EXHIBIT 2.1
--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
by and between
TA LEASING HOLDING CO, INC.,
and
XXXXXX & COMPANY LIMITED
Dated July 10, 2004
--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is made as of July 10, 2004, by and
between TA LEASING HOLDING CO., INC., a Delaware corporation ("Seller"),
TRANSAMERICA CORPORATION, in its capacity as guarantor pursuant to Section 5.12,
and XXXXXX & COMPANY LIMITED, an English-registered limited company
("Purchaser"). Capitalized terms used in this Agreement not otherwise defined
have the meanings ascribed to them in Section 1.01 hereof.
RECITALS
A. Seller owns all of the issued and outstanding shares of Capital
Stock of the companies set forth on Schedule 1 hereto (the "Companies").
B. Seller and the Purchased Entities (as defined herein) are engaged in
the marine container leasing business and related businesses (the "Business").
C. Prior to the closing of the transactions contemplated hereby, Seller
and its Affiliates will engage in a restructuring (the "Restructuring") pursuant
to which, among other things, the Reorganized Subsidiaries (as defined below)
will be distributed by the Companies and/or their Affiliates, as the case may
be, on the terms set forth on Schedule 5.08. "Reorganized Subsidiaries" shall
mean each of the companies set forth on Schedule 2 hereto.
D. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Purchased Entities by delivery of the Shares (as
defined herein), on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. For purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
"2003 EBITDA" shall mean the aggregate EBITDA of the Purchased Entities
for the year ended December 31, 2003.
"Acquisition" shall have the meaning set forth in Section 2.01.
"Acquisition Proposal" shall mean any proposal or offer made by any
Person other than Purchaser or any of its Affiliates to acquire all or a
substantial part of the business or properties of the Purchased Entities or any
capital stock of the Purchased Entities, whether by
merger, tender offer, exchange offer, sale of assets or similar transactions
involving the Purchased Entities or any subsidiary, division or operating or
principal business unit thereof.
"Adjusted Purchase Price" shall have the meaning set forth in Section
2.05(c).
"Aegon Approval" shall have the meaning set forth in Section 7.01(d).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person; provided that, for the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
ownership of fifty percent (50%) or more of the equity interest of such Person
or the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" means this agreement and all amendments made hereto by
written agreement between Seller and Purchaser, including all Schedules and
Exhibits attached hereto.
"Ancillary Agreements" means the Noncompete Agreement and the
Transition Services Agreement.
"Applicable Law" shall have the meaning set forth in Section 3.04.
"Applicable Settlement Rate" shall have the meaning set forth in
Section 2.05(c).
"Balance Sheet" shall mean the most recent balance sheet of the
Purchased Entities included in the Combined Financial Statements.
"Benefit Plan" means any Plan, existing at the Closing Date or prior
thereto, with respect to which the Purchased Entities may reasonably be expected
to have any liability, or under which any Employee, former Employee, director,
agent or independent contractor of the Purchased Entities or any beneficiary
thereof is covered, is eligible for coverage or has benefit rights.
"Bonus Period" shall have the meaning set forth in Section 5.10(e).
"Bonus Plans" shall have the meaning set forth in Section 5.10(e).
"Business" shall have the meaning set forth in the Recitals.
"Business Day" means each day other than Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or regulation to close.
"Business Material Adverse Effect" means any circumstance, development,
change or effect that either individually or in the aggregate is materially
adverse (x) to the business, properties, assets, liabilities, financial
condition or results of operations of the Purchased Entities, taken as a whole,
or (y) to the ability of Seller to perform its obligations under this Agreement;
provided, however, that none of the following will be deemed, individually or
together, to constitute a "Business Material Adverse Effect": (i) any changes,
circumstances
-2-
or effects resulting from or relating to changes in general economic conditions,
(ii) any changes in conditions or developments generally applicable to the
industries in which the Purchased Entities are involved that do not affect the
Purchased Entities disproportionately to other Persons in such industry, (iii)
any changes or modifications required by Applicable Law on and after the date
hereof, and (iv) any changes, circumstances or effects attributable to the
announcement or pendency of the transactions contemplated by this Agreement
(including any cancellations of lease agreements, any reductions in sales, any
disruption in supplier, manufacturer, depot agent or similar relationships or
any loss of employees), or resulting from or relating to compliance with the
terms of, or the taking of any action required by, this Agreement.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Closing" shall have the meaning set forth in Section 2.02(a).
"Closing Date" shall have the meaning set forth in Section 2.02(a).
"Closing Date LIBOR" shall have the meaning set forth in Section
2.05(c).
"Closing Date Payment" shall have the meaning set forth in Section
2.03.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined Financial Statements" shall have the meaning set forth in
Section 2.04(a).
"Commitment Letters" means one or more executed commitment letters from
one or more financial institutions, issued to Purchaser, pursuant to which the
financial institutions named therein agree to provide to Purchaser, bridge loan
financing in an aggregate amount of not less than $1,200,000,000 to fund the
Acquisition, on terms consistent with the provisions of this Agreement, subject
only to customary and normal conditions for transactions of this type, and
otherwise on terms no less favorable in the aggregate to Purchaser than those
set forth in the term sheets delivered to Seller on July 8, 2004.
"Companies" shall have the meaning set forth in the Recitals.
"Company Group" means any combined, unitary, consolidated or other
affiliated group within the meaning of Section 1504 of the Code or otherwise, of
which any Purchased Entity is or has been a member for Federal, state, local or
foreign Tax purposes.
"Confidentiality Obligations" means any confidentiality obligations set
forth herein, in the Non-Disclosure Agreement or in any Ancillary Agreement to
which the parties hereto are parties or by which they are bound.
"Confidentiality Regulations" means Treasury Regulation Section
1.6011-4(b)(3) or any successor provision of the Treasury Regulations
promulgated under Section 6011 of the Code.
-3-
"Consent" shall have the meaning set forth in Section 3.04.
"Container Leases" means those lease agreements pursuant to which a
Purchased Entity leases Containers to a lessee.
"Containers" means marine containers (including dry cargo containers,
refrigerated containers, gen sets, open top containers, flat racks and all other
related equipment).
"Contracts" shall have the meaning set forth in Section 3.13.
"Cut-Off Date" means the last day of the month immediately preceding
the month in which the Closing occurs.
"Disclosure Schedule" means the document delivered by Seller to
Purchaser simultaneously with the execution hereof containing the information
required to be included therein pursuant to this Agreement.
"DOJ" shall have the meaning set forth in Section 5.06(b).
"EBITDA" of the Purchased Entities for any fiscal year shall mean, for
the Purchased Entities in the aggregate, the amount calculated and adjusted in
accordance with Schedule 1.01(a). Schedule 1.01(a) sets forth all of the items
and adjustments to be included in the calculation of EBITDA.
"EBITDA Notice of Objection" shall have the meaning set forth in
Section 2.04(b).
"EBITDA Statement" shall have the meaning set forth in Section 2.04(a).
"Employee" shall have the meaning set forth in Section 3.19(c).
"Environmental Laws" shall have the meaning set forth in Section 3.18.
"Equipment Held for Lease" means equipment held for lease of the
Purchased Entities as presented and calculated in accordance with the Combined
Financial Statements and March 31, 2004 Balance Sheet.
"Equity Commitments" means (i) Purchaser's commitment to provide an
aggregate of $75,000,000 in equity funding to fund the Acquisition, and (ii) one
or more executed commitment letters from one or more financial institutions,
issued to Purchaser, pursuant to which the financial institutions named therein
agree to provide to Purchaser equity financing in an aggregate amount of not
less than $125,000,000 to fund the Acquisition, on terms consistent with the
provisions of this Agreement, subject only to customary and normal conditions
for transactions of this type, and otherwise on terms no less favorable in the
aggregate to Purchaser than those set forth in the term sheets delivered to
Seller on July 8, 2004.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
-4-
"ERISA Affiliate" means, with respect to any Person, trade or business,
any other Person, trade or business that is, or was at the relevant time, a
member of a group described in Section 414(b), (c), (m) or (o) of the Code (or
the regulations or administrative rulings issued thereunder) or Section
4001(b)(1) of ERISA that includes or included the first Person, trade or
business, or that is, or was at the relevant time, a member of the same
"controlled group" as the first Person, trade or business pursuant to Section
4001(a)(14) of ERISA.
"Federal Income Tax" means any Tax imposed under Subtitle A of the
Code.
"Financial Institution" shall have the meaning set forth in Section
5.12.
"Final Allocation" shall have the meaning set forth in Section 6.08.
"Final Determination" means (i) with respect to Federal Income Taxes, a
"determination" as defined in Section 1313(a) of the Code or execution of an
Internal Revenue Service Form 870-AD and (ii) with respect to Taxes other than
Federal Income Taxes, any final determination of liability in respect of a Tax
that, under applicable law, is not subject to further appeal, review or
modification through proceedings or otherwise (including the expiration of a
statute of limitations or a period for the filing of claims for refunds, amended
returns or appeals from adverse determinations).
"Final Purchase Price" shall have the meaning set forth in Section
2.05(c).
"Forte License Agreement" shall have the meaning set forth in Section
3.11(f).
"FTC" shall have the meaning set forth in Section 5.06(b).
"FTC Letter" shall have the meaning set forth in Section 5.06(a).
"GAAP" shall mean, at any time or during any period, United States
generally accepted accounting principles as in effect at such time or during
such period (or if no period is specified, as of the date of this Agreement),
applied on a consistent basis.
"Governmental Entity" shall have the meaning set forth in Section 3.04.
"Guarantor" shall have the meaning set forth in Section 5.12.
"Guaranty" shall have the meaning set forth in Section 5.12.
"Hazardous Substances" means any petroleum and petroleum products,
material or substance that 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.
"HIPAA" means the Health Insurance Portability and Accountability Act
of 1996, as amended.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
-5-
"Indebtedness" shall mean (i) all indebtedness for borrowed money or
for the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (ii) any other indebtedness that is
evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations under financing leases, (iv) all obligations in respect of
acceptances issued or created, (v) all liabilities secured by any Lien on any
property and (vi) all guarantee obligations.
"Indemnified Guarantees" means the financial or performance guarantees
currently in effect and provided for the benefit of the Business which are set
forth on a schedule to be provided by Seller to Purchaser within ten (10) days
of the date hereof; provided, however, that "Indemnified Guarantees" shall not
include any guarantees that are terminable and for which Purchaser has delivered
a notice to Seller to terminate such guarantee at least ten (10) days prior to
the Closing Date.
"Indemnified Party" shall have the meaning set forth in Section
9.04(a).
"Indemnifying Party" shall have the meaning set forth in Section
9.04(a).
"Indemnity Threshold" shall have the meaning set forth in Section
9.05(a).
"Independent Expert" shall have the meaning set forth in Section
2.04(b).
"Insurance Claim" shall have the meaning set forth in Section 5.13.
"Initial Allocation" shall have the meaning set forth in Section 6.08.
"Intellectual Property" means all goodwill, customer lists, works of
authorship, inventions, patents, patent applications, trade secrets, trade
secret rights, software, source codes, copyright rights and registrations,
trademarks, trade names, service marks, emblems, logos, insignia and related
marks and registrations, models, technical information, confidential business
information, specifications, technical manuals and data, data bases, drawings,
proprietary processes, product and services information and development and any
and all other intellectual property in any format or medium, and copies and
tangible embodiments thereof.
"Intercompany Agreement" shall have the meaning set forth in Section
3.25.
"Judgment" shall have the meaning set forth in Section 3.04.
"Knowledge" when used in any representation or warranty with respect to
Seller means actual knowledge of any of the individuals set forth on Schedule
1.01(b) hereto or the knowledge such individuals should have acquired in the
prudent exercise of each such individual's duties, and when used in any
representation or warranty with respect to Purchaser means actual knowledge of
A. Xxxx Xxxxxx, Xx Xxxxx and Xxxxx Xxxxx or the knowledge such individuals
should have acquired in the prudent exercise of each such individual's duties.
"Leased-In Containers" means Containers that a Purchased Entity, as
lessee, leases (whether pursuant to personal property lease agreements or
pursuant to finance leases, loan agreements or other secured financing
arrangements).
"Leased Property" shall have the meaning set forth in Section 3.10.
-6-
"License Agreements" shall mean all agreements (including any
outstanding decrees, orders, judgments, settlement agreements or stipulations)
to which any Purchased Entity is a party or otherwise bound (whether between any
Purchased Entity and an independent Person or inter-corporate) which contain
provisions granting any Purchased Entity rights in any Intellectual Property.
"Liens" shall have the meaning set forth in Section 3.09.
"Losses" shall have the meaning set forth in Section 9.02.
"Major Customers" shall have the meaning set forth in Section 3.22.
"Managed Containers" means Containers, other than Owned Containers and
Leased-In Containers, that are managed by a Purchased Entity on behalf of a
third party pursuant to management agreements.
"March 31, 2004 Balance Sheet" shall have the meaning set forth in
Section 3.05.
"Minor Claims" shall have the meaning set forth in Section 9.05(a).
"Multiemployer Plan" means a multiemployer plan within the meaning of
Section 3(37) of ERISA with respect to which the Companies or any ERISA
Affiliate of the Companies has, since 1999, had an obligation to contribute or,
with respect 1999 and years occurring thereafter, has or could have withdrawal
liability under Section 4201 of ERISA.
"Names" and "Marks" shall have the meaning set forth in Section
5.04(a).
"Net Working Capital" means the net working capital of the Purchased
Entities, which shall be calculated in accordance with the accounting principles
used in the preparation of the March 31, 2004 Balance Sheet and in accordance
with Schedule 1.01(c).
"Noncompete Agreement" means that certain Noncompete Agreement between
Purchaser and Transamerica Corporation, substantially in the form of Exhibit A
hereto.
"Non-Disclosure Agreement" means that certain Non-Disclosure Agreement
entered into by and between Transamerica Finance Corporation and Purchaser,
dated as of March 18, 2004.
"Owned Containers" means Containers that are owned by a Purchased
Entity.
"Owned Intellectual Property" shall mean all Intellectual Property
owned by any Purchased Entity.
"Permits" means all permits, licenses, franchises, approvals or
authorizations from a Governmental Entity.
"Permitted Liens" shall have the meaning set forth in Section 3.09.
"Person" means any individual, partnership, joint venture, association,
joint stock company, corporation, trust, trustee, limited liability company,
unincorporated organization, or government or other department, agency or
political subdivision thereof.
-7-
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, worker's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, or whether for the benefit of a single
individual or more than one individual including, but not limited to, any
"employee benefit plan" within the meaning of Section 3(3) of ERISA, but
excluding, however, any governmental plan or program requiring the mandatory
payment of social insurance taxes or similar contributions to a governmental
fund with respect to the wages of an employee.
"Plan Sponsor" shall have the meaning given such term in ERISA Section
3(16)(B).
"Post-Closing Notice of Objection" shall have the meaning set forth in
Section 2.05(b).
"Post-Closing Tax Period" means any taxable period (or portion thereof)
beginning after the Closing Date.
"Pre-Closing Tax Period" means any taxable period (or portion thereof)
ending on or before 11:59 p.m. on the Closing Date.
"Proceeding" shall have the meaning set forth in Section 3.14.
"Property Taxes" shall have the meaning set forth in Section 6.02(b).
"Purchase Price" shall have the meaning set forth in Section 2.01.
"Purchased Entities" means the Companies and each of the other Persons
set forth on Schedule 1.01(d).
"Purchaser" shall have the meaning set forth in the Preamble to this
Agreement.
"Purchaser Indemnitees" shall have the meaning set forth in Section
9.02.
"Purchaser Material Adverse Effect" shall have the meaning set forth in
Section 4.01.
"Purchaser's Benefit Plans" shall have the meaning set forth in Section
5.10(d).
"Reorganized Subsidiaries" shall have the meaning set forth in the
Recitals.
"Restructuring" shall have the meaning set forth in the Recitals.
"Section 338(g) Elections" shall have the meaning set forth in Section
6.07(b).
"Section 338(h)(10) Companies" shall have the meaning set forth in
Section 6.07(a).
"Section 338(h)(10) Elections" shall have the meaning set forth in
Section 6.07(a).
-8-
"Selected Accounting Firm" means a nationally recognized accounting
firm mutually chosen by Seller and Purchaser.
"Seller" shall have the meaning set forth in the Preamble to this
Agreement.
"Seller Indemnitees" shall have the meaning set forth in Section 9.03.
"Shares" means all the issued and outstanding Capital Stock of the
Companies.
"Statement" shall have the meaning set forth in Section 2.05(a).
"Straddle Period" shall have the meaning set forth in Section 6.01.
"Subsidiary Shares" means all the issued and outstanding Capital Stock
of the Purchased Entities, other than the Shares.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
windfall profits, environmental (including taxes under Code section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever or any obligation to contribute
to the payment of Taxes determined on a consolidated, combined or unitary basis
with respect to a group of corporations that includes Seller and the Purchased
Entities, including any interest, penalty, or addition thereto.
"Tax Adjustment Amount" shall have the meaning set forth in Section
2.06(a).
"Tax Benefit" with respect to any event or adjustment for any Person
means the positive excess, if any, of the Tax liability of such Person without
regard to such event or adjustment over the Tax liability of such Person taking
into account such event or adjustment, with all other circumstances remaining
unchanged.
"Tax Claim" shall have the meaning set forth in Section 6.10(a).
"Tax Cost" with respect to any event or adjustment for any Person means
the positive excess, if any, of the Tax liability of such Person taking such
event or adjustment into account over the Tax liability of such Person without
regard to such event or adjustment, with all other circumstances remaining
unchanged.
"Tax Return" means any return (including estimated returns),
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto.
"Taxing Authority" means any governmental or regulatory authority, body
or instrumentality exercising any authority to impose, regulate or administer
the imposition of Taxes.
"Tax Structure" shall have the meaning set forth in Section 5.01.
"Tax Treatment" shall have the meaning set forth in Section 5.01.
-9-
"Third Party Claim" shall have the meaning set forth in Section
9.04(a).
"Transfer Tax" or "Transfer Taxes" means any federal, state, county,
local, foreign and other sales, use, value added, transfer, conveyance,
documentary transfer, recording or other similar tax, fee or charge imposed upon
the sale, transfer or assignment of property or any interest therein or the
recording thereof pursuant to this Agreement, and any penalty, addition to tax
or interest with respect thereto.
