Acquired Business including all buildings, structures or other
improvements located thereon and (B) all Owned Properties; and (ii) all real
property and interests in real property leased, subleased, or otherwise occupied
by the Parent, the Seller or any Purchased Entity and used in connection with
the conduct or operation of any of the Acquired Businesses (other than the
Acquired International Structured Finance Business), as lessee (individually, a
"Leased Property", collectively, the "Leased Properties"), and with respect to
the Leased Properties, lists all leases, contracts and agreements governing such
leasehold interests (collectively, the "Real Property Leases") (the Leased
Properties, together with the Owned Properties, shall be referred to herein
collectively as the "Real
50
Property"). The Parent and the Seller have delivered or otherwise made available
to the Purchaser true and correct copies of: (i) each Real Property Lease,
together with all amendments, modifications, or supplements thereto, if any, and
any other material documents relating to the Leased Properties; and (ii) all
deeds and title policies and other evidence of ownership, if any, with respect
to the Owned Properties, and any other material documents relating to the Owned
Properties.
(b) Each Purchased Entity has good, marketable and indefeasible fee
simple title to the Owned Property owned by it, free and clear of all
Encumbrances, subject only to Permitted Encumbrances. Each of the Parent and the
Seller and each Purchased Entity has a valid, binding and enforceable leasehold
interest in the Leased Property leased by it, except as enforcement may be
limited by the Bankruptcy Exception, free and clear of all Encumbrances, subject
only to Permitted Encumbrances. The Real Property Leases are in full force and
effect, and none of the Parent, the Seller or any Purchased Entity has received
any notice of default or of any event that with notice or lapse of time, or
both, would constitute a default by the Parent, the Seller or any Purchased
Entity under any Real Property Lease. To the Seller's Knowledge, there is no
default or event that with notice or lapse of time, or both, would constitute a
default by any other party to any Real Property Lease.
(c) Except as set forth on Section 3.13(c) of the Disclosure Schedule
upon the consummation of the Acquisition, (i) the Purchased Entities will be
entitled to the actual and exclusive use, occupancy and possession of the Real
Property for the purposes for which such Real Property is now being used on the
same terms and conditions as they use such properties as of the date hereof
subject to the terms of the Real Property Leases and related documentation
(copies of which have been made available to Purchaser) and (ii) each Purchased
Entity will have the full right to exercise any renewal options running to it
contained in the Real Property Leases on the terms and conditions contained
therein and in related documentation (copies of which have been made available
to Purchaser), and upon due exercise would be entitled to enjoy the use of Real
Property subject thereto for the full term of such renewal options, subject to
the terms and conditions pertaining thereto.
.14 Assets.
(a) Except as set forth in Section 3.14(a) of the Disclosure Schedule,
the Purchased Entities and the Asset Sellers (with respect to the Acquired
International Structured Finance Business) own or lease (or, after giving effect
to transfer of the Other Acquired Business Assets pursuant to Section 5.12, will
own or lease) all Property required to conduct each Acquired Business in the
ordinary and usual course of businesses consistent with their respective past
practices (collectively, the "Assets"). Except as set forth in Section 3.14(a)
of the Disclosure Schedule, after giving effect to transfer of the Other
Acquired Business Assets pursuant to Section 5.12, each Purchased Entity will
have good and valid title to all Property used or held for use by it, free and
clear of all Encumbrances other than Permitted Encumbrances. Except as set forth
in Section 3.14(a) of the Disclosure Schedule, no Purchased Entity and no Asset
Seller (with
51
respect to the Acquired International Structured Finance Business) is a lessee
under any lease of tangible personal Property involving annual aggregate
payments in respect thereof in excess of $600,000 other than those which may be
canceled by such Purchased Entity or Asset Seller without any payment or penalty
upon no more than 30 days' prior notice. Except as set forth in Section 3.14(a)
of the Disclosure Schedule, the consummation of the Acquisition will not give
rise to any right of any Person to (x) terminate any Purchased Entity's right or
entitlement to use any Property currently used or employed by it in the conduct
of the Acquired Businesses as presently conducted by it or (y) require that any
Purchased Entity obtain a consent or pay a fee in order to continue to use any
Property currently used or employed by it in the conduct of the Acquired
Businesses as presently conducted by it. To Seller's Knowledge, all Property of
which a Purchased Entity is (or, after giving effect to transfer of the Other
Acquired Business Assets pursuant to Section 5.12 hereof, will be) the lessee or
obligor are in full force and effect according to their terms and there are no
outstanding defaults thereunder, except for any defaults which could not
reasonably be expected to give rise to any (i) right of termination thereunder,
(ii) right by any Person to recover Losses, charges, penalties or fees against
any Purchased Entity in excess of $100,000, in the aggregate or (iii) grant of
injunctive or equitable relief against any Purchased Entity.
(b) The Asset Sellers own all right, title and interest in and to the
Acquired ISF Assets, free and clear of all Encumbrances other than Permitted
Encumbrances. None of the Other Acquired Business Assets are Financing
Contracts, Portfolio Property or Credit Enhancements.
.15 Employee Benefit Plans, etc.
(a) Section 3.15(a) of the Disclosure Schedule contains an accurate and
complete list of all Company Benefit Plans and Company Benefit Arrangements and
separately identifies which plans and arrangements are Assumed Benefit Plans and
Assumed Benefit Arrangements. To Seller's Knowledge, no Selling Entities,
Purchased Entities or any of their respective ERISA Affiliates is or within the
last six years has been obligated to make contributions or withdrawal liability
payments to a "multiemployer plan" as defined in Section 3(37) of ERISA and no
Company Benefit Plan is a "multiple employer plan" subject to Section 4063 and
4064 of ERISA. None of the Purchased Entities is the plan sponsor, or has within
the previous six (6) years been the plan sponsor, of any Employee Benefit Plan
subject to ERISA. There is no material amount or payment arising from or in
connection with any Company Benefit Plan, Company Benefit Arrangement or Title
IV Plan (other than an Assumed Benefit Plan or Assumed Benefit Arrangement) with
respect to which the Purchaser is or will be liable to any Person, including any
Governmental Authority, any employee of any Selling Entity, any Purchased Entity
or any of their respective ERISA Affiliates.
(b) True, correct and complete copies of the following documents, with
respect to each Assumed Benefit Plan and Assumed Benefit Arrangement, have been
made available or delivered to the Purchaser by the Seller: (A) any plans and
amendments thereto, (B) the most recent Forms 5500, all schedules thereto and
any
52
financial statements and actuarial reports attached thereto, (C) the most recent
IRS determination letter, (D) summary plan descriptions, and (E) written
descriptions of all non-written agreements relating to such plans and
arrangements. True, correct and complete copies of the following documents, with
respect to each Company Benefit Plan and Company Benefit Arrangement, have been
made available or delivered to the Purchaser by the Seller: (x) the most recent
IRS determination letter and (y) summary plan descriptions. The AEGON USA, Inc.
Profit Sharing Plan and the AEGON USA, Inc. Pension Plan are the only Company
Benefit Plans intended to be qualified under Section 401 of the Code, each such
plan has received a favorable determination letter from the Internal Revenue
Service which is in full force and effect and which have not been revoked, and
no material actions have occurred to cause the loss of such qualification or
exemption of the trust maintained thereunder or the imposition of any liability,
penalty or tax under ERISA or the Code. Except as set forth in Section 3.15(b)
of the Disclosure Schedule, (i) all contributions or payments required to have
been made under any Assumed Benefit Plan or Assumed Benefit Arrangement or by
Law (without regard to any waivers granted under Section 412 of the Code), to
any funds or trusts established thereunder or in connection therewith have been
made by the due date thereof (including any valid extension); (ii) all Assumed
Benefit Plans and Assumed Benefit Arrangements have been maintained, in all
material respects, in accordance with their terms and with all provisions of the
Code and ERISA (including rules and regulations thereunder) and other applicable
Law; and (iii) neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (A) result in any
payment (including severance, unemployment compensation, golden parachute or
other payments) becoming due to any Company Employee under any Company Benefit
Plan, Company Benefit Arrangement or otherwise, (B) increase any benefits
otherwise payable under any Company Benefit Plan or Company Benefit Arrangement,
or (C) result in the acceleration of the time of payment or vesting of any such
benefits. None of the Selling Entities, the Purchased Entities or any of their
respective Subsidiaries has any contract, plan or commitment, whether legally
binding or not, to create any additional Assumed Benefit Plan or Assumed Benefit
Arrangement, or to modify any existing Assumed Benefit Plan or Assumed Benefit
Arrangement. The Adjusted Cut-Off Date Pricing Schedule shall properly reflect
all liabilities and reserves for any Company Employees under any Assumed Benefit
Plan and Assumed Benefit Arrangement, including any Foreign Plans which qualify
as such, in accordance with GAAP as in effect on such date, consistently applied
by the Selling Entities, and the terms of such plans (including any liabilities
and reserves for retiree health and welfare obligations of the Selling Entities
and Purchased Entities).
(c) Section 3.15(c) of the Disclosure Schedule contains an accurate and
complete list of each Company Benefit Plan or Company Benefit Arrangement that
is maintained outside of the United States for employees who are employed
primarily outside of the United States and that is sponsored by any Purchased
Entity (the "Foreign Plans"). With respect to each Foreign Plan: (i) all
employer and employee contributions to each Foreign Plan required by Law or by
the terms of such Foreign Plan have been made, or, if applicable, accrued in
accordance with the Accounting Principles; (ii) the fair
53
market value of the assets of each funded Foreign Plan, the liability of each
insurer for any Foreign Plan funded through insurance or the book reserve
established for any Foreign Plan, together with any accrued contributions, is
sufficient to procure or provide for the accrued benefit obligations determined
in accordance with the Accounting Principles, as of the Cut-Off Time, with
respect to all current or former participants in such plan according to the
actuarial assumptions and valuations most recently used to determine employer
contributions to such Foreign Plan and no transaction contemplated by this
Agreement shall cause such assets or insurance obligations to be less than such
benefit obligations; and (iii) each Foreign Plan required to be registered has
been registered and has been maintained in good standing with applicable
Governmental Authorities.
(d) None of the Company Employees in the United States is represented
in his or her capacity as an employee of any Purchased Entity or of Asset Seller
by any labor organization, nor have any of the Selling Entities or the Purchased
Entities (i) recognized any labor organization nor has any labor organization
been elected as the collective bargaining agent of any of such employees or (ii)
entered into any collective bargaining agreement or union contract recognizing
any labor organization as the bargaining agent of any of such Company Employees.
To the Seller's Knowledge, there is no union organization activity involving any
of the Company Employees in the United States, pending or threatened, nor has
there been union representation involving any of the Company Employees within
the last five years. Except as set forth in Section 3.15(d) of the Disclosure
Schedule, none of the Selling Entities or Purchased Entities has entered into
any collective bargaining agreement or union contract recognizing any labor
organization as the bargaining agent of any Company Employees outside the United
States. To the Seller's Knowledge, there is no ongoing union organization
activity or request for union certification involving any of the Company
Employees outside the United States, pending or threatened.
(e) Except as set forth in Section 3.15(e) of the Disclosure Schedule,
(i) there are no unfair labor practice charges, grievances or complaints pending
or threatened in writing by or on behalf of any employee or group of employees
of the Purchased Entities or on behalf of any Transferred Employee which, if
individually or collectively resolved against the Purchased Entities or Asset
Seller, could result in a material liability, (ii) there is no picketing,
pending or threatened, and there are no strikes, slowdowns, work stoppages,
other job actions, lockouts, arbitrations, grievances or other material labor
disputes involving any of the Company Employees, pending or threatened and (iii)
there are no complaints, charges or claims against the Purchased Entities or
Asset Seller pending or, to Seller's Knowledge, threatened which could be
brought or filed, with any Governmental Authority, based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by the Purchased Entities or Asset Seller, of any individual which
could result in a material liability. Since January 1, 2002, the Purchased
Entities and the TLI are in compliance in all material respects with all Laws
relating to the employment of labor, including all such Laws relating to the
collection and payment of withholding and/or social security Taxes and any
similar Tax.
54
There has been no "mass layoff" or "plant closing" as defined by WARN with
respect to the Purchased Entities or Asset Seller during the six months prior to
the Closing.
.16 Taxes.
(a) Except as set forth in Section 3.16 of the Disclosure Schedule:
(i) All material Tax Returns of or relating to the Purchased Entities or
the Acquired ISF Assets required to be filed have been timely filed, and all
such Tax Returns are true and correct in all material respects, and all
material Taxes due and payable from or with respect to the Purchased Entities
or the Acquired ISF Assets have been timely paid or have been provided for on
the books and records of the relevant entity in accordance with the
Accounting Principles, including in the Financial Statements;
(ii) With respect to any taxable period for which Tax Returns have not yet
been filed, or for which Taxes are not yet due or owing, the Purchased
Entities have made due and sufficient current accruals for any such material
Taxes in their books and records in accordance with the Accounting
Principles, including in the Financial Statements;
(iii) The Seller has previously delivered to the Purchaser true and
complete copies of each of (A) any audit reports claiming a Tax deficiency in
an amount exceeding $10,000 issued in the three years prior to the date of
this Agreement relating to the United States federal, state, local or foreign
Taxes due from or with respect to each Purchased Entity or the Acquired ISF
Assets and (B) for all taxable periods ending on or after June 30, 2000, the
United States federal income Tax Returns, those foreign Tax Returns showing
taxable income in excess of $15,000, those state and local income Tax Returns
for Illinois, and the next ten largest state income Tax Returns determined by
reference to those Tax Returns with respect to which the Purchased Entities
have the highest annual Tax liability shown thereon, and those five sales and
property Tax Returns determined by reference to those Tax Returns with
respect to which the Purchased Entities have the highest annual Tax liability
shown thereon filed by or with respect to any Purchased Entity or the
Acquired ISF Assets or in the case of such Tax Return filed on a
consolidated, combined or unitary basis (each a "Consolidated Tax Return"),
the pro forma Tax Return for the relevant Purchased Entity prepared on a
separate company basis;
(iv) There are no outstanding waivers in writing or comparable material
binding consents regarding the application of any statute of limitations in
respect of Taxes of or relating to any Purchased Entity or the Acquired ISF
Assets;
(v) None of the Seller, its Affiliates, any Purchased Entity or any other
Person has (A) extended the time within which to file any income or other
material Tax Return of or relating to any Purchased Entity or the Acquired
ISF
55
Assets, which Tax Return has since not been filed or (B) granted to any
Person any power of attorney that is currently in force with respect to any
Tax matter relating to any Purchased Entity or the Acquired ISF Assets;
(vi) There are no actions, suits, investigations, audits or claims by any
Governmental Authority with respect to material Taxes of or relating to any
Purchased Entity or the Acquired ISF Assets, nor has any Purchased Entity or
Asset Seller or any of their shareholders, directors or officers received any
written notice from any Governmental Authority that it intends to conduct
such an audit or investigation;
(vii) Section 3.16 of the Disclosure Schedule lists, for each Purchased
Entity, the common parent of every consolidated, combined or affiliated group
of corporations of which each Purchased Entity was (but is not currently) a
member for any taxable period for which the time for assessment has not
expired;
(viii) No Purchased Entity has participated in, or cooperated with, an
international boycott within the meaning of Section 999 of the Code;
(ix) The U.K. Accounts make full provision or reserve in respect of any
period ended on or before the U.K. Accounts Date for all Tax assessed or
liable to be assessed on TCFL or any U.K. Subsidiary or for which any of them
is accountable at the U.K. Accounts Date whether or not TCFL and any U.K.
Subsidiary has or may have any right of reimbursement against any other
person and proper provision has been made and shown in the U.K. Accounts for
deferred taxation in accordance with U.K. GAAP;
(x) Since the U.K. Accounts Date:
(1) Neither TCFL nor any U.K. Subsidiary has been involved in any
transaction which has given, may give or would, but for the availability of
any relief, give rise to any Tax other than in respect of any Tax on actual
income earned by TCFL or any U.K. Subsidiary in the course of its trade;
(2) Neither TCFL nor any U.K. Subsidiary has made any payment (or
incurred any liability to make any payment) which could be disallowed as a
deduction in computing the taxable profits of TCFL or any U.K. Subsidiary or
as a charge on the income of TCFL or any U.K. Subsidiary or which would not
be eligible for capital allowances;
(3) No disposal has taken place or other event occurred such that
TCFL or any U.K. Subsidiary would be required to bring a disposal value into
account for the purposes of the CAA or such that a chargeable gain could or
would accrue to TCFL or any U.K. Subsidiary;
(xi) All necessary conditions for all capital allowances claimed by
TCFL or any U.K. Subsidiary were at all material times satisfied and
remained satisfied;
56
(xii) Neither TCFL nor any U.K. Subsidiary have been party to any
transaction or transactions within section 765 or 765A ICTA save in
circumstances where either the Treasury General Consents 1988 applied or
where TCFL or any U.K. Subsidiary applied for and obtained the consent of
the Treasury to the transaction or transactions;
(xiii) Neither TCFL nor any U.K. Subsidiary has acquired any asset
other than trading stock from any other company belonging at the time of
acquisition to the same group of companies as TCFL within the meaning of
section 170 TCGA and no member of any group of companies of which TCFL is
or has at any material time been the principal company (as defined in
section 170(2)(b) TCGA) has so acquired any asset;
(xiv) Neither TCFL nor any U.K. Subsidiary is, nor has either ever
been, a close company as defined by section 414 of the ICTA;
(xv) No Tax liability of TCFL or of any U.K. Subsidiary will arise in
connection with the disposal of the TCFL Shares;
(xvi) Transamerica GmbH Germany has established adequate systems and
procedures to meet VAT requirements of each relevant Governmental
Authority in all material respects. The method applied by Transamerica
GmbH Germany for the apportionment of supplies for VAT purposes has been
and is correct in all material respects;
(xvii) Transamerica GmbH Germany has not acquired assets which can be
subjected to a revision of their VAT position, leading to a recapture of
any material VAT deducted or refunded on or before the Closing Date;
(xviii) Transamerica GmbH Germany has not taken any measures or entered
into any transaction which is a constructive dividend; and
(xix) No material payment made by TCFF can be qualified as a deemed
dividend.
(b) Except with respect to Non-Surviving Tax Items and except as set
forth in Section 3.16 of the Disclosure Schedule:
(i) None of the assets or liabilities of any of the Purchased Entities and
none of the Acquired ISF Assets is a debt obligation that (A) was issued with
"original issue discount" as that term is defined in Section 1273(a) of the
Code in excess of $50,000; (B) is a "registration-required obligation" as
defined in Section 163(f)(2) of the Code; (C) is an "applicable high yield
discount obligation" as defined in Section 163(i)(1) of the Code; or (D) is a
"disqualified debt instrument" as defined in section 163(b)(2) of the Code;
57
(ii) To the Seller's Knowledge, no claim has been made in writing by a
Governmental Authority in a jurisdiction in which any Purchased Entity or
Asset Seller (with respect to the Acquired ISF Assets) does not file Tax
Returns to the effect that any Purchased Entity or Asset Seller is or may be
subject to taxation by that jurisdiction;
(iii) None of the Purchased Entities has executed or entered into any
written agreement with, or obtained any written consents or written
clearances from, nor has there been any written agreement executed or entered
into on behalf of any of them with any Governmental Authority, relating to
material Taxes, including any IRS private letter rulings or comparable
rulings of other taxing authorities and closing agreements pursuant to
Section 7121 of the Code or any predecessor provision thereof or any similar
provision of United States federal, foreign, state or local Law;
(iv) None of the Purchased Entities or any other Person on behalf of any
Purchased Entity has (A) agreed to or is required to make any adjustments
pursuant to Section 481(a) of the Code (or any predecessor provision) or any
similar provision of state or local Law by reason of a change in accounting
methods initiated by any such entity, or has any knowledge that any
Governmental Authority has proposed any such adjustment or change in
accounting methods, or (B) any application pending with any Governmental
Authority requesting permission for any changes in accounting methods that
relate to the business or operations of any Purchased Entity;
(v) No Property owned by any Purchased Entity and none of the Acquired ISF
Assets (A) is Property required to be treated as being owned by another
Person pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (B) is "tax-exempt use property"
within the meaning of Section 168(h)(1) of the Code, (C) is "tax-exempt bond
financed property" within the meaning of Section 168(g) of the Code, (D) is
subject to Section 168(g)(1)(A) of the Code, or (E) is "limited use property"
(as the term is used in Rev. Proc. 76-30);
(vi) There is no contract, plan or arrangement involving any Purchased
Entity and covering any Person that, individually or collectively, could give
rise to the payment of any amount that would not be deductible by the
Purchaser, any Purchased Entity or any of their post-Closing Affiliates by
reason of Section 280G or Section 162(m) of the Code;
(vii) No Purchased Entity has any elections in effect under Section 108,
168, 338, 441, 472, 1017, 1033 or 4977 of the Code or under any similar
provisions of state or local Law;
58
(viii) None of the assets or liabilities of any Purchased Entity (other
than Transamerica Public Finance LLC) nor any of the Acquired ISF Assets are
debt instruments, and no Purchased Entity (other than Transamerica Public
Finance LLC) is an obligor on any indebtedness, the interest on which is, or
purports to be, excludable, in whole or in part, from gross income for
federal income tax purposes;
(ix) No Purchased Entity is a party to, bound by, or obligated under, any
Tax Sharing Agreement;
(x) No Purchased Entity has constituted either a "distributing
corporation" or a "controlled corporation" (within the meaning of Section
355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code (A) in the two years prior to the
date of this agreement or (B) in a distribution which could otherwise
constitute part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) in conjunction with the transactions
contemplated by this Agreement;
(xi) No Purchased Entity constitutes or, directly or indirectly, owns an
interest in, and none of the Acquired ISF Assets is, a taxable mortgage pool
within the meaning of Section 7701(i) of the Code;
(xii) The Seller and the Company are members of a "selling consolidated
group" within the meaning of Treasury Regulation Section 1.338(h)(10)-1(c);
(xiii) No partnership in which any Purchased Entity owns an interest and
none of the Acquired ISF Assets which is a partnership interest has in effect
a valid election pursuant to Section 754 of the Code, which election will
remain in effect for the taxable year of such partnership in which the
transactions contemplated by this Agreement occur;
(xiv) For federal income tax purposes, none of the allocations of income,
gain, loss or deductions in respect of any partnership interest held by any
Purchased Entity for the respective partnership taxable years or portions
thereof ending on or prior to the Closing Date were required to be determined
under Section 704(c) of the Code or the principles thereof;
(xv) No borrower on, co-lender under, or Person holding a participation in
an asset of any of the U.S. Purchased Entities that is a debt obligation is
other than a "United States person" as such term is defined in Section
7701(a)(30) of the Code;
(xvi) No indebtedness of any of the Purchased Entities is "corporate
acquisition indebtedness" within the meaning of Section 279(b) of the Code;
(xvii) None of the assets of any of the Purchased Entities (other than
interests in Transamerica Public Finance LLC or assets owned by Transamerica
Public
59
Finance LLC) and none of the Acquired ISF Assets directly or indirectly
secures any debt the interest on which is tax-exempt under Section 103(a) of
the Code;
(xviii) Except with respect to Financing Contracts entered into in the
ordinary course of business consistent with past practice, there is no
material amount of taxable income of any of the Purchased Entities received
or accrued prior to the Closing that will be reportable in any taxable period
beginning after the Closing Date that is attributable to a transaction (such
as an installment sale) that occurred prior to the Closing except to the
extent the Taxes payable in connection therewith are reflected on the
Adjusted Cut-Off Date Pricing Schedule;
(xix) Except as required by applicable Law, since December 31, 2002, no
Purchased Entity has made or changed any election concerning any material
Taxes, changed an annual accounting period or adopted or changed any
accounting method, in either case to the extent such change would materially
affect the Taxes of any Purchased Entity, filed any material amended Tax
Return, settled any material Tax Claim or assessment or surrendered any right
to claim a refund of any material Taxes;
(xx) None of the Seller, its Affiliates, any Purchased Entity or any other
Person on behalf of any Purchased Entity has (A) engaged in any "intercompany
transactions" in respect of which a material amount of gain was and continues
to be deferred by a Purchased Entity pursuant to Treasury Regulation Section
1.1502-13 or any predecessor or successor thereof or analogous or similar
provision under state, local or foreign Law or (B) has "excess loss accounts"
in excess of $1 million in respect of the stock of any subsidiary pursuant to
Treasury Regulation Section 1.1502-19, or any predecessor or successor
thereof or analogous or similar provision under state, local or foreign Law;
(xxi) No Purchased Entity is a "United States person" within the meaning
of Section 7701(a)(30) of the Code;
(xxii) There are no liens for Taxes upon the assets of any Purchased
Entity or on any Acquired ISF Assets, except for liens arising as a matter of
law relating to current Taxes not yet due;
(xxiii) No action has been taken by either TCFL or any U.K. Subsidiary in
respect of which any consent or clearance from any Governmental Authority was
required save in circumstances where such consent or clearance was validly
obtained, and where any conditions attaching thereto were and will,
immediately, following completion, continue to be met;
(xxiv) No transaction, act, omission or event has occurred (including
without limitation the execution or implementation of this Agreement) in
consequence of which TCFL or any U.K. Subsidiary is or may be held liable for
any Tax or may
60
otherwise be held liable for or to indemnify any Person in respect of Tax
which is primarily or directly chargeable against or attributable to any
Person other than TCFL or any U.K. Subsidiary in question;
(xxv) There are no circumstances under which TCFL or any U.K. Subsidiary
may be held liable to Tax in the United Kingdom on the income, profits or
gains of any foreign company;
(xxvi) Section 3.16 of the Disclosure Schedule contains particulars of all
arrangements relating to the surrender under sections 402-413 ICTA and
("group relief") to which TCFL or any U.K. Subsidiary is or has been a party
and:
(1) all claims by TCFL or each U.K. Subsidiary for such relief
were when made and are now valid and have been allowed by way of relief from
corporation tax;
(2) TCFL and each U.K. Subsidiary have received all payments due
to them under any arrangements or agreement for surrender of group relief by
it for periods prior to the U.K. Accounts Date;
(3) no such payment exceeds or could exceed the amount permitted
by section 402(6) ICTA as the case may be; and
(4) there exists or existed for any period of account in respect
of which a surrender has been made or purports to have been made no
arrangements such as are specified in section 410(1)-(6) ICTA as the case may
be;
(xxvii) TCFL and each U.K. Subsidiary are registered taxable persons for
the purpose of any applicable VAT Legislation and neither TCFL nor any U.K.
Subsidiary have at any time been treated as a member of a group of companies
for such purpose nor have TCFL or any U.K. Subsidiary made any application to
be so treated and no circumstances exist whereby TCFL or any U.K. Subsidiary
would or might become liable for VAT as an agent or otherwise by virtue of
section 47 of VATA;
(xxviii) TCFL and each U.K. Subsidiary have complied in all respects with
the provisions of the VAT Legislation and have made and maintained accurate
and up-to-date records, invoices, accounts and other documents required by or
necessary for the purposes of the VAT Legislation and TCFL and each U.K.
Subsidiary have at all times punctually paid and made all payments and
returns required thereunder;
(xxix) Section 3.16 of the Disclosure Schedule sets out full details of
each of the assets of TCFL and any U.K. Subsidiary of a kind described in
part XV of the Value Added Tax Regulations 1995 (SI No. 2518) (adjustments to
the deduction of input tax on capital items) in relation to which that part
could operate to adjust the amount of input tax deducted; and
61
(xxx) To Seller's Knowledge, no Obligor under any Financing Contract is
required under any applicable Law to withhold from payments on any such
Financing Contract any interest or other withholdings for the payment of
Taxes to any Governmental Authority;
(c) Except with respect to Non-Surviving Tax Items and except as set
forth in Section 3.16 of the Disclosure Schedule.
(i) Any material interest expenses relating to long term debt in the sense
of sect. 8 no. 1 German Trade Tax Act have been stated correctly and
completely;
(ii) Transamerica GmbH Germany has applied for, received and used all
public grants, subsidies or other financial business development support only
in accordance with applicable law, regulations and regulatory requirements.
No such grants, subsidies or development support or any part thereof will
have to be repaid as a result of the transaction reflected in this Agreement
or of other circumstances which have already materialized;
(iii) Transamerica GmbH Germany has not participated in any
reorganizations or mergers during the current financial year or the previous
seven financial years in connection with which material exemptions from Tax
have been claimed or granted or which are to be regarded as a tax-neutral
contribution in kind;
(iv) Transamerica GmbH Germany does not have any Tax relevant obligation
resulting from any past restructuring or from any application for material
Tax benefits or similar claims which has not been satisfied and/or will
continue to bind GmbH after the Closing Date; and
(v) Transamerica GmbH Germany's material liabilities as set out in its
Financial Statements are recognized as liabilities for Tax purposes and any
material interest expense thereon is deductible for corporate tax purposes as
recorded in the relevant tax returns.
