<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 15, 1997
Date of Earliest Event Reported: December 1, 1997
T & W FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
WASHINGTON
(State or other jurisdiction of incorporation or organization)
0-23013 91-1844249
(Commission File Number) (I.R.S. Employer Identification No.)
6416 PACIFIC HIGHWAY EAST, TACOMA, WASHINGTON 98424
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (253) 922-5164
- ------------------------------------------------------------------------------
<PAGE> 2
ITEM 2. Acquisitions of Assets.
T & W Financial Corporation, the registrant, owns eighty-five percent
(85%) of the membership interests of T & W Financial Services Company L.L.C.
(the "Company"). On December 1, 1997, the Company acquired the Specialty Vehicle
Finance Division of TransAmerica Commercial Finance Corporation
("Transamerica"). The acquired assets consist primarily of direct financing
leases and floor plan financing receivables. The total purchase price for the
assets acquired was approximately $60 million. The Company paid a premium of
approximately $2.4 million to Transamerica. The acquisition premium was based
on discounting the lease receivables and acquiring the floor plan receivables
at par. In addition, the Company paid a premium for the net assets of the
Specialty Vehicle Finance Division. The Company funded the acquistion through
proceeds from T & W Financial Corporation's initial public offering as well as
a bridge loan by CoreStates, N.A., and, eventually in January, 1998, will
utilize a conduit securitization structure by CIBC Oppenheimer Corp. The
acquisition will be handled under purchase accounting and it is anticipated
that no gain will be booked due to the acquisition.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
It is impractical to provide the required financial information
at the time of filing this report. The required financial information
will be filed by amendment to this Form 8-K no later than January 29,
1998.
(b) Pro Forma Financial Information.
It is impractical to provide the required pro forma financial
information at the time of filing this report. The required pro forma
financial information will be filed by amendment to this Form 8-K no
later than January 29, 1998.
(c) Exhibits.
Exhibit Number Description
2.1* Asset Purchase and Sale Agreement
dated as of November 12, 1997
* Portions of this Agreement are omitted pursuant to a Confidential Treatment
Request under Rule 24-b2 of the Securities and Exchange Act of 1934.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized
T & W Financial Corporation
(Registrant)
Date: December 15, 1997 By: /s/ PAUL LUKE
----------------------------
Paul Luke
Senior Vice President, Chief Financial
Officer, Secretary, Treasurer and Director
Page 2
<PAGE> 1
EXHIBIT 2.1*
ASSET PURCHASE AND SALE AGREEMENT
This ASSET PURCHASE AND SALE AGREEMENT is made as of the 12th day of
November, 1997, (the "Agreement") by and between T&W Financial Services Company,
LLC, a Washington company ("Buyer") and Transamerica Commercial Finance
Corporation, a Delaware corporation ("Seller"), with its principal place of
business located at 1701 Golf Road, Continental Towers II, Suite 500, Rolling
Meadows, Illinois 60008.
In consideration of the mutual promises and covenants hereinafter set
forth and for value received, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. In addition to the capitalized terms defined elsewhere
in this Agreement, except as otherwise expressly provided or unless the context
otherwise requires, the following terms defined in this SECTION 1.1 shall have
the following meanings for all purposes of this Agreement:
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For purposes of this definition, "control" (including with
correlative meaning, the terms "controlled by" and "under common control with")
as used with respect to any Person shall mean (a) the ownership of 50% or more
of the voting securities or other voting interests of such Person, or (b) the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of such Person, whether through ownership
of voting securities, by contract or otherwise.
"Agreement" shall mean this Asset Purchase and Sale Agreement, all
ancillary agreements, and all Exhibits and Schedules attached hereto, as the
same may be amended from time to time in accordance with the provisions hereof.
"Assignor" shall mean any Person that has financed Inventory or leased
Vehicles and has assigned its rights in the Inventory, the finance agreement,
lease and/or the Vehicles to the Seller.
"Assignor Contract" shall mean any contract entered into by the Seller
and an Assignor pursuant to which the Assignor's rights in the Collateral are
assigned to the Seller.
"Bankruptcy Exception" shall mean, in respect to any agreement, contract
or commitment, any limitation thereon imposed by any bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar law affecting
creditors' rights and remedies generally and, with respect to the enforceability
thereof, any limitation imposed by general principles of equity, including, but
not limited to, principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
* Portions of this Agreement are omitted pursuant to a Confidential Treatment
Request under 24b-2.
<PAGE> 2
"Business" shall mean all inventory floor plan financing and lease
funding operations relating to Funeral Vehicles and all lease funding operations
relating to, and leasing of, shuttle buses conducted by the Seller in the United
States through its Specialty Vehicle Finance Division.
"Business Day" shall mean any day other than a Saturday, Sunday or day
on which the banks in Chicago, Illinois are authorized or obligated by law or
executive order to be closed.
"Buyer" shall have the meaning set forth in the preamble hereto.
"Collateral" shall mean all Inventory and other personal or real
property of any Dealer or Shuttle Bus Lessee in which the Seller or its
predecessor or an Assignor has been granted a security interest pursuant to, or
in connection with, any Contract to secure the performance by such Dealer or
Shuttle Bus Lessee of its obligations under any Contract, which may include
under the terms of the governing documentation, without limitation, any
equipment, furniture, fixtures, contract rights, documents, instruments,
accounts receivable, general intangibles, chattel paper and books and papers,
any such property returned or repossessed by or on behalf of the Dealer,
including such of the same as may be after-acquired property, and any and all
accessions to, substitutions for, or proceeds thereof.
"Confidentiality Agreement" shall mean that certain confidentiality
agreement entered into between the Seller and the Buyer and its Affiliates,
dated September 19, 1997.
"Contract" shall mean a Dealer Contract, a Dealer Lease, a Manufacturer
Contract, an Assignor Contract or a Shuttle Lease.
"Contract Documents" shall mean all Contracts, Credit Supports and other
documents related to or created in connection with a Contract and the related
Credit Supports, including without limitation, security agreements, sales
contracts, invoices, notices of shipment, schedules, receipts, evidences of
insurance, manufacturers' statements of origin, financing statements, fixture
filings, notations on vehicle or vessel titles or registration certificates,
notification letters (both to and from the Seller) and other evidences of lien
perfection, consignment agreements and related notification letters, storage
agreements, landlords' waivers, mortgagees' waivers, powers of attorney,
intercreditor agreements, shareholder subordination agreements, "dear dealer"
letters, program letters, correspondence, UCC searches, credit reports, copies
of charters and business licenses, credit reports obtained by the Seller, credit
applications and supporting credit materials provided to the Seller by a Dealer,
Manufacturer, Assignor, Shuttle Bus Lessee or Person providing a Credit Support,
and all amendments, supplements and addenda thereto and related documents or
memoranda (including, but not limited to, information stored on film or in
electronic data form).
"Credit Supports" shall mean all guaranties, recourse agreements,
letters of credit, mortgages, deeds of trust, surety agreements and other
agreements entered into by any Person or certificates of deposit or other assets
deposited with the Seller to secure or enhance the performance of a Dealer,
Manufacturer, Shuttle Bus Lessee or Assignor under a Contract, other than the
Dealer Reserves.
2
<PAGE> 3
"Damages" shall mean, in respect of any obligation to indemnify any
Person pursuant to the terms of this Agreement, any and all losses, claims,
damages, liabilities, obligations, judgments, settlements, awards, demands,
offsets, reasonable out-of-pocket costs, expenses and attorneys' fees (including
any such reasonable costs, expenses and attorneys' fees incurred in enforcing
such right of indemnification against any Indemnitor or with respect to any
appeal), interest and penalties, if any, provided however, Damages shall not
include any amounts for consequential, incidental or punitive damages or for
loss of future profit or loss of goodwill.
"Dealer" shall mean any Person engaged in the sale or lease of Vehicles
in the United States for which the Seller provides inventory floor plan or lease
financing through the Business.
"Dealer Contract" shall mean any contract entered into by the Seller or
any predecessor of the Seller or Assignor and any Dealer (including any addenda
and amendments thereto and any assumptions thereof and any related program
letters and arrangements relating to Dealer Reserves), including, without
limitation, any and all security agreements or financing agreements arising out
of the financing of Inventory or in the form of a working capital loan, pursuant
to which the Seller is the creditor, secured party and/or obligee, whether
directly or as an assignee.
"Dealer Lease" shall mean any retail lease by a Dealer for Vehicles,
which has been financed directly or indirectly by the Seller.
"Dealer Reserves" shall mean the rate participation funds obtained from
lessees under Dealer Leases for the benefit of a Dealer and credit enhancement
funds held back from a Dealer to secure a Dealer's obligations under a Dealer
Contract. Dealer Reserves do not include any internal or book reserves
established by the Seller.
"Employee" shall mean any employee of the Seller who has been assigned
by the Seller on a dedicated and full-time basis to work in the Business as of
the date of this Agreement.
"Exhibit" shall mean any of several written Exhibits to this Agreement,
each of which (a) is hereby incorporated into and made a part of this Agreement
for all purposes, and (b) has been furnished to the Buyer in its final form in
advance of the execution of this Agreement.
"Floorplan Receivables" shall mean all of the Seller's (or an
Assignor's) existing and future rights to payments under the Dealer Contracts
and the related Credit Supports and shall include the right to payment of any
interest or finance charges and any other obligations of such Dealer with
respect thereto.
"Funeral Vehicles" shall mean hearses and limousines used in the funeral
industry.
"GAAP" shall mean United States generally accepted accounting principles
consistently applied, as in effect from time to time.
3
<PAGE> 4
"Income Tax" shall mean all Taxes based upon, measured by or calculated
with respect to income, profits, gains or similar items (whether based on a
regular or alternative tax base) including any interest, penalty or addition
thereto.
"Indemnification Event" shall mean any action, proceeding, claim or
defensive position for which a Person is entitled to indemnification under this
Agreement.
"Indemnitor" shall mean the indemnifying Person in the case of any
obligation to indemnify another Person established pursuant to the terms of this
Agreement.
"Interparty Claim" shall mean an Indemnification Event commenced or
asserted against a party to this Agreement by another party to this Agreement or
an indemnified party hereunder.
