Exhibit 2.1
ASSET PURCHASE AGREEMENT
between
TRANSAMERICA LEASING INC.
and
INTERPOOL, INC.
Dated as of July 27, 2000
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..............................................1
1.1 Definitions..............................................1
1.2 Other Definitional Provisions............................8
ARTICLE II SALE OF ASSETS; ASSUMPTION OF LIABILITY;
PURCHASE PRICE.........................................9
2.1 Sale and Purchase of Assets..............................9
2.2 Excluded Assets.........................................10
2.3 Assumption of Liabilities...............................11
2.4 Excluded Liabilities....................................12
2.5 Purchase and Sale.......................................13
2.6 Post-Closing Purchase Price Adjustment..................14
2.7 Cash Management after the Cut-Off Date..................16
ARTICLE III CLOSING.................................................18
3.1 Closing.................................................18
3.2 Closing Deliveries......................................18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER................19
4.1 Organization, Power.....................................19
4.2 Authority Relative to Agreement.........................19
4.3 Non-Contravention.......................................19
4.4 Consents................................................20
4.5 Signing Statements......................................20
4.6 Litigation..............................................21
4.7 Compliance with Laws; Permits and Licenses..............21
4.8 Absence of Certain Changes or Events....................21
4.9 Special Purpose Financial Statements....................21
4.10 Warranty Claims.........................................22
4.11 Employees; Employee Benefits............................22
4.12 Taxes...................................................23
4.13 Material Contracts......................................23
4.14 Title to Assets; Absence of Encumbrances; Assets........25
4.15 Leases of Real Property.................................26
4.16 Environmental...........................................26
4.17 Intellectual Property...................................27
4.18 Brokers.................................................27
4.19 Accounts Receivables....................................27
4.20 No Regulatory Impediment................................28
4.21 Limitation on Representations and Warranties............28
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER.............28
5.1 Organization............................................28
5.2 Authority Relative to Agreement.........................28
5.3 Non-Contravention.......................................29
5.4 Consents................................................29
5.5 Brokers.................................................29
5.6 Financing...............................................29
5.7 No Regulatory Impediment................................30
ARTICLE VI COVENANTS...............................................30
6.1 Conduct of Business.....................................30
6.2 Access; Confidentiality.................................31
6.3 Taking of Necessary Action..............................32
6.4 Release of Seller from Assumed Liabilities..............33
6.5 Exclusivity.............................................33
6.6 Release of Purchaser from Excluded Liabilities..........33
6.7 Insurance; Risk of Loss.................................33
6.8 Assumption of Proceedings...............................34
6.9 Mail; Payments..........................................34
6.10 License of Name.........................................34
6.11 Post-Closing Sales Tax Cooperation......................36
6.12 Post-Closing Accounting Cooperation.....................36
6.13 General Cooperation.....................................36
6.14 Assigned Contracts......................................36
6.15 Bulk Sales Waiver.......................................36
6.16 Public Announcements....................................37
6.17 Notices of Certain Events...............................37
6.18 Further Assurances......................................37
6.19 Covenant Not to Compete.................................37
6.20 Cooperation with Respect to Financing...................38
6.21 Insurance Reimbursement.................................39
6.22 Contingent Guaranty.....................................39
6.23 Transition Services Agreement...........................39
ARTICLE VII EMPLOYEE MATTERS........................................39
7.1 Business Employees......................................39
7.2 Employment..............................................40
7.3 Employee Benefits.......................................40
7.4 Assumption of Liabilities...............................41
7.5 Retirement Plan for Salaried Business Employees.........42
7.6 401(k) Plan.............................................42
7.7 TARRP...................................................43
7.8 Workers' Compensation...................................43
7.9 Vacation Pay............................................44
7.10 Welfare Plans...........................................44
7.11 Educational Assistance Policy...........................44
7.12 Adoption Assistance Policy..............................44
7.13 Bonuses.................................................45
7.14 Plant Closing Laws......................................45
7.15 Employee Communications.................................45
ARTICLE VIII CONDITIONS TO THE CLOSING...............................45
8.1 Conditions of Obligation of Each Party..................45
8.2 Additional Conditions to the Obligations of Purchaser...46
8.3 Additional Conditions to the Obligations of Seller......47
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER.......................47
9.1 Termination.............................................47
9.2 Effect of Termination...................................48
9.3 Extension; Waiver.......................................49
ARTICLE X TAX MATTERS.............................................49
10.1 Post-Closing Tax and Accounting Matters.................49
10.2 Allocation of Consideration.............................49
ARTICLE XI INDEMNIFICATION.........................................50
11.1 By Seller...............................................50
11.2 By Purchaser............................................51
11.3 Indemnification Procedure...............................52
11.4 Survival................................................53
11.5 Exclusivity.............................................53
11.6 Limits on Environmental Indemnification.................53
ARTICLE XII MISCELLANEOUS...........................................54
12.1 Amendment and Modification; Waiver of Provisions........54
12.2 Expenses................................................55
12.3 Successors and Assigns; Assignments.....................56
12.4 No Third Parties Benefited..............................57
12.5 Notices.................................................57
12.6 Law Governing...........................................58
12.7 Counterparts............................................58
12.8 Entire Agreement........................................58
12.9 Choice of Forum; Waiver of Jury Trial...................58
12.10 Headings................................................59
12.11 Severability............................................59
EXHIBIT A Signing Net Assets Statement
EXHIBIT B Signing Net Book Value of Equipment Report
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of July 27, 2000
("Agreement"), between TRANSAMERICA LEASING INC., a Delaware corporation
("Seller"), and INTERPOOL, INC., a Delaware corporation ("Purchaser").
WITNESSETH
WHEREAS, Seller owns certain assets and properties used
in the conduct of Seller's Business (as hereinafter defined);
WHEREAS, Seller and Purchaser desire to enter into this
Agreement pursuant to which Seller agrees to sell to Purchaser and
Purchaser agrees to purchase from Seller substantially all of the assets,
properties, rights and business of and to assume certain liabilities
relating to Seller's Business.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements hereinafter set forth, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms when used in this
Agreement shall have the following meanings:
"Accounting Firm" has the meaning set forth in Section
10.2.
"Accounts Receivable" means any and all trade accounts,
notes and other receivables of Seller and its Subsidiaries in respect of
the Business and all claims relating thereto or arising therefrom.
"Accrued Interest" shall have the meaning set forth in
Section 2.5(b).
"Additional Equipment Payment Amount" has the meaning set
forth in Section 2.6(b).
"Additional Net Assets Payment Amount" has the meaning
set forth in Section 2.6(b).
"Affiliate" means, with respect to any Person, any other
Person controlling, controlled by or under common control with such Person.
For purposes of this definition, "control" (including with correlative
meaning, the terms "controlled by" and "under common control with") as used
with respect to any Person shall mean (a) the ownership of 50% or more of
the voting securities or other voting interests of such Person or (b) the
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
"Agreement" has the meaning set forth in the Preamble.
"Allocation Agreement" has the meaning set forth in
Section 10.2.
"Applicable Law" has the meaning set forth in Section
4.3.
"Assets" has the meaning set forth in Section 2.1.
"Assumed Liabilities" has the meaning set forth in
Section 2.3.
"Bank Commitment Letter" has the meaning set forth in
Section 5.6.
"Benefit Plan" has the meaning set forth in Section
4.11(b).
"Business" means Seller's North American Intermodal
Business, comprised of Trailer, Domestic Container and Chassis rental,
operating, leasing and management businesses.
"Business Claims" has the meaning set forth in Section
6.7(b).
"Business Day" means any day which is not a Saturday,
Sunday or a day on which banks in New York City are authorized or obligated
by law or executive order to be closed.
"Business Employee" has the meaning set forth in Section
7.1.
"Business Liabilities" has the meaning set forth in
Section 6.7(b).
"Canada Trust Transaction Documents" means all documents
executed and delivered in connection with or pursuant to that certain
Equipment Sub-Lease Agreement made as of December 17, 1996 between Maple
Assets Investments Limited and Transamerica Leasing Inc. (including but not
limited to the "Transaction Documents" as such term is used in said
Equipment Sub-Lease Agreement).
"Cash Management Schedule" has the meaning set forth in
Section 2.7(b).
"Chassis" means any and all chassis, excluding tank
chassis, owned, managed or leased-in by Seller or any of its Subsidiaries
and used or held for use in connection with the Business.
"Cleanup" means all actions required by Environmental
Laws (based upon reasonable evidence of an actual or potential violation of
Environmental Laws or other Release or Third Party Environmental Claims)
to: (1) cleanup, remove, treat or remediate Hazardous Materials in the
Environment; (2) prevent the Release of Hazardous Materials so that they do
not migrate, endanger or threaten to endanger public health or welfare or
the Environment; (3) perform pre-remedial studies and investigations and
post-remedial monitoring and care; or (4) respond to any Governmental
Authority requests for information or documents in any way relating to
cleanup, removal, treatment or remediation or potential cleanup, removal,
treatment or remediation of Hazardous Materials in the Environment.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"COBRA" has the meaning set forth in Section 7.10(b).
"Code" means the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"Competitive Business" has the meaning set forth in
Section 6.19(a).
"Confidentiality Agreement" means the Confidentiality
Agreement, dated March 7, 2000, between Parent and Purchaser.
"Contract" has the meaning set forth in Section 4.3.
"Cut-Off Date" has the meaning set forth in Section 3.1.
"Cut-Off Date Net Assets Statement" has the meaning set
forth in Section 2.6(a).
"Cut-Off Date Net Book Value of Equipment Report" has the
meaning set forth in Section 2.6(a).
"Cut-Off Date Statements" has the meaning set forth in
Section 2.6(a).
"Down Payment" shall have the meaning set forth in
Section 2.5(b).
"Disputed Cash Management Items" has the meaning set
forth in Section 2.7(c).
"Domestic Container" means any and all domestic
containers owned, managed or leased-in by Seller or any of its Subsidiaries
and used or held for use in connection with the Business.
"EBITDA" has the meaning set forth in Section 4.9.
"Encumbrances" means any mortgages, claims, liens,
charges, security interests, encumbrances, imperfections of or other
matters affecting title, and any rights of third parties whatsoever.
"Environment" means the ambient air, surface water,
groundwater, soils, surface or subsurface strata and the interior of a
building, except that the inside of a tank or container shall not be
considered the interior of a building.
"Environmental Laws" means any and all federal, state,
local and foreign statutes, laws, judicial, administrative and regulatory
decisions, regulations, ordinances, codes, licenses, authorizations and
approvals in either case having the force and effect of law and in each
case as in effect on the Closing Date and which relate to the protection of
the environment or human health (as it relates to the environment) or to
emissions, discharges, releases or spills of Hazardous Materials into the
environment.
"Equipment Refund Amount" has the meaning set forth in
Section 2.6(b).
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" has the meaning set forth in Section
4.11(d).
"Excluded Assets" has the meaning set forth in Section
2.2.
"Excluded Liabilities" has the meaning set forth in
Section 2.4.
"Financing" has the meaning set forth in Section 5.6.
"GAAP" means United States generally accepted accounting
principles as of the date hereof.
"Governmental Authority" has the meaning set forth in
Section 4.3.
"Hazardous Materials" means any toxic, radioactive or
hazardous substance or waste, pollutant or contaminant, petroleum or
petroleum product, exposed friable asbestos as of the Closing Date and any
substances that are defined or listed in or otherwise regulated or
classified as hazardous, toxic or extremely hazardous pursuant to any
Environmental Law.
"HSR Act" has the meaning set forth in Section 8.1(b).
"Impartial Accounting Firm" has the meaning set forth in
Section 2.6(a).
"Indemnified Costs" has the meaning set forth in Section
11.1(a).
"Instruments of Transfer" means warranty deeds, bills of
sale, assignments, endorsements of certificates of title and other
instruments and documents.
"Intellectual Property" has the meaning set forth in
Section 4.17.
"Interest Rate" has the meaning set forth in Section 2.5.
"IRS" means the Internal Revenue Service of the United
States of America or any successor agency or authority.
"Knowledge" as to Seller means the actual knowledge of
the employees of Seller or its Subsidiaries listed in Section 1 of the
Seller Disclosure Schedule.
"Lease" has the meaning set forth in Section 4.15.
"Leased Premises" has the meaning set forth in Section
4.15.
"Liabilities" has the meaning set forth in Section 2.3.
"License" has the meaning set forth in Section 6.10(a).
"License Term" has the meaning set forth in Section
6.10(a).
"LTIP" means the Transamerica Finance Corporation
Long-Term Incentive Plan.
"Major Customer" means those customers of the Business
who collectively accounted for 85% of the revenues of the Business in the
month ended June 30, 2000.
"Material Adverse Effect" means a material adverse effect
on the financial condition, results of operations or business of the
Business or the Assets or the Assumed Liabilities, each taken as a whole
(other than (a) as a result of changes (i) in prevailing interest rates or
financial market conditions, (ii) in general economic conditions affecting
any industry in which the Business operates or which it serves, (ii) in law
or applicable regulations or the official interpretations thereof or (iii)
in GAAP or (b) as a result of the announcement or expectation of the
consummation of the transactions contemplated hereby (it being understood
that employee departures resulting from such announcement or expectation
shall not constitute, or be considered in determining whether there has
been, a Material Adverse Effect)).
"Material Contract" has the meaning set forth in Section
4.13.
"Names" has the meaning set forth in Section 6.10(b).
"Net Assets" means, with respect to the Signing Net
Assets Statement or the Cut-Off Date Net Assets Statement, the total net
assets (excluding Equipment) calculated in accordance with Seller's
historical accounting practices, as reflected on the Signing Net Assets
Statement or the Cut-Off Date Net Assets Statement, as the case may be.
"Net Assets Refund Amount" has the meaning set forth in
Section 2.6(b).
"Net Assets Statement" has the meaning set forth in
Section 2.6(a).
"Net Book Value of Equipment" means, with respect to the
Signing Net Book Value of Equipment Report or the Cut-Off Date Net Book
Value of Equipment Report, the total book value of the Trailers, Domestic
Containers and Chassis, net of depreciation, calculated in accordance with
Seller's historical accounting practices, as reflected on the Signing Net
Book Value of Equipment Report or the Cut-Off Date Net Book Value of
Equipment Report, as the case may be.
"Net Book Value of Equipment Report" has the meaning set
forth in Section 2.6(a).
"Offsetting Recovery" has the meaning set forth in
Section 11.1(b).
"Parent" means Transamerica Corporation.
"Permits" means permits, certificates, licenses,
approvals and other authorizations of Governmental Authorities.
"Permitted Encumbrances" means (a) the lien of current
Taxes not yet due and payable or which are being contested in good faith,
(b) lease Contracts relating to Trailers, Domestic Containers and Chassis
owned or leased by Seller or any of its Subsidiaries, (c) operating
lease-in and management Contracts relating to Trailers, Domestic Containers
and Chassis owned by third parties, including the Canada Trust Transaction
Documents, (d) Encumbrances disclosed in Section 1.1(c) of the Seller
Disclosure Schedule and (e) such other imperfections of title and other
Encumbrances, if any, which, individually or in the aggregate, do not
materially impair (x) the value of the Assets or (y) the use of the Assets
in the ordinary course of business consistent with past practices.
"Person" means any individual, corporation, partnership,
joint venture, association, joint stock company, limited liability company
or other form of entity, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Prefix" has the meaning set forth in Section 6.10(b).
"Premium Recapture" has the meaning set forth in Section
11.1(b).
"Proceeding" has the meaning set forth in Section
4.17(c).
"Proposed Allocation" has the meaning set forth in
Section 10.2.
"Purchase Price" has the meaning set forth in Section
2.5.
"Purchaser" has the meaning set forth in the Preamble.
"Purchaser DC Plan" has the meaning set forth in Section
7.6(a).
"Purchaser Disclosure Schedule" means the disclosure
schedule delivered by Purchaser to Seller at the time of execution hereof.
"Release" means any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, dispersal, leaching or
migration of Hazardous Materials into the Environment or into or out of any
property, including the movement of Hazardous Materials through or in the
Environment.
"Retirement Plan" means the Retirement Plan for Salaried
U.S. Employees of Transamerica Corporation and its Affiliates.
"Sales Tax Claim" has the meaning set forth in Section
12.2(c).
"Seller" has the meaning set forth in the Preamble.
"Seller Bonus Plan" has the meaning set forth in Section
7.13.
"Seller Disclosure Schedule" means the disclosure
schedule delivered by Seller to Purchaser at the time of execution hereof.
"Seller 401(k) Plan" has the meaning set forth in Section
7.6(a).
"Seller's Insurance Policies" has the meaning set forth
in Section 6.7(b).
"Separation Pay Plan" means the Transamerica Separation
Pay Plan as in effect on June 30, 2000.
"Signing Net Assets Statement" means the special purpose
financial statement entitled "Combined Net Asset Statement" of the Business
as of June 30, 2000, including the methodologies and principles utilized in
the preparation thereof attached hereto as Exhibit A.
"Signing Net Book Value of Equipment Report" means the
report, which sets forth, in each case as of June 30, 2000, the number of
the Trailers, Domestic Containers and Chassis owned, managed and leased-in
by the Business and related book value, net of depreciation, calculated in
accordance with Seller's historical accounting practices, of such Trailers,
Domestic Containers and Chassis, attached hereto as Exhibit B.
"Special Purpose Financial Statements" has the meaning
set forth in Section 4.9.
"Stated Purchase Price" means an amount equal to the sum
of (i) the Net Book Value of Equipment as reflected on the Cut-Off Date Net
Book Value of Equipment Report, (ii) the Net Assets as reflected on the
Cut-Off Date Net Assets Statement, and (iii) sixty-five million dollars
($65,000,000).
"Subsidiary" means, with respect to any Person,
corporation, partnership, joint venture, limited liability company, other
business entity or other legal entity of which the outstanding shares of
stock or other equity interests having ordinary voting power to elect a
majority of the board of directors (or comparable body) of such corporation
or other entity are owned, directly or indirectly through one or more
intermediaries, by such entity.
"TARRP" has the meaning set forth in Section 7.7.
"TARRP Continuation Period" has the meaning set forth in
Section 7.7.
"TARRP Payment" has the meaning set forth in Section 7.7.
"Tax Returns" means all returns, declarations, reports,
estimates, information returns and statements required or other document
(including any related or supporting documentation) filed or to be filed in
connection with any determination, assessment or collection of any Tax.
"Taxes" means any and all federal, state, county,
provincial, local, foreign and other taxes, including all net income, gross
income, gross receipts, premium, estimated, sales, use, ad valorem,
property, transfer, franchise, profits, license, withholding, payroll,
employment, excise, severance, VAT, GST, consumption, stamp and occupation
taxes and customs duties, together with any interest, additions to tax or
interest, and penalties with respect thereto imposed by any Taxing
Authority with respect to the Business or the Assets.
"Taxing Authority" means any Governmental Authority
having jurisdiction over the assessment, determination, collection or other
imposition of Taxes.
"Tax Benefit" to a party means an amount by which the Tax
liability of such party (or group of Affiliates including such party) is
actually reduced (including by deduction, reduction of income by virtue of
increased tax basis or otherwise, entitlement to refund, credit or
otherwise) after taking into account any increase in such party's Tax
liability as a result of its receipt of any related indemnity payment plus
any related interest received from the relevant Taxing Authority. Where a
party has other losses, deductions, credits or items available to it, the
Tax Benefit from any losses, deductions, credits or items relating to the
Indemnified Costs shall be deemed to be realized on a pro rata basis with
any other losses, deductions, credits or items of such party (or group of
Affiliates including such party).
"Third Party Consents" has the meaning set forth in
Section 4.4.
"Third Party Environmental Claim" means any claim,
action, cause of action, investigation or notice (written or oral) by any
Person or entity (other than a party to this Agreement or an Affiliate
thereof) relating to the Business or the Assets and alleging potential
liability (including, without limitation, potential liability for
investigatory costs, Cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (a) the presence, or Release of
any Hazardous Materials in the Environment at any location, whether or not
owned or operated by the Seller, or (b) circumstances forming the basis of
any violation, or alleged violation, of any Environmental Law.