(d) Except with respect to Non-Surviving Tax Items and except as set
forth in Section 3.16 of the Disclosure Schedule:
(i) Neither TCFL nor any U.K. Subsidiary is party to any loan relationship
as defined in chapter II of part IV of the U.K. Finance Xxx 0000 which may
give rise to debits or credits (other than interest taxable or deductible on
an accruals basis);
(ii) All transactions entered into by TCFL or any U.K. Subsidiary have
been entered into on an arm's length basis and the consideration (if any)
charged or received or paid by TCFL or any U.K. Subsidiary on all
transactions entered into by them has been equal to the consideration which
might have been expected to be charged, received or paid (as appropriate)
between independent persons dealing
62
at arm's length and no notice or enquiry by any Governmental Authority has
been made in connection with any such transaction;
(iii) Neither a balancing charge in respect of any capital allowances
claimed or given nor any chargeable gain or profit (disregarding any
indexation relief available) would arise if any of the assets of TCFL or any
U.K. Subsidiary (other than trading stock) were to be realized for a
consideration equal to the amount of the book value thereof as shown or
included in the U.K. Accounts;
(iv) Neither TCFL nor any U.K. Subsidiary made (and will not be deemed to
have made) any distribution within the meaning of Sections 209 and 210 ICTA
(bonus issue following repayment of capital) since 5 April 1965 except
dividends properly authorised and shown in their accounts, nor is TCFL nor
any U.K. Subsidiary bound to make any such distribution;
(v) TCFL and each U.K. Subsidiary have always been resident in the United
Kingdom and have never been resident in any other territory nor treated as so
resident for the purposes of any double Tax agreement nor do either have a
permanent establishment in any other territory;
(vi) All documents containing rights on which TCFL or any U.K. Subsidiary
may want to rely in the United Kingdom have been duly stamped (and where any
such documents have been executed and retained outside the United Kingdom,
such documents would not require stamping if brought into the United Kingdom)
and all such duty, interest and penalties have been duly paid. Since the
Accounts Date neither TCFL nor any U.K. Subsidiary have been a party to any
transaction whereby either TCFL or any U.K. Subsidiary was or is or could
become liable to stamp duty reserve tax; and
(vii) During the period of three years ending on the Closing Date, neither
TCFL nor any U.K. Subsidiary has been a party to a transfer or conveyance on
which relief from U.K. stamp duty was claimed.
(e) Except with respect to Non-Surviving Tax Items and except as set
forth in Section 3.16 of the Disclosure Schedule:
(i) Except as set forth in Section 3.16(e) of the Disclosure Schedule,
none of the Canadian Purchased Entities are or have been party to any
transaction that presents a material risk of being recharacterized by the
Canada Custom and Revenue Agency ("CCRA") pursuant to Section 245 of the
Canadian Income Tax Act; and
(ii) All of the Canadian Purchased Entities have established adequate
systems and procedures to meet the value added tax requirements of CCRA and
the provincial sales tax authorities.
63
(f) Except with respect to Non-Surviving Tax Items and except as set
forth in Section 3.16 of the Disclosure Schedule:
(i) Transamerica Commercial Finance France S.A. ("TCFF") meets all
material VAT requirements and EU reporting requirements that it is subject to
and cannot be qualified as the VAT representative of any other Person. VAT
pro rata has been computed according to French VAT rules as well as "taxe sur
les salaries";
(ii) TCFF is not thinly capitalized and all of its material interest
expense is deductible for French corporate income tax purposes;
(iii) TCFF does not enjoy or has not enjoyed any material Tax benefit,
favorable regime or consent in consideration for or subject to written
undertakings or obligations by which TCFF or any Person is still bound,
whether for past restructurings or in connection with its activity;
(iv) To the extent included on the Adjusted Cut-Off Date Pricing Schedule
(A) any material TCFF Tax loss carryforwards, including evergreen, and
carryback receivables are valid and are, or will be, utilizable or receivable
and (B) any of TCFF's carryback receivables are valid claims against the
French TRESOR PUBLIC;
(v) All material TCFF documents or contracts in which TCFF is a party that
are subject to registration have been duly and timely registered;
(vi) To Seller's knowledge, TCFF has not directly or indirectly entered
into any transactions likely to be disqualified or recharacterized by any
Governmental Authority on the grounds that they are designed to circumvent
Tax or social obligations;
(vii) To Seller's knowledge, the profit-sharing (CONTRATS DE PARTICIPATION
ET D'INTERESSEMENT), corporate savings (PLAN D'EPARGNE ENTREPRISE),
stock-options and other similar plans enjoyed by the employees of TCFF duly
qualify for the purpose of the Tax regime normally applicable to them; and
(viii) TCFF has complied with French banking authorities' reporting
obligations.
.17 Derivative Instruments. There are no currency swaps, interest rate
swaps, currency options, forward rate agreements, hedging or currency exchange
agreements or any other treasury derivative instrument relating to any of the
Acquired Businesses (each a "Derivative Instrument" and collectively, the
"Derivative Instruments"), whether entered into for the account of an Asset
Seller or a Purchased Entity or for the account of a customer of an Asset Seller
or a Purchased Entity, other than the Derivative Instruments set forth on
Section 3.17 of the Disclosure Schedule.
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.18 Insurance. Section 3.18 of the Disclosure Schedule sets forth a
list of all liability, property, workers compensation, directors and officers'
liability and other policies of insurance (other than any policies of insurance
required to be maintained by any Obligor pursuant to the terms of any Financing
Contract or in respect of any Portfolio Property) that insure the assets,
business, Properties, operations, prospects or financial condition of the
Purchased Entities or the Asset Sellers (with respect to the Acquired
International Structured Finance Business) or that affect or relate to the
ownership, use or operations of (x) any of the Properties or assets of the
Purchased Entities or (y) any Acquired ISF Assets, all of which insurance
policies are in full force and effect and no written notice of cancellation or
non-renewal (other than as contemplated by Section 5.07) has been received in
respect of any such policies of insurance. All premiums required to be paid
thereunder have been paid in full and in a timely manner.
.19 Intellectual Property. (a) Section 3.19(a) of the Disclosure
Schedule sets forth a list of all Owned Intellectual Property and Section
3.19(b) of the Disclosure Schedule sets forth a list of all Licensed
Intellectual Property, in each case, other than Intellectual Property of the
type described in clause (d) of the definition "Intellectual Property". Section
3.19(c) of the Disclosure Schedule lists all notices or claims which, to the
Seller's Knowledge, claim material infringement, misappropriation or violation
by any Purchased Entity, any Asset Seller or any of their Affiliates of
Intellectual Property owned or licensed by any Person other than any Purchased
Entity or any Asset Seller. The Company Intellectual Property constitutes all of
the Intellectual Property necessary to conduct each of Acquired Businesses
(other than the Acquired International Structural Finance Business) as presently
conducted. Except as disclosed in Section 3.19(c) of the Disclosure Schedule,
(i) to the Seller's Knowledge, the conduct of the Acquired Businesses as
currently conducted does not infringe, misappropriate or violate the
Intellectual Property of any Person; (ii) no claim has been asserted to any
Selling Entity or any Purchased Entity in the preceding five years that the
conduct of any of the Acquired Businesses as currently conducted infringes,
misappropriates or violates the Intellectual Property of any Person; (iii) with
respect to each item of Owned Intellectual Property (including the Specified
Intellectual Property owned by one or more Purchased Entity), a Purchased Entity
is (and, after giving effect to the transactions contemplated by Section 5.12,
the Purchaser, a Purchased Entity or an Acquiring Subsidiary will be) the owner
of the entire right, title and interest in and to such item of Owned
Intellectual Property (including the exclusive right to use and license the
same); (iv) with respect to each item of Licensed Intellectual Property, a
Purchased Entity has the right to use such Licensed Intellectual Property in the
continued operation of its business in accordance with the terms of the
agreement or license governing such Licensed Intellectual Property; and (v) to
the Seller's Knowledge, no Person is engaging in any activity that infringes,
misappropriates or violates the Owned Intellectual Property.
(b) Except as set forth in Section 3.19(b) of the Disclosure Schedule,
the consummation of the Acquisition will not give rise to a right by a third
party to (i) terminate any Purchased Entity's, or Purchaser's (or any applicable
Acquiring Subsidiary's) rights to use all of the Company Intellectual Property
used in the Acquired Business on the date hereof, or (ii) require that any
Purchased Entity or the Purchaser (or
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any applicable Acquiring Subsidiary) obtain any consent or pay any additional
fees or payments to use all of the Company Intellectual Property used in the
Acquired Business on the date hereof.
.20 Environmental Matters.
(a) Section 3.20 of the Disclosure Schedule contains an accurate and
complete description of all investigations, actions, proceedings and claims
arising under any Environmental Law against or involving any Purchased Entity or
any Acquired ISF Assets that are (i) pending or, to the Seller's Knowledge,
threatened to be brought against or involving any Purchased Entity, any Acquired
ISF Assets or any Property owned, operated or leased by any Purchased Entity or
(ii) to the Seller's Knowledge, pending or threatened against any Portfolio
Property.
(b) Each of the Parent and the Seller and each Purchased Entity has
conducted its activities relating to foreclosures or other enforcement against
or realizations on, Portfolio Property (i) in a manner consistent with its past
practice, (ii) in compliance in all material respects with its policies relating
thereto and (iii) in compliance, in all material respects, with all
Environmental Laws applicable thereto.
(c) Except as set forth in Section 3.20(c) of the Disclosure Schedule,
and except as contained in the environmental assessment reports listed in
Section 3.20(c) of the Disclosure Schedule and previously delivered to the
Purchaser, to Seller's Knowledge, (i) no Portfolio Property held by any of the
Purchased Entities (other than any Mortgaged Property subject to a Mortgage
Loan) is used to store and/or transport Hazardous Materials and, (ii) no Adverse
Environmental Condition has occurred with respect to any Portfolio Property.
.21 Financing Contracts.
(a) Except as set forth in Section 3.21(a) of the Disclosure Schedule,
to Seller's Knowledge, each Financing Contract, Credit Enhancement and, with
respect to any Mortgage Loan set forth on the Mortgage Loan Schedule, each Loan
Document (i) is valid, binding and enforceable by a Purchased Entity or an Asset
Seller (and, after giving effect to the Acquisition, the Purchaser or the
applicable Acquiring Subsidiaries) against the Obligor thereunder, in the case
of a Financing Contract or, in the case of a Credit Enhancement or Loan
Document, the obligor thereunder, in each case, in accordance with its written
terms (except as may be limited by the Bankruptcy Exception), and (ii)
constitutes and arose out of a bona fide business transaction entered into in
the ordinary and usual course of business of such Asset Seller or Purchased
Entity (as applicable), consistent with its past practices. All amendments,
modifications, waivers, extensions, cancellations and releases in respect of any
Financing Contract are in writing and, except for any such documents entered
into in connection with a Syndicated Facility (and only to the extent copies of
which documents have not been received by a Purchased Entity or an Asset
Seller), are maintained in hard copy or are stored electronically in the
Legal/Credit Files for such Financing Contract.
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(b) Except as set forth in Section 3.21(b) of the Disclosure Schedule,
(i)(A) each Financing Contract, Credit Enhancement (other than Portfolio
Property) and with respect to any Financing Contract that is a Mortgage Loan,
Loan Document is, or as of the Closing Date will be, in full force and effect,
free and clear of all Encumbrances other than Permitted Encumbrances, and (B) to
Seller's Knowledge, no Financing Contract, Credit Enhancement (other than
Portfolio Property) or, with respect to any Financing Contract that is a
Mortgage Loan, Loan Document is subject to any valid defense, offset, claim,
right of rescission or counterclaim (other than non-appropriation with respect
to Financing Contracts with Governmental Authorities containing
non-appropriation clauses) by the Obligor under such Financing Contract or Loan
Document, in the case of a Financing Contract or Loan Document, or by the
obligor thereunder, in the case of a Credit Enhancement, or any Person claiming
under any such right; (ii) as of July 31, 2003 and as of the Cut-Off Date (A) to
Seller's Knowledge, no Asset Seller and no Purchased Entity (to the extent that
it is a party thereto) is in breach of or default under any Financing Contract,
Credit Enhancement or, with respect to any Financing Contract that is a Mortgage
Loan, Loan Document, (B) to Seller's Knowledge, (1) with respect to any
Financing Contract originated or held by a Purchased Entity part of the
distribution Finance Business Line no scheduled payment due thereunder is more
than 60 days past due and (2) with respect to any Financing Contract originated
or held by a Purchased Entity part of any Business Line other than the
distribution finance Business Line, no scheduled payment due thereunder is more
than thirty (30) days past due, and (C) no Selling Entity, no Purchased Entity
and none of their respective Affiliates has received notice that an Obligor
under a Financing Contract originated or held by a Purchased Entity (other than
a Purchased Entity part of the distribution finance Business Line) has breached
any of its obligations in respect of any negative covenants or financial
covenants (or other similar agreements or undertakings) contained in such
Financing Contract or in any related agreement; (iii) other than as reflected in
the applicable Legal/Credit Files with respect to interests in Syndicated
Facilities, an Asset Seller or Purchased Entity is (and, after giving effect to
the transactions contemplated by Section 2.01, a Purchased Entity, the Purchaser
or an Acquiring Subsidiary will be) the sole owner and holder of all right,
title and interest in each Financing Contract and each Credit Enhancement other
than the rights of the Obligor therein, or rights created by the Financing
Contract in favor of third parties; (iv) [intentionally omitted]; (v) an Asset
Seller or Purchased Entity (or, to the Seller's Knowledge, in connection with
any Syndicated Facility, the administrative, collateral agent, trustee or the
Depository Trust Company) has (and, after giving effect to the transactions
contemplated by Section 2.01, a Purchased Entity, the Purchaser or an Acquired
Subsidiary will have) in its possession an executed original of any wholesale
financing agreement, note, if any, or lease (and an executed original or a true
and correct copy of all other Documents), in each case, duly executed by each
party thereto comprising each Financing Contract and Credit Enhancement and all
other Documents required by the applicable Selling Entity's or Purchased
Entity's credit or investment approval with respect to such Financing Contract
(including, with respect to any Financing Contract which is a lease,
documentation which accurately evidences the original equipment cost with
respect to any Portfolio Property that is subject thereto for purposes of
determining personal property Tax liability); (vi) (A) except for Financing
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Contracts with Governmental Authorities containing non-appropriation clauses, no
Financing Contract that is in the form of a lease is terminable at the option of
the Obligor thereunder except to the extent that such Obligor is required to pay
the applicable Purchased Entity or Asset Seller (with respect to any Acquired
ISF Asset) a termination payment in an amount not less than the present value of
all remaining scheduled payments, computed using a discount rate equal to the
contract rate, if provided for, or otherwise the implicit rate for such
Financing Contract and (B) no Financing Contract that is in the form of a loan,
is terminable at the option of the Obligor thereunder except to the extent that
the Obligor is required to pay the applicable Purchased Entity or Asset Seller
not less than the sum of the outstanding principal balance plus accrued and
unpaid interest thereunder at the time of termination, (vii) all payments
pursuant to each Financing Contract are made directly to the applicable Asset
Seller or Purchased Entity, or to lockboxes with respect to which an Asset
Seller (with respect to any Acquired ISF Assets) or a Purchased Entity is the
account holder, or to blocked accounts with respect to which such Asset Seller
or Purchased Entity (as applicable) is the account holder or beneficiary, or to
accounts maintained by an administrative agent, collateral agent, trustee or the
Depository Trust Company in connection with any Syndicated Facilities, or to
servicers of Financing Contracts (to the extent such servicing arrangements are
entered into by a Purchased Entity or Asset Seller in the ordinary course of its
business), or pursuant to other similar arrangements; (viii) an Asset Seller or
Purchased Entity has approved credit applications and otherwise entered into
commitments with respect to each Financing Contract in a manner consistent with
such Person's credit policies, collateral eligibility standards and credit
quality classifications in effect at the time (other than ordinary course
deviations therefrom, consistent with such Person's past practices) and
otherwise complied with standards of evaluating, originating, underwriting and
funding new businesses which are in all respects consistent with its past
practices; and (ix) no Asset Seller and no Purchased Entity has been, or is
committed to become, a party to any agreement, contract or commitment with
respect to the residual interest in any Portfolio Property (other than (A) with
respect to any Portfolio Property subject to a Financing Contract that is a
finance lease and (B) residual sharing agreements that do not impair the value
of the Residual and which are both (1) entered into in the ordinary course of
business, consistent with past practices, and (2) reflected in the credit
approval documentation with respect to the related Financing Contract).
(c) Except as set forth in Section 3.21(c) of the Disclosure Schedule,
(i) (A) except as permitted by the applicable credit approval documentation
contained in the Legal/Credit Files for such Financing Contract, (B) except as
otherwise reflected in the Legal/Credit Files for such Financing Contract, or
(C) except in connection with a Syndicated Facility (and then only to the extent
not materially and adversely different than the information contained in the
Legal/Credit Files) no Financing Contract (and, with respect to any Financing
Contract which is a Mortgage
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Loan, no Loan Document) is subject to any debt subordination agreement,
participation agreement, intercreditor agreement, owner trust agreement,
purchase agreement, collateral sharing agreement, residual sharing agreement,
remarketing agreement or vendor recourse agreement and (ii) no Financing
Contract (and, with respect to any Financing Contract which is a Mortgage Loan,
no Loan Document) is subject to any agreement, contract or other arrangement
(other than this Agreement or any Vendor Program Agreement) pursuant to which
any interest in any Financing Contract or Loan Document (as applicable) or any
payment due under any Financing Contract, Loan Document, Credit Enhancement or
with respect to any Portfolio Property has been sold, used as collateral,
transferred or participated to or otherwise disposed of to any Person or Persons
by the applicable Purchased Entity or Asset Seller except in connection with
Ordinary Course Asset Transactions, and then only to the extent such transaction
is accurately reflected in the Legal/Credit Files for such Financing Contract
and in such Asset Seller's or Purchased Entities financial reporting records.
(d) Section 3.21(d) of the Disclosure Schedule sets forth a list of
each Credit Enhancement that is a letter of credit or a certificate of deposit
that has a maximum face amount in excess of $250,000 and the expiration or
maturity date thereof, if applicable. The Legal/Credit File for each Financing
Contract contains originals of each Credit Enhancement in the form of a letter
of credit, certificate of deposit, stock certificate or other instrument that is
required by the credit approval for the related Financing Contract (other than
any Credit Enhancements of the type described above which are provided by
Obligors in connection which Syndicated Facilities and are held by the related
collateral or administrative agent for the ratable benefit of a Purchased Entity
or an Asset Seller (as applicable)).
(e) As of the Closing, no Obligor under any Financing Contract has
acquired any Portfolio Property, any interest in any Portfolio Property or the
use of any Portfolio Property pursuant to such Financing Contract, in any case,
for personal, family or household use.
(f) (i) With respect to each Financing Contract directly originated by
a Purchased Entity or an Asset Seller (with respect to the Acquired
International Structured Finance Business) for which the Obligor thereunder is a
Governmental Authority, (i) the applicable Asset Seller or Purchased Entity has
complied with all bidding requirements applicable to such transaction and with
all requirements of any applicable request for proposal, including those
applicable to the Portfolio Property and all Laws governing equal employment
opportunity, affirmative action and environmental protection; (ii) an Asset
Seller or Purchased Entity is the Person, or assignee of the Person, named in
and subject to the request for proposal and (iii) the applicable Asset Seller or
Purchased Entity has obtained the consent of such Governmental Authority if
required by the terms of the Financing Contract, for the consummation of the
Acquisition.
(ii) Except as set forth in Section 3.21(f)(ii) of the Disclosure
Schedule, the United States Government is not an Obligor under any Financing
Contract.
(g) (i) Neither the billing and collection nor the enforcement of any
Financing Contract or Credit Enhancement (other than any Financing Contract part
of, or Credit Enhancement granted or delivered in connection with, any
Syndicated Facility) in accordance with the written terms thereof has resulted,
or will result in, a violation of any
69
current applicable Law. (ii) To Seller's Knowledge, neither the billing and
collection nor the enforcement of any Financing Contract part of, or Credit
Enhancement granted or delivered in connection with, any Syndicated Facility in
accordance with the written terms thereof has resulted, or will result in, a
violation of any current applicable Law.
.22 Portfolio Property.
(a) To Seller's Knowledge, except as disclosed in Section 3.22(a) of
the Disclosure Schedule, with respect to each item of Portfolio Property, (i)
the applicable Asset Seller or Purchased Entity has (and, after giving effect to
the Acquisition, the Purchaser, a Purchased Entity or an Acquiring Subsidiary
will have) either (A) a valid first priority security interest in such Portfolio
Property which has been duly perfected (including pursuant to all appropriate
Uniform Commercial Code filings) when, as and to the extent required by such
Asset Seller's or Purchased Entity's written operating procedures pertaining to
such matters (copies of which have been provided to the Purchaser) and the
credit approval documentation contained in the Legal/Credit Files for such
Financing Contract or (B) good and valid title to such Portfolio Property, free
and clear of all Encumbrances, other than Permitted Encumbrances; (ii) the
amount of the Original Equipment Cost with respect to such Portfolio Property
(if subject to a lease) is described accurately in the files of the applicable
Asset Seller or Purchased Entity that relate to such item of Portfolio Property;
(iii) except as set forth in Section 3.22(a) of the Disclosure Schedule, such
Portfolio Property is not an aircraft; and (iv) no Person has an option to
purchase any item of such Portfolio Property that is subject to a Financing
Contract that is a lease for a fixed amount less than the greater of (A) the
Residual thereof or (B) the amount set forth in the Financing Contract covering
such Portfolio Property.
(b) Except as set forth in Section 3.22(b) of the Disclosure Schedule,
(i) to the Seller's Knowledge, the use, ownership and possession of each item of
Portfolio Property complies in all material respects with all Laws applicable to
such Portfolio Property; and (ii) to the extent required by the applicable
credit approval documentation each Financing Contract requires the Obligor
thereunder (and not an Asset Seller, a Purchased Entity or any other Person) to
maintain insurance against loss or damage with respect to the Portfolio Property
subject to or governed by such Financing Contract.
(c) All documents required to be recorded or filed with the U.S. Coast
Guard or any other Governmental Entities with respect to any vessel, vehicle or
aircraft comprising Portfolio Property have been duly filed or recorded, and all
filing fees and Taxes, if any, payable in connection with such filings have been
paid in full. Each vehicle, vessel and aircraft comprising Portfolio Property
has been duly registered with the appropriate Governmental Entities, and legal
title to or the benefits of a mortgage with respect to each such vehicle, vessel
or aircraft is vested in a Purchased Entity or Asset Seller.
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.23 Mortgage Loans.
(a) Mortgage Loan Schedule; Due on Sale. (i) The Mortgage Loan Schedule
sets forth all interests in all Financing Contracts owned by the Purchased
Entities that are Mortgage Loans, and all information set forth on the Mortgage
Loan Schedule is true, complete and correct in all material respects as of the
date specified thereon. Except as set forth in Section 3.23(a) of the Disclosure
Schedule, no Mortgage Loan owned by any Purchased Entity is cross-collateralized
with any other loan or obligation that is not owned by a Purchased Entity.
(ii) Each Mortgage Loan owned by a Purchased Entity contains a "due on
sale" clause as described in the succeeding sentence. The "due on sale"
clause in respect of each such Mortgage Loan provides for the acceleration of
the payment of the Mortgage Loan balance if, without prior written consent of
the holder of the Mortgage, (A) the related Mortgaged Property or any
material portion thereof is sold, transferred or encumbered by a junior
mortgage or deed of trust (with respect to any Mortgage Loan that is secured
by a single parcel of Mortgaged Property), (B) is sold, transferred or
encumbered by a junior mortgage or deed of trust in violation of the terms of
the related Mortgage Loan, or (C) except as set forth in Section 3.23(a)(ii)
of the Disclosure Schedule, a controlling interest in the Obligor, if the
Obligor is a corporation, or otherwise, a controlling interest in the
manager, managing member or general partner of the Obligor, is transferred,
sold or encumbered by a junior mortgage or deed of trust.
(b) Adequacy of Terms. To the Seller's Knowledge, (i) all Mortgages,
Notes and Loan Documents executed in connection with each Mortgage Loan owned by
a Purchased Entity contain customary provisions regarding the rights and
remedies of the holder thereof and (ii) there is no exemption available to the
Obligor thereunder which would interfere with such right to foreclose, except as
may be available at law or in equity. To Seller's Knowledge, the Mortgages,
Notes and Loan Documents executed in connection with each Mortgage Loan contain
enforceable provisions which render the rights and remedies of the holder
thereof adequate for the practical realization against the Mortgaged Property of
the benefits of the security, including realization by judicial or, if
applicable, non-judicial foreclosure.
(c) Scope of Collateral. (i) Each Mortgage, together with any separate
security agreements, chattel mortgages or equivalent instruments, establishes
and creates a valid and, to Seller's Knowledge, enforceable security interest in
favor of the holder thereof in all of the related Obligor's personal Property
used in, and reasonably necessary to operate, the related Mortgaged Property.
(ii) To Seller's Knowledge, no lessee's and no sublessee's (if any)
interest in any Ground Lease is subject to any Encumbrances (other than
Permitted Encumbrances) superior to, or of equal priority with, the related
Mortgage.
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(iii) Except as set forth in Section 3.23(c)(iii) of the Disclosure
Schedule, none of the Mortgage Loans owned by any Purchased Entity permit the
related Mortgaged Property to be encumbered by any Encumbrance (other than
Permitted Encumbrances) junior to or of equal priority with the Encumbrance
of the related Mortgage, without the prior written consent of the holder of
the Mortgage or the satisfaction of debt service coverage or similar criteria
specified therein.
(d) Assignment of Leases. To the Seller's Knowledge, (i) any assignment
of leases related to and delivered in connection with the Mortgage Loans owned
by the Purchased Entities establishes and creates a valid, subsisting and
enforceable first priority lien and first priority security interest in the
related Obligor's interest in all Leases or other agreements pursuant to which
any Person is entitled to occupy, use or possess all or any portion of the
Mortgaged Property, and (ii) each assignor thereunder has the full right to
assign the same. Each title insurance policy with respect to each assignment of
leases insures that the assignment of leases establishes and creates a good and
valid first priority lien in all Leases or other agreements pursuant to which
any Person is entitled to occupy, use or possess all or any portion of the
Mortgaged Property.
(e) Full Disbursement of Proceeds. Each of the Mortgage Loans owned by
a Purchased Entity has been closed and, other than with respect to any such
Mortgage Loan shown as having an unfunded loan commitment, as being a revolving
credit facility or as having an unfunded future advance component as set forth
in the Mortgage Loan Schedule, the proceeds have been fully disbursed and there
is no funding obligation of any kind (whether fixed, conditional or otherwise)
in respect of any such Mortgage Loan, including any requirement to make advances
or payments or any obligation to purchase participations in letters of credit
under any Loan Document or any obligation relating to any currency or interest
rate hedge or similar arrangement that a Purchased Entity or the Purchaser is or
shall be required to pay or otherwise perform that a Purchased Entity has not
paid or otherwise performed in full. To Seller's Knowledge, all costs, expenses,
fees and other charges incurred in making or closing each Mortgage Loan owned by
a Purchased Entity and in the recording of or filing of notices or statements
with respect to each Loan Document were paid, and none of the respective
Obligors is entitled to any refund of any amounts paid or due under any of the
Loan Documents. To Seller's Knowledge, no Purchased Entity has any reimbursement
obligations to any issuer of any letter of credit or any other Person relating
to any such Mortgage Loan.
(f) Collateral File. The Collateral File contains: (i) all of the
information and documents in the Seller's or in any Purchased Entity's
possession with respect to the Mortgage Loans owned by any of them and any
related Mortgaged Property, and (ii) all material information and documents with
respect to such Mortgage Loans and Mortgaged Property (including an American
Land Title Association (or equivalent) survey of the Mortgaged Property,
prepared by a duly qualified surveyor, which locates all improvements to such
Mortgage Property (if any)). Each Loan Document with respect to each such
Mortgage Loan (in each case, including all waivers, consents, supplements,
forbearances, cancellations, releases and amendments thereto and any estoppel
certificates
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in respect thereof) and all schedules and exhibits thereto is in writing and is
contained in the Collateral File.
(g) Condition of Mortgaged Property; Condemnation. Except as disclosed
in Section 3.23(g)(i) of the Disclosure Schedule, the title policy (or, with
respect to those Mortgage Loans set forth in Section 3.23(g)(ii) of the
Disclosure Schedule, a marked title commitment which is duly executed or
acknowledged by the title insurer and which constitutes a title policy)
contained in the Collateral File with respect to any Mortgage Loan, (i) Seller
has no Knowledge that any parcel of Mortgaged Property or any portion thereof is
subject to any decree or order to be sold or is being condemned, expropriated or
otherwise taken by any Governmental Authority with or without payment of
compensation therefor, nor, to the Seller's Knowledge, has any such
condemnation, expropriation or taking been proposed, (ii) Seller has no
Knowledge that any of the material improvements on any Mortgaged Property lies,
to any extent, outside the boundaries and building restriction lines of such
property, or that any improvements on adjoining properties materially encroach
upon such Mortgaged Property so as to adversely affect the value or
marketability of such Mortgaged Property, (iii) neither the Seller nor any
Purchased Entity has received notice that any of the buildings, fixtures and
improvements included on or in the Mortgaged Property and owned or leased by an
Obligor are not in satisfactory condition or repair for the continued use of the
Mortgaged Property in the ordinary course of business consistent with past
practices or there is any material defect or defects affecting any Mortgaged
Property, or (iv) Seller has no Knowledge that any of the improvements located
on or forming part of each Mortgaged Property do not comply with any applicable
zoning Laws or do not constitute a legal non-conforming use or structure.
(h) Title Insurance. The Collateral File contains a true, correct and
complete copy of an American Land Title Association lender's title insurance
policy (or, with respect to those Mortgage Loans set forth in Section
3.23(g)(ii) of the Disclosure Schedule, a marked title commitment which is duly
executed or acknowledged by the title insurer and which constitutes a title
policy) or other generally acceptable form of policy or insurance acceptable to
prudent mortgage lending institutions, issued by a title insurer acceptable to
prudent mortgage lending institutions and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the applicable
Purchased Entity and its successors and assigns as to its Encumbrance on each
Mortgaged Property, in an amount at least equal to the sum of the original
principal amount of the related Mortgage Loan, plus all advances of principal
provided under the Loan Documents. Each such title insurance policy insures that
the Mortgage is a good and valid first priority lien on the related Mortgaged
Property, subject only to Permitted Encumbrances. Except as set forth in Section
3.23(h) of the Disclosure Schedule, to Seller's Knowledge no claims have been
made under any such title insurance policy, and the Seller has no Knowledge of
any matter that would impair the coverage of such title insurance policy. Except
as set forth in Section 3.23(h) of the Disclosure Schedule, the premiums for the
policy, endorsements and all special endorsements, if any, have been paid in
full. To Seller's Knowledge and subject to the terms of the title policies, upon
the consummation of the
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Acquisition, all such title policies will continue to inure to the benefit of a
Purchased Entity without consent of or notice to the applicable insurer.