"Inventory" shall mean all Vehicles owned by a Dealer, the purchase of
which has been financed directly or indirectly under a Dealer Contract.
"Lease Receivables" shall mean the sum of (a) all of the Seller's (or an
Assignor's) existing rights to payments under the Dealer Leases and the related
Credit Supports and shall include the right to payment of any interest or
finance charges and other obligations of such Dealer with respect thereto, (b)
all of the Seller's (or an Assignor's) existing and future rights to payments
under the Shuttle Leases, and (c) the Lease Residuals, less (d) booked but
unearned interest under the Dealer Leases and the Shuttle Bus Leases.
"Lease Residuals" shall mean the residual value of each Vehicle, as set
forth in the Dealer Lease and Shuttle Lease corresponding to such Vehicle.
"Lien" shall mean any mortgage, pledge, lien, charge, security interest
or other encumbrance of any nature whatsoever, including without limitation any
conditional sale or other title retention agreement, any lease in the nature
thereof and the filing of or agreement to execute and deliver any financing
statement under the UCC of any jurisdiction.
"Manufacturer" shall mean any manufacturer or distributor of Vehicles
with respect to which the Seller provides inventory floor plan or lease
financing in connection with the sale by such manufacturer of Vehicles to one or
more Dealers.
"Manufacturer Contract" shall mean any contract entered into by the
Seller or any predecessor of the Seller or Assignor with any Manufacturer
(including any related program letters, addenda and amendments thereto and any
assumptions thereof) with respect to the financing of Inventory, the repurchase,
remarketing or disposition of any Collateral, manufacturer recourse obligations
or otherwise relating to the Business.
"Manufacturer Discounts" shall mean any rights to any discounts,
payments or other benefits which may become due to the Seller from any
Manufacturer in connection with the Seller's financing
4
<PAGE> 5
a Dealer's acquisition of Inventory or with respect to any Inventory acquired
from such Manufacturer by or on behalf of a Dealer.
"Material Adverse Effect" shall mean, with respect to the Seller or the
Business, a material adverse effect on the business, prospects or financial
condition of the Purchased Assets (excluding the Excluded Assets and Excluded
Liabilities), taken as a whole (other than any effect resulting from changes in
(a) prevailing interest rates, (b) general economic conditions affecting the
Business or any competitors with respect to such Business, (c) levels of loan or
lease delinquency or chargeoffs experienced by the Business, (d) law or
applicable regulations, (e) GAAP or (f) departures or reactions of employees
dedicated or assigned to the Business resulting from the decision to sell the
Purchased Assets or any business announcement or the expectation of the
consummation of the transactions contemplated by this Agreement. "Material
Adverse Effect" shall mean, with respect to the Buyer, a material adverse effect
on the Buyer's ability to consummate the transactions contemplated by this
Agreement.
"Net Assets" shall mean the sum of (a) the Lease Receivables and (b) the
Floorplan Receivables, less (i) the Dealer Reserves, (ii) security deposits held
under the Dealer Leases and the Shuttle Leases, (iii) amounts owed but not yet
paid to Manufacturers for Inventory included in the Floorplan Receivables, and
(iv) amounts received from Dealers or Shuttle Bus Lessees to pay sales taxes
owed and not yet paid.
"Permitted Liens" shall mean (a) Liens set forth on SCHEDULE 1.1, (b)
Liens shown in the Contracts, Credit Supports, or other Contract Documents or
Dealer and Manufacturer files maintained by the Seller and included in the
Purchased Assets, and (c) inchoate liens for Taxes that have accrued but are not
yet due and payable or Taxes that are being contested by the Seller in good
faith.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Purchase Price Deposit" shall mean $500,000.
"Receivables" shall mean all of the Lease Receivables and the Floorplan
Receivables.
"Regulatory Approvals" shall mean such approvals, consents and licenses
of any Regulatory Authority necessary to be obtained for the lawful transfer of
the Purchased Assets to the Buyer.
"Regulatory Authority" shall mean any federal, state, local or other
governmental (whether legislative, judicial, independent or executive) authority
or instrumentality, domestic or foreign.
"Schedule" shall mean any one of several written Schedules to this
Agreement, each of which (a) is hereby incorporated into and made a part of this
Agreement for all purposes, (b) has been
5
<PAGE> 6
initialed on the first page thereof by the President, one of the Executive Vice
Presidents or one of the Vice Presidents of the Buyer and the Seller and (c) has
been furnished to the Buyer in its final form in advance of the execution of
this Agreement and/or the Closing Date, as the case may be.
"Seller" shall have the meaning set forth in the preamble hereto.
"Seller's Account" shall mean the account of the Seller, the account
number of which will be contained in wiring instructions delivered by the Seller
to the Buyer.
"Seller's Knowledge " or "to the knowledge of the Seller" shall mean the
actual and best knowledge of the Employees.
"Settlement Date" shall mean the date five (5) Business Days after the
date on which the Final Closing Statement is delivered to the Buyer and the
Seller pursuant to SECTION 2.4(E) hereof.
"Shuttle Bus Lessee" shall mean any Person who is the lessee under a
Shuttle Lease.
"Shuttle Leases" shall mean all leases between the Seller or an
Assignor, as lessor, and lessees of shuttle buses.
"Straddle Period" shall mean any Taxable period that begins before and
ends after the Closing Date.
"Tax" shall mean all federal, state, local and foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, 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, including any interest, penalty or addition thereto,
and including any transferee or secondary liability in respect of any Tax
(whether by law, contractual agreement or otherwise). "Taxes" and "Taxable"
shall have correlative meanings.
"Tax Laws" shall mean the Code, federal, state, county, local, or
foreign laws relating to Taxes and any regulations or official administrative
pronouncements released thereunder.
"Tax Returns" shall mean all returns, declarations, reports, estimates
and information returns and statements of any Person required to be filed or
sent by or with respect to it in respect of any Taxes.
"Third Party Claim" shall mean an Indemnification Event commenced or
asserted, either affirmatively or defensively, against a party to this Agreement
or an indemnified party hereunder by a Person who is neither a party to this
Agreement nor an indemnified party hereunder.
6
<PAGE> 7
"Transamerica Marks" shall mean (a) the word "Transamerica," (b) the
stylized pyramid logo of Transamerica Corporation, (c) any representation or
other likeness of the Transamerica Building located at 600 Montgomery Street,
San Francisco, California, (d) any trademark, trade name or service mark using
or otherwise incorporating the prefix "Trans" and (e) any trademark, trade name
or service mark using or otherwise incorporating the word "pyramid."
"Transitional Services Agreement" shall mean an agreement between the
Seller and the Buyer pursuant to which the Seller agrees to perform data
processing and other services for the Buyer upon mutually satisfactory terms and
conditions, including the payment for services provided, following the Closing.
"UCC" shall mean the Uniform Commercial Code.
"Vehicles" shall mean the Funeral Vehicles and the shuttle buses.
1.2 OTHER DEFINITIONS. The following indicates the location in this
Agreement of other terms defined herein:
"Assumed Liabilities" shall have the meaning set forth in SECTION 2.1(c)
hereof.
"Closing" shall have the meaning assigned to the term in SECTION 3.1.
"Closing Date" shall have the meaning assigned to the term in SECTION
3.1.
"Closing Statement" shall have the meaning assigned to the term in
SECTION 2.4.
"Consents" shall have the meaning assigned to the term in SECTION 6.5.
"Estimated Purchase Price" shall have the meaning assigned to the term
in SECTION 2.3.
"Excluded Assets" shall have the meaning set forth in SECTION 2.1(b).
"Final Closing Statement" shall have the meaning set forth in SECTION
2.4(b).
"Indemnification Dispute" shall have the meaning set forth in SECTION
10.6.
"Other Taxes" shall have the meaning set forth in SECTION 7.6 hereof.
"Proprietary Information" shall have the meaning set forth in SECTION
12.3.
"Purchase Price" shall have the meaning set forth in SECTION 2.3.
"Purchased Assets" shall have the meaning set forth in SECTION 2.1(a).
7
<PAGE> 8
"Purchased Receivables" shall have the meaning set forth in SECTION
2.1(A)(II).
"Representative" shall have the meaning set forth in SECTION 10.6.
"Settlement Payment" shall mean an amount determined in accordance with
the provisions of SECTION 2.4(D) hereof.
"Tax Audit" shall have the meaning assigned to the term in SECTION
11.6(D).
1.3 OTHER DEFINITIONAL PROVISIONS. All terms defined in this Agreement
in the singular shall have comparable meanings when used in the plural and
vice-versa. The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Underlined references to
Articles, Sections, Schedules and Exhibits shall refer to those portions of this
Agreement. The use of the masculine, feminine or neuter gender herein shall not
limit any provision of this Agreement. The use of the terms "including" or
"include" shall in all cases herein mean "including, without limitation" or
"include, without limitation," respectively.