"Trademarks" has the meaning set forth in Section
6.10(a).
"Trailer" means any and all North American intermodal
trailers owned, managed or leased-in by Seller or any of its Subsidiaries
and used or held for use in connection with the Business.
"Transferred Employees" has the meaning set forth in
Section 7.2(a).
"Transition Services Agreement" has the meaning set forth
in Section 6.23.
"2000 Incentive Bonus" has the meaning set forth in
Section 7.13.
1.2 Other Definitional Provisions. (a) The words
"herein," "hereof," "hereto," 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.
(b) The terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(c) Whenever the words "include," "includes" or "including" are used in
this Agreement they shall be deemed to be followed by the words "without
limitation."
(d) All terms defined in this Agreement shall have the defined meanings
contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(e) The definitions contained in this Agreement are applicable to the
masculine as well as to the feminine and neuter genders of such term.
ARTICLE II
SALE OF ASSETS; ASSUMPTION OF LIABILITY; PURCHASE PRICE
2.1 Sale and Purchase of Assets. At the Closing, Seller shall sell,
transfer, assign, convey and deliver to Purchaser, and Purchaser shall
purchase and acquire from Seller, any and all right, title and interest of
Seller in, to and under all of the assets of Seller used primarily in the
operations of the Business as those assets exist on the Closing Date, other
than Excluded Assets (as that term is defined in Section 2.2), wherever
located, including the assets set forth below in this Section 2.1 (any and
all such assets, the "Assets"):
(a) all Trailers, Domestic Containers and Chassis;
(b) all of the rights and benefits of Seller under Contracts, purchase
orders, proposals or bids primarily relating to the Business (but not
including Contracts relating to systems hardware, software and other
information technology except as set forth in Section 2.1(b) of the Seller
Disclosure Schedule) to the extent such Contracts, purchase orders,
proposals or bids are assignable;
(c) all books and records of Seller primarily relating to the Assets and
Assumed Liabilities;
(d) the Names, Trademarks and Prefixes, solely to the extent provided by
the license granted pursuant to Section 6.10(a);
(e) all personal computers primarily relating to the Business and software
primarily relating to the Business, in each case which are set forth in
Section 2.1(e) of the Seller Disclosure Schedule;
(f) all Permits used or held for use primarily in connection with the
Business, to the extent such Permits are assignable;
(g) all Accounts Receivable, net of reserves, including amounts receivable
from railroads (net of any amounts payable to the railroads) as a result of
the railroads' self-reporting system;
(h) all investments set forth in Section 2.1(h) of the Seller Disclosure
Schedule, including BAMCO and PAMC;
(i) all real property set forth in Section 2.1(i) of the Seller Disclosure
Schedule, together with (i) all buildings, other facilities and other
structures and improvements thereon, (ii) all rights, privileges,
hereditaments and appurtenances appertaining thereto or to any of such
buildings or other facilities or other structures or improvements and (iii)
to the extent constituting real property under Applicable Laws, all
fixtures, leasehold improvements, installations, equipment (including
furniture, fax machines and other office equipment) and other property
attached thereto or located thereon;
(j) all machinery, vehicles, tools, replacement and spare parts and
supplies owned by Seller and used or held for use primarily in connection
with the Business;
(k) all manufacturer's warranties and indemnities to the extent primarily
related to the Assets and all claims under such warranties and indemnities
(to the extent assignable); and
(l) subject to Section 2.2(b), all security deposits (to the extent
reflected as a credit on the Cut-Off Net Assets Statement), earnest
deposits, and all other forms of security placed with Seller or its
Subsidiaries for the performance of a contract or agreement which otherwise
constitute a portion of the Assets.
2.2 Excluded Assets. The term "Assets" shall not include any property or
assets of Seller or any of its Affiliates of any kind or nature, real or
personal, tangible or intangible, not expressly included within the
definition of "Assets" (each and all of such items being herein referred to
as "Excluded Assets"), including the following:
(a) all furniture and fixtures owned or leased by Seller or any of its
Affiliates and located at Seller's headquarters in Purchase, New York, and
all other assets and property owned or leased by Seller or any of its
Affiliates and located at such location to the extent not specified in
Section 2.1;
(b) any cash or cash equivalent investments of Seller or any Affiliate of
Seller other than as provided under Section 2.7 hereof;
(c) any assets and associated claims arising out of Excluded Assets or
Excluded Liabilities;
(d) Tax receivables and Tax refunds relating to the Business for periods up
to the Cut-Off Date;
(e) the corporate and Tax records of Seller;
(f) all systems hardware and software except as specified in Section 2.1;
(g) Seller's insolvency insurance policy with Royal Belge S.A. d'Assurances
covering bankrupt customers and the Assets with respect to which Seller has
put Royal Belge S.A. d'Assurances on notice of a claim or potential claim
under such policy prior to the Closing;
(h) Claims to the extent relating to Excluded Liabilities; and
(i) The Transamerica Marks and the Names, Trademarks and Prefixes, except
to the extent of the license granted pursuant to Section 6.10(a).
2.3 Assumption of Liabilities. At the Closing, Purchaser shall assume and
become liable for, and shall pay, perform and discharge as and when due all
of the debts, liabilities, claims, demands, expenses, commitments and
obligations (whether accrued or not, known or unknown, disclosed or
undisclosed, fixed or contingent, asserted or unasserted, liquidated or
unliquidated, arising prior to, at or after the Closing) (collectively,
"Liabilities") of Seller (other than the Excluded Liabilities) which are
expressly set forth below in this Section 2.3 (each and all of the
foregoing items, the "Assumed Liabilities"):
(a) all Liabilities reflected on the Cut-Off Net Assets Statement;
(b) all Liabilities of the type reflected on the Signing Net Assets
Statement incurred in the ordinary course of business since June 30, 2000;
(c) all Liabilities arising from commitments (in the form of accepted
purchase orders or otherwise) or outstanding quotations, proposals or bids
to purchase or sell, lease or manage Domestic Containers, Trailers and/or
Chassis to the extent that such commitment quotation, proposal or bid
constitutes an Asset;
(d) all Liabilities arising in the ordinary course of business from
commitments (in the form of issued purchase orders or otherwise), or
outstanding quotations, proposals or bids, to purchase or acquire
components, machinery, vehicles, tools, tires, replacement and spare parts,
and/or other materials primarily in connection with the Business to the
extent that such commitment quotation, proposal or bid constitutes an
Asset;
(e) all Liabilities under Contracts, Leases and Permits used or held for
use primarily in connection with the Business to the extent such Contracts,
Leases or Permits are assigned to Purchaser;
(f) all Liabilities under Article VII, Article X and Article XI that
Purchaser has agreed expressly to assume, pay for or be responsible for;
(g) all Liabilities of Seller under any guaranties issued, granted or
provided primarily in connection with the Business, which are listed on
Section 2.3 of the Seller Disclosure Schedule;
(h) all Liabilities arising in the ordinary course of business with respect
to any condition of or return, warranty or other Liabilities relating to
Domestic Containers, Trailers, Chassis and other products or services of
the Business; and
(i) all other Liabilities (of the types not covered by the preceding
subsections of this Section 2.3) arising in the ordinary course of business
to the extent primarily relating to the Business or any of the Assets.
2.4 Excluded Liabilities. Purchaser shall not assume any Liabilities of the
Seller or any of its Affiliates except as expressly provided in Section
2.3, and the Seller shall be solely and exclusively liable with respect to
all Liabilities of the Seller other than the Assumed Liabilities (any and
all such Liabilities being herein referred to as "Excluded Liabilities"),
including the following:
(a) all Liabilities to the extent relating to the Excluded Assets;
(b) all Liabilities Seller has expressly agreed to retain, pay for or be
responsible for pursuant to Article VII, X and XI;
(c) except as assumed pursuant to this Agreement by Purchaser, all
Liabilities of the Seller arising out of the conduct of the Business or
ownership of the Assets on or prior to the Cut-Off Date;
(d) all Liabilities of the Seller relating to the Business or the Assets
under, relating to or arising out of (i) Environmental Laws, including any
actual or alleged violation or breach thereof, (ii) Third Party
Environmental Claims, (iii) Cleanup or (iv) Release, other than, in each
such case, such Liabilities relating to or arising out of the ownership,
operation, use or disposition of the Business or the Assets after the
Closing;
(e) except as expressly assumed elsewhere in this Agreement by Purchaser,
all Liabilities of the Seller for Taxes incurred on or prior to the Cut-Off
Date, including all Taxes arising out of the Business or the Assets,
including any ad valorem, real or personal or intangible property, sales,
personal, social security or other Taxes which are not due or assessed
until after the Closing Date but which are attributable to any period (or
portion thereof) ending on or prior to the Cut-Off Date;
(f) all Liabilities of the Seller incurred in connection with: (i) any
discussions or negotiations with any third parties with respect to any
merger, business combination, sale of assets, purchase of assets, sale or
purchase of shares of capital stock or other securities or similar
transaction, including the transactions contemplated by this Agreement, or
(ii) subject to Section 12.2(b), the consummation (or preparation for the
consummation) of the transactions contemplated by any of the foregoing
(including all attorneys', brokers' and accountants' fees and expenses);
(g) all Liabilities of the Seller to the current or former employees of the
Seller relating to or arising out of any period on or prior to the Closing
except for Liabilities Purchaser has expressly agreed to assume pursuant to
Article VII;
(h) all Liabilities of Seller arising out of or related to any Encumbrance
on any Asset other than Permitted Encumbrances, including any and all
mortgages on any of the Real Property other than such Liabilities arising
out of or relating to the ownership, operation, use or disposition of the
Assets after the Closing (provided, however, that any Liability that is
expressly included in Section 2.3 as an Assumed Liability shall not be an
Excluded Liability solely because it arises out of or relates to an
Encumbrance on an Asset);
(i) all Liabilities for death, personal injury, other injury to persons,
property damage, or, except as expressly assumed in Section 2.3(e) or (h),
other loss or damage, to the extent relating to, resulting from, primarily
caused by or arising out of, the Assets, the Business, or any products or
services thereof, including the use of or exposure thereto, whether such
Liabilities are based on tort, negligence, strict liability, failure to
warn, design or manufacturing defect, conspiracy, breach of express or
implied warranties of merchantability or fitness for any purpose or use,
employment (except as expressly assumed in Article VII), occupational
disease, toxic tort, workers' compensation, occupational health and safety
or occupational injury laws or Environmental Law, but in any such case only
to the extent such Liabilities relate to events occurring prior to the
Closing Date or, with respect to such Liabilities arising under
Environmental Laws only, the presence of Hazardous Materials or violations
of Environmental Law existing prior to the Closing Date;
(j) the pending litigation set forth on Section 2.4(j) of the Seller
Disclosure Schedule and other litigation pending at the Closing; and
(k) all other Liabilities to the extent relating to or arising out of the
operations or businesses of Seller or any of its Affiliates other than the
Business or the Assets.
2.5 Purchase and Sale. (a) Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing, (a) Seller shall sell, convey,
transfer and deliver to Purchaser, and Purchaser shall purchase, acquire
and accept from Seller, all of Seller's right, title and interest in, to
and under the Assets, free and clear of all Encumbrances (other than
Permitted Encumbrances), (b) Purchaser will assume the Assumed Liabilities,
and (c) Purchaser shall deliver to Seller the Stated Purchase Price by wire
transfer of immediately available funds in New York City which are
denominated in U.S. dollars, to such account or accounts as Seller shall
designate in writing to Purchaser not less than at least three Business
Days prior to the Closing increased by interest on such amount from the
Cut-Off Date to the Closing Date, inclusive, at an annual rate equal to (1)
the daily closing three-month London Interbank Offered Rate (LIBOR) as
reported from time to time on page C-1 of the "Money and Investing" section
of The Wall Street Journal plus (2) 100 basis points (the "Interest Rate"),
such interest to be calculated on the basis of a year of 365 days (the
Stated Purchase Price plus interest being the "Purchase Price"), subject to
adjustment as provided herein; provided that the purchase of the Assets and
the assumption of the Assumed Liabilities provided for in this Article II
shall be deemed to occur as of the Cut-Off Date.
(b) Contemporaneously with the execution of this Agreement, Purchaser has
delivered to Seller by check, and Seller hereby acknowledges receipt of,
the amount of $5 million (the "Down Payment"). The Down Payment shall be
held by Seller and invested in a separate account with the interest
accruing on such amount being for the benefit of Purchaser from and
including the date hereof until and excluding the date of application or
repayment thereof in accordance with this Agreement ("Accrued Interest").
If the Closing is subsequently consummated, the Down Payment (with Accrued
Interest thereon) shall be a deposit and credit towards the Purchase Price.
If the Closing is not consummated, the Down Payment (together with Accrued
Interest thereon) either (i) shall be applied and credited towards the
liquidated damages provided for in accordance with Section 9.2(b), if such
liquidated damages are payable in accordance therewith, or (ii) shall
promptly be returned (together with Accrued Interest thereon) to Purchaser,
if such liquidated damages are not payable to Seller in accordance with
Section 9.2(b).
2.6 Post-Closing Purchase Price Adjustment. (a) (i) At least three business
days prior to the Closing Date, Seller shall prepare in good faith and
deliver to Purchaser (A) a statement setting forth the Net Assets as of the
Cut-Off Date (the "Cut-Off Date Net Assets Statement") and (B) a report
setting forth the Net Book Value of Equipment as of the Cut-Off Date (the
"Cut-Off Date Net Book Value of Equipment Report," and, together with the
Cut-Off Date Net Assets Statement, referred to as the "Cut-Off Date
Statements"). The Cut-Off Date Statements will be in conformity with
Seller's historical accounting practices and will present fairly in
conformity therewith the respective information set forth therein. The
Cut-Off Date Statements will be prepared on the same basis as and in a
manner consistent with the Signing Net Asset Statement and the Signing Net
Book Value Report. The methodology and principles used in the preparation
of the Signing Net Assets Statement shall govern the preparation of the
Cut-Off Date Net Assets Statement and the methodology and principles used
in the preparation of the Signing Net Book Value of Equipment Report shall
govern the preparation of the Cut-Off Date Net Book Value of Equipment
Report. During the preparation of the Cut-Off Date Statements, Seller shall
provide Purchaser and its representatives reasonable access to the
information and related documentation used in the preparation of the
Cut-Off Date Statements and will permit Purchaser and its representatives
to meet with and ask questions of the individuals preparing the Cut-Off
Date Statements and, if a physical inventory is taken as part of such
preparation, to observe such taking of physical inventory.
(ii) After the Closing, Purchaser and its independent certified public
accountants shall have the right to audit commencing as of the Closing and
continuing until 30 days following the Closing, at Purchaser's expense, the
information presented in the Cut-Off Date Statements and to examine and
review all records and work papers and other supporting documents used to
prepare the Cut-Off Date Statements. Purchaser shall notify Seller in
writing, on or before the 30th day following Closing, of (A) any objections
it has to the Cut-Off Date Net Assets Statement, setting forth a reasonably
detailed explanation of Purchaser's objections and the dollar amount of
each such objection and (B) any objections it has to the Cut-Off Date Net
Book Value of Equipment Report, setting forth a reasonably detailed
explanation of Purchaser's objections and the dollar amount of each such
objection. If Purchaser does not deliver such notice on or before the 30th
day following Closing, the Cut-Off Date Net Assets Statement and the
Cut-Off Date Net Book Value of Equipment Report, as the case may be, shall
be deemed to have been irrevocably accepted by Purchaser.
(iii) If Purchaser in good faith objects to the information set forth on
the Cut-Off Date Net Assets Statement or the information set forth on the
Cut-Off Date Net Book Value of Equipment Report, Seller and Purchaser shall
use reasonable efforts to resolve any such objections within 30 days of
Seller's receipt of Purchaser's objections. If Seller and Purchaser are
unable to resolve the matter within such 30-day period, they shall jointly
appoint an impartial nationally recognized independent certified public
accounting firm (the "Impartial Accounting Firm") mutually acceptable to
Purchaser and Seller (or, if they cannot agree on a mutually acceptable
firm, they shall cause their respective accounting firms to select such
firm) within five days of the end of such 30-day period to resolve any such
remaining matters. Any such resolution shall be made applying the
methodologies and principles used in the preparation of the Signing Net
Assets Statement or the Signing Net Book Value of Equipment Report, as the
case may be, and shall be final, conclusive and binding on Purchaser and
Seller. The fees of the Impartial Accounting Firm shall be borne equally by
Purchaser on the one hand and Seller on the other hand. Seller and
Purchaser shall fully cooperate with the Impartial Accounting Firm. The
Impartial Accounting Firm shall be requested to reach its written
conclusion regarding the dispute within 30 days of its appointment to
settle the dispute. The Cut-Off Date Net Assets Statement after the
acceptance thereof by Purchaser pursuant to the last sentence of Section
2.6(a)(ii) or the resolution of all disputes in connection therewith in
accordance with this Section 2.6(a)(iii) is referred to herein as the "Net
Assets Statement." The Cut-Off Date Net Book Value of Equipment Report
after the acceptance thereof by Purchaser pursuant to the last sentence of
Section 2.6(a)(ii) or the resolution of all disputes in connection
therewith in accordance with this Section 2.6(a)(iii) is referred to herein
as the "Net Book Value of Equipment Report."
(b) Payments. (i) If the Net Book Value of Equipment as reflected on the
Net Book Value of Equipment Report is greater than the Net Book Value of
Equipment as reflected on the Cut-Off Date Net Book Value of Equipment
Report, then the Purchase Price shall be increased by the amount of such
excess (the amount of such Purchase Price increase shall be hereinafter
referred to as the "Additional Equipment Payment Amount"). If the Net Book
Value of Equipment as reflected on the Net Book Value of Equipment Report
is less than the Net Book Value of Equipment as reflected on the Cut-Off
Date Net Book Value of Equipment Report, then the Purchase Price shall be
decreased by such excess (the amount of such Purchase Price reduction shall
be hereinafter referred to as the "Equipment Refund Amount"). If the Net
Book Value of Equipment as reflected on the Net Book Value of Equipment
Report equals the Net Book Value of Equipment as reflected on the Cut-Off
Date Net Book Value of Equipment Report, then the Purchase Price shall not
be adjusted pursuant to this Section 2.6(b)(i).
(ii) If the Net Assets as reflected on the Net Assets Statement is greater
than the Net Assets as reflected on the Cut-Off Date Net Assets Statement,
then the Purchase Price shall be increased by the amount of such excess
(the amount of such Purchase Price increase shall be hereinafter referred
to as the "Additional Net Assets Payment Amount"). If the Net Assets as
reflected on the Net Assets Statement is less than the Net Assets as
reflected on the Cut-Off Date Net Assets Statement, then the Purchase Price
shall be decreased by such excess (the amount of such Purchase Price
reduction shall be hereinafter referred to as the "Net Assets Refund
Amount"). If the Net Assets as reflected on the Net Assets Statement equals
the Net Assets as reflected on the Cut-Off Date Net Asset Statement, then
the Purchase Price shall not be adjusted pursuant to this Section
2.6(b)(ii).
(c) The Equipment Refund Amount (if any) and the Net
Assets Refund Amount (if any) shall be paid by Seller to Purchaser by wire
transfer of immediately available funds to an account designated by
Purchaser. The Additional Equipment Payment Amount (if any) and the
Additional Net Assets Payment Amount (if any) shall be paid by Purchaser to
Seller by wire transfer of immediately available funds to an account
designated by Seller. The Equipment Refund Amount, the Net Assets Refund
Amount, the Additional Equipment Payment Amount, and the Additional Net
Assets Payment Amount, as the case may be, shall be increased by interest
on such amount from the Cut-Off Date to the payment date at the Interest
Rate. Any payments required pursuant to this Section 2.6(c) shall be made
within five days after the later of the date the Net Assets Statement
becomes final and binding on the parties hereto or the date the Net Book
Value of Equipment Report becomes final and binding on the parties hereto,
as the case may be.
