1
EXECUTION COPY
FIRST AMENDED STOCK PURCHASE AGREEMENT
between
GATX RAIL CORPORATION ("RAIL"),
GATX TERMINALS HOLDING CORPORATION ("HOLDINGS")
and
KINDER MORGAN ENERGY PARTNERS, L.P. ("PURCHASER")
February 28, 2001
2
TABLE OF CONTENTS
PAGE
ARTICLE 1 PURCHASE AND SALE OF TERMINALS..............................................1
1.1 Purchase and Sale of Terminals Stock...................................1
1.2 Payment at the Terminals Closing.......................................1
1.3 Determination of Working Capital Adjustment............................1
1.4 Purchase Price Allocation..............................................4
1.5 Additional Payment at Terminals Closing................................4
1.6 General and Administrative Expenses Regarding the Terminals
Companies..............................................................4
ARTICLE 1A PURCHASE AND SALE OF GPL...........................................4
1A.1 Purchase and Sale of GPL Stock................................4
1A.2 Payment at Closing............................................4
1A.3 Determination of Working Capital Adjustment and Debt
Adjustment....................................................5
1A.4 Purchase Price Allocation.....................................7
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER WITH
RESPECT TO THE TERMINALS COMPANIES..........................................8
2.1 Authority of Seller....................................................8
2.2 Capitalization; Seller's Ownership of Terminals Companies..............8
2.3 Organization...........................................................9
2.4 Consents and Approvals.................................................9
2.5 Personal Property.....................................................10
2.6 Real Property.........................................................10
2.7 Leased Real Property..................................................10
2.8 Intellectual Property.................................................10
2.9 Financial Statements..................................................11
2.10 No Material Adverse Change............................................12
2.11 Tax Matters...........................................................12
2.12 Laws and Regulations; Litigation......................................13
2.13 ERISA and Related Matters.............................................14
2.14 Material Contracts....................................................16
2.15 Brokers, Etc..........................................................18
2.16 Insurance.............................................................18
-i-
3
TABLE OF CONTENTS
(Continued)
PAGE
2.17 Employees.............................................................18
2.18 Environmental.........................................................18
2.19 Environmental Permits.................................................19
2.20 Affiliate Transactions................................................20
2.21 Licenses; Permits.....................................................20
2.22 Hedging...............................................................20
2.23 Bankruptcy............................................................20
2.24 Other Disclosures.....................................................20
ARTICLE 2A REPRESENTATIONS AND WARRANTIES OF SELLER
WITH RESPECT TO THE CALNEV COMPANIES..............................20
2A.1 Authority of Seller..........................................20
2A.2 Capitalization; Seller's Ownership of the Calnev
Companies....................................................21
2A.3 Organization.................................................21
2A.4 Consents and Approvals.......................................21
2A.5 Personal Property............................................22
2A.6 Real Property................................................22
2A.7 Leased Real Property.........................................22
2A.8 Intellectual Property........................................23
2A.9 Financial Statements.........................................23
2A.10 No Material Adverse Change...................................23
2A.11 Tax Matters..................................................24
2A.12 Laws and Regulations; Litigation.............................25
2A.13 ERISA and Related Matters ...................................26
2A.14 Material Contracts...........................................28
2A.15 Brokers, Etc.................................................29
2A.16 Insurance....................................................29
2A.17 Employees....................................................29
2A.18 Environmental................................................30
2A.19 Environmental Permits........................................31
2A.20 Affiliate Transactions.......................................31
-ii-
4
TABLE OF CONTENTS
(Continued)
PAGE
2A.21 Licenses; Permits............................................31
2A.22 Hedging......................................................31
2A.23 Bankruptcy...................................................31
2A.24 Other Disclosures............................................31
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER................................31
3.1 Authority of Purchaser................................................31
3.2 Brokers, Etc..........................................................32
3.3 Securities............................................................32
3.4 Financing.............................................................32
3.5 Independent Investigation.............................................32
ARTICLE 4 COVENANTS OF SELLER WITH RESPECT TO THE
TERMINALS COMPANIES........................................................33
4.1 Corporate and Other Actions...........................................33
4.2 Full Access...........................................................33
4.3 Ordinary Course of Business...........................................33
4.4 HSR Filings...........................................................34
4.5 [Intentionally omitted]...............................................34
4.6 Registration Statements and Periodic Reports..........................34
4.7 Intercompany Accounts and Contracts...................................34
4.8 Conversion into Single-Member Limited Liability Companies.............35
4.9 No Solicitations......................................................35
4.10 Confidentiality.......................................................35
4.11 Insurance.............................................................36
4.12 Excluded Companies....................................................36
4.13 No Solicitation of Continuing Employees...............................36
4.14 Consents..............................................................37
4.15 Argo Lease............................................................37
ARTICLE 4A COVENANTS OF SELLER WITH RESPECT TO THE
CALNEV COMPANIES..................................................38
4A.1 Corporate and Other Actions..................................38
4A.2 Full Access..................................................38
-iii-
5
TABLE OF CONTENTS
(Continued)
PAGE
4A.3 Ordinary Course of Business..................................38
4A.4 Intercompany Accounts and Contracts..........................39
4A.5 Conversion into Single-Member Limited Liability Companies....39
4A.6 No Solicitations.............................................39
4A.7 Confidentiality..............................................40
4A.8 Insurance....................................................40
4A.9 No Solicitation of Continuing Employees......................40
4A.10 Consents Prior to the Calnev Closing.........................41
4A.11 HSR Filing With Respect to the Calnev Companies..............41
ARTICLE 5 COVENANTS OF PURCHASER WITH RESPECT TO THE
TERMINALS COMPANIES........................................................41
5.1 Corporate and Other Actions...........................................41
5.2 Confidentiality.......................................................41
5.3 Terminals Employees and Benefit Plans.................................42
5.4 Full Access...........................................................47
5.5 HSR Filings...........................................................47
5.6 Directors' and Officers' Indemnification..............................47
5.7 Use of GATX Name......................................................48
5.8 Assumption of Obligations.............................................48
5.9 Services to Terminal de Productos Especializados S.A. de C.V.;
Other Services........................................................48
5.10 License Agreement with KTSB...........................................48
5.11 Agreement with Nippon GATX Company Limited............................48
5.12 License to the Calnev Companies.......................................49
ARTICLE 5A COVENANTS OF PURCHASER WITH RESPECT TO THE
CALNEV COMPANIES..................................................49
5A.1 Corporate and Other Actions..................................49
5A.2 Confidentiality..............................................49
5A.3 Calnev Employees and Benefit Plans...........................49
5A.4 Full Access..................................................54
5A.5 Directors' and Officers' Indemnification.....................54
-iv-
6
TABLE OF CONTENTS
(Continued)
PAGE
5A.6 Use of GATX Name.............................................54
5A.7 HSR Filing With Respect to the Calnev Companies..............55
5A.8 Assumption of Obligations....................................55
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
WITH RESPECT TO TERMINALS SALE.............................................55
6.1 Warranties True as of Both Present Date and Closing Date..............55
6.2 Compliance with Agreements and Covenants..............................56
6.3 Competition Law Approvals.............................................56
6.4 Injunctions; Consents.................................................56
6.5 Deliveries by Seller..................................................56
ARTICLE 6A CONDITIONS PRECEDENT TO OBLIGATIONS OF
PURCHASER WITH RESPECT TO CALNEV SALE.............................56
6A.1 Warranties True as of Both Present Date and Closing Date.....56
6A.2 Compliance with Agreements and Covenants.....................57
6A.3 Competition Law Approvals....................................57
6A.4 Injunctions; Consents........................................57
6A.5 Deliveries by Seller.........................................58
ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF
SELLER WITH RESPECT TO TERMINALS COMPANIES SALE ...........................58
7.1 Warranties True as of Both Present Date and Closing Date..............58
7.2 Compliance with Agreements and Covenants..............................58
7.3 Competition Law Approvals.............................................58
7.4 Injunctions; Consents.................................................58
7.5 Deliveries by Purchaser...............................................58
ARTICLE 7A CONDITIONS PRECEDENT TO OBLIGATIONS OF
SELLER WITH RESPECT TO CALNEV SALE................................58
7A.1 Warranties True as of Both Present Date and Closing Date.....59
7A.2 Compliance with Agreements and Covenants.....................59
7A.3 Competition Law Approvals....................................59
7A.4 Injunctions; Consents........................................59
7A.5 Deliveries by Purchaser......................................59
ARTICLE 8 TERMINALS CLOSING..........................................................59
-v-
7
TABLE OF CONTENTS
(Continued)
PAGE
8.1 Terminals Closing.....................................................59
8.2 Seller's Deliveries...................................................59
8.3 Purchaser's Deliveries................................................60
8.4 Termination...........................................................60
ARTICLE 8A CALNEV CLOSING; ASSET DIVISION....................................61
8A.1 Calnev Closing...............................................61
8A.2 Seller's Deliveries..........................................61
8A.3 Purchaser's Deliveries.......................................61
8A.4 Termination..................................................62
8A.5 Asset Division...............................................62
8A.6 Actions Taken Contemporaneously with Asset Division..........64
8A.7 Special Severance Payment....................................67
ARTICLE 9 SURVIVAL AND INDEMNIFICATION RELATING TO
TERMINALS SALE.............................................................67
9.1 Survival..............................................................67
9.2 Indemnification by Seller.............................................67
9.3 Indemnification by Purchaser..........................................69
9.4 Schedule 9.2(a) Matters...............................................70
ARTICLE 9A SURVIVAL AND INDEMNIFICATION RELATING TO
CALNEV SALE.......................................................71
9A.1 Survival.....................................................71
9A.2 Indemnification by Seller....................................71
9A.3 Indemnification by Purchaser.................................73
ARTICLE 9B SURVIVAL AND INDEMNIFICATION GENERALLY............................74
9B.1 Claims.......................................................74
9B.2 Notice of Third Party Claims; Assumption of Defense..........74
9B.3 Settlement or Compromise.....................................75
9B.4 Time Limits..................................................75
9B.5 Net Losses and Subrogation...................................75
9B.6 Purchase Price Adjustments...................................76
9B.7 Limitations on Liability of Seller...........................76
-vi-
8
TABLE OF CONTENTS
(Continued)
PAGE
9B.8 Limitations on Liability of Purchaser........................78
ARTICLE 10 TAX MATTERS WITH RESPECT TO THE TERMINALS
COMPANIES..................................................................79
10.1 Liability for Taxes...................................................79
10.2 Tax Returns...........................................................80
10.3 Cooperation on Tax Matters............................................82
10.4 Carrybacks and Refunds................................................83
10.5 Survival..............................................................83
10.6 Conflict..............................................................83
10.7 Transfer Taxes........................................................83
ARTICLE 10A TAX MATTERS WITH RESPECT TO THE CALNEV............................84
10A.1 Liability for Taxes..........................................84
10A.2 Tax Returns..................................................85
10A.3 Cooperation on Tax Matters...................................87
10A.4 Carrybacks and Refunds.......................................88
10A.5 Survival.....................................................88
10A.6 Conflict.....................................................88
ARTICLE 11 MISCELLANEOUS..............................................................88
11.1 Expenses..............................................................88
11.2 Amendment.............................................................88
11.3 Notices...............................................................88
11.4 Waivers...............................................................89
11.5 Counterparts..........................................................89
11.6 Headings..............................................................89
11.7 Applicable Law........................................................89
11.8 Assignment............................................................89
11.9 No Third Party Beneficiaries..........................................89
11.10 Forum; Waiver of Jury Trial...........................................90
11.11 Schedules.............................................................90
11.12 Incorporation.........................................................90
11.13 Complete Agreement....................................................90
-vii-
9
TABLE OF CONTENTS
(Continued)
PAGE
11.14 Disclaimer............................................................90
11.15 Knowledge Defined.....................................................91
11.16 Public Announcements..................................................91
11.17 Defined Terms.........................................................91
11.18 Currency..............................................................91
11.19 References............................................................91
11.20 Employer Identification Numbers.......................................91
-viii-
10
EXHIBITS
Exhibit A - Confidentiality Agreement
Exhibit B -Services Agreement
Exhibit C - Terminals Closing Balance Sheet
SCHEDULES
1.4 Terminals Asset Allocation
1A.4 Calnev Asset Allocation
2.2 Capitalization; Ownership
2.3 Organization
2.4 Consents and Approvals
2.6 Real Property
2.7 Real Property Leases
2.8 Intellectual Property
2.9(a) Combined Financial Statements
2.9(b) Audited September 30th Balance Sheet
2.9(c) Terminals September 30th Balance Sheet
2.9(d) Terminals Companies December 31, 2000 Financial Statements
2.9(e) Bonds, Deposits, Financial Assurance and Insurance Coverage
2.10 No Material Adverse Change
2.11 Tax Matters
2.12(a) No Violations of Law
2.12(b) Litigation
2.13 ERISA Matters
2.13(a) GATX Corporation Summary of Benefit Plans with Acceleration Provisions
2.14 Material Contracts
2.16 Insurance Policies
2.17 Employee Matters
2.18 Environmental Matters
2.19 Environmental Permits
2.20 Affiliate Transactions
2.21 Licenses, Permits and Authorizations
-ix-
11
2.24 Banks
2A.9(b) Calnev September 30th Balance Sheet
2A.12(c) Tariffs and Rates
3.4 Purchaser's Financial Resources
4.3 Ordinary Course
4.7 Intercompany Payables and Agreements
5.3(a) Terminals Employees
5.8 Parental Guarantees
6.4(b) Additional Consents Required for Closing
9.2(a) Special Indemnification Matters
11.15(a) Knowledge of Seller
11.15(b) Knowledge of Purchaser
-x-
12
FIRST AMENDED STOCK PURCHASE AGREEMENT
THIS FIRST AMENDED STOCK PURCHASE AGREEMENT is entered into on the 28th
day of February, 2001, between GATX RAIL CORPORATION, a corporation organized
under the laws of New York ("Rail"), GATX TERMINALS HOLDING CORPORATION, a
Delaware corporation and a wholly-owned subsidiary of Rail ("Holdings" and,
together with Rail, "Seller") and KINDER MORGAN ENERGY PARTNERS, L.P., a
Delaware limited partnership ("Purchaser").
WHEREAS, subject to the terms and conditions set forth herein, Seller
desires to sell, assign and transfer to Purchaser, and Purchaser desires to
purchase and take assignment and delivery from Seller of, all of the issued and
outstanding shares of capital stock of GATX Terminals Corporation, a Delaware
corporation, which shall be converted into a single-member limited liability
company prior to the Terminals Closing Date ("Terminals"); and
WHEREAS, subject to the terms and conditions set forth herein, Seller
desires to sell, assign and transfer to Purchaser, and Purchaser desires to
purchase and take assignment and delivery from Seller of, all of the issued and
outstanding shares of capital stock of GATX Pipe Line Company, a Delaware
corporation, which shall be converted into a single-member limited liability
company prior to the Calnev Closing Date ("GPL").
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, Purchaser and Seller agree as follows:
ARTICLE 1
PURCHASE AND SALE OF TERMINALS
1.1 Purchase and Sale of Terminals Stock. Subject to the terms and
conditions hereof, at the Terminals Closing (as defined below), Seller shall
sell, assign and deliver to Purchaser, and Purchaser shall purchase and take
assignment and delivery of, all of the issued and outstanding shares of capital
stock, such capital stock having been converted into a limited liability company
membership interest prior to the Terminals Closing Date, of Terminals (the
"Terminals Stock").
1.2 Payment at the Terminals Closing. Subject to the terms and
conditions hereof, at the closing of the transactions contemplated by Section
1.1 hereof (the "Terminals Closing"), Purchaser shall pay, by wire transfer of
same-day funds, the amount of $784,000,000 less $168,970,000 (which is the
Terminals Aggregate Non-Current Balance Sheet Liability reflected on the
Terminals Closing Balance Sheet) (the "Terminals Purchase Price"). The Terminals
Purchase Price shall be payable to Seller to such accounts as Seller may direct
in advance of the Terminals Closing. The Terminals Purchase Price is subject to
adjustment pursuant to Section 1.3 below.
1.3 Determination of Working Capital Adjustment.
(a) Closing Balance Sheet. In order to determine the Terminals
Working Capital Adjustment, Seller has prepared and delivered to
Purchaser the Terminals Closing Balance Sheet. The Terminals Closing
Balance Sheet was prepared using accounting
13
principles and significant estimates in accordance with GAAP and
consistent with those used in the preparation of the Terminals
September 30th Balance Sheet and shall take into account the Terminals
Adjustments. Seller shall permit Purchaser's accountants reasonable
access (i) to Seller's accountants and (ii) to review all work papers
and other pertinent information requested from time to time and used in
connection with the preparation of the Terminals Closing Balance Sheet.
(b) Working Capital Adjustment. If Terminals Working Capital as
shown on the Terminals Closing Balance Sheet is less than the Terminals
Working Capital as shown on the Terminals September 30th Balance Sheet,
then Seller shall remit to Purchaser the Terminals Working Capital
Adjustment. Seller shall remit the undisputed portion of such amount,
together with interest thereon at the prime interest rate as reported
in The Wall Street Journal on the Terminals Closing Date (the "Prime
Interest Rate") plus 2%, calculated on an annual basis (based on a
365-day year) but prorated for the actual number of days for which
interest is to be paid (i.e., the number of days from the Terminals
Closing Date to the date of payment), by wire transfer of same-day
funds, not later than the fifteenth (15th) business day after the
Terminals Closing Date, to an account that Purchaser shall designate to
Seller. Seller shall retain the disputed portion of such amount until
the dispute is resolved pursuant to the procedures set forth in Section
1.3(c) below. If Terminals Working Capital as shown on the Terminals
Closing Balance Sheet is greater than the Terminals Working Capital as
shown on the Terminals September 30th Balance Sheet, then Purchaser
shall remit to Seller the Terminals Working Capital Adjustment.
Purchaser shall remit the undisputed portion of such amount, together
with interest thereon at the Prime Interest Rate plus 2% calculated on
an annual basis (based on a 365-day year) but prorated for the actual
number of days for which interest is to be paid (i.e., the number of
days from the Terminals Closing Date to the date of payment), by wire
transfer of same-day funds, not later than the fifteenth (15th)
business day after the Terminals Closing Date, to an account that
Seller shall designate to Purchaser. Purchaser shall retain the
disputed portion of such amount until the dispute is resolved pursuant
to Section 1.3(c) below.
(c) Disputes. If Purchaser notifies Seller in writing within
fifteen (15) business days after the Terminals Closing Date that
Purchaser disagrees with the determination of Terminals Working Capital
as shown on the Terminals Closing Balance Sheet, for the reason that
the determination does not meet the criteria set forth in Section
2.9(c) ("Terminals Dispute Notice") and such Terminals Dispute Notice
(i) states with reasonable specificity the basis for such disagreement
and quantifies such dispute and (ii) seeks an adjustment to the
Terminals Working Capital reflected on the Terminals Closing Balance
Sheet of at least $340,000, Seller and Purchaser shall attempt in good
faith to resolve such dispute as soon as possible. If the parties are
unable to resolve such dispute within fifteen (15) days after Seller's
receipt of such Terminals Dispute Notice, Seller and Purchaser shall,
as soon as reasonably practicable thereafter, jointly submit such
dispute for arbitration to an independent certified public accounting
firm mutually acceptable to Seller and Purchaser (or, if the parties
cannot agree within one week on such an arbitrating accounting firm, to
the Chicago office of Arthur Andersen LLP (the "Terminals Arbitrating
Accounting Firm")) for the purpose of resolving the dispute set forth
in such Terminals Dispute Notice. The review performed by the Terminals
2
14
Arbitrating Accounting Firm shall be limited to the unresolved issues
identified in the Terminals Dispute Notice, which issues shall relate
only to the accounting determinations specified in the first sentence
of this Section 1.3(c). The Terminals Arbitrating Accounting Firm shall
review and decide the issue or issues that are the subject of such
dispute as specified in such Terminals Dispute Notice within thirty
(30) days after such submission. The decision of the Terminals
Arbitrating Accounting Firm shall be set forth in writing and delivered
to Seller and Purchaser. The decision of the Terminals Arbitrating
Accounting Firm shall be final and binding on Seller and Purchaser, and
the Terminals Working Capital reflected on the Terminals Closing
Balance Sheet, as adjusted to reflect the determination of the
Terminals Arbitrating Accounting Firm, shall constitute the final and
binding "Terminals Working Capital" for purposes of Section 1.3(b);
provided, that the Terminals Working Capital reflected on the Terminals
Closing Balance Sheet shall not be adjusted unless and until the
decision of the Terminals Arbitrating Accounting Firm would result in
an adjustment to the Terminals Working Capital shown on the Terminals
Closing Balance Sheet submitted by Seller of at least $340,000. If the
final and binding Terminals Working Capital as determined by the
Terminals Arbitrating Accounting Firm would result in a refund of
certain of the amounts paid by Purchaser to Seller with respect to the
delivery of the Terminals Closing Balance Sheet (the "Terminals Initial
Payment"), then, not later than the third (3rd) business day after
delivery of the decision of the Terminals Arbitrating Accounting Firm,
Seller shall remit such refund, together with interest thereon at the
Prime Interest Rate plus 2% calculated on an annual basis (based on a
365-day year) but prorated for the actual number of days for which
interest is to be paid (i.e., the number of days from the date of
Terminals Initial Payment to the date of payment), by wire transfer of
same-day funds to an account that Purchaser shall designate to Seller.
If the final and binding Terminals Working Capital as determined by the
Terminals Arbitrating Accounting Firm would result in an additional
payment from Purchaser to Seller, then, not later than the third (3rd)
business day after delivery of the decision of the Terminals
Arbitrating Accounting Firm, Purchaser shall remit such additional
amount, together with interest thereon at the Prime Interest Rate plus
2%, calculated on an annual basis (based on a 365-day year) but
prorated for the actual number of days for which interest is to be paid
(i.e., the number of days from the Terminals Closing Date to the date
of payment), by wire transfer of same-day funds to an account that
Seller shall designate to Purchaser. The fees and costs of the
Terminals Arbitrating Accounting Firm shall be shared equally by
Purchaser and Seller.
(d) Adjustments Not Subject to Limitation. Any amounts paid to
Purchaser as a result of adjustments under this Section 1.3 shall not
be subject to, or impact in any way, any limitations, including without
limitation any basket or cap, contained in this Agreement. The
Terminals Purchase Price shall be deemed adjusted downwards or upwards,
as the case may be, by the amounts, if any, remitted by Seller or
Purchaser under this Section 1.3. Notwithstanding anything to the
contrary contained in this Agreement, if and to the extent Seller pays
a Terminals Working Capital Adjustment to Purchaser, then Seller shall
have no additional liability to Purchaser whatsoever (pursuant to
Section 2.9 or Section 9.2 hereof or otherwise) with respect to the
Terminals Working Capital shortfall that resulted in a reduction in the
Terminals Purchase Price pursuant to this Section 1.3.
3
15
1.4 Purchase Price Allocation. Seller and Purchaser agree to allocate
the Terminals Purchase Price for the Terminals Companies' assets as set forth on
Schedule 1.4 (the "Terminals Asset Allocation"). The Terminals Asset Allocation
shall be revised after all adjustments, if any, have been made to the Terminals
Purchase Price in accordance with Section 1.3. The Terminals Asset Allocation
shall be completed in the manner required by Section 1060 of the Code. Seller
and Purchaser further agree to comply with all filing, notice and reporting
requirements described in Section 1060 of the Code and the Treasury Regulations
promulgated thereunder, including the timely preparation and filing of Form 8594
based on the Terminals Asset Allocation. Seller and Purchaser hereby agree that
they will report the federal, state, foreign and other tax consequences of the
transactions contemplated by this Agreement in a manner consistent with the
Terminals Asset Allocation.
1.5 Additional Payment at Terminals Closing. Subject to the terms and
conditions hereof, at the Terminals Closing, Purchaser shall pay to Seller, by
wire transfer of same-day funds to such accounts as Seller may direct in advance
of the Terminals Closing, in addition to any amounts payable pursuant to Section
1.2 or Section 1.3, an amount equal to the sum of $11,000,000. The parties
hereby agree that such amount represents an interest payment with respect to
indebtedness of the Terminals Companies.
1.6 General and Administrative Expenses Regarding the Terminals
Companies. Seller shall either pay directly or reimburse Purchaser for all of
the general and administrative expenses of the Terminals Companies in connection
with the Chicago office of Seller that are billed or invoiced subsequent to
February 28, 2001, whether incurred directly by Seller and its Affiliates or
allocated indirectly by Seller or an Affiliate to any of the Terminals Companies
(it being understood that the obligation of reimbursement pursuant to this
sentence is in no way subject to or limited by the provisions of Section 9B.7).
ARTICLE 1A
PURCHASE AND SALE OF GPL
1A.1 Purchase and Sale of GPL Stock. Subject to the terms and
conditions hereof, at the Calnev Closing (as defined below), Seller shall sell,
assign and deliver to Purchaser, and Purchaser shall purchase and take
assignment and delivery of, all of the issued and outstanding shares of capital
stock, such capital stock having been converted into a limited liability company
membership interest prior to the Calnev Closing Date, of GPL (the "GPL Stock").
1A.2 Payment at Closing. Subject to the terms and conditions hereof, at
the closing of the transactions contemplated by Section 1A.1 hereof (the "Calnev
Closing"), Purchaser shall pay, by wire transfer of same-day funds, the amount
of $375,000,000 less the Calnev Aggregate Non-Current Balance Sheet Liability
reflected on the Calnev September 30th Balance Sheet (the "Calnev Purchase
Price"). The Calnev Purchase Price shall be payable to Seller to such accounts
as Seller may direct in advance of the Calnev Closing. The Calnev Purchase Price
is subject to adjustment pursuant to Section 1A.3 below.
4
16
1A.3 Determination of Working Capital Adjustment and Debt Adjustment.
(a) Closing Balance Sheet. In order to determine the Calnev
Working Capital Adjustment and the Calnev Debt Adjustment, Seller shall
prepare and deliver to Purchaser, within sixty (60) days following the
Calnev Closing Date, the Calnev Closing Balance Sheet. The Calnev
Closing Balance Sheet shall be prepared by Seller at its own expense
with the assistance of personnel of Calnev as may be reasonably
requested by Seller. The Calnev Closing Balance Sheet shall be prepared
using accounting principles and significant estimates in accordance
with GAAP and consistent with those used in the preparation of the
Calnev September 30th Balance Sheet and shall take into account the
Calnev Adjustments. During and after preparation of such Calnev Closing
Balance Sheet, Seller shall permit Purchaser's accountants reasonable
access (i) to Seller's accountants and (ii) to review all work papers
and other pertinent information requested from time to time and used in
connection with the preparation of the Calnev Closing Balance Sheet.
(b) Working Capital Adjustment. If Calnev Working Capital as
shown on the Calnev Closing Balance Sheet is less than Calnev Working
Capital as shown on the Calnev September 30th Balance Sheet, then
Seller shall remit to Purchaser the Calnev Working Capital Adjustment.
Seller shall remit the undisputed portion of such amount, together with
interest thereon at the Prime Interest Rate plus 2%, calculated on an
annual basis (based on a 365-day year) but prorated for the actual
number of days for which interest is to be paid (i.e., the number of
days from the Calnev Closing Date to the date of payment), by wire
transfer of same-day funds, not later than the fifteenth (15th)
business day after delivery to Purchaser of the Calnev Closing Balance
Sheet, to an account that Purchaser shall designate to Seller. Seller
shall retain the disputed portion of such amount until the dispute is
resolved pursuant to the procedures set forth in Section 1A.3(d) below.
If Calnev Working Capital as shown on the Calnev Closing Balance Sheet
is greater than the Calnev Working Capital as shown on the Calnev
September 30th Balance Sheet, then Purchaser shall remit to Seller the
Calnev Working Capital Adjustment. Purchaser shall remit the undisputed
portion of such amount, together with interest thereon at the Prime
Interest Rate plus 2% calculated on an annual basis (based on a 365-day
year) but prorated for the actual number of days for which interest is
to be paid (i.e., the number of days from the Calnev Closing Date to
the date of payment), by wire transfer of same-day funds, not later
than the fifteenth (15th) business day after delivery to Purchaser of
the Calnev Closing Balance Sheet, to an account that Seller shall
designate to Purchaser. Purchaser shall retain the disputed portion of
such amount until the dispute is resolved pursuant to Section 1A.3(d)
below.
(c) Debt Adjustment. If the Calnev Aggregate Non-Current
Balance Sheet Liability as shown on the Calnev Closing Balance Sheet is
greater than the Calnev Aggregate Non-Current Balance Sheet Liability
as shown on the Calnev September 30th Balance Sheet, then Seller shall
remit to Purchaser the Calnev Debt Adjustment. Seller shall remit the
undisputed portion of such amount, together with interest thereon at
the Prime Interest Rate plus 2%, calculated on an annual basis (based
on a 365-day year) but prorated for the actual number of days for which
interest is to be paid (i.e., the number of days from the Calnev
Closing Date to the date of payment), by wire transfer of same-day
5
17
funds, not later than the fifteenth (15th) business day after delivery
to Purchaser of the Calnev Closing Balance Sheet, to an account that
Purchaser shall designate to Seller. Seller shall retain the disputed
portion of such amount until the dispute is resolved pursuant to the
procedures set forth in Section 1A.3(d) below. If the Calnev Aggregate
Non-Current Balance Sheet Liability as shown on the Calnev Closing
Balance Sheet is less than the Calnev Aggregate Non-Current Balance
Sheet Liability as shown on the Calnev September 30th Balance Sheet,
then Purchaser shall remit to Seller the Calnev Debt Adjustment.
Purchaser shall remit the undisputed portion of such amount, together
with interest thereon at the Prime Interest Rate plus 2% calculated on
an annual basis (based on a 365-day year) but prorated for the actual
number of days for which interest is to be paid (i.e., the number of
days from the Calnev Closing Date to the date of payment), by wire
transfer of same-day funds, not later than fifteenth (15th) business
day after delivery to Purchaser of the Calnev Closing Balance Sheet, to
an account that Seller shall designate to Purchaser. Purchaser shall
retain the disputed portion of such amount until the dispute is
resolved pursuant to the procedures set forth in Section 1A.3(d).
(d) Disputes. If Purchaser notifies Seller in writing within
fifteen (15) business days after receipt of the Calnev Closing Balance
Sheet that Purchaser disagrees with the determination of Calnev Working
Capital or Calnev Aggregate Non-Current Balance Sheet Liability, in
each case as shown on the Calnev Closing Balance Sheet, for the reason
that the determination does not meet the criteria set forth in Section
2A.9(b) ("Calnev Dispute Notice"), and such Calnev Dispute Notice (i)
states with reasonable specificity the basis for such disagreement and
quantifies such dispute and (ii) with respect to Calnev Working
Capital, seeks an adjustment to the Calnev Working Capital reflected on
the Calnev Closing Balance Sheet of at least $160,000, Seller and
Purchaser shall attempt in good faith to resolve such dispute as soon
as possible. If the parties are unable to resolve such dispute within
fifteen (15) days after Seller's receipt of such Calnev Dispute Notice,
Seller and Purchaser shall as soon as reasonably practicable thereafter
jointly submit such dispute for arbitration to an independent certified
public accounting firm mutually acceptable to Seller and Purchaser (or,
if the parties cannot agree within one week on such an arbitrating
accounting firm, to the Chicago office of Arthur Andersen LLP (the
"Calnev Arbitrating Accounting Firm")) for the purpose of resolving the
dispute set forth in such Calnev Dispute Notice. The review performed
by the Calnev Arbitrating Accounting Firm shall be limited to the
unresolved issues identified in the Calnev Dispute Notice, which issues
shall relate only to the accounting determinations specified in the
first sentence of this Section 1A.3(d). The Calnev Arbitrating
Accounting Firm shall review and decide the issue or issues that are
the subject of such dispute as specified in such Calnev Dispute Notice
within thirty (30) days after such submission. Seller and Purchaser
hereby agree, and the Calnev Arbitrating Accounting Firm shall be
directed, that the Calnev Closing Balance Sheet estimates for reserves
included in the Calnev Aggregate Non-Current Balance Sheet Liability
shall be conclusive unless it is established that, based solely on
information available at the Calnev Closing, there was no reasonable
basis for the change (if any) in such estimates from September 30, 2000
to the date of the Calnev Closing. The decision of the Calnev
Arbitrating Accounting Firm shall be set forth in writing and delivered
to Seller and Purchaser. The decision of the Calnev Arbitrating
Accounting Firm shall be final and binding on Seller and Purchaser, and
the Calnev Working Capital and/or the Calnev
6
18
Aggregate Non-Current Balance Sheet Liability reflected on the Calnev
Closing Balance Sheet, as adjusted to reflect the determination of the
Calnev Arbitrating Accounting Firm, shall constitute the final and
binding "Calnev Working Capital" for purposes of Section 1A.3(b) and/or
"Calnev Aggregate Non-Current Balance Sheet Liability" for purposes of
Section 1A.3(c) (as applicable); provided, that the Calnev Working
Capital reflected on the Calnev Closing Balance Sheet shall not be
adjusted unless and until the decision of the Calnev Arbitrating
Accounting Firm would result in an adjustment to the Calnev Working
Capital shown on the Calnev Closing Balance Sheet submitted by Seller
of at least $160,000. If the final and binding Calnev Working Capital
and/or Calnev Aggregate Non-Current Balance Sheet Liability as
determined by the Calnev Arbitrating Accounting Firm would result in a
refund of certain of the amounts paid by Purchaser to Seller with
respect to the delivery of the Calnev Closing Balance Sheet (the
"Calnev Initial Payment"), then, not later than the third (3rd)
business day after delivery of the decision of the Calnev Arbitrating
Accounting Firm, Seller shall remit such refund, together with interest
thereon at the Prime Interest Rate plus 2% calculated on an annual
basis (based on a 365-day year) but prorated for the actual number of
days for which interest is to be paid (i.e., the number of days from
the date of Calnev Initial Payment to the date of payment), by wire
transfer of same-day funds to an account that Purchaser shall designate
to Seller. If the final and binding Calnev Working Capital and/or
Calnev Aggregate Non-Current Balance Sheet Liability as determined by
the Calnev Arbitrating Accounting Firm would result in an additional
payment from Purchaser to Seller, then, not later than the third (3rd)
business day after delivery of the decision of the Calnev Arbitrating
Accounting Firm, Purchaser shall remit such additional amount, together
with interest thereon at the Prime Interest Rate plus 2%, calculated on
an annual basis (based on a 365-day year) but prorated for the actual
number of days for which interest is to be paid (i.e., the number of
days from the Calnev Closing Date to the date of payment), by wire
transfer of same-day funds to an account that Seller shall designate to
Purchaser. The fees and costs of the Calnev Arbitrating Accounting Firm
shall be shared equally by Purchaser and Seller.
(e) Adjustments Not Subject to Limitation. Any amounts paid to
Purchaser as a result of adjustments under this Section 1A.3 shall not
be subject to, or impact in any way, any limitations, including without
limitation any basket or cap, contained in this Agreement. The Calnev
Purchase Price shall be deemed adjusted downwards or upwards, as the
case may be, by the amounts, if any, remitted by Seller or Purchaser
under this Section 1A.3. Notwithstanding anything to the contrary
contained in this Agreement, if and to the extent Seller pays a Calnev
Working Capital Adjustment or a Calnev Debt Adjustment to Purchaser,
then Seller shall have no additional liability to Purchaser whatsoever
(pursuant to Section 2A.9 or Section 9A.2 hereof or otherwise) with
respect to the Calnev Working Capital shortfall or the incremental
Calnev Aggregate Non-Current Balance Sheet Liability that resulted in a
reduction in the Calnev Purchase Price pursuant to this Section 1A.3.
