EXHIBIT 10.1
SHARE PURCHASE AGREEMENT
by and between
Triton CSA International B.V.
as "Seller"
and
Mobile Mini, Inc.
as "Purchaser"
Dated as of March 13, 2006
TABLE OF CONTENTS
(Not part of this Agreement)
PAGE
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ARTICLE I. PURCHASE AND SALE........................................................... 1
1.01 Purchase and Sale of Shares................................................ 1
1.02 Purchase Price............................................................. 1
1.03 Closing.................................................................... 1
1.04 Deliveries................................................................. 2
1.05 Purchase Price Adjustments................................................. 2
1.06 Discharge of Obligations................................................... 5
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER................................... 6
2.01 Organization of Seller; Authority and Binding Effect....................... 7
2.02 Organization of the Subject Companies...................................... 7
2.03 Capitalization; Ownership of Shares........................................ 7
2.04 Subsidiaries............................................................... 8
2.05 No Violations.............................................................. 8
2.06 Consents and Approvals..................................................... 8
2.07 Financial Statements....................................................... 8
2.08 Absence of Changes......................................................... 9
2.09 Ownership, Possession and Sufficiency of Assets............................ 10
2.10 Litigation................................................................. 12
2.11 Compliance With Law; Permits............................................... 12
2.12 Environmental Matters...................................................... 12
2.13 Brokers and Finders........................................................ 13
2.14 Contracts.................................................................. 13
2.15 Intellectual Property...................................................... 15
2.16 Tax Matters................................................................ 16
2.17 Employment Matters - Personnel Information................................. 16
2.18 Employment Matters - Employee Plans........................................ 19
2.19 Insurance.................................................................. 20
2.20 Books and Records.......................................................... 20
2.21 General Corporate Information.............................................. 20
2.22 Certain Business Practices................................................. 21
2.23 Office of Foreign Assets Control........................................... 21
2.24 Export Control............................................................. 21
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF PURCHASER............................... 21
3.01 Organization............................................................... 22
3.02 Authority and Binding Effect............................................... 22
3.03 No Violations.............................................................. 22
3.04 Consents and Approvals..................................................... 22
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3.05 Brokers and Finders........................................................ 22
3.06 Absence of Proceedings..................................................... 22
3.07 Investment Intent.......................................................... 23
3.08 Financial Capability....................................................... 23
3.09 Due Diligence by Purchaser................................................. 23
ARTICLE IV. COVENANTS.................................................................. 23
4.01 Alternative Proposals...................................................... 23
4.02 Conduct of the Business through the Effective Time......................... 24
4.03 Access to Information; Confidentiality; Environmental Adjustment........... 25
4.04 Consents and Approvals..................................................... 27
4.05 Public Announcements....................................................... 27
4.06 Employee Benefits Matters.................................................. 27
4.07 Directors' and Officers' Indemnification; Release from Liability........... 28
4.08 Resignations of Directors and Officers..................................... 30
4.09 Tax Matters................................................................ 30
4.10 Assignment of Trademarks................................................... 32
4.11 Covenant Not to Compete.................................................... 32
4.12 Non-Solicitation........................................................... 33
4.13 2005 Audited Financial Statements; EBITDA Adjustment....................... 33
4.14 Royal Wolf UK Board Meeting................................................ 33
ARTICLE V. CONDITIONS TO CLOSING....................................................... 35
5.01 Conditions to Obligations of Seller........................................ 35
5.02 Conditions to Obligations of Purchaser..................................... 36
ARTICLE VI. TERMINATION................................................................ 38
6.01 Termination................................................................ 38
6.02 Effect of Termination; Break Fee........................................... 39
ARTICLE VII. INDEMNIFICATION........................................................... 39
7.01 Survival of Warranties and Covenants....................................... 39
7.02 Indemnification by Seller.................................................. 39
7.03 Indemnification by Purchaser............................................... 40
7.04 Tax Indemnification........................................................ 40
7.05 Indemnification Process.................................................... 42
7.06 Limitations on Claims...................................................... 43
7.07 Mitigation................................................................. 44
7.08 Exclusivity of Indemnification Remedy...................................... 44
7.09 Characterization of Indemnification Payments............................... 45
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ARTICLE VIII. DEFINITIONS AND TERMS.................................................... 45
8.01 Specific Definitions....................................................... 45
8.02 Other Definitional Provisions.............................................. 51
ARTICLE IX. GENERAL PROVISIONS......................................................... 52
9.01 Expenses................................................................... 52
9.02 Further Assurances......................................................... 52
9.03 Amendment/Non-Assignment................................................... 52
9.04 Waiver..................................................................... 52
9.05 Notices.................................................................... 52
9.06 [Reserved]................................................................. 54
9.07 Applicable Law............................................................. 54
9.08 No Third Party Rights...................................................... 54
9.09 Counterparts; Facsimile Signatures......................................... 54
9.10 Severability............................................................... 54
9.11 Entire Agreement........................................................... 55
9.12 Arbitration; Process Agents................................................ 55
9.13 Fair Construction.......................................................... 55
9.14 Construction of Certain Provisions......................................... 55
9.15 Reasonable Consent Required................................................ 55
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LIST OF SCHEDULES
Post-Closing Adjustment Schedule
Discharged Obligations Schedule
Disclosure Schedules
Capitalization Schedule
Subsidiaries Schedule
No Violations Schedule
Consents and Approvals Schedule
Financial Statements Schedule
Certain Changes Schedule
Assets Schedule
Litigation Schedule
Environmental Matters Schedule
Contracts Schedule
Intellectual Property Schedule
Tax Schedule
Personnel Information Schedule
Employee Plans Schedule
Insurance Schedule
General Corporate Information Schedule
Closing Consents Schedule
D&O Released Parties Schedule
EBITDA Adjustment Schedule
Permitted Lien Schedule
LIST OF EXHIBITS
A - Base Form of Escrow Agreement
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INDEX TO DEFINED TERMS
Set forth below is an index of certain terms defined in this Share
Purchase Agreement. See Article VIII for all other terms used but not elsewhere
defined in this Share Purchase Agreement.
TERM LOCATION
-------------------------------------------------------------------------------- --------------------------------
Actual EBITDA................................................................... Section 4.13(b)
Adjustment Amount............................................................... Post-Closing Adjustment Schedule
Agreed Remediation Amount....................................................... Section 4.03(d)
Agreement....................................................................... Introduction
Alternative Transaction......................................................... Section 4.01
Annual Financial Statements..................................................... Section 2.07(a)
Applicable Rate................................................................. Section 1.05(g)
Benefit Plans................................................................... Section 2.18(a)
Business........................................................................ Recitals
Closing......................................................................... Section 1.03
Closing Date.................................................................... Section 1.03
Closing Determination........................................................... Section 1.05(c)
Closing Financial Statements.................................................... Section 1.05(c)
Closing Purchase Price.......................................................... Section 1.04(b)
Competitive Business............................................................ Section 4.11(a)
Containers...................................................................... Section 2.09(d)
Container Leases................................................................ Section 2.14(b)
D&O Indemnitees................................................................. Section 4.07(a)
D&O Released Parties............................................................ Section 4.07(c)
D&O Tail Insurance.............................................................. Section 4.07(b)
Damages......................................................................... Section 7.02(a)
December Determination.......................................................... Section 1.05(a)
December Determination Financial Statements..................................... Section 1.05(a)
Deductible...................................................................... Section 7.06(a)
Disclosure Schedule............................................................. Article II
EBITDA.......................................................................... EBITDA Adjustment Schedule
Effective Time.................................................................. Section 1.03
85% Condition .................................................................. Section 4.13(b)
Escrow Agent.................................................................... Section 1.04(b)
Escrow Agreement................................................................ Section 1.04(b)
Estimated EBITDA................................................................ Section 4.13(a)
ERM............................................................................. Section 4.03(d)
ERM Environmental Reports....................................................... Section 4.03(d)
Excluded Taxes.................................................................. Section 7.04(a)
Final Adjustment Amount......................................................... Section 1.05(d)
Financial Statements............................................................ Section 2.07(a)
Foreign Benefit Plan............................................................ Section 2.18(a)
Indemnification Cap............................................................. Section 7.06(b)
Indemnified Party............................................................... Section 7.05(a)
Indemnifying Party.............................................................. Section 7.05(a)
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Interim Balance Sheets.......................................................... Section 2.07(a)
Interim Financial Statements.................................................... Section 2.07(a)
Lease........................................................................... Section 2.09(b)
Leased Real Property............................................................ Section 2.09(b)
Limited Environmental Liability Release Agreement............................... Section 4.03(d)
Management Employee............................................................. Section 4.12
Non-Registered Intellectual Property............................................ Section 2.15(b)
Outside Date.................................................................... Section 6.01(b)
Owned Intellectual Property..................................................... Section 2.15(a)
Owned Real Property............................................................. Section 2.09(c)
Party........................................................................... Introduction
Per Diem Taxes.................................................................. Section 7.04(c)(i)
Pre-Closing Adjustment Amount................................................... Section 1.05(b)
Pre-Closing Determination....................................................... Section 1.05(b)
Pre-Closing Financial Statements................................................ Section 1.05(b)
Preliminary Adjustment Amount................................................... Section 1.05(c)
Purchase Price.................................................................. Section 1.02
Purchaser....................................................................... Introduction
Purchaser Indemnified Party..................................................... Section 7.02(a)
Registered Intellectual Property................................................ Section 2.15(a)
Releasing Parties............................................................... Section 4.07(c)
Retention Agreements............................................................ Section 4.06(a)
Review Period................................................................... Section 1.05(d)
Royal Wolf Netherlands.......................................................... Recitals
Royal Wolf UK................................................................... Recitals
Royal Wolf US................................................................... Recitals
Royal Wolf US Severance Pay Plan................................................ Section 4.02(d)
RW Insured Parties.............................................................. Section 4.07(b)
Scheduled Consents.............................................................. Section 2.06
Scheduled Contracts............................................................. Section 2.14(a)
Seller.......................................................................... Introduction
Seller Indemnified Party........................................................ Section 7.03(a)
Seller Updates.................................................................. Article II
Settlement Accountant........................................................... Section 1.05(d)
Severance Arrangements.......................................................... Section 4.02(d)
Share Purchase.................................................................. Recitals
Shares.......................................................................... Recitals
Statement of Objections......................................................... Section 1.05(d)
Subject Company................................................................. Recitals
Subject Company Assets.......................................................... Section 2.09
Subject Company Employees....................................................... Section 2.18(a)
Subject Company Insurance....................................................... Section 2.19
Subject Territory............................................................... Section 4.10
Supporting Binder............................................................... Section 1.05(e)
Tax Claim....................................................................... Section 7.04(d)
Third Party Claims.............................................................. Section 7.05(b)
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2005 Audit Financial Statements................................................. Section 4.13(a)
U.S. Benefit Plans.............................................................. Section 2.18(a)
U.S. Pension Plan............................................................... Section 2.18(b)
U.S. Welfare Plans.............................................................. Section 2.18(d)
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement"), dated as of March
13, 2006, is made and entered into by and between Mobile Mini, Inc., a Delaware
corporation (together with its permitted assignees, "Purchaser"), and Triton CSA
International B.V., a company organized under the laws of the Netherlands
("Seller"). Purchaser and Seller are sometimes individually referred to herein
as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Seller owns all of the issued and outstanding share capital
(the "Shares") of A Royal Wolf Portable Storage, Inc., a California corporation
("Royal Wolf US"), Royalwolf Trading (UK) Limited, a limited company organized
under the laws of England and Wales ("Royal Wolf UK") and Royal Wolf Containers
B.V., a company organized under the laws of the Netherlands ("Royal Wolf
Netherlands"; Royal Wolf US, Royal Wolf UK and Royal Wolf Netherlands and/or
their Subsidiaries are sometimes individually referred to herein as a "Subject
Company" and collectively as the "Subject Companies);
WHEREAS, the Subject Companies are engaged in the business of
portable storage unit leasing (the "Business"); and
WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
all of Seller's right, title and interest in and to the Shares on the terms and
conditions contained herein (the "Share Purchase").
NOW THEREFORE, in consideration of the foregoing and the respective
warranties, covenants, agreements and conditions hereinafter set forth, and
intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I.
PURCHASE AND SALE
1.01 Purchase and Sale of Shares. Upon the terms and subject to the
conditions of this Agreement, at the Closing, Seller shall sell, transfer,
convey, assign and deliver to Purchaser, and Purchaser shall purchase, acquire
and accept from Seller, all of Seller's right, title and interest in and to the
Shares.
1.02 Purchase Price. The aggregate price to be paid by Purchaser for
the Shares shall be $52,500,000 (the "Purchase Price"), subject to adjustment
pursuant to Sections 1.05, 4.03(d), and 4.13(b).
1.03 Closing. The closing of the Share Purchase (the "Closing") will
take place at 2:00 p.m. Rotterdam time on the last day of the calendar month in
which satisfaction or waiver (as permitted by this Agreement) of the conditions
(excluding conditions that, by their terms, cannot be satisfied until the
Closing Date, but subject to the fulfillment or waiver of those conditions on
the Closing Date) set forth in Article V occurs; provided, however, that if such
day is not a Business Day, then the Closing shall occur on the immediately
preceding Business Day (such date being the "Closing Date"). The Closing will be
deemed to be effective, and title and
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all risk of loss of the Shares shall pass from Seller to Purchaser, at 11:59
p.m. Rotterdam time on the last day of the calendar month in which the Closing
occurs, such time being the "Effective Time," unless another time or date is
agreed to in writing by the Parties. The Closing shall be held at the offices of
Seller in Rotterdam, located at the address set forth in Section 9.05, unless
another place is agreed to in writing by the Parties.
1.04 Deliveries. At the Closing:
(a) Seller shall deliver, or cause to be delivered, to
Purchaser, the certificates evidencing the Shares along with duly executed share
transfer forms in favor of Purchaser;
(b) Purchaser shall pay the Purchase Price, as same may be
adjusted by the Pre-Closing Adjustment Amount and pursuant to Sections 4.03(d)
and 4.13(b) (the "Closing Purchase Price"), by delivery of (i) the Closing
Purchase Price, less an amount equal to the Indemnification Cap (as the
Indemnification Cap may be reduced pursuant to Section 4.03(d)), delivered by
wire transfer of immediately available Dollar funds to an account designated by
Seller, and (ii) an amount equal to the Indemnification Cap (as the
Indemnification Cap may be reduced pursuant to Section 4.03(d)) by wire transfer
of immediately available Dollar funds to a financial institution reasonably
satisfactory to Purchaser and Seller (the "Escrow Agent") with directions to
retain, hold and dispose of these funds in accordance with the terms of a
mutually acceptable Escrow Agreement between the Parties based substantially in
the form attached as Exhibit A hereto (the "Escrow Agreement") to fund the
payment of any liability of Seller to Purchaser arising under Article VII of
this Agreement. The Escrow Agreement shall provide that a portion of the
escrowed amount be released to Seller on the first annual anniversary of the
Closing Date. The amount to be released to Seller will be fifty percent (50%) of
the difference between the original escrow amount and the sum of claims paid
from the escrow plus the amount of claims then outstanding that are unresolved
and unpaid. The remainder of the escrow amount (less the amount of unresolved
claims made but not paid) will be released on the 18-month anniversary of the
Closing Date.
(c) Each Party shall deliver the certificates and other
documents and instruments required to be delivered by or on behalf of such Party
pursuant to Article V or the other provisions of this Agreement.
1.05 Purchase Price Adjustments.
(a) The Purchase Price shall be subject to adjustment in
accordance with the terms and conditions of this Section 1.05 and the
Post-Closing Adjustment Schedule. For illustrative purposes, appended as Annex A
to the Post-Closing Adjustment Schedule is a calculation of the Adjustment
Amount (as such term is defined in the Post-Closing Adjustment Schedule) based
on the accompanying unaudited financial statements of each Relevant Entity as of
December 31, 2005 (said calculation being referred to herein as the "December
Determination; said accompanying financial statements being referred to herein
as the December Determination Financial Statements").
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(b) Not later than five (5) Business Days prior to the Closing
Date, Seller shall prepare and deliver to Purchaser unaudited financial
statements as of the last day of the calendar month immediately preceding the
calendar month in which the Closing Date takes place for each Relevant Entity of
the types comprising the December Determination Financial Statements (the
"Pre-Closing Financial Statements") and a written determination (the
"Pre-Closing Determination") of the Adjustment Amount based on the Pre-Closing
Financial Statements (the "Pre-Closing Adjustment Amount"), in each case
expressed in Dollars. The Pre-Closing Determination and Pre-Closing Financial
Statements shall be prepared in accordance with the same accounting principles,
practices, methodologies and policies used in the preparation of the December
Determination and December Determination Financial Statements, respectively.
(c) Within sixty (60) days after the Closing Date, Seller
shall prepare and deliver to Purchaser unaudited financial statements as of the
Effective Time for each Relevant Entity of the types comprising the December
Determination Financial Statements (the "Closing Financial Statements") and a
written determination (the "Closing Determination") of the Adjustment Amount
based on the Closing Financial Statements (the "Preliminary Adjustment Amount"),
in each case expressed in Dollars. The Closing Determination and Closing
Financial Statements shall be prepared in accordance with the same accounting
principles, practices, methodologies and policies used in the preparation of the
December Determination and December Determination Financial Statements,
respectively. After the Closing Date, at Seller's request, Purchaser shall
assist Seller and its Representatives in the preparation of the Closing
Financial Statements and the Closing Determination. Purchaser shall provide
Seller and its Representatives any information reasonably requested and shall
provide them full access at all reasonable times to the properties, books,
records and other materials of each Relevant Entity and the personnel of, and
work papers prepared by or for Purchaser, the Relevant Entities or their
respective accountants, including, without limitation, to such historical
financial information relating to the Relevant Entities as Seller may reasonably
request in connection with Seller's preparation and delivery of the Closing
Determination in accordance with this Section 1.05.