"Transition Services Agreement" means that certain Transition Services
Agreement between Purchaser and Seller, substantially in the form of Exhibit B
hereto.
"Unaudited Financial Statements" shall have the meaning set forth in
Section 3.05(a). Section 1.02 Construction. Unless the context otherwise clearly
indicates, words used in the singular include the plural and words used in the
plural include the singular. The Schedules and Exhibits referred to herein shall
be incorporated into this Agreement as an integral part hereof to the same
extent as if they were set forth verbatim herein. All "Article" and "Section"
references herein are references to Articles and Sections of this Agreement,
unless otherwise specified. The Recitals and the captions and headings of
Articles and Sections of this Agreement are solely for the purpose of reference,
are not part of the agreement of the parties and shall not affect the meaning or
interpretation of this Agreement. All references herein to dollars (or $) shall
mean US Dollars.
ARTICLE II
PURCHASE AND SALE OF SHARES AND RELATED TRANSACTIONS
Section 2.01 Purchase and Sale of Shares. Upon the terms and subject to
the conditions of this Agreement, at the Closing (as defined in Section
2.02(a)), Seller agrees to sell, transfer, assign and deliver to Purchaser, the
Purchased Entities by delivering all of the Shares, free and clear of all Liens,
and Purchaser agrees to purchase, acquire and accept from Seller, the Shares,
for an aggregate purchase price of $1,325,000,000, subject to adjustment before
the Closing Date as set forth in Section 2.04 (the "Purchase Price"), payable as
set forth in Section 2.03 and subject to further adjustment after the Closing
Date as set forth in Section 2.05 and 2.06. The purchase and sale of the Shares
are collectively referred to in this Agreement as the "Acquisition".
Section 2.02 Closing; Effective Time. (a) The closing of the
Acquisition (the "Closing") shall take place at the offices of Xxxxxx, Xxxx &
Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. on the third
Business Day after the conditions set forth in Section 7.01 have been satisfied
(or waived), or, if on such day any other condition set forth in Article VII has
not been satisfied (or waived by the party or parties entitled to the benefit
thereof), as soon as practicable after all the conditions set forth in Article
VII have been satisfied (or waived by the party or parties entitled to the
benefit thereof), or at such other place, time and date as may be agreed by
Seller and Purchaser. The date on which the Closing occurs is referred to in
this Agreement as the "Closing Date".
(b) In the case of any Purchased Entity that has its principal place of
business in the United States, the Closing shall be deemed to be effective as of
11:59 p.m. New York City time on the calendar day which is the Closing Date, and
in the case of any Purchased
-10-
Entity that has its principal place of business in a jurisdiction outside the
United States, the Closing shall be deemed to be effective as of 11:59 p.m.
local time in such principal place of business on the calendar day which is the
Closing Date. Notwithstanding anything herein to the contrary, with respect to
each Employee, the Closing shall be deemed to be effective as of 11:59 p.m.
local time in the city of employment for each such Employee.
Section 2.03 Payment of Purchase Price; Delivery of Shares. At Closing,
Purchaser shall deliver to Seller payment, by wire transfer of immediately
available funds to an account designated in writing by Seller (such designation
to be made at least one Business Day prior to the Closing Date), in an amount
equal to the Purchase Price (the "Closing Date Payment"). At the Closing, Seller
shall deliver to Purchaser or its designee stock certificates of the Companies,
duly endorsed in blank (or accompanied by duly executed stock powers),
representing the Shares so as to transfer and assign to Purchaser, good and
valid title to the Shares, free and clear of all Liens.
Section 2.04 Pre-Closing Purchase Price Adjustment.
(a) 2003 EBITDA. Within seven (7) Business Days after the date of this
Agreement, Seller shall deliver to Purchaser the combined historical balance
sheets of the Purchased Entities as of December 31 in each of the years 2002 and
2003, together with combined historical statements of income, stockholders'
equity and cash flows for the periods ended December 31 in each of the years
2001, 2002 and 2003, all certified by Ernst & Young LLP, independent certified
public accountants, whose reports thereon are included therein (collectively,
the "Combined Financial Statements"), together with a statement (the "EBITDA
Statement") prepared by management of Seller and audited by Ernst & Young LLP in
accordance with auditing standards generally accepted in the United States,
setting forth the 2003 EBITDA. Concurrently with the delivery of the Combined
Financial Statements and the EBITDA Statement, Seller shall also authorize and
instruct Ernst & Young LLP to provide access to Purchaser's accountants to
working papers prepared by Ernst & Young LLP in the course of the audit of the
Combined Financial Statements (but not including working papers considered
proprietary, privileged or otherwise prohibited from disclosure under applicable
AICPA guidelines and ethical standards).
(b) Objections; Resolution of Disputes.
(i) Unless Purchaser notifies Seller in writing, within 30 days after
Seller's delivery to Purchaser of the EBITDA Statement, of any objection to
the conformity of the calculations and adjustments set forth in the EBITDA
Statement with the calculations and adjustments set forth in Schedule
1.01(a) (the "EBITDA Notice of Objection"), the EBITDA Statement shall
become final and binding. During such 30-day period, Purchaser and its
representatives shall be afforded reasonable access, during normal business
hours, to Seller's employees for purposes of reviewing the EBITDA Statement
and related books and records. Any EBITDA Notice of Objection shall specify
in reasonable detail the basis for the objections set forth therein.
(ii) If Purchaser provides the EBITDA Notice of Objection to Seller
within such 30-day period, Purchaser and Seller shall, during the 30-day
period following Seller's receipt of the EBITDA Notice of Objection,
attempt in good faith to resolve Purchaser's objections. During such 30-day
period, Seller and its representatives shall be permitted to review the
working papers of Purchaser relating to the EBITDA Notice of Objection and
the basis therefor. If Purchaser and Seller are unable to resolve all such
-11-
objections within such 30-day period, the matters remaining in dispute
shall be submitted to a Selected Accounting Firm (and, if Purchaser and
Seller are unable to so agree on a Selected Accounting Firm within 10 days
after the end of such 30-day period, then Purchaser and Seller shall each
select such a firm and such firms shall jointly select a third nationally
recognized firm to resolve the disputed matters) (such Selected Accounting
Firm or, if applicable, such selected firm being the "Independent Expert").
The parties shall instruct the Independent Expert to render its reasoned
written decision as promptly as practicable but in no
event later than 30 days after its selection. The resolution of disputed
items by the Independent Expert shall be final and binding, and the
determination of the Independent Expert shall constitute an arbitral award
that is final, binding and non-appealable and upon which a judgment may be
entered by a court having jurisdiction thereover. The fees and expenses of
the Independent Expert incurred under this Section 2.04(b) shall be shared
ratably by Purchaser and Seller in proportion to the
relative difference between the result obtained by the Independent Expert
to Purchaser's position, on the one hand, and to Seller's position, on the
other hand. After the EBITDA Statement shall have become final and binding,
the Purchase Price shall be adjusted in accordance with Section 2.04(c)
below.
(c) Adjustment to Purchase Price. The Purchase Price shall be decreased
by an amount equal to (i) the amount, if any, by which the 2003 EBITDA is
less than $218,006,000, multiplied by (ii) 6.1.
Section 2.05 Post-Closing Purchase Price Adjustment.
(a) Net Working Capital; Equipment Held for Lease. Within 60 days after
the Closing Date, Purchaser shall cause to be prepared and delivered to
Seller a balance sheet for the Purchased Entities as of the Cut-Off Date,
which shall have been audited at Purchaser's expense by Purchaser's
auditor, together with a statement (the "Statement") prepared by such
auditor setting forth (i) the Net Working Capital of the Purchased Entities
as of the close of business on the Cut-Off Date (including a separate item
setting forth the amount, if any, of current Taxes payable allocable to
Straddle Period Taxes), and (ii) the net book value of Equipment Held for
Lease as of the close of business on the Cut-Off Date. After the Closing
Date, at Purchaser's reasonable request, Seller shall assist Purchaser and
its representatives with respect to the preparation of the Statement as may
be reasonably requested.
(b) Objections; Resolution of Disputes.
(i) Unless Seller notifies Purchaser in writing within 30 days after
Purchaser's delivery to Seller of the Statement of any objection to the
computation of Net Working Capital or Equipment Held for Lease set forth
therein (the "Post-Closing Notice of Objection"), the Statement shall
become final and binding. During such 30-day period Seller and its
representatives shall be permitted to review the working papers of
Purchaser relating to the Statement and shall be afforded reasonable
access, during normal business hours, to Purchaser's employees for purposes
of reviewing the Statement and related books and records. Any Post-Closing
Notice of Objection shall specify in reasonable detail the basis for the
objections set forth therein.
(ii) If Seller provides the Post-Closing Notice of Objection to
Purchaser within such 30-day period, Purchaser and Seller shall, during the
30-day period following Purchaser's receipt of the Post-Closing Notice of
Objection, attempt in good faith to resolve Seller's objections. During
such 30-day period, Purchaser and its
-12-
representatives shall be permitted to review the working papers of
Seller relating to the Post-Closing Notice of Objection and the basis
therefor. If Purchaser and Seller are unable to resolve all such
objections within such 30-day period, the matters remaining in dispute
shall be submitted to the Independent Expert. The parties shall
instruct the Independent Expert to render its reasoned written decision
as promptly as practicable but in no event later than 30 days after its
selection. The resolution of disputed items by the Independent Expert
shall be final and binding, and the determination of the Independent
Expert shall constitute an arbitral award that is final, binding and
non-appealable and upon which a judgment may be entered by a court
having jurisdiction thereover. The fees and expenses of the Independent
Expert incurred under this Section 2.05(b) shall be shared ratably by
Purchaser and Seller in proportion to the relative difference between
the result obtained by the Independent Expert to Purchaser's position,
on the one hand, and to Seller's position, on the other hand. After the
Statement shall have become final and binding, neither party may have
any further right to make any claims against the other party in respect
of (i) any element of Net Working Capital or Equipment Held for Lease,
as the case may be or (ii) any payment made pursuant to Section
2.05(c).
(c) Adjustment Payment. The Purchase Price shall be: (A) decreased by
an amount equal to (i) the amount, if any, by which Net Working Capital as of
Closing is less than $4,919,000; plus (ii) the amount, if any, by which the net
book value of Equipment Held for Lease as of Closing is less than
$1,081,539,000; and (B) increased by an amount equal to the amount, if any, by
which the net book value of Equipment Held for Lease as of Closing is greater
than $1,081,539,000 (the Purchase Price as so increased or decreased being
hereinafter called the "Adjusted Purchase Price"). Within 10 days after the
Statement has become final and binding in accordance with Section 2.05(b), (i)
if the Closing Date Payment is greater than the Adjusted Purchase Price, Seller
shall pay to Purchaser an amount equal to such difference, plus simple interest
thereon at the Applicable Settlement Rate from the Closing Date to the date
payment is made in full, and (ii) if the Closing Date Payment is less than the
Adjusted Purchase Price, Purchaser shall pay to Seller an amount equal to such
difference, plus simple interest thereon at the Applicable Settlement Rate from
the Closing Date to the date payment is made in full (the Closing Date Payment
as so increased or decreased being hereinafter called the "Final Purchase
Price"). Any such payment hereunder shall be made by wire transfer of
immediately available funds to an account designated in writing by Purchaser or
Seller, as the case may be. For purposes of this Section 2.05(c), (x) the
"Applicable Settlement Rate" shall be Closing Date LIBOR plus one percent (1%),
and (y) "Closing Date LIBOR" shall be the London Interbank Offered Rate (LIBOR)
as reported on the Closing Date in The Wall Street Journal for the specified
interval of calendar months (expressed as the 3-month LIBOR rate, 6-month LIBOR
rate, 9-month LIBOR rate and so on, as applicable) that most closely corresponds
to the time period between the Closing Date and the date that payment in full
pursuant to this Section 2.05(c) is made.
Section 2.06 Tax Adjustment Amount
(a) In addition to adjustments to the Purchase Price pursuant to
Section 2.05, the Purchase Price shall be increased by an amount equal to
pre-tax income for the period commencing on July 1, 2004 and ending on the
Cut-Off Date prepared in accordance with GAAP, on a consistent basis in
accordance with past practices and without giving any effect to income from
forgiveness of indebtedness, restructuring or other actions taken by Seller or
the Purchased Entities in contemplation of the transaction contemplated hereby,
times .375 (the "Tax Adjustment Amount").
-13-
(b) Within sixty (60) days after the Closing Date, Purchaser shall
prepare and deliver to Seller a calculation of the Tax Adjustment Amount.
Thereafter, rules similar to those set forth in Section 2.05(b) shall apply to
such calculation.
(c) Payment of the Tax Adjustment Amount shall be made in accordance
with the procedures set forth in Section 2.05(c).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Each representation and warranty contained in this Article III is
qualified by the corresponding section of the Disclosure Schedule attached
hereto (each section of which qualifies the correspondingly numbered
representation and warranty to the extent expressly specified therein). This
Article III and the Disclosure Schedule shall be read together as an integrated
provision. Seller hereby represents, covenants and warrants to Purchaser as
follows:
Section 3.01 Corporate Organization and Good Standing. Seller and each
of the Purchased Entities is duly organized, validly existing and in good
standing under the laws of their respective jurisdiction of incorporation or
organization, with full corporate power and authority to carry on their
respective businesses as such businesses are now conducted, and to own, lease or
operate their assets and properties. Seller and each of the Purchased Entities
is duly qualified to do business and in good standing in every jurisdiction in
which the character of the properties owned or leased by them or the nature of
the business conducted by them makes such qualification necessary, except where
failure to be so qualified would not have a Business Material Adverse Effect.
Complete and accurate copies of the charter documents and bylaws (if applicable)
of Seller and each of the Purchased Entities, with all amendments thereto to the
date hereof, have been made available to Purchaser or its representatives.
Section 3.02 Ownership of Capital Stock. (a) The authorized Capital
Stock of each of the Purchased Entities consists of the number of shares of
Capital Stock, the par value per share of such Capital Stock, and the number of
shares issued and outstanding as described on Schedule 3.02(a).
(b) Seller owns all of the outstanding Shares. The Shares are validly
issued, fully paid and nonassessable. Seller has good and valid title to, and
sole record and beneficial ownership of, the Shares. Except as set forth on
Schedule 3.02(b), the Shares are held by Seller free and clear of all Liens. The
Companies own, directly or indirectly, all of the outstanding Subsidiary Shares.
The Subsidiary Shares are validly issued, fully paid and nonassessable. The
Companies have good and valid title to, and sole record and beneficial ownership
of, the Subsidiary Shares. Except as set forth on Schedule 3.02(b), the
Subsidiary Shares are held by the Companies free and clear of all Liens.
(c) Neither Seller nor the Companies have granted, issued or agreed to
grant or issue any equity interests in the Purchased Entities other than the
Shares and the Subsidiary Shares, there are no outstanding options, warrants,
subscription rights, securities that are convertible into or exchangeable for,
or any other commitments of any character relating to, any equity interests of
the Purchased Entities, and there are no outstanding contractual obligations of
Seller or the Purchased Entities to repurchase, redeem or otherwise acquire any
Shares or Subsidiary Shares, or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in any Purchased Entity or
any other Person.
-14-
(d) There are no voting trusts or other agreements or understandings to
which Seller or any Purchased Entity is a party with respect to the voting of
the capital stock of any of the Purchased Entities.
(e) Except for the Subsidiary Shares and as set forth on Schedule
3.02(e), the Companies do not directly or indirectly own, either of record or
beneficially, any equity interest in any other entity.
Section 3.03 Authorization. Seller has full corporate power and
authority to execute this Agreement and the Ancillary Agreements to which it is,
or is specified to be, a party and to consummate the transactions contemplated
by this Agreement and such Ancillary Agreements. Each Purchased Entity has full
corporate power and authority to execute the Ancillary Agreements, if any, to
which it is, or is specified to be, a party and to consummate the transactions
contemplated by such Ancillary Agreements. Seller has taken all corporate action
required by its certificate of incorporation and bylaws to authorize the
execution and delivery of this Agreement and the Ancillary Agreements to which
it is, or is specified to be, a party and to authorize the consummation of the
transactions contemplated by this Agreement and such Ancillary Agreements. Each
Purchased Entity has taken all corporate action required by its corporate
organizational documents to authorize the execution and delivery of the
Ancillary Agreements, if any, to which it is, or is specified to be, a party and
to authorize the consummation of the transactions contemplated by such Ancillary
Agreements. Seller has duly executed and delivered this Agreement, and this
Agreement and each Ancillary Agreement, when duly executed and delivered by
Purchaser as contemplated by this Agreement, will be duly authorized, executed
and delivered by Seller and will constitute a legal, valid and binding
obligation, enforceable against it in accordance with its terms subject, as to
enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting creditors' rights generally and to general equitable
principles. Each Ancillary Agreement, if any, to which a Purchased Entity is a
party, when duly executed and delivered by Purchaser as contemplated by this
Agreement, will be duly authorized, executed and delivered by such Purchased
Entity and will constitute a legal, valid and binding obligation, enforceable
against it in accordance with its terms subject, as to enforcement, to
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors' rights generally and to general equitable principles.
