CONFIDENTIAL
ASSET PURCHASE AGREEMENT
among
MARUBENI AMERICA CORPORATION
and
PLM INTERNATIONAL, INC.
PLM Rental, Inc.
TEC AcquiSub, Inc.
PLM TRANSPORTATION EQUIPMENT CORPORATION
dated
May 24, 2000
TABLE OF CONTENTS
ARTICLE I -PURCHASE AND SALE OF ACQUIRED ASSETS AND ASSUMED LIABILITIES............................... 1
1.1 DEFINITIONS............................................................................. 1
1.2 PURCHASE AND SALE OF ASSETS AND ASSIGNMENT AND ASSUMPTION OF OBLIGATIONS................ 9
1.3 CONSIDERATION........................................................................... 12
1.4 CLOSING................................................................................. 12
1.5 POST-CLOSING ADJUSTMENT TO THE ESTIMATED PURCHASE PRICE (OTHER THAN THE HOLDBACK AMOUNT) 14
ARTICLE II -RELATED MATTERS........................................................................... 15
2.1 CONFIDENTIALITY......................................................................... 16
2.2 FURTHER ASSURANCES; ACCESS TO BOOKS AND RECORDS......................................... 16
2.3 ACCOUNTS RECEIVABLES/PREPAYMENT ITEMS PROCEEDS.......................................... 18
2.4 ASSIGNMENT AND TRANSFER FEES AND TAXES.................................................. 18
ARTICLE III -REPRESENTATIONS AND WARRANTIES OF SELLERS................................................ 19
3.1 CORPORATE ORGANIZATION, ETC............................................................. 20
3.2 AUTHORIZATION, ETC...................................................................... 20
3.3 NO VIOLATION............................................................................ 21
3.4 TITLE TO ASSETS; ENCUMBRANCES........................................................... 21
3.5 LITIGATION.............................................................................. 25
3.6 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES...................................... 25
3.7 CONSENTS................................................................................ 25
3.8 COMPLIANCE WITH LAW..................................................................... 25
3.9 ASSIGNMENT.............................................................................. 26
3.10 BROKERAGE.............................................................................. 26
3.11 INSIDER INTERESTS...................................................................... 26
3.12 ENVIRONMENTAL, HEALTH AND SAFETY....................................................... 27
3.13 ACCOUNTS AND NOTES RECEIVABLE.......................................................... 27
3.14 MEES PIERSON FACILITY.................................................................. 28
3.15 SEC FILINGS; FINANCIAL STATEMENTS...................................................... 28
3.16 ABSENCE OF ABSENCE OF CERTAIN CHANGES OR EVENTS........................................ 28
3.17 TAXES.................................................................................. 29
3.18 CONDUCT OF BUSINESS.................................................................... 29
3.19 EMPLOYEES.............................................................................. 29
3.20 MATERIAL MISSTATEMENTS OR OMISSIONS.................................................... 30
3.21 LICENSE OF PLM NAME.................................................................... 30
3.22 NO OTHER WARRANTIES OR REPRESENTATIONS................................................. 30
ARTICLE IV -REPRESENTATIONS AND WARRANTIES OF BUYER................................................... 30
4.1 CORPORATE ORGANIZATION.................................................................. 30
4.2 AUTHORIZATION, ETC...................................................................... 31
4.3 NO VIOLATION............................................................................ 31
4.4 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES...................................... 31
4.5 LITIGATION.............................................................................. 31
4.6 CONSENTS................................................................................ 31
4.7 BROKERAGE............................................................................... 32
4.8 FUNDING................................................................................. 32
ARTICLE V -COVENANTS OF SELLER........................................................................ 32
5.1 FULL ACCESS............................................................................. 32
5.2 CONSENTS................................................................................ 32
5.3 HSR ACT FILINGS......................................................................... 32
5.4 PROXY STATEMENT; STOCKHOLDERS'MEETING................................................... 33
5.5 CERTIFICATES............................................................................ 33
5.6 AGREEMENTS.............................................................................. 33
5.7 DELIVERY OF ASSETS AND DOCUMENTS........................................................ 33
5.8 REGULAR COURSE OF BUSINESS.............................................................. 33
5.9 BUSINESS RELATIONS...................................................................... 34
5.10 NO DEFAULT............................................................................. 34
5.11 INTENTIONALLY OMITTED.................................................................. 35
5.12 EXCLUSIVITY............................................................................ 36
5.13 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE........................................... 37
5.14 EMPLOYEES OF THE BUYERS................................................................ 38
5.15 CHANGE OF NAME OF PLM RENTAL........................................................... 38
5.16 FILING OF MATERIAL CONTRACTS OF PLM..................................................... 38
5.17 ENVIRONMENTAL INFORMATION............................................................... 38
ARTICLE VI -COVENANTS OF BUYER........................................................................ 38
6.1 CERTIFICATES............................................................................ 39
6.2 HSR ACT FILINGS......................................................................... 39
6.3 AGREEMENTS.............................................................................. 39
6.4 EMPLOYEES............................................................................... 39
6.5 RE-TITLING; TRANSFER TAXES.............................................................. 40
6.6 DISCHARGE OF OBLIGATIONS................................................................ 41
6.7 NOTIFICATION............................................................................ 41
6.8 ENVIRONMENTAL ASSESSMENTS............................................................... 41
6.9 RELEASES................................................................................ 41
ARTICLE VII -CONDITIONS TO THE OBLIGATIONS OF SELLERS................................................. 42
7.1 REPRESENTATIONS AND WARRANTIES TRUE..................................................... 42
7.2 PERFORMANCE............................................................................. 42
7.3 HSR ACT WAITING PERIODS; NO GOVERNMENTAL PROCEEDING OR LITIGATION....................... 42
7.4 NO INJUNCTION........................................................................... 42
7.5 CERTIFICATES............................................................................ 42
7.6 OPINION OF BUYER'S COUNSEL.............................................................. 42
7.7 STOCKHOLDER APPROVAL.................................................................... 43
7.8 ESCROW AGREEMENT........................................................................ 43
7.9 EMPLOYMENT ARRANGEMENTS.................................................................. 43
ARTICLE VIII -CONDITIONS TO OBLIGATIONS OF BUYER...................................................... 43
8.1 REPRESENTATIONS AND WARRANTIES TRUE..................................................... 43
8.2 PERFORMANCE............................................................................. 43
8.3 HSR ACT WAITING PERIODS; NO GOVERNMENTAL PROCEEDING OR LITIGATION....................... 43
8.4 NO INJUNCTION........................................................................... 44
8.5 OPINION OF SELLER'S COUNSEL............................................................. 44
8.6 CONSENTS OBTAINED; 90% OF THE BUSINESS OBTAINED; ENVIRONMENTAL INSURANCE OBTAINED....... 44
8.7 AGREEMENTS.............................................................................. 45
8.8 PLM STOCKHOLDER APPROVAL................................................................ 45
8.9 EMPLOYMENT ARRANGEMENTS................................................................. 45
8.10 PARTNERSHIP'S ASSET PURCHASE AGREEMENT.................................................. 45
8.11 NO BUSINESS MATERIAL ADVERSE EFFECT SINCE MARCH 31, 2000................................ 45
ARTICLE IX -SURVIVAL; INDEMNIFICATION................................................................. 45
9.1 SURVIVAL................................................................................ 45
9.2 INDEMNIFICATION BY BUYER................................................................ 46
9.3 INDEMNIFICATION BY SELLERS.............................................................. 46
9.4 INDEMNIFICATION PROCEDURES.............................................................. 46
9.5 INDEMNIFICATION LIMITS.................................................................. 47
ARTICLE X -TERMINATION AND ABANDONMENT................................................................ 48
10.1 METHODS OF TERMINATION.................................................................. 48
10.2 PROCEDURE UPON TERMINATION.............................................................. 49
10.3 BREAK-UP FEE........................................................................... 49
ARTICLE XI -MISCELLANEOUS............................................................................. 50
11.1 TIME OF THE ESSENCE..................................................................... 50
11.2 AMENDMENT AND MODIFICATION.............................................................. 50
11.3 WAIVER OF COMPLIANCE................................................................... 50
11.4 EXPENSES................................................................................ 50
11.5 NOTICES................................................................................. 50
11.6 ASSIGNMENT.............................................................................. 51
11.7 PUBLICITY............................................................................... 51
11.8 GOVERNING LAW........................................................................... 52
11.9 ARBITRATION............................................................................. 52
11.10 COUNTERPARTS........................................................................... 53
11.11 HEADINGS............................................................................... 53
11.12 ENTIRE AGREEMENT....................................................................... 53
11.13 THIRD PARTIES.......................................................................... 53
11.14 SEVERABILITY........................................................................... 53
11.15 SOLE REMEDY............................................................................ 53
11.16 PLM LIABILITY WITH RESPECT TO THE PARTNERSHIPS ASSET PURCHASE AGREEMENT................ 53
EXHIBITS
A-1 Owned Transportation Equipment
A-2 Customer Equipment Leases
A-3 TRAC Lease Transportation Equipment and TRAC Leases
A-4 Equipment Purchase Orders and Purchase Order Transportation Equipment
B-1 Leased Facilities and Facility Leases
B-2 Subleased Facilities and Facility Subleases
C-1 Other Assets
C-2 Information Systems Contracts
C-3 Miscellaneous Contractual Obligations
C-4 Receivables/Prepayment Items
D Form of Assignment and Assumption of Equipment Purchase Orders
E-1 and E-1A Form of Assignment and Assumption of Customer Equipment Leases
E-2 Form of Assignment and Assumption of Information Systems Contracts
E-3 Form of Assignment and Assumption of Miscellaneous Contractual
Obligations
F Form of Assignment and Assumption of TRAC Leases
G-1 Form of Assignment and Assumption of Facility Leases
G-2 Form of Assignment and Assumption of Facility Subleases
G-3 Form of Assignment and Assumption of Mees Pierson Facility
G-4 Form of Transition Services Agreement
H Form of ▇▇▇▇▇▇▇ ▇▇▇▇ of Sale
J Form of License of PLM Name
K Form of Opinion of Buyer's Counsel
L Form of Opinion of Sellers' Counsel
N Intentionally Omitted
P Intentionally Omitted
Q Escrow Agreement
R Releases
S Form of Partnerships Asset Purchase Agreement
T Form of Non-Competition Agreement
U PLM Name
SCHEDULES
Schedule 1 - Purchase Price
Schedule 2.4-List of Taxing Jurisdictions
Schedule 3 - Sellers Disclosure Schedule
Schedule 8.6 - Consents obtained for satisfaction of Condition and Environmental
Insurance
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT ("Agreement") dated May 24, 2000 is among
Marubeni America Corporation, a New York corporation, PLM International, Inc., a
Delaware corporation, PLM Rental, Inc, a Delaware corporation, TEC AcquiSub,
Inc., a California corporation, and PLM Transportation Equipment Corporation, a
California corporation.
This Agreement sets forth the terms and conditions upon which Sellers
will sell, and Buyer will purchase, all of the Acquired Assets and the Assumed
Liabilities. As herein set forth, Buyer is permitted to assign its rights
hereunder to MAC Leasing, Inc. or any Affiliate that is a direct or indirect
subsidiary of Marubeni Corporation. Concurrently herewith, the Partnerships and
Buyer will enter into the Partnerships Asset Purchase Agreement whereby the
Partnerships will sell, and Buyer will purchase, those assets and agreements of
the Business that are owned by the Partnerships.
In consideration of the mutual agreements contained herein, intending
to be legally bound hereby, the parties hereto agree as follows:
Article I
PURCHASE AND SALE OF ACQUIRED ASSETS AND ASSUMED LIABILITIES
1.1 Definitions. For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acquired Assets" means, collectively, the Transportation Equipment,
the Receivables/Prepayment Items, the Inventory, the PLM Name, the Other Assets,
the Equipment Purchase Orders, the Facility Leases, the Facility Subleases, the
Customer Equipment Leases, the TRAC Leases, the Information Systems Contracts
and the assets that are set forth on Schedule 1 to the extent not otherwise
identified in the foregoing items.
"Acquisition Proposal" means any inquiry, proposal or offer for a
transaction involving the lease other than in the ordinary course of business,
sale or other disposition of all, or any portion or portions representing in
aggregate 50% or more of the net book value, of the Business.
"Affiliate" shall have the meaning prescribed by Rule 12b-2 of the
regulations promulgated pursuant to the Securities Exchange Act.
"Assignment and Assumption of Customer Equipment Leases" means an
assignment and assumption of Customer Equipment Leases substantially in the form
attached hereto as Exhibit E-1 (and E-1A with respect to Customer Equipment
Leases owned by PLM Investment Management or PLM FSI).
"Assignment and Assumption of Information System Contracts" means an
assignment and assumption of Information System Contracts substantially in the
form attached hereto as Exhibit E-2.
"Assignment and Assumption of Facility Leases" means an assignment and
assumption of Facility Leases substantially in the form attached hereto as
Exhibit G-1.
"Assignment and Assumption of Facility Subleases" means an assignment
and assumption of Facility Subleases substantially in the form attached hereto
as Exhibit G-2.
"Assignment and Assumption of Equipment Purchase Orders" means an
assignment and assumption of Equipment Purchase Orders substantially in the form
attached hereto as Exhibit D.
"Assignment and Assumption of Mees Pierson Facility" means an
assignment and assumption of the Mees Pierson Facility substantially in the form
attached hereto as Exhibit G-3.
"Assignment and Assumption of Miscellaneous Contractual Obligations"
means an assignment and assumption of the Miscellaneous Contractual Obligations
substantially in the form attached hereto as Exhibit E-3.
"Assignment and Assumption of TRAC Leases" means an assignment and
assumption of the TRAC Leases substantially in the form attached hereto as
Exhibit F.
"Assumed Liabilities" means, collectively, the Equipment Purchase
Orders, the Facility Leases, the Facility Subleases, the Customer Equipment
Leases, TRAC Leases, the Mees Pierson Facility, the Miscellaneous Contractual
Obligations, the Information Systems Contracts and the liabilities that are set
forth on Schedule 1 to the extent not otherwise identified in the foregoing
items.
"Business" means all of those assets and agreements of Sellers,
Affiliates of Sellers and the Partnerships that are necessary for those trailer
leasing operations carried on under the PLM Name.
"Business Material Adverse Effect" shall mean, for purposes of this
Agreement, any change, event or effect that is materially adverse to the
business, assets (including intangible assets), condition (financial or
otherwise), prospects, properties, or results of operations of the Business or
the Acquired Assets, except for those changes, events and effects that are
caused by (i) general business or economic conditions affecting the U.S. economy
as a whole, (ii) conditions affecting the industry in which the Business
competes as a whole, (iii) conditions resulting from the announcement of this
Agreement or the pendency of the consummation of this Agreement, and (iv)
conditions resulting from or relating to the taking of any action contemplated
by this Agreement and not in violation of Section 5.8 or otherwise agreed to in
writing by Buyer.
"Buyer" means Marubeni America Corporation, a corporation formed under
the laws of the State of Delaware.
"Closing" means the closing referred to in Section 1.4 of this
Agreement.
"Closing Date" means 12:01 a.m. of the date on which the Closing
occurs.
"Closing List" means the lists in substantially the form of the
relevant Exhibits, wherever such Exhibits are applicable, which: (A) shall be
prepared by Sellers as of not less than three business days prior to Closing and
provided to Buyer not less than three business days prior to Closing, but shall
be updated and made accurate as of the Closing Date and provided to Buyer when
the Closing Financial Statements are delivered to Buyer pursuant to Section
1.5(a) below, and (B) shall be of: (a) Owned Transportation Equipment, TRAC
Lease Transportation Equipment and TRAC Leases, and Purchase Order
Transportation Equipment and Equipment Purchase Orders, (b) Leased Facilities,
Facility Leases, Subleased Facilities and Facility Subleases, and (c)
Receivables/Prepayment Items, Customer Equipment Leases, the Information Systems
Contracts, PLM Name, and Other Assets as of the Closing Date.
"Customer Equipment Leases" means the trailer lease agreements, trailer
rental agreements and any other leases or subleases, together, in each case,
with any amendments thereto and related security and other deposits (to the
extent that such deposits have not been used to reduce the Purchase Price),
guarantees and security agreements, related to (i) the Transportation Equipment
with Sellers as lessor or sublessor, and (ii) the Equipment owned by any of the
Partnerships or PLM Investment Management or PLM FSI with such entity as lessor
or sublessor, in either case whether existing in written form or evidenced by
computer records and data of Sellers, all of such Customer Equipment Leases, as
of the date hereof being listed on Exhibit A-2 hereto.