(d) Upon receipt of the Closing Determination, Purchaser shall
have sixty (60) days (the "Review Period") to review such Closing Determination
and related Closing Financial Statements. If Purchaser has accepted such Closing
Determination and related Closing Financial Statements in writing or has not
given written notice to Seller setting forth in reasonable detail any objection
of Purchaser to such Closing Determination and related Closing Financial
Statements (a "Statement of Objections") prior to the expiration of the Review
Period, then such Closing Determination and Closing Financial Statements shall
be final and binding upon the Parties, and the Preliminary Adjustment Amount
shall be deemed the Adjustment Amount as of the Effective Time (the "Final
Adjustment Amount"). In the event that Purchaser delivers a Statement of
Objections during the Review Period, the Parties shall use their reasonable
efforts to agree on the Adjustment Amount within thirty (30) days following the
receipt by Seller of the Statement of Objections. If the Parties are unable to
reach an agreement as to such amount within such thirty (30) day period, then
the matter shall be submitted to PricewaterhouseCoopers LLP, or such other "Big
4" accountant as shall be mutually agreed between the Parties (such accountant,
the "Settlement Accountant"), who, acting as an expert and not as an arbitrator,
shall resolve the matters still in dispute, but only such matters, and shall
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adjust the Closing Determination and related Closing Financial Statements in
accordance with this Section 1.05 to reflect such resolution and establish the
Final Adjustment Amount. The Settlement Accountant shall make such determination
within forty (40) days following the engagement of the Settlement Accountant,
and such determination shall be final and binding upon the Parties. Either Party
may seek to enforce the Settlement Accountant's determination in a court of
competent jurisdiction and any disputes with respect to the matters relating to
this Section 1.05 shall not be subject to arbitration under Section 9.12. Each
Party will bear fifty percent (50%) of the fees, charges and expenses of the
Settlement Accountant, unless the Final Adjustment Amount is within (10%) of the
Preliminary Adjustment Amount, in which event one hundred percent (100%) of the
fees, charges and expenses of the Settlement Accountant shall be borne (x) by
Seller if the Adjustment Amount is positive, or (y) by Purchaser if the
Adjustment Amount is negative.
(e) The scope of any dispute to be resolved by the Settlement
Accountant shall be limited to whether the amounts set forth on the Closing
Determination and related Closing Financial Statements were prepared in a manner
consistent with the December Determination and the December Determination
Financial Statements (i.e., in accordance with the consistent application of the
same accounting principles, practices, methodologies and policies used in the
preparation of the December Determination and the December Determination
Financial Statements), and whether there were mathematical errors in the Closing
Determination or the Closing Financial Statements. The Parties acknowledge that
the sole purpose of the Closing Determination is to adjust the Purchase Price
pursuant to the methodology set forth on the Post-Closing Adjustment Schedule as
of the Effective Time and such purpose can only be fulfilled if the calculation
of the Closing Determination and the preparation of the related Closing
Financial Statements is done using the same accounting principles, practices,
methodologies and policies as were used in the calculation of the December
Determination and the preparation of the December Determination Financial
Statements. In resolving a dispute relating to the Adjustment Amount or any
particular item in the Closing Determination or Closing Financial Statements,
the Settlement Accountant may not assign a value to the Adjustment Amount or any
such particular item greater than the greatest value for the Adjustment Amount
or such item claimed by either Party or less than the smallest value for the
Adjustment Amount or such item claimed by either Party, in each case as
presented to the Settlement Accountant. Within ten (10) days after the
engagement of the Settlement Accountant, each of the Parties shall present to
the Settlement Accountant, with a copy to the other Party, their respective
positions with respect to the items set forth in the Statement of Objections in
the form of a written binder of supporting materials (the "Supporting Binder")
and no ex parte conferences, oral examinations, testimony, depositions,
discovery or other form of evidence gathering or hearings shall be conducted or
allowed by any Party (or any of its Representatives) and the Settlement
Accountant; provided, that, at the Settlement Accountant's request, or as
mutually agreed by the Parties, the Parties may meet with the Settlement
Accountant so long as Representatives of both the Parties are present.
(f) Each of the Parties shall make readily available to the
Settlement Accountant, with a copy to the other Party, all available relevant
work papers and books and records relating to the Relevant Entities as are
reasonably requested by the Settlement Accountant and shall use reasonable
efforts to cooperate with, and do all things reasonably practicable to assist,
the Settlement Accountant in resolving any disputed matters. Following the
Effective Time, any action the Purchaser may take, or cause to be taken, with
respect to the
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accounting books and records of the Relevant Entities on which the Closing
Determination and the related Closing Financial Statements are to be based that
is not consistent with the accounting principles, practices, methodologies and
policies of the Relevant Entities shall not be effective for the purpose of
determining the Final Adjustment Amount. Without limiting the generality of the
foregoing, no change made, or caused to be made, by Purchaser in any reserve or
other account existing as of the date of the December Determination Financial
Statements that is not a result of events occurring after the date of the
December Determination Financial Statements and made in a manner consistent with
the accounting principles, practices, methodologies and policies of the Relevant
Entities used in connection with the preparation of the December Determination
Financial Statements shall be effective for the purpose of determining the Final
Adjustment Amount.
(g) In the event that the Final Adjustment Amount is greater
than the Pre-Closing Adjustment Amount, the Purchase Price shall be increased
by, and Purchaser shall pay to Seller, within five (5) Business Days following
the determination of the Final Adjustment Amount pursuant to Section 1.05(d), an
amount equal to the excess of the Final Adjustment Amount over the Pre-Closing
Adjustment Amount, together with interest thereon for the period from the
Closing Date to (and including) the date of payment, at the "Prime Rate" quoted
in the "Money Rates" section of The Wall Street Journal (the "Applicable Rate"),
by wire transfer of immediately available Dollar funds to one or more accounts
designated by Seller.
(h) In the event that the Final Adjustment Amount is less than
the Pre-Closing Adjustment Amount, the Purchase Price shall be reduced by, and
Seller shall pay to Purchaser, within five (5) Business Days following the
determination of the Final Adjustment Amount pursuant to Section 1.05(d), an
amount equal to the excess of the Pre-Closing Adjustment Amount over the Final
Adjustment Amount, together with interest thereon for the period from the
Closing Date to (and including) the date of payment, at the Applicable Rate, by
wire transfer of immediately available Dollar funds to one or more accounts
designated by Purchaser.
1.06 Discharge of Obligations.
(a) On or before the Closing Date, Seller shall cause the
Subject Companies to cause to be paid, discharged in full or otherwise satisfied
and released, and shall deliver satisfactory releases, and terminations of any
security interest held in respect of, or other evidence thereof reasonably
satisfactory to Purchaser, such deliveries to be made as promptly as practicable
following the date on which such releases and terminations are received by
Seller and in any event on the Closing Date, (i) all Indebtedness of the Subject
Companies, (ii) those operating leases listed on the Discharged Obligations
Schedule, and (iii) any debt or liabilities or any other inter-company
arrangement owed by any of the Subject Companies to Seller or any Affiliate of
Seller (other than a Subject Company). All documents evidencing obligations
under subsections (i), (ii) and (iii) of this Section 1.06 are listed on the
Discharged Obligations Schedule attached hereto.
(b) On or before the Closing Date, Seller shall also cause any
Affiliate of Seller (other than a Subject Company) to cause to be paid,
discharged in full or otherwise satisfied and released, and shall deliver
evidence thereof reasonably satisfactory to Purchaser,
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any inter-company debt or liabilities owed by any of such Affiliates to any of
the Subject Companies (i) without any residual or continuing obligation or
liability on the part of any of the Subject Companies, (ii) which action shall
not result in any equity or debt securities of any of the Subject Companies
being issued to an entity other than Seller and (iii) so that immediately prior
to Closing, all of the issued and outstanding capital stock of the Subject
Companies shall be held by Seller.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that as of the date of this
Agreement the statements contained in this Article II are true and correct,
except as set forth in the disclosure schedule delivered by Seller prior to the
execution of this Agreement (the "Disclosure Schedule") or as otherwise
expressly contemplated by this Agreement. Whether or not specifically required
by the specific terms of this Article II or otherwise, Seller may modify its
representations and warranties contained in this Agreement by disclosing
relevant facts on the Disclosure Schedule; provided, however, that for any such
disclosure to be effective, it must indicate the specific Section or Subsection
of this Agreement to which it relates. The disclosure of any information in the
Disclosure Schedule shall not be deemed to constitute an acknowledgment that
such information is required to be disclosed in connection with the
representations and warranties made by Seller in this Agreement or that it is
material, nor shall such information be deemed to establish a standard of
materiality.
No later than five (5) Business Days prior to the Closing Date, Seller may
supplement or amend the Disclosure Schedule in writing with respect to any
matter arising after the date of this Agreement which, if existing or occurring
at the date of this Agreement, would have been required to be set forth or
described in such Disclosure Schedule or which is necessary to correct any
information in such Disclosure Schedule or in the representations and warranties
of Seller herein which have been rendered inaccurate by such matter (the "Seller
Updates"); provided, however, that with respect to any matters that constitute a
Material Adverse Effect, Seller shall deliver a Seller Update promptly after the
occurrence of the matter. In any event, if any Seller Update is made and the
Purchaser has not, in its reasonable discretion, had an adequate opportunity to
review and investigate the matter disclosed as of the scheduled Closing Date,
notwithstanding any other provision of this Agreement to the contrary, the
Purchaser may postpone the Closing Date for up to ten (10) days. In the event
the Closing occurs, the relevant representations and warranties of Seller to
which the Seller Updates relate shall be amended to the extent set forth in the
Seller Update. In the event that an individual Seller Update or more than one
Seller Update in the aggregate constitutes a Material Adverse Effect, the
Purchaser may, at its sole election, notify Seller in writing that it is
terminating this Agreement. Upon timely delivery of Purchaser's proper notice of
its election to terminate this Agreement to Seller pursuant to the immediately
preceding sentence, all duties and obligations of Purchaser and Seller under
this Agreement to consummate the transactions contemplated by this Agreement
shall terminate and be null and void ab initio.
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2.01 Organization of Seller; Authority and Binding Effect. Seller is
a company validly existing and in good standing under the laws of the
Netherlands. Seller has all requisite corporate power and authority to execute
and deliver this Agreement and all other certificates, agreements or other
documents to be executed and delivered by Seller pursuant hereto and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement has been duly and validly authorized
by all necessary corporate action of Seller and no additional authorization on
the part of Seller is necessary in connection with the execution, delivery and
performance of this Agreement. This Agreement has been duly executed and
delivered by Seller, and this Agreement is a legally valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and to general
principles of equity.
2.02 Organization of the Subject Companies. Each Subject Company is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite corporate power and authority
to own its properties and to carry on the Business as it is now being conducted.
Each Subject Company is duly licensed or qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business or ownership of its properties makes such qualification necessary,
except where the failure to have such power or authority, to be in good standing
or to be duly qualified to transact business, would not reasonably be expected
to result in a Material Adverse Effect. Seller has made available to Purchaser
correct and complete copies of each Subject Company's organizational and
constitutional documents, which documents reflect all amendments made thereto at
any time on or prior to the date hereof. Correct and complete copies of the
minute books containing the records of actions of the shareholders and board of
directors of each Subject Company held at any time on or prior to the date
hereof, the share register, and the share transfer ledger of each Subject
Company have been made available to Purchaser. Each Subject Company has filed
all returns, particulars, resolutions and other documents required by the
relevant company registrar under the law of its jurisdiction of incorporation.
Each Subject Company is not in default under or in violation of any provision of
its organizational documents.
2.03 Capitalization; Ownership of Shares.
(a) The authorized and issued share capital of each Subject
Company is set forth on the Capitalization Schedule. At the Closing, the Shares
being sold hereunder will constitute all of the issued and outstanding share
capital of the Subject Companies. All of the issued and outstanding Shares have
been duly authorized, validly issued and are fully paid, nonassessable and free
of preemptive rights. Except as set forth on the Capitalization Schedule and
except for this Agreement and the transactions contemplated hereby, at the
Closing, there will be no outstanding options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require any Subject Company to issue, sell, or otherwise
cause to become outstanding any share capital of such Subject Company. Except
for this Agreement and the transactions contemplated hereby, at the Closing,
there will be no outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to the Subject Companies.
7
(b) Seller is the owner, beneficially and of record, of the
Shares. At the Closing, Seller will transfer the Shares to Purchaser, free and
clear of any Liens (other than Liens created by Purchaser).
2.04 Subsidiaries. The Subsidiaries Schedule sets forth a true and
complete list of each Subject Company as of the date hereof, including the
jurisdiction of organization of such Subject Company, any jurisdictions in which
any such Subject Company is qualified to do business as a foreign entity, and
the authorized (if applicable) and outstanding stock of each such Subject
Company. All of the outstanding shares of each such Subject Company are duly and
validly issued and are owned as set forth on the Subsidiaries Schedule, free and
clear of any Liens (other than as may be set forth in the applicable
organizational documents of such Subsidiary or identified on the Subsidiaries
Schedule) and, if applicable, are fully paid and nonassessable. Except as set
forth on the Subsidiaries Schedule and except for this Agreement and the
transactions contemplated hereby, at the Closing, there will be no outstanding
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require any
Subject Company to issue, sell, or otherwise cause to become outstanding any of
its capital stock. Except as set forth on the Subsidiaries Schedule, at the
Closing, there will be no outstanding or authorized stock appreciation, phantom
stock, profit participation, or similar rights with respect to any Subject
Company.
2.05 No Violations. Except as set forth on the No Violations
Schedule, and subject to obtaining the Scheduled Consents, the execution and
delivery of this Agreement by Seller, and the performance and consummation of
the transactions contemplated by this Agreement by Seller, do not and will not
(a) conflict with or violate any provision of the organizational documents of
Seller or any Subject Company, (b) conflict with, or result in the breach of, or
constitute a default under, or result in the termination, cancellation or
acceleration (whether after the giving of notice or the lapse of time or both)
of any right or obligation of Seller or any Subject Company under, any material
Contract, or (c) to the knowledge of Seller, materially violate or result in a
breach of or constitute a default under any Law applicable to Seller or any
Subject Company.
2.06 Consents and Approvals. Except for any Consent required under
applicable Laws relating to competition and for Consents set forth on the
Consents and Approvals Schedule (the "Scheduled Consents"), no Consent is
required to be obtained by Seller or any Subject Company in connection with the
execution, delivery and performance of this Agreement by Seller or, to the
extent a party hereto or thereto, any Subject Company, except for any Consent
the failure of which to make or obtain would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
2.07 Financial Statements.
(a) Seller has made available to Purchaser (i) (A) the audited
year-end reporting package and related schedules of Royal Wolf US at December
31, 2004, (B) the audited financial statements of Royal Wolf UK for the years
ended December 31, 2004, 2003 and 2002, and (C) the reviewed financial
statements of Royal Wolf Netherlands for the year ended December 31, 2004 and
the compiled financial statements of Royal Wolf Netherlands for the years ended
December 31, 2003 and 2002 (the balance sheets and other financial statements
8
referred to in this clause 2.07(a)(i) are collectively referred to herein as the
"Annual Financial Statements") and (ii) (A) the unaudited balance sheet of Royal
Wolf US as of December 31, 2005 and related statements of cash flow and income
for the year then ended, (B) the unaudited balance sheet of Royal Wolf UK as of
December 31, 2005 and related statements of cash flow and income for the year
then ended, and (C) the unaudited balance sheet of Royal Wolf Netherlands as of
December 31, 2005 and related statements of cash flow and income for the year
then ended (the balance sheets referred to in this clause 2.07(a)(ii) are
collectively referred to herein as the "Interim Balance Sheets"; the Interim
Balance Sheets and other financial statements referred to in this clause
2.07(a)(ii) are collectively referred to herein as the "Interim Financial
Statements"; the Interim Financial Statements and the Annual Financial
Statements are collectively referred to herein as the "Financial Statements").
Except as set forth on the Financial Statements Schedule, each Financial
Statement has been prepared in accordance with GAAP consistently applied
throughout the periods covered by such Financial Statement (except for any
changes in application set forth in the notes to such Financial Statement), and
presents fairly, in all material respects, the financial position, consolidated
or non-consolidated, as the case may be, of the subject Relevant Entity and its
consolidated Subsidiary (if any) as of such dates and the results of operations
and cash flows for the respective periods then ended, as applicable, subject to,
in the case of each Interim Financial Statement, the absence of notes and
schedules, and year end adjustments that will not be material.
(b) The Subject Companies do not have any material Liabilities
required by GAAP to be reflected on a balance sheet except: (i) Liabilities
reflected or reserved against on the Interim Balance Sheets; (ii) Liabilities
which have arisen after the date of the Interim Balance Sheets in the ordinary
course of business or otherwise in accordance with the terms and conditions of
this Agreement, and (iii) Liabilities disclosed as such elsewhere in this
Agreement or the Schedules and Exhibits hereto.
2.08 Absence of Changes. Except as disclosed on the Certain Changes
Schedule, between the date of the Interim Balance Sheets and the date hereof,
the Subject Companies have conducted their operations and affairs only in the
ordinary and normal course consistent with past practice, and during such period
there has not been any Material Adverse Change. Without limiting the generality
of the foregoing, and except as disclosed on the Certain Changes Schedule,
between the date of the Interim Balance Sheets and the date hereof, other than
in the ordinary course of business, the Subject Companies have not:
(a) commenced or entered into arrangements for capital
expenditures in excess of $100,000, individually or in the aggregate, other than
purchases of Containers not in excess of $500,000;
(b) disposed of any capital assets if the greater of the book
value or the fair market value, individually or in the aggregate, of such assets
exceeds $100,000, other than disposals of Containers not in excess of $500,000,
or incurred, created or assumed any Lien on any individual capital asset if the
greater of the book value or the fair market value of such capital asset exceeds
$500,000, other than Permitted Liens;
9
(c) entered into any Contract (including any hedging
arrangement or other derivative transaction) in excess of $100,000 in the
aggregate, or incurred any Indebtedness in excess of $100,000 in the aggregate;
(d) increased the salary, wage, rate of compensation,
commission, bonus or other direct or indirect remuneration payable to, or other
compensation of, any executive officer or any other employee of the Subject
Companies in excess of three percent (3%) or entered into any Contract in
respect of any such increase except as specifically identified by officer or
employee on the Certain Changes Schedule, nor amended, adopted or terminated any
Benefit Plan that would increase the liability of such Subject Company or
entered into any collective bargaining agreement covering Subject Company
Employees;
(e) amended in any material respect any Scheduled Contract
that would materially and adversely affect the use and enjoyment thereof by
Purchaser, or terminated any of the Scheduled Contracts other than pursuant to
its terms or defaulted in the performance of any material covenant or obligation
thereunder which default was not cured within any applicable grace period;
(f) made any material change in any accounting principle,
practice, policy or method, other than as required by GAAP or any applicable
Law;
(g) merged with or into or consolidated with any other Person
or acquired any business or assets (other than inventory) of any other Person;
(h) amended its certificate of incorporation, memorandum of
association, bylaws or similar organizational documents;
(i) purchased or entered into any other agreement or
obligation to purchase any securities of, or interests in, any Person;
(j) issued or sold any capital stock or other securities,
options, warrants, calls or other rights to acquire such stock;
(k) engaged in any transactions with any of the other Subject
Companies, Seller or any Affiliate of Seller; or
(l) agreed or committed to do any of the foregoing.