Section 3.04 No Conflicts or Violations; No Consents or Approvals
Required. The execution and delivery by Seller of this Agreement does not, the
execution and delivery by Seller and each of the Purchased Entities of each
Ancillary Agreement to which it is, or is specified to be, a party will not, and
in the case of Seller, the consummation of the transactions contemplated by this
Agreement and such Ancillary Agreements, or, in the case of each of the
Purchased Entities, the transactions contemplated by such Ancillary Agreement to
which such Purchased Entity is a party, will not (i) in the case of Seller,
violate, conflict with or result in any breach of any provision of its
certificate of incorporation or bylaws and, in the case of each of the Purchased
Entities, violate, conflict with or result in any breach of any provision of its
comparable corporate organizational documents, (ii) except as set forth in
Schedule 3.04, violate, result in the termination or the acceleration of, or
conflict with or constitute a default (with or without notice thereof of lapse
of time) under, or result in the creation or imposition of any Lien, other than
Permitted Liens or Liens caused by Purchaser, upon any of the properties or
assets of the Purchased Entities pursuant to, any agreement, contract, mortgage,
indenture, lease, franchise, Permit or other instrument to which Seller or any
of the Purchased Entities is a party or by which any of the properties or assets
of the Purchased Entities is bound, or (iii) violate any judgment, order or
decree ("Judgment") or statute, law, ordinance, rule or
-15-
regulation ("Applicable Law") applicable to Seller or any of the Purchased
Entities or any of the properties or assets of the Purchased Entities, other
than, in the case of clauses (ii) and (iii) above, any such items that would not
reasonably be expected to have a Business Material Adverse Effect. Except as set
forth on Schedule 3.04, no consent, approval or authorization ("Consent") of, or
registration, declaration or filing with, any Federal, state, local or foreign
court of competent jurisdiction, governmental agency, authority, instrumentality
or regulatory body (a "Governmental Entity"), is required to be obtained or made
by or with respect to Seller or any of the Purchased Entities in connection with
the execution, delivery and performance of this Agreement or the consummation of
the Acquisition, other than (A) compliance with and filings under the HSR Act,
and (B) those the failure of which to obtain or make would not reasonably be
expected to have a Business Material Adverse Effect. Except as set forth on
Schedule 3.04, no Consent of any third party that is not a Governmental Entity
is required to be obtained or made by or with respect to Seller or any of the
Purchased Entities in connection with the execution, delivery and performance of
this Agreement or the consummation of the Acquisition, other than those the
failure of which to obtain or make would not reasonably be expected to have a
Business Material Adverse Effect.
Section 3.05 Financial Statements. (a) Attached as Schedule 3.05(a)
hereto are (i) the unaudited combined balance sheets of the Purchased Entities
as of December 31 in each of the years 2001 through 2003, together with
unaudited combined statements of income, stockholders' equity and cash flows for
each of the years then ended (not including notes thereto), and (ii) an
unaudited combined balance sheet of the Purchased Entities as of March 31, 2004
(the "March 31, 2004 Balance Sheet") and unaudited combined statements of
income, shareholders' equity and cash flows for the quarterly period then ended
(collectively, the "Unaudited Financial Statements"). The Unaudited Financial
Statements have been prepared from, are in accordance with and accurately
reflect, in all material respects, the books and records of the Purchased
Entities, have been prepared in accordance with U.S. GAAP on a consistent basis
during the periods involved, and fairly present, in all material respects, the
combined financial position and the combined results of operations and cash
flows of Purchased Entities as of the times and for the periods referred to
herein.
(b) The Combined Financial Statements delivered pursuant to Section
2.04 will be prepared from, will be in accordance with and will accurately
reflect, in all material respects, the books and records of the Purchased
Entities, will be prepared in accordance with U.S. GAAP on a consistent basis
during the periods involved and will fairly present, in all material respects,
the combined financial position and the combined results of operations and cash
flows of Purchased Entities as of the times and for the periods referred to
herein.
Section 3.06 Books and Records. The books of account, minute books,
stock record books and other records of the Purchased Entities are complete and
correct in all material respects and have been maintained in accordance with
sound business practices, including the maintenance of a system of internal
controls that is adequate for the Business as currently conducted. True and
complete copies of all minute books and all stock record books of the Purchased
Entities have heretofore been delivered or will be made available to Purchaser.
Section 3.07 No Undisclosed Liabilities. Except (a) as disclosed in the
Combined Financial Statements and the March 31, 2004 Balance Sheet and (b) for
liabilities and obligations incurred in the ordinary course of business and
consistent with past practice since the March 31, 2004 Balance Sheet, no
Purchased Entity has any liability or obligation of
-16-
any nature, whether or not accrued, contingent or otherwise, that has, or would
be reasonably likely to have, a Business Material Adverse Effect.
Section 3.08 Accounts Receivable. All accounts receivable of the
Purchased Entities, whether reflected in the Balance Sheet or otherwise,
represent sales actually made in the ordinary course of business and represent
accounts receivable that have been created pursuant to bona fide transactions.
Section 3.09 Assets Other than Real Property Interests. The Purchased
Entities have good, valid and marketable title to all material properties or
assets of the Purchased Entities, in each case free and clear of all mortgages,
liens, charges, claims, pledges or other encumbrances of any kind (collectively,
"Liens"), except (i) such Liens as are set forth in Schedule 3.09, (ii)
mechanics', carriers', workmen's, repairmen's or other like Liens arising or
incurred in the ordinary course of business with respect to a liability that is
not yet due or delinquent, (iii) Liens arising under original purchase price
conditional sales Contracts or equipment leases with third parties entered into
in the ordinary course of business, (iv) purchase options granted to lessees
pursuant to Container Leases entered into in the ordinary course of business and
which are set forth on Schedule 3.09, and (v) other minor imperfections of
title, licenses or encumbrances, which, individually or in the aggregate with
such other Liens described in clauses (i) through (iv), could not reasonably be
expected to materially impair the continued use and operation of the assets to
which they relate in the conduct of the Business as presently conducted (the
Liens described in clauses (i) through (v) above are referred to collectively as
"Permitted Liens"). Except as set forth on Schedule 3.09, the rights, properties
and other assets presently owned by the Purchased Entities, together with the
rights, properties and other assets presently leased or licensed by third
parties unaffiliated with the Purchased Entities, include all the rights,
properties and other assets used in, and all the rights, properties and other
assets necessary for, the conduct of the Business as currently conducted by the
Purchased Entities.
Section 3.10 Real Property. None of the Purchased Entities owns,
directly or indirectly, in whole or in part, any interest in any real property.
Schedule 3.10 sets forth a list of all real property and interests in real
property leased by one of the Purchased Entities and used or held for use in the
operation or conduct of the Business (individually, a "Leased Property"). Each
lease with respect to a Leased Property is a valid and binding obligation of one
of the Purchased Entities and is in full force and effect and neither the
applicable Purchased Entity, nor to the Knowledge of Seller, the landlord, is in
default of its obligations thereunder. With respect to each Leased Property,
except as set forth on Schedule 3.10, (i) the only documents existing with
respect to the Leased Property are those previously delivered and none of such
documents have been amended or modified, and there are no other agreements
(written or oral) with respect to such Leased Property, (ii) there are no tenant
improvements or similar monetary obligations owing to the landlord under the
related lease that have not been paid by the Purchased Entities, (iii) there are
no security deposits held by the landlord with respect to the related lease, and
there is no obligation by the Purchased Entities to restore any security
deposit. The Leased Property constitutes all of the real property used in, and
necessary for the conduct of, the Business as currently conducted by the
Purchased Entities.
Section 3.11 Intellectual Property. (a) Schedule 3.11(a) sets forth,
for all of the following included in the Owned Intellectual Property, a complete
and accurate list of all United States, state, foreign and international (i)
patents and patent applications, (ii) trademark registrations, applications and
material unregistered trademarks, including, without limitation,
-17-
Internet domain names, (iii) copyright registrations, applications and material
unregistered copyrights and (iv) software.
(b) Schedule 3.11(b) sets forth a complete and accurate list of (i) all
License Agreements other than end-user licenses of commercially available
"off-the-shelf" software, and (ii) all agreements in which any Purchased Entity
grants to any Person rights in any Owned Intellectual Property. The License
Agreements are valid and binding obligations of the Purchased Entity,
enforceable in accordance with their terms, and, to the Knowledge of Seller,
there exists no event or condition (including the consummation of the
transactions contemplated by this Agreement) which will result in a violation or
breach of, or constitute a default by any Purchased Entity, or the other party
thereto, under any such License Agreement.
(c) To the Knowledge of Seller, the Owned Intellectual Property and
Intellectual Property licensed under the License Agreements constitute all of
the Intellectual Property necessary for the conduct of the Business by the
Purchased Entities after the Closing in the same manner as currently conducted
by the Purchased Entities.
(d) All Owned Intellectual Property is owned by a Purchased Entity,
free and clear of all Liens. To the Knowledge of Seller, the Owned Intellectual
Property that is the subject of a License Agreement has been duly maintained, is
valid and subsisting, in full force and effect and has not been cancelled,
expired or abandoned. No Purchased Entity has granted to any third Person any
exclusive right with respect to any of the Owned Intellectual Property.
(e) There is no pending or, to the Knowledge of Seller, threatened
claim against any Purchased Entity (i) alleging that the Purchased Entity, the
Owned Intellectual Property or the Intellectual Property licensed under any
License Agreements infringes, misappropriates, dilutes or otherwise violates any
Intellectual Property rights of any third Person, or (ii) challenging any
Purchased Entity's ownership or use of, or the validity, enforceability or
registerability of, any Intellectual Property.
(f) During the two-year period prior to the date hereof, no Purchased
Entity has brought or threatened in writing a claim against any Person (i)
alleging infringement, misappropriation, dilution or any other violation of the
Owned Intellectual Property (other than with respect to Terms 2000 (as defined
below)) or the License Agreements (other than that certain license agreement
between Forte Software Inc. and Transamerica Leasing Inc. (the "Forte License
Agreement")) or (ii) challenging any Person's ownership or use of, or the
validity, enforceability or registerability of, any Intellectual Property. No
Purchased Entity has brought or threatened a claim against any Person alleging
infringement, misappropriation, dilution or any other violation of Terms 2000 or
the Forte License Agreement. As used herein, "Terms 2000" shall refer to the
proprietary equipment tracking and billing system developed for Transamerica
Leasing Inc.
(g) The Purchased Entities have taken reasonable measures to protect
the confidentiality of the trade secrets included in Terms 2000. No trade
secrets included in Terms 2000 have been disclosed or authorized to be disclosed
to any third Person other than pursuant to a written agreement that adequately
protects the Purchased Entities proprietary interests in such trade secrets. To
the Knowledge of Seller, no third Person that is a party to any non-disclosure
agreement with any Purchased Entity thereof is in breach or default thereof.
-18-
Section 3.12 Litigation. Schedule 3.12 lists (a) each action, suit, claim or
proceeding (including, but not limited to, any arbitration proceeding) pending
or, to the Knowledge of Seller, threatened during the two-year period prior to
the date hereof, and (b) each investigation pending or, to the Knowledge of
Seller, threatened during the two-year period prior to the date hereof, against
any Purchased Entity at law or in equity, or before or by any Governmental
Entity. None of the Purchased Entities is, in any material respect, in default
with respect to any order, writ, injunction or decree known to or served upon
such entity of any Governmental Entity.
Section 3.13 Contracts. Schedule 3.13 lists:
(i) each Container Lease with any Major Customer (as defined in Section
3.22);
(ii) each management agreement for Managed Containers that provides for
the management of 500 or more Containers;
(iii) each contract, legally binding arrangement or agreement or
purchase order for the purchase of Containers that have not been delivered
as of the date hereof;
(iv) each agreement that adversely affects or restricts the freedom of
any of the Purchased Entities to compete in its lines of business or with
any Person or in any geographical area or otherwise to conduct the Business
as presently conducted;
(v) each depot agency agreement pursuant to which a Purchased Entity
has made any payment to a depot agent since January 1, 2003, or to which
there is a payment obligation that is not contingent on actual use of the
depot; (vi) each contract or agreement with any Employee;
(vii) each agreement for the disposition of material assets or
properties of any of the Purchased Entities, except for dispositions in the
ordinary course of business; and
(viii) all other material contracts and agreements to which any of the
Purchased Entities is a party relating to or affecting the operation of the
Business and which require an annual payment by a Purchased Entity in
excess of $250,000 (other than the leases for Leased Property set forth on
Schedule 3.10).
The contracts set forth in clause (i)-(viii) above, together with the
leases for the Leased Property set forth on Schedule 3.10 are collectively
referred to as the "Contracts." Each Contract is valid, binding and in full
force and effect, and is enforceable by the Purchased Entity, as applicable, in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and to general equitable principles. Each Purchased
Entity that is a party to a Contract has performed in all material respects the
obligations required to be performed by it under such Contract. There has not
occurred any material breach or material default under any depot agency
agreement or Container Lease by the other party thereto, and to the Knowledge of
Seller there has not occurred any breach or default under any Contract that is
not a depot agency agreement or Container Lease by the other party thereto.
Except as set forth in Schedule 3.10, since January 1, 2003, no Purchased Entity
has received or given any written notice of default under any Contract to which
it is a party.
-19-
Section 3.14 Permits. The Purchased Entities have obtained and have in
effect all Permits necessary to conduct the Business as it is presently being
conducted in accordance with the ordinances, rules, requirements and regulations
of any Governmental Entity having jurisdiction. Except as set forth in Schedule
3.14, (i) all Permits necessary to conduct the Business as it is presently being
conducted are validly held by one of the Purchased Entities, and the applicable
Purchased Entity has complied in all material respects with the terms and
conditions thereof, (ii) during the past twelve months neither Seller nor any of
the Purchased Entities has received written notice of any suit, action or
proceeding (a "Proceeding") relating to the revocation or material modification
of any such Permits and (iii) none of such Permits would reasonably be expected
to be subject to suspension, modification, revocation or nonrenewal as a result
of the execution and delivery of this Agreement or the consummation of the
Acquisition.
Section 3.15 Compliance with Applicable Law. The operation of the
Business is, and has been, conducted in accordance with all applicable laws,
regulations, orders and other requirements of all Governmental Entities that
affect the business, properties or assets of the Business, except where the
failure to comply would not, individually or in the aggregate, reasonably be
expected to have a Business Material Adverse Effect. Without limiting the
foregoing, the operations of the Business do not violate or fail to comply with
applicable health, fire, safety, zoning or building codes, laws or ordinances,
rules or regulations, including, without limitation, the International
Convention for Safe Containers or the continuous safety inspection system
overseen by the United States Coast Guard, except where the failure to comply
would not, individually or in the aggregate, reasonably be expected to have a
Business Material Adverse Effect. The Purchased Entities have not received any
written notice of any material violation of any such law, regulation, order or
other legal requirement, and are not in material default with respect to any
order, writ, judgment, award, injunction or decree of any Governmental Entity,
applicable to any Purchased Entity or any of their respective assets, properties
or operations. There are no pending or, to the Knowledge of Seller, threatened
actions or proceedings by any Governmental Entity alleging violations in any
material respect of such codes, laws or ordinances.
Section 3.16 Benefit Plans. All Benefit Plans are listed in Schedule
3.16, and copies of all material documentation relating to such Benefit Plans
have been delivered or made available to Purchaser (including copies of written
Benefit Plans, written descriptions of Benefit Plans, summary plan descriptions,
trust agreements, the three most recent annual returns on Form 5500, employee
communications and IRS determination letters). Except as set forth on Schedule
3.16:
(a) each Benefit Plan has at all times been maintained and administered
in all material respects in accordance with its terms and with the requirements
of all applicable law, including ERISA, the Code and any applicable non-United
States Laws, except to the extent that any failure with respect thereto could
not reasonably be expected to result in a material liability to the Purchased
Entities, and each Benefit Plan intended to qualify under section 401(a) of the
Code has received a favorable determination or opinion letter to that effect
and, to the Knowledge of Seller and the Purchased Entities, no event has
occurred since the date of such determination or opinion letter that could
reasonably be expected to result in the loss of the tax qualification of such
Benefit Plan;
(b) no Benefit Plan is a Multiemployer Plan and there does not now
exist, nor do any circumstances exist that would reasonably be expected to
result in, any liability under Title IV of ERISA, that could be a material
liability of the Purchased Entities following the
-20-
Closing Date, other than for premiums payable to the Pension Benefit Guaranty
Corporation under Title IV of ERISA;
(c) no benefit under any Benefit Plan, including without limitation any
severance or parachute payment plan or agreement, will be established or become
accelerated, vested or payable by reason of any transaction contemplated under
this Agreement either alone or in conjunction with another event (e.g.,
termination of employment);
(d) no Benefit Plan provides health or death benefit coverage beyond
the termination of an employee's employment, except as required by Part 6 of
Subtitle B of Title I of ERISA or section 4980B of the Code or any state or
non-United States laws requiring continuation of benefits coverage following
termination of employment;
(e) no suit, actions or other litigation (excluding claims for benefits
incurred in the ordinary course of plan activities) have been brought or, to the
Knowledge of Seller or the Purchased Entities, threatened against or with
respect to any Benefit Plan that could reasonably be expected to result in a
material liability to the Purchased Entities and to the Knowledge of Seller,
there are no facts or circumstances that could reasonably be expected to give
rise to any such suit, action or other litigation;
(f) all contributions to Benefit Plans that were required to be made
under such Benefit Plans have been or will be made in accordance with such local
Law and the terms of such Benefit Plans, and all benefits accrued under any
unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved
in accordance with generally accepted accounting principles in the local
jurisdiction, Seller and the Purchased Entities have performed all material
obligations required to be performed under all Benefit Plans; and
(g) the consummation of the transactions contemplated by this Agreement
will not result in any Purchased Entities having to make or being bound by any
commitment or obligation to make any "excess parachute payment" within the
meaning of Section 280G of the Code.
Section 3.17 Tax Matters. Except as set forth in Schedule 3.17:
(a) Each Purchased Entity and each Company Group has filed, and with
respect to Tax Returns the due date for filing of which is after the date hereof
and before the Closing Date, will file, on a timely basis all material Tax
Returns required to be filed. All such Tax Returns are, or in the case of Tax
Returns the due date for filing of which is after the date hereof and before the
Closing Date, will be, true and complete in all material respects.
(b) With respect to all Taxes imposed on each Purchased Entity and each
Company Group in any taxable period or portion of a period ending on or before
the Closing Date, (i) all applicable Tax laws have been, or with respect to the
period between the date hereof and the Closing Date, will be, complied with in
all material respects, and (ii) all Taxes required to be paid to Taxing
Authorities or others on or before the date hereof have been, or in the case of
such Taxes the due date for payment of which is between the date of this
Agreement and the Closing Date will be, timely paid in full.
(c) (i) no Tax Return of any Purchased Entity or any Company Group is
currently under examination by the Internal Revenue Service, (ii) no material
Tax Return of any Purchased Entity or any Company Group is under audit or
examination by any other Taxing
-21-
Authority, and (iii) no notice of such an audit or examination has been received
by any Purchased Entity.