"Damages" means, whether suffered in connection with this Agreement or
the Partnerships Asset Purchase Agreement, any assessments, losses, damages,
judgments, liabilities, claims, losses, charges, actions, suits, proceedings,
Taxes, deficiencies, interest, penalties, costs and expenses, including without
limitation reasonable attorneys' fees, removal costs, remediation costs, closure
costs, fines, penalties and expenses of investigation and ongoing monitoring),
which for the avoidance of doubt it is expressly agreed and understood are
irrespective of any actual or potential recovery under any insurance (except to
the extent specifically set forth in Section 9.5), and all references herein to
Damages shall be determined by reference not only to those suffered in
connection with this Agreement but also the Partnerships Asset Purchase
Agreement.
"Environmental, Health and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 and the Resource
Conservation and Recovery Act of 1976, each as amended, together with all other
laws (including without limitation, statutes, common law, rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings and changes
thereunder) of federal, state and local governments (and all agencies thereof)
concerning pollution or protection of the environment and public health and
safety, including without limitation laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants or chemical,
industrial, hazardous or toxic materials or wastes into ambient air, surface
water, ground water or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or chemical, industrial, hazardous or toxic
materials, substances or wastes.
"Equipment" means new or used trailers, refrigeration units for use on
trailers, and all ancillary components for trailers and refrigeration units.
"Equipment Purchase Orders" means the equipment purchase orders, vendor
invoices and/or other obligations of Sellers relating to the purchase of
Equipment, all of such Equipment Purchase Orders as of the date hereof being
listed on Exhibit A-4 hereto.
"Escrow Agreement" means an agreement substantially in the form
attached hereto as Exhibit Q and the escrow agent thereunder shall be any of
▇▇▇▇▇▇ Bank, ▇▇▇▇▇ Fargo Bank, Imperial Bank or any such other bank independent
of the parties mutually agreed upon by the parties.
"Estimated Purchase Price" shall mean the amount as calculated in
accordance with Schedule 1, which schedule sets forth the methodology by which
the Purchase Price will be determined, such amount to be determined using such
methodology and reviewed by KPMG, LLP with Buyer to be notified of the amount
thereof not less than three business days before the Closing, and such amount
will reflect the estimated net book value of the estimated assets that are set
forth on Schedule 1 less the estimated liabilities that are set forth on
Schedule 1, estimated as of the Closing Date, plus the Premium.
"Excluded Liabilities" means all liabilities or obligations that are
either: (A) not fairly and accurately identified herein as Assumed Liabilities,
or (B) Pre-Closing Liabilities.
"Exhibit A" means Exhibits ▇-▇, ▇-▇ , ▇-▇ and A-4.
"Exhibit B" means Exhibits B-1 and B-2.
"Exhibit C" means Exhibits C-1, C-2, C-3 and C-4.
"Facility Leases" means the leases relating to the Leased Facilities,
all of such Facility Leases, as of the date hereof, together with all relevant
permits or authorizations relating to zoning or land use in connection
therewith, being listed and described on Exhibit B-1.
"Facility Subleases" means the subleases relating to the Subleased
Facilities, all of such Facility Subleases as of the date hereof, together with
all relevant permits or authorizations relating to zoning or land use in
connection therewith and any deposits that relate to the Subleased Facilities,
being listed and described on Exhibit B-2.
"GAAP" means generally accepted accounting principles consistently
applied as in the consolidated financial statements of PLM for the period ended
December 31, 1999.
"Holdback Amount" shall bear the same meaning as shall be assigned to
such term in the Escrow Agreement.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Inventory" means the entire tire and parts inventory of the Sellers
relating to the repair and maintenance of the Transportation Equipment as such
Inventory exists on the Closing Date.
"Information Systems Contracts" means the contracts concerning
information systems relating to the Business as set forth on Exhibit C-2.
"Knowledge" with respect to:(i) the Sellers, means, after having made
reasonable inquiries of each of their respective officers, directors and
responsible employees, (and in the case of Section 3.12(a)(ii), (c) and (d) to
the extent the defined term is referred to in such subsections, having
interviewed those of Sellers' employees with knowledge of environmental-related
issues associated with any of the Leased Facilities), the actual knowledge of,
or the receipt of notification by, ▇▇. ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇
and ▇▇. ▇▇▇▇▇; and (ii) the Buyer, means, after having made reasonable inquiries
of its officers, directors and responsible employees, the actual knowledge of,
or the receipt of notification by, any senior executive officer of Buyer.
"Leased Facility" or "Leased Facilities" means the land and buildings
which are leased by Sellers as lessees pursuant to the Facility Leases, all of
such Leased Facilities as at the date hereof being listed and described on
Exhibit B-1 hereto.
"License of PLM Name" means the irrevocable, royalty-free license of
the PLM Name, substantially in the form attached hereto as Exhibit J.
"Mees Pierson Facility" means that certain loan facility extended to
PLM pursuant to the Facility Agreement dated as of May 6, 1999 between PLM as
borrower and Mees Pierson N.V. as lender, as consented and agreed to by PLM
Rental.
"Miscellaneous Contractual Obligations" means the types of obligations
of the Business as set forth on Exhibit C-3, to the extent fairly and accurately
identified and not incurred in violation of Section 5.8.
"Non-Competition Agreement" means the agreement substantially in the
form attached as Exhibit T.
"Other Assets" means Sellers' owned and leased interests and licenses
in and of the service vehicles, yard tractors, equipment, office furniture,
computer hardware and software, books and records and other tangible and
intangible personal property of Sellers relating to the Business being listed
and described on Exhibit C-1 hereto.
"Owned Transportation Equipment" means the units of Equipment owned by
Sellers as of the date hereof and listed and described on Exhibit A-1 hereto.
"Partnerships" means, collectively, PLM Equipment Growth Fund, a
California limited partnership, PLM Equipment Growth Fund II, a California
limited partnership, PLM Equipment Growth Fund III, a California limited
partnership, PLM Equipment Growth Fund IV, a California limited partnership, PLM
Equipment Growth Fund V, a California limited partnership, PLM Equipment Growth
Fund VI, a California limited partnership, PLM Equipment Growth & Income Fund
VII, a California limited partnership, and Professional Lease Management Income
Fund, L.L.C., a California limited liability company
"Partnerships Asset Purchase Agreement" means that certain asset
purchase agreement dated as of the date hereof between the Partnerships and
Buyer.
"PLM" means PLM International, Inc., a Delaware corporation.
"PLM FSI" means PLM Financial Services, Inc., a Delaware corporation.
"PLM Investment Management" means PLM Investment Management, Inc., a
California corporation.
"PLM Rental" means PLM Rental, Inc., a Delaware corporation.
"PLM Trailer Leasing" means any trade name under which Sellers or the
Partnerships are "doing business as" in connection with the Business (including
without limitation PLM Rental) and, in the case of the name of PLM Trailer
Leasing, which is the trade name under which PLM has registered a service ▇▇▇▇
and obtained a Certificate of Registration with the United States Patent and
Trademark Office.
"PLM Name" means "PLM Trailer Leasing" and related marks as listed and
described on Exhibit U hereto.
"PLM Stockholder Approval" means the affirmative vote of holders of a
majority of the outstanding shares of the Common Stock of PLM approving the sale
by PLM to the Buyer of the Acquired Assets owned by it for itself and not the
other Sellers.
"PLM Subsidiaries" means collectively: (i) PLM Rental, Inc., a Delaware
corporation; (ii) TEC AcquiSub, Inc., a California corporation; (iii) PLM
Transportation Equipment Corporation, a California corporation; (iv) PLM
Investment Management, Inc., a California corporation; and (iv) PLM Financial
Services, Inc., a Delaware corporation.
"PLM TEC" means PLM Transportation Equipment Corporation, a California
corporation.
"Post-Closing Liabilities" means liabilities or obligations arising
from or relating to the ownership, use or operation of the Acquired Assets or
the Assumed Liabilities or the Business on or after the Closing Date.
"Pre-Closing Liabilities" means (other than those that are fairly and
accurately identified herein as Assumed Liabilities) liabilities or obligations
arising from or relating to the ownership, use or operation of the Acquired
Assets or the Assumed Liabilities or the Business before the Closing Date,
including without limitation with respect to (i) all liabilities or obligations
of Sellers for sales and use and employment Taxes arising from or relating to
transactions of Sellers prior to Closing, for unpaid Taxes of any person or
entity under Treasury Regulation 1.1502-6 (or any similar provision of state,
local or foreign law), or otherwise for Taxes due, accrued or relating to the
period prior to Closing, (ii) all liabilities or obligations of Sellers under
any arbitration or litigation proceeding, or any claims alleged or asserted
relating to any event, circumstance or occurrence, arising prior to Closing, or
(iii) all liabilities or obligations attributable to any period prior to Closing
arising under any Environmental, Health and Safety Laws.
"Premium" is the amount identified in the defined term "Premium" set
forth in Schedule 1.
"Purchase Order Transportation Equipment" means any unit of Equipment
for which the Sellers have entered into an Equipment Purchase Order, and which
is purchased by Sellers between the date hereof and the Closing Date, which is
described on Exhibit A-4 hereto.
"Purchase Price" shall have the meaning ascribed thereto in Section
1.5(c).
"Receivables/Prepayment Items" means all of Sellers' accounts
receivable related to or arising from the Acquired Assets or the Assumed
Liabilities, net of any loss reserves, and together with any prepaid expenses
related to or arising from the Acquired Assets or the Assumed Liabilities, any
claims related to or arising from the Acquired Assets or the Assumed Liabilities
against any third party, and any rebates or recoveries or proceeds from
insurance coverage or third parties related to or arising from the Acquired
Assets or the Assumed Liabilities, the types of all of which are set forth on
Exhibit C-4.
"Reconciliation Schedule" means a list of all Equipment deleted or
added to the Transportation Equipment after the date hereof and as of the
Closing Date. Such "deleted" units of Transportation Equipment are those units
of Transportation Equipment that are listed on Exhibits ▇-▇, ▇-▇ ▇▇▇ ▇-▇ but are
not listed on the Closing List. Such "added" units of Transportation Equipment
are those units of Purchase Order Transportation Equipment which are not listed
on Exhibits ▇-▇, ▇-▇ and A-3 but are listed on the Closing List. The
Reconciliation Schedule shall be prepared by Sellers as of not less than three
business days prior to Closing and provided to Buyer not less than three
business days prior to Closing, but shall be updated and made accurate as of the
Closing Date and provided to Buyer when the Closing Financial Statements are
delivered to Buyer pursuant to Section 1.5(a) below.
"Rental Contract" means those Customer Equipment Leases identified and
listed on Exhibit A-2 and which are documented in substantially the form of
Section 3.4.4 of the Sellers Disclosure Schedule.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Sellers" means PLM, PLM Rental, TEC, and PLM TEC.
"▇▇▇▇▇▇▇ ▇▇▇▇ of Sale" means the ▇▇▇▇ of sale in the form attached
hereto as Exhibit H delivered by each Seller pursuant to Section 1.4(b)(i).
"Sellers Disclosure Schedule" means the document delivered by Sellers
to Buyer simultaneously with the execution hereof containing the information
required to be included therein pursuant to this Agreement.
"Subleased Facility" means each Leased Facility that a Seller has
subleased as sublessor pursuant to a Facility Sublease, all of such Subleased
Facilities as of the date hereof being listed and described on Exhibit B-2.
"Superior Proposal" means any unsolicited bona fide written Acquisition
Proposal, for which financing, to the extent required, is committed, from a
party other than Buyer or its Affiliates, which the board of directors of PLM
determines in good faith in compliance with its fiduciary duties under Delaware
law based upon the advice of outside legal counsel and after consultation with
reputable investment bankers is superior to the transaction contemplated by this
Agreement.
"Taxes" shall mean all federal, state, local or foreign taxes,
including but not limited to income, gross receipts, windfall profits, value
added, severance, property, production, sales, use, license, excise, franchise,
custom duty, employment, withholding or similar taxes, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.
"TEC" means TEC AcquiSub, Inc., a California corporation.
"Term Lease" means those Customer Equipment Leases that are not Rental
Contracts.
"TRAC Lease Transportation Equipment" means the units of transportation
equipment leased by Sellers as lessee from certain financial institutions
pursuant to the TRAC Leases , all of such TRAC Lease Transportation Equipment at
the date hereof being listed and described on Exhibit A-3 hereto.
"TRAC Leases" means the TRAC leases which relate to the TRAC Leased
Transportation Equipment, pursuant to which a Seller is lessee, all of such TRAC
Leases as of the date hereof being listed and described on Exhibit A-3 hereto.
"Transition Services Agreement" means an agreement between PLM and
Buyer, in the form attached hereto as Exhibit G-4.
"Transportation Equipment" means the Owned Transportation Equipment,
the TRAC Lease Transportation Equipment and the Purchase Order Transportation
Equipment.
The plural or singular of any defined term shall have a meaning
correlative to such defined term.
1.2 Purchase and Sale of Assets and Assignment and Assumption of
Obligations. Upon and subject to the terms and conditions of this Agreement, at
the Closing:
(a) Sellers will sell, transfer, convey, assign and deliver to
Buyer, and Buyer shall purchase, acquire and accept from Sellers, all
of Sellers' right, title, interest and obligations in the Acquired
Assets and the Assumed Liabilities, together with (i) all
manufacturers' warranties (to the extent assignable), technical
information and specifications, license plates (where permitted by
law), certificates of title and all other rights relating to the
Transportation Equipment, (ii) all security and other deposits paid to
or deposited with Sellers under the terms of any Customer Equipment
Lease and which have not been refunded or paid pursuant to the terms of
such Customer Equipment Lease, to the extent that such deposits have
not been used to reduce the Purchase Price, (iii) all existing
correspondence and contract files relating to the Acquired Assets and
the Assumed Liabilities, and (iv) the books, records (including without
limitation, with respect to Purchase Order Transportation Equipment,
copies of correspondence, specifications and delivery dates for such
units of equipment), copies of electronic data files, billing files and
credit files relating to vendors and customers of the Business;
(b) Sellers will assign to Buyer, and Buyer will assume,
acquire and accept, all of Sellers' right, title, interest and
obligations as lessee in and to the Facility Leases and the TRAC Leases
described on the Closing List, in the form of Assignments attached as
Exhibits F and G-1;
(c) Sellers will assign to Buyer, and Buyer will assume,
acquire and accept all of Sellers' right, title and interest as lessor
in and to the Facility Subleases and the Customer Equipment Leases
described on the Closing List, in the form of Assignments attached as
Exhibits G-2 and E-1 (other than those of the Customer Equipment Leases
owned by PLM Investment Management and PLM FSI);
(d) Sellers will assign to Buyer, and Buyer will assume,
acquire and accept, all of Sellers' right, title, interest and
obligations in and to Equipment Purchase Orders listed and described on
the Closing List, in the form of Assignments attached as Exhibit D;
(e) Sellers will enter into the License of PLM Name to license
to Buyer and/or other entity or entities designated by Buyer, on an
exclusive basis, the PLM Name, and Sellers will enter into with Buyer
and/or other entity or entities designated by Buyer the Transition
Services Agreement and the Non-Competition Agreement;
(f) Seller will assign to Buyer and Buyer will assume, acquire
and accept, all of Seller's right, title, interest and obligations in
and to the Mees Pierson Facility, in the form of Assignment attached as
Exhibit G-3;
(g) Sellers will assign to Buyer and Buyer will assume,
acquire and accept, all of Seller's right, title, interest and
obligations in and to the Miscellaneous Contractual Obligations, in the
form of Assignment attached as Exhibit E-3; and
(h) Sellers will assign to Buyer and Buyer will assume,
acquire and accept, all of Seller's right, title, interest and
obligations in and to the Information Systems Contracts, in the form of
Assignment attached as Exhibit E-2.
(i) Sellers will cause each of PLM Investment Management and
PLM FSI to transfer and/or assign to Buyer and Buyer will assume,
acquire and accept, all of PLM Investment Management and PLM FSI's
right, title, interest and obligations in and to those of the Customer
Equipment Leases owned by PLM Investment Management and PLM FSI, in the
form of Assignment attached as Exhibit E-1A.
Other than the Assumed Liabilities, Buyer will not assume or have any
responsibility with respect to any other obligation or liability of Sellers. For
the avoidance of doubt, it is expressly agreed and understood that the Threshold
(as defined in Section 9.5) and other limitations on survival or otherwise in
Article IX are not applicable with respect to the Excluded Liabilities, with the
exception of those liabilities or obligations attributable to any period prior
to Closing arising under any Environmental, Health and Safety Laws.