(i) No Holdbacks. Except as listed on the Mortgage Loan Schedule, any
and all requirements as to completion of any on-site or off-site improvement and
as to disbursements of any holdback funds escrowed for such purpose that were to
have been complied with on or before the Closing Date have been complied with or
have been waived by a Purchased Entity in the ordinary course of its business
consistent with past practices, or any such holdback funds so escrowed have not
been released and are listed on the Mortgage Loan Schedule.
(j) Insurance. Each Mortgaged Property is, and is required pursuant to
the related Mortgage to be, insured by (i) a fire and extended perils insurance
policy providing coverage against loss or damage sustained by risks insured
against by Persons operating similar properties in the locality of the Mortgaged
Property in an amount not less than the lesser of the principal balance of the
related Mortgage Loan and the replacement cost of the Mortgaged Property unless
otherwise mandated by applicable Governmental Authority or applicable Law; (ii)
a business interruption or rental loss insurance policy in an amount at least
equal to twelve (12) months of operations of the Mortgaged Property; (iii) a
flood insurance policy (if any portion of buildings or other structures on the
Mortgaged Property are located in an area identified by the Federal Emergency
Management Agency as having special flood hazards and the Federal Emergency
Management Agency requires flood insurance to be maintained); and (iv) a
comprehensive general liability insurance policy in amounts as are generally
required by commercial mortgage lenders, and in any event not less than $1
million per occurrence. Each such insurance policy contains a standard mortgagee
clause that names the mortgagee as an additional insured in the case of
liability insurance policies and as a loss payee in the case of property
insurance policies and requires prior notice to the holder of the Mortgage of
termination or cancellation. No such notice has been received, including any
notice of nonpayment of premiums, that (i) has not been cured or (ii) that,
without further action by the Obligor or holder of the Mortgage, would result in
the cancellation, termination or default under such insurance policy. Each
Mortgage obligates the related Obligor to maintain all such insurance and, upon
such Obligor's failure to do so, authorizes the holder of the Mortgage to
maintain such insurance at the Obligor's cost and expense and to seek
reimbursement therefor from such Obligor. Each Mortgage and, if applicable, each
Ground Lease, provides that casualty insurance proceeds will be applied (A) to
the restoration or repair of the related Mortgaged Property, or (B) to the
restoration or repair of the related Mortgaged Property, with any excess
insurance proceeds after restoration or repair being paid to the Obligor, or (C)
to the reduction of the principal amount of the related Mortgage Loan. To
Seller's Knowledge, no Purchased Entity has taken any action to limit or
invalidate the coverage provided by any insurance policy referred to in this
Section 3.23(j) and there does not exist any valid defense by an insurer to deny
or limit coverage based on any action of any Purchased Entity.
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(k) Escrows and Reserves. The Mortgage Loan Schedule contains a list of
all balances in all escrow accounts held by any Purchased Entity for Taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, deposits, security deposits, replacement reserves, tenant improvement
costs or holdbacks, or other escrowed funds relating to the Mortgage Loans owned
by the Purchased Entities (collectively, the "Mortgage Loan Holdbacks"). All
escrow payments relating to each such Mortgage Loan that, as of the Closing
Date, have been collected by a Purchased Entity, have been collected and paid in
accordance with the Loan Documents and applicable Law. Any Purchased Entity's
failure to collect, as of the Closing Date, any escrow payments required to be
collected by the applicable Loan Documents will have no material adverse effect
on such Purchased Entity's ability to collect such escrow payments after the
Closing. The balance of each account constituting escrow payments collected by
the Purchased Entities relating to each such Mortgage Loan as of the Closing
Date is listed on the Mortgage Loan Schedule. Except for the escrow payments
listed in the Mortgage Loan Schedule (including Mortgage Loan Holdbacks), no
Purchased Entity holds any funds or property of or owes any amounts or property
to any Obligor and no Purchased Entity has effected or received the benefit of
any setoff against any Obligor on account of any such Mortgage Loans.
(l) Whole Loans; Participations. (i) Except for the participations
listed in Section 3.23(l) of the Disclosure Schedule (each, a "Participation"),
no Mortgage Loan owned by any Purchased Entity is a participation and one or
more Purchased Entities are the direct obligee with respect to each such
Mortgage Loan.
(ii) With respect to each Participation, (A) to Seller's Knowledge, the
operation of any of the terms of the participation agreement or other
agreement governing the relationship among the participants (the
"Participation Agreement") and participation certificate(s), if any, or the
exercise of any right thereunder, will not render the Participation Agreement
and participation certificate(s), if any, unenforceable, in whole or in part;
(B) the related Participation Agreement and participation certificate(s)
(including all amendments, modifications, waivers, reservations or
cancellations in respect thereof), included in the Collateral File are true,
correct and complete copies of the documents they purport to be and have not
been superseded, amended, modified, cancelled or otherwise changed except as
set forth on the Mortgage Loan Schedule; and (C) no Purchased Entity has
waived any default, breach or violation of any related Participation
Agreement or participation certificate (if any).
(m) Leasehold Estate. Each Mortgaged Property consists of a fee simple
estate in real property or, if any Mortgage Loan is secured in whole or in part
by the interest of an Obligor as a lessee or sublessee under a ground lease of a
Mortgaged Property and not by the related fee interest in such Mortgaged
Property (a "Ground Lease"). All Mortgage Loans which are secured in whole or in
part by a Ground Leases are set forth in Section 3.23(m) of the Disclosure
Schedule, and to Seller's Knowledge, there are no defaults or events of default
under any such Ground Leases. With respect to each such Ground Lease, Seller has
provided Purchaser with true, complete and correct
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copies of (i) each such Ground Lease and all related amendments, waivers,
consents, together with all estoppel certificates, subordination and/or
non-disturbance agreements and other ancillary documents, correspondence and
notices in respect thereof; (ii) evidence of the recording of such Ground Lease
or a memorandum thereof (including, for this purpose, information contained in
the relevant title insurance policy); and (iii) evidence (reflected in the
applicable Ground Lease or related estoppel certificate) that such Ground Lease
is superior to any fee mortgage or other Encumbrance on the related fee
interest.
(n) Tenant Leases. No Mortgaged Property is subject to any lease,
occupancy agreement, or license agreement other than the Leases described in the
rent roll contained in the Collateral File and no Person has any possessory
interest in, or the right to occupy, any Mortgaged Property except under and
pursuant to such Leases. If any Mortgage Loan is secured by any Mortgaged
Property that is leased to tenants pursuant to a Lease, (i) each Lease that
covers 50% or more of the square footage of any parcel of Mortgaged Property and
each Credit Tenant Lease (A) to the Seller's Knowledge is in full force and
effect, (B) to the Seller's Knowledge no monetary default has occurred
thereunder and (C) to the Seller's Knowledge, (x) no non-monetary default has
occurred thereunder, and (y) there is no existing condition which, but for the
passage of time or the giving of notice (or both), would constitute a default
thereunder; (ii) with respect to any Lease other than those described in Clause
(i) above (A) such Lease is in full force and effect and (B) except with respect
to (1) multi-family and assisted living Mortgage Property, (2) Syndicated
Facilities and (iii) paragraph (C) below, no monetary or, to the Seller's
Knowledge, non-monetary default has occurred thereunder, nor, to the Seller's
Knowledge, is there any existing condition which, but for the passage of time or
the giving of notice (or both), would constitute a default under the terms of no
more than 20% of such Leases for each Mortgaged Property and (C) except as
disclosed, with respect to such Lease of a single tenant, where such Lease is
more than 20% of the total Mortgaged Property, Seller has not received notice of
any monetary or non-monetary default, or of any existing condition which, but
for the passage of time or the giving of notice (or both), would constitute a
default under the terms of such Lease; (iii) to the Seller's Knowledge all
tenants under the Leases have rights in respect of the Mortgaged Property as
tenants only, except such rights as may have been subordinated to the related
Mortgage Loan; and (iv) to the Seller's Knowledge all of the Leases and all of
the rents, charges, issues and profits due and payable thereunder have been
validly assigned as collateral security to a Purchased Entity for the Mortgage
Loan.
(o) Environmental Assessment. An environmental site assessment, or an
update of a previous such report, was performed with respect to each Mortgaged
Property in connection with the origination or transfer of beneficial interest
of each Mortgage Loan set forth on the Mortgage Loan Schedule, a report of each
such assessment (or the most recent assessment with respect to each Mortgaged
Property) (an "Environmental Report") is contained in the related Collateral
File. Each Mortgage requires the related Obligor to comply with all applicable
Environmental Laws. Where an Environmental Report disclosed a Release or the
existence of an Adverse Environmental Condition or circumstance affecting any
Mortgaged Property, (i) a party not related to the Obligor was
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identified as the responsible party for such Release, condition or circumstance,
or (ii) environmental insurance covering such condition was obtained or must be
maintained until the condition or circumstance is remediated, or (iii) the
Obligor was required either to provide additional security (which may include an
environmental indemnity) that was deemed to be sufficient by the originator in
light of the circumstances and/or to establish an operations and maintenance
plan. Except to the extent described in an Environmental Report contained in a
Collateral File, and no Purchased Entity nor, to the Seller's Knowledge, any
Obligor or any current tenant thereon, has received any notice of violation or
potential violation of any applicable Environmental Laws.
(p) Obligors. The Obligor in respect of each Mortgage Loan is a limited
liability company, general partnership, limited partnership or corporation.
(q) Mortgage Loans Covered By Section 3.23. Solely for purposes of
Section 3.23(a) through (g) and (i) through (p), Mortgage Loans shall not be
deemed to include any Mortgage Loans set forth in Section 3.23(q) of the
Disclosure Schedule which are originated and held by a Purchased Entity in the
ordinary course of its business, consistent with its past practices.
.24 [Intentionally Omitted].
.25 Brokers. Except as previously disclosed to the Purchaser, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of any of the Selling
Entities and no Purchased Entity is or shall, at or after Closing, be obligated
to pay any such fees or commissions to any Person.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Selling Entities to enter into this Agreement,
the Purchaser hereby represents and warrants as of the date hereof and as of the
Closing Date as follows:
.1 Organization and Authority of the Purchaser. The Purchaser is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware and has all necessary corporate power and authority to
enter into this Agreement, the Related Agreements and other Documents to be
executed and delivered by the Purchaser pursuant hereto and thereto, to carry
out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by the Purchaser of
this Agreement, the Related Agreements and any other Document to be executed and
delivered by the Purchaser pursuant hereto and thereto, the performance by the
Purchaser of its obligations hereunder and thereunder and the consummation by
the Purchaser of the transactions contemplated hereby and thereby
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have been duly authorized by all requisite action on the part of the Purchaser.
This Agreement has been, and upon their execution, the Related Agreements and
any other Document to be executed and delivered by the Purchaser pursuant hereto
and thereto shall have been, duly executed and delivered by the Purchaser, and
(assuming due authorization, execution and delivery by the other parties hereto)
this Agreement constitutes, and upon their execution, the Related Agreements and
any other Document to be executed and delivered by the Purchaser pursuant hereto
and thereto will constitute, a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms, except
as enforcement thereof may be limited by the Bankruptcy Exception.
.2 No Conflict. Assuming that all consents, approvals, authorizations,
filings, notifications and other actions described in or otherwise listed on
Exhibit 4.03 and the Regulatory Approvals have been obtained, made or taken, as
applicable, the execution, delivery and performance of this Agreement, the
Related Agreements and any other Document to be executed and delivered hereto
and thereto by the Purchaser, compliance by the Purchaser with the terms and
provisions hereof and thereof and the consummation by the Purchaser of the
transactions contemplated hereby and thereby will not (a) violate, conflict with
or result in the breach of any provision of the certificate of incorporation or
by laws of the Purchaser, (b) conflict with or violate any Law or Governmental
Order applicable to the Purchaser or (c) conflict with, or result in any breach
of, constitute a default (or event which with the giving of notice or lapse or
time, or both, would become a default) under, require any consent under, or give
to others any rights of termination, amendment, acceleration, suspension,
revocation, or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of the Purchaser pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Purchaser is a party
or by which any of such assets or properties are bound or affected which would
have a material adverse effect on the ability of the Purchaser to consummate the
transactions contemplated by this Agreement.
.3 Authorizations. Other than the Regulatory Approvals, no notices,
reports or other filings are required to be made by the Purchaser with, nor are
any consents, licenses, permits, Authorizations or approvals required to be
obtained from any Governmental Authority or any other Person in connection with
the execution and delivery by the Purchaser of this Agreement, any Related
Agreement or any other document, agreement or instrument to be executed and
delivered by the Purchaser pursuant hereto or thereto or the consummation by the
Purchaser of the transactions contemplated hereby or thereby.
.4 Investment Purpose; Accredited Investor. The Purchaser is acquiring
the Shares, the Public Finance Interests, the TCFL Shares, the TFBV Shares and
the TGMBH Shares solely for the purpose of investment and not with a present
view to, or for offer or sale in connection with, any distribution thereof. The
Purchaser is an "accredited investor" (as that term is defined in Rule 501 of
Regulation D under the Securities Act of 1933) and by reason of its business and
financial experience, it has such
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knowledge, sophistication and experience in business and financial matters as to
be capable of evaluating the merits and risks of the prospective investment, is
able to bear the economic risk of such investment and is able to afford a
complete loss of such investment.
.5 Available Funds. The Purchaser has or has available to it all funds
necessary to satisfy all of its obligations hereunder and in connection with the
Acquisition, and its ability to consummate such transactions is not dependent or
conditional upon the receipt of financing (whether debt or equity) from any
third party (including any Affiliate of Purchaser).
.6 Litigation. No Action by or against the Purchaser is pending or, to
the knowledge of the Purchaser, threatened, that (a) could affect the legality,
validity or enforceability of this Agreement, the Related Agreements or any
other Document to be executed and delivered by the Purchaser pursuant hereto or
thereto or (b) seeks to delay or prevent the consummation of, or that would be
reasonably likely to materially and adversely affect the Purchaser's ability to
consummate the transactions contemplated by this Agreement, the Related
Agreements and any other Document to be executed by the Purchaser pursuant
hereto or thereto.
.7 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
.1 Conduct of Business Prior to the Closing; Access to Information.
Between the date of this Agreement and the Closing:
(a) The Parent, the Seller and TLI (with respect to the Acquired
International Structured Finance Business) shall give or cause to be given to
the Purchaser and its representatives and agents reasonable access to their
premises, personnel and books and records (wherever located) that relate to the
Acquired Businesses and to the premises, personnel and books and records of the
Purchased Entities and, with respect to the Acquired ISF Assets and the Assumed
ISF Liabilities, the Asset Sellers, including all accounting books and records,
all financial record and statements, all Tax Returns (other than Consolidated
Tax Returns except for the pro-forma Tax Returns of the Purchased Entities) and
Tax records (but only insofar as such Tax Returns and Tax records directly
relate to the Acquired Businesses, the Acquired ISF Assets or the Assumed ISF
Liabilities), all records pertaining to any Financing Contract, any Portfolio
Property and personnel and employment related matters; provided, however, that
such investigation shall be conducted during normal business hours upon
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reasonable advance notice and in such manner as not to interfere unreasonably
with the business of the Selling Entities or the Purchased Entities.
(b) The Parent and the Seller shall and shall cause the Purchased
Entities and, with respect to the Acquired ISF Assets and the Assumed ISF
Liabilities, the Asset Sellers to use commercially reasonable efforts,
consistent with past practice, to preserve substantially intact the business of
the Purchased Entities and the Acquired ISF Assets and the Assumed ISF
Liabilities (respectively), to preserve and retain all present business
relationships and to cooperate with the Purchaser, as and to the extent
reasonably requested by Purchaser from time to time, in furtherance of the
foregoing.
(c) The Parent and the Seller shall, and shall cause their Affiliates
(other than the Purchased Entities) to, conduct their respective business
relationships with the Purchased Entities in the ordinary and usual course of
business consistent with their respective past practices; provided, however,
that except as otherwise expressly provided in this Agreement, without the prior
written consent of the Purchaser, in no event shall the Parent, the Seller, or
any of their Affiliates (other than Purchased Entities) deal with, or enter into
any contracts, commitments or arrangements with any Purchased Entity other than
on terms and provisions no less favorable than those which could be obtained by
the Purchased Entities with respect to similar dealings, contracts, commitments
or arrangements with third parties. Except as otherwise expressly required by
this Agreement, the Parent, the Seller and TLI shall cause each Purchased Entity
and each Asset Seller to conduct their respective businesses in the ordinary and
usual course consistent with their respective past practices, to maintain its
books, accounts and records in the usual, regular and ordinary manner, to cause
such books, accounts and records to be true and complete in all material
respects, and to comply with the provisions set forth in this Section 5.01
applicable thereto.
(d) Except as otherwise expressly required by this Agreement or as
described in Section 5.01 of the Disclosure Schedule, neither the Parent nor the
Seller shall permit any Purchased Entity, without prior consent of the
Purchaser, to: (i) issue or commit to issue any shares of its Capital Stock; or
(ii) grant or commit to grant any options, warrants or rights to subscribe for
or purchase or otherwise acquire any shares of its Capital Stock or issue or
commit to issue any securities convertible into or exchangeable for shares of
its Capital Stock; or (iii) declare, set aside, make or pay any dividend or
other distribution in respect of its Capital Stock; or (iv) directly or
indirectly redeem, purchase or otherwise acquire or commit to acquire any shares
of its Capital Stock; or (v) effect a split, modification or reclassification of
its Capital Stock or a recapitalization; or (vi) change its Certificate or
Articles of Incorporation or By-laws or other constituent documents; or (vii)
borrow or agree to borrow any funds other than in the ordinary course of
business, consistent with its past practices; or (viii) make or commit to make
any capital expenditures except those listed in Section 3.12(b) of the
Disclosure Schedule and except for those not in excess of $7.5 million; or (ix)
amend or modify in any respect, any of the agreements with respect to
Indebtedness of the Purchased Entities set forth in Section 5.01(d)(ix) of the
Disclosure Schedule (it being agreed that nothing contained in this clause (ix)
shall in any way limit or restrict the
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Parent, the Seller or any Purchased Entity from renewing, extending or
refinancing any such agreement on terms substantially similar to the terms of
such agreements on the date hereof); or (x) (A) assume, guarantee or otherwise
become responsible for the obligations of, any Person, which obligations exceed
$50,000 individually or $500,000 in the aggregate, other than in connection with
any letter of credit facility or subfacility entered into by a Purchased Entity
in the ordinary course of its business and with respect to which the related
obligor has reimbursement or payment obligations to such Purchased Entity, or
(B) endorse notes or other similar instruments or make any advances to any
Person, in each case, other than in the ordinary course of its business and
consistent with its past practices; or (xi) mortgage, pledge or otherwise
encumber any of its Properties (other than with respect to the leasing of
Portfolio Property in the ordinary course of business of any Purchased Entity or
Asset Seller (with respect to the Acquired International Structured Finance
Business) consistent with past practices); or (xii) other than in the ordinary
course of business, consistent with its past practices (including Ordinary
Course Asset Transactions) sell, lease, transfer or otherwise dispose of any of
its Properties; or (xiii) enter into an agreement, contract or commitment (other
than this Agreement) to do any of the things prohibited by the foregoing clauses
(i) through (xii); provided, however, that nothing in this Section 5.01(d) shall
prohibit any Purchased Entity from entering into or performing under any
agreements or arrangements relating to the securitization of assets.
(e) Except as otherwise expressly required by this Agreement, none of
the Parent or the Seller, shall or shall permit any Purchased Entity and, with
respect to the Acquired International Structured Finance Business, none of the
Parent, the Seller or TLI shall or shall permit any Asset Seller, in either
case, without prior consent of the Purchaser (which consent, in the case of
clauses (ii), (iii), (iv) and (vi) below or with respect to any agreement,
contract or commitment to take any of the actions prohibited by clauses (ii),
(iii), (iv) and (vi) below, shall not be unreasonably withheld or delayed), to:
(i) change its methods of accounting or accounting practice or policy (for
financial accounting purposes) (including with respect to specific or permanent
special loss reserves) as in effect on the date hereof, except as required by
changes in GAAP and as disclosed to the Purchaser in writing prior to the
Closing; or (ii) directly or indirectly in any way extend or otherwise
restructure the payment schedule, payment terms or any other term or condition
of any Financing Contract or Vendor Program Agreement, release any collateral or
make any advance, extension, novation, modification or other accommodation to
any Obligor or any other party thereto, other than for such actions in respect
of a Financing Contract or Vendor Program Agreement that are taken in the
ordinary course of business by a Purchased Entity or an Asset Seller consistent
with its past practices; or (iii) enter into or materially modify any agreement,
contract or commitment which, if entered into, created or established prior to
the date of this Agreement, would be required to be listed (or, in the case of
such modifications and amendments, pertains to an agreement, contract,
commitment, program, plan or arrangement which is presently listed) in Section
3.12(a)(i) or Section 3.12(a)(ix) through 3.12(a)(xii) of the Disclosure
Schedule; or (iv) establish, create or participate in any Employee Benefit Plan,
any Company Benefit Plan or any Company Benefit Arrangement
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(where such Company Benefit Arrangement represents a material change) or modify
any existing Company Benefit Plan or Company Benefit Arrangement (other than any
modifications that are required by Law and for Company Benefit Arrangements
where such modifications are material), in each case, only to the extent such
Company Benefit Plan, Company Benefit Arrangement or Employee Benefit Plan (as
applicable) is not being assumed by Purchaser or one of its Affiliates or
continued by the Purchased Entities following the Closing in accordance with the
terms and provisions set forth in this Agreement; provided, however, that the
Parent and the Seller shall give the Purchaser at least five (5) Business Days
prior written notice of any such proposed modification) which, if entered into,
created or established prior to the date of this Agreement, would be required to
be listed (or, in the case of modifications, pertains to a Company Benefit Plan
which is presently listed) in Section 3.15(a), Section 3.15(b) or Section
3.15(c) of the Disclosure Schedule and provided, further, that nothing in this
Section 5.01(e) shall limit the ability of any of the Selling Entities or any of
their Affiliates (other than any Purchased Entity or TLI (with respect to the
Acquired International Structured Finance Business) to enter into or modify any
Company Benefit Plan or Company Benefit Arrangement in which Company Employees
represent less than ten percent (10%) of all participants of such plan or
arrangement; or (v) take any action that would breach any Selling Entity's
representations, warranties and covenants contained in this Agreement if such
representation, warranty or covenant were made at the time of the action; or
(vi) change in any respect the credit policies or collateral eligibility
standards of the Purchased Entities or any Asset Seller (with respect to the
Acquired ISF Assets); or (vii) [intentionally deleted]; (viii) after the Cut-Off
Time, repay, retire, satisfy or otherwise discharge any Indebtedness, in each
case, to the extent such Indebtedness is between any Purchased Entity, on the
one hand, and any Selling Entity or any of its Affiliates (other than another
Purchased Entity) on the other hand; or (ix) enter into an agreement, contract
or commitment (other than this Agreement) to do any of the things prohibited by
the foregoing clauses (i) through (vii); provided, however, that notwithstanding
the foregoing, none of the Purchased Entities and none of the Asset Sellers
shall acquire or operate, or agree to acquire or operate, any real property
(whether in fee or pursuant to a lease) on which an underground storage tank
containing, or intended for the storage of, Hazardous Materials is located.
(f) (i) Following the Closing, the Purchaser shall cause the Purchased
Entities to use commercially reasonable efforts to retain and to make available
(including the right to make, at the Seller's expense, photocopies), for a
period of five (5) years following the Closing Date (or such longer period as
may be required by Law), all financial and other information in its possession
or in the possession of the Purchased Entities and relating to the operation of
the Acquired Businesses prior to the Closing Date, and those officers, employees
and authorized agents of any Purchased Entity who have knowledge relating to any
Acquired Business as is reasonably required by the Seller or its Affiliates in
connection with the resolution of claims made by (A) any Selling Entity against
any Person or (B) any Person against any Selling Entity, in each case, relating
to any Acquired Business and an event or circumstance occurring prior to the
Closing.
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(ii) Following the Closing, each Selling Entity shall use commercially
reasonable efforts to retain and to make available (including the right to
make, at the Purchaser's expense, photocopies), for a period of five (5)
years following the Closing Date (or such longer period as may be required by
Law), all financial and other information in the possession of such Selling
Entity or any of its Affiliates and relating to the operation of the Acquired
Businesses prior to the Closing Date, and those officers, employees and
authorized agents of any Selling Entity or their respective Affiliates who
have knowledge relating to any Acquired Business as is reasonably required by
the Purchaser or its Affiliates in connection with the resolution of claims
made by (A) the Purchaser or any Purchased Entity against any Person or (B)
any Person against the Purchaser or any Purchased Entity, in each case,
relating to any Acquired Business and an event or circumstance occurring
prior to the Closing.
.2 Pending or Threatened Actions. Between the date of this Agreement
and the Closing, the Parent, the Seller and TLI, on the one hand, and the
Purchaser, on the other hand, shall inform each other, promptly upon obtaining
Knowledge thereof, of any pending or threatened Action which reasonably could be
anticipated to (i) render inaccurate in any material respect any representation
or warranty made by any Selling Entity or the Purchaser (as the case may be); or
(ii) prohibit or restrain or materially and adversely affect the consummation of
the transactions contemplated hereby or the performance by any Selling Entity or
the Purchaser of their respective obligations hereunder.
.3 Tax Matters
(a) Taxes.
(i) Except for Taxes set forth on the Adjusted Cut-Off Date Pricing
Schedule or the Adjusted Cut-Off Date Acquired ISF Assets and Liabilities
Pricing Schedule, the Seller Indemnitors shall be liable for, shall promptly
defend and shall indemnify and hold the Purchaser Indemnitees harmless from
and against any and all of the following Taxes and all reasonable associated
costs, expenses, damages, or losses (including reasonable fees for attorneys
and other outside consultants) incurred in contesting or otherwise in
connection with any such Taxes (except where such following Taxes arise in
respect of TCFL or any U.K. Subsidiary):
(A) Taxes imposed on any Purchased Entity (or any predecessor
thereof) or imposed on or with respect to any of the Acquired ISF Assets for
any taxable period or portion thereof (including any Straddle Period) that
ends on or before the close of business on the Cut-Off Date other than any
such Taxes imposed on any Purchased Entity or imposed on or with respect to
any of the Acquired ISF Assets resulting from transactions or any other
actions that are outside the ordinary course of business and that occur on
the Closing Date but
83
after the Closing unless such transactions or actions were undertaken by or
for the benefit of the Selling Entities;
(B) in the case where the Closing Date is after the Cut-Off Date,
(i) interest and penalties imposed on any Purchased Entity or imposed on or
with respect to any of the Acquired ISF Assets with respect to Taxes
(assuming solely for this purpose that such term does not include any
references to interest or penalties) due and payable during any taxable
period or portion thereof that begins on or after the close of business on
the Cut-Off Date and ends on or prior to the close of business on the Closing
Date and (ii) Taxes imposed on any Purchased Entity or imposed on or with
respect to any of the Acquired ISF Assets resulting from transactions or any
other actions that are outside the ordinary course of business and that occur
for any taxable period or portion thereof that begins on or after the close
of business on the Cut-Off Date and ends on or prior to the close of business
on the Closing Date unless such transactions or actions were undertaken by or
for the benefit of the Purchaser, and, in the case of each of clauses (i) and
(ii), other than any such interest, penalties or Taxes imposed on any
Purchased Entity or imposed on or with respect to any of the Acquired ISF
Assets resulting from transactions or any other actions that are outside the
ordinary course of business and that occur on the Closing Date but after the
Closing unless such transactions or actions were undertaken by or for the
benefit of the Selling Entities;
(C) Taxes imposed on any member of a consolidated, combined or
unitary group of which any Purchased Entity (or any predecessor of either) is
or was a member on or prior to the Closing Date, by reason of the liability
of any Purchased Entity (or any predecessor of either), pursuant to Treasury
Regulations Section 1.1502-6(a) or any analogous or similar domestic or
foreign, state or local Law or regulation;
(D) Taxes related to a breach of a representation in Section
3.16(b), (c), (d), (e) or (f), except that in the case of a breach of a
representation in Section 3.16(b)(i), (ii), (iv), (v), (vii), (viii), (xi),
(xvi), (xvii), (xxi), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii) or
(xxix) or 3.16(e)(ii), only Taxes that are imposed on any Purchased Entity or
on or with respect to any of the Acquired ISF Assets for any taxable period
or portion thereof that ends on or before the close of business on the first
anniversary of the Closing Date (the "3.16 Early Indemnification Cut-Off
Date"); provided, however, that, for purposes of this paragraph (D), in no
event shall the Selling Entities have any indemnification obligation for
Taxes after the expiration of the applicable statute of limitations relating
to such Taxes; provided further, however, that Taxes with respect to an
indemnity obligation resulting from a breach of the representation contained
in Section 3.16(b)(xx)(A) relating to an intercompany transaction (an
"Intercompany Transaction") shall not include Taxes payable by a Purchaser
Indemnitee to the extent such Taxes would have been payable by the Purchaser
Indemnitee in connection with the transaction generating such indemnity
obligation, assuming
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for this purpose that the Tax basis of the underlying asset in the hands of
the Purchaser Indemnitee immediately after the Intercompany Transaction was
the same as the tax basis of the asset in the hands of the transferor in the
Intercompany Transaction; provided further, however, in the case of a breach
of a representation, which is not subject to the 3.16 Early Indemnification
Cut-Off Date, where such breach results from an election, undertaking,
arrangement or specific transaction in respect of which the relevant
Purchaser Indemnitee is bound, the Purchaser Indemnitees shall not be
entitled to indemnification pursuant to this Section 5.03(a)(i)(D) for Taxes
accruing with respect to such election, undertaking, arrangement or specific
transaction after the relevant Purchaser Indemnitee is no longer bound by
such election, undertaking, arrangement or specific transaction; provided
further, however, in the case of a breach of a representation, which is not
subject to the 3.16 Early Indemnification Cut-Off Date, where such breach
results from a Tax reporting position taken on a Tax Return in respect of
which the relevant Purchaser Indemnitee is bound, the Purchaser Indemnitees
shall not be entitled to indemnification pursuant to this Section
5.03(a)(i)(D) for Taxes accruing with respect to such position after the
later of (i) the date the relevant Purchaser Indemnitee is no longer bound by
such position and (ii) the first anniversary of the Closing Date; provided
further, however, in the case of the breach of a representation contained in
Section 3.16(b)(xxx), Taxes shall be only indemnified to the extent such
Taxes are not collected from the applicable Obligor after the exercise of
reasonable commercial efforts;
(E) Taxes resulting from, arising out of, based upon, or relating
to, the transactions contemplated by this Agreement to occur on or prior to
the Closing;
(F) Taxes resulting from, arising out of, based upon, or relating
to the Section 338(h)(10) Elections made pursuant to this Agreement;
(G) sales, use or other similar Taxes assessed in respect of any
Financing Contract after the Closing Date where such Taxes were erroneously
paid at the inception of such Financing Contract to the extent that such
Taxes are not collected from the applicable Obligor after the exercise of
reasonable commercial efforts;
(H) sales, use or other similar Taxes required to be collected in
respect of any Financing Contract during the 12 months following the Closing
Date if (1) such Taxes are not being collected by any Purchased Entity
pursuant to its reliance on an applicable exemption from such Taxes, (2) such
exemption from Taxes is dependent upon receipt of a properly executed
Exemption Certificate, and (3) within 12 months of the Closing, the Purchaser
has notified the Seller that a properly completed and executed Exemption
Certificate is neither in the Purchaser's or any Purchased Entity's existing
records or files nor obtainable from the particular customer following
reasonable commercial efforts of the Purchaser
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and the Purchased Entities to obtain such Exemption Certificate from the
customer;
(I) if TCFF is not in compliance with all applicable VAT
requirements on the Cut-Off Date, any interest and penalties payable by TCFF
that accrue during the 12 month period ending on the first anniversary of the
Cut-Off Date to the extent attributable to improper VAT compliance procedures
of TCFF as in effect on the Cut-Off Date, together with TCFF's reasonable
costs of creating appropriate VAT compliance procedures and any reasonable
costs incurred (including, without limitation, reasonable fees for attorneys
and other outside consultants) in connection with any VAT audit or other
compliance proceeding relating to such 12 month period.