(d) No material adjustment to the Tax liability of any Purchased Entity
has been proposed in writing (or is currently pending) by any Taxing Authority
in connection with any Tax Return of any Purchased Entity. All deficiencies
asserted or assessments made as a result of any examinations have been fully
paid or are fully reflected as a liability in the financial statements of the
applicable Purchased Entity. No extensions or waivers of the statute of
limitations for Federal, foreign or material state and local Tax Returns for any
Purchased Entity are currently in effect for any taxable year.
(e) There are no liens for Taxes (other than liens for current Taxes
not yet due and payable) on any of the assets of the Purchased Entities.
(f) The Combined Financial Statements reflect an adequate reserve for
all Taxes payable by the Purchased Entities for all taxable periods and portions
thereof through the date of such financial statements, exclusive of any accruals
established to reflect timing differences and any accruals reflected only in the
notes thereto.
(g) None of the Purchased Entities or any Company Group is a party to
or is bound by any Tax sharing agreement that will not have been terminated at
or prior to Closing, Tax indemnity obligation, group relief obligation or
similar agreement, arrangement or practice with respect to Taxes (including,
without limitation, any advance pricing agreement, closing agreement or other
agreement relating to Taxes with any Taxing Authority).
(h) (i) none of the Purchased Entities is a party to any lease made
pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954, (ii) none of
the Purchased Entities is a party to any "disqualified leasebacks or long-term
agreements" within the meaning of Section 467(b)(4) of the Code, and (iii) none
of the assets of the Purchased Entities is subject to a lease under Section
7701(h) of the Code or under any predecessor section thereof.
(i) With respect to any open taxable year, the Purchased Entities have
employed the alternative depreciation system under Section 168(g)(1)(A) of the
Code for all tangible property used predominantly outside the United States
(within the meaning of Sections 168(g)(1) and (d)(4) of the Code). None of the
Purchased Entities is a party to any lease arrangement that is not characterized
as a true lease for U.S. federal income tax purposes. With respect to any open
taxable year, the Purchased Entities have properly identified, and timely and
properly made an election under Revenue Procedure 90-10 with respect to all
assets that do not constitute "tax-exempt use property" within the meaning of
Section 168(h) of the Code.
(j) There are no outstanding agreements or waivers extending, or having
the effect of extending, the statutory period of limitation applicable to any
Tax Returns required to be filed with respect to the Purchased Entities and none
of the Purchased Entities or any Company Group has requested any extension of
time within which to file any Tax Return, which return has not yet been filed.
No power of attorney with respect to any Taxes has been executed or filed with
any Taxing Authority by or on behalf of any of the Purchased Entities or any
Company Group.
(k) Each of the Purchased Entities has complied in all respects with
all applicable laws relating to the payment and withholding of Taxes (including
withholding of Taxes
-22-
pursuant to Sections 1441, 1442, 1446, 3121 and 3402 of the Code or any
comparable provision of any state, local or foreign laws) and have, within the
time and in the manner prescribed by applicable law, withheld from and paid over
to the proper Taxing Authorities all amounts required to be so withheld and paid
over under such laws.
(l) None of the Purchased Entities has been a party to any distribution
occurring during the last three (3) years that was treated by the parties as a
tax-free distribution under Section 355 of the Code.
(m) None of the Purchased Entities is a party to any "listed
transaction" as defined in Treasury Regulation Section 1.6011-4(b)(2) or similar
provision under state or foreign law.
(n) None of the Purchased Entities is a United States real property
holding company within the meaning of Section 897 of the Code.
(o) The Seller is not a "foreign person" within the meaning of Section
1445 of the Code.
(p) None of the Purchased Entities has ever (i) made an election under
Section 1362 of the Code to be treated as an S corporation for Federal Income
Tax purposes, or (ii) made any similar election under any comparable provision
of any state, local or foreign tax law.
(q) Each of the Purchased Entities has complied with the requirements
of, and none of the Purchased Entities have agreed to or are required to make
any adjustments pursuant to, Section 482 (and any related sections) of the Code,
the Treasury regulations promulgated thereunder and any comparable provisions of
state, local, domestic or foreign tax law.
(r) Each Purchased Entity that is a corporation organized under the
laws of the United States is, and until the Closing Date will be, a member of
Seller's consolidated group for U.S. Federal Income Tax purposes. With respect
to each Purchased Entity that is organized under the laws of a foreign
jurisdiction, stock satisfying the requirements of Section 1504(a)(2) of the
Code is, and until the Closing Date will be, owned by Seller or one of the
Purchased Entities.
Section 3.18 Environmental Matters. Except as set forth in Schedule 3.18, and
except for any matter that would not reasonably be expected to have a Business
Material Adverse Effect, (i) each Purchased Entity is in compliance with, and
has no response, remediation or investigation obligation or liabilities pursuant
to, all United States federal, state, local or, to the Knowledge of Seller,
foreign law, rules, regulations or legal requirements relating to (A) releases,
discharges or emissions, or threatened releases, discharges or emissions, of
Hazardous Substances; (B) the manufacture, handling, transport, use, treatment,
storage or disposal of Hazardous Substances or materials containing Hazardous
Substances; or (C) pollution or protection of the environment or the protection
of human health or safety ("Environmental Laws"), which compliance includes the
possession by the Purchased Entities of all Permits required under applicable
Environmental Laws to operate the Business and compliance with the terms and
conditions thereof; (ii) within the past three (3) years, neither Seller nor the
Purchased Entities have received any communication from a Governmental Entity or
any other Person that alleges Seller or the Purchased Entities are not in such
compliance;
-23-
(iii) there are no pending or, to the Knowledge of Seller, threatened
Proceedings against Seller or any of the Purchased Entities alleging that the
Business is in violation of any Environmental Laws; (iv) to the Knowledge of
Seller, there are no Liens, orders, judgments, settlements or investigations
involving (A) any of the Purchased Entities, (B) any Leased Property or (C) that
certain property located in Romulus, Michigan to be transferred to TBC III, Inc.
on or before the Closing Date, pursuant to Environmental Laws; and (v) no
notices to, or authorizations from, any Governmental Entity pursuant to any
Environmental Laws are required in order to complete the Acquisition or as a
result of entering into this Agreement, including, without limitation, any
obligations triggered by the sales or transfers of businesses or real property
such as by way of example the New Jersey Industrial Site Recovery Act, N.J.S.A.
13:1K-1 et seq.
Section 3.19 Employment Matters; Employees. Except as set forth on Schedule
3.19:
(a) no Purchased Entity: (i) is party to, or has any obligation under,
any collective bargaining agreement or other Contract with any labor union or
organization, (ii) has any obligation to recognize or deal with any labor union
or organization, (iii) has experienced any strike or material grievance, claim
of unfair labor practice or other collective bargaining dispute within the past
three years. No union organizational campaign is pending or, to the Knowledge of
Seller, threatened with respect to any employees of the Purchased Entities, and
no question concerning representation exists respecting such employees. There
are no pending or, to the Knowledge of Seller, threatened strikes, slowdowns,
work stoppages or lock-outs of any kind by, or with respect to, any employees of
the Purchased Entities.
(b) there are no pending or, to Knowledge of Seller, threatened
material claims or judgments in connection with, or under, any employment or
labor law against the Purchased Entities.
(c) Schedule 3.19(c) sets forth an accurate and complete list of each
employee employed by the Purchased Entities as of the date hereof (each, an
"Employee").
Section 3.20 Containers. (a) Schedule 3.20(a) sets forth a list of
all Owned Containers, Leased-In Containers and Managed Containers as of March
31, 2004, and with respect to each Container included thereon, sets forth (i)
the name of manufacturer, the year of manufacture and equipment type, and (ii)
whether the Container is "on-hire" or "off-hire" and, for those that are
"on-hire," sets forth the lessee and associated contract code for such
Container, and, for those that are "off-hire" sets forth the location and status
of such Container.
(b) Schedule 3.20(b) sets forth a list of each Container Lease that
includes a provision granting the lessee a purchase option with respect to the
Containers subject to such Container Lease.
(c) Each of the "on-hire" Containers set forth on Schedule 3.20(a) is
subject to Container Leases that require the lessee to maintain the Containers
in good repair and operating condition and in a safe condition pursuant to the
International Convention for Safe Containers. Each of the "off-hire" Containers
set forth on Schedule 3.20(a) (except for Containers held for sale) has been
maintained in good repair and good leaseable operating condition and are
suitable and adequate in all material respects for their current use, or the
Purchased Entities have established adequate reserves for repairs to such
Containers.
-24-
Section 3.21 Warranty Claims. Except as set forth on Schedule 3.21,
since January 1, 2002, no customer of any Purchased Entity has asserted in
writing or requested in writing that such Purchased Entity assert a warranty
claim with respect to any Container against the manufacturer thereof. Neither
Seller nor any Purchased Entity is asserting a warranty claim, nor is Seller or
any Purchased Entity currently maintaining any legal action against the
manufacturer of any Container or currently alleging any cause of action based on
such manufacturer's breach of warranty, express or implied.
Section 3.22 Customers and Suppliers. Schedule 3.22 sets forth a list
for the twelve months ended December 31, 2003 of the top 45 revenue producing
lessee customers of the Purchased Entities (collectively, the "Major
Customers"). Except as set forth on Schedule 3.22, since January 1, 2003, there
has not been any material adverse change in the business relationship of any of
the Purchased Entities with any Major Customer, or any manufacturer, depot
agency or supplier from whom all the Purchased Entities in the aggregate
purchased more than 5% of the goods or services purchased from all vendors
during the twelve month period ending December 31, 2003. To the Knowledge of
Seller, there exists no present condition or state of facts or circumstances
involving any Major Customer and their relationships with any Purchased Entity
which would reasonably be expected to have a Business Material Adverse Effect.
Section 3.23 Absence of Changes or Events. (a) Since March 31, 2004,
(i) there has not been any event, circumstance, condition, development or
occurrence that has, or would reasonably be expected to have, a Business
Material Adverse Effect, and (ii) except as set forth in Schedule 3.23 and
except for such transactions as are contemplated by this Agreement, including
the negotiation thereof, each of the Purchased Entities has conducted in all
material respects its respective businesses in the ordinary course consistent
with past practice.
(b) Since June 30, 2004, through the date hereof, no Purchased Entity
has taken any action that would constitute a breach of clauses (a) through (o)
of Section 5.03.
Section 3.24 Brokers and Finders. Neither Seller nor any of its
Affiliates nor any of their officers, directors or employees has incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement which could result in any
liability for such fees being imposed on Purchaser or its Affiliates.
Section 3.25 Intercompany Agreements. (a) Schedule 3.25(a) contains a
complete and correct list of all contracts, arrangements, understandings,
transfers of assets or liabilities, provision of goods or services or other
commitments or transactions (whether or not reduced to writing), whether or not
entered into in the ordinary course of business, between any Purchased Entity,
on the one hand, and Seller or any of its Affiliates (other than any Purchased
Entity), on the other hand (collectively, "Intercompany Agreements").
(b) Schedule 3.25(b) sets forth the outstanding Indebtedness owed by a
Purchased Entity to Seller or any of its Affiliates (other than any Purchased
Entity) as of the date hereof. As of the Closing there will be no outstanding
Indebtedness or other obligation owed by any Purchased Entity to Seller or any
of its Affiliates (other than any Purchased Entity).
Section 3.26 Insurance. (a) Schedule 3.26 lists all insurance policies
pursuant to which any of the Purchased Entities are insured as of the date of
this Agreement. Such
-25-
policies are in full force and effect and, to the Knowledge of Seller,
sufficiently insure against risks and liabilities customary for the Business.
Neither Seller nor any Purchased Entity have received a notice of cancellation
or nonrenewal of any such policy.
(b) Schedule 3.26 sets forth a true, complete and correct list of all
insurance policies or binders of fire, liability, workmen's compensation, motor
vehicle, directors' and officers' liability, errors and omissions liability,
property, casualty and other forms of insurance owned by, held by, applied for
by, the premiums for which are paid by, or under which any coverage is provided
or available to, any Purchased Entity, but not including life insurance policies
or any other employee benefit-related policies. Except for master policies held
by Seller's Affiliates that name Seller and Purchased Entities as insured
parties, Seller has delivered or made available to Purchaser true, complete and
correct copies of such policies and binders and all pending applications for any
such policies or binders.
(c) Except as set forth in Schedule 3.26, (i) each Purchased Entity is,
and has been, covered on an uninterrupted basis since January 1, 2000 by valid
and effective insurance policies or binders which are in the aggregate
reasonable or customary in scope and amount (including the deductible or
self-insured amounts) in view of the size of, and risks attendant to, the
Business, (ii) all such policies or binders are in full force and effect, no
written notice of cancellation, termination or non-renewal of any insurance
policy or that the issuer of any policy is not willing or able to perform its
obligations thereunder, has been received with respect to any such policy and
all premiums due and payable thereon have been paid in full on a timely basis,
(iii) there are no pending or, to the Knowledge of Seller, threatened, actions
to revoke, cancel, terminate or limit any material insurance policy or binder,
(iv) there are no pending or, to the Knowledge of Seller, threatened, material
claims against such insurance by any of the Purchased Entities as to which the
insurers have denied liability, (v) to the Knowledge of Seller, the Purchased
Entities have complied with the provisions of such policies, (vi) there exist no
material claims under such insurance policies or binders that have not been
properly and timely submitted by the Purchased Entities to its insurers and
(vii) to the Knowledge of Seller, there is no inaccuracy in any application for
such policies or binders which could render such policies or binders invalid or
unenforceable.
Section 3.27 Foreign Corrupt Practices Act. None of the Purchased Entities, nor
to the Knowledge of Seller, any agent, employee or other Person acting on behalf
of any of the Purchased Entities, has, directly or indirectly, used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds, violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended, or made any bribe,
rebate, payoff, influence payment, kickback or other similar unlawful payment.
Section 3.28 No Other Representations or Warranties. Except as
otherwise set forth in this Article III and without limiting the representations
and warranties set forth herein and in the Ancillary Agreements, Seller makes no
other representations or warranties, either express or implied, as to Seller,
the Shares, the Purchased Entities or the Business. Without limiting the
generality of the foregoing, Seller makes no representations or warranties to
Purchaser with respect to any projections, financial models, estimates or
budgets heretofore delivered to or made available to Purchaser or with respect
to future revenues, expenses or expenditures, future results of operations (or
any component thereof), future cash flows or future financial condition (or any
component thereof) of the Purchased Entities.
-26-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents, covenants and warrants to Seller as
follows:
Section 4.01 Corporate Organization and Good Standing. Purchaser is
duly organized, validly existing and in good standing under the laws of its
country of incorporation, with full power and authority to carry on its business
as such business is now conducted, and to own, lease or operate its assets and
properties, other than such franchises, licenses, permits, authorizations and
approvals the lack of which would not reasonably be expected to have a material
adverse effect on the ability of Purchaser to consummate the Acquisition (a
"Purchaser Material Adverse Effect"). Purchaser is duly qualified to do business
and in good standing in every jurisdiction in which the character of the
properties owned or leased by it or the nature of the business conducted by it
makes such qualification necessary, except where failure to be so qualified
would not reasonably be expected to have a Purchaser Material Adverse Effect.
Section 4.02 Authorization. Purchaser has full power and authority to
execute this Agreement and the Ancillary Agreements to which it is, or is
specified to be, a party and to consummate the transactions contemplated by this
Agreement and by such Ancillary Agreements. Purchaser has taken all action
required by its organizational documents to authorize the execution and delivery
of this Agreement and the Ancillary Agreements to which it is, or is specified
to be, a party and to authorize the consummation of the Acquisition and the
other transactions contemplated hereby and thereby. Purchaser has duly executed
and delivered this Agreement, and this Agreement and each Ancillary Agreement to
which Purchaser is a party, when duly executed and delivered by Seller and each
Purchased Entity, if any, party to any such Ancillary Agreement, as contemplated
by this Agreement, will be duly authorized, executed and delivered by Purchaser
and will constitute a legal, valid and binding obligation, enforceable against
it in accordance with its terms subject, as to enforcement, to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and to general equitable principles.
Section 4.03 No Conflicts or Violations; No Consents or Approvals
Required. The execution and delivery by Purchaser of this Agreement do not, the
execution and delivery by Purchaser of each Ancillary Agreement to which it is,
or is specified to be, a party will not, and the consummation of the Acquisition
and the other transactions contemplated hereby and thereby will not (i) violate,
conflict with or result in a breach of any provision of the organizational
documents of Purchaser, (ii) violate, result in the termination or the
acceleration of, or conflict with or constitute a default (with or without
notice thereof of lapse of time) under, or result in the creation or imposition
of any Lien, upon any of the properties or assets of Purchaser pursuant to, any
agreement, contract, mortgage, indenture, lease, franchise, permit or other
instrument to which Purchaser is a party or by which any of its properties or
assets is bound or (iii) violate any Judgment or Applicable Law applicable to
Purchaser or its properties or assets, other than, in the case of clauses (ii)
and (iii) above, any such items that would not reasonably be expected to have a
Purchaser Material Adverse Effect. No Consent of, or registration, declaration
or filing with, any Governmental Entity is required to be obtained or made by or
with respect to Purchaser in connection with the
-27-
execution, delivery and performance of this Agreement or the consummation of the
Acquisition other than (A) compliance with and filings under the HSR Act, and
(B) those the failure of which to obtain or make would not reasonably be
expected to have a Purchaser Material Adverse Effect. No Consent of any third
party that is not a Governmental Entity is required to be obtained or made by or
with respect to Purchaser in connection with the execution, delivery and
performance of this Agreement or the consummation of the Acquisition, other than
those the failure of which to obtain or make would not reasonably be expected to
have a Purchaser Material Adverse Effect.
Section 4.04 Litigation. There are no material claims, actions, suits,
or proceedings (including, but not limited to, any arbitration proceeding) of
any nature, at law or in equity, pending or, to the Knowledge of Purchaser,
threatened by or against Purchaser, the directors, officers, employees, agents
of Purchaser, or any of their respective Affiliates involving, affecting or
relating to the transactions contemplated by this Agreement or Purchaser's
ability to complete the transactions contemplated by this Agreement. Purchaser
is not subject to any order, writ, judgment, award, injunction or decree of any
Governmental Entity involving, affecting or relating to the transactions
contemplated by this Agreement or Purchaser's ability to complete the
transactions contemplated by this Agreement.