2.7 Cash Management after the Cut-Off Date. (a) Purchaser and Seller agree
that following the Cut-Off Date the Business will be operated for the
account of Purchaser, with the intention that all revenues, expenses, cash
flows and profits of the Business shall be for the account of Purchaser and
that the following provisions of this Section 2.7 are intended to give
effect to the foregoing principle. The Cash Management Schedule shall be
prepared in a manner which is designed to avoid any duplication or
double-counting with respect to any adjustment made pursuant to Section 2.6
hereof.
(b) Cash Management Schedule. (i) Between the Cut-Off Date and the Closing,
(A) any payments of whatever nature by Seller or any other Affiliate of
Parent for the benefit of and relating to the Business (including, without
limitation, for wages, salaries and other employee benefits or otherwise
with respect to any individuals who would be Business Employees assuming
that the Closing had occurred on the Cut-Off Date, but excluding any
payments of Excluded Liabilities (or liabilities which would be Excluded
Liabilities), or with respect to which Purchaser is indemnified by Seller
hereunder) shall be payable in the ordinary course of business consistent
with past practice and shall be treated as a payable to Seller from the
Business; (B) any goods or services provided by Seller or any other
Affiliate of Parent for the benefit of the Business shall be treated as a
payable to Seller from the Business and the amounts which are so treated
(including, without limitation, all charges for corporate shared services,
allocations and amortization/depreciation of shared systems and software)
which are incurred or reported in the ordinary course of business
consistent with past practice shall be in accordance with the prior
practice for intercompany transactions between Seller or any other
Affiliate of Parent and the Business; and (C) all receipts of the Business
after the Cut-Off Date (including without limitation, in respect of the
operation of the Business and sales Domestic Containers, Trailers and/or
Chassis) which are transferred to Seller or any other Affiliate of Parent
shall be treated as a payable to the Business from Seller, and the amounts
which are so treated shall be in accordance with the prior practice for
intercompany transactions between Seller or any other Affiliate of Parent
and the Business.
(ii) The net balance as of the Closing Date due to Seller or the Business,
as the case may be, in respect of the aggregate amounts described in
clauses (A) through (C), as reflected in a schedule of such amounts (the
"Cash Management Schedule"), which shall be prepared and delivered to
Purchaser as promptly as practicable, but in no event more than 30 days
after the Closing Date, shall be paid by Purchaser (if a net balance is due
to Seller) or Seller (if a net balance is due to the Business), to Seller
or Purchaser, as the case may be, within five Business Days following
delivery of the Cash Management Schedule to Purchaser together with
interest thereon at an annual rate equal to the Interest Rate, such
interest to be calculated on the basis of a year of 365 days, calculated
with respect to each separate item included in the calculation of such net
balance from the date such item accrued or arose to the date immediately
preceding the date of payment.
(c) Disagreements with Respect to Cash Management Schedule. (i) Seller
shall provide Purchaser and its counsel, accountants and other advisors
full access to books, records and personnel of the Business as reasonably
requested by Purchaser in order to understand and verify the accuracy of
the Cash Management Schedule. During the preparation of the Cash Management
Schedule, Seller will provide to Purchaser access to the information and
related documentation used in the preparation of the Cash Management
Schedule. During the 30 days following delivery by Seller of the Cash
Management Schedule, Purchaser shall be free to dispute any item reflected
in the Cash Management Schedule. At the end of the 30-day period provided
by this Section 2.7(c)(i), Purchaser and Seller shall jointly prepare a
report listing the matters in dispute by item (the "Disputed Cash
Management Items"). Promptly following the conclusion of such 30-day period
and completion of the report referred to in the preceding sentence, Seller
shall pay to Purchaser or Purchaser shall pay to Seller, as applicable, the
amount of the adjustments to be made pursuant to this Section 2.7(c) which
have been resolved during such period.
(ii) If after the 30-day period provided in Section 2.7(c)(i) there shall
be Disputed Cash Management Items, Purchaser shall, within 30 days
following delivery of the report contemplated by Section 2.7(c)(i) with
respect to Disputed Cash Management Items, deliver a notice to Seller
setting forth in reasonable detail Purchaser's disagreement with the Cash
Management Schedule.
(iii) If a notice of disagreement shall be delivered pursuant to Section
2.7(c)(ii), the parties shall, during the 30 days following delivery of the
notice that sets forth Purchaser's disagreement, use reasonable efforts to
reach agreement on the Disputed Cash Management Items. If, during such
period, the parties are unable to reach such agreement, then they shall
promptly thereafter jointly appoint an Impartial Accounting Firm mutually
acceptable to Purchaser and Seller (or, if they cannot agree on a mutually
acceptable firm, they shall cause their respective accounting firms to
select such firm) within five days of the end of such 30-day period to
resolve any such remaining matters. Any such resolution shall be made
applying the methodologies and principles used in the preparation of the
Signing Net Assets Statement or the Signing Net Book Value of Equipment
Report, as the case may be, and shall be final, conclusive and binding on
Purchaser and Seller. The fees of the Impartial Accounting Firm shall be
borne equally by Purchaser on the one hand and Seller on the other hand.
Seller and Purchaser shall fully cooperate with the Impartial Accounting
Firm. The Impartial Accounting Firm shall be requested to reach its written
conclusion regarding the dispute within 30 days of its appointment to
settle the dispute.
(iv) Any payment resulting from the adjustment to be made pursuant to this
Section 2.7(c) shall be paid by wire transfer of immediately available
funds in New York City which are denominated in U.S. dollars, to such
account or accounts as Seller or Purchaser, as the case may be, shall
designate in writing to the other party hereto at least two Business Days
prior to the time such payment is required pursuant to this Section
2.7(c)(iv) and shall be paid (i) within five Business Days after expiration
of the time for delivery of a notice of disagreement pursuant to Section
2.7(c)(ii) if no such notice of disagreement is delivered pursuant to said
Section 2.7(c)(ii), or (ii) if a notice of disagreement is delivered
pursuant to Section 2.7(c)(ii), then within five Business Days after the
earlier of (A) agreement between the parties pursuant to Section
2.7(c)(iii) with respect to the Disputed Cash Management Items and (B) the
report of the independent arbitrator referred to in Section 2.7(c)(iii).
ARTICLE III
CLOSING
3.1 Closing. Unless this Agreement shall have been terminated and the
transactions herein abandoned pursuant to Article IX, subject to the
provisions of Article VIII, the closing (the "Closing") of the purchase of
the Assets and the assumption of the Assumed Liabilities provided for in
Article II shall take place at the offices of Wachtell, Lipton, Rosen &
Katz, 51 West 52nd Street, New York, New York, at 10:00 a.m., New York City
time, on the third business day following the satisfaction or waiver of the
conditions set forth in Article VIII, but in no event earlier than the
thirteenth business day of a calendar month, or at such other place and
time and on such other date as the parties may mutually agree. The date on
which the Closing occurs is herein called the "Closing Date"; provided that
the purchase of the Assets and the assumption of the Assumed Liabilities
provided for in Article II shall be deemed to occur as of the close of
business on the last calendar day of the month immediately preceding the
month in which the Closing Date occurs (the "Cut-Off Date"), and the
Cut-Off Date Net Book Value of Equipment Report provided for in Section
2.6(a) (including any post-closing adjustments arising therefrom) and the
Cut-Off Date Net Assets Statement (including any post-closing adjustments
arising therefrom) shall present the information to be required therein as
of the Cut-Off Date.
3.2 Closing Deliveries. (a) At the Closing, Seller will deliver or cause to
be delivered to Purchaser:
(i) duly executed counterparts of the Instruments of Transfer;
(ii) the books and records constituting Assets;
(iii) a duly executed counterpart of an assumption of Assumed Liabilities;
(iv) a duly executed counterpart of the Transition Services Agreement;
(v) all such other deeds, documents, certificates, assignments, agreements
and other instruments as, in the reasonable opinion of Purchaser, are
necessary to vest in Purchaser legal and beneficial title to the Assets;
and
(vi) all other previously undelivered agreements, instruments, certificates
and documents required hereunder to be delivered by Seller to Purchaser at
or prior to the Closing in connection with the transactions contemplated
hereby.
(b) At the Closing, Purchaser will deliver to Seller:
(i) the Purchase Price to be delivered at the Closing in accordance with
Article II hereof;
(ii) a duly executed counterpart of an assumption of Assumed Liabilities;
(iii) a duly executed counterpart of the Instruments of Transfer;
(iv) a duly executed counterpart of the Transition Services Agreement; and
(v) all other previously undelivered agreements, instruments,
certificates and documents required hereunder to be delivered by
Purchaser to Seller at or prior to the Closing in connection with
the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Seller Disclosure Schedule
delivered by Seller to the Purchaser prior to the execution of this
Agreement and making reference to the particular section of this Agreement
to which exception is being taken (unless the applicability of such
exception is reasonably apparent), Seller represents and warrants to
Purchaser as follows:
4.1 Organization, Power. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
Seller and its Subsidiaries, as applicable, have full power and authority
to own all of the Assets and to carry on the Business as it is now being
conducted, and, where applicable, is duly qualified or licensed to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the nature of the Business or Assets makes such
qualification or license necessary, except where failure to be so
incorporated, existing, qualified, licensed or in good standing would not
have a Material Adverse Effect. Seller has heretofore made available to the
Purchaser complete and correct copies of its certificate of incorporation
and by-laws as currently in effect.
4.2 Authority Relative to Agreement. Seller has the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery by Seller of
this Agreement have been and prior to Closing the consummation by Seller of
the transactions contemplated hereby will be duly authorized by all
necessary corporate action and no other corporate proceedings on the part
of Seller are necessary for Seller to authorize this Agreement or to
consummate the transactions contemplated by this Agreement. Assuming that
this Agreement has been duly executed and delivered by Purchaser, this
Agreement constitutes a valid and legally binding agreement of Seller
enforceable against Seller in accordance with its terms, except as affected
by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally or general equitable principles (whether considered in a
proceeding at equity or in law).
4.3 Non-Contravention. The execution and delivery of this Agreement by
Seller do not, and the consummation by Seller of the transactions
contemplated hereby and the performance by Seller of the obligations which
it is obligated to perform hereunder will not, (a) violate any provision of
the certificate of incorporation or by-laws or other organizational
documents of Seller or (b) assuming that all consents, authorizations,
orders or approvals of, filings or registrations with, and notices to, each
United States federal, state, local and foreign governmental entity,
commission, board or other regulatory authority, agency body or entity
("Governmental Authority") listed in Section 4.4(a) of the Seller
Disclosure Schedule and all Third Party Consents listed in Section 4.4(b)
of the Seller Disclosure Schedule have been obtained or made, (i) violate
any law, regulation, rule, order, judgment or decree to which the Assets or
Seller or any of its Subsidiaries is subject (other than Environmental
Laws) ("Applicable Law") or Environmental Laws or (ii) violate, result in
the termination or the acceleration of, or conflict with or constitute a
default (with or without notice thereof of lapse of time) under, or result
in the creation or imposition of any Encumbrances, other than Permitted
Encumbrances, upon any of the Assets pursuant to, any agreement, contract,
mortgage, indenture, lease, franchise, Permit or other instrument (each, a
"Contract"), to which Seller or any of its Subsidiaries is a party
primarily relating to the Business or by which any of the Assets is bound,
except, in the case of clauses (b)(i) and (ii), for such violations,
terminations, accelerations, conflicts, defaults, Encumbrances, other than
Permitted Encumbrances, or losses of licenses or other contractual rights
as would not have a Material Adverse Effect.
4.4 Consents. (a) Except as described in Section 4.4(a) of the Seller
Disclosure Schedule, no consent, authorization, order or approval of,
filing or registration with, or notice to, any Governmental Authority and
(b) except as described in Section 4.4(b) of the Seller Disclosure
Schedule, no consent, authorization, order or approval of, filing or
registration with, or notice to, any party to any Material Contract
(collectively, "Third Party Consents") to which Seller or any of its
Subsidiaries is a party primarily relating to the Business or by which any
of the Assets is bound is required for the execution and delivery of this
Agreement by Seller and the consummation by Seller of the transactions
contemplated hereby, except for such consents, authorizations, orders,
approvals, filings, registrations, notices or Third Party Consents (i)
which are required solely by reason of the specific regulatory status of
Purchaser or any Affiliate thereof or (ii) the failure of which to be
obtained or made would not be material or prohibit the consummation by
Seller of the transactions contemplated hereby.
4.5 Signing Statements. The Signing Net Assets Statement and the Signing
Net Book Value of Equipment Report have each been prepared in accordance
with Seller's historical accounting practices consistently applied, except
as otherwise noted in Section 4.5 of the Seller Disclosure Schedule. The
Signing Net Assets Statement and the Signing Net Book Value of Equipment
Report were each derived from the books and records of Seller. The Signing
Net Assets Statement presents fairly in all material respects the Net
Assets of the Business as of June 30, 2000 and is in accordance with U.S.
generally accepted accounting principles consistently applied, except as
described in Section 4.5 of the Seller Disclosure Schedule. The Signing Net
Book Value of Equipment Report presents fairly in all material respects the
Trailers, Domestic Containers and Chassis owned, managed and leased-in by
the Business and the related book value thereof, net of depreciation, and
(a) Seller's accounting methodologies and principles used in the
preparation of the Signing Net Book Value of Equipment Report are in
accordance with U.S. generally accepted accounting principles consistently
applied, except as described in Section 4.5 of the Seller Disclosure
Schedule, (b) such methodologies and principles are used to prepare
Seller's books and records and the Signing Net Book Value of Equipment
Report, (c) the Signing Net Book Value of Equipment Report was prepared
from Seller's books and records without modification and (d) the amounts
capitalized with respect to the Trailers, Domestic Containers and Chassis
included on the Signing Net Book of Equipment Report include only those
amounts that may be capitalized in accordance with U.S. generally accepted
accounting principles. The financial information included on the Signing
Net Assets Statement and the Signing Net Book Value of Equipment Report is
or will be included in the unaudited consolidated financial statements of
Transamerica Finance Corporation.
4.6 Litigation. Except as set forth in Section 4.6 of the Seller Disclosure
Schedule, there is no action (or, to the Knowledge of Seller, claim,
charge, audit, or investigation) suit or proceeding pending or, to the
Knowledge of Seller, threatened against Seller or any of its Subsidiaries
primarily relating to or arising out of the Business or the Assets before
any court, arbitrator or Governmental Authority, that would have a Material
Adverse Effect. None of Seller or any of its Subsidiaries is, in any
material respect, in violation of any orders, judgments, injunctions or
decrees applicable to the Assets or the Business. There are no outstanding
orders, writs, judgments, injunctions, decrees or settlements of or with
any Governmental Authority that apply, in whole or in part, to the Assets
or the Business that materially restrict the ownership, disposition or use
of the Assets or the conduct of the Business.
4.7 Compliance with Laws; Permits and Licenses. (a) Except as set forth in
Section 4.7 of the Seller Disclosure Schedule, the Business has been during
the past three years and is being conducted, in all material respects in
compliance with all Applicable Laws. Except as set forth in Section 4.7 of
the Seller Disclosure Schedule, Seller has not received any written notice
in the past three years with respect to the material failure of the
Business to be conducted in compliance with all Applicable Laws or
Environmental Laws.
(b) Except as would not have a Material Adverse Effect, Seller, its
Subsidiaries, and/or the Business hold all Permits necessary for the
operation of the Business as presently conducted. All such Permits are in
full force and effect and no proceedings are pending or, to the Knowledge
of Seller, threatened by a Governmental Authority for the suspension,
revocation or termination of any such Permits, except where such failures
to be in full force and effect and such proceedings would not be reasonably
expected to, individually or in the aggregate, have a Material Adverse
Effect.
4.8 Absence of Certain Changes or Events. Since June 30, 2000, (a) there
has not been any change or development in or affecting the Business or
Assets that has had a Material Adverse Effect, (b) the Business has been
operated in the ordinary course of business consistent with past practices
and (c) Seller has not taken any action, which would have resulted in a
violation of subparagraphs (ii), (iv), (v), (vi), (vii), (viii) or (ix) of
Section 6.1 assuming such subparagraphs of Section 6.1 had been binding
upon Seller from June 30, 2000 through the date hereof.
4.9 Special Purpose Financial Statements. Section 4.9 of the Seller
Disclosure Schedule contains a true and complete copy of the special
purpose financial statements (the "Special Purpose Financial Statements")
of the Business for the years ended December 31, 1999, 1998 and 1997, and
for the quarters ended March 31, 2000 and June 30, 2000, all of which have
been prepared in accordance with Seller's historical accounting practices
consistently applied during the respective periods then ended, except as
otherwise noted in Section 4.9 of the Seller Disclosure Schedule. The
Special Purpose Financial Statements were derived from the books and
records of Seller. The Special Purpose Financial Statements present fairly
in all material respects the earnings before interest, taxes, depreciation
and amortization, each as defined in Section 4.9 of the Seller Disclosure
Schedule ("EBITDA"), of the Business for the respective periods then ended
and are in accordance with U.S. generally accepted accounting principles
consistently applied during the respective periods then ended, except as
described in Section 4.9 of the Seller Disclosure Schedule. The financial
information included in the Special Purpose Financial Statements is, or
with respect to the June 30, 2000 financial statements, will be included in
the audited or unaudited, as the case may be, consolidated financial
statements of Transamerica Finance Corporation.
4.10 Warranty Claims. Since January 1, 1999 and as of the date hereof, no
customer of Seller has in writing asserted or requested that Seller assert
a warranty claim with respect to any equipment constituting part of the
Assets against the manufacturer of such equipment. Seller is not presently
asserting any warranty claim, nor has Seller commenced any legal action
against the manufacturer of any equipment or alleged any cause of action
based on such manufacturer's breach of warranty, express or implied.
4.11 Employees; Employee Benefits. (a) Except as set forth in Section
4.11(a) of the Seller Disclosure Schedule, Seller and its Subsidiaries have
no written contracts of employment with any of the Business Employees, and
are not party to or subject to any collective bargaining agreements with
any union representing any of the Business Employees.
(b) Section 4.11(b) of the Seller Disclosure Schedule contains to the
extent solely relating to the Business Employees a true and complete list
of each severance or termination pay, medical, surgical, hospitalization,
life insurance and other "welfare" plan or program (within the meaning of
section 3(1) of ERISA; each profit-sharing, stock bonus or other "pension"
plan or program (within the meaning of section 3(2) of ERISA); each
deferred compensation, incentive compensation, annual bonus, stock
purchase, stock option and other equity compensation plan or program; each
individual employment, termination or severance agreement; and each other
material employee benefit plan or program in each case, that is sponsored,
maintained or contributed to by Seller solely for the benefit of any
Business Employee (the "Benefit Plans"). Copies of all Benefit Plans and
all amendments thereto and of all summary plan descriptions or summaries of
material modifications have been delivered or made available to Purchaser.
(c) All contributions required to be made with respect to any Benefit Plan
prior to the Closing Date have been timely made, and each Benefit Plan has
been operated and administered in all material respects in accordance with
Applicable Law, including but not limited to ERISA and the Code. Each
Benefit Plan intended to be qualified within the meaning of section 401(a)
of the Code has received a favorable determination letter from the IRS as
to its qualification under the Code.
(d) No liability under Subtitle C or D of Title IV of ERISA has been or is
reasonably expected to be incurred by the Seller or any of its Subsidiaries
with respect to any ongoing, frozen or terminated "single-employer plan,"
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of an entity which
is considered one employer with the Seller under Section 4001 of ERISA or
Section 414 of the Code (an "ERISA Affiliate"), for which Purchaser could
reasonably be expected to have any Liability following the Closing Date.
Neither the Seller, any of its Subsidiaries nor an ERISA Affiliate has
contributed to a "multiemployer plan", within the meaning of Section 3(37)
of ERISA, at any time in the six years prior to the date hereof, for which
Purchaser could reasonably be expected to have any Liability following the
Closing Date.