1A.4 Purchase Price Allocation. Seller and Purchaser agree to allocate
the Calnev Purchase Price for the assets of the Calnev Companies as set forth on
Schedule 1A.4 (the "Calnev Asset Allocation"). The Calnev Asset Allocation shall
be revised after all adjustments, if any, have been made to the Calnev Purchase
Price in accordance with Section 1A.3. The
7
19
Calnev Asset Allocation shall be completed in the manner required by Section
1060 of the Code. Seller and Purchaser further agree to comply with all filing,
notice and reporting requirements described in Section 1060 of the Code and the
Treasury Regulations promulgated thereunder, including the timely preparation
and filing of Form 8594 based on the Calnev Asset Allocation. Seller and
Purchaser hereby agree that they will report the federal, state, foreign and
other tax consequences of the transactions contemplated by this Agreement in a
manner consistent with the Calnev Asset Allocation.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT TO THE TERMINALS COMPANIES
Holdings and Rail jointly and severally represent and warrant to
Purchaser as follows (it being understood that, notwithstanding anything to the
contrary contained herein, Holdings and Rail are not making any representations
or warranties as to whether the conversion (whether by state law conversion or
merger) of the Terminals Companies into limited liability companies pursuant to
Section 4.8 hereof would result in a violation or breach of any of the matters
set forth in (i) the third sentence of Section 2.3, (ii) the first sentence of
Section 2.4, (iii) clause (b) of the second sentence of Section 2.7, (iv)
Section 2.9(c), (v) Section 2.10, (vi) Section 2.12(a) (solely as it relates to
foreign qualifications), (vii) Section 2.12(b), (viii) Section 2.13, (ix)
Section 2.14(c), (x) Section 2.16, (xi) Section 2.18(b), (xii) Section 2.19 or
(xiii) Section 2.21):
2.1 Authority of Seller. Each of Rail and Holdings is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of New York and Delaware (as applicable) and has all requisite corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated herein. Terminals is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and, upon conversion into a single-member limited liability company, shall be a
duly organized and validly existing limited liability company in good standing
under the laws of the State of Delaware. The execution, delivery and performance
of this Agreement by Rail and Holdings has been duly authorized by all necessary
corporate action. This Agreement has been duly and validly executed and
delivered by Rail and Holdings and constitutes the legal, valid and binding
obligation of Rail and Holdings, enforceable against Rail and Holdings in
accordance with its terms, except as may be limited by (a) applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws from time to
time in effect which affect creditors' rights generally or (b) legal and
equitable limitations on the availability of specific remedies.
2.2 Capitalization; Seller's Ownership of Terminals Companies.
(a) Schedule 2.2 sets forth each Person, other than certain
Excluded Companies, of which Terminals, directly or indirectly, (i)
owns all of the capital stock and (ii) upon conversion of such Persons
into single-member limited liability companies prior to the Terminals
Closing, will own all of the membership interests (all such Persons,
both prior to and after having been converted into single-member
limited liability companies, together with Terminals, being referred to
as the "Terminals Companies" and each individually as a "Terminals
Company"). The authorized, issued and outstanding capital stock of each
of the Terminals Companies is as set forth on Schedule 2.2 (which
8
20
Schedule for the purposes of this Section 2.2 shall be deemed to
exclude the Calnev Companies) and the issued and outstanding capital
stock of each of the Terminals Companies is duly authorized, fully paid
and nonassessable. Upon conversion into single-member limited liability
companies and at the Terminals Closing, the membership interests of
each of the Terminals Companies will be fully paid and nonassessable,
owned beneficially and of record by Holdings, with respect to
Terminals, and, directly or indirectly, by Terminals, with respect to
the Terminals Companies other than Terminals.
(b) There are no outstanding options, rights, warrants,
Contracts or commitments for the issuance or sale by Seller or any of
the Terminals Companies of, or any securities of any of the Terminals
Companies convertible into or exchangeable for, any shares of capital
stock of any of the Terminals Companies (whether treasury or issued and
outstanding), and there is no agreement or arrangement not yet fully
performed which would result in the creation of any of the foregoing.
(c) Holdings owns and has, and at the Terminals Closing shall
transfer to Purchaser, good and valid title to the Terminals Stock,
free and clear of all Liens. The Terminals Stock constitutes all the
issued and outstanding capital stock of Terminals.
2.3 Organization. Each of the Terminals Companies is a corporation or
other business entity validly existing under the laws of the jurisdiction of its
organization. Schedule 2.3 sets forth the jurisdictions in which each of the
Terminals Companies is incorporated and is duly licensed or qualified to do
business as a foreign corporation. Each of the Terminals Companies has all
requisite corporate power to own, lease and operate its properties and to carry
on its business as now being conducted, is duly qualified to do business and is
in good standing in each jurisdiction where the conduct of its business or
ownership of its properties requires such qualification, except where the
failure to qualify would not reasonably be expected to have a Terminals Material
Adverse Effect.
2.4 Consents and Approvals. The execution and delivery of this
Agreement by Rail and Holdings does not, and the consummation of the
transactions contemplated by Section 1.1 hereof and performance by Rail and
Holdings of their obligations hereunder, assuming the receipt of the consents,
approvals and waivers listed on Schedule 2.4, will not: (a) violate or
constitute a default under any term, condition or provision of (i) the charter,
bylaws or analogous organizational documents of Rail, Holdings or any of the
Terminals Companies; or (ii) any Contract, lease, collective bargaining
agreement (or agreements relating thereto), instrument, mortgage, permit,
Governmental authorization, license or franchise to which Rail, Holdings or any
of the Terminals Companies is a party or by which any of their respective
properties are bound; (b) result in the creation of any Lien upon any of the
Terminals Companies' respective stock, securities, membership interests or
properties or give to others any interest or right in any of the Terminals
Companies' respective stock, securities, membership interests or properties,
including, but not limited to, a right to purchase any of such stock,
securities, membership interests or properties; (c) require any consent,
Governmental authorization or approval under any Law or any judicial,
administrative or arbitration order, award, judgment, writ, injunction or decree
applicable to Rail, Holdings or any of the Terminals Companies; or (d) result in
the suspension, modification, revocation or nonrenewal of any license, permit or
Governmental authorization issued or granted to any of the Terminals Companies
by Governmental Authorities
9
21
that are necessary for the conduct of the business of the Terminals Companies,
except, with respect of each of clauses (a)(ii)-(d), for matters that are not
reasonably expected to have a Terminals Material Adverse Effect. Except as set
forth on Schedule 2.4, the failure of any Person not a party hereto to authorize
or approve this Agreement will not give any Person the right to enjoin, rescind
or otherwise prevent or impede the sale of the Terminals Stock to Purchaser in
accordance with the terms of this Agreement or to reach in any fashion the
Terminals Stock in the hands of the Purchaser following the Terminals Closing or
to obtain damages from, or any other judicial relief against, Purchaser as a
result of the transactions carried out in accordance with the provisions of this
Agreement.
2.5 Personal Property. The Terminals Companies have good and valid
title to their material respective personal properties reflected in the
Terminals Companies December 31, 2000 Financial Statements or acquired after the
date thereof (except for properties sold or otherwise disposed of since the date
thereof in the ordinary course of business) free and clear of all Liens, except
for Terminals Permitted Liens.
2.6 Real Property. Schedule 2.6 contains a true and correct list of all
Terminals Real Property that is owned by the Terminals Companies. Except as set
forth on Schedule 2.6, to Seller's knowledge, the Terminals Real Property is
owned by a Terminals Company free and clear of all Liens, except for: (a) Liens
reflected in the Terminals Companies December 31, 2000 Financial Statements, (b)
Liens arising by operation of Law for taxes not yet due and payable, (c)
imperfections or irregularities of title and other Liens that would not
reasonably be expected to have a Terminals Material Adverse Effect and (d)
zoning, planning and other restrictions of record.
2.7 Leased Real Property. Schedule 2.7 contains a true and correct list
of all Terminals Leased Real Property that is held by the Terminals Companies
under valid and subsisting leases. Except as set forth on Schedule 2.7, (a)
during the twelve (12) months prior to the date hereof, none of the Terminals
Companies has received any notice of default under any lease pertaining to any
Terminals Leased Real Property and (b) to Seller's knowledge, there are no
uncured defaults under any lease without regard to when notice may have been
given that would give the lessor the right to terminate the lease, in each case
that would reasonably be expected to result in a Terminals Material Adverse
Effect.
2.8 Intellectual Property. Set forth on Schedule 2.8 is a list of all
Terminals Intellectual Property owned by any of the Terminals Companies. The
Terminals Companies own all right, title and interest in and to, or have a valid
right to use, all of the Terminals Intellectual Property. Except as set forth on
Schedule 2.8, and other than those matters that would not reasonably be expected
to have a Terminals Material Adverse Effect, (a) no claim adverse to the
interests of the Terminals Companies in the Terminals Intellectual Property is
pending or, to Seller's knowledge, has been threatened; (b) none of the
Terminals Companies has received notice of any infringement or other violation
of such party's right in any of the Terminals Intellectual Property; and (c) no
litigation is pending or, to Seller's knowledge, threatened, wherein the
Terminals Intellectual Property is alleged to infringe or violate the right of
any third party.
10
22
2.9 Financial Statements.
(a) The Combined Financial Statements, as set forth in
Schedule 2.9(a), fairly present, in accordance with GAAP consistently
applied (except as noted therein), the combined financial condition of
the Terminals Companies and the Calnev Companies as and at the date
thereof and the results of their operations and cash flows for the
periods covered thereby.
(b) The Audited September 30th Balance Sheet, as set forth in
Schedule 2.9(b), fairly presents in accordance with GAAP consistently
applied (except as noted therein) the combined financial condition of
the Terminals Companies and the Calnev Companies as and at the date
thereof.
(c) The Terminals September 30th Balance Sheet, as set forth
in Schedule 2.9(c), (i) was derived from the books and records of the
Terminals Companies and the Audited September 30th Balance Sheet, (ii)
fairly presents in all material respects, in accordance with GAAP
consistently applied (except for the absence of footnotes and other
normal presentation items and subject to the Terminals Adjustments),
the consolidated financial condition of the Terminals Companies as and
at the date thereof, (iii) is unaudited, (iv) includes all adjustments
consistent with GAAP consistently applied (which such adjustments shall
consist only of normal recurring items which management reasonably
considers necessary for a fair statement of the consolidated financial
position for the applicable period) and (v) reflects the Terminals
Adjustments.
(d) The Terminals Companies December 31, 2000 Financial
Statements, as set forth in Schedule 2.9(d), (i) were derived from the
books and records of Terminals and from the Combined Financial
Statements, (ii) fairly present in all material respects, in accordance
with GAAP consistently applied (except for the absence of footnotes and
other normal presentation items and subject to the Terminals
Adjustments), the consolidated financial condition of the Terminals
Companies as and at the date thereof and the results of its operations
for the period covered thereby, (iii) are unaudited, (iv) include all
adjustments consistent with GAAP consistently applied (which such
adjustments shall consist only of normal recurring items which
management reasonably considers necessary for a fair statement of the
consolidated financial position for the applicable period) and (v)
reflect the Terminals Adjustments.
(e) To Seller's knowledge, no event has occurred which either
entitles, or would, upon notice or lapse of time or both, entitle the
holder of any indebtedness for borrowed money affecting the Terminals
Companies to accelerate, or which does accelerate, the maturity of any
indebtedness affecting the Terminals Companies.
(f) Schedule 2.9(f) contains a true and complete list and
description of all bonds, deposits, financial assurance requirements
and insurance coverage required to be submitted to regulatory
authorities for the continued ownership and operation of the assets and
properties of the Terminals Companies and for their continued business
operations.
11
23
(g) Since January 1, 2001, no Terminals Company has incurred
any indebtedness for borrowed money from any Person other than an
Affiliate.
2.10 No Material Adverse Change. Except (i) as set forth on Schedule
2.10 and (ii) for the transfer of the Excluded Companies, since December 31,
2000 (and giving effect to the matters described in Section 1.1) there has not
occurred: (a) any change in the consolidated financial condition or results of
operations of the Terminals Companies that constitutes a Terminals Material
Adverse Effect; (b) any loss of or damage to any of the properties of the
Terminals Companies which is reasonably anticipated to cost more than $1,000,000
to repair or replace; (c) any Lien placed on any of the properties of the
Terminals Companies, except as would be permitted by Section 2.5 or Section 2.6;
(d) any amendment to or change in the charter, bylaws or analogous
organizational documents of any of the Terminals Companies (other than pursuant
to the terms of this Agreement); (e) any change in the accounting methods or
practices used by any of the Terminals Companies; (f) any material strike or
work stoppage or material slowdown, or any known threat of the foregoing, by
employees of any of the Terminals Companies; or (g) any change in the assets or
liabilities of the Terminals Companies that constitutes a Terminals Material
Adverse Effect.
2.11 Tax Matters. Except as set forth in Schedule 2.11:
(a) all Tax Returns required to be filed by or with respect to
each of the Terminals Companies and any affiliated, consolidated,
combined, unitary or similar group of which any of the Terminals
Companies is or was a member have been duly filed on a timely basis
(taking into account all extensions of due dates) and such Tax Returns
are true, complete and correct except for such matters that would not
have a Terminals Material Adverse Effect;
(b) all Taxes owed by any of the Terminals Companies and any
affiliated, consolidated, combined, unitary or similar group of which
any of the Terminals Companies is or was a member which are or have
become due have been timely paid in full (whether or not shown on or
reportable on such Tax Returns), except where the failure to pay such
Taxes would not have a Terminals Material Adverse Effect, and except
for the portion of such Taxes being contested in good faith;
(c) the amount of the Terminals Companies' liability for
unpaid Taxes for all periods ending on or before the date of the
Terminals Companies December 31, 2000 Financial Statements does not
exceed the amount of the current liability accruals for Taxes
(excluding reserves for deferred Taxes) reflected on the Terminals
Companies December 31, 2000 Financial Statements and the amount of the
Terminals Companies' liability for unpaid Taxes for all periods ending
on or before the Terminals Closing Date will not exceed the amount of
the current liability accruals for Taxes (excluding reserves for
deferred Taxes) as such accruals are reflected on the Terminals Closing
Balance Sheet;
(d) there have been no waivers or extensions of any statute of
limitations filed with any Governmental Authority responsible for
assessing or collecting Taxes in respect to any Tax Return of, or which
includes, the Terminals Companies;
12
24
(e) all material Taxes which the Terminals Companies have been
required to collect or withhold have been duly collected or withheld
and, to the extent required when due, have been or will be duly paid to
the proper Governmental Authority;
(f) there is no material action, suit, proceeding,
investigation, audit, claim or assessment pending, or to Seller's
knowledge proposed, with respect to any liability for Tax or with
respect to any Tax Return for which the Terminals Companies could be
liable;
(g) all Tax sharing agreements to which any of the Terminals
Companies are subject will terminate as of the Terminals Closing Date;
no payments under any such agreements will become due by any of the
Terminals Companies upon such termination at the Terminals Closing or
thereafter; and the Terminals Companies are not party to any similar
arrangement with any other party and have no current contractual
obligation to indemnify any other person or entity with respect to Tax;
(h) no Governmental Authority in a jurisdiction where any of
the Terminals Companies or any affiliated, consolidated, combined,
unitary or similar group of which any of the Terminals Companies is or
was a member have not filed Tax Returns has made any material claim,
assertion or threat that the Terminals Companies are or may be subject
to taxation by such jurisdiction, except for such claims, assertions or
threats that would not reasonably be expected to have a Terminals
Material Adverse Effect;
(i) no Terminals Company has been a member of an affiliated
group filing consolidated Tax Returns other than a group the common
parent of which is GATX Corporation;
(j) none of the property of the Terminals Companies is subject
to a safe-harbor lease (pursuant to section 168(f)(8) of the Internal
Revenue Code of 1954 as in effect after the Economic Recovery Tax Act
of 1981 and before the Tax Reform Act of 1986) or is "tax-exempt use
property" (within the meaning of section 168(h) of the Code) or
"tax-exempt bond financed property" (within the meaning of section
168(g)(5)) of the Code; and
(k) no Terminals Company is required to make any adjustment
under Section 481(a) of the Code by reason of a change in accounting
method or otherwise.
2.12 Laws and Regulations; Litigation.
(a) Except as set forth on Schedule 2.12(a), to Seller's
knowledge, none of the Terminals Companies is in violation of or in
default under any Law (other than any Environmental Law as matters
related to Environmental Laws are addressed by Sections 2.18 and 2.19
hereof) or any order of any court or federal, state, municipal or
Governmental Authority applicable to them that would reasonably be
expected to have a Terminals Material Adverse Effect.
(b) Except as set forth on Schedule 2.12(b), there is no
demand, claim, suit, fine, investigation, charge, complaint, grievance,
action, arbitration or legal,
13
25
administrative or other proceeding pending or, to Seller's knowledge,
threatened against or affecting the Terminals Companies or any of their
respective officers, directors, employees, assets, properties or
businesses and relating to the businesses or properties of the
Terminals Companies (other than matters related to Environmental Laws
as matters related to Environmental Laws are addressed by Sections 2.18
and 2.19 hereof) that would reasonably be expected to have a Terminals
Material Adverse Effect.
(c) With respect to the Terminals Companies that own or
operate regulated common carriers, (i) such Terminals Companies have
obtained from Governmental Authorities requisite approval of all
tariffs and rates (which such tariffs and rates are currently in
effect) and (ii) to Seller's knowledge, there is no complaint, protest
or investigation pending or threatened with respect to such Terminals
Companies' tariffs or rates.
2.13 ERISA and Related Matters.
(a) Set forth on Schedule 2.13 is a list of all Benefit Plans
that are maintained, contributed to or participated in by any of the
Terminals Companies or with respect to which any of the Terminals
Companies is a party (the "Terminals Companies Plans") on the date
hereof. Any Terminals Companies Plan which covers only employees or
former employees of the Terminals Companies (or any of them) is
indicated on Schedule 2.13 and is referred to herein as a "Terminals
Subsidiary Plan."
(b) With respect to all Terminals Companies Plans (other than
a multiemployer plan as defined in Section 3(37) of ERISA), Seller has
supplied to Purchaser a true and correct copy of each such plan and, to
the extent applicable, all applicable related trusts and amendments
thereto, the most recent summary plan descriptions and favorable
determination letters and the annual reports most recently filed for
the Terminals Subsidiary Plans.
(c) All the Terminals Companies Plans comply in form and
operation in all material respects with their terms and all applicable
requirements of Law; provided, however, that as to multiemployer plans,
this representation is made as to Seller's knowledge.
(d) All Terminals Companies Plans which are employee pension
benefit plans as defined in Section 3(2) of ERISA and which are
intended to comply with Section 401(a) of the Code are the subject of a
favorable determination letter from the IRS, and nothing has occurred
since the date of the last such determination letter which resulted or
is likely to result in the revocation of such determination; provided,
however, that as to any such plans that are multiemployer plans, this
representation is made as to Seller's knowledge.
(e) To Seller's knowledge, there have been no "prohibited
transactions" (as described in Section 406 of ERISA or Section 4975 of
the Code) with respect to any of the Terminals Companies Plans.
14
26
(f) Except as set forth on Schedule 2.13, all accrued
obligations of the Terminals Companies, whether arising by operation of
Law, by contract or by past custom, for compensation, including
bonuses, to its officers, directors, employees, consultants or agents,
for Taxes and other obligations to any Governmental Authority payable
by any of the Terminals Companies in connection with such compensation,
and for payments with respect to any Terminals Companies Plan, have
been paid, or adequate accruals for such obligations have been and are
being made by the Terminals Companies, and will be reflected on the
Terminals Closing Balance Sheet.
(g) There are no actions, suits or claims pending or, to
Seller's knowledge, threatened, other than routine claims for benefits
and qualified domestic relations, medical or child support orders
involving any Terminals Companies Plans; provided, however, that with
respect to any multiemployer plan, this representation is made to
Seller's knowledge.
(h) Except as set forth on Schedule 2.13, none of the
Terminals Companies Plans are multiemployer plans (as defined in
Section 3(37) of ERISA). To Seller's knowledge, based on the
information described in Schedule 2.13, the withdrawal liability with
respect to the multiemployer plans listed on Schedule 2.13 is as set
forth in that schedule.
(i) No Terminals Company has received any claim or demand for
withdrawal liability (within the meaning of Section 4201 of ERISA) from
any multiemployer plan, the liability for which has not been satisfied.
(j) No termination or partial termination of any existing
Terminals Companies Plan which is an employee pension benefit plan as
defined in Section 3(2) of ERISA has occurred, nor has a notice of
intent to terminate any such existing Terminals Companies Plan been
issued by Seller or any of the Terminals Companies. The Pension Benefit
Guaranty Corporation has not instituted, and is not expected to
institute, any proceedings to terminate any Terminals Companies Plan.
(k) No Terminals Companies Plan that is a pension plan (with
the meaning of Section 3(2) of ERISA) and that is not a multiemployer
plan has suffered any "accumulated funding deficiency," within the
meaning of Section 302 of ERISA and Section 412 of the Code, whether or
not waived, and if any such Terminals Companies Plan were terminated on
the Closing Date, none of the Terminals Companies would have any
liability to any participants or beneficiaries as a result of the
termination except to the extent of funds set aside for such purpose or
reflected as reserved for such purpose on the Terminals Closing Balance
Sheet.
(l) No termination liability to the Pension Benefit Guaranty
has been or is expected to be incurred if any Terminals Companies Plan
were terminated on the Terminals Closing Date. There has been no
"reportable event," as defined in Section 4043 of ERISA, with respect
to any Terminals Companies Plan that is not a multiemployer plan, for
which notice has not been waived.
15
27
(m) None of the Terminals Companies has received notice that
it is liable for any funding taxes under Sections 413(b)(6) or 4971 of
the Code on account of an accumulated funding deficiency of any
multiemployer plan to which any Terminals Company or ERISA Affiliate
has contributed or is required to contribute.
(n) Except as specifically described on Schedule 2.13
(including Schedule 2.13(a) or as required by Section 411(d)(3) of the
Code, the consummation of the transactions contemplated hereby will not
accelerate or increase any liability under any Terminals Companies Plan
because of an acceleration or increase of any of the rights or benefits
to which employees may be entitled thereunder.
(o) No breach or violation of or default under any Terminals
Companies Plan which is not sponsored or maintained by any of the
Terminals Companies (other than a multiemployer plan) will subject
Purchaser or any of the Terminals Companies to any Taxes, Liens,
encumbrances, penalties or any other liabilities.
(p) Except as specifically described on Schedule 2.13
(including Schedule 2.13(a)) or as required by law, no Terminals
Companies Plan provides health or welfare benefits for any retired or
former employee, and no Terminals Company is obligated to provide
health or welfare benefits to any active employee following such
employee's retirement or other termination of service. To the extent
that such obligations exist, such obligations (except with respect to
(i) health and life insurance applicable to employees who terminate
employment other than on account of retirement and (ii) severance
benefits) are fully funded or adequately reserved for with respect to
the Terminals Companies. Other than pursuant to a collective bargaining
agreement, no Terminals Company has adopted or distributed a formal
plan, policy or program representing, promising or affirming to any
employees or former employees the duration of retiree health or welfare
benefits.
2.14 Material Contracts.
(a) Schedule 2.14 contains a complete and accurate list of
all Contracts of the following categories to which any of the Terminals
Companies is a party or by which any of them is bound as of the date of
this Agreement (the "Terminals Material Contracts"):
(i) (1) continuing contracts for the purchase of
materials, supplies, or equipment (other than purchase
contracts and orders for inventory in the ordinary course of
business consistent with past practice), (2) management,
service, consulting, or other similar types of contracts or
(3) advertising agreements or arrangements, in any such case
that have an aggregate committed future liability to any
Person in excess of $1,000,000 and that is not terminable by
the applicable Terminals Company by notice of not more than 60
days for a cost of less than $1,000,000;
(ii) material Terminals Intellectual Property licenses
(including any license or other agreement under which the
applicable Terminals Company is licensee or licensor of any
such Terminals Intellectual Property);
16
28
(iii) agreements under which any of the Terminals
Companies has directly or indirectly guaranteed indebtedness
of any Person in the principal amount individually in excess
of $1,000,000;
(iv) agreements under which any of the Terminals
Companies is obligated to advance, loan, extend credit, or
make a capital contribution to, or other investment in, any
Person (other than any of the Terminals Companies), in any
such case that, individually, is in excess of $1,000,000;
(v) all Contracts, leases or easements involving
annual rental payments or receipts in excess of $1,000,000;
(vi) all promissory notes, loans, agreements,
indentures, evidences of indebtedness or other instruments
providing for the lending of money, whether as borrower or
lender, in excess of $1,000,000 and all related security
agreements or similar agreements associated therewith;
(vii) Contracts which limit the freedom of any of the
Terminals Companies to compete with any Person or operate at
any location, including, without limitation, any preferential
rights granted to third parties to purchase or lease such
location;
(viii) any Contract for a pending or completed
acquisition or disposition (by merger or otherwise) of all or
substantially all of the assets (other than inventory) or
capital stock of any Person (including, without limitation,
the Terminals Companies) under which any of the Terminals
Companies currently has (or in the case of a pending
acquisition or disposition may have) any liability;
(ix) Contracts between the Terminals Companies, on one
hand, and Seller or any Affiliate of Seller (or any current or
former officer, director or employee of Seller or any
Affiliate of Seller) on the other hand;
(x) all Contracts pertaining to the operation or
maintenance of any and all facilities of any Terminals Company
under which such Terminals Company has a committed aggregate
liability of at least $1,000,000; and
(xi) to the extent not otherwise listed on Schedule
2.14, any Contract under which any of the Terminals Companies
is obligated to indemnify or otherwise make whole any Person
for any obligation or liability in liquidated amount in excess
of $1,000,000.
(b) True copies of the Terminals Material Contracts, and
accurate written summaries of the oral Terminals Material Contracts,
identified on Schedule 2.14 have been made available to Purchaser.
(c) Except as set forth on Schedule 2.14, to Seller's
knowledge, no party to a Terminals Material Contract identified in
Schedule 2.14 is in default under, or in breach or violation of (and no
event has occurred which, with notice or the lapse of time or both,
17
29
would constitute a default under, or a breach or violation or lapse of)
any term, condition or provision of such Terminals Material Contract
except for defaults, breaches, violations or events which, individually
or in the aggregate, would not have a Terminals Material Adverse
Effect.
2.15 Brokers, Etc. Except for Salomon Smith Barney Inc. and J.P. Morgan
& Co. Incorporated, the fees and expenses of which shall be the responsibility
of Seller, no broker or investment banker acting on behalf of Seller or any of
the Terminals Companies or under the authority of any of them is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
directly or indirectly from Seller or any of the Terminals Companies in
connection with any of the transactions contemplated herein.
2.16 Insurance. To Seller's knowledge, the Terminals Insurance Policies
related to the Terminals Companies are valid and binding in accordance with
their terms, are in full force and effect and insure against risks and
liabilities to an extent and in a manner customary in the industry in which the
Terminals Companies operate. To Seller's knowledge, no Terminals Company is in
default with respect to any provision contained in any Terminals Insurance
Policy or has failed to give any notice of or present any claim reasonably
anticipated to exceed such Terminals Company's self-insurance retention under
any Terminals Insurance Policy in due and timely fashion.
2.17 Employees. Except as set forth on Schedule 2.17, (a) no Terminals
Company is a party to a collective bargaining agreement, currently negotiating
any such agreement, or, to Seller's knowledge, the subject of any proceeding or
organizing activity seeking to compel it to bargain with any labor unions or the
subject of any pending or threatened arbitration, strike, labor dispute, work
slowdown or work stoppage; and (b) no charge of discrimination, grievance,
unfair labor practice, consent decree, conciliation agreement, settlement
agreement or other complaint against any Terminals Company is currently pending
or, to Seller's knowledge, threatened before the National Labor Relations Board,
the Equal Employment Opportunity Commission or any other Governmental Authority.
Seller has provided Purchaser with access to true and correct copies of (i) any
written material relating to the material personnel policies of any of the
Terminals Companies and (ii) any agreement of any employee of the Terminals
Companies who is paid or entitled to payment by any Terminals Company in an
amount exceeding, in the aggregate, $100,000 for fiscal year 2000, or expected
to exceed, in the aggregate, $100,000 for fiscal year 2001.
2.18 Environmental.
(a) To Seller's knowledge, except as set forth on Schedule
2.18, there is no uncured violation of any Environmental Law that (i)
has given rise to a current obligation of any of the Terminals
Companies to undertake a "Response Action" or a "Removal Action" (as
such terms are defined pursuant to CERCLA) and (ii) would reasonably be
expected to have a Terminals Material Adverse Effect at any site or
facility currently owned or operated by any of the Terminals Companies.
Except as set forth on Schedule 2.18 and other than those matters that
would not reasonably be expected to have a Terminals Material Adverse
Effect, during the last five years, to Seller's knowledge, there have
been no notices or complaints received by any of the Terminals
Companies
18
30
alleging a violation of an Environmental Law at any current or former
site or facility that was at any time owned or operated by the
Terminals Companies.
(b) To Seller's knowledge, the Terminals Companies have timely
filed all reports and notifications, and have generated and maintained
all records and data concerning their operations as are required under
applicable Environmental Laws, except where the failure to so file,
generate or maintain would not reasonably be expected to have a
Terminals Material Adverse Effect.
(c) Except as set forth on Schedule 2.18, there is no civil,
criminal or administrative action, suit, demand, claim, notice of
violation, investigation or proceeding pending or, to Seller's
knowledge, threatened against the Terminals Companies in connection
with the conduct of their business relating to or arising under any
Environmental Laws.
(d) Except as disclosed on Schedule 2.18, since January 1,
1990, the Terminals Companies have not owned, leased or operated a site
that (i) pursuant to CERCLA or any similar state or foreign law, has
been placed or is proposed to be placed by any Governmental Authority
on the "National Priorities List" or similar state or foreign list, as
in effect as of the Terminals Closing Date, or (ii) is involved with
any voluntary cleanup program sponsored by a Governmental Authority.
(e) Except as disclosed on Schedule 2.18 and except as would
not reasonably be expected to have a Terminals Material Adverse Effect,
since January 1, 1990 none of the Terminals Companies has been
identified by any Governmental Authority as a potentially responsible
party under CERCLA or any similar state or foreign law with respect to
any site, and no Hazardous Substances generated, transported or
disposed of by or on behalf of the Terminals Companies have been found
at any site where a Person has made written demand on any Terminals
Company to conduct or pay for a remedial investigation, removal or
other response action pursuant to any Environmental Law.
(f) Except as set forth on Schedule 2.18 and except as would
not reasonably be expected to have a Terminals Material Adverse Effect,
there is no provision of any lease, purchase agreement, sale agreement,
joint venture or any similar agreement by or under which any of the
Terminals Companies is currently bound to conduct or pay for a remedial
investigation, removal or other response action pursuant to any
Environmental Law.
2.19 Environmental Permits. To Seller's knowledge, except as set forth
on Schedule 2.19, the Terminals Companies are in possession of all permits,
licenses, registrations and government authorizations ("Terminals Environmental
Permits") required under Environmental Laws for the current operation of their
business and are in compliance with the requirements and limitations included in
such Terminals Environmental Permits, except where the failure to so possess or
comply would not reasonably be expected to have a Terminals Material Adverse
Effect.
19
31
2.20 Affiliate Transactions. Set forth on Schedule 2.20 is a list of
each written agreement pursuant to which (a) Rail, Holdings or any of their
Affiliates provides services to any of the Terminals Companies or (b) any of the
Terminals Companies provides services to Rail, Holdings or any of their
Affiliates.
2.21 Licenses; Permits. Set forth on Schedule 2.21 is a true and
complete list of all material licenses, permits and authorizations issued or
granted to any of the Terminals Companies by Governmental Authorities that are
necessary for the conduct of the business of the Terminals Companies.
2.22 Hedging. No Terminals Company engages in any futures or options
trading or is a party to any price swaps, hedges, futures or similar
instruments.
2.23 Bankruptcy. There are no bankruptcy, reorganization or arrangement
proceedings pending against, being contemplated by, or to Seller's knowledge,
threatened against Rail, Holdings or the Terminals Companies.
2.24 Other Disclosures. Set forth on Schedule 2.24 is a list of each
bank in which any of the Terminals Companies has an account, and the identity of
each such account, and each bank in which any of the Terminals Companies has a
safe deposit box, together with the names of all persons authorized to draw
thereon and have access thereto.
ARTICLE 2A
REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT TO THE
CALNEV COMPANIES
Holdings and Rail jointly and severally represent and warrant to
Purchaser as follows (it being understood that, notwithstanding anything to the
contrary contained herein, Holdings and Rail are not making any representations
or warranties as to whether the conversion of the Calnev Companies into limited
liability companies pursuant to Section 4A.5 hereof would result in a violation
or breach of any of the matters set forth in (i) the third sentence of Section
2A.3, (ii) the first sentence of Section 2A.4, (iii) clause (b) of the second
sentence of Section 2A.7, (iv) Section 2A.9(c), (v) Section 2A.10, (vi) Section
2A.12(a) (solely as it relates to foreign qualifications), (vii) Section
2A.12(b), (viii) Section 2A.13, (ix) Section 2A.14(c), (x) Section 2A.16, (xi)
Section 2A.18(b), (xii) Section 2A.19 or (xiii) Section 2A.21):
2A.1 Authority of Seller. Each of Rail and Holdings is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of New York and Delaware (as applicable) and has all requisite corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated herein. GPL is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and, upon conversion into a single-member limited liability company, shall be a
duly organized and validly existing limited liability company in good standing
under the laws of the State of Delaware. The execution, delivery and performance
of this Agreement by Rail and Holdings has been duly authorized by all necessary
corporate action. This Agreement has been duly and validly executed and
delivered by Rail and Holdings and constitutes the legal, valid and binding
obligation of Rail and Holdings, enforceable against Rail and Holdings in
accordance with its
20
32
terms, except as may be limited by (a) applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws from time to time in effect which
affect creditors' rights generally or (b) legal and equitable limitations on the
availability of specific remedies.
2A.2 Capitalization; Seller's Ownership of the Calnev Companies.
(a) Schedule 2.2 sets forth each Person of which GPL, directly
or indirectly, (i) owns all of the capital stock and (ii) upon
conversion of such Persons into single-member limited liability
companies prior to the Calnev Closing, will own all of the membership
interests (all such Persons, both prior to and after having been
converted into single-member limited liability companies, together with
GPL, being referred to as the "Calnev Companies" and each individually
as a "Calnev Company"). The authorized, issued and outstanding capital
stock of each of the Calnev Companies is as set forth on Schedule 2.2
(which Schedule for the purposes of this Section 2A.2 shall be deemed
to exclude the Terminals Companies) and the issued and outstanding
capital stock of each of the Calnev Companies is duly authorized, fully
paid and nonassessable. Upon conversion into single-member limited
liability companies and at the Calnev Closing, the membership interests
of each of the Calnev Companies will be fully paid and nonassessable,
owned beneficially and of record by Holdings, with respect to GPL, and,
directly or indirectly, by GPL, with respect to the Calnev Companies
other than GPL.
(b) There are no outstanding options, rights, warrants,
contracts or commitments for the issuance or sale by Seller or any of
the Calnev Companies of, or any securities of any of the Calnev
Companies convertible into or exchangeable for, any shares of capital
stock of any of the Calnev Companies (whether treasury or issued and
outstanding), and there is no agreement or arrangement not yet fully
performed which would result in the creation of any of the foregoing.
(c) Holdings owns and has, and at the Calnev Closing shall
transfer to Purchaser, good and valid title to the GPL Stock, free and
clear of all Liens. The GPL Stock constitutes all the issued and
outstanding capital stock of GPL.
(d) The equity interests of Calnev and GATX Las Vegas
Corporation are the only assets owned by GPL and GPL conducts no other
business operations.
2A.3 Organization. Each of the Calnev Companies is a corporation or
other business entity validly existing under the laws of the jurisdiction of its
organization. Schedule 2.3 sets forth the jurisdictions in which each of the
Calnev Companies is duly licensed or qualified to do business as a foreign
corporation. Each of the Calnev Companies has all requisite corporate power to
own, lease and operate its properties and to carry on its business as now being
conducted, is duly qualified to do business and is in good standing in each
jurisdiction where the conduct of its business or ownership of its properties
requires such qualification, except where the failure to qualify would not
reasonably be expected to have a Calnev Material Adverse Effect.
2A.4 Consents and Approvals. The execution and delivery of this
Agreement by Rail and Holdings does not, and the consummation of the
transactions contemplated by Section 1A.1
21
33
hereof and performance by Rail and Holdings of their obligations hereunder,
assuming the receipt of the consents, approvals and waivers listed on Schedule
2.4, will not: (a) violate or constitute a default under any term, condition or
provision of (i) the charter, bylaws or analogous organizational documents of
any of the Calnev Companies; or (ii) any Contract, lease, collective bargaining
agreement (or agreements relating thereto), instrument, mortgage, permit,
Governmental authorization, license or franchise to which any of the Calnev
Companies is a party or by which any of its properties are bound; (b) result in
the creation of any Lien upon any of any of the Calnev Companies' stock,
securities, membership interests or properties or give to others any interest or
right in any of any of the Calnev Companies' stock, securities, membership
interests or properties, including, but not limited to, a right to purchase any
of such stock, securities, membership interests or properties; (c) require any
consent, Governmental authorization or approval under any Law or any judicial,
administrative or arbitration order, award, judgment, writ, injunction or decree
applicable to any of the Calnev Companies; or (d) result in the suspension,
modification, revocation or nonrenewal of any license, permit or Governmental
authorization issued or granted to any of the Calnev Companies by Governmental
Authorities that are necessary for the conduct of the business of the Calnev
Companies, except, with respect of each of clauses (a)(ii)-(d), for matters that
are not reasonably expected to have a Calnev Material Adverse Effect. Except as
set forth on Schedule 2.4, the failure of any Person not a party hereto to
authorize or approve this Agreement will not give any Person the right to
enjoin, rescind or otherwise prevent or impede the sale of the GPL Stock to
Purchaser in accordance with the terms of this Agreement or to reach in any
fashion the GPL Stock in the hands of the Purchaser following the Calnev Closing
or to obtain damages from, or any other judicial relief against, Purchaser as a
result of the transactions carried out in accordance with the provisions of this
Agreement.