ARTICLE II
PURCHASE OF ASSETS;
PURCHASE PRICE AND PAYMENT
2.1 PURCHASE AND SALE OF PURCHASED ASSETS AND ASSUMPTION OF LIABILITIES.
(a) Upon the terms and subject to the conditions of this Agreement,
at the Closing the Buyer shall purchase from the Seller, and the Seller shall
sell to the Buyer, all of the Seller's right, title and interest in and to all
of the following assets, properties, rights, contracts and claims as the same
shall exist as of the Closing, with such changes, deletions or additions thereto
from the date of this Agreement as are permitted under this Agreement (all of
which are hereinafter collectively referred to as the "Purchased Assets"):
(i) all Lease Receivables listed on SCHEDULE 2.1(A)(I),
including all collections thereon received by the Seller subsequent
to the Closing Date;
(ii) all Floorplan Receivables listed on SCHEDULE 2.1(A)(II)
(together with the Lease Receivables listed on SCHEDULE 2.1(A)(I)),
the "Purchased Receivables"), including all collections thereon
received by the Seller subsequent to the Closing Date;
(iii) all Shuttle Leases relating to the Lease Receivables
listed on SCHEDULE 2.1(A)(I);
8
<PAGE> 9
(iv) all Dealer Contracts relating to the Floorplan
Receivables listed on SCHEDULE 2.1(a)(ii);
(v) all Manufacturer Contracts, including, without
limitation, all Manufacturer Contracts with the Manufacturers
listed on SCHEDULE 2.1(a)(v), including the right to receive all
payments to the Seller thereunder and, in particular, all related
Manufacturer Discounts;
(vi) all Assignor Contracts;
(vii) all Credit Supports payable after the Closing Date;
(viii) all other Contract Documents to the extent they
relate to the Purchased Receivables and the Contracts and Credit
Supports described in the foregoing clauses (iii), (iv), (v),
(vi) and (vii);
(ix) all Collateral under the Dealer Contracts, the Dealer
Leases, the Manufacturer Contracts, the Assignor Contracts and
the Shuttle Leases;
(x) all books, records and credit files with respect to
any Dealer, Manufacturer, Assignor or Shuttle Bus Lessee which is
an obligor under a Contract described in the foregoing clauses
(iii), (iv), (v), or (vi), including, but not limited to, (A)
books, records and files contained in computerized storage media
and (B) books, records and files relating to Collateral,
purchasing, accounting, sales, leasing, marketing,
creditworthiness, taxes and banking relationships as the same
shall apply to such Dealer, Manufacturer, Assignor or Shuttle Bus
Lessee or to the Purchased Receivables or the transactions
contemplated by this Agreement;
(xi) an original or copy of all business and financial
records (other than records maintained by the Seller's legal
staff, or prepared by or for the management of the Seller which
do not relate to particular Dealers, Manufacturers, Assignors or
Shuttle Bus Lessees ), files, books, form contracts and documents
to the extent they relate directly to the Purchased Assets
described in the other clauses of this SECTION 2.1(a), including,
but not limited to, manuals and data, sales and advertising
materials, sales distribution and purchase correspondence; and
(xii) all rights, claims, credits, causes of action or
rights of set-off against third parties, directly arising out of
the Purchased Assets described in the other clauses of this
SECTION 2.1(a) and the right to commence suits against such
parties for claims arising out of the Purchased Assets described
in the other clauses of this SECTION 2.1(a).
9
<PAGE> 10
(b) EXCLUDED ASSETS. Notwithstanding any other provision of this
Agreement to the contrary, all right, title and interest of Seller in and to the
following (the "Excluded Assets") shall be retained (and not sold, transferred
conveyed or delivered to the Buyer) by the Seller, and all of which are
specifically excluded from the definition of "Purchased Assets": (i) any
trademarks, service marks, copyrights, tradenames, tradestyles, logos, artwork
or names of or utilized by the Seller or any of its Affiliates, and all
registrations and applications therefor, including but not limited to the
Transamerica Marks, (ii) any computer programs or other software owned or
licensed by the Seller or any of its Affiliates, and (iii) any intangibles of
the Seller and its Affiliates, (iv) any claim (including any claim for Tax
Refunds with respect to any Tax Returns of the Seller or any of its Affiliates),
setoff or other rights relating to the Purchased Assets arising on or prior to
the Closing Date, and any claim (including any claim for Tax Refunds with
respect to any Tax Returns of the Seller or any of its Affiliates), setoff or
other rights relating to any other Excluded Assets, (v) all cash amounts on
deposit on behalf of the Seller, including with banks and financial
institutions, including as relates to the Purchased Assets and the Business,
(vi) all internal book reserves not constituting Dealer Reserves established by
the Seller relating to the Purchased Assets, (vii) all licenses, permits,
consents and approvals of or for the benefit of the Seller, (vii) any prepaid
expenses relating to the Business, and (viii) and any assets not specifically
constituting Purchased Assets.
(c) LIABILITIES ASSUMED BY THE BUYER. The Buyer agrees to assume,
pay, perform, fulfill and discharge all liabilities, debts, duties, payments and
obligations arising from or in connection with or relating to the Business or
any or all of the Purchased Assets or the use or operation of the Purchased
Assets, as and when due, whether fixed, absolute, contingent, material,
immaterial, matured or unmatured, arising after the Closing Date with respect to
the Contracts and the Contract Documents (including the Seller's obligations
thereunder with respect to (i) Dealer Reserves and (ii) advances approved but
not yet funded) whether such obligations arise under such Contract or under a
related Contract Document or otherwise (the "Assumed Liabilities").
2.2 THE PURCHASE PRICE. The Buyer shall pay the Seller for the
Purchased Assets a total purchase price (the "Purchase Price") equal to (a) [*]
as of the Closing Date, plus (b) the difference between (i) the sum of the [*]
as of the Closing Date, discounted by [*] as of the Closing Date.
2.3 THE PURCHASE PRICE DEPOSIT AND ESTIMATED PURCHASE PRICE. On the
date hereof, the Buyer shall pay the Seller the Purchase Price Deposit by wire
transfer in immediately available funds to the account of Transamerica Specialty
Finance, First National Bank of Chicago, Chicago, Illinois, Account No. 5105013,
ABA No. 071000013. Buyer shall make a second payment to the Seller in the amount
of an estimate of the Purchase Price (the "Estimated Purchase Price") based on
the most recent information available to the Seller as of three (3) Business
Days prior to the Closing Date as provided in SECTION 3.2.
* [Confidential Treatment Requested]
10
<PAGE> 11
2.4 CLOSING STATEMENT: SETTLEMENT PAYMENT.
(a) Within twenty (20) Business Days after the Closing Date, the
Seller shall deliver to the Buyer a closing statement, certified by an
authorized officer of the Seller, showing the (i) the Lease Receivables,
including the lease payments under the Dealer Leases and Shuttle Leases, the
Residual Values and booked but unearned interest, (ii) the Floorplan
Receivables, (iii) the Dealer Reserves, (iv) amounts owed but not yet paid to
Manufacturers for Inventory included in the Floorplan Receivables, and (v)
amounts received from Dealers or Shuttle Bus Lessees to pay sales taxes owed and
not yet paid, each as of the Closing Date (the "Closing Statement").
(b) Within 30 days of its receipt of the Closing Statement, the
Buyer shall review the Closing Statement and shall deliver to the Seller a copy
of such statement, modified to reflect all adjustments, if any, that the Buyer
deems appropriate as the result of such review, together with a copy of all of
the Buyer's working papers with respect thereto. Within 30 days of receipt of
the Closing Statement as modified by the Buyer and the related working papers,
the Seller shall accept such Closing Statement, as modified by the Buyer, or the
Seller and the Buyer shall agree upon such further adjustments as may be
required. In the event that the Seller does not accept the Closing Statement, as
modified by the Buyer, and the Seller and the Buyer cannot agree upon further
adjustments, the Seller and the Buyer shall follow the procedures set forth in
SECTION 10.6 of this Agreement for agreeing upon the Closing Statement. The
Closing Statement, as accepted or agreed upon by the Seller and the Buyer, or as
delivered to the Buyer and the Seller by the mediator, shall constitute the
"Final Closing Statement" for the purposes of determining the amount of the
purchase price to be paid by the Buyer to the Seller for the Purchased Assets
pursuant to SECTION 2.2.
(c) During the preparation and review of the Closing Statement
and the period during which any dispute may be raised as contemplated by SECTION
2.4(b), the Seller and the Buyer shall provide each other with reasonable
access, upon reasonable written notice and during normal business hours and
without disruption to their normal business operations, to their respective
premises, books, records (excluding documents prepared with respect to such
dispute), and employees relating to the Business and the transactions
contemplated hereby.
(d) The Settlement Payment shall be an amount equal to the
difference between (i) the Estimated Purchase Price paid by the Buyer to the
Seller pursuant to the provisions of SECTION 2.3 and (ii) the Purchase Price
required to be paid to the Seller by the Buyer for the Purchased Assets pursuant
to SECTION 2.2.
(e) On the Settlement Date, the Settlement Payment shall be paid,
by wire transfer of immediately available funds, to an account designated prior
to the Settlement Date by the recipient thereof, as follows:
(i) if the aggregate Purchase Price required to be paid by
the Buyer to the Seller for the Purchased Assets pursuant to
SECTION 2.2 exceeds the amount of the Estimated Purchase Price,
the Buyer shall pay the Settlement Payment to the Seller;
11
<PAGE> 12
or
(ii) if the amount of the Estimated Purchase Price exceeds
the aggregate price required to be paid by the Buyer to the
Seller for the Purchased Assets pursuant to SECTION 2.2, the
Seller shall pay the Settlement Payment to the Buyer.
ARTICLE III
CLOSING
3.1 CLOSING. The consummation of the transactions provided for in this
Agreement (the "Closing") shall take place at the offices of the Seller's
counsel, Schiff Hardin & Waite, 7200 Sears Tower, Chicago, Illinois, at 9:00
a.m., Central Standard Time: (a) on a date which is at least two (2) Business
Days after the satisfaction or waiver of the last of the conditions required to
be satisfied or waived pursuant to ARTICLES VIII AND IX, or (b) at such other
place, time or date as the parties shall agree upon in writing. The date on
which the Closing is to occur is referred to herein as the "Closing Date."
3.2 BUYER'S DELIVERIES. At the Closing, the Buyer shall deliver the
Estimated Purchase Price. Such payment shall be made no later than 1:00 p.m.
Central Standard Time on the Closing Date by wire transfer in immediately
available funds to Seller's Account. The Buyer shall deliver all of the items
required to be delivered to the Seller pursuant to ARTICLE IX of this Agreement.
3.3 SELLER'S DELIVERIES. At the time of the Closing, the Seller shall
make available to the Buyer at the Seller's offices in Rolling Meadows,
Illinois, a copy of all of the tangible Purchased Assets, other than the titles
listed on SCHEDULE 3.3. Promptly following the time of the Closing, if the Buyer
so requests, the Seller shall pack and, at the Buyer's expense, ship for
delivery to the Buyer at its offices in Tacoma, Washington, a copy of all of the
tangible Purchased Assets not already located at the Buyer's offices. The Seller
shall deliver all of the items required to be delivered to the Buyer pursuant to
ARTICLE VIII of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby makes the following representation and warranties to
the Buyer:
4.1 ORGANIZATION. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Seller is duly qualified or otherwise authorized to do business and is in good
standing in each jurisdiction where the conduct of the Business and the
ownership or lease of the Purchased Assets so requires.