2.09 Ownership, Possession and Sufficiency of Assets.
(a) Except as set forth on the Assets Schedule, the Subject
Companies have good and valid title to, or a valid right to use, the assets
shown on the Interim Balance Sheets or acquired after the date thereof, free and
clear of all Liens other than Permitted Liens, except for assets which were
disposed of in the ordinary course of business since the date of the Interim
Balance Sheets.
(b) The Assets Schedule lists all real property leases,
licenses or tenancies to which any Subject Company is a party (the "Leased Real
Property"). A true,
10
complete, and correct copy of each lease (and all amendments thereto) pertaining
to the Leased Real Property has previously been made available to Purchaser. The
relevant Subject Company holds good and valid leasehold title to or license or
permission to occupy the Leased Real Property, in each case, in accordance with
the provisions of the applicable lease, license, tenancy or sublease for such
Leased Real Property (each, a "Lease") and free of all Liens, except for
Permitted Liens. Except as set forth on the Assets Schedule: (i) all of the
Leases to which any Subject Company is a party are in full force and effect and
grant the leasehold estates or rights of occupancy or use they purport to grant;
(ii) to the knowledge of Seller, the occupancy by the relevant Subject Company
under each Lease is in compliance with all applicable Laws relating to such
occupancy and use; and (iii) there are no pending or, to the knowledge of
Seller, threatened litigation, dispute or condemnation proceedings with respect
to the Leased Real Property. Except as identified on the Assets Schedule or for
such occurrences or defaults that would not reasonably be expected to have a
Material Adverse Effect, there are no existing defaults on the part of any
Subject Company or, to the knowledge of Seller, any other party under any Lease,
and no event has occurred which, with notice, lapse of time or both, would
constitute a default on the part of any Subject Company or, to the knowledge of
Seller, any other party under any Lease.
(c) No Subject Company owns any real property. No Subject
Company has any actual or contingent liability in respect of any land or
buildings that have, at any time, been leased, owned or occupied by a Subject
Company but which are no longer leased, owned or occupied by a Subject Company,
relating to any such formerly leased or owned real property.
(d) Except for those disposed of in the ordinary course of
business or as otherwise permitted by this Agreement, the Subject Companies
shall, on the Closing Date, own or possess all assets owned by, leased and/or
licensed to the Subject Companies on the date of this Agreement, and all assets
acquired thereafter as permitted or contemplated by this Agreement (such assets,
inclusive of the Leased Real Property, hereafter referred to as the "Subject
Company Assets"). The Subject Company Assets constitute all of the assets
necessary to operate the Business in all material respects as it is presently
being conducted. Except for those assets disposed of after the date of the
Interim Balance Sheets or acquired after the date of the Interim Balance Sheets,
in each case in the ordinary course of business consistent with past practice or
as otherwise permitted by this Agreement, all material Subject Company Assets
owned by the Subject Companies are reflected on the Interim Balance Sheets. All
Subject Company Assets used in connection with the Business of each of the
Subject Companies are in normal operating condition to operate the Business as
it is presently conducted, except where the failure to be in such condition
would not materially interfere with the operation of the Business as presently
conducted. The Subject Companies have good and valid title to the Subject
Company Assets which they purport to own or lease, free and clear of any Liens,
except for Permitted Liens. All of the Subject Company Assets that consist of
portable storage containers, portable offices (collectively, the "Containers")
or container or office delivery equipment are located either at the premises of
the lessee identified in the pertinent lease agreement therefor, or are in the
possession of the relevant Subject Company or a bailee as reflected in the books
and records of the relevant Subject Company. At the Effective Time, the Subject
Companies shall have good and valid title to the Subject Company Assets which
they purport to own, free and clear of any Liens, except for Permitted Liens
(other than any Liens referred to in Clause (g), (i) or (j) in the definition
thereof, Liens referred to in clause (a) of the definition thereof of the type
11
referred to in said clause (g), (i), or (j), and any extensions, renewals and
replacements of any such Liens)
(e) All of the accounts receivable of the Subject Companies
reflected on the Interim Balance Sheets of the Subject Companies are, and those
existing as of the Effective Time will be, the result of bona fide transactions
of the Business in the ordinary course. Except as set forth on the Assets
Schedule, since February 28, 2006, there have not been any write-offs as
uncollectible of any accounts receivable of any Subject Company, individually in
excess of $250 or, in the aggregate, in excess of $2,500.
2.10 Litigation. Except as set forth on the Litigation Schedule,
there is no Proceeding pending or, to the knowledge of Seller, threatened,
whether by or before any Governmental Authority or otherwise, against Seller or
any Subject Company which, if adversely determined, would reasonably be expected
to have a Material Adverse Effect. Except as set forth on the Litigation
Schedule, there are no Judgments rendered against Seller or any Subject Company
or any of their respective properties or businesses that would reasonably be
expected to have a Material Adverse Effect.
2.11 Compliance With Law; Permits. Except for matters that are the
subject of the representations and warranties in Sections 2.12, 2.15, 2.16, 2.17
and 2.18, to the knowledge of Seller, the Subject Companies are in compliance
with all Laws applicable to their respective businesses as currently conducted,
except for such failures to comply that would not reasonably be expected to have
a Material Adverse Effect. Except as would not reasonably be expected to have a
Material Adverse Effect and except for Permits relating to matters that are the
subject of the representations and warranties in Sections 2.12, 2.15, 2.16, 2.17
and 2.18, each Subject Company holds, owns or possesses all Permits required to
conduct its business as currently conducted, which Permits are valid and in full
force and effect. Except as would not reasonably be expected to have a Material
Adverse Effect, each Subject Company is in compliance with its obligations under
such Permits.
2.12 Environmental Matters. Except as set forth on the Environmental
Matters Schedule:
(a) Each Subject Company is in compliance with all applicable
Environmental Laws, except for instances of noncompliance that, individually or
in the aggregate, will not constitute a Material Adverse Effect;
(b) Each Subject Company is in possession of, and in
compliance with, all permits, certificates, licenses, approvals, tariffs and
other authorizations of or issued by Governmental Authorities required by
applicable Environmental Laws relating to the operations of the Subject Company,
except for permits which are not possessed or instances of noncompliance that,
individually or in the aggregate, will not constitute a Material Adverse Effect;
(c) There are no current Environmental Claims pending, or to
Seller's knowledge threatened, against a Subject Company;
12
(d) No Subject Company has either expressly or, to Seller's
knowledge, by operation of law, assumed or undertaken any liability or
corrective, investigatory or remedial obligation of any other Person relating to
any Environmental Claims; and
(e) Except for instances that individually or in the aggregate
will not constitute a Material Adverse Effect, to Seller's knowledge, no
Environmental Lien has attached to any property leased by a Subject Company for
which Seller or the Subject Company has any material liability.
2.13 Brokers and Finders.
Other than CIBC World Markets Corp., whose fees shall be paid
by Seller, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of Seller and/or
any Subject Company entitled to any fee or commission from Seller and/or any
Subject Company in connection with the transactions contemplated by this
Agreement.
2.14 Contracts.
(a) Except for the contracts set forth on the Contracts
Schedule (the "Scheduled Contracts") or as contemplated by this Agreement, no
Subject Company is a party to:
(i) any contract that involves the purchase or sale of
goods or services to Seller or any Affiliate of Seller after the Closing or any
other contract with a value, or involving payments by or to such Subject Company
of more than $100,000 per year and that is not terminable by such Subject
Company upon less than twelve (12) months' notice;
(ii) any employment or consulting agreement having a
remaining term of at least one (1) year and requiring payments of base salary in
excess of $25,000 per year or aggregate payments under any such agreement in
excess of $25,000;
(iii) any stock option, share purchase, profit sharing,
deferred compensation, bonus or other incentive compensation contract, plan or
arrangement;
(iv) any note, mortgage, indenture or other obligation
or agreement or other instrument for or relating to indebtedness for borrowed
money (including, without limitation, capitalized lease obligations), or any
guarantee of third party obligations, of more than $500,000 in the aggregate,
but excluding intercompany indebtedness solely between or among the Subject
Companies;
(v) collective bargaining agreements with any labor
unions or associations representing Subject Company Employees;
(vi) any leases of real or personal property as lessee
with an annual base rental obligation of more than $100,000 or a total remaining
rental obligation of more than $500,000, but excluding leases solely between or
among the Subject Companies;
13
(vii) any agreement pursuant to which such Subject
Company has licensed as licensee third party software material to the Business,
except for widely available third party software which is of an "off-the-shelf"
nature and not modified or customized;
(viii) any material limited liability company, joint
venture or partnership agreements;
(ix) any agreement materially limiting the freedom of
any of the Subject Companies from engaging in any line of business in any
geographic area or to compete with any Person;
(x) any agreement which provides for an outstanding loan
or advance (excluding advances for travel and entertainment expenses made in
accordance with such Subject Company's customary policies for such advances) in
an amount in excess of $25,000 to any shareholder, director, or executive
officer of such Subject Company;
(xi) any agreement with Seller or any Affiliate of
Seller which is not a Subject Company;
(xii) any agreement providing for a Lien (other than a
Permitted Lien) upon a material portion of the assets of such Subject Company;
or
(xiii) any agreements with suppliers, or distribution or
sale contracts which involve payments in excess of $500,000 per year and which
are not terminable by the Subject Company party thereto upon less than twelve
(12) months' notice.
(b) The Contracts Schedule sets forth a true, complete and
correct list of all customers under all leases and other agreements, both
written and oral, to which a Subject Company is a party and pursuant to which a
customer leases or otherwise has possession of a Container (collectively, the
"Container Leases") along with a description of Containers associated with such
customers.
(c) Except as set forth on the Contracts Schedule, and except
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (i) all of the Scheduled Contracts and Container Leases
are in full force and effect and constitute legal and binding obligations of the
Subject Company party thereto, and (ii) neither the Subject Company party
thereto nor, to the knowledge of Seller, any other party is in breach of or
default under, and, to the knowledge of Seller, no event has occurred which with
notice or lapse of time, or both, would become a breach of or default under, any
Scheduled Contract or Container Lease. Except as set forth on the Contracts
Schedule or the Consents and Approvals Schedule, neither Seller nor any Subject
Company has received written notice of the intention of any other party to such
Scheduled Contract or Container Lease to cancel, terminate or renegotiate any
such Scheduled Contract or Container Lease except pursuant to the express terms
thereof.
(d) Seller has made available to Purchaser true and correct
copies of all written Scheduled Contracts and Container Leases and true and
complete descriptions of all non-written Scheduled Contracts and Container
Leases which are disclosed on the Contracts Schedule, in each case together with
all amendments, waivers, or other changes thereto.
14
(e) Seller has not received written notice that any of the
five (5) largest customers of any Subject Company (measured by annualized lease
revenue under Container Leases as of the date hereof) intend to cease leasing
Containers or to alter materially the amount of the Container rental business
any such customer is presently doing with any Subject Company.
(f) Except as set forth on the Contracts Schedule, there are
no fixed price purchase options at the end of lease term or any arrangement
whereby portions of rental payments may be credited towards the purchase of a
Container.
(g) Except as set forth on the Contracts Schedule, no Subject
Company has committed to make available to any Person any Containers except
pursuant to an existing lease under usual and customary terms, nor committed to
make any Containers available for sale, lease or use at special rates or without
charge to any charity or non-profit organization or event.
2.15 Intellectual Property.
(a) The Intellectual Property Schedule lists all patents,
registered trademarks, registered service marks and registered copyrights and
all applications for registration for any of the foregoing owned by any Subject
Company that are material to the Business (collectively, the "Registered
Intellectual Property"). Except as set forth on the Intellectual Property
Schedule and for matters that would not reasonably be expected to have a
Material Adverse Effect, (i) the right, title or interest of each Subject
Company in each item of its Registered Intellectual Property and other
Intellectual Property which such Subject Company owns that is material to the
Business (collectively, "Owned Intellectual Property") is free and clear of
Liens, except for Permitted Liens, (ii) there is no material claim against any
Subject Company by any Person or any Proceeding pending against any Subject
Company or, to the knowledge of Seller, threatened against any Subject Company
which challenges the validity or enforceability of the Registered Intellectual
Property or the rights of such Subject Company to continued use of the Owned
Intellectual Property; and (iii) Seller has no knowledge of any infringement or
improper use by any third party of the Owned Intellectual Property which
infringement or use would reasonably be expected to have a Material Adverse
Effect.
(b) Except as set forth on the Intellectual Property Schedule
and for matters that would not reasonably be expected to have a Material Adverse
Effect, with respect to any non-registered trademarks, service marks, or
copyrights owned by any Subject Company and necessary to the conduct of the
Business (the "Non-Registered Intellectual Property"), (i) the right, title or
interest of each Subject Company in each item of its Non-Registered Intellectual
Property is free and clear of Liens, except for Permitted Liens, (ii) there is
no material claim by any Person or any Proceeding pending against any Subject
Company or, to the knowledge of Seller, threatened against any Subject Company
that challenges the use of any of the Non-Registered Intellectual Property by
the Subject Company using same, or the rights of such Subject Company to
continued use of the Non-Registered Intellectual Property; and (iii) Seller has
no knowledge of any infringement or improper use by any third party of the
Non-Registered Intellectual Property which infringement or improper use would
reasonably be expected to have a Material Adverse Effect. To Seller's knowledge,
no Subject Company has taken or omitted to
15
take any action which action or omission to act would have the effect of waiving
any material rights in or to any item of Non-Registered Intellectual Property
which is necessary to the conduct of the Business.
2.16 Tax Matters. Except as set forth on the Tax Schedule:
(a) the Subject Companies have filed with the appropriate
taxing or other Governmental Authorities all Income Tax and other material Tax
Returns required to be filed through the date hereof, and all Taxes shown as due
on such Tax Returns are correct as to amount and have been paid. No Subject
Company has requested any extension of time within which to file any such Tax
Returns which is currently in effect. Seller has made available to Purchaser
copies of all Income Tax Returns of the Subject Companies for their last three
(3) Tax Periods for which Tax Returns were required to be filed prior to the
Effective Time;
(b) all Taxes that any of the Subject Companies has been
required to collect or withhold have been duly collected or withheld and, to the
extent required when due, have been or will be duly paid to the proper taxing or
other Governmental Authority;
(c) during the ten (10) years prior to the Effective Time, no
deficiencies for Taxes of any of the Subject Companies have been claimed,
proposed or assessed in writing by any taxing or other Governmental Authority.
There are no pending or, to the knowledge of Seller, threatened audits, suits,
proceedings, actions or claims for or relating to any liability in respect of
Taxes of any of the Subject Companies. Audits of federal, state, local and
foreign Tax Returns by the relevant taxing or other Governmental Authorities
have been completed for the Tax Periods set forth on the Tax Schedule. No
extension of a statute of limitations relating to Taxes is in effect with
respect to any Subject Company;
(d) there are no Liens for Taxes (other than for current Taxes
not yet due and payable) upon the assets of any Subject Company; and
(e) no Subject Company is a party to or bound by any binding
tax sharing, tax indemnity or tax allocation agreement or other similar
arrangement with any Person other than a Subject Company.
2.17 Employment Matters - Personnel Information.
(a) Except as set forth on the Personnel Information Schedule,
no Subject Company has agreed to recognize any union, works council or other
collective bargaining unit, nor has any union, works council or other collective
bargaining unit been certified as representing any Subject Company Employees.
Seller has no knowledge of any organizational effort currently being made or
threatened by or on behalf of any labor union or works council with respect to
Subject Company Employees. There is no labor strike, slowdown, work stoppage or
lockout actually pending or, to the knowledge of Seller, threatened against any
Subject Company.
(b) Except as listed or described on the Personnel Information
Schedule and for any exceptions which, individually or in the aggregate, would
not result in a Material Adverse Effect, each Subject Company (i) is and has
been in substantial compliance in
16
all material respects with all applicable Laws regarding employment and
employment practices and those laws relating to terms and conditions of
employment, wages and hours, occupational safety and health and workers'
compensation, (ii) has no unfair labor practice charges or complaints pending
or, to the knowledge of Seller, threatened against it before any Governmental
Authority, (iii) has no grievances pending or, to the knowledge of Seller,
threatened against it, and (iv) has no charges pending before agencies of any
province or locality responsible for the prevention of unlawful employment
practices.
(c) Set forth in the Personnel Information Schedule are
anonymised details of all Royal Wolf UK employees and the principal terms of
their contract of employment including:
(i) their remuneration (including any benefits and
privileges provided or which Royal Wolf UK is bound to provide to
them or their dependents whether now or in the future);
(ii) details of relevant bonus programs, bonus awards
and entitlement to future bonus;
(iii) details of relevant pension schemes and
obligations, including employer and employee contributions;
(iv) the commencement date of each contract and the date
on which continuous service began;
(v) the length of notice or the severance pay necessary
to terminate each contract, or if a fixed term, the expiry date of
the fixed term and details of any previous renewals;
(vi) the type of contract (whether full or part-time or
other);
(vii) their date of birth; and
(viii) the country in which the Royal Wolf UK employee
works or performs services and/or is paid and the law governing the
contract.
(d) Set forth in the Personnel Information Schedule are
anonymised details of all Royal Wolf UK employees who are on secondment,
maternity, paternity, adoption or other leave or absent due to ill-health or for
any other reason.
(e) No notice to terminate the contract of employment of any
Royal Wolf UK employee (whether given by Royal Wolf UK or by its employees) is
pending, outstanding or threatened and no dispute, claim or complaint under any
Laws or otherwise is outstanding between Royal Wolf UK and any of its employees
or former employees relating to their employment or its termination.
17
(f) No offer of employment or engagement has been made by
Royal Wolf UK that has not yet been accepted, or which has been accepted but
where the employment or engagement has not yet started.
(g) Save as set out in the Employee Plans Schedule there are
no retention or change of control agreements or arrangements applicable to Royal
Wolf UK employees.
(h) All contracts between Royal Wolf UK and its employees are
terminable at any time on three months' notice or less without compensation
(other than for statutory liability), and in those jurisdictions where such a
provision is unlawful, all contracts between Royal Wolf UK and its employees are
terminable at any time without notice but with statutory minimum compensation
(other than for statutory liability). All contracts between Royal Wolf UK and
its employees are terminable at any time for just cause and/or justified reasons
according to the applicable collective bargaining agreement and/or national law.