For purposes of this Section 5.03, a breach of a representation or
warranty contained in this Agreement shall be deemed to exist either if such
representation or warranty is actually inaccurate or breached or if such
representation or warranty would have been breached or been inaccurate if such
representation or warranty had not contained any limitation or qualification as
to materiality, Material Adverse Effect or Knowledge, it being the intention of
the parties hereto that the Purchaser Indemnitees shall be indemnified and held
harmless from and against any and all Taxes and all reasonable associated costs,
expenses, damages, or losses (including reasonable fees for attorneys and other
outside consultants) incurred in contesting or otherwise in connection with any
such Taxes suffered or incurred by any of them resulting from, arising out of,
based upon or relating to the failure of any such representation or warranty to
be true, correct and complete in any respect, determined in each case without
regard to any qualification as to materiality, Material Adverse Effect or
Knowledge set forth with respect thereto.
(ii) The Purchaser shall be liable for, shall promptly defend and shall
indemnify and hold the Seller Indemnitees harmless from and against Taxes
(including, for the avoidance of doubt, any Taxes due as a result of the
transfer of the Capital Stock of TCFF by the Purchaser or its Affiliates
after the Closing) relating to any Purchased Entity or the Acquired ISF
Assets for which the Selling Entities are not liable pursuant to this Section
5.03, and all reasonable associated costs, expenses, damages, or losses
(including reasonable fees for attorneys and other outside consultants)
incurred in contesting or otherwise in connection with any such Taxes.
(iii) To the extent permitted by Law or administrative practice, the
taxable year of each of the Purchased Entities (other than TCFL or any U.K.
Subsidiary) that includes the Closing Date shall be treated as closing on the
close of business on the Closing Date. In respect of TCFL and any U.K.
Subsidiary incorporated in the U.K., the parties shall use reasonable
endeavours to procure that the Cut-Off Date shall be an accounting reference
date (as defined in Section 224 of the United Kingdom Companies Act 1985) or,
if such treatment does not occur, shall
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for the purposes of this Section 5.03 be deemed to be an actual accounting
reference date of such companies.
(iv) For purposes of Section 5.03, where it is necessary to apportion
between the Selling Entities and the Purchaser the Tax liability of any
Purchased Entity for a Straddle Period, such liability shall be apportioned
between the period deemed to end on the close of business on the Cut-Off Date
(the "Pre-Closing Period") and the period deemed to begin at the beginning of
the day following the Cut-Off Date (the "Post-Closing Period") as follows:
(1) in the case of Taxes that are either (x) based upon or related
to income or receipts, or (y) imposed in connection with any sale or other
transfer or assignment of property (real or personal, tangible or intangible)
(other than conveyances pursuant to this Agreement, as provided under Section
5.03(a)(iv)), the amount allocated to the Pre-Closing Period shall be deemed
equal to the amount which would be payable if the taxable period ended with
the Cut-Off Date; and
(2) in the case of Taxes imposed on a periodic basis with respect to
the assets of the Purchased Entities, or otherwise measured by the level of
any item, the amount allocated to the Pre-Closing Period shall be deemed to
be the amount of such Taxes for the entire period (or, in the case of such
Taxes determined on an arrears basis, the amount of such Taxes for the
immediately preceding period), multiplied by a fraction the numerator of
which is the number of calendar days in the period ending on the Cut-Off Date
and the denominator of which is the number of calendar days in the entire
period; provided, however, that property Taxes whose lien date is in the
Pre-Closing Period shall be allocated to the Pre-Closing Period and property
Taxes whose lien date is in the Post-Closing Period shall be allocated to the
Post-Closing Period; provided further, however, that exemptions, allowances
or deductions that are calculated on an annual basis (including depreciation
or amortization deductions) shall be allocated between the Pre-Closing Period
and the Post-Closing Period in proportion to the number of days in each such
period.
In any case where it is relevant to allocate Taxes for taxable periods which
include but do not end on the Section 3.16 Early Indemnification Cut-Off Date or
the Closing Date, the principles set forth in the immediately preceding two
paragraphs shall apply.
(v) The Purchaser shall in good faith treat any transaction or other
action not contemplated by this Agreement that is entered into or undertaken
by the Purchaser on the Closing Date but after the Closing and that is
properly allocable to a taxable period beginning after the Closing Date under
the principles of Treasury Regulation Section 1.1502-76(b)(1)(ii)(B) as
having occurred in a taxable period beginning after the Closing Date.
87
(vi) Notwithstanding anything herein to the contrary, the Selling Entities
shall be liable for and shall pay all Transfer Taxes resulting from, arising
out of, imposed directly or indirectly on or in connection with, based upon,
or relating to, the transactions contemplated by this Agreement (including
any such Taxes resulting from, arising out of, based upon, or relating to,
the Section 338(h)(10) Elections). The parties agree to comply with any
available bulk sales or other Transfer Tax exemption including but not
limited to providing any forms, certificates or other documentation necessary
in order to qualify for an exemption from any obligation to pay, collect or
withhold any Transfer Taxes; provided, however, that the Purchaser (or its
designated Affiliate) will be qualified to do business and registered for
sales tax in all states and will complete the appropriate bulk sales or sales
tax resale exemption certification.
(vii) Notwithstanding any other provision in this Agreement to the
contrary, the Selling Entities shall make appropriate adjustments to settle
all amounts due to or due from each of the Purchased Entities pursuant to any
Tax Sharing Agreement on or prior to the Closing Date. Any Tax Sharing
Agreement in effect at the Closing Date shall be terminated as of the Closing
Date, and no additional amounts shall be due to or from any of the Purchased
Entities after the Closing Date pursuant to any Tax Sharing Agreement.
(viii) In relation to TCFL and any U.K. Subsidiary, TCHL hereby covenants
with the Purchaser to pay to the U.K. Purchaser an amount equal to any or all
Taxes and all reasonable associated costs, expenses, damages, or losses
(including reasonable fees for attorneys and other outside consultants)
incurred in contesting or otherwise in connection with any such Taxes imposed
on or with respect to TCFL or any U.K. Subsidiary arising (A) in connection
with or as a result of any event, act, transaction or omission occurring or
entered into or deemed to occur or be entered into (each being a "Relevant
Event") on or before the Cut-Off Date (but for the avoidance of doubt not in
respect of a Relevant Event occurring or entered into or deemed to occur or
be entered into after the Cut-Off Date); or (B) in respect of or by reference
to any income, profits or gains earned, accrued or received or deemed to be
earned accrued or received on or before the Cut-Off Date; or (C) resulting
from any misrepresentation or breach of warranty contained in Sections 3.16
(b) and (d) but only to the extent that such warranty relates to TCFL or any
U.K. Subsidiary and by applying the principles of Section 5.03(a)(i)(D); or
(D) resulting from any failure by the Selling Entities to timely pay any and
all U.K. Taxes required to be borne by the Selling Entities pursuant to
Section 5.03(a)(vi); or (E) that result from, arise out of, are based upon,
or relate to the transactions contemplated by this Agreement and, in respect
of any such transactions other than those contemplated by Section 2.06(e) and
(f), which occur on or prior to the Closing Date; or (F) in respect of any
Taxes which are primarily or directly chargeable against or attributable to
the Seller or any Affiliate of the Seller (not being a Purchased Entity) but
only to the extent that TCFL or any U.K. Subsidiary is liable for such Taxes
by virtue of being or having been an Affiliate of or having been treated as
an Affiliate of the Seller for Tax purposes up to and
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including the Closing Date; or (G) in respect of any Taxes arising pursuant
to section 179 TCGA in respect of a Relevant Event occurring after the
Cut-Off Date but on or before the Closing Date; or (H) in respect of a
Relevant Event occurring or entered into or deemed to occur or be entered
into outside the ordinary course of business after the Cut-Off Date and on or
before the Closing Date; or (I) in the case where the Closing Date is after
the Cut-Off Date, interest and penalties imposed on or with respect to TCFL
or any U.K. Subsidiary with respect to Taxes (assuming solely for this
purpose that such term does not include any references to interest or
penalties) due and payable during any taxable period or portion thereof that
begins on or after the close of business on the Cut-Off Date and ends on or
prior to the close of business on the Closing Date; provided, however, that
TCHL shall have no obligation to make a payment under this covenant with
respect to any of the following: (1) Taxes for which provision has been made
in the Adjusted Cut-Off Date Balance Sheet of TCFL (but only to the extent of
such provision); (2) Taxes which would not have arisen but for a Relevant
Event voluntarily occurring, being entered into or, in the case of an
omission, not occurring or being entered into (whether actual or otherwise)
effected by TCFL, any U.K. Subsidiary or the U.K. Purchaser at any time after
the Closing Date, other than any such Relevant Event (a) carried out or
effected under a legally binding commitment created on or before the Closing
Date and not in the ordinary course of business (but for the avoidance of
doubt only to the extent that such Tax is subject to the above covenants
contained in (A) to (I) inclusive), (b) carried out or effected in either the
ordinary course of business or the ordinary course of acquiring and disposing
of capital assets (but for the avoidance of doubt only to the extent that
such Tax is subject to the above covenants contained in (A) to (I)
inclusive), (c) without prejudice to the generality of (b) above, consisting
of TCFL or any U.K. Subsidiary ceasing or being deemed to cease to be a
member of any group of companies or associated with any other company for the
purposes of any Tax (but for the avoidance of doubt only to the extent that
such Tax is subject to the above covenants contained in (A) to (I)
inclusive), or (d) carried out or effected to ensure compliance with law or
U.K. GAAP (but for the avoidance of doubt only to the extent that such Tax is
subject to the above covenants contained in (A) to (I) inclusive); (3) Taxes
attributable to the Purchaser's failure to satisfy any of its obligations
pursuant to this Section 5.03 but only to the extent that such Taxes arise or
are increased by such failure; and (4) Taxes attributable to a change in
legislation (whether relating to Taxes or otherwise) made after the Cut-Off
Date but with retrospective effect (which for the purposes of this provision,
retrospective effect means any effect occurring before the Cut-Off Date);
provided further, however, a claim for Tax under this section 5.03(a)(viii)
may only be made by the U.K. Purchaser at any time prior to the seventh
anniversary of the Closing Date except if such Tax arises as a result of
fraudulent or negligent conduct by TCFL or any U.K. Subsidiary or the Seller
or any Affiliate of the Seller in which case the deadline for making a claim
shall be extended to the statutory limitation period as shall be in force at
the relevant time, but, for the
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avoidance of doubt, the amount of any amounts payable under this covenant for
such Taxes shall be governed as above.
(ix) In respect of TCFL and any U.K. Subsidiary, TCHL shall pay all
amounts in respect of Tax for which it is liable under Section 5.03(a)(viii)
above, (i) at least five business days before the date on which the Tax in
question should be paid without incurring interest or penalties or, (ii) if
that date has already elapsed, no later that five business days after receipt
of a notice from the U.K. Purchaser requiring such payment.
(x) All sums payable under Section 5.03(a)(viii) shall be paid free and
clear of all deductions or withholdings (including Tax) unless the deduction
or withholding is required by law, in which event or if the U.K. Purchaser
shall incur any liability for Tax chargeable or assessable in respect of any
payment pursuant to Section 5.03(a)(viii), TCHL shall pay such additional
amounts as shall be required to ensure that the net amount received and
retained by the U.K. Purchaser after Tax will equal the full amount which
would have been received and retained by it had no such deduction or
withholding been made and/or no such liability to Tax been incurred.
(xi) In consequence of its obligations contained in Section 5.03(a)(vi),
TCHL shall pay to the U.K. Purchaser at Closing an amount equal to 0.5 per
cent. of the aggregate of the Initial TCFL Payment plus the percentage of the
Premium which relates to the acquisition of the TCHL Shares (such percentage
to be agreed by the parties on or prior to Closing), representing the
provisional amount of U.K. stamp duty (the "Provisional Duty") due on the
stock transfer form for the transfer of the TCFL Shares (the "TCFL
Transfer"). The Purchaser shall procure that the U.K. Purchaser shall submit
the TCFL Transfer, together with a cheque for the Provisional Duty, to the
U.K. Inland Revenue Stamp Office for adjudication and stamping on a
provisional basis no later than 30 days after Closing. To the extent that the
U.K. Purchaser is required to make an additional payment (representing
additional consideration for the acquisition of the TCFL Shares) pursuant to
this Agreement then the Purchaser shall procure that the U.K. Purchaser shall
deduct from the such additional payment an amount equal to 0.5 per cent. of
such additional payment (representing the additional stamp duty due on the
TCFL Transfer) together with any related interest and penalties arising from
the late payment of the additional stamp duty (the aggregate amount to be so
deducted being the "Additional Duty")(except to the extent that such interest
and penalties arises from a breach by the Purchaser of its obligations under
this Section 5.03(a)(xi)). The Purchaser shall then procure that the U.K.
Purchaser shall resubmit the transfer of the TCFL Shares to the U.K. Inland
Revenue Stamp Office together with a cheque for the Additional Duty (if any).
(xii) Notwithstanding the provisions of Section 5.03(a)(i) and the
division of Straddle Period property Taxes described in Section
5.03(a)(iv)(2), the Purchaser agrees to pay or cause to be paid property
Taxes with respect to any
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property which has a lien date in a Pre-Closing Period but with respect to
which a property Tax invoice is not received by the relevant Purchased Entity
or Selling Entity prior to the Closing Date and the Purchaser agrees not to
seek indemnification from the Selling Entities with respect to such payment
except to the extent that such Taxes are not collected after the exercise of
commercially reasonable efforts from the applicable obligor.
(b) Tax Returns.
(i) The following provisions of this Section 5.03(b)(i) shall not apply to
Tax Returns relating to TCFL or any U.K. Subsidiary. The Selling Entities
shall (A) timely file or cause to be timely filed all Tax Returns that are
required to be filed by or with respect to any of the Purchased Entities or
ISF Acquired Assets on or before the Closing Date and only such Tax Returns
that are required to be filed after the Closing Date that are for any taxable
period that ends on or before the Closing Date and (B) timely remit (or cause
to be timely remitted) any Taxes due in respect of such Tax Returns to the
proper Governmental Authority. Such Tax Returns shall be prepared in a manner
consistent with prior practice unless otherwise required by Law. The Selling
Entities shall also timely file or cause to be timely filed all Consolidated
Tax Returns that are required to include (1) any Selling Entity (or an
Affiliate thereof other than the Purchased Entities) and (2) any Purchased
Entity. In each case, the Selling Entities shall timely remit (or cause to be
timely remitted) any Taxes due in respect of such Tax Returns to the proper
Governmental Authority. Such Tax Returns, to the extent they relate to any
Purchased Entity or any of the ISF Acquired Assets, shall be prepared in a
manner consistent with prior practice unless otherwise required by Law.
(ii) The following provisions of this Section 5.03(b)(ii) shall not apply
to Tax Returns relating to TCFL or any U.K. Subsidiary. The Purchaser shall
timely file or cause to be timely filed all Tax Returns (other than
Consolidated Tax Returns that include (1) any Selling Entity (or an Affiliate
thereof other than the Purchased Entities) and (2) any Purchased Entity) that
relate to any Purchased Entity or any of the Acquired ISF Assets for any
taxable period that ends after the Closing Date, and the Purchaser shall
timely remit (or cause to be timely remitted) any Taxes due in respect of
such Tax Returns to the proper Governmental Authority.
(A) With respect to any Tax Returns described in Sections
5.03(b)(i) or (ii) for which the non-filing party (or its Affiliate) has any
liability for the Taxes due (including pursuant to its indemnity obligations
hereunder) or which may reasonably be expected to have an adverse effect on
the non-filing party (or its Affiliates), the filing party shall furnish a
copy of such completed Tax Returns (other than any income Tax Return of or
that includes any of the Asset Sellers) or, in the case of a Consolidated Tax
Return, a copy of a pro-forma Tax Return, prepared for the relevant Purchased
Entity or Asset Seller on a separate company basis, to the non-filing party
for the non-filing party's approval not later than 20 Business Days before
the due date for filing such returns (including
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extensions thereof), together with a statement setting forth the amount of
Tax for which the non-filing party is responsible hereunder properly taking
into account any and all relevant estimated or other payments of any Tax
related thereto by either such party (the "Statement"). The non-filing party
shall have the right to review such Tax Return and Statement prior to the
filing of such Tax Return. The Seller and the Purchaser agree to consult and
resolve in good faith any dispute arising as a result of the review of such
Tax Return and the Statement and to mutually consent to the filing as
promptly as possible of such Tax Return. In the event the parties are unable
to resolve any dispute within 10 Business Days following the delivery of such
Tax Return and Statement to the non-filing party, the parties shall jointly
request the Selected Accounting Firm to resolve any issue in dispute as
promptly as possible. If the Selected Accounting Firm is unable to make a
determination with respect to any disputed issue within 5 Business Days prior
to the due date (including extensions) for the filing of the Tax Return in
question, then the filing party may file such Tax Return on the due date
(including extensions) therefor without such determination having been made
and without the non-filing party's consent. Notwithstanding the filing of
such Tax Return, the Selected Accounting Firm shall make a determination with
respect to any disputed issue, and the amount of Taxes for which the
non-filing party is responsible hereunder, shall be as determined by the
Selected Accounting Firm. The fees and expenses of the Selected Accounting
Firm shall be paid one-half by the Purchaser and one-half by the Seller. Not
later than 3 Business Days before the due date for the payment of Taxes with
respect to such Tax Return, and notwithstanding any dispute as to the
Statement, the non-filing party shall pay to the filing party an amount equal
to the Taxes shown on the Statement (as adjusted in accordance with any
determination made by the Selected Accounting Firm) as being the
responsibility of the non-filing party hereunder. No payment pursuant to this
Section 5.03(b)(ii) shall excuse any of the Selling Entities or the Purchaser
from its indemnification obligations hereunder if the amount of Taxes as
ultimately determined (on audit or otherwise) for the periods covered by such
Tax Returns that are the responsibility of the Selling Entities or the
Purchaser, as the case may be, exceeds the amount of the Selling Entities' or
the Purchaser's, as the case may be, payment under this Section 5.03(b)(ii);
provided, however, that if the Selling Entities or the Purchaser disputed the
Statement and if the Selected Accounting Firm shall determine that the amount
shown on the Statement as being the responsibility of the Selling Entities or
the Purchaser differs from the correct amount that is the responsibility of
the Selling Entities or the Purchaser, the Purchaser shall pay to the Selling
Entities, or the Selling Entities shall pay to the Purchaser, the amount
necessary to reflect the Selected Accounting Firm's determination. The
Purchaser shall have the right to review, for at least 10 Business Days prior
to the filing thereof, any Tax Return (other than any Consolidated Tax
Return) filed by any of the Selling Entities with respect to any of the
Purchased Entities which is not described in the first sentence of this
paragraph.
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(iii) Neither the Purchaser nor any Affiliate of the Purchaser shall (or
shall cause or permit any of the Purchased Entities to) amend, refile or
otherwise modify any Tax Return relating in whole or in part to any Purchased
Entity with respect to any taxable year or period ending on or before the
Closing Date (or with respect to any Straddle Period) without the prior
written consent of the Seller, which consent shall not be unreasonably
withheld.
(iv) None of the Parent or the Seller, shall or shall permit any Purchased
Entity and, with respect to the Acquired International Structured Finance
Business, none of the Parent, the Seller or TLI shall or shall permit any
Asset Seller, in either case, without prior consent of the Purchaser, to make
or change any election concerning any Taxes, change an annual accounting
period or adopt or change any accounting method, in either case to the extent
such change would affect the Taxes of any Purchased Entity, enter into any
closing agreement with respect to Taxes, file any amended Tax Return, settle
any Tax Claim or assessment or surrender any right to claim a refund of any
Taxes or obtain or enter into any Tax ruling or other Tax agreement,
contract, understanding, arrangement or plan with a Governmental Authority.
The Selling Entities, the Asset Sellers and their respective Affiliates shall
cooperate with the Purchaser to seek to have an election made under Section
754 of the Code with respect to any asset of any Purchased Entity or any of
the Acquired ISF Assets which is treated as an interest in a partnership for
federal income tax purposes.
(v) If the Tax Return for TCFL and/or any U.K. Subsidiary for the period
ended on the U.K. Accounts Date (in respect of each of TCFL and any U.K.
Subsidiary, the "2002 Tax Return") has not been filed by the Closing Date
then TCHL shall prepare the 2002 Tax Return. If the Cut-Off Date is an actual
accounting reference date of TCFL and/or any U.K. Subsidiary, TCHL shall
prepare the Tax Return for TCFL and/or any U.K. Subsidiary for the period
ended on the Cut-Off Date (in respect of each of TCFL and any U.K.
Subsidiary, the "Cut-Off Date Tax Return"). TCHL shall ensure that the
Cut-Off Date Tax Return (and, where relevant, the 2002 Tax Return) is
submitted in draft form to the U.K. Purchaser or its duly authorised agent at
least 60 days before the last date on which the Cut-Off Date Tax Return (and,
where relevant, the 2002 Tax Return) can be filed to avoid interest and/or
penalties for late filing. The Purchaser shall procure that the company to
which the Cut-Off Date Tax Return (and, where relevant, the 2002 Tax Return)
relates shall file such Cut-Off Date Tax Return (and, where relevant, the
2002 Tax Return) provided that the company to which the Cut-Off Date Tax
Return (and, where relevant, the 2002 Tax Return) relates may amend and then
file the Cut-Off Date Tax Return (and, where relevant, the 2002 Tax Return)
if it reasonably considers that such amendment is necessary to ensure that
the Cut-Off Date Tax Return (and, where relevant, the 2002 Tax Return) is
complete and accurate.
(vi) If the Cut-Off Date is not an actual accounting reference date of
TCFL and/or any U.K. Subsidiary, the U.K. Purchaser shall prepare and file
the Tax
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Return for TCFL and/or any U.K. Subsidiary for the period during which the
Cut-Off Date takes place (in respect of each of TCFL and any U.K. Subsidiary,
the "Straddle Tax Return") and shall submit such Straddle Tax Return in draft
form to TCHL or its duly authorised agent for comment at least 60 days before
the last date on which it can be filed to avoid interest and/or penalties for
late filing. TCHL or its agent shall then have 30 days within which to
provide comments or suggestions on the Straddle Tax Return. The Purchaser
shall procure that the company to which the Straddle Tax Return relates shall
adopt any reasonable comments or suggestions so provided by TCHL or its duly
authorised agent which relate to the portion of the Straddle Period prior to
the Cut-Off Date, unless the company to which the Straddle Tax Return relates
reasonably considers that adoption of these comments or suggestions would
render the Straddle Tax Return incomplete or inaccurate.
(c) Tax Contests.
(i) If a notice of deficiency, proposed adjustment, assessment, audit,
examination or other administrative or judicial proceeding, suit, dispute or
other claim (a "Tax Claim") shall be delivered, sent, commenced or initiated,
in writing, to or against any party, any of its Affiliates or any Purchased
Entity (a "Notified Party") by any Governmental Authority with respect to
Taxes for which the other party would be liable pursuant to Section 5.03(a),
the Notified Party shall, if informed thereof promptly, notify the other
party in writing of such Tax Claim; provided, however, that the failure of
any party to give the other party prompt notice as provided herein shall not
relieve the other party of its obligations under this Section 5.03 except to
the extent that the other party is prejudiced thereby.
(ii) Subject to the remainder of this Section 5.03(c)(ii), the Selling
Entities shall have the sole right to represent the Purchased Entities'
interests in any Tax Claim for which the Selling Entities have an
indemnification obligation hereunder (or in respect of TCFL and any U.K.
Subsidiary, a liability to pay under the covenant in Section 5.03(a)(viii)),
and to employ counsel of their choice at their expense; provided, however,
that the Selling Entities shall keep the Purchaser reasonably informed with
respect to any issue relating to such Tax Claim. The Purchaser may also
participate in the defense of such Tax Claim at its expense. In the event
that issues relating to a potential adjustment for which the Selling Entities
(or any Affiliate) have liability are required to be dealt with in the same
proceeding as separate issues relating to a potential adjustment for which
the Purchaser (or any Affiliate) could be liable, the Purchaser shall have
the right, at its expense, to control such Tax Contest but only with respect
to the latter issues. With respect to an issue relating to a potential
adjustment for which both the Selling Entities (or any Affiliate) and the
Purchaser (or any Affiliate) could be liable or could be adversely affected,
(A) each party may participate in the Tax Contest and the controlling party
shall consult with the non-controlling party and consider in good faith and
reasonably accommodate any comments or concerns of the non-controlling party,
and (B) with respect to such issue, the Tax Contest
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relating thereto shall be controlled by the Purchaser; provided, however, in
the case of a Tax Contest with respect to a Pre-Closing Period, that party
which would bear the burden of the greater portion of the sum of the
adjustment and any corresponding adjustments that may reasonably be
anticipated for future taxable periods shall control. Except as otherwise
provided, the principle set forth in the immediately preceding sentence shall
govern also for purposes of deciding any issue that must be decided jointly
(including, without limitation, choice of judicial forum) in situations in
which separate issues are otherwise controlled under this Section 5.03 by the
Selling Entities and the Purchaser.
(iii) Neither the Selling Entities, the Purchased Entities, the Purchaser
nor any Affiliate thereof shall enter into any compromise or agree to settle
any Tax Claim that could adversely affect (including, without limitation, by
reason of the payment of any Tax) the other party for such year or a
subsequent year (and in respect of TCFL or any U.K. Subsidiary, a prior year)
without the prior written consent of the other party, which consent may not
be unreasonably withheld or delayed.
(d) Assistance and Cooperation. After the Closing Date, each of the
Seller Indemnitors and the Purchaser shall (and shall cause their respective
Affiliates to):
(i) timely sign and deliver such certificates or forms as may be necessary
or appropriate to establish an exemption from (or otherwise reduce), or file
Tax Returns or other reports with respect to, Transfer Taxes;
(ii) assist the other party in preparing any Tax Returns which such other
party is responsible for preparing and/or filing in accordance with Section
5.03(b) and the Selling Entities shall deliver (or shall cause to be
delivered) to the Purchaser (or to an Affiliate of the Purchaser as
designated by the Purchaser) (including for purposes of this sentence, the
Purchaser's tax advisors), as soon as practicable after the Purchaser's
request, such information and data (as are reasonably available concerning
any Tax attributes allocated to the Purchased Entities that are reasonably
necessary in order to enable the Purchaser to complete and file (or cause to
be completed and filed) all Tax Returns described in Section 5.03(b) it may
be required to file (or cause to be filed) with respect to the activities of
any Purchased Entity, from and after the Closing Date;
(iii) cooperate in any reasonably requested manner in preparing for any
audits of, or disputes with taxing authorities regarding, any Tax Returns of
any Purchased Entity and consult with the other party and its counsel in
connection with audits and proceedings where it is representing any Purchased
Entity;
(iv) make available to the other party and to any Governmental Authority,
as reasonably requested by such other party in connection with any Tax Return
described in Section 5.03(b) for which the requesting party is responsible
for
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filing pursuant to Section 5.03(b) or any proceeding described in Section
5.03(c) all information relating thereto;
(v) provide any required powers of attorney;
(vi) furnish one another with copies of all correspondence received from
any Governmental Authority in connection with any Tax audit or information
request with respect to any Tax Return described in Section 5.03(b) or any
proceeding described in Section 5.03(f) and retain all Tax Returns, schedules
and work papers, records and other documents in its possession relating to
Tax matters of the Purchased Entities for each taxable period first ending
after the Closing Date and for all prior taxable periods until the expiration
of the statute of limitations of the taxable periods to which such Tax
Returns and other documents relate, without regard to extensions except to
the extent notified in writing of such extensions for the respective taxable
periods; and
(vii) assist each other in the filing of any Tax Return including amended
Tax Returns or any other claims for refund of Taxes as may be reasonably
requested by the other party; provided, however, that any reasonable out of
pocket costs incurred by the non-requesting party as a result of such request
shall be borne by the requesting party.