(e) Except as set forth in Section 4.11(e) of the Seller Disclosure
Schedule and in Article VII, the consummation of the transactions
contemplated by this Agreement shall not, either alone or in combination
with another event, (i) entitle any Business Employee to severance pay that
would be an Assumed Liability or (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due any such Business
Employee that would be an Assumed Liability.
(f) There are no pending, or, to the Knowledge of Seller, threatened or
anticipated claims against any or with respect to any Benefit Plan brought
by any Business Employee or his or her beneficiary covered under any such
Benefit Plan (other than routine claims for benefits) that would be an
Assumed Liability.
4.12 Taxes. (a) Seller and its Subsidiaries have paid all Taxes payable
with respect to the Assets or the Business, the non-payment of which would
result in a lien on any of the Assets (other than Permitted Encumbrances)
or would result in Purchaser becoming liable or responsible therefor.
(b) Except as set forth in Section 4.12 of the Seller Disclosure Schedule,
no material audit or other administrative proceedings or court proceedings
are presently pending or proposed in writing with regard to any Taxes or
Tax Returns of Seller or any of its Subsidiaries with respect to the Assets
or the income or operation of the Business. There is no pending claim that
has been asserted or proposed in writing by any Tax authority of a
jurisdiction where Seller and its Subsidiaries do not file Tax Returns with
respect to the Business to the effect that Seller or one or more of its
Subsidiaries is or may have been subject to taxation by that jurisdiction
based solely on the operation of the Business.
(c) No power of attorney currently in force has been granted by Seller or
any of its Subsidiaries with respect to the Business that would be binding
on Purchaser with respect to taxable periods commencing on or after the
Closing Date.
(d) Neither Seller nor any of its Subsidiaries has received a tax ruling or
entered into a closing agreement with any Taxing Authority that would
affect the Business after the Closing Date.
4.13 Material Contracts. (a) Section 4.13 of the Seller Disclosure Schedule
sets forth, as of the date hereof, the following (other than Excluded
Liabilities):
(i) each agreement that materially and adversely affects or materially
restricts the freedom of the Seller to compete in its lines of business or
with any Person or in any geographical area or otherwise to conduct the
Business as presently conducted;
(ii) each Benefit Plan listed in Section 4.11(b) of the Seller Disclosure
Schedule;
(iii) each contract, legally binding arrangement or agreement or purchase
order for the purchase of equipment, materials or supplies which
constitutes a part of the Assets, except those contracts or agreements
terminable without penalty on 30 or fewer days' notice or those involving
the receipt or payment of less than $100,000 per year;
(iv) each contract or agreement with any employee (or group of employees)
which is assumed by Purchaser under this Agreement which is not terminable
without penalty on 30 or fewer days' notice;
(v) each guaranty provided by the Seller as of the date hereof which
constitutes a part of the Assumed Liabilities;
(vi) each agreement, warranty, contract, or lease relating to the Trailers,
Domestic Containers, or Chassis with any Major Customer; and
(vii) other than this Agreement, each agreement for the disposition of
material Assets.
(b) The Seller has made available or will make available to the Purchaser
within 20 days after the date hereof true, correct and complete copies of
all agreements described in Section 4.13(a). The agreements described in
Section 4.13(a) and other agreements meeting the criteria specified
therein, whether entered into before the date hereof or between the date
hereof and the Closing are referred to as the "Material Contracts."
(c) Except as set forth in Section 4.13(c) of the Seller Disclosure
Schedule, as of the date hereof, each Material Contract has been executed
by the other party thereto and is in full force and effect, and constitutes
the legal, valid and binding obligation of Seller or its Subsidiaries, as
the case may be, as a party thereto, in accordance with the terms of such
agreement. In the twelve months preceding the date hereof, the Seller or
any of its subsidiaries have not given or received a written notice of
default under or had any material dispute with respect to any Material
Contract.
(d) Section 4.13(d) of the Seller Disclosure Schedule sets forth the
parties, the location, the lease amount payable and security deposits on
deposit for each real property lease and true, correct and complete copies
thereof have been made available to Purchaser. In the twelve months
preceding the date hereof, Seller has not materially breached or been in
default under any Real Property Lease. A true, correct and complete copy of
each of the real property leases set forth in Section 4.13(d) of the Seller
Disclosure Schedule will be delivered to Purchaser within 20 days after the
date hereof and the original executed versions thereof shall be delivered
at Closing.
(e) A true, correct and complete copy of each lease of Chassis, Domestic
Containers and Trailers that is a Material Contract (collectively, the
"Equipment Leases") will be made available to Purchaser within 20 days
after the date hereof. Except as set forth in Section 4.13(e) of the Seller
Disclosure Schedule, Seller has not sold, assigned or otherwise granted to
any party (including any lessee under an Equipment Lease) any present or
future right or option to acquire any ownership interest in any equipment
under an Equipment Lease that is a Material Contract or to retain any such
equipment without paying a reasonable rental therefore after the expiration
of the term of such lease, other than ordinary course hold-over provisions.
The defaults by the lessees under the Equipment Leases do not in the
aggregate have a Material Adverse Effect. To the Knowledge of Seller, there
are no oral Material Contracts or oral modifications to any Material
Contracts.
(f) Under the terms of the Canada Trust Transaction Documents, Seller is
entitled to receive and retain all sublease rental payments received by
Seller from subleasing the assets that are subject to the Canada Trust
Transaction Documents so long as Seller is not in default under the Canada
Trust Transaction Documents and Seller is not in default under the Canada
Trust Transaction Documents in any respect that would impair the right to
receive and retain such sublease rental payments.
The "Non-Disturbance Undertaking" dated December 18, 1996
included in the Canada Trust Transaction Documents is to the Knowledge of
Seller in full force and effect and has not been amended, waived or
modified since the date thereof.
4.14 Title to Assets; Absence of Encumbrances; Assets. (a) Except as set
forth in Section 4.14(a) of the Seller Disclosure Schedule, Seller has
good, valid and marketable title to its owned real properties which
constitute Assets and good and valid title to the other Assets, in each
case free and clear of all Encumbrances other than Permitted Encumbrances.
At the Closing Seller will deliver to the Purchaser, good and valid title
to (or, in the case of the Assets that are leased by the Seller, a valid
leasehold interest in) the Assets, free and clear of all Liens except
Permitted Encumbrances. As of the Closing, there will be no Encumbrances
relating to any of the Assets other than Permitted Encumbrances and other
than arising from any financing by Purchaser.
(b) Upon consummation of the transactions contemplated hereby, Purchaser
shall acquire all the Assets, other than Excluded Assets, that are
necessary for the continuing conduct and operation of the Business in all
material respects as conducted and operated by Seller immediately prior to
the Closing (other than headquarter-level services provided by Seller and
its Affiliates to the Business and assets associated with the provision of
such services).
(c) Except as set forth in Section 4.14(c) of the Seller Disclosure
Schedule or pursuant to this Agreement, there does not exist any right,
option or agreement granting any Person the right to purchase or otherwise
acquire any of the Trailers, Domestic Containers and Chassis or other
Assets.
(d) Except as set forth in Section 4.14(d) of the Seller Disclosure
Schedule, the Trailers, Domestic Containers and Chassis that are off-hire
as of the date of the Signing Net Assets Statement have been maintained in
all material respects in good leasable operating condition, in any
instance, in accordance with Seller's written policies which interpret the
Rules and Regulations of the U.S. Federal Highway Act, the Rules and
Regulations of the U.S. Department of Transportation and the TOFC/COFC
Interchange Rules and Trailer and Container Service and Reporting Rules as
adopted by the Association of American Railroads, as applicable (or an
accrual has been made and reflected on the Signing Net Assets Statement to
the extent that such Trailers, Domestic Containers and Chassis have not
been so maintained) and are suitable and adequate in all material respects
for their current use. The Trailers, Domestic Containers and Chassis that
are on-hire as of the date hereof are in all material respects, subject to
leases which provide for the lessee to maintain such Trailer, Domestic
Container or Chassis, as applicable, in good operating condition, in any
instance, in accordance with Seller's written policies which interpret the
Rules and Regulations of the U.S. Federal Highway Act, the Rules and
Regulations of the U.S. Department of Transportation and the TOFC/COFC
Interchange Rules and Trailer and Container Service and Reporting Rules as
adopted by the Association of American Railroads, as applicable. normal
wear and tear excepted.
4.15 Leases of Real Property. Section 4.15 of the Seller Disclosure
Schedule lists all material real estate leased (the "Leased Premises"), as
of the date hereof, by Seller or any of its Subsidiaries, in each case as
lessee, which is used or held for use primarily in connection with the
Business. Each lease (a "Lease") with respect to a Leased Premises is a
valid and binding obligation of Seller or the Subsidiary thereof which is
the lessee thereof and, to Seller's knowledge, is in full force and effect,
except where the failure to be valid and binding or in full force and
effect would not have a Material Adverse Effect. Except as set forth in
Section 4.13 of the Seller Disclosure Schedule, Seller and its Subsidiaries
do not own any real property (other than real property acquired in
satisfaction of debts previously contracted in good faith) used primarily
in connection with the Business.
4.16 Environmental. (a) Except as set forth in Section 4.16(a) of the
Seller Disclosure Schedule, and except as would not have a Material Adverse
Effect, (i) Seller is in compliance with all applicable Environmental Laws
with respect to the Business, which compliance includes the possession by
the Seller or its Subsidiaries of all material permits and other
governmental authorizations required under applicable Environmental Laws to
operate the Business and compliance with the terms and conditions thereof,
and (ii) within the past three years Seller has not received any
communication from a Governmental Authority, that alleges that the Seller
is not in such compliance.
(b) Except as set forth in Section 4.16(b) of the Seller Disclosure
Schedule and except as would not have a Material Adverse Effect, within the
past three years no notice, demand, request for information, citation,
claim, action, proceeding, summons or complaint has been received by any of
Seller or any of its Subsidiaries, and no penalty has been assessed or, to
Seller's knowledge, threatened against any of Seller or any of its
Subsidiaries by any Governmental Authority with respect to any (i) alleged
violation by any of Seller or any of its Subsidiaries of any Environmental
Law with respect to the leased or owned real property used or held for use
primarily in connection with the Business, (ii) alleged failure by Seller
or any of its Subsidiaries to have any Permit required under any
Environmental Law in connection with the conduct of the Business or (iii)
alleged release, disposal, transportation or storage of any Hazardous
Substance by Seller or any of its Subsidiaries at, upon, or under the
leased or owned real property used or held for use primarily in the
Business except in the ordinary course of business.
(c) Except as set forth in Section 4.16(c) of the Seller Disclosure
Schedule and except as would not have a Material Adverse Effect, to
Seller's knowledge there are no administrative or judicial judgments,
orders, or decrees that relate to violations of Environmental Law with
respect to the Business.
(d) Except as set forth in Section 4.16(d) of the Seller Disclosure
Schedule and except as would not have a Material Adverse Effect, to
Seller's knowledge Seller is not engaged in any activity in connection with
the operation of the Business that would violate any Environment Law that
relates to the Assets.
4.17 Intellectual Property. (a) Except as would not have a Material Adverse
Effect, the trademarks, trade names and service marks listed in Section
6.10 (the "Intellectual Property") are owned free and clear of all
Encumbrances by, or validly licensed to, Seller or its Subsidiaries, as
applicable. Except as would not have a Material Adverse Effect and except
as set forth in Section 4.17 of the Seller Disclosure Schedule, each of
Seller and its Affiliates owns or possesses, and has taken all actions
appropriate to record, reserve and protect, adequate and enforceable
long-term licenses or other rights to use all such Intellectual Property.
(b) There is no restriction or limitation on the
right of the Seller or any of its Subsidiaries to transfer any of the
Intellectual Property to Purchaser to the extent provided in Section 6.10,
and upon the Closing, there will be no restriction or limitation on the
right of the Seller or any of its Subsidiaries to transfer to Purchaser any
of the Intellectual Property of Seller or any of its Subsidiaries to the
extent provided in Section 6.10.
(c) The use of the Intellectual Property is not, to
the knowledge of the Seller, in conflict with the rights of others. As of
the date hereof, except as would not have a Material Adverse Effect on the
Business: there is no claim, action, suit, charge, proceeding, audit or
investigation by any Governmental Authority (collectively, a "Proceeding")
pending, or, to the knowledge of the Seller, threatened, with respect to
the Intellectual Property, and no person, to the knowledge of the Seller,
is infringing upon or otherwise violating any of the Intellectual Property
owned or used by Seller.
(d) As of the date hereof, except as would not have
a Material Adverse Effect on the Business: there are no proceedings pending
against the Seller and the Seller and its Subsidiaries have not received
any notice of any claims, alleging that the conduct of the Business
infringes upon or constitutes the unauthorized use of the proprietary
rights of any third party. The Intellectual Property is not as of the date
hereof subject to any material outstanding order, decree, judgment,
stipulation or injunction restricting the use thereto by Seller.
4.18 Brokers. No broker, investment banker, financial advisor or other
Person, other than Morgan Stanley Dean Witter & Co. and Donaldson Lufkin
and Jenrette, the fees and expenses of which will be paid by Seller or an
Affiliate thereof, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Seller.
4.19 Accounts Receivables. All accounts receivable which constitute Assets
are the result of bona fide transactions in the ordinary course of
business. The reserves for allowance for doubtful accounts in the Signing
Net Assets Statement were established in a manner consistent with Seller's
historical accounting practices.
4.20 No Regulatory Impediment. Excluding the requirements of the HSR Act,
Seller is not aware of any fact relating to its business, operations,
financial condition or legal status that might materially impair its
ability to obtain, on a timely basis, all consents, authorizations, orders,
approvals and Permits from, and make all necessary filings and
registrations with and all notices to, Governmental Authorities necessary
for the consummation of the transactions contemplated hereby.
4.21 Limitation on Representations and Warranties. Except as otherwise set
forth herein and without limiting the representations and warranties set
forth herein, Seller makes no representations or warranties as to the
Assets or the Business, which are being transferred to Purchaser "AS IS,"
"WHERE IS" and with all defects at the Closing Date. Without limiting the
generality of the foregoing, Seller makes no representation or warranty to
Purchaser with respect to (a) any projections, estimates or budgets
heretofore delivered to or made available to Purchaser of future revenues,
expenses or expenditures, future results of operations (or any component
thereof), future cash flows or future financial condition (or any component
thereof) of the Assets or the Business (including any information included
in or omitted from the Confidential Offering Memorandum previously
furnished to Purchaser) or (b) any other information or documents made
available to Purchaser or its counsel, accountants, advisors or other
representatives with respect to the Assets or the Business, except as
expressly covered by a representation and warranty contained in Section 4.1
through 4.20.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as expressly set forth in the Purchaser Disclosure
Schedule delivered by Purchaser to Seller prior to the execution of this
Agreement and making reference to the particular section of this Agreement
to which exception is being taken (unless the applicability of such
exception is reasonably apparent), the Purchaser represents and warrants to
Seller as follows:
5.1 Organization. Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Purchaser has heretofore made available to Seller complete
and correct copies of its certificate of incorporation and by-laws as
currently in effect.
5.2 Authority Relative to Agreement. Purchaser has the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery by Purchaser
of this Agreement have been and prior to Closing the consummation by
Purchaser of the transactions contemplated hereby will be duly authorized
by all necessary corporate action and no other corporate proceedings on the
part of the Purchaser are necessary for Purchaser to authorize this
Agreement or to consummate the transactions contemplated by this Agreement.
Assuming that this Agreement has been duly executed and delivered by
Seller, this Agreement constitutes a valid and legally binding agreement of
Purchaser enforceable against Purchaser in accordance with its terms,
except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors rights generally or general equitable principles (whether
considered in a proceeding at equity or in law).
5.3 Non-Contravention. The execution and delivery of this Agreement by
Purchaser do not, and the consummation by Purchaser of the transactions
contemplated hereby and the performance by Purchaser of the obligations
which it is obligated to perform hereunder will not, (a) violate any
provision of the certificate of incorporation or by-laws or other
organizational documents of Purchaser or (b) assuming that all consents,
authorizations, orders or approvals of, filings or registrations with, and
notices to, each Governmental Authority listed in Section 5.4(a) of the
Purchaser Disclosure Schedule and all Third Party Consents listed in
Section 5.4 (b) of the Purchaser Disclosure Schedule have been obtained or
made, (i) violate any Applicable Law or Environmental Laws or (ii) violate,
result in the termination or the acceleration of, or conflict with or
constitute a default under, any Contract to which Purchaser is a party or
by which any of its properties are bound, except, in the case of clauses
(b)(i) and (ii), for such violations, terminations, accelerations,
conflicts or defaults as would not prohibit, materially delay or otherwise
materially impair Purchaser's ability to consummate the transactions
contemplated hereby.
5.4 Consents. (a) Except as described in Section 5.4(a) of the Purchaser
Disclosure Schedule, no consent, authorization, order or approval of,
filing or registration with, or notice to, any Governmental Authority and
(b) except as described in Section 5.4(b) of the Purchaser Disclosure
Schedule, no Third Party Consent is required for the execution and delivery
of this Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby, except for such consents, authorizations,
orders, approvals, filings, registrations, notices or Third Party Consents
the failure of which to be obtained or made would not prohibit, materially
delay or otherwise materially impair the consummation by Purchaser of the
transactions contemplated hereby.
5.5 Brokers. No broker, investment banker, financial advisor or other
person, other than Salomon Smith Barney, the fees and expenses of which
will be paid by Purchaser, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of Purchaser.
5.6 Financing. Purchaser has entered into a commitment letter with Salomon
Smith Barney, Inc. (collectively, including all exhibits, appendices and
annexes thereto, the "Bank Commitment Letter") pursuant to which Salomon
Smith Barney, Inc. has committed to provide to Purchaser subject to the
terms and conditions therein, funds which together with cash to be
available to Purchaser at Closing, would be sufficient to consummate the
transactions contemplated hereby and to pay all related fees and expenses
of Purchaser (the "Financing"). Section 5.6 of the Purchaser Disclosure
Schedule sets forth a true, correct and complete copy of the Bank
Commitment Letter.
5.7 No Regulatory Impediment. Excluding the requirements of the HSR Act,
Purchaser is not aware of any fact relating to its business, operations,
financial condition or legal status that might materially impair its
ability to obtain, on a timely basis, all consents, authorizations, orders,
approvals and Permits from, and make all necessary filings and
registrations with and all notices to, Governmental Authorities necessary
for the consummation of the transactions contemplated hereby.
ARTICLE VI
COVENANTS
6.1 Conduct of Business. (a) Except to the extent that Purchaser shall
otherwise consent in writing and except as expressly contemplated by this
Agreement, between the date hereof and Closing, Seller shall, and shall
cause its Subsidiaries to, (i) use commercially reasonable efforts to
preserve the Business' organization and goodwill intact, preserve and
maintain the Business licenses, and maintain satisfactory relationships
with customers, suppliers and employees, (ii) maintain the Assets in normal
operating condition and repair, ordinary wear and tear excepted, in
accordance with the maintenance practices of Seller in effect on the date
hereof, including repairing or replacing, consistent with past practice,
Assets that are damaged or destroyed, (iii) maintain the books, accounts
and records of the Business on a basis consistent with past practice, (iv)
use reasonable efforts to keep in full force and effect insurance
comparable in amount and scope of coverage to that now maintained by them
with respect to the Business but subject to Section 6.7, (v) use
commercially reasonable efforts to preserve all Intellectual Property owned
by the Business or in which the Business has rights, and (vi) continue
operating Business in the ordinary course consistent with past practices.