4.2 AUTHORIZATION. The Seller has the power and authority to execute,
deliver and
12
<PAGE> 13
perform this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance by the Seller of this Agreement and the
consummation by the Seller of the transactions contemplated hereby have been
duly authorized by all necessary corporate action. This Agreement has been duly
and validly executed and delivered by the Seller and, assuming due execution,
delivery and performance by the Buyer, constitutes a valid and legally binding
obligation of the Seller enforceable against the Seller in accordance with and
subject to its terms, except only as enforcement hereof may be limited by the
Bankruptcy Exception. The execution and delivery of this Agreement by the Seller
do not, and the consummation by the Seller of the transactions contemplated
hereby and the performance by the Seller of the obligations which it is
obligated to perform hereunder will not (a) violate any provision of the
certificate of incorporation or by-laws of the Seller, (b) assuming all
necessary consents and approvals are received, constitute a violation of any
law, regulation, rule, statute, judgment, decree or order of any governmental
authority applicable to the Seller or the Purchased Assets, or (c) result in the
creation of any Lien on the Purchased Assets.
4.3 OWNERSHIP OF THE PURCHASED ASSETS. The Seller has good and
marketable title to the Purchased Assets, free and clear of any Liens other than
Permitted Liens.
4.4 CONTRACT DOCUMENTS VALID AND ENFORCEABLE. Each Contract to which the
Seller is a party, assuming the due execution of a duly authorized Person on
behalf of each other party thereto, is the legal, valid and binding obligation
of each Person that is an obligor thereunder, arose out of a bona fide business
transaction entered into in the ordinary course of business of the Seller and is
enforceable by the Seller, in accordance with its terms, except only as
enforcement may be limited by the Bankruptcy Exception. Except as set forth on
SCHEDULE 4.4, each Contract included in the Contract Documents to which the
Seller is a party, is in full force and effect. The Seller has not received
written notice of any claim, charge or threat that the Seller has breached any
Contract.
4.5 COMPLIANCE WITH LAW. To the knowledge of the Seller, the Seller is
not in violation of any applicable law, statute, ordinance, order, rule or
regulation promulgated or judgment entered by any Regulatory Authority relating
to the operation or conduct of the Business or the ownership of the Purchased
Assets, including, without limitation, the provisions of any federal, state,
local or foreign law or regulation governing or pertaining to permissible
charges in connection with the extension of credit or the billing or collection
of obligations arising under the Contracts (including, but not limited to, usury
laws), except for all violations in the aggregate which would not have a
Material Adverse Effect on the Business.
4.6 LITIGATION. Except as set forth on SCHEDULE 4.6, there are no
actions, suits or judicial or administrative proceedings in any court or by or
before any other governmental authority pending or threatened in writing against
the Seller with respect to the Purchased Assets or the conduct of the Business
that would singularly, or in the aggregate, have a Material Adverse Effect on
the Business. There are no judicial or administrative actions, proceedings or
investigations pending or threatened in writing that question the validity of
this Agreement or of the transactions contemplated by this Agreement.
13
<PAGE> 14
4.7 CONDUCT OF BUSINESS - ABSENCE OF CERTAIN CHANGES. Since October 1,
1997, the Seller has materially complied with its customary procedures and
policies in (i) extending credit or entering into a commitment to extend credit
to any Dealer, (ii) collecting past due accounts and (iii) inspecting the
Collateral held as Inventory by Dealers under the Dealer Contracts. Since
October 1, 1997, the Seller has not terminated any Dealer, any Manufacturer, any
Shuttle Bus Lessee or any Assignor.
4.8 FINANCIAL DATA. The financial data set forth on SCHEDULE 4.8 with
respect to the Business was derived from the books and records of the Seller and
is true and correct in all material respects.
4.9 BROKERS. No Person acting on behalf of the Seller or any of its
Affiliates or under the authority of any of them is or will be entitled to any
broker's or finder's fee or any other commission or similar fee, directly or
indirectly, from any of the parties hereto in connection with any of the
transactions contemplated herein.
4.10 NO OTHER WARRANTIES OR REPRESENTATIONS. Except as otherwise
expressly set forth in this ARTICLE IV, the Seller makes no other warranties or
representations. The Buyer disclaims any warranties, representations and
indemnities not expressly set forth in this Agreement, whether express or
implied, including but not limited to any warranties of merchantability, fitness
for particular use, or as to the financial responsibility of the obligors to pay
their obligations under the Contract Documents. The Seller does not warrant and
represent, and has not in any way warranted or represented the collectibility,
yield or enforceability of any Purchased Receivables or that any or all of the
Purchased Receivables will be collectible or enforceable in any amounts.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby makes the following representations and warranties to
the Seller:
5.1 ORGANIZATION. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Washington and is
duly qualified, licensed and in good standing in each jurisdiction where the
Business will be conducted after the Closing Date.
5.2 AUTHORIZATION. The Buyer has the power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by the Buyer of
this Agreement and the consummation by the Buyer of the transactions
contemplated hereby have been duly authorized by all necessary corporate action.
This Agreement has been duly and validly executed and delivered by the Buyer,
and assuming the due execution, delivery and performance by the Seller, this
Agreement constitutes the valid and binding obligation of the Buyer, enforceable
against the Buyer in accordance with and subject to its terms, except only as
enforcement hereof may be limited by the Bankruptcy Exception. The execution and
14
<PAGE> 15
delivery of this Agreement by the Buyer do not, and the consummation by the
Buyer of the transactions contemplated hereby and the performance by the Buyer
of the obligations which it is obligated to perform hereunder will not (a)
conflict with any provision of the certificate of incorporation or by-laws of
the Buyer, (b) assuming all necessary consents and approvals are received,
constitute a violation of any law, regulation, rule, statute, judgment, decree
or order, or (c) result in the imposition of any Lien on the Purchased Assets.
5.3 LITIGATION. There are no actions, suits or judicial or
administrative proceedings pending in any court or by or before any other
governmental authority pending or threatened in writing against the Buyer which
would have a Material Adverse Effect on the Purchased Assets and the Business or
which would prohibit the Buyer from entering into this Agreement or performing
or consummating any of its obligations under or pursuant to this Agreement.
5.4 BROKERS. No Person acting on behalf of the Buyer or any of its
Affiliates or under the authority of any of them is or will be entitled to any
broker's or finder's fee or any other commission or similar fee, directly or
indirectly, from any of the parties hereto in connection with any of the
transactions contemplated herein.
5.5 FUNDS. On the Closing Date, the Buyer will have the funds necessary
to pay the entire Purchase Price and consummate its other obligations under this
Agreement.
5.6 THE BUYER'S DUE DILIGENCE. The Buyer represents that the Buyer is a
sophisticated the Buyer and is very knowledgeable about the Business. The Buyer
further represents that it has been advised by its independent professional,
financial, legal, accounting and tax advisors of its own choosing and is aware
of the risks inherent in owning and managing the Purchased Assets and the
Business. The Buyer further represents that it has undertaken, at its own
expense and to its own satisfaction, a review of the Purchased Assets and the
Business as it deems necessary or advisable and that the Seller has not made,
and the Buyer has not relied upon, any statements or representations by the
Seller, including but not limited to any statements or representations relating
to anticipated future performance of the Purchased Assets or any other
statements or representations, excepting only those representations and
warranties of the Seller expressly set forth in this Agreement, and the Buyer
has utilized its sole judgment and discretion throughout the entire due
diligence process.
ARTICLE VI
AGREEMENTS PENDING THE CLOSING
6.1 OPERATION OF THE BUSINESS. Between the date of this Agreement and
the Closing, except as otherwise contemplated by this Agreement:
(a) Except to the extent that the Buyer otherwise consents or as
contemplated by this Agreement, the Seller will carry on the Business in the
ordinary course of business.
15
<PAGE> 16
(b) The Seller shall not, without the prior written consent of
the Buyer:
(i) waive or commit to waive any rights relating to the
Business or Purchased Assets other than in the ordinary course of
business;
(ii) enter into, assume or otherwise acquire any Contract
relating to the Business, except in the ordinary and usual course
of business and except where credit approval has been granted by
the Seller in accordance with the Seller's customary requirements
and procedures for granting such credit approval;
(iii) advance funds pursuant to any existing Contract,
except in the ordinary and usual course of business and except
where credit approval has been granted by the Seller in
accordance with the Seller's customary requirements and
procedures for granting such credit approval;
(iv) sell, lease, transfer or otherwise dispose of any of
the Purchased Assets in any material amount other than in the
ordinary course of business or as a result of the actions of
Dealers, Shuttle Bus Lessees, Assignors or Manufacturers;
(v) change, or change the current enforcement of, any
existing policy or procedure relating to the collection of
Receivables or the inspection of Inventory; or
(vi) enter into any agreement (other than this Agreement)
to do any of the things prohibited by the foregoing clauses (i)
through (v).
6.2 INVESTIGATION. Between the date of this Agreement and the
Closing, the Seller shall provide the Buyer and the Buyer's representatives and
agents with reasonable access, upon reasonable written notice and during normal
business hours and without disruption to normal business operations to:
(a) all financial records and statements, assets, financing
documentation, licenses, contracts, standards, policies, insurance policies and
information relating to operating routines used by the Seller in connection with
the Business, and
(b) all personnel responsible for such matters, including the
Employees, for the purposes of conducting the Buyer's due diligence
investigation.
6.3 REGULATORY FILINGS. As soon as practicable following the date
hereof (to the extent not already made), each of the Seller and the Buyer shall
make or cause to be made by it or on its behalf all Regulatory Filings (if any)
required to be made.
6.4 PENDING OR THREATENED LITIGATION. Between the date of this
Agreement and the Closing, the Seller and the Buyer shall inform each other,
promptly upon obtaining knowledge
16
<PAGE> 17
thereof, of any pending or threatened litigation which reasonably could be
anticipated to:
(a) materially affect the Purchased Assets;
(b) render inaccurate in a material respect any representation or
warranty made by the Seller or the Buyer; or
(c) prohibit or restrain or affect the consummation of the
transactions contemplated hereby or the performance by the Seller or the Buyer
of their respective obligations hereunder.