Notwithstanding anything herein to the contrary, Buyer may, based upon (x)
information received concerning impairments to title that are disclosed by
Sellers to Buyer after the date hereof which materially and adversely affects
the use consistent with past practice of the Leased Facilities, or (y) the
results of environmental assessments received by Buyer, or if no definitive
environmental assessment has been received by Buyer based upon any environmental
information received up to the time of Buyer's determination, select, up to
sixty (60) days after the date hereof, or if Buyer has not had sufficient time
to receive definitive environmental assessments, or to review any definitive
environmental assessment received, as a result of events substantially and
reasonably beyond the control of Buyer, up to such date being no later than
ninety (90) days after the date hereof (with Closing being deferred until ninety
(90) days after the date hereof in the event that all conditions to Closing have
otherwise been satisfied or waived prior to such date), any one or more of the
Leased Facilities, up to a maximum of ten (10) Leased Facilities, that Buyer
shall determine not to purchase hereunder, so that Acquired Assets and Assumed
Liabilities no longer include any such Leased Facility; provided that Buyer
shall only be permitted not to purchase any such Leased Facility to the extent
that Buyer nevertheless remains responsible for acquiring all of those assets
that are Acquired Assets relating to that Leased Facility and that to the extent
that Closing has been deferred for the reasons set forth above, Buyer shall have
used its best efforts to have received and reviewed such environmental
assessments within such ninety (90) day period.
1.3 Consideration. Upon and subject to the terms and conditions of this
Agreement, in reliance on the representations, warranties and agreements of
Sellers contained herein, and in consideration of the sale, assignment, transfer
and delivery of the Acquired Assets, referred to in Section 1.2 hereof, Buyer
will deliver, or cause to be delivered, the Estimated Purchase Price (less the
Holdback Amount) at the Closing, and the Holdback Amount to the escrow agent
under the Escrow Agreement, together with the following:
(a) the Assignment and Assumption of TRAC Leases;
(b) the Assignment and Assumption of Customer Equipment
Leases;
(c) the Assignment and Assumption of Facility Leases;
(d) the Assignment and Assumption of Facility Subleases;
(e) the Assignment and Assumption of Equipment Purchase
Orders;
(f) the Assignment and Assumption of Mees Pierson
Facility;
(g) the Assignment and Assumption of the Information
Systems Contracts; and
(h) the Assignment and Assumption of Miscellaneous
Contractual Obligations.
1.4 Closing.
(a) Subject to the terms and provisions of this Agreement, the
Closing of the transactions contemplated by this Agreement will take
place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Share LLP, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on the
later of sixty days after the date hereof (unless deferred in
accordance with Section 1.2 or Section 2.4) and the second business day
following satisfaction or waiver of all of the conditions set forth in
Articles VII and VIII, at 10:00 A.M., local time, or at such other time
and place as may be agreed upon by the parties hereto.
(b) At the Closing, each Seller will deliver to Buyer (or, in
the case of (v), will cause PLM Investment Management and PLM FSI to
deliver to Buyer): (i) a duly executed ▇▇▇▇▇▇▇ ▇▇▇▇ of Sale; (ii) all
documents of title, instruments and deeds necessary to transfer, assign
and convey ownership to Buyer of all of the Acquired Assets and the
Assumed Liabilities, which, at Sellers' option and only for the Owned
Transportation Equipment, may take the form of executed powers of
attorney; (iii) duly executed counterparts of each Assignment and
Assumption of TRAC Leases, together with an original fully executed
copy of each TRAC Lease (if in Sellers' possession and, if not in
Sellers' possession, a true and complete copy thereof); (iv) a duly
executed counterpart of the Assignment and Assumption of Mees Pierson
Facility together with a fully executed copy thereof; (v) a duly
executed counterpart of the Assignment and Assumption of Customer
Equipment Leases, (together with all security and other deposits
required under the Customer Equipment Leases, to the extent that such
deposits have not been used to reduce the Purchase Price); (vi) a duly
executed counterpart of each Assignment and Assumption of Facility
Sublease described in Section 1.2(c) hereof together with an original
Facility Sublease (together also with all security and other deposits
required under the Facility Subleases, to the extent that such deposits
have not been used to reduce the Purchase Price); (vii) a duly executed
counterpart of each Assignment and Assumption of Facility Lease,
together with an original executed copy of each Facility Lease, (viii)
a duly executed counterpart of each Assignment and Assumption of
Equipment Purchase Order, together with an original copy of each
agreement, invoice or other document relating to each Equipment
Purchase Order; (ix) an original executed copy of the License of PLM
Name; (x) executed copies of the consents referred to in Section 8.6
hereof; (xi) the opinions of counsel referred to in Section 8.5 hereof;
(xii) the Closing List and the Reconciliation Schedule; (xiii) a duly
executed Transition Services Agreement and a duly executed
Non-Competition Agreement; (xiv) a duly executed Assignment and
Assumption of the Information Systems Contracts; and (xv) a duly
executed Assignment and Assumption of Miscellaneous Contractual
Obligations.
(c) At the Closing, Buyer will deliver to Sellers (or, in the
case of (iii), will deliver to PLM Investment Management and PLM FSI):
(i) duly executed counterparts of each Assignment and Assumption of
TRAC Leases; (ii) a duly executed counterpart of the Assignment and
Assumption of Mees Pierson Facility; (iii) a duly executed counterpart
of the Assignment and Assumption of Customer Equipment Leases; (iv) a
duly executed counterpart of each Assignment and Assumption of Facility
Lease; (v) a duly executed counterpart of each Assignment and
Assumption of Facility Sublease; (vi) a duly executed counterpart of
each Assignment and Assumption of Equipment Purchase Order; (vii) duly
executed counterparts of the License of PLM Name; (viii) the Estimated
Purchase Price (less the Holdback Amount) and the Holdback Amount to
the escrow agent under the Escrow Agreement; (ix) executed copies of
the consents referred to in Section 7.9 hereof; (ix) the opinion of
counsel referred to in Section 7.6 hereof; (x) a duly executed
counterpart of the Transition Services Agreement and a duly executed
counterpart of the Non-Competition Agreement; (xi) a duly executed
Assignment and Assumption of the Information Systems Contracts; and
(xii) a duly executed Assignment and Assumption of Miscellaneous
Contractual Obligations.
1.5 Post Closing Adjustment to the Estimated Purchase Price (other
than the Holdback Amount).
(a) Within 30 days following the Closing, Sellers shall
prepare, or cause to be prepared, and deliver to Buyer financial
statements (the "Closing Financial Statements") which shall set forth
the actual net book value of the assets that are set forth on Schedule
1 less the liabilities that are set forth on Schedule 1 as of the
Closing Date. The Closing Financial Statements shall be prepared using
the same methodology, other than as to the Premium and other than that
the net book value will reflect the actual net book value of the assets
that are set forth on Schedule 1 less the liabilities that are set
forth on Schedule 1 as of the Closing Date, as set forth in Schedule 1
and reviewed by KPMG, LLP.
(b) Buyer and Buyer's accountants shall, within 15 days after
the delivery by Sellers of the Closing Financial Statements, complete
their review of the actual net book value of the assets that are set
forth on Schedule 1 less the liabilities that are set forth on Schedule
1 as of the Closing Date as derived using the same methodology, other
than as to the Premium and other than that the net book value will
reflect the actual net book value of the assets that are set forth on
Schedule 1 less the liabilities that are set forth on Schedule 1 as of
the Closing, as set forth on Schedule 1 (the "Net Book Value"). In the
event that Buyer objects to the Net Book Value, as derived from the
Closing Financial Statements, Buyer shall inform Sellers in writing
(the "Buyer's Objection"), setting forth a specific description of the
basis of Buyer's Objection and the adjustments to the Net Book Value
which Buyer believes should be made, on or before the last day of such
15-day period. Sellers shall then have 7 days to review and respond to
Buyer's Objection. The parties shall use all reasonable efforts to
resolve any dispute as to the proper calculation of Net Book Value as
of the Closing Date. If Sellers and Buyer are unable to resolve all of
their disagreements with respect to the determination of the foregoing
items within 10 days following the completion of Sellers' review of
Buyer's Objection, they shall refer their remaining differences to a
nationally recognized firm of independent public accountants with a San
Francisco office, jointly selected by Buyer and Sellers (the "CPA
Firm"), who shall, acting as experts and not as arbitrators, determine
on the basis of using the same methodology, other than as to the
Premium and other than that the net book value will reflect the actual
net book value of the assets that are set forth on Schedule 1 less the
liabilities that are set forth on Schedule 1 as of the Closing, and
only with respect to the remaining differences so submitted, whether
and to what extent, if any, the Net Book Value, as derived from the
Closing Financial Statements, requires adjustment. The parties shall
instruct the CPA Firm to deliver its written determination to Buyer and
Sellers no later than the twentieth day after the remaining differences
underlying the Buyer's Objection are referred to the CPA Firm. The CPA
Firm's determination shall be conclusive and binding upon Buyer and
Seller. The fees and disbursements of the CPA Firm shall be shared
equally by Buyer and Sellers. Buyer and Sellers shall make readily
available to the CPA Firm all relevant books and records and any work
papers (including those of the parties' respective accountants)
relating to the consolidated financial statements of PLM for the period
ended December 31, 1999 and the Closing Financial Statements and all
other items reasonably requested by the CPA Firm. The "Adjusted Closing
Financial Statements" shall be (i) the Closing Financial Statements in
the event that (x) no Buyer's Objection is delivered to Sellers during
the 15-day period specified above or (y) Sellers and Buyer so agree,
(ii) the Closing Financial Statements, adjusted in accordance with the
Buyer's Objection in the event that Sellers do not respond to Buyer's
Objection within the 7-day period following receipt by Sellers of
Buyer's Objection, or (iii) the Closing Financial Statement, as
adjusted by either (x) the agreement of Sellers and Buyer or (y) the
CPA Firm.
(c) Within ten business days following issuance of the
Adjusted Closing Financial Statements, the adjustment payments payable
pursuant to this Section 1.5(c) shall be paid by wire transfer of
immediately available funds to a bank account designated by Buyer or
Sellers, as the case may be. Buyer or Sellers, as the case may be,
shall make an adjustment payment in respect of Net Book Value in an
amount equal to the difference between (x) the amount equal to the
Estimated Purchase Price less the Premium (the "Estimated Net Book
Value") and (y) the Net Book Value as derived from the Adjusted Closing
Financial Statements. The adjustment payment in respect of Net Book
Value will be made by Sellers to Buyer to the extent that Net Book
Value on the Adjusted Closing Financial Statements is less than
Estimated Net Book Value and by Buyer to Sellers to the extent that Net
Book Value on the Adjusted Closing Financial Statements is greater than
Estimated Net Book Value. The Estimated Purchase Price as adjusted by
such adjustment payment shall be the "Purchase Price" for the purposes
of this Agreement. For the avoidance of doubt, it is expressly agreed
and understood that the Threshold (as defined in Section 9.5) and other
limitations on survival or otherwise in Article IX are not applicable
with respect to any obligations under this Section 1.5. For the
avoidance of doubt, it is further expressly agreed and understood that
in calculating the Purchase Price hereunder there shall be no double
counting so that the Holdback Amount shall be irrelevant for the
purposes of this Section and no adjustment to the Estimated Purchase
Price shall affect the Holdback Amount or result in Buyer having to
make more than one payment of the Holdback Amount hereunder to the
escrow agent under the Escrow Agreement.
Article II
RELATED MATTERS
2.1 Confidentiality. Each party hereto and their respective Affiliates
will hold, and will cause all of its consultants and advisors to hold in strict
confidence, unless compelled to disclose by judicial or administrative process
or, in the opinion of its counsel, by other requirements of law, all documents
and information concerning the other party and their respective Affiliates
furnished to it by such other party or its representatives in connection with
the transactions contemplated by this Agreement (except to the extent that such
information can be shown to have been (i) previously known by the party to which
it was furnished, (ii) in the public domain through no fault of such party, or
(iii) later lawfully acquired from other sources by the party to which it was
furnished), and each party will neither use such information nor release or
disclose such information to any other person, except its auditors, attorneys,
financial advisors, bankers and other consultants and advisors in connection
with this Agreement, as well as to any others to whom disclosure may be required
by applicable law. If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained, except to the extent such
information comes into the public domain through no fault of the party required
to hold it in confidence; and such information shall not be disclosed to any
employees or representatives of the party required to hold such information in
confidence, except as is necessary to evaluate the transactions contemplated by
this Agreement; and all such documents (including copies thereof) shall be
returned to the other party immediately upon the written request of such other
party, except to the extent copies are required to be retained to meet
regulatory or other legal requirements. Without limiting the generality of the
foregoing, Sellers agree to enforce any confidentiality agreements relating to
the Business that have been entered into (including without limitation with any
third parties that have acquired information in connection with any possible
Acquisition Proposal whether before or after the date of this Agreement) and to
cooperate and give reasonable assistance to Buyer in the enforcement thereof for
the protection of the Business. In the case where such confidentiality
agreements are to be enforced against individuals who are or were employees of
the Business prior to Closing, Sellers shall bear the expenses thereof but shall
be reimbursed by Buyer following Closing taking place. Otherwise, all expenses
of enforcement of confidentiality agreements shall be borne by Buyer.
2.2 Further Assurances; Access to Books and Records.
(a) After the Closing, each party hereto shall from time to
time, at the request of the other party, (i) execute and deliver such
other necessary instruments of conveyance and transfer as the other
party may reasonably request, in order to more effectively consummate
the transactions contemplated hereby and to vest in the other party
good and marketable title to the assets being transferred hereunder
(including, without limitation, assistance in the collection or
reduction to possession of any of such assets being transferred
hereunder, assignments of warranties and certificates of title) and
(ii) provide to the other party such information as is, in the opinion
of counsel to the other party, necessary to enable the other party to
comply with applicable laws and regulations relating to the
transactions contemplated hereby and the disclosure thereof.
(b) Buyer agrees that after the Closing, during normal
business hours and upon reasonable prior notice, it will permit Sellers
and its auditors, through their authorized representatives, to have
access to and examine and take copies of (all under the supervision of
Buyer's personnel and at Seller's expense) all books and records
relating to the Acquired Assets which were acquired from Sellers
(including but not limited to correspondence, memoranda, books of
account and the like) and relating to events occurring prior to the
Closing Date and to transactions or events occurring subsequent to the
Closing Date which are related to or arise out of transactions or
events occurring prior to the Closing Date.
(c) Notwithstanding anything to the contrary in this
Agreement, this Agreement shall not constitute an agreement to assign
or transfer any governmental approval or application therefor,
instrument, contract, lease, permit or other agreement or arrangement,
or any claim, right or benefit arising thereunder or resulting
therefrom, if an assignment or transfer or an attempt to make such an
assignment or transfer without the consent of a third party would
constitute a breach or violation thereof or affect adversely the rights
of the Buyer or Sellers, and any transfer or assignment of any interest
under any such instrument, contract, lease, permit or other agreement
or arrangement that requires the consent of a third party shall be made
subject to such consent or approval being obtained. In the event any
such consent or approval is not obtained on or prior to the Closing
Date, Sellers shall continue to use all reasonable efforts to obtain
such approval or consent after the Closing Date until such time as such
consent or approval has been obtained, and Sellers will cooperate with
the Buyer in any lawful and economically feasible arrangement to
provide that the Buyer shall receive the benefits under any such
instrument, contract, lease, permit or other agreement or arrangement,
including performance by Sellers as agent, if economically feasible,
provided that the Buyer shall undertake to pay or satisfy the
corresponding liabilities for the enjoyment of such benefit to the
extent Buyer would have been responsible therefor if such consent or
approval had been obtained. To the extent any of the rights and
obligations with respect to an Acquired Asset or Assumed Liability are
not transferred to Buyer, Buyer's sole rights under this Agreement with
respect to Sellers' failure to obtain consent to the transfer thereof
is as provided in this Section 2.2.
(d) The parties shall allocate on or before Closing the
Purchase Price (other than the Holdback Amount for so long as it has
not been released under the Escrow Agreement) among the Acquired Assets
and the Assumed Liabilities except to the extent that modifications are
necessary to reflect changes in the Acquired Assets and the Assumed
Liabilities between the date hereof and the Closing Date or to the
extent that modifications are necessary to reflect any adjustment made
to the Estimated Purchase Price in order to establish the Purchase
Price pursuant to Section 1.5(c), and the parties agree to report for
state and federal Tax purposes in accordance with such allocation of
the Purchase Price.
2.3 Accounts Receivables/Prepayment Items Proceeds. The Sellers hereby
agree to remit, or assign any claims they may have with respect to, and to
endorse to Buyer any payment they receive after the Closing in respect of any
Receivable/Prepayment Item as promptly as reasonably practicable, and in any
event within three business days of receipt thereof.