(e) Election Under Section 338(h)(10).
(i) The Selling Entities and the Purchaser shall, in respect of each
Purchased Entity listed on Exhibit 5.03(e) and those entities listed on
Exhibit 5.03(e)(ii) with respect to which Purchaser notifies Seller within
120 days after the Closing Date of its desire to make a Section 338(h)(10)
Election (collectively , the "Section 338 Companies"), (i) take all actions
necessary and appropriate (including timely filing such forms, Tax Returns,
elections, schedules and other documents as may be required), at each party's
cost and expense, to effect and preserve a timely Section 338(h)(10) election
in accordance with the requirements of Section 338 of the Code (and any
corresponding elections under state or local Tax Law) (collectively, the
"Section 338(h)(10) Elections"), and the Selling Entities and the Purchaser
shall report the sale of such entities pursuant to this Agreement
consistently with the Section 338(h)(10) Elections and shall take no position
contrary thereto or inconsistent therewith in any Tax Return, any discussion
with or proceeding before any Governmental Authority, or otherwise. On the
Closing Date, the Selling Entities shall deposit with the Purchaser five
copies of an Internal Revenue Form 8023 ("Election Under Section 338 for
Corporations Making Qualified Stock Purchases") with respect to each entity
listed on Schedules 5.03(e) and 5.03(e)(ii), completed as reasonably agreed
by the parties and duly executed by the relevant Selling Entities. The
Purchaser shall be responsible for the preparation and filing of all forms
and documents required in connection with the Section 338(h)(10) Elections
and shall provide the Seller with copies of (A) any necessary corrections,
amendments or supplements to such
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Form 8023 as reasonably agreed to by the parties or as necessary to conform
the allocation of the Purchase Price to the Final Allocation, (B) all
attachments required to be filed therewith pursuant to the applicable
Treasury Regulations, and (C) any comparable forms and attachments with
respect to any applicable state or local elections being made pursuant to the
Section 338(h)(10) Elections. The Selling Entities and the Purchaser shall
execute (or cause to be executed) and deliver to each other such documents or
forms as are required by any Tax Laws to complete properly the Section
338(h)(10) Elections. The Selling Entities and the Purchaser shall cooperate
fully with each other and make available to each other such Tax data and
other information as may be reasonably required by the Selling Entities and
the Purchaser in order to timely file the Section 338(h)(l0) Elections and
any other required statements or schedules. The Selling Entities and the
Purchaser shall (A) promptly execute (or cause to be executed) and deliver to
one another, as would be appropriate, any amendments subsequent to the filing
of the Section 338(h)(10) Elections to Form 8023 (and any comparable state
and local forms) and attachments which are required to be filed under
applicable Law and are reasonably requested by the other party, (B) comply
with all of the requirements of Section 338(h)(10) of the Code and the
Treasury Regulations thereunder, and (C) take no action inconsistent with the
requirements for filing the Section 338(h)(10) Elections under the Code and
the applicable Treasury Regulations.
(ii) For purposes of making the Section 338(h)(10) Elections the Purchaser
shall determine the value of the assets of the Section 338 Companies
(including those entities listed on Exhibit 5.03(e)(ii) with respect to which
the Purchaser has notified the Seller of its desire to make a Section
338(h)(10) Election) and shall within 120 days of the Closing Date provide
the Seller with an allocation of the Purchaser's (or its Affiliates')
"adjusted grossed-up basis" (within the meaning of the Treasury Regulations
under Section 338 of the Code) in the shares of the Section 338 Companies to
such assets (the "Initial Allocation"). The Initial Allocation shall be
binding upon the Purchaser and the Selling Entities for purposes of
allocating the "deemed selling price" (within the meaning of the Treasury
Regulations) among the assets of the affected entities; provided, however,
that if the Seller believes that all or a portion of the Initial Allocation
is incorrect and notifies the Purchaser in a writing including a description
of the objection and basis supporting the Seller's objections and any
calculations or documentation that support the objection, within 30 days
after having received the Initial Allocation, the Seller and the Purchaser
agree to consult and resolve in good faith any dispute arising as a result of
the review of the Initial Allocation. In the event the parties are unable to
resolve any dispute within 10 Business Days following notice to the Purchaser
of Seller's objection, the Selected Accounting Firm will be retained to
resolve any issue in dispute as promptly as possible and the determination of
such Selected Accounting Firm shall be final. The Purchaser and the Selling
Entities shall then be bound by the Initial Allocation as adjusted, if
necessary, to reflect the determination of the Selected Accounting Firm (the
"Final
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Allocation"). Notwithstanding anything to the contrary in this Agreement, the
Final Allocation shall be determined no later than 20 days prior to the
filing deadline of the Section 338 Forms. The Parent and the Purchaser shall
bear equally all costs of the Selected Accounting Firm. The Purchaser and the
Selling Entities shall file, and cause their respective Affiliates to file,
all Section 338 Forms in a manner consistent with the Final Allocation and
notwithstanding anything to the contrary in this Agreement, shall take no
position inconsistent therewith.
(f) Dispute Procedures. Except as otherwise expressly provided herein,
if the parties disagree as to any matter arising out of this Section 5.03, the
parties shall resolve such disputes in accordance with principles similar to
those set forth in Section 5.05(c).
(g) Tax Refunds. Unless set forth on the Adjusted Cut-Off Date Pricing
Schedule or the Adjusted Cut-Off Date Acquired ISF Assets and Liabilities
Pricing Schedule, any refund (including any interest with respect thereto) of
Taxes of or relating to any of the Purchased Entities or the Acquired ISF Assets
for or attributable to any taxable period or portion thereof ending on or prior
to the Closing Date shall be the property of the Seller, and if received by or
otherwise credited to the Purchaser or any Affiliate thereof including the
Purchased Entities shall be paid over promptly to the Seller. Any refund
(including any interest with respect thereto) of Taxes of or relating to any of
the Purchased Entities or the Acquired ISF Assets for or attributable to any
taxable period or portion thereof beginning after the Closing Date shall be the
property of the Purchaser, and if received by or otherwise credited to the
Seller or any Affiliate (other than any Purchased Entity) thereof shall be paid
over promptly to the Purchaser.
(h) Survival. Notwithstanding anything in this Agreement to the
contrary, (i) the representations and warranties provided pursuant to Section
3.16(a) shall terminate at Closing and (ii) the representations and warranties
provided pursuant to Section 3.16(b), (c), (d), (e) and (f) and any covenants
contained in Section 5.03 shall survive until 90 days after the expiration of
the relevant statute of limitations; provided, however, that the amount of any
indemnification for Taxes shall be governed by Section 5.03.
(i) Indemnity Payments. In determining the amount of any Taxes, related
expenses and Losses to be indemnified under this Agreement, the parties shall
make appropriate adjustments to reduce the amount of the indemnified Tax,
related expenses or Losses to reflect Tax Benefits that the indemnified party
actually recognizes or the present value of those Tax Benefits that an
indemnified party is reasonably expected to recognize as a result of the event
giving rise to such indemnification payment. For purposes of this Agreement,
"Tax Benefit" means a reduction in the amount of Taxes that would otherwise be
payable by the indemnified party.
(j) Any payments under Section 5.03 or Section 5.04 shall be treated by
the parties hereto for foreign and domestic federal, state, provincial and local
income Tax
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purposes as a non-taxable reimbursement or purchase price adjustment or
contribution to capital, except to the extent that a contrary treatment is
required by Law.
(k) In no event shall the Purchaser or any Affiliate thereof make or
permit to be made any election under Section 338(g) of the Code with respect to
TDF de Mexico S. de X.X. de C.V. (Mexico), Transamerica Corporate Services de
Mexico S. de X.X. de C.V. or Transamerica Distribution Finance Corporation de
Mexico S. de X.X. de C.V. without first obtaining the written consent of the
Seller.
(l) The portion of the Purchase Price attributable to the Acquired ISF
Assets (and any Assumed ISF Liabilities) shall be allocated among the Acquired
ISF Assets in the manner, and pursuant to the procedures, described in Section
5.03(e)(ii). Such allocation is intended to comply with Section 1060 of the
Code, and no party hereto shall take (or permit any of its Affiliates to take)
any position inconsistent with such allocation without the prior written consent
of the other parties hereto.
(m) The parties agree that the Purchaser intends to cause one of its
Affiliates to transfer the Capital Stock of TCFF to one of the Affiliates of the
Purchaser after the Closing and any Taxes or Losses that may arise as a result
of such transfer shall be the responsibility of the Purchaser and the Purchaser
agrees not to seek indemnification with respect to such Taxes or Losses.
(n) Except in the case of fraud or intentional breach or inaccuracies
with respect to the representations of the Selling Entities contained in this
Agreement the Selling Entities' indemnity obligations under this Section 5.03
shall be limited to $1,500,000,000. Each Purchaser Indemnitee entitled to
indemnification pursuant to this Section 5.03 for Taxes and all reasonable
associated costs, expenses, damages or losses (including reasonable fees for
attorneys and other outside consultants) incurred in contesting or otherwise in
connection with any such Taxes (collectively, "Indemnified Taxes"), shall be
entitled to indemnification hereunder to the extent that the aggregate amount of
all such Indemnified Taxes exceeds $500,000. If with respect to any individual
claim under this Section 5.03, the total amount of Indemnified Taxes
attributable to such claim is less than $2,000, then the Purchaser Indemnitee
shall not have recourse for such Indemnified Taxes.
.4 Indemnification.
(a) Indemnification by the Selling Indemnitors for Breach. Each of the
Seller Indemnitors, jointly and severally, shall indemnify and hold harmless the
Purchaser and its Affiliates (including, after the Cut-Off Time, the Purchased
Entities), and in each such case their respective directors, officers, employees
and agents (collectively, the "Purchaser Indemnitees"), from and against and in
respect of any and all Losses suffered or incurred by any of them resulting
from, arising out of or based upon (without duplication): (i) any breach of any
representation or warranty made by any Selling Entity in this Agreement; or (ii)
any failure to perform duly and punctually any covenant, agreement or
undertaking on the part of Aegon or any Selling Entity contained in this
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Agreement; or (iii) any breach of a representation or warranty in or omission of
information required to be included in any certificate or other agreement,
instrument or document, in each case delivered by any Selling Entity or any
Asset Seller to the Purchaser pursuant to the terms of this Agreement
(collectively, the "Seller Related Documents"). For purposes of this Section
5.04, other than with respect to Section 3.07(e), a breach of a representation
or warranty contained in this Agreement or a Seller Related Document shall be
deemed to exist either if such representation or warranty is actually inaccurate
or breached or if such representation or warranty would have been breached or
been inaccurate if such representation or warranty had not contained any
limitation or qualification as to materiality, Material Adverse Effect or
Knowledge, it being the intention of the parties hereto that the Purchaser
Indemnitees shall be indemnified and held harmless from and against any and all
Losses suffered or incurred by any of them resulting from, arising out of, based
upon or relating to the failure of any such representation or warranty to be
true, correct and complete in any respect, determined in each case without
regard to any qualification as to materiality, Material Adverse Effect or
Knowledge set forth with respect thereto.
(b) Survival of Representations, Warranties and Covenants of the Seller
Indemnitors.
(i) (A) Category A Representations of the type described in any of clauses
(b) through (d) of that definition, (B) the representations and warranties of
any Selling Entity in any of the Seller Related Documents, (C) Category B
Representations of the type described in any of clauses (c) through (e) of
that definition, and (D) the obligations of the Selling Entities set forth in
any of Section 5.17(b) or Section 5.04(e)(i)(A) , and, in each case, the
indemnifications with respect to their breach, shall survive until June 30,
2005.
(ii) (A) Category A Representations of the type described in clause (a) of
that definition, (B) Category B Representations of the type described in
clause (b) of that definition and (C) Section 3.15 (to the extent relating to
any Assumed Benefit Plan or Assumed Benefit Arrangement) and, in each case,
the indemnifications with respect to their breach, shall survive until the
fifth anniversary of the Closing Date.
(iii) Category B Representations of the type described in clause (a) of
that definition and the indemnifications with respect to their breach, shall
survive until it is no longer possible in Law or in fact for a Purchaser
Indemnitee to suffer or incur Losses as a result of such breach and for so
long thereafter as such Person may assert a claim with respect thereto.
(iv) The obligations of the Selling Entities set forth in any of Section
5.01(a) through 5.01(e), 5.02, 5.06, 5.08, 5.09, 5.11, 5.12, 5.13, 5.14,
5.17(a) or 5.20 and the indemnifications with respect to their breach shall
survive until the first anniversary of the Closing Date.
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(v) The obligations of the Selling Entities set forth in any of Section
5.04(c) (to the extent such obligations relate to Assumed Benefit Plans or
Assumed Benefit Arrangements), 5.04(d)(iii), 5.04(d)(vi), 5.04(d)(vii) or
5.04(e)(i)(C) shall survive until the fifth anniversary of the Closing Date.
(vi) The obligations of Aegon or any Selling Entity set forth in any of
Sections 5.01(f), 5.07, or 5.16 and the indemnifications with respect to
their breach and with respect to any breach of Section 5.15, shall survive
until the date that is one year after the last date that any Selling Entity
is required to take any action or refrain from taking any action under each
such Section.
(vii) Notwithstanding Section 5.04(b)(i) through Sections 5.04(b)(vi), any
matter as to which a claim has been asserted by written notice in accordance
with Section 5.04(i)(i) that is pending or unresolved at the end of any
applicable survival period shall continue to be covered by this Section 5.04
notwithstanding any applicable statute of limitations (which the parties
hereby waive) or the expiration of such survival period until such matter is
finally terminated or otherwise resolved by the parties under this Agreement
or by a court of competent jurisdiction and any amounts payable hereunder are
finally determined and paid.
(c) ERISA Indemnification. Each Seller Indemnitor, jointly and
severally, shall indemnify and hold harmless all Purchaser Indemnitees from and
against any and all Losses suffered or incurred by any of them resulting from,
arising out of or based upon (without duplication) any of the following:
(i) any Company Benefit Plan, any Company Benefit Arrangement, any Title
IV Plan (including any Multiemployer Plan) or any Foreign Plan maintained by,
contributed to, or required to be contributed to, at any time, by a Selling
Entity, a Purchased Entity, or any of their respective ERISA Affiliates,
which is not sponsored by a Purchased Entity;
(ii) any Assumed Benefit Plan and Assumed Benefit Arrangement with respect
to any Losses based on actions or inactions arising on or prior to the
Closing except to the extent reflected on the Cut-Off Date Balance Sheet;
(iii) the employment or termination of employment, including a
constructive termination or failure to employ by a Selling Entity or its
Affiliates of any individual (including any Company Employee) attributable to
any action or inaction of Selling Entities or any of their Affiliates (i)
prior to the Closing or (ii) in connection with the transactions contemplated
by this Agreement; or
(iv) any claims by any employee of a Selling Entity, a Purchased Entity or
any of their Affiliates for workers' compensation and/or related medical
benefits incurred after the Closing which relate to an injury or illness
originating prior to the Closing.
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(d) Additional Indemnification by the Seller Indemnitors. Each Seller
Indemnitor, jointly and severally, shall indemnify and hold harmless all
Purchaser Indemnitees from and against and in respect of any and all Losses
suffered or incurred by any of them resulting from, arising out of or based upon
(without duplication):
(i) any Excluded Assets or the ownership, operation, servicing,
management, lease or use of any thereof, or any action taken with respect
thereto, by either a Purchased Entity or any other Person;
(ii) any Excluded Liabilities;
(iii) any actual or asserted Liabilities (whether for indemnification or
otherwise) under any agreement entered into prior to the Closing related to
the sale by any Purchased Entity or any of their current or former Affiliates
of any of their respective Capital Stock or other securities, assets,
Properties, operations or businesses;
(iv) any actual or asserted Liabilities of any Purchased Entities (whether
for indemnification or otherwise) under or in respect of any of the
instruments set forth on Exhibit 5.04(d)(iv);
(v) any of the transactions undertaken pursuant to Section 5.08, Section
5.09, Section 5.11, Section 5.12 or Section 5.13;
(vi) any act, practice or conduct undertaken by a Purchased Entity or,
with respect to any Acquired ISF Asset or Assumed ISF Liability, an Asset
Seller, on or prior to the Closing that resulted in, gave rise to or
otherwise constituted a violation or breach of any Law (except to the extent
covered by Section 5.03) applicable to any Purchased Entity, any Asset
Seller, any Acquired Business or any Acquired ISF Asset or Assumed ISF
Liability; or
(vii) any Action (including any counterclaims or crossclaims) resulting
from, arising out of, based upon or relating to any condition existing or
action or event occurring prior to or on the Closing Date, whether or not
pending or threatened on the date hereof or at the Closing, and whether
brought, made or instigated by any Governmental Authority or any private
Person including the matters set forth in Section 3.10 of the Disclosure
Schedule; provided, however, that no Selling Entity shall have any liability
for attorneys' fees and expenses, court costs or other out-of-pocket amounts
incurred by a Purchaser Indemnitee in the defense of claims made by an
Obligor against such Purchaser Indemnitee in connection with the ordinary
course enforcement, collection or foreclosure Actions brought by such
Purchaser Indemnitee after the Closing in respect of any Financing Contracts.
(e) Environmental Indemnification by the Seller Indemnitors. (i)
Subject to the limitations set forth in clause (ii) of this Section 5.04(e) and
in Section 5.04(f) (as such Section 5.04(f) relates to Environmental Losses
(Portfolio Property)), each Seller
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Indemnitor, jointly and severally, shall indemnify and hold harmless all
Purchaser Indemnitees from and against and in respect of any and all Losses
suffered or incurred by any of them resulting from, arising out of or based upon
(without duplication):
(A) any Environmental Loss (Portfolio Property);
(B) any Environmental Loss resulting from, arising out of, based
upon or relating to asbestos, in whatever form (including any exposure to, or
contact with, asbestos or asbestos-containing Property); or
(C) any Environmental Loss not covered by clause (B) hereof.
(ii) Subject to Section 5.04(f)(iv) (in the case of Environmental Losses
of the type described in Section 5.04(e)(i)(C)), Aegon's and the Selling
Entities' aggregate indemnity obligations for Losses under Section
5.04(e)(i)(B) and 5.04(e)(i)(C) shall be limited to:
(A) 0% of the first $5 million of such Losses;
(B) 100% of the next $5 million of such Losses;
(C) 95% of the next $900 million of such Losses; and
(D) 100% of any additional such Losses.
(f) Limitation on Liability.
(i) Each Purchaser Indemnitee entitled to indemnification for any Losses
suffered or incurred by such Person resulting from, arising out of or based
upon, any breach of any Category B Representation of the type described in
clause (a) of that definition made by any Selling Entity in this Agreement
shall be entitled to such indemnification for the full amount of such Losses
to the extent that the aggregate amount of all such Losses (A) do not exceed
the sum of (A) the Purchase Price plus (B) the Intercompany Debt amount, as
determined pursuant to Section 5.05(a)(vi) or the special report to be
delivered pursuant to Section 5.05 (a)(vii).
(ii) Each Purchaser Indemnitee entitled to indemnification for any Losses
suffered or incurred by such Person resulting from, arising out of, based
upon or relating to, any breach of any Category A Representation made by any
Selling Entity in this Agreement shall be entitled to such indemnification
for the full amount of such Losses to the extent that the sum of (A) the
aggregate amount of all such Losses plus (B) all Losses that are not
indemnifiable by the Selling Entities pursuant to Section 5.04(e)(ii),
exceeds $25,000,000 (the "5.04(f)(ii) Deductible"). If with respect to any
individual claim under this Agreement for Losses resulting from, arising out
of or based upon any breach of a Category A Representation of the type
described in clause (a) or (d) of that definition, the total
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amount of Losses attributable to such claim is less than $15,000 (the
"5.04(f)(ii)(A) Threshold Amount"), then a Purchaser Indemnitee shall not
have recourse for such Losses. If with respect to any individual claim under
this Agreement for Losses resulting from, arising out of or based upon any
breach of a Category A Representation of the type described in clause (b) or
(c) of that definition, the total amount of Losses attributable to such claim
is less than $2,000 (the "5.04(f)(ii)(B) Threshold Amount"), then a Purchaser
Indemnitee shall not have recourse for such Losses. In the event any claims
result from, arise out of, are based on or are related to the same or
substantially similar facts, events or circumstances with respect to a
particular Financing Contract or a series or pattern of facts, events or
circumstances with respect to such Financing Contract, then the Losses
attributable to such claims shall be aggregated and included in determining
if any of the 5.04(f)(ii) Deductible, the 5.04(f)(ii)(A) Threshold Amount or
5.04(f)(ii)(B) Threshold Amount (as applicable) shall have been satisfied.
(iii) Each Purchaser Indemnitee entitled to indemnification for any Losses
(A) suffered or incurred by such Person resulting from, arising out of, based
upon or relating to any breach of any Category B Representation made by any
Selling Entity in this Agreement or (B) of the type described in 5.04(c) or
5.04(d), shall be entitled to such indemnification for the full amount of all
such Losses to the extent that the aggregate amount of all such Losses
exceeds $50,000 (the "5.04(f)(iii) Deductible"). If (A) with respect to any
individual claim under this Agreement for Losses resulting from, arising out
of or based upon (1) any breach of any Category B Representation contained in
Section 3.10, or (2) Section 5.04(d)(v) or Section 5.04(d)(vii), the total
amount of Losses attributable to such claim is less than $25,000 (the
"5.04(f)(iii)(A) Threshold Amount"), then a Purchaser Indemnitee shall not
have recourse for such Losses; (B) with respect to any individual claim under
this Agreement for Losses resulting from, arising out of or based upon (1)
any breach of a Category B Representation contained in Section 3.11 or (2)
Section 5.04(d)(vi), the total amount of Losses attributable to such claim is
less than $10,000 (the "5.04(f)(iii)(B) Threshold Amount"), then a Purchaser
Indemnitee shall not have recourse for such Losses; or (C) with respect to
any individual claim under this Agreement for Losses resulting from, arising
out of or based upon (1) any breach of any Category B Representation (other
than (x) any Category B Representation contained in Section 3.10 or 3.11) or
(2) Section 5.04(c), or Section 5.04(d) (other than clauses (d)(v), (d)(vi)
or (d)(vii) thereof), the total amount of Losses attributable to such claim
is less than $2,000 (the "5.04(f)(iii)(C) Threshold Amount"), then a
Purchaser Indemnitee shall not have recourse for such Losses. In the event
such claims result from, arise out of, are based on or are related to the
same or substantially similar facts, events or circumstances with respect to
a particular Financing Contract or a series or pattern of facts, events or
circumstances with respect to such Financing Contract, then the Losses
attributable to such claims shall be aggregated and included in determining
if any of the 5.04(f)(iii) Deductible or the 5.04(f)(iii)(A) Threshold
Amount,
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5.04(f)(iii)(B) Threshold Amount or 5.04(f)(iii)(C) Threshold Amount (as
applicable) shall have been satisfied.
(iv) Except (A) in the case of fraud or intentional breach or inaccuracies
with respect to the representations of the Selling Entities contained in this
Agreement or any Seller Related Agreement, or (B) as set forth in Section
5.04(f)(i) above, the Selling Entities' indemnity obligations under Section
5.04(a), 5.04(c), 5.04(d), 5.04(e)(i)(A) and 5.04(e)(i)(C) shall be limited,
in the aggregate, to $1,500,000,000.
(v) In calculating any amounts payable by Aegon or any Selling Entity
pursuant to Section 5.04(a), 5.04(c), 5.04(d) or 5.04(e) in respect of any
Losses incurred by any Purchaser Indemnitee, such Selling Entity shall
receive credit for (and the amount of Losses subject to indemnification
pursuant thereto shall be reduced by) any insurance proceeds actually
received by such Purchaser Indemnitee in respect thereof from any of the
Seller's insurance policies or any Insurance Policies maintained by Seller,
net of any costs incurred in the form of a retroactive increase in premiums
(or other similar costs under such insurance policies).
(vi) Any Losses for which any Purchaser Indemmitee is entitled to be
indemnified pursuant to this Agreement shall be reduced to the extent of any
liabilities or reserves (other than liabilities or reserves for bad debt,
credit losses or allowances for loss) that are reflected on the Adjusted
Cut-Off Date Pricing Schedule or supporting general ledger documentation and
that are specifically identified thereon, as relating to the Indemnification
Event that resulted in such Losses.
(vii) Any amounts actually paid by Aegon under the Loss Protection
Agreement in respect of any Financing Contract covered thereby shall be taken
into account in determining the aggregate amount of Losses for which the
Purchaser Indemnitees shall be entitled to indemnification under this Section
5.04.
(viii) No Purchaser Indemnitee shall be entitled to indemnification
pursuant to this Section 5.04 to the extent the relevant Loss is addressed by
Section 5.03.
(g) Indemnification by the Purchaser for Breach. The Purchaser shall
indemnify and hold harmless the Selling Entities and each of their respective
Affiliates and their respective directors, officers, employees and agents
(collectively, "Seller Indemnitees") from and against any and all Losses
suffered or incurred by any of them or resulting from, arising out of or based
upon (without duplication): (i) any breach of any representation or warranty
made by the Purchaser in this Agreement; or (ii) any failure to perform duly and
punctually any covenant, agreement or undertaking on the part of the Purchaser
contained in this Agreement; or (iii) any breach of a representation or warranty
in or omission of information required to be included in any certificate,
Schedule, Exhibit or other agreement, instrument or document, in each case
delivered or to be delivered by
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the Purchaser to any Selling Entity pursuant to the terms of this Agreement
(collectively the "Purchaser Related Documents"); or (iv) the operation and
conduct of any Purchased Entity, Acquired ISF Asset or Assumed ISF Liability
after the Closing to the extent the fact, event or circumstance that gave rise
to such Losses are not subject to indemnification by Aegon or the Selling
Entities pursuant to this Agreement or any Seller Related Agreement; (v) any
Action brought by any Company Employee or Transferred Employee as a result of
any wrongful or illegal act, practice or conduct undertaken by the Purchaser
with respect to such Company Employee or Transferred Employee pursuant to
Section 5.01 (a) at any time from and after the date of this Agreement through
the Closing; or (vi) any failure on the part of the Purchaser, or one of its
Affiliates, to (x) employ the Transferred Employees employed outside of the
United States on terms and conditions that are no less than required by local
Law to avoid any claim of constructive discharge, a severance payment, a
termination indemnity or payment of a similar nature for such Transferred
Employees who are in those jurisdictions or who are under other applicable
circumstances that would recognize such a claim for any of the same and (y) with
respect to the Transferred Employees, assume all liabilities under the existing
employment contracts and collective bargaining agreements as required by
operation of Law. For purposes of this Section 5.04, a breach of a
representation or warranty contained in this Agreement or a Purchaser Related
Document shall be deemed to exist either if such representation or warranty is
actually inaccurate or breached or if such representation or warranty would have
been breached or been inaccurate if such representation or warranty had not
contained any limitation or qualification as to materiality, Material Adverse
Effect or knowledge, it being the intention of the parties hereto that the
Seller Indemnitees shall be indemnified and held harmless from and against any
and all Losses suffered or incurred by any of them resulting from, arising out
of, based upon or relating to the failure of any such representation or warranty
to be true, correct and complete in any respect, determined in each case without
regard to any qualification as to materiality, Material Adverse Effect or
knowledge set forth with respect thereto.
(h) Survival of Representations and Warranties of the Purchaser. The
representations and warranties of the Purchaser in (i) this Agreement and (ii)
the Purchaser Related Documents shall survive the Closing until June 30, 2005.
(i) Indemnification Procedure. Except as otherwise provided in Section
5.03(c) with respect to Taxes (which, for this purpose, shall include any claim
with respect to any Excluded Liability which is with respect to Taxes), for the
purposes of administering the indemnification provisions of this Section 5.04,
the following procedures shall apply from and after the Closing Date:
(i) Any Person claiming indemnification pursuant to this Agreement shall
promptly notify the Indemnitor in writing of the occurrence of any event that
such Person asserts is or may be an Indemnification Event and shall describe
in reasonable detail the facts, events and circumstances relating to the
subject matter of such claim and the amount (if reasonably calculable) of the
Losses in connection therewith; provided, however, that any delay or failure
by the
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indemnified Person to give notice to any Indemnitor as required by this
Section 5.04 shall not relieve the Indemnitor of its obligations hereunder
except to the extent, if at all, that the Indemnitor is materially and
adversely prejudiced by reason of such delay or failure.
(ii) Except as otherwise set forth in this Section 5.04, if such
Indemnification Event involves the claim of any third party, the Indemnitor
shall be entitled to participate in and, to the extent it shall wish, assume
control over (in which case the Indemnitor shall assume all expenses with
respect to) the defense, settlement, adjustment or compromise of such claim
if, in the case of assuming control, it shall provide the indemnified Persons
with a written acknowledgement of its liability for indemnity against Losses
relating to such Indemnification Event. Notwithstanding the foregoing,
pursuant to the terms of Section 5.04(i)(vi) hereof, the Purchaser shall have
the sole right, with counsel of its choice, to elect to defend, settle or
otherwise dispose of any action, claim or proceeding that constitutes a
Non-Assumable Claim (any such action, claim or proceeding, a "Retained
Claim") and Seller shall not be entitled to assume the defense thereof. If
the Indemnitor assumes the defense, settlement, adjustment or compromise of
any Indemnification Event, it shall pursue such defense, settlement,
adjustment or compromise diligently and in good faith and the indemnified
Person (and its counsel) shall be entitled to continue to participate at its
own cost (except as provided below) in any such Action or in any negotiations
or proceedings to settle or otherwise eliminate any claim for which
indemnification is being sought. An indemnified Person shall have the right
to employ separate counsel in any Action and to participate in the defense
thereof at the expense of the Indemnitor (A) if the retention of such counsel
has been specifically authorized by the Indemnitor, (B) if the counsel is
retained because the Indemnitor does not notify the indemnified Person within
20 Business Days after its receipt of a claim notice that the Indemnitor has
elected to undertake the defense thereof, or (C) to the extent such
participation relates to a claim or defense as to which the Indemnitor may
have a conflict of interest.