6.5 CONSENTS TO ASSIGNMENT OF PURCHASED ASSETS. Prior to the Closing,
the Seller and the Buyer shall jointly use their best efforts to obtain all
documents, assignments, consents and acknowledgments from Dealers,
Manufacturers, Assignors, Shuttle Bus Lessees and Persons providing Credit
Supports required to enable the Buyer to obtain valid assignments of all of the
Seller's right, title and interest in the Purchased Assets (the "Consents"),
provided, however, that the Seller shall not be obligated to incur any expense
in connection with obtaining such Consents. Within three (3) business days
following the Closing Date, the Seller and the Buyer, at the Buyer's expense,
shall jointly notify all Dealers, Manufacturers, Shuttle Bus Lessees and
Assignors of the transactions contemplated hereby and the assignment to the
Buyer of the Purchased Receivables, the related Dealer Contracts, the Seller's
Interest in the Inventory financed thereby, the Dealer Leases, the Manufacturer
Contracts, the Assignor Contracts and the Shuttle Bus Leases.
6.6 OTHER NECESSARY TRANSFER INSTRUMENTS. The Seller shall execute and
deliver all other instruments and shall take or cause to be taken all such
further reasonable action as may be reasonable necessary: (a) to vest in the
Buyer title to and possession of all the Purchased Assets free and clear of all
liens other than Permitted Liens as of the Closing, and (b) to vest in the Buyer
a lien in the Collateral as of the Closing, provided that, the Buyer shall pay
all of the Seller's out-of-pocket expenses incurred in connection therewith and
provided further that, in accordance with SECTION 12.2, the Seller shall have no
obligation to file or pay filing fees or taxes associated with any documents of
transfer, assignments or conveyances to the Buyer.
6.7 BUYER COMMUNICATIONS WITH DEALERS OR MANUFACTURERS. Except for the
communications contemplated by SECTION 6.5 or as may be agreed by the Seller,
prior to the Closing, the Buyer shall not communicate with any Dealer,
Manufacturer, Assignor or Shuttle Bus Lessee with respect to the transactions
contemplated by this Agreement.
6.8 TRANSITIONAL SERVICES. The Buyer and the Seller shall use their best
efforts to negotiate prior to the Closing Date a mutually acceptable
Transitional Services Agreement.
6.9 OFFER OF EMPLOYMENT. The Buyer agrees that the Seller will continue
to employ, prior to the Closing Date, for such periods as it deems reasonable in
its sole discretion, the Employees. This provision is not intended to benefit
any third party, including but not limited to any
17
<PAGE> 18
employees of the Seller. The Seller will permit the Buyer to extend offers
or solicit the employment of the Employees, on any terms or conditions as the
Buyer shall desire, and such offer shall be made in writing, conditioned only
upon occurrence of the Closing, and shall require that any acceptance be
communicated to the Buyer and the Seller in writing.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 COOPERATION; RECORD RETENTION. The Buyer agrees to retain and
preserve in good condition, for the greater of seven (7) years or pursuant to
the Buyer's record retention policy, all records of the Seller delivered to the
Buyer in connection with this transaction and in existence as of the Closing
Date. The Buyer agrees that the Seller and its independent auditors shall have
reasonable access to such books and records and have the assistance and
cooperation of the appropriate personnel of the Buyer or its successors in the
review of such books and records. The Buyer shall provide the Seller with such
information requested by the Seller, and otherwise cooperate with the Seller as
reasonably requested, including but not limited to with respect to matters
relating to the Purchased Assets and the operation of the Business or the status
of the Purchased Assets prior to the Closing Date, or to enable the Seller or
its Affiliates to conduct any litigation or defend any claim.
7.2 INSURANCE. Effective 11:59 p.m. on the Closing Date, all insurance,
relating to the Purchased Assets, provided to the Seller through any insurance
provider, including Transamerica Corporation's Risk Management Program, shall
cease. The Buyer shall be responsible for obtaining all necessary and proper
insurance coverage for the Purchased Assets and its operation of the Purchased
Assets, at the Buyer's expense, from and after the Closing Date.
7.3 USE OF TRANSAMERICA MARKS. As promptly as possible and in no event
later than thirty (30) days after the Closing Date, the Buyer shall completely
and permanently obliterate or remove from all Purchased Assets all Transamerica
Marks, and in the event such Mark cannot be completely and permanently removed
from any such Purchased Asset, the Buyer will promptly destroy such item. From
and after the Closing Date, except as expressly permitted in the power of
attorney referred to in SECTION 8.6 of this Agreement, the Buyer shall not (i)
use in any manner the Transamerica Marks, or in any variation thereof, or any
acronym based thereon or any logo incorporating any such Transamerica Mark or
acronym or (ii) in any way represent that it is, or otherwise hold itself out as
being, affiliated with the Seller or any of the Seller's Affiliates, including
but not limited to Transamerica Corporation. Notwithstanding the foregoing, in
connection with transition arrangements, the Buyer shall be entitled to use the
word "Transamerica" in customer, regulatory and other routine communications but
only to the extent necessary to describe the transactions contemplated by this
Agreement.
7.4 NON-SOLICITATION AGREEMENT. The Seller agrees that it shall not for
a period of five (5) years after the Closing Date (a) solicit, directly or
indirectly, any account of any Dealer for inventory financing of the purchase by
the Dealer of any Funeral Vehicles or any shuttle bus of the
18
<PAGE> 19
type financed by the Seller on the date hereof; or (b) engage in the Funeral
Vehicle and shuttle bus inventory finance and lease funding business as engaged
in by the Seller on the date hereof, directly or indirectly, including through
the ownership of stock (other than an investment of less than 50% of the capital
stock of a publicly held corporation) of a business or unincorporated division
or otherwise in the United States of America. Notwithstanding the foregoing, the
Seller and its Affiliates shall be permitted to: (i) engage in advertising,
solicitations and marketing campaigns, programs and other efforts not primarily
directed or targeted at any Dealer, so long as such efforts are not based on or
derived from the information contained in the Purchased Assets; (ii) respond to
unsolicited inquiries by a Dealer; (iii) provide notices and communications
relating to the transactions contemplated hereby in accordance with the
provisions hereof; and (iv) use any names of or other information relating to
Dealers for research, modeling or any other purpose not prohibited herein.
7.5 FINANCIAL SERVICES BUSINESS. From and after the Closing Date, the
Seller and its Affiliates may continue to directly or indirectly own, manage or
operate any forms of financial services businesses including, but not limited to
inventory or floor plan financing, receivables financing, equipment leasing,
vendor leasing, lease financing and the like, and any other service business,
without any restrictions other than as expressly imposed by SECTION 7.4.
7.6 TAX MATTERS.
(a) Allocation of Certain Taxes. The Buyer and the Seller agree
that if the Business is permitted but not required under applicable state, local
or foreign Tax Laws to treat the day before the Closing Date or the Closing Date
as the last day of a taxable period, the Buyer and the Seller shall treat such
day as the last day of the taxable period. Any Income Taxes for a Straddle
Period shall be apportioned between the Seller and the Buyer based on the actual
operation of the Business during the portion of such period ending on the
Closing Date and the portion of such period beginning on the day following the
Closing Date (except that Income Taxes attributable to transactions or events
occurring on the Closing Date shall be apportioned to the Seller only if such
transactions or events are properly includible in the Seller's Affiliate's
consolidated federal income Tax Return and shall otherwise be apportioned to the
Buyer), and for purposes of the provisions of this SECTION 7.6, each portion of
such period shall be deemed to be a taxable period (whether or not it is in fact
a taxable period). All Taxes other than Income Taxes ("Other Taxes") relating to
a Straddle Period shall be apportioned between the Buyer and the Seller based on
the number of days during the portion of such period occurring on and before the
Closing Date, and the number of days during such period occurring after the
Closing Date and for purposes of this SECTION 7.6, each portion of such period
shall be deemed to be a taxable period (whether or not it is in fact a taxable
period). To the extent estimated Taxes have been paid prior to the Closing Date
with respect to a Straddle Period, the Seller's liability with respect thereto
shall be reduced by that amount; provided, further that if such payment of Taxes
exceeds (or is less than) the Seller's liability as calculated pursuant to this
SECTION 7.6, the Buyer shall promptly pay the Seller the amount of such excess
(or the Seller shall promptly pay the Buyer the amount of such shortfall). Upon
timely notice from the Buyer, the Seller shall pay to the Buyer at least ten
(10) days prior to the date any payment for Taxes
19
<PAGE> 20
as described in this SECTION 7.6 is due, the Seller's share of such Taxes as
described in this SECTION 7.6.
(b) Tax Returns. The Buyer and the Seller and their respective
Affiliates shall cooperate in the preparation of all Tax Returns relating in
whole or in part to taxable periods ending on or before or including the Closing
Date that are required to be filed after such date.
(c) Refunds. The Seller shall be entitled to any refunds or credits
of Taxes attributable to or arising in taxable periods ending on or before the
Closing Date. The Buyer shall be entitled to any refunds or credits of Taxes
attributable to or arising in taxable periods beginning after the Closing Date.
The Buyer shall forward to the Seller or reimburse the Seller for any refunds or
credits due the Seller after receipt thereof, and the Seller shall promptly
forward to the Buyer or reimburse the Buyer for any refunds or credits due the
Buyer after receipt thereof. Notwithstanding any other provision contained in
this ARTICLE VII, neither the Seller nor the Buyer shall request any refund,
overpayment or credit which will result in a tax detriment to the other party
without either a consent of the other party or reimbursing the other party for
the present value of such tax detriment as determined by nationally recognized
tax counsel or a big four accounting firm.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE BUYER
Unless such conditions are waived by the Buyer, the obligation of the
Buyer to consummate the Closing under this Agreement shall be subject to the
fulfillment, at or prior to the Closing, of the following conditions:
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. The
representations and warranties of the Seller contained in this Agreement and any
representations or warranties of the Seller contained in any other documents,
certificates or Schedules delivered by or on behalf of the Seller pursuant to
this Agreement shall be true in all material respects at the Closing, as though
made at and as of the Closing, and the Seller shall have performed all
obligations and complied with all covenants and conditions required by this
Agreement to be performed or complied with by the Seller at or prior to the
Closing.