(b) Seller agrees that, between the date hereof and Closing, except (A) as
expressly authorized under this Agreement or (B) as otherwise consented to
by Purchaser in writing or (C) as set forth in Section 6.1(b) of the Seller
Disclosure Schedule, Seller shall not, and shall cause its Subsidiaries not
to:
(i) other than in the ordinary course of business, enter into or amend or
modify in any material respect any Material Contract or other transaction
or commitment which is material to the financial condition, results of
operations or business of the Business, taken as a whole;
(ii) except in the ordinary course of business, sell, lease or otherwise
dispose of any material part of the Business or the Assets;
(iii) create or suffer to exist any new Encumbrance on any of the Assets,
except for (A) Permitted Encumbrances and (B) leases on Trailers, Domestic
Containers, Chassis and other equipment held for lease in connection with
the Business;
(iv) purchase or acquire any asset or property for the Business (or make
any commitment with respect thereto), or incur any liability or obligation
(fixed or contingent) or enter into any Contract with respect to the
Business or the Assets, except for (A) incurrences of liabilities or
obligations and entering into Contracts, in the ordinary course of
business, (B) purchases and commitments in the ordinary course of business
consistent with the Purchase Order Schedule of the Business attached hereto
as Section 6.1(b)(iv) of the Seller Disclosure Schedule or (C) purchases
and commitments for not more than $2,500,000 in the aggregate;
(v) grant or agree to grant any general increases in the rates of salaries
or compensation payable to any Business Employee, except in the ordinary
course of business;
(vi) commit to pay any bonus to an executive level or management Business
Employee not eligible to receive a bonus as of the date hereof as
previously disclosed to Purchaser or increase the target bonus of any such
Business Employee from that previously disclosed to Purchaser, if such
increase would increase total annual compensation to above $100,000;
(vii) transfer or otherwise change any of the material terms or conditions
of employment of any Business Employee, except in the ordinary course of
business;
(viii) provide for any new pension, retirement or other employment benefits
for Business Employees that would be Assumed Liabilities or, except for
changes to Seller's or Parent's benefit plans generally, any increase in
any existing Benefit Plans;
(ix) enter into any employment, severance or consulting agreements that
would be Assumed Liabilities or hire an employee of the Business at a
salary in excess of $100,000 per annum;
(x) settle or compromise any material claims, actions, or litigation
related to the Business or the Assets, except in the ordinary course of
business consistent with past practice;
(xi) take any action which would have or be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect;
(xii) enter into any agreement, contract, commitment or arrangement to do
any of the foregoing, or authorize, recommend, propose or announce an
intention to do, any of the foregoing; or
(xiii) take, or agree to or commit to take, any action that would make any
representation or warranty of Seller contained herein inaccurate at the
Closing.
6.2 Access; Confidentiality. Seller agrees to permit Purchaser and its
accountants, counsel and other authorized representatives to have, during
the period from the date hereof to the Closing Date, reasonable access to
the Assets over which Seller has physical control, premises, books and
records of Seller and its Subsidiaries that relate primarily to the
Business or Assets and personnel of the Business during normal business
hours. Seller agrees to make available to Purchaser, upon reasonable
advance notice and during normal business hours, the officers and employees
of Seller and its Subsidiaries, as Purchaser may reasonably request;
provided, that such availability shall not interfere with the normal
operations of Seller and its Subsidiaries. Seller shall furnish Purchaser
with such financial and operational data and other information with respect
to the Business and Assets as Purchaser shall from time to time reasonably
request and as are maintained by Seller in the ordinary course of business.
Notwithstanding the foregoing, Seller and its Subsidiaries shall not be
required to permit Purchaser and its representatives to have access to any
documents, portions thereof or other information which Seller and/or its
Subsidiaries are prohibited from disclosing due to confidentiality
restrictions, and except as contemplated by Section 6.1 of this Agreement,
Seller and Purchaser hereby agree that until the Closing shall occur,
Purchaser shall have no right to direct or control the Business or its
operations. Any information regarding the Business or Assets heretofore or
hereafter obtained from Seller or its Subsidiaries by Purchaser or its
representatives shall be subject to the terms of the Confidentiality
Agreement, and such information shall be held by Purchaser and its
representatives in accordance with the terms of the Confidentiality
Agreement, provided, however, that following the Closing, this Section 6.2
and the Confidentiality Agreement shall not prohibit Purchaser from using
and providing to third parties such information concerning the Assets or
the Business (but not any other assets, liabilities or other information
relating to Seller) as it may deem appropriate. From the date hereof
through the Closing, Seller will continue to prepare and to promptly
provide to Purchaser such management reports and information and financial
statements and information as Seller currently prepares in the ordinary
course of business.
6.3 Taking of Necessary Action. (a) Each of the parties hereto agrees to
use its commercially reasonable efforts to take or cause to be taken all
action and promptly do or cause to be done all things necessary, proper or
advisable to consummate and make effective the transactions contemplated
hereby.
(b) Each of Seller and Purchaser shall (i) as soon as practicable after the
date hereof, file such applications, notices, registrations and requests as
may be required or advisable to be filed by it with any Governmental
Authority in connection with the transactions contemplated hereby, (ii)
furnish the other party with copies of all documents and correspondence (A)
prepared by or on behalf of such party for submission to any Governmental
Authority and (B) received by or on behalf of such party from any
Governmental Authority, in each case in connection with the transactions
contemplated hereby and (iii) consult with and keep the other party
informed as to the status of such matters. To the extent that any
application, notice, registration or request so filed contains any
significant information relating to the other party or any of its
Affiliates, prior to submitting such application, notice, registration or
request to any Governmental Authority, each party will permit the other
party to review such information and will consider in good faith the
suggestions of the other party with respect thereto. Each party shall have
the right to approve any such information that relates to it, and its
Affiliates, or, in the case of Seller, the Business or the Assets (which
approval shall not be unreasonably withheld).
(c) Each party shall cooperate with the other party in the preparation and
filing of any applications, notices, registrations and responses to
requests for additional information from Governmental Authorities made by
the other party with any Governmental Authority in connection with the
transactions contemplated hereby, including providing such information as
the other party may reasonably request for inclusion in such applications,
notices, registrations and responses.
(d) Notwithstanding anything to the contrary in this Section 6.3, (i)
neither Purchaser nor any of its Affiliates or Subsidiaries shall be
required to divest a material portion of any of (X) the Trailers, (Y) the
Domestic Containers or (Z) the Chassis or a material portion of any of (A)
the trailers, (B) the domestic containers or (C) the chassis of Purchaser
and its Subsidiaries, and (ii) neither Purchaser nor any of its Affiliates
or Subsidiaries shall be required to take or agree to take any other action
or agree to any limitation that could reasonably be expected to be material
to the business, assets, condition (financial or otherwise), results of
operations or prospects of Purchaser and its Affiliates or Subsidiaries
taken as a whole or to the Business taken as a whole.
6.4 Release of Seller from Assumed Liabilities. In addition to assuming the
Assumed Liabilities in accordance with Section 2.3, Purchaser agrees to use
its commercially reasonable efforts to cause Seller or any Affiliate of
Seller to be absolutely and unconditionally released on or prior to the
Closing Date from each Assumed Liability. In addition to assuming the
Assumed Liabilities in accordance with Section 2.3, Purchaser agrees to
continue to use its best efforts after the Closing Date to relieve Seller
and such Affiliates of any Assumed Liabilities that are not released or
otherwise discharged prior to the Closing Date.
6.5 Exclusivity. Recognizing that Purchaser's investigations of Seller and
the Business, and the negotiation and drafting of this Agreement and the
other agreements, documents and instruments to be executed by Purchaser in
connection herewith have to date required and will continue to require
Purchaser to expend significant time, effort and money, and to induce
Purchaser to execute and deliver this Agreement and proceed with the
transaction contemplated hereby, Seller agrees that, as long as Purchaser
is not in material breach of its obligations under this Agreement (which
breach, if curable, has not been cured within five Business Days of
notice), none of Seller, Parent, any of their Subsidiaries or any of their
directors, officers, representatives, financial advisors, or agents will,
directly or indirectly, encourage any offers from, solicit, encourage,
initiate, respond to (other than by a bare statement, without further
detail or explanation, that they are not permitted to respond) or continue
any discussions with, engage in discussions or negotiations with or provide
any information to, or enter into any agreements or understandings with,
any Person, other than Purchaser and its officers, employees, advisors and
agents, concerning any sale or other transfer of the Business or Assets, or
any material portion of the Business or Assets.
6.6 Release of Purchaser from Excluded Liabilities. Purchaser shall not
assume any Excluded Liability and Seller shall retain all liability for
paying, satisfying and performing all Excluded Liabilities.
6.7 Insurance; Risk of Loss. (a) Effective as of the Closing Date (i)
Seller will terminate or cause its Subsidiaries to terminate all coverage
relating to the Business, the Assets and current or former Business
Employees under the general corporate policies of insurance, cancelable
surety bonds and hold harmless agreements of Seller for the benefit of all
of its controlled subsidiaries and (ii) from and after the Closing Date
Purchaser shall become solely responsible for all insurance coverage and
related risk of loss with respect to the Business, Assets and current or
former Business Employees for events occurring, circumstances existing and
Liabilities accruing on or after the Closing.
(b) Notwithstanding clause (a), to the extent that (i) any insurance
policies (other than Seller's insolvency insurance policy referred to in
Section 2.2(g)) controlled by Seller and its Subsidiaries ("Seller's
Insurance Policies") cover any Liability, loss, damage or expense relating
to any of the Business, the Assets and current or former Business Employees
("Business Liabilities") and arising out of occurrences, events or
circumstances prior to the Closing Date and (ii) Seller's Insurance
Policies continue after the Closing to permit claims to be made thereunder
with respect to Business Liabilities arising out of occurrences, events or
circumstances prior to the Closing Date ("Business Claims"), Seller shall
reasonably cooperate with Purchaser in submitting Business Claims (or
pursuing Business Claims previously made) on behalf of Purchaser under
Seller's Insurance Policies; provided, that Seller shall be under no
obligation to commence or maintain litigation to enforce any Business Claim
(except to the extent that Purchaser agrees to hold Seller harmless under
terms reasonably acceptable to Seller in connection therewith).
6.8 Assumption of Proceedings. From and after the Closing Date, Purchaser
shall assume the defense of and indemnify and hold Seller and its
Affiliates harmless from and against any and all actions, suits, claims and
administrative or other proceedings of every kind and nature instituted or
commenced against Seller or any of its Affiliates at any time after the
Closing Date that constitutes an Assumed Liability. Purchaser shall have
the right to assume and conduct the defense of any such matters, and Seller
and its Subsidiaries shall cooperate in such defense to the extent
reasonably requested by Purchaser.
6.9 Mail; Payments. Seller hereby authorizes Purchaser after the Closing to
receive and open all mail and other communications received by the
Business, and to act with respect to such communications in such manner as
Purchaser may elect if such communications primarily relate to the Business
or any of the Assets, or, if such communications do not so primarily
relate, to forward the same promptly to Seller. After the Closing,
Purchaser shall have the right and authority to endorse, without recourse,
the name of Seller or any of its Subsidiaries on any check or any other
evidence of indebtedness received by Purchaser on account of any of the
Assets or the Business. Any payment received by Seller or any of its
Subsidiaries after the Closing to the extent relating to the Assets or
Business shall be promptly remitted to Purchaser and any payment received
by Purchaser to the extent in respect of Excluded Assets or Excluded
Liabilities shall be promptly remitted to Seller. Seller or a Subsidiary
thereof shall promptly deliver to Purchaser the original of any mail or
other communication received by it after the Closing primarily relating to
the Assets or Excluded Liabilities or the Business and any moneys, checks
or other instruments of payment to which Purchaser is entitled.
6.10 License of Name. (a) Seller hereby grants to Purchaser a fully-paid,
royalty-free and non-exclusive license to use the Names and the
corresponding trademarks (including other common law or statutory trademark
rights therein and derivations or stylizations thereof, "Trademarks") and
the Prefixes, in connection with and as a part of the Business (the
"License") for the relevant period of time from and after the Closing Date
as set forth in the following sentence (the "License Term") and subject to
the following provisions of this Section 6.9. The License granted to
Purchaser hereunder authorizes Purchaser to continue to use the Names, any
corresponding Trademark and the Prefixes that appear on a Trailer, Domestic
Container or Chassis as of the Closing Date, on such Trailer, Domestic
Container or Chassis for the life of such Trailer, Domestic Container or
Chassis without obligation to remove, cover or otherwise obscure the
appearance of the Name, Trademark or Prefix thereon; provided, that if any
Trailer, Domestic Container or Chassis is refurbished or repainted or
ceases, directly or indirectly, to be both owned and operated by Purchaser,
then in each case the License with respect to such Trailer, Domestic
Container or Chassis shall terminate and Purchaser shall promptly remove
any Name, Trademark or Prefix thereon. In no event may Purchaser use the
Names or any corresponding Trademark on any Trailer, Domestic Container or
Chassis not acquired hereunder. At the expiration of the License Term, all
such use of the Names, any corresponding Trademarks and the Prefixes by
Purchaser shall cease.
(b) (i) As used herein, "Names" means the terms "Transamerica,"
"Transamerica Leasing," "Trans Ocean," "Realco," "ICS" and such other names
that correspond to the Prefixes.
(ii) "Prefix" shall mean all of the alphabetical prefixes imprinted on, and
used by Seller to identify, the Trailers, Domestic Containers or Chassis,
which shall include the following BIC-registered prefixes: "ICSU," "ICSZ,"
"IKSU," "NCHU," "NCRU," "REAU," "REAZ," "RMPZ," "RTMZ," "RXXZ," "SMTZ,"
"TCPU," "TCPZ," "TDNZ," "TGPZ," "TMEZ," "TRLU," "TRZZ," "TSPZ," "TSSZ,"
"TSXZ" and "UTHZ."
(c) Purchaser hereby waives and disclaims any right or interest in or to
ownership of the Names or any Trademarks that may arise under any
Applicable Law out of the use hereunder of the Names or any such Trademarks
and acknowledges that its right to use the Names, Trademarks and Prefixes
is solely to the extent provided in subsection (a) above. No right to
assign, transfer or sublicense the Names or any corresponding Trademark is
included herein, and such rights to use the Names or any corresponding
Trademark are expressly withheld, except that Purchaser may assign or
otherwise transfer its rights to use the Names or any corresponding
Trademark hereunder to its Subsidiaries or by operation of law in a merger
(subject to the provisions of this Section 6.10); provided that in the
event that such Subsidiary ceases to be a Subsidiary, the rights hereunder
assigned or otherwise transferred shall terminate. Purchaser may not
assign, sublicense or otherwise transfer, directly or indirectly, the
License (or any portion thereof) granted hereunder except by operation of
law in a merger (subject to the provisions of this Section 6.10).
(d) Purchaser shall, as soon as reasonably practicable following the
Closing Date, make application for and effect a change in all of the
registrations and licenses with respect to the Trailers and Chassis from
Seller or an Affiliate thereof to Purchaser. Any registration fees or
charges associated with the registration and licensing of Purchaser as
owner of the Trailers, Domestic Containers and Chassis shall be paid by
Purchaser and any refunds of such registration fees already paid by or on
behalf of Seller or an Affiliate thereof shall be for Purchaser's account
and, if paid to Seller or an Affiliate thereof, shall promptly be paid over
by Seller to Purchaser.
(e) After the Closing, Purchaser shall not use any forms (including forms
of agreement), stationery, brochures or other similar items (the
"Supplies") that bear any Names or Prefixes or any current logos of Parent
or any of its Affiliates, provided that Purchaser may continue to use
business forms included within the Supplies, provided, further, that
Purchaser shall cease using such business forms as promptly as practicable,
but in no event later than 60 days after the Closing.
6.11 Post-Closing Sales Tax Cooperation. Seller agrees that following the
Closing, Purchaser shall have reasonable access during normal business
hours to the books and records of Seller as they relate to the sales taxes
paid by the Business during the period prior to Closing; provided that such
access shall not interfere with the normal operations of the Seller's
business.
6.12 Post-Closing Accounting Cooperation. Purchaser agrees that following
the Closing, Seller and/or its independent auditors shall have reasonable
access during normal business hours to the books and records of the
Business as they relate to the period prior to Closing and shall have the
reasonable assistance and cooperation of the appropriate personnel of
Purchaser and its Affiliates in the review of such books and records and in
the preparation of the Cut-Off Date Net Book Value of Equipment Report, the
Cut-Off Date Net Assets Statement and Cash Management Schedule; provided
that such access shall not interfere with the normal operations of the
Business.
6.13 General Cooperation. From the date hereof through the Closing, Seller
and Purchaser will cooperate reasonably in order to achieve a smooth
transition consistent with the mutual business interests of the Seller and
the Purchaser. In this regard, the Seller and the Purchaser agree that they
will enter into good faith discussions concerning the Business, including
personnel policies and procedures, and other operational matters relating
to the Business.
6.14 Assigned Contracts. Seller shall use its commercially reasonable
efforts to obtain any consent, approval or amendment required to novate
and/or assign any Contract included in the Assets, or any other Asset to be
assigned to Purchaser hereunder provided that Seller shall not be required
to pay any significant amount or offer any significant inducement in
connection therewith. Seller shall keep Purchaser reasonably informed from
time to time of the status of the foregoing and Purchaser shall cooperate
with Seller in this regard. To the extent that the rights of Seller or any
of its Subsidiaries under any Contract included in the Assets, or under any
other Asset to be assigned to Purchaser hereunder, may not be assigned
without the consent of another Person which has not been obtained prior to
the Closing, neither this Agreement nor any of the Instruments of Transfer
shall constitute an agreement to assign the same if an attempted assignment
would be unlawful. If any such consent has not been obtained or if any
attempted assignment would be ineffective or would impair Purchaser's
rights under the instrument in question so that Purchaser would not acquire
the benefit of all such rights, then Seller or a Subsidiary thereof, as
applicable, to the maximum extent permitted by Applicable Law and the
instrument, shall act as Purchaser's agent in order to obtain for Purchaser
the benefits thereunder and shall cooperate, to the maximum extent
permitted by Applicable Law and the instrument, with Purchaser in any other
reasonable arrangement designed to provide such benefits (and the
corresponding burdens) to Purchaser (including by entering into an
equivalent arrangement).
6.15 Bulk Sales Waiver. Purchaser and Seller hereby waive compliance with
the terms and conditions of any applicable bulk sales or bulk transfer law
or similar laws that may be applicable to the bulk sale or bulk transfer of
the Assets. Seller will indemnify and hold harmless Purchaser from any and
all claims relating to the provisions of the "bulk sales law" of any
applicable jurisdiction with respect to the transactions contemplated by
this Agreement.
6.16 Public Announcements. Prior to the Closing Date, Seller and Purchaser
will use reasonable efforts to consult with each other about any
description of the transactions contemplated by this Agreement contained in
any press release or other public statements prior to the issuance thereof
and provide each other with the opportunity to review and comment upon any
such description, and shall not issue any such press release or make any
such public statement prior to such consultation, except as may be required
by applicable law, court order or by obligations pursuant to any listing
agreement with any national securities exchange. The parties shall use
reasonable efforts to agree on the description of the transactions
contemplated by this Agreement contained in any initial press releases to
be issued by the parties with respect to their execution and delivery of
this Agreement.
6.17 Notices of Certain Events. Seller and Purchaser will use commercially
reasonable efforts to promptly notify each other of, and cure before the
Closing, any event, transaction or circumstance, that such party learns has
caused or will cause any covenant or agreement of such party under this
Agreement to be breached or that renders or will render untrue any
representation or warranty of such party contained in this Agreement in
each case so as to cause a condition to Closing not to be satisfied. No
notice given pursuant to this paragraph shall have any effect on the
representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition
contained herein.
6.18 Further Assurances. Each party shall cooperate with the other, and
execute and deliver, or use its commercially reasonable efforts to cause to
be executed and delivered, all such other instruments, including
instruments of conveyance, assignment and transfer, and to make all filings
with and to obtain all consents, approvals or authorizations of any
Governmental Authority or other regulatory authority or any other Person
under any Permit, agreement, indenture or other instrument, and take all
such other actions as such party may reasonably be requested to take by the
other party hereto from time to time, consistent with the terms of this
Agreement, in order to effectuate the provisions and purposes of this
Agreement and the transactions contemplated hereby.