2.4 Assignment and Transfer Fees and Taxes. Buyer and Sellers shall
cooperate reasonably with each other and keep each other reasonably informed in
the preparation and filing of all legally required or permitted documentation
relating to, and in the minimization or, if possible, the elimination of, fees
or Taxes to be paid by Buyer or Sellers to any third party (including government
entities) or each other (as a result of an indemnification provision or
provision allocating responsibility) arising from the transfer and/or assignment
from Sellers to Buyer of the Acquired Assets and the Assumed Liabilities,
including but not limited to all documents for the purposes of sales and use or
other similar Taxes and employment Taxes in every state and local jurisdiction
on the attached Schedule 2.4. Without limiting the obligations of Sellers as set
forth in this Section 2.4, Sellers shall use all commercially reasonable efforts
to assist Buyer to obtain and deliver, at the earliest practicable date, to
Buyer all legally required or permitted documentation which has the effect that
Buyer is not liable for any amounts for sales or use or other similar Taxes and
employment Taxes as a successor to the business or assets of the Sellers (or
other comparable documentation under state or local law). Notwithstanding the
foregoing, subject to any of the parties' right to attempt to minimize or, if
possible, eliminate any fees or Taxes through negotiation or appeal, Buyer and
Sellers will comply with all lawful instructions and/or requirements imposed by
taxing or other governmental authorities resulting from or associated with the
filing of the aforementioned documents.
Sellers intend to negotiate a voluntary disclosure agreement with state
taxing or governmental authorities in Illinois with respect to sales or use
Taxes, including Illinois Retailers Occupation and Use Taxes, and employment
Taxes, in Illinois attributable to periods prior to the Closing. In such
negotiations, Sellers are entitled to negotiate for the reduction or elimination
of Sellers' Taxes provided that they do not hold out Buyer or make reference to
Buyer as an alternative source for the payment of such Taxes. Buyer shall have
the burden of proof in the event that Buyer asserts that any of Sellers have
held out Buyer or made reference to Buyer as an alternative source for the
payment of such Taxes. Sellers shall use reasonable efforts to reach such a
voluntary disclosure agreement with state taxing or governmental authorities in
Illinois within sixty (60) days of the date hereof, but if any of Sellers shall
not have reached such agreement by such date, as a result of events
substantially and reasonably beyond the control of Sellers, Sellers shall have
the right to defer the Closing to a date ninety (90) days after the date hereof
in the event that all conditions to Closing have otherwise been satisfied or
waived prior to such date; provided that to the extent that Closing has been
deferred for the reasons set forth above, Sellers shall have used their best
efforts to have reached such an agreement within such ninety (90) period.
Notwithstanding anything contained in this Agreement or any Exhibit or
Schedule to the contrary, except for the immediately succeeding sentence, Buyer
shall not make any filings with, notify, contact, or otherwise communicate with
any Illinois revenue or taxing authorities, prior to five (5) days from the date
of Closing, with respect to any of the Taxes, interest or penalties referred to
in Section 6.5 or employment Taxes of Sellers. Notwithstanding the foregoing, to
the extent that Buyer receives any communication or contact from such taxing
authorities, to which Buyer believes it is legally required to respond, Buyer
will inform Sellers of the communication or contact and make reasonable efforts
in coordination with the Sellers to jointly develop a response to such
communication or contact. If Buyer and Sellers cannot develop a mutually
satisfactory response or disagree as to whether a response is required or the
extent to which a response is required to meet Buyer's legal obligations, Buyer
and Sellers agree to seek and abide by an opinion of an independent law firm,
waiving any potential objections to the opinion and, with respect to such law
firm, any potential or actual conflicts of interest that such law firm may have.
Such counsel shall be requested to address in its opinion any statutory,
regulatory or other authority which would permit Buyer to legally delay the date
upon which such response is required. Such counsel shall be retained within a
reasonable time with respect to the due date for response specified in the
communication or contact from such revenue or taxing authority, but shall not
exceed more than five (5) days from the date Buyer informs Seller of such
communication or notice. Buyer and Sellers further agree that such opinion will
be sought from a law firm recognized as experts in the field of state and local
tax law in Illinois (such as, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, Chartered). The reasonable
fees and expenses of such legal counsel shall be the responsibility of the
Sellers.
From the period beginning five (5) days prior to Closing and
thereafter, Buyer, after an initial three (3) days prior written notice (which
will only be required to be made by Buyer once under this Agreement) may file a
completed application for a seller's permit and all other legally required
permits and applications and make all legally required filings under such
permits or registrations once granted, in order to conduct business in Illinois
post Closing.
Article III
REPRESENTATIONS AND WARRANTIES OF SELLERS
For purposes of the representations and warranties made in this Article
III as of the date hereof, "Transportation Equipment" shall mean the
Transportation Equipment listed on Exhibit A. For purposes of the
representations and warranties made in this Article III as of the Closing Date,
"Transportation Equipment" shall mean the Transportation Equipment specified in
the Closing List. For purposes of the representations and warranties of Sellers
contained herein, disclosure in any section of the Sellers Disclosure Schedule
shall be deemed to be adequate response and disclosure of such facts or
circumstances with respect to all representations or warranties by Sellers which
would reasonably call for disclosure of such information, whether or not such
disclosure is specifically associated with or purports to respond to one or more
or all of such representations or warranties; provided such disclosure is fair
and accurate. The inclusion of any information in any section of the Sellers
Disclosure Schedule or other document delivered by Sellers pursuant to this
Agreement shall not be deemed to be an admission or evidence of the materiality
of such item, nor shall it establish a standard of materiality for any purpose
whatsoever. PLM and each other Seller hereby represents and warrants, jointly
and severally, to Buyer as follows:
3.1 Corporate Organization, Etc.
(a) Each Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
organization as listed in Section 3.1 of the Sellers Disclosure
Schedule and has full power and authority, directly or indirectly, to
own and lease the Acquired Assets and to carry on its business as
presently conducted; and is duly qualified or licensed to do business
as a foreign corporation in good standing in such other jurisdictions
in which their direct or indirect ownership or possession of the
Acquired Assets requires such qualification or, if one or more of the
PLM Subsidiaries are not so qualified in any such jurisdiction, it or
they can become so qualified in such jurisdiction without any material
adverse effect upon the Acquired Assets.
(b) PLM Rental, TEC, PLM TEC, PLM Investment Management, and
PLM FSI are direct and indirect wholly-owned subsidiaries of PLM.
3.2 Authorization, Etc. The execution, delivery and performance by each
Seller of this Agreement and the consummation by each Seller of the transactions
contemplated hereby are within each Seller's powers and, except for the PLM
Stockholder Approval for the sale by PLM of the Acquired Assets owned by it for
itself and not the other Sellers, have been duly authorized by all necessary
corporate action on the part of each Seller. The PLM Stockholder Approval is the
only vote of the Sellers and the holders of any of the Sellers' equity or debt
securities necessary in connection with the consummation of the transactions
contemplated hereby. This Agreement constitutes a valid and binding agreement of
each Seller, enforceable in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws relating to creditors'
rights generally and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
3.3 No Violation. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate any
provision of the Certificate of Incorporation, bylaws or other organizational
documents of any Seller, or, except as specified in Section 3.3 of the Sellers
Disclosure Schedule, violate, or be in conflict with, or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or acceleration of the maturity
of any debt or obligation pursuant to, or result in the creation or imposition
of any security interest, lien or other encumbrance upon any of the Acquired
Assets under any agreement or commitment with respect to the Acquired Assets to
which any Seller is a party or by which any Seller is bound, or to which any of
the Acquired Assets is subject, or violate any statute or law or in any respect
any judgment, decree, order, regulation or rule of, or proposed settlement
before, any court or governmental authority.
3.4 Title to Assets; Encumbrances.
3.4.1 Owned Transportation Equipment. Except as set forth in
Section 3.4.1 of Sellers Disclosure Schedule and except for the
Customer Equipment Leases and liens that a lessee is required to
discharge, all such Owned Transportation Equipment is free and clear of
all title defects, liens, claims, charges, security interests or other
encumbrances of any nature whatsoever including, without limitation,
chattel mortgages, conditional sales contracts, purchase options,
collateral security arrangements and other title or interest retention
arrangements, has been duly registered and licensed by appropriate
governmental authorities, which registration is in full force and
effect, and all registration and license fees due and payable relating
to the Owned Transportation Equipment have been paid, and each unit of
Owned Transportation Equipment has a valid license plate, registration,
and certificate of title corresponding to such unit of Owned
Transportation Equipment. The liens or encumbrances over any of the
Acquired Assets or Assumed Liabilities securing the Senior Loan
referred to in Section 3.4.1 of Sellers Disclosure Schedule shall have
been released and discharged as of Closing. Exhibit A-1 contains, and
the Closing List as of the Closing Date will contain, a fair, complete
and accurate list of all Owned Transportation Equipment and a fair,
complete and accurate description of the information disclosed under
the categories addressed therein. Except as specifically identified in
Section 3.4.1 of the Sellers Disclosure Schedule, all units that are
off-lease of the Owned Transportation Equipment are in roadworthy,
cargoworthy condition without incurring in excess of $500 of repairs
(excluding the cost of repairing and replacing tires associated with
normal wear and tear).
3.4.2 TRAC Lease. Sellers have made available to Buyer
current, correct and complete copies of all TRAC Leases and all
amendments, modifications, renewals and addenda to such TRAC Leases.
Each Seller has valid and effective TRAC Leases relating to all of the
TRAC Lease Transportation Equipment which it purports to lease as
lessee as of the date hereof as set forth on Exhibit A-3 hereto and, as
of the Closing Date, will have valid and effective leasehold interests
pursuant to the relevant TRAC Leases to all of the TRAC Lease
Transportation Equipment listed on the Closing List. Except as set
forth in Section 3.4.2 of the Sellers Disclosure Schedule, each TRAC
Lease is valid, binding and enforceable in accordance with its terms
(except as enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to creditors' rights generally and to general principles of
equity), and is in full force and effect; there are no existing
material defaults thereunder; no event of default has occurred which
(whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a material default
thereunder. Except as set forth in Section 3.4.2 of the Sellers
Disclosure Schedule and except for TRAC Leases and the Customer
Equipment Leases and liens that a lessee is required to discharge, all
such TRAC Lease Transportation Equipment is free and clear of all title
defects, liens, claims, charges, security interests or other
encumbrances of any nature whatsoever including, without limitation,
chattel mortgages, conditional sales contracts, collateral security
arrangements and other title or interest retention arrangements, has
been duly registered and licensed by appropriate governmental
authorities, which registration is in full force and effect, and all
registration and license fees due and payable relating to the TRAC
Lease Transportation Equipment have been paid, and each unit of TRAC
Lease Transportation Equipment has a valid license plate, registration,
and certificate of title corresponding to such unit of TRAC Lease
Transportation Equipment. Exhibit A-3 contains, and the Closing List as
of the Closing Date will contain, a fair, complete and accurate list of
all TRAC Lease Transportation Equipment and TRAC Leases and a fair,
complete and accurate description of the information disclosed under
the categories addressed therein. Except as specifically identified in
Section 3.4.2 of the Sellers Disclosure Schedule, all units that are
off-lease of the TRAC Lease Transportation Equipment are in roadworthy,
cargoworthy condition without incurring in excess of $500 of repairs
(excluding the cost of repairing and replacing tires associated with
normal wear and tear).
3.4.3 Equipment Purchase Orders. Exhibit A-4 contains, and the
Closing List shall contain, a complete and accurate list of all
Equipment Purchase Orders Sellers have entered into (including without
limitation details of specifications and delivery dates). Sellers have
made available to Buyer current, correct and complete copies of all
Equipment Purchase Orders and all amendments, modifications, renewals
and addenda to such Equipment Purchase Orders. Except as set forth in
Section 3.4.3 of the Sellers Disclosure Schedule, to Sellers' Knowledge
each Equipment Purchase Order is valid, binding and enforceable in
accordance with its terms (except as enforceability may be subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to creditors' rights
generally and to general principles of equity), and is in full force
and effect.
3.4.4 Customer Equipment Leases. Exhibit A-2 contains as of
May 15, 2000, and the Closing List shall contain, a complete and
accurate list of all Customer Equipment Leases, which are constituted
only of either Rental Contracts or Term Leases. Exhibit A-2 identifies
the amount of each security and other deposit paid to or deposited with
Sellers under the terms of the relevant Customer Equipment Lease.
Exhibit A-2 identifies, and the Closing List shall identify, each
Customer Equipment Lease as either a Rental Contract or a Term Lease.
Each Customer Equipment Lease constituting a Rental Contract is
documented in substantially the form that is included in Exhibit A-2.
All Customer Equipment Leases constituting Term Leases are listed and
described in Exhibit A-2, and Buyer has been provided a copy of all
such Term Leases. Except as set forth in Section 3.4.4 of the Sellers
Disclosure Schedule, to Sellers' Knowledge each Customer Equipment
Lease is valid, binding and enforceable in accordance with its terms
(except as enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to creditors' rights generally and to general principles of
equity), and is in full force and effect; to Sellers' Knowledge there
are no existing material defaults thereunder; to Sellers' Knowledge no
event of default has occurred which (whether with or without notice,
lapse of time or the happening or occurrence of any other event) would
constitute a material default thereunder; and subject to the TRAC
Leases, to Sellers' Knowledge and except for liens that a lessee is
required to discharge, the Customer Equipment Leases are free and clear
of any liens, charges, encumbrances, pledges or other rights of others
of any nature or kind related to or affecting the rental and other
payments due under the Customer Equipment Leases.
3.4.5 Other Agreements. Other than with respect to liabilities
of no more than $5,000 in aggregate, Schedule 1 prepared as of the
Closing Date and Exhibits A through C and the Closing List shall
contain, a complete, fair and accurate list of each of the Acquired
Assets (other than Inventory) and Assumed Liabilities. Sellers have
made available to Buyer current, correct and complete copies of all
such other agreements and all amendments, modifications, renewals and
addenda to such other agreements. Section 3.4.5 of the Sellers
Disclosure Schedule contains, and will contain as of the Closing Date,
a complete list of the nature, scope and dollar amounts of coverage of
all insurance policies relating to the Business maintained by Sellers
and of the nature of coverage maintained by third parties for the
benefit of Sellers under Customer Equipment Leases. All such insurances
have been obtained and maintained consistent with Sellers' past
policies, practices and procedures. To the Knowledge of Sellers, no
event, circumstance or occurrence has occurred which has resulted in or
could result in the invalidation of any claim under such insurances
insofar as they relate to Transportation Equipment that is off-lease or
the invalidation of any policy or in material adjustment in the amount
of the premiums relating thereto insofar as they relate to
Transportation Equipment that is off-lease.
3.4.6 Facilities. Exhibit B contains, and the Closing List
shall contain, a complete and accurate list of all Leased Facilities,
Subleased Facilities, Facility Leases and Facility Subleases. Sellers
own no real property relating to the Business. Each Seller is the owner
and holder of all the leasehold estates purported to be granted to it
by Facility Leases listed on Exhibit B-1 hereto, and all such Facility
Leases, and all Facility Subleases listed on Exhibit B-2, constitute
valid and binding obligations of such Seller (except as enforceability
may be subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws related to creditors'
rights generally and general principles of equity), and are in full
force and effect. Except as set forth in Section 3.4.6 of the Sellers
Disclosure Schedule, (a) all rent and other sums and charges payable
under any Facility Lease or Facility Sublease are current, (b) no
notice of default, termination or breach or a condition or limitation
has been received by any Seller with respect to any such Facility Lease
or Facility Sublease, (c) no event or condition has occurred or exists
which, with the giving of notice or the lapse of time or both, would
constitute a default or breach of a condition or limitation or give
rise to a right of termination by the lessor under any such Facility
Lease or, to Seller's Knowledge, by the lessee under any such Facility
Sublease and (d) the leasehold interest in and leasehold estate under
each Facility Lease is held by the relevant Seller free and clear of
all liens except for the Facility Subleases. Sellers have made
available to Buyer current, correct and complete copies of all Facility
Leases referred to in Exhibit B-1 hereto and all Facility Subleases
referred to in Exhibit B-2 hereto and all amendments, modifications,
renewals and addenda to such Facility Leases and Facility Subleases.
Sellers have not been notified of any lis pendens or other filings
regarding the pendency of any litigation or claim affecting any Leased
Facility. Except for the Facility Subleases or as set forth in Section
3.4.6 of the Sellers Disclosure Schedule, no Seller owns or holds nor
is obligated under, or a party to, any option, right of first refusal
or other contractual right to purchase, acquire, sell or dispose of any
portion of or interest in any Leased Facility. Except for the Facility
Subleases, no Seller is the lessor, sublessor or grantor under any
lease or contract granting to another person any right to the
possession, use occupancy or enjoyment of any Leased Facility. Except
as set forth in Section 3.4.6 of the Sellers Disclosure Schedule, no
condemnation proceeding or other regulatory action is pending or, to
Sellers' knowledge, threatened, which would preclude or impair the use
of any Leased Facility.
3.4.7 Other Assets. Exhibit C-1 sets forth, and the Closing
List will contain, a complete list of the Other Assets.