(i) Royal Wolf UK is not a party to, bound by or proposing to
introduce in respect of any of its directors or employees any redundancy payment
scheme in addition to statutory redundancy pay, nor is there any agreed
procedure for redundancy selection.
(j) Royal Wolf UK has not received any claim for failure to
provide information or to consult with Royal Wolf UK employees under any Laws.
(k) Royal Wolf UK has not in the last 12 month period agreed
to make an ex gratia payment or provided or agreed to provide an ex gratia
benefit to a present or former director or officer, employee or former employee
or to their dependants in connection with the actual or proposed termination or
suspension of employment or variation of an employment contract.
(l) There are no sums owing to or from any Royal Wolf UK
employee other than reimbursement of expenses, wages for the current salary
period and holiday pay for the current holiday year as at the date hereof.
(m) Royal Wolf UK has not offered, promised or agreed to any
future variation in the contract of any employee.
(n) In respect of each Royal Wolf UK employee, Royal Wolf UK
has:
(i) performed all obligations and duties they are
required to perform (and settled all outstanding claims), including
salaries, social security payments and other statutory obligations,
whether or not legally binding;
(ii) complied with and continue to comply with the terms
of any relevant agreement or arrangement with any trade union,
employee representative or body of employees or their
representatives (whether binding or not);
18
(iii) maintained adequate, suitable and up to date
records;
(iv) complied with and continue to comply with
applicable employment legislation, including requirements concerning
employment contracts, working environment and social security
legislation.
2.18 Employment Matters - Employee Plans.
(a) The Employee Plans Schedule lists each employee benefit
plan (as defined in Section 3(3) of ERISA) and each material plan, program,
policy or arrangement, including, but not limited to, bonus, deferred
compensation, incentive compensation, severance or termination pay, salary
continuation, vacation, supplemental unemployment benefit, plans, programs or
arrangements maintained, or contributed to (or required to be contributed to),
by the Subject Companies or on behalf of employees of the Subject Companies
("Subject Company Employees") whether or not funded, formal or informal, other
than benefit plans which are mandated by Law or maintained by a Governmental
Authority (collectively, the "Benefit Plans"). The Benefit Plans which are
maintained for Subject Company Employees in the United States are referred to as
"U.S. Benefit Plans" and the Benefit Plans which are maintained for Subject
Company Employees in jurisdictions outside the United States and are exempt from
ERISA by reason of Section 4(b)(4) thereof are referred to herein as "Foreign
Benefit Plans".
(b) None of the U.S. Benefit Plans which is a "pension plan"
within the meaning of Section 3(2) of ERISA (a "U.S. Pension Plan") is a
"multiemployer plan" as defined in Section 3(37) of ERISA, or is subject to the
requirements of Title IV of ERISA, Section 302 of ERISA or Section 412 of the
Code. No Subject Company has any material liability to the Pension Benefit
Guaranty Corporation under Title IV of ERISA, nor has any contingent liability
under Title IV of ERISA with respect to an ERISA Affiliate. Each U.S. Pension
Plan that is intended to be "qualified" within the meaning of Section 401(a) of
the Code has received a determination letter from or may rely upon an opinion
letter of the United States Internal Revenue Service that it is so qualified,
and no fact or event has occurred since the date of such determination letter
that would reasonably be expected to affect adversely the qualified status of
any such U.S. Pension Plan.
(c) Each U.S. Benefit Plan has been administered in all
material respects in accordance with its terms and all applicable Laws,
including ERISA and the Code, and, except to the extent such failure would not
result in a Material Adverse Effect, all contributions required to be made on
behalf of Subject Company Employees under the terms of any of U.S. Benefit Plans
which are due as of the date hereof have been timely made.
(d) No U.S. Benefit Plan that is a "welfare plan" (as defined
in Section 3(1) of ERISA) (the "U.S. Welfare Plans") provides or promises
post-retirement health or life benefits to current employees or retirees of any
Subject Company, except to the extent required under any applicable state law or
under Section 4980B of the Code. Each U.S. Welfare Plan that is a "group health
plan" (as defined in Code Section 5000(b)) has at all times been in material
compliance with the provisions of Section 4980B of the Code and Parts 6 and 7 of
Title I of ERISA and any similar applicable state laws.
19
(e) Except as set forth on the Employee Plans Schedule or to
the extent such noncompliance would not result in a Material Adverse Effect: (i)
each Foreign Benefit Plan is, and has been, established, registered (where
required), qualified, administered, funded (where required) and invested in
compliance in all material respects with the terms thereof and all applicable
Laws, (ii) with respect to each Foreign Benefit Plan, all required filings and
reports have been made in a timely manner with all Governmental Authorities,
(iii) all obligations of the Subject Companies to or under the Foreign Benefit
Plans (whether pursuant to the terms thereof or any applicable Laws) have been
satisfied, and there are no outstanding defaults or violations thereunder by any
Subject Company, (iv) full payment has been made in a timely manner of all
amounts which are required to be made as contributions, payments or premiums to
or in respect of any Foreign Benefit Plan under applicable Law or under any
Foreign Benefit Plan, (v) no material taxes, penalties or fees are owing or
assessable under any such Foreign Benefit Plan, (vi) to the knowledge of Seller,
no event has occurred with respect to any Foreign Benefit Plan which would
result in the revocation of the registration of any registered Foreign Benefit
Plan, or which would entitle any Person (without the consent of the sponsor of
such Foreign Benefit Plan) to wind up or terminate any such Foreign Benefit
Plan, in whole or in part, or could otherwise reasonably be expected to have an
adverse effect on the tax status of any such Foreign Benefit Plan, and (vii) no
contribution holidays have been taken under any of the Foreign Benefit Plans.
(f) Except for the Transaction Bonuses or as set forth on the
Employee Plans Schedule, the execution and delivery of, and performance of the
transactions contemplated by, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under any
Benefit Plan or individual agreement that will or may result in any payment
(whether of severance pay or otherwise), acceleration, vesting or increase in
benefits with respect to any Subject Company Employee.
2.19 Insurance. The Insurance Schedule contains a complete and
accurate list of all existing insurance policies maintained by any Subject
Company (the "Subject Company Insurance"). The Subject Company Insurance is in
full force and effect, and provides coverage as may be required by applicable
Laws and by any Contracts to which any Subject Company is a party. Except as
would not, individually or in the aggregate, have a Material Adverse Effect, no
Subject Company is in default under any Subject Company Insurance nor has any
Subject Company failed to give notice or present any claim under any such
coverage in a due and timely fashion. There are no outstanding unpaid premiums
except in the ordinary course of business and no notice of cancellation or
non-renewal of any such coverage has been received.
2.20 Books and Records. The minute books and corporate records of
the Subject Companies contain correct, complete and accurate copies of the
minutes of all board of directors, director committee or shareholders meetings
and of all written consents executed in lieu of the holding of any such meeting,
in each case to the extent such minutes or written consents include material
actions of the board of directors or shareholders.
2.21 General Corporate Information. The General Corporate
Information Schedule lists the following information for each Subject Company:
(a) its full and correct legal name, type of organization, jurisdiction of
organization, organizational ID number (if applicable)
20
and mailing address; (b) its place of business or, if it has more than one place
of business, the location of its chief executive office; (c) its bank accounts;
and (d) its officers and directors.
2.22 Certain Business Practices. None of Seller or any Subject
Company, nor any directors, officers, agents, or employees of Seller or any
Subject Company has (i) used any funds of any Subject Company for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to
political activity or (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the United States Foreign Corrupt
Practices Act of 1977, as amended, which, in the cases of clauses (i) and (ii),
will constitute a Material Adverse Effect.
2.23 Office of Foreign Assets Control. None of the Seller or any
Subject Company: (i) is a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by the U.S. Department of the Treasury's
Office of Foreign Assets Control ("OFAC") available at:
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇/▇▇▇/▇▇▇▇▇.▇▇▇▇, or as otherwise
published from time to time; (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a Person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at:
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇▇▇.▇▇▇▇, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or Person; or (iii) derives more than 10% of its assets or
operating income from investments in or transactions with any such country,
agency, organization or Person.
2.24 Export Control. Each of the Seller and each Subject Company is:
(i) without notice of violation of and in material compliance with all relevant
anti-boycott laws, regulations and guidelines, including without limitation
Section 999 of the Code and the regulations and guidelines issued pursuant
thereto and the Export Administration Regulations administered by the U.S.
Department of Commerce, as amended from time to time, including all reporting
requirements and is not a party to any agreement requiring it to participate in
or cooperate with the Arab boycott of Israel, including any agreement to provide
boycott-related information or to refuse to do any business with any person or
entity for boycott-related reasons; and (ii) without notice of violation of and
in material compliance with any applicable export or reexport control or
sanctions laws, orders or regulations of any and all applicable jurisdictions,
including without limitation the United States, the European Union and member
states thereof, Canada, Mexico and Taiwan, including without limitation the
Export Administration Regulations administrated by the U.S. Department of
Commerce and sanctions and embargo executive orders and regulations administered
by OFAC, as amended from time to time, and without notice of violation of and in
material compliance with any required export or re-export licenses or
authorizations granted under such laws, regulations or orders.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser warrants to Seller as of the date hereof and as of the
Closing Date, the following:
21
3.01 Organization. Purchaser is a Corporation validly existing and
in good standing under the laws of Delaware.
3.02 Authority and Binding Effect. Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and all
other certificates, agreements or other documents to be executed and delivered
by Purchaser and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance of this Agreement by Purchaser has been
duly and validly authorized by all necessary corporate action of Purchaser and
no additional authorization on the part of Purchaser is necessary in connection
with the execution, delivery and performance of this Agreement. This Agreement
has been duly executed and delivered by Purchaser and this Agreement is a
legally valid and binding obligation of Purchaser, enforceable against Purchaser
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and to general principles of equity.
3.03 No Violations. The execution and delivery of this Agreement by
Purchaser, and the performance and consummation of the transactions contemplated
by this Agreement by Purchaser, do not and will not, (a) conflict with or
violate any provision of the certificate of incorporation, bylaws or other
organizational documents of Purchaser, (b) conflict with, or result in the
breach of, or constitute a default under, or result in the termination,
cancellation or acceleration (whether after the giving of notice or the lapse of
time or both) of any right or obligation of Purchaser under, any contract or
agreement to which Purchaser is party or to which any of its assets is subject,
or (c) to the knowledge of Purchaser, violate or result in a breach of or
constitute a default under any Law applicable to Purchaser or by which Purchaser
or any of its assets is bound or affected, except, in the cases of clauses (b)
and (c), for any conflict, breach, default, termination, cancellation,
acceleration, loss or violation which, individually or in the aggregate, would
not materially impair Purchaser's ability to perform its obligations hereunder
and is not reasonably likely to prohibit or delay the performance of this
Agreement by Purchaser.
3.04 Consents and Approvals. Except for any Consent required under
applicable Laws relating to competition, no Consent is required to be obtained
by Purchaser or any Affiliate of Purchaser in connection with the execution,
delivery and performance by Purchaser of this Agreement, other than in all cases
where the failure to obtain such Consent would not, individually or in the
aggregate, materially impair Purchaser's ability to perform its obligations
hereunder and is not reasonably likely to prohibit or delay the performance of
this Agreement by Purchaser.
3.05 Brokers and Finders. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of Purchaser who might be entitled to any fee or commission from
Purchaser in connection with the transactions contemplated by this Agreement.
3.06 Absence of Proceedings. There is no Proceeding pending or, to
the knowledge of Purchaser, threatened, whether by or before any Governmental
Authority or otherwise, against Purchaser or any Affiliate of Purchaser that
would reasonably be expected to
22
materially impair Purchaser's ability to perform its obligations hereunder or
reasonably be likely to prohibit or delay the performance of this Agreement by
Purchaser.
3.07 Investment Intent. Purchaser is acquiring the Shares for its
own account and not with a view to their distribution within the meaning of
Section 2(11) of the Securities Act.
3.08 Financial Capability. Purchaser has available borrowing
availability under existing credit facilities to fund the consummation of the
transactions contemplated by this Agreement and to satisfy all other costs and
expenses arising in connection therewith, without requirement of approval or
consent by any lender or other Person.
3.09 Due Diligence by Purchaser. The representations and warranties
set forth in Article II constitute the sole and exclusive representations and
warranties of Seller to Purchaser in connection with the transactions
contemplated hereby, and Purchaser acknowledges and agrees that Seller is not
making any representation or warranty whatsoever, express or implied, beyond
those expressly given in this Agreement, including any implied warranty as to
condition, merchantability, or suitability as to any of the assets of any
Subject Company and it is understood that Purchaser takes such assets and the
assets related thereto as is and where is (subject to the benefit of the
representations and warranties set forth in Article II of this Agreement).
Purchaser further acknowledges and agrees that any estimates, budgets,
projections, forecasts or other predictions that may have been provided to
Purchaser or any of its Representatives are not representations or warranties of
Seller or its Affiliates, and that actual results may vary substantially from
any such estimates, budgets, projections, forecasts or other predictions.
Purchaser further acknowledges and agrees that (a) except and solely to the
extent of the representations and warranties in Article II, Seller has made no
representation or warranty either expressed or implied as to the accuracy or
completeness of any information regarding the Business, the Subject Companies or
the transactions contemplated hereby furnished or made available to Purchaser
and its Representatives, and (b) except with respect to the representations and
warranties in Article II, Purchaser shall have no claim or right to
indemnification pursuant to Article VII with respect to any information,
documents or materials furnished by Seller, any of its Affiliates or any of
their respective Representatives to Purchaser, including the Confidential
Information Memorandum dated December 2005 prepared by CIBC World Markets,
Corp., in expectation of the transactions contemplated hereby.
ARTICLE IV.
COVENANTS
4.01 Alternative Proposals. From the date hereof, until the earlier
of the Effective Time or the termination of this Agreement as provided herein,
Seller agrees that neither it nor any of its Subsidiaries or Affiliates, nor any
of their Representatives, shall, directly or indirectly, (i) encourage, invite,
initiate or solicit any inquiries relating to or the submission or making of a
proposal by any Person with respect to the sale of any material part of the
assets of the Subject Companies, the sale or issuance of any equity securities
(howsoever described) or other securities of any Subject Company, or the merger,
share exchange, consolidation or other
23
reorganization of any Subject Company (each, an "Alternative Transaction") or
(ii) participate in or encourage, invite, initiate or solicit negotiations or
discussions with, or furnish or cause to be furnished any information to, any
Person relating to an Alternative Transaction. Upon the execution of this
Agreement, Seller shall immediately cease, or cause to be ceased, any
discussions or negotiations with any Person regarding any proposed or potential
Alternative Transaction and shall request the prompt return to Seller, or
destruction of, any confidential information provided in connection with any
such discussions or negotiations. Seller's board of directors shall not cause
Seller to enter into any memorandum of understanding, agreement in principle,
letter of intent, contract or agreement (whether written or oral) related to any
Alternative Transaction.
4.02 Conduct of the Business through the Effective Time. During the
period from the date hereof through and including the Effective Time, except as
otherwise contemplated by this Agreement or as Purchaser shall otherwise consent
in writing, Seller shall cause the Subject Companies to (i) conduct their
business and operations in the ordinary and usual course in a manner consistent
with past practice, and (ii) use commercially reasonable efforts to preserve
intact their present business organization and to preserve the good will and
relationships with current customers, suppliers and others having significant
business dealings with them. Without limiting the foregoing, during the period
from the date hereof through and including the Effective Time or termination of
this Agreement, except as otherwise provided for in this Agreement or with the
prior consent of Purchaser (which consent shall not be unreasonably withheld,
conditioned or delayed), other than in the ordinary course of business, Seller
shall cause the Subject Companies not to:
(a) commence or enter into arrangements for capital
expenditures in excess of $500,000, individually or in the aggregate, other than
purchases of Containers which may be made to satisfy the condition precedent set
forth in Section 5.02(c)(ii)(x);
(b) dispose of any capital assets if the greater of the book
value or the fair market value, individually or in the aggregate, of such assets
exceeds $500,000, other than disposals of Containers which may be made to
satisfy the condition precedent set forth in Section 5.02(c)(ii)(x), or incur,
create or assume any Lien on any individual capital asset if the greater of the
book value or the fair market value of such capital asset exceeds $500,000,
other than Permitted Liens and Liens created in connection with transactions
permitted under clause 4.02(a);
(c) enter into any Contract with Seller or any Affiliate of
Seller other than on terms and conditions not less favorable to the Subject
Company than could be obtained from third parties who are not Seller or such
Affiliates, nor enter into any Contract (including any hedging arrangement or
other derivative transaction) in excess of $100,000, or incur any Indebtedness
in excess of $100,000 in the aggregate, other than Contracts and Indebtedness
relating to transactions permitted under clauses 4.02(a) and 4.02(b) or
associated with Permitted Liens;
(d) except as required by Law or the terms of any existing
Contract or for increases for which Seller shall be solely responsible, increase
the salary, wage, rate of compensation, commission, bonus or other direct or
indirect remuneration payable to, or other
24
compensation of, any executive officer of the Subject Companies or enter into
any Contract in respect of any such increase, nor amend, adopt or terminate any
Benefit Plan that would materially increase the liability of such Subject
Company or enter into any collective bargaining agreement covering Subject
Company Employees; provided, however, prior to the Effective Time Royal Wolf US
shall terminate the Severance Pay Plan effective November 1, 2004 of Royal Wolf
US (the "Royal Wolf US Severance Pay Plan") and the Seller may enter into
individual severance arrangements with the employees of Royal Wolf US which will
provide for severance according to the form of individual severance agreement
set forth on the Employee Plans Schedule (the "Severance Arrangements");
(e) amend in any material respect any Scheduled Contract that
would materially and adversely affect the use and enjoyment thereof by
Purchaser, or terminate any of the Scheduled Contracts other than pursuant to
its terms (except with respect to termination of such Scheduled Contracts caused
by the termination or default of any other party thereto) or default in the
performance of any material covenant or obligation thereunder which default is
not cured within any applicable grace period;
(f) make any material change in any accounting principle,
practice, policy or method, other than as required by GAAP or any applicable
Law;
(g) merge with or into or consolidate with any other Person or
acquire any business or assets (other than inventory) of any other Person;
(h) amend its certificate of incorporation, memorandum of
association, bylaws or similar organizational documents;
(i) purchase or enter into any other agreement or obligation
to purchase any securities of, or interests in, any Person;
(j) issue or sell any capital stock or other securities,
options, warrants, calls or other rights to acquire such stock; or
(k) take, agree or commit to do any of the foregoing.
Notwithstanding the foregoing, during the period from the date hereof through
and including the Effective Time or termination of this Agreement, except with
the prior consent of Purchaser, Seller shall cause the Subject Companies not to
dispose, individually or in the aggregate, of more than ten (10) Containers that
are container office modules, container office storage combos, container
canteens, container cabins, or refrigerated containers.
4.03 Access to Information; Confidentiality; Environmental
Adjustment.
(a) Between the date hereof and the Closing Date, Seller shall
cause the Subject Companies to afford the Representatives of Purchaser
reasonable access, at reasonable times during normal business hours, to the
personnel, premises, properties, Contracts, books and records, and other
documents and financial, operating and other data of the Subject Companies as
Purchaser may reasonably request. The foregoing shall not require Seller or any
Subject Company to permit any inspection, or to disclose any information, that
in their
25
reasonable judgment is reasonably likely to result in the waiver of any
attorney-client privilege or the disclosure of any trade secrets of third
parties or violate any of their obligations with respect to confidentiality if
Seller or such Subject Company, as the case may be, shall have used reasonable
efforts to obtain the consent of such third party to such inspection or
disclosure. Seller shall not be required, nor shall Seller be required to cause
the Subject Companies, to take any action beyond reasonable efforts or that
would unreasonably disrupt their respective normal operations. The
confidentiality of all such documents and information furnished in connection
with the transactions contemplated by this Agreement shall be governed by the
terms of the Confidentiality Agreement.
(b) Purchaser agrees to hold all of the books and records
(including, without limitation, Contracts, other documents, and financial,
operating and other data) of each Subject Company existing on the Closing Date
and not to destroy or dispose of any such books or records for a period of six
(6) years from the Closing Date or such longer time as may be required by Law.
(c) Seller (or its successors or assigns) may retain (i) one
(1) copy of the materials included in the data room organized by Seller in
connection with the transactions contemplated by this Agreement, together with a
copy of all documents referred to in such materials, (ii) all internal
correspondence and memoranda, valuations, investment banking presentations and
bids received from others in connection with the sale of the Shares, and (iii) a
copy of all unconsolidated, consolidating and consolidated financial information
and all other accounting records prepared or used in connection with the
preparation of the Financial Statements, the Interim Balance Sheets, the
December Determination, the December Determination Financial Statements, the
Closing Financial Statements and the Closing Determination.
Seller acknowledges that Purchaser has heretofore engaged Environmental
Resources Management ("ERM") to perform Phase I environmental testing with
respect to Leased Real Property in the United States. Seller shall provide ERM
such access to the premises, properties, and documents of Royal Wolf US as such
consultant may reasonably request in connection with such testing and the
preparation of its Phase I environmental reports. Purchaser shall cause ERM to
provide Seller with a copy of its final reports (the "ERM Environmental
Reports"), and any interim findings, as and when ERM provides same to Purchaser.
If, based on the ERM Environmental Reports, the Parties mutually conclude that
Royal Wolf US could be deemed financially responsible party for environmental
remediation at a Leased Real Property location, then the Parties will work in
good faith to promptly arrive at a mutually agreed estimate of the costs of
remediation (the "Agreed Remediation Amount"). If the Agreed Remediation Amount
is: (i) less than or equal to $1.0 million, then Seller shall pay the Agreed
Remediation Amount to Purchaser at the Closing in the form of a downward
adjustment to the Purchase Price against the delivery of a release and indemnity
by Purchaser, satisfactory in form and substance to Seller, the effect that
Seller shall have no further liability, and shall be indemnified, with respect
to those matters identified for remediation in the ERM Environmental Reports (a
"Limited Environmental Liability Release Agreement"); and (ii) greater than $1.0
million, then Seller may, in its sole and absolute discretion, elect to (A) pay
the Agreed Remediation Amount to Purchaser at the Closing in the form of a
downward adjustment to the Purchase Price against the delivery of a Limited
Environmental Liability Release Agreement, or (B) terminate this
26
Agreement subject to Purchaser's right to elect to close the transactions in
accordance with the terms of this Agreement with a $1.0 million downward
adjustment of the Purchase Price and the delivery of a Limited Environmental
Liability Release Agreement. In addition to being an adjustment to the Purchase
Price, the full amount of any adjustment made under this Section 4.03(d), up to
$1.0 million, shall be offset against the Indemnification Cap amount (i.e.,
would in effect lower, on a Dollar for Dollar basis, the maximum amount of
indemnifiable Damages recoverable by Purchaser under Article VII).
4.04 Consents and Approvals.
(a) Upon the terms and subject to the conditions of this
Agreement, each Party will do all things reasonably practicable and use
reasonable efforts to fulfill the conditions precedent to the other Party's
obligations under this Agreement.
(b) If any Subject Company has not obtained by Closing all of
the Scheduled Consents listed on the Closing Consents Schedule, then, to the
extent reasonably practicable, the Parties shall use reasonable efforts to enter
into one or more alternative, lawful arrangements under which Purchaser shall
have the benefit from and after Closing of such Contract or Permit for which the
Scheduled Consent was not able to be obtained prior to Closing.
4.05 Public Announcements. The initial press release relating to
this Agreement shall be issued jointly by the Parties in a form previously
agreed upon by the Parties. Thereafter, the Parties shall consult with each
other, and use reasonable efforts to agree upon the text of any press release,
before issuing any press release or making any public statement with respect to
this Agreement or the transactions contemplated hereby and shall not issue any
such press release or make any such public statement without the prior written
consent of the other Party, which shall not be unreasonably withheld or delayed;
provided, however, that any Party may, without the prior written consent of the
other Party, issue such press release or make such public statement as may, upon
the advice of counsel, be required by applicable Law or the rules and
regulations of the Securities and Exchange Commission or the Nasdaq Stock Market
in the case of Purchaser, in advance of obtaining such prior written consent, in
which case, the Parties shall timely cooperate to reach mutual agreement as to
the language of any such report, statement or press release.
4.06 Employee Benefits Matters.
(a) Purchaser agrees to cause the Subject Companies, for a
period of one (1) year following the Closing Date, to provide the Subject
Company Employees benefits that are substantially equivalent to the benefit that
Purchaser then provides to its employees with the same level of responsibility
or seniority; provided, however, that Purchaser shall not be obligated under the
terms of this Agreement to cause the continuation of any employment relationship
with any Subject Company Employee for any specific period of time. Purchaser
agrees that for purposes of all benefit plans established by Purchaser in which
a Subject Company Employee shall be eligible to participate after the Closing
Date on which an employee's benefit depends, in whole or in part, on length of
service, credit will be given to such Subject Company Employee for service
previously credited with the Subject Companies prior to the Closing Date,
provided, that such crediting of service does not result in duplication of
27
benefits, and provided that such crediting of service shall not be given for
benefit accrual purposes under any defined benefit plan. Purchaser agrees that
the relevant Subject Company or Purchaser shall make all payments to which
Subject Company Employees become entitled under the terms of the retention
agreements (if any) set forth on the Employee Plans Schedule (the "Retention
Agreements") and Seller shall have no liability for payments under or with
respect to such Retention Agreements.
(b) Purchaser agrees that the Subject Companies will act as
payroll agent for Seller or an Affiliate of Seller with respect to the payment
of the Transaction Bonuses and all amounts under the Severance Arrangements. In
that regard, Seller shall, on or prior to the Closing Date, deposit with the
Subject Companies the amount of the Transaction Bonuses and any additional
employer liabilities associated with the payment of the Transaction Bonuses
(e.g., social security, national insurance or other employment taxes). Purchaser
agrees to cause each Subject Company that is the employer of a Subject Company
Employee entitled to a Transaction Bonus and/or severance under a Severance
Arrangement to pay on behalf of Seller or an Affiliate of Seller, the
Transaction Bonuses and/or any such severance less any applicable tax
withholdings to the applicable Subject Company Employee as directed by Seller.
Purchaser shall cause each Subject Company which pays a Transaction Bonus and/or
severance on behalf of Seller or an Affiliate of Seller to timely remit all
income and employment tax withholdings on the Transaction Bonuses and/or
severance paid to the applicable Governmental Authority. As soon as practicable
after payment of any severance under a Severance Arrangement, Purchaser shall
remit to Seller an invoice for the amount of severance paid on Seller's behalf.
Seller shall reimburse Purchaser within 30 days of receipt of such invoice for
all severance paid. The Parties agree that Seller shall have full liability for
the Transaction Bonuses and the severance under any Severance Arrangement and as
such shall be entitled to claim all tax deductions applicable for payment of the
Transaction Bonuses and severance under any Severance Arrangement. Other than
its obligations to act as a payroll agent with respect to the Transaction
Bonuses and Severance Arrangements, Purchaser shall have no liability for the
Transaction Bonuses or the Severance Arrangements and will not claim, nor be
entitled to claim any tax deductions applicable to the Transaction Bonuses or
Severance Arrangements.
(c) The Parties acknowledge and agree that all provisions
contained in this Section 4.06 with respect to Subject Company Employees are
included for the sole benefit of the respective Parties and shall not create any
right in any other Person, including, without limitation, any Subject Company
Employees or former Subject Company Employees.
4.07 Directors' and Officers' Indemnification; Release from
Liability.
(a) The provisions of the organizational documents of the
Subject Companies concerning the elimination of Liability and indemnification of
directors and officers shall not, for a period of six (6) years from the Closing
Date (or, if longer, the period required by applicable Law), be amended in any
manner that would adversely affect the rights thereunder of any Person that is
as of the date hereof or the Closing Date a current or former officer or
director of any Subject Company. In addition to the foregoing, from and after
the Closing Date, Purchaser and each Subject Company shall, jointly and
severally, indemnify, and hold harmless each Person who is, or at the Closing
Date will be, a current or former officer or director of such Subject Company
(the "D&O Indemnitees") against all Damages arising out of or pertaining to
28
acts or omissions (or alleged acts or omissions) of the D&O Indemnitees, or any
of them, in their capacities as such, excluding, with respect to each D&O
Indemnitee, Damages that are finally determined by a court of competent
jurisdiction (after the exhaustion of all appeals) to have resulted solely from
the gross negligence and willful misconduct of such D&O Indemnitee. To the
extent consistent with the rights afforded D&O Indemnitees as of January 1,
2006, and to the maximum extent permitted by applicable Law, the indemnification
and related rights hereunder shall be mandatory rather than permissive, and
Purchaser and the Subject Company, as applicable, shall promptly advance
expenses in connection with such indemnification to the extent permitted under
applicable Law; provided, that to the extent required by Law, the Person to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such Person is not entitled to indemnification.
(b) Effective upon the Closing, Purchaser and each Subject
Company, and each of their respective Representatives, successors and assigns
(collectively, the "Releasing Parties"), shall be deemed to have remised,
released and forever discharged the individuals set forth on the D&O Released
Parties Schedule (collectively, the "D&O Released Parties") of and from any and
all Claims which the Releasing Parties, or any of them, now have, ever had, or
at the Closing may have, or hereafter can, shall or may have, against the D&O
Released Parties, or any of them, for, upon or by reason of any matter, cause or
thing whatsoever, from the beginning of time through the Closing Date, except
Claims arising directly in connection with this Agreement and the transactions
contemplated hereby, and Claims based upon a D&O Released Party's recklessness
or intentional misconduct.
As of the Closing Date, Purchaser, on behalf of each of the
Releasing Parties, expressly acknowledges that it has had, or has had and
waived, the opportunity to be advised by independent legal counsel and hereby
waives and relinquishes all rights and benefits afforded by Section 1542 of the
California Civil Code (and any analogous law of any other state, locality, or
other jurisdiction) and does so understanding and acknowledging the significance
and consequence of such specific waiver of Section 1542 which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
(c) Purchaser, on behalf of each of the Releasing Parties,
hereby warrants and covenants to each D&O Released Party that there has not been
and will not be any assignment or other transfer of any right or interest in any
Claims that any Releasing Party ever had, has or may have against the D&O
Released Parties, and hereby agrees to indemnify and hold each D&O Released
Party harmless from any Claims and Damages directly or indirectly incurred by
any of the D&O Released Parties as a result of any Person asserting any right or
interest pursuant to any such purported assignment or transfer of any such right
or interest.
(d) Purchaser, on behalf of each of the Releasing Parties,
hereby agrees that if any Releasing Party hereafter commences, joins in, or in
any manner seeks relief through any suit arising out of, based upon, or relating
to any of the Claims released hereunder,
29
or in any manner asserts against any D&O Released Party any of the Claims
released hereunder, then such Releasing Parties will pay to such D&O Released
Party, in addition to any other Damages, direct or indirect, all attorneys' fees
incurred in defending or otherwise responding to such suit or Claims.
(e) The provisions of this Section 4.07 are (i) intended to be
for the benefit of, and shall be enforceable in accordance with the Contracts
(Rights of Third Parties) ▇▇▇ ▇▇▇▇ by, each Person released or entitled to
indemnification, insurance coverage or other benefit hereunder, and each such
Person's heirs, Representatives, successors or assigns, it being expressly
agreed that such Persons shall be third party beneficiaries of this Section
4.07, and (ii) in addition to, and not in substitution for, any other right to
indemnification or contribution that any such Person may have by contract or
otherwise. Neither Purchaser nor any of the Subject Companies shall (A) amend
the provisions of this Section 4.07 in a manner that would adversely affect any
such third party beneficiary without the prior written consent of such third
party beneficiary or (B) following the Closing, enter into, or permit any of its
Subsidiaries to enter into, any merger, consolidation or similar transaction
unless Purchaser shall have ensured that the surviving or resulting entity is
creditworthy and will assume the obligations imposed by this Section 4.07. With
respect to any Claim by a third party beneficiary under this Section 4.07, no
Releasing Party may assert by way of defense, set-off, or counterclaim, any
Claim against, or Damages owing by, Seller or another third party beneficiary.
(f) Purchaser agrees to, at Closing and from time to time
thereafter, cause the Subject Companies to execute and deliver such other
documents and instruments and take such other actions as may be reasonably
requested by Seller or any D&O Released Party to implement the provisions of
this Section 4.07 including, without limitation, to confirm the Subject
Companies' release and agreement to provide indemnification as described herein.
4.08 Resignations of Directors and Officers. Subject to the
provisions of Section 4.14, effective as of the Closing, the directors and
officers of the Subject Companies shall resign from all such positions, which
resignations shall be delivered to Purchaser at the Closing.
4.09 Tax Matters.
(a) Tax Returns. Purchaser shall prepare or cause to be
prepared (on a basis consistent with past Tax Returns of the Subject Companies)
all Tax Returns of each Subject Company which are filed after the Closing Date
for all Tax Periods ending on or prior to the Effective Time and for all
Straddle Periods. Purchaser shall permit Seller at least thirty (30) days to
review and comment on each such Tax Return prior to filing and shall make such
revisions to such Tax Returns as are reasonably requested by Seller. Purchaser
shall then cause the appropriate Subject Company to execute and timely file or
cause to be filed such Tax Returns. To the extent required by Section 7.04,
Seller shall pay all Taxes due for Tax Periods ending on or prior to the
Effective Time with respect to such Tax Returns. Purchaser shall pay or cause to
be paid all Taxes due with respect to Straddle Period Tax Returns; provided,
however, that Seller shall pay Purchaser (in accordance with the procedures set
forth in Section 7.04(f)) for any amount owed by Seller pursuant to Section 7.04
with respect to such Straddle Period Tax Returns. Purchaser agrees to cause all
Subject Company Tax Returns for the Tax
30
Periods including the Effective Time to be filed on the basis that the relevant
Tax Period ended as of the Effective Time unless the relevant Governmental
Authority will not accept a Tax Return filed on that basis.
(b) Cooperation on Tax Matters. Each Party shall cooperate
fully, and do all things reasonably practicable to assist, as and to the extent
reasonably requested by the other Party, in connection with the requesting
Party's filing of Tax Returns, response to any inquiry from a taxing authority,
and participation in any Tax audit, Tax litigation or other Tax Proceeding,
including any Tax Claim. Such cooperation and assistance shall include the
retention and (upon the other Party's request) the provision of records and
information which are reasonably relevant to any such inquiry, audit, litigation
or other Proceeding and making employees available on a mutually convenient
basis to execute Tax Returns, provide additional information and explanation of
any material provided hereunder or to testify at any Proceeding. Each Party
agrees, and Purchaser agrees to cause each Subject Company, (i) to retain all
books and records with respect to Tax matters pertinent to such Subject Company
relating to any Tax Period beginning prior to the Effective Time until the
expiration of the statute of limitations (and, to the extent notified by the
other Party, any extensions thereof) of the respective Tax Periods, and to abide
by all record retention agreements entered into with any taxing authority, and
(ii) to give the other Party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if a Party so requests,
the other Party shall, and Purchaser shall cause such Subject Company to, allow
the other Party to take possession of such books and records. Purchaser further
agrees, and Purchaser agrees to cause each Subject Company, upon request, to use
its commercially reasonable efforts to obtain any certificate or other document
from any Governmental Authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated by this Agreement).
(c) Tax Refunds. The amount or economic benefit of any refunds
or over-accruals of Taxes of any Subject Company for any Tax Period, or the
portion of any Straddle Period, ending on or prior to the Effective Time shall
be for the account of Seller. The amount or economic benefit of any refunds of
Taxes of any Subject Company for any Tax Period beginning after the Effective
Time shall be for the account of Purchaser. The amount or economic benefit of
any refunds or over-accruals of Taxes of any Subject Company for any Straddle
Period shall be apportioned between Seller and Purchaser in the manner described
in Section 7.04(c). Any such amounts owing to Seller as provided in this clause
4.09(c) shall be paid by Purchaser within five (5) Business Days of the receipt
of any such refunds. Purchaser shall not cause or permit the Subject Companies
to carry back to any Tax Period ending on or prior to the Effective Time any net
operating loss or other Tax attribute arising after the Effective Time.
(d) Transfer and Other Taxes. All transfer, documentary,
sales, use, stamp, registration and other such Taxes and fees (including any
penalties and interest) incurred in connection with the transactions
contemplated by this Agreement, shall be paid by Purchaser when due, and
Purchaser will, at its own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, and, if required by applicable law,
Seller will join in the execution of any such Tax Returns and other
documentation.
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(e) Tax Sharing Agreements. Seller shall cause the provisions
of any Tax sharing agreement or similar arrangement between Seller or any
Affiliate of Seller which is not a Subject Company, on the one hand, and any
Subject Company on the other hand, to be terminated on or prior to the Effective
Time. After the Effective Time, no party shall have any rights or obligations
under any such terminated Tax sharing agreement.
(f) Elections. None of Purchaser or its Affiliates shall make
any election, file any amended return or take any other action with respect to
Taxes which could adversely affect the Tax liability of Seller or any of its
Affiliates (affiliation being measured following Closing), including any
indemnification obligation of Seller under Section 7.04 or any rights of Seller
to receive amounts under Section 4.09(c), without the prior written consent of
Seller. Without limiting the generality of the foregoing, none of Purchaser or
its Affiliates shall make an election under Treasury Regulation Section
301.7701-3 effective prior to the second (2nd) day after the Effective Time to
change the U.S. tax classification of any of the Subject Companies.
4.10 Assignment of Trademarks. The Parties agree that prior to
Closing, Seller shall cause one or more of the Subject Companies to accept the
assignment of all right, title and interest of Seller and its Affiliates in the
United States and European Union (the "Subject Territory") in perpetuity in the
trademarks "Royal Wolf" and "Royalwolf," the wolf logo and associated good will.
Purchaser further agrees to cooperate with, and do all things reasonably
practicable to assist, Seller in making all necessary or desirable filings
outside of the Subject Territory and not to oppose or challenge any
registrations by Seller or Seller's designee of the "Royal Wolf" and "Royalwolf"
trademarks or the wolf logo outside of the Subject Territory
4.11 Covenant Not to Compete.
(a) For a period of one (1) year from and after the Closing,
Seller agrees that it and Royal Wolf Holdings Limited shall not, and they shall
cause their respective Subsidiaries not to, engage directly or indirectly in any
business that competes in the Subject Territory with the Business as it is
conducted as of the Closing (a "Competitive Business").
(b) Notwithstanding the provisions of clause 4.11(a), (i)
Seller, Royal Wolf Holdings Limited and their respective Subsidiaries may invest
as passive investors owning, in aggregate, not more than ten percent (10%) of
the outstanding shares of any class of securities of any Person that is engaged
in any Competitive Business having a class of securities registered pursuant to
the United States Securities Exchange Act of 1934, so long they do not in any
way, either directly or indirectly, manage or exercise control over any such
Person or otherwise take any part in any of such Person's businesses, other than
exercising rights as a shareholder, and (ii) none of Seller, Royal Wolf Holdings
Limited or their respective Subsidiaries shall be prohibited from acquiring a
Person engaged in a Competitive Business together with other lines of business
if not more than twenty percent (20%) of the value of the acquired Person's
assets (measured by the most current financial statements published by the
acquired Person in the ordinary course of business) relates to the Competitive
Business.
(c) The provisions of the covenant contained in clause 4.11(a)
shall be deemed to be a separate covenant in each of the states, cities,
counties, countries or other
32
political subdivisions of the Subject Territory. The Parties acknowledge and
agree that the time, scope, and other provisions of clause 4.11(a) have been
specifically negotiated by sophisticated, commercial parties and specifically
hereby agree that such time, scope and other provisions are reasonable under the
circumstances. The Parties further agree that if, at any time, despite the
express agreement of the Parties, a court of competent jurisdiction holds that
any portion of clause 4.11(a) is unenforceable because any of the restrictions
therein are unreasonable, or for any other reason, such decision shall not
affect the validity or enforceability of any of the other provisions of this
Agreement, and the maximum restrictions of time or scope reasonable under the
circumstances, as determined by such court, will be substituted for any such
restrictions which are held unenforceable. In the event of a breach by any party
of any of the provisions of clause 4.11(a), the Parties acknowledge that such
breach may cause irreparable damage to Purchaser, the exact amount of which may
be difficult to ascertain, and the remedies at law for any such breach may be
inadequate. Accordingly, Purchaser may be entitled, in addition to any other
rights or remedies existing in its favor, to seek specific performance and
injunctive relief in order to enforce or prevent breach of any such provisions.
4.12 Non-Solicitation. For a period of two (2) years from and after
the Closing, Seller agrees that it and Triton Holdings Limited shall not, and it
shall cause those of its Subsidiaries engaged in container rental related
businesses not to, without the prior written consent of Purchaser, directly or
indirectly, solicit or cause to be solicited the employment of, or employ, any
Person in the Subject Territory, other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (if such
solicitation relates to employment respecting the disposition of Seller's
container rental related business in New Zealand and the liquidation of Seller's
container rental related businesses in Singapore and Hong Kong) and any
non-employee director or officer resigning in accordance with Section 4.08, who
is now a Subject Company Employee. Notwithstanding the foregoing, except in
respect of Management Employees, the restrictions set forth in the immediately
preceding sentence shall not apply to (i) any solicitation directed at the
public in general, in publications available to the public in general (and any
employment occasioned thereby), or (ii) the solicitation or employment of any
Person who is not a Management Employee and who, at the time of solicitation,
was no longer a Subject Company Employee. As used in this Section 4.12,
"Management Employee" means any person employed or serving at the time of the
Closing as (i) a director, officer, or a CSC manager of any Subject Company,
without regard to the actual title assigned to such Person, or (ii) as a Subject
Company Employee who at the time of solicitation is serving in a capacity with
the Purchaser or any of its subsidiaries as a branch manager or a more senior
management position.
4.13 2005 Audited Financial Statements; EBITDA Adjustment.
(a) Seller shall cause to be completed, as soon as possible
after the date of this Agreement, the audit of the financial statements of Royal
Wolf US and Royal Wolf UK, in accordance with GAAP, and the compilation of the
financial statements of Royal Wolf Netherlands, in each case as of December 31,
2005 and for the fiscal year then ended, and each accompanied by the auditor's
unqualified report thereon (the "2005 Audit Financial Statements"). Seller shall
deliver or cause to be delivered such financial statements to Purchaser,
together with any management letters or other correspondence thereon or related
thereto delivered by the auditors. The US auditors shall be ▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇▇ CPAs; the UK auditors shall be ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP.
33
(b) Prior to the Closing Date, the Purchase Price shall be
subject to reduction in accordance with the terms and conditions of this Section
4.13(b) and the EBITDA Adjustment Schedule.
(i) For illustrative purposes, appended as Annex A to
the EBITDA Adjustment Schedule is a calculation of EBITDA (as such term is
defined in the EBITDA Adjustment Schedule) based on the accompanying unaudited
financial statements of each Relevant Entity as of December 31, 2005 (said
calculation being referred to herein as the "Estimated EBITDA").
(ii) Following delivery of the 2005 Audit Financial
Statements in accordance with Section 4.13(a), and not later than five (5)
Business Days prior to the Closing Date, Seller shall prepare and deliver to
Purchaser a calculation of EBITDA based on the 2005 Audit Financial Statements
(said calculation being referred to herein as the "Actual EBITDA").
(iii) The financial statement items used in the
calculation of Estimated EBITDA and Actual EBITDA shall be determined in
accordance with GAAP (subject to adjustment to add back amounts paid under fleet
operating leases during the relevant period and any other differences implicit
in the definitions and calculations set forth in the EBITDA Adjustment Schedule
which may be inconsistent with GAAP).
(iv) If Actual EBITDA is greater than or an amount equal
to at least 95% of Estimated EBITDA, no Purchase Price adjustment will be made
pursuant to this Section 4.13(b). If Actual EBITDA is between 5% and 15% less
than Estimated EBITDA, then the Purchase Price shall be adjusted by subtracting
from the amount of the Purchase Price an amount determined by multiplying the
Purchase Price by a fraction the numerator of which is Actual EBITDA and the
denominator of which is Estimated EBITDA. It is a condition to Purchaser's
obligations to consummate the transactions contemplated by this Agreement that
Actual EBITDA be not less than 85% of Estimated EBITDA (the "85% Condition");
provided, that, if Actual EBITDA is less than 85% of Estimated EBITDA, Purchaser
may waive the 85% Condition and cause the Purchase Price to be reduced by an
amount equal to 15% of the Purchase Price.
4.14 Royal Wolf UK Board Meeting. The Seller shall cause a board
meeting of Royal Wolf UK to be held at Closing at which the following matters
shall take place:
(a) A resolution to register the transfer of the Shares in
Royal Wolf UK shall be passed at such board meeting of the company, subject to
the transfers being stamped at the cost of the Purchaser.
(b) Those persons identified by the Purchaser shall resign as
directors of Royal Wolf UK with immediate effect.
(c) The persons the Purchaser nominees shall be appointed as
directors and secretary of Royal Wolf UK. The appointments shall take effect at
the end of the board meeting.
34
(d) If requested by the Purchaser, new auditors identified by
the Purchaser shall be appointed as the auditors of Royal Wolf UK with effect
from the end of the relevant board meeting.
(e) If requested by the Purchaser, the address of the
registered office. of Royal Wolf UK shall be changed to the address identified
by the Purchaser.
(f) If requested by the Purchaser, the accounting reference
date of Royal Wolf UK shall be changed to the date identified by the Purchaser
ARTICLE V.
CONDITIONS TO CLOSING
5.01 Conditions to Obligations of Seller. The obligations of Seller
to consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction or waiver at or prior to the Closing of each of the
following conditions:
(a) Purchaser shall have performed and complied with all
agreements and covenants required to be performed and complied with by Purchaser
under this Agreement at or prior to the Closing, except for such non-performance
or non-compliance as would not, individually or in the aggregate, materially
affect its ability to perform its obligations hereunder and are not reasonably
likely to prohibit, restrict or delay the performance of this Agreement by
Purchaser.
(b) The representations and warranties of Purchaser in Article
III of this Agreement that are qualified as to materiality shall be true and
correct, and those that are not so qualified shall be true and correct in all
material respects at and as of the date hereof and at and as of the Closing Date
(except in the case of any representation and warranty that by its terms is made
as of a date specified therein, in which case any such representation and
warranty that is qualified as to materiality shall be true and correct, and any
such representation and warranty not so qualified shall be true and correct in
all material respects, as of such date).
(c) Seller and Escrow Agent shall each have received, in the
aggregate, the Closing Purchase Price in the manner set forth in Section
1.04(b).
(d) Seller shall have received from Purchaser a certificate
signed by an appropriate officer of Purchaser as to Purchaser's compliance with
the conditions set forth in clauses (a) and (b) of this Section 5.01.
(e) No Law shall have been enacted, entered or promulgated
prohibiting the consummation of the transactions contemplated hereby and no
Judgment shall have been entered permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby.
(f) All material filings required by any Governmental
Authority under applicable Laws contemplated by this Agreement shall have been
made and any required waiting
35
period under such Laws applicable to the transactions contemplated by this
Agreement shall have expired or been earlier terminated.
(g) All Consents listed on the Closing Consents Schedule shall
have been obtained, given or made.
(h) Seller shall have received from Purchaser a copy of the
resolutions of the board of directors of Purchaser approving the transactions
contemplated by this Agreement to be performed by Purchaser, certified by
Purchaser.
(i) Seller shall have received from Purchaser counterparts of
the Escrow Agreement duly executed by Purchaser.
(j) In the event there has been an adjustment to Purchase
Price made pursuant to Section 4.03(d), Seller shall have received from
Purchaser counterparts of the Limited Environmental Liability Release Agreement
duly executed by Purchaser.
All certificates, instruments, and other documents contemplated hereby and
required to be delivered by Purchaser to effect the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to Seller.
5.02 Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver at or prior to the Closing of each of the
following conditions:
(a) Seller shall have performed and complied with all
agreements and covenants required to be performed and complied with by Seller
under this Agreement at or prior to the Closing, except for such non-performance
or non-compliance as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(b) The representations and warranties of Seller in Article II
of this Agreement that are qualified as to materiality shall be true and
correct, and those that are not so qualified shall be true and correct in all
material respects at and as of the date hereof and at and as of the Closing Date
(except in the case of any representation and warranty that by its terms is made
as of a date specified therein, in which case any such representation and
warranty that is qualified as to materiality shall be true and correct, and any
such representation and warranty not so qualified shall be true and correct in
all material respects, as of such date), except where the failure of such
representations and warranties to be in compliance with the standard set forth
above in this clause 5.02(b) would not have a Material Adverse Effect.
(c) Purchaser shall have received from Seller (i) the
certificates and instruments referred to in Section 1.04(a) and (ii) evidence
reasonably satisfactory to Purchaser that (x) the aggregate number of Containers
owned by the Subject Companies shall not be less than 17,846 units, and that (y)
each Subject Company owns substantially all of the Containers in its fleet, free
and clear of any Lien other than Permitted Liens (other than any Liens referred
to in clause (g), (i), or (j) in the definition thereof, Liens referred to in
clause (a) of the definition thereof of the type referred to in said clause (g),
(i), or (j), and any extensions, renewals and
36
replacements of any such Liens), and that no Container is subject to a finance
lease with a Subject Company as lessee.
(d) Purchaser shall have received from Seller, not later than
five (5) Business Days prior to the Closing Date, the Pre-Closing Determination
referred to in Section 1.05(b).
(e) Purchaser shall have received from Seller a certificate
signed by an appropriate officer of Seller as to Seller's compliance with the
conditions set forth in clauses (a) and (b) of this Section 5.02.
(f) No Law shall have been enacted, entered or promulgated
prohibiting the consummation of the transactions contemplated hereby and no
Judgment shall have been entered permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby.
(g) All material filings required by any Governmental
Authority under applicable Laws contemplated by this Agreement shall have been
made and any required waiting period under such Laws applicable to the
transactions contemplated by this Agreement shall have expired or been earlier
terminated.
(h) Purchaser shall have received from Seller: (i) a copy of
the resolutions of the board of directors of Seller approving the transactions
contemplated by this Agreement to be performed by Seller, certified by Seller
and (ii) a copy of the articles of association for Seller, certified by the its
secretary and dated as of or about the Closing Date.
(i) The resignations required pursuant to Section 4.08 above
shall have been duly executed and delivered to Purchaser.
(j) All Consents listed on the Closing Consents Schedule shall
have been obtained, given or made, and Purchaser shall have received evidence
thereof.
(k) Purchaser shall have received a certificate of each
Subject Company pursuant to Treasury Regulations Section 1.1445-2(c)(3) stating
that Subject Company is not nor has it been a U.S. real property holding
corporation (as defined in Section 897(c)(2) of the Code) during the applicable
period specified in Section 897(c)(1) of the Code.
(l) Purchaser shall have received copies of the 2005 Audit
Financial Statements.
(m) The 85% Condition shall have been satisfied or waived.
(n) Purchaser shall have received from Seller counterparts of
the Escrow Agreement duly executed by Seller.
(o) In respect of Royal Wolf UK, Purchaser shall have received
from Seller (i) the statutory registers and minute books (written up to the time
of the Closing Date), the common seal, certificate of incorporation and any
certificates of incorporation on change of
37
name; and (ii) irrevocable powers of attorney in the agreed form executed by the
holder of the Shares in favour of the Purchaser or its nominee to enable the
beneficiary (pending registration of the transfer of the Shares) to exercise all
voting and other rights attaching to the Shares and to appoint proxies for this
purpose.
(p) The Royal Wolf US Severance Pay Plan shall be terminated.
All certificates, instruments, and other documents contemplated hereby and
required to be delivered by Seller to effect the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to Purchaser.
ARTICLE VI.
TERMINATION
6.01 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any time prior
to the Closing:
(a) by the mutual written agreement of the Parties;
(b) by either Party by giving written notice of such
termination to the other Party, if the Closing shall not have occurred on or
prior to six (6) months (the "Outside Date"); provided, however, that the right
to terminate this Agreement under this clause 6.01(b) shall not be available to
any Party whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Closing to occur on or prior to
the Outside Date;
(c) by either Party if (i) a Law shall have been enacted,
entered or promulgated prohibiting the consummation of the transactions
contemplated hereby or (ii) a Judgment shall have been entered permanently
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby, and such Judgment shall have become final and
non-appealable and the Party seeking to terminate this Agreement pursuant to
this clause 6.01(c)(ii) shall have used its commercially reasonable efforts to
remove such Judgment;
(d) by either Party upon a material breach by the other Party
of any of its obligations under this Agreement, which breach has not been cured
within twenty (20) days after notice thereof has been provided to such other
Party; provided that there shall be no right to terminate if such breach was
caused, in whole or in part, by a material breach by the Party seeking to
terminate this Agreement pursuant to this clause 6.01(d);
(e) by Seller in accordance with, and subject to the
conditions of, Section 4.03(d); and
(f) by Purchaser in accordance with, and subject to the
conditions of, Section 4.13(b).
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6.02 Effect of Termination. If this Agreement is terminated as
permitted under Section 6.01, such termination shall be without liability to
either Party or their respective Affiliates or Representatives, and following
such termination neither Party shall have any liability under this Agreement or
relating to the transactions contemplated by this Agreement; provided that no
such termination shall relieve any Party that has recklessly or willfully
breached any provision of this Agreement from Liability for such breach, and any
such breaching Party shall remain fully liable for any and all Damages incurred
or suffered by the other Party as a result of such breach. The provisions of
Sections 4.05, 6.02, 9.01, 9.07 and 9.12 and the Confidentiality Agreement shall
survive any termination of this Agreement and shall remain in full force and
effect. Payments for reimbursements pursuant to this Section 6.02 shall be made
in cash no later than five (5) days following delivery by the Party entitled to
such reimbursement to the other Party, of a written notice setting forth the
amount to be reimbursed.
ARTICLE VII.
INDEMNIFICATION
7.01 Survival. The representations and warranties and covenants of
the Parties contained in this Agreement shall survive the Closing for the
applicable period set forth in this Section 7.01, and any and all claims and
causes of action for indemnification under this Article VII arising out of the
inaccuracy or breach of any warranty or covenant of a Party must be made prior
to the termination of the applicable survival period. All of the representations
and warranties and covenants of the Parties contained in this Agreement and any
and all claims and causes of action for indemnification under this Article VII
with respect thereto shall terminate eighteen (18) months following the Closing
Date; provided that (a) the representations and warranties in (i) Sections 2.01
(Organization of Seller; Authority and Binding Effect), 2.03 (Capitalization;
Ownership of Shares), 2.13 (Brokers and Finders), 3.01 (Organization of
Purchaser), 3.02 (Authority and Binding Effect), 3.07 (Investment Intent) and
3.09 (Due Diligence by Purchaser) shall survive indefinitely and (ii) Section
2.16 (Tax Matters) shall survive until the expiration of the applicable statute
of limitations, and (b) the covenants and release of Purchaser contained in
Section 4.07 (D&O Indemnification and Release) shall survive indefinitely; it
being understood that in the event an Indemnified Party delivers notice of any
claim for indemnification under this Article VII within the applicable survival
period and such notice describes such claims with reasonable specificity, the
representations and warranties that are the subject of such indemnification
claim shall survive as to such claims until such time as such claim is finally
resolved.
7.02 Indemnification by Seller.
(a) Subject to the terms and conditions of this Article VII,
from and after the Closing Date, Seller agrees to indemnify, defend and save
Purchaser and its Affiliates and their respective Representatives (each a
"Purchaser Indemnified Party") harmless from and against any and all
Liabilities, obligations, deficiencies, demands, claims, suits, actions, or
causes of action, assessments, losses, costs or expenses, including costs or
expenses of any and all investigations, proceedings, judgments, settlements and
compromises (including reasonable fees and expenses of attorneys, accountants
and other experts) (collectively, "Damages") arising out of or relating to:
39
(i) any inaccuracy or breach of any then surviving
representation and warranty of Seller contained in this Agreement; or
(ii) any non-compliance with or breach of any covenant
or agreement of Seller contained in this Agreement.
(b) Notwithstanding anything in this Agreement to the
contrary, the recourse of any Purchaser Indemnified Party for any and all
Damages relating to or arising from Tax matters, including those set forth in
Sections 2.16 and 4.09, shall be controlled by Section 7.04 rather than this
Section 7.02.
7.03 Indemnification by Purchaser.
(a) Subject to the terms and conditions of this Article VII,
from and after the Closing Date, Purchaser agrees to indemnify, defend and save
Seller and its Affiliates and their respective Representatives (each a "Seller
Indemnified Party") harmless from and against any and all Damages arising out of
or relating to:
(i) any inaccuracy or breach of any then surviving
representation and warranty of Purchaser contained in this Agreement; or
(ii) any non-compliance with or breach of any covenant
or agreement of Purchaser contained in this Agreement.
(b) Notwithstanding anything in this Agreement to the
contrary, the recourse of any Seller Indemnified Party for any and all Damages
relating to or arising from Tax matters, including those set forth in Sections
2.16 or 4.09 shall be controlled by Section 7.04 rather than this Section 7.03.
7.04 Tax Indemnification.
(a) Subject to the terms and conditions of this Article VII,
from and after the Closing, Seller shall indemnify, save and hold harmless
Purchaser from and against (i) all liability for Taxes of each Subject Company
(other than Excluded Taxes) for all Pre-Closing Tax Periods (as shall be
evidenced by any Tax Return prepared by Purchaser in accordance with Section
4.09(a) and any additional documentation reasonably requested by Seller) except
to the extent of the amount of such Taxes paid by the Subject Companies at or
prior to the Effective Time, or by Seller or any of its Affiliates (other than
the Subject Companies) at any time; and (ii) any Taxes arising out of, resulting
from or incident to any breach by Seller of any covenant contained in Sections
4.09 or 7.04. Notwithstanding anything to the contrary in this Agreement, Seller
shall not be liable for or pay for (x) any Taxes (collectively, "Excluded
Taxes") that are imposed on any Subject Company as a result of actions taken or
elections made by Purchaser or any Subject Company after the Effective Time,
including but not limited to elections under Section 338(g) of the Code or
Treasury Regulation Section 301.7701-3 or (y) any Taxes subject to
indemnification by Purchaser pursuant to Sections 7.04(b)(i) or 7.04(b)(ii).
(b) Subject to the terms and conditions of this Article VII,
from and after the Closing, Purchaser shall indemnify, save and hold harmless
the Seller Indemnified
40
Parties from and against (i) all liability for Taxes of each Subject Company for
any Post-Closing Tax Period; (ii) any Taxes arising out of, resulting from or
incident to the breach by Purchaser of any covenant contained in Sections 4.09
or 7.04; and (iii) Excluded Taxes.
(c) In the case of any Straddle Period:
(i) real, personal and intangible property Taxes and any
other Taxes levied on a per diem basis ("Per Diem Taxes") of a Subject Company
for a Pre-Closing Tax Period shall be equal to the amount of such Per Diem Taxes
for the entire Straddle Period multiplied by a fraction, the numerator of which
is the number of days during the Straddle Period that are in the Pre-Closing Tax
Period and the denominator of which is the total number of days in the Straddle
Period; and
(ii) the Taxes of a Subject Company (other than Per Diem
Taxes or Excluded Taxes) for any Pre-Closing Tax Period shall be computed as if
such Pre-Closing Tax Period ended as of the Effective Time.
(d) If a claim shall be made by, or an audit, investigation,
litigation or other Proceeding is conducted by or with, any Governmental
Authority with respect to Taxes, which, if successful, might result in an
indemnity payment to a Person pursuant to this Section 7.04 (a "Tax Claim"), the
notice provisions set forth in Section 7.05 shall apply.
(e) With respect to any Tax Claim relating to a Tax Period
ending on or prior to the Effective Time, Seller shall notify the Purchaser of
such Tax Claim promptly upon becoming aware of such Tax Claim but shall control
all proceedings and may make all decisions taken in connection with such Tax
Claim (including selection of counsel) at its own expense; provided, however,
that Purchaser may participate in proceedings and decisions to the extent they
involve Excluded Taxes. Seller and Purchaser shall jointly control all
proceedings taken in connection with any Tax Claim relating to Taxes of any
Subject Company for a Straddle Period, each paying its own expenses. Purchaser
shall control at its own expense all proceedings with respect to any Tax Claim
relating to a Tax Period beginning after the Effective Time. A Party shall
promptly notify the other Party if it decides not to control the defense or
settlement of any Tax Claim which it is entitled to control pursuant to this
Agreement, and the other Party shall thereupon be permitted to defend and settle
such Proceeding at its own expense.
(f) Seller's indemnity obligation in respect of Taxes for a
Pre-Closing Tax Period pursuant to Section 7.04(a)(i) shall be effected by its
payment to Purchaser of such amount within ten (10) days after the
determinations required by Section 7.04(a)(i) are completed (but not earlier
than five (5) days prior to the date on which Taxes for the relevant Tax Period
are required to be paid to the relevant Governmental Authority). If the amount
of any such Taxes paid by Seller or any of its Affiliates (other than the
Subject Companies) at any time plus the amount of such Taxes paid by the Subject
Companies at or prior to the Effective Time exceeds the amount of such Taxes for
the Pre-Closing Tax Period, Purchaser shall pay to Seller the amount of such
excess within ten (10) days after the Tax Return with respect to the final
liability for such Taxes is required to be filed with the relevant Governmental
Authority. In the case of a Tax that is contested in accordance with the
provisions of Section 7.04(e), payment of the Tax to the appropriate
Governmental Authority shall not be considered to be due earlier than
41
the date a final determination to such effect is made by the appropriate
Governmental Authority or court.
7.05 Indemnification Process.
(a) Any Person seeking indemnification under this Article VII
(an "Indemnified Party") shall give the Party from whom indemnification is being
sought (an "Indemnifying Party") notice of any matter which such Indemnified
Party has determined has given or could give rise to a right of indemnification
under this Agreement as soon as practicable after the Person entitled to
indemnification becomes aware of any fact, condition or event which may give
rise to Damages for which indemnification may be sought under this Article VII.
Such notice shall state the nature and basis of any Claim and the amount
thereof, to the extent known, along with copies of the relevant documents
evidencing such Claim and the basis for indemnification sought.
(b) The liability of an Indemnifying Party under this Article
VII with respect to Damages arising from claims of any third party which are
subject to the indemnification provided for in this Article VII ("Third Party
Claims") shall be governed by and contingent upon the following additional terms
and conditions: if an Indemnified Party shall receive notice of any Third Party
Claim, the Indemnified Party shall give the Indemnifying Party notice of such
Third Party Claim within twenty (20) days of the receipt by the Indemnified
Party of such notice; provided, however, that the failure to provide such notice
shall not release the Indemnifying Party from any of its obligations under this
Article VII except to the extent the Indemnifying Party is materially and
irreparably prejudiced by such failure. The Indemnifying Party shall be entitled
to assume and control the defense of such Third Party Claim at its expense and
through counsel of its choice, provided it gives notice of its intention to do
so to the Indemnified Party within thirty (30) days of the receipt of such
notice from the Indemnified Party; provided, however, that if there exists a
material conflict of interest (other than one that is of a monetary nature) that
would make it inappropriate for the same counsel to represent both the
Indemnified Party and the Indemnifying Party, then the Indemnified Party shall
be entitled to retain its own counsel, at the expense of the Indemnifying Party,
provided that the Indemnifying Party shall not be obligated to pay the
reasonable fees and expenses of more than one separate counsel for all
Indemnified Parties, taken together (except to the extent that local counsel is
necessary or advisable for the conduct of such Proceeding, in which case the
Indemnifying Party shall also pay the reasonable fees and expenses of any such
local counsel). If the Indemnifying Party shall not assume the defense of any
Third Party Claim or litigation resulting therefrom, the Indemnified Party may
defend against such claim or litigation in such manner as it may deem
appropriate and may settle such claim or litigation on such terms as it may deem
appropriate; provided, however, that in settling any action in respect of which
indemnification is payable under this Article VII, it shall act reasonably and
in good faith. In the event the Indemnifying Party exercises the right to
undertake any such defense against any such Third Party Claim as provided above,
the Indemnified Party shall cooperate with, and do all things reasonably
practicable to assist, the Indemnifying Party in such defense and make available
to the Indemnifying Party, all witnesses, pertinent records, materials and
information in the Indemnified Party's possession or under the Indemnified
Party's control relating thereto as is reasonably requested by the Indemnifying
Party. Similarly, in the event the Indemnified Party is, directly or indirectly,
conducting the defense against any such Third Party Claim, the
42
Indemnifying Party shall cooperate with, and do all things reasonably
practicable to assist, the Indemnified Party in such defense and make available
to the Indemnified Party, all such witnesses, records, materials and information
in the Indemnifying Party's possession or under the Indemnifying Party's control
relating thereto as is reasonably requested by the Indemnified Party. The
Indemnifying Party shall not, without the written consent of the Indemnified
Party, (i) settle or compromise any Third Party Claim or consent to the entry of
any judgment, unless such settlement, compromise or judgment includes an
unconditional written release by the claimant or plaintiff of the Indemnified
Party from all liability in respect of such Third Party Claim, (ii) settle or
compromise any Third Party Claim if the settlement imposes equitable remedies or
material obligations on the Indemnified Party other than financial obligations
for which such Indemnified Party will be indemnified hereunder, or (iii) settle
or compromise any Third Party Claim if the result is to admit civil or criminal
liability or culpability on the part of the Indemnified Party or that gives rise
to criminal liability with respect to the Indemnified Party. No Third Party
Claim which is being defended in good faith by the Indemnifying Party in
accordance with the terms of this Agreement shall be settled or compromised by
the Indemnified Party without the written consent of the Indemnifying Party.
7.06 Limitations on Claims.
(a) Notwithstanding anything to the contrary in this
Agreement, indemnification under Section 7.02 shall not be available pursuant to
this Article VII unless and until the amount of indemnifiable Damages asserted
against Seller under this Article VII exceeds an amount equal to one percent
(1%) of the Purchase Price (as may be adjusted pursuant to this Agreement) in
the aggregate (the "Deductible"). Once the Deductible has been exceeded, the
Purchaser Indemnified Party shall be entitled to the benefit of the indemnity
under Section 7.02 for any Claim to the extent the aggregate of all such past or
then current Claims is in excess of the Deductible; provided, however, that the
Deductible shall not apply to claims for Damages to the extent arising out of,
resulting from or incident to any inaccuracy or breaches by Seller of its
representations and warranties set forth in Sections 2.01 (Organization of
Seller; Authority and Binding Effect), 2.03 (Capitalization; Ownership of
Shares), 2.09(d) (Ownership, Possession and Sufficiency of Assets) to the extent
that the representation and warranty expressly relates to title to Containers or
(in the case of Royal Wolf US and its Subsidiaries only) Container delivery
equipment, and 2.13 (Brokers and Finders).
(b) Notwithstanding anything to the contrary contained in this
Agreement, the maximum aggregate amount of indemnifiable Damages that may be
recovered with respect to Claims made under Sections 7.02 and 7.04 shall equal
ten percent (10%) of the Purchase Price (as may be adjusted pursuant to this
Agreement) (the "Indemnification Cap", as may be reduced pursuant to Section
4.03(d)).
(c) Notwithstanding any other provision of this Agreement to
the contrary, neither Party shall be required to indemnify, hold harmless or
otherwise compensate the other Party (or any other Person) for Damages with
respect to mental or emotional distress or exemplary, consequential, special or
punitive damages.
(d) The amount of any Damages claimed by any Purchaser
Indemnified Party hereunder shall be net of any allowances and reserves provided
in the
43
Financial Statements or the Closing Financial Statements that are specifically
identified with respect thereto.
(e) The amount of any Damages claimed by any Purchaser
Indemnified Party hereunder shall be net of any insurance, indemnity,
contribution, Tax benefit or other payments or recoveries of a like nature
directly referable to the matter giving rise to the relevant claim (it being
agreed that, promptly after the realization of any such reductions of Damages
pursuant hereto, such Purchaser Indemnified Party shall reimburse Seller for
such reduction in Damages for which such Purchaser Indemnified Party was
indemnified prior to the realization of such reductions of Damages).
(f) Notwithstanding any provision to the contrary contained in
this Agreement, in the event that an Indemnifying Party can establish that an
Indemnified Party had actual knowledge, on or prior to the Closing Date, of a
breach of a warranty or covenant of the Indemnifying Party upon which a claim
for indemnification by the Indemnified Party is based, then the Indemnifying
Party shall have no liability for any Damages resulting from or arising out of
such claim. With respect to Seller, the actual knowledge shall be that of any
Person named in the definition of "knowledge" in Section 8.01; with respect to
Purchaser, the actual knowledge, after inquiry of their direct reports, of
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇.
(g) If an Indemnified Party recovers Damages from an
Indemnifying Party under this Article VII, the Indemnifying Party shall be
subrogated, to the extent of such recovery, to the Indemnified Party's rights
against any third party, other than a third party with whom the Indemnified
Party has a material business agreement or arrangement, with respect to such
recovered Losses subject to the subrogation rights of any insurer providing
insurance coverage under one of the Indemnified Party's policies and except to
the extent that the grant of subrogation rights to the Indemnifying Party is
prohibited by the terms of the applicable insurance policy.
(h) The amount of any Damages claimed by any Purchaser
Indemnified Party hereunder shall be reduced to the extent that Purchaser shall
have received the benefit of an adjustment pursuant to this Agreement due to the
fact that the item that is the subject of the indemnification claim was
specifically taken into account in the Closing Determination or the Closing
Financial Statements.
7.07 Mitigation. The Parties shall cooperate with, and do all things
reasonably practicable to assist, each other to mitigate or resolve any Claim or
Damages.
7.08 Exclusivity of Indemnification Remedy. Except in respect of
fraud (including violations of applicable securities laws), from and after the
Closing, the indemnification for Damages provided in this Article VII shall be
the sole and exclusive remedy of the Parties with respect to this Agreement (but
this Section 7.08 shall not apply to or limit the rights or remedies of any
third party beneficiary under Section 4.07). Purchaser hereby expressly waives
any right to rescind this Agreement.
44
7.09 Characterization of Indemnification Payments. The Parties agree
to treat any payment made under this Article VII as an adjustment to the
Purchase Price.
ARTICLE VIII.
DEFINITIONS AND TERMS
8.01 Specific Definitions. As used in this Agreement, the following
terms have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banks in New York or Rotterdam are authorized or obligated by law
or executive order to close.
"Capitalized Lease Obligations" means (without duplication) that
portion of any obligation of a Subject Company as lessee under a lease which at
the time would be required to be capitalized on the balance sheet of such lessee
in accordance with GAAP.
"Claim" means any claim, demand or Proceeding asserted or instituted
by any Person that could give rise to Damages.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations and interpretations issued thereunder.
"Confidentiality Agreement" means that certain letter agreement,
dated as of December 5, 2005 between Purchaser and Triton Holdings Limited.
"Consent" means any consent, approval, waiver, permit, grant,
franchise, concession, agreement, license, exemption or order of, registration,
certificate, clauses of declaration or filing with, or report or notice to any
Person or entity, including, but not limited to any Governmental Authority,
which, as relevant, by its or their terms is final and conclusive, from which
there is no further appeal right, or as to which any such appeal right has
expired.
"Contract" means any agreement, contract, lease, power of attorney,
note, loan, evidence of indebtedness, purchase order, letter of credit,
settlement agreement, franchise agreement, undertaking, covenant not to compete,
employment agreement, license, instrument, obligation, commitment, policy,
purchase and sales order, quotation and other executory commitment to which any
Subject Company is a party or to which any of the assets of a Subject Company
are subject, whether oral or written, express or implied.
"Dollars" and the "$" sign means United States Dollars. In any
instance where an amount is to be denominated in United States Dollars in or
pursuant to this Agreement, and the underlying amount is not in United States
Dollars but in a foreign currency, the exchange rate to
45
be utilized to convert such amount from such foreign currency to United States
Dollars shall be the rate of exchange set forth in The Wall Street Journal for
converting such currency into United States Dollars as of the date of the
specified transaction or as of the date the amount is so reported.
"Environmental Claim" means any claim, order, investigation, action,
suit, proceeding, injunction, demand, citation, summons, directive, fine,
penalty, assessment or violation of or under any Environmental Laws, including,
without limitation, any claim, order, investigation, action, suit, proceeding,
injunction, demand, citation, summons, directive, fine, penalty, assessment or
violation brought or issued by any Governmental Authority, and any written
notice advising the applicable Person of any of the foregoing.
"Environmental Laws" means any national, supra-national, federal,
state, district, or local Laws, regulations, directives, ordinances, orders,
permits and judgments, consent orders and common Law relating to the protection
of the environment, including any Law of strict liability, nuisance or with
respect to conducting abnormally dangerous activities including, without
limitation, provisions pertaining to or regulating air pollution, water
pollution, noise control, wetlands, water courses, natural resources, wildlife,
Hazardous Substance, or any other activities or conditions which impact or
relate to the environment or nature, the protection of human health, the
condition of the workplace, or transportation, emission, storage, deposit and
disposal of Hazardous Substance. Such Environmental Laws shall include, without
limitation, the Comprehensive Environmental Response, Compensation, and Recovery
Act, 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et
seq., the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.,
the Emergency Planning and Community Right to Know Act, 42 U.S.C. Section 11001
et seq., the Oil Pollution Act, 33 U.S.C. Section 2701 et seq., and the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., each as amended, and any
equivalent laws of any other relevant jurisdiction in which the Business is
conducted, together with all regulations promulgated thereunder, as all of the
foregoing exist at the date of this Agreement or on the Closing Date.
"Environmental Lien" shall mean any Lien (except for Permitted
Liens), whether recorded or unrecorded, in favor of any Governmental Authority,
relating to any liability of a Subject Company with respect to an Environmental
Claim.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the regulations and interpretations issued thereunder.
"ERISA Affiliate" means each corporation, trade or business which is
treated as a single employer with any Subject Company under Sections 414(b),
414(c) and 414(m) of the Code.
"GAAP" means, with respect to each Subject Company, the accounting
principles accepted in the country under the laws of which such Subject Company
was formed (i.e., United States generally accepted accounting principles in
respect of Royal Wolf US and Temporary Mobile Storage, Inc., a California
corporation (and a wholly-owned Subsidiary of Royal Wolf US), and International
Accounting Standards in respect of the other Subject Companies).
46
"Governmental Authority" means any nation or government, any state
or provincial or other political subdivision thereof, any province, city or
municipality, any Person exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, including, without
limitation, any governmental authority, agency, tribunal, department, board,
commission or instrumentality of the European Union and political subdivisions
thereof, the United States, any State of the United States, or any political
subdivision thereof, any government authority, agency, department, board,
commission or instrumentality of the United States or any political subdivision
thereof and any tribunal or arbitrator(s) of competent jurisdiction, and any
self-regulatory organization.
"Hazardous Substance" means any pollutant, contaminant, chemical,
waste and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or
flammable chemical or chemical compound or otherwise hazardous substance or
waste, including, without limitation, electrical waste, any quantity of friable
asbestos, urea formaldehyde, PCBs, radon gas, crude oil or any fraction thereof,
all forms of natural gas, petroleum products, by-products or derivatives,
radioactive substance or material, pesticide, waste waters, or sludges that are
subject to regulation, control or remediation under any Environmental Laws.
"Income Taxes" means any income, franchise, net profits, excess
profits or similar Taxes measured on the basis of net income.
"Indebtedness" means, at any particular time, with respect to any
Subject Company (without duplication), all indebtedness of such Subject Company
for borrowed money or on account of advances to such Subject Company or
obligations under acquisition agreements, in respect of which such Subject
Company is liable or evidenced by any bond, debenture, note or similar
instrument issued by such Subject Company, including all principal, accrued and
unpaid interest, prepayment premiums, penalties and other fees or charges
related thereto, any Capitalized Lease Obligations, swaps, collars, caps, ▇▇▇▇▇▇
or other agreements relating to the fixing of interest rates of indebtedness,
but excluding in any event, inter-company indebtedness owing from a Subject
Company to one or more other Subject Companies.
"Intellectual Property" means:
(a) all Inventions and patents;
(b) all trademarks (in any form such as, by way of example and
not by way of limitation, word marks and logos), service marks (in any
form such as, by way of example and not by way of limitation, word marks,
logos, designs, slogans and general intangibles of like nature), trademark
or service ▇▇▇▇ registrations and applications, trade dress, trade names,
domain names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all
goodwill associated therewith, and all applications for registration,
registrations, extensions, renewals, and goodwill of any of the foregoing;
(c) all works of authorship, copyrights, and all applications
for registration, registrations, and renewals of any of the foregoing;
47
(d) all mask works and all applications for registration,
registrations, and renewals of any of the foregoing;
(e) all trade secrets, including all information encompassed
in any items and, by way of example and not by way of limitation, business
and technical information, ideas, research and development, know-how,
show-how, formulas, mathematical calculations, algorithms, compositions,
manufacturing and production processes and techniques, concepts, ideas,
methods, schematics, technology, technical data, designs, drawings,
flowcharts, block diagrams, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and
proposals, to the extent that such information has not been released
publicly;
(f) all common law, statutory, treaty, and convention rights
(including rights of priority) concerning any of the foregoing categories
listed in subsections (a) through (e); and
(g) all copies and tangible embodiments (regardless of form or
medium) of anything within the foregoing categories listed in subsections
(a) through (f).
"Inventions" means any procedures, techniques, systems, machines,
methods, processes, uses, apparatuses, compositions of matter, designs or
configurations, formulas, mathematical calculations, algorithms, computer
programs, or any improvements of the foregoing, discovered, conceived, reduced
to practice, developed, made, or produced, and shall include but not be limited
to the meaning of "Invention" under the United States or Canadian patent laws,
whether patentable or unpatentable and whether or not reduced to practice, all
improvements thereon, invention and patent disclosures, and all forms of
protection for any of the foregoing, including, by way of example and not by way
of limitation, inventor's certificates, patent applications, and patents,
together with all continuations, continuations-in-part, divisionals, revisions,
additions, extensions, reissues, and reexaminations of any of the foregoing,
patents, copyrights, trade dress, trademarks, service marks, applications for
issuance or registration of the foregoing and trade secrets.
"Judgments" means any judgments, injunctions, orders, stays,
decrees, writs, rulings, settlements, or awards of any court or other judicial
authority or any other Governmental Authority.
"knowledge" or similar language shall mean, with respect to Seller,
the actual knowledge, after inquiry of their direct reports, of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇.
"Laws" means all laws, statutes, statutory instruments, conventions,
directives, ordinances, treaties, rules, regulations, orders or decrees of any
Governmental Authority, or Judgments.
"Liabilities" means any liabilities or obligations (whether accrued,
absolute, contingent, unliquidated, or otherwise, whether or not known, whether
due or to become due, and regardless of when asserted).
48
"Liens" means all liens, mortgages, easements, charges, claims,
security interests, options or other encumbrances of any nature.
"Material Adverse Change" means a change that has had a Material
Adverse Effect.
"Material Adverse Effect" means any change or effect that
individually, or together with others in the aggregate, is material and adverse
to (a) the business, properties, financial condition or results of operations of
the Subject Companies, taken as a whole, or (b) the ability of Seller to
consummate the transactions contemplated by this Agreement, provided, however,
that any actual or prospective change or changes relating to or resulting from
one or more of (i) any change or changes in general economic conditions
(including, without limitation, changes in financial or market conditions) or
local, regional, national or international conditions in the industries in which
the Business is conducted, (ii) acts of terrorism or war (whether or not
declared), occurring prior to, on or after the date hereof, (iii) the
announcement or consummation of the transactions contemplated by this Agreement,
(iv) any change in accounting requirements or principles or the interpretation
thereof, or (v) the taking of any action approved or consented to by Purchaser
or contemplated by this Agreement, shall be deemed not to constitute a "Material
Adverse Effect."
"Permits" means all permits, authorizations, approvals,
registrations, regulatory licenses, certificates, directives, orders or
variances granted by or obtained from any Governmental Authority and used or
required in connection with the Business.
"Permitted Liens" means with respect to or upon any of the property
or assets of a Subject Company, any (a) Liens on property of such Subject
Company existing on the date hereof; (b) Liens incurred and pledges and deposits
made in the ordinary course of business in connection with worker's
compensation, unemployment insurance, old-age pensions and other social security
benefits; (c) Liens securing the performance of bids, tenders, leases, contracts
(other than for the repayment of debt), statutory obligations, surety, customs
and appeal bonds and other obligations of like nature, incurred as an incident
to and in the ordinary course of business; (d) Liens imposed by law, such as
carriers', warehouseman's, mechanics', materialmen's, landlords', laborers',
suppliers', construction and vendors' liens, incurred in good faith in the
ordinary course of business and securing obligations which are not yet due or
which are being contested in good faith by appropriate proceedings as to which
such Subject Company shall, to the extent required by GAAP, have set aside on
its books adequate reserves; (e) Liens securing the payment of Taxes, either not
delinquent or being contested in good faith by appropriate legal or
administrative proceedings and as to which such Subject Company shall, to the
extent required by GAAP, have set aside on its books adequate reserves; (f)
zoning restrictions, easements, licenses, rights of way, declarations,
reservations, provisions, covenants, conditions, waivers, restrictions on the
use of property or other title matters (and with respect to leasehold interests,
Liens and other obligations incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased property, with or
without consent of the lessee), none of which materially impairs the use of any
parcel of property material to the operation of the Business or the value of
such property for the purpose of such business; (g) Liens on property existing
at the time such property was acquired by such Subject
49
Company or purchase money Liens to facilitate the acquisition of property by
such Subject Company; (h) Liens listed on the Permitted Lien Schedule; (i) Liens
identified in the Financial Statements, (j) Liens granted or incurred by such
Subject Company since the date of the Interim Balance Sheets in the ordinary
course of its business, (k) the Container Leases; and (l) extensions, renewals
and replacements of Liens referred to in (a) through (k) of this sentence.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Post-Closing Tax Period" means any Tax Period beginning after the
Effective Time and that portion of any Straddle Period beginning after the
Effective Time.
"Pre-Closing Tax Period" means any Tax Period ending on or prior to
the Effective Time and that portion of any Straddle Period up to and including
the Effective Time.
"Proceeding" means any action, application, suit, demand, claim or
legal, administrative, arbitration or other alternative dispute resolution
proceeding, hearing or investigation.
"Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching, exhausting or migration on or into the environment or into, on, under
or from any property.
"Relevant Entity" means Royal Wolf US, Royal Wolf UK and Royal Wolf
Netherlands, as applicable.
"Representative" means with respect to any Person, any of such
Person's officers, directors, managers, employees, shareholders, members,
partners, controlling persons, agents, consultants, advisors, and other
representatives, including legal counsel, accountants and financial advisors.
"Securities Act" means the Securities Act of 1933, as amended, and
any similar statute enacted in any other relevant jurisdiction.
"Straddle Period" means any Tax Period that includes but does not
end on the Effective Time.
"Subsidiary" or "Subsidiaries" of any Person means any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which fifty percent (50.0%) or more of the voting stock or
other equity interests (in the case of Persons other than corporations) is owned
or controlled directly or indirectly by such Person, or one or more of the
Subsidiaries of such Person, or a combination thereof.
"Tax Period" means any period prescribed by any taxing or
Governmental Authority for which a Tax Return is required to be filed or a Tax
is required to be paid.
50
"Tax Returns" means any report, return, election, document,
estimated tax filing, declaration or other filing required to be supplied to any
taxing authority or jurisdiction with respect to Taxes, including any amendments
thereto.
"Taxes" means all taxes, assessments, charges, duties, fees, levies,
imposts or other governmental charges, including, without limitation, all
federal, state, local, municipal, county, foreign and other income, franchise,
profits, capital gains, capital stock, capital structure, transfer, gross
receipt, sales, use, transfer, service, occupation, ad valorem, property,
excise, severance, windfall profits, premium, stamp, license, payroll,
employment, "PAYE" or national insurance, social security, unemployment,
disability, environmental (including taxes under Code Section 59A), alternative,
minimum, add-on, value-added, withholding and other taxes, assessments, charges,
duties, fees, levies, imposts or other governmental charges of any kind
whatsoever (whether payable directly or by withholding and whether or not
requiring the filing of a Tax Return), and all estimated taxes, deficiency
assessments, additions to tax, additional amounts imposed by any Governmental
Authority, penalties and interest.
"Transaction Bonuses" mean the bonuses payable upon consummation of
the transactions contemplated by this Agreement by Seller or an Affiliate of
Seller pursuant to those certain plans, programs and agreements listed on
Section B of the Employee Plans Schedule.
"United States" means the United States of America, any state of the
United States, and the District of Columbia.
8.02 Other Definitional Provisions.
(a) The location of the definition of each term defined within this
Agreement (other than those terms defined in this Article VIII) is noted in the
Index to Defined Terms following the table of contents to this Agreement;
(b) "herein," "hereby," "hereunder," "hereof" and other equivalent
words shall refer to this Agreement as an entirety and not solely to the
particular portion of this Agreement in which any such word is used;
(c) all definitions set forth herein shall be deemed applicable
whether the words defined are used herein in the singular or the plural;
(d) all pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require;
(e) the words "include" and "including" and variations thereof shall
not be deemed terms of limitation, but rather shall be deemed to be followed by
the words "without limitation";
(f) all accounting terms not specifically defined herein shall be
construed in accordance with GAAP;
(g) the captions and descriptive headings herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof;
51
(h) any references herein to a particular Section, Article, Exhibit
or Schedule means a Section or Article of, or an Exhibit or Schedule to, this
Agreement unless another agreement is specified; and
(i) the Exhibits and Disclosure Schedules attached hereto are
incorporated herein by reference and shall be considered part of this Agreement
as if fully set forth herein.
ARTICLE IX.
GENERAL PROVISIONS
9.01 Expenses. Except as otherwise provided in Section 6.02, each
Party shall pay all fees and expenses incurred by it in connection with this
Agreement and the transactions contemplated by this Agreement. In relation to
the Shares of Royal Wolf UK, Purchaser shall pay all stamp taxes on the transfer
of the Shares hereunder.
9.02 Further Assurances. From time to time after the Closing and
without further consideration, each Party, upon the request of the other Party
and at such other Party's expense, shall execute and deliver such documents and
instruments of conveyance and transfer as such other Party may reasonably
request in order to consummate more effectively the terms of this Agreement
(including the purchase and sale of the Shares as contemplated by this Agreement
and the vesting in Purchaser of title to the Shares transferred under this
Agreement).
9.03 Amendment/Non-Assignment. Subject to Section 4.07(f), this
Agreement may not be amended except by an instrument in writing signed by the
Parties. This Agreement may not be assigned or transferred by Purchaser or
Seller without the prior written consent of the other; provided, that Purchaser
may assign its right hereunder in whole or in part to one or more wholly-owned
direct or indirect subsidiaries; provided, further, that no such assignment
shall relieve Purchaser of any of its liabilities or obligations hereunder. This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors or assigns, heirs, legatees, distributees,
executors, administrators and guardians.
9.04 Waiver. Either Party may (a) extend the time for the
performance of any of the obligations or other acts of the other, (b) waive any
inaccuracies in the representations and warranties of the other contained in
this Agreement or in any document delivered by the other pursuant to this
Agreement or (c) waive compliance with any of the agreements, or satisfaction of
any of the conditions, contained in this Agreement by the other. Any agreement
on the part of a Party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by such Party. The failure of any
Party to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any Party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
9.05 Notices. Any notices or other communications required or
permitted under, or otherwise in connection with, this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in person or
upon confirmation of receipt when transmitted by facsimile transmission or on
receipt after dispatch by registered or certified mail, postage
52
prepaid, or by reputable overnight courier such as Federal Express, DHL or UPS,
addressed as follows:
If to Seller:
Triton CSA International B.V.
c/o KPMG Meijburg & Co.
Brainpark
K.P. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
the Netherlands
Telephone: ▇▇-▇▇-▇▇-▇▇-▇▇▇
Facsimile: 31-10-45-30-733
With copies to:
Triton Investments Limited
c/▇ ▇▇▇▇▇▇▇ Corporate Services (Bermuda) Ltd.
Canon's Court
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ EX
Bermuda
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
International Financial Advisors, Inc.
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Pritzker Organization, LLC
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser to:
Mobile Mini, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
53
With copies to:
Mobile Mini, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as the Person to whom notice is to be given has furnished
in writing to the other parties listed in this Section 9.05. A notice of change
in address shall not be deemed to have been given until received by the
addressee.
9.06 [Reserved]
9.07 Applicable Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of New York
(USA).
9.08 No Third Party Rights. Except as otherwise provided herein,
this Agreement is intended to be solely for the benefit of the Parties and is
not intended to confer any benefits upon, or create any rights in favor of, any
Person other than the Parties.
9.09 Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute a single instrument.
Facsimile signatures on this Agreement shall be deemed to be originals for all
purposes.
9.10 Severability. If any restriction or limitation in Section 4.11
(Covenant Not To Compete) of this Agreement is deemed to be unreasonable,
onerous or unduly restrictive by a court of competent jurisdiction, it shall not
be stricken in its entirety and held totally void and unenforceable, but shall
remain effective to the maximum extent permissible within reasonable bounds. If
any phrase, clause or provision of this Agreement is declared invalid or
unenforceable by a court of competent jurisdiction, such phrase, clause or
provision shall be deemed severed from this Agreement, but will not affect any
other provisions of this Agreement, which shall otherwise remain in full force
and effect. The subdivisions of Section 4.11 are each declared to be separate
and distinct covenants.
54
9.11 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto set forth the entire understanding and agreement among the Parties as to
the matters covered in this Agreement and supersede and replace any prior
understanding, agreement or statement of intent, in each case, written or oral,
of any and every nature with respect to such understanding, agreement or
statement other than the Confidentiality Agreement.
9.12 Arbitration; Process Agents. Any dispute arising out of or in
connection with this Agreement, including any question regarding its existence,
validity or termination, shall be referred to and finally resolved by
arbitration under the London Court of International Arbitration rules, which
rules are deemed to be incorporated by reference into this Section 9.12. There
shall be three (3) arbitrators. The place of arbitration shall be London,
England. The language to be used in the arbitral proceedings shall be English.
Judgment on the award rendered by the Tribunal may be entered in any court
having jurisdiction thereof. Seller hereby appoints ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP at its
principal place of business in London (currently ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(marked for attention of the Litigation Department, Departmental Managing
Partner)) as its agent for service of process in England in relation to any
matter arising out of this Agreement. Purchaser hereby appoints ▇▇▇▇▇ ▇▇▇▇ at
its principal place of business in London (currently ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ (marked for attention of the Litigation Department, Departmental
Managing Partner)) as its agent for service of process in England in relation to
any matter arising out of this Agreement.
9.13 Fair Construction. This Agreement shall be deemed to be the
joint work product of the Parties without regard to the identity of the
draftsperson, and any rule of construction that a document shall be interpreted
or construed against the drafting Party shall not be applicable. Each Party has
caused this Agreement to be executed on its behalf by its duly authorized
representative, all as of the day and year first above written.
9.14 Construction of Certain Provisions. It is understood and agreed
that the specification of any Dollar amount in the representations and
warranties in this Agreement or the inclusion of any specific item on the
Disclosure Schedules or Exhibits is not intended to imply that such amounts or
higher or lower amounts, or the items so included or other items, are or are not
material, and no Party shall use the fact of the setting of such amounts or the
fact of the inclusion of any such item on the Disclosure Schedules in any
dispute or controversy between the Parties as to whether any obligation, item or
matter not described herein or included in a Disclosure Schedule or Exhibit is
or is not material for purposes of this Agreement.
9.15 Reasonable Consent Required. Where any provision of this
Agreement requires a Party to obtain the consent, approval or other acquiescence
of the other Party, such consent, approval or other acquiescence shall not be
unreasonably conditioned, withheld or delayed by such other Party.
[Signature page to follow]
55
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as
of the date first above written.
MOBILE MINI, INC.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
TRITON CSA INTERNATIONAL B.V.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________