6.19 Covenant Not to Compete. (a) For a period of four years from and after
the Closing, the Seller agrees that it and Transamerica Finance Corporation
shall not, and they shall cause their respective Subsidiaries not to,
engage directly or indirectly in any business that competes with the
Business as it is conducted as of the Closing in North America (a
"Competitive Business"); provided, however, that the foregoing will not
preclude Seller, Transamerica Finance Corporation or their respective
Subsidiaries from engaging and continuing to engage in any businesses or
activities in which they shall be engaged immediately after the Closing,
including (i) Seller's tank chassis leasing business (which is currently
under contract to be sold) and (ii) the provision and marketing of direct
financing leases or full payout leases or installment loans relating to
trailers, domestic containers and chassis (where a direct financing lease
shall mean a lease in which the lessee has a purchase option to acquire the
equipment subject to such lease at the end of the lease term). Seller and
Transamerica Finance Corporation shall not request that Aegon or any of its
Subsidiaries fund an initiative that is managed, directly or indirectly, by
Seller or Transamerica Finance Corporation to engage in a Competitive
Business or assist Aegon or any of its Subsidiaries in engaging in a
Competitive Business during the four-year period described above.
(b) Notwithstanding the provisions of Section 6.19(a),
(i) Seller, Transamerica Finance Corporation and their respective
Subsidiaries may invest as passive investors owning not more than 10% of
the outstanding shares of any class of securities of any corporation that
is engaged in any Competitive Business having a class of securities
registered pursuant to the Securities Exchange Act of 1934, so long as
neither Seller nor any of its Subsidiaries in any way, either directly or
indirectly, manages or exercises control over any such corporation or
otherwise takes any part in any of its businesses, other than exercising
its rights as a shareholder, and (ii) Seller and its Subsidiaries shall not
be prohibited from acquiring a Person engaged in a Competitive Business
together with other lines of business if (A) not more than 20% of the value
of the acquired Person's assets (measured by the most current financial
statements published by the acquired Person in the ordinary course of
business) relates to the Competitive Business, and (B) such Competitive
Business is divested by Seller or its Subsidiary, as applicable, within six
months of its purchase.
(c) The provisions of the covenant contained in Section 6.19(a) shall be
deemed to be a separate covenant in each of the states, cities, counties,
or other political subdivisions of the United States and in foreign
countries. The parties acknowledge and agree that the time, scope, and
other provisions of Section 6.19(a) have been specifically negotiated by
sophisticated, commercial parties and specifically hereby agree that such
time, scope and other provisions are reasonable under the circumstances.
The parties further agree that if, at any time, despite the express
agreement of the parties, a court of competent jurisdiction holds that any
portion of Section 6.19(a) is unenforceable because any of the restrictions
therein are unreasonable, or for any other reason, such decision shall not
affect the validity or enforceability of any of the other provisions of
this Agreement, and the maximum restrictions of time or scope reasonable
under the circumstances, as determined by such court, will be substituted
for any such restrictions which are held unenforceable. In the event of a
breach by any party of any of the provisions of Section 6.19(a), the
parties acknowledge that such breach may cause irreparable damage to
Purchaser, the exact amount of which may be difficult to ascertain, and the
remedies at law for any such breach may be inadequate. Accordingly, the
Purchaser may be entitled, in addition to any other rights or remedies
existing in their favor, to seek specific performance and injunctive relief
in order to enforce or prevent breach of any such provisions.
6.20 Cooperation with Respect to Financing. Between the date hereof and the
Closing, Purchaser agrees to use commercially reasonable efforts to secure
the Financing. Between the date hereof and the Closing, Purchaser and
Seller agree to reasonably cooperate in connection with Purchaser's efforts
to secure the Financing, and any other financing as contemplated by the
Bank Commitment Letter, including cooperating with Purchaser in connection
with Purchaser's (a) obtaining appraisals of the Assets, (b) sending
notices to lessees of the change of ownership, (c) making application for
new title certificates and (d) seeking access to Seller's accountants and
their work papers, making employees of the Business available, providing
all information relating to the Business reasonably requested by Purchaser,
and permitting Purchaser and its accountants to conduct agreed upon
procedures with respect to the Business; provided, however, that Seller
shall not be required to incur any liability in connection therewith unless
Purchaser shall agree indemnify Seller and its Affiliates and their
directors, officers and employees harmless against any such liabilities and
all costs, damages and losses relating thereto; provided, further, however
that Purchaser shall not be obligated to so indemnify if such liability is
determined to have resulted from inaccurate information provided by Seller.
In addition, after the Closing Seller will reasonably cooperate with
Purchaser in connection with Purchaser's preparation of initial and
three-year historical audited (and unaudited) financial statements
(including footnotes) of the Business as required for Purchaser's filings
under the securities laws, including providing (i) Purchaser and its
accountants with access to Seller's accountants and their work papers in
accordance with customary professional standards and (ii) customary written
representations from Seller to Purchaser's accountants.
6.21 Insurance Reimbursement. In the event that following the Cut-Off Date
and prior to the Closing Date, a claim arises under Seller's insolvency
insurance policy with Royal Belge S.A. d'Assurances, Seller agrees to
process the claim and remit the proceeds to Purchaser.
6.22 Contingent Guaranty. In the event that Parent, or another entity with
net assets in excess of $5 billion, is no longer the owner of Seller, or
Seller has net assets of less than $2 billion, the parties agree that
Transamerica Finance Corporation shall guarantee the obligations and
performance of Seller under this Agreement.
6.23 Transition Services Agreement. Seller and Purchaser shall negotiate in
good faith a customary transition services agreement (the "Transition
Services Agreement") to be entered into at the Closing pursuant to which
Seller will provide to Purchaser (at a cost to be paid by Purchaser equal
to Seller's cost consistent with Seller's past practices) for the benefit
of the Business the services presently being provided to the Business and
not being transferred to Purchaser (other than certain headquarters level
administrative services, such as legal services) for a reasonable
transition period; provided that Purchaser shall use commercially
reasonable efforts to migrate from such transitional services as promptly
as reasonably practicable after the Closing; and provided, further, that
the manner in which Seller will fulfill its obligations under the
Transition Services Agreement (e.g., providing services presently being
provided to the Business) shall be adjusted as necessary in light of
changing circumstances (including employee departures). The parties agree
to use their best efforts to finalize the Transition Services Agreement
within 30 days after the date hereof.
ARTICLE VII
EMPLOYEE MATTERS
7.1 Business Employees. "Business Employees" shall mean: (a) all persons
employed by Seller or any of its Affiliates in the Business immediately
before the Closing; (b) all employees of Seller or any of its Affiliates
(i) who are absent from work with the Business on account of sickness,
vacation or leave of absence (including any person on disability leave who
is able to return to active employment with Purchaser within six months
following the Closing Date or any longer period required by Applicable Law)
or (ii) for whom an obligation to recall, rehire or otherwise return to
employment exists under Applicable Law or contract; and (c) the shared
services and headquarters personnel, whose names are set forth in Section
7.1 of the Seller Disclosure Schedule. Seller has provided Purchaser with a
preliminary list of Business Employees, including each such employee's
job/position/title, salary or grade level, target bonus and supervisor's
name, and Seller will provide Purchaser with an update to such list of
Business Employees prior to the Closing based upon new employees hired by
the Business and departures of Business Employees as of the date of such
update, and upon mutually agreed to additions to and deletions from the
shared services and headquarters personnel set forth on such list.
7.2 Employment. (a) Effective as of the Closing Date, Purchaser shall make
an offer of employment to each Business Employee selected by Purchaser in
its sole discretion, provided that, notwithstanding anything contained
herein to the contrary, no later than 30 days prior to the Closing Date,
Purchaser shall provide Seller with a final list of the Business Employees
to whom Purchaser will make offers. To the extent that, as of the Closing
Date, Purchaser does not make or honor such offers to any of the Business
Employees set forth on Purchaser's final offer list, Purchaser shall
indemnify and hold harmless Seller and its Affiliates for all wages,
salaries and other employee benefit costs payable in the ordinary course of
business consistent with past practice incurred by Seller or its Affiliates
in respect of such Business Employees, during the period from the date of
delivery of the final list to Seller by Purchaser (no less than 30 days
prior to the Closing Date) through and including the Closing Date (on the
same basis as such costs will be reimbursed to Seller by Purchaser for the
period between the Cut-Off Date and the Closing Date in accordance with
Section 2.7). Subject to Purchaser's obligations under this Agreement,
Purchaser's offers of employment shall be on terms and conditions
determined by Purchaser. Notwithstanding anything contained herein to the
contrary, Purchaser's hiring procedures will comply with Applicable Law.
Purchaser's employment of those Business Employees who accept offers of
employment shall be deemed to commence on the Closing Date. Those Business
Employees who have been offered employment by Purchaser and who accept such
offers of employment shall be referred to herein as the "Transferred
Employees," and the parties hereto intend that there shall be continuity of
employment following the Closing with respect to all Transferred Employees.
(b) Except as set forth in Section 7.7 with respect to TARRP Payments, the
severance and outplacement benefits under the Separation Pay Plan and the
payments under the LTIP, which are hereby expressly retained by Seller,
after the Closing, Seller shall not be responsible for wages, salaries and
other employee benefits for Transferred Employees for the service of such
Transferred Employees with the Purchaser after the Cut-Off Date, provided
that, with respect to the period from the Cut-Off Date to the day prior to
Closing Date, Purchaser's liability for wages, salaries and other employee
benefits shall be in accordance with Section 2.7. Purchaser shall be
responsible for paying or providing (or, for the period after the Cut-Off
Date to the day prior to the Closing Date, reimbursing Seller for the cost
of paying or providing, in accordance with Section 2.7) any wages, salaries
and other employee benefits (other than as provided in Section 7.7 with
respect to TARRP Payments, the severance and outplacement benefits under
the Separation Pay Plan and the payments under the LTIP) to all Transferred
Employees, for all periods following the Cut-Off Date.
7.3 Employee Benefits. (a) Subject to the other provisions of this Article
VII, Purchaser agrees that for a period of at least one year after the
Closing Date it will (i) provide Transferred Employees with a wage and
salary program no less favorable than that in place at the Business
immediately prior to the Closing Date and (ii) provide all Transferred
Employees with compensation and benefits which are no less favorable than
the compensation (including incentive compensation) and benefit plans,
programs and policies of general applicability that are provided to
similarly situated employees of Purchaser and its Subsidiaries (and
excluding for this purpose individual negotiated commission arrangements).
Effective as of the Closing Date, the Purchaser will count the service of
each Transferred Employee with Seller and its Affiliates (and their
predecessor entities) for purposes of determining each Transferred
Employee's eligibility to participate in and eligibility for benefits
(including but not limited to, vesting, and eligibility for early
retirement, benefit forms, eligibility for early retirement subsidies, but
not including benefit accruals under any defined benefit pension plan of
Purchaser) under each of Purchaser's or its Affiliate's employee benefit
plans, programs or arrangements that are provided to such Transferred
Employees. With respect to Transferred Employees, Purchaser's or its
Affiliate's medical and health plans shall take into account expenses
incurred by Transferred Employees (during the plan year in which the
Closing Date occurs) under Seller's medical and health plans for purposes
of determining deductibles and out-of-pocket limits under Purchaser's or
its Affiliate's medical and health plans for the remainder of the plan
year, and Purchaser's welfare benefit plans shall waive all limitations as
to pre-existing condition exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Transferred
Employees. With respect to vacation, severance, and service related awards
provided by Purchaser or its Affiliates, the seniority or period of service
of each Transferred Employee shall include periods of service with Seller
and its Affiliates (and their predecessor entities). On the Closing Date,
Seller shall provide Purchaser with a schedule setting forth the years of
credited service under Seller's benefit and compensation plans, programs
and policies for each Transferred Employee. Except as set forth in Section
7.7 with respect to TARRP Payments, the severance and outplacement benefits
under the Separation Pay Plan and the payments under the LTIP, from and
after the Closing Date, Purchaser shall be solely responsible for all
termination and severance benefits, costs, charges and Liabilities of any
nature incurred with respect to a Transferred Employee after the Cut-Off
Date, including any claims arising out of or relating to any plant closing,
mass layoff, termination or similar event under Applicable Law occurring on
or after the Closing Date.
(b) As of the Closing Date, the Transferred Employees shall cease active
participation in each Benefit Plan of Seller or its Affiliates and no
additional benefits shall be accrued thereunder for the Transferred
Employees, except as provided under Section 7.7 with respect to TARRP
Payments, the severance and outplacement benefits under the Separation Pay
Plan and the payments under the LTIP.
7.4 Assumption of Liabilities. Except as specifically provided otherwise in
this Article VII, at the Closing, Purchaser shall assume all
employee-related obligations for wages, salaries and benefits payable in
the ordinary course of business consistent with past practice for the
period from the Cut-off Date to the day prior to the Closing Date, and all
other employee-related Liabilities that arise after the Closing Date with
respect to Transferred Employees and their beneficiaries and dependents;
provided, however, that Purchaser, except as specifically provided
otherwise in this Article VII, shall not assume any Liabilities that are
payable prior to, at or after the Closing with respect to (a) any Benefit
Plans that are maintained by Seller or its Affiliates, or (b) with respect
to Business Employees who do not become Transferred Employees (other than
Liabilities for the wages, salaries and employee benefits of the Business
Employees for the period from the Cut-Off Date to the day prior to the
Closing Date in accordance with Section 2.7). Seller shall retain, pay and
be responsible for all Liabilities referred to in clauses (a) and (b) of
the immediately preceding sentence.
7.5 Retirement Plan for Salaried Business Employees. As of the Closing, the
Transferred Employees shall cease active participation in the Retirement
Plan, and no additional benefits shall accrue thereunder, except as
provided under Section 7.7 with respect to TARRP Payments. Effective as of
the Closing, Seller shall fully vest the Transferred Employees in their
accrued retirement benefits under the Retirement Plan. Seller and its
Affiliates shall retain all assets and Liabilities for accrued retirement
benefits under the Retirement Plan.
7.6 401(k) Plan. (a) Effective as of the Closing, Purchaser shall establish
a defined contribution plan and trust for (or cause an existing defined
contribution plan to cover) the Transferred Employees, who are eligible to
participate in the Transamerica Employees Stock Savings Plan (the "Seller
401(k) Plan"), which shall be qualified under Sections 401 and 501 of the
Code and shall provide for salary reduction contributions pursuant to
Section 401(k) of the Code (the "Purchaser DC Plan"). Effective as of the
Closing, Seller shall fully vest the account balances of the Transferred
Employees under the Seller 401(k) Plan. On the Closing, Purchaser shall
provide Seller with evidence reasonably satisfactory to Seller that such
Purchaser DC Plan has been established and is so qualified.
(b) As of and following the Closing, the Purchaser DC Plan shall permit and
accept a plan to plan transfer of the assets and liabilities associated
with the account balances of the Transferred Employees under the Seller
401(k) Plan. Seller shall cause a cash transfer to be made from the Seller
401(k) Plan in an amount equal to the account balances of the Transferred
Employees under the Seller 401(k) Plan to the Purchaser DC Plan as soon as
practicable after the Closing Date; provided, however, that in no event
shall the transfer take place until the later of (i) the date that
Purchaser provides Seller with a favorable determination letter from the
IRS (or an opinion of counsel) with respect to the qualification of the
Purchaser DC Plan under Section 401(a) of the Code, and (ii) the date that
Seller provides Purchaser with a favorable determination letter from the
IRS (or an opinion of counsel) with respect to the qualification of the
Seller 401(k) Plan under Section 401(a) of the Code, provided, further,
that the transfer shall occur prior to the 180 day anniversary of the
Closing Date. If practicable, the transfer shall be made as of the last day
of the first calendar quarter ending after the Closing Date. The transfer
shall be made in cash. Any outstanding plan loans to Transferred Employees
shall be transferred with the underlying accounts. The account balances of
the Transferred Employees shall be valued as of the date on which the
transfer is made. The account balances of Transferred Employees in the
Seller 401(k) Plan shall share in the earnings, appreciation and
depreciation of the investment funds in which the accounts are invested for
the period between the Closing and the date on which the transfer is made.
Any benefits that are payable to Transferred Employees from the Seller
401(k) Plan after the Closing and before assets are transferred shall be
paid from the Seller 401(k) Plan in the ordinary course.
(c) The account balances to be credited under the Purchaser DC Plan for
Transferred Employees shall not be less than the account balances of the
Transferred Employees under the Seller 401(k) Plan as of the date on which
the transfer is made, and the transfer shall be made in accordance with
Applicable Law. Effective on the date of the transfer of Seller 401(k) Plan
assets, (i) the Purchaser DC Plan shall assume all Liabilities in
connection with the account balances of Transferred Employees under the
Seller 401(k) Plan, and (ii) Seller, its Affiliates and the Seller 401(k)
Plan shall have no further liability with respect to the Transferred
Employees' participation in and account balances under the Seller 401(k)
Plan. Subject to compliance with the provisions of this Section 7.6, Seller
and its Affiliates shall have no liability with respect to the Purchaser DC
Plan.
7.7 TARRP. (a) For the period commencing on the Closing Date and ending on
July 20, 2002 (the "TARRP Continuation Period"), Seller shall continue to
provide Transferred Employees, whose employment with Purchaser is
terminated under circumstances that make them eligible for benefits under
the Transamerica Retention and Retirement Program ("TARRP"), including a
termination by the Transferred Employee due to Purchaser's failure to
provide a "Comparable Position" as defined in TARRP, with the "TARRP
Payment" (as defined in TARRP) under TARRP as in effect from time to time.
For purposes of calculating the TARRP Payment of an eligible Transferred
Employee, Seller shall count such eligible Transferred Employee's service
with Purchaser and its Affiliates in addition to prior service with Seller
and its Affiliates. During the TARRP Continuation Period, Purchaser shall
provide each Transferred Employee who is entitled to a TARRP Payment with
"Outplacement Assistance" (as defined in TARRP) in accordance with the
program disclosed on Section 4.11(b) of the Seller Disclosure Schedule and
Purchaser shall be solely liable for such benefits. To the extent a
Transferred Employee is not eligible for or does not elect TARRP benefits
upon a termination of employment from Purchaser (including a termination by
the Transferred Employee due to Purchaser's failure to provide a
"Comparable Position" as defined in TARRP) during the TARRP Continuation
Period, such employee shall be entitled to receive benefits under the
Separation Pay Plan and outplacement assistance (on the same basis as
provided to terminated Transferred Employees who are receiving TARRP
Payments), and Seller shall be solely liable for the payment of such
separation benefits and outplacement assistance. In addition, to the extent
a Transferred Employee is entitled to receive payments under the LTIP,
Seller shall be solely liable for the payment of such amounts.
(b) Purchaser agrees (i) that only Transferred Employees whose termination
is a "bona fide" termination (as defined herein) will be reported as
terminated from Purchaser for purposes of TARRP, (ii) that such terminated
Transferred Employees may not be rehired by Purchaser or any of its
Affiliates within six months of their termination date, (iii) to notify
Seller of a bona fide termination at least 75 days prior to the planned
termination date, (iv) to cooperate with Seller in providing the required
TARRP notice to the Transferred Employees at least 60 days prior to the
termination date, and (v) to cooperate in fulfilling all other requirements
of TARRP. A termination of employment from the Purchaser for purposes of
this Agreement will be considered "bona fide" only if it constitutes a
"retirement" (rather than a termination permitting the distribution of just
ancillary or incidental benefits) under Treas. Regs. Section 1.401-1(b)(1)
or a "severance of employment" under Revenue Ruling 56-693 or is a
termination by the Transferred Employee due to Purchaser's failure to
provide a "Comparable Position" as defined in TARRP. Furthermore, a
termination of employment will not be considered "bona fide" for purposes
of this Agreement if at the time of the Transferred Employee's eligibility
for TARRP, there is any express or implied agreement or understanding that
such employee will be rehired or will provide services in the future in any
capacity to Purchaser or any of its Affiliates.