(iii) The Indemnitor shall obtain the prior written approval of the
indemnified Person(s) (which approval shall not be unreasonably withheld)
before entering into any settlement, adjustment, or compromise with respect
to an Indemnification Event that provides for any relief other than (A) the
payment of monetary Losses by the Indemnitor and (B) a full and unconditional
release of the indemnified Person(s).
(iv) (A) If the Indemnitor does not assume control over the defense of an
Action or claim as provided in Section 5.04(i)(ii) within 20 Business Days of
receipt of notice thereof, the indemnified Person shall have the right to
defend such Action or claim in such manner as it may deem appropriate;
provided, however, that such indemnified Person shall obtain the prior
written approval of the Indemnitor before entering into any settlement,
adjustment or compromise with respect to such Action or claim (which approval
shall not be unreasonably
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withheld or delayed) other than a settlement, adjustment or compromise that
provides for (1) the payment of monetary Losses by indemnified Person(s)
without recourse to the Indemnitor and (2) a full and unconditional release
of the Indemnitor. The indemnified Party must pursue the defense or
settlement of any such claims diligently and in good faith.
(B) The Indemnitor shall have the right to participate, at its
own cost and expense, in all aspects of the defense of any Action that is
being defended by an indemnified Person. The Indemnitor and indemnified
Person shall cooperate in such defense and the indemnified Person shall keep
the Indemnitor timely informed of all material developments relating to such
defense, permit the Indemnitor to inspect and make copies (at the
Indemnitor's cost) of all relevant correspondence and documentation relating
thereto and consult with the Indemnitor in making strategic decisions with
respect thereto; provided, however, that the indemnified Person shall retain
the sole right and authority to direct counsel, make decisions and otherwise
control such Action; provided, further, that such inspection and consultation
shall be conducted during normal business hours upon reasonable advance
notice and in such manner as not to interfere unreasonably with the business
of the indemnified Person. Nothing herein shall be deemed to require an
indemnified Person to make any disclosures that could waive any privilege it
might have; provided, however, that the indemnified Person must make
reasonable accommodations (including entering into joint defense agreements
with an Indemnitor) to permit the Indemnitor to have access to documentation,
and to consult with, counsel to the indemnified Person.
(v) In the event that the Indemnitor reimburses an indemnified Person for
any third party Losses, such indemnified Person shall remit to the Indemnitor
any reimbursement that such indemnified Person subsequently receives from
another Person in respect of such Losses.
(vi) Upon delivery of a claim notice pursuant to Section 5.04(i), the
Purchaser and the Purchased Entities shall have the sole right to declare
that a Non-Assumable Claim shall be treated as a Retained Claim. The
Indemnitor, on the one hand, and the Purchaser and the Purchased Entities, on
the other hand, shall each bear fifty percent (50%) of the reasonable out of
pocket costs and expenses incurred by the Purchaser or a Purchased Entity in
defending any Non-Assumable Claim to the extent such costs and expenses are
indemnifiable Losses pursuant to Section 5.04(a), Section 5.04(d) or
otherwise pursuant to this Agreement. The Purchaser and the Purchased
Entities shall pursue the defense or settlement of any Retained Claims
diligently and in good faith. The Purchaser and the Purchased Entities shall
consult with the Indemnitor prior to proffering any written offer of
settlement to a third party claimant in respect of a Retained Claim. If the
Purchaser or any Purchased Entity settle or compromise a Retained Claim
without obtaining the Indemnitor's prior written consent, then the Indemnitor
shall be deemed to have reserved all of its rights to contest its liability
with respect to such Retained Claim (including the reasonableness of such
settlement).
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The Indemnitor shall have the right to participate, at its own cost and
expense, in all aspects of the defense of any Retained Claim. The Indemnitor
and indemnified Person shall cooperate in such defense and the indemnified
Person shall keep the Indemnitor timely informed of all material developments
relating to such defense, permit the Indemnitor to inspect and make copies
(at the Indemnitor's cost) of all relevant correspondence and documentation
relating thereto and consult with the Indemnitor in making strategic
decisions with respect thereto; provided, however, that the Purchaser shall
retain the sole right and authority to direct counsel, make decisions and
otherwise control any Retained Claim; provided, further, that such inspection
and consultation shall be conducted during normal business hours upon
reasonable advance notice and in such manner as not to interfere unreasonably
with the business of the Purchaser or the Purchased Entities. Nothing herein
shall be deemed to require an indemnified Person to make any disclosures that
could waive any privilege it might have; provided, however, that the
indemnified Person must make reasonable accommodations (including entering
into joint defense agreements with an Indemnitor) to permit the Indemnitor to
have access to documentation, and to consult with, counsel to the indemnified
Person.
(vii) Upon the receipt by the Purchaser or any of the Purchased Entities
of a written offer of compromise or settlement relating to a Retained Claim
that (A) includes a full, final and unconditional release of each of the
Purchaser Indemnitees from any and all Losses with respect thereto, (B)
requires only (1) the payment of money for which the Selling Entities have
sole liability under this Agreement (a "Monetary Settlement") or (2) a
Monetary Settlement and action by the Indemnitor or any of its Affiliates
(other than any Purchased Entity) (any such offer of compromise, a "Retained
Claim Offer"), and (C) includes an unconditional release of the Purchaser
Indemnitees, the Purchaser and the Purchased Entities shall promptly inform
the Indemnitor of such offer, together with a description of the material
terms thereof. The Purchaser and the Purchased Entities shall also promptly
inform the Indemnitor of the entry of a judgment with respect to any Retained
Claim, which judgment requires only the payment of money for which the
Selling Entities have sole liability under this Agreement. The Selling
Entities shall have the right to terminate their liability for Losses in
respect of any Retained Claim that is the subject of such a judgment or a
Retained Claim Offer upon their irrevocable offer to the Purchaser and the
Purchased Entities, as applicable, to pay the amount contained in such
judgment or Retained Claim Offer. Upon receipt by the Purchaser and the
Purchased Entities, as applicable (x) of the amount contained in such
judgment or Retained Claim Offer and payment of all other indemnifiable
Losses suffered or incurred by the Purchaser and the Purchased Entities in
respect of such Retained Claim (in each case, in the form of immediately
available funds) and (y) a fully executed agreement of the Selling Entities
and the third-party claimant(s) in the applicable Retained Claim agreeing to
the non-cash terms of such Retained Claim Offer, if any, the Selling Entities
shall have no further liability to the Purchaser Indemnitees in respect of
such Retained Claim.
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(viii) (A) In the event indemnification is requested and the Indemnitor
has assumed the defense of any claim or Action, the relevant Indemnitor, its
representatives and agents shall have access to the premises, books and
records of the indemnified Person(s) seeking such indemnification and their
Affiliates to the extent reasonably necessary to assist the Indemnitor in
defending or settling any Action or claim; provided, however, that such
access shall be conducted in such manner as not to interfere unreasonably
with the operation of the business of such indemnified Person(s). Nothing
herein shall be deemed to require an indemnified Person to (A) make any
disclosures that could waive any privilege, or to breach any confidentiality
obligations, it might have; provided, however, that the indemnified Person
must make reasonable accommodations (including entering into joint defense
agreements with an Indemnitor) to permit the Indemnitor access to such
privileged or confidential materials or (B) take any actions or refrain from
taking any actions that, in its reasonable judgment, might prejudice its
rights. The indemnified Person(s) shall cooperate with the Indemnitor in the
defense of any Action or claim to be indemnified hereunder (except as
otherwise expressly set forth herein).
(j) Exclusive Remedy. Except with respect to claims based on fraud
between or among the Purchaser and the Selling Entities and/or claims seeking
equitable remedies (including pursuant to Section 3.15), the indemnification
remedies set forth in this Agreement shall constitute the sole and exclusive
remedies of the parties hereto with respect to any breach of representation,
warranty or obligation under this Agreement.
(k) Effect of Payments. To the extent that any amounts are required to
be paid by any Selling Entity to any Purchaser Indemnitee from and after the
Closing pursuant to this Section 5.04, such Selling Entity shall not, and shall
not be entitled to take any action against, collect any amounts from or seek
reimbursement from, any Purchased Entity in respect of any such payment;
provided that nothing in this clause (k) shall affect any Seller Indemnitees'
rights to indemnification or reimbursement from the, Purchaser pursuant to this
Section 5.04.
.5 Preparation of Cut-Off Statements.
(a) Preparation of Balance Sheets.
(i) As soon as practicable following the Closing, the Seller shall, with
the cooperation and assistance of the Purchaser, (A) prepare drafts of the
Cut-Off Date Balance Sheets for each of the Company, Public Finance, TCFL,
TFBV and TGMBH and (B) calculate the Intercompany Debt as of the Closing. The
draft Cut-Off Date Balance Sheets shall be prepared in accordance with the
Accounting Principles, as of the Cut-Off Time (with respect to the Cut-Off
Date Balance Sheets) and after giving effect to the exclusion of the Excluded
Assets and Excluded Liabilities and the inclusion of the Other Acquired
Business Assets and Included Liabilities and the calculation of the
Intercompany Debt shall be in accordance with the Accounting Principles and
made as of the time immediately
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prior to the Closing. The Purchaser and the Seller shall use reasonable
efforts to cause the draft Cut-Off Date Balance Sheets and the draft
calculation of the Intercompany Debt to be completed within 60 days following
the Closing Date and, upon completion, such draft Cut-Off Date Balance Sheets
and calculation shall promptly be provided to the Purchaser, the Purchaser's
Accountants, the Seller and the Seller's Accountants.
(ii) Immediately following the preparation and distribution of the draft
Cut-Off Date Balance Sheets of each of the Company, Public Finance, TCFL,
TFBV and TGMBH and the draft calculation of the Intercompany Debt amount as
of the time immediately prior to the Closing, the Seller shall cause the
Seller's Accountants to audit each such draft Cut-Off Date Balance Sheet and
draft calculation of the Intercompany Debt amount, and such audits shall be
conducted in accordance with generally accepted auditing standards and shall
be sufficient to permit the Seller's Accountants to (A) render its opinion to
the effect that (1) the Cut-Off Date Balance Sheet of the Company fairly
presents the financial position of the Company, (2) the Cut-Off Date Balance
Sheet of Public Finance fairly presents the financial position of Public
Finance, (3) the Cut-Off Date Balance Sheet of TCFL fairly presents the
financial position of TCFL, (4) the Cut-Off Date Balance Sheet of TFBV fairly
presents the financial position of TFBV, and (5) the Cut-Off Date Balance
Sheet of TGMBH fairly presents the financial position of TGMBH, in each case
as of the Cut-Off Time in conformity with Section 5.05(a)(i) and (B) render a
special report certifying as to the completeness and accuracy of the
Intercompany Debt calculation as of the time immediately prior to the
Closing.
(iii) Following the distribution of the draft Cut-Off Date Balance Sheets
and the draft calculation of the Intercompany Debt amount referred to in
Section 5.05(a)(i), the Purchaser's Accountants shall be entitled to perform
all necessary procedures and take any other steps that the Purchaser's
Accountants, in the exercise of their professional judgment, deem appropriate
to confirm that each of the draft Cut-Off Date Balance Sheets and the draft
calculation of the Intercompany Debt amount have been prepared in conformity
with the standard set forth in Section 5.05(a)(i).
(iv) The Seller shall use reasonable efforts to cause the Seller's
Accountants to deliver the audited draft Cut-Off Date Balance Sheets and the
audited draft calculation of the Intercompany Debt, as referred to in clause
(ii) above, to each of the Purchaser, the Seller and the Purchaser's
Accountants within 90 days following the date of their receipt of the draft
Cut-Off Date Balance Sheets. During the 30 days following their receipt of
the audited draft Cut-Off Date Balance Sheets and the audited draft
calculation of the Intercompany Debt, both the Seller and the Purchaser (in
consultation with the Purchaser's Accountants) shall have the opportunity to
review the audited draft Cut-Off Date Balance Sheets and the audited draft
calculation of the Intercompany Debt (together with the Seller's Accountants'
working papers, including any portion thereof pertaining
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to any proposed adjustment) and, during such 30-day period, the Seller, the
Purchaser's Accountants and the Purchaser shall have the right to propose to
the Seller's Accountants those changes to any of the audited draft Cut-Off
Date Balance Sheets and the audited draft calculation of the Intercompany
Debt that the Purchaser, the Purchaser's Accountants or the Seller determine
to be appropriate in order to cause the audited draft Cut-Off Date Balance
Sheet to conform, in all respects, to the standard set forth of Section
5.05(a)(i) and the audited draft calculation of the Intercompany Debt to be
complete and accurate.
(v) Within the same 30-day period as referred to in Section 5.05(a)(iv),
the Purchaser and the Seller shall also provide one another and the Seller's
Accountants with notices of any asset or liability which such Person proposes
to ask the Seller's Accountants to reflect on or eliminate from any Cut-Off
Date Balance Sheet in order to prepare the Adjusted Cut-Off Date Pricing
Schedule as contemplated by clause (a) of the definition of "Special
Adjustments".
(vi) The Seller shall cause the Seller's Accountants to prepare (after
consultation with the Purchaser and the Seller), and to deliver, within 10
days of the end of the 30-day period referred to in Section 5.05(a)(iv), to
the Purchaser and the Seller a draft Adjusted Cut-Off Date Pricing Schedule
which shall be prepared from the Cut-Off Date Balance Sheets so as to treat
each of Public Finance, TCFL, TFBV and TGMBH as wholly-owned Subsidiaries of
the Company as of the time immediately prior to the Cut-Off Time, and shall
reflect the Special Adjustments requested to be made by the Seller or the
Purchaser in the notices referred to in Section 5.05(a)(v). Both the
Purchaser and the Seller shall have the opportunity to review the draft
Adjusted Cut-Off Date Pricing Schedule during the 15 days following their
receipt thereof.
(vii) In the event of any dispute between the Seller and the Seller's
Accountants, on the one hand, and the Purchaser and the Purchaser's
Accountants, on the other hand, regarding any of the adjustments proposed by
the Seller or the Seller's Accountants, on the one hand, or the Purchaser or
the Purchaser's Accountants, on the other hand, with respect to any of the
draft audited Cut-Off Date Balance Sheets of the Company, Public Finance,
TCFL, TFBV and TGMBH, the draft Adjusted Cut-Off Date Pricing Schedule or the
draft audited calculation of the Intercompany Debt which the Seller and the
Seller's Accountants, on the one hand, and the Purchaser and the Purchaser's
Accountants, on the other hand, cannot resolve within 45 days after the
receipt thereof (as the case may be), either the Seller or the Purchaser
shall have the right, upon delivery of written notice to the other, to
require that such dispute be resolved in accordance with the provisions set
forth in Section 5.05(c). Promptly following the resolution of any disputes
with respect to any proposed adjustments to any of the draft audited Cut-Off
Date Balance Sheets, to the draft Adjusted Cut-Off Date Pricing Schedule or
to the draft audited calculation of the Intercompany Debt, the Seller shall
cause the Seller's Accountants to prepare and deliver to the Purchaser and
the Seller (A) the final audited calculation of the Intercompany Debt, the
final
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audited Cut-Off Date Balance Sheets and the final Adjusted Cut-Off Date
Pricing Schedule, each of which shall reflect all adjustments thereto which
have been agreed upon by the Seller and the Seller's Accountants, on the one
hand, and the Purchaser and the Purchaser's Accountants, on the other hand,
or which have been resolved pursuant to Section 5.05(c) and (B) the Seller's
Accountant's opinion on the Cut-Off Date Balance Sheets and a special report
on the final audited calculation of the Intercompany Debt.
(viii) The Purchaser shall cooperate and comply with all reasonable
requests of the Seller and the Seller's Accountants to assist such Persons in
accomplishing the preparation of the Cut-Off Date Balance Sheets of each of
the Company, Public Finance, TCFL, TFBV and TGMBH, the audit of the Cut-Off
Date Balance Sheets of each of the Company, Public Finance, TCFL, TFBV and
TGMBH the preparation of the Adjusted Cut-Off Date Pricing Schedule and the
draft and final audited calculation of the Intercompany Debt. Without
limiting the foregoing, (A) each of the Purchaser, the Seller, the
Purchaser's Accountants and the Seller's Accountants shall have full access
to all relevant accounting, financial and other records reasonably requested
by it in connection with the preparation, confirmation or review of each
Cut-Off Date Balance Sheet, the Adjusted Cut-Off Date Pricing Schedule and
the calculation of the Intercompany Debt as well as the Seller's Accountant's
working papers with respect thereto and draft opinion and special report
thereon and (B) each shall make available to the other and its accountants
such personnel as they may reasonably request in connection with the
preparation or confirmation of Cut-Off Date Balance Sheets and the Adjusted
Cut-Off Date Pricing Schedule, the calculation of the Intercompany Debt or
the review of the Seller's Accountant's draft opinion or special report with
respect thereto.
(b) Preparation of Statements of Acquired ISF Assets and Liabilities.
(i) As soon as practicable following the Closing, the Seller, with the
cooperation and assistance of the Purchaser, shall prepare a draft of the
Cut-Off Date Statement of Acquired ISF Assets and Liabilities. The draft
Cut-Off Date Statement of Acquired ISF Assets and Liabilities shall be
prepared in accordance with the Accounting Principles and shall present
fairly the Acquired ISF Assets and the Assumed ISF Liabilities as of the time
immediately prior to the Cut-Off Time. The Seller shall use reasonable
efforts to cause the draft Cut-Off Date Statement of Acquired ISF Assets and
Liabilities to be completed within 60 days following the Closing Date and,
upon completion, such statement of assets and liabilities shall promptly be
provided to the Seller, the Seller's Accountants, the Purchaser and the
Purchaser's Accountants.
(ii) Immediately following the preparation and distribution of the draft
Cut-Off Date Statement of Acquired ISF Assets and Liabilities, the Seller
shall cause the Seller's Accountants to audit the draft Cut-Off Date
Statement of Acquired ISF Assets and Liabilities. Seller's Accountants shall
conduct the audit of the
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Cut-Off Date Statement of Acquired ISF Assets and Liabilities in accordance
with generally accepted auditing standards and the audit shall be sufficient
to permit the Seller's Accountants to prepare a draft special report on the
results of the audit of the Cut-Off Date Statement of Acquired ISF Assets and
Liabilities setting forth Seller's Accountants' opinion to the effect that
the Cut-Off Date Statement of Acquired ISF Assets and Liabilities (A) has
been prepared from the books and records of the Asset Sellers and the
applicable Affiliates of the Seller and (B) presents fairly, in all material
respects, the Acquired ISF Assets and the Assumed ISF Liabilities as of the
time immediately prior to the Cut-Off Time in conformity with Section
5.05(b)(i).
(iii) Following the preparation and distribution of the draft Cut-Off Date
Statement of Acquired ISF Assets and Liabilities referred to in Section
5.05(b)(i), the Purchaser's Accountants shall be entitled to perform all
necessary procedures and take any other steps that Purchaser's Accountants,
in the exercise of their professional judgment, deem appropriate to confirm
that the draft Cut-Off Date Statement of Acquired ISF Assets and Liabilities
has been prepared in conformity with Section 5.05(b)(i).
(iv) The Seller shall use reasonable efforts to cause the Seller's
Accountants to deliver to the Purchaser and the Purchaser's Accountants the
draft audited of the Cut-Off Date Statement of Acquired ISF Assets and
Liabilities and a draft of its special report within 90 days following the
delivery of the draft Cut-Off Date Statement of Acquired ISF Assets and
Liabilities in accordance with Section 5.05(b)(i). During the 30 days
following their receipt of such draft audited Cut-Off Date Statement of
Acquired ISF Assets and Liabilities and draft special report, the Purchaser's
Accountants shall have the opportunity to review the draft audited Cut-Off
Date Statement of Acquired ISF Assets and Liabilities and such draft special
report (together with the Seller's Accountants' working papers, including any
portion thereof pertaining to any proposed adjustments) and, during such
30-day period, the Purchaser's Accountants shall have the right to propose to
the Seller's Accountants those changes to the draft audited Cut-Off Date
Statement of Acquired ISF Assets and Liabilities and draft special report
(and the proposed adjustments, if any, set forth therein) that the
Purchaser's Accountants determine (based upon, among other things, the
procedures and steps taken under clause (iii) above) to be appropriate in
order to cause the draft audited Cut-Off Date Statement of Acquired ISF
Assets and Liabilities to conform, in all respects, to the provisions of
Section 5.05(b)(i).
(v) Within the same 30-day period as referred to in Section 5.05(b)(iv),
the Purchaser and the Seller shall also provide one another and the Seller's
Accountants with notices of any asset or liability which such Person proposes
to ask the Seller's Accountants to reflect on or eliminate from the Cut-Off
Date Statement of Acquired ISF Assets and Liabilities in order to prepare the
Adjusted Cut-Off Date Acquired ISF Assets and Liabilities Pricing Schedule as
contemplated by clause (b) of the definition of "Special Adjustments".
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(vi) The Seller shall cause the Seller's Accountants to prepare (after
consultation with the Purchaser and the Seller), and to deliver, within 10
days of the end of the 30-day period referred to in Section 5.05(b)(iv), to
the Purchaser and the Seller a draft Adjusted Cut-Off Date Acquired ISF
Assets and Liabilities Pricing Schedule which shall reflect the Special
Adjustments requested to be made by the Seller or the Purchaser in the
notices referred to in Section 5.05(b)(v). Both the Purchaser and the Seller
shall have the opportunity to review the draft Adjusted Cut-Off Date Acquired
ISF Assets and Liabilities Pricing Schedule during the 15 days following
their receipt thereof.
(vii) In the event of any dispute between the Purchaser's Accountants and
the Seller's Accountants regarding the draft audited Cut-Off Date Statement
of Acquired ISF Assets and Liabilities and, draft special report of the
Seller's Accountants or any of the adjustments proposed by the Seller's
Accountants or the Purchaser's Accountants with respect to the draft Adjusted
Cut-Off Date Acquired ISF Assets and Liabilities Pricing Schedule, which the
Purchaser and the Purchaser's Accountants, on the one hand, and the Seller
and the Seller's Accountants, on the other hand, cannot resolve within 45
days after the receipt thereof, either the Purchaser or the Seller shall have
the right, upon delivery of written notice to the other, to require that such
dispute be resolved in accordance with the provisions set forth in Section
5.05(c). Promptly following the resolution of any disputes between the
Purchaser's Accountants and the Seller's Accountants with respect to either
the draft audited Cut-Off Date Statement of Acquired ISF Assets and
Liabilities and, draft special report or any proposed adjustments to the
draft Adjusted Cut-Off Date Acquired ISF Assets and Liabilities Pricing
Schedule, the Seller shall, with the cooperation and assistance of the
Purchaser, prepare and deliver to the Purchaser, (A) the Adjusted Cut-Off
Date Acquired ISF Assets and Liabilities Pricing Schedule which shall reflect
all adjustments thereto which have been agreed upon by the Seller and the
Seller's Accountants, on the one hand, and the Purchaser and the Purchaser's
Accountants, on the other hand, or which have been resolved pursuant to
Section 5.05(c) and (B) a final special report on the Cut-Off Date Statement
of Acquired ISF Assets and Liabilities.
(viii) Each of Seller, Seller's Accountants and Purchaser's Accountants
shall have full access to all relevant accounting, financial and other
records reasonably requested by it in connection with the preparation,
confirmation or review of the Cut-Off Date Statement of Acquired ISF Assets
and Liabilities, the Seller's Accountants' draft special report thereon or
the Adjusted Cut-Off Date Acquired ISF Assets and Liabilities Pricing
Schedule as well as the Seller's Accountants working papers with respect
thereto and draft special report thereon. Without limiting the foregoing,
each party shall, and shall cause its Subsidiaries to, make available to the
other and its auditors such personnel as they may reasonably request in
connection with the review or confirmation of the Cut-Off Date Statement of
Acquired ISF Assets and Liabilities or the Adjusted Cut-Off Date Acquired ISF
Assets and Liabilities Pricing Schedule or the review of Seller's
Accountants' draft special report.
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(c) Conflict Resolution Mechanism. Any dispute involving any of the
adjustments to any draft Cut-Off Date Balance Sheet, the draft Cut-Off Date
Statement of Acquired ISF Assets and Liabilities, the draft Adjusted Cut-Off
Date Pricing Schedule, the draft Adjusted Cut-Off Date Acquired ISF Assets and
Liabilities Pricing Schedule or the draft calculation of the Intercompany Debt
amount proposed by the Seller, the Seller's Accountants, the Purchaser or the
Purchaser's Accountants (including any interpretation or application of any
provision of this Agreement affecting the preparation of the any Cut-Off Date
Balance Sheet, the Cut-Off Date Statement of Acquired ISF Assets and
Liabilities, the Adjusted Cut-Off Date Pricing Schedule, the Adjusted Cut-Off
Date Acquired ISF Assets and Liabilities Pricing Schedule or the draft
calculation of the Intercompany Debt amount) not resolved by the Seller and the
Purchaser within 45 days of the relevant date of receipt thereof, upon the
election of the Seller or the Purchaser, shall be resolved by the Selected
Accounting Firm. The Selected Accounting Firm shall resolve only issues upon
which the Purchaser and the Seller have been unable to agree. The decision of
such Selected Accounting Firm shall be rendered within 30 days after appointment
of the Selected Accounting Firm. The decision of the Selected Accounting Firm
shall be final and binding upon the parties.
(d) Payment of Fees. The Purchaser shall pay all of the fees of the
Purchaser's Accountants and all expenses incurred by such firm in connection
with the tasks outlined in this Section 5.05, and the Seller shall pay all fees
of the Seller's Accountants and all expenses incurred by such firm in connection
with the tasks outlined in this Section 5.05. The Purchaser and the Seller shall
each pay one-half of the fees and expenses incurred in connection with any
disputes that are resolved by the Selected Accounting Firm pursuant to Section
5.05(c).
(e) Cooperation. Each of the Seller and the Purchaser shall use their
respective reasonable efforts to cause the Purchaser's Accountants and the
Seller's Accountants to cooperate with each other in connection with all of
their activities undertaken in connection with this Section 5.05. Prior to the
commencement of the audit of any Cut-Off Date Balance Sheet, the Cut-Off Date
Statement of Acquired ISF Assets and Liabilities and/or the draft calculation of
the Intercompany Debt amount, the Seller shall instruct the Seller's Accountants
to make available to the Purchaser's Accountants their work papers from the
audits pertaining to the Business Lines of the relevant Financial Statements.
.6 Regulatory and Other Authorizations; Notices and Consents.
(a) The Selling Entities shall use (and shall cause their Affiliates to
use) their respective commercially reasonable efforts to promptly obtain all
consents, licenses, permits, Authorizations or approvals required to be obtained
by any of them from any Governmental Authority or any other Person in connection
with the Acquisition (including each of the Regulatory Approvals and the
approvals described in Sections 3.06 and 3.14 of the Disclosure Schedule) and
the Purchaser shall use its (and shall cause the Acquiring Subsidiaries to use
their respective) commercially reasonable efforts to promptly obtain all
consents, licenses, permits, Authorizations or approvals required to be
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obtained by any of them from any Governmental Authority or any other Person in
connection with the Acquisition (including each of the Regulatory Approvals and
the approvals described in Exhibit 4.03) (it being agreed, that in connection
with obtaining such third party consents, approvals, Authorization or waivers,
none of the Parent, the Seller or TLI will cause or permit any Purchased Entity
or any Asset Seller (with respect to any Acquired ISF Assets or any Assumed ISF
Liabilities) (i) to waive any rights it may have in respect of third parties or
(ii) to agree to any material modifications with respect to any of the Financing
Contracts or Material Contracts). To the extent that the Selling Entities are
required to spend any amounts in order to obtain from any Person (other than any
Governmental Authority) any of the consents, licenses, permits, Authorizations
or approvals described above, the Purchaser shall pay to the applicable Selling
Entity, promptly upon such Selling Entity's written request therefor, 50% of all
such costs actually expended by it; provided, however, that in no event shall
the Purchaser be required to reimburse the Selling Entities for more than
$100,000 (in the aggregate) in connection with the Selling Entities efforts to
obtain such consents, licenses, permits or Authorizations as set forth above.
The Seller shall cause the Purchased Entities to cooperate with the Purchaser in
promptly seeking to obtain all such consents, licenses, permits, Authorizations
or approvals.
(b) Each of the Selling Entities and the Purchaser agrees to make, or
to cause to be made, all appropriate filings of notifications and reports
reasonably required to obtain the consents, licenses, permits, Authorizations
and approvals required to be obtained by it pursuant to Section 5.06(a) as
promptly as practicable after the date of this Agreement, and to supply promptly
any additional information and documentary material that may properly be
requested by any Governmental Authority.
(c) Notwithstanding anything in this Agreement to the contrary, in no
event shall the Purchaser or any of its Affiliates have any obligation to
dispose of, hold separate or otherwise restrict their respective enjoyment of
any of their respective assets or properties (including, after the Closing, the
assets or properties of any Purchased Entity or the Acquired ISF Assets).