Section 4.05 Review. Purchaser has had the opportunity to conduct due
diligence of Seller, the Purchased Entities and the Business to Purchaser's
satisfaction and has had an opportunity to discuss the Business, the operation
related thereto and any and all other matters related to the Business with
Seller and the Purchased Entities to Purchaser's satisfaction.
Section 4.06 Securities Matters. The Shares to be received by Purchaser
will be acquired for investment for Purchaser's own account, not with a view to
the distribution of any part thereof, and Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the same.
Purchaser does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to such person or to any
third person, with respect to any of the Shares.
Section 4.07 Brokers and Finders. Neither Purchaser nor any of the
Purchaser's Affiliates nor any of their officers, directors or employees has
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement which could
result in any liability for such fees being imposed on Seller or its Affiliates.
Section 4.08 Purchaser Equity Commitment. Purchaser has committed to
provide an aggregate of $75,000,000 in equity funding to consummate the
Acquisition and has, and will have at Closing, available funds in such amount.
ARTICLE V
COVENANTS
Section 5.01 Confidentiality. All information furnished by Seller or
any of Seller's Affiliates to Purchaser or any of Purchaser's Affiliates,
agents, representatives, advisors or potential finance providers in connection
with this Agreement and the transactions contemplated hereby (i) shall be deemed
to be "Information" (as defined in the Non-Disclosure Agreement) for purposes of
the Non-Disclosure Agreement, and (ii) shall be received in confidence and kept
confidential by Purchaser and Purchaser's Affiliates, agents, representatives,
advisors or finance providers in accordance with the terms and conditions of the
Non-Disclosure Agreement. All obligations of Purchaser under the
-28-
Non-Disclosure Agreement with respect to information relating solely to the
Purchased Entities or the Business shall terminate simultaneously with the
Closing; all other obligations of Purchaser under the Non-Disclosure Agreement
shall survive the Closing. Notwithstanding anything to the contrary contained
herein or in the Non-Disclosure Agreement, the Confidentiality Obligations as
they relate to the transactions contemplated by this Agreement shall not apply
to the purported or claimed Federal Income Tax treatment of the transactions
(the "Tax Treatment") or to any fact that may be relevant to understanding the
purported or claimed Federal Income Tax treatment of the transactions (the "Tax
Structure"), 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 Tax Treatment and Tax Structure of the transactions contemplated
by this Agreement and any materials of any kind (including any tax opinions or
other tax analyses) that relate to the Tax Treatment or Tax Structure. In
addition, each party hereto acknowledges that it has no proprietary or exclusive
rights to any tax matter or tax idea related to the transactions contemplated by
this Agreement. The preceding sentence is intended to ensure that the
transactions contemplated by this Agreement shall not be treated as having been
offered under conditions of confidentiality for purposes of the Confidentiality
Regulations and shall be construed in a manner consistent with such purpose.
Section 5.02 Access. Upon the reasonable request of Purchaser, Seller
shall afford to Purchaser, its counsel, accountants and other representatives
full access, during normal business hours, prior to the Closing Date (or the
earlier termination of this Agreement) to the depots, offices, facilities,
properties, employees, contracts, books and records of Seller and the Purchased
Entities, to the extent such access or disclosure does not conflict with
Applicable Law or any confidentiality obligations of Seller or any Purchased
Entities; provided, however, that any such investigation shall be conducted in
such a manner as not to interfere unreasonably with the operation of the
Business.
Section 5.03 Certain Changes and Conduct of Business. From and after
the date of this Agreement and until the Closing (or the earlier termination of
this Agreement), the Purchased Entities shall, and Seller shall cause the
Purchased Entities to, (i) conduct the Business in the ordinary course
consistent with past practices, and (ii) use their commercially reasonable
efforts to preserve the business organization of the Purchased Entities intact,
keep available the services of the current officers and employees of the
Purchased Entities and maintain the material business relationships with
customers, lessees, suppliers, manufacturers, depot agents and others with whom
Seller and the Purchased Entities deal with in connection with the conduct of
the Business. Without limiting the generality of the preceding sentence, except
as expressly authorized pursuant to the terms hereof, the Purchased Entities
shall not, and Seller shall not permit the Purchased Entities to, do any of the
following without obtaining the consent of the Purchaser, which shall not be
unreasonably delayed (or with respect to Section 5.03(n)(ii) which shall not be
unreasonably withheld or delayed; provided, however, that withholding such
consent shall not be deemed unreasonable if, in the Purchaser's reasonable
judgment, providing such consent would have an adverse Tax effect on Purchaser's
Tax position after Closing):
(a) make any change in the charter documents or bylaws of such
Purchased Entity;
(b) issue any additional shares of Capital Stock or grant any option,
warrant or right to acquire any Capital Stock or issue any security convertible
into or exchangeable for the Capital Stock of such Purchased Entity, alter any
term of any of the outstanding securities of such Purchased Entity, or make any
change in the outstanding shares of Capital Stock or other ownership interests
or in the capitalization, whether by reason of a reclassification,
-29-
recapitalization, stock split or combination, exchange or readjustment of
shares, stock dividend or otherwise;
(c) (i) issue any notes, bonds, debentures or other corporate
securities or grant any option, warrant or right to purchase any of the
foregoing, (ii) issue any securities convertible or exchangeable for debt
securities of such Purchased Entity, or (iii) issue any options or other rights
to acquire directly or indirectly any debt securities of such Purchased Entity
or any security convertible into or exchangeable for such debt securities;
(d) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to any shares of any class or
series of its Capital Stock, except as set forth on Schedule 5.08;
(e) organize any new Subsidiary or acquire any Capital Stock or other
equity securities, or equity or ownership interest in the business, of any other
Person;
(f) modify, amend or terminate in any material respect any of its
Contracts or waive, release or assign any material rights or claims, except in
the ordinary course of business and consistent with past practice;
(g) (i) incur or assume any long-term or short-term Indebtedness; (ii)
pay or satisfy any inter-company Indebtedness; (iii) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person, except in the ordinary
course of business and consistent with past practice; (iv) make any loans,
advances or capital contributions to, or investments in, any other Person, other
than finance leases entered into in the ordinary course of business; or (v)
enter into any commitment or transaction (including any capital expenditure or
purchase, sale or lease of assets or real estate) involving payments by any of
the Purchased Entities in excess of $500,000;
(h) lease, license, mortgage, pledge or encumber any assets other than
in the ordinary course of business and consistent with past practice or
transfer, sell or dispose of any assets other than in the ordinary course of
business consistent with past practice or dispose of or permit to lapse any
rights to any Intellectual Property;
(i) establish, enter into any new, or amend any existing, employment,
severance, consulting or salary continuation arrangements with or for the
benefit of any officers, directors or employees, or grant any increases in the
compensation, bonuses or benefits to officers, directors and employees, other
than (i) pursuant to and in accordance with the terms of Transamerica Leasing
Corporation 2004 TMC Strategic Incentive Compensation Plan, Effective January 1,
2004, the Transamerica Finance Corporation 2004-2006 Retention and Incentive
Compensation Plan, Effective January 1, 2004, and the Transamerica Finance
Corporation 2004-2006 Executive Retention and Incentive Compensation Plan,
Effective January 1, 2004 (with respect to which Transamerica Finance
Corporation or any one of its Affiliates reimburses the amount of any payment by
any Purchased Entity); and (ii) normal compensation increases to persons who are
not officers or directors in the ordinary course of business and consistent with
past practice and that, in the aggregate, do not result in a material increase
in benefits or compensation expense of the Purchased Entities;
(j) permit any insurance policy naming it as a beneficiary or a loss
payable payee to be cancelled or terminated, except (i) with respect to
insurance policies obtained in connection with Container Leases or depot
agreements where a Purchased Entity is a named
-30-
beneficiary on a policy obtained by the lessee or depot, or (ii) where the
cancelled or terminated insurance policy is replaced by a policy with comparable
limits and coverage;
(k) enter into any contract or transaction relating to the purchase of
assets, except in the ordinary course of business and consistent with past
practice or to the extent a Purchased Entity is bound as of the date hereof
under any Contract to make such purchase;
(l) pay, repurchase, discharge or satisfy any of its claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction of
liabilities or obligations in the ordinary course of business consistent with
past practice;
(m) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization,
except for the Restructuring and as otherwise set forth on Schedule 5.08;
(n) (i) change any of the accounting methods used by it unless required
by Applicable Law or GAAP or (ii) make any election relating to Taxes, change
any election relating to Taxes already made, adopt any accounting method
relating to Taxes, change any accounting method relating to Taxes unless
required by GAAP, enter into any closing agreement relating to Taxes, file any
material amended Tax Return, settle any claim or assessment relating to Taxes or
consent to any claim or assessment relating to Taxes or any waiver of the
statute of limitations for any such claim or assessment; or
(o) commit itself to do any of the foregoing.
Section 5.04 Seller's Trademarks and Trade Names. (a) Seller hereby
grants to Purchaser a license, on a nonexclusive basis without charge, and
effective upon the Closing, to use the name "Transamerica" and any derivation
thereof or logo, trademark or tradename owned by Seller or its Affiliates,
including but not limited to, (i) the stylized pyramid logo of Transamerica
Corporation, and (ii) any representation or likeness of the Transamerica
Building located at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
(collectively, the "Names" and "Marks"), on the Containers included in the
Acquisition or on any containers that are acquired by Purchaser following the
Closing pursuant to the commitments by the Purchased Entities in existence as of
the Closing Date for purchases of Containers, to the extent the Names and Marks
appear on such Containers as of the date of the Closing or the date of purchase
by Purchaser (with respect to Containers acquired following the Closing pursuant
to the aforementioned commitments for Container purchases), as applicable, but
only for use so long as the Names or Marks remain on such Containers.
(b) Seller hereby grants to Purchaser a license, on a nonexclusive
basis without charge, and effective upon the Closing for a maximum period of
ninety (90) days from the date of the Closing, to use the name Names and Marks
in connection with operation of the Business; provided that, on and after the
ninetieth (90th) day from the date of Closing, and except as provided in Section
5.04(a), Purchaser shall cause each of the Purchased Entities to cease the use
of the Names and Marks in connection with their respective businesses. Purchaser
shall use its commercially reasonable efforts to cause, within 30 days following
the Closing, each of the Purchased Entities to change its corporate name to a
name that does not include the Names or Marks. Except as set forth in this
Section 5.04, Purchaser acknowledges that any license with respect to the Names
and Marks between Seller, on the one hand, and any Purchased Entity, on the
other hand, shall terminate as of the Closing.
-31-
Section 5.05 Termination of Intercompany Agreements. Concurrently with
the Closing, Seller will, without cost to Purchaser or any of the Purchased
Entities, cause to be terminated all Intercompany Agreements (other than the
Ancillary Agreements), including, without limitation, all service agreements and
any and all licenses covering the Names or the Marks. The parties acknowledge
that as of the Closing Date, neither Seller nor any of its Affiliates, on the
one hand, nor Purchaser nor any of its Affiliates, on the other hand, shall have
any obligation to provide any support or other services to the other party
relating to the Business other than those services expressly required to be
provided pursuant to the Transition Services Agreement. Seller acknowledges that
prior to 11:59 p.m. on the Closing Date, the Purchased Entities will be released
and discharged without payment from any and all liabilities and obligations to
Seller and any of its Affiliates (other than the Purchased Entities), under or
relating to any Intercompany Agreement (other than the Ancillary Agreements).
Section 5.06 HSR Act Filings and Other Antitrust Filings. (a) Seller
shall, as promptly as practicable after the date hereof, submit a letter to the
FTC (the "FTC Letter") seeking confirmation that a notification and report form
under the HSR Act is not required to be filed with respect to the Acquisition.
(b) If the FTC objects to the conclusion set forth in the FTC Letter,
then Seller and the Purchaser shall, as promptly as practicable but in no event
later than ten (10) days following receipt of the FTC Letter, each file with the
Federal Trade Commission ("FTC") and the Department of Justice ("DOJ") the
notification and report form under the HSR Act, if any, required in connection
with the transactions contemplated hereby and as promptly as practicable supply
any additional information, if any, requested in connection herewith pursuant to
the HSR Act. Any such notification and report form and additional information,
if any, submitted to the FTC or the DOJ shall be in substantial compliance with
the requirements of the HSR Act. Each of Purchaser, Seller and the Purchased
Entities shall furnish to the others such information and assistance as the
others may reasonably request in connection with their preparation of any filing
or submission which is necessary under the HSR Act. Each of Purchaser, Seller
and the Purchased Entities shall keep the others apprised in a prompt manner of
the status and substance of any communications with, and inquiries or requests
for additional information from, the FTC and the DOJ and shall comply promptly
with any such inquiry or request. Each of Purchaser, Seller and the Purchased
Entities shall use commercially reasonable efforts to obtain the termination or
expiration of any applicable waiting period required under the HSR Act for the
consummation of the transactions contemplated hereby. The filing fees payable
under the HSR Act in connection with the transactions contemplated hereby shall
be paid equally by Purchaser and Seller, and each of Purchaser and Seller shall
pay its own respective costs incurred in preparation of all reports and
notifications required under the HSR Act.
(c) Each party shall cooperate with the other party in the preparation
and filing of any applications, notices, registrations and responses to requests
for additional information in connection with any antitrust approvals required
in connection with this Acquisition by Governmental Entities outside the United
States.
Section 5.07 No Solicitation of Competing Transaction. Until the
earlier to occur of (i) the Closing Date, or (ii) such time, if any, as this
Agreement is terminated pursuant to Article VIII, Seller shall not, and shall
cause the Purchased Entities and its other Affiliates and each of their
respective officers, directors, employees, representatives and agents not to,
directly or indirectly, encourage, solicit, initiate or participate in
discussions or negotiations with, or provide any information to, any Person or
group (other than Purchaser, any of its Affiliates or
-32-
representatives) concerning any Acquisition Proposal. Until the earlier to occur
of (i) the Closing Date, or (ii) such time, if any, as this Agreement is
terminated pursuant to Article VIII, Seller and the Purchased Entities shall
immediately notify Purchaser of the existence of any proposal or inquiry
received by Seller or any of the Purchased Entities, and Seller shall
immediately communicate to Purchaser the terms of any proposal or inquiry which
any of them or any of the Purchased Entities may receive (and shall immediately
provide to Purchaser copies of any written materials received by Seller or any
of the Purchased Entities in connection with such proposal, discussion,
negotiation or inquiry) and the identity of the party making such proposal or
inquiry. Seller and the Purchased Entities shall request (or if any of them has
the contractual right to do so, demand) as of the Closing Date the return of all
documents, analyses, financial statements, projections, descriptions and other
data previously furnished to others in connection with Seller's efforts to sell
the Purchased Entities.
Section 5.08 Further Assurances; Restructuring. (a) Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto shall
use all its commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable consistent with applicable law to cause the fulfillment of the
conditions to Closing set forth herein and to consummate and make effective in
the most expeditious manner practicable the transactions contemplated hereby,
including without limitation, (i) Purchaser shall draw down available funding to
consummate the Acquisition promptly following satisfaction (or waiver) of all of
the conditions to all of the Commitment Letters, Equity Commitments and this
Agreement, and (ii) Seller shall use its commercially reasonable efforts to
obtain the consents identified on Schedule 3.04.
(b) Seller shall cause the consummation of the Restructuring on the
terms set forth on Schedule 5.08.
Section 5.09 Notice of Changes. (a) From time to time prior to the
Closing, Seller shall promptly supplement or amend the Disclosure Schedule with
respect to any matter arising after the delivery thereof pursuant hereto that,
if existing at, or occurring on, the date of this Agreement, would have been
required to be set forth or described in the Disclosure Schedule. No supplement
to or amendment of the Disclosure Schedule made after the execution hereof
pursuant to this section or otherwise shall be deemed to cure any breach of any
representation of or warranty made pursuant to this Agreement.
(b) Seller shall give notice to Purchaser, and Purchaser shall give
notice to Seller, promptly after becoming aware of (i) the occurrence or non
occurrence of any event whose occurrence or non occurrence would be likely to
cause either (A) any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at any time from the date hereof
to the Closing Date or (B) any condition set forth in Article VII to be
unsatisfied in any material respect at any time from the date hereof to the
Closing Date and (ii) any material failure of Seller or Purchaser, respectively,
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this section shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
Section 5.10 Employee Matters.
(a) Effective as of the Closing Date, the Purchaser or its Affiliates
shall cause the Purchased Entities to continue to employ the Employees and
shall, subject to the provisions of Section 5.10(e), provide employee benefits
which are substantially comparable to the benefits
-33-
they enjoyed immediately prior to the Closing Date, to the extent commercially
reasonable, for a period of no less than 12 months after the Closing Date;
provided, however, that Purchaser will have no obligation to provide any U.S.
defined pension plan benefits or any equity-based compensation. Purchaser and
its Affiliates shall be responsible for, and shall indemnify Seller and its
Affiliates from and against, any Losses related to any severance, termination
indemnity, redundancy, compensation, benefit or other similar payment incurred
by Seller or any of its Affiliates to the extent that any of the Purchased
Entities do not continue to employ the Employees on the same terms and
conditions, including without limitation compensation, position, location,
benefits, severance and bonus as they enjoyed immediately prior to the Closing
Date. No provision in this Section 5.10(a) shall (i) limit the Purchased
Entities' right to terminate any Employee's employment in its discretion, or
(ii) except as otherwise provided in this Agreement, require the Purchased
Entities to maintain any specific employee benefit plan, arrangement or program
or any employment condition.
(b) In furtherance of its obligations under this Section 5.10, the
Purchaser and its Affiliates shall:
(i) cause the Purchased Entities to continue to maintain the
Benefit Plans that transfer with the Purchased Entities by operation of law
in any applicable jurisdiction; and
(ii) establish new employee benefit or fringe benefit plans,
programs, policies or arrangements as deemed appropriate by Purchaser to
cover the Employees (and, to the extent appropriate, their dependents and
other beneficiaries); or
(iii) cover the Employees (and, to the extent appropriate, their
dependents and other beneficiaries) under its existing employee benefit or
fringe benefit plans, programs, policies or arrangements as deemed
appropriate by Purchaser; or
(iv) any combination of clauses (ii) and (iii) above.