2A.5 Personal Property. The Calnev Companies have good and valid title
to their respective personal properties reflected in the Calnev September 30th
Balance Sheet or acquired after the date thereof (except for properties sold or
otherwise disposed of since the date thereof in the ordinary course of business)
free and clear of all Liens, except for Calnev Permitted Liens.
2A.6 Real Property. Schedule 2.6 contains a true and correct list of
all Calnev Real Property that is owned by the Calnev Companies. Except as set
forth on Schedule 2.6, to Seller's knowledge, such Calnev Real Property is owned
by one of the Calnev Companies free and clear of all Liens, except for: (a)
Liens reflected in the Calnev September 30th Balance Sheet, (b) Liens arising by
operation of Law for taxes not yet due and payable, (c) imperfections or
irregularities of title and other Liens that would not reasonably be expected to
have a Calnev Material Adverse Effect and (d) zoning, planning and other
restrictions of record.
2A.7 Leased Real Property. Schedule 2.7 contains a true and correct
list of all Calnev Leased Real Property that is held by any of the Calnev
Companies under valid and subsisting leases. Except as set forth on Schedule
2.7, (a) during the twelve (12) months prior to the date hereof, none of the
Calnev Companies has received any notice of default under any lease pertaining
to any Calnev Leased Real Property and (b) to Seller's knowledge, there are no
uncured defaults under any lease without regard to when notice may have been
given that would give the lessor the right to terminate the lease, in each that
would reasonably be expected to result in a Calnev Material Adverse Effect.
22
34
2A.8 Intellectual Property. Set forth on Schedule 2.8 is a list of all
Calnev Intellectual Property owned by any of the Calnev Companies. The Calnev
Companies own all right, title and interest in and to, or have a valid right to
use, all of the Calnev Intellectual Property. Except as set forth on Schedule
2.8, and other than those matters that would not reasonably be expected to have
a Calnev Material Adverse Effect, (a) no claim adverse to the interests of the
Calnev Companies in the Calnev Intellectual Property is pending or, to Seller's
knowledge, has been threatened; (b) none of the Calnev Companies has received
notice of any infringement or other violation of such party's right in any of
the Calnev Intellectual Property; and (c) no litigation is pending or, to
Seller's knowledge, threatened wherein the Calnev Intellectual Property is
alleged to infringe or violate the right of any third party.
2A.9 Financial Statements.
(a) [Intentionally omitted].
(b) The Calnev September 30th Balance Sheet, as set forth in
Schedule 2A.9(b), (i) was derived from the books and records of the
Calnev Companies and the Audited September 30th Balance Sheet, (ii)
fairly presents in all material respects, in accordance with GAAP
consistently applied (except for the absence of footnotes and other
normal presentation items and subject to the Calnev Adjustments), the
consolidated financial condition of the Calnev Companies as and at the
date thereof, (iii) is unaudited, (iv) includes all adjustments
consistent with GAAP consistently applied (which such adjustments shall
consist only of normal recurring items which management reasonably
considers necessary for a fair statement of the consolidated financial
position for the applicable period) and (v) reflects the Calnev
Adjustments.
(c) To Seller's knowledge, no event has occurred which either
entitles, or would, upon notice or lapse of time or both, entitle the
holder of any indebtedness for borrowed money affecting any Calnev
Company to accelerate, or which does accelerate, the maturity of any
indebtedness affecting any Calnev Company.
(d) Schedule 2.9(f) contains a true and complete list and
description of all bonds, deposits, financial assurance requirements
and insurance coverage required to be submitted to regulatory
authorities for the continued ownership and operation of the assets and
properties of the Calnev Companies and for their continued business
operations.
2A.10 No Material Adverse Change. Except as set forth on Schedule 2.10,
since September 30, 2000 (and giving effect to the matters described in Section
1A.1) there has not occurred: (a) any change in the consolidated financial
condition or results of operations of the Calnev Companies that constitutes a
Calnev Material Adverse Effect; (b) any loss of or damage to any of the
properties of any Calnev Company which is reasonably anticipated to cost more
than $320,000 to repair or replace; (c) any Lien placed on any of the properties
of any Calnev Company, except as would be permitted by Section 2A.5 or Section
2A.6; (d) any amendment to or change in the charter, bylaws or analogous
organizational documents of any Calnev Company (other than pursuant to the terms
of this Agreement); (e) any change in the accounting methods or practices used
by any of the Calnev Companies; (f) any material strike or work stoppage or
23
35
material slowdown, or any known threat of the foregoing, by employees of any of
the Calnev Companies; or (g) any change in the assets or liabilities of the
Calnev Companies that constitutes a Calnev Material Adverse Effect.
2A.11 Tax Matters. Except as set forth in Schedule 2.11:
(a) all Tax Returns required to be filed by or with respect to
each of the Calnev Companies and any affiliated, consolidated,
combined, unitary or similar group of which any of the Calnev Companies
is or was a member have been duly filed on a timely basis (taking into
account all extensions of due dates) and such Tax Returns are true,
complete and correct except for such matters that would not have a
Calnev Material Adverse Effect;
(b) all Taxes owed by any of the Calnev Companies and any
affiliated, consolidated, combined, unitary or similar group of which
any of the Calnev Companies is or was a member which are or have become
due have been timely paid in full (whether or not shown on or
reportable on such Tax Returns), except where the failure to pay such
Taxes would not have a Calnev Material Adverse Effect, and except for
the portion of such Taxes being contested in good faith;
(c) the amount of the Calnev Companies' liability for unpaid
Taxes for all periods ending on or before the date of the Calnev
September 30th Balance Sheet does not exceed the amount of the current
liability accruals for Taxes (excluding reserves for deferred Taxes)
reflected on the Calnev September 30th Balance Sheet and the amount of
the Calnev Companies' liability for unpaid Taxes for all periods ending
on or before the Calnev Closing Date will not exceed the amount of the
current liability accruals for Taxes (excluding reserves for deferred
Taxes) as such accruals are reflected on the Calnev Closing Balance
Sheet;
(d) there have been no waivers or extensions of any statute of
limitations filed with any Governmental Authority responsible for
assessing or collecting Taxes in respect to any Tax Return of, or which
includes, any of the Calnev Companies;
(e) all material Taxes which any of the Calnev Companies have
been required to collect or withhold have been duly collected or
withheld and, to the extent required when due, have been or will be
duly paid to the proper Governmental Authority;
(f) there is no material action, suit, proceeding,
investigation, audit, claim or assessment pending or to Seller's
knowledge proposed with respect to any liability for Tax or with
respect to any Tax Return for which any of the Calnev Companies could
be liable;
(g) all Tax sharing agreements to which any of the Calnev
Companies are subject will terminate as of the Calnev Closing Date; no
payments under any such agreements will become due by any of the Calnev
Companies upon such termination at the Calnev Closing or thereafter;
and no Calnev Company is party to any similar arrangement with any
other party and has no current contractual obligation to indemnify any
other person or entity with respect to Tax;
24
36
(h) no Governmental Authority in a jurisdiction where any of
the Calnev Companies or any affiliated, consolidated, combined, unitary
or similar group of which any of the Calnev Companies is or was a
member have not filed Tax Returns has made any material claim,
assertion or threat that the Calnev Companies are or may be subject to
taxation by such jurisdiction, except for such claims, assertions or
threats that would not reasonably be expected to have a Calnev Material
Adverse Effect;
(i) no Calnev Company has been a member of an affiliated group
filing consolidated Tax Returns other than a group the common parent of
which is GATX Corporation;
(j) none of the property of any Calnev Company is subject to a
safe-harbor lease (pursuant to section 168(f)(8) of the Internal
Revenue Code of 1954 as in effect after the Economic Recovery Tax Act
of 1981 and before the Tax Reform Act of 1986) or is "tax-exempt use
property" (within the meaning of section 168(h) of the Code) or
"tax-exempt bond financed property" (within the meaning of section
168(g)(5)) of the Code; and
(k) no Calnev Company is required to make any adjustment under
Section 481(a) of the Code by reason of a change in accounting method
or otherwise.
2A.12 Laws and Regulations; Litigation.
(a) Except as set forth on Schedule 2.12(a), to Seller's
knowledge, none of the Calnev Companies is in violation of or in
default under any Law (other than any Environmental Law as matters
related to Environmental Laws are addressed by Sections 2A.18 and 2A.19
hereof) or any order of any court or federal, state, municipal or
Governmental Authority applicable to them that would reasonably be
expected to have a Calnev Material Adverse Effect.
(b) Except as set forth on Schedule 2.12(b), there is no
demand, claim, suit, fine, investigation, charge, complaint, grievance,
action, arbitration or legal, administrative or other proceeding
pending or, to Seller's knowledge, threatened against or affecting any
of the Calnev Companies or any of their respective officers, directors,
employees, assets, properties or businesses and relating to the
businesses or properties of the Calnev Companies (other than matters
related to Environmental Laws as matters related to Environmental Laws
are addressed by Sections 2A.18 and 2A.19 hereof) that would reasonably
be expected to have a Calnev Material Adverse Effect.
(c) With respect to the Calnev Companies that own or operate
regulated common carriers, (i) such Calnev Companies have obtained from
Governmental Authorities requisite approval of all tariffs and rates
(which such tariffs and rates are currently in effect) and (ii) to
Seller's knowledge, there is no complaint, protest or investigation
pending or threatened with respect to such Calnev Companies' tariffs or
rates other than as set forth on Schedule 2A.12(c).
25
37
2A.13 ERISA and Related Matters .
(a) Set forth on Schedule 2.13 is a list of all Benefit Plans
that are maintained, contributed to or participated in by any of the
Calnev Companies or with respect to which any of the Calnev Companies
is a party (the "Calnev Plans") on the date hereof. Any Calnev Plan
which covers only employees or former employees of the Calnev Companies
is indicated on Schedule 2.13 and is referred to herein as a "Calnev
Subsidiary Plan."
(b) With respect to all Calnev Plans (other than a
multiemployer plan as defined in Section 3(37) of ERISA), Seller has
supplied to Purchaser a true and correct copy of each such plan and, to
the extent applicable, all applicable related trusts and amendments
thereto, the most recent summary plan descriptions and favorable
determination letters and the annual reports most recently filed for
the Calnev Subsidiary Plans.
(c) All Calnev Plans comply in form and operation in all
material respects with their terms and all applicable requirements of
Law; provided, however, that as to multiemployer plans, this
representation is made as to Seller's knowledge.
(d) All Calnev Plans which are employee pension benefit plans
as defined in Section 3(2) of ERISA and which are intended to comply
with Section 401(a) of the Code are the subject of a favorable
determination letter from the IRS, and nothing has occurred since the
date of the last such determination letter which resulted or is likely
to result in the revocation of such determination; provided, however,
that as to any such plans that are multiemployer plans, this
representation is made as to Seller's knowledge.
(e) To Seller's knowledge, there have been no "prohibited
transactions" (as described in Section 406 of ERISA or Section 4975 of
the Code) with respect to any Calnev Plans.
(f) Except as set forth on Schedule 2.13, all accrued
obligations of the Calnev Companies, whether arising by operation of
Law, by contract or by past custom, for compensation, including
bonuses, to its officers, directors, employees, consultants or agents,
for Taxes and other obligations to any Governmental Authority payable
by any of the Calnev Companies in connection with such compensation,
and for payments with respect to any Calnev Plan, have been paid, or
adequate accruals for such obligations have been and are being made by
the Calnev Companies, and will be reflected on the Calnev Closing
Balance Sheet.
(g) There are no actions, suits or claims pending or, to
Seller's knowledge, threatened, other than routine claims for benefits
and qualified domestic relations, medical or child support orders
involving any Calnev Plans; provided, however, that with respect to any
multiemployer plan, this representation is made to Seller's knowledge.
(h) Except as set forth on Schedule 2.13, none of the Calnev
Plans are multiemployer plans (as defined in Section 3(37) of ERISA).
To Seller's knowledge based on the information described in Schedule
2.13, the withdrawal liability with respect to the multiemployer plans
listed on Schedule 2.13 is as set forth in that schedule.
26
38
(i) No Calnev Company has received any claim or demand for
withdrawal liability (within the meaning of Section 4201 of ERISA) from
any multiemployer plan, the liability for which has not been satisfied.
(j) No termination or partial termination of any existing
Calnev Plan which is an employee pension benefit plan as defined in
Section 3(2) of ERISA has occurred, nor has a notice of intent to
terminate any such existing Calnev Plan been issued by Seller or any of
the Calnev Companies. The Pension Benefit Guaranty Corporation has not
instituted, and is not expected to institute, any proceedings to
terminate any Calnev Plan.
(k) No Calnev Plan that is a pension plan (with the meaning of
Section 3(2) of ERISA) and that is not a multiemployer plan has
suffered any "accumulated funding deficiency," within the meaning of
Section 302 of ERISA and Section 412 of the Code, whether or not
waived, and if any such Calnev Plan were terminated on the Calnev
Closing Date, none of the Calnev Companies would have any liability to
any participants or beneficiaries as a result of the termination except
to the extent of funds set aside for such purpose or reflected as
reserved for such purpose on the Calnev Closing Balance Sheet.
(l) No termination liability to the Pension Benefit Guaranty
has been or is expected to be incurred if any Calnev Plan were
terminated on the Calnev Closing Date. There has been no "reportable
event," as defined in Section 4043 of ERISA, with respect to any Calnev
Plan that is not a multiemployer plan, for which notice has not been
waived.
(m) None of the Calnev Companies has received notice that it
is liable for any funding taxes under Sections 413(b)(6) or 4971 of the
Code on account of an accumulated funding deficiency of any
multiemployer plan to which either any Calnev Company or an ERISA
Affiliate has contributed or is required to contribute.
(n) Except as specifically described on Schedule 2.13
(including Schedule 2.13(a) or as required by Section 411(d)(3) of the
Code, the consummation of the transactions contemplated hereby will not
accelerate or increase any liability under any Calnev Plan because of
an acceleration or increase of any of the rights or benefits to which
employees may be entitled thereunder.
(o) No breach or violation of or default under any Calnev Plan
which is not sponsored or maintained by any of the Calnev Companies
(other than a multiemployer plan) will subject Purchaser or any of the
Calnev Companies to any Taxes, Liens, encumbrances, penalties or any
other liabilities.
(p) Except as specifically described on Schedule 2.13
(including Schedule 2.13(a) or as required by law, no Calnev Plan
provides health or welfare benefits for any retired or former employee,
and no Calnev Company is obligated to provide health or welfare
benefits to any active employee following such employee's retirement or
other termination of service. To the extent that such obligations
exist, such obligations (except with respect to (i) health and life
insurance applicable to employees who terminate
27
39
employment other than on account of retirement and (ii) severance
benefits) are fully funded or adequately reserved for with respect to
all of the Calnev Companies. Other than pursuant to a collective
bargaining agreement, no Calnev Company has adopted or distributed a
formal plan, policy or program representing, promising or affirming to
any employees or former employees the duration of retiree health or
welfare benefits.
2A.14 Material Contracts.
(a) Schedule 2.14 contains a complete and accurate list of all
Contracts of the following categories to which any of the Calnev
Companies is a party or by which any of them is bound as of the date of
this Agreement (the "Calnev Material Contracts"):
(i) (1) continuing contracts for the purchase of
materials, supplies, or equipment (other than purchase
contracts and orders for inventory in the ordinary course of
business consistent with past practice), (2) management,
service, consulting, or other similar types of contracts or
(3) advertising agreements or arrangements, in any such case
that have an aggregate committed future liability to any
Person in excess of $1,000,000 and that is not terminable by
the applicable Calnev Company by notice of not more than 60
days for a cost of less than $1,000,000;
(ii) material Calnev Intellectual Property licenses
(including any license or other agreement under which the
applicable Calnev Company is licensee or licensor of any such
Calnev Intellectual Property);
(iii) agreements under which any of the Calnev
Companies has directly or indirectly guaranteed indebtedness
of any Person in the principal amount individually in excess
of $1,000,000;
(iv) agreements under which any of the Calnev
Companies is obligated to advance, loan, extend credit, or
make a capital contribution to, or other investment in, any
Person, in any such case that, individually, is in excess of
$1,000,000;
(v) all Contracts, leases or easements involving
annual rental payments or receipts in excess of $1,000,000;
(vi) all promissory notes, loans, agreements,
indentures, evidences of indebtedness or other instruments
providing for the lending of money, whether as borrower or
lender, in excess of $1,000,000 and all related security
agreements or similar agreements associated therewith;
(vii) Contracts which limit the freedom of any of the
Calnev Companies to compete with any Person or operate at any
location, including, without limitation, any preferential
rights granted to third parties to purchase or lease such
location;
28
40
(viii) any Contract for a pending or completed
acquisition or disposition (by merger or otherwise) of all or
substantially all of the assets (other than inventory) or
capital stock of any Person (including, without limitation,
any Calnev Company) under which any of the Calnev Companies
currently has (or in the case of a pending acquisition or
disposition may have) any liability;
(ix) Contracts between any Calnev Company, on one
hand, and Seller or any Affiliate of Seller (or any current or
former officer, director or employee of Seller or any
Affiliate of Seller) on the other hand;
(x) all Contracts pertaining to the operation or
maintenance of any and all facilities of any of the Calnev
Companies under which any Calnev Company has a committed
aggregate liability of at least $1,000,000; and
(xi) to the extent not otherwise listed on Schedule
2.14, any Contract under which any of the Calnev Companies is
obligated to indemnify or otherwise make whole any Person for
any obligation or liability in liquidated amount in excess of
$1,000,000.
(b) True copies of the Calnev Material Contracts, and accurate
written summaries of the oral Calnev Material Contracts, identified on
Schedule 2.14 have been made available to Purchaser.
(c) Except as set forth on Schedule 2.14, to Seller's
knowledge, no party to a Calnev Material Contract identified in
Schedule 2.14 is in default under, or in breach or violation of (and no
event has occurred which, with notice or the lapse of time or both,
would constitute a default under, or a breach or violation or lapse of)
any term, condition or provision of such Calnev Material Contract
except for defaults, breaches, violations or events which, individually
or in the aggregate, would not have a Calnev Material Adverse Effect.
2A.15 Brokers, Etc. Except for Salomon Smith Barney Inc. and J.P.
Morgan & Co. Incorporated, the fees and expenses of which shall be the
responsibility of Seller, no broker or investment banker acting on behalf of
Seller or any of the Calnev Companies or under the authority of any of them is
or will be entitled to any broker's or finder's fee or any other commission or
similar fee directly or indirectly from Seller or any of the Calnev Companies in
connection with the Calnev Sale.
2A.16 Insurance. To Seller's knowledge, the Insurance Policies related
to the Calnev Companies are valid and binding in accordance with their terms,
are in full force and effect and insure against risks and liabilities to an
extent and in a manner customary in the industry in which Calnev operates. To
Seller's knowledge, no Calnev Company is in default with respect to any
provision contained in any Insurance Policy or has failed to give any notice of
or present any claim reasonably anticipated to exceed such Calnev Company`s
self-insurance retention under any Insurance Policy in due and timely fashion.
2A.17 Employees. Except as set forth on Schedule 2.17, (a) no Calnev
Company is a party to a collective bargaining agreement, currently negotiating
any such agreement, or, to
29
41
Seller's knowledge, the subject of any proceeding or organizing activity seeking
to compel it to bargain with any labor unions or the subject of any pending or
threatened arbitration, strike, labor dispute, work slowdown or work stoppage;
and (b) no charge of discrimination, grievance, unfair labor practice, consent
decree, conciliation agreement, settlement agreement or other complaint against
any Calnev Company is currently pending or, to Seller's knowledge, threatened
before the National Labor Relations Board, the Equal Employment Opportunity
Commission or any other Governmental Authority. Seller has provided Purchaser
with access to true and correct copies of (i) any written material relating to
the material personnel policies of Calnev and (ii) any agreement of any employee
of any Calnev Company who is paid or entitled to payment by any Calnev Company
in an amount exceeding, in the aggregate, $100,000 for fiscal year 2000, or
expected to exceed, in the aggregate, $100,000 for fiscal year 2001.
2A.18 Environmental.
(a) To Seller's knowledge, except as set forth on Schedule
2.18, there is no uncured violation of any Environmental Law that (i)
has given rise to a current obligation of any of the Calnev Companies
to undertake a "Response Action" or a "Removal Action" (as such terms
are defined pursuant to CERCLA) and (ii) would reasonably be expected
to have a Calnev Material Adverse Effect at any site or facility
currently owned or operated by any of the Calnev Companies. Except as
set forth on Schedule 2.18 and other than those matters that would not
reasonably be expected to have a Calnev Material Adverse Effect, during
the last five years, to Seller's knowledge, there have been no notices
or complaints received by any of the Calnev Companies alleging a
violation of an Environmental Law at any current or former site or
facility that was at any time owned or operated by any Calnev Company.
(b) To Seller's knowledge, each of the Calnev Companies has
timely filed all reports and notifications, and has generated and
maintained all records and data concerning their operations as are
required under applicable Environmental Laws, except where the failure
to so file, generate or maintain would not reasonably be expected to
have a Calnev Material Adverse Effect.
(c) Except as set forth on Schedule 2.18, there is no civil,
criminal or administrative action, suit, demand, claim, notice of
violation, investigation or proceeding pending or, to Seller's
knowledge, threatened against any of the Calnev Companies in connection
with the conduct of their business relating to or arising under any
Environmental Laws.
(d) Except as disclosed on Schedule 2.18, since January 1,
1990, no Calnev Company has not owned, leased or operated a site that
(i) pursuant to CERCLA or any similar state or foreign law, has been
placed or is proposed to be placed by any Governmental Authority on the
"National Priorities List" or similar state or foreign list, as in
effect as of the Calnev Closing Date, or (ii) is involved with any
voluntary cleanup program sponsored by a Governmental Authority.
(e) Except as disclosed on Schedule 2.18 and except as would
not reasonably be expected to have a Calnev Material Adverse Effect,
since January 1, 1990 none of the
30
42
Calnev Companies has been identified by any Governmental Authority as a
potentially responsible party under CERCLA or any similar state or
foreign law with respect to any site, and no Hazardous Substances
generated, transported or disposed of by or on behalf of any of the
Calnev Companies have been found at any site where a Person has made
written demand on any Calnev Company to conduct or pay for a remedial
investigation, removal or other response action pursuant to any
Environmental Law.
(f) Except as set forth on Schedule 2.18 and except as would
not reasonably be expected to have a Calnev Material Adverse Effect,
there is no provision of any lease, purchase agreement, sale agreement,
joint venture or any similar agreement by or under which any of the
Calnev Companies is currently bound to conduct or pay for a remedial
investigation, removal or other response action pursuant to any
Environmental Law.
2A.19 Environmental Permits. To Seller's knowledge, except as set forth
on Schedule 2.19, the Calnev Companies are in possession of all Calnev
Environmental Permits required under Environmental Laws for the current
operation of their business and are in compliance with the requirements and
limitations included in such Calnev Environmental Permits, except where the
failure to so possess or comply would not reasonably be expected to have a
Calnev Material Adverse Effect.
2A.20 Affiliate Transactions. There are no Contracts between any of the
Calnev Companies on the one hand and Rail, Holdings, a Terminals Company or any
of their Affiliates on the other hand.
2A.21 Licenses; Permits. Set forth on Schedule 2.21 is a true and
complete list of all material licenses, permits and authorizations issued or
granted to any of the Calnev Companies by Governmental Authorities that are
necessary for the conduct of the business of the Calnev Companies.
2A.22 Hedging. No Calnev Company engages in any futures or options
trading and is not a party to any price swaps, hedges, futures or similar
instruments.
2A.23 Bankruptcy. There are no bankruptcy, reorganization or
arrangement proceedings pending against, being contemplated by, or to Seller's
knowledge, threatened against Rail, Holdings or any of the Calnev Companies.
2A.24 Other Disclosures. Set forth on Schedule 2.24 is a list of each
bank in which any of the Calnev Companies has an account, and the identity of
each such account, and each bank in which Calnev has a safe deposit box,
together with the names of all persons authorized to draw thereon and have
access thereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
3.1 Authority of Purchaser. Purchaser is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with all requisite limited
31
43
partnership power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Purchaser has all requisite
limited partnership power to enter into this Agreement and to carry out its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by Purchaser has been duly authorized by all necessary limited
partnership action. This Agreement has been duly and validly executed and
delivered by Purchaser and constitutes the legal, valid and binding obligation
of Purchaser enforceable against Purchaser in accordance with its terms, except
as may be limited by (a) applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect that affect
creditors' rights generally or (b) legal and equitable limitations on the
availability of specific remedies. The execution and delivery of this Agreement
by Purchaser does not, and the consummation of the transactions contemplated
hereby and performance by Purchaser of its obligations hereunder will not,
violate or conflict with any provision of: (i) the certificate of limited
partnership or the Limited Partnership Agreement of Purchaser; (ii) any material
agreement, lease, instrument, mortgage, license or franchise to which Purchaser
is a party or by which any of its properties is bound; or (iii) any Law
applicable to Purchaser and which violation or conflict would reasonably be
expected to have a material adverse effect on the financial condition of
Purchaser. The failure of any Person not a party hereto to authorize or approve
this Agreement or the transactions contemplated hereby will not give any Person
the right to enjoin, rescind or otherwise prevent or impede the purchase of the
Stock by Purchaser in accordance with the terms of this Agreement or to obtain
damages from, or any other judicial relief against, Seller or Purchaser as a
result of any transactions carried out in accordance with the provisions of this
Agreement.
3.2 Brokers, Etc. Except for Merrill Lynch & Co., the fees and expenses
of which shall be the responsibility of Purchaser, no broker or investment
banker acting on behalf of Purchaser is or will be entitled to any broker's or
finder's fee or any other commission or similar fee directly or indirectly in
connection with any of the transactions contemplated hereby.
3.3 Securities. Purchaser hereby acknowledges that the Stock is not
registered under the Securities Act or registered or qualified for sale under
any applicable securities Law of the United States or any state or province of
the United States and cannot be resold without registration thereunder or
exemption therefrom. Purchaser is acquiring such Stock for its own account as
principal, for investment and has no present intention to dispose of the Stock,
in whole or in part, or of any interest in the Stock to any other person.
Purchaser has sufficient knowledge and experience in financial and business
matters to enable it to evaluate the risks of investment in such Stock and has
the ability to bear the economic risks of such investment.
3.4 Financing. Purchaser has all necessary financial resources (which
resources are listed on Schedule 3.4) available in connection with the
acquisition of the Stock to consummate the transactions contemplated hereby. The
financial statements of Purchaser as of December 31, 1999 and for the period
then ended, which have been previously delivered to Seller, fairly present the
financial condition and results of operations of Purchaser as of the date and
for the period then ended in accordance with GAAP.
3.5 Independent Investigation. In making the decision to enter into
this Agreement and the Related Agreements and to consummate the transactions
contemplated hereby and thereby, other than reliance on the representations,
warranties, covenants, obligations and
32
44
indemnities of Seller set forth in this Agreement and in Seller's Related
Agreements, Purchaser has performed its own independent investigation, analysis
and evaluation of the Terminals Companies and the Calnev Companies (including
Purchaser's own estimate and appraisal of the value of the business, financial
condition, assets, operations and prospects of the Terminals Companies and the
Calnev Companies). Purchaser confirms to Seller that Purchaser is sophisticated
and knowledgeable in the business of the Terminals Companies and the Calnev
Companies and is capable of evaluating the matters set forth above.
ARTICLE
COVENANTS OF SELLER WITH RESPECT TO THE TERMINALS COMPANIES
Seller hereby covenants to and agrees with Purchaser as follows:
4.1 Corporate and Other Actions. Prior to the Terminals Closing Date,
Seller shall use all commercially reasonable efforts to fulfill its obligations
under this Agreement relating to the Terminals Sale and to consummate the
Terminals Sale and the transactions contemplated thereby.
4.2 Full Access. Prior to the Terminals Closing Date, Seller shall
cause the Terminals Companies to afford Purchaser and its counsel, accountants
and other authorized representatives, with reasonable prior notice, reasonable
access during normal business hours (when accompanied by an authorized
representative of the Terminals Companies) to the respective premises,
properties, personnel, books and records of the Terminals Companies and any
other assets or information that Purchaser reasonably deems necessary and shall
furnish Purchaser with such financial and operating data concerning the
Terminals Companies as Purchaser shall reasonably request; provided, however,
that Purchaser shall not be entitled to the access contemplated by this Section
4.2 until such time as Purchaser delivers to Seller a duly executed amended
Confidentiality Agreement as required by Section 5.2 hereof.
4.3 Ordinary Course of Business. Prior to the Terminals Closing Date,
Seller shall cause the Terminals Companies to be operated in the ordinary course
of business; provided, however, that Seller shall not be obligated to cause the
Terminals Companies to make any capital expenditures prior to the Terminals
Closing other than Terminals Maintenance Capital Expenditures in the ordinary
course of business. In addition, prior to the Terminals Closing Date, other than
as contemplated by this Agreement (including, without limitation, Section 4.8
hereof), Seller shall not permit any of the Terminals Companies to do any of the
following without the prior written consent of Purchaser (which shall not be
unreasonably withheld): (a) make any change in its authorized capital stock,
certificate of incorporation or bylaws; (b) other than with respect to
intercompany transactions, pay any stock dividends or make any reclassification
with respect to its outstanding stock; (c) issue or sell any shares of its
capital stock or securities convertible into or exchangeable for its capital
stock; (d) purchase or otherwise acquire for consideration any outstanding
shares of its capital stock; (e) other than with respect to (i) the Excluded
Companies, (ii) the Thorofare Terminal and (iii) certain real property fronting
on Archer Avenue in Argo, Illinois, sell, transfer, convey or otherwise dispose
of, or encumber with any Lien (other than Terminals Permitted Liens), any asset
except in the ordinary course of business and consistent with past practice
(provided that, other than with respect to the sale or transfer of the Thorofare
Terminal, the Excluded Companies and the real property located
33
45
in Argo, Illinois, the cash or other proceeds received shall be retained in the
respective Terminals Company and shall not be distributed to Seller or its
Affiliates); (f) make any material changes in its accounting principles or
practices; (g) other than with respect to the transfer from Terminals to Rail
(or an Affiliate of Rail) of any indebtedness owing to Terminals from TPE or any
other Excluded Company, enter into any material transaction with Seller or any
of its Affiliates; (h) make any borrowings from parties other than Affiliates or
incur any debt or lease financing from parties other than Affiliates (other than
borrowings in an aggregate principal amount outstanding at any time not in
excess of $15,000,000 and debt or lease financing incurred in the ordinary
course of business and consistent with past practice), or assume, guarantee,
endorse (except for the negotiation or collection of negotiable instruments in
the ordinary course of business and consistent with past practice) or otherwise
become liable for any material obligations of any other Person; (i) make any
loans, advances or capital contributions to, or investments in, any other Person
or (j) (i) except as set forth on Schedule 4.3, increase the compensation of any
officer or key employee other than in the ordinary course of business or as
required by any agreement or bylaw in effect on the date of this Agreement, (ii)
adopt any new employee benefit plan or materially amend any existing employee
benefit plan other than to reflect changes in Law and plan administration or
other than in the ordinary course of business and consistent with past practices
or (iii) enter into any new employment or consulting agreement for which the
aggregate consideration to be paid is greater than $100,000. Prior to the
Terminals Closing Date, Seller shall, as soon as reasonably practicable, provide
written notice to Purchaser in the event any of the Terminals Companies has made
or is planning to make a capital expenditure that is more than $500,000.
4.4 HSR Filings. As promptly as practicable, Seller shall (in
cooperation with Purchaser) (i) make all filings and submissions with the
Department of Justice ("DOJ") and the Federal Trade Commission ("FTC") under the
HSR Act and any applicable state or foreign laws or regulations as may be
reasonably required to be made with all other Governmental Authorities in
connection with the transactions contemplated by this Agreement, requesting
early termination of any waiting period thereunder, (ii) respond promptly to any
inquiries from the DOJ, the FTC or other Governmental Authorities in connection
with such filings and (iii) comply in all material respects with the
requirements of the HSR Act. Subject to regulatory constraints, Seller and
Purchaser shall each keep the other party fully advised with respect to any
requests from or communications with the DOJ, FTC or other Governmental
Authority and shall consult with the other party with respect to all filings and
responses thereto.
4.5 [Intentionally omitted].
4.6 Registration Statements and Periodic Reports. In connection with
the preparation and filing of any registration statement or periodic report of
Purchaser or its Affiliates pursuant to any rule or regulation promulgated under
the Securities Act and the Securities Exchange Act of 1934, as amended,
including, but not limited to, Regulation S-X, Seller shall use commercially
reasonable efforts to cooperate with Purchaser and its accountants in satisfying
Purchaser's financial reporting requirements with respect to this Agreement and
as otherwise may be required from time to time.
4.7 Intercompany Accounts and Contracts. Except as set forth on
Schedule 4.7, prior to or on the Terminals Closing Date (a) the Terminals
Companies shall pay or otherwise
34
46
extinguish the outstanding payables owed to Seller or any of its Affiliates and
(b) Seller and any of its Affiliates shall pay or otherwise extinguish the
outstanding payables owed to the Terminals Companies. All intercompany Contracts
between Seller and/or its Affiliates, on the one hand, and the Terminals
Companies, on the other hand, shall terminate as of the Terminals Closing with
full releases of liability and obligation, except for those Contracts listed on
Schedule 4.7.
4.8 Conversion into Single-Member Limited Liability Companies. Prior to
the Terminals Closing Date, Seller shall cause the Terminals Companies to be
converted into single-member limited liability companies (by state law
conversions in the case of Terminals Companies that are Delaware corporations
and by mergers in the case of Rahway River Land Company and Southwest Florida
Pipeline Company) with all related documents and instruments to be in form and
substance mutually satisfactory to Seller and Purchaser, provided, however, that
Seller shall not be deemed to have breached its obligations under this Section
4.8 if the conversion of any Terminals Company into a limited liability company
(whether by state law conversion or by merger) is or has been enjoined or
restrained by a court of competent jurisdiction. Upon the conversion of the
Terminals Companies into single-member limited liability companies and
thereafter, neither Seller nor any of its Affiliates will make an election or
take any action resulting in any Terminals Company being treated as anything
other than an entity disregarded from its owner for federal income tax purposes,
and Seller and its Affiliates will file all federal income and relevant state
income Tax Returns in a manner consistent with the Terminals Companies'
disregarded entity status. All references in this Agreement to the Terminals
Companies and their capital stock shall thereafter refer to the Terminals
Companies as limited liability companies and to their membership interests,
respectively.
4.9 No Solicitations. Seller will not take, nor will it permit the
Terminals Companies or any Affiliate of Seller (or authorize or permit any
investment banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of Seller, the Terminals Companies or any
such Affiliate) to take, directly or indirectly, any action to (i) solicit,
encourage, negotiate, assist or otherwise facilitate (including by furnishing
confidential information with respect to the Terminals Companies or permitting
access to the assets and properties and books and records of the Terminals
Companies) any offer or inquiry from any Person concerning a Terminals
Acquisition Proposal ("Terminals Company Competing Transaction") or (ii) enter
into any agreement, arrangement or understanding (a) which binds Seller, the
Terminals Companies or their Affiliates to a Terminals Company Competing
Transaction or (b) requires them to abandon, terminate or fail to consummate the
transactions contemplated by this Agreement. Seller, the Terminals Companies and
their Affiliates will immediately cease all existing activities, discussions and
negotiations with any parties conducted heretofore with respect to any Terminals
Company Competing Transaction.
4.10 Confidentiality. After the Terminals Closing Date, Seller shall
not, directly or indirectly, use or provide to, and shall not permit any
Affiliate, directly or indirectly, to use or provide to any other Person any
material nonpublic information concerning the business or operations (financial
or other) of the Terminals Companies, except (a) as on the advice of counsel is
required in governmental filings or judicial, administrative or arbitration
proceedings and (b) as may be necessary or desirable for the sale or transfer of
any Excluded Company (so long as the recipient of such information is bound to a
commercially reasonable confidentiality agreement with respect to such
information).
35
47
4.11 Insurance.
(a) From the date hereof to the Terminals Closing Date, Seller
shall cause the Terminals Companies to maintain in full force and
effect all of their respective Terminals Insurance Policies now in
effect or renewals thereof covering their assets, operations and
employees. Upon the conversion or merger of each Terminals Company into
a limited liability company as required by Section 4.8 hereof, Seller
shall notify the insurance carriers for such Terminals Company of the
change in the identity of such company as a result of such conversion
or merger.