(d) If the Selling Entities have been unable to obtain any third party
consents necessary to the transfer of ownership to the Purchaser or an Acquiring
Subsidiary of title to any Acquired ISF Assets or other Property that is subject
to a consent or approval set forth in Section 3.06 or Section 3.14 of the
Disclosure Schedule for a period ending six months after the Closing Date, then
the Purchaser shall have the right to require the Selling Entities to purchase
such Acquired ISF Asset or other Property that is subject to a consent or
approval set forth in Section 3.06 or Section 3.14 of the Disclosure Schedule at
a price equal to the net book value of such Acquired ISF Asset or Property as of
the date of such purchase by wire transfer of immediately available funds to an
account designed by the Purchaser. The Purchaser shall assign, or shall cause
any of its Affiliates to assign, to Seller or any of its Affiliates on an
"AS-IS, WHERE IS" basis without representation or warranty or recourse of any
kind, all of the Purchaser's or its Affiliate's right, title and interest in the
Acquired ISF Asset and any other Property subject to such consent or approval.
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.7 Insurance; Intercompany Obligations; Indebtedness of Purchased
Entities.
(a) Effective as of the Closing, the Parent and the Seller shall cause
all coverage's provided for any Purchased Entity or any Acquired ISF Asset under
the general corporate policies of insurance and cancelable surety bonds and hold
harmless agreements of the Parent, the Seller or any of their Affiliates
(whether or not held for itself or for the benefit of its Subsidiaries) to be
terminated; provided, however, that no such termination of coverage's under
occurrence liability policies shall be effected so as to prevent the Purchaser
or any Purchased Entity from being entitled to make a claim under such policies
for Losses from events occurring prior to the Closing to the extent that
coverage for such Losses was otherwise provided by any such policy; provided,
further, that all Dealer Policies shall be terminated on not less than 90 days
prior to written notice to each Dealer, or, at the election of Purchaser, such
Dealer Policies shall not be terminated with Seller's interest therein assigned
to the Purchaser.
(b) Notwithstanding anything contained in Section 5.07(a), to the
extent that (i) any insurance policies owned or controlled by the Parent, the
Seller or any of their respective Affiliates (other than any Purchased Entity)
(collectively, the "Seller's Insurance Policies") cover any loss, liability,
claim, damage or expense resulting from, arising out of, based upon or relating
to, any Purchased Entity or any Acquired ISF Asset (the "Company Liabilities")
and resulting from, arising out of, based upon or relating to, occurrences prior
to the Closing and (ii) the Seller's Insurance Policies permit claims to be made
thereunder with respect to Company Liabilities resulting from, arising out of,
based upon or relating to, occurrences prior to the Closing (the "Company
Claims"), the Parent and the Seller shall cooperate in a commercially reasonable
manner and shall cause their Affiliates to cooperate in a commercially
reasonable manner with the Purchaser or the applicable Purchased Entity in
submitting Company Claims (or pursuing Company Claims previously made) on behalf
of the Purchaser or such Purchased Entity, as applicable, under any Seller's
Insurance Policies.
(c) Except as set forth in Section 5.07(a) and Section 5.07(b), from
and after the Closing Date, Purchaser shall become solely responsible for all
insurance coverage and related risk of loss with respect to the Purchased
Entities and the Asset Sellers (with respect to the Acquired ISF Asset) and
their respective businesses, assets and current or former employees and the
Acquired ISF Assets.
(d) At or prior to the Closing and effective as of the time immediately
prior to the Cut-Off Time, the Seller shall, and shall cause each of its
Affiliates to take whatever steps may be necessary (i) to terminate each
agreement between or among one or more Purchased Entities, on the one hand, and
any Selling Entity or any of its Affiliates (other than any Purchased Entity) on
the other hand, (other than the agreements, documents or instruments in respect
of any indebtedness of any Purchased Entity to any Selling Entity or any of its
Affiliates (other than another Purchased Entity)), and (ii) to release, repay,
satisfy and/or discharge all intercompany obligations owed by any Purchased
Entity to any Selling Entity or any of its Affiliates (other than any Purchased
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Entity) (other than Indebtedness of any Purchased Entity to any Selling Entity
or any of its Affiliates (other than another Purchased Entity)).
.8 Securitizations.
(a) U.S. Securitization Program.
(i) The Parent shall, with the cooperation and assistance of Purchaser
(including executing as a party, together with Parent, its affiliates and the
other applicable parties to the U.S. RPA, any agreements or documentation as
may be required on terms and conditions reasonably acceptable to Purchaser),
use commercially reasonable efforts to cause the appropriate special purpose
entities to negotiate, execute and deliver an agreement (the "U.S. RPA
Amendment") with the applicable parties to that certain Receivables Purchase
Agreement relating to the U.S. floorplan securitization program of
Transamerica Commercial Finance Corporation (as has been or may be amended
hereafter from time to time, the "U.S. RPA") providing, on terms and
conditions reasonably acceptable to Parent and Purchaser, for the payment in
full by the Purchaser of all the then outstanding payment obligations under
the U.S. RPA (the "U.S. Payment Amount"), with such payment in full to occur
at the Closing (the "U.S. RPA Pre-Payment"), and providing for termination of
the U.S. RPA. If the U.S. RPA Amendment is obtained, the Purchaser shall
cooperate with the Parent in order to arrange funding in an amount equal to
the U.S. Payment Amount, to be used to fund the U.S. RPA Pre-Payment, by
depositing funds into an account under the control of the Purchaser with the
Royal Bank of Canada ("RBC") prior to the Closing; or
(ii) If the Parent is unable to obtain the U.S. RPA Amendment, the Parent
may, at the Parent's election:
(A) Cause Inventory Funding Company LLC ("IFC") (i) to deliver a
notice to the applicable parties to the U.S. RPA, at least five (5) "Business
Days" (as defined in the U.S. RPA) prior to the Closing Date or such shorter
notice period as may be acceptable to the applicable parties, to the effect that
IFC is terminating the purchase facility under the U.S. RPA and, in connection
therewith, shall no longer sell interests in receivables pursuant to the U.S.
RPA to the U.S. RPA conduits or RBC, and (ii) to take any other actions required
under the U.S. RPA to cause IFC, effective not later than the Closing Date, to
terminate the purchase facility under the U.S. RPA and, in connection therewith,
to cease to sell interests in receivables under the U.S. RPA to the U.S. RPA
conduits or RBC, including but not limited to obtaining the necessary consents
from applicable parties to the U.S. RPA (whether pursuant to the U.S. RPA, any
related agency agreement or any other applicable agreement) pursuant to
documentation in form and substance reasonably satisfactory to the Purchaser
(the "IFC Consents"). The representations and warranties of the Selling Entities
set forth in Section 3.21 and Section 3.22 shall be true and correct as of the
Closing with respect to the Financing Contracts under the U.S. RPA.
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(B) Cause IFC to admit General Electric Capital Services, Inc.
("GECS") as a member of IFC, pursuant to documentation in form and substance
reasonably satisfactory to GECS, and shall cause the interest of GECS as a
member of IFC to be not less than five percent (5%) of the capitalization of
IFC. The Purchaser shall replace the Parent as the performance guarantor in
respect of the U.S. RPA, pursuant to documentation in form and substance
reasonably satisfactory to the Purchaser, Parent and RBC;
(C) Obtain from the applicable parties to the U.S. RPA (whether
pursuant to the U.S. RPA, any related agency agreement or any other applicable
agreement) waivers (pursuant to documentation in form and substance reasonably
satisfactory to the Purchaser and Parent) of any default, event of default,
event of termination or similar event, regardless of how described in the U.S.
RPA, (i) arising from the matters described in Section 5.08(a)(ii)(A) or Section
5.08(a)(ii)(B), (ii) arising from the changes of ownership resulting from the
transactions contemplated by this Agreement, (iii) otherwise arising from the
transactions contemplated by this Agreement, or (iv) otherwise existing under
the U.S. RPA; and
(D) Cause officers of IFC and Inventory Funding Trust (and an
officer of Transamerica Commercial Finance Corporation, as the beneficial owner
of Inventory Funding Trust), to deliver at the Closing certificates to counsel
for the Purchaser, Mayer, Brown, Xxxx & Maw LLP, in form and substance
satisfactory to such counsel, in support of an opinion to be delivered by such
counsel, for the benefit of the Purchaser, with respect to the "true sale" of
receivables from Inventory Funding Trust to IFC and in support of an opinion to
be delivered by such counsel, for the benefit of the Purchaser, with respect to
the "non-consolidation" of IFC and Inventory Funding Trust;
In addition, prior to Closing, the appropriate senior executives of each of
Parent and Purchaser shall meet to discuss the extent to which the conditions to
the Closing as set forth in Article VIII hereof have been satisfied.
(b) TCFCC Securitization Program. The Parent shall, with the
cooperation and assistance of Purchaser (including executing as a party,
together with Parent, its affiliates and the other applicable parties to the
Canadian RPA, any agreements or documentation as may be required on terms and
conditions reasonably acceptable to Purchaser), use commercially reasonable
efforts to cause TCFC Canada to negotiate, execute and deliver an agreement (the
"Canadian RPA Amendment") with the applicable parties to that certain
Receivables Purchase Agreement relating to the Canadian floorplan securitization
program of TCFC Canada (as has been or may be amended hereafter from time to
time, the "Canadian RPA"), providing, on terms and conditions reasonably
acceptable to Parent and Purchaser, for the payment in full by the Purchaser of
all the then outstanding payment obligations under the Canadian RPA (the
"Canadian Payment Amount"), with such payment in full to occur at the Closing
(the "Canadian RPA Pre-Payment") and providing for termination of the Canadian
RPA. If the Canadian RPA Amendment is obtained, the Purchaser shall cooperate
with the Parent in order to arrange funding in an amount equal to the Canadian
Payment Amount, to be used to fund the
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Canadian RPA Pre-Payment, by depositing funds into an account under the control
of the Purchaser with RBC prior to the Closing.
(c) With respect to the transactions contemplated by this Section 5.08,
the Purchaser shall use commercially reasonable efforts to consider and
negotiate in good faith an extension of up to $300 million dollars of short term
credit to the Parent under the Purchaser's standard underwriting practices.
.9 Derivative Instruments. Prior to the Closing and effective as of the
time immediately prior to the Cut-Off Time, the Parent and the Seller shall
unwind, or cause to be unwound, all Derivative Instruments (other than the
Xxxxxxx Estates Derivative) and related arrangements of any of the Purchased
Entities set forth or required to be set forth in Section 3.17 of the Disclosure
Schedule. At or immediately after Closing, the Purchaser and the Parent shall
enter into such agreements as shall be necessary so as to assign to the
Purchaser all of the Parent's right, title and interest in and to the Xxxxxxx
Estates Derivative and the Purchaser shall assume all of the Parent's
obligations thereunder.
.10 Third Party Obligations of the Selling Entities and Its Affiliates.
(a) On or prior to the Closing, the Purchaser shall use its
commercially reasonable efforts to replace each letter of credit of a Selling
Entity or an Affiliate of a Selling Entity that is set forth in Exhibit 5.10(a)
and each guarantee of a Selling Entity or an Affiliate of Selling Entity that is
set forth in Exhibit 5.10(b), and, in each case, shall use its commercially
reasonable efforts to obtain an unconditional release of each Selling Entity and
its Affiliates, with respect to each obligation.
(b) In the event that, after using its commercially reasonable efforts,
the Purchaser is not able to replace any letter of credit or any guarantee
referred to in clause (a) above on or prior to the Closing, then on the Closing
Date the Purchaser shall provide to the applicable Selling Entity or its
Affiliate an indemnity agreement in respect of the payment of each such, letter
of credit or guarantee, in substantially the form attached hereto as Exhibit
1.01(n) (the "GE Indemnity").
.11 Transfer of Excluded Assets and Assumption of Excluded Liabilities.
(a) Prior to the Closing and effective as of the time immediately prior
to the Cut-Off Time, the Parent and the Seller shall:
(i) cause the Purchased Entities to transfer all of the issued and
outstanding Capital Stock of the Excluded Subsidiaries without any
representation or warranty, and without recourse, to one or more Persons
(other than any Purchased Entity) (each such Person, a "Transferee"); and
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(ii) cause the Purchased Entities to transfer the Excluded Assets without
any representation or warranty of any kind, and without recourse, to one or
more Transferees who shall assume, in their entirety, the Excluded
Liabilities.
(b) The Purchaser shall reasonably cooperate with the Parent and the
Seller with respect to the actions described in Section 5.11(a).
(c) All amounts received by any Purchased Entity after the Closing in
respect of the Excluded Assets or Excluded Liabilities shall be received by such
Purchased Entity as the Selling Entities' agent, in trust for and on behalf of
the Selling Entities, and the Purchaser shall cause such Purchased Entity
promptly to pay all of such amounts over to the Seller, by wire transfer of
immediately available funds, and shall provide to the Seller information as to
the nature, source and classification of such payments, including any invoices
relating thereto.
.12 Transfer of Other Acquired Business Assets and Included
Liabilities.
(a) Prior to the Closing and effective as of the time immediately prior
to the Cut-Off Time, (i) each of the Parent and the Seller shall, and shall
cause each of its applicable Subsidiaries and Affiliates (other than any
Purchased Entity) (each such Person, an "Acquired Business Asset Transferor")
to, (A) transfer to the Company all of the Other Acquired Business Assets owned
by them, free and clear of all Encumbrances, other than Permitted Encumbrances
and (B) transfer, assign and delegate to the Company all of the Included
Liabilities and (ii) each of the Parent and the Seller shall cause the Company
to assume the Included Liabilities; provided, however, that in no event shall
the Company assume or otherwise become liable for, any Excluded Liabilities.
(b) All amounts received by the Seller or any of its Affiliates after
the Closing in respect of the Other Acquired Business Assets shall be received
by the Seller or such Affiliate as the Company's agent, in trust for and on
behalf of the Company, and the Seller shall, or shall cause its applicable
Affiliates promptly to pay all of such amounts over to the Company, by wire
transfer of immediately available funds, and shall provide to the Company
information as to the nature, source and classification of such payments,
including any invoices relating thereto.
.13 Consent Solicitations. As promptly as reasonably practicable
following the date hereof, the Parent shall commence solicitations (the "Consent
Solicitations") of consents ("Consents") from holders of the Parent's debt
securities registered under the Securities Act of 1933 and outstanding
immediately prior to the Closing Date (the "Public Debt") in order to permit the
Parent and the Seller to consummate the transactions contemplated hereby.
.14 Powers of Attorney; Bank Accounts. The Seller shall, on the Closing
Date, take all steps necessary to remove all Persons who are signatories or
holders of powers-of-attorney in respect of any accounts, lockboxes and
safe-deposit boxes maintained by any Purchased Entity who are not Company
Employees or who are
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Excluded Employees, from the list of authorized signatories and holders and
otherwise extinguish their signing authority with respect to such accounts.
.15 Noncompete; No-Hire.
(a) Noncompete. Aegon and each Selling Entity agrees that, without the
prior written consent of Purchaser, during the period commencing on the Closing
Date and ending on the third anniversary thereof, it shall not, and shall not
permit any of its Affiliates to, directly or indirectly, either alone or in
partnership, through any Person controlled by any of them, or in conjunction
with any Person as principal, agent, partner, member or shareholder, engage in
any business comprising part of the distribution finance Business Line at the
time of Closing within the United States (it being agreed that nothing contained
in this Section 5.15 shall restrict or prohibit Aegon or any Selling Entity or
any Affiliate of Aegon or any Selling Entity from (i) engaging in the lines of
business presently conducted by the Excluded Subsidiaries, Aegon or its
Affiliates (other than the distribution finance business) or (ii) providing any
services required to be provided by it pursuant to the Transition Services
Agreement); provided, however, that Aegon, any Selling Entity or any of their
respective Affiliates may acquire, directly or indirectly, (by stock purchase,
asset purchase, merger or other similar transaction) any Person that is engaged
in any business comprising part of the distribution finance Business Line,
provided that Aegon or such Selling Entity or Affiliate shall sell that portion
of the acquired business that competes with the distribution finance Business
Line to an unaffiliated Person as promptly as practicable after the consummation
of such acquisition and, in any event, within 12 months thereafter; and
provided, further, that nothing in this Section 5.15 shall prohibit Aegon, the
Selling Entities or any of their respective Affiliates from owning, directly or
indirectly, less than 10% of the publicly traded securities of any Person
(whether traded over the counter or on a national securities exchange) engaged
in the distribution finance Business Line.
(b) No-Hire. Aegon and each Selling Entity agree that, without the
prior written consent of the Purchaser, during the period commencing on the
Closing Date and ending on the second anniversary thereof, they shall not, and
shall not permit any of their Affiliates to, (i) hire, offer employment to, or
retain as an employee, consultant or advisor any Company Employee on a list to
be provided by the Purchaser to the Seller prior to the Closing of up to 50
individuals or (ii) cause any such Company Employee to leave the employ of a
Purchased Entity, the Purchaser or any applicable Acquiring Subsidiary. The
Purchaser may amend, modify or supplement Exhibit 5.15(b) at Closing to add up
to an additional 50 names.
(c) Material Inducement; Reasonableness of Covenants. Each of Aegon and
the Selling Entities acknowledge and agree that the covenants and agreements
contained in Section 5.15(a) and Section 5.15(b) above are (i) material
inducements to the Purchaser to enter into this Agreement and each of the
Related Agreements and (ii) commercially reasonable and necessary to protect the
interests of the Purchaser.
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(d) Breach of Covenants. The parties hereto recognize that a breach by
Aegon or any Selling Entity of any of the covenants contained in this Section
5.15 would result in Losses to the Purchaser and that the Purchaser could not
adequately be compensated for such Losses by monetary award alone. Accordingly,
the parties agree that in the event of any such breach, in addition to any other
remedies available to the Purchaser at law or otherwise, the Purchaser shall be
entitled to: (i) apply to a court of competent jurisdiction for relief by way of
preliminary and permanent injunction, restraining order, decree or otherwise as
may be appropriate to ensure compliance by Aegon or any Selling Entity, and (ii)
if the Purchaser obtains a final judgment which is no longer subject to appeal,
recover from Aegon or any Selling Entity an amount at least equal to all
reasonable costs and expenses (including legal fees) incurred by the Purchaser
to enforce any provision of this Section 5.15.
.16 Confidentiality.
(a) The Confidentiality Agreement shall continue in full force and
effect in accordance with its terms with respect to any Evaluation Material (as
defined in the Confidentiality Agreement) to the extent that such Evaluation
Material relates to the Acquired Businesses until the earlier of (i) the
termination of the Confidentiality Agreement in accordance with its terms or
(ii) the Closing, with respect to any Acquired Business, at which time such
Confidentiality Agreement and the obligations of the Purchaser thereunder with
respect to such Evaluation Material shall terminate. The Confidentiality
Agreement shall continue in full force and effect with respect to any other
Evaluation Material. From and after the Closing, any reference to the "Company"
set forth in the non-solicitation agreement of the Purchaser set forth in the
Confidentiality Agreement shall be deemed to be a reference to Transamerica
Corporation and its subsidiaries after giving effect to the Acquisition.
(b) The Selling Entities shall (and shall cause their Affiliates to)
keep confidential all nonpublic information in their possession regarding the
Purchased Entities and the Acquired Businesses (including any information made
available pursuant to Section 5.01); provided, however, that the Selling
Entities will not be required to maintain as confidential any information (i)
that is or becomes generally available to the public other than as a result of a
disclosure by the Selling Entities or any of their Affiliates, (ii) becomes
available to any Selling Entity on a non-confidential basis from a source other
than any Purchased Entity, the Purchaser or any of their respective Affiliates,
provided that the source of such information was not known by such Selling
Entity to be bound by a confidentiality agreement with, or other contractual,
legal or fiduciary obligation of confidentiality to, any party with respect to
such information, (iii) is or was independently developed by a Selling Entity,
without reference to any Evaluation Material solely relating to the Acquired
Businesses, or (iv) to the extent that such information is required to be
disclosed pursuant to the terms of a Governmental Order or other legal
requirement.
(c) Notwithstanding anything to the contrary set forth herein or in any
other agreement to which the parties hereto are parties or by which they are
bound, the
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obligations of confidentiality contained herein and therein, as they relate to
the Acquisition, shall not apply to the federal Tax structure or federal Tax
treatment of the Acquisition, and each party hereto (and any employee,
representative, or agent of any party hereto) may disclose to any and all
Persons, without limitation of any kind, the federal Tax structure and federal
Tax treatment of the Acquisition. The preceding sentence is intended to cause
the Acquisition not to be treated as having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Code, and shall be construed in a manner consistent with such purpose. In
addition, each party hereto acknowledges that it has no proprietary or exclusive
rights to the Tax structure of the Acquisition or any Tax matter or Tax idea
related to the Acquisition.
.17 Supplements to the Disclosure Schedule; Approved Property; Closing
Date Portfolio Tapes.
(a) Not earlier than ten (10) nor later than three (3) Business Days
prior to the Closing, the Seller shall supplement the Disclosure Schedule with
respect to any matter, condition or occurrence hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required to
have been set forth or described in Section 3.04(b), 3.06, 3.10, 3.11, 3.13(a)
(with respect to Owned Property), or 3.23 of the Disclosure Schedule or would
otherwise have been inconsistent with its corresponding representations herein.
No supplement or amendment of the applicable Disclosure Schedule by the Seller
pursuant to this Section 5.17(a) shall be deemed to cure (or affect the rights
of any party with respect to) any breach of any representations and warranties
or have any effect for the purpose of determining satisfaction of the conditions
set forth in Section 8.01 or Section 8.02. The Purchaser shall not be deemed to
have waived any right or claim under this Agreement or otherwise, including
pursuant to the indemnification provisions of Section 5.04 hereof, with respect
to any matters disclosed, or otherwise known, to the Purchaser, whether prior to
or after the date of this Agreement, except to the extent such matters are
actually set forth in the Disclosure Schedule as of the date of the execution of
this Agreement.
(b) Within seven (7) Business Days after the Closing Date, the Parent
and the Seller shall deliver to the Purchaser the Cut-Off Date Portfolio Tape
and the Cut-Off Date Acquired ISF Assets Portfolio Tape, together with a
certificate from an officer of the Parent and the Seller certifying the
Portfolio Information therein is true, complete and correct in all respects. The
Purchaser shall, and shall cause each of the Purchased Entities to, cooperate
with the Seller (including by making personnel and books and records available
to Seller during normal business hours and upon reasonable notice to the
Purchaser) so as to permit Seller such access to the records pertaining to
Financing Contracts as is necessary to prepare the Closing Date Data Tape and
the Closing Date Acquired ISF Assets Portfolio Tape; provided, however, that
such access shall not interfere unreasonably with the business of the Purchaser
or the Purchased Entities. All of the Portfolio Information set forth in the
Closing Date Portfolio Tape and in the Closing Date Acquired ISF Assets
Portfolio Tape shall be true, correct, complete and accurate in all respects.
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.18 Transamerica Name and Xxxx. As promptly as possible but in no event
later than 180 days after the Closing, the Purchaser shall completely and
permanently obliterate or remove from all assets used in the Acquired Businesses
all Transamerica Marks, and in the event that any such xxxx cannot be completely
and permanently obliterated or removed from any such asset, the Purchaser shall
promptly destroy such item (it being understood and agreed that notwithstanding
the foregoing, (i) in the event that any Properties of the Purchased Entities
are in the possession of third parties, the Purchaser's obligations with respect
to obliteration and removal of Transamerica Marks shall commence on the first
day that such Properties are returned to the dominion and control of the
Purchaser or the Purchased Entities, (ii) with respect to Portfolio Property
bearing any Transamerica Xxxx the Purchaser shall be required to take
commercially reasonable efforts to obliterate or remove such marks, but in no
event shall Purchaser have any obligation to damage or destroy any such
Portfolio Property and (iii) in no event shall Purchaser have any obligation to
obliterate any Transamerica Marks from any documents related to existing
Financing Contracts or Backlog in existence immediately prior to the Closing).
From and after the Closing, except as set forth in this Section 5.18, the
Purchaser shall not permit any Purchased Entity to (a) use any acronym based on,
or any logo incorporating, any such Transamerica Xxxx or acronym, (b) in any way
represent that it is, or otherwise hold itself out as being, affiliated with the
Parent or any of its Affiliates or (c) except as provided in the following
sentence otherwise use any Transamerica Xxxx. Notwithstanding the foregoing, for
a period of not more than 180 days after the Closing in connection with
transition arrangements, Purchaser shall be entitled to use or disseminate any
equipment, software, invoices, purchaser orders, sales orders, labels,
letterhead, envelopes, signage, business cards, displays, product packaging,
websites, e-mail addresses, promotional materials, shipping documents or other
Documentation used in the conduct or operations of the Acquired Businesses and
existing on the Closing Date (the "Existing Stock") that bear any Transamerica
Xxxx or acronym where the removal, erasure, deletion or obliteration of the
Transamerica Xxxx or acronym on such Existing Stock would be impractical. Except
as set forth in this Section 5.18, the Purchaser shall not be entitled to use
any of the Seller's trademarks, service marks, trade dress or logos together
with any of the Purchaser's trademarks, service marks, trade dress or logos on
any stationery or advertising or in any other form or Documentation. As soon as
practicable after the Closing Date and not later than 60 days thereafter the
Purchaser shall cause each of the Purchased Entities to take all reasonable
actions reasonably necessary to change its corporate name and any other names
under which it conducts business to names that do not use the word
"Transamerica" or "AEGON" or any other Transamerica Xxxx or any name confusingly
similar to a Transamerica Xxxx.
.19 Further Action. Each of the parties hereto shall use commercially
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things necessary, proper or advisable under applicable Law,
and execute and deliver such documents and other papers, as may be required to
carry out the provisions of this Agreement, to satisfy the conditions to the
Closing and consummate and make effective the transactions contemplated by this
Agreement.
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.20 Estoppel Certificates. From and after the date hereof, Seller and
each of the other Selling Entities shall use their respective commercially
reasonable efforts to obtain estoppel certificates in form and substance
satisfactory to the Purchaser, from each ground lessor in respect of the Ground
Leases and each credit tenant lessee in respect of the Credit Tenant Leases
(respectively), in each case, as set forth in Section 3.23(m) of the Disclosure
Schedule.
.21 Post Closing Cooperation. (a) From and after the date hereof, the
Purchaser and the Selling Entities shall cooperate with each other, and the
Purchaser shall use its commercially reasonable efforts to identify which of the
contracts, agreements and arrangements set forth in Section 3.14(a) of the
Disclosure Schedule (the "Restricted Agreements") are, after the Closing,
necessary or desirable for the Purchaser, any applicable Acquiring Subsidiary or
any Purchased Entity, in the reasonable determination of the Purchaser, to
conduct any of the Acquired Businesses in the ordinary course of business,
consistent with past practices. (i) In the event that the Purchaser shall, from
time to time, determine that one or more of the Restricted Agreements are
necessary to conduct any of the Acquired Businesses in the ordinary course of
business, the Purchaser shall notify Seller in writing of such determination and
(ii) with respect to each software license agreement with respect to Xxxxxx
Software, the Seller shall, promptly thereafter (or, with respect to Xxxxxx
Software) use its reasonable best efforts to obtain from each of the
counterparties thereto, a consent to transfer or assign (or a waiver in respect
of any such transfer or assignment of) such Restricted Agreement to the
Purchaser, an Acquiring Subsidiary or a Purchased Entity (including, by paying
any necessary waiver or consent fees to the counterparties thereof to effect
such transfer or assignment).
(b) If, in the exercise of its reasonable best efforts to obtain any
consent or waiver pursuant to the provisions of Section 5.21(a) above, then the
Seller shall be required to pay any fees or additional payments in consideration
for the consent or waiver to such transfer or assignment, and the Purchaser
shall reimburse the Seller an amount equal to 50% of any such fees or additional
payments actually paid by the Seller; provided, that if the Seller is unable to
obtain any consents or waivers with respect to the transfer of any Property
subject to a Restricted Agreement prior to the Closing Date, then the Seller
shall provide the Purchased Entities use and access to such Property pursuant to
the Transition Services Agreement until such time as such consents or waivers
are obtained by the Seller.
.22 No Qualification or Limitation; No Other Representations and
Warranties. (a) It is acknowledged and agreed that no review or investigation by
the Purchaser shall be deemed to limit or otherwise qualify any Selling Entity's
representations or warranties to the Purchaser or otherwise to limit or impair
any rights the Purchaser has with respect to any Selling Entity, including
pursuant to Article V hereof.
(b) The parties hereto agree that except as specifically set forth in
this Agreement or in any Purchaser Related Document or Seller Related Document,
none of the Selling Entities nor any of their respective directors, officers,
employees, agents or
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representatives, on the one hand, and none of the Purchaser nor any of its
directors, officers, employees, agents or representatives, on the other hand,
makes, has or have made, or shall be deemed to have made, or shall be liable to
any other or bound in any manner by, any express or implied representations or
warranties. Without limiting the generality of the foregoing, except as may be
expressly contained in a representation or warranty contained in this Agreement
or in any Seller Related Document or Purchaser Related Document, no party hereto
makes any representation or warranty with respect to (a) any projections,
estimates or budgets heretofore delivered to or made available to the other or
(b) any other information or documents made available to the other or its
counsel, accountants, advisors or other representatives with respect to the
Purchased Entities or the business, operations, assets or liabilities of the
Purchased Entities.