(c) Notwithstanding Section 5.10(b), immediately prior to the Closing,
Seller shall cause, or shall cause one of its Affiliates to cause, the Purchased
Entities to cease to be adopting employers of all Benefit Plans under which
AEGON USA, Inc. is the Plan Sponsor and the participation by Employees in all
such Benefit Plans shall cease immediately prior to the Closing.
(d) Following the Closing Date: (i) for purposes of determining
eligibility to participate, vesting and benefits in plans, programs, policies
and arrangements described in Sections 5.10(b)(ii) and (iii) (including
vacation, severance and service awards) maintained by Purchaser or its
Affiliates ("Purchaser's Benefit Plans") for Employees, each Employee will be
credited with all such Employee's years of service with a Purchased Entity, (ii)
the Purchaser shall cause the eligibility of any Employee under Purchaser's
Benefit Plans providing health and welfare benefits not to be subject to any
exclusion for any pre-existing condition or waiting periods if such Employee had
met the participation requirements under a Benefit Plan maintained by a Seller
or an Affiliate of Seller immediately prior to the Closing, (iii) eligible
expenses incurred by any Employee up to and including the Closing Date shall be
taken into account for purposes of satisfying applicable deductible provisions
and/or annual out-of-pocket limits, if any, under Purchaser's Benefit Plans in
which such Employee is eligible to participate.
-34-
(e) Notwithstanding anything in this Agreement to the contrary, for the
period commencing on the Closing Date and ending on December 31, 2004 (the
"Bonus Period"), Purchaser shall cause the Purchased Entities to provide each
Employee with the opportunity to earn a bonus equal to the bonus that such
Employee could have earned under the Transamerica 2004 TMC Strategic Incentive
Compensation Plan and the Transamerica 2004-2006 TFC Retention and Incentive
Compensation Plan (the "Bonus Plans") during the Bonus Period, had the
transactions contemplated by this Agreement not taken place, using substantially
the same bonus plan metrics and individual bonus targets as in effect for such
Employee immediately prior to the Closing Date under the Bonus Plans. Further,
for the period commencing on the Closing Date and ending one year thereafter,
the Purchased Entities shall cover Employees under a Purchaser severance policy
that is no less favorable than the terms and benefits described in Section 5.03
"Benefits Upon Sale of Assets" in the Transamerica Separation Pay Plan (US) and
Transamerica Special Redundancy Program (International) severance policies set
forth on Schedule 3.16 of the Companies Disclosure Schedule.
(f) With respect to any Benefit Plan described in Section 5.10(c) which
is "group health plan" under HIPAA, Seller and its Affiliates shall cause their
records as to the length and dates of each group health plan participant's (and
covered dependents') creditable coverage, within the meaning of HIPAA, to be
transferred to the Purchased Entities. For this purpose, "participants" shall
mean Employees and former employees of the Purchased Entities with respect to
whom Seller and its Affiliates have any current or potential HIPAA
responsibilities as of or after the Closing Date. Purchaser shall cause the
Purchased Entities to be responsible for providing timely certificates of
creditable coverage (within the meaning of HIPAA) to all participants (and
covered dependents), with such certificates to include and aggregate each such
employee's (and covered dependents') period of creditable coverage under both
the Benefit Plans described in Section 5.10(f) and Purchaser's Benefit Plans;
provided, however, that the Purchased Entities' obligation with respect to
creditable coverage earned by individuals while they were employed prior to the
Closing Date shall be limited to the data provided to the Purchased Entities by
Seller and its Affiliates.
(g) Purchaser and its Affiliates shall be responsible for providing the
notices and making available the health care continuation coverage, all as
required by Section 4980B of the Code, for each Employee and his or her
respective covered dependents, whose qualifying event (as defined in Section
4980B of the Code) occurs after the Closing Date.
(h) Purchaser and its Affiliates shall be responsible for providing any
notice required pursuant to the Workers Adjustment Retraining and Notification
Act of 1988, any successor federal law, and any other applicable plant closing
notification laws or transfer of undertaking laws, including state law, foreign
laws or contractual requirements, with respect to any layoff or plant closing
related to events occurring after the Closing Date and shall be solely liable
for any liabilities associated with any failure to provide any such notice in a
timely manner.
(i) Immediately prior to Closing, Seller shall cause all Employees to
become fully vested in their benefits, if any, under the AEGON USA, Inc. Pension
Plan, the AEGON USA, Inc. Profit Sharing Plan, the AEGON USA, Inc. Employee
Excess Restoration Plan and the AEGON USA, Inc. Executive Profit Sharing Plan.
(j) None of Purchaser, its Affiliates or the officers, directors,
employees, agents or representatives of Purchaser or its Affiliates shall
contact or communicate with any Employee other than in furtherance of the
transactions contemplated by this Agreement; provided, that no such persons
shall communicate with any Employee with respect to general
-35-
transaction announcements, future plans for the Business, future positions or
future benefits without the Seller's prior written consent.
(k) Seller shall undertake to provide to Purchaser within fifteen (15)
days of the date of this Agreement a written statement as to the amount of
unfunded liabilities, determined on a termination basis, under any non-United
States Benefits Plans that are defined benefit-type pension plans.
Section 5.11 Transaction Financing Obligations. (a) Between the date
hereof and the Closing, Purchaser agrees to use its best efforts to secure all
financing necessary for Purchaser to consummate the Acquisition on or before
September 30, 2004, including, without limitation, using its best efforts to
obtain one or more Commitment Letters and one or more Equity Commitments on or
before August 10, 2004, and to cause any conditions to Commitment Letters,
Equity Commitments or other financing to be satisfied as expeditiously as
practicable; provided, however, that in fulfilling its obligation under this
Section 5.11, Purchaser shall not be obligated to pay any amounts in excess of
$10,000,000 in the aggregate to secure financing necessary to consummate the
Acquisition; provided further, that for any amount Purchaser pays in using best
efforts to secure financing to consummate the Acquisition, Seller shall pay,
dollar for dollar, an equal amount to assist in securing financing, up to a
maximum amount of such Seller payments of $10,000,000; provided further that
Purchaser shall not be obligated to (i) commence any litigation against any
financial institution or other third party unless Purchaser has received advice
of counsel acceptable to both Purchaser and Seller to the effect that the
initiation of any such litigation is reasonably likely to result in Purchaser
securing financing necessary to consummate the Acquisition on or before
September 30, 2004, or (ii) engage or contact any third party financial
institution unless Purchaser reasonably believes that (A) any of the financial
institutions providing the Commitment Letters are not working in good faith to
satisfy the conditions contained in such Commitment Letters; and (B) engaging
any such third party financial institution is reasonably likely to result in
Purchaser securing the financing necessary to consummate the Acquisition on or
prior to September 30, 2004; provided further that, in the event that Purchaser
recovers or receives reimbursement of any amounts paid in fulfilling Purchaser's
obligations under this Section 5.11 (including return of commitment or other
fees) and Seller has paid, dollar for dollar, an equal amount, Purchaser shall
pay to Seller one-half of all such recovered or reimbursed amounts, up to the
amount paid by Seller, after reimbursing Purchaser and Seller on a pro-rata
basis for the costs and expenses in securing such recovery.
(b) Between the date hereof and the Closing, Seller agrees to cooperate
with Purchaser in connection with Purchaser's efforts to secure such financing,
including (i) cooperating with Purchaser in connection with Purchaser's
obtaining appraisals of the assets of the Purchased Entities and seeking access
to Seller's accountants and their work papers, (ii) making employees of the
Business available upon reasonable notice, and (iii) providing all information
relating to the Business reasonably requested by Purchaser.
(c) Between the date hereof and the Closing, Purchaser agrees to update
Seller regarding the status of the process of securing financing to consummate
the Acquisition and the satisfaction of any conditions to such financing, and to
provide to Seller, promptly upon reasonable request from Seller, information
regarding Purchaser's financing in connection with the Acquisition and progress
made in securing such financing.
Section 5.12 Transamerica Corporation Guarantee. In order to induce
Purchaser to execute this Agreement, Transamerica Corporation (the "Guarantor")
hereby
-36-
unconditionally guarantees the full and prompt payment and performance of the
obligations of Seller set forth in this Agreement (the "Guaranty"). This
Guaranty shall be a continuing and irrevocable guaranty of payment and
performance in accordance with the terms of this Agreement, and the Guarantor
shall remain liable on its obligations hereunder until the payment and
performance in full of the obligations of Seller. Guarantor hereby represents
that it has all requisite corporate power and authority to undertake its
obligations set forth in this Section 5.12 and to guarantee the full and prompt
payment and performance of the obligations of Seller set forth in this
Agreement. This Guaranty and the rights, interests or obligations thereunder may
not be assigned by Guarantor or Purchaser without the prior written consent of
the other party; provided, however, that (i) Purchaser may assign its rights and
obligations under the Guaranty to Affiliates of Purchaser in connection with
consummating the transactions contemplated by this Agreement, and (ii) Purchaser
or its permitted assignees in clause (i) above may assign its rights and
obligations under the Guaranty to commercial lenders or institutional investors
(each, a "Financial Institution") as collateral in connection with financing or
refinancing the Acquisition and only to a maximum of five (5) Financial
Institutions. Notwithstanding anything to the contrary, permissible Financial
Institution assignees of Guaranty shall have no rights against Guarantor or with
respect to the Guaranty unless (i) Purchaser is in default of its obligations
under applicable agreements between Purchaser and such Financial Institution and
(ii) such permissible Financial Institution assignees have pursued all available
remedies against Purchaser. Guarantor's liability under the Guaranty shall be
secondary and not that of a principle obligor. Subject to the foregoing, the
Guaranty shall inure to the benefit of and be binding upon Purchaser and
Guarantor and their respective permitted successors and assigns. Except as
provided above, nothing in the Guaranty will confer upon any person or entity
not a party to the Guaranty, or the legal representatives of such person or
entity, any rights or remedies of any nature or kind whatsoever under or by
reason of the Guaranty. Guarantor shall deliver to Purchaser the unaudited
consolidated financial statements of the Guarantor as of December 31 in each of
the years during the term of the Guaranty, and unaudited consolidated statements
of income of the Guarantor for each quarter during the term of the Guaranty;
provided, however, that before the delivery of such financial statements,
Purchaser shall enter a confidentiality agreement with the Guarantor in form and
substance mutually satisfactory to both parties. At the Seller's option (which
option may be exercised only once), Seller may at any time designate a
substitute guarantor, provided such substitute guarantor (i) has publicly
available financial statements; (ii) has a tangible net worth of not less than
$2 billion dollars, calculated in accordance with U.S. GAAP; (iii) executes a
binding agreement, in form and substance reasonably satisfactory to Purchaser,
acknowledging its obligation to be bound by the terms, conditions and
obligations of the Guaranty set forth in this Section 5.12 of the Agreement; and
(v) is an Affiliate of Seller. This paragraph contains the entire agreement of
Guarantor with respect to the Guaranty of the obligations of Seller under this
Agreement. The terms and conditions of this Guaranty may not be waived, altered,
amended or otherwise modified except in writing signed by Guarantor and
Purchaser.
Section 5.13 Insurance. (a) The parties acknowledge and agree that,
except with respect to those policies set forth on Schedule 5.13, (i) the
Purchased Entities will not continue after the Closing as named insured parties
under existing insurance policies, (ii) existing insurance coverage of the
Purchased Entities will cease on the Closing Date, (iii) from and after the
Closing Date, Purchaser shall be solely responsible for all insurance coverage
for the Purchased Entities and the Business and related risk of loss with
respect to the Business, including the Purchased Entities' portion of any
deductible or self insured retention amount in respect of insurance claims under
existing insurance policies relating to pre-Closing occurrences and (iv)
Purchaser shall be responsible for administering insurance claims under existing
policies that relate to pre-Closing occurrences; provided, that promptly upon
receiving
-37-
notice of such claims, Purchaser shall notify Seller in writing of such claim
(an "Insurance Claim"), and shall provide Seller such information as may be
reasonably requested for purposes of evaluating such Insurance Claim, and shall
afford Seller the opportunity to participate in the administration of such
Insurance Claim if Seller requests in writing within ten (10) Business Days of
receipt of such Insurance Claim.
(b) The parties acknowledge and agree that the assets of the Purchased
Entities at Closing shall include all proceeds from existing insurance policies
for the Purchased Entities relating to pre-Closing claims or occurrences, any
benefits under such insurance policies and any claims by any Purchased Entity in
respect thereof, to the extent arising out of any insured loss of any Purchased
Entity covered by any such policy whether occurring prior to or after the
Closing Date. In the event Seller or any of its Affiliates (other than a
Purchased Entity) receives any such proceeds or benefits after the Closing Date,
Seller shall, or shall cause such Affiliate, to take such action as may be
required under Section 5.08(a) to transfer such proceeds or benefits to
Purchaser.
ARTICLE VI
TAX MATTERS
Section 6.01 Tax Returns. Seller shall, or where relevant shall cause
the Purchased Entities to, timely prepare and file with the relevant Taxing
Authorities all Tax Returns of the Purchased Entities with respect to taxable
periods ending on or before the Closing Date. Seller shall provide drafts of
such Tax Returns, and draft copies of the pro forma Tax Returns of the Purchased
Entities that will be included in any Tax Return for any Company Group with
respect to which none of the Purchased Entities is the parent, to Purchaser 60
days prior to the date such Tax Returns are due for Purchaser's review and
comment. Purchaser shall, or shall cause the Purchased Entities to, timely
prepare and file with the relevant Taxing Authorities all Tax Returns for any
taxable periods of the Purchased Entities beginning after the Closing Date and
all Tax Returns with respect to any taxable period that includes (but does not
end on) the Closing Date (a "Straddle Period"). Purchaser shall furnish Seller
with a draft of each Straddle Period Tax Return at least 60 days before such Tax
Return is due, and no such Tax Return shall be filed with any Taxing Authority
without Seller's written consent, which consent shall not be unreasonably
withheld. All Tax Returns to be prepared by Seller pursuant to this Section 6.01
and all Straddle Period Tax Returns shall be prepared on a basis consistent with
applicable law and the past practices of the Purchased Entities. All Tax Returns
for a taxable period including the Closing Date shall be filed on the basis that
the relevant taxable period ended at the end of the day on the Closing Date,
unless the relevant Taxing Authority will not accept such a Tax Return.
Section 6.02 Indemnification for Taxes. (a) From and after the Closing,
except for Taxes included in the definition of the Tax Adjustment Amount, Seller
shall be liable for and shall indemnify Purchaser Indemnitees against and hold
them harmless on an after-Tax basis from (i) all liability for Taxes of the
Purchased Entities and each Company Group with respect to any Pre-Closing Tax
Period, (ii) all liability (as a result of Treasury Regulation ss. 1.1502-6(a)
or otherwise) for Taxes of Seller or any other corporation which is or has ever
been affiliated with Seller (other than the Purchased Entities) or with whom the
Purchased Entities otherwise joins, has ever joined, or is or has ever been
required to join, in filing any consolidated, combined or unitary Tax Return
prior to the Closing Date, (iii) all liability for Taxes of the Purchased
Entities or any Company Group arising (directly or indirectly) as a result of
the Acquisition or the other
-38-
transactions contemplated hereby (including, but not limited to, the
Restructuring), (iv) any breach of any representation or warranty contained in
Section 3.17, (v) all liability for Seller Taxes resulting from the Section
338(g) election contemplated by Section 6.07(b), (vi) all liability for Taxes
resulting from the Section 338(h)(10) elections (and any comparable elections
under state or local Tax law) contemplated by Section 6.07, and (vii) all
liability for reasonable legal fees and expenses attributable to any item in the
foregoing clauses.
(b) Straddle Periods. In the case of any Straddle Period (i) real,
personal and intangible property Taxes ("Property Taxes") of the Purchased
Entities for the Pre-Closing Tax Period shall equal the Property Taxes for such
Straddle Period multiplied by a fraction, the numerator of which is the number
of days during the Straddle Period that are in the Pre-Closing Tax Period and
the denominator of which is the number of days in the Straddle Period; and (ii)
the Taxes of the Purchased Entities (other than Property Taxes) for the
Pre-Closing Tax Period shall be computed on a closing of the books method as of
the close of business on the Closing Date. The indemnity obligation under
Section 6.02(a) in respect of Taxes for a Straddle Period shall be effected by
Seller's payment to the Purchaser, or at the Purchaser's direction, to any of
the Purchased Entities, of the excess of (i) such Taxes for the Pre-Closing Tax
Period, over (ii) the amount of such Taxes paid by Seller or any of its
Affiliates (other than the Purchased Entities) at any time plus the amount of
such Taxes paid by the Purchased Entities on or prior to the Closing Date and
plus the amount, if any, accrued for Straddle Period Taxes reflected on the
Statement prepared pursuant to Section 2.05(a) of this Agreement to the extent
such amount accrued for Straddle Period Taxes has not previously been taken into
account in reducing any other indemnity payment under this Section 6.02(b). Such
excess shall be paid no later than 15 Business Days prior to the date on which
the Tax Return with respect to the final liability for such Taxes is required to
be filed. If the amount of such Taxes paid by Seller or any of its Affiliates
(other than the Purchased Entities) at any time plus the amount of such Taxes
paid by the Purchased Entities on or prior to the Closing Date exceeds the
amount payable pursuant to the preceding sentence, the Purchaser shall pay to
Seller the amount of such excess within 15 Business Days after the Tax Return
with respect to the final liability for such Taxes is required to be filed. The
payments to be made pursuant to this Section 6.02(b) with respect to a Straddle
Period shall be appropriately adjusted to reflect any Final Determination with
respect to Straddle Period Taxes.
(c) From and after the Closing, Purchaser shall be liable for and shall
indemnify Seller, its Affiliates and each of their respective officers,
directors, employees, stockholders, agents and representatives (the "Seller
Indemnitees") against and hold them harmless on an after-Tax basis from (i) all
liability for Taxes of the Purchased Entities and each Company Group with
respect to any Post-Closing Tax Period (other than any Taxes for which Seller is
liable pursuant to Section 6.02(a)(v) of this Agreement), (ii) all liability (as
a result of Treasury Regulation ss. 1.1502-6(a) or otherwise) for Taxes of
Purchaser or any other corporation which is or has ever been affiliated with
Purchaser (other than the Purchased Entities) or with whom Purchaser otherwise
joins, has ever joined, or is or has ever been required to join, in filing any
consolidated, combined or unitary Tax Return and (iii) all liability for
reasonable legal fees and expenses attributable to any item in the foregoing
clauses.