(b) Before or after the Terminals Closing. Seller shall
provide to Purchaser access to (and, at Purchaser's expense, copies of)
the insurance policies and related records of Seller and its Affiliates
that relate to the business and properties now or previously owned,
leased and/or operated by any Terminals Company (including business or
property included in the General American Transportation Corporation
prior to July 1, 1975) in order for Purchaser to assess whether claims
for the benefit of any Terminals Company can be made under any of the
applicable insurance policies. If Purchaser determines that any such
claims can be made under any of the insurance policies for the benefit
of any of the Terminals Companies, then, at Purchaser's expense, Seller
shall (i) use commercially reasonable efforts to cooperate with
Purchaser and any Terminals Company in preparing and documenting any
such claim and (ii) on behalf of any Terminals Company, make, file and
use commercially reasonable efforts to pursue any such claim; provided,
however, that (x) Seller or its Affiliates will not be required to
make, file or pursue those claims which, if paid by the insurer, would
result in a retroactive premium adjustment, payment obligation
(including self-insured retention or deductible) or other charge-back
to Seller or its Affiliates unless Purchaser agrees in writing to
reimburse Seller for such adjustment or charge-back, (y) in settling
any such claim with an insurer, Seller and its Affiliates will not be
required to release any rights, and Purchaser shall not cause the
release of any rights, to make claims under the insurance policy for
matters that are not related to the claim that is being settled for the
Terminals Company and (z) Seller or its Affiliates will not be required
to commence litigation or to make any expenditure or payment unless
Purchaser agrees to fully indemnify Seller and its Affiliates for any
such expenditure or payment and also for any Losses incurred by Seller
or any of its Affiliates in connection with any such litigation
(including, without limitation, reasonable attorneys' fees).
Notwithstanding the foregoing, Purchaser agrees that no claim
contemplated under this Section 4.11 shall be made against Trail Ltd.,
a rail car leasing captive insurer partially owned by GATX Corporation
which provided insurance coverage during the periods in question.
4.12 Excluded Companies. Prior to the Terminals Closing (or in the case
of GPS, no later than April 30, 2001), Seller shall cause the Excluded Companies
and all assets, Contracts and liabilities related thereto to be transferred
outside of Terminals such that, at the Terminals Closing, Terminals no longer
owns or is responsible for, directly or indirectly, the Excluded Companies or
any assets, Contracts or liabilities related thereto.
4.13 No Solicitation of Continuing Employees. Subsequent to the
Terminals Closing and for a period of one (1) year thereafter Seller shall not
(and Seller shall cause its Affiliates not
36
48
to) solicit (i.e. initiate discussions with) for hire any of the Terminals
Continuing Employees so long as such Terminals Continuing Employees are employed
by the Terminals Companies, Purchaser or any Affiliate thereof. Notwithstanding
the foregoing, the provisions of this Section 4.13 shall in no way prohibit
Seller or its Affiliates from engaging in the general trade solicitation of
employees so long as such solicitation is not directed specifically at Terminals
Continuing Employees.
4.14 Consents. Prior to the Terminals Closing, as reasonably requested
by Purchaser, Seller shall, and shall cause the Terminals Companies to, use
commercially reasonable efforts to cooperate with and assist Purchaser in
Purchaser's efforts to secure all necessary consents, approvals, exemptions and
waivers from third parties (including Governmental Authorities) and to give all
required notices (collectively "Terminals Designated Approvals") as shall be
required to enable Seller to sell the Terminals Stock to Purchaser, consummate
the Terminals Sale or to prevent the sale of Terminals Stock from causing a
breach of, or default under, or a termination of, any contract, lease license or
other agreement identified on any Schedule attached hereto. Nothing in this
Agreement shall require Seller or any of the Terminals Companies to commence
litigation or to make any expenditure or payment (other than reasonable
attorneys' fees) unless Purchaser agrees to fully indemnify Seller and the
Terminals Companies for any such expenditure or payment and also for any Losses
incurred by Seller or any Terminals Company in connection with any such
litigation (including, without limitation, reasonable attorneys' fees);
provided, however, that solely with respect to those Terminals Designated
Approvals listed as items 1 (Philadelphia Water Department), 2 (City of
Philadelphia), 3 (Tampa Port Authority), 4 (Tampa Port Authority) and 12 (Port
of Seattle) on Schedule 2.4 hereof, Seller shall be required to pay any
reasonable costs necessary to cure an existing condition at the facility in
question if and only if (i) such existing condition amounts to a failure of the
facility in question to be in compliance with the terms of the permit, license
or agreement as to which the Terminals Designated Approval is being sought and
(ii) the curing of such existing condition is required by the applicable
Governmental Authority, based on the terms of the applicable permit, license or
agreement, as a prerequisite for granting such Terminals Designated Approval.
4.15 Argo Lease. For a period of not more than two years from the
Terminals Closing Date, Seller shall, at the request of Purchaser and at no cost
or expense to Seller other than reasonable attorneys' fees, use commercially
reasonable efforts to assist Terminals in working with the Metropolitan Water
Reclamation District of Greater Chicago ("MWRD") in Terminals' effort to procure
a new lease for the MWRD property at the Argo terminal, including, without
limitation, waiving any potential conflict of interest so that the attorneys
currently representing Terminals in this effort may be available to continue to
do so. Notwithstanding the foregoing, nothing contained in this Section 4.15
shall require Seller to initiate or participate in any litigation unless
Purchaser agrees to fully indemnify Seller with respect to any Losses incurred
in connection therewith and to pay any and all costs (including, without
limitation, reasonable attorneys' fees) incurred in connection therewith.
37
49
ARTICLE 4A
COVENANTS OF SELLER WITH RESPECT TO THE CALNEV COMPANIES
Seller hereby covenants to and agrees with Purchaser as follows:
4A.1 Corporate and Other Actions. Prior to the Calnev Closing Date,
Seller shall use all commercially reasonable efforts to fulfill its obligations
under this Agreement related to the Calnev Sale or New Calnev Sale (as
applicable) and to consummate the Calnev Sale or New Calnev Sale (as applicable)
and the transactions contemplated thereby.
4A.2 Full Access. Prior to the Calnev Closing Date, Seller shall cause
the Calnev Companies to afford Purchaser and its counsel, accountants and other
authorized representatives, with reasonable prior notice, reasonable access
during normal business hours (when accompanied by an authorized representative
of the Calnev Companies) to the respective premises, properties, personnel,
books and records of the Calnev Companies and any other assets or information
that Purchaser reasonably deems necessary and shall furnish Purchaser with such
financial and operating data concerning the Calnev Companies as Purchaser shall
reasonably request; provided, however, that Purchaser shall not be entitled to
the access contemplated by this Section 4A.2 until such time as Purchaser
delivers to Seller a duly executed amended Confidentiality Agreement as required
by Section 5A.2 hereof.
4A.3 Ordinary Course of Business. Prior to the Calnev Closing Date,
Seller shall cause the Calnev Companies to be operated in the ordinary course of
business; provided, however, that Seller shall not be obligated to cause the
Calnev Companies to make any capital expenditures prior to the Calnev Closing
other than Calnev Maintenance Capital Expenditures in the ordinary course of
business. In addition, prior to the Calnev Closing Date, other than as
contemplated by this Agreement, Seller shall not permit any of the Calnev
Companies to do any of the following without the prior written consent of
Purchaser (which shall not be unreasonably withheld): (a) make any change in its
authorized capital stock, certificate of incorporation or bylaws; (b) other than
with respect to intercompany transactions, pay any cash or stock dividends or
make any reclassification with respect to its outstanding stock; (c) issue or
sell any shares of its capital stock or securities convertible into or
exchangeable for its capital stock; (d) purchase or otherwise acquire for
consideration any outstanding shares of its capital stock; (e) sell, transfer,
convey or otherwise dispose of, or encumber with any Lien (other than Calnev
Permitted Liens), any asset except in the ordinary course of business and
consistent with past practice; (f) make any material changes in its accounting
principles or practices; (g) enter into any material transaction with Seller or
any of its Affiliates; (h) make any borrowings from parties other than
Affiliates or incur any debt or lease financing from parties other than
Affiliates (other than borrowings in an aggregate principal amount outstanding
at any time not in excess of $15,000,000 and debt or lease financing incurred in
the ordinary course of business and consistent with past practice), or assume,
guarantee, endorse (except for the negotiation or collection of negotiable
instruments in the ordinary course of business and consistent with past
practice) or otherwise become liable for any material obligations of any other
Person; (i) make any loans, advances or capital contributions to, or investments
in, any other Person or (j) (i) except as set forth on Schedule 4.3, increase
the compensation of any officer or key employee other than in the ordinary
course of business or as required by any agreement or bylaw in effect on the
date of this Agreement, (ii) adopt any new employee benefit plan or materially
amend any
38
50
existing employee benefit plan other than to reflect changes in Law and plan
administration or other than in the ordinary course of business and consistent
with past practices or (iii) enter into any new employment or consulting
agreement for which the aggregate consideration to be paid is greater than
$100,000. Prior to the Closing Date, Seller shall, as soon as reasonably
practicable, provide written notice to Purchaser in the event any of the Calnev
Companies has made or is planning to make a capital expenditure that is more
than $500,000.
4A.4 Intercompany Accounts and Contracts. Except as set forth on
Schedule 4.7, prior to or on the Calnev Closing Date (a) the Calnev Companies
shall pay or otherwise extinguish the outstanding payables owed by any Calnev
Company to Seller or any of its Affiliates and (b) Seller and any of its
Affiliates shall pay or otherwise extinguish the outstanding payables owed to
the Calnev Companies. All intercompany Contracts between Seller and/or its
Affiliates, on the one hand, and the Calnev Companies, on the other hand, shall
terminate as of the Calnev Closing with full releases of liability and
obligation, except for those Contracts listed on Schedule 4.7.
4A.5 Conversion into Single-Member Limited Liability Companies. Prior
to the Calnev Closing Date, Seller shall cause each of the Calnev Companies to
be converted into single-member limited liability companies (by state law
conversion) with all related documents and instruments to be in form and
substance mutually satisfactory to Seller and Purchaser, provided, however, that
Seller shall not be deemed to have breached its obligations under this Section
4A.5 if the conversion of any Calnev Company into a limited liability company is
or has been enjoined or restrained by a court of competent jurisdiction. Upon
the conversion of the Calnev Companies into single-member limited liability
companies and thereafter, neither Seller nor any of its Affiliates will make an
election or take any action resulting in any Calnev Company being treated as
anything other than an entity disregarded from its owner for federal income tax
purposes, and Seller and its Affiliates will file all federal income and
relevant state income Tax Returns in a manner consistent with the Calnev
Companies' disregarded entity status. All references in this Agreement to the
Calnev Companies and their capital stock shall thereafter refer to the Calnev
Companies as a limited liability company and to their membership interests,
respectively.
4A.6 No Solicitations. Seller will not take, nor will it permit any
Calnev Company or any Affiliate of Seller (or authorize or permit any investment
banker, financial advisor, attorney, accountant or other Person retained by or
acting for or on behalf of Seller, the Calnev Companies or any such Affiliate)
to take, directly or indirectly, any action to (i) solicit, encourage,
negotiate, assist or otherwise facilitate (including by furnishing confidential
information with respect to the Calnev Companies or permitting access to the
assets and properties and books and records of the Calnev Companies) any offer
or inquiry from any Person concerning a Calnev Acquisition Proposal ("Calnev
Company Competing Transaction") or (ii) enter into any agreement, arrangement or
understanding (a) which binds Seller, any Calnev Company or their Affiliates to
a Calnev Company Competing Transaction or (b) requires them to abandon,
terminate or fail to consummate the transactions contemplated by this Agreement.
Seller, the Calnev Companies and their respective Affiliates will immediately
cease all existing activities, discussions and negotiations with any parties
conducted heretofore with respect to any Calnev Company Competing Transaction.
39
51
4A.7 Confidentiality. After the Calnev Closing Date, Seller shall not,
directly or indirectly, use or provide to, and shall not permit any Affiliate,
directly or indirectly, to use or provide to any other Person any material
nonpublic information concerning the business or operations (financial or other)
of the Calnev Companies, except as on the advice of counsel is required in
governmental filings or judicial, administrative or arbitration proceedings.
4A.8 Insurance.
(a) From the date hereof to the Calnev Closing Date, Seller
shall cause the Calnev Companies to maintain in full force and effect
all of their respective Calnev Insurance Policies now in effect or
renewals thereof covering their assets, operations and employees. Upon
the conversion of each Calnev Company into a limited liability company
as required by Section 4A.5 hereof, Seller shall notify the insurance
carriers for such Calnev Company of the change in the identity of such
company as a result of such conversion or merger.
(b) Before or after the Calnev Closing, Seller shall provide
to Purchaser access to (and, at Purchaser's expense, copies of) the
insurance policies and related records of Seller and its Affiliates
that relate to the business and properties now or previously owned,
leased and/or operated by any Calnev Company (including business or
property included in the General American Transportation Corporation
prior to July 1, 1975) in order for Purchaser to assess whether claims
for the benefit of the Calnev Companies can be made under any of the
applicable insurance policies. If Purchaser determines that any such
claims can be made under any of the insurance policies for the benefit
of any of the Calnev Companies, then, at Purchaser's expense, Seller
shall (i) use commercially reasonable efforts to cooperate with
Purchaser and the Calnev Companies in preparing and documenting any
such claim and (ii) on behalf of any Calnev Company, make, file and use
commercially reasonable efforts to pursue any such claim; provided,
however, that (x) Seller or its Affiliates will not be required to
make, file or pursue those claims which, if paid by the insurer, would
result in a retroactive premium adjustment, payment obligation
(including self-insured retention or deductible) or other charge-back
to Seller or its Affiliates unless Purchaser agrees in writing to
reimburse Seller for such adjustment or charge-back, (y) in settling
any such claim with an insurer, Seller and its Affiliates will not be
required to release any rights, and Purchaser shall not cause the
release of any rights, to make claims under the insurance policy for
matters that are not related to the claim that is being settled for the
Calnev Company and (z) Seller or its Affiliates will not be required to
commence litigation or to make any expenditure or payment unless
Purchaser agrees to fully indemnify Seller and its Affiliates for any
such expenditure or payment and also for any Losses incurred by Seller
or any of its Affiliates in connection with any such litigation
(including, without limitation, reasonable attorneys' fees).
4A.9 No Solicitation of Continuing Employees. Subsequent to the Calnev
Closing and for a period of one (1) year thereafter Seller shall not (and Seller
shall cause its Affiliates not to) solicit (i.e. initiate discussions with) for
hire any of Calnev Continuing Employees so long as such Calnev Continuing
Employees are employed by any Calnev Company, Purchaser or any Affiliate
thereof. Notwithstanding the foregoing, the provisions of this Section 4A.9
shall in no
40
52
way prohibit Seller or its Affiliates from engaging in the general trade
solicitation of employees so long as such solicitation is not directed
specifically at Calnev Continuing Employees.
4A.10 Consents Prior to the Calnev Closing. As reasonably requested by
Purchaser, Seller shall, and shall cause the Calnev Companies to, use
commercially reasonable efforts to cooperate with and assist Purchaser in
Purchaser's efforts to secure all necessary consents, approvals, exemptions and
waivers from third parties (including Governmental Authorities) and to give all
required notices as shall be required to enable Seller to sell the GPL Stock to
Purchaser, consummate the Calnev Sale or to prevent the sale of GPL Stock from
causing a breach of, or default under, or a termination of, any contract, lease
license or other agreement identified on any Schedule attached hereto. Nothing
in this Agreement shall require Seller or any Calnev Company to commence
litigation or to make any expenditure or payment (other than reasonable
attorneys' fees) unless Purchaser agrees to fully indemnify Seller and the
Calnev Companies for any such expenditure or payment and also for any Losses
incurred by Seller or any Calnev Company in connection with any such litigation
(including, without limitation, reasonable attorneys' fees).
4A.11 HSR Filing With Respect to the Calnev Companies. In the event
that the Calnev Closing has not been consummated prior to December 1, 2001, as
promptly as practicable, Seller shall (in cooperation with Purchaser) (i) make
all filings and submissions with the DOJ and the FTC under the HSR Act and any
applicable state or foreign laws or regulations as may be reasonably required to
be made with all other Governmental Authorities in connection with the
transactions contemplated by this Agreement, requesting early termination of any
waiting period thereunder, (ii) respond promptly to any inquiries from the DOJ,
the FTC or other Governmental Authorities in connection with such filings and
(iii) comply in all material respects with the HSR Act. Subject to regulatory
constraints, Seller and Purchaser shall keep the other party fully advised with
respect to any requests for or communications with the DOJ, FTC or other
Governmental Authority and shall consult with the other party with respect to
all filings and responses thereto.
ARTICLE 5
COVENANTS OF PURCHASER WITH RESPECT TO THE TERMINALS COMPANIES
Purchaser hereby covenants to and agrees with Seller as follows:
5.1 Corporate and Other Actions. Prior to the Terminals Closing Date,
Purchaser shall use all commercially reasonable efforts to fulfill its
obligations under this Agreement relating to the Terminals Sale and to
consummate the Terminals Sale and the transactions contemplated thereby.
5.2 Confidentiality. As soon as reasonably practicable after the date
of this Agreement, Purchaser agrees to deliver to Terminals a duly executed
amendment to the Confidentiality Agreement providing that the term of the
Confidentiality Agreement with respect to the Terminals Companies shall not
expire until the Terminals Closing Date.
41
53
5.3 Terminals Employees and Benefit Plans.
(a) Purchaser shall be entitled to determine, in its sole
discretion, the employee staffing that will be required for the
Terminals Companies after the Terminals Closing and shall make offers
of continuing employment with the Terminals Companies or with
Purchaser, its general partner or an Affiliate of either ("Purchaser
Employer"), effective on the Terminals Closing Date, to any or all
Terminals Employees in its discretion; provided, however, that
Purchaser shall make offers of continuing employment to at least 532
Terminals Employees. As used herein, "Terminals Employees" means the
employees of the Terminals Companies as of the date hereof who will be
full-time, active or regular part-time employees on the Terminals
Closing Date, including those on temporary leave for jury duty, family
or short-term medical leave or vacation. Schedule 5.3(a) lists the
Terminals Employees and sets forth, for each of the Terminals
Employees, his or her job title and, to the extent available, his or
her current annual rate of base wages or base salary. Any such offers
of continuing employment shall be made as soon as practicable prior to
the Terminals Closing Date and shall specify the terms of such
employment, which terms shall be in accordance with the following
provisions of this Section 5.3, and shall provide for a base salary no
less favorable than the base salary in effect on the Terminals Closing
Date. Each Terminals Employee who remains employed by the Terminals
Companies or becomes employed by a Purchaser Employer pursuant to this
Section 5.3(a) shall be referred to herein as a "Terminals Continuing
Employee." As soon as practicable, but prior to the Terminals Closing
Date, Purchaser shall provide Seller with notice of those Terminals
Employees to whom it has made an offer of continuing employment. As
soon as practicable after the Terminals Closing Date, Purchaser shall
furnish Seller with a list of all Terminals Employees who become
Terminals Continuing Employees as of the Terminals Closing Date.
Effective as of the day immediately preceding the Terminals Closing
Date, Seller shall cause the Terminals Companies to transfer to one or
more Affiliates of Seller or terminate the employment of any employee
of the Terminals Companies on such preceding day who will not be a
Terminals Continuing Employee immediately following the Terminals
Closing, including those employees on long-term disability. Seller
shall be solely responsible for any severance costs and all benefits or
other liabilities associated with any employee of the Terminals
Companies who does not become a Terminals Continuing Employee;
provided, however, that Purchaser shall be responsible for payment of
all severance obligations described in Section 5.3(h) and for the
second installment of the stay bonus under the individual stay bonus
agreements to the Terminals Continuing Employees who are eligible for
such payments, the amount of such payments with respect to stay bonuses
not to exceed $1,100,000. At the Terminals Closing, Seller shall
provide Purchaser with a list of those Terminals Continuing Employees
who are entitled to receive stay bonuses and the amount thereof.
Purchaser shall be solely responsible for compliance with and any and
all liabilities in connection with the Worker Adjustment Retraining and
Notification Act ("WARN"). Purchaser and Seller shall cooperate with
each other in causing the appropriate entity to send WARN notices to
affected employees prior to the Terminals Closing Date in order to
limit the WARN notice period.
(b) Effective as of the Terminals Closing Date, the Terminals
Companies shall cease to be participating employers in the GATX
Non-Contributory Pension Plan
42
54
for Salaried Employees, Non-Contributory Pension Plan of GATX (Hourly
Employees) (collectively, the "Seller Pension Plans"), GATX Salaried
Employees Retirement Savings Plan and GATX Hourly Employees Retirement
Savings Plan (individually a "Seller Savings Plan" and, collectively,
the "Seller Savings Plans") (all such pension and savings plans being
referred to, collectively, as the "GATX Qualified Plans"), and as of
such date all Terminals Continuing Employees shall cease to be eligible
to participate in the GATX Qualified Plans. Any service or compensation
earned by a Terminals Continuing Employee for any period after the
Terminals Closing Date shall be disregarded for all purposes of the
GATX Qualified Plans. To the extent allowed by applicable law, Seller
shall cause all Terminals Continuing Employees to be fully vested in
their accrued benefits under the GATX Qualified Plans as of the
Terminals Closing Date. Purchaser shall have no obligation for any
past, present or future accrued liabilities under the GATX Qualified
Plans.
(c) Effective as of the Terminals Closing Date, Purchaser
shall take all action necessary or appropriate (i) to extend coverage
under one or more new or existing defined contribution plans (the
"Purchaser Savings Plan") qualified under section 401(a) of the Code
and meeting the requirements of section 401(k) of the Code to Terminals
Continuing Employees who have account balances under a Seller Savings
Plan as of the Terminals Closing Date and (ii) to permit such employees
to roll over such account balances (including any outstanding plan
loans) to the Purchaser Savings Plan as soon as practicable after the
Terminals Closing Date to the extent that Seller determines that
distribution of such balances from the Seller Savings Plans is
permitted by applicable law. If Seller determines that such
distribution is not permitted, the account balance of each Terminals
Continuing Employee under a Seller Savings Plan shall be transferred
(within the meaning of section 414(l) of the Code) to the Purchaser
Savings Plan, as soon as practicable after the Terminals Closing Date,
in a transfer conforming to the requirements of section 411(d)(6) of
the Code, but only to the extent that such Terminals Continuing
Employee elects such a transfer in accordance with procedures
established by Seller.
(d) Effective as of the Terminals Closing Date, the Terminals
Companies shall cease to be participating employers in the Terminals
Companies Plans that are welfare benefit plans as described in Section
3(1) of ERISA and that are not Terminals Subsidiary Plans (together
with Calnev Plans that are welfare benefits plans and not Calnev
Subsidiary Plans, the "Seller Welfare Benefit Plans"). Effective as of
the Terminals Closing Date, Purchaser shall take all actions necessary
or appropriate to extend coverage to Terminals Continuing Employees who
are covered under the Seller Welfare Benefit Plans on the Terminals
Closing Date (and their covered dependents) under one or more new or
existing welfare benefit plans (the "Purchaser Welfare Benefit Plans")
providing medical, dental, prescription drug, vision, life insurance,
accident insurance, flexible spending account, short-term and long-term
disability benefits. Terminals Continuing Employees shall be eligible
to participate in the Purchaser Welfare Benefit Plans without regard to
any eligibility period, waiting period, evidence of insurability
requirements (except for evidence of insurability requirements
applicable to Purchaser's supplemental life insurance plan) or
pre-existing condition limitations and shall be given credit under the
Purchaser Welfare Benefit Plans for amounts paid under a
43
55
corresponding Seller Welfare Benefit Plan or Terminals Subsidiary Plan
during the same period for purposes of applying deductibles,
co-payments and out-of-pocket maximums as though such amounts had been
paid in accordance with the terms and conditions of the applicable
Purchaser Welfare Benefit Plan.
(e) Effective as of the Terminals Closing Date, the Terminals
Companies shall cease to be participating employers in the GATX Excess
Benefit Retirement Plan and the GATX Supplemental Retirement Plan
(individually a "GATX Non-Qualified Plan" and, collectively, the "GATX
Non-Qualified Plans"), and all Terminals Continuing Employees shall
cease to be eligible to participate in the GATX Non-Qualified Plans.
Any service or compensation earned by a Terminals Continuing Employee
for any period after the Terminals Closing Date shall be disregarded
for all purposes of the GATX Non-Qualified Plans. Purchaser shall have
no obligation for any past, present or future accrued liabilities under
the GATX Non-Qualified Plans.
(f) One or more of the Terminals Companies is a party to and
bound by the terms of the collective bargaining agreements set forth in
Schedule 2.17 ("Terminals Bargaining Agreements"). Purchaser agrees
that, subject to the following provisions of this paragraph (f) or
Purchaser's renegotiation of such Terminals Bargaining Agreements in
writing prior to the Terminals Closing Date, Purchaser shall (or shall
cause the Terminals Companies to) comply with and perform all
obligations under the Terminals Bargaining Agreements for periods after
the Terminals Closing Date during which the Terminals Bargaining
Agreements remain in effect and comply with and perform all obligations
that survive the expiration of the Terminals Bargaining Agreements
under applicable law with respect to Terminals Continuing Employees who
are covered by such agreements (the "Terminals Continuing Union
Employees"), including without limitation obligations relating to
wages, vacation, holiday and severance pay, insurance, post-retirement
medical, life and pension benefits. Except as otherwise specifically
provided below in this paragraph (f), Purchaser shall take all such
actions (including, without limitation, the establishing of, or causing
of, one or more Terminals Companies to establish such mirror plans) as
may be necessary or appropriate to provide to Terminals Continuing
Union Employees (and their eligible dependents) for periods after the
Terminals Closing Date during which the Terminals Bargaining Agreements
remain in effect the benefits set forth in the Terminals Bargaining
Agreements, including any such benefits that survive the expiration of
the Terminals Bargaining Agreements. For purposes of fulfilling the
pension obligations under certain Terminals Bargaining Agreements, on
or as soon as practicable after the Terminals Closing Date, Purchaser
shall (or shall cause a Terminals Company to) extend coverage to
Terminals Continuing Union Employees under a qualified defined benefit
pension plan (the "Purchaser Hourly Pension Plan") which shall be
identical in all material respects to the Non-Contributory Pension Plan
of GATX (the "Seller Hourly Pension Plan") as in effect as of the
Terminals Closing Date and shall credit the service and pay credited to
each Terminals Continuing Union Employee under the Seller Hourly
Pension Plan as of the Terminals Closing Date for all purposes under
the Purchaser Hourly Pension Plan, including eligibility, vesting,
benefit accrual and eligibility for subsidized benefits. The benefit
(expressed as a single life annuity) payable from the Purchaser Hourly
Pension Plan with respect to each Terminals Continuing Union Employee,
determined as of the date as of
44
56
which payment from the Purchaser Hourly Pension Plan actually
commences, shall be reduced by the benefit (expressed as a single life
annuity) payable with respect to such individual from the Seller Hourly
Pension Plan, based on such Terminals Continuing Union Employee's
accrued benefit under the Seller Hourly Pension Plan as of the
Terminals Closing Date and determined as follows: (i) if the Terminals
Continuing Union Employee is eligible to commence (or has commenced)
payment from the Seller Hourly Pension Plan at the date that payment
from the Purchaser Hourly Pension Plan commences, the benefit payable
from the Seller Hourly Pension Plan shall be determined as if payment
of the Terminals Continuing Union Employee's pension from the Seller
Hourly Pension Plan commenced as of the same date that payment from the
Purchaser Hourly Pension Plan commences (without regard to the date as
of which payment from the Seller Hourly Pension Plan actually
commences); and (ii) if the Terminals Continuing Union Employee is not
eligible to commence payment from the Seller Hourly Pension Plan at the
date that payment from the Purchaser Hourly Pension Plan commences, the
benefit payable from Purchaser Hourly Pension Plan shall be reduced by
the Terminals Continuing Union Employee's accrued benefit under the
Seller Hourly Pension Plan as of the Terminals Closing Date,
actuarially reduced from (A) age 65 if the employee has less than 15
years of service under the Seller Hourly Pension Plan, and (B) age 62
if the Terminals Continuing Union Employee has 15 or more years of
service under the Seller Hourly Pension Plan. The actuarial reduction
for this purpose shall reflect the actuarial basis for purposes of
determining early commencement of benefits as set forth in the Seller
Hourly Pension Plan as in effect on the Terminals Closing Date. In no
event shall the benefit actually payable from the Seller Hourly Pension
Plan with respect to a Terminals Continuing Union Employee be greater
than the benefit to which such individual is entitled under the terms
of the Seller Hourly Pension Plan as in effect on the Terminals Closing
Date, determined as if the Terminals Continuing Union Employee
terminated from the employ of the Terminals Companies and all its
Affiliates on the Terminals Closing Date. In no event shall the benefit
actually payable from the Purchaser Hourly Pension Plan with respect to
a Terminals Continuing Union Employee be greater than (i) the benefit
to which such individual would have been entitled under the Seller
Hourly Pension Plan had such individual continued participation under
the Seller Hourly Pension Plan after the Terminals Closing Date (under
the terms of the Seller Hourly Pension plan in effect as of the
Terminals Closing Date but determined as though the Seller Hourly
Pension Plan were amended to take into account any pension changes
negotiated by Purchaser after the Terminals Closing Date) until the
date as of which such individual ceases accruing benefits under the
Purchaser Hourly Pension Plan, less (ii) the amount by which the
benefit under the Purchaser Hourly Pension Plan shall be reduced
pursuant to this paragraph (f).
(g) For periods after the Terminals Closing Date, Purchaser
shall ensure that (i) Terminals Continuing Employees who are not
Terminals Continuing Union Employees (and their eligible dependents)
shall participate in the employee benefit plans, policies, programs and
arrangements maintained from time to time by Purchaser (collectively,
the "Purchaser Plans") on terms and conditions which, subject to the
following provisions of this paragraph (g), are substantially the same
as applied to other similarly situated employees and former employees
of Purchaser, (ii) Terminals Continuing Employees shall be given credit
under the Purchaser Plans (other than plans
45
57
qualified under Section 401(a) of the Code) and the Purchaser Welfare
Benefits Plans for their service with Seller and the Terminals
Companies and their predecessors for all purposes (including
eligibility for vacation, severance and post-retirement medical
benefits) to the extent that such service is taken into account under
the corresponding Terminals Companies Plan as of the Terminals Closing
Date, (iii) Terminals Continuing Employees shall be given credit under
the Purchaser Plans that are qualified under Section 401(a) of the Code
for their service with Seller and the Terminals Companies and their
predecessors for purposes of eligibility and vesting.
(h) Purchaser shall provide severance and other benefits under
the Enhanced GATX Severance Pay Program and under any severance
arrangements listed on Schedule 2.13 (including Schedule 2.13(a)) to
any Terminals Continuing Employee whose employment terminates during
the 12-month period beginning on the Terminals Closing Date; provided,
however, that to the extent that Purchaser is unable to provide certain
benefits under such arrangements, Purchaser shall substitute the cash
equivalent thereof.
(i) Purchaser shall pay and be responsible for the payment of
all amounts which may be or become due to Terminals Continuing
Employees under Purchaser's bonus plans for the calendar year in which
the Terminals Closing Date occurs as if the Terminals Continuing
Employees became covered by such plans as of January 1 of such year.
The Terminals Closing Balance Sheet shall include an accrual for the
amount of the bonus accrued by Terminals Continuing Employees under the
Seller's bonus plans for the period from January 1 of the year in which
the Terminals Closing Date occurs through the Terminals Closing Date.
(j) Purchaser shall be responsible for the vacation time
accrued by Terminals Continuing Employees prior to the Terminals
Closing Date. Purchaser shall recognize the vacation time accrued by
Terminals Continuing Employees on Seller's payroll records as of the
Terminals Closing Date. Purchaser shall not be required to make a cash
payment to Terminals Continuing Employees for such accrued vacation
time except for payments of accrued but unused vacation pay upon
termination of a Terminals Continuing Employee's employment. Purchaser
shall have no obligation for any vacation time accrued prior to the
Terminals Closing Date by Terminals Employees who are not Terminals
Continuing Employees.
(k) On or prior to the Terminals Closing Date, Seller shall,
or shall cause the Terminals Companies to, take such action as may be
necessary or appropriate to conform the Terminals Companies Plans to
the provisions of this Section 5.3. Unless specifically permitted by
the terms of this Agreement or as set forth on Schedule 4.3 hereto,
from the date hereof until the Terminals Closing Date, to the extent
that Terminals Continuing Employees would be affected, Seller shall not
(i) increase the rate of compensation payable or to become payable to
any Terminals Employee, (ii) enter into any new, or agree to any
increase in the benefits to be provided under any existing, individual
severance agreement, stay bonus agreement or employment agreement,
(iii) amend any Terminals Companies Plan to increase any benefits or
rights thereunder, or (iv) adopt any new plan, program, policy or
arrangement which, if it existed as of the Terminals Closing Date,
would constitute a Terminals Companies Plan.
46
58
(l) The parties acknowledge and agree that all provisions
contained in this Agreement with respect to employee benefit plans or
employee compensation are included for the sole benefit of the
respective parties hereto and shall not create any right in any other
Person, including, without limitation, any employees of the Terminals
Companies, any participant in any Terminals Companies Plans or any
beneficiary thereof.
(m) The corresponding reserve on the balance sheet having been
removed, Seller shall retain and discharge the workers compensation
liability of Terminals arising out of workers compensation accidents
occurring prior to the Terminals Closing Date.
5.4 Full Access. From and after the Terminals Closing Date, Purchaser
shall cause the Terminals Companies to afford Seller and its counsel,
accountants and other authorized representatives, with two days' prior notice,
reasonable access during normal business hours to the respective premises,
properties, personnel, books and records of the Terminals Companies and any
other assets or information that Seller reasonably deems necessary to prepare
the Terminals Closing Balance Sheet and any report or Tax Return required to be
filed by Seller (but so as not to unduly disrupt the normal course of operations
of the Terminals Companies), including, without limitation, preparing or
defending any such Tax Return and any interim or annual report or other
accounting statements. Personnel of the Terminals Companies shall be available
to execute Tax statute of limitation waivers and amended Tax Returns at Seller's
request for the Tax Returns for the Tax Period prior to the Terminals Closing
Date. Personnel of the Terminals Companies shall assist Seller in the
preparation of the Terminals Closing Balance Sheet with respect to the Terminals
Companies and any Tax Returns which Seller is required to prepare pursuant to
Sections 10.2(a) and 10.2(b); provided, however, Seller shall not be obligated
to compensate such personnel, Purchaser or the Terminals Companies for such
assistance.
5.5 HSR Filings. As promptly as practicable, Purchaser shall (in
cooperation with Seller) (i) make all filings and submissions with the DOJ and
the FTC under the HSR Act and any applicable state or foreign laws or
regulations as may be reasonably required to be made with Governmental
Authorities in connection with the transactions contemplated by this Agreement,
requesting early any termination of the waiting period thereunder, (ii) respond
promptly to any inquiries from the DOJ, the FTC or other Governmental
Authorities in connection with such filings and (iii) comply in all material
respects with the requirements of the HSR Act. Subject to regulatory
constraints, Seller and Purchaser shall each keep the other party fully advised
with respect to any requests from or communications with the DOJ, FTC or other
Governmental Authority and shall consult with the other party with respect to
all filings and responses thereto.
5.6 Directors' and Officers' Indemnification. For a period of six years
from the Terminals Closing Date, Purchaser agrees not to amend the certificate
of incorporation or bylaws of any of the Terminals Companies in any way to
reduce or eliminate the level of indemnification provided by the applicable
Terminals Company to the past and current officers and directors of such
Terminals Company.
47
59
5.7 Use of GATX Name. As promptly as reasonably practicable subsequent
to the Terminals Closing, Purchaser shall use its reasonable best efforts to
cause each of the Terminals Companies to cease using the GATX name or any
derivative thereof in any way. Without limiting the foregoing, as promptly as
reasonably practicable subsequent to the Terminals Closing, Purchaser shall use
its reasonable best efforts to cause the Terminals Companies to (a) change the
name of any Terminals Company that includes "GATX" and (b) remove the GATX name,
any derivative thereof and any logo related thereto from any tanks, trucks or
other objects on which such name appears. Notwithstanding the foregoing, within
three months of the Terminals Closing, the Terminals Companies shall not use the
GATX name or any derivative thereof in any way.
5.8 Assumption of Obligations. Effective as of the Terminals Closing,
Purchaser shall assume the guarantees and other obligations of Seller with
respect to the Terminals Companies set forth on Schedule 5.8 and shall use its
reasonable best efforts to cause Seller to be fully released and discharged from
such obligations.