8.2 CLOSING CERTIFICATE. The Seller shall have delivered to the Buyer a
certificate of the Seller, substantially in the form of EXHIBIT A hereto, dated
the Closing Date and signed on its behalf by its President or any Vice President
in his or her respective representative capacity, certifying as to the
fulfillment of the conditions to the obligations of the Buyer as set forth in
this Agreement.
8.3 NO LITIGATION. No action or proceeding shall have been instituted
and remain pending before a Regulatory Authority to restrain, prohibit or
otherwise challenge the sale of the Purchased Assets to the Buyer or the
performance of the obligations of the parties under this Agreement, nor shall
any Regulatory Authority have notified any party to this Agreement that the
20
<PAGE> 21
consummation of the transactions contemplated hereby would constitute a
violation of the laws of the United States or any state thereof or of any other
jurisdiction to which such authority is subject and that such authority intends
to commence proceedings to restrain the consummation of such transactions, to
force divestiture if the same are consummated or to modify materially the terms
or results of such transactions, unless such authority shall have withdrawn such
notice prior to what would otherwise have been the Closing Date.
8.4 REGULATORY APPROVALS. All Regulatory Approvals shall have been
obtained.
8.5 DELIVERY OF BILLS OF SALE AND OTHER TRANSFER INSTRUMENTS. The Seller
shall have executed and delivered to the Buyer a Bill of Sale and Assignment,
substantially in the form of EXHIBIT B; the Buyer shall have received such other
bills of sale, endorsements, assignments and other instruments of transfer and
conveyance as shall have been reasonably requested by the Buyer to vest in the
Buyer the Seller's full right, title and interest in the Purchased Assets; the
Buyer shall have received from the Seller a limited power of attorney,
substantially in the form of EXHIBIT C, permitting the Buyer only to endorse
checks or drafts received after the Closing Date and to execute amendments to
financing statements on behalf of the Seller; and the Seller shall permit the
Buyer to take actual possession and operating control of the Purchased Assets at
the Closing.
8.6 NO MATERIAL ADVERSE CHANGE. Between the date of this Agreement and
the Closing, there shall have occurred no change that has had a Material Adverse
Effect on the Business.
8.7 TRANSITIONAL SERVICES AGREEMENT. The Buyer and the Seller shall have
entered into the Transitional Services Agreement.
ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER
Unless such conditions are waived by the Seller, the obligations of the
Seller to consummate the Closing under this Agreement shall be subject to the
fulfillment, at or prior to the Closing, of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. The
representations and warranties of the Buyer contained in this Agreement and any
representations or warranties of the Buyer contained in any other documents or
certificates delivered by or on behalf of the Buyer pursuant to this Agreement
shall be true in all material respects at the Closing, as though made at and as
of the Closing, and the Buyer shall have performed all obligations and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by the Buyer at or prior to the Closing.
9.2 CLOSING CERTIFICATE. The Buyer shall have delivered to the Seller a
certificate of the Buyer, substantially in the form of EXHIBIT D hereto, dated
the Closing Date and signed on behalf
21
<PAGE> 22
of the Buyer by its President or any Vice President in his or her respective
representative capacity, certifying as to the fulfillment of the conditions to
the obligations of the Seller as set forth in this Agreement.
9.3 NO LITIGATION. No action or proceeding shall have been instituted
and remain pending before a Regulatory Authority to restrain, prohibit or
otherwise challenge the sale of the Purchased Assets to the Buyer or the
performance of the obligations of the parties under this Agreement, nor shall
any Regulatory Authority have notified any party to this Agreement that the
consummation of the transactions contemplated hereby would constitute a
violation of the laws of the United States or any state thereof or of any other
jurisdiction to which such authority is subject and that such authority or body
intends to commence proceedings to restrain the consummation of such
transactions or to modify materially the terms or results of such transactions,
unless such authority shall have withdrawn such notice prior to what would
otherwise have been the Closing Date.
9.4 REGULATORY APPROVALS. All Regulatory Approvals shall have been
obtained.
9.5 DELIVERY OF ASSUMPTION AGREEMENT. The Buyer shall have executed and
delivered to the Seller an Assumption Agreement, in substantially the form of
EXHIBIT E, and the Seller shall have received at the Closing such other
instruments as may be reasonably requested by the Seller to effect the
assumption by the Buyer of the Assumed Liabilities.
9.6 CORPORATE APPROVAL. The sale of the Purchased Assets shall have
received all required internal approvals of the Seller.
9.7 TRANSITIONAL SERVICES AGREEMENT. The Buyer and the Seller shall have
entered into the Transitional Services Agreement.
ARTICLE X
INDEMNIFICATION
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Seller or by the Buyer in this Agreement or in any
certificate delivered pursuant to the terms hereof shall expire eighteen (18)
months after the Closing Date.
10.2 INDEMNIFICATION BY THE SELLER.
(a) Subject to SECTIONS 10.2(B) and 10.4, the Seller shall indemnify
and hold harmless the Buyer and each of its directors, officers, employees,
agents and Affiliates from and against any and all Damages arising out of or
based upon :
(i) any breach of any representation or warranty made by the
Seller in this
22
<PAGE> 23
Agreement or any Schedule incorporated by reference into any of
Seller's representations or warranties, or in any certificate
delivered pursuant to the terms hereof and not waived in writing by
the Buyer;
(ii) any failure to perform any covenant, agreement or
undertaking on the part of the Seller contained in this Agreement;
(iii) any act or omission of the Seller prior to the Closing
Date;
(iv) any suit, action or proceeding, whether governmental or
private either (A) pending on or before the Closing Date and not
expressly assumed by the Buyer in writing or (B) arising out of or
based upon or relating to any act, event or occurrence prior to the
Closing, including, without limitation, the matters listed on
SCHEDULE 4.6; and
(v) any and all Taxes that may be imposed on or assessed against
the Seller or, if with respect to the operations of the Seller or
its Affiliates, the Purchased Assets to the extent such liability
relates to the Seller's ownership thereof.
(b) The Seller shall have no obligation to indemnify the Buyer
pursuant to SECTION 10.2(A) unless and until the aggregate amount of Damages
incurred by the Buyer and its directors, officers, employees, agents and
Affiliates exceeds $50,000, and then the Seller shall indemnify the Buyer and
its directors, officers, employees, agents and Affiliates for the amount of such
Damages in excess of $50,000; and provided further that the Seller's liability
under SECTION 10.2(A), shall in no event exceed the Purchase Price.
10.3 INDEMNIFICATION BY THE BUYER. Subject to SECTION 10.4, the Buyer
shall indemnify and hold harmless the Seller and its directors, officers,
employees, agents and Affiliates against any and all Damages arising out of or
based upon or with respect to (a) any breach of any representation or warranty
made by the Buyer in this Agreement or in any certificate delivered by the Buyer
to the Seller pursuant to the terms hereof, (b) any failure to perform any
covenant, agreement or undertaking on the part of the Buyer contained in this
Agreement, (c) any act or omission of the Buyer on or after the Closing Date,
and (d) any and all Taxes that may be imposed on or assessed against the Buyer
or, if with respect to the operations of the Buyer or its Affiliates, the
Purchased Assets to the extent such liability relates to the Buyer's ownership
thereof.
10.4 LIMITATIONS ON INDEMNIFICATION.
(a) Neither party shall have any obligation to indemnify another
party with respect to any Interparty Claim unless such Interparty Claim is
commenced or asserted prior to the expiration date of the representation or
warranty on which the claim for indemnification is based as set forth in SECTION
10.1. Neither party shall have any obligation to indemnify another party with
respect to any breach of any representation or warranty made in this Agreement
or in any certificate, Schedule,
23
<PAGE> 24
Exhibit or other document delivered pursuant to the terms hereof in
connection with a Third Party Claim, unless (i) the event giving rise to such
Third Party Claim occurs on or prior to the expiration date of the
representation or warranty on which the claim for indemnification is based as
set forth in SECTION 10.1 and (ii) the indemnified party notifies the Indemnitor
of such Third Party Claim in writing on or before such expiration date.
(b) If an Indemnification Event arising as a result of a breach of a
representation or warranty or failure to perform an obligation can be cured by
an Indemnitor by means of the payment of money, the assumption of a liability or
any other action by the Indemnitor, then the Indemnitor shall have the right to
cure such Indemnification Event within 60 days after receiving notice thereof
from the indemnified party and, upon so doing, shall have no further liability
to the indemnified party with respect to such Indemnification Event. Failure to
exercise such right to cure shall not adversely affect the rights or obligations
of the Indemnitor. For purposes of this SECTION 10.4(B), a "cure" shall consist
of (i) giving the indemnified party the "Benefit of the bargain", and (ii)
reimbursing the indemnified party for its reasonable out-of-pocket expenses,
other than salary and overhead, incurred as a result of the breach or default.
Where the indemnified party is the Buyer, it shall be deemed to have received
the "benefit of the bargain" if, as of the completion of the cure, (x) it is
vested with the title to the Purchased Assets provided in this Agreement, (y)
the Buyer's rights (as represented and warranted herein) to enforce the
Purchased Receivables, Contracts and Credit Supports are not materially impaired
by the Seller's breach or default, and (z) the Buyer is in substantially the
same position it would have been in had the breach or default not occurred.
10.5 PROCEDURES FOR THIRD PARTY CLAIMS. For the purposes of
administering the indemnification provisions of this ARTICLE X with respect to
Third Party Claims, the following procedures shall apply from and after the
Closing Date:
(a) Each indemnified party shall notify the Indemnitor of any
Indemnification Event in writing within 30 days following the receipt of notice
of the commencement of any action or proceeding or within 30 days of (i) the
assertion of any Third Party Claim against such indemnified party or (ii) the
discovery by such indemnified party of any loss giving rise to indemnity
pursuant to SECTION 10.2 or 10.3. The indemnified party shall indicate in such
notification whether such indemnified party is requesting indemnification with
respect to such Indemnification Event and the amount of indemnification
initially anticipated. In the case of a claim which is amended so as to give
rise to an Indemnification Event, any 30-day notification requirement shall
begin to run from the first day the indemnifying party receives notice that such
Third Party Claim is amended to include any claim which is an Indemnification
Event hereunder. The failure to give notice as required by this SECTION 10.6(a)
in a timely fashion shall result in a waiver of any right to indemnification
hereunder.