(d) Any indemnity payment to be made under this Section 6.02, other
than an indemnity payment described in Section 6.02(b), shall be paid within 30
days after the indemnified party makes written demand upon the indemnifying
party, but in no case earlier than 5 business days prior to the date on which
the relevant Taxes are required to be paid to the relevant Taxing Authority
(including as estimated Tax payments).
-39-
Section 6.03 Cooperation. Purchaser and Seller shall cooperate fully,
and to the extent reasonably requested by the other party, in connection with
the filing of all Tax Returns pursuant to this Agreement and any audit,
litigation, or other proceeding related to such Tax Returns. Such cooperation
shall include the retention and provision of records and information relevant to
any such tax filing, audit, litigation or other matter and making employees
available on a reasonable basis.
Section 6.04 Refunds and Credits. Any refund or credit of Taxes of the
Purchased Entities for any taxable period ending on or before the Closing Date
shall be for the account of Seller. Notwithstanding the foregoing, however, any
such refund or credit shall be for the account of Purchaser to the extent that
such refunds or credits are attributable (determined on a marginal basis) to the
carryback from a Post-Closing Tax Period (or the portion of a Straddle Period
that begins on the date after the Closing Date) of items of loss, deductions or
other Tax items of the Purchased Entities (or any of their respective
Affiliates, including Purchaser). Any refund or credit of Taxes of the Purchased
Entities for any Post-Closing Tax Period shall be for the account of Purchaser.
Any refund or credit of Taxes of the Purchased Entities for any Straddle Period
shall be equitably apportioned between Seller and Purchaser. Each party shall,
or shall cause its Affiliates to, forward to any other party entitled under this
Section 6.04 to any refund or credit of Taxes any such refund within 10 days
after such refund is received or reimburse such other party for any such credit
within 10 days after the credit is allowed or applied against other Tax
liability; provided, however, that any such amounts shall be net of any Tax Cost
or Tax Benefit to the payor party attributable to the receipt of such refund
and/or the payment of such amounts to the payee party. The parties shall treat
any payments under this section as an adjustment to the Purchase Price, unless,
and then only to the extent, otherwise required by a Final Determination. The
control of the prosecution of a claim for refund of Taxes paid pursuant to a
deficiency assessed subsequent to the Closing Date as a result of an audit shall
be governed by the provisions of Section 6.10.
Section 6.05 Tax Sharing Agreements. Any tax sharing agreement between
Seller and any of its Affiliates (other than the Purchased Entities) and any of
the Purchased Entities shall terminate as of the Closing Date and will have no
further effect for any taxable year (including the current year, a future year,
or a past year).
Section 6.06 Transfer Taxes. All Transfer Taxes incurred in connection
with this Agreement and the transactions contemplated hereby shall be borne by
Seller, and Seller will indemnify Purchaser on an after-Tax basis for any such
Transfer Taxes imposed on Purchaser. Seller at its own expense shall file all
necessary Tax Returns and other documentation with respect to such Transfer
Taxes, unless otherwise required by applicable law. Promptly following the
filing thereof, Seller will furnish to Purchaser a copy of such return or other
filing and a copy of a receipt showing payment of any such Transfer Taxes. With
respect to any such returns or filings required to be filed by Purchaser, Seller
will pay to Purchaser, not later than five (5) Business Days before the due date
for payment of such Transfer Taxes, an amount equal to the Transfer Taxes shown
on such return or other filing, and Purchaser will furnish to Seller a copy of
such return or other filing and a copy of a receipt showing payment of any
Transfer Taxes.
Section 6.07 Section 338(h)(10) Election. (a) Seller and Purchaser
agree to 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
-40-
Tax Law) (collectively, the "Section 338(h)(10) Elections") with respect to the
purchase of the stock of each Purchased Entity that is a corporation organized
under the laws of the U.S. (the "Section 338(h)(10) Companies"), to report the
sale of such entities pursuant to this Agreement consistent with the Section
338(h)(10) Elections and to take no position contrary thereto or inconsistent
therewith in any Tax Return, any discussion with or proceeding before any Taxing
Authority, or otherwise. No later than 20 days prior to the filing date, Seller
shall deposit with the Purchaser five copies of an Internal Revenue Form 8023
(entitled "Election Under Section 338 for Corporations Making Qualified Stock
Purchases") with respect to each Section 338(h)(10) Company completed as
reasonably agreed by the parties and duly executed by the relevant Seller.
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 Seller with copies of (A) any necessary corrections, amendments or
supplements to such 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. Seller and 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.
Seller 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 Seller and the Purchaser in order to timely file the Section
338(h)(10) Elections and any other required statements or schedules. Seller and
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.
(b) Purchaser shall be entitled to make an election under Section
338(g) with respect to the stock of any Purchased Entity that is not organized
under the laws of the U.S. (the "Section 338(g) Elections").
Section 6.08 Allocation of Purchase Price. The parties agree that the
Purchase Price, and the assumed liabilities will be allocated to the assets of
the Section 338(h)(10) Companies in a manner consistent with Sections 338 and
338(h)(10) of the Code and the Treasury Regulations promulgated thereunder.
Purchaser shall determine the value of the assets of the Section 338(h)(10)
Companies and shall at least 60 days prior to the due date for filing any form
with respect to the allocation provide 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(h)(10) Companies to the assets of the Section 338(h)(10) Companies
(the "Initial Allocation"). The Initial Allocation shall be binding upon
Purchaser and Seller 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 Seller believes that all or a
portion of the Initial Allocation is incorrect and notifies Purchaser in a
writing including a description of the objection and basis supporting Seller's
objections and any calculations or documentation that support the objection,
within 20 days after having received the Initial Allocation, Seller and
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 days following notice to the
-41-
Purchaser of Seller's objection, the Selected Accounting Firm will be retained
to resolve any issue in dispute within 10 days and the determination of such
Selected Accounting Firm shall be final. The Selected Accounting Firm's review
shall be limited to whether a disputed item has been prepared in accordance with
Sections 338 and 338(h)(10) of the Code and the Treasury regulations promulgated
thereunder. Purchaser and Seller shall then be bound by the Initial Allocation
as adjusted, if necessary, to reflect the determination of the Selected
Accounting Firm (the "Final 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(h)(10) Forms.
Seller and Purchaser shall bear equally all costs of the Selected Accounting
Firm. Purchaser and Seller shall file, and cause their respective Affiliates to
file, all Section 338(h)(10) Forms in a manner consistent with the Final
Allocation and notwithstanding anything to the contrary in this Agreement, shall
take no position inconsistent therewith unless, and then only to the extent,
otherwise required by a Final Determination. For the avoidance of doubt, nothing
in this Section 6.08 shall limit Purchaser's exclusive control over any
election(s) made pursuant to Section 338(g) of the Code, and any filings and
allocations made with respect thereto.
Section 6.09 Calculation of Losses. The amount of any loss for which
indemnification is provided under this Article VI shall be net of any amounts
recoverable by the indemnified party under insurance policies with respect to
such loss and shall be (i) increased to take account of any net Tax Cost to the
indemnified party arising from the receipt of indemnity payments hereunder
(grossed up for such increase), and (ii) reduced to take account of any net Tax
Benefit realized by the indemnified party arising from the incurrence or payment
of any such loss. In computing the amount of any such Tax Cost or Tax Benefit,
the indemnified party shall be deemed to recognize all other items of income,
gain, loss deduction or credit before recognizing any item arising from the
receipt of any indemnity payment hereunder or the incurrence or payment of any
indemnified loss. Any indemnity payment under this Agreement shall be treated as
an adjustment to the Purchase Price for Tax purposes, unless, and then only to
the extent, otherwise required by a Final Determination.
Section 6.10 Procedures Relating to Indemnification of Tax Claims.
(a) Notice. If a claim shall be made by any Taxing Authority, which, if
successful, might result in an indemnity payment to any Purchaser Indemnitee
pursuant to Section 6.02(a) or to any Seller Indemnitee pursuant to Section
6.02(c), the party receiving the claim shall promptly notify the other party in
writing of such claim (a "Tax Claim"). Failure to give notice of a Tax Claim to
an indemnitor within a sufficient period of time and in reasonably sufficient
detail to allow the indemnitor to effectively contest such Tax Claim shall
affect the liability of the indemnitor to indemnitee only to the extent that the
indemnitor's position is actually and materially prejudiced as a result thereof.
(b) Control of Proceedings. Seller shall control all proceedings taken
in connection with any Tax Claim relating solely to Taxes of the Purchased
Entities for a Pre-Closing Tax Period, and may make all decisions in connection
with such Tax Claim, provided, however, that (A) Seller shall keep Purchaser
fully informed with respect to the prosecution or defense of such Tax Claim, and
Purchaser shall have the right to participate in all aspects of any Tax Claim
that could be reasonably expected to have a detrimental effect on Purchaser, and
(B) Seller shall not settle any such Tax Claim in a manner that would adversely
affect the liability of Purchaser for any Taxes in a Post-Closing Tax Period
without prior written consent of Purchaser which consent shall not be
unreasonably be withheld. Seller and Purchaser shall jointly control all
proceedings taken in connection with any Tax Claim relating solely to Taxes of
-42-
the Purchased Entities for a Straddle Period, and neither party shall settle any
such Tax Claim without the written consent of the other party which shall not be
unreasonably be withheld. Purchaser shall control all proceedings with respect
to any Tax Claims with respect to taxable periods beginning after the Closing
Date, provided, however, that (A) Purchaser shall keep Seller fully informed
with respect to the prosecution or defense of such Tax Claim, and (B) Purchaser
shall not settle any such Tax Claim in a manner that would adversely affect the
liability of Seller for any Taxes in a Pre-Closing Tax Period without prior
written consent of Seller which consent shall not be unreasonably be withheld.
Section 6.11 FIRPTA Certificates. Seller shall deliver to Purchaser at
or prior to the Closing a certificate, in form and substance reasonably
satisfactory to Purchaser and consistent with Treasury Regulation Section
1.897-2(h), certifying that the Acquisition is exempt from withholding pursuant
to the Foreign Investment in Real Property Tax Act.
Section 6.12 Survival. The representations in Section 3.17 shall
survive the Closing and continue in full force and effect for a period beginning
on the Closing Date and ending thirty (30) days following the expiration of the
applicable statute of limitations, and they shall thereafter be of no further
force or effect.
Section 6.13 Governing Provisions. The provisions of this Article VI,
and not those of Article IX (except for Section 9.08), shall govern all matters
relating to indemnification for Taxes.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.01 Conditions to Obligations of Each Party. The obligations
of Seller, on the one hand, and Purchaser, on the other hand, to consummate the
transactions contemplated hereby are subject to the fulfillment, on or before
the Closing Date, of the conditions set forth in this Section 7.01, any one or
more of which may be waived in writing by the party entitled to the benefit of
such condition (subject to the provisions of Section 10.01).
(a) No Action or Proceeding. No preliminary or permanent injunction or
other order issued by any Governmental Entity that declares this Agreement
invalid in any material respect or prevents or would be violated by the
consummation of the transactions contemplated hereby, or which would reasonably
be expected to have a Business Material Adverse Effect, is in effect. No action
or proceeding has been instituted or threatened by any Governmental Entity,
other person, or entity which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement, the result of which would reasonably be
expected to have a Business Material Adverse Effect.
(b) Government Consents. All Consents from Governmental Entities, if
any, shall have been obtained. All waiting periods under the HSR Act shall have
expired or been properly terminated.
(c) Ancillary Agreements. Seller shall have executed and delivered to
Purchaser, and Purchaser shall have executed and delivered to Seller, the
Ancillary Agreements, each dated as of the Closing Date.
-43-
(d) Aegon Approval. Seller shall have received the approval of the
AEGON N.V. supervisory board (the "Aegon Approval") for the consummation of the
transactions contemplated by this Agreement.
Section 7.02 Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated hereby are subject to the
fulfillment, on or before the Closing Date, of the conditions set forth in this
Section 7.02, any one or more of which may be waived by Purchaser in writing in
its discretion (subject to the provisions of Section 10.01).
(a) Representations and Warranties; Covenants. The representations and
warranties of Seller contained in this Agreement shall be true and correct in
all respects on the Closing Date as though made on the Closing Date (except to
the extent that any representation and warranty expressly speaks as of an
earlier date, in which case such representation and warranty shall be true and
correct as of such earlier date), except where the failure to be so true and
correct, individually or in the aggregate, would not reasonably be expected to
have a Business Material Adverse Effect (provided, however, if a representation
or warranty is qualified by "materiality" or "Business Material Adverse Effect,"
such qualifiers shall be disregarded for purposes of this Section 7.02(a)), and
Seller shall have performed in all material respects all obligations required to
be performed by it under this Agreement on or before the Closing Date. At the
Closing, Seller shall have delivered to Purchaser a certificate dated as of the
Closing Date to such effect signed by its president, chief executive officer or
chief financial officer.
(b) Financing. Purchaser shall have available to it the net proceeds of
(i) the financing contemplated by the Commitment Letters and by the Equity
Commitments, or (ii) other debt and equity financing in the same aggregate
amount which is on terms substantially similar to (and no less favorable in the
aggregate to Purchaser than) those set forth in the Commitment Letters and the
Equity Commitments.
(c) Resignation of Directors; Nominee Shares. Purchaser shall have
received the written resignations, effective as of the Closing, of the directors
of the Purchased Entities. Purchaser shall have received certificates evidencing
all of the Shares and Subsidiary Shares held by nominees on behalf of Seller,
duly endorsed in blank, or accompanied by stock powers duly executed in blank or
such other forms of assignment so as to transfer and assign to Purchaser such
Shares and Subsidiary Shares held by nominees.
(d) Employment Contracts. Purchaser shall have entered into an
employment contract with the current President of the Business, in form and
substance satisfactory to the Purchaser in the Purchaser's sole discretion.
(e) Other Consents. Seller shall have received the material Consents
listed on Schedule 7.02(e). Section 7.03 Conditions to Obligations of Seller.
The obligations of Seller to consummate the transactions contemplated hereby are
subject to the fulfillment, on or before the Closing Date, of the conditions set
forth in this Section 7.03, any one or more of which may be waived by Seller in
writing in its discretion (subject to the provisions of Section 10.01).
(a) Representations and Warranties; Covenants. The representations and
warranties of Purchaser contained in this Agreement shall be true and correct in
all respects on the Closing Date as though made on the Closing Date (except to
the extent that any
-44-
representation and warranty expressly speaks as of an earlier date, in which
case such representation and warranty shall be true and correct as of such
earlier date), except where the failure to be so true and correct, individually
or in the aggregate, would not reasonably be expected to have a Purchaser
Material Adverse Effect, and Purchaser shall have performed in all material
respects all obligations required to be performed by it under this Agreement on
or before the Closing Date. At the Closing, Purchaser shall have delivered to
Seller a certificate dated as of the Closing Date to such effect signed by the
chief executive officer or chief financial officer of Purchaser.
(b) Purchase Price Payment. Seller shall have received the Purchase
Price in immediately available funds and in accordance with its payment
instructions.
Section 7.04 Frustration of Closing Conditions. Neither Purchaser nor
Seller may rely on the failure of any condition set forth in this Article VII to
be satisfied if such failure was caused by such party's failure to act in good
faith or to use its efforts to cause the Closing to occur, as required by
Section 5.08. Purchaser may not rely on the failure of the condition set forth
in Section 7.02(b) to be satisfied unless Purchaser has first consulted with
Seller regarding the availability of financing and has given Seller a reasonable
opportunity to assist Purchaser in securing necessary financing.
ARTICLE VIII
TERMINATION AND ABANDONMENT
Section 8.01 Termination. (a) Notwithstanding anything to the contrary in this
Agreement, this Agreement may be terminated and the Acquisition and the other
transactions contemplated by this Agreement abandoned at any time prior to the
Closing:
(i) by mutual written consent of Seller and Purchaser;
(ii) by Seller, if any of the conditions set forth in Section 7.01 or
7.03 shall have become incapable of fulfillment, and shall not have been waived
by Seller;
(iii) by Purchaser, if any of the conditions set forth in Section 7.01
or 7.02 shall have become incapable of fulfillment, and shall not have been
waived by Purchaser;
(iv) by Seller or Purchaser, if the Closing does not occur on or prior
to September 30, 2004;
(v) by Seller, if Purchaser has not delivered to Seller, on or before
August 10, 2004, the Commitment Letters and the Equity Commitments; or
(vi) by Purchaser, if the Aegon Approval has not been obtained on or
before August 2, 2004;
provided, however, that the party seeking termination pursuant to clause (ii),
(iii), (iv), (v) or (vi) is not then in material breach of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
-45-
(b) In the event of termination by Seller or Purchaser pursuant to this
Section 8.01, written notice thereof shall forthwith be given to the other party
and the transactions contemplated by this Agreement shall be terminated, without
further action by any party. If the transactions contemplated by this Agreement
are terminated as provided herein:
(i) Purchaser shall, and shall cause each of its directors, officers,
employees, agents, representatives and advisors to, return to Seller all
documents and other material received from Seller or any of its Affiliates
relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof; and
(ii) all confidential information received by Purchaser, its directors,
officers, employees, agents, representatives or advisors with respect to
the business of Seller and its Affiliates and the Purchased Entities
(whether or not related to the Business) shall be treated in accordance
with the Section 5.01, which shall remain in full force and effect
notwithstanding the termination of this Agreement.
Section 8.02 Effect of Termination. If this Agreement is terminated and
the transactions contemplated hereby are abandoned as described in Section 8.01,
this Agreement shall become null and void and of no further force and effect,
except for the provisions of (i) Section 5.01 relating to the obligation of
Purchaser to keep confidential certain information and data obtained by it from
Seller or Seller's representatives, (ii) Section 5.07 relating to payment of
fees in connection with HSR Act filings and other foreign antitrust filings,
(iii) Section 10.06 relating to certain expenses, (iv) Section 8.01 and this
Section 8.02 and (v) Section 10.03 relating to publicity. Nothing in this
Section 8.02 shall be deemed to release any party from any liability for any
breach by such party of the terms, conditions, covenants and other provisions of
this Agreement or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement.