5.9 Services to Terminal de Productos Especializados S.A. de C.V.;
Other Services. Subsequent to the Terminals Closing and for so long as Seller or
any of its Affiliates has any beneficial ownership interest in Terminal de
Productos Especializados S.A. de C.V. ("TPE"), Purchaser shall cause the
Terminals Companies to provide certain services to TPE. Details regarding such
services, and the rates to be paid by TPE for such services shall be as set
forth in the Services Agreement attached hereto as Exhibit B. Representatives of
each of Purchaser and Seller shall meet on a monthly basis to review the extent
and adequacy of such services. The Services Agreement shall also provide the
terms and conditions pursuant to which Purchaser shall cause the Terminals
Companies to provide certain services to Seller subsequent to the Terminals
Closing.
5.10 License Agreement with KTSB. Purchaser acknowledges and agrees
that nothing contained in this Agreement shall prevent Terminals from, prior to
Terminals Closing, executing a License Agreement with Kertih Terminals SBN BHD
relating to its GALAHAD software on substantially the same terms as have
previously been disclosed to Purchaser. In the event that Terminals does not
execute such License Agreement prior to Terminals Closing, Purchaser shall cause
Terminals to execute such License Agreement subsequent to Terminals Closing so
long as the terms thereof are substantially similar to the terms that have
previously been disclosed to Purchaser.
5.11 Agreement with Nippon GATX Company Limited. Purchaser acknowledges
and agrees that nothing contained in this Agreement shall prevent Terminals
from, prior to the Terminals Closing, transferring the Services Agreement
between Terminals and Nippon GATX Company Limited ("Nippon") to Rail or an
Affiliate of Rail. In the event that Terminals is not able to transfer such
agreement to Rail or an Affiliate of Rail, (i) Rail agrees to cause (at its sole
cost and expense) one or more employees of Seller or an Affiliate to render any
services to Nippon that are requested by Nippon pursuant to the agreement and to
indemnify Purchaser for any and all Losses incurred by Purchaser related thereto
and (ii) Purchaser agrees to cause Terminals to remit to Rail any and all fees
received by Terminals subsequent to the Terminals Closing from Nippon pursuant
to the said Services Agreement.
48
60
5.12 License to the Calnev Companies. Effective as of the Terminals
Closing and continuing until the earliest to occur of (a) the Calnev Closing,
(b) the New Calnev Closing and (c) March 31, 2002 (the "License Term"),
Purchaser hereby grants to each of the Calnev Companies a non-exclusive,
royalty-free license to use the GALAHAD, CAS and Lawsen software systems and the
documentation and source code associated therewith. During the License Term,
Purchaser shall service and maintain such software (and provide upgrades thereto
if and to the extent it provides upgrades to its own facilities) in the same
manner as Purchaser services and maintains such software at its own facilities.
Purchaser shall provide Seller with a monthly invoice (together with all
supporting documentation as reasonably requested by Seller) for its cost to
service, maintain and support such software and Seller (or an Affiliate) shall,
within three business days of the receipt of such invoice, pay to Purchaser the
amount of such invoice.
ARTICLE 5A
COVENANTS OF PURCHASER WITH RESPECT TO THE CALNEV COMPANIES
Purchaser hereby covenants to and agrees with Seller as follows:
5A.1 Corporate and Other Actions. Prior to the Calnev Closing Date,
Purchaser shall use all commercially reasonable efforts to fulfill its
obligations under this Agreement related to the Calnev Sale or New Calnev Sale
(as applicable) and to consummate the Calnev Sale and the transactions
contemplated thereby.
5A.2 Confidentiality. Purchaser agrees to deliver to Seller a duly
executed amendment to the Confidentiality Agreement providing that the term of
the Confidentiality Agreement with respect to the Calnev Companies shall not
expire until the Calnev Closing Date.
5A.3 Calnev Employees and Benefit Plans.
(a) Purchaser shall be entitled to determine, in its sole
discretion, the employee staffing that will be required for the Calnev
Companies after the Calnev Closing and shall make offers of continuing
employment with the Calnev Companies or a Purchaser Employer or its
general partner or Purchaser's other Affiliates or their general
partners, effective on the Calnev Closing Date, to any or all Calnev
Employees in its discretion; provided, however, that Purchaser shall
make offers of continuing employment to at least 68 Calnev Employees.
As used herein, "Calnev Employees" means the employees of the Calnev
Companies as of the date hereof who will be full-time, active or
regular part-time employees on the Calnev Closing Date, including those
on temporary leave for jury duty, family or short-term medical leave or
vacation. Schedule 5.3(a) lists the Calnev Employees and sets forth,
for each of the Calnev Employees, his or her job title and, to the
extent available, his or her current annual rate of
base wages or base salary. Any such offers of continuing employment
shall be made as soon as practicable prior to the Calnev Closing Date
and shall specify the terms of such employment, which terms shall be in
accordance with the following provisions of this Section 5A.3, and
shall provide for a base salary no less favorable than the
base salary in effect on the Calnev Closing Date. Each Calnev Employee
who remains employed by any of the Calnev Companies or becomes employed
by a Purchaser
49
61
Employer pursuant to this Section 5A.3(a) shall be referred to herein
as a "Calnev Continuing Employee." As soon as practicable but prior to
the Calnev Closing Date, Purchaser shall provide Seller with notice of
those Calnev Employees to whom it has made an offer of continuing
employment. As soon as practicable after the Calnev Closing Date,
Purchaser shall furnish Seller with a list of all Calnev Employees who
become Calnev Continuing Employees as of the Calnev Closing Date.
Effective as of the day immediately preceding the Calnev Closing Date,
Seller shall cause the Calnev Companies to transfer to one or more
Affiliates of Seller or terminate the employment of any employee of the
Calnev Companies on such preceding day who will not be a Calnev
Continuing Employee immediately following the Calnev Closing, including
those employees on long-term disability. Seller shall be solely
responsible for any severance costs and all benefits or other
liabilities associated with any employee of the Calnev Companies who
does not become a Calnev Continuing Employee; provided, however, that
Purchaser shall be responsible for payment of all severance obligations
described in Section 5A.3(h) and for the second installment of the stay
bonus under the individual stay bonus agreements to the Calnev
Continuing Employees who are eligible for such payments, the amount of
such payments with respect to stay bonuses not to exceed $1,100,000
less the aggregate amount of stay bonuses paid or to be paid to
Terminals Continuing Employees pursuant to Section 5.3(a). At the
Calnev Closing, Seller shall provide Purchaser with a list of those
Calnev Continuing Employees who are entitled to receive stay bonuses
and the amount thereof. Purchaser shall be solely responsible for
compliance with and any and all liabilities in connection with WARN.
Purchaser and Seller shall cooperate with each other in causing the
appropriate entity to send WARN notices to employees prior to the
Calnev Closing Date in order to limit the WARN notice period.
(b) Effective as of the Calnev Closing Date, each Calnev
Company shall cease to be participating employers in the GATX Qualified
Plans, and as of such date all Calnev Continuing Employees shall cease
to be eligible to participate in the GATX Qualified Plans. Any service
or compensation earned by a Calnev Continuing Employee for any period
after the Calnev Closing Date shall be disregarded for all purposes of
the GATX Qualified Plans. To the extent allowed by applicable law,
Seller shall cause all Calnev Continuing Employees to be fully vested
in their accrued benefits under the GATX Qualified Plans as of the
Calnev Closing Date. Purchaser shall have no obligation for any past,
present or future accrued liabilities under the GATX Qualified Plans.
(c) Effective as of the Closing Date, Purchaser shall take all
action necessary or appropriate (i) to extend coverage under the
Purchaser Savings Plan to Calnev Continuing Employees who have account
balances under a Seller Savings Plan as of the Calnev Closing Date and
(ii) to permit such employees to roll over such account balances
(including any outstanding plan loans) to the Purchaser Savings Plan as
soon as practicable after the Calnev Closing Date to the extent that
Seller determines that distribution of such balances from the Seller
Savings Plans is permitted by applicable law. If Seller determines that
such distribution is not permitted, the account balance of each Calnev
Continuing Employee under a Seller Savings Plan shall be transferred
(within the meaning of section 414(l) of the Code) to the Purchaser
Savings Plan, as soon as practicable after the Calnev Closing Date, in
a transfer conforming to the requirements
50
62
of section 411(d)(6) of the Code, but only to the extent that such
Calnev Continuing Employee elects such a transfer in accordance with
procedures established by Seller.
(d) Effective as of the Calnev Closing Date, each Calnev
Company shall cease to be participating employers in the Seller Welfare
Benefit Plans that are not Calnev Subsidiary Plans. Effective as of the
Calnev Closing Date, Purchaser shall take all actions necessary or
appropriate to extend coverage to Calnev Continuing Employees who are
covered under the Seller Welfare Benefit Plans on the Calnev Closing
Date (and their covered dependents) under one or more Purchaser Welfare
Benefit Plans providing medical, dental, prescription drug, vision,
life insurance, accident insurance, flexible spending account,
short-term and long-term disability benefits. Calnev Continuing
Employees shall be eligible to participate in the Purchaser Welfare
Benefit Plans without regard to any eligibility period, waiting period,
evidence of insurability requirements (except for evidence of
insurability requirements applicable to Purchaser's supplemental life
insurance plan) or pre-existing condition limitations and shall be
given credit under the Purchaser Welfare Benefit Plans for amounts paid
under a corresponding Seller Welfare Benefit Plan or Calnev Subsidiary
Plan during the same period for purposes of applying deductibles,
co-payments and out-of-pocket maximums as though such amounts had been
paid in accordance with the terms and conditions of the applicable
Purchaser Welfare Benefit Plan.
(e) Effective as of the Calnev Closing Date, each Calnev
Company shall cease to be participating employers in the GATX
Non-Qualified Plans, and all Calnev Continuing Employees shall cease to
be eligible to participate in the GATX Non-Qualified Plans. Any service
or compensation earned by a Calnev Continuing Employee for any period
after the Calnev Closing Date shall be disregarded for all purposes of
the GATX Non-Qualified Plans. Purchaser shall have no obligation for
any past, present or future accrued liabilities under the GATX
Non-Qualified Plans.
(f) No Calnev Company is currently a party to or bound by the
terms of any collective bargaining agreement ("Calnev Bargaining
Agreements"). Purchaser agrees that, subject to the following
provisions of this paragraph (f) or Purchaser's renegotiation of such
Calnev Bargaining Agreements in writing prior to the Calnev Closing
Date and only to the extent any Calnev Company shall become a party to
or become bound by the terms of a Calnev Collective Bargaining
Agreement prior to the Calnev Closing Date, Purchaser shall (or shall
cause Calnev to) comply with and perform all obligations under the
Calnev Bargaining Agreements for periods after the Calnev Closing Date
during which the Calnev Bargaining Agreements remain in effect and
comply with and perform all obligations that survive the expiration of
the Calnev Bargaining Agreement under applicable law with respect to
Calnev Continuing Employees who are covered by such agreements (the
"Calnev Continuing Union Employees"), including without limitation
obligations relating to wages, vacation, holiday and severance pay,
insurance, post-retirement medical, life and pension benefits. Except
as otherwise specifically provided below in this paragraph (f),
Purchaser shall take all such actions (including, without limitation,
the establishing of, or causing of, the Calnev Companies to establish,
such mirror plans) as may be necessary or appropriate to provide to
Calnev Continuing Union Employees (and their eligible dependents), if
any, for periods after the Calnev Closing
51
63
Date during which the Calnev Bargaining Agreements remain in effect the
benefits set forth in the Calnev Bargaining Agreements, including any
such benefits that survive the expiration of the Calnev Bargaining
Agreements. For purposes of fulfilling the pension obligations under
Calnev Bargaining Agreements, if any, on or as soon as practicable
after the Calnev Closing Date, Purchaser shall (or shall cause the
Calnev Companies to) extend coverage to Calnev Continuing Union
Employees under the Purchaser Hourly Pension Plan which shall be
identical in all material respects to the Seller Hourly Pension Plan as
in effect as of the Calnev Closing Date and shall credit the service
and pay credited to each Calnev Continuing Union Employee under the
Seller Hourly Pension Plan as of the Calnev Closing Date for all
purposes under the Purchaser Hourly Pension Plan, including
eligibility, vesting, benefit accrual and eligibility for subsidized
benefits. The benefit (expressed as a single life annuity) payable from
the Purchaser Hourly Pension Plan with respect to each Calnev
Continuing Union Employee, determined as of the date as of which
payment from the Purchaser Hourly Pension Plan actually commences,
shall be reduced by the benefit (expressed as a single life annuity)
payable with respect to such individual from the Seller Hourly Pension
Plan, based on such Calnev Continuing Union Employee's accrued benefit
under the Seller Hourly Pension Plan as of the Calnev Closing Date and
determined as follows: (i) if the Calnev Continuing Union Employee is
eligible to commence (or has commenced) payment from the Seller Hourly
Pension Plan at the date that payment from the Purchaser Hourly Pension
Plan commences, the benefit payable from the Seller Hourly Pension Plan
shall be determined as if payment of the Calnev Continuing Union
Employee's pension from the Seller Hourly Pension Plan commenced as of
the same date that payment from the Purchaser Hourly Pension Plan
commences (without regard to the date as of which payment from the
Seller Hourly Pension Plan actually commences); and (ii) if the Calnev
Continuing Union Employee is not eligible to commence payment from the
Seller Hourly Pension Plan at the date that payment from the Purchaser
Hourly Pension Plan commences, the benefit payable from Purchaser
Hourly Pension Plan shall be reduced by the Calnev Continuing Union
Employee's accrued benefit under the Seller Hourly Pension Plan as of
the Calnev Closing Date, actuarially reduced from (A) age 65 if the
employee has less than 15 years of service under the Seller Hourly
Pension Plan, and (B) age 62 if the Calnev Continuing Union Employee
has 15 or more years of service under the Seller Hourly Pension Plan.
The actuarial reduction for this purpose shall reflect the actuarial
basis for purposes of determining early commencement of benefits as set
forth in the Seller Hourly Pension Plan as in effect on the Calnev
Closing Date. In no event shall the benefit actually payable from the
Seller Hourly Pension Plan with respect to a Calnev Continuing Union
Employee be greater than the benefit to which such individual is
entitled under the terms of the Seller Hourly Pension Plan as in effect
on the Calnev Closing Date, determined as if the Calnev Continuing
Union Employee terminated from the employ of Calnev and all its
Affiliates on the Calnev Closing Date. In no event shall the benefit
actually payable from the Purchaser Hourly Pension Plan with respect to
a Calnev Continuing Union Employee be greater than (i) the benefit to
which such individual would have been entitled under the Seller Hourly
Pension Plan had such individual continued participation under the
Seller Hourly Pension Plan after the Calnev Closing Date (under the
terms of the Seller Hourly Pension plan in effect as of the Calnev
Closing Date but determined as though the Seller Hourly Pension Plan
were amended to
52
64
take into account any pension changes negotiated by Purchaser after the
Calnev Closing Date) until the date as of which such individual ceases
accruing benefits under the Purchaser Hourly Pension Plan, less (ii)
the amount by which the benefit under the Purchaser Hourly Pension Plan
shall be reduced pursuant to this paragraph (f).
(g) For periods after the Calnev Closing Date, Purchaser shall
ensure that (i) Calnev Continuing Employees who are not Calnev
Continuing Union Employees (and their eligible dependents) shall
participate in the Purchaser Plans on terms and conditions which,
subject to the following provisions of this paragraph (g), are
substantially the same as applied to other similarly situated employees
and former employees of Purchaser, (ii) Calnev Continuing Employees
shall be given credit under the Purchaser Plans (other than plans
qualified under Section 401(a) of the Code) and the Purchaser Welfare
Benefits Plans for their service with Seller and the Calnev Companies
and their predecessors for all purposes (including eligibility for
vacation, severance and post-retirement medical benefits) to the extent
that such service is taken into account under the corresponding Calnev
Plan as of the Calnev Closing Date, (iii) Calnev Continuing Employees
shall be given credit under the Purchaser Plans that are qualified
under Section 401(a) of the Code for their service with Seller and
Calnev and their predecessors for purposes of eligibility and vesting.
(h) Purchaser shall provide severance and other benefits under
the Enhanced GATX Severance Pay Program and under any severance
arrangements listed on Schedule 2.13 (including Schedule 2.13(a)) to
any Calnev Continuing Employee whose employment terminates during the
12-month period beginning on the Calnev Closing Date; provided,
however, that to the extent that Purchaser is unable to provide certain
benefits under such arrangements, Purchaser shall substitute the cash
equivalent thereof.
(i) Purchaser shall pay and be responsible for the payment of
all amounts which may be or become due to Calnev Continuing Employees
under Purchaser's bonus plans for the calendar year in which the Calnev
Closing Date occurs as if the Calnev Continuing Employees became
covered by such plans as of January 1 of such year. The Calnev Closing
Balance Sheet shall include an accrual for the amount of the bonus
accrued by Calnev Continuing Employees under the Seller's bonus plans
for the period from January 1 of the year in which the Calnev Closing
Date occurs through the Calnev Closing Date.
(j) Purchaser shall be responsible for the vacation time
accrued by Calnev Continuing Employees prior to the Calnev Closing
Date. Purchaser shall recognize the vacation time accrued by Calnev
Continuing Employees on Seller's payroll records as of the Calnev
Closing Date. Purchaser shall not be required to make a cash payment to
Calnev Continuing Employees for such accrued vacation time except for
payments of accrued but unused vacation pay upon termination of a
Calnev Continuing Employee's employment. Purchaser shall have no
obligation for any vacation time accrued prior to the Calnev Closing
Date by Calnev Employees who are not Calnev Continuing Employees.
53
65
(k) On or prior to the Calnev Closing Date, Seller shall, or
shall cause the Calnev Companies to, take such action as may be
necessary or appropriate to conform the Calnev Plans to the provisions
of this Section 5A.3. Unless specifically permitted by the terms of
this Agreement or as set forth on Schedule 4.3 hereto, from the date
hereof until the Calnev Closing Date, to the extent that Calnev
Continuing Employees would be affected, Seller shall not (i) increase
the rate of compensation payable or to become payable to any Calnev
Employee, (ii) enter into any new, or agree to any increase in the
benefits to be provided under any existing, individual severance
agreement, stay bonus agreement or employment agreement, (iii) amend
any Calnev Plan to increase any benefits or rights thereunder, or (iv)
adopt any new plan, program, policy or arrangement which, if it existed
as of the Calnev Closing Date, would constitute a Calnev Plan.
(l) The parties acknowledge and agree that all provisions
contained in this Agreement with respect to employee benefit plans or
employee compensation are included for the sole benefit of the
respective parties hereto and shall not create any right in any other
Person, including, without limitation, any employee of the Calnev
Companies, any participant in any Calnev Plans or any beneficiary
thereof.
(m) The corresponding reserve on the balance sheet having been
removed, Seller shall retain and discharge the workers compensation
liability of the Calnev Companies arising out of workers compensation
accidents occurring prior to the Calnev Closing Date.
5A.4 Full Access. From and after the Calnev Closing Date, Purchaser
shall cause Calnev to afford Seller and its counsel, accountants and other
authorized representatives, with two days' prior notice, reasonable access
during normal business hours to the respective premises, properties, personnel,
books and records of the Calnev Companies and any other assets or information
that Seller reasonably deems necessary to prepare the Calnev Closing Balance
Sheet with respect to Calnev and any report or Tax Return required to be filed
by Seller (but so as not to unduly disrupt the normal course of operations of
the Calnev Companies), including, without limitation, preparing or defending any
such Tax Return and any interim or annual report or other accounting statements.
Personnel of the Calnev Companies shall be available to execute Tax statute of
limitation waivers and amended Tax Returns at Seller's request for the Tax
Returns for the Tax Period prior to the Calnev Closing Date. Personnel of the
Calnev Companies shall assist Seller in the preparation of the Calnev Closing
Balance Sheet with respect to the Calnev Companies and any Tax Returns which
Seller is required to prepare pursuant to Sections 10A.2(a) and 10A.2(b);
provided, however, that Seller shall not be obligated to compensate such
personnel, Purchaser or the Calnev Companies for such assistance.
5A.5 Directors' and Officers' Indemnification. For a period of six
years from the Calnev Closing Date, Purchaser agrees not to amend the
certificate of incorporation or bylaws of Calnev in any way to reduce or
eliminate the level of indemnification provided by any of the Calnev Companies
to the past and current officers and directors of such Calnev Company.
5A.6 Use of GATX Name. As promptly as reasonably practicable subsequent
to the Calnev Closing, Purchaser shall use its reasonable best efforts to cause
each of the Calnev Companies to cease using the GATX name or any derivative
thereof in any way. Without
54
66
limiting the foregoing, as promptly as reasonably practicable subsequent to the
Calnev Closing, Purchaser shall use its reasonable best efforts to cause the
Calnev Companies to (a) change the name of any Calnev Company that includes
"GATX" and (b) to remove the GATX name, any derivative thereof and any logo
related thereto from any tanks, trucks or other objects on which such name
appears. Notwithstanding the foregoing, within three months of the Calnev
Closing, no Calnev Company shall use the GATX name or any derivative thereof in
any way.
5A.7 HSR Filing With Respect to the Calnev Companies. In the event that
the Calnev Closing has not been consummated prior to December 1, 2001, as
promptly as practicable, Purchaser shall (in cooperation with Seller) (i) make
all filings and submissions with the DOJ and the FTC under the HSR Act and any
applicable state or foreign laws or regulations as may be reasonably required to
be made with all other Governmental Authorities in connection with the
transactions contemplated by this Agreement, requesting early termination of any
waiting period thereunder, (ii) respond promptly to any inquiries from the DOJ,
the FTC or other Governmental Authorities in connection with such filings and
(iii) comply in all material respects with the HSR Act. Subject to regulatory
constraints, Seller and Purchaser shall keep the other party fully advised with
respect to any requests from or communications with the DOJ, FTC or other
Governmental Authority and shall consult with the other party with respect to
all filings and responses thereto.
5A.8 Assumption of Obligations. Effective as of the Calnev Closing,
Purchaser shall assume the guarantees and other obligations of Seller set forth
on Schedule 5.8 with respect to the Calnev Companies and shall use its
reasonable best efforts to cause Seller to be fully released and discharged from
such obligations.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER WITH RESPECT TO
TERMINALS SALE
The obligation of Purchaser to purchase the Terminals Stock as provided
herein is, at the option of Purchaser, subject to satisfaction of each of the
following conditions precedent on or before the Terminals Closing Date:
6.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Seller contained herein in Article 2 qualified
by a reference to materiality or a Terminals Material Adverse Effect shall have
been accurate, true and correct in all respects, and those not so qualified
shall have been accurate, true and correct in all material respects, on and as
of the date hereof, and, except to the extent that any such representation or
warranty qualified by a reference to materiality or a Terminals Material Adverse
Effect is made solely as of the date hereof or as of another date earlier than
the Terminals Closing Date, shall also be accurate, true and correct in all
respects, and those not so qualified shall be accurate, true and correct in all
material respects on and as of the Terminals Closing Date with the same force
and effect as though made by Seller on and as of the Terminals Closing Date;
provided, that if one or more of such representations or warranties are not
accurate, true and correct (or accurate, true and correct in all material
respects, as applicable) on and as of any such date, the conditions precedent in
this Section 6.1 shall nevertheless be deemed satisfied unless the inaccuracy,
falsity or incorrectness of all such representations or warranties, taken
together, would reasonably be expected to have a
55
67
Terminals Material Adverse Effect or a material adverse effect on the ability of
Purchaser to consummate the transaction described in Section 1.1 hereof.
6.2 Compliance with Agreements and Covenants. Seller shall have
performed and complied in all material respects with all of its covenants and
obligations contained in this Agreement to be performed and complied with by it
on or prior to the Terminals Closing Date.
6.3 Competition Law Approvals. All required notice and waiting periods
under the HSR Act and any other applicable competition laws shall have expired
or been waived.
6.4 Injunctions; Consents.
(a) All necessary filings with and consents of any
Governmental Authority or agency required for the consummation of the
transaction described in Section 1.1 hereof shall have been made and
obtained, all waiting periods with respect to such filings shall have
expired or been terminated, and no court or any Governmental Agency
shall have issued an injunction enjoining the transaction described in
Section 1.1 hereof nor shall any Governmental Authority have instigated
any formal proceeding seeking such an injunction. For purposes of
clarification, the closing condition set forth in the first clause of
the previous sentence shall apply only to those filings and consents
where the failure to make such filing or obtain such consent would
prohibit the sale of the Terminals Stock to Purchaser or make such sale
illegal.
(b) Each of the consents set forth on Schedule 6.4(b) hereof
with respect to the Terminals Companies shall have been obtained.
Notwithstanding anything in this Agreement to the contrary, with
respect to the condition to the Terminals Closing set forth in this
Section 6.4(b), if this condition is not satisfied but Purchaser
nevertheless elects to waive this condition and close the transactions
contemplated hereby, none of the Seller Indemnified Parties shall have
any liability pursuant to this Agreement as a result of any breach of
any representation, warranty, covenant or other obligation hereunder
relating to the waived condition and Purchaser shall indemnify, defend
and hold the Seller Indemnified Parties harmless from and against any
and all Losses incurred by the Seller Indemnified Parties as a
consequence for having failed to obtain the consent or consents that
cause the failure of the condition.
6.5 Deliveries by Seller. Seller shall have effected the deliveries
required pursuant to Section 8.2 below.
ARTICLE 6A
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER WITH RESPECT TO
CALNEV SALE
The obligation of Purchaser to purchase the GPL Stock as provided
herein is, at the option of Purchaser, subject to satisfaction of each of the
following conditions precedent on or before the Calnev Closing Date:
6A.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Seller contained in Article 2A qualified by a
reference to materiality or a
56
68
Calnev Material Adverse Effect shall have been accurate, true and correct in all
respects, and those not so qualified shall have been accurate, true and correct
in all material respects, on and as of the date hereof, and, except to the
extent that any such representation or warranty qualified by a reference to
materiality or a Calnev Material Adverse Effect is made solely as of the date
hereof or as of another date earlier than the Calnev Closing Date, shall also be
accurate, true and correct in all respects, and those not so qualified shall be
accurate, true and correct in all material respects on and as of the Calnev
Closing Date with the same force and effect as though made by Seller on and as
of the Calnev Closing Date; provided, that if one or more of such
representations or warranties are not accurate, true and correct (or accurate,
true and correct in all material respects, as applicable) on and as of any such
date, the conditions precedent in this Section 6A.1 shall nevertheless be deemed
satisfied unless the inaccuracy, falsity or incorrectness of all such
representations or warranties would reasonably be expected to have a Calnev
Material Adverse Effect or a material adverse effect on the ability of Purchaser
to consummate the transaction described in Section 1A.1 hereof.
6A.2 Compliance with Agreements and Covenants. Seller shall have
performed and complied in all material respects with all of its covenants and
obligations with respect to the Calnev Companies to be performed and complied
with by them on or prior to the Calnev Closing Date.
6A.3 Competition Law Approvals. All required notice and waiting periods
under the HSR Act and any other applicable competition laws shall have expired
or been waived.
6A.4 Injunctions; Consents.
(a) All necessary filings with and consents of any
Governmental Authority or agency required for the consummation of the
transaction described in Section 1A.1 hereof shall have been made and
obtained, all waiting periods with respect to such filings shall have
expired or been terminated, and no court or any Governmental Agency
shall have issued an injunction enjoining the transaction described in
Section 1A.1 hereof nor shall any Governmental Authority have
instigated any formal proceeding seeking such an injunction. For
purposes of clarification, the closing condition set forth in the first
clause of the previous sentence shall apply only to those filings and
consents where the failure to make such filing or obtain such consent
would prohibit the sale of the GPL Stock to Purchaser or make such sale
illegal.
(b) Each of the consents set forth on Schedule 6.4(b) hereof
with respect to Calnev shall have been obtained. Notwithstanding
anything in this Agreement to the contrary, with respect to the
condition to the Calnev Closing set forth in this Section 6A.4(b), if
this condition is not satisfied but Purchaser nevertheless elects to
waive this condition and close the transactions contemplated hereby,
none of the Seller Indemnified Parties shall have any liability
pursuant to this Agreement as a result of any breach of any
representation, warranty, covenant or other obligation hereunder
relating to the waived condition and Purchaser shall indemnify, defend
and hold the Seller Indemnified Parties harmless from and against any
and all Losses incurred by the Seller Indemnified Parties as a
consequence for having failed to obtain the consent or consents that
cause the failure of the condition.
57
69
6A.5 Deliveries by Seller. Seller shall have effected the deliveries
required pursuant to Section 8A.2 below.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER WITH RESPECT TO
TERMINALS COMPANIES SALE
The obligation of Seller to sell the Terminals Stock as provided herein
is, at the option of Seller, subject to the satisfaction of each of the
following conditions precedent on or before the Terminals Closing Date:
7.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Purchaser contained herein qualified by a
reference to materiality or a material adverse effect shall have been accurate,
true and correct in all respects, and those not so qualified shall have been
accurate, true and correct in all material respects on and as of the date
hereof, and shall also be accurate, true and correct in all respects, and those
not so qualified shall be accurate, true and correct in all material respects,
on and as of the Terminals Closing Date with the same force and effect as though
made by Purchaser on and as of the Terminals Closing Date.
7.2 Compliance with Agreements and Covenants. Purchaser shall have
performed and complied in all material respects with all of its covenants and
obligations contained in this Agreement to be performed and complied with by it
on or prior to the Terminals Closing Date.
7.3 Competition Law Approvals. All required notice and waiting periods
under the HSR Act and any other applicable competition laws shall have expired
or been waived.
7.4 Injunctions; Consents. All necessary filings with and consents of
any Governmental Authority and agency required for the consummation of the
transactions described in Section 1.1 hereof shall have been made and obtained,
all waiting periods with respect to such filings shall have expired or been
terminated, and no court or any Governmental Authority shall have issued an
injunction enjoining the transactions described in Section 1.1 hereof nor shall
any Governmental Authority have instigated any formal proceeding seeking such an
injunction. For purposes of clarification, the closing condition set forth in
the first clause of the previous sentence shall apply only to those filings and
consents where the failure to make such filing or obtain such consent would
prohibit the sale of the Terminals Stock to Purchaser or make such sale illegal.
7.5 Deliveries by Purchaser. Purchaser shall have effected the
deliveries required pursuant to Section 8.3 below.
ARTICLE 7A
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER WITH RESPECT TO
CALNEV SALE
The obligation of Seller to sell the GPL Stock as provided herein is,
at the option of Seller, subject to the satisfaction of each of the following
conditions precedent on or before the Calnev Closing Date:
58
70
7A.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Purchaser contained herein qualified by a
reference to materiality or a material adverse effect shall have been accurate,
true and correct in all respects, and those not so qualified shall have been
accurate, true and correct in all material respects on and as of the date
hereof, and shall also be accurate, true and correct in all respects, and those
not so qualified shall be accurate, true and correct in all material respects,
on and as of the Calnev Closing Date with the same force and effect as though
made by Purchaser on and as of the Calnev Closing Date.
7A.2 Compliance with Agreements and Covenants. Purchaser shall have
performed and complied in all material respects with all of its covenants and
obligations related to the Calnev Companies to be performed and complied with by
it on or prior to the Calnev Closing Date.
7A.3 Competition Law Approvals. All required notice and waiting periods
under the HSR Act and any other applicable competition laws shall have expired
or been waived.
7A.4 Injunctions; Consents. All necessary filings with and consents of
any Governmental Authority and agency required for the consummation of the
transactions described in Section 1A.1 hereof shall have been made and obtained,
all waiting periods with respect to such filings shall have expired or been
terminated, and no court or any Governmental Authority shall have issued an
injunction enjoining the transactions described in Section 1A.1 hereof nor shall
any Governmental Authority have instigated any formal proceeding seeking such an
injunction. For purposes of clarification, the closing condition set forth in
the first clause of the previous sentence shall apply only to those filings and
consents where the failure to make such filing or obtain such consent would
prohibit the sale of the GPL Stock to Purchaser or make such sale illegal.
7A.5 Deliveries by Purchaser. Purchaser shall have effected the
deliveries required pursuant to Section 8A.3 below.
ARTICLE 8
TERMINALS CLOSING
8.1 Terminals Closing.
(a) The payment of the Terminals Purchase Price and
consummation of the transaction set forth in this Agreement relating to
the Terminals Sale shall take place at the offices of Mayer, Brown &
Platt, 190 South LaSalle Street, Chicago, Illinois 60603 at 10:00 A.M.
on March 1, 2001 (it being understood that, subject to Section 8.1(b),
the Terminals Closing shall be deemed to have occurred at 12:00 A.M. on
March 1, 2001 for any and all purposes) (the "Terminals Closing Date").
(b) Notwithstanding the actual Terminals Closing Date,
assuming consummation of the Terminals Sale, such Terminals Sale shall
have economic effect as if they had been consummated at 12:00 A.M. on
January 1, 2001. Seller and Purchaser shall reasonably assist each
other in making the accounting and tax determinations necessary to
effectuate the provisions of the preceding sentence.
8.2 Seller's Deliveries. At the Terminals Closing, Seller shall deliver
to Purchaser:
59
71
(a) a certificate, signed by an executive officer of Rail,
certifying as to the compliance by Seller with Sections 6.1 and 6.2
hereof;
(b) any applicable conveyance documents or other evidence of
transfer of the membership interests of the Terminals Companies in form
and substance reasonably satisfactory to Purchaser;
(c) the stock record book, minute book and seal (if any) of
each of the Terminals Companies;
(d) such resignations effective as of the Terminals Closing
Date of any officer or director of the Terminals Companies as may be
requested by Purchaser;
(e) a certification of Holding's non-foreign status as set
forth in Treasury Regulation Section 1.1445-2(b);
(f) a duly executed copy of each Related Agreement (including,
without limitation, the Services Agreement contemplated by Section
5.9); and
(g) any other items required to be delivered by Seller under
the terms and provisions of this Agreement.
8.3 Purchaser's Deliveries. At the Terminals Closing, Purchaser shall
deliver to Seller:
(a) a certificate, signed by an executive officer of
Purchaser, certifying as to the compliance by Purchaser with Sections
7.1 and 7.2 hereof;
(b) confirmation of the wire transfer of same-day funds in the
amount of the Terminals Purchase Price, as required by Section 1.2;
(c) a duly executed copy of each Related Agreement (including,
without limitation, the Services Agreement contemplated by Section
5.9); and
(d) any other items (including bank guarantees) to be
delivered by Purchaser under the terms and provisions of this
Agreement.
8.4 Termination. This Agreement shall terminate with respect to the
Terminals Sale:
(a) upon the mutual agreement of Seller and Purchaser;
(b) upon written notice from Purchaser to Seller if each of
the conditions precedent set forth in Article 6 has not been satisfied
on or before April 2, 2001; provided, however, if the consent of the
Port of Tampa to the assignment of any of the leases specified as a
condition to the Terminals Closing in Section 6.4(b) has not been
obtained by April 2, 2001, Seller may, upon notice to Purchaser given
no later than three business days prior to April 2, 2001, elect to
extend the date in this clause (b) to May 31, 2001; or
60
72
(c) upon written notice from Seller to Purchaser if each of
the conditions precedent set forth in Article 7 has not been satisfied
on or before April 2, 2001.
If this Agreement is terminated pursuant to this Section 8.4, all
further obligations of the parties under this Agreement will terminate, except
that (i) the obligations in Section 11.1 will survive and (ii) if this Agreement
with respect to Terminals Sale is terminated by a party because of the breach of
the Agreement by the other party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired. The obligations of the parties under the
Confidentiality Agreement (as amended) shall survive, and continue in full force
and effect after termination of this Agreement with respect to Terminals Sale.
ARTICLE 8A
CALNEV CLOSING; ASSET DIVISION
8A.1 Calnev Closing. The Calnev Closing shall take place at the offices
of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603 at
10:00 A.M. as soon as reasonably practicable after the date on which all
conditions precedent set forth in Articles 6A and 7A have been satisfied or
waived by the parties, or such other date as is mutually agreeable to Seller and
Purchaser (the "Calnev Closing Date").
8A.2 Seller's Deliveries. At the Calnev Closing, Seller shall deliver
to Purchaser:
(a) a certificate, signed by an executive officer of Rail,
certifying as to the compliance by Seller with Sections 6A.1 and 6A.2
hereof;
(b) any applicable conveyance documents or other evidence of
transfer of the membership interests of the Calnev Companies in form
and substance reasonably satisfactory to Purchaser;
(c) the stock record book, minute book and seal (if any) of
each of the Calnev Companies;
(d) such resignations effective as of the Calnev Closing Date
of any officer or director of all of the Calnev Companies as may be
requested by Purchaser;
(e) a certification of Holding's non-foreign status as set
forth in Treasury Regulation Section 1.1445-2(b); and
(f) any other items required to be delivered by Seller under
the terms and provisions of this Agreement.
8A.3 Purchaser's Deliveries. At the Calnev Closing, Purchaser shall
deliver to Seller:
(a) a certificate, signed by an executive officer of
Purchaser, certifying as to the compliance by Purchaser with Sections
7A.1 and 7A.2 hereof;
61
73
(b) confirmation of the wire transfer of same-day funds in the
amount of the Calnev Purchase Price, as required by Section 1A.2; and
(c) any other items (including bank guarantees) to be
delivered by Purchaser under the terms and provisions of this
Agreement.
8A.4 Termination. After consummation of the Terminals Sale, this
Agreement shall terminate with respect to the Calnev Sale:
(a) upon the mutual agreement of Seller and Purchaser;
(b) upon written notice from Purchaser to Seller if each of
the conditions precedent set forth in Article 6A has not been satisfied
on or before December 31, 2001; or
(c) upon written notice from Seller to Purchaser if each of
the conditions precedent set forth in Article 7A has not been satisfied
on or before December 31, 2001.
If this Agreement is terminated with respect to the Calnev Sale pursuant to this
Section 8A.4, all further obligations of the parties under this Agreement will
terminate, except that (i) any obligations in this Agreement and the Related
Agreements with respect to the Terminals Sale shall continue and be unaffected
by such termination with respect to the Calnev Sale pursuant to this Section
8A.4, (ii) the obligations in Section 11.1 will survive and (iii) if this
Agreement is terminated with respect to the Calnev Sale by a party because of
the breach of the Agreement by the other party or because one or more of the
conditions to the terminating party's obligations under this Agreement with
respect to the Calnev Sale is not satisfied as a result of the other party's
failure to comply with its obligations under this Agreement with respect to the
Calnev Sale, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired. The obligations of the parties under the
Confidentiality Agreement shall survive, and continue in full force and effect
after termination of this Agreement with respect to the Calnev Sale.
8A.5 Asset Division. The parties agree to consummate the Calnev Sale
upon receipt of all requisite regulatory approvals for the Calnev Sale. In
addition, to preserve the possibility of an alternative transaction in the event
that CalPUC does not approve the Calnev Sale (or delays such approval), the
parties shall undertake all actions necessary to divide the assets and
liabilities of the Calnev Companies, to execute the operating agreement
regarding certain Calnev assets and to consummate the New Calnev Sale
(collectively, the "Asset Division") in the event the application before the
CalPUC for the approval of the Calnev Sale has not been placed on the CalPUC's
agenda for its March 27, 2001 meeting or in the event the CalPUC does not
approve the Calnev Sale at its March 27, 2001 meeting. The parties shall proceed
as promptly as is reasonably practicable to complete the Asset Division so as to
achieve the following objectives:
(a) Any and all assets of the Calnev Companies that may be
transferred without the necessity of obtaining the approval of the
CalPUC and all associated liabilities (the "Transferable Assets and
Liabilities") shall be transferred by the Calnev Companies to a special
purpose subsidiary to be formed by Seller ("New Calnev").
62
74
(b) Any and all assets and liabilities of the Calnev Companies
other than the Transferable Assets and Liabilities (the "Retained
Assets and Liabilities") shall be retained by the Calnev Companies.
(c) Seller and Purchaser (or the appropriate wholly-owned
Affiliates thereof) shall execute a mutually agreeable operating
agreement (the "Operating Agreement") that will govern the operation by
Purchaser (or, subject to the reasonable approval of Seller, its
designee) of the Retained Assets and Liabilities, designed so as to
minimize any interference in the normal business operations of the
Calnev Companies as constituted prior to such Asset Division and to
observe applicable Law. The Asset Division, the New Calnev Sale and the
Operating Agreement shall be subject to the overall mandate that the
Operating Agreement and the other documents pertaining to the New
Calnev Sale and the Asset Division shall contain commercially
reasonable terms and conditions including, without limitation, that:
(i) the Purchaser (or, subject to the reasonable
approval of Seller, its designee) shall act as operator (the
"Operator") of the Retained Assets and Liabilities in
accordance with the Operating Agreement;
(ii) the execution, delivery and performance of the
Operating Agreement, the Asset Division and the New Calnev
Sale shall not violate any Law or require the consent or
approval of any Governmental Authority;
(iii) all revenues derived from the operation of the
Retained Assets and Liabilities shall be collected by the
Operator and held for the benefit of Calnev in a separately
identifiable operating account;
(iv) the Operator shall pay from such account: (A)
all costs associated with the Retained Assets and Liabilities,
including general and administrative expenses and other
overhead costs associated with the Retained Assets and
Liabilities; (B) an appropriate percentage of general overhead
and expenses incurred in the joint operation of the Calnev
Companies and New Calnev which cannot be allocated to
Transferable Assets and Liabilities or to Retained Assets and
Liabilities; and (C) as its sole and exclusive compensation
under the Operating Agreement, an amount of compensation that
is mutually agreeable to the parties (or, if the parties
cannot so agree, as is determined by the arbitration panel
contemplated by Section 8A.6);
(v) the Operator shall remit to Calnev the remainder
of the funds in the account on a monthly basis;
(vi) the Operator shall assume all operating risks
associated with the operation of the Retained Assets and
Liabilities;
(vii) the Operator shall indemnify Seller, and
release Seller from, all Losses associated with the operation
of the Retained Assets and Liabilities except for those solely
attributable to the gross negligence or willful misconduct of
Seller;
63
75
(viii) Seller shall have exclusive responsibility to
determine intrastate tariff changes and capital expenditures;
(ix) the Operator may be terminated by Seller for
reasonable cause and upon reasonable notice;
(x) the consummation of the Asset Division, the
Operating Agreement and the New Calnev Sale shall be subject
to the satisfaction of the closing conditions set forth in
Article 6A and Article 7A hereof; and
(xi) the consummation of the Asset Division, the
Operating Agreement and the New Calnev Sale shall be subject
to customary representations, warranties and covenants as may
be mutually agreeable to each of Purchaser and Seller.
If the Asset Division occurs, the parties will, unless and until they mutually
agree to the contrary or until the receipt of a final non-appealable order
denying approval of the transfer of the Retained Assets and Liabilities,
exercise reasonable best efforts to cause the CalPUC to approve the transfer of
the Retained Assets and Liabilities to Purchaser.
(d) Subject to the terms and conditions of this Section 8A.5
and the expiration or waiver of all required notice and waiting periods
under the HSR Act and any other applicable competition laws, Seller
shall sell, assign and deliver to Purchaser, and Purchaser shall
purchase and take assignment and delivery of, all of the issued and
outstanding shares of capital stock of New Calnev, such capital stock
having been converted into a limited liability company membership
interest prior to any such sale (the "New Calnev Sale"). At the New
Calnev Closing, Purchaser shall pay, by wire transfer of same-day
funds, an amount equal to the Calnev Purchase Price (as adjusted to
account for the difference in the Calnev Working Capital and Calnev
Aggregate Non-Current Balance Sheet Liability between September 30,
2000 and the New Calnev Closing Date pursuant to the mechanics set
forth in Section 1A.3 hereof) multiplied by a fraction equal to the
difference between (i) one (1) and (ii) a fraction having a numerator
equal to the average revenue attributable to the Retained Assets and
Liabilities in 1999 and 2000 (prior to the Asset Division) and a
denominator equal to the average total revenue of the Calnev Companies
in 1999 and 2000 (prior to the Asset Division), in each case as
determined from the books and records of the Calnev Companies and the
filings made by the Calnev Companies with the CalPUC and with the
Federal Energy Regulatory Commission (the "New Calnev Purchase Price").
8A.6 Actions Taken Contemporaneously with Asset Division.
Contemporaneously with the commencement of negotiations with respect to the
Asset Division pursuant to Section 8A.5, the parties shall undertake the
following:
(a) As promptly as possible after the commencement of the
negotiations contemplated by Section 8A.5, the parties shall provide
written notice to the CalPUC of their intention to consummate the Asset
Division. Such notice shall state that the parties intend to pursue the
CalPUC's approval of the intrastate portion of the transaction which is
subject to the jurisdiction of the CalPUC, but proceed to close on the
interstate portion
64
76
and enter into an operating agreement whereby the Purchaser (or its
designee) shall operate the intrastate assets on behalf of Calnev.
(b) On or before the fifth day following the commencement of
the negotiations contemplated by Section 8A.5 and Section 8A.6, and in
anticipation of the arbitration of potential disputes between them
before a three member panel, the parties shall take such steps as may
be required to initiate arbitration proceedings before the American
Arbitration Association (the "AAA"). The parties shall request the AAA
to tender separate lists of potential arbitrators having the following
qualifications:
(i) One list shall be comprised of attorneys licensed
to practice law in the State of California with ten (10) or
more years of experience in practicing before the CalPUC; and
(ii) The other list shall be comprised of former
Justices of the California Supreme Court.
(c) The parties shall select three arbitrators from the lists
so tendered, in the manner and within the time frame specified by
applicable rules of the AAA. Two of the arbitrators shall have the
qualifications specified in Section 8A.6(b)(i) and the remaining
arbitrator shall have the qualifications specified in Section
8A.6(b)(ii). In the event a former Justice of the California Supreme
Court is not available, the AAA shall instruct the two arbitrators so
selected to select a third arbitrator having the qualifications set
forth in Section 8A.6(b)(i) above.
(d) Within thirty days following the receipt by each of the
parties of the AAA's designation of the panel so selected, the panel
shall develop and provide to the parties instructions as to the
arbitral procedure, including the timeframe within which the parties
must (i) provide a submission of issues to the panel, (ii) provide
supporting documentation and memoranda of law, (iii) reply to the
documentation and memoranda submitted by the other party and (iv) take
such other action as the panel may deem necessary or advisable so that
the resolution of the issues submitted may be resolved as promptly as
possible, but in any event as close to July 1, 2001 as is reasonably
practicable.
(e) No sooner than thirty (30) days after the commencement of
negotiations pursuant to Section 8A.5 as mutually agreed by the
parties, either party may ask the arbitration panel to resolve any
points of disagreement between the parties relating to the Asset
Division, Operating Agreement and New Calnev Sale. An arbitration
proceeding conducted in accordance with this section, including the
time table set forth herein shall be the exclusive remedy available to
either party with respect to the Asset Division and for the failure of
the other party to reach an agreement relating to the Asset Division,
the Operating Agreement or the New Calnev Sale (other than for breach
of the obligations under Section 8A.5 and Section 8A.6). The
arbitration shall take place in Denver, Colorado, shall be governed by
the choice of law set forth in Section 11.7 hereof, and, unless the
parties otherwise agree, shall be governed by the commercial
arbitration rules of the AAA. The panel shall resolve any issue
submitted to it on the basis of (i)
65
77
preserving the division between Transferable Assets and Liabilities and
Retained Assets and Liabilities set forth in Section 8A.5(a) and (b),
on terms not inconsistent with Section 8A.5(c), (ii) operational
safety, (iii) operational efficiency and (iv) any other factors
relevant to the achievement of the objectives set forth in this Section
8A.5. The decision of the arbitration panel shall be final and binding
on Seller and Purchaser, and the Asset Division, the Operating
Agreement and the New Calnev Sale shall be conformed to reflect the
decision of the arbitration panel. The parties shall exercise
commercially reasonable efforts to consummate the Asset Division as
soon as reasonably practicable after receipt of the decision of the
arbitration panel. If the arbitration panel is unable to resolve one or
more of the disputes, the parties will continue to negotiate in good
faith (but in any event not beyond December 31, 2001) toward a mutually
agreeable resolution, reserving the right to ask the arbitration panel
to resolve future disputes. The arbitration panel shall be directed to
expressly confirm that the arbitration panel's proposed resolution of
the issues submitted to arbitration by the parties does not violate
applicable Law and does not require the approval of any Governmental
Authority. All costs of the arbitration contemplated by this Section
8A.5(e) shall be shared equally by Purchaser and Seller.
(f) Notwithstanding anything in this Agreement to the
contrary, upon the first to occur of the following: (i) the mutual
agreement of the parties, and (ii) the failure of the Asset Division to
occur on or before December 31, 2001, and if the Calnev Sale has not
occurred by December 31, 2001, the Seller and the Purchaser shall cease
efforts to consummate the Asset Division and shall have no further
rights as to each other with respect to the Calnev Companies, this
Agreement shall terminate with respect to the Calnev Sale pursuant to
Section 8A.4, the Asset Division, the Operating Agreement and the New
Calnev Sale and the Seller shall be free to divest the Calnev Companies
(by way of sale of equity, sale of assets, merger, joint venture,
partnership, sale-leaseback, lease finance, synthetic lease or
otherwise) to any bona fide third party that is not an Affiliate of
Seller at its discretion, provided, however, that (x) if Seller divests
the Calnev Companies for gross proceeds (including any debt and
non-cash consideration) in excess of $375,000,000, Seller shall pay to
Purchaser within five business days of the consummation of such
divestiture an amount equal to the sum of 25% of the amount by which
the gross proceeds (including any debt and non-cash consideration) from
the divestiture exceed $375,000,000 (except that no such payment shall
be due if the reason the transaction between Seller and Purchaser with
respect to the Calnev Companies did not close before December 31, 2001
was on account of a breach by Purchaser of its obligations under this
Agreement) and (y) the terms of Section 8A.5(f)(ii)(x) and Section
8A.6(b) shall survive. Nothing in this Section 8A.5(f) shall be
construed so as to prevent Seller from transferring any Calnev Company
to any of its wholly-owned Affiliates; provided, however, that upon any
divestiture by such Affiliate to any bona fide third party that is not
an Affiliate of Seller, Purchaser shall be entitled to the payments
required in the second sentence of this Section 8A.5(f). If a third
party that is not an Affiliate of Seller or Purchaser objects to the
Asset Division, Operating Agreement or the New Calnev Sale on the
ground that it would violate applicable Law and Purchaser nevertheless
elects to consummate the Asset Division, the Operating Agreement and
the New Calnev Sale, and the issue raised by the third party has not
been addressed by an arbitration panel pursuant to this Section 8A.6,
Purchaser agrees to indemnify Seller, to
66
78
the maximum extent permitted by Law, for any Calnev Losses incurred by
a Seller Indemnified Party resulting from such objection.
8A.7 Special Severance Payment.
(a) Upon the earlier of the Calnev Closing and the date of the
consummation of the Asset Division, Purchaser shall pay to Seller an
additional amount equal to the product of (x) 600 minus the number of
Terminals Employees and Calnev Employees who are Terminals Continuing
Employees or Calnev Continuing Employees, respectively, as of such date
and (y) the average severance payment made to all Terminals Employees
and Calnev Employees other than severance payments to Terminals
Employees or Calnev Employees based in Chicago.
(b) In the event that neither the Calnev Sale nor the Asset
Division shall have occurred prior to March 31, 2002, Purchaser shall
pay to Seller an additional amount equal to the product of (x) 532
minus the number of Terminals Continuing Employees and (y) the average
severance payment described made to all Terminals Employees other than
severance payments to Terminals Employees based in Chicago.
ARTICLE 9
SURVIVAL AND INDEMNIFICATION RELATING TO TERMINALS SALE
9.1 Survival. The representations and warranties of the parties hereto
contained herein with respect to the Terminals Companies and in the Related
Agreements shall survive the Terminals Closing until January 1, 2002, except
that (i) Terminals Tax Warranties shall survive until the applicable Tax Statute
of Limitations Date, (ii) the Terminals Environmental Warranty shall survive
until July 1, 2002, and (iii) Terminals Title and Authorization Warranties and
the representations and warranties set forth in Sections 2.3, 2.4(a)(i), 2.15
and 2.23 shall survive forever. Any covenant or obligation of the parties
pursuant to this Agreement that requires action to be taken prior to the
Terminals Closing (other than such covenants contained in Section 4.8 and
Article 10 hereof) shall survive the Terminals Closing until January 1, 2002.
Except where a shorter time period is specifically provided in this Agreement,
all other covenants and obligations of the parties with respect to the Terminals
Companies or the Terminals Closing pursuant to this Agreement (including,
without limitation, such covenants contained in Section 4.8 and Article 10
hereof) shall survive the Terminals Closing forever. The Schedule 9.2(a) Matters
shall survive the Terminals Closing forever. Neither Purchaser nor Seller shall
have any liability with respect to claims first asserted in connection with any
representation, warranty, covenant or obligation with respect to the Terminals
Companies or the Terminals Closing hereunder after the survival period specified
therefor in this Section 9.1.
9.2 Indemnification by Seller. Solely for the purpose of
indemnification in this Section 9.2, the representations and warranties of
Seller with respect to the Terminals Companies in this Agreement (other than the
representations and warranties of Seller contained in Section 2.10) shall be
deemed to have been made without regard to any materiality or Terminals Material
Adverse Effect qualifiers. Subject to Section 9B.7, Rail and Holdings, jointly
and severally, agree to indemnify Purchaser, its officers, directors,
Affiliates, successors and assigns, including, for the avoidance of doubt, the
Terminals Companies after the Terminals Closing (the
67
79
"Terminals Purchaser Indemnified Parties") against, and agree to hold the
Terminals Purchaser Indemnified Parties harmless from, any and all Terminals
Losses incurred or suffered by any Terminals Purchaser Indemnified Party arising
out of any of the following:
(a) the matters set forth in Schedule 9.2(a) (the "Schedule 9.2(a)
Matters"), whether or not a breach of a representation, warranty,
covenant or agreement has occurred, it being further agreed that (i)
the limitations on liability or survival of obligations of Seller set
forth in this Agreement shall in no way limit or apply to any
indemnification under this Section 9.2(a) and (ii) for purposes of this
Section 9.2(a) only, each Calnev Company shall cease to be an "Excluded
Company" upon the earlier of the Calnev Closing and the New Calnev
Closing;
(b) any breach of or any inaccuracy in any representation or
warranty made by Seller in Article 2 of this Agreement or any Related
Agreement or other document delivered by Seller at the Terminals
Closing; provided, that Seller shall have no liability under this
Section 9.2(b) for any breach of or inaccuracy in any such
representation or warranty unless (i) in the case of such
representations and warranties, except for Terminals Tax Warranties,
the Terminals Environmental Warranty, Terminals Title and Authorization
Warranties, and the representations and warranties set forth in
Sections 2.3, 2.4(a)(i), 2.15 and 2.23, a notice of the Terminals
Purchaser Indemnified Party's claim is given to Seller not later than
the close of business on January 1, 2002, (ii) in the case of Terminals
Tax Warranties, a notice of the Terminals Purchaser Indemnified Party's
claim is given to Seller not later than the close of business on the
applicable Tax Statute of Limitations Date, and (iii) in the case of
the Terminals Environmental Warranty, a notice of the Terminals
Purchaser Indemnified Party's claim is given to Seller not later than
the close of business on July 1, 2002;
(c) any breach of or failure by Seller to perform any covenant,
obligation or other agreement of Seller with respect to the Terminals
Companies or the Terminals Closing set out in this Agreement or any
Related Agreement or other document delivered by Seller at the
Terminals Closing; provided, that Seller shall have no liability under
this Section 9.2(c) for any breach or failure occurring on or prior to
the Terminals Closing Date unless a notice of the Terminals Purchaser
Indemnified Party's claim is given to Seller within the applicable time
period set forth in Section 9.1 hereof;
(d) incurred by any Terminals Purchaser Indemnified Party
pursuant to the letter agreement dated March 18, 1999 regarding the
GATX Terminals Limited Pension Scheme; or
(e) any post-employment welfare benefit payable under a Seller
Welfare Benefit Plan with respect to any individual who is an employee
or former employee of the Terminals Companies on the Terminals Closing
Date (or the eligible dependent of such an employee or former
employee), excluding (i) severance costs and continuation coverage
(within the meaning of Code Section 4980(B)(f) ("COBRA") with respect
to Terminals Continuing Employees and their qualified beneficiaries,
and (ii) post-retirement medical and life benefits with respect to
Terminals Continuing Union
68
80
Employees (and their eligible dependents) who are not eligible to
commence receipt of an immediate pension benefit on or before the
Terminals Closing Date.
9.3 Indemnification by Purchaser. Solely for the purpose of
indemnification in this Section 9.3, the representations and warranties of
Purchaser in this Agreement with respect to the Terminals Closing shall be
deemed to have been made without regard to any materiality or Terminals Material
Adverse Effect qualifiers. Subject to Section 9B.8, Purchaser agrees to
indemnify Seller, its officers, directors, its Affiliates after the Terminals
Closing, successors and assigns (the "Terminals Seller Indemnified Parties")
against, and agrees to hold the Terminals Seller Indemnified Parties harmless
from, any and all Losses incurred or suffered by any Terminals Seller
Indemnified Party arising out of any of the following:
(a) any breach of or any inaccuracy in any representation or
warranty made by Purchaser in Article 3 of this Agreement or any
Related Agreement or any document delivered by Purchaser at the
Terminals Closing; provided, that Purchaser shall have no liability
under this Section 9.3(a) for any breach of or inaccuracy in any
representation or warranty unless, in the case of all representations
and warranties with respect to the Terminals Closing, except for
Terminals Title and Authorization Warranties and the representation and
warranty set forth in Section 3.2, a notice of the Terminals Seller
Indemnified Party's claim is given to Purchaser not later than the
close of business on January 1, 2002;
(b) any breach of or failure by Purchaser to perform any covenant,
obligation or other agreement of Purchaser set out in this Agreement
and relating to the Terminals Closing or any Related Agreement or any
document delivered by Purchaser at the Terminals Closing;
(c) any occurrence, event, act or omission of any Terminals
Company prior or subsequent to the Terminals Closing, other than an
occurrence, event, act or omission which provides the basis for a right
of Purchaser to indemnification under Section 9.2;
(d) the termination of employment of any individual who, on or
after the Terminals Closing Date, is an employee of a Terminals
Company, Purchaser or any Affiliate of Purchaser, any employee matter
relating to any such employee, and any welfare benefit (including
post-retirement health and life benefits) to be provided with respect
to any such employee under the terms of any collective bargaining
agreement to which any Terminals Company is a party on or after the
Terminals Closing Date (excluding any post-retirement health or life
benefit with respect to a Terminals Continuing Union Employee who is
eligible to commence receipt of an immediate pension benefit prior to
or coincident with the Terminals Closing Date;
(e) the enforcement against Seller or any Terminals Seller
Indemnified Party of any of the guarantee or other obligations set
forth on Schedule 5.8 and any and all Terminals Losses related to
environmental matters incurred by Seller pursuant to contractual
indemnification obligations of the Terminals Companies to third parties
related to previously divested assets or businesses, including, without
limitation, those indemnification obligations set forth on Appendix A
to Schedule 9.2(a) attached hereto;
69
81
(f) any occurrence, event, act or omission of or related to the
business of the Terminals Companies (which was conducted as a division
of General American Transportation Corporation) that occurred prior to
July 1, 1975, other than an occurrence, event, act or omission which
provides the basis for a right of Purchaser to indemnification under
Section 9.2;
(g) shut-down benefits under any Seller Pension Plan subsequent to
the Terminals Closing triggered by the termination of an employee of
any of the Terminals Companies on or after the Terminals Closing Date
and on or before January 1, 2006; or
(h) any contamination of air, soil or ground water by any
Terminals Company (or any predecessor of a Terminals Company), or for
which any Terminals Company (or any predecessor of a Terminals Company)
is or may by law or contract become liable (including, but not limited
to, the remediation and other environmental indemnification obligations
of the Terminals Companies set forth on Appendix A to Schedule 9.2(a)
attached hereto), or the violation of any applicable Environmental Law
by any Terminals Company (or any predecessor of a Terminals Company),
including but not limited to the failure of Purchaser to adequately
fund or discharge the remediation obligations of any Terminals Company
(or any predecessor of a Terminals Company) pursuant to any statute or
regulations or any order or directive issued by an agency under
applicable Environmental Laws; provided, however, that the
indemnification provided by this paragraph 9.3(h) shall not apply to
any contamination that was required to be disclosed by Seller pursuant
to Section 2.18 but was not so disclosed.
9.4 Schedule 9.2(a) Matters.
(a) The parties acknowledge and agree that as of the Terminals
Closing Date Seller shall retain full and total responsibility for and
control of the Schedule 9.2(a) Matters. After the Terminals Closing
Date, Seller will have no claim against Purchaser or any Terminals
Purchaser Indemnified Party for any Loss which Seller may incur due to
any of the Schedule 9.2(a) Matters; provided, however, that (i) Seller
may recover from Purchaser for actual court costs and reasonable
attorneys' fees incurred to compel the reasonable cooperation described
in this Section 9.4 or otherwise incurred due to a breach by Purchaser
of its obligations under this Section 9.4. It is the parties' intent
that all responsibility for and control of the Schedule 9.2(a) Matters
transfer to Seller as of the Terminals Closing Date without further
action on the part of the parties, except for the obligation of
reasonable cooperation as described below.
(b) Subsequent to the Terminals Closing, Purchaser shall cause the
Terminals Companies to reasonably cooperate with and assist Seller in
Seller's defense of the Schedule 9.2(a) Matters. Such cooperation shall
include, without limitation, (i) retaining documents related to the
Schedule 9.2(a) Matters as Seller shall reasonably request and (ii)
causing employees of the Terminals Companies to be available to Seller
and Seller's counsel, during business hours, for interviews and
depositions relating to the Schedule 9.2(a) Matters.
70
82
(c) In taking all of the actions permitted or required by this
Section 9.4, Seller shall act, at Seller's expense, on behalf of the
Terminals Companies and shall have sole authority (including, without
limitation, settlement authority and the authority to approve and cause
the filing of pleadings, briefs and other documents on behalf of the
Terminals Companies) and responsibility for and exercise sole and
complete control of the Schedule 9.2(a) Matters. Upon Seller's written
request to Purchaser, Purchaser shall cause the president or other
executive officer of the relevant Terminals Company to execute any
document and agreement, including any settlement agreement with respect
to the Schedule 9.2(a) Matters as required by Seller. Notwithstanding
the foregoing, (i) Seller shall not be entitled to take or omit to take
action with respect to the Schedule 9.2(a) Matters, and (ii) Purchaser
will not be required to cause the relevant Terminals Company to execute
any document or agreement with respect to the Schedule 9.2(a) Matters,
if, in either case, such would result in a restriction on Purchaser,
any Terminals Company or any of their Affiliates.
(d) For purposes of this Section 9.4, in determining whether
reasonable cooperation has been exercised, no consideration shall be
given to the fact of Seller's indemnity of Terminals Purchaser
Indemnified Parties, and the conduct of Purchaser shall be evaluated as
if neither Purchaser nor the Terminals Companies were indemnified by
Seller on the Schedule 9.2(a) Matters.
ARTICLE 9A
SURVIVAL AND INDEMNIFICATION RELATING TO CALNEV SALE
9A.1 Survival. The representations and warranties of the parties hereto
contained herein with respect to the Calnev Companies and in the Related
Agreements with respect to the Calnev Companies shall survive the Calnev Closing
or the New Calnev Closing (as applicable) for a period of one (1) year, except
that (i) Calnev Tax Warranties shall survive until the applicable Tax Statute of
Limitations Date, (ii) the Calnev Environmental Warranty shall survive for a
period of eighteen (18) months, and (iii) Calnev Title and Authorization
Warranties and the representations and warranties set forth in Sections 2A.3,
2A.4(a)(i), 2A.15 and 2A.23 shall survive forever. Any covenant or obligation of
the parties pursuant to this Agreement that requires action to be taken prior to
the Calnev Closing or the New Calnev Closing (as applicable) (other than such
covenants contained in Sections 4A.5 and Article 10A hereof) shall survive the
Calnev Closing or the New Calnev Closing (as applicable) for a period of one (1)
year. Except where a shorter time period is specifically provided in this
Agreement, all other covenants and obligations of the parties with respect to
Calnev or the Calnev Closing or the New Calnev Closing (as applicable) pursuant
to this Agreement (including, without limitation, such covenants contained in
Sections 4A.5 and Article 10A hereof) shall survive the Calnev Closing or the
New Calnev Closing (as applicable) forever. Neither Purchaser nor Seller shall
have any liability with respect to claims first asserted in connection with any
representation, warranty, covenant or obligation with respect to Calnev or the
Calnev Closing or the New Calnev Closing (as applicable) hereunder after the
survival period specified therefor in this Section 9A.1.
9A.2 Indemnification by Seller. Solely for the purpose of
indemnification in this Section 9A.2, the representations and warranties of
Seller with respect to the Calnev Companies in this Agreement (other than the
representations and warranties of Seller contained in Section 2A.10)
71
83
shall be deemed to have been made without regard to any materiality or Calnev
Material Adverse Effect qualifiers. Subject to Section 9A.4, Rail and Holdings,
jointly and severally, agree to indemnify Purchaser, its officers, directors,
Affiliates, successors and assigns, including, for the avoidance of doubt, the
Calnev Companies after the Calnev Closing or the New Calnev Closing (as
applicable) (the "Calnev Purchaser Indemnified Parties") against, and agree to
hold the Calnev Purchaser Indemnified Parties harmless from, any and all Calnev
Losses incurred or suffered by any Calnev Purchaser Indemnified Party arising
out of any of the following:
(a) [Intentionally omitted];
(b) any breach of or any inaccuracy in any representation or
warranty made by Seller in Article 2A of this Agreement or any Related
Agreement or any document delivered by Seller at the Closing; provided,
that Seller shall have no liability under this Section 9A.2(b) for any
breach of or inaccuracy in any such representation or warranty unless
(i) in the case of such representations and warranties, except for
Calnev Tax Warranties, the Calnev Environmental Warranty, Calnev Title
and Authorization Warranties, and the representations and warranties
set forth in Sections 2A.3, 2A.4(a)(i), 2A.15 and 2A.23, a notice of
the Calnev Purchaser Indemnified Party's claim is given to Seller not
later than the close of business on the first anniversary of the Calnev
Closing Date or the New Calnev Closing (as applicable), (ii) in the
case of Calnev Tax Warranties, a notice of the Calnev Purchaser
Indemnified Party's claim is given to Seller not later than the close
of business on the applicable Tax Statute of Limitations Date, and
(iii) in the case of the Calnev Environmental Warranty, a notice of the
Calnev Purchaser Indemnified Party's claim is given to Seller not later
than the close of business on the day which is eighteen (18) months
after the Calnev Closing Date or the New Calnev Closing Date (as
applicable);
(c) any breach of or failure by Seller to perform any covenant,
obligation or other agreement of Seller with respect to Calnev or the
Calnev Closing or the New Calnev Closing (as applicable) set out in
this Agreement or any Related Agreement or any document delivered by
Seller at the Calnev Closing or the New Calnev Closing (as applicable)
provided, that Seller shall have no liability under this Section
9A.2(c) for any breach or failure occurring on or prior to the Calnev
Closing Date or the New Calnev Closing Date (as applicable) unless a
notice of the Calnev Purchaser Indemnified Party's claim is given to
Seller within the applicable time period set forth in Section 9A.1
hereof;
(d) incurred by any Calnev Purchaser Indemnified Party pursuant to
the letter agreement dated March 18, 1999 regarding the GATX Terminals
Limited Pension Scheme; or
(e) any post-employment welfare benefit payable under a Seller
Welfare Benefit Plan with respect to any individual who is an employee
or former employee of Calnev on the Calnev Closing Date or the New
Calnev Closing Date (as applicable) (or the eligible dependent of such
an employee or former employee), excluding (i) severance costs and
continuation coverage (within the meaning of (COBRA) with respect to
Calnev Continuing Employees and their qualified beneficiaries, and (ii)
post-retirement medical and life benefits with respect to Calnev
Continuing Union Employees (and their eligible
72
84
dependents) who are not eligible to commence receipt of an immediate
pension benefit on or before the Calnev Closing Date or the New Calnev
Closing Date (as applicable).
9A.3 Indemnification by Purchaser. Solely for the purpose of
indemnification in this Section 9A.3, the representations and warranties of
Purchaser in this Agreement with respect to the Calnev Closing or the New Calnev
Closing (as applicable) shall be deemed to have been made without regard to any
materiality or Calnev Material Adverse Effect qualifiers. Subject to Section
9B.7, Purchaser agrees to indemnify Seller, its officers, directors, its
Affiliates after the Calnev Closing or the New Calnev Closing (as applicable),
successors and assigns (the "Calnev Seller Indemnified Parties") against, and
agrees to hold the Calnev Seller Indemnified Parties harmless from, any and all
Losses incurred or suffered by any Calnev Seller Indemnified Party arising out
of any of the following:
(a) any breach of or any inaccuracy in any representation or
warranty made by Purchaser in Article 3 of this Agreement or any
Related Agreement or any document delivered by Purchaser at the Calnev
Closing or the New Calnev Closing (as applicable); provided, that
Purchaser shall have no liability under this Section 9A.3(a) for any
breach of or inaccuracy in any representation or warranty unless, in
the case of all representations and warranties with respect to the
Calnev Closing or the New Calnev Closing (as applicable), except for
Calnev Title and Authorization Warranties and the representation and
warranty set forth in Section 3.2, a notice of the Calnev Seller
Indemnified Party's claim is given to Purchaser not later than the
close of business on the first anniversary of the Calnev Closing Date
or the New Calnev Closing Date (as applicable);
(b) any breach of or failure by Purchaser to perform any covenant,
obligation or other agreement of Purchaser set out in this Agreement
and relating to the Calnev Closing or the New Calnev Closing (as
applicable) or any Related Agreement or any document delivered by
Purchaser at the Calnev Closing or the New Calnev Closing (as
applicable);
(c) any occurrence, event, act or omission of the Calnev Closing
prior or subsequent to the Calnev Closing or the New Calnev Closing (as
applicable), other than an occurrence, event, act or omission which
provides the basis for a right of Purchaser to indemnification under
Section 9A.2;
(d) the termination of employment of any individual who, on or
after the Calnev Closing Date or the New Calnev Closing Date (as
applicable), is an employee of a Calnev Company, Purchaser or any
Affiliate of Purchaser, any employee matter relating to any such
employee, and any welfare benefit (including post-retirement health and
life benefits) to be provided with respect to any such employee under
the terms of any collective bargaining agreement to which any Calnev
Company is a party on or after the Calnev Closing Date or the New
Calnev Closing Date (as applicable) (excluding any post-retirement
health or life benefit with respect to a Calnev Continuing Union
Employee who is eligible to commence receipt of an immediate pension
benefit prior to or coincident with the Calnev Closing Date or the New
Calnev Closing Date (as applicable);
73
85
(e) the enforcement against Seller or any Calnev Seller
Indemnified Party of any of the guarantee or other obligations set
forth on Schedule 5.8 and any and all Calnev Losses related to
environmental matters incurred by Seller pursuant to contractual
indemnification obligations of the Calnev Companies to third parties
related to previously divested assets or businesses, including, without
limitation, those indemnification obligations set forth on Appendix A
to Schedule 9.2(a) attached hereto;
(f) [Intentionally omitted];
(g) shut-down benefits under any Seller Pension Plan subsequent to
the Calnev Closing or the New Calnev Closing (as applicable) triggered
by the termination of an employee of Calnev on or after the Calnev
Closing Date or the New Calnev Closing Date (as applicable) and on or
before the fifth anniversary of the Calnev Closing Date or the New
Calnev Closing Date (as applicable); or
(h) any contamination of air, soil or ground water by any Calnev
Company (or any predecessor of a Calnev Company), or for which any
Calnev Company (or any predecessor of any Calnev Company) is or may by
law or contract become liable (including, but not limited to, the
remediation and other environmental indemnification obligations of any
Calnev Company set forth on Appendix A to Schedule 9.2(a) attached
hereto), or the violation of any applicable Environmental Law by any
Calnev Company (or any predecessor of any Calnev Company), including
but not limited to the failure of Purchaser to adequately fund or
discharge the remediation obligations of any Calnev Company (or any
predecessor of any Calnev Company) pursuant to any statute or
regulations or any order or directive issued by an agency under
applicable Environmental Laws; provided, however, that the
indemnification provided by this paragraph 9A.3(h) shall not apply to
any contamination that was required to be disclosed by Seller pursuant
to Section 2A.18 but was not so disclosed.
ARTICLE 9B
SURVIVAL AND INDEMNIFICATION GENERALLY
9B.1 Claims. As promptly as is reasonably practicable after becoming
aware of a claim for indemnification under this Agreement not involving a claim,
or the commencement of any suit, action or proceeding, of the type described in
Section 9B.2, the Indemnified Person shall give notice to the Indemnifying
Person of such claim, which notice shall specify the facts alleged to constitute
the basis for such claim, the representations, warranties, covenants and
obligations alleged to have been breached and the amount that the Indemnified
Person seeks hereunder from the Indemnifying Person, together with such
information as may be necessary for the Indemnifying Person to determine that
the limitations in Section 9B.7 or Section 9B.8 (as applicable) have been
satisfied or do not apply.
9B.2 Notice of Third Party Claims; Assumption of Defense. The
Indemnified Person shall give notice as promptly as is reasonably practicable to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement (which notice shall specify
in reasonable detail the nature and amount of such claim together with such
74
86
information as may be necessary for the Indemnifying Person to determine that
the limitations in Section 9B.7 or Section 9B.8 (as applicable) have been
satisfied or do not apply). The Indemnifying Person may, at its own expense, (a)
participate in the defense of any such claim, suit, action or proceeding and (b)
upon notice to the Indemnified Person, at any time during the course of any such
claim, suit, action or proceeding, assume the defense thereof with counsel of
its own choice and in the event of such assumption, shall have the exclusive
right, subject to clause (i) of Section 9B.3, to settle or compromise such
claim, suit, action or proceeding. If the Indemnifying Person assumes such
defense, the Indemnified Person shall have the right (but not the duty) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Person. Whether or not
the Indemnifying Person chooses to defend or prosecute any such claim, suit,
action or proceeding, all of the parties hereto shall cooperate in the defense
or prosecution thereof.
9B.3 Settlement or Compromise. Any settlement or compromise made or
caused to be made by the Indemnified Person (unless the Indemnifying Person has
the exclusive right to settle or compromise under clause (b) of Section 9B.2) or
the Indemnifying Person, as the case may be, of any such claim, suit, action or
proceeding of the kind referred to in Section 9B.2 shall also be binding upon
the Indemnifying Person or the Indemnified Person, as the case may be, in the
same manner as if a final judgment or decree had been entered by a court of
competent jurisdiction in the amount of such settlement or compromise; provided,
that (i) no obligation, restriction, Terminals Loss or Calnev Loss shall be
imposed on the Indemnified Person as a result of such settlement or compromise
without its prior written consent, which consent shall not be unreasonably
withheld, and (ii) the Indemnified Person will not compromise or settle any
claim, suit, action or proceeding without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld.
9B.4 Time Limits. Any right to indemnification or other recovery under
Article 9 or Article 9A shall only apply to Terminals Losses or Calnev Losses
with respect to which the Indemnified Person shall have notified the
Indemnifying Person within the applicable time period set forth in Section 9.2
or 9.3 or Section 9A.2 or 9A.3, as the case may be. If any claim for
indemnification or other recovery is timely asserted, the Indemnified Person
shall have the right to bring an action, suit or proceeding with respect to such
claim within one year after first giving the Indemnifying Person notice thereof,
but may not bring any such action, suit or proceeding thereafter.
9B.5 Net Losses and Subrogation.
(a) Notwithstanding anything contained herein to the contrary, the
amount of any Losses incurred or suffered by an Indemnified Person
shall be calculated after giving effect to (i) any insurance proceeds
received by the Indemnified Person (or any of its Affiliates) with
respect to such Terminals Losses or Calnev Losses, (ii) any Tax benefit
realized by the Indemnified Person (or any of its Affiliates; provided,
however, that for this purpose only the term "Affiliate" shall not
include upstream Affiliates of Purchaser) arising from the facts or
circumstances giving rise to such Terminals Losses or Calnev Losses and
(iii) any recoveries obtained by the Indemnified Person (or any of its
Affiliates) from any other third party. Each Indemnified Person shall
exercise commercially reasonable efforts to obtain such proceeds,
benefits and recoveries. If any
75
87
such proceeds, benefits or recoveries are received by an Indemnified
Person (or any of its Affiliates) with respect to any Terminals Losses
or Calnev Losses after an Indemnified Person has received
indemnification from an Indemnifying Person with respect thereto, the
Indemnified Person (or such Affiliate) shall pay to the Indemnifying
Person the amount of such proceeds, benefits or recoveries (up to the
amount of the Indemnifying Person's payment). Purchaser shall be
obligated under this Section 9B.5 notwithstanding Section 9.4(a).
(b) Upon making any payment to an Indemnified Person in respect of
any Terminals Losses or Calnev Losses, the Indemnifying Person will, to
the extent of such payment, be subrogated to all rights of the
Indemnified Person (and its Affiliates) against any third party in
respect of the Terminals Losses or Calnev Losses to which such payment
relates. Such Indemnified Person (and its Affiliates) and Indemnifying
Person will execute upon request all instruments reasonably necessary
to evidence or further perfect such subrogation rights.
9B.6 Purchase Price Adjustments. Any amounts payable under Section 9.2
or Section 9.3 or Section 9A.2 or Section 9A.3 shall be treated by Purchaser and
Seller as an adjustment to the Purchase Price except as to amounts previously
included as income or expense by Purchaser.
9B.7 Limitations on Liability of Seller. Notwithstanding any other
provision of this Agreement:
(a) Other than Terminals Title and Authorization Warranties,
Calnev Title and Authorization Warranties and the representations and
warranties set forth in Sections 2.3, 2.4(a)(i), 2.15, 2.23, 2A.3,
2A.4(a)(i), 2A.15 and 2A.23 to all of which no limitation under this
Section 9B.7(a) shall apply, the Purchaser Indemnified Parties shall
have the right to payment by Seller under Section 9.2(b) or Section
9A.2(b) only if, and only to the extent that, the Purchaser Indemnified
Parties shall have incurred
(i) as to any particular inaccuracy or breach, indemnifiable
Losses in excess of $100,000, and
(ii) as to all inaccuracies and breaches, indemnifiable Losses
(other than as excluded in clause (i)) in excess of one percent
(1.0%) of the Purchase Price in the aggregate
(it being understood, for purposes of clarification, that the
basket and other thresholds set forth in this sentence shall not
apply to Section 9.2(a), Section 9.2(c), Article 10, Section
9A.2(c), Section 9B.7(d) and Article 10A). For purposes of
calculating the $100,000 limitation in clause (i) of the previous
sentence, all claims arising out of a single or recurring
condition, event or circumstance shall be aggregated.
(b) Except as provided in Section 9.2(a) to which no limitation
under this Section 9B.7(b) shall apply, Seller shall have no liability
under or in connection with this Agreement or the Related Agreements or
the transactions contemplated hereby or thereby (including under
Section 9.2(b), Section 9.2(c), Section 9A.2(b), Section 9A.2(c) or
76
88
otherwise for any breach of or inaccuracy in any representation or
warranty or for any breach of any covenant or obligations or for any
other reason) in excess of
(i) as to all representations and warranties other than the
Terminals Title and Authorization Warranties, the Calnev Title and
Authorization Warranties, the Terminals Environmental Warranty,
the Calnev Environmental Warranty and the representations and
warranties set forth in Sections 2.3, 2.4(a)(i), 2.15, 2.23, 2A.3,
2A.4(a)(i), 2A.15, and 2A.23, ten percent (10%) of the Purchase
Price in the aggregate,
(ii) as to the Terminals Environmental Warranty and the Calnev
Environmental Warranty, thirteen and one third percent (13.3%) of
the Purchase Price in the aggregate, and
(iii) as to the Terminals Title and Authorization Warranties,
the Calnev Title and Authorization Warranties, the covenants and
obligations (including Section 4.15, Section 9B.7(d), Article 10
and Article 10A), and the representations and warranties set forth
in Sections 2.3, 2.4(a)(i), 2.15, 2.23, 2A.3, 2A.4(a)(i), 2A.15
and 2A.23, the Purchase Price in the aggregate;
provided, that in no event shall Seller's aggregate liability for
any and all matters referred to in clauses (i) and (ii) exceed
thirteen and one third percent (13.3%) of the Purchase Price in
the aggregate and in no event shall Seller's aggregate liability
for any and all matters referred to in clauses (i), (ii) and (iii)
exceed the Purchase Price in the aggregate. Any indemnification
for Losses pursuant to Section 9.2(a) shall in no way apply to,
limit or be limited by Purchaser Indemnified Parties' right to
indemnification under Article 9, Article 9A or Article 9B.
(c) The sole and exclusive liability and responsibility of Seller
to the Purchaser Indemnified Parties under or in connection with this
Agreement or the Related Agreements or the transactions contemplated
hereby or thereby (including for any breach of or inaccuracy in any
representation or warranty or for any breach of any covenant or
obligation or for any other reason), and the sole and exclusive remedy
of the Purchaser Indemnified Parties with respect to any of the
foregoing, shall be as set forth in Article 9, Article 9A, Article 9B,
Article 10 and Article 10A. To the extent that the Purchaser
Indemnified Parties have any Losses for which they may assert any other
right to indemnification, contribution or recovery from Seller (whether
under this Agreement or under any common law or any statute, including
any Environmental Law, or otherwise), Purchaser hereby waives, releases
and agrees not to assert such right, and Purchaser agrees to cause each
of the Purchaser Indemnified Parties to waive, release and agree not to
assert such right.
(d) Except for matters for which the Purchaser Indemnified Parties
are entitled to indemnification pursuant to Article 9, Article 9A or
Article 9B, in no event shall Seller have any liability for any health,
dental, life, disability or accidental death or dismemberment claim
which is incurred on or after the Terminals Closing Date, the Calnev
Closing Date or the New Calnev Closing Date (as applicable) by any
Terminals
77
89
Continuing Employees or Calnev Continuing Employee (as applicable) (or
their eligible dependents) or any Losses relating thereto. For purposes
of this paragraph (d), a claim (other than a workers' compensation
claim) shall be considered incurred (i) in the case of a health or
dental claim, on the date on which the services giving rise to the
claim are rendered, (ii) in the case of a life insurance, death or
dismemberment claim, on the date of the death or injury giving rise to
the claim, (iii) in the case of a short-term disability claim, on the
date for which the short-term disability payment is made, and (iii) in
the case of a long-term disability ("LTD") claim, on the first day of
the period for which LTD benefits are payable. Notwithstanding the
foregoing provisions of this paragraph (d), Seller shall retain the
liability for workers' compensation claims (including claims for
related health and dental services) with respect to Terminals
Continuing Employees and Calnev Continuing Employees, which claims
arise out of workers, compensation accidents occurring prior to the
Terminals Closing Date, the Calnev Closing Date or the New Calnev
Closing Date (as applicable).
(e) Except for matters for which the Purchaser Indemnified Parties
are entitled to indemnification pursuant to Article 9, Article 9A or
Article 9B, in no event shall Seller have any liability for any claims
(or for any Losses relating thereto) which are first made after the
Terminals Closing, the Calnev Closing or the New Calnev Closing (as
applicable) or claims (or for any Losses relating thereto) which are
first made after the Terminals Closing, the Calnev Closing or the New
Calnev Closing (as applicable) and which arise out of or in connection
with any services provided at any time by the Terminals Companies or
Calnev (as applicable)
9B.8 Limitations on Liability of Purchaser. Notwithstanding any other
provision of this Agreement:
(a) Other than the Terminals Title and Authorization Warranties,
the Calnev Title and Authorization Warranties and the representation
and warranty set forth in Section 3.2 to all of which no limitation
under this Section 9B.8(a) shall apply, the Seller Indemnified Parties
shall have the right to payment by Purchaser under Section 9.3(a) and
Section 9A.3(a) only if, and only to the extent that, the Seller
Indemnified Parties shall have incurred
(i) as to any particular inaccuracy or breach, indemnifiable
Losses in excess of $100,000, and
(ii) as to all inaccuracies and breaches, indemnifiable Losses
(other than as excluded in clause (i)) in excess of one percent
(1.0%) of the Purchase Price in the aggregate.
For purposes of calculating the $100,000 limitation in clause (i)
of the previous sentence, all claims arising out of a single or
recurring condition, event or circumstance shall be aggregated.
(b) Purchaser shall have no liability under or in connection with
this Agreement or the Related Agreements or the transactions
contemplated hereby or thereby (including under Section 9.3, Section
9A.3 or otherwise for any breach of or inaccuracy
78
90
in any representation or warranty or for any breach of any covenant or
obligations or for any other reason) in excess of
(i) as to all representations and warranties other than
Terminals Title and Authorization Warranties, the Calnev Title and
Authorization Warranties and the representation and warranty set
forth in Section 3.2, ten percent (10%) of the Purchase Price in
the aggregate, and
(ii) as to the Terminals Title and Authorization Warranties,
the Calnev Title and Authorization Warranties, covenants and
obligations, and the representation and warranty set forth in
Section 3.2, the Purchase Price in the aggregate;
provided, that in no event shall Purchaser's aggregate liability
for any and all matters referred to in clauses (i) and (ii) exceed
the Purchase Price in the aggregate.
ARTICLE 10
TAX MATTERS WITH RESPECT TO THE TERMINALS COMPANIES
10.1 Liability for Taxes.
(a) Seller shall be liable for, and shall indemnify and hold
Purchaser, the Terminals Companies and their respective Affiliates
harmless from any Taxes, together with any costs, expenses, losses or
damages, including reasonable expenses of investigation and attorneys'
and accountants' fees and expenses, arising out of or incident to the
determination, assessment or collection of such Taxes ("Terminals Tax
Losses"), (i) imposed on or incurred by any of the Terminals Companies
by reason of the several liability of the Terminals Companies pursuant
to Treasury Regulations Section 1.1502-6 or any analogous state, local
or foreign law or regulation which is attributable to having been a
member of any consolidated, combined or unitary group on or prior to
the Terminals Closing Date, (ii) resulting from the Terminals Companies
ceasing to be a member of the affiliated group (within the meaning of
Code Section 1504(a)) that includes Seller, (iii) imposed on or
incurred by the Terminals Companies with respect to any period (or
portion thereof) prior to and including the Terminals Closing Date (the
"Terminals Pre-Closing Date Period"), (iv) attributable to any
discharge of indebtedness that may result from any capital
contributions by Seller (or an Affiliate of Seller) to any of the
Terminals Companies of any intercompany indebtedness owed by any of the
Terminals Companies to Seller (or an Affiliate of Seller), (v)
resulting from the actions taken under Section 4.12 of this Agreement,
or (vi) relating to all income Taxes arising as a result of the sale of
the Terminals Stock and the Terminals Sale; provided, however, that
Seller shall not be liable or offer an indemnification for any amount
of current liability accrual for Taxes to the extent reflected on the
Terminals Closing Balance Sheet with respect to the Terminals
Companies.
(b) Purchaser shall be liable for, and shall indemnify and hold
Seller and its Affiliates harmless from any Terminals Tax Losses (i)
imposed on or incurred by the Terminals Companies with respect to the
period after the Terminals Closing Date or (ii)
79
91
with respect to state and local Transaction Taxes incurred by Seller in
connection with converting any of the Terminals Companies into limited
liability companies pursuant to Section 4.8 hereof (provided, however,
that the indemnification by Purchaser pursuant to this clause (ii)
shall be limited to those Taxes in excess of the Transaction Taxes
which would have arisen had the Terminals Companies been sold as
corporations and an election under Section 338(h)(10) of the Code had
been made).
(c) Whenever it is necessary for purposes of this Article 10 to
determine the portion of any Taxes imposed on or incurred by the
Terminals Companies for a taxable period beginning before and ending
after the Terminals Closing Date which is allocable to the Terminals
Pre-Closing Date Period, the determination shall be made, in the case
of property or ad valorem taxes or franchise taxes (which are measured
by, or based solely upon capital, debt or a combination of capital and
debt), on a per diem basis and, in the case of other Taxes, by assuming
that the Terminals Pre-Closing Date Period constitutes a separate
taxable period of the Terminals Companies and by taking into account
the actual taxable events occurring during such period (except that
exemptions, allowances and deductions for a taxable period beginning
before and ending after the Terminals Closing Date that are calculated
on an annual or periodic basis, such as the deduction for depreciation,
shall be apportioned to the Terminals Pre-Closing Date Period ratably
on a per diem basis). Notwithstanding anything to the contrary herein,
any franchise Tax paid or payable with respect to any of the Terminals
Companies shall be allocated to the taxable period during which the
income, operations, assets or capital comprising the base of such Tax
is measured, regardless of whether the right to do business for another
taxable period is obtained by the payment of such franchise Tax.
(d) Purchaser agrees to pay to Seller any refund received after
the Terminals Closing Date by Purchaser or its Affiliates, including
the Terminals Companies, in respect of any Taxes for which Seller is
liable under clause (a) of this Section 10.1. Seller agrees to pay to
Purchaser any refund received by Seller or its Affiliates in respect of
any Taxes for which Purchaser is liable under clause (b) of this
Section 10.1. The parties shall cooperate, each at its own expense, in
order to take all reasonably necessary steps to claim any such refund.
Any such refund received by a party or its Affiliate for the account of
the other party shall be paid to such other party within 90 days after
such refund is received.
(e) Purchaser and Seller agree not to make or cause any election
(including an election to ratably allocate items under Treasury
Regulations Section 1.1502-76(b)(2)(ii)) to allocate tax items in a
manner inconsistent with Section 10.1(c) hereof.
10.2 Tax Returns.
(a) Seller shall cause to be included in the consolidated federal
income Tax Returns (and the state income Tax Returns of any state that
permits consolidated, combined or unitary income Tax Returns, if any)
of the Parent Group (as defined herein) for all periods ending on or
before the Terminals Closing Date and for periods which include the
Terminals Closing Date, all items of income, gain, loss, deduction and
credit ("Terminals Tax Items") of the Terminals Companies which are
required to be included
80
92
therein, shall cause such Tax Returns to be timely filed with the
appropriate Government Authorities, and shall be responsible for the
timely payment of all Taxes due with respect to the periods covered by
such Tax Returns. For purposes of this Agreement, "Parent Group" (i)
means the affiliated group of corporations within the meaning of
Section 1504 of the Code which files a consolidated federal income Tax
Return and as to which Seller is a member, and (ii) in the case of any
combined or unitary Tax Return, the group of corporations filing such
Tax Return that includes any of the Terminals Companies or Calnev (as
applicable).
(b) With respect to any Tax Return covering a taxable period
ending on or before the Terminals Closing Date that is required to be
filed after the Terminals Closing Date with respect to any of the
Terminals Companies that is not described in paragraph (a) above,
Seller shall cause such Tax Return to be prepared, shall cause to be
included in such Tax Return all Terminals Tax Items required to be
included therein, shall cause such Tax Return to be filed timely with
the appropriate Government Authority, and shall be responsible for the
timely payment of all Taxes due with respect to the period covered by
such Tax Return.
(c) With respect to any Tax Return covering a taxable period
beginning on or before the Terminals Closing Date and ending after the
Terminals Closing Date that is required to be filed after the Terminals
Closing Date with respect to any of the Terminals Companies, Purchaser
shall cause such Tax Return to be prepared, shall cause to be included
in such Tax Return all Terminals Tax Items required to be included
therein, shall furnish a copy of such Tax Return to Seller, shall file
timely such Tax Return with the appropriate Government Authority, and
shall be responsible for the timely payment of all Taxes due with
respect to the period covered by such Tax Return. Purchaser shall
determine, in accordance with the provisions of Section 10.1(c) of the
Agreement, the amount of Tax due with respect to the Terminals
Pre-Closing Date Period (the "Seller's Terminals Tax") and shall notify
Seller of its determination of the Seller's Terminals Tax. Seller shall
pay to Purchaser an amount equal to the Seller's Terminals Tax not
later than five days after the filing of such Tax Return. Any refund
attributable to Tax Returns filed pursuant to this Section 10.2(c)
shall be apportioned between Purchaser and Seller in a manner
consistent with the calculation of the Seller's Terminals Tax.
(d) Purchaser shall, with respect to any Tax Return which
Purchaser is responsible under Section 10.2(c) for preparing and
filing, make such Tax workpapers available for review by Seller if the
Tax Return is with respect to Taxes for which Seller may be liable (in
whole or in part) hereunder or under applicable law. Purchaser shall
make such workpapers available for review no later than twenty (20)
days before the due date for filing such Tax Returns to provide Seller
with a meaningful opportunity to analyze and comment on such Tax
Returns and have such Tax Returns modified before filing, accepting the
position of Purchaser unless such position is contrary to the
provisions of Section 10.2(e) hereof. If, within ten (10) days of such
delivery, Seller shall deliver to Purchaser a written statement
describing Seller's objections to such Tax Return and all grounds
therefor, and the parties are unable to resolve such objections within
the ten (10) day period prior to filing such Tax Return, such Tax
Return shall be filed as prepared by Purchaser, and any remaining
disputes shall be resolved by the
81
93
Terminals Arbitrating Accounting Firm as provided in Section 10.2(f).
Seller will join in the execution of such Tax Return and other
documentation if required to do so by applicable Law.
(e) Any Tax Return which includes or is based on the operations,
ownership, assets or activities of the Terminals Companies for any
taxable period beginning before and ending after the Terminals Closing
Date, and any Tax Return in respect of any Taxes for which Seller may
be liable (in whole or in part) hereunder shall be prepared in
accordance with past Tax accounting practices used with respect to the
Tax Returns in question (unless such past practices are no longer
permissible under the applicable law), and to the extent any items are
not covered by past practices (or in the event such past practices are
no longer permissible under the applicable tax law), in accordance with
reasonable tax accounting practices selected by the filing party with
respect to such Tax Return under this Agreement with the consent (not
to be unreasonably withheld or delayed) of the non-filing party.
(f) The Terminals Arbitrating Accounting Firm shall be instructed
to resolve any disputes referred to it pursuant to Section 10.2(d)
within five (5) days after such referral. The resolution of disputes by
the Terminals Arbitrating Accounting Firm shall be set forth in writing
and shall be conclusive and binding upon all parties and the parties
shall join in the execution and cooperate in the filing of any amended
Tax Return as shall be necessary to implement such resolution. The fees
and expenses of the Terminals Arbitrating Accounting Firm shall be
apportioned by the Terminals Arbitrating Accounting Firm based on the
degree to which each party's claims were unsuccessful and shall be paid
by the parties in accordance with such determination. For example, if
pursuant to this Section 10.2(f) Seller submitted an objection
affecting the amount of Tax due in the amount of $100,000 and prevailed
as to $45,000 of the amount, then Seller would bear 55% of the fees and
expenses of the Terminals Arbitrating Accounting Firm.
(g) Unless required by law, Purchaser shall not file an amended
Tax Return for any period ending on or prior to the Terminals Closing
Date without the consent of Seller.
(h) Subject to Section 10.1(b)(ii), all Transaction Taxes related
to the Terminals Companies, whether levied on Purchaser or Seller or
their respective Affiliates, shall be borne 50% by Seller and 50% by
Purchaser, and Seller shall file all necessary documentation with
respect to, and make all payments of, such Transaction Taxes and fees
on a timely basis.
10.3 Cooperation on Tax Matters.
(a) Purchaser and the Terminals Companies and Seller shall
cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns pursuant to this
Article 10 and any audit, litigation or other proceeding with respect
to Taxes although the party responsible for filing the Tax Return
pursuant to this Agreement shall control any such audit, litigation or
other proceeding, provided that the controlling party may not, without
the consent of the other party, agree to any
82
94
settlement which would result in an increase in the amount of Taxes for
which any other party is or may be liable. Such cooperation shall
include the retention and (upon the other party's request) the
provision of records and information which are reasonably relevant to
any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.
Purchaser and Seller agree (i) to retain all books and records with
respect to Tax matters pertinent to the Terminals Companies relating to
any Taxable Period beginning before the Terminals Closing Date until
the expiration of the applicable statute of limitations (and, to the
extent notified by Purchaser or Seller, any extensions thereof) of the
respective Taxable Periods, and to abide by all record retention
agreements entered into with any taxing authority and (ii) to give the
other party reasonable written notice prior to transferring, destroying
or discarding any such books and records and, if the other party so
requests, the Terminals Companies, as the case may be, shall allow the
other party to take possession of such books and records.
(b) Purchaser and Seller further agree, upon reasonable request by
the other party, to use all reasonable commercial efforts to obtain any
certificate or other document from any Governmental Authority or any
other Person as may be necessary to mitigate, reduce or eliminate any
Tax that could be imposed (including, but not limited to, with respect
to the transactions contemplated hereby).
10.4 Carrybacks and Refunds. Any required amended Tax Return relating
to a Terminals Pre-Closing Date Period and any refund claims relating to a
Terminals Pre-Closing Date Period shall be prepared by Seller. Neither Purchaser
nor any of its Affiliates shall file any Tax Return or any other document which
attempts to carry back to any Terminals Pre-Closing Date Period any item of
income, loss, deduction or credit (including, without limitation, any net
operating loss) incurred, created or sustained during any Tax period which ends
after the Terminals Closing Date.
10.5 Survival. Anything to the contrary in this Agreement
notwithstanding, the representations, warranties, covenants, agreements, rights
and obligations of the parties hereto with respect to any Tax matter related to
the Terminals Companies shall survive the Terminals Closing and shall not
terminate until the applicable Tax Statute of Limitations Date.
10.6 Conflict. In the event of a conflict between the provisions of
this Article 10 and any other provisions of this Agreement, the provisions of
this Article 10 shall control.
10.7 Transfer Taxes. Each of the Purchaser and Seller shall cooperate
with each other in the preparation and filing of all necessary documentation
related to Transaction Taxes in the State of Washington resulting from the
Terminals Sale within 30 days of the Terminals Closing. Any such Transaction
Taxes shall be shared in the manner set forth in Section 10.2(h).
83
95
ARTICLE 10A
TAX MATTERS WITH RESPECT TO THE CALNEV COMPANIES
10A.1 Liability for Taxes.
(a) Seller shall be liable for, and shall indemnify and hold
Purchaser, the Calnev Companies and their respective Affiliates
harmless from any Taxes, together with any costs, expenses, losses or
damages, including reasonable expenses of investigation and attorneys'
and accountants' fees and expenses, arising out of or incident to the
determination, assessment or collection of such Taxes ("Calnev Tax
Losses"), (i) imposed on or incurred by any of the Calnev Companies by
reason of the several liability of the Calnev Companies pursuant to
Treasury Regulations Section 1.1502-6 or any analogous state, local or
foreign law or regulation which is attributable to having been a member
of any consolidated, combined or unitary group on or prior to the
Calnev Closing Date, (ii) resulting from any of the Calnev Companies
ceasing to be a member of the affiliated group (within the meaning of
Code Section 1504(a)) that includes Seller, (iii) imposed on or
incurred by any of the Calnev Companies with respect to any period (or
portion thereof) prior to and including the Calnev Closing Date (the
"Calnev Pre-Closing Date Period"), (iv) attributable to any discharge
of indebtedness that may result from any capital contributions by
Seller (or an Affiliate of Seller) to any of the Calnev Companies of
any intercompany indebtedness owed by any of the Calnev Companies to
Seller (or an Affiliate of Seller) or (v) relating to all income Taxes
arising as a result of the sale of the GPL Stock and the Calnev Sale;
provided, however, that Seller shall not be liable or offer an
indemnification for any amount of current liability accrual for Taxes
to the extent reflected on the Calnev Closing Balance Sheet with
respect to the Calnev Companies.
(b) Purchaser shall be liable for, and shall indemnify and hold
Seller and its Affiliates harmless from any Calnev Tax Losses (i)
imposed on or incurred by any of the Calnev Companies with respect to
the period after the Calnev Closing Date or (ii) with respect to state
and local Transaction Taxes incurred by Seller in connection with
converting any of the Calnev Companies into limited liability companies
pursuant to Section 4A.5 hereof (provided, however, that the
indemnification by Purchaser pursuant to this clause (ii) shall be
limited to those Taxes in excess of the Transaction Taxes which would
have arisen had the Calnev Companies been sold as corporations and an
election under Section 338(h)(10) of the Code had been made).
(c) Whenever it is necessary for purposes of this Article 10A to
determine the portion of any Taxes imposed on or incurred by any of the
Calnev Companies for a taxable period beginning before and ending after
the Calnev Closing Date which is allocable to the Calnev Pre-Closing
Date Period, the determination shall be made, in the case of property
or ad valorem taxes or franchise taxes (which are measured by, or based
solely upon capital, debt or a combination of capital and debt), on a
per diem basis and, in the case of other Taxes, by assuming that the
Calnev Pre-Closing Date Period constitutes a separate taxable period of
the Calnev Companies and by taking into account the actual taxable
events occurring during such period (except that exemptions, allowances
and deductions for a taxable period beginning before and ending after
the Calnev Closing
84
96
Date that are calculated on an annual or periodic basis, such as the
deduction for depreciation, shall be apportioned to the Calnev
Pre-Closing Date Period ratably on a per diem basis). Notwithstanding
anything to the contrary herein, any franchise Tax paid or payable with
respect to any of the Calnev Companies shall be allocated to the
taxable period during which the income, operations, assets or capital
comprising the base of such Tax is measured, regardless of whether the
right to do business for another taxable period is obtained by the
payment of such franchise Tax.
(d) Purchaser agrees to pay to Seller any refund received after
the Calnev Closing Date by Purchaser or its Affiliates, including any
Calnev Company, in respect of any Taxes for which Seller is liable
under clause (a) of this Section 10A.1. Seller agrees to pay to
Purchaser any refund received by Seller or its Affiliates in respect of
any Taxes for which Purchaser is liable under clause (b) of this
Section 10A.1. The parties shall cooperate, each at its own expense, in
order to take all reasonably necessary steps to claim any such refund.
Any such refund received by a party or its Affiliate for the account of
the other party shall be paid to such other party within 90 days after
such refund is received.
(e) Purchaser and Seller agree not to make or cause any election
(including an election to ratably allocate items under Treasury
Regulations Section 1.1502-76(b)(2)(ii)) to allocate tax items in a
manner inconsistent with Section 10A.1(c) hereof.
10A.2 Tax Returns.
(a) Seller shall cause to be included in the consolidated federal
income Tax Returns (and the state income Tax Returns of any state that
permits consolidated, combined or unitary income Tax Returns, if any)
of the Parent Group for all periods ending on or before the Calnev
Closing Date and for periods which include the Calnev Closing Date, all
items of income, gain, loss, deduction and credit ("Calnev Tax Items")
of the Calnev Companies which are required to be included therein,
shall cause such Tax Returns to be timely filed with the appropriate
Government Authorities, and shall be responsible for the timely payment
of all Taxes due with respect to the periods covered by such Tax
Returns.
(b) With respect to any Tax Return covering a taxable period
ending on or before the Calnev Closing Date that is required to be
filed after the Calnev Closing Date with respect to each of the Calnev
Companies that is not described in paragraph (a) above, Seller shall
cause such Tax Return to be prepared, shall cause to be included in
such Tax Return all Calnev Tax Items required to be included therein,
shall cause such Tax Return to be filed timely with the appropriate
Government Authority, and shall be responsible for the timely payment
of all Taxes due with respect to the period covered by such Tax Return.
(c) With respect to any Tax Return covering a taxable period
beginning on or before the Calnev Closing Date and ending after the
Calnev Closing Date that is required to be filed after the Calnev
Closing Date with respect to Calnev, Purchaser shall cause such Tax
Return to be prepared, shall cause to be included in such Tax Return
all Calnev
85
97
Tax Items required to be included therein, shall furnish a copy of such
Tax Return to Seller, shall file timely such Tax Return with the
appropriate Government Authority, and shall be responsible for the
timely payment of all Taxes due with respect to the period covered by
such Tax Return. Purchaser shall determine, in accordance with the
provisions of Section 10A.1(b) of the Agreement, the amount of Tax due
with respect to the Calnev Pre-Closing Date Period (the "Seller's
Calnev Tax") and shall notify Seller of its determination of the
Seller's Calnev Tax. Seller shall pay to Purchaser an amount equal to
the Seller's Calnev Tax not later than five days after the filing of
such Tax Return. Any refund attributable to Tax Returns filed pursuant
to this Section 10A.2(c) shall be apportioned between Purchaser and
Seller in a manner consistent with the calculation of the Seller's
Calnev Tax.
(d) Purchaser shall, with respect to any Tax Return which
Purchaser is responsible under Section 10A.2(c) for preparing and
filing, make such Tax workpapers available for review by Seller if the
Tax Return is with respect to Taxes for which Seller may be liable (in
whole or in part) hereunder or under applicable law. Purchaser shall
make such workpapers available for review no later than twenty (20)
days before the due date for filing such Tax Returns to provide Seller
with a meaningful opportunity to analyze and comment on such Tax
Returns and have such Tax Returns modified before filing, accepting the
position of Purchaser unless such position is contrary to the
provisions of Section 10A.2(e) hereof. If, within ten (10) days of such
delivery, Seller shall deliver to Purchaser a written statement
describing Seller's objections to such Tax Return and all grounds
therefor, and the parties are unable to resolve such objections within
the ten (10) day period prior to filing such Tax Return, such Tax
Return shall be filed as prepared by Purchaser, and any remaining
disputes shall be resolved by the Calnev Arbitrating Accounting Firm as
provided in Section 10A.2(f). Seller will join in the execution of such
Tax Return and other documentation if required to do so by applicable
Law.
(e) Any Tax Return which includes or is based on the operations,
ownership, assets or activities of the Calnev Companies for any taxable
period beginning before and ending after the Calnev Closing Date, and
any Tax Return in respect of any Taxes for which Seller may be liable
(in whole or in part) hereunder shall be prepared in accordance with
past Tax accounting practices used with respect to the Tax Returns in
question (unless such past practices are no longer permissible under
the applicable law), and to the extent any items are not covered by
past practices (or in the event such past practices are no longer
permissible under the applicable tax law), in accordance with
reasonable tax accounting practices selected by the filing party with
respect to such Tax Return under this Agreement with the consent (not
to be unreasonably withheld or delayed) of the non-filing party.
(f) The Calnev Arbitrating Accounting Firm shall be instructed to
resolve any disputes referred to it pursuant to Section 10A.2(d) within
five (5) days after such referral. The resolution of disputes by the
Calnev Arbitrating Accounting Firm shall be set forth in writing and
shall be conclusive and binding upon all parties and the parties shall
join in the execution and cooperate in the filing of any amended Tax
Return as shall be necessary to implement such resolution. The fees and
expenses of the Calnev
86
98
Arbitrating Accounting Firm shall be apportioned by the Calnev
Arbitrating Accounting Firm based on the degree to which each party's
claims were unsuccessful and shall be paid by the parties in accordance
with such determination. For example, if pursuant to this Section
10A.2(f) Seller submitted an objection affecting the amount of Tax due
in the amount of $100,000 and prevailed as to $45,000 of the amount,
then Seller would bear 55% of the fees and expenses of the Calnev
Arbitrating Accounting Firm.
(g) Unless required by law, Purchaser shall not file an amended
Tax Return for any period ending on or prior to the Calnev Closing Date
without the consent of Seller.
(h) Subject to Section 10A.1(b)(ii), all Transaction Taxes related
to the Calnev Companies, whether levied on Purchaser or Seller or their
respective Affiliates, shall be borne 50% by Seller and 50% by
Purchaser, and Seller shall file all necessary documentation with
respect to, and make all payments of, such Transaction Taxes and fees
on a timely basis.
10A.3 Cooperation on Tax Matters.
(a) Purchaser and the Calnev Companies and Seller shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to this Article 10A
and any audit, litigation or other proceeding with respect to Taxes
although the party responsible for filing the Tax Return pursuant to
this Agreement shall control any such audit, litigation or other
proceeding, provided that the controlling party may not, without the
consent of the other party, agree to any settlement which would result
in an increase in the amount of Taxes for which any other party is or
may be liable. Such cooperation shall include the retention and (upon
the other party's request) the provision of records and information
which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient
basis to provide additional information and explanation of any material
provided hereunder. Purchaser and Seller agree (i) to retain all books
and records with respect to Tax matters pertinent to the Calnev
Companies relating to any Taxable Period beginning before the Calnev
Closing Date until the expiration of the applicable statute of
limitations (and, to the extent notified by Purchaser or Seller, any
extensions thereof) of the respective Taxable Periods, and to abide by
all record retention agreements entered into with any taxing authority
and (ii) to give the other party reasonable written notice prior to
transferring, destroying or discarding any such books and records and,
if the other party so requests, the Calnev Companies, as the case may
be, shall allow the other party to take possession of such books and
records.
(b) Purchaser and Seller further agree, upon reasonable request
by the other party, to use all reasonable commercial efforts to obtain
any certificate or other document from any Governmental Authority or
any other Person as may be necessary to mitigate, reduce or eliminate
any Tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
87
99
10A.4 Carrybacks and Refunds. Any required amended Tax Return relating
to a Calnev Pre-Closing Date Period and any refund claims relating to a Calnev
Pre-Closing Date Period shall be prepared by Seller. Neither Purchaser nor any
of its Affiliates shall file any Tax Return or any other document which attempts
to carry back to any Calnev Pre-Closing Date Period any item of income, loss,
deduction or credit (including, without limitation, any net operating loss)
incurred, created or sustained during any Tax period which ends after the Calnev
Closing Date.
10A.5 Survival. Anything to the contrary in this Agreement
notwithstanding, the representations, warranties, covenants, agreements, rights
and obligations of the parties hereto with respect to any Tax matter related to
the Calnev Companies shall survive the Calnev Closing and shall not terminate
until the applicable Tax Statute of Limitations Date.
10A.6 Conflict. In the event of a conflict between the provisions of
this Article 10A and any other provisions of this Agreement, the provisions of
this Article 10A shall control.
ARTICLE 11
MISCELLANEOUS
11.1 Expenses. Each party hereto shall bear its own expenses with
respect to this transaction. Purchaser shall pay any HSR Act or similar filing
or reporting fee.
11.2 Amendment. This Agreement may be amended, modified or supplemented
only in writing signed by each of the parties hereto.
11.3 Notices. Any written notice to be given hereunder shall be deemed
given: (a) when received if given in person or by courier; (b) on the date of
transmission if sent by telex, telecopy or other wire transmission (receipt
confirmed); (c) three (3) days after being deposited in the U.S. mail, certified
or registered mail, postage prepaid; and (d) if sent by a nationally recognized
overnight delivery service, the day following the date given to such overnight
delivery service (specified for overnight delivery). All notices shall be
addressed as follows:
If to Seller, addressed as follows:
GATX Rail Corporation
500 West Monroe Street
Chicago, Illinois 60661
Attention: Ronald J. Ciancio, Esq.
Telephone: (312) 621-6591
Facsimile: (312) 621-6637
with a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: James J. Junewicz, Esq.
Telephone: (312) 782-0600
Facsimile: (312) 701-7711
88
100
If to Purchaser, addressed as follows:
Kinder Morgan Energy Partners, L.P.
One Allen Center, Suite 1000
500 Dallas Street
Houston, Texas 77002
Attention: Joseph Listengart, Esq.
Telecopy: (713) 369-9499
with a copy to:
Bracewell & Patterson, L.L.P.
South Tower Pennzoil Place
711 Louisiana, Suite 2900
Houston, Texas 77002
Attention: Rick L. Wittenbraker, Esq.
Telecopy: (713) 221-2133
11.4 Waivers. The failure of a party to require performance of any
provision hereof shall not affect its right at a later time to enforce the same.
No waiver by a party of any term, covenant, representation or warranty contained
herein shall be effective unless in writing. No such waiver in any one instance
shall be deemed a further or continuing waiver of any such term, covenant,
representation or warranty in any other instance.
11.5 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.6 Headings. The headings preceding the text of Articles and Sections
of this Agreement and the Schedules and Exhibits thereto are for convenience
only and shall not be deemed part of this Agreement.
11.7 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws, and not the laws of
conflicts, of the state of New York.
11.8 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns; provided,
that no assignment of either party's rights or obligations may be made without
the written consent of the other party, which consent shall not be unreasonably
withheld or delayed; provided, further, that Purchaser, Rail or Holdings may
assign all of its rights, privileges and obligations hereunder to any Affiliate
of Purchaser, Rail or Holdings (as applicable) without such consent. No
assignment under this Section 11.8 shall relieve Purchaser, Rail or Holdings (as
applicable) of any of its obligations under this Agreement.
11.9 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and those Persons (or categories of Persons)
specifically described herein, and,
89
101
except as aforesaid, no provision of this Agreement shall be deemed to confer
any remedy, claim or right upon any third party.
11.10 Forum; Waiver of Jury Trial. Each party agrees that any suit,
action or proceeding brought by such party against the other in connection with
or arising from this Agreement ("Judicial Action") shall be brought solely in
the Circuit Court of Cook County or the United States District Court for the
Northern District of Illinois, and each party consents to the jurisdiction and
venue of each such court. EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY JUDICIAL ACTION.
11.11 Schedules. Each of Purchaser and Seller acknowledges and agrees
that (a) with respect to the representations and warranties contained in Article
2 hereof, the Schedules attached hereto shall be deemed not to include any
information or disclosures with respect to the Calnev Companies and (b) with
respect to the representations and warranties contained in Article 2A hereof,
the Schedules attached hereto shall be deemed not to include any information or
disclosures with respect to the Terminals Companies. Purchaser agrees that any
disclosure by Seller in any Schedule attached hereto shall (a) constitute a
disclosure under each other Schedule referred to herein for all purposes of this
Agreement, whether or not such disclosure is specifically referenced within such
other Schedule, and (b) not establish any threshold of materiality. Seller may,
from time to time prior to or at the Terminals Closing, Calnev Closing or the
New Calnev Closing (as applicable), by notice in accordance with the terms of
this Agreement, supplement or amend any Schedule to disclose any matter
hereafter arising which, if existing, occurring or known at the date hereof
would have been required to be so disclosed. No such supplemental or amended
Schedule shall be deemed to cure any breach of any representation or warranty
for purposes of Section 6.1 or Section 6A.1 (as applicable). If, however, the
Terminals Closing or Calnev Closing (as applicable) occurs, any such supplement
and amendment will be effective to cure and correct for all other purposes any
breach of any representation, warranty, covenant or obligation which would have
existed if Seller had not made such supplement or amendment, and all references
to any Schedule hereto which is supplemented or amended as provided in this
Section 11.11 shall for all purposes at and after the Terminals Closing, Calnev
Closing or the New Calnev Closing (as applicable) be deemed to be a reference to
such Schedule as so supplemented or amended.
11.12 Incorporation. The respective Schedules, Exhibits and Appendices
attached hereto and referred to herein are incorporated into and form a part of
this Agreement.
11.13 Complete Agreement. This Agreement and the Related Agreements (if
and when executed) constitute the complete agreement of the parties with respect
to the subject matter hereof and supersedes all prior discussions, negotiations
and understandings.
11.14 Disclaimer. Seller disclaims any representations or warranties
except as specifically set forth in this Agreement. In particular, Seller
disclaims any representation or warranty, and Purchaser agrees that Seller shall
have no liability, with respect to any information concerning the Terminals
Companies or the Calnev Companies not expressly represented and warranted to in
this Agreement, including, without limitation, (a) the information set forth in
the Confidential Information Memorandum distributed by Salomon Smith Barney Inc.
with respect to the Terminals Companies or the Calnev Companies, (b) any
information regarding the
90
102
Terminals Companies or the Calnev Companies provided at any management
presentation related to the transactions contemplated by this Agreement, (c) any
information communicated by Salomon Smith Barney or made available through the
data room process or (d) any financial projection or forecast relating to any of
the Terminals Companies or the Calnev Companies. With respect to any such
projection or forecast delivered by or on behalf of Seller to Purchaser,
Purchaser acknowledges that (x) there are significant uncertainties inherent in
such projections and forecasts and (y) Purchaser is familiar with such
uncertainties and takes full responsibility for making its own evaluation of the
adequacy and accuracy of all such projections and forecasts; provided, that
Seller in no way limits the representations, warranties, covenants or other
agreements made by Seller hereunder. Purchaser shall have no claim against
Seller (or any of its officers, directors or employees), and Seller shall have
no liability to Purchaser, with respect to any such disclaimed information,
including, without limitation, the Confidential Information Memorandum or any
financial projection or forecast relating to any of the Terminals Companies or
any of the Calnev Companies.
11.15 Knowledge Defined. For purposes of this Agreement, (a) the term
"knowledge of Seller" or variations thereof shall be limited to the actual
knowledge of the executive officers and directors of Seller set forth on
Schedule 11.15(a), and (b) the term "knowledge of Purchaser" or variations
thereof shall be limited to the actual knowledge of the executive officers and
directors of Purchaser set forth on Schedule 11.15(b).
11.16 Public Announcements. Seller and Purchaser each agree that they
and their Affiliates will not issue any press release or otherwise make any
public statement or respond to any media inquiry with respect to this Agreement
or the transactions contemplated hereby without the prior approval of the other
party, which shall not be unreasonably withheld, except as may be required by
Law or by any stock exchanges having jurisdiction over Seller, Purchaser or
their Affiliates.
11.17 Defined Terms. Certain capitalized terms used herein shall have
the meanings ascribed to such terms in Appendix I.
11.18 Currency. All references to "dollars" or "$" in this Agreement
shall mean United States Dollars.
11.19 References. Seller and Purchaser each agree that all references
in this Agreement to the stock, certificate of incorporation, bylaws or other
property or attribute related to the corporate form of each of the Terminals
Companies or the Calnev Companies (as applicable) shall be deemed to refer to
the analogous limited liability company property or attribute upon the
conversion of the Terminals Companies or the Calnev Companies (as applicable)
into limited liability companies pursuant to the terms of this Agreement.
11.20 Employer Identification Numbers. The parties agree that from the
Terminals Closing, the Calnev Closing or the New Calnev Closing (as applicable)
until December 31, 2001, Rail and its Affiliates shall be permitted to continue
to use the federal employer identification numbers for each of the Terminals
Companies and the Calnev Companies that has such a number (collectively, the
"EINs"). In consideration for the foregoing, Rail shall (or shall cause an
Affiliate to) reimburse Purchaser for the difference between the federal
unemployment tax paid
91
103
by Purchaser and its Affiliates with respect to the EINs for the 2001 tax year
and the federal unemployment tax that Purchaser and its Affiliates would have
paid with respect to the EINs for the 2001 tax year if Rail and/or its
Affiliates had not used the EINs subsequent to the Terminals Closing, the Calnev
Closing or the New Calnev Closing (as applicable) (it being understood that the
obligation of reimbursement pursuant to this sentence is in no way subject to or
limited by the provisions of Section 9B.7).
92
104
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on February 28, 2001.
GATX RAIL CORPORATION
By: /s/ BRIAN A. KENNEY
------------------------------------
Name: Brian A. Kenney
Title: Vice President
GATX TERMINALS HOLDING CORPORATION
By: /s/ RONALD J. CIANCIO
------------------------------------
Name: Ronald J. Ciancio
Title: Vice President
KINDER MORGAN ENERGY PARTNERS, L.P.
By Kinder Morgan G.P., Inc., its general partner
By: /s/ JOSEPH LISTENGART
------------------------------------
Name: Joseph Listengart
Title: Vice President and
General Counsel
105
APPENDIX I
DEFINITIONS
The following terms shall have the following meanings:
"Affiliate" means any Person controlling, controlled by or under
common control with another "Person"; for purposes of this definition (and for
such purposes only), "control" shall mean the ownership, directly or indirectly,
of 50% or more of the outstanding common stock of a Person.
"Agreement" means this First Amended Stock Purchase Agreement,
including all Appendices, Schedules and Exhibits hereto, as it may be amended
from time to time in accordance with its terms.
"Asset Division" has the meaning set forth in Section 8A.5.
"Audited September 30th Balance Sheet" means the audited combined
balance sheet of the Terminals Companies and the Calnev Companies as of
September 30, 2000.
"Benefit Plans" means an employee benefit plan, program, policy,
arrangement or agreement, including, but not limited to, employee welfare
benefit plans and employee pension benefit plans as defined in Sections 3(1) and
3(2), respectively, of ERISA.
"Bonus Plans" means the (a) GATX Continuity Incentive Plan; (b) GATX
Safety Incentive Plan; (c) GATX Sales Retention Bonus Plan; (d) GATX Key Manager
Retention Plan; (e) GATX Hot Skills Marketing Supplement Program; and (f) GATX
Performance Bonus Program (the Management Incentive Program).
"Calnev" means Calnev Pipe Line Company, a Delaware corporation.
"Calnev Acquisition Proposal" means any proposal for a merger or other
business combination to which the Calnev Companies are a party or the direct or
indirect acquisition of any equity interest in, or a substantial portion of the
assets of, the Calnev Companies other than the transactions contemplated by this
Agreement.
"Calnev Adjustments" means, with respect to any financial statements
related to the Calnev Companies delivered by Seller to Purchaser hereunder, the
following: (a) exclusion of all intercompany balances with Seller and its
Affiliates, (b) exclusion of all cash balances and (c) exclusion of accruals for
pension liabilities, Other Post-Employment Benefits (other than with respect to
the Calnev Continuing Union Employees), workers' compensation and long-term
disability.
"Calnev Aggregate Non-Current Balance Sheet Liability" means the
aggregate of all liabilities shown on the Calnev Closing Balance Sheet or the
Calnev September 30th Balance Sheet (as applicable) of the Calnev Companies
other than current liabilities; provided, however, that a new liability set
forth on the Calnev Closing Balance Sheet that was not set forth on the Calnev
September 30th Balance Sheet shall not be included in the determination of
Calnev
106
Aggregate Non-Current Balance Sheet Liability as shown on a Calnev Closing
Balance Sheet to the extent that such liability was incurred to fund the
acquisition of a non-current asset which is reflected on the Calnev Closing
Balance Sheet in an amount at least equal to the related indebtedness.
"Calnev Arbitrating Accounting Firm" shall have the meaning set forth
in Section 1A.3 (d).
"Calnev Asset Allocation" shall have the meaning set forth in Section
1A.4.
"Calnev Bargaining Agreements" shall have the meaning set forth in
Section 5A.3(f).
"Calnev Closing" shall have the meaning set forth in Section 1A.2.
"Calnev Closing Balance Sheet" means the unaudited, pro forma
consolidated balance sheet of the Calnev Companies as of the Calnev Closing
Date, prepared on a basis consistent with the Calnev September 30th Balance
Sheet (including, without limitation, taking into account the Calnev
Adjustments), which Calnev Closing Balance Sheet shall not reflect any events
subsequent to the Calnev Closing or related to the sale of the Calnev Companies
as contemplated herein.
"Calnev Closing Date" shall have the meaning set forth in Section 8A.1.
"Calnev Companies" shall have the meaning set forth in Section 2A.2(a).
"Calnev Company Competing Transaction" shall have the meaning set forth
in Section 4A.6.
"Calnev Continuing Employees" shall have the meaning set forth in
Section 5A.3(a).
"Calnev Debt Adjustment" means the difference between the Calnev
Aggregate Non-Current Balance Sheet Liability as shown on a Calnev September
30th Balance Sheet and the Calnev Aggregate Non-Current Balance Sheet Liability
as shown on a Calnev Closing Balance Sheet.
"Calnev Dispute Notice" shall have the meaning set forth in Section
1A.3 (d).
"Calnev Employees" shall have the meaning set forth in Section 5A.3.
"Calnev Continuing Union Employees" shall have the meaning set forth in
Section 5A.3(f).
"Calnev Environmental Permits" shall have the meaning set forth in
Section 2A.19.
"Calnev Environmental Warranty" means a representation or warranty in
Section 2A.18.
"Calnev Initial Payment" shall have the meaning set forth in Section
1A.3(d).
2
107
"Calnev Intellectual Property" means domestic and foreign: (a)
registered and unregistered trade names, trademarks and service marks; (b)
patent registrations and patent applications; and (c) copyright registrations
and copyright applications that, in each case, are material to the operation of
the business of the Calnev Companies.
"Calnev Insurance Policies" means the policies or binders of fire,
liability and any other insurance listed on Schedule 2.16 held by or on behalf
of the Calnev Companies and covering its assets and operations which are
material to the operation of the business of the Calnev Companies. Schedule 2.16
accurately identifies the types, policy limits and coverage amounts of such
insurance coverage, including whether such policies of liability insurance are
"claims made" or "occurrence based."
"Calnev Leased Real Property" means any real property that (a) is the
subject of a lease to which any Calnev Company is a party as lessee, (b) is
material to the conduct of the business of any of the Calnev Companies as it is
currently being conducted and (c) requires aggregate annual rent payments from
the Calnev Companies of $100,000 or more but shall not include any lease of any
pipeline interest.
"Calnev Loss" or "Calnev Losses" means any and all damages, losses,
actions, proceedings, causes of action, obligations, liabilities, claims,
encumbrances, penalties, demands, assessments, judgments, costs and expenses
including, without limitation, court costs and reasonable attorneys' and
consultants' fees and costs of litigation but in any event shall exclude (a) any
interest with respect thereto or (b) consequential, punitive, special or
incidental damages or lost profits claimed, incurred or suffered by any Calnev
Purchaser Indemnified Party; provided, that the exclusion set forth in this
clause (b) shall not apply with respect to consequential, punitive, special or
indirect damages or lost profits otherwise subject to indemnity under Article 9A
of this Agreement and required to be paid by any Calnev Purchaser Indemnified
Party to any Person who is not an Affiliate (other than natural persons,
including current and former employees) of any Calnev Purchaser Indemnified
Party.
"Calnev Maintenance Capital Expenditure" means the amount of a capital
expenditure necessary to replace or maintain assets due to obsolescence or wear
and tear; maintain or enhance the health of persons affected by the operation of
the business of the Calnev Companies; required due to government regulation or
regulatory order; or required for the protection of the environment.
"Calnev Material Adverse Effect" means a material adverse effect on the
assets, operations or financial condition of the Calnev Companies taken as a
whole; provided, that, for purposes of this Agreement, a Calnev Material Adverse
Effect shall not include (a) changes to the industry or markets in which the
Calnev Companies operate that are not unique to the Calnev Companies and (b) any
change resulting from the announcement or disclosure of the transactions
contemplated herein.
"Calnev Material Contracts" shall have the meaning set forth in Section
2A.14(a).
"Calnev Permitted Liens" means (a) Liens reflected on the Calnev
September 30th Balance Sheet; (b) Liens arising by operation of Law for taxes
not yet due and payable; (c) the
3
108
rights of customers, suppliers and subcontractors in the ordinary course of
business under general principles of commercial law; (d) Liens that would not
reasonably be expected to have a Calnev Material Adverse Effect; and (e) Liens
noted on Schedule 2.5.
"Calnev Plans" shall have the meaning set forth in Section 2A.13.
"Calnev Pre-Closing Date Period" shall have the meaning set forth in
Section 10A.1(a).
"Calnev Purchase Price" shall have the meaning set forth in Section
1A.2.
"Calnev Purchaser Indemnified Parties" shall have the meaning set forth
in Section 9A.2.
"Calnev Real Property" means any real property that (a) is owned in
whole or in part by any Calnev Company, (b) is material to the conduct of the
business of such Calnev Company as it is currently being conducted and (c) has a
market value of $1,000,000 or more.
"Calnev Sale" means the purchase and sale of the GPL Stock contemplated
by this Agreement and the transactions related thereto.
"Calnev Seller Indemnified Parties" shall have the meaning set forth in
Section 9A.3.
"Calnev September 30th Balance Sheet" means the consolidated balance
sheet of the Calnev Companies as of September 30, 2000 that (i) reflects the
Calnev Adjustments and (ii) was derived from the Audited September 30th Balance
Sheet.
"Calnev Subsidiary Plan" shall have the meaning set forth in Section
2A.13.
"Calnev Tax Items" shall have the meaning set forth in Section
10A.2(a).
"Calnev Tax Losses" shall have the meaning set forth in Section
10A.1(a).
"Calnev Tax Warranty" means a representation or warranty in Section
2A.11.
"Calnev Title and Authorization Warranty" means a representation or
warranty in Section 2A.1, 2A.2 or 3.1.
"Calnev Working Capital" means current assets of the Calnev Companies
minus current liabilities of the Calnev Companies, excluding (i) cash, (ii)
intercompany obligations between and among the Calnev Companies and Seller or
its Affiliates and (iii) the cash and other proceeds received by the Calnev
Companies in connection with the divestiture of any asset between the date
hereof and the Calnev Closing pursuant to Section 4.3A(e) hereof.
"Calnev Working Capital Adjustment" means the difference between Calnev
Working Capital as shown on the Calnev September 30th Balance Sheet and Calnev
Working Capital as shown on a Calnev Closing Balance Sheet.
"CalPUC" means the California Public Utility Commission.
4
109
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. 9601 et seq., as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined Financial Statements" means the GATX Terminals Corporation
Combined Financial Statements for the Year-Ended December 31, 2000 (including
the Calnev Companies) attached hereto as Schedule 2.9(a), with the Report of
Independent Auditors.
"Confidentiality Agreement" means that certain Letter Agreement dated
July 21, 2000 between Terminals and Purchaser as amended from time to time.
"Contracts" means all contracts (written or oral), plans, undertakings,
commitments or agreements (including, without limitation, intercompany
contracts).
"DOJ" shall have the meaning set forth in Section 4.4.
"EINs" shall have the meaning set forth in Section 11.20.
"Environmental Laws" means all federal, state and local civil and
criminal laws, regulations, rules, ordinances, codes, decrees, judgments,
injunctions, directives or judicial or administrative orders relating to the
pollution, preservation or protection of the environment, natural resources or
human health and safety, including, without limitation, laws relating to
Releases or threatened Releases of Hazardous Substances (including, without
limitation, Releases to ambient air, surface water, groundwater, land, surface
and subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, transport, disposal or handling of
Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any Person which, together with another Person,
constitutes a single employer within the meaning of Section 414 of the Code or a
"controlled group" within the meaning of Section 4001(a)(14) of ERISA."
"Excluded Companies" means GATX Terminals Antwerpen, N.V.; GATX Dutch
Holding Corporation B.V.; GATX Terminals Asia Private Limited; GATX Terminals
B.V.; GATX Terminals Limited; GATX Terminals Overseas Holding Corporation;
Paktank Midland Storage Ltd.; Unitank Storage Co. Ltd.; GATX Terminals (Pulau
Busing) Limited; GATX Spanish Holding Corporation, S.L.; Corporacion Industrial
Portuaria S.A. de C.V.; GATX Siam Limited; GATX Terminals (Jurong) Pte. Ltd.;
Kertih Terminals SDN BHD; Manchester Jetline Limited; Nippon Chemical Handling
Co.; Nippon GATX Company Limited; Shandong Lanshan GATX Terminals Co., Ltd.;
Terminales Portuaria, S.A. (TEPSA); Wymondham Oil Storage Co. Limited; GATX Thai
Terminals; GATX Terminals de Argentina S.A.; GATX Servicios S.A.; GATX Terminals
Latin America Holding Corp.; GATX Terminals de Mexico S.A. de C.V.; Corporacion
Industrial Portuaria S.A. de C.V.; TPE, GPS, GATX SI, Inc., GPL, Calnev and GATX
Las Vegas Corporation.
"FTC" shall have the meaning set forth in Section 4.4.
5
110
"GAAP" means United States generally accepted accounting principles in
use from time to time.
"GATX Non-Qualified Plan" shall have the meaning set forth in Section
5.3(e).
"GATX Qualified Plans" shall have the meaning set forth in Section
5.3(b).
"Governmental Authority" means any United States federal, state,
provincial or municipal entity, any foreign government and any political
subdivision or other executive, legislative, administrative, judicial,
quasi-judicial or other governmental department, commission, court, board,
bureau, agency or instrumentality, domestic or foreign.
"GPL" shall have the meaning specified in the recitals.
"GPL Stock" shall have the meaning set forth in Section 1A.1.
"GPS" means, collectively, GATX Product Services, LP, a Delaware
limited partnership, and GATX Management Services, LLC, a Delaware limited
liability company.
"Hazardous Substances" means any pollutant, contaminant, petroleum or
petroleum product, dangerous or toxic substance, hazardous or extremely
hazardous substance or chemical, or otherwise hazardous material regulated under
Environmental Laws.
"Holdings" shall have the meaning specified in the preamble hereof.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Indemnified Person" means the Person or Persons entitled to, or
claiming a right to, indemnification under Article 9 or Article 9A.
"Indemnifying Person" means the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article 9 or
Article 9A.
"Insurance Premium" shall have the meaning set forth in Section 4.13.
"Insurer" shall have the meaning set forth in Section 4.13.
"IRS" means the Internal Revenue Service.
"Judicial Action" shall have the meaning set forth in Section 11.10.
"Law" means any law, statute, regulation, ordinance, rule, order,
decree, judgment, consent decree, settlement agreement or governmental
requirement enacted, promulgated, entered into, agreed to or imposed by any
court or other governmental authority or body.
"License Term" shall have the meaning set forth in Section 5.12.
6
111
"Lien" means any lien, security interest, charge, claim, mortgage,
deed of trust, option, lease or other encumbrance.
"Limited Partnership Agreement" means the Second Amended and Restated
Agreement of Limited Partnership of Purchaser dated as of January 14, 1998, and
effective as of February 14, 1997.
"Loss" or "Losses" means, collectively, Terminals Loss, Terminals
Losses, Calnev Loss and Calnev Losses.
"MWRD" shall have the meaning set forth in Section 4.15.
"New Calnev" shall have the meaning set forth in Section 8A.5(a).
"New Calnev Closing" means the effective time of each of the Asset
Division, the Operating Agreement and the New Calnev Sale, all of which shall be
deemed to occur simultaneously.
"New Calnev Sale" shall have the meaning set forth in Section 8A.5(d).
"New Calnev Purchase Price" shall have the meaning set forth in Section
8A.5(d).
"Nippon" shall have the meaning set forth in Section 5.11.
"Operating Agreement" shall have the meaning set forth in Section
8A.5(c).
"Operator" shall have the meaning set forth in Section 8A.5(c)(i).
"Parent Group" shall have the meaning set forth in Section 10.2(a).
"Person" means any individual, corporation, partnership, association,
limited liability company, trust, governmental or quasi-governmental authority
or body or other entity or organization.
"Prime Interest Rate" shall have the meaning set forth in Section
1.3(b).
"Purchase Price" means the aggregate of (a) the Terminals Purchase
Price and (b) in the event that either the Calnev Closing or the New Calnev
Closing occurs, the Calnev Purchase Price or the New Calnev Purchase Price (as
applicable).
"Purchaser" shall have the meaning specified in the preamble hereof.
"Purchaser Employer" shall have the meaning set forth in Section
5.3(a).
"Purchaser Hourly Pension Plan" shall have the meaning set forth in
Section 5.3(f).
"Purchase Indemnified Parties" means, collectively, the Terminals
Purchaser Indemnified Parties or the Calnev Purchaser Indemnified Parties.
7
112
"Purchaser Plans" shall have the meaning set forth in Section 5.3(g).
"Purchaser Savings Plan" shall have the meaning set forth in Section
5.3(c).
"Purchaser Welfare Benefits Plan" shall have the meaning set forth in
Section 5.3(d).
"Rail" shall have the meaning specified in the preamble hereof.
"Regulations" means the Treasury Regulations promulgated under the
Code.
"Related Agreement" means any contract that is or is to be entered into
at the Terminals Closing or Calnev Closing or otherwise pursuant to this
Agreement including, without limitation, the Confidentiality Agreement and the
Services Agreement. The Related Agreements executed by a specified Person shall
be referred to as "such Person's Related Agreements," "its Related Agreements"
or another similar expression.
"Release" means any discharge, emission, spilling, leaking, pumping,
pouring, injecting, dumping, leaching, migrating or disposing into or through
the environment of any Hazardous Substance including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Substance.
"Retained Assets and Liabilities" shall have the meaning set forth in
Section 8A.5(b).
"Schedule 9.2(a) Matters" shall have the meaning set forth in Section
9.2(a).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller" shall have the meaning specified in the preamble hereof.
"Seller Hourly Pension Plan" shall have the meaning set forth in
Section 5.3(f).
"Seller Indemnified Parties" means, collectively, the Terminals Seller
Indemnified Parties as the Calnev Seller Indemnified Parties.
"Seller Pension Plan" shall have the meaning set forth in Section
5.3(b).
"Seller Savings Plan" shall have the meaning set forth in Section
5.3(b).
"Seller's Calnev Tax" shall have the meaning set forth in Section
10A.2(c).
"Seller's Terminals Tax" shall have the meaning set forth in Section
10.2(c).
"Seller Welfare Benefit Plans" shall have the meaning set forth in
Section 5.3(d).
"Stock" means, collectively, the Terminals Stock and the GPL Stock.
"Tax" or "Taxes" mean all taxes, charges, fees, duties, levies or other
assessments, including (without limitation) income, gross receipts, capital
stock, net proceeds, ad valorem,
8
113
turnover, real, personal and other property (tangible and intangible), sales,
use, franchise, excise, value added, stamp, leasing, lease, user, transfer,
fuel, excess profits, occupational, interest equalization, windfall profits,
unitary, severance and employees' income withholding, unemployment and Social
Security taxes, duties, assessments and charges (including the recapture of any
tax items such as investment tax credits), which are imposed by the United
States, or any Governmental Authority, including, without limitation, any
interest, penalties or additions to tax related thereto imposed by any
Governmental Authority (including any interest or penalties with respect to such
Taxes).
"Tax Period" or "Taxable Period" means any period prescribed by any
Governmental Authority for which a Tax Return is required to be filed or a Tax
is required to be paid.
"Tax Return" means all returns and reports of or with respect to Taxes
required to be filed with any Governmental Authority or depository.
"Tax Statute of Limitations Date" means the close of business on the
45th day after the expiration of the applicable statute of limitations with
respect to Taxes, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).
"Terminals" shall have the meaning set forth in the preamble hereof.
"Terminals Acquisition Proposal" means any proposal for a merger or
other business combination to which the Terminals Companies are a party or the
direct or indirect acquisition of any equity interest in, or a substantial
portion of the assets of, the Terminals Companies other than the transactions
contemplated by this Agreement.
"Terminals Adjustments" means, with respect to any financial statements
related to the Terminals Companies delivered by Seller to Purchaser hereunder,
the following: (a) exclusion of the assets, liabilities and results of
operations of the Excluded Companies, (b) exclusion of all intercompany balances
with Seller and its Affiliates, (c) exclusion of all cash balances and (d)
exclusion of accruals for pension liabilities, Other Post-Employment Benefits
(other than with respect to the Terminals Continuing Union Employees), workers
compensation and long-term disability.
"Terminals Aggregate Non-Current Balance Sheet Liability" means the
aggregate of all liabilities shown on the Terminals Closing Balance Sheet or the
Terminals September 30th Balance Sheet (as applicable) other than current
liabilities; provided, however, that a new liability set forth on the Terminals
Closing Balance Sheet that was not set forth on the Terminals September 30th
Balance Sheet shall not be included in the determination of Terminals Aggregate
Non-Current Balance Sheet Liability as shown on the Terminals Closing Balance
Sheet to the extent that such liability was incurred to fund the acquisition of
a non-current asset which is reflected on the Terminals Closing Balance Sheet in
an amount at least equal to the related indebtedness.
"Terminals Arbitrating Accounting Firm" shall have the meaning set
forth in Section 1.3(c).
"Terminals Asset Allocation" shall have the meaning set forth in
Section 1.4.
9
114
"Terminals Bargaining Agreements" shall have the meaning set forth in
Section 5.3(f).
"Terminals Closing" shall have the meaning set forth in Section 1.2.
"Terminals Closing Balance Sheet" means the unaudited, pro forma
consolidated balance sheet of the Terminals Companies as December 31, 2000,
prepared on a basis consistent with the respective Terminals September 30th
Balance Sheet (including, without limitation, taking into account the Terminals
Adjustments), which Terminals Closing Balance Sheet shall not reflect any events
subsequent to December 31, 2000 or related to the sale of Terminals as
contemplated herein.
"Terminals Closing Date" means March 1, 2001.
"Terminals Companies" shall have the meaning set forth in Section 2.2.
"Terminals Companies Plans" shall have the meaning set forth in Section
2.13(a).
"Terminals Companies December 31, 2000 Financial Statements" means the
unaudited consolidated financial statements of the Terminals Companies as of
December 31, 2000, which Terminals Companies December 31, 2000 Financial
Statements reflect the Terminals Adjustments.
"Terminals Company Competing Transaction" shall have the meaning set
forth in Section 4.9.
"Terminals Continuing Employee" shall have the meaning set forth in
Section 5.3(a).
"Terminals Continuing Union Employees" shall have the meaning set forth
in Section 5.3(f).
"Terminals Designated Approvals" shall have the meaning set forth in
Section 4.14.
"Terminals Dispute Notice" shall have the meaning set forth in Section
1.3(c).
"Terminals Employees" shall have the meaning set forth in Section 5.3.
"Terminals Environmental Permits" shall have the meaning set forth in
Section 2.19.
"Terminals Environmental Warranty" means a representation or warranty
in Section 2.18.
"Terminals Facilities" shall have the meaning set forth in Section
4.13.
"Terminals Intellectual Property" means domestic and foreign: (a)
registered and unregistered trade names, trademarks and service marks; (b)
patent registrations and patent applications; and (c) copyright registrations
and copyright applications that, in each case, are material to the operation of
the business of the Terminals Companies.
"Terminals Initial Payment" shall have the meaning set forth in Section
1.3(c).
10
115
"Terminals Insurance Policies" means the policies or binders of fire,
liability and any other insurance listed on Schedule 2.16 held by or on behalf
of the Terminals Companies and covering their respective assets and operations
which in each case are material to the operation of the business of Terminals.
Schedule 2.16 accurately identifies the types, policy limits and coverage
amounts of such insurance coverage, including whether such policies of liability
insurance are "claims made" or "occurrence based."
"Terminals Leased Real Property" means any real property that (a) is
the subject of a lease to which any Terminals Company is a party as lessee, (b)
is material to the conduct of the business of such Terminals Company as it is
currently being conducted and (c) requires aggregate annual rent payments from
such Terminals Company of $100,000 or more but shall not include any lease of
any pipeline interest.
"Terminals Loss" or "Terminals Losses" means any and all damages,
losses, actions, proceedings, causes of action, obligations, liabilities,
claims, encumbrances, penalties, demands, assessments, judgments, costs and
expenses including, without limitation, court costs and reasonable attorneys'
and consultants' fees and costs of litigation but in any event shall exclude (a)
any interest with respect thereto or (b) consequential, punitive, special or
incidental damages or lost profits claimed, incurred or suffered by any
Terminals Purchaser Indemnified Party; provided, that the exclusion set forth in
this clause (b) shall not apply with respect to consequential, punitive, special
or indirect damages or lost profits otherwise subject to indemnity under Article
9 of this Agreement and required to be paid by any Terminals Purchaser
Indemnified Party to any Person who is not an Affiliate (other than natural
persons, including current and former employees) of any Terminals Purchaser
Indemnified Party.
"Terminals Maintenance Capital Expenditure" means the amount of a
capital expenditure necessary to replace or maintain assets due to obsolescence
or wear and tear; maintain or enhance the health of persons affected by the
operation of the business of the Terminals Companies; required due to government
regulation or regulatory order; or required for the protection of the
environment.
"Terminals Material Adverse Effect" means a material adverse effect on
the assets, operations or financial condition of the Terminals Companies taken
as a whole; provided, that, for purposes of this Agreement, a Terminals Material
Adverse Effect shall not include (a) changes to the industry or markets in which
the Terminals Companies operate that are not unique to the Terminals Companies
and (b) any change resulting from the announcement or disclosure of the
transactions contemplated herein.
"Terminals Material Contracts" shall have the meaning set forth in
Section 2.14(a).
"Terminals Permitted Liens" means (a) Liens reflected in the Terminals
Companies December 31, 2000 Financial Statements; (b) Liens arising by operation
of Law for taxes not yet due and payable; (c) the rights of customers, suppliers
and subcontractors in the ordinary course of business under general principles
of commercial law; (d) Liens that would not reasonably be expected to have a
Terminals Material Adverse Effect; and (e) Liens noted on Schedule 2.5.
"Terminals Pre-Closing Date Period" shall have the meaning set forth in
Section 10.1.
11
116
"Terminals Purchase Price" shall have the meaning set forth in Section
1.2.
"Terminals Purchaser Indemnified Parties" shall have the meaning set
forth in Section 9.2.
"Terminals Real Property" means any real property that (a) is owned in
whole or in part by any Terminals Company, (b) is material to the conduct of the
business of such Terminals Company as it is currently being conducted and (c)
has a market value of $1,000,000 or more.
"Terminals Sale" means the purchase and sale of the Terminals Stock
contemplated by this Agreement and the transactions related thereto.
"Terminals Seller Indemnified Parties" shall have the meaning set forth
in Section 9.3.
"Terminals September 30th Balance Sheet" means the consolidated balance
sheet of the Terminals Companies as of September 30, 2000 attached hereto as
Exhibit D, that (i) reflects the Terminals Adjustments and (ii) was derived from
the Audited September 30th Balance Sheet.
"Terminals Stock" shall have the meaning set forth in Section 1.1.
"Terminals Subsidiary Plan" shall have the meaning set forth in Section
2.13(a).
"Terminals Tax Items" shall have the meaning set forth in Section
10.2(a).
"Terminals Tax Losses" shall have the meaning set forth in Section
10.1(a).
"Terminals Tax Warranty" means a representation or warranty in Section
2.11.
"Terminals Title and Authorization Warranty" means a representation or
warranty in Section 2.1, 2.2, or 3.1.
"Terminals Working Capital" means current assets of the Terminals
Companies minus current liabilities of the Terminals Companies, excluding (i)
cash, (ii) intercompany obligations between and among the Terminals Companies
and Seller or its Affiliates and (iii) the cash and other proceeds received by a
Terminals Company in connection with the divestiture of any asset between the
date hereof and the Terminals Closing pursuant to Section 4.3(e) hereof.
"Terminals Working Capital Adjustment" means the difference between
Terminals Working Capital as shown on the Terminals September 30th Balance Sheet
and Terminals Working Capital as shown on the Terminals Closing Balance Sheet.
"TPE" shall have the meaning set forth in Section 5.9.
"Transaction Taxes" means all sales, use, transfer, filing,
recordation, registration and similar taxes and fees arising from or associated
with the transactions contemplated hereunder, but shall not include any taxes
based on income.
"Transferable Assets and Liabilities" shall have the meaning set forth
in Section 8A.5(a).
12
117
"Treasury Regulations" means the regulations promulgated from time to
time under the Code.
"WARN" shall have the meaning set forth in Section 5.3(a).
13