3.5 Litigation. Except as disclosed in Section 3.5 of the Sellers
Disclosure Schedule, there is no action, suit, inquiry, proceeding, arbitration
or investigation by or before any court or governmental or other regulatory or
administrative agent or commission pending or, to the Knowledge of Sellers,
threatened against any Seller which relates to the Acquired Assets or the
Assumed Liabilities or which challenge the validity of this Agreement or any
action taken or to be taken by Sellers pursuant to this Agreement or in
connection with the transactions contemplated hereby. No Seller is subject to
any judgment, order or decree entered in any lawsuit or proceeding which may
have an adverse effect on the Acquired Assets, or the operation thereof.
3.6 Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of any governmental or regulatory authority is
required in connection with the execution, delivery and performance of this
Agreement by any Seller or the consummation by it of the transactions
contemplated hereby other than compliance by the Closing with any applicable
requirements of the HSR Act and the Securities Exchange Act of 1934.
3.7 Consents. Except as set forth in Section 3.7 of the Sellers
Disclosure Schedule, no consent of any person other than PLM Stockholder
Approval is necessary to the consummation of the transactions by any Seller or
any of the Partnerships contemplated hereby, including, without limitation,
consents from parties to loans, contracts, leases or other agreements and
consents from governmental agencies, whether federal, state or local. The
consents required with respect to item 4 of Section 3.3 of the Sellers
Disclosure Schedule and item 2 of Section 3.7 of the Sellers Disclosure Schedule
shall have been obtained and any liens or encumbrances arising in connection
therewith shall have been released and discharged as against the Acquired Assets
and the Assumed Liabilities as of Closing.
3.8 Compliance with Law. To Sellers' Knowledge, the operations relating
to the Acquired Assets have been conducted in accordance with all applicable
laws, regulations and other requirements of all national governmental
authorities, and of all states, municipalities and other political subdivisions
and agencies thereof, having jurisdiction over Sellers, including, without
limitation, all such laws, regulations and requirements relating to antitrust,
consumer protection, environmental, zoning and land use, currency exchange,
equal opportunity, health, occupational safety, pension, securities and trading
with-the-enemy matters. Since June 1, 1998, no Seller has received any
notification of any asserted present or past failure by any Seller to comply
with such laws, rules or regulations.
3.9 Assignment. Each Seller has complete and unrestricted power and the
unqualified right to sell, assign, transfer and deliver to Buyer, and upon
consummation of the transactions contemplated by this Agreement, Buyer will
acquire, good, valid and marketable title to the Acquired Assets, and, in the
case of the Assumed Liabilities, TRAC Lease Transportation Equipment and the
Leased Facilities, legal, valid and enforceable possessory rights therein, free
and clear of all mortgages, pledges, liens, claims, purchase options, security
interests, encumbrances or charges of any kind, except for those listed in
Section 3.4.1 or 3.4.2 or 3.9 of the Sellers Disclosure Schedule or as
contemplated by Section 3.4.1 or 3.4.2 hereof. Any liens or encumbrances arising
in connection with item 4 of Section 3.3 of the Sellers Disclosure Schedule and
item 2 of Section 3.7 of the Sellers Disclosure Schedule shall have been
released and discharged as against the Acquired Assets and the Assumed
Liabilities as of Closing. The ▇▇▇▇▇▇▇ ▇▇▇▇ of Sale and the deeds, endorsements,
assignments and other instruments to be executed and delivered to Buyer by
Sellers at the Closing will be valid and binding obligations of Sellers
enforceable in accordance with their terms (except as enforceability may be
subject to bankruptcy, insolvency, reorganization, moratorium, or other similar
laws relating to creditors' rights generally and to general principles of
equity), and will effectively vest in Buyer good, valid and marketable title to
the Acquired Assets, and, in the case of TRAC Lease Transportation Equipment and
the Leased Facilities, legal, valid and enforceable possessory rights therein.
If in accordance with Section 8.6 Sellers are unable to obtain the consent of
any lessor under one or more of the TRAC Leases or the lender under the Mees
Pierson Facility and Buyer has waived the requirement to obtain such consent and
the parties have consummated the transactions that are the subject of this
Agreement, then without prejudice to Section 8.6 all obligations and liens or
encumbrances arising under the relevant TRAC Lease(s) or the Mees Pierson
Facility, as the case may be, shall have been discharged and released, and Buyer
will acquire, good, valid and marketable title to the Owned Transportation
Equipment to the extent the subject thereof, free and clear of all liens and
encumbrances and applicable ownership rights of any lessor under the relevant
TRAC Lease(s) or the lender under the Mees Pierson Facility, as the case may be
3.10 Brokerage. Except for Imperial Capital, LLC ("Imperial"), Sellers
have not retained any broker or finder in connection with the transactions
contemplated by this Agreement. All fees of Imperial shall be exclusively for
the account of Sellers, and any brokerage or finder's fee due to any broker or
finder in violation of the foregoing representation shall be paid by Sellers.
3.11 Insider Interests. No officer or director of any Seller nor any
Affiliate of any Seller has any interest in any property, real or personal,
tangible or intangible, including without limitation, inventions, patents,
trademarks or trade names, used in or pertaining to the Acquired Assets or the
Assumed Liabilities. None of the Assumed Liabilities will include any amount or
liability owing to any Seller except as listed on Section 3.11 of the Sellers
Disclosure Schedule.
3.12 Environmental, Health and Safety.
(a) (i) Each Seller has complied with all Environmental,
Health and Safety Laws; and (ii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand or notice has been
filed, commenced or, to the Knowledge of Sellers threatened, against
any Seller alleging any failure so to comply. Each Seller has obtained
and been in compliance with all of the terms and conditions of all
permits, licenses and other authorizations which are required under,
and has complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables which are contained in, all Environmental, Health and Safety
Laws.
(b) Each Seller has not handled, disposed of, arranged for the
disposal of or exposed any individual to any substance, material or
condition or owned or operated any property or facility in any manner
that could form the basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand
under any Environmental, Health and Safety Laws or otherwise against
the Business or any Seller giving rise to any liability for damage to
any Leased Facility (surface or subsurface), or for any illness of or
personal injury to any individual.
(c) To the Knowledge of Sellers, there are no past or present
actions, activities, circumstances, conditions, events or incidents
under any Environmental, Health and Safety Laws or otherwise which
could form the basis of any claim against the Business or the Acquired
Assets or against any person or entity whose liability for any claim
the Business has or may have retained or assumed either contractually
or by operation of law.
(d) To the Knowledge of Sellers, none of the Transportation
Equipment has been used other than in compliance with Environmental,
Health and Safety Laws.
3.13 Accounts and Notes Receivable. Exhibit C-4 sets forth as of May
12, 2000, and the Closing List will contain, a complete list of
Receivables/Prepayment Items. Except as set forth in Section 3.13 of the Sellers
Disclosure Schedule, all of the Receivables/Prepayment Items and notes
receivable (including direct financing leases and rental receivables) owing to
Sellers as of the date hereof constitute, and as of the Closing Date will
constitute valid claims arising from bona fide transactions in the ordinary
course of business, and as of the date hereof Sellers have not received any
written notice denying such obligations or asserting rights to set-off. None of
the Receivables/Prepayment Items have been pledged to any third party. All loss
reserves relating to the Business have been created and maintained consistent
with Sellers' past policies, practices and procedures, including without
limitation with respect to Ameriserv and other bankruptcies. For the avoidance
of doubt, it is expressly agreed and understood that the Receivables/Prepayment
Items acquired by Buyer hereunder are those Receivables/Prepayment Items related
to or arising from the Acquired Assets or the Assumed Liabilities as of the
Closing Date.
3.14 Mees Pierson Facility. Except as set forth in Section 3.14 of the
Sellers Disclosure Schedule, the Mees Pierson Facility is valid, binding and
enforceable in accordance with its terms (except as enforceability may be
subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to creditors' rights generally and to
general principles of equity), and is in full force and effect; there are no
existing material defaults thereunder; and no event of default has occurred
which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a material default thereunder.
Sellers have made available to Buyer a current, correct and complete copy of the
Mees Pierson Facility and all amendments, modifications, renewals and addenda to
the Mees Pierson Facility.
3.15 SEC Filings; Financial Statements. PLM's consolidated revenues for
refrigerated and dry van trailers for its fiscal years ended December 31, 1997
and December 31, 1998 were respectively $5,544,000 and $9,744,000. Utilization
of Sellers' refrigerated trailers increased from 62% in 1998 to approximately
76% in 1999. Utilization of Sellers' dry vans decreased from approximately 77%
in 1998 to approximately 74% in 1999. Transportation Equipment has been
depreciated by Sellers on a straight-line method down to such equipment's
estimated salvage value. During the three months ended March 31, 2000 Sellers
purchased Transportation Equipment for $5,500,000.00 and sold Transportation
Equipment with a net book value of $58,000.00 for $45,000.00. As of May 2, 2000
Sellers had committed to purchase $19,700,000.00 of Transportation Equipment.
The information presented in Note 9 regarding the trailer leasing segment in
PLM's Notes to Consolidated Financial Statements March 31, 2000 as filed in
PLM's Quarterly Report on Form 10Q for the period ended March 31, 2000 fairly
presents the information stated therein insofar as it is applicable to the
Acquired Assets and Assumed Liabilities.
3.16 Absence of Certain Changes or Events. Except as listed on Section
3.16 of the Sellers Disclosure Schedule, since December 31, 1999, there has not
been (i) any Business Material Adverse Effect, (ii) any material loss or damage
(whether or not covered by insurance) to any of the Acquired Assets, which
materially affects or impairs the ability of any Seller to conduct the Business,
or any other event or condition of any character which has materially and
adversely affected the business or operation of the Business, (iii) any mortgage
or pledge of any of the Acquired Assets or the Assumed Liabilities other than in
the ordinary course of business, (iv) any indebtedness incurred by any Seller
creating an encumbrance on the Acquired Assets or the Assumed Liabilities other
than in the ordinary course of business, (v) any contract or other transaction
entered into by any Seller relating to, or otherwise affecting in any way, the
Acquired Assets or the Assumed Liabilities, other than in the ordinary course of
business, (vi) any sale or transfer of the Acquired Assets or the Assumed
Liabilities, except in the ordinary course of business, (vii) any material
changes in the accounting systems, accounting policies or accounting practices
of any Seller, (viii) any waiver by any Seller of any rights affecting the
Acquired Assets or the Assumed Liabilities which have any material value, and
(ix) no person has made or, to the Knowledge of the Sellers, threatened to make
any claim that the operation of the Business is in violation or infringement of
any patent, patent license, tradename, trademark, servicemark, copyright,
know-how or other proprietary or trade right (collectively, "Intellectual
Property Rights") of any third party. Since December 31, 1999, the Business has
been conducted in all respects only in the ordinary course.
3.17 Taxes. Each Seller has made all withholding of Taxes required to
be made under all applicable tax laws and regulations. No claim has ever been
made by any authority in any jurisdiction in which no Tax return has been filed
with respect to the Business that any of the Sellers or the Business is or may
be subject to Tax in that jurisdiction. Subject as set forth in the second
paragraph of Section 6.5, Buyer will not be liable for any Taxes attributable to
any Seller as a result of the consummation of the transactions contemplated by
this Agreement. None of the Assumed Liabilities is an obligation to make a
payment that will not be deductible under Section 280G of the Code or an
obligation to pay sales or use Taxes in any jurisdiction with respect to
transactions of Sellers arising prior to Closing.
3.18 Conduct of Business. Except for rights of PLM under the License of
PLM Name, those overhead facilities, personnel, working capital, insurance
policies (except to the extent claims, rebates, recoveries or proceeds comprise
Receivables/Prepayment Items), or functions or services to be provided by
Sellers under the Transition Services Agreement, the Acquired Assets and Assumed
Liabilities, when taken together with those assets or agreements that are being
concurrently purchased by Buyer pursuant to the Partnerships Asset Purchase
Agreement, constitute all of the assets and agreements of Sellers, Affiliates of
Sellers and the Partnerships that are necessary for the operation of the
Business as presently conducted by Sellers, Affiliates of Sellers and the
Partnerships including constituting all or substantially all of the operating
assets and goodwill of the Business.
3.19 Employees. No payments will be required to be made by Buyer to
those employees who accept employment by Buyer effective as of the Closing as a
result of the consummation of this Agreement, except to the extent set forth in
the second sentence of Section 6.4. No employee of the Business is a member of a
union and there is no collective bargaining agreement relating to any of the
employees of the Business and no efforts have been made to organize for union or
collective bargaining purposes any such employees. None of Sellers, nor any
trade or business, whether or not incorporated, that would be treated as a
single employer with any of Sellers under Section 4001 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 414(b),
(c), (m) or (o) of the Internal Revenue Code of 1986, as amended (the "Code"),
maintains, contributes to, or is obligated to contribute to, or has ever
maintained, contributed to or been obligated to contribute to, any employee
benefit plan that is subject to Title IV of ERISA or Section 412 of the Code.
3.20 Material Misstatements or Omissions. No representation or warranty
by any Seller and no document, certificate or other information furnished in
Sellers Disclosure Schedule or the Closing List or any Schedule or Exhibit
hereto or required hereunder to be furnished to Buyer, in the context of the
other representations or warranties by any Seller or any other information
furnished in Sellers Disclosure Schedule or any Schedule or Exhibit hereto or
required hereunder to be furnished to Buyer as a whole, contains or will contain
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements of fact contained herein or therein, in light
of the circumstances in which they are made, not misleading.
3.21 License of PLM Name. PLM is the exclusive owner of the entire and
unencumbered right, title and interest in and to the Service Marks (as defined
in the License of PLM Name) that are the subject of the License of PLM Name and
such Service Marks are subsisting and have not been adjudged invalid or
unenforceable, in whole or in part.
3.22 No Other Warranties or Representations. SUBJECT TO THE EXPRESS
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III, SELLERS MAKE NO
WARRANTY THAT ANY OF THE ACQUIRED ASSETS ARE MERCHANTABLE OR FIT FOR ANY
PARTICULAR PURPOSE NOR IS THERE ANY OTHER WARRANTY OR CONDITION WITH RESPECT
THERETO, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT WITH
RESPECT TO SUCH ACQUIRED ASSETS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES
OR CONDITIONS WITH RESPECT TO THE MERCHANTABLE QUALITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF ANY SUCH ACQUIRED ASSETS, PROPERTIES AND PRODUCTS WHICH
MIGHT OTHERWISE BE IMPLIED BY THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW.
EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, BUYER SPECIFICALLY ACKNOWLEDGES
THAT THE ACQUIRED ASSETS BEING TRANSFERRED AND CONVEYED PURSUANT TO THIS
AGREEMENT ARE BEING SOLD AND PURCHASED ON AN "AS IS" AND "WHERE IS" BASIS AND
THAT NO WARRANTY OF COLLECTIBILITY OF ANY SPECIFIC RECEIVABLE/PREPAYMENT ITEM OR
NOTE RECEIVABLE IS MADE UNDER THIS AGREEMENT.
Article IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
4.1 Corporate Organization. Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
4.2 Authorization, Etc. The execution, delivery and performance by
Buyer of this Agreement and the consummation by Buyer of the transactions
contemplated hereby are within Buyer's corporate power and authority and have
been duly authorized by all necessary corporate action on the part of Buyer.
This Agreement constitutes a valid and binding agreement of Buyer, enforceable
in accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws relating to creditors' rights generally and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4.3 No Violation. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate any
provisions of the Certificates of Incorporation or bylaws of Buyer, or violate,
or be in conflict with, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any security interest, lien or other encumbrance
upon any property or assets of Buyer under, any material agreement or commitment
to which Buyer is a party or by which Buyer is bound, or to which the property
of Buyer is subject, or materially violate any statute or law or in any material
respect any judgment, decree, order, regulation or rule of any court or
governmental authority.
4.4 Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of any governmental or regulatory authority is
required in connection with the execution, delivery and performance of this
Agreement by Buyer or the consummation by it of the transactions contemplated
hereby other than compliance by the Closing with any applicable requirements of
the HSR Act.
4.5 Litigation. There is no material action, suit, inquiry, proceeding
or investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the Knowledge of Buyer,
threatened against Buyer or any of its Affiliates which challenges the validity
of this Agreement or any action taken or to be taken by Buyer pursuant to this
Agreement or in connection with the transactions by Buyer contemplated hereby.
4.6 Consents. Except as set forth in section 3.7 of the Sellers
Disclosure Schedule, no consent of any person is necessary to the consummation
of the transactions by Buyer contemplated hereby, including, without limitation,
consents from parties to loans, contracts, leases or other agreements and
consents from governmental agencies, whether federal, state or local.
4.7 Brokerage. Except for ▇.▇. ▇▇▇▇▇▇ & Co. Incorporated ("▇.▇.
▇▇▇▇▇▇"), Buyer has not retained any broker or finder in connection with the
transactions contemplated by this Agreement. All fees of ▇.▇. ▇▇▇▇▇▇ shall be
exclusively for the account of Buyer, and any brokerage or finder's fee due to
any broker or finder in violation of the foregoing representation shall be paid
by Buyer.