ARTICLE VI
[INTENTIONALLY OMITTED]
ARTICLE VII
EMPLOYEE MATTERS
.1 Excluded and Inactive Employees. On or prior to the Closing Date,
the Seller shall cause one or more of its Affiliates (other than any Purchased
Entity) to hire the Excluded Employees and Inactive Employees, set forth in the
letter agreement provided to Purchaser on the date hereof (which information in
such letter agreement shall be updated as of the Closing Date), or in the case
of Excluded Employees and Inactive Employees employed by any of the Excluded
Subsidiaries, continue the employment of Excluded Employees and Inactive
Employees. Following the Closing, the Purchaser or one of its Affiliates (which
Affiliate may be a Purchased Entity) shall offer employment to any Inactive
Employee, as set forth in the letter agreement provided to Purchaser on the date
hereof, (which information in such letter agreement shall be updated as of the
Closing Date), subject to the following conditions: (a) if on medical or
disability leave, such individual is released by his or her physician to return
to active employment and (b) such individual actually reports for active
employment with the Purchaser or one of its Affiliates promptly following such
medical release or expiration of approved leave; provided, however, that the
Purchaser and its Affiliates shall not be required to offer employment under
this provision to any Inactive Employee after the later of (i) six months after
the Closing Date and (ii) the expiration of any period under applicable Law,
including the Uniformed Services and Reemployment Rights Act. The Seller shall
retain liability and responsibility for any Excluded Employee and Inactive
Employee until such employee becomes an employee of the Purchaser or one of its
Affiliates or, if earlier, until such employee's employment with the Seller or
its Affiliate terminates. The Purchaser shall assume all liabilities and
responsibilities for each Inactive Employee accruing on and after the date such
Inactive Employee becomes an employee of the Purchaser or one of its Affiliates.
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.2 Transferred Employees; Terms and Condition of Employment. (a)
Effective as of the Closing, (i) each Purchased Entity shall continue the
employment of its employees (where employment continues by operation of Law)
(other than any Excluded Employees and Inactive Employees) or, where employment
does not continue by operation of law, (ii) the Purchaser or one of its
Affiliates shall offer employment to each Company Employee, other than Excluded
Employees and Inactive Employees. For purposes of this Agreement, the term
"Company Employee" shall include each person employed by Seller, TCHL, the ISF
Division of TLI and each of the Purchased Entities as of the Closing Date, all
as set forth in the letter agreement provided to Purchaser on the date hereof,
which information in such letter agreement shall be updated as of the Closing
Date for new hires and terminations in the ordinary course of business,
consistent with its past practices, collectively "Company Employees." Company
Employees who continue or accept employment pursuant to this Section 7.02 (a)
shall be referred to as "Transferred Employees".
(b) For a period of 12 months following the Closing, the Purchaser or
one of its Affiliates shall provide the Transferred Employees (as long as they
continue to be employed by Purchaser or its Affiliates) with (i) the same or
better level of base salary or wages and the same incentive bonus opportunity as
provided to such employee immediately prior to the Closing, (ii) a position with
substantially equivalent job duties in the same geographic location as currently
held by such employee immediately prior to the Closing, (iii) separation pay
benefits and terms that are the same as those provided in the TSRP Plans, or
under Section 5.03, "Benefit Upon Sale of Assets" under the separation pay
plans, as appropriate, copies of which were provided to Purchaser on the date
hereof pursuant to the letter agreement (contingent upon executing a general
employment release) or, at the election of the employee, separation pay benefits
as provided under the applicable plan of Purchaser or its Affiliates, and (iv)
employee benefit plans, benefit arrangements and programs that are no less
favorable in the aggregate than those in effect for such employees immediately
prior to the Closing Date and (v) any other benefits expressly required to be
provided by Purchaser and its Affiliates pursuant to this ARTICLE VII. Purchaser
and its Affiliates shall be responsible for any legally mandated continuation of
health care coverage for Transferred Employees and/or their dependents who have
a loss of health care coverage due to a "qualifying event" (under COBRA)
following the Closing Date, and Seller or its Affiliates shall be responsible
for any legally mandated continuation of health care coverage for Company
Employees and/or their dependents who have a loss of health care coverage due to
a "qualifying event" (under COBRA) on or prior to the Closing Date. In addition
to and not in contravention of the foregoing, notwithstanding anything contained
herein to the contrary, Purchaser and its Affiliates shall comply with
applicable Law in respect of making offers of employment to and the hiring of
Company Employees, the provision of benefits to Transferred Employees and the
crediting of service to Transferred Employees..
.3 Service Recognition. The Purchaser shall recognize and credit each
Transferred Employee's full and partial years of service with any Selling Entity
or any of their affiliates (as recognized under any Selling Entity's service
crediting rules as in effect on the Closing Date) prior to the date the such
employee becomes a Transferred
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Employee for purposes of any waiting period, vesting, eligibility, participation
or coverage requirement and benefit entitlement (but excluding benefit accruals)
under any employee benefit plan and other fringe benefit (including vacation,
severance and service awards) maintained by Purchaser or its Affiliates
("Purchaser Benefit Plan") in which such employee participates and which is made
available to such employees following the Closing Date by Purchaser or its
Affiliates; provided, however, that with respect to any Purchaser Benefit Plan
that is a defined benefit pension plan in which such Transferred Employee
participates following the Closing Date, such service credit shall equal the
amount of vesting service credited in full years to the Transferred Employee
under the AEGON USA, Inc. Pension Plan as of the date such employee becomes a
Transferred Employee. In addition, the Purchaser shall waive any pre-existing
condition exclusions, evidence of insurability provisions, waiting period
requirements or any similar provision under any of the Purchaser Benefit Plans
that are welfare plans (as defined in Section 3(1) of ERISA), provided that for
elective benefits the Transferred Employee elects to enroll in the plan on or
before 31 days from the date such employee first becomes eligible to participate
in the plan. Further, Transferred Employees shall be eligible to receive credit
under the Purchaser Benefit Plans for the 2003 calendar year towards any
applicable deductibles and annual out-of-pocket limits for expenses incurred
under the corresponding Selling Entity's medical plan during the 2003 calendar
year but prior to the Closing Date. Purchaser shall credit each Transferred
Employee with unused AEGON "Wellness Days" for U.S. employees, vacation,
personal, holiday and sickness days for employees outside of the U.S., accrued
in accordance with the vacation and personnel policies applicable to any such
Transferred Employee prior to the Closing, provided such amounts are properly
reflected on the Adjusted Cut Off Date Pricing Schedule (other than with respect
to U.S. and foreign employees, the AEGON "Wellness Days" and personal, holiday
and sickness days). With respect to vacation, severance, service awards and
other such benefits provided by Purchaser or its Affiliates, the seniority or
period of service of each Transferred Employee shall include periods of service
with any Selling Entity (and their predecessor entities.)
.4 Vesting of Benefits Under the Seller's Pension and Savings Plans.
Except as may be required by applicable Law or as otherwise required by this
Agreement, the Selling Entities shall cause, as of the Closing Date, all
Transferred Employees: (i) to cease to be active participants in all Company
Benefit Plans which are Employee Benefit Plans and (ii) to be fully vested in
their accrued benefits under the AEGON USA, Inc. Pension Plan, AEGON USA, Inc.
Profit Sharing Plan, AEGON USA, Inc. Executive Profit Sharing Plan and AEGON
USA, Inc. Excess Restoration Plan (collectively, the "AEGON Pension Plans").
Effective as of the Closing Date, in accordance with the provisions of section
401(k)(2) of the Code, the Selling Entities shall cause Transferred Employees to
be treated as having severance from employment for purposes of the AEGON USA,
Inc. Profit Sharing Plan. Seller or its Affiliates shall make contributions to
the AEGON Pension Plans on behalf of Transferred Employees without regard to the
fact that such employees will not be employed by Seller or one of its Affiliates
on the last day of the respective plan year, if applicable. In addition, Seller
shall treat all Transferred
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Employees as terminated for purposes of any non-qualified deferred compensation
plan maintained by Seller or its Affiliates.
.5 Assumed Benefit Plans. (a) As of the Closing Date, Purchaser or its
Affiliates shall assume the obligations under the Company Benefit Plans
maintained by Purchased Entities or any of their Subsidiaries and which are set
forth in the letter agreement provided to Purchaser on the date hereof (the
"Assumed Benefit Plans"). In addition, as Purchaser or its Affiliates, as the
case may be, deems necessary or advisable in furtherance of its obligations
under this Agreement, they shall (i) establish new employee benefit plans, (ii)
cover the Transferred Employees under their existing employee benefit plans
and/or Assumed Benefit Plans or (iii) any combination of the above. Seller and
its Affiliates agree to cooperate in good faith and do all things reasonably
necessary to assist Purchaser and its Affiliates in this regard.
(b) U.K. Pension Scheme. The Purchaser shall ensure that the U.K.
Subsidiary uses its reasonable best endeavors to procure that the pension plan
maintained for its employees accepts transfer payments from the Transamerica
U.K. Subsidiaries Pension & Life Assurance Scheme in accordance with the
provisions of that plan in respect of each Transferred Employee who exercises
his statutory right to a transfer payment from the Transamerica U.K.
Subsidiaries Pension & Life Assurance Scheme.
(c) Assumed Benefit Plans. Where permitted under local Law, Seller or
its Affiliates shall cause to be transferred to Purchaser or its Affiliate, or
the relevant employee benefit plan of Purchaser or its Affiliate, such cash,
insurance contracts and other assets held or maintained by the Seller or its
Affiliate with respect to each Assumed Benefit Plan (other than those described
in Sections 7.05(b)) as of the date of transfer in such amount as the Seller and
the Purchaser shall mutually agree. Such transfer shall be made as soon as
practical following the Closing Date.
.6 Assumed Benefit Arrangements. As of the Closing Date, Purchaser or
its Affiliates shall assume the obligations under the Company Benefit
Arrangements maintained by Purchased Entities or any of their Subsidiaries or
which it has specifically agreed to assume and that are set forth in the letter
agreement provided to Purchaser on the date hereof (the "Assumed Benefit
Arrangements"). Seller shall reimburse Purchaser for any amounts due following
the Closing Date under the Assumed Benefit Arrangements which relate to periods
on or prior to the Closing Date to the extent such amounts are not reflected on
the Adjusted Cut Off Date Pricing Schedule.
.7 Intentionally Omitted.
.8 [Intentionally Omitted.]
.9 DAP XXX; Bonus Payments. Seller and its Affiliates (other than the
Purchased Entities) shall be solely liable and responsible for (i) all amounts
and benefits due under the Transamerica Finance Corporation 2002 - 2004 DAP XXX
Bonus Plan and (ii) all amounts and benefits due under as a result of this
transaction under any of Seller or
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its Affiliates' annual bonus plans, and Purchaser and its Affiliates (including
the Purchased Entities) shall have no liability to any Company Employee or any
other individual thereunder.
.10 WARN. From and after the date hereof, the Selling Entities and
Purchased Entities shall not terminate the employment of any Company Employees
(other than a discharge for misconduct or poor performance) without the consent
of the Purchaser, which consent shall not be unreasonably withheld. Purchaser
and its Affiliates shall be responsible for providing any notice required
pursuant to WARN, any successor federal law, and any other applicable plant
closing notification laws, including state law, foreign laws or contractual
requirements, with respect to a layoff or plant closing relating to the
Purchased Entities that occurs as a result of or after the Closing, and
Purchaser and its Affiliates shall be solely liable for all Losses with respect
to the failure to provide any such notice in a timely manner.
.11 Employee Communications. Any communication proposed to be delivered
prior to the Closing by Purchaser and its Affiliates to the Company Employees or
Excluded Employees regarding matters contained in or relating to the
transactions contemplated under this Agreement, or otherwise respecting any
changes or potential changes in employee benefit plans, practices, or procedures
or employment that may or will occur in connection with the transactions
contemplated by this Agreement, shall be subject to prior approval of Seller,
which approval shall not be unreasonably withheld.
.12 Flexible Benefits Plan. Effective as of the Closing Date, the
Selling Entities shall transfer, or cause to be transferred, to the Purchaser an
amount, in cash, representing each Transferred Employee's 2003 contributions to
Seller's or its Affiliate's health care spending account plan and the dependent
care spending account plan (the "Seller Flexible Benefits Plan"), net of
reimbursements (but not less than zero). The Purchaser shall cause such amounts
to be credited to each Transferred Employee's accounts under the Purchaser's
corresponding health care and dependent care spending account plans (the
"Purchaser Flexible Benefits Plan") in which such Transferred Employees
participate following the Closing Date, and all claims for reimbursement which
have not been paid as of the date of the transfer to the Purchaser Flexible
Benefits Plan shall be paid pursuant to and under the terms of the Purchaser
Flexible Benefits Plan. In connection with such transfer, Purchaser shall deem
that the Transferred Employees' deferral elections made under the Seller
Flexible Benefits Plan for the 2003 calendar year shall continue in effect under
the Purchaser Flexible Benefits Plan for the remainder of the 2003 calendar year
following the Closing Date.
ARTICLE VIII
CONDITIONS TO CLOSING
.1 Conditions to Obligations of the Selling Entities. The obligation of
the Selling Entities to consummate the Acquisition shall be subject to the
fulfillment, at or prior to the Closing, of each of the following conditions:
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(a) Representations, Warranties and Covenants. Unless waived in
accordance with this Agreement, (i) the representations and warranties of the
Purchaser contained in this Agreement shall have been true and correct when made
and shall be true and correct in all material respects as of the Closing with
the same force and effect as if made as of the Closing Date (other than such
representations and warranties as are made as of another date, which
representations and warranties shall be true and correct as of such date), (ii)
the covenants and agreements contained in this Agreement to be complied with by
the Purchaser on or before the Closing shall have been complied with in all
material respects, and (iii) the Seller shall have received a certificate from
the Purchaser certifying as to the matters set forth in clauses (i) and (ii)
above signed by a duly authorized representative thereof;
(b) Authorizations. All Regulatory Approvals shall have been obtained;
(c) No Governmental Order or Action. No court shall have issued or
entered any Governmental Order that is then in effect and that has the effect of
making the Acquisition illegal or otherwise prohibiting its consummation. No
Action shall have been instituted by a Governmental Authority and, at what would
otherwise have been the Closing Date, remain pending before a Governmental
Authority to restrain or prohibit or otherwise challenge the performance of the
obligations of the parties hereto, nor shall any Governmental Authority have
notified any party to this Agreement that the consummation of the Acquisition
would constitute a violation of Law and that it intends to commence proceedings
to restrain the consummation of the Acquisition, to force divestiture if the
same is consummated or to materially modify the terms or results of the
Acquisition unless such Governmental Authority shall have withdrawn such notice,
or has otherwise indicated in writing that it will not take any action prior to
what would otherwise have been the Closing Date;
(d) Consent Solicitations; Consents. The Consent Solicitations shall
have been completed and the requisite Consents shall have been obtained;
(e) Closing Deliveries. The Purchaser shall have delivered to the
Seller each of the items required to be delivered by it at or prior to Closing
pursuant to Section 2.05; and
(f) Related Agreements. The Purchaser shall have executed and delivered
to the Seller each of the Related Agreements to which it or one or more of its
Affiliates are a party.
(g) The payment by the Purchaser of the U.S. Payment Amount pursuant to
Section 5.08(a)(i), and evidence thereof shall have been delivered to Parent;
and
(h) The payment by the Purchaser of the Canadian Payment Amount
pursuant to Section 5.08(b), and evidence thereof shall have been delivered to
Parent.
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.2 Conditions to Obligations of the Purchaser. The obligation of the
Purchaser to consummate the Acquisition shall be subject to the fulfillment, at
or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. Unless waived in
accordance with this Agreement, (i) the representations and warranties of the
Selling Entities contained in this Agreement shall have been true and correct
when made and such representations and warranties shall be true and correct as
of the Closing (without giving any effect to any qualifications or limitation as
to materiality or Material Adverse Effect contained therein) with the same force
and effect as if made as of the Closing Date (other than such representations
and warranties as are made as of another date which representations and
warranties shall be true and correct (without giving any effect to any
qualifications or limitation as to materiality or Material Adverse Effect
contained therein) as of such other date) except where the failure to be so true
and correct would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect, (ii) the covenants and agreements contained in
this Agreement to be complied with by any Selling Entity on or before the
Closing shall have been complied with in all material respects, and (iii) the
Purchaser shall have received a certificate from the Parent and the Seller
certifying as to the matters set forth in clauses (i) and (ii) above;
(b) Authorizations. All Regulatory Approvals shall have been obtained;
(c) No Governmental Order or Action. No court shall have issued or
entered any Governmental Order that is then in effect and that has the effect of
making any of the Acquisition illegal or otherwise prohibiting its consummation.
No Action shall have been instituted by a Governmental Authority and, at what
would otherwise have been the Closing Date, remain pending before a Governmental
Authority to restrain or prohibit or otherwise challenge the performance of the
obligations of the parties hereto, nor shall any Governmental Authority have
notified any party to this Agreement that the consummation of the Acquisition
would constitute a violation of Law and that it intends to commence proceedings
to restrain the consummation of the Acquisition, to force divestiture if the
same is consummated or to materially modify the terms or results of the
Acquisition unless such Governmental Authority shall have withdrawn such notice,
or has otherwise indicated in writing that it will not take any action, prior to
what would otherwise have been the Closing Date;
(d) Consent Solicitations; Consents. The Consent Solicitations shall
have been completed and the requisite Consents shall have been obtained;
(e) Closing Deliveries. The Parent and the Seller shall have delivered
to the Purchaser each of the items required to be delivered by them at or prior
to Closing as set forth in Section 2.04;
(f) Related Agreements. Each of the Selling Entities shall have
executed and delivered to the Purchaser each of the Related Agreements to which
it or its Affiliate is a party;
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(g) Tax Certificates. The Selling Entities shall have each provided the
Purchaser with (i) an affidavit of non-foreign status that complies with Section
1445 of the Code or (ii) a properly executed and acknowledged certification
which states that shares of Capital Stock which the relevant Selling Entity is
selling pursuant to this Agreement do not constitute "United States real
property interests" within the meaning of Section 897(c) of the Code and
otherwise satisfies the requirements of Treasury Regulations Section
1.1445-2(c)(3) to exempt the relevant transaction contemplated hereunder from
withholding pursuant to the provisions of the Foreign Investment in Real
Property Tax Act; and
(h) Document Deliveries. The Asset Sellers shall have (i) delivered to
Purchaser or the applicable Acquiring Subsidiary all documents in the
Legal/Credit Files of the Asset Sellers with respect to any Financing Contract
which constitutes an Acquired ISF Asset, including (to the extent contained
therein) (A) all documents evidencing Indebtedness (which shall include, for the
avoidance of doubt, any original note, bond or other evidence of indebtedness
for each Acquired ISF Asset that is a Financing Contract, duly endorsed held by
the Asset Sellers), and (B) all documents necessary to enforce the Purchaser's
or the applicable Acquiring Subsidiary's rights as a lessor, secured party,
owner or seller with respect to any Acquired ISF Asset, (ii) delivered to
Purchaser or the applicable Acquiring Subsidiary any and all escrows, deposits,
security, impounds, accounts or other or additional collateral relating to each
Acquired ISF Asset that is a Financing Contract; and (iii) executed,
acknowledged and delivered to the Purchaser or the applicable Acquiring
Subsidiary such other transfer instruments or documents (including Obligor
notices in connection with any applicable foreign exchange Law requirements) as
may be necessary or desirable to transfer, or evidence the transfer, of each
such Financing Contract and each other Acquired ISF Asset to Purchaser or the
applicable Acquiring Subsidiary, all in such form as Purchaser or the applicable
Acquiring Subsidiary may reasonably request. For purposes of this Section
8.02(h) delivery shall mean providing access and control to the Purchaser.
(i) (i) the U.S. RPA Pre-Payment shall have been made and the U.S. RPA
shall have been terminated pursuant to the U.S. RPA Amendment or (ii) all of the
matters contemplated by Section 5.08(a)(ii) shall have been successfully
completed or performed to the reasonable satisfaction of the Purchaser, and
evidence thereof shall have been delivered to the Purchaser;
(j) the Canadian RPA Pre-Payment contemplated by Section 5.08(b) shall
have been made and the Canadian RPA shall have been terminated pursuant to the
Canadian RPA Amendment, and evidence thereof shall have been delivered to the
Purchaser; and
(k) The Parent shall have paid in full all of the then outstanding
payment obligations under that certain Amended and Restated Receivables Purchase
Agreement relating to the equipment loan/lease program of Transamerica Equipment
Finance Corporation and other parties (with such payment to occur at or prior to
the Closing) (the
135
"TEFS RPA") and shall have terminated the TEFS RPA, and evidence thereof shall
have been delivered to the Purchaser.
ARTICLE IX
TERMINATION AND WAIVER
.1 Termination. This Agreement may be terminated and the Acquisition
abandoned at any time prior to the Closing Date:
(a) by the mutual written consent of the Seller and the Purchaser;
(b) by either the Seller or the Purchaser upon written notice given to
the other in the event of a breach or default in the performance by the other
or, with respect to any notice delivered to the Seller, any of the Selling
Entities, of any representation, warranty, covenant or agreement contained in
this Agreement which breach or default (i) would result in a failure of a
condition set forth in Section 8.02 (in the case of a breach by the Selling
Entities) or Section 8.01 (in the case of a breach by the Purchaser) to be
satisfied and (ii) has not been, or cannot be, cured within 60 days of written
notice of such breach or default which is given by the terminating party to the
breaching or defaulting party;
(c) by either the Purchaser or the Seller in the event that any
Governmental Authority shall have issued an order, decree or ruling or shall
have taken any Action restraining, enjoining or otherwise prohibiting the
Acquisition, and such order, decree, ruling or other Action shall have become
final and nonappealable; provided, however, that if such order, decree, ruling
or Action shall relate solely to the acquisition of TCFC Canada, its
Subsidiaries and any other business, assets, operations and activities that are
located in Canada, neither the Purchaser nor the Sellers may terminate this
Agreement pursuant to this Section 9.01(c) in respect of such order, decree,
ruling or Action; or
(d) by either the Seller or the Purchaser upon written notice delivered
to the other if the Closing shall not have occurred by the Termination Date that
is six months after the date of this Agreement; provided, however, that the
right to terminate this Agreement under this Section 9.01 shall not be available
to any party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in or the failure of the Closing
to occur on or prior to such date; provided, further, that if all of the
conditions precedent to the consummation of the Acquisition have been satisfied
or waived other than those Regulatory Approvals relating to the acquisition of
TCFC Canada, its Subsidiaries any other business, assets, operations and
activities that are located in Canada, and neither the Purchaser nor the Sellers
shall have exercised its option under Section 2.09(b), the Seller may extend
such date by up to an additional 30 days by delivery of a notice to the
Purchaser pursuant to the terms hereof.
136
.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 9.01, this Agreement, other than Section 9.02, shall
forthwith become void and have no further force and effect and there shall be no
duties, liabilities or obligations of any kind or nature whatsoever on the part
of any party hereto except that (a) the representations and warranties contained
in Section 3.25 and Section 4.07, respectively, and the covenants in Section
5.16 and Section 10.01, respectively, shall survive any such termination of this
Agreement and (b) any such termination of this Agreement shall not relieve any
party hereto from any liability arising out of any knowing, willful or
intentional breach of this Agreement prior to such termination.
.3 Waiver. The parties to this Agreement may (a) extend the time for
the performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and warranties of the other
parties contained herein or in any document delivered by the other parties
pursuant hereto or (c) waive compliance with any of the agreements or conditions
of the other parties contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party to be
bound thereby. No waiver by any party of any term or condition or of the breach
of any provision, term, covenant, representation or warranty contained in this
Agreement in any one or more instances shall be deemed to be or construed as a
further or continuing waiver of any such term or condition, or of any other
provision, term, covenant, representation or warranty set forth in this
Agreement. The failure of any party to assert any of its rights hereunder shall
not constitute a waiver of any of such rights.
ARTICLE X
GENERAL PROVISIONS
.1 Expenses. Except as otherwise specified in this Agreement, all costs
and expenses, including fees and disbursements of counsel, financial advisors
and accountants, incurred in connection with the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses, whether or
not the Closing shall have occurred.
.2 [INTENTIONALLY OMITTED].
.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made by
delivery in person, by express courier service, by telecopy, or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.03):
137
if to any Selling Entity:
TRANSAMERICA FINANCE CORPORATION
0000 Xxxxxxxx Xxxx XX
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Telecopy: (000) 000-0000
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
if to the Purchaser:
GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx X. X. Xxxxx
Telecopy: (000) 000-0000
with a copy to:
GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: J. Xxxxx Xxxxxx, Esq.
Telecopy: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy: 000-000-0000
(a) Any notice or other communication, if addressed and sent, mailed or
delivered as provided above, shall be deemed given or received three (3) days
after the date of mailing as indicated on the certified or registered mail
receipt, or on the next Business Day if mailed by express courier service, or on
the date of delivery or transmission if delivered in person or sent by telecopy
(except that a notice of change of address shall not be deemed to have been
given until received by the addressees). Failure or delay in delivering any
notice, demand, request, consent, approval, declaration or other
138
communication to any Person designated to receive a copy thereof shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
.4 Public Announcements. Prior to the Closing Date, the Selling
Entities and the Purchaser will, prior to any issuance of any description of the
transactions contemplated by this Agreement in any press release or other public
statements, use reasonable efforts to consult with each other and provide each
other with the opportunity to review and comment upon any such description, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable Law, regulation,
court order or by obligations pursuant to any listing agreement with any
national securities exchange. The Selling Entities and the Purchaser shall use
reasonable efforts to agree on the description of the transactions contemplated
by this Agreement contained in the initial press releases to be issued by the
parties with respect to their execution and delivery of this Agreement.
.5 Table of Contents and Headings. The table of contents and the
headings contained in this Agreement are for convenience of reference only and
shall not affect in any way the meaning or interpretation of this Agreement.
.6 Severability. If any provision of this Agreement is held by any
court of competent jurisdiction to be invalid, illegal or unenforceable, all
other provisions of this Agreement shall nevertheless remain in full force and
effect. Upon such determination, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
.7 Entire Agreement. This Agreement, the Related Agreements and the
Confidentiality Agreement constitute the entire agreement of the parties hereto
with respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, between or among any Selling Entity and the
Purchaser with respect to the subject matter hereof and thereof.
.8 Assignment. This Agreement may not be assigned, except by operation
of law; provided, however, that the Purchaser may assign its rights hereunder to
one or more of its Affiliates (which assignment shall, in no event, relieve the
Purchaser of any of its duties or obligations hereunder). Notwithstanding the
foregoing, no assignment otherwise permitted hereunder shall, without the
written consent of the Seller, relieve the Purchaser from any of its liabilities
under this Agreement.
.9 No Third Party Beneficiaries. This Agreement is not intended and
shall not be construed to confer upon any Person other than the parties hereto
any rights or remedies hereunder except that the parties hereto agree and
acknowledge that the agreements and covenants contained in Article V are,
subject to Article VIII and Article IX, intended for the benefit of each
Purchaser Indemnitee and each Seller Indemnitee
139
referred to therein (each such Person, a "Third Party Beneficiary"), and that,
subject to Article VIII and Article IX, each Purchaser Indemnitee and each
Seller Indemnitee, although not a party to this Agreement, shall be and hereby
is constituted a direct and irrevocable third-party beneficiary of the
agreements and covenants contained in Article V and shall have the right to
enforce such agreements and covenants against the applicable party thereto in
all respects fully and to the same extent as if such Third Party Beneficiary
were a party hereto. Notwithstanding the foregoing, this Agreement (including
Article V) may be amended or waived by the Purchaser or any Selling Entity at
any time and from time to time in accordance with Section 8.03 and Section 9.10
and any such amendment or waiver shall be fully effective with respect to the
rights of the Third Party Beneficiaries under Article V.
.10 Amendment. This Agreement may not be amended or modified except (a)
by an instrument in writing signed by, or on behalf of, each of the Selling
Entities and the Purchaser or (b) by a waiver that complies with Section 8.03.
.11 Binding Effect. This Agreement and the covenants, terms and
conditions set forth herein shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
.12 Waiver of Jury Trial. EACH OF THE PARTIES HERETO KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT OR ANY RELATED AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING OR STATEMENTS (WHETHER VERBAL OR WRITTEN) RELATING TO
THE FOREGOING. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO
ENTER INTO THIS AGREEMENT.
.13 Conveyancing Documents. No provision contained in any conveyancing
document delivered pursuant to this Agreement shall affect in any manner
whatsoever any of the indemnification provisions contained herein.
.14 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to the
choice of law provisions thereof. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought and
determined in any New York state or federal court sitting in the City of New
York. The parties hereto unconditionally and irrevocably agree and consent to
the non-exclusive jurisdiction of, and service of process and venue in, the
United States District Court for the Southern District of New York and the
courts of the State of New York located in the County of New York, State of New
York and waive any objection with respect thereto, for the purpose of any
action, suit or proceeding arising out of or relating to this Agreement or the
transactions
140
contemplated hereby. Each party agrees that service of process on such party as
provided in Section 9.03 shall be deemed effective service of process on such
party.
.15 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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141
IN WITNESS WHEREOF, Aegon, the Parent, the Seller, TCHL, TLI, BWAC 21,
TGI, the other Asset Sellers and the Purchaser have caused this Agreement to be
executed as of the date first written above by their respective duly authorized
representatives.
SELLING ENTITIES:
TRANSAMERICA COMMERCIAL TRANSAMERICA FINANCE
FINANCE CORPORATION, I CORPORATION
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
--------------------------------- --------------------------------
Name: Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx
Title: Executive Vice President Title: Executive Vice President
and Chief Financial Officer and Chief Financial Officer
TRANSAMERICA LEASING INC. TRANSAMERICA COMMERCIAL
HOLDINGS LIMITED
By: /s/ Xxxx X. Xxxx By: /s/ X.X. Xxxxxx
--------------------------------- --------------------------------
Name: Xxxx X. Xxxx Name: X.X. Xxxxxx
Title: Sr. VP. Tax Title: Director
BWAC TWENTY-ONE, INC. TRANSAMERICA GMBH, INC.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
--------------------------------- --------------------------------
Name: Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx
Title: Executive Vice President Title: Executive Vice President
and Chief Financial Officer and Chief Financial Officer
PURCHASER: AEGON:
GENERAL ELECTRIC CAPITAL CORPORATION AEGON U.S. CORPORATION
By: /s/ Xxxx X.X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------------- --------------------------------
Name: Xxxx X.X. Xxxxx Name: Xxxxxxx X. Xxxxx
Title: Vice President Title: President and Chief
Executive Officer
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TABLE OF CONTENTS
(CONTINUED)
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