ARTICLE IX
INDEMNIFICATION
Section 9.01 Survival of Certain Representations and Warranties. The
representations and warranties set forth in Article III and Article IV shall
generally survive the Closing and continue in full force and effect for a period
of eighteen (18) months after the Closing Date, and they shall thereafter be of
no further force or effect. Notwithstanding the foregoing, the representations
and warranties of Seller contained in Sections 3.02 (Ownership of Capital
Stock), 3.03 (Authorization), 3.17 (Tax Matters) and 3.18 (Environmental
Matters) shall survive the Closing and continue in full force and effect for a
period beginning on the Closing Date and ending thirty (30) days following the
expiration of the applicable statute of limitations, and they shall thereafter
be of no further force or effect. Except with respect to those covenants and
agreements regarding actions contemplated to be taken prior to the Closing set
forth in Sections 5.02 (Access), 5.03 (Certain Changes and Conduct of Business),
5.05 (Termination of Intercompany Agreements), 5.06 (HSR Act Filings and Other
Antitrust Filings), 5.07 (No Solicitation of Competing Transaction), 5.08(b)
(Restructuring), 5.09 (Notice of Changes) and 5.11 (Transaction Financing), each
of which shall survive the Closing for eighteen (18) months after the Closing
Date, all covenants and agreements of the parties contained in this Agreement
shall survive the Closing for their respective periods set forth in this
Agreement.
-46-
Section 9.02 Indemnification by Seller. Subject to the limitations set
forth in Section 9.05, from and after the Closing, Seller shall indemnify,
defend and hold harmless Purchaser and its Affiliates and each of their
respective officers, directors, employees, agents and representatives (the
"Purchaser Indemnitees") from and against any and all losses, damages,
liabilities, costs or expenses, including reasonable third-party attorneys' fees
and court costs (collectively, "Losses"), to the extent arising or resulting
from any of the following:
(a) any breach of any representation or warranty of Seller contained in
this Agreement;
(b) any breach of any covenant of Seller contained in this Agreement;
(c) the sale by Transamerica Leasing Inc. of its minority interest in
Indian Container Leasing Co. Ltd.;
(d) the Restructuring or any Reorganized Subsidiary;
(e) litigation or claims relating to any business of the Seller or its
Affiliates other than the Business;
(f) any contingent liability described in a note to the Combined
Financial Statements which is not reflected on Schedule 9.02(f); or
(g) any liability related to the underfunding of the Transamerica UK
Pension Scheme.
Section 9.03 Indemnification by Purchaser. Subject to the limitations
set forth in Section 9.05, from and after the Closing, Purchaser shall
indemnify, defend and hold harmless Seller and each of its Affiliates and each
of their respective officers, directors, employees, stockholders, agents and
representatives (the "Seller Indemnitees") from and against any and all Losses,
to the extent arising or resulting from any of the following:
(a) any breach of any representation or warranty of Purchaser contained
in this Agreement;
(b) any breach of any covenant of Purchaser contained in this
Agreement;
(c) any claim against Seller or any Affiliate of Seller relating to the
failure by Seller to obtain any Consent set forth on Schedule 7.02(e) that
Purchaser has waived; or
(d) any claim against Seller or any Affiliate relating to events
occurring after the Closing in connection with Indemnified Guarantees.
Section 9.04 Indemnification Procedures.
(a) Procedures Relating to Indemnification of Third Party Claims. If
any party (the "Indemnified Party") receives written notice of the commencement
of any action or proceeding or the assertion of any claim by a third party or
the imposition of any penalty or assessment for which indemnity may be sought
under Section 9.02 or 9.03 (a "Third Party Claim"), and such Indemnified Party
intends to seek indemnity pursuant to this Article IX, the Indemnified Party
shall promptly provide the other party (the "Indemnifying Party") with written
-47-
notice of such Third Party Claim, stating the nature, basis and the amount
thereof, to the extent known, along with copies of the relevant documents
evidencing such Third Party Claim and the basis for indemnification sought.
Failure of the Indemnified Party to give such notice will not relieve the
Indemnifying Party from liability on account of this indemnification, except if
and to the extent that the Indemnifying Party is actually prejudiced thereby.
The Indemnifying Party will have 30 days from receipt of any such notice of a
Third Party Claim to give notice to assume the defense thereof. If notice to the
effect set forth in the immediately preceding sentence is given by the
Indemnifying Party, the Indemnifying Party will have the right to assume the
defense of the Indemnified Party against the Third Party Claim with counsel of
its choice. So long as the Indemnifying Party has assumed the defense of the
Third Party Claim in accordance herewith, (i) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and participate in the defense
of the Third Party Claim, (ii) the Indemnified Party will not file any papers or
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnifying
Party and (iii) the Indemnifying Party will not (A) admit to any wrongdoing or
(B) consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim to the extent such judgment or settlement
provides for equitable relief, in each case, without the prior written consent
of the Indemnified Party (such written consent will not be withheld or delayed
unreasonably). The parties will act in good faith in responding to, defending
against, settling or otherwise dealing with such claims. The parties will also
cooperate in any such defense and give each other reasonable access to all
information relevant thereto. Whether or not the Indemnifying Party has assumed
the defense, such Indemnifying Party will not be obligated to indemnify the
Indemnified Party hereunder for any settlement entered into or any judgment that
was consented to without the Indemnifying Party's prior written consent.
(b) Procedures for Non-Third Party Claims. The Indemnified Party will
notify the Indemnifying Party in writing promptly of its discovery of any matter
that does not involve a Third Party Claim being asserted against or sought to be
collected from the Indemnified Party, giving rise to the claim of indemnity
pursuant hereto. The failure so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from liability on account of this
indemnification, except only to the extent that the Indemnifying Party is
actually prejudiced thereby. The Indemnifying Party will have 30 days from
receipt of any such notice to give notice of dispute of the claim to the
Indemnified Party. The Indemnified Party will reasonably cooperate and assist
the Indemnifying Party in determining the validity of any claim for indemnity by
the Indemnified Party and in otherwise resolving such matters. Such assistance
and cooperation will include providing reasonable access to and copies of
information, records and documents relating to such matters, furnishing
employees to assist in the investigation, defense and resolution of such matters
and providing legal and business assistance with respect to such matters.
Section 9.05 Limitations on Indemnification. (a) Notwithstanding the
foregoing provisions of this Article IX,
(i) Seller shall not be responsible pursuant to Section 9.02(a) (except
in connection with a breach of representations and warranties contained in
Sections 3.02 (Ownership of Capital Stock), 3.17 (Tax Matters) and 3.18
(Environmental Matters)), for (x) any Losses suffered by any Purchaser
Indemnitee unless the aggregate of all Losses suffered by the Purchaser
Indemnitees exceeds, on a cumulative basis, an amount equal to Ten Million
Dollars ($10,000,000) (the "Indemnity Threshold"), and then from the first
dollar to the full extent of such Losses, or (y) any individual items where
the Loss relating thereto is less than Two Thousand Five Hundred Dollars
($2,500) (provided that any Losses arising out of one or more claims
involving or arising out of the same or
-48-
substantially similar facts, events or circumstances shall be
aggregated as one claim for purposes of determining whether the basket
set forth in this Section 9.05(a)(i)(y) applies) ("Minor Claims"),
unless the aggregate of amount of Minor Claims exceeds Fifty Thousand
($50,000), and then only to the extent of any such excess (subject to
the Indemnity Threshold); and
(ii) the aggregate liability of Seller hereunder, pursuant to Section
9.02(a) (except in connection with a breach of representations and
warranties contained in Sections 3.02 (Ownership of Capital Stock), 3.17
(Tax Matters) and 3.18 (Environmental Matters)), for Losses suffered by the
Purchaser Indemnitees shall in no event exceed Two Hundred Million Dollars
($200,000,000). In no event shall Seller be obligated to indemnify the
Purchaser Indemnitees or any other person with respect to any matter to the
extent that such matter was reflected in the calculation of the adjustment
to the Closing Date Payment, if any, pursuant to Section 2.05.
(b) Notwithstanding the foregoing provisions of this Article IX,
(i) Purchaser shall not be responsible, pursuant to Section 9.03(a),
for (x) any Losses suffered by any Seller Indemnitee unless the aggregate
of all Losses suffered by the Seller Indemnitees exceeds the Indemnity
Threshold, and then from the first dollar to the full extent of such
Losses, or (y) any individual items where the Loss relating thereto is a
Minor Claim (provided that any Losses arising out of one or more claims
involving or arising out of the same or substantially similar facts, events
or circumstances shall be aggregated as one claim for purposes of
determining whether the basket set forth in this Section 9.05(b)(i)(y)
applies), unless the aggregate of amount of Minor Claims exceeds Fifty
Thousand ($50,000), and then only to the extent of any such excess (subject
to the Indemnity Threshold); and
(ii) the aggregate liability of Purchaser hereunder, pursuant to
Section 9.03(a), for Losses suffered by the Seller Indemnitees shall in no
event exceed Two Hundred Million Dollars ($200,000,000).
(c) Neither party hereto shall be liable to the other for indirect,
special, incidental, consequential or punitive damages claimed by such other
party resulting from such first party's breach of its representations,
warranties or covenants hereunder.
Section 9.06 Mitigation. Each Indemnified Party shall use its
commercially reasonable efforts to mitigate any Losses that an Indemnified Party
asserts under this Article IX. In the event that an Indemnified Party shall fail
to make such commercially reasonable efforts to mitigate any such Losses, then
notwithstanding anything else to the contrary contained herein, neither Seller
nor Purchaser, as the case may be, shall be required to indemnify any
Indemnified Party for that portion of any Losses that could reasonably be
expected to have been avoided through the exercise of such commercially
reasonable efforts.
Section 9.07 Calculation of Indemnity Payments. The amount of any Loss
for which indemnification is provided under this Article IX shall be net of any
amounts recovered or recoverable by the Indemnified Party under insurance
policies with respect to such Loss and shall be (a) increased to take account of
any net Tax cost actually incurred by the Indemnified Party arising from the
receipt of indemnity payments hereunder (grossed up for such increase) and (b)
reduced to take account of any net Tax benefit actually realized by the
Indemnified Party arising from the incurrence or payment of any such indemnified
amount. In computing the
-49-
amount of any such Tax cost or Tax benefit, the Indemnified Party shall be
deemed to recognize all other items of income, gain, loss, deduction or credit
before recognizing any item arising from the receipt of any indemnity payment
hereunder or the incurrence or payment of any indemnified amount.
Section 9.08 Tax Treatment of Indemnification. For all Tax purposes,
Purchaser and Seller agree to treat (and shall cause each of their respective
Affiliates to treat) any indemnity payment under this Agreement as an adjustment
to the Final Purchase Price unless a final determination provides otherwise.
Section 9.09 Exclusivity of Indemnification. The indemnification provisions of
this Article IX are intended to provide the exclusive remedy as to all Losses
that any party hereunder may incur arising from or relating to the transactions
contemplated by this Agreement. Each party hereby waives, to the extent that it
may do so, any other rights or remedies that may arise under any applicable
statute, rule or regulation; provided, however, that the foregoing shall not be
interpreted to limit the types of remedies, including specific performance or
other equitable remedies, which may be sought by an Indemnitee in connection
with a breach of any covenant or agreement contained herein and shall not limit
any available remedy for fraud or a willful misrepresentation or breach by
another party.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment, Modification and Waiver. This Agreement may be
amended, modified or superseded and any of the terms, covenants,
representations, warranties or conditions hereof may be waived only by an
instrument in writing signed by each of the parties hereto or, in the case of a
waiver, by or on behalf of the party waiving compliance. In the event any party
waives in writing any term or condition or the breach of any provision, term,
covenant, representation or warranty contained in this Agreement, such party
shall be deemed forever to have waived any claim it may have had against the
other party with respect to compliance with such term or condition or the breach
of such provision, term, covenant, representation or warranty contained in this
Agreement.
Section 10.02 Assignability, Parties in Interest and No Third Party
Beneficiaries. This Agreement and the rights, interests or obligations hereunder
may not be assigned by any of the parties hereto without the prior written
consent of the other party hereto; provided, however, that Purchaser may assign
any of its rights and obligations under this Agreement before Closing to one or
more of its Affiliates, it being agreed and understood that one or more of
Purchaser's Affiliates may be designated to acquire one or more of the Purchased
Entities, provided such Purchaser Affiliate agrees in writing to be bound by the
terms herein applicable to Purchaser and provided Purchaser agrees to remain
liable hereunder and to perform its duties and obligations hereunder; provided
further, that Purchaser or any permissible Affiliate assignee hereunder may also
assign its rights and obligations under this Agreement to a Financial
Institution as collateral in connection with financing or refinancing the
Acquisition and only to a maximum of five (5) Financial Institutions.
Notwithstanding anything to the contrary, permissible Financial Institution
assignees shall have no rights against Seller or its Affiliates unless (i)
Purchaser is in default of its obligations under applicable agreements between
Purchaser and such Financial Institution and (ii) such permissible Financial
Institution assignees have pursued all available remedies against Purchaser.
Subject to the foregoing, this Agreement shall inure to the benefit of and be
binding upon Purchaser and Seller and their respective permitted
-50-
successors and assigns. Except as provided above, nothing in this Agreement will
confer upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.
Section 10.03 Publicity. No press release or other public announcement
or disclosure related to this Agreement or the transactions contemplated herein
(including but not limited to the terms and conditions of this Agreement) shall
be issued or made without the prior approval of Purchaser, on the one hand, and
Seller, on the other hand. The foregoing shall not prohibit any disclosure
required by law; provided that such disclosure is made pursuant to Section 5.01
hereof and that the disclosing party consults with the other parties, to the
extent practicable, at least two (2) Business Days in advance of such
disclosure.
Section 10.04 Notices. All notices, requests, permissions, waivers and
other communications hereunder shall be in writing and shall be deemed to have
been duly given (a) three Business Days following sending by registered or
certified mail, postage prepaid, (b) when sent, if sent by facsimile; provided
that the facsimile transmission is promptly confirmed by telephone, (c) when
delivered, if delivered personally to the intended recipient, and (d) one
Business Day following sending by overnight delivery via a national courier
service and, in each case, addressed to a party at the following address for
such party:
(a) If to Seller, to:
Transamerica Finance Corporation
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax Number: (000) 000-0000
Transamerica Finance Corporation
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Fax Number: (000) 000-0000
(with copies to:)
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxx Xxxxxxxxx, Esq.
Fax Number: (000) 000-0000
or to such other person or address as Seller furnishes to Purchaser in writing.
-51-
(b) if to the Purchaser, to:
Xxxxxx & Company Limited
000 Xxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Attention: Xxxxx Xxxxx
Fax Number: 000 00 (0)00 0000 0000
(with copies to:)
Cadwalader, Xxxxxxxxxx & Xxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Fax Number: (000) 000-0000
or to such other person or address as Purchaser shall furnish to Seller
in writing.
Section 10.05 Complete Agreement. This Agreement, including the
Schedules (and the Introduction thereto) and Exhibits hereto, any written
amendments to the foregoing satisfying the requirements of Section 10.01 hereof,
the Non-Disclosure Agreement and the Ancillary Agreements, including the
schedules, exhibits and annexes thereto, constitute the entire agreement among
the parties with respect to the subject matter hereof and thereof and supersede
any previous agreements and understandings between the parties with respect to
such matters. All Exhibits and Schedules annexed hereto or referred to herein
are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein shall be defined as set forth in this Agreement. There
are no restrictions, promises, representations, warranties, agreements or
undertakings of any party hereto with respect to the transactions contemplated
by this Agreement, the Non-Disclosure Agreement or the Ancillary Agreements
other than those set forth herein or therein or in any other document required
to be executed and delivered hereunder or thereunder. In the event of any
conflict between the provisions of this Agreement (including the Schedules (and
the Introduction thereto) and Exhibits hereto), on the one hand, and the
provisions of the Non-Disclosure Agreement or the Ancillary Agreements
(including the schedules and exhibits thereto), on the other hand, the
provisions of this Agreement shall control.
Section 10.06 Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, except as otherwise expressly provided herein
each of the parties hereto shall be responsible for the payment of its own
respective costs and expenses incurred in connection with the negotiations
leading up to and the performance of its respective obligations pursuant to this
Agreement and the Ancillary Agreements including the fees of any attorneys,
accountants, brokers or advisors employed or retained by or on behalf of such
party; provided, however, that in the event the Aegon Approval has not been
obtained on or before August 2, 2004, Seller shall reimburse Purchaser for
Purchaser's reasonable out-of-pocket expenses paid to third parties (including
reimbursement of employees for their out-of-pocket expenses) in connection with
the financing of the Acquisition up to an amount not to exceed Five Million
Dollars ($5,000,000).
Section 10.07 Severability; Enforcement. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that
-52-
any restriction hereunder is too broad to permit enforcement of such restriction
to its fullest extent, each party agrees that a court of competent jurisdiction
may enforce such restriction to the maximum extent permitted by law, and each
party hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.
Section 10.08 Governing Law. This Agreement and any disputes arising
under or related thereto (whether for breach of contract, tortious conduct or
otherwise) shall be governed and construed in accordance with the laws of the
State of New York, without reference to its conflicts of law principles.
Section 10.09 Jurisdiction. Each party irrevocably agrees that any
legal action, suit or proceeding against them arising out of or in connection
with this Agreement or the transactions contemplated hereby or disputes relating
hereto (whether for breach of contract, tortious conduct or otherwise) shall be
brought exclusively in the United States District Court for the Southern
District of New York, or, if such court does not have subject matter
jurisdiction, the state courts of New York located in New York County and hereby
irrevocably accepts and submits to the exclusive jurisdiction and venue of the
aforesaid courts in personam, with respect to any such action, suit or
proceeding.
Section 10.10 Waiver of Trial by Jury. Each party hereby waives to the
fullest extent permitted by Applicable Law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement or the transactions contemplated hereby or
disputes relating hereto. Each party (a) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 10.10.
Section 10.11 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-53-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
XXXXXX & COMPANY LIMITED
By: /s/ A. Xxxx Xxxxxx
--------------------------------------------
Name: A. Xxxx Xxxxxx
Title: Chairman
TA LEASING HOLDING CO, INC.
By: /s/ Xxxx Xxxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxxx
Title: CEO
TRANSAMERICA CORPORATION,
in its capacity as Guarantor
pursuant to Section 5.12
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Executive Vice President
-54-