4.8 Funding. Buyer has immediately available funds sufficient to make
all of its payment obligations hereunder at the times set forth herein.
Article V
COVENANTS OF SELLER
Sellers hereby covenant and agree with Buyer:
5.1 Full Access. Sellers shall afford to Buyer, its counsel,
accountants and other representatives full access (under supervision of Sellers'
personnel and at Buyer's expense) prior to the Closing Date to the offices,
facilities, properties, books and records of Sellers in order that Buyer may
have full opportunity to make such investigations as it shall desire to make of
the affairs of Sellers with respect to the Acquired Assets, TRAC Lease
Transportation Equipment, the Leased Facilities and the Assumed Liabilities;
provided, however, that any such investigation shall be conducted in such a
manner as not to interfere unreasonably with the operation of the businesses of
Sellers.
5.2 Consents. Sellers will use all commercially reasonable efforts to
obtain, prior to the Closing, all consents necessary to be obtained by Sellers
and will cooperate reasonably in obtaining all approvals and consents necessary
to be obtained by Buyer in connection with the consummation of the transactions
contemplated hereby. All such consents if obtained will be in writing, and
executed counterparts thereof will be delivered to Buyer at or prior to the
Closing.
5.3 HSR Act Filings. Promptly following the date hereof, the Sellers
shall make any and all filings which are required under the HSR Act. The Sellers
will furnish to Buyer such necessary information and reasonable assistance as
Buyer may request in connection with its preparation of necessary filings or
submissions under provisions of the HSR Act. The Sellers will supply Buyer
copies of all correspondence, filings or communications (or memoranda setting
forth the substance thereof) between any of the Sellers or their
representatives, on the one hand, and the Federal Trade Commission, the
Antitrust Division of the U.S. Department of Justice or any other governmental
agency or authority or members of their respective staffs on the other hand,
with respect to this Agreement or the transactions contemplated hereby, other
than confidential or proprietary information therein.
5.4 Proxy Statement; Stockholders' Meeting. In connection with the PLM
Stockholder Approval, after the date hereof PLM will promptly prepare and file
with the SEC a proxy statement (the "PLM Proxy Statement"), soliciting the PLM
Stockholder Approval. The PLM Proxy Statement shall be filed no later than the
date that the proxy statement for the annual meeting of PLM is filed and such
proxy statement for such annual meeting may comprise part of the PLM Proxy
Statement. PLM will promptly respond to any comments of the SEC, and will cause
the PLM Proxy Statement to be mailed to all stockholders of PLM at the earliest
practicable time and in any event no later than the proxy statement for the
annual meeting of PLM, notwithstanding any exercise of its fiduciary-out
pursuant to Section 5.12. PLM will notify Buyer promptly upon the receipt of any
comments from the SEC or its staff of any request by the SEC or its staff for
amendments or supplements to the PLM Proxy Statement or for additional
information, and will supply Buyer with all such portions of correspondence
between such party or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, as relate to the PLM Proxy Statement insofar as
it relates to the transaction the subject of this Agreement. Buyer shall be
afforded a reasonable opportunity to review the PLM Proxy Statement and all
other related proxy materials insofar as affecting Buyer. PLM shall duly call,
hold and convene its stockholders' meeting to obtain the PLM Stockholder
Approval as promptly as practicable after the date on which the PLM Proxy
Statement is mailed to its stockholders. PLM shall solicit from its stockholders
proxies in favor of the PLM Stockholder Approval, and shall take all other
action necessary or advisable to secure the vote or consent of stockholders
required by the Delaware General Corporation Law and the certificate of
incorporation and bylaws of the Company to obtain such approval. Unless acting
in compliance with the specific terms of the fiduciary-out provided pursuant to
Section 5.12, the Board of Directors of PLM shall unanimously recommend that
PLM's stockholders vote in favor of the PLM Stockholder Approval, the PLM Proxy
Statement shall include a statement to such effect, and neither the Board of
Directors of PLM nor any committee thereof shall withdraw, amend or modify, or
propose or resolve to withdraw, amend or modify such unanimous recommendation.
5.5 Certificates. At the Closing, Sellers will furnish Buyer with such
certificates of their respective officers to evidence compliance with the
covenants set forth in this Article V.
5.6 Agreements. Sellers shall deliver to Buyer on the Closing Date
executed counterparts of the documents set forth in Section 1.4(b) hereof.
5.7 Delivery of Assets and Documents. Sellers will deliver the items
set forth in Section 1.4(b)hereof.
5.8 Regular Course of Business. Except as otherwise required by the
terms of this Agreement, Sellers will promptly provide to Buyer a copy of all
PLM SEC Reports and will:(i) not take or, if within Sellers' control, suffer or
permit any action, which would render untrue any representations and warranties
contained in this Agreement (ii) take any commercially reasonable action, in any
one instance up to $10,000.00 and in a maximum aggregate of instances under this
Agreement and the Partnerships Asset Purchase Agreement up to $250,000.00, to
cure, to the extent capable of cure, any inaccuracy in any representation or
warranty contained in this Agreement, (iii) operate the Acquired Assets and the
Assumed Liabilities in the ordinary and usual course, substantially in the same
manner as heretofore operated, and (iv) not institute any new methods of
purchase, sale, lease, management, accounting or operation or engage in any
transaction, enter into any agreement or make any commitment that is not in the
ordinary course of the business unless required by law. Without limiting the
generality of the foregoing, except as otherwise contemplated by the terms of
this Agreement, from the date hereof until the Closing, Sellers will: (a)
maintain the Acquired Assets consistent with past practice; (b) keep in full
force and effect, to the extent commercially reasonable, insurance comparable in
amount and scope of coverage to that now maintained; (c) perform in all material
respects all obligations under all material contracts of the Business and not
defer necessary maintenance; (d) maintain the books of account and records and
loss reserves of the Business in the usual and regular manner, and not sell or
encumber the Acquired Assets or the Assumed Liabilities other than in the
ordinary course of business; (e) not, except with Buyer's consent which consent
will not be unreasonably withheld, delayed or conditioned, approve any new
individual capital expenditures in excess of $10,000.00 (excluding Purchase
Order Transportation Equipment), incur any liability that would otherwise
constitute any of the Assumed Liabilities (excluding Customer Equipment Leases)
in excess of $10,000.00, transfer, encumber or otherwise deal with any of the
Acquired Assets having a book value or fair market value in any one transaction
in excess of $50,000.00, and vary the pricing schedule for Customer Equipment
Leases other than in accordance with Sellers' past pricing practices and
procedures; (f) comply in all material respects with all laws and regulations
applicable to the Business; (g) maintain and protect all Intellectual Property
Rights relating to the Business; and (h) not make, other than in the ordinary
course of business, any change in any benefit plan or compensation to officers,
directors or employees or adopt any new benefit Plan relating to its employees
who work primarily for the Business, provided that any change affecting any
senior executive that is not of broad application to employees at large shall be
deemed to be outside the ordinary course of business. Sellers may fill vacancies
for positions as employees of the Business in the ordinary course of business
other than with respect to senior executives.
5.9 Business Relations. Sellers shall use their best efforts to
preserve for Buyer the Business and the relationships with licensors, lessors,
creditors, suppliers, distributors, customers, depots, employees and others
having business relations with respect to the Acquired Assets, the Assumed
Liabilities and the Business.
5.10 No Default. Sellers shall not do any act or omit to do any act, or
permit any act or omission to act, which will cause a material breach of any
Assumed Liability or any material contract or commitment of Sellers with respect
to the Transportation Equipment or Leased Facilities.
5.11 Intentionally Omitted.
5.12 Exclusivity.
(a) Until the earlier of (i) the Closing or (ii) the date of
termination of this Agreement pursuant to the provisions of Article X
(the "Exclusivity Period"), each of Sellers shall not, and shall not
authorize or permit any of its officers, directors or employees or any
investment banker, attorney or other advisor or representative retained
by any of them to directly or indirectly, (i) solicit, initiate,
encourage or induce the making, submission or announcement of any
Acquisition Proposal, (ii) participate in any discussions or
negotiations regarding, or furnish to any person or entity any
non-public information with respect to, or take any action to
facilitate any inquiries or the making of any proposal that constitutes
or may reasonably be expected to lead to, any Acquisition Proposal,
(iii) engage in discussions with any person or entity with respect to
any Acquisition Proposal, or (iv) enter into any letter of intent or
any agreement relating to any Acquisition Proposal; provided, however,
that at any time prior to obtaining the PLM Stockholder Approval, the
Board of Directors of PLM, in response to a Superior Proposal, may
authorize Sellers to (x) furnish non-public information with respect to
Sellers to the person or entity which made such Acquisition Proposal
pursuant to a customary written confidentiality agreement, and (y)
participate in negotiations and discussions regarding such Acquisition
Proposal. PLM will immediately cease and cause to be terminated any
existing activities, discussions and negotiations conducted prior to
the date hereof with respect to any Acquisition Proposal with any third
party. PLM shall provide Buyer with (i) at least 48 hours prior notice
of any meeting of the Board of Directors of PLM at which they are
reasonably expected to consider an Acquisition Proposal, and (ii) five
business days prior written notice of a meeting of the Board of
Directors, or any committee thereof, at which they are reasonably
expected to withdraw, amend or modify their unanimous recommendation to
vote in favor of PLM Stockholder Approval or to make the determination
to recommend instead a Superior Proposal.
(b) During the Exclusivity Period, each of the Sellers also
agree to:
notify Buyer immediately upon receiving any inquiry from any person or
entity relating to any Acquisition Proposal; and
disclose the identity of any person or entity, making a bona
fide offer relating to an Acquisition Proposal, the terms and
conditions of such offer, and keep Buyer fully informed on a current
basis of the status and details of any Acquisition Proposal.
(c) Each of the Sellers acknowledges that this Section 5.12
was a significant inducement for Buyer to enter into this Agreement and
the absence of such provision would have resulted in either (i) a
material reduction in the Purchase Price or (ii) a failure to induce
Buyer to enter into this Agreement. The parties hereto agree that
irreparable damage would occur in the event that the provisions of this
Section 5.12 were not performed in accordance with their specific terms
or were otherwise breached. The parties hereto agree that Buyer shall
be entitled to seek an injunction or injunctions to prevent breaches of
the provisions of this Section 5.12 and to enforce specifically the
terms and provisions hereof in any court of the United States or any
state having jurisdiction, this being in addition to any other remedy
to which Buyer may be entitled at law or in equity.
5.13 Notification; Updates to Disclosure Schedule.
(a) During the period between the date hereof and the Closing,
the Sellers shall promptly notify Buyer in writing of the discovery by
any of the Sellers of: any event, condition, fact or circumstance that
occurred or existed on or prior to the date of this Agreement and that
caused or constitutes a breach of or inaccuracy in any representation
or warranty made by the Sellers in this Agreement; any event,
condition, fact or circumstance that occurs, arises or exists after the
date of this Agreement and that would cause or constitute a breach of
or inaccuracy in any representation or warranty made by the Sellers in
this Agreement if (A) such representation or warranty had been made as
of the time of the occurrence, existence or discovery of such event,
condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of
this Agreement; any breach of any covenant or obligation of any of the
Sellers contained in this Agreement; and any event, condition, fact or
circumstance that may make the timely satisfaction of any of the
conditions set forth in Article VIII impossible or unlikely.
(b) If any event, condition, fact or circumstance that is
required to be disclosed pursuant to this Section 5.13 requires any
change in any disclosure schedule hereunder, or if any such event,
condition, fact or circumstance would require such a change assuming
the disclosure schedule were dated as of the date of the occurrence,
existence or discovery of such event, condition, fact or circumstance,
then the Sellers shall promptly deliver to Buyer an update to the
disclosure schedule (a "Disclosure Schedule Update") specifying such
change. No such Disclosure Schedule Update shall be deemed to
supplement or amend the disclosure schedule for the purpose of (i)
determining the accuracy of any of the representations and warranties
made by the Sellers in this Agreement as of the Closing, or (ii)
determining whether the conditions set forth in Article 8 have been
satisfied; provided, however that the Closing of the transaction
contemplated by this Agreement will be deemed a waiver by Buyer of any
untrue representation or warranty made by Sellers if and to the extent
such inaccuracy is fairly and accurately disclosed in any of Sellers
Disclosure Schedules or any such Disclosure Schedule Update.
5.14 Employees of the Buyers. Each of the Sellers agrees that Buyer is
under no obligation to offer to or to hire any employee of the Business and
agrees (i) to cooperate in Buyer's efforts to hire those employees of the
Business designated by Buyer; (ii) to advise Buyer of the terms and conditions
of employment (including existing severance, retirement benefits, etc.) of all
such employees; (iii) to make such employees available for interview by Buyer;
and (iv) to encourage all such employees as are selected by Buyer to consider
employment with Buyer. In addition, for those employees whom Buyer has agreed to
hire and who have agreed to become employees of Buyer effective as of the
Closing ("New Hires"), each of the Sellers agrees during the period between the
date hereof and the Closing (i) not to terminate the employment of any of the
New Hires (other than for cause in line with Sellers' current employment
policies) without the express written permission of Buyer (which shall not be
unreasonably withheld); and (ii) to continue to pay the compensation, withhold
and pay taxes and other deductions, provide the benefits to which the New Hires
are entitled pursuant to federal and state law and pursuant to the policies and
practices of Sellers.
5.15 Change of Name of PLM Rental. Within 30 days following the
Closing, Sellers shall have changed the name of PLM Rental to another name not
confusingly similar to the current name of PLM Rental and provided evidence of
the amendment of PLM Rental's charter for this purpose having taken effect in
PLM Rental's state of incorporation and in any state that such corporation is
qualified to do business.
5.16 Filing of Material Contracts of PLM. PLM shall file with the
Securities and Exchange Commission this Agreement, the Non-Competition Agreement
and the License of PLM Name (in each case without Exhibits or Schedules or any
information that PLM requests confidential treatment for from the Securities and
Exchange Commission, if PLM shall so request) as material contracts, in the case
of this Agreement, as part of the exhibits to the PLM Proxy Statement and, in
the case of the Non-Competition Agreement and the License of PLM Name, after the
Closing as part of the exhibits to PLM's next periodic report under the
Securities Exchange Act of 1934.
5.17 Environmental Information. Sellers shall have disclosed to Buyer
no later than fifteen (15) business days after the date hereof, having
interviewed those of Sellers' employees with knowledge of environmental-related
issues associated with any of the Leased Facilities, all written information and
all documents in Sellers' possession, custody or control, that discuss, arise
from, or otherwise relate to the generation, transportation, use, storage,
emission, discharge, release, or threatened release of any material or substance
regulated or defined by any Environmental, Health and Safety Laws.
Article VI
COVENANTS OF BUYER
Buyer hereby covenants and agrees with Sellers:
6.1 Certificates. At the Closing, Buyer will furnish Sellers with such
certificates of its officers and others to evidence compliance with the
covenants set forth in this Article VI.
6.2 HSR Act Filings. Promptly following the date hereof, Buyer shall
make any and all filings which are required under the HSR Act. Buyer will
furnish to the Sellers such necessary information and reasonable assistance as
the Sellers may request in connection with its preparation of necessary filings
or submissions under provisions of the HSR Act. Buyer will supply the Sellers
copies of all correspondence, filings or communications (or memoranda setting
forth the substance thereof) between Buyer or its representatives, on the one
hand, and the Federal Trade Commission, the Antitrust Division of the U.S.
Department of Justice or any other governmental agency or authority or members
of their respective staffs on the other hand, with respect to this Agreement or
the transactions contemplated hereby, other than confidential or proprietary
information therein.
6.3 Agreements. Buyer shall deliver to Sellers on the Closing Date
executed counterparts of the documents set forth in Section 1.4(c) hereof.
6.4 Employees. Buyer will offer as promptly as reasonably practicable
following the date hereof employment to no less than sixty (60) employees of the
Business designated by Buyer that Buyer selects on such terms and conditions as
Buyer will determine, but on terms that are at least as good with respect to job
responsibility, salary, and bonus and commission plans and that are comparable
overall, to the extent reasonably feasible, with respect to benefits to those
currently enjoyed by such employees. The parties shall work together to insure
that at Closing at least fifty (50) of the employees of the Business designated
by Buyer that Buyer selects shall have accepted employment and become employees
of Buyer. Buyer shall notify PLM within forty-five (45) days after the date
hereof, in the event that the transactions that are the subject of this
Agreement have not been consummated by such date, of the progress made by such
date with respect to the number of employees of the Business who are reasonably
anticipated to have entered into employment arrangements with Buyer by Closing
and whether five of those seven individuals identified in writing previously by
Buyer to Seller are reasonably anticipated to have entered into employment
arrangements with Buyer by Closing. Buyer shall have financial responsibility
for those employee severance costs which are associated with any employee who
accepts employment with Buyer in accordance with Buyer's employee severance
policies, having given credit for prior employment with Sellers. As to any
employees of Sellers who receive severance payments from Sellers and are
subsequently hired by Buyer or any of its Affiliates (either as employees or
contractors) within 5 months from the Closing Date, the aggregate amount of
severance payments made by Sellers to all such employees shall be promptly paid
by Buyer to Sellers.