(b) The Indemnitor shall be entitled (but not obligated) to assume
the defense or settlement of any Third Party Claim, or to participate in any
negotiations or proceedings to settle or otherwise eliminate any Third Party
Claim. If the Indemnitor fails to elect in writing within five (5) Business Days
of the notification referred to above to assume the defense, the indemnified
party may
24
<PAGE> 25
engage counsel as provided herein to defend, settle or otherwise dispose of
such Third Party Claim, which counsel shall be reasonably satisfactory to the
Indemnitor, provided that the Indemnitor may nevertheless assume the defense at
any time after such five-day period. During any period that the Indemnitor has
not assumed the defense or settlement, the indemnified party shall provide the
Indemnitor with advance notice in writing of all settlement agreements,
dispositive pleading and dispositive hearings.
(c) In cases where the Indemnitor has assumed the defense or
settlement with respect to a Third Party Claim, the Indemnitor shall be entitled
to assume the defense or settlement thereof with counsel of its own choosing,
which counsel shall be reasonably satisfactory to the indemnified party;
provided that (i) the indemnified party (and its counsel) shall be entitled to
continue to participate at its own cost in any such action or proceeding or in
any negotiations or proceedings to settle or otherwise eliminate any claim for
which indemnification is being sought (provided that the indemnified party shall
not be entitled to settle without the approval of the Indemnitor, which approval
will not be unreasonably withheld or delayed), and (ii) the Indemnitor shall not
be entitled to settle, compromise, decline to appeal, or otherwise dispose of
any such Third Party Claim without the consent or agreement of the indemnified
party (which consent will not be unreasonably withheld or delayed); provided
that if such consent is withheld and the proposed settlement includes as an
unconditional term thereof the release of all indemnified parties from all
liability with respect to the Third Party Claim, then, except as set forth in
the next following sentence, the Indemnitor's liability shall be limited to the
amount for which the Indemnitor agreed with the claimant to settle and the
Indemnitor shall remain responsible for its costs and attorneys' fees to the
date such settlement was rejected by the indemnified party and the indemnified
party shall be responsible for the costs and attorneys' fees in respect of such
Third Party Claim thereafter. If the indemnified party does not consent to a
proposed settlement because the settlement requires the indemnified party to
release a Person asserting a Third Party Claim from an obligation owing by such
Person to the indemnified party (and the Indemnitor has not agreed to perform
such obligation on behalf of such Person), or because the indemnified party
reasonably determines that the terms (as distinguished from the fact or
precedential value) of such settlement will have an adverse impact on the
continuing operations of the indemnified party's business, then the obligations
of the Indemnitor hereunder shall not be limited as provided in the foregoing
sentence.
(d) In no event shall an Indemnitor be liable to any indemnified
party for the cost of employing or using in-house legal counsel regardless of
whether such Indemnitor has, or has not, assumed the defense or settlement of
such action, proceeding or claim.
(e) In the event indemnification is requested, the relevant
Indemnitor, its representative and agents shall have reasonable access upon
reasonable written notice and during normal business hours, to the premises,
books and records and employees of the indemnified party or parties seeking such
indemnification to the extent reasonably necessary to assist it in defending or
settling any action, proceeding or claim; provided, however, that (i) such
access shall be conducted in such manner as not to interfere unreasonably with
the operation of the business of the indemnified party or parties and shall only
take place in the presence of a representative of the
25
<PAGE> 26
indemnified party or parties unless otherwise so agreed, (ii) the indemnified
party shall not be required to disclose any information with respect to itself
or any of its Affiliates and shall not be required to participate in the defense
of any claim to be indemnified hereunder, unless otherwise required or
reasonably necessary to the defense of any claim to be indemnified hereunder,
and (iii) the Indemnitor shall keep such information confidential and not use
such information except in connection with the indemnification hereunder.
(f) In the case of an Indemnification Event where the Seller is
the Indemnitor, the Buyer shall treat any affected Receivables in the same
manner as it treats Receivables in the same manner as it treats Receivables not
subject to indemnification unless otherwise instructed by the Seller.
10.6 PROCEDURES FOR INTERPARTY CLAIMS. Each indemnified party shall
notify the Indemnitor of any Interparty Claim in writing within thirty (30) days
of the discovery of such claim. In the event the Indemnitor disputes (the
"Indemnification Dispute") the Interparty Claim, it shall be resolved in
accordance with the procedures set forth in this SECTION 10.6. Each party shall
designate a representative (each, a "Representative") to oversee compliance with
each party's respective obligations under this SECTION 10.6. The Representatives
shall meet (by conference telephone call or in person at a mutually agreeable
site) to attempt to resolve the Indemnification Dispute. If the Representatives
resolve the Indemnification Dispute, and payments is required, payment shall be
made within five (5) Business Days. If no agreement is reached within thirty
(30) days after the date of the indemnified party's written notification of an
Interparty Claim, the chief financial officer of each party shall meet (by
conference telephone call or in person at a mutually agreeable site) to attempt
to resolve the Indemnification Dispute. If the chief financial officers resolve
the Indemnification Dispute, and payment is required, payment shall be made
within five (5) Business Days. If no agreement is reached within sixty (60) days
after the date of the indemnified party's written notification of an
Intercompany Claim, the chief executive officer of the Buyer and the chief
executive officer of the Seller shall meet (by conference telephone call or in
person at a mutually agreeable site) to attempt to resolve the Indemnification
Dispute. If the chief executive officers resolve the Indemnification Dispute,
and payment is required, payment shall be made within five (5) Business Days. If
no agreement is reached within ninety (90) days after the day of the indemnified
party's written notification of an Interparty Claim, the Indemnification dispute
shall be resolved by non-binding mediation.
10.7 EXCLUSIVITY. Subsequent to the Closing, the indemnification
provided in this ARTICLE X shall be the sole and exclusive remedy for breaches
of this Agreement.
10.8 DISCLAIMER OF CERTAIN DAMAGES. The remedies for breach of this
Agreement shall be limited to actual and direct Damages (as such term is defined
herein) and shall exclude any and all consequential, incidental, punitive,
exemplary or indirect damages, all of which consequential, incidental, punitive,
exemplary or indirect damages the Seller and the Buyer hereby expressly waive.
26
<PAGE> 27
ARTICLE XI
TERMINATION
11.1 TERMINATION OF AGREEMENT. This Agreement may be terminated and
the transactions contemplated hereunder abandoned:
(a) At any time prior to the Closing Date by the mutual written
agreement of the Seller and Buyer;
(b) By the Seller:
(i) if the Closing is not consummated on or before January
31, 1998, unless the failure of such occurrence shall be due to
the intentional failure of the Seller to perform or observe the
covenants, agreements and conditions hereof to be performed or
observed by the Seller at or before the Closing Date; or
(ii) if events occur which render impossible compliance
with one or more of the conditions set forth in ARTICLE IX hereof
and such conditions are not waived by the Seller; provided that
such events did not result from any action or omission by the
Seller which was within its control and which the Seller was not
expressly permitted to take or omit by the terms of this
Agreement.
(c) By the Buyer:
(i) if the Closing is not consummated on or before January
31, 1998, unless the failure of such occurrence shall be due to
the intentional failure of the Buyer to perform or observe the
covenants, agreements and conditions hereof to be performed or
observed by the Buyer at or before the Closing Date; or
(ii) if events occur which render impossible compliance
with one or more of the conditions set forth in ARTICLE VIII
hereof and such conditions are not waived by the Buyer; provided
that such events did not result from any action or omission by
the Buyer which was within its control and which the Buyer was
not expressly permitted to take or omit by the terms of this
Agreement.
11.2 EFFECT OF TERMINATION. In the event that this Agreement shall be
terminated pursuant to SECTION 11.1, all further obligations of the parties
under this Agreement shall terminate without further liability of either party
to the other, except that the parties shall remain subject to the provisions of
SECTIONS 11.3 AND 12.2. In the event this Agreement shall be terminated pursuant
to SECTION 11.1 as a result of the Seller's failure to observe the covenants,
agreements and conditions hereof to be performed or observed by the Seller, the
Seller shall return the Purchase Price Deposit to the Buyer.
11.3 PROPRIETARY INFORMATION. Notwithstanding any provision herein to
the contrary, in the event that this Agreement is terminated, the Buyer shall,
upon the request of the Seller, promptly certify that it has destroyed (except
to the extent that such information is included in the corporate
27
<PAGE> 28
minutes of the Buyer or otherwise required to be maintained by law) all written
information about the properties, operations and assets of the Seller furnished
or made available to the Buyer in connection with this Agreement or the
transactions contemplated herein by the Seller or any of its Affiliates,
directors, officers, employees or agents, regardless of the manner in which it
was furnished or made available, together with all analyses, compilations,
reports, studies, notes of conversations and other materials that are derived
from such written information prepared by or on behalf of the Buyer or any of
its Affiliates, directors, officers, employees or agents (all such information
being referred to herein as "PROPRIETARY INFORMATION"), including all copies,
reproductions, summaries, analyses or extracts of Proprietary Information in the
possession of the Buyer or any of its Affiliates, directors, officers, employees
or agents, and, unless otherwise agreed to in writing by the Seller, the Buyer
shall not disclose or use in any way Proprietary Information, including, without
limitation, Proprietary Information included in the corporate minutes of the
Buyer.