7.8 Workers' Compensation. At Closing, Purchaser shall assume all
Liabilities for all claims under workers' compensation laws that are
payable after the Cut-Off Date with respect to Transferred Employees,
without regard to when the Liabilities arose; provided, however, that
Seller shall retain, pay and be responsible for any Liability for worker's
compensation claims incurred with respect to the Transferred Employees
prior to the Closing Date, to the extent that such claims are covered by
Seller's workers compensation insurance.
7.9 Vacation Pay. As soon as reasonably practicable following the Closing
Date, Seller shall pay all Liabilities for unpaid vacation pay earned,
banked or accrued by Transferred Employees prior to the Closing Date.
Subject to the foregoing and Applicable Law, on and after the Closing,
Seller shall have no Liability for vacation pay for Transferred Employees.
7.10 Welfare Plans. (a) Seller shall be liable for and shall hold Purchaser
harmless from and against all claims for welfare benefits by Business
Employees that are incurred prior to the Closing Date, and Purchaser shall
be liable and shall hold Seller harmless from and against all claims for
welfare benefits by Transferred Employees that are incurred on or after the
Closing Date. For purposes of this Agreement, the following claims shall be
deemed to be incurred as follows: (i) life, accidental death and
dismemberment and business travel accident insurance benefits, upon the
date of death or accident giving rise to such benefits, (ii) health,
dental, vision and/or prescription drug benefits, on the date such
services, materials or supplies were provided and (iii) disability income
benefits, on the date of disability as determined by the disability carrier
for the individual.
(b) Seller shall be responsible for satisfying the obligations under
Section 601 et seq. of ERISA and Section 4980B of the Code ("COBRA"), to
provide continuation coverage to or with respect to any Business Employee
and their beneficiaries in accordance with law with respect to any
"qualifying event" occurring before the Closing Date, or occurring on or
after the Closing Date if such Business Employee does not become a
Transferred Employee. Purchaser shall be responsible for satisfying the
obligations under COBRA to provide continuation coverage to or with respect
to any Transferred Employee or their beneficiaries with respect to any
"qualifying event" which occurs on or after the Closing Date.
(c) Seller shall be liable for and shall hold Purchaser harmless from and
against any retiree welfare benefits to be provided to retirees of the
Business who have actually retired prior to the Closing Date.
7.11 Educational Assistance Policy. To the extent a Transferred Employee
successfully completes a course that is in progress prior to the Cut-Off
Date, the expenses for which are reimbursable under the Seller Educational
Assistance Policy, Seller shall reimburse such Transferred Employee for the
eligible expenses under the terms and conditions of the Seller Educational
Assistance Policy. The eligible expenses for any courses initiated and
successfully completed by a Transferred Employee on or after the Cut-Off
Date shall be reimbursed by the Purchaser under the Purchaser employee
educational assistance plan.
7.12 Adoption Assistance Policy. To the extent a Transferred Employee
incurs eligible expenses for an adoption of a child, the expenses for which
are reimbursable under the Seller Adoption Benefit Plan, prior to the
Cut-Off Date, Seller shall reimburse such Transferred Employee for the
eligible expenses under the terms and conditions of the Seller Adoption
Benefit Plan. Eligible expenses incurred by a Transferred Employee on or
after the Cut-Off Date shall be reimbursed by the Purchaser under the
Purchaser adoption benefit plan. For purposes hereof, an expense shall be
considered to be "incurred" when the services giving rise to the expense
are rendered.
7.13 Bonuses. With respect to the payment of the annual bonuses earned by
the Transferred Employees in respect of the 2000 calendar year (the "2000
Incentive Bonus") under the applicable annual bonus plans of Seller as in
effect immediately prior to the Closing Date (the "Seller Bonus Plan"),
Seller shall pay and be solely liable for the proportionate share of the
2000 Incentive Bonus for the period commencing on January 1, 2000 and
ending on the Cut-Off Date, and Purchaser shall pay and be solely liable
for the proportionate share of the 2000 Incentive Bonus under the Seller
Bonus Plan for the period commencing on the day after the Cut-Off Date and
ending on December 31, 2000 (or such earlier date of termination of a
Company Employee). The Seller's portion of a Transferred Employee's 2000
Incentive Bonus shall be determined in accordance with the Exhibit to the
Seller Bonus Plan entitled "Amounts Payable from Incentive Compensation
Plan if Changes in Employment Occur Pursuant to the Plan General
Provisions." The Purchaser's portion of a Transferred Employee's 2000
Incentive Bonus, whether paid or payable for the period ending on December
31, 2000 or, if earlier, the period ending on such Transferred Employee's
termination of employment from Purchaser, shall be determined based on the
Transferred Employee's target bonus percentage previously disclosed to
Purchaser for the 2000 bonus year.
7.14 Plant Closing Laws. Purchaser shall be responsible for providing any
notice required pursuant to the United States Federal Worker Adjustment and
Retraining Act of 1988, any successor United States federal law, and any
other applicable plant closing notification law with respect to a layoff or
plant closing relating to the Business that occurs as a result of or after
the Closing caused by Purchaser on or after the Closing Date with respect
to individuals employed by Seller in the Business prior to the Closing
Date. For this purpose, Purchaser shall be deemed to have caused a mass
layoff if the mass layoff would not have occurred but for Purchaser's
failure to offer employment to the Business Employees. Seller agrees to
cooperate with Purchaser to enable Purchaser to comply with its obligation
hereunder.
7.15 Employee Communications. From the date hereof through the Closing,
Seller and Purchaser agree to promptly give the other party prior written
notice of, and to coordinate with the other party with respect to, any
written communication to be delivered by Seller or Purchaser to the
Business Employees regarding matters contained in or relating to the
transactions contemplated under this Agreement or benefits or employment
conditions that may or will apply to Transferred Employees.
ARTICLE VIII
CONDITIONS TO THE CLOSING
8.1 Conditions of Obligation of Each Party. The respective obligations of
Purchaser and Seller to consummate the purchase and sale of the Assets and
the assumption by Purchaser of the Assumed Liabilities contemplated hereby
are subject to the satisfaction, at or prior to the Closing Date, of each
of the following conditions:
(a) No Injunction. At the Closing Date, there shall be no injunction,
restraining order or decree of any nature of any court or Governmental
Authority of competent jurisdiction in effect that restrains or prohibits
the purchase of the Assets and/or assumption of the Assumed Liabilities
hereunder.
(b) Regulatory Authorization. The applicable waiting period specified under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act") shall have expired or been terminated.
(c) Transition Services Agreement. At or prior to the Closing Date, the
parties will enter into the Transition Services Agreement.
8.2 Additional Conditions to the Obligations of Purchaser. The obligation
of Purchaser to consummate the purchase of the Assets and assumption of the
Assumed Liabilities contemplated hereby is subject to the satisfaction, at
or prior to the Closing Date, of each of the following additional
conditions:
(a) Representations and Warranties. The representations and warranties of
Seller contained in Article IV of this Agreement shall be true and correct
in all respects as of the Closing Date as though made at and as of the
Closing Date, except to the extent that any representation and warranty is
made as of a specified date other than the Closing Date, in which case such
representation and warranty shall be true and correct in all respects as of
such date, in each case, except where the failure to be so true and correct
would not have a Material Adverse Effect (without giving effect to
"materiality", "material" or Material Adverse Effect qualifications
contained in such representations and warranties). In determining whether
this condition is satisfied, any Excluded Liabilities (and any changes in
Excluded Liabilities) shall not be taken into account.
(b) Performance of Covenants. Seller shall have performed in all material
respects all obligations and agreements, and complied in all material
respects with all covenants, contained in this Agreement to be performed or
complied with by it prior to or at the Closing Date.
(c) Certificate. Purchaser shall have received a certificate of Seller,
dated the Closing Date, executed by the chief executive officer or chief
financial officer of Seller, to the effect that the conditions specified in
paragraphs (a) and (b) above have been fulfilled.
(d) Consents and Approvals. All consents, waivers, authorizations and
approvals of third Persons as are set forth in Section 8.2(d) of the Seller
Disclosure Schedule shall have been obtained.
(e) Receipt of Financing. Purchaser shall have received, on terms
reasonably satisfactory to Purchaser and its counsel, the net proceeds of
the Financing contemplated by the Bank Commitment Letter or of other
financing in the same aggregate amount which is on terms substantially
similar to (and no less favorable to Purchaser than) those set forth in the
Bank Commitment Letter heretofore delivered to Seller (without regard to
any amendments or changes that may from time to time be made to the Bank
Commitment Letter in accordance with the terms thereof), sufficient,
together with available cash, to (i) consummate the transactions
contemplated hereby and (ii) pay the fees and expenses of Purchaser in
connection with the transactions contemplated by this Agreement.
8.3 Additional Conditions to the Obligations of Seller. The obligation of
Seller to consummate the sale of the Assets and assumption by Purchaser of
the Assumed Liabilities contemplated hereby is subject to the satisfaction,
at or prior to the Closing Date, of each of the following additional
conditions:
(a) Representations and Warranties. The representations and warranties of
Purchaser contained in Article V of this Agreement shall be true and
correct in all respects as of the Closing Date as though made at and as of
the Closing Date, except to the extent that any representation and warranty
is made as of a specified date other than the Closing Date, in which case
such representation and warranty shall be true and correct in all respects
as of such date, in each case, except where the failure to be so true and
correct would not have a material adverse effect on the benefits to be
provided to Seller from the transactions contemplated hereby. In
determining whether this condition is satisfied, any Assumed Liabilities
(and any changes in Assumed Liabilities) shall not be taken into account.
(b) Performance of Covenants. Purchaser shall have performed in all
material respects all obligations and agreements, and complied in all
material respects with all covenants, contained in this Agreement to be
performed or complied with by it prior to or at the Closing Date.
(c) Certificate. Seller shall have received a certificate of Purchaser,
dated the Closing Date, executed by the chief executive officer or chief
financial officer of Purchaser, to the effect that the conditions specified
in paragraphs (a) and (b) above have been fulfilled.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(a) By mutual written consent of Seller and Purchaser;
(b) By either party upon written notice given to the other party in the
event of a breach or default in the performance by such other party of any
representation, warranty, covenant or agreement contained in this Agreement
which breach or default (i) would result in a failure of a condition set
forth in Section 8.1 or 8.2 (in the case of a breach by Seller) or Section
8.1 or 8.3 (in the case of a breach by Purchaser) to be satisfied and (ii)
has not been, or cannot be, cured within 60 days of written notice of such
breach or default which is given by the terminating party to the breaching
or defaulting party;
(c) By either party upon written notice to the other party in the event
that any Governmental Authority (including any court of competent
jurisdiction) the consent of which is necessary for the consummation of the
transactions contemplated hereby shall have issued an order, decree or
ruling enjoining or otherwise prohibiting the purchase of the Assets and/or
assumption of the Assumed Liabilities hereunder, and such order, decree or
ruling shall have become final and non-appealable; or
(d) By either party upon written notice given to the other party in the
event that the Closing shall not have taken place on or before December 31,
2000; provided, that the failure of the Closing to occur on or before such
date is not the result of a breach of any covenant, agreement,
representation or warranty hereunder by the party seeking such termination.
9.2 Effect of Termination. (a) In the event of the termination of this
Agreement as provided above, this Agreement (other than this Section) shall
become void and of no further force and effect and, other than in the event
of a termination pursuant to Section 9.1(b) as a result of a willful
material breach or default of any covenant or agreement by the
non-terminating party and other than as provided in Section 2.5(b) and
Section 9.2(b), there shall be no duties, liabilities or obligations of any
kind or nature whatsoever on the part of either party hereto to the other
party based either upon this Agreement or the transactions contemplated
hereby, except that the obligations of the parties referred to in Sections
4.18 and 5.5, the penultimate sentence of Section 6.2 and Section 12.2(a),
(b), (d) and (e) shall continue to apply following any such termination of
this Agreement.
(b) Purchaser and Seller agree that Purchaser is to bear a significant
portion of any risk associated with the financing condition set forth in
Section 8.2(e). Accordingly, in order to induce Seller to enter into this
Agreement, Purchaser and Seller agree that Purchaser shall pay Seller
promptly upon termination of the Agreement an amount of $10 million (minus
the amount of the Down Payment plus Accrued Interest thereon) in liquidated
damages if at the time of termination the conditions to Purchaser's
obligations to consummate the purchase of the Assets and assumption of the
Assumed Liabilities contemplated hereby that are set forth in Sections
8.1(a) and (b) and Section 8.2 (other than the requirements of Section
8.2(e)) shall have been satisfied (or Seller shall have been willing and
able to fulfill such conditions upon due notice). Such payment will be made
upon demand by Seller by wire transfer of immediately available funds to an
account designated by Seller. Notwithstanding the foregoing, (i) Purchaser
shall not be required to pay the amount described above if the failure of
the condition set forth in Section 8.2(e) to be satisfied shall have been
caused by Seller's breach of this Agreement (which, if curable, shall not
have been cured within five Business Days of written notice referring to
this Section) and (ii) if all of the conditions to Purchaser's obligation
to consummate the transactions contemplated hereby (including the
requirements of Section 8.2(e)) shall have been satisfied or waived by
Purchaser and Purchaser shall have offered to consummate the Closing, but
the Agreement shall be terminated without the Closing having been taken
place as a result of Seller's not being willing to waive any closing
condition it has under this Agreement, then Purchaser shall not be
obligated to pay the amount described above (and Seller shall have any
other rights it has under this Agreement.).
The parties agree that, unless there is a willful and
material breach by Purchaser of any of its obligations under this
Agreement, the liquidated damages amount set forth in this Section 9.2(b)
shall be the sole and exclusive remedy of Seller for any claim, loss, cost,
expense, damage or liability or obligation relating to the Agreement and
the transactions contemplated hereby in the event such amount is payable
and paid to Seller and that such amount is reasonable in proportion to the
probable damages likely to be sustained by Seller if the transactions
contemplated hereby are not consummated under such circumstances. The
parties agree and acknowledge that the amount of actual damages to be
sustained by Seller in the event of the nonconsummation of the transaction
under the circumstances referred to above is uncertain and difficult to
predict at this time and incapable of precise estimation. This Section
9.2(b) shall survive any termination of this Agreement. Any amount paid
under this Section 9.2(b) shall be applied against any damages to which
Seller may be entitled for a willful material breach by Purchaser so that
Seller shall not be compensated twice for the same loss.
9.3 Extension; Waiver. At any time prior to the Closing, each of the
parties hereto may (a) extend the time for the performance of any of the
obligations or acts of any other party hereto, (b) waive any inaccuracies
in the representations and warranties of the other party contained herein
or in any document delivered pursuant hereto, (c) waive compliance with any
of the agreements of the other party contained herein or (d) waive any
condition to its obligations hereunder. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set
forth in a written instrument signed on behalf of such party.
ARTICLE X
TAX MATTERS
10.1 Post-Closing Tax and Accounting Matters. Following the Closing, each
of Purchaser and Seller will furnish to the other, at the other's expense,
such necessary and available information and access to the personnel of
Purchaser and its Affiliates or Seller and its Affiliates, as the case may
be, as the other may reasonably request in connection with Tax and
accounting matters of the other relating to the Assets. Purchaser and
Seller will not destroy any information which is subject to this Section
10.1 for a period of six years after the Closing Date and thereafter shall
not destroy any such information without giving at least 60 days' written
notice to the other, and, if the other so requests within 60 days of
receipt of such notice, Purchaser or Seller, as the case may be, shall
deliver to the other or to its order, at the other's expense, such
information intended to be destroyed.
10.2 Allocation of Consideration. Seller and Purchaser agree that they
shall use, and shall cause their respective Subsidiaries to use, their
reasonable best efforts to enter into an agreement (the "Allocation
Agreement") as to the allocation of the Purchase Price (as adjusted
pursuant to Article II) and the Assumed Liabilities among the Assets
acquired hereunder. Purchaser shall initially prepare a draft of the
Allocation Agreement (the "Proposed Allocation") and shall submit such
Proposed Allocation to Seller within 90 days after the Closing Date. If,
within 60 days after Seller's receipt of the Proposed Allocation, Seller
shall not have objected in writing to such Proposed Allocation, the
Proposed Allocation shall become the Allocation Agreement. In the event
that Seller objects in writing within such 60 day period and Seller and
Purchaser are unable to reach an agreement, the dispute shall be referred
to a nationally recognized accounting firm mutually acceptable to Seller
and Purchaser (the "Accounting Firm") for resolution, and the determination
of the Accounting Firm shall be binding upon Seller and Purchaser and their
respective Subsidiaries and shall constitute the Allocation Agreement, with
Seller and Purchaser each bearing one-half of the costs, fees and expenses
of the Accounting Firm. Seller and Purchaser agree to act, and to cause
their respective Subsidiaries to act, in accordance with the allocations
contained in the Allocation Agreement determined pursuant to this Section
10.2. Purchaser shall initially prepare for delivery to Seller a completed
set of Internal Revenue Service Form 8594, including all additional
information and materials required to be attached to such Form 8594
pursuant to the Treasury Regulations under Section 1060 of the Code. Such
documents and forms shall be delivered to Seller for review no later than
60 days prior to the date any such forms are required to be filed. For all
purposes hereunder, any indemnification payments pursuant to Article XI
shall be treated as an adjustment to the Purchase Price.
ARTICLE XI
INDEMNIFICATION
11.1 By Seller. (a) Subject to subsections (b) and (c) of this Section
11.1, Seller shall indemnify and hold harmless Purchaser, its Affiliates,
officers, directors, employees, agents, successors, and assigns and related
entities from, and reimburse them for any, loss, cost deficiency, demand,
assessment, expense (including all reasonable legal and expert fees and
expenses), damage (including damages to Persons, property or the
environment), liability, fines, penalties or claims but not including
consequential, punitive or special damages (collectively, the "Indemnified
Costs") arising out of or resulting from:
(i) any breach of any representation or warranty made by Seller in this
Agreement;
(ii) Seller's breach of or failure to perform any of its covenants or
agreements contained in or made pursuant to this Agreement (except with
respect to any Excluded Liability or Excluded Asset to which clauses (iii)
and (v), respectively, shall apply);
(iii) any Excluded Liability (whether known or unknown at the time of
Closing);
(iv) any failure to comply with the terms and conditions of any applicable
bulk sales or bulk transfer or similar laws that may be applicable to the
bulk sale or bulk transfer of the Assets, notwithstanding Section 6.15; and
(v) any Excluded Asset.
(b) Notwithstanding the foregoing, Seller shall have no liability:
(i) to the extent of any insurance or other recovery received by a Person
entitled to indemnification under Section 11.1(a) in respect of an
Indemnified Cost an "Offsetting Recovery") (provided that the net present
value of all actual increases (in the following year) in insurance premiums
which are directly attributable to any such Indemnified Cost (the "Premium
Recapture") is deducted from any such Offsetting Recovery for purposes of
this Section 11.1(b)(i), provided further, however, that the Premium
Recapture shall not exceed the amount of the Offsetting Recovery); and
(ii) to the extent that Purchaser or any Affiliate thereof realizes a Tax
Benefit on or before the fourth anniversary of the Closing Date which is
directly attributable to such Indemnified Cost.
(c) Notwithstanding the foregoing, Seller shall have no liability for
indemnification pursuant to Section 11.1(a)(i) or (ii) unless the aggregate
of all Indemnified Costs under Section 11.1(a)(i) or (ii) for which Seller
would, but for this subsection (c), be liable exceeds on a cumulative basis
an amount equal to $6 million, in which case Seller's liability shall be
only for such excess, nor shall Seller be liable for any such Indemnified
Costs that, when added to the amounts that Seller has otherwise paid
pursuant to Section 11.1(a)(i) or (ii), exceed the amount of $100 million.
Seller shall not be liable to pay Indemnified Costs more than once with
respect to an Indemnified Cost resulting from the same facts, events or
circumstances, even if such facts, events or circumstances constitute both
an Excluded Liability and a breach of any representations and warranties
for which Seller shall or would but for this provision be obligated to pay
Indemnified Costs hereunder, provided, however, Seller shall be liable to
pay for Indemnified Costs that arise out of the same facts, events or
circumstances when the Indemnified Costs resulting from such facts, events
or circumstances that are not duplicative or result in damages, costs or
liabilities that were not indemnified pursuant to the first such
indemnification payment.
11.2 By Purchaser. (a) Subject to subsections (b) and (c) of this Section
11.2, Purchaser shall indemnify and hold Parent, Seller, and their
Affiliates, officers, directors, employees, agents, successors, and
assigns, and related entities from, and reimburse them for, Indemnified
Costs arising or resulting from:
(i) any breach of any representation or warranty made by Purchaser in this
Agreement;
(ii) Purchaser's breach of or failure to perform any of its covenants or
agreements contained in or made pursuant to this Agreement (except with
respect to any Assumed Liability or Asset to which clauses (iii) and (iv),
respectively, shall apply);
(iii) any Assumed Liability;
(iv) any Asset; and
(v) the ownership of the Assets or the operation or conduct of the
Business, in each case from and after the Closing Date other than with
respect to Excluded Assets or Excluded Liabilities.
(b) Notwithstanding the foregoing, Purchaser shall have no liability to the
extent that Parent, Seller or any Affiliate thereof realizes a Tax Benefit
which is directly attributable to such Indemnified Cost on or before the
fourth anniversary of the Closing Date or receives insurance or other
recovery in respect of an Indemnified Cost.
(c) Notwithstanding the foregoing, Purchaser shall have no liability for
indemnification pursuant to Section 11.2(a)(i) or (ii) unless the aggregate
of all Indemnified Costs under Section 11.2(a)(i) or (ii) for which
Purchaser would, but for this subsection (c), be liable exceeds on a
cumulative basis an amount equal to $6 million, in which case Purchaser's
liability shall be only for such excess, nor shall Purchaser be liable for
any such Indemnified Costs that, when added to the amounts that Purchaser
has otherwise paid pursuant to Section 11.2(a)(i) or (ii), exceed the
amount of $100 million. Purchaser shall not be liable to pay Indemnified
Costs more than once with respect to an Indemnified Cost resulting from the
same facts, events or circumstances, even if such facts, events or
circumstances constitute both an Assumed Liability and a breach of any
representations and warranties for which Purchaser shall or would but for
this provision be obligated to pay Indemnified Costs hereunder, provided,
however, Purchaser shall be liable to pay for Indemnified Costs that arise
out of the same facts, events or circumstances when the Indemnified Costs
resulting from such facts, events or circumstances that are not duplicative
or result in damages, costs or liabilities that were not indemnified
pursuant to the first such indemnification payment.
11.3 Indemnification Procedure. (a) Any Person claiming indemnification
pursuant to this Agreement shall promptly notify the indemnifying party in
writing of the occurrence of any event that such party asserts is or may be
an indemnifiable event pursuant to this Agreement and shall describe in
reasonable detail the facts, events and circumstances relating to the
subject matter of such claim and the amount (if reasonably calculable) of
the Indemnified Costs in connection therewith. If such event involves the
claim of any third party, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, assume control over (in
which case the indemnifying party shall assume all expense with respect to)
the defense, settlement, adjustment or compromise of such claim.
(b) The indemnified party shall have the right to employ separate counsel
in any action or claim and to participate in the defense thereof at the
expense of the indemnifying party only (i) if the retention of such counsel
has been specifically authorized by the indemnifying party or (ii) if the
counsel is retained because the indemnifying party does not notify the
indemnified party within 60 days after receipt of a claim notice that it
elects to undertake the defense thereof.
(c) The indemnifying party shall obtain the prior written approval of the
indemnified party before entering into any settlement, adjustment, or
compromise of such claim or ceasing to defend against such claim that
provides for any relief other than the payment of monetary damages with
respect to the indemnified party.
(d) If the indemnifying party does not assume control over the defense of
such claim as provided in Section 11.3(a) within 60 days of receipt of
notice thereof, the indemnified party shall have the right to defend the
claim in such manner as it may deem appropriate and to settle, adjust, or
compromise such claim and shall not thereby waive any right to
indemnification hereunder.
(e) In the event that the indemnifying party reimburses the indemnified
party for any third party claim, the indemnified party shall remit to the
indemnifying party any reimbursement that the indemnified party
subsequently receives for such third party claim.
(f) Any matter as to which a claim has been asserted by written notice in
accordance with Section 11.3(a) to the indemnifying party that is pending
or unresolved at the end of any applicable survival period shall continue,
to the extent permitted by law, to be covered by this Article XI
notwithstanding any applicable statute of limitations (which the parties
hereby toll with respect to each other) or the expiration of such survival
period until such matter is finally terminated or otherwise resolved by the
parties under this Agreement or by a court of competent jurisdiction and
any amounts payable hereunder are finally determined and paid.
(g) The right to indemnification pursuant to this Section 11.3 shall not be
affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or
after the execution and delivery of this Agreement or the date the Closing
occurs, with respect to the accuracy or inaccuracy of or compliance with,
any representation, warranty, covenant or obligation.
11.4 Survival. Except for the representations and warranties set forth in
Section 4.1 and Section 4.2, each of which shall survive forever, and
Section 4.12 and Section 4.14(a), each of which shall survive until 30 days
after the expiration of the applicable statute of limitations (as such
periods may be extended by request of the applicable Governmental
Authority) with respect to such representations and warranties, the
remaining representations and warranties made herein or in any other
documentation delivered pursuant to this Agreement and the covenants and
agreements to be performed on or prior to the Closing Date shall survive
until the completion of the audit for the year ending December 31, 2001 but
no later than March 31, 2002; provided, that (a) expiration of a
representation, warranty, covenant or agreement shall not affect the
obligations of a Party with respect to claims for indemnification for which
notice has been given to the indemnifying party in accordance with Section
11.3 prior to such expiration and (b) all covenants, agreements and
indemnification matters that contemplate or may involve actions to be taken
or obligations in effect after the Closing shall survive until the third
anniversary of the Closing Date unless otherwise provided herein or unless
it is evident from the context that such obligations should survive beyond
that date; provided, that this clause (b) shall not apply to the
indemnification obligations of Seller under Sections 11.1(a)(iii), (iv) and
(v), or of Purchaser under Sections 11.2(a)(iii), (iv) and (v).
11.5 Exclusivity. The indemnification provided in this Article XI shall be
the exclusive remedy for a breach of any representation or warranty in this
Agreement or of the covenant set forth in Section 6.1(b)(xiii), provided
that no party hereto shall be deemed to have waived any right of recourse
(whether a claim under this Article XI or otherwise) arising from
fraudulent conduct of any other party hereto.
11.6 Limits on Environmental Indemnification. Each of Purchaser and Seller
shall inform the other promptly in writing upon its receipt of any Third
Party Environmental Claim or its obtaining Knowledge (as defined for
purposes of this sentence in the immediately following sentence) of any
basis for any Third Party Environmental Claim or any Release or requirement
for a Cleanup, provided that the failure of a party to so promptly inform
the other party shall not affect the rights or obligations of either party
(including indemnification rights or obligations) except to the extent that
such failure to give prompt notice adversely affects the other party. For
purpose of the preceding sentence, "Knowledge" with respect to Purchaser
means the actual knowledge of any employees of Purchaser or its
Subsidiaries set forth on Section 11.6 to the Purchaser Disclosure
Schedule, and "Knowledge" with respect to Seller means the actual knowledge
of any employees of Seller or its Subsidiaries set forth on Section 11.6 to
the Seller Disclosure Schedule, provided that each of Purchaser and Seller
shall establish mutually satisfactory policies and procedures designed to
seek to inform the persons listed on Section 11.6 to the Purchaser
Disclosure Schedule of any Third Party Environmental Claim or any Release
or requirement for a Cleanup of which any person in their organization is
aware. Subject to the provisions of Section 11.3 hereof, Seller shall be
entitled to manage and control any Cleanup and other remediation activities
undertaken in connection with its indemnification obligations under this
Agreement relating to Environmental Laws, and as such shall have reasonable
access to the Assets and the right to determine, in its reasonable
discretion, the Cleanup measures that are required to comply with
Environmental Laws; provided, however, that (i) nothing herein purports to
authorize Seller to fail or refuse to comply with or fulfill the terms of
any order of a Governmental Authority unless such order is subject to
appeal or (ii) to prevent Purchaser from taking actions with regard to
Cleanup that are reasonably required in order for it to comply with
Environmental Law. Subject to clause (ii) of the preceding sentence and to
the following sentence, Purchaser and Seller shall reasonably cooperate
with respect to any Third Party Environmental Claims or Cleanup, and
Purchaser shall not take any action contrary to Seller's reasonable
direction with respect to a Cleanup. If at any time Seller assumes control
over a matter as provided in Section 11.3, then it shall thereafter direct
the communications with respect thereto and afford Purchaser a reasonable
opportunity to participate, except that nothing herein shall prevent
Purchaser from complying with law, responding to a governmental request for
information or otherwise providing legally required notice to a
Governmental Authority, but in such cases, Purchaser shall notify the
Seller of the nature and substance of the proposed compliance with law or
communication, give Seller reasonable opportunity to comment thereon, and
not unreasonably refuse to incorporate Seller's comments. Notwithstanding
any other provision herein, Seller shall not be required to indemnify
Purchaser or any party indemnified hereunder due to its relationship with
Purchaser with respect to any Indemnified Costs arising out of or
attributable to (i) internal costs or overhead of any such indemnified
party or (ii) any modification or change in the operations of the Business
or use of the Assets to a non-industrial or non-commercial use after the
Closing. The indemnification provided in this Article XI shall be the
exclusive remedy with respect to any Third Party Environmental Claim,
Cleanup obligation, or other Liability relating to Environmental Laws under
this Agreement; provided that no party hereto shall be deemed to have
waived any right of recourse (whether a claim under this Article XI or
otherwise) arising from fraudulent conduct of any party hereto.
ARTICLE XII
MISCELLANEOUS
12.1 Amendment and Modification; Waiver of Provisions. This Agreement may
be amended, modified or waived only by a written instrument executed by all
of the parties hereto. The failure of any party at any time or times to
require performance of any provision of this Agreement shall in no manner
affect the right of such party at a later date to enforce the same. No
waiver by any party of any condition or the breach of any provision, terms,
covenant, representation or warranty contained in this Agreement in any one
or more instances shall be deemed to be or construed as a further or
continuing waiver of any such condition or of the breach of any other
provision, term, covenant, representation or warranty of this Agreement.
12.2 Expenses. The parties agree that fees and out-of-pocket expenses shall
be paid as follows:
(a) Fees and disbursements of counsel, consultants and accountants shall be
paid by the party retaining such Persons;
(b) Each party shall bear its own expenses incurred with respect to filings
under the HSR Act and obtaining all required consents, authorizations,
orders or approvals of, filings or registrations with, and notices to,
Governmental Authorities; provided that each party shall pay one half of
the filing fee under the HSR Act;
(c) Purchaser shall be responsible for 75% and Seller shall be responsible
for 25% of any sales or transfer Taxes arising from the transfer of the
Assets to Purchaser or assumption of the Assumed Liabilities by Purchaser.
Seller and Purchaser shall use their commercially reasonable efforts to
minimize the sales and transfer Taxes to be allocated pursuant to the
immediately preceding sentence, including by securing any reasonably
available exemption and, in the case of Purchaser, by making any available
election to collect use Tax from its lessees in lieu of the imposition of
such sales or transfer Taxes, provided that Purchaser will elect to collect
use Tax from its lessees if, and only to the extent that, Seller has
collected and currently collects use Tax from such lessee during periods
prior to the Closing. Seller shall, in consultation with Purchaser, prepare
and file any Tax Returns relating to such sales and transfer Taxes. Seller
shall notify Purchaser in writing within 10 days of receipt by Seller of
written notice of any pending or threatened audit, notice of deficiency,
proposed adjustment, assessment, examination or other administrative or
judicial proceeding, suit, dispute or other claim, in each case relating to
the sales and transfer Taxes described in the first sentence of this
Section 12.2(c) (a "Sales Tax Claim"), provided that notice under this
sentence shall not be considered delinquent unless it materially and
adversely affects Purchaser's participation rights with respect to such
Sales Tax Claim. In the event that the Sales Tax Claim relates exclusively
to sales and transfer Taxes described in the first sentence of this Section
12.2(c), or it is reasonably practicable to segregate the portion of the
Sales Tax Claim relating solely to sales and transfer Taxes described in
the first sentence of this Section 12.2(c), then:
(i) if the Taxing Authority asserting a Sales Tax
Claim will allow Purchaser to defend such Sales
Tax Claim in Purchaser's own name, then
Purchaser shall conduct the defense of such
Sales Tax Claim or segregated portion, as the
case may be, and Seller shall be entitled to
participate at its own expense in such Sales Tax
Claim or segregated portion, as the case may be;
or
(ii) if the Taxing Authority asserting a Sales Tax
Claim will not allow Purchaser to defend such
Sales Tax Claim in Purchaser's own name, then
Seller shall conduct the defense of such Sales
Tax Claim or segregated portion, as the case may
be, and Purchaser shall be entitled to
participate at its own expense in such Sales Tax
Claim or segregated portion, as the case may be.
In the event that the Sales Tax Claim does not relate exclusively to sales
and transfer Taxes described in the first sentence of this Section 12.2(c),
and it is not reasonably practicable to segregate the portion of the Sales
Tax Claim relating solely to sales and transfer Taxes described in the
first sentence of this Section 12.2(c), Seller shall conduct such the
defense of such Sales Tax Claim and (i) Seller shall keep Purchaser fully
informed of developments in such Sales Tax Claim as it relates to sales and
transfer Taxes described in the first sentence of this Section 12.2(c),
(ii) Purchaser shall be entitled to receive appropriately redacted copies
of all documents and correspondence related to such Sales Tax Claim, and
(iii) Seller shall consult in good faith with Purchaser as to the status of
such Sales Tax Claim and shall seek Purchaser's counsel as to strategies to
be taken in connection therewith. The party controlling the defense of a
Sales Tax Claim shall not settle or compromise the portion of a Sales Tax
Claim relating to sales and transfer Taxes described in the first sentence
of this Section 12.2(c) without the prior written consent of the party not
controlling the defense of such Sales Tax Claim, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, neither
Seller nor Purchaser shall be required to contest any Sales Tax Claim,
provided that the party controlling the defense of such Sales Tax Claim
shall be required to contest a Sales Tax Claim if (i) the party not
controlling such Sales Tax Claim supplies an opinion of a "Big Five"
accounting firm that has had no material relationship with such party or
its Affiliates during the preceding two years or of nationally recognized
independent tax counsel, in either case to the effect that there is a
reasonable basis for such contest, and (ii) the portion of such Sales Tax
Claim relating to sales and transfer Taxes described in Section 12.2(c)
exceeds $250,000. If Seller chooses not to contest any Sales Tax Claim
asserted by a Taxing Authority which will permit Purchaser to defend such
Sales Tax Claim in Purchaser's own name, Purchaser may elect to contest
such Sales Tax Claim, provided that in no event will Seller be obligated to
pay more in settlement of such Sales Tax Claim than it would have been
obligated to pay with respect to such Sales Tax Claim had such Sales Tax
Claim not been contested either by Seller or by Purchaser;
(d) Seller shall be solely responsible for the fees and expenses of Morgan
Stanley Dean Witter & Co. and Donaldson, Lufkin & Jenrette, and Purchaser
shall be solely responsible for the fees and expenses of Salomon Smith
Barney; and
(e) All other fees and out-of-pocket expenses incurred in connection with
the transactions contemplated hereby shall be paid by the party incurring
such expenses.
12.3 Successors and Assigns; Assignments. All terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective transferees, successors and assigns. No party
hereto may assign any of its rights or delegate any of its obligations
hereunder without the prior written consent of the other parties, except
Purchaser may assign its rights, but not its obligations, hereunder to its
financing sources and may assign certain or all of its rights and
obligations (provided it continues to fully and unconditionally guarantee
such obligations) to a subsidiary or other entity controlled by Purchaser
in connection with obtaining financing for the transactions contemplated
hereby, and any such attempted assignment or delegation without such
consent shall be null and void.
12.4 No Third Parties Benefited. Except for the provisions of Article XI
which are intended for the benefit of, and to be enforceable by, any of the
Indemnified Parties and their respective successors, heirs and personal
representatives. 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.
12.5 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered personally, by
courier, by telecopy or by mail (regular, certified or registered), postage
prepaid, addressed as follows:
If to Seller:
Transamerica Leasing, Inc.
c/o Transamerica Corporation
The Transamerica Pyramid
600 Montgomery Street
San Francisco, California 94111
Attention: Richard H. Fearon
(Telecopy: (415) 983-4164)
and to:
Transamerica Leasing, Inc.
100 Manhattanville Road
Purchase, New York 10577
Attention: Edward T. Mann
(Telecopy: (914) 697-2502)
and to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Daniel A. Neff, Esq.
and
Trevor S. Norwitz, Esq.
(Telecopy: (212) 403-2000)
If to Purchaser:
Interpool, Inc.
633 Third Avenue, 17th Floor
New York, NY 10017
Attention: Raoul Witteveen
(Telecopy: (212) 986-2038)
and to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Paul T. Schnell, Esq.
and
Richard J. Grossman, Esq.
(Telecopy: (212) 735-2000)
or to such other address as a party may from time to time designate in
writing in accordance with this Section. Each notice or other communication
given to any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been received (a) on the Business Day it
is sent, if sent by personal delivery, or (b) on the first Business Day
after sending, if sent by overnight delivery, properly addressed and
prepaid or (c) upon receipt, if sent by mail (regular, certified or
registered); provided, however, that notice of change of address shall be
effective only upon receipt. The parties agree that delivery of process or
other papers in connection with any such action or proceeding in the manner
provided in Section 12.5, or in such other manner as may be permitted by
law, shall be valid and sufficient service thereof.
12.6 Law Governing. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New York, without
giving effect to the choice of law provisions thereof.
12.7 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of
which shall constitute but one and the same instrument.
12.8 Entire Agreement. This Agreement and the schedules, annexes, and
exhibits hereto, and the Confidentiality Agreement constitute the entire
Agreement among the parties and supersede and cancel any and all prior
agreements, written or oral, among them relating to the subject matter
hereof and supersede and cancel all prior agreements, negotiations,
correspondence, undertakings, understandings and communications of the
parties, oral and written, with respect to the subject matter hereof.
12.9 Choice of Forum; Waiver of Jury Trial. Any judicial proceeding brought
against any of the parties hereto with respect to his Agreement shall be
brought in any court of competent jurisdiction in the Southern District of
New York irrespective of where such party may be located at the time of
such proceeding, and by execution and delivery of this Agreement, each of
the parties to this Agreement hereby consents to the exclusive jurisdiction
of any such court and waives any defense or opposition to such
jurisdiction. To the extent permitted by Applicable Law, the parties hereby
irrevocably waive any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
12.10 Headings. The article, section, paragraph and other headings
contained in this Agreement are inserted for convenience of reference only
and shall not affect in any way the meaning or interpretation of this
Agreement.
12.11 Severability. This Agreement shall be deemed severable; the
invalidity or unenforceability of any term or provision of this Agreement
shall not affect the validity or enforceability of this Agreement or of any
other term hereof, which shall remain in full force and effect. If it is
ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, each party agrees that such
restriction may be enforced to the maximum extent permitted by law, and
each party hereby consents and agrees that such scope may be judicially
modified accordingly in any proceeding brought to enforce such restriction.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their duly authorized officers, as of the
day and year first above written.
TRANSAMERICA LEASING INC.
By: /s/ Richard H. Fearon
----------------------------------------------
Name: Richard H. Fearon
Title: Authorized Signatory
INTERPOOL, INC.
By: /s/ Martin Tuchman
----------------------------------------------
Name: Martin Tuchman
Title: Chairman and Chief Executive Officer