6.5 Re-Titling; Transfer Taxes. Following the Closing, Buyer will take
all steps necessary to re-title all units of Transportation Equipment acquired
hereunder out of the name of Sellers and into Buyer's name within 60 days after
Closing, or if not feasible by such date, as promptly as reasonably practicable
thereafter, and to pay the fees payable to the relevant DMV for re-titling of
Transportation Equipment. Sellers will cooperate reasonably with Buyer in
connection therewith.
For purposes of this Section 6.5, "Transfer Taxes" means sales and use
Taxes, or other similar Taxes, imposed upon and related to sales or uses of
tangible personal property. Notwithstanding anything to the contrary in this
Agreement, Buyer shall be responsible for all Transfer Taxes associated with the
consummation of the transactions that are the subject of this Agreement,
including Taxes or any related interest or penalties arising from or relating to
the position that the transfers made pursuant to this Agreement qualify or are
asserted by Buyer to qualify for exemption or exclusion from Transfer Taxes.
Sellers shall be responsible for (i) Transfer Taxes and any related interest and
penalties arising from or relating to transactions or activities of Sellers
prior to Closing, however they arise, e.g., whether assessed to Buyer or any of
Sellers directly or indirectly, (ii) Taxes and any related interest and
penalties which would otherwise not be payable by Buyer, but for, any of
Sellers' failure to comply with Transfer Tax filings or notifications that are
legally required to be filed by any of Sellers with taxing and other
governmental authorities in connection with a sale of this type, unless such
failure resulted from any action or inaction of any of Sellers approved, in
advance, by Buyer in writing, and (iii) any Taxes, directly or indirectly
related to or arising from Pre-Closing liabilities, and interest and penalties,
with respect thereto, arising from or relating to any of Sellers' failure to
make any filings or notifications that are permitted to be filed by any of
Sellers with state and local taxing and other governmental authorities in
connection with a sale of this type for the states listed in Schedule 2.4 in
circumstances where Buyer has reasonably requested any of Sellers to make such
filings or notifications. Provided, however, that to the extent Buyer requests
any of Sellers to make any filings or notifications for which any of Sellers are
not legally required to make, Buyer shall reimburse Seller for any reasonable
out-of-pocket costs, including legal and accounting expenses and fees, and any
amounts payable to a governmental or regulatory authority, not directly or
indirectly related to or arising from Pre-Closing Liabilities, for which Seller
otherwise would not be responsible hereunder.
Buyers and Sellers agree to use all commercially reasonable efforts to
separately determine the Transfer Tax filings and notifications that they are
legally required to make in a transaction of this type for the state and local
jurisdictions of the states listed in Schedule 2.4. After using such
commercially reasonable efforts, Buyers and Sellers will inform each other as to
their respective determination as to the required filings along with any
permitted filings of which they are or become aware. After so informing each
other, Buyer and Sellers will reasonably cooperate with each other and will make
available copies of each filing or notification upon reasonable request that
they respectively make (whether legally required or permitted).
To the extent Seller's payment of sales or use Taxes attributable to
periods prior to the Closing generate credits, deductions, exemptions or
exclusions in Illinois, which may be available to Buyer or any of Sellers in
determining the Illinois sales and use and other similar taxes due in Illinois
in connection with the transactions under this Agreement, Buyer shall, to the
extent not legally prohibited, receive the benefit of any such credits,
deductions, exemptions or exclusions, directly or indirectly.
6.6 Discharge of Obligations. Buyer will timely pay, perform and
discharge all obligations assumed pursuant to Section 1.3.
6.7 Notification. During the period between the date hereof and the
Closing, Buyer shall promptly notify the Sellers in writing of:
(a) the discovery by Buyer of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes a breach of or inaccuracy in
any representation or warranty made by Buyer in this Agreement;
(b) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause
or constitute a breach of or inaccuracy in any representation or
warranty made by Buyer in this Agreement if (i) such representation or
warranty had been made as of the time of the occurrence, existence or
discovery of such event, condition, fact or circumstance, or (ii) such
event, condition, fact or circumstance had occurred, arisen or existed
on or prior to the date of this Agreement;
(c) any breach of any covenant or obligation of Buyer; and
(d) any event, condition, fact or circumstance that may make
the timely satisfaction of any of the conditions set forth in Article VII
impossible or unlikely.
6.8 Environmental Assessments. Buyer will promptly following the date
hereof organize for environmental assessments to be carried out on each of the
Leased Facilities and will use reasonable efforts to provide in any engagement
arrangement entered into with any firm of environmental consultants that the
results of such assessments shall be provided to Buyer no later than fifty (50)
days after the date hereof.
6.9 Releases. Buyer will use all commercially reasonable efforts to
obtain prior to Closing releases substantially in the form set forth in Exhibit
R in respect of the Mees Pierson Facility, the TRAC Leases and the Facility
Leases.
Article VII
CONDITIONS TO THE OBLIGATIONS OF SELLERS
Each and every obligation of Sellers under this Agreement to be
performed on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions, unless waived in
writing by Sellers:
7.1 Representations and Warranties True. All of the representations and
warranties of Buyer set forth in this Agreement that are qualified as to
materiality shall be true and complete when taken as a whole and any such
representations and warranties that are not so qualified shall be true and
complete in all material respects when taken as a whole as of the date of this
Agreement and as of the Closing Date as if made on and as of the Closing Date
(except to the extent that any such representation or warranty is made as of a
specific date, in which case such representation or warranty shall be true and
complete, or true and complete, as the case may be, as of such specified date).
7.2 Performance. Buyer shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it on or prior to the
Closing, including without limitation the agreements in Section 1.4(c) hereof.
7.3 HSR Act Waiting Periods; No Governmental Proceeding or Litigation.
All waiting periods applicable to the transactions contemplated hereby with
respect to the Acquired Assets under the HSR Act shall have expired or been
terminated. No suit, action or other proceeding by any governmental body shall
have been instituted which questions in any material way the validity or
legality of the transfer of the Acquired Assets and the Business.
7.4 No Injunction. On the Closing Date there shall be no effective
injunction, writ, preliminary restraining order or any order of any nature
issued by a court of competent jurisdiction directing that the transactions
provided for herein or any of them not be consummated as so provided or imposing
any conditions on the consummation of the transactions contemplated hereby which
Sellers deems unacceptable in its sole discretion.
7.5 Certificates. Buyer shall have furnished Sellers with such
certificates of its officers and others to evidence compliance with the
conditions set forth in this Article VII as may be reasonably requested by
Sellers.
7.6 Opinion of Buyer's Counsel. Buyer shall have delivered to Sellers
an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to Buyer, dated as of the Closing
Date, substantially in the form attached hereto as Exhibit K.
7.7 Stockholder Approval. PLM Stockholder Approval shall have been
obtained.
7.8 Escrow Agreement. Buyer shall have entered into the Escrow
Agreement.
7.9 Employment Arrangements. Buyer shall have as promptly as reasonably
practicable following the date hereof made offers of employment arrangements to
not less than sixty (60) of the employees of the Business on terms that are at
least as good with respect to job responsibility, salary, and bonus and
commission plans and that are comparable overall, to the extent reasonably
feasible, with respect to benefits to those currently enjoyed by such employees.
This condition shall terminate automatically and no longer be applicable sixty
(60) days after the date hereof.
Article VIII
CONDITIONS TO OBLIGATIONS OF BUYER
Each and every obligation of Buyer under this Agreement to be performed
on or before the Closing shall be subject to the satisfaction, on or before the
closing, of each of the following conditions, unless waived in writing by Buyer:
8.1 Representations and Warranties True. All of the representations and
warranties of Sellers set forth in this Agreement that are qualified as to
materiality shall be true and complete when taken as a whole and any such
representations and warranties that are not so qualified shall be true and
complete when taken as a whole as of the date of this Agreement and as of the
Closing Date as if made on and as of the Closing Date (except to the extent that
any such representation or warranty is made as of a specific date, in which case
such representation or warranty shall be true and complete, or true and complete
in all material respects, as the case may be, as of such specified date).
Notwithstanding the foregoing, Buyer agrees that this condition shall be
satisfied for all purposes hereunder so long as the aggregate amount of any
Damages Buyer would have with respect to any breaches of the representations and
warranties of (x) Sellers set forth in this Agreement, and (y) the Partnerships
set forth in the Partnerships Asset Purchase Agreement, does not exceed in the
aggregate Two Million Two Hundred Thousand Dollars ($2,200,000.00).
8.2 Performance. Sellers shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it on or prior to the
Closing, including without limitation the agreements in Section 1.4(b) hereof.
8.3 HSR Act Waiting Periods; No Governmental Proceeding or Litigation.
All waiting periods applicable to the transactions contemplated hereby with
respect to the Acquired Assets under the HSR Act shall have expired or been
terminated. No suit, action or other proceeding by any governmental body shall
have been instituted which questions in any material way the validity or
legality of the transfer of the Acquired Assets and the Business.
8.4 No Injunction. On the Closing Date there shall be no effective
injunction, writ, preliminary restraining order or any order of any nature
issued by a court of competent jurisdiction directing that the transactions
provided for herein or any of them not be consummated as so provided or imposing
any conditions on the consummation of the transactions contemplated hereby which
Buyer deems unacceptable in its sole discretion.
8.5 Opinion of Seller's Counsel. Sellers shall have delivered to Buyer
the opinion of ▇▇▇▇▇▇ Radovsky ▇▇▇▇▇▇▇ & Share LLP, counsel to Sellers, dated as
of the Closing Date, substantially in the form attached hereto as Exhibit L.
8.6 Consents Obtained; 90% of the Business Obtained; Environmental
Insurance Obtained. All approvals and consents referred to in Schedule 8.6 in a
form reasonably satisfactory to Buyer, including without limitation under the
TRAC Leases, the Facility Leases and the Mees Pierson Facility, shall have been
obtained; provided, however, that, at the request of Sellers, if Sellers are
unable to obtain the consent of any lessor under one or more of the TRAC Leases
or the lender under the Mees Pierson Facility and Buyer is willing to waive the
requirement to obtain such consent and is willing to consummate the transactions
that are the subject of this Agreement, then the Estimated Purchase Price shall
be adjusted as a result of adjusting the Assumed Liabilities to take into
account the amounts owing to such lessor(s) or lender, as the case may be,
(excluding prepayment and breakage fees and expenses), and all obligations and
liens or encumbrances arising under the relevant TRAC Lease(s) or the Mees
Pierson Facility, as the case may be, shall have been discharged and released.
Not less than 90% of the net book value of the Business shall as a result of
consummation of this Agreement and the Partnerships Asset Purchase Agreement be
owned by Buyer. Sellers shall have paid all premiums on and incepted coverage
with reputable insurers on behalf of Buyer (with Buyer named as loss payee) on a
policy of insurance on no less favorable terms to the parties than those set
forth in the specimen policy and related memo attached as Schedule 8.6 hereto
with respect to any liability relating to investigation, removal, remediation,
containment, cleanup or abatement required under any Environmental, Health and
Safety Laws, whether on-site or off-site, arising out of or relating to, in
whole or in part, any event, release, circumstance or occurrence arising prior
to the Closing, whether or not disclosed in this Agreement; such coverage to
relate to any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand under any Environmental,
Health and Safety Laws against the Business or Buyer and giving rise to any
liability for Damage in connection with any Leased Facility (surface or
subsurface) that is assumed by Buyer as an Assumed Liability at Closing, or for
any illness of or bodily injury to any individual and to include without
limitation business interruption in relation thereto; such coverage also to have
a per occurrence limit of $5,000,000.00 and an aggregate maximum limit of
$15,000,000.00, and to be effective for a period of not less than 3 years
following the Closing Date.
8.7 Agreements. Sellers shall have entered into the License of PLM
Name, the Transition Services Agreement, the Non-Competition Agreement, and the
Escrow Agreement.
8.8 PLM Stockholder Approval. The PLM Stockholder Approval shall have
been obtained.
8.9 Employment Arrangements. Buyer shall have entered into employment
arrangements with not less than fifty (50) of the employees of the Business, who
shall include not less than five of those seven individuals identified in
writing previously by Buyer to Seller. This condition shall terminate
automatically and no longer be applicable sixty (60) days after the date hereof.
8.10 Partnerships Asset Purchase Agreement. At the Closing, the
transactions contemplated by the Partnerships Asset Purchase Agreement shall be
consummated.
8.11 No Business Material Adverse Effect since March 31, 2000. There
shall have been no Business Material Adverse Effect since March 31, 2000.
Article IX
SURVIVAL; INDEMNIFICATION
9.1 Survival. The representations, warranties, covenants and
obligations of the parties contained in this Agreement shall survive the Closing
for the period set forth in this Section 9.1 and shall not be limited or
otherwise affected by or as a result of any information furnished to, or any
investigation made by, or the Knowledge of, any of the parties. The covenants
and obligations of each of the Sellers in Sections 1.2, 1.5, Article II,
Sections 5.15, 5.16 and 6.5, Article IX and XI shall survive the Closing in
accordance with their terms and otherwise until the applicable statute of
limitations has run thereon. Save as set forth above and below, following the
Closing all of the representations, warranties, covenants and obligations of
Sellers contained in this Agreement and all claims and causes of action with
respect thereto, shall terminate upon expiration of the later of December 31,
2000 or six months after the Closing Date, except that (i) the representations
and warranties in Section 3.21 and 3.12 (and the covenants and obligations
related thereto) and the indemnification in Section 9.3(iv) (and the covenants
and obligations related thereto) shall survive the Closing until the third
anniversary of the Closing Date, and (ii) the representations and warranties in
Section 3.17 (and the covenants and obligations related thereto) and the
indemnification in Section 9.3(ii) (and the covenants and obligations related
thereto) shall survive the Closing until the applicable statute of limitations
has run thereon, and the representations, warranties, covenants and obligations
of Buyer contained in this Agreement and all claims and causes of action with
respect thereto shall survive the Closing until the applicable statute of
limitations has run thereon, it being understood that in the event notice of any
claim for indemnification under Section 9.2 or Section 9.3 hereof shall have
been given within the applicable survival period, the representations,
warranties, covenants and obligations that are the subject of such
indemnification claim shall survive until such time as such claim is finally
resolved.
9.2 Indemnification by Buyer. Buyer hereby agrees that it shall
indemnify, defend and hold harmless Sellers, their Affiliates, and, if
applicable, their respective directors, officers, shareholders, partners,
attorneys, accountants, agents and employees and their heirs, successors and
assigns (the "Seller Indemnified Parties") from, against and in respect of any
Damages imposed on, sustained, incurred or suffered by or asserted against any
of the Seller Indemnified Parties, directly or indirectly relating to or arising
out of (i) any breach of any representation or warranty made by Buyer contained
in this Agreement, (ii) the Assumed Liabilities and the Post-Closing
Liabilities, and (iii) the breach of any covenant or agreement of Buyer
contained in this Agreement.
9.3 Indemnification by Sellers. Each of the Sellers hereby jointly and
severally agrees that it shall indemnify, defend and hold harmless Buyer, its
Affiliates and, if applicable, their respective directors, officers,
shareholders, partners, attorneys, accountants, agents and employees and their
heirs, successors and assigns (the "Buyer Indemnified Parties" collectively with
the Seller Indemnified Parties, "Indemnified Parties" and each an "Indemnified
Party") from, against and in respect of any Damages imposed on, sustained,
incurred or suffered by or asserted against any of the Buyer Indemnified
Parties, directly or indirectly relating to or arising out of (i) any breach of
any representation or warranty made by any of the Sellers contained in this
Agreement for the period such representation or warranty survives, (ii) the
Excluded Liabilities (with the exception of those liabilities or obligations
attributable to any period prior to Closing arising under any Environmental,
Health and Safety Laws), (iii) the breach of any covenant or agreement of any of
the Sellers contained in this Agreement for the period that such covenant or
agreement survives the Closing, and (iv) liabilities or obligations attributable
to any period prior to Closing arising under any Environmental, Health and
Safety Laws.