ARTICLE XII
MISCELLANEOUS
12.1 ENTIRE AGREEMENT AMENDMENT AND MODIFICATION; WAIVER OF PROVISIONS.
This Agreement and the Confidentiality Agreement constitute the entire Agreement
between the parties and supersede and cancel any and all prior agreements,
written or oral, among them relating to the subject matter hereof. This
Agreement may be amended, modified or waived only by a written instrument
executed by all of the parties hereto. The failure of any party at any time or
times to require performance of any provision of this Agreement shall in no
manner affect the right of such party at a later date to enforce the same. No
waiver by any party of any condition or the breach of any provision, terms,
covenant, representation or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or of the
breach of any other provision, term, covenant, representation or warranty of
this Agreement.
12.2 EXPENSES, TAXES AND FEES. The parties agree that fees and
out-of-pocket expenses shall be paid as follows:
(a) Fees and disbursements of counsel, consultants and
accountants shall be paid by the party retaining such persons;
(b) Each party shall bear its own expenses incurred with respect
to any regulatory filings and obtaining all required Regulatory Approvals;
(c) The Buyer shall be responsible for Taxes payable upon and in
connection with the conveyance, transfer and recording the assignment to the
Buyer of the Seller's security interest in the Collateral of the Purchased
Assets to the Buyer and any other taxes arising from the transfer of the
Purchased Assets to the Buyer; and
(d) All other fees and out-of-pocket expenses incurred in
connection with the
28
<PAGE> 29
transactions contemplated hereby shall be paid by the party incurring such
expenses.
12.3 SUCCESSORS AND ASSIGNS; ASSIGNMENTS. All terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective transferees, successors and assigns. No party hereto
may assign any of its rights or delegate any of its duties hereunder without the
prior written consent of the other parties, and any such attempted assignment or
delegation without such consent shall be null and void.
12.4 FURTHER ASSURANCES. Each party will, whenever and as often as
reasonably requested to do so by the other do, execute, acknowledge and deliver
any and all such other and further acts, assignments, transfers, instruments of
further assurance, approvals and consents as are necessary or proper in order to
complete the transactions contemplated hereby.
12.5 NO THIRD PARTIES BENEFITED. This Agreement is made and entered into
for the protection and benefit of the parties hereto and their permitted
successors and assigns, and no other Person shall be a direct or indirect
beneficiary of or have any direct or indirect cause of action or claim in
connection with this Agreement or any of the documents executed in connection
herewith; provided, however, that those Persons expressly set forth in SECTIONS
10.1 AND 10.2 are intended beneficiaries of ARTICLE X, Indemnification.
12.6 GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Illinois, without giving
effect to the choice of law provisions thereof.
12.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute but one and the same instrument.
12.8 CHOICE OF FORUM. Any judicial proceeding brought against any of the
parties hereto with respect to this Agreement shall be brought in any court of
competent jurisdiction in Cook County, Illinois, irrespective of where such
party may be located at the time of such proceeding, and by execution and
delivery of this Agreement, each of the parties to this Agreement hereby
consents to the exclusive jurisdiction of any such court, agrees and consents
that service of process may be made upon such party in any legal proceeding
relating to the Agreement, and waives any defense or opposition to such
jurisdiction.
12.9 NOTICES. Any notices or other communications required or permitted
hereunder shall be in writing and shall be sufficiently given if delivered in
person or sent by registered mail or certified mail, postage prepaid and return
receipt requested, by overnight courier service, by commercial delivery service,
by facsimile transmission or by telex or other written form of electronic
communication,
If to the Buyer:
29
<PAGE> 30
T&W Financial Services Company, LLC
6416 Pacific Highway East
Tacoma, Washington 98424
Attention: Paul Luke
Telecopy number: ____________
If to the Seller:
Transamerica Commercial Finance Corporation
1933 N. Meacham Road
Schaumburg, Illinois 60173
Attention: Richard Strickler
Telecopy number: ____________
With a copy to:
Transamerica Commercial Finance Corporation
1701 Golf Road, Continental Towers II, Suite 500
Rolling Meadows, IL 60008
Attention: General Counsel & Vice President of Corporate Development
Telecopy number: (847) 734-7455
or to such other address as shall be furnished in writing by the Seller or the
Buyer, as the case may be, to the other, and any such notice or communication
shall be deemed to have been received as of the date so delivered or
electronically transmitted or on the third day after being mailed.
12.10 SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
12.11 HEADINGS. The subject headings of this Agreement are included for
purposes of convenience only and shall not affect the construction of any of its
provisions.
12.12 ANNOUNCEMENTS. Neither the Seller nor the Buyer shall issue any
press release or otherwise make any public announcement with respect to the
transactions contemplated by this Agreement without the prior written consent of
the other party (which consent shall not be unreasonably withheld), except for
any such press release or public announcement which may be required by law or
pursuant to any listing agreement with any national securities exchange. Nothing
in this SECTION 12.12 shall be deemed to limit the right of the Seller or the
Buyer to communicate with their respective advisors or employees with respect to
the transactions contemplated by this Agreement.
30
<PAGE> 31
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf by its officer or representative thereunto duly
authorized as of the day and year first above written.
T&W FINANCIAL SERVICES COMPANY, LLC
By:
---------------------------------
Title:
------------------------------
TRANSAMERICA COMMERCIAL FINANCE
CORPORATION
By:
---------------------------------
Title:
------------------------------
31
<PAGE> 32
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
<S> <C>
DEFINITIONS............................................................1
1.1 Definitions.....................................................1
1.2 Other Definitions...............................................7
1.3 Other Definitional Provisions...................................8
ARTICLE II
PURCHASE OF ASSETS;
PURCHASE PRICE AND PAYMENT.............................................8
2.1 Purchase and Sale of Purchased Assets and
Assumption of Liabilities......................................8
2.2 The Purchase Price.............................................10
2.3 The Purchase Price Deposit and Estimated Purchase Price........10
2.4 Closing Statement: Settlement Payment..........................11
ARTICLE III
CLOSING...............................................................12
3.1 Closing........................................................12
3.2 Buyer's Deliveries.............................................12
3.3 Seller's Deliveries............................................12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER..........................12
4.1 Organization...................................................12
4.2 Authorization..................................................12
4.3 Ownership of the Purchased Assets..............................13
4.4 Contract Documents Valid and Enforceable.......................13
4.5 Compliance with Law............................................13
4.6 Litigation.....................................................13
4.7 Conduct of Business - Absence of Certain Changes...............14
4.8 Financial Data.................................................14
4.9 Brokers........................................................14
4.10 No Other Warranties or Representations.........................14
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER...........................14
5.1 Organization...................................................14
5.2 Authorization..................................................14
5.3 Litigation.....................................................15
5.4 Brokers........................................................15
5.5 Funds..........................................................15
5.6 The Buyer's Due Diligence......................................15
</TABLE>
i
<PAGE> 33
<TABLE>
<CAPTION>
ARTICLE VI
<S> <C>
AGREEMENTS PENDING THE CLOSING........................................15
6.1 Operation of the Business......................................15
6.2 Investigation..................................................16
6.3 Regulatory Filings.............................................16
6.4 Pending or Threatened Litigation...............................16
6.5 Consents to Assignment of Purchased Assets.....................17
6.6 Other Necessary Transfer Instruments...........................17
6.7 Buyer Communications with Dealers or Manufacturers.............17
6.8 Transitional Services..........................................17
6.9 Offer of Employment............................................17
ARTICLE VII
ADDITIONAL AGREEMENTS.................................................18
7.1 Cooperation; Record Retention..................................18
7.2 Insurance......................................................18
7.3 Use of Transamerica Marks......................................18
7.4 Non-Solicitation Agreement.....................................18
7.5 Financial Services Business....................................19
7.6 Tax Matters....................................................19
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE BUYER............................20
8.1 Representations and Warranties; Performance of Agreements......20
8.2 Closing Certificate............................................20
8.3 No Litigation..................................................20
8.4 Regulatory Approvals...........................................21
8.5 Delivery of Bills of Sale and Other Transfer Instruments.......21
8.6 No Material Adverse Change.....................................21
8.7 Transitional Services Agreement................................21
ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER.................21
9.1 Representations and Warranties; Performance of Agreements......21
9.2 Closing Certificate............................................21
9.3 No Litigation..................................................22
9.4 Regulatory Approvals...........................................22
9.5 Delivery of Assumption Agreement...............................22
9.6 Corporate Approval.............................................22
9.7 Transitional Services Agreement................................22
</TABLE>
ii
<PAGE> 34
<TABLE>
<CAPTION>
ARTICLE X
<S> <C>
INDEMNIFICATION.......................................................22
10.1 Survival of Representations and Warranties.....................22
10.2 Indemnification by the Seller..................................22
10.3 Indemnification by the Buyer...................................23
10.4 Limitations on Indemnification.................................23
10.5 Procedures for Third Party Claims..............................24
10.6 Procedures for Interparty Claims...............................26
10.7 Exclusivity....................................................26
10.8 Disclaimer of Certain Damages..................................26
ARTICLE XI
TERMINATION...........................................................27
11.1 Termination of Agreement.......................................27
11.2 Effect of Termination..........................................27
11.3 Proprietary Information........................................27
ARTICLE XII
MISCELLANEOUS.........................................................28
12.1 Entire Agreement Amendment and Modification;
Waiver of Provisions..........................................28
12.2 Expenses, Taxes and Fees.......................................28
12.3 Successors and Assigns; Assignments............................29
12.4 Further Assurances.............................................29
12.5 No Third Parties Benefited.....................................29
12.6 Governing Law..................................................29
12.7 Counterparts...................................................29
12.8 Choice of Forum................................................29
12.9 Notices........................................................29
12.10 Severability...................................................30
12.11 Headings.......................................................30
12.12 Announcements..................................................30
</TABLE>
EXHIBITS
Exhibit A - Seller's Closing Certificate
Exhibit B - Bill of Sale
Exhibit C - Power of Attorney
Exhibit D - Buyer's Closing Certificate
Exhibit E - Assumption Agreement
iii
<PAGE> 35
SCHEDULES
---------
Schedule 1.1 - Permitted Liens
2.1(a)(i) - Lease Receivables
2.1(a)(ii) - Floorplan Receivables
2.1(a)(v) - Manufacturers
3.3 - Titles
4.4 - Contracts
4.6 - Litigation
4.8 - Financial Data
iv