9.4 Indemnification Procedures. With respect to third party claims, all
claims for indemnification by any Indemnified Party hereunder shall be asserted
and resolved as set forth in this Section 9.4. In the event that any written
claim or demand for which an indemnifying party, any Seller or Buyer as the case
may be (a "Seller Indemnifying Party" or a "Buyer Indemnifying Party" as the
case may be and collectively, an "Indemnifying Party") would be liable to any
Indemnified Party hereunder is asserted against or sought to be collected from
any Indemnified Party by a third party, such Indemnified Party shall promptly,
but in no event more than 15 days following such Indemnified Party's receipt of
such claim or demand, notify the Indemnifying Party of such claim or demand and
the amount or the estimated amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of such claim and demand)
(the "Claim Notice"). The Indemnifying Party shall have 30 days from the
personal delivery or mailing of the Claim Notice (the "Notice Period") to notify
the Indemnified Party whether or not the Indemnifying Party disputes the
liability of the Indemnifying Party to the Indemnified Party hereunder with
respect to such claim or demand. All costs and expenses incurred by the
Indemnifying Party in defending such claim or demand shall be a liability of,
and shall be paid by, the Indemnifying Party. In the event that the Indemnifying
Party notifies the Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such claim or demand, the Indemnified Party
may proceed with the defense of such claim or demand and the Indemnifying Party
shall bear and pay all costs and expenses (including reasonable attorneys' fees
and costs) in connection with the Indemnified Party's defense of any such claim
or demand (whether or not incurred by the Indemnified Party). The Indemnified
Party shall not settle, adjust or compromise a claim or demand without the
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld. If the Indemnified Party permits the Indemnifying Party to have
control of the defense of any such claim or demand, then the Indemnifying Party
shall not, without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld, settle, adjust or compromise any
such claim or demand. If the Indemnifying Party elects not to contest such claim
or demand, whether by not giving the Indemnified Party timely notice as provided
above or otherwise, then the amount of any such claim or demand, or, if the same
be contested by the Indemnified Party, then that portion thereof as to which
such defense is unsuccessful (and the reasonable costs and expenses pertaining
to such defense) shall be the liability of the Indemnifying Party hereunder. The
Indemnifying Party will give the Indemnified Party and its counsel access to,
during normal business hours, the relevant business records and other documents,
and shall permit them to consult with the employees and counsel of the
Indemnifying Party.
9.5 Indemnification Limits. Other than in the case of any claim arising
under Section 6.5 and 9.3(ii), a Seller Indemnifying Party shall not be required
to indemnify any Buyer Indemnified Party with respect to any claim for
indemnification pursuant to this Article IX unless and until the aggregate
amount of Damages suffered by the Buyer Indemnified Parties under this Agreement
or by the Buyer Indemnified Parties (as defined therein) under the Partnerships
Asset Purchase Agreement exceeds in aggregate One Million Two Hundred And Fifty
Thousand Dollars ($1,250,000.00) (the "Threshold"), at which point the Seller
Indemnifying Parties shall indemnify the full amount of the Damages, subject to
any applicable limitations in this Article IX on the Seller Indemnifying Party's
indemnification obligations. Buyer shall notify PLM as promptly as reasonably
practicable of all claims that count towards the Threshold. In addition, to the
extent the Threshold is applicable, the aggregation of claims must only reach
the Threshold once, and after such point the Buyer Indemnified Parties may seek
indemnification for all claims that may arise under this Article IX. Other than
in the case of any claim arising under Section 6.5 and 9.3(ii), the
indemnification obligations of the Seller Indemnifying Parties under this
Article IX shall not exceed in the aggregate an amount equal to the Premium
under this Agreement and the Premium (as defined therein) under the Partnerships
Asset Purchase Agreement in aggregate; provided that, in the case of any claim
relating to any liability or obligation attributable to any period prior to
Closing arising under any Environmental, Health and Safety Laws, the
indemnification obligations of the Seller Indemnifying Parties under this
Article IX shall not exceed in aggregate the amount of the deductible of the
coverage obtained pursuant to Section 8.6, except above the amount of such
deductible, if applicable, to the extent of any exclusion or limitation in such
coverage or lack of coverage in which case the indemnification obligations of
the Seller Indemnifying Parties under this Article IX shall not exceed the
excess of the per occurrence limit of $5,000,000.00 and the aggregate maximum
limit of $15,000,000.00 that would otherwise have been applicable under such
coverage had it been available, as the case may be, over the sum of (x) any
proceeds actually received by, or actually paid by the insurer for the benefit
of, Buyer in accordance with the policy of insurance referred to in Section 8.6
and (y) such deductible, if applicable, to the extent paid by Sellers hereunder.
Other than in the case of any claim arising under Section 6.5 and 9.3(ii), with
respect to any claim for indemnification hereunder made after Closing (but not
with respect to assessing the extent of Damages suffered by Buyer with respect
to Sections 8.1 and 10.1) if and to the extent that an Indemnified Party has
actually recovered from a third party (including without limitation an insurer)
on an absolute basis that is not contingent in any way the amount of any
liability recoverable hereunder, then to the extent of such actual recovery and
only when actually received by the recovering party the amount thereof shall
accordingly reduce the extent of any claim that would otherwise have arisen
hereunder. Each party agrees to use its reasonable efforts to pursue any rights
that it may have against any such third party, but unless and until there is any
such actual receipt by the recovering party from such third party no liability
shall be reduced hereunder to any Indemnified Party.
Article X
TERMINATION AND ABANDONMENT
10.1 Methods of Termination. The transactions contemplated herein may
be terminated and/or abandoned in whole at any time before the Closing (i) by
any party if the PLM Stockholder Approval shall not have been obtained by reason
of the failure to obtain the required vote at a meeting of PLM's stockholders
duly convened therefor or at any adjournment thereof; provided however, that the
right to terminate this Agreement under this Section 10.1(i) shall not be
available to any of Sellers where the failure to obtain the PLM Stockholder
Approval shall have been caused by the action or failure to act of any of
Sellers and such action or failure to act constitutes a breach by any of Sellers
of this Agreement, (ii) by mutual consent of the parties, (iii) by Buyer at any
time prior to the Closing in the event that Buyer reasonably believes that any
representation, warranty or covenant of any Seller in this Agreement has been
breached or was or is not true and correct, provided that such breach results or
would result in aggregate Damages under this Agreement and under the
Partnerships Asset Purchase Agreement in excess of Two Million Two Hundred
Thousand Dollars ($2,200,000.00), and provided that such Seller shall have 5
business days to cure any such breach after receipt of written notice thereof
from Buyer, (iv) by Sellers at any time prior to the Closing if Sellers
reasonably believe that any representation, warranty or covenant of Buyer in
this Agreement has been materially breached or was or is not materially true and
correct, provided that Buyer shall have 5 business days to cure any such breach
after receipt of written notice thereof from Sellers, or (v) by any party, if
the Closing has not occurred on or prior to September 30, 2000, unless the
failure to close is a result of the actions or omissions of the party seeking to
terminate this Agreement.
10.2 Procedure upon Termination. In the event of termination and/or
abandonment by the Buyer or by the Sellers pursuant to Article X hereof, written
notice thereof shall forthwith be given to the other party and the transactions
contemplated by this Agreement shall be terminated and abandoned, without
further action by Buyer or Sellers. If the transactions contemplated by this
Agreement are terminated and abandoned as a whole or if the obligations
hereunder expire as provided pursuant to Article IX:
(a) each party will re-deliver all documents, work papers and
other material of any other party (including all copies) relating to
the transactions contemplated hereby, whether so obtained before or
after the execution hereof, to the party furnishing the same;
(b) all confidential information received by any party hereto
with respect to the business of any other party or its subsidiaries and
partners shall be treated in accordance with Section 2.1 hereof; and
(c) no party hereto shall have any liability or further
obligation to any other party to this Agreement except as stated in
subparagraphs (a) and (b) of this Section 10.2, except for breaches of
this Agreement occurring prior to termination of this Agreement that
were intentional or for representations or warranties that were
fraudulent or incorrect when made, and except to the extent remaining
applicable for Section 10.3 and Article XI.
10.3 Break-Up Fee. If: (A) there shall be a failure by PLM to have duly
called, held and convened its stockholders' meeting for the purpose of obtaining
PLM Stockholder Approval by September 25, 2000 (other than as a result of events
substantially and reasonably beyond the control of PLM) or any material breach
by PLM of Section 5.12, or (B) the PLM Board of Directors or any committee
thereof withdraws its unanimous approval or recommendation of this Agreement and
PLM Stockholder Approval is not obtained at a meeting duly called, held and
convened for such purpose, or (C) PLM Stockholder Approval is not obtained at a
meeting duly called, held and convened for such purpose and any Acquisition
Proposal with any person or entity other than with Buyer is consummated within 9
months of the date of this Agreement, then PLM shall pay to Buyer $3,000,000
(which payment the parties acknowledge is an integral part of the transactions
contemplated by this Agreement and that without this provision Buyer would not
have entered into this Agreement and that in any event such payment would be a
reasonable and genuine estimate of Damages that would be suffered by Buyer if
the eventualities in which it would be payable occur) in immediately available
funds within one (1) business day after demand by Buyer. In the case of such fee
becoming payable pursuant to Section 10.3(A) or (B), Buyer agrees to reimburse
such fee if nevertheless Closing shall subsequently occur within 9 months of the
date of this Agreement.
Article XI
MISCELLANEOUS PROVISIONS
11.1 Time of the Essence. Time is of the essence under this Agreement.
11.2 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented by written agreement of the
Sellers and Buyer at any time prior to the Closing with respect to any of the
terms contained herein.
11.3 Waiver of Compliance. Any failure of any Seller, on the one hand,
or Buyer, on the other, to comply with any obligation, covenant, agreement or
condition herein may be expressly waived in writing by Buyer or Sellers,
respectively, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
11.4 Expenses. (With the exception of the fees and expenses incurred in
relation to filings under the HSR Act, which shall be shared equally between the
parties), whether or not the transactions contemplated by this Agreement shall
be consummated, each Seller agrees that all fees and expenses incurred by it in
connection with this Agreement shall be borne by Sellers, and Buyer agrees that
all fees and expenses incurred by it in connection with this Agreement shall be
borne by Buyer including, without limitation, all fees of counsel and
accountants.
11.5 Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, certified or registered mail
with postage prepaid:
(a) If to Buyer, to:
Marubeni America Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
or to such other person or address as Buyer shall furnish to Sellers in
writing.
(b) If to Sellers, to:
PLM International, Inc.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Share LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
or to such other person or address as Sellers shall furnish to Buyer in
writing.
11.6 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and, except as otherwise provided in this Section, inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties, except by operation of law and
except that Buyer may assign its rights and interests (but not its obligations)
under this Agreement to MAC Leasing, Inc. or any Affiliate that is a direct or
indirect subsidiary of Marubeni Corporation.
11.7 Publicity. Neither party shall make or issue, or cause to be made
or issued, any announcement or written statement concerning this Agreement or
the transactions contemplated hereby for dissemination to the general public
without first providing the other parties a copy of any such statement or
announcement and the parties shall, whenever practicable, consult with each
other concerning the timing and content of such announcement before such
announcement is made. Sellers have provided to Buyer a copy of PLM's proposed
announcement of the signing of this Agreement and permitted Buyer to have a
reasonable opportunity to consult thereon and to organize for Buyer's parent to
announce as contemporaneously as reasonably possible in Japan.
11.8 Governing Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws of
the State of California without regard to its conflicts of law doctrine.
11.9 Arbitration. Subject to Sections 1.5 and 5.12, any dispute arising
out of this Agreement, or its performance or breach, shall be resolved by
binding arbitration at San Francisco, California, under the Commercial
Arbitration Rules (the "AAA Rules") of the American Arbitration Association (the
"AAA"). This arbitration provision is expressly made pursuant to and shall be
governed by the Federal Arbitration Act, 9 U.S.C. Section 1-14. The Parties
agree that pursuant to Section 9 of the Federal Arbitration Act, a judgment of a
United States District Court of competent jurisdiction shall be entered upon the
award made pursuant to the arbitration. A single arbitrator, who shall have the
authority to allocate the costs of any arbitration initiated under this
paragraph, shall be selected according to the AAA Rules within ten (10) days of
the submission to the AAA of the response to the statement of claim or the date
on which any such response is due, whichever is earlier. The arbitrator shall be
required to furnish to the parties to the arbitration a preliminary statement of
the arbitrator's decision that includes the legal rationale for the arbitrator's
conclusion and the calculations pertinent to any damage award being made by the
arbitrator. The arbitrator shall then furnish each of the parties to the
arbitration the opportunity to comment upon and/or contest the arbitrator's
preliminary statement of decision either, in the discretion of the arbitrator,
through briefs or at a hearing. The arbitrator shall render a final decision
following any such briefing or hearing. The arbitrator shall conduct the
arbitration in accordance with the Federal Rules of Evidence. The arbitrator
shall decide the amount and extent of pre-hearing discovery which is
appropriate. The arbitrator shall have the power to enter any award of monetary
and/or injunctive relief (including the power to issue permanent injunctive
relief and also the power to reconsider any prior request for immediate
injunctive relief by any party and any order as to immediate injunctive relief
previously granted or denied by a court in response to a request therefor by any
party), including the power to render an award as provided in Rule 43 of the AAA
Rules; provided, however, THAT THE ARBITRATOR SHALL NOT HAVE THE POWER TO AWARD
CONSEQUENTIAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES UNDER ANY CIRCUMSTANCES
(WHETHER STYLED AS LOSS OF PROFIT, LOSS OF EXPECTED ECONOMIC ADVANTAGE,
PUNITIVE, EXEMPLARY OR TREBLE DAMAGES, OR ANY PENALTY OR PUNITIVE TYPE OF
DAMAGES) REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER ANY
APPLICABLE LAW, THE PARTIES ARE HEREBY WAIVING THEIR RIGHTS, IF ANY, TO RECOVER
ANY SUCH DAMAGES, WHETHER IN ARBITRATION OR LITIGATION. The arbitrator shall
have the power to award the prevailing party its costs and reasonable attorneys'
fees; provided, however, that the arbitrator shall not award attorneys' fees to
a prevailing party if the prevailing party received a settlement offer unless
the arbitrator's award to the prevailing party is greater than such settlement
offer without taking into account attorneys' fees in the case of the settlement
offer or the arbitrator's award. Any arbitration shall be held in San Francisco,
California, for any claim brought by the parties. In addition to the above
courts, the arbitration award may be enforced in any court having jurisdiction
over the parties and the subject matter of the arbitration.
11.10 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.11 Headings. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
11.12 Entire Agreement. This Agreement, including the Exhibits hereto,
the Sellers Disclosure Schedule and the other documents and certificates
delivered pursuant to the terms hereof, sets forth the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein, and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto.
11.13 Third Parties. Except with respect to MAC Leasing, Inc. or any
Affiliate that is a direct or indirect subsidiary of Marubeni Corporation,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any person or corporation other than the parties hereto and
their successors or assigns any rights or remedies under or by reason of this
Agreement.
11.14 Severability. If a court of competent jurisdiction should hold
any of the provisions of this Agreement invalid, illegal or unenforceable in any
respect, the remaining provisions shall nevertheless be given full effect and
shall be construed as if such invalid, illegal or unenforceable provisions or
part of a provision had never been contained in this Agreement.
11.15 Sole Remedy. Buyer's sole and exclusive remedy for breach of any
representation, warranty or covenant herein (other than with respect to Article
II) following Closing having occurred hereunder shall be the indemnification
provision contained in Article IX.
11.16 PLM Liability with respect to the Partnerships Asset Purchase
Agreement. PLM agrees hereunder that PLM shall be jointly and severally liable
to Buyer with respect to any claim that may be made against any or all of the
Partnerships or PLM FSI by Buyer with respect to the Partnerships Asset Purchase
Agreement and for which any or all of the Partnerships or PLM FSI would have
liability to Buyer thereunder (except that for the purposes of PLM being liable
under this Section of this Agreement, if any one or more of the Partnerships or
PLM FSI is liable with respect to the Partnerships Asset Purchase Agreement, it
shall not be necessary for Buyer to show which of the Partnerships or PLM FSI is
individually liable or to have to allocate liability among the Partnerships or
PLM FSI with respect to the Partnerships Asset Purchase Agreement), without
prejudice to the liabilities and obligations of the Partnerships or PLM FSI
under the Partnerships Asset Purchase Agreement. For the avoidance of doubt, it
is hereby expressly agreed and understood that the only limitations applicable
to any claim against PLM under this Section 11.16 shall be those limitations
that would be applicable to any claim under the Partnerships Asset Purchase
Agreement and that no other limitations shall be applicable hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed , all as of the day and year first above written.
MARUBENI AMERICA CORPORATION
By_______________________________________
Name:
Title:
PLM INTERNATIONAL, INC.
By_______________________________________
Name:
Title:
PLM RENTAL, INC.
d/b/a PLM TRAILER LEASING
By_______________________________________
Name:
Title:
TEC ACQUISUB, INC.
By_______________________________________
Name:
Title:
PLM TRANSPORTATION EQUIPMENT CORPORATION
By_______________________________________
Name:
Title: