EXHIBIT 2.1
AMENDED AND RESTATED
INVESTMENT AGREEMENT
dated as of
September 5, 2003
among
U.N. HOLDINGS (CAYMAN), LTD.,
VIGILANT INTERNATIONAL, LTD.,
U.N. HOLDINGS II, INC., U.N. HOLDINGS LLC,
U.N. HOLDINGS INC.,
WIND RIVER INVESTMENT CORPORATION
and
THOSE TRUSTS LISTED ON SCHEDULE A
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions............................................................................... 2
ARTICLE 2
PURCHASE, SALE AND CONTRIBUTION
Section 2.01 The Transactions.......................................................................... 10
Section 2.02 Closing................................................................................... 11
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
WIND RIVER AND THE TRUSTS
Section 3.01 Organization, Good Standing and Qualification............................................. 13
Section 3.02 Corporate Authorization; Approvals........................................................ 13
Section 3.03 Noncontravention.......................................................................... 14
Section 3.04 Capital Structure......................................................................... 14
Section 3.05 Subsidiaries.............................................................................. 15
Section 3.06 Other Equity Interests.................................................................... 15
Section 3.07 Governmental Authorization................................................................ 15
Section 3.08 Financial Statements; Undisclosed Liabilities............................................. 16
Section 3.09 Regulatory Reports........................................................................ 17
Section 3.10 Absence of Certain Changes................................................................ 17
Section 3.11 Compliance with Laws; Permits............................................................. 18
Section 3.12 Litigation................................................................................ 19
Section 3.13 Employee Benefits......................................................................... 20
Section 3.14 Labor..................................................................................... 22
Section 3.15 Employees................................................................................. 22
Section 3.16 Taxes..................................................................................... 23
Section 3.17 Intellectual Property; Data Security...................................................... 25
Section 3.18 Brokers and Finders....................................................................... 26
Section 3.19 Actuarial Analyses........................................................................ 26
Section 3.20 Material Contracts........................................................................ 26
Section 3.21 Risk Management........................................................................... 27
Section 3.22 Derivatives............................................................................... 27
Section 3.23 Insurance Coverage........................................................................ 27
Section 3.24 Records................................................................................... 28
Section 3.25 Properties................................................................................ 28
-i-
PAGE
Section 3.26 Environmental Matters..................................................................... 28
Section 3.27 Investments............................................................................... 29
Section 3.28 Reinsurance Agreements.................................................................... 29
Section 3.29 Insurance Brokers......................................................................... 29
Section 3.30 Disclosure................................................................................ 30
ARTICLE 4
REPRESENTATION AND WARRANTIES OF THE TRUSTS
Section 4.01 Organization.............................................................................. 30
Section 4.02 Authorization; Approvals.................................................................. 30
Section 4.03 Noncontravention.......................................................................... 30
Section 4.04 Governmental Authorization................................................................ 30
Section 4.05 Ownership of Wind River Common Stock...................................................... 30
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CAYMAN PURCHASER,
PARENT, U.S. PURCHASER AND THE COMPANY
Section 5.01 Organization.............................................................................. 31
Section 5.02 Authorization; Approvals.................................................................. 31
Section 5.03 Noncontravention.......................................................................... 31
Section 5.04 Governmental Authorization................................................................ 32
Section 5.05 Purchase for Investment................................................................... 32
Section 5.06 No Inducement or Reliance; Forecasts and Projections...................................... 32
Section 5.07 Brokers and Finders....................................................................... 33
Section 5.08 Ownership of Parent; No Prior Activities.................................................. 33
ARTICLE 6
COVENANTS OF WIND RIVER AND THE TRUSTS
Section 6.01 Conduct of Business....................................................................... 34
Section 6.02 Access to Information..................................................................... 37
Section 6.03 Notices of Certain Events................................................................. 38
Section 6.04 Resignations.............................................................................. 38
Section 6.05 Nonsolicitation........................................................................... 38
Section 6.06 Intercompany Accounts..................................................................... 39
Section 6.07 Covenant Not to Compete; Nonsolicitation of Employees..................................... 39
Section 6.08 Adjustment of Principal of Senior Notes................................................... 40
Section 6.09 Certain Employee Benefits................................................................. 40
Section 6.10 Non-Marketable Securities................................................................. 40
Section 6.11 Data Security............................................................................. 41
-ii-
PAGE
ARTICLE 7
COVENANTS OF CAYMAN PURCHASER, PARENT,
U.S. PURCHASER AND THE COMPANY
Section 7.01 Confidentiality........................................................................... 41
Section 7.02 Directors' and Officers' Indemnification and Insurance.................................... 42
Section 7.03 Notices of Certain Events................................................................. 42
Section 7.04 Observer Rights........................................................................... 43
ARTICLE 8
MUTUAL COVENANTS
Section 8.01 Maintenance and Preservation of Records................................................... 43
Section 8.02 Regulatory and Other Authorizations....................................................... 43
Section 8.03 Further Assurances........................................................................ 44
Section 8.04 Employee Benefit Matters.................................................................. 44
ARTICLE 9
TAX MATTERS
Section 9.01 Indemnification by the Trusts............................................................. 46
Section 9.02 Filing of Tax Returns..................................................................... 47
Section 9.03 Tax Refunds............................................................................... 47
Section 9.04 Cooperation............................................................................... 48
Section 9.05 Contests.................................................................................. 48
Section 9.06 Coordination.............................................................................. 49
Section 9.07 Miscellaneous............................................................................. 50
Section 9.08 No Election under Section 338(h)(10)...................................................... 50
ARTICLE 10
CONDITIONS
Section 10.01 Mutual Conditions......................................................................... 50
Section 10.02 Conditions to Obligations of Cayman Purchaser, Parent,
U.S. Purchaser and the Company............................................................ 50
Section 10.03 Conditions to Obligations of Wind River and the Trusts.................................... 52
-iii-
PAGE
ARTICLE 11
SURVIVAL; INDEMNIFICATION
Section 11.01 Survival.................................................................................. 52
Section 11.02 Indemnification........................................................................... 53
Section 11.03 Procedures................................................................................ 54
Section 11.04 Calculation of Damages.................................................................... 55
Section 11.05 Exclusivity............................................................................... 55
Section 11.06 Trust Arrangements........................................................................ 56
ARTICLE 12
TERMINATION
Section 12.01 Grounds for Termination................................................................... 56
Section 12.02 Effect of Termination..................................................................... 57
ARTICLE 13
MISCELLANEOUS
Section 13.01 Notices................................................................................... 57
Section 13.02 Amendments and Waivers.................................................................... 58
Section 13.03 Expenses.................................................................................. 58
Section 13.04 Successors and Assigns.................................................................... 58
Section 13.05 Governing Law............................................................................. 58
Section 13.06 Jurisdiction.............................................................................. 59
Section 13.07 WAIVER OF JURY TRIAL...................................................................... 59
Section 13.08 Counterparts; Third Party Beneficiaries................................................... 59
Section 13.09 Entire Agreement.......................................................................... 59
Section 13.10 Captions.................................................................................. 59
Section 13.11 Specific Performance...................................................................... 59
Section 13.12 Severability.............................................................................. 59
Section 13.13 Publicity................................................................................. 60
Section 13.14 Trustees.................................................................................. 60
Section 13.15 Waiver of Conflict........................................................................ 60
SCHEDULES
SCHEDULE A -- The Trusts
SCHEDULE B -- Obligors
SCHEDULE C -- Knowledge Individuals
SCHEDULE D -- Regulatory Approvals
SCHEDULE E -- Certificate Officers
-iv-
EXHIBITS
EXHIBIT 1 -- Form of Employment Agreement
EXHIBIT 2 -- Form of Deed of Guaranty
EXHIBIT 3 -- Form of Management Agreement
EXHIBIT 4 -- Terms of Parent Preferred Shares
EXHIBIT 5 -- Form of Senior Note
EXHIBIT 6 -- Form of Shareholders Agreement
-v-
AMENDED AND RESTATED INVESTMENT AGREEMENT dated as of
September 5, 2003, among U.N. HOLDINGS (CAYMAN), LTD., an exempted company
formed with limited liability under the laws of the Cayman Islands ("Cayman
Purchaser"), VIGILANT INTERNATIONAL, LTD., an exempted company formed with
limited liability under the laws of the Cayman Islands ("Parent"), U.N. HOLDINGS
II, INC., a Delaware corporation ("U.S. Purchaser"), U.N. HOLDINGS LLC, a
Delaware limited liability company ("U.N. Holdings LLC"), U.N. HOLDINGS INC., a
Delaware corporation (the "Company"), WIND RIVER INVESTMENT CORPORATION, a
Delaware corporation ("Wind River"), and those trusts set forth on Schedule A
(the "Trusts").
W I T N E S S E T H :
WHEREAS, U.N. Holdings LLC, the Company, Wind River and the
Trusts entered into that certain Investment Agreement, dated as of May 1, 2003,
as amended May 30, 2003, August 7, 2003 and August 26, 2003 (the "Original
Investment Agreement"), and the parties hereto desire that this Agreement amend
and restate the Original Investment Agreement in its entirety;
WHEREAS, U.N. Holdings LLC acknowledges that as a result of
this Agreement, it will not be a party to the Transactions (as defined below) as
contemplated by the Original Investment Agreement;
WHEREAS, the Trusts own all of the issued and outstanding
capital stock of Wind River;
WHEREAS, the Company is a direct wholly-owned subsidiary of
U.S. Purchaser and U.S. Purchaser is an indirect wholly-owned subsidiary of
Parent;
WHEREAS, Cayman Purchaser, Parent, U.S. Purchaser, the
Company, Wind River and the Trusts desire to enter into a transaction in which,
among other things (a) Cayman Purchaser shall purchase from Parent and Parent
shall sell to Cayman Purchaser an aggregate of 9,985,000 Parent Class B Common
Shares (as defined below) and an aggregate of 14,000,000 Parent Preferred Shares
(as defined below) for aggregate consideration of $239,850,000 in cash, (b) the
Trusts shall contribute an aggregate of 42.946470 shares of Wind River Common
Stock (as defined below) to the Company for 200,000 shares of Company Common
Stock (as defined below), (c) the Trusts shall contribute an aggregate of
25.767883 shares of Wind River Common Stock to Parent in exchange for 2,500,000
Parent Class A Common Shares and 3,500,000 Parent Preferred Shares, (d) Parent
shall contribute (or shall cause its direct and indirect subsidiaries to
contribute) 25.767883 shares of Wind River Common Stock to the Company, (e)
Parent shall cause U.S. Purchaser to be capitalized with at least $197,500,000
in cash, such capitalization to be effected in such manner as Parent shall
determine, (f) U.S. Purchaser shall purchase from the Company and the Company
shall sell to U.S. Purchaser 194,999 shares of Company Common Stock for
aggregate consideration of $97,499,500 in cash, (g) U.S. Purchaser shall
purchase from the Trusts and the Trusts shall sell to U.S. Purchaser 200,000
shares of Company Common Stock for aggregate consideration of $100,000,000 in
cash and (h) Wind River shall redeem 31.285647 shares of Wind River Common Stock
held by the Trusts in exchange for the Senior Notes (as defined below), in each
case, upon the terms and subject to the conditions set forth below.
- 1 -
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions. (a) As used in this Agreement, the
following terms have the following meanings:
"Action" means any complaint, claim, prosecution, indictment,
action, suit, arbitration or proceeding by or before any Governmental Authority.
"Adjusted Statutory Surplus of UNIC" means, as of any date,
the statutory surplus of UNIC as would be reflected on a balance sheet of UNIC
as of such date prepared in accordance with SAP; provided, however, that, for
purposes of calculating statutory surplus: (i) the sum of the amounts of
unrealized gains and losses and realized gains and losses associated with
unaffiliated equity securities for the period from January 1, 2003 through the
date of such balance sheet shall be added back to or subtracted from, as
appropriate, such statutory surplus; (ii) any reduction in statutory surplus
since December 31, 2002 resulting from uncollectible or potentially
uncollectible reinsurance recoverables shall be disregarded; provided, however,
that the maximum reduction that shall be disregarded under this clause (ii)
shall be $7.5 million and any amounts over $7.5 million shall not be disregarded
and (iii) such statutory surplus shall be increased by an amount equal to
$9,652,000.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with such Person.
"Agreement" means this Amended and Restated Investment
Agreement, together with all Schedules and Exhibits.
"AIA" means American Insurance Adjustment Agency, Inc., a
Pennsylvania corporation.
"AIS" means American Insurance Service, Inc., a Pennsylvania
corporation.
"AMC Group" means The AMC Group, L.P., a Pennsylvania limited
partnership.
"AMCD" means American Manufacturing Corporation, a Delaware
corporation.
"AMCP" means American Manufacturing Corporation, a
Pennsylvania corporation.
"Balance Sheet" means the unaudited consolidated balance sheet
of AIS and the other Subsidiaries of Wind River as of the Balance Sheet Date
included in the GAAP Financial Statements.
"Balance Sheet Date" means December 31, 2002.
- 2 -
"Barbados Insurance Company" means Wind River Insurance
Company (Barbados) Ltd., a Barbados exempt insurance company.
"Closing Agreement" means a written and legally binding
agreement with a Tax Authority relating to Taxes.
"Closing Date" means the date of the Closing; provided, that
the Closing shall be deemed to be effective as of 11:59 p.m., Eastern Daylight
Time, on the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Common Stock" means the common stock, par value
$0.01, of the Company.
"Contract" means any agreement, lease, contract, license,
note, mortgage, indenture, arrangement or obligation, whether written or oral,
in each case, excluding policies of insurance, contracts of reinsurance or
retrocessional agreements issued or entered into by one or more of the
Subsidiaries.
"Deed of Guaranty" means a Deed of Guaranty to be executed by
Parent and the Trusts, in substantially the form of Exhibit 2.
"Disclosure Letter" means the Disclosure Letter, dated as of
the date of the Original Investment Agreement, delivered by Wind River and the
Trusts to U.N. Holdings LLC and the Company, and appended to, and forming a part
of, this Agreement.
"DSIC" means Diamond State Insurance Company, an Indiana
corporation.
"Employee Plan" means any Plan that (i) is sponsored, entered
into, maintained, administered or contributed to, as the case may be, by Wind
River or any of its Subsidiaries or (ii) covers any current or former employee,
officer or director of Wind River or any of its Subsidiaries with respect to
service for Wind River or any of its Subsidiaries.
"Employment Agreements" means the employment agreements, by
and between Wind River or one of its Subsidiaries and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. March, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
substantially in the form of Exhibit 1.
"Environmental Laws" means all Laws that have as their purpose
or that pertain to the protection of the environment (both indoors and
outdoors), or the regulation of any Hazardous Substances, including: (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601 et seq.; (ii) the Resource Conservation and
Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.; (iii) the
Toxic Substances Control Act of 1976, as amended, 15 U.S.C. Section 2601 et
seq.; (iv) the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq.; (v) the Clean Air Act, 42 U.S.C. Section 7401 et seq.;
(vi) the Superfund Amendments and Reauthorization Act of 1986, Public Law
99-499, ▇▇▇ ▇▇▇▇. ▇▇▇▇; (vii) the Safe Drinking Water Act, 42 U.S.C. Section
300(f) et seq.; and (viii) all regulations promulgated in connection with any of
the foregoing.
- 3 -
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliates" means Wind River, its Subsidiaries and any
other entity that is, or was at the relevant time, (i) treated as a single
employer under Section 414 of the Code with Wind River or any of its
Subsidiaries or (ii) a member of the same "controlled group" as Wind River or
any of its Subsidiaries, pursuant to Section 4001(a)(14) of ERISA.
"Financial Statements" means the GAAP Financial Statements,
the Wind River Financial Statements and the SAP Financial Statements.
"Fox ▇▇▇▇▇" means Fox ▇▇▇▇▇ & Company, LLC, a Delaware limited
liability company.
"GAAP" means U.S. generally accepted accounting principles,
consistently applied.
"Governmental Authority" means any U.S. or non-U.S.
governmental or regulatory authority, agency, court, commission, tribunal, body
or other governmental, quasi-governmental, regulatory or self-regulatory entity,
including any state insurance department or insurance or consumer finance
regulatory agency, in each case, of competent jurisdiction.
"Hazardous Substances" means any waste, emission, material or
substance (including gases, liquids and solids) defined or identified as toxic,
hazardous or dangerous in (or for the purposes of), or that is regulated under,
any Environmental Law, including asbestos, asbestos-containing materials, radon
gas, urea formaldehyde foam insulation, polychlorinated biphenyls, and oil or
petroleum products and by-products.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"IRS" means the Internal Revenue Service of the United States.
"IUI" means International Underwriters, Inc., a Pennsylvania
corporation.
"▇.▇. ▇▇▇▇▇▇▇▇" means ▇.▇. ▇▇▇▇▇▇▇▇ & Associates, LLC, an
Illinois limited liability company.
"knowledge of Wind River", "Wind River's knowledge" or any
other similar knowledge qualification means the actual knowledge of those
individuals set forth on Schedule C after due inquiry.
"Lien" means, with respect to any property or asset, any
mortgage, lien, pledge, charge, security interest, encumbrance, title defect,
easement, tenancy, right-of-way, license, use restriction, claim, hypothecation,
assignment, preemptive right, option, right of first refusal, right of first
offer, right of consent, restrictive covenant or other right, title or interest
of any Person, in any such case relating to such property or asset.
- 4 -
"Little Round Top" means Little Round Top, Inc., a
Pennsylvania corporation.
"Loyalty" means Loyalty Insurance Company, Inc., a Barbados
corporation.
"Management Agreement" means the Management Agreement, by and
among Fox ▇▇▇▇▇, AMC Group and Parent, substantially in the form of Exhibit 3.
"Material Adverse Change" means the occurrence of any event,
incident or occurrence, or the existence of any circumstance or set of facts,
that, individually or in the aggregate, has or would reasonably be expected to
have a material adverse effect on the business, assets, liabilities, financial
condition, results of operations or prospects of Wind River and its Subsidiaries
taken as a whole, except any such effect resulting solely from or arising solely
in connection with (i) changes in United States economic, regulatory or
political conditions generally, including acts of war or terrorism, (ii) any
event, incident or occurrence affecting the property and casualty insurance and
reinsurance industry generally that, in the case of each of clause (i) and (ii),
does not disproportionately affect Wind River and its Subsidiaries relative to
other similarly situated businesses, (iii) the occurrence of any event, incident
or occurrence that is specifically contemplated by, or that is directly related
to the satisfaction of, the conditions to Closing set forth in Sections
10.02(h), (i), (k), (l) or (m) but that does not cause the condition set forth
in such Section to not be satisfied or (iv) the result of the review of the
reserves for claims and claims expenses of the Insurance Companies contemplated
by Section 6.08(a) of the Original Investment Agreement or any event, incident
or occurrence related to the recovery of amounts due from Obligors.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 3(37) of ERISA.
"Multiple Employer Plan" means a multiple employer plan within
the meaning of Section 4063 or 4064 of ERISA.
"Non-Marketable Securities" means the interests in ▇▇▇▇▇▇ &
Partners Fund, L.P., Grotech Partners, L.P., Co-Investment Fund, Liberty
Associated & Partners, Bueurk, ▇▇▇▇▇, ▇▇▇▇▇▇ LLC and Zon Capital Partners held
in the Investment Assets and the notes receivable from 181 Properties, L.P. and
AMC Group.
"Obligors" means those obligors of Wind River or its
Subsidiaries set forth on Schedule B.
"Parent Class A Common Shares" means the Class A Common
Shares, par value $0.0001 per share, of Parent.
"Parent Class B Common Shares" means the Class B Common
Shares, par value $0.0001 per share, of Parent.
"Parent Preferred Shares" means the Series A Preferred Shares,
par value $0.0001 per share, of Parent, the rights and preferences of which are
set forth in the resolutions of the Parent's Board of Directors included in
Exhibit 4.
- 5 -
"Parent Shares" means Parent Class A Common Shares, the Parent
Class B Common Shares and Parent Preferred Shares.
"Person" means an individual, corporation, partnership,
limited liability company, association, trust or other entity or organization,
including a Governmental Authority.
"Plan" means any employment, severance or similar contract,
agreement or arrangement (whether or not written) or any plan, policy, fund,
program or contract or arrangement (whether or not written) providing for
compensation, bonus, profit-sharing, stock option, or other stock related rights
or other forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance or other
benefits).
"Post-Closing Tax Period" means any taxable period beginning
after the Closing Date; and, with respect to a taxable period that begins on or
before the Closing Date and ends thereafter, the portion of such taxable period
beginning after the Closing Date.
"Pre-Closing Tax Period" means any taxable period ending on or
before the Closing Date; and, with respect to a taxable period that begins on or
before the Closing Date and ends thereafter, the portion of such taxable period
ending on and including the Closing Date.
"Property Taxes" means Taxes imposed on a periodic basis with
respect to the assets of Wind River or any of its Subsidiaries, or otherwise
measured by the level of any asset, including real, personal and intangible ad
valorem property taxes.
"Records" means all books and records of Wind River and its
Subsidiaries, including all accounting (including accounting work papers),
financial reporting, tax, business, marketing, environmental, legal, corporate
and other files, documents, instruments and papers, whether originals, copies
(including computer generated, recorded or stored records) or otherwise,
customer lists, lists of insurance producers, insurance producer information
(including producer records), policy information, policyholder information,
insurance policy forms, rate filing information, rating plans, claim records,
sales records, underwriting records, advertising and promotional materials,
financial statements, budgets, projections, financial, tax and accounting
records, personnel records, compliance records, ledgers, journals, deeds, legal
documents, title policies, manuals, minute books, stock certificates and books,
stock transfer ledgers, contracts, franchises, permits, licenses, reports,
management information systems, computer tapes, discs and other files, retrieval
programs, operating data or plans and environmental studies or plans.
"Senior Note Adjustment Base Amount" means an amount equal to
(i) the sum of (a) the amount of all recoverables on paid losses outstanding as
of December 31, 2002, plus (b) all additional amounts recoverable after December
31, 2002 for, including but not limited to, paid losses, paid loss adjustment
expenses, returned premium and commission payable, in each case, from Obligors
under agreements between Wind River or any of its Subsidiaries and the Obligors,
minus (ii) $50 million.
- 6 -
"Senior Notes" means the Senior Notes issued by Wind River to
the Trusts, each substantially in the form of Exhibit 5.
"Shareholders Agreement" means the Shareholders Agreement, by
and among Cayman Purchaser, Parent and the Trusts, substantially in the form of
Exhibit 6.
"Spin-Offs" means, collectively, (i) the distribution by AMCD
of all the outstanding shares of AIS to the sole shareholder of AMCD, AMCP and
(ii) the distribution by AMCP of all the outstanding shares of AIS to the
shareholders of AMCP, in each case, that occurred in 1997.
"Subsidiary" means any entity of which securities or other
ownership interests having voting power to elect a majority of the board of
directors or other Persons performing similar functions are directly or
indirectly beneficially owned by Wind River, including AIS, UNIC, DSIC, UNCIC,
UNSIC, ▇.▇. ▇▇▇▇▇▇▇▇, AIA, Unity, IUI, Loyalty and Deale, LLC, but excluding
Little Round Top.
"Tax Authority" means the IRS and any other domestic or
foreign Governmental Authority responsible for the administration of any Taxes.
"Tax Claim" means any claim with respect to Taxes made by any
Tax Authority that, if pursued successfully, would reasonably be expected to
serve as the basis for a claim for indemnification under Article 9.
"Tax Detriment" means an increase in liability for Taxes for
any taxable period, or a reduction of (i) a refund for Taxes for any taxable
period or (ii) any other Tax attribute of a Person that could have reduced that
Person's or an Affiliate of that Person's liability for Taxes for any taxable
period, in each case, when and as actually realized through an increase of Taxes
otherwise due and net of any offsetting Tax benefit actually realized through a
reduction of Taxes otherwise due.
"Taxes," with respect to any Person means (i) all taxes,
charges, fees, levies or other assessments, including all net income, gross
income, gross receipts, excise, stamp, real or personal property, ad valorem,
withholding, social security, unemployment, use, license, net worth, payroll,
franchise, severance, transfer, recording, employment, premium, windfall
profits, environmental, customs duties, capital stock, profits, sales,
registration, value added, alternative or add-on minimum, estimated or other
taxes, assessments or charges imposed by any Tax Authority and any interest,
penalties, or additions to tax attributable thereto, (ii) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in clause (i) of this definition, and (iii) any liability of
such Person for the payment of any amounts of the type described in clause (i)
as a result of any express or implied obligation to indemnify any other Person
other than Cayman Purchaser or its Affiliates.
"Tax Return" means any return, report, form or similar
statement filed or required to be filed with respect to any Tax (including any
attached schedules), including any information return, claim for refund, amended
return or declaration of estimated Tax.
- 7 -
"Title IV Plan" means a Plan subject to Title IV of ERISA,
Section 302 of ERISA, or Section 412 or 4971 of the Code, that is sponsored or
maintained by any of the ERISA Affiliates, or to which any of the ERISA
Affiliates contributes or is obligated to contribute.
"Transactions" means the transactions contemplated by this
Agreement, including the execution, delivery and performance of the Deed of
Guaranty, the Management Agreement and the Shareholders Agreement.
"UNCIC" means United National Casualty Insurance Company, an
Indiana corporation.
"UNIC" means United National Insurance Company, a Pennsylvania
corporation.
"Unity" means Unity Risk Partners Insurance Services, Inc., a
California corporation.
"UNSIC" means United National Specialty Insurance Company,
Inc., a Wisconsin corporation.
"Updated Disclosure Letters" means (1) a letter dated May 28,
2003 from ▇▇▇▇▇▇ ▇. ▇▇▇▇ of Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP sent to ▇▇▇▇ ▇. ▇▇▇ of
U.N. Holdings LLC and the Company and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, which provided supplemental disclosure to the
Disclosure Letter, and (2) a letter dated August 13, 2003 from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
of Wind River sent to ▇▇▇▇ ▇. ▇▇▇ of U.N. Holdings LLC and the Company and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇,
which provided an update to the disclosure under item 13 of Section 3.12 of the
Disclosure Letter.
"Wind River Common Stock" means the common stock, par value
$1.00, of Wind River.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal, as those terms are defined in
Part I of Subtitle E of Title IV of ERISA, from such Multiemployer Plan.
"WWW Litigation" means Bank of America, N.A. v. Diamond State
Ins. Co. (S.D.N.Y., 01 CV 0645 (LMM) (GWG)), Diamond State Ins. Co. v. Partner
Reinsurance Co. of the United States, Third Party Defendant (referred to
arbitration for consolidation with the Arbitration between the United National
Ins. Group and Partner Reinsurance Co., Ltd.) (S.D.N.Y., 01 CV 0645 (LMM)
(GWG)), Diamond State Ins. Co. v. Worldwide Weather Trading Co., LLC (S.D.N.Y.,
01 CV 2900 (LMM) (GWG)), and Arbitration Between United National Ins. Group and
Partner Reinsurance Co., Ltd. (Arbitrators: N. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇).
- 8 -
(b) Each of the following terms is defined in the Section
set forth opposite such term:
TERM SECTION
Actuarial Analyses 3.19
AMC Pension Plan 6.09
AMC Savings Plan 6.09
Attorney Materials 6.02(c)
Board 7.04
Cayman Purchaser Preamble
Claim 11.03(a)
Closing 2.02
COBRA Coverage 3.13(h)
Company Preamble
Confidential Information 7.01(a)
Damages 11.02(a)
GAAP Financial Statements 3.08(a)
Indemnified Persons 11.02(a)
Indemnifying Party 11.03(a)
Indemnity Period 11.06(a)
Insurance Companies 3.05(a)
Intellectual Property 3.17(a)
Investment Assets 3.27
Laws 3.11(a)
Material Contract 3.20(b)
Noncompetition Period 6.07(a)
Non-resident Jurisdiction 3.16(e)
Obligor Proceeds 6.08(b)
Original Investment Agreement Recitals
Parent Preamble
PBGC 3.13(e)
Permits 3.11(b)
Regulatory Reports 3.09
Reinsurance Agreement 3.28(a)
Release 3.26(e)
SAP 3.08(c)
SAP Financial Statements 3.08(c)
SAR Agreements 3.13(g)
Senior Note Adjustment Amount 6.08(b)
Senior Notes Observer 7.04
Subsidiary Securities 3.05(b)
Tax Contest Expenses 9.01(a)
Tax Proceeding 9.05(b)
Third Party Claim 11.03(b)
Transfer Taxes 9.01(b)
Trusts Preamble
U.N. Holdings LLC Preamble
- 9 -
TERM SECTION
U.S. Purchaser Preamble
Welfare Benefits 8.04(b)
Wind River Preamble
Wind River Financial Statements 3.08(b)
Wind River Participants 8.04(d)(i)
Wind River Plans 3.13(a)
Wind River Savings Plan 8.04(d)(i)
(c) Except as otherwise provided or if the context
otherwise requires, whenever used in this Agreement, (i) any noun or pronoun
shall be deemed to include the plural and the singular, (ii) the terms "include"
and "including" shall be deemed to be followed by the phrase "without
limitation" and (iii) the word "or" shall be inclusive and not exclusive.
ARTICLE 2
PURCHASE, SALE and CONTRIBUTION
Section 2.01 The Transactions. Upon the terms and subject to
the conditions of this Agreement, at the Closing:
(a) Cayman Purchaser shall purchase from Parent and
Parent shall sell to Cayman Purchaser 9,985,000 Parent Class B Common
Shares and 14,000,000 Parent Preferred Shares for aggregate
consideration of $239,850,000 in cash, and Parent shall cause U.S.
Purchaser to be capitalized with at least $197,500,000 of such
consideration, such capitalization to be effected in such manner as
Parent shall determine;
(b) Each Trust shall contribute to the Company and the
Company shall accept from each Trust, free and clear of any Liens, that
number of shares of Wind River Common Stock set forth opposite the name
of such Trust on Schedule A (or 42.946470 shares of Wind River Common
Stock in the aggregate), in exchange for, free and clear of any Liens,
that number of shares of Company Common Stock set forth opposite the
name of such Trust on Schedule A (or 200,000 shares of Company Common
Stock in the aggregate);
(c) Each Trust shall contribute to Parent and Parent
shall accept from each Trust, free and clear of any Liens, that number
of shares of Wind River Common Stock set forth opposite the name of
such Trust on Schedule A (or 25.767883 shares of Wind River Common
Stock in the aggregate), in exchange for, free and clear of any Liens,
that number of Parent Class A Common Shares and Parent Preferred Shares
set forth opposite the name of such Trust on Schedule A (or 2,500,000
Parent Class A Common Shares and 3,500,000 Parent Preferred Shares in
the aggregate), and Parent shall, and shall cause its direct and
indirect subsidiaries to, contribute such 25.767883 shares of Wind
River Common Stock to the Company;
(d) the Company shall sell to U.S. Purchaser and U.S.
Purchaser shall purchase from the Company, free and clear of any Liens,
194,999 shares of Company
Common Stock for aggregate consideration of $97,499,500 in cash, to be
paid as provided in Section 2.02;
(e) each Trust shall sell to U.S. Purchaser and U.S.
Purchaser shall purchase from such Trust, free and clear of any Liens,
that number of shares of Company Common Stock set forth opposite the
name of such Trust on Schedule A (or 200,000 shares of Company Common
Stock in the aggregate) for that amount in cash set forth opposite the
name of such Trust on Schedule A (or $100,000,000 in the aggregate), to
be paid as provided in Section 2.02;
(f) Wind River shall redeem from each Trust that number
of shares of Wind River Common Stock set forth opposite the name of
such Trust on Schedule A (or 31.285647 shares of Wind River Common
Stock in the aggregate) in exchange for a Senior Note having a
principal amount equal to that amount set forth opposite the name of
such Trust on Schedule A;
(g) Parent shall enter into the Deed of Guaranty;
(h) Cayman Purchaser, Parent and the Trusts shall enter
into the Shareholders Agreement; and
(i) Parent, Fox ▇▇▇▇▇ and AMC Group shall enter into the
Management Agreement.
Section 2.02. Closing. The closing (the "Closing") of the
Transactions shall take place at the offices of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇,
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as soon as reasonably
practicable, but in no event later than three business days, after satisfaction
or waiver of the conditions set forth in Article 10 (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions), or at such other time or place as
Cayman Purchaser, the Trusts and Wind River may mutually agree. At the Closing:
(a) Parent shall issue to Cayman Purchaser 9,850,000
Parent Class B Common Shares and 14,000,000 Parent Preferred Shares in
uncertificated book entry form;
(b) Cayman Purchaser shall deliver to Parent $239,850,000
in immediately available funds by wire transfer to such account
designated by Parent by notice given to Cayman Purchaser not later than
two business days prior to the Closing Date, and Parent shall cause
U.S. Purchaser to be capitalized with at least $197,500,000 of such
consideration, such capitalization to be effected in such manner as
Parent shall determine;
(c) each Trust shall deliver to the Company certificates
for that number of shares of Wind River Common Stock set forth opposite
the name of such Trust on Schedule A (or 42.946470 shares of Wind River
Common Stock in the aggregate), duly endorsed or accompanied by stock
powers duly endorsed in blank for transfer, with any required transfer
stamps affixed thereto;
- 11 -
(d) each Trust shall deliver to Parent certificates for
that number of shares of Wind River Common Stock set forth opposite the
name of such Trust on Schedule A (or 25.767883 shares of Wind River
Common Stock in the aggregate), duly endorsed or accompanied by stock
powers duly endorsed in blank for transfer, with any required transfer
stamps affixed thereto, and Parent shall, and shall cause its direct
and indirect subsidiaries to deliver such certificates and any
accompanying stock powers duly endorsed in blank for transfer, with any
required transfer stamps affixed thereto to the Company;
(e) the Company shall issue to each Trust that number of
shares of Company Common Stock set forth opposite the name of such
Trust on Schedule A (or 200,000 shares of Company Common Stock in the
aggregate) in uncertificated book entry form;
(f) Parent shall issue each Trust that number of Parent
Class A Common Shares and Parent Preferred Shares set forth opposite
the name of such Trust on Schedule A (or 2,500,000 Parent Class A
Common Shares and 3,500,000 Parent Preferred Shares in the aggregate)
in uncertificated book entry form;
(g) U.S. Purchaser shall deliver to the Company
$97,499,500 in immediately available funds by wire transfer to such
account designated by the Company by notice given to U.S. Purchaser not
later than two business days prior to the Closing Date;
(h) the Company shall issue to U.S. Purchaser 194,999
shares of Company Common Stock in uncertificated book entry form;
(i) U.S. Purchaser shall deliver to each Trust cash in an
amount equal to that set forth opposite the name of such Trust on
Schedule A (or an aggregate of $100,000,000) in immediately available
funds by wire transfer to such account of such Trust designated by such
Trust by notice given to U.S. Purchaser not later than two business
days prior to the Closing Date;
(j) each Trust shall transfer to U.S. Purchaser that
number of shares of Company Common Stock set forth opposite the name of
such Trust on Schedule A (or 200,000 shares of Company Common Stock in
the aggregate);
(k) each Trust shall deliver to Wind River certificates
for that number of shares of Wind River Common Stock set forth opposite
the name of such Trust on Schedule A (or 31.285647 shares of Wind River
Common Stock in the aggregate), duly endorsed or accompanied by stock
powers duly endorsed in blank for transfer, with any required transfer
stamps affixed thereto;
(l) Wind River shall deliver to each Trust a Senior Note
having a principal amount equal to that amount set forth opposite the
name of such Trust on Schedule A, duly executed on behalf of Wind
River;
(m) Parent shall deliver to the Trusts the Deed of
Guaranty, duly executed on behalf of Parent;
- 12 -
(n) Cayman Purchaser, Parent and the Trusts shall deliver
to each of the others the Shareholders Agreement, duly executed on
behalf of such party;
(o) Parent shall deliver to Fox ▇▇▇▇▇ and AMC Group the
Management Agreement, duly executed on behalf of Parent; and
(p) In order to effect the foregoing issuances and
transfers of shares, (i) Cayman Purchaser and the Trusts shall take all
necessary steps to ensure that Parent's Board of Directors updates
Parent's Register of Members to reflect the issuance of the Parent
Shares in the Transactions, and (ii) the Company shall take all
necessary steps to update the Company's stock ledger to reflect the
issuances and transfers of shares of Company Common Stock in the
Transactions.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF WIND RIVER AND THE TRUSTS
Wind River and the Trusts jointly and severally represent and
warrant to Cayman Purchaser, Parent, U.S. Purchaser and the Company that, except
as set forth in the applicable section of the Disclosure Letter or as otherwise
disclosed in the Updated Disclosure Letters, as of the date of the Original
Investment Agreement (except as specifically indicated):
Section 3.01. Organization, Good Standing and Qualification.
Wind River and each of its Subsidiaries (a) is a corporation or other entity
duly organized, validly existing and, if applicable, in good standing under the
laws of its respective jurisdiction of organization, (b) has all requisite
corporate or similar power and authority to own, operate and lease its
properties and assets and to carry on its business as currently conducted and
(c) is duly qualified to do business and is in good standing as a foreign
corporation or other entity in each jurisdiction where the ownership, operation
or leasing of its assets or properties or conduct of its business requires such
qualification, except in the case of this clause (c) where the failure to be so
qualified or in good standing, individually or in the aggregate, would not or
would not reasonably be expected to materially adversely affect the business,
financial condition, results of operations or prospects of Wind River and its
Subsidiaries taken as a whole. Wind River has delivered to Cayman Purchaser or
one of its Affiliates a true, correct and complete copy of the certificate of
incorporation and bylaws, or similar organizational documents, of Wind River and
each of its Subsidiaries, in each case as amended to date, and that are in full
force and effect.
Section 3.02. Corporate Authorization; Approvals. As of the
date of this Agreement, Wind River has all necessary corporate power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement and to consummate the Transactions. As of the date of this
Agreement, the execution, delivery and performance of this Agreement by Wind
River, and the consummation by Wind River of the Transactions, have been duly
and validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of Wind River are necessary to authorize this Agreement
or to consummate the Transactions. This Agreement has been duly and validly
executed and delivered by Wind River as of the date of this Agreement and,
assuming the due authorization, execution and delivery by
- 13 -
each other party, constitutes a legal, valid and binding obligation of Wind
River, enforceable against Wind River in accordance with its terms.
Section 3.03. Noncontravention. As of the date of this
Agreement, the execution, delivery and performance of this Agreement by Wind
River do not, and the consummation by Wind River of the Transactions will not,
constitute or result in (a) a breach or violation of, or a default under, the
certificate of incorporation or bylaws of Wind River or the comparable
organizational documents of any of its Subsidiaries, (b) assuming compliance
with the matters set forth in Sections 3.07, 4.04 and 5.04, a material breach or
violation of, or material default under, any Law, (c) a breach or violation of,
or a default under, or the creation or acceleration of any material obligations
or the creation of any Lien on the assets of Wind River or any of its
Subsidiaries (with or without notice, lapse of time or both) pursuant to, or the
creation or acceleration of any right of termination under, or require the
consent of any Person under, any Material Contract binding upon Wind River or
any of its Subsidiaries or any of their respective assets or any franchise,
Permit or other similar authorization held by Wind River or any of its
Subsidiaries or (d) any adverse change in the rights or obligations of Wind
River or any of its Subsidiaries under any Material Contract to which they are a
party.
Section 3.04. Capital Structure. (a) The designations and
numbers of authorized, issued and outstanding shares of capital stock of Wind
River and each of its Subsidiaries, together with the name of the holders of
record thereof, are set forth in Section 3.04(a) of the Disclosure Letter. All
of the issued and outstanding shares of Wind River Common Stock have been duly
authorized and are validly issued, fully paid and nonassessable and not subject
to preemptive rights. There are no outstanding (i) securities of Wind River or
any of its Subsidiaries that are convertible into or exchangeable for shares of
capital stock of Wind River or (ii) options or other rights to acquire from Wind
River or any of its Subsidiaries, or other obligation of Wind River or any of
its Subsidiaries to issue any capital stock, or any securities convertible into
or exchangeable for any capital stock, of Wind River. Since the Balance Sheet
Date, Wind River has issued no shares of Wind River Common Stock, or securities
convertible into or exchangeable for shares of Wind River Common Stock. Wind
River has no commitments (including contingent or conditional commitments) to
issue or deliver any shares of its capital stock. Except as contemplated by this
Agreement, there are no outstanding obligations of Wind River or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any of Wind River's
capital stock.
(b) (i) There is no capital stock or other equity or
voting securities of Wind River or any of its Subsidiaries authorized, reserved,
issued or outstanding, (ii) neither Wind River nor any of its Subsidiaries is
party to any agreement creating preemptive or other outstanding rights,
subscriptions, options, warrants, stock appreciation rights, redemption rights,
repurchase rights, convertible securities or other agreements, arrangements or
commitments of any character relating to, or the value of which is determined by
reference to, the issued or unissued capital stock or other equity interest of
Wind River or any of its Subsidiaries, and (iii) neither Wind River nor any of
its Subsidiaries is party to any agreement creating any other securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of Wind River or any
of its Subsidiaries, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. Neither
- 14 -
Wind River nor any of its Subsidiaries has outstanding any bonds, debentures,
notes or other similar obligations.
Section 3.05. Subsidiaries. (a) Wind River does not have any
Subsidiaries other than those set forth on Section 3.05(a) of the Disclosure
Letter. Section 3.05(a) of the Disclosure Letter (i) lists the jurisdiction of
organization of each Subsidiary of Wind River, and (ii) in the case of any
Subsidiary of Wind River that operates as an insurance company (collectively,
the "Insurance Companies"), lists, as of March 31, 2003, the U.S. jurisdictions
where the Insurance Companies are domiciled or "commercially domiciled" and
licensed to do insurance business for insurance regulatory purposes. Each
Subsidiary of Wind River holds all licenses or authorizations required or
necessary to conduct its business in all material respects as currently
conducted.
(b) All of the outstanding capital stock of, or other
voting securities or ownership interests in, each Subsidiary of Wind River is
duly authorized, fully paid and nonassessable and not subject to preemptive
rights and is owned beneficially and of record by Wind River, directly or
indirectly, free and clear of any Liens and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of (except for applicable insurance and securities law restrictions)
such capital stock or other voting securities or ownership interests). There are
no outstanding (i) securities of Wind River or any of its Subsidiaries that are
convertible into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any Subsidiary of Wind River or (ii)
options or other rights to acquire from Wind River or any of its Subsidiaries,
or other obligation of Wind River or any of its Subsidiaries to issue, any
capital stock or other voting securities or ownership interests in, or any
securities convertible into or exchangeable for any capital stock or other
voting securities of or ownership interests in, any Subsidiary of Wind River
(the items in clauses (i) and (ii) being referred to collectively with the
capital stock of the Subsidiaries of Wind River as the "Subsidiary Securities").
There are no outstanding obligations of Wind River or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any of the Subsidiary Securities.
Section 3.06. Other Equity Interests. Wind River does not own
(other than (a) in a bona fide fiduciary capacity, (b) in the ordinary course of
its insurance business, (c) in customer accounts held or maintained in the
ordinary course or (d) in any general account or otherwise in the ordinary
course to offset insurance liabilities) beneficially, directly or indirectly,
(i) any material equity securities or similar material interests of any Person
other than its Subsidiaries (including any securities that impose any obligation
to contribute capital) or (ii) any interest in any general partnership,
unlimited company or other Person with share capital or other equity or similar
interests of unlimited liability, or any general partnership interest in a
limited partnership.
Section 3.07. Governmental Authorization. Other than the
reports, filings, registrations, consents, approvals, permits, authorizations,
applications, expiry of waiting periods and/or notices under the HSR Act and
under the insurance laws of Indiana, Pennsylvania and Wisconsin, no notices,
reports or other filings are required to be made by Wind River or any of its
Subsidiaries with, nor are any consents, registrations, approvals, permits,
applications, expiry of waiting periods or authorizations required to be
obtained by Wind River or any of its
- 15 -
Subsidiaries from, any Governmental Authority, in connection with the execution
and delivery of this Agreement by Wind River or the consummation by Wind River
of the Transactions.
Section 3.08. Financial Statements; Undisclosed Liabilities.
(a) (i) Section 3.08(a) of the Disclosure Letter includes true, correct and
complete copies of the audited consolidated financial statements of AIS
including audited consolidated balance sheets as of December 31, 2000 and 2001,
and audited consolidated statements of income and cash flows for the years ended
December 31, 2000 and 2001, in each case, together with the unqualified opinion
of PricewaterhouseCoopers LLP thereon and (ii) Wind River has delivered to
Cayman Purchaser or one of its Affiliates true, correct and complete copies of
the audited consolidated financial statements of AIS including an audited
consolidated balance sheet as of December 31, 2002 and audited consolidated
statements of income and cash flow for the year ended December 31, 2002
(collectively, the "GAAP Financial Statements"). The GAAP Financial Statements
fairly present in all material respects the consolidated financial position and
results of operations and cash flows of AIS and the other Subsidiaries of Wind
River as of the respective dates or for the respective periods set forth
thereon, in each case in accordance with GAAP as in effect as of such dates and
for such periods, consistently applied during the periods involved, except as
may be noted therein or in the notes thereto. AIS is a wholly-owned direct
Subsidiary of Wind River and each other Subsidiary of Wind River is owned
directly or indirectly by AIS.
(b) Wind River has delivered to Cayman Purchaser or one
of its Affiliates true, correct and complete copies of the unaudited
unconsolidated financial statements of Wind River including unaudited
unconsolidated balance sheets as of December 31, 2000, 2001 and 2002, and
unaudited and unconsolidated statements of income for the years ended December
31, 2000, 2001 and 2002 (collectively, the "Wind River Financial Statements").
The Wind River Financial Statements fairly present in all material respects the
unconsolidated financial position and results of operations of Wind River as of
the respective dates or for the respective periods set forth thereon.
(c) Wind River has delivered to Cayman Purchaser or one
of its Affiliates true, correct and complete copies of the annual statutory
statements (the "SAP Financial Statements") of each Insurance Company as of
December 31, 1999, 2000, 2001 and 2002 as filed with the insurance regulatory
authority of the respective jurisdictions of domicile of the Insurance
Companies. The SAP Financial Statements were prepared in accordance with the
statutory accounting practices and procedures required or permitted by the
applicable insurance regulatory authority of the respective jurisdictions of
domicile of the Insurance Companies ("SAP"), as in effect as of such dates and
for such periods applied during the periods involved, except as may be noted
therein or in the notes thereto, and fairly present in all material respects the
statutory financial position of the Insurance Companies as of the respective
date thereof and the statutory results of operations and cash flows of the
Insurance Companies for the respective periods then ended. No deficiency has
been asserted in writing to any Insurance Company by any Governmental Authority
with respect to any of the SAP Financial Statements.
(d) Since the Balance Sheet Date neither Wind River nor
any of its Subsidiaries has incurred any liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due), other than (i) liabilities incurred in the ordinary course of business,
consistent with past practice, and that are not prohibited by this
- 16 -
Agreement or (ii) in connection with the negotiation, execution, delivery and
performance of this Agreement (including in connection with the Original
Investment Agreement) and the Transactions. As of the Balance Sheet Date,
neither AIS nor any of the other Subsidiaries of Wind River had any liabilities
of any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether due or to become due) with respect to operations or entities that are
not reflected within (A) the GAAP Financial Statements that are required to be
accrued or disclosed in a balance sheet (or notes thereto) prepared in
accordance with GAAP or (B) the SAP Financial Statements that are required to be
accrued or disclosed in a balance sheet (or notes thereto) prepared in
accordance with SAP.
Section 3.09. Regulatory Reports. Since December 31, 1999,
Wind River and each of its Subsidiaries has timely filed all material periodic
statements, together with all exhibits, interrogatories, notes, schedules and
any actuarial opinions, affirmations or certifications or other supporting
documents in connection therewith, required to be filed with or submitted to any
Governmental Authority on forms prescribed or permitted thereby (collectively,
the "Regulatory Reports"). The Regulatory Reports complied in all material
respects with all applicable Laws when filed, and no material deficiency has
been asserted with respect to any Regulatory Report by any Governmental
Authority.
Section 3.10. Absence of Certain Changes. Except as
contemplated by this Agreement, or as may be consented to by Cayman Purchaser or
one of its Affiliates prior to the Closing pursuant to Section 6.01 or as may
have been consented to by Cayman Purchaser or one of its Affiliates prior to
Closing pursuant to Section 6.01 of the Original Investment Agreement , since
the Balance Sheet Date, Wind River and each of its Subsidiaries have conducted
their respective businesses only in the ordinary course, consistent with past
practice, and, without limiting the generality of the foregoing, there has not
been:
(a) any Material Adverse Change;
(b) any declaration, setting aside or payment of any
dividend or other distribution in respect of the capital stock of Wind
River or any repurchase, redemption or other acquisition by Wind River
or any of its Subsidiaries of any capital stock or other securities of,
or ownership interests in, Wind River or any of its Subsidiaries;
(c) any split, combination, recapitalization,
redenomination of capital stock or other similar transaction or
issuance or authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for capital stock of Wind
River;
(d) any material addition, or any development involving a
prospective material addition, to AIS's consolidated loss and loss
adjustment expense reserves, except in the ordinary course of business
consistent with past practice, including the establishment of reserves
in connection with insurance coverage based on premiums earned since
the Balance Sheet Date and except for any increase in reserves prior to
Closing associated with the calculation of the Reserve Adjustment
Amount (as defined in the Original Investment Agreement) as
contemplated by Section 6.08(a) of the Original Investment Agreement;
- 17 -
(e) any material change in the tax, underwriting,
reinsurance, marketing, pricing, claim processing and payment,
reserving, actuarial, risk management, investment, financial and
accounting practices, policies, procedures and methods of Wind River or
any of its Subsidiaries, except as required by Law or by reason of a
concurrent change in GAAP or SAP;
(f) capital expenditures in any calendar quarter in
excess of $250,000;
(g) any damage, destruction or other casualty loss (to
assets of Wind River or any of its Subsidiaries not covered by
insurance) in excess of $250,000;
(h) any incurrence, assumption or guarantee by Wind River
or any of its Subsidiaries of any indebtedness, obligation or
liability, other than in the ordinary course of business consistent
with past practice;
(i) any loan, advance or capital contribution (not
including investments made in the ordinary course of business
consistent with past practice) by Wind River or any of its Subsidiaries
to any Person, other than to Wind River or any of its Subsidiaries; or
(j) any sale, assignment, transfer or other disposition
of, or any incurrence, creation or assumption of any Lien on, any
material asset of Wind River or any of its Subsidiaries, other than in
the ordinary course of business consistent with past practice.
Section 3.11. Compliance with Laws; Permits. (a) The business
and operations of Wind River and each of its Subsidiaries have been and are
being, conducted in material compliance with all applicable federal, state,
local or non-U.S. laws, statutes, ordinances, rules, regulations, rulings,
written interpretations, judgments, orders, injunctions, decrees, arbitration
awards or agency requirements of any Governmental Authority, including all
regulations regulating the business and products of insurance and all applicable
orders and directives of insurance regulatory authorities and orders resulting
from market conduct examinations of insurance regulatory authorities
(collectively, "Laws"), in each case to the extent applicable to Wind River and
its Subsidiaries, and except, with respect to the business and operations of
Wind River and each of its Subsidiaries prior to December 31, 1999, as would not
or would not reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the business, financial condition, results of
operations or prospects of Wind River and its Subsidiaries taken as a whole. To
the knowledge of Wind River, except for regulatory examinations or reviews
conducted in the ordinary course, no investigation or review by any Governmental
Authority with respect to Wind River or any of its Subsidiaries is as of the
date of the Original Investment Agreement pending or threatened. Notwithstanding
the generality of the foregoing, all insurance policies, binders, slips,
certificates and Material Contracts issued by the Insurance Companies since
December 31, 1999 are, to the extent required under Law, in forms approved in
all material respects by applicable regulatory authorities or have been filed
and not objected to (or such objection has been withdrawn or resolved) by such
authorities within the period provided for objection and such forms comply in
all material respects with Laws applicable to Wind River and its Subsidiaries.
All reports, statements, documents, registrations, filings and submissions made
by Wind River or its Subsidiaries to state insurance regulatory authorities
since December 31, 1999 complied in all material respects with Laws in effect
when
- 18 -
filed and no material deficiencies have been asserted by any such regulatory
authority with respect to such reports, statements, documents, registrations,
filings or submissions that have not been satisfied. To the knowledge of Wind
River, all premium rates established by the Insurance Companies since December
31, 1999, that are required to be filed with or approved by insurance regulatory
authorities, have been so filed or approved, the premiums charged conform to the
premiums so filed or approved and comply in all material respects (or complied
in all material respects at the relevant time) with the insurance laws
applicable thereto.
(b) Wind River and each of its Subsidiaries holds all
insurance licenses from the insurance regulatory authorities set forth in
Section 3.11(b) of the Disclosure Letter and all other material licenses,
permits, orders, consents, approvals, registrations, authorizations,
qualifications and filings with and under all Laws and Governmental Authorities
and any applicable industry or other non-governmental self-regulatory
organizations (collectively, the "Permits") necessary for the ownership and
conduct of the respective businesses of Wind River and each of its Subsidiaries
in each of the jurisdictions in which Wind River or any of its Subsidiaries
conduct or operate their respective businesses in all material respects in the
manner now conducted. The Permits are in full force and effect in all material
respects. To the knowledge of Wind River, there is no pending or threatened
Action that may reasonably be expected to lead to the revocation, termination or
suspension of any such Permits. Notwithstanding the foregoing, all
representations regarding environmental permits, compliance with Environmental
Laws and environmental regulatory matters shall be governed by Section 3.26.
(c) No change is required in Wind River's or any of its
Subsidiaries' processes, properties, practices or procedures in connection with
any such Laws, and Wind River has not received any notice or communication of
any noncompliance with any such Laws that has not been cured as of the date of
the Original Investment Agreement. Notwithstanding the generality of the
foregoing, Wind River and each of its Subsidiaries has in place policies and
procedures with respect to itself and its insurance agents, managing general
agents, third-party administrators, brokers, broker/dealers, distributors and
agents intended to assure that their sales processes and practices are
consistent with applicable Law governing such practices and processes, and,
where there has been any deviation therefrom, such deviation has been cured,
resolved or settled through agreements with applicable Governmental Authorities
or are barred by all applicable statutes of limitations or other equitable
principles. To the knowledge of Wind River, all employees of Wind River and each
of its Subsidiaries with management responsibility with respect to any business
line, and all officers and directors thereof required to be registered with or
licensed under applicable Laws, are so licensed and in good standing with the
applicable Governmental Authority.
Section 3.12. Litigation. (a) Except for first party
contractual and coverage claims under insurance policies issued by the Insurance
Companies and Actions under "direct action" statutes of various states, in each
case in the ordinary course of the insurance operations of Wind River and its
Subsidiaries, there are no (i) material Actions pending or, to the knowledge of
Wind River, threatened, or to the knowledge of Wind River, investigations or
inquiries pending or threatened against Wind River or any of its Subsidiaries
that are not covered by insurance, (ii) judgments or outstanding orders,
injunctions, decrees, stipulations, settlement agreements, citations,
investigations, fines or awards against or binding upon Wind River or any
- 19 -
of its Subsidiaries or any of their respective assets or properties or (iii)
Actions by Wind River or any of its Subsidiaries against any Person.
(b) Wind River has made available to Cayman Purchaser or
one of its Affiliates true, correct and complete copies of the pleadings in the
WWW Litigation, those of which filed by Wind River and its Subsidiaries, taken
as a whole, accurately set forth in all material respects the facts and
circumstances underlying such litigation.
Section 3.13. Employee Benefits. (a) Section 3.13(a) of the
Disclosure Letter sets forth a true, correct and complete list of all Employee
Plans, and identifies those Employee Plans that are maintained solely for the
benefit of employees of Wind River and its Subsidiaries and their beneficiaries
and dependents (the "Wind River Plans"). With respect to each Employee Plan,
Wind River has delivered to Cayman Purchaser or one of its Affiliates a true,
correct and complete copy of: (i) each Employee Plan, trust agreement, and
insurance contract and other funding vehicle related thereto; (ii) the most
recent Annual Report (Form 5500 Series) and accompanying schedule, if any; (iii)
the current summary plan description and any material modifications thereto, if
any (in each case, whether or not required to be furnished under ERISA); (iv)
the most recent annual financial report, if any; (v) the most recent actuarial
report, if any; and (vi) the most recent determination letter from the IRS, if
any. There have been no amendments to any Employee Plan adopted or approved, nor
has Wind River or any of its Subsidiaries undertaken to make any such amendments
or to adopt or approve any new Employee Plan that is not reflected in an
Employee Plan document delivered to Cayman Purchaser or one of its Affiliates
pursuant to this Section 3.13(a).
(b) Each Employee Plan has been operated and administered
and is in material compliance with its terms and all applicable Law, and there
are no Actions (other than routine claims for benefits in the ordinary course)
pending or, to the knowledge of Wind River, threatened with respect to any
Employee Plan or the assets thereof that, if adversely determined, would result
in any material liability or obligation of Wind River or any of its
Subsidiaries. All contributions required to be made to any Employee Plan by Law
or by any plan document or other contractual undertaking, and all premiums due
or payable with respect to insurance policies funding any Employee Plan, for any
period through the date of the Original Investment Agreement have been timely
made or paid in full or, to the extent not required to be made or paid on or
before the date of the Original Investment Agreement, have been fully reflected
on the Balance Sheet. Each Employee Plan that is an employee welfare benefit
plan under Section 3(1) of ERISA either (i) is funded through an insurance
company contract and is not a "welfare benefit fund" with the meaning of Section
419 of the Code or (ii) is unfunded.
(c) None of the ERISA Affiliates maintains, contributes
to or is obligated to contribute to any Multiemployer Plan or Multiple Employer
Plan, nor has any of them, at any time during the last six years, maintained,
contributed to or been obligated to contribute to any Multiemployer Plan or
Multiple Employer Plan. None of the ERISA Affiliates has incurred any Withdrawal
Liability that has not been satisfied in full. None of the ERISA Affiliates has
received any notification, nor has any reason to believe, that any Multiemployer
Plan to which any of them contributes or is obligated to contribute is in
reorganization, has been terminated, is insolvent, or may reasonably be expected
to be in reorganization, to be insolvent, or to be terminated.
- 20 -
(d) Wind River and each of its Subsidiaries have timely
paid all contributions, premiums and expenses payable to or in respect of each
Employee Plan under the terms thereof and in accordance with all applicable
Laws, except where any failure to pay such amounts has not resulted and will not
result in any material liability or obligation of Wind River or any of its
Subsidiaries.
(e) With respect to each Title IV Plan that is not a
Multiemployer Plan: (i) there does not exist any accumulated funding deficiency
within the meaning of Section 412 of the Code or Section 302 of ERISA, whether
or not waived; (ii) no reportable event within the meaning of Section 4043(c) of
ERISA for which the 30-day notice requirement has not been waived has occurred,
and the consummation of the Transactions will not result in the occurrence of
any such reportable event; (iii) all premiums to the Pension Benefit Guaranty
Corporation (the "PBGC") have been timely paid in full; (iv) no liability (other
than for premiums to the PBGC) under Title IV of ERISA has been or is expected
to be incurred by Wind River or any of its Subsidiaries; and (v) the PBGC has
not instituted proceedings to terminate any such Title IV Plan and no condition
exists that presents a risk that such proceedings will be instituted or that
would constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any such Title IV Plan.
(f) Neither Wind River nor any of its Subsidiaries has
incurred, either directly or indirectly (including as a result of an
indemnification obligation), any liability under or pursuant to any provision of
Title I or IV of ERISA or the penalty, excise tax or joint and several liability
provisions of the Code relating to any Employee Plan, or any other Plan
sponsored or maintained by any ERISA Affiliate and, to the knowledge of Wind
River, no event, transaction or condition has occurred, exists or is expected to
occur or be deemed to occur at or prior to the Closing that would reasonably be
expected to result in any such liability to Wind River or any of its
Subsidiaries or, after the Closing, to Cayman Purchaser or one of its
Affiliates.
(g) Except as provided in Section 6.09, neither the
execution and delivery of this Agreement, nor the consummation of the
Transactions, either alone or in combination with any other event (whether
contingent or otherwise), will (i) entitle any current or former employee,
consultant or director of Wind River or any of its Subsidiaries to any increased
or modified benefit or payment; (ii) increase the amount of compensation or
benefits due to any such employee, consultant or director; (iii) accelerate the
vesting, payment or funding of any compensation, stock-based award, incentive
compensation or other compensation or benefit; (iv) result in any "parachute
payment" under Section 280G of the Code (whether or not such payment is
considered to be reasonable compensation for services rendered); (v) cause any
compensation to fail to be deductible under Section 162(m) or any other
provision of the Code or any similar Law; (vi) otherwise result in any payment
in the nature of severance or termination pay; or (vii) limit or prohibit
(except to the extent required by ERISA or the Code) the ability to amend,
merge, terminate or receive a reversion of assets from any Employee Plan or
related trust. Without limiting the generality of the foregoing, as of the date
of this Agreement each payment that may be made pursuant to the Stock
Appreciation Rights Agreements identified in Section 3.13(g) of the Disclosure
Letter (the "SAR Agreements") has been approved such that, by virtue of Sections
280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code, it will not be a "parachute
payment."
- 21 -
(h) Neither Wind River nor any of its Subsidiaries has
any liability for life, health, medical or other welfare benefits to former
employees or beneficiaries or dependents thereof, except for health continuation
coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA
("COBRA Coverage"). Wind River and each of its Subsidiaries has reserved the
right to amend, terminate or modify at any time all plans or arrangements, if
any, providing for retiree health or life insurance coverage.
Section 3.14. Labor. (a) Wind River, its Subsidiaries and each
member of their respective business enterprises has complied with the Worker
Adjustment and Retraining Notification Act and all similar state, local and
foreign laws.
(b) Each individual who renders services to Wind River or
any of its Subsidiaries who is classified by Wind River or such Subsidiary, as
applicable, as having the status of an independent contractor or other
non-employee status for any purpose (including for purposes of taxation and tax
reporting and under Employee Plans) is properly so characterized.
(c) No labor organization or group of employees of Wind
River or any of its Subsidiaries has made a pending demand for recognition or
certification, and there are no representation or certification proceedings, or
petitions seeking a representation proceeding, presently pending, or, to the
knowledge of Wind River, threatened to be brought or filed, with the National
Labor Relations Board or any other labor relations tribunal or authority. To the
knowledge of Wind River, there are no organizing activities, strikes, work
stoppages, slowdowns, lockouts, material arbitrations or material grievances, or
other material labor disputes pending or threatened against or involving Wind
River or any of its Subsidiaries. Wind River and each of its Subsidiaries is in
compliance in all material respects with all applicable Laws and collective
bargaining agreements respecting employment and employment practices, terms and
conditions of employment, wages and hours and occupational safety and health.
Since December 31, 1999, no material unfair labor practice complaints have been
filed against Wind River or any of its Subsidiaries with any Governmental
Authority and neither Wind River nor any of its Subsidiaries has received any
notice or communication reflecting an intention or threat to file any such
complaint. Since December 31, 1999, no Person has made any claim, and to the
knowledge of Wind River there is no basis for any claim, against Wind River or
any of its Subsidiaries arising out of any statute, ordinance or regulation
relating to discrimination with respect to employees or employment practices.
Section 3.15. Employees. Section 3.15 of the Disclosure Letter
sets forth a true, correct and complete list as of the date of the Original
Investment Agreement of the names of (a) all officers of Wind River and each of
its Subsidiaries, and (b) each employee of Wind River or any of its Subsidiaries
as of April 17, 2003 whose annual base salary exceeds $100,000, as well as the
base salary of and bonus earned or received by all such individuals for the
fiscal year ended on the Balance Sheet Date. Section 3.15 of the Disclosure
Letter sets forth a true, correct and complete list, as of the date of the
Original Investment Agreement, of each agreement with respect to the employment
or termination of employment of any employee of Wind River or any of its
Subsidiaries under which Wind River or any of its Subsidiaries has any
continuing payment or performance obligations.
- 22 -
Section 3.16. Taxes. (a) Since December 31, 1993, all Tax
Returns required to be filed by, or with respect to, Wind River or any of its
Subsidiaries have been timely filed (taking into account extensions) in the
manner prescribed by Law and are true, correct and complete in all material
respects.
(b) Since December 31, 1993, Wind River and each of its
Subsidiaries has timely paid all Taxes due and payable by it or for which it may
be liable (other than Taxes that are being contested in good faith and for which
adequate reserves are reflected in accordance with GAAP on the GAAP Financial
Statements dated as of the Balance Sheet Date or on the Balance Sheet).
(c) Wind River and each of its Subsidiaries has made
provision in accordance with GAAP on the GAAP Financial Statements dated as of
the Balance Sheet Date and on the Balance Sheet (in each case, as adjusted for
operations in the ordinary course of business since the Balance Sheet Date) for
all accrued and contingent liabilities for Taxes.
(d) Wind River (and any predecessor thereof) is, and
since the date of its formation has been, properly characterized as an
"S-corporation" within the meaning of Section 1361(a)(1) of the Code. Wind River
(and any predecessor thereof) has validly elected to be characterized as an
"S-corporation" in all state and local jurisdictions where it would, absent such
election, be subject to corporate income or franchise Tax, and has maintained
its status as an "S-corporation" in such jurisdictions at all times thereafter.
No state of facts exists or existed that presents or presented a risk that Wind
River's status as an "S-corporation" is or was subject to termination or
revocation. Wind River does not have any "earnings and profits" other than
earnings and profits deemed to have been received by Wind River under Section
381(c)(2) of the Code. The amount of earnings and profits of AIS on December 31,
1997 was approximately $253.9 million. Wind River has not been liable for any
Taxes imposed pursuant to Section 1374 or 1375 of the Code. Section 3.16(d) of
the Disclosure Letter sets forth each Subsidiary that is properly characterized
as a "Qualified Subchapter S Subsidiary" within the meaning of Section
1361(b)(3)(B) of the Code.
(e) Neither Wind River nor any of its Subsidiaries is
doing business or maintains a taxable presence in a jurisdiction (a
"Non-resident Jurisdiction") in which it does not file income Tax Returns, and
no claim has been made in writing by any Tax Authority in a Non-resident
Jurisdiction that Wind River or any of its Subsidiaries are or may be subject to
taxation by that jurisdiction. No non-U.S. Subsidiary of Wind River is engaged
in a trade or business in the United States for federal income Tax purposes.
(f) There is no action, suit, proceeding, investigation,
assessment, adjustment, audit or claim now proposed in writing or pending
against or with respect to Wind River or any of its Subsidiaries in respect of
any Tax.
(g) The United States federal income Tax Returns that
include Wind River or any of its U.S. Subsidiaries have been examined and
settled with the IRS (or the applicable statute of limitations for the
assessment of federal income Taxes for such periods have expired) for all years
through December 31, 1993. There are no outstanding waivers or other agreements
extending any statutory periods of limitation for the assessment of Taxes of
Wind River or any of
- 23 -
its Subsidiaries. No power of attorney currently in force has been granted by
Wind River or any of its Subsidiaries concerning any Tax matter.
(h) No gain or loss was recognized by AMCD or AMCP for
income Tax purposes as a result of the Spin-Offs. The facts presented to the IRS
with respect to the private letter ruling issued in 1997 regarding the Spin-Offs
were true and complete as of the date of such Spin-Offs and no issues or
circumstances exist that would allow the IRS to revoke such private letter
ruling with retroactive effect. Within the past three years neither Wind River
nor any of its Subsidiaries has been a "distributing corporation" or a
"controlled corporation" in a distribution intended to qualify under Section
355(a) of Code. Other than the private letter ruling with respect to the
Spin-Offs, neither Wind River nor any of its Subsidiaries has received a binding
Tax ruling from or entered into a Closing Agreement with any Tax Authority.
(i) Except for complete and accurate copies of Tax
sharing agreements and all amendments thereto made available to Cayman Purchaser
or one of its Affiliates prior to the execution of this Agreement, there are no
agreements relating to the allocation or sharing of Taxes between Wind River or
any of its Subsidiaries, on the one hand, and any Person, on the other hand; nor
are there any express or implied obligations on Wind River or any of its
Subsidiaries to indemnify any Person for Taxes.
(j) All Taxes required to be withheld, including from any
compensation, dividend or other payment, by or on behalf of Wind River or any of
its Subsidiaries have been withheld, and such withheld Taxes have been duly and
timely paid (or are properly held for payment) to the proper Tax Authorities.
(k) Neither Wind River nor any of its Subsidiaries
presently is or since January 1, 1994 has been (i) a "personal holding company"
within the meaning of Section 542(a) of the Code, (ii) a "foreign personal
holding company" within the meaning of Section 552(a) of the Code, (iii) except
for Loyalty, a "controlled foreign corporation" within the meaning of Section
957 of the Code, (iv) a "foreign investment company" within the meaning of
Section 1246 of the Code or (v) except for Loyalty, a "passive foreign
investment company" within the meaning of Section 1297 of the Code. Section 1291
of the Code does not apply to any distribution paid by, or any disposition of
the stock of, Loyalty.
(l) Neither Wind River nor any of its Subsidiaries (i)
has been a member of an affiliated group that files Tax Returns on a
consolidated, combined or unitary basis (other than with respect to an
affiliated group the common parent of which was AIS, UNIC or AMCP) or (ii) has
any liability for Taxes of any Person under United States Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise, other than liabilities for
Taxes of an affiliated, consolidated, combined or unitary group that includes
AIS, UNIC or AMCP as the common parent.
(m) Neither Wind River nor any of its Subsidiaries will
be required to include any material item of income in, or exclude any material
item of deduction from, taxable income for any Post-Closing Tax Period as a
result of any (i) change in method of accounting for a Pre-Closing Tax Period
under Section 481(c) of the Code (or any corresponding or similar provision of
state, local or non-U.S. income Tax law), (ii) Closing Agreement, (iii)
installment sale or open
- 24 -
transaction disposition or intercompany transaction made on or prior to the
Closing Date, (iv) prepaid amount received on or prior to the Closing Date or
(v) deferred intercompany gain or excess loss account described in Treasury
Regulations promulgated under Section 1502 of the Code (or any corresponding or
similar provision of state, local or non-U.S. income Tax law).
(n) Neither Wind River nor any of its Subsidiaries
recognized a material amount of gain (or was otherwise required to include a
material amount in income), as a result of any Tax election made during the
period from January 1, 2003 through the Closing Date.
(o) There are no material liens for Taxes upon the assets
of Wind River or any of its Subsidiaries, except for liens for current Taxes not
yet due and payable.
(p) None of the Trusts is subject to withholding,
including under Section 1445 of the Code, with respect to the Transactions.
(q) Neither Wind River nor any of its Subsidiaries has
entered into any transaction that is required to be disclosed or registered as a
tax shelter or is a "listed transaction" pursuant to Section 6011, 6111 or 6112
of the Code or the Treasury Regulations and IRS pronouncements promulgated
thereunder.
(r) Section 3.16(r) of the Disclosure Letter lists all
federal, state, local, and foreign income and franchise Tax Returns filed with
respect to Wind River or any of its Subsidiaries for taxable periods ending
after December 31, 1996, and indicates all Tax Returns for taxable periods ended
on or after December 31, 1999 that (i) have been audited or (ii) are currently
subject of audit. The Trusts have delivered or have caused to be delivered to
Cayman Purchaser or one of its Affiliates true, correct and complete copies of
all Tax Returns, examination reports, and statements of deficiencies assessed
against or agreed to by Wind River or any of its Subsidiaries for taxable
periods ending on or after December 31, 1999, except for state and municipal
premium tax returns, true, correct and complete copies of which have been made
available to Cayman Purchaser or one of its Affiliates.
Section 3.17. Intellectual Property; Data Security. (a) Wind
River and each of its Subsidiaries owns, or is licensed or otherwise possesses
legally enforceable rights to use, all United States and foreign patents,
trademarks, trade names, trade dress, service marks, copyrights, domain names
and any applications and registrations therefor, technology, know-how, computer
software programs or applications (including application software and system
software, source code, object code, computer software databases, programs and
similar systems, and tangible or intangible proprietary information or
materials, including trade secrets and any other similar type of proprietary
intellectual property right (collectively, "Intellectual Property") that are
material to the business of Wind River or any of its Subsidiaries as currently
conducted, and any such patents, trademarks, trade names, service marks and
copyrights held by Wind River or any of its Subsidiaries are valid and
enforceable.
(b) To the knowledge of Wind River, the use of
Intellectual Property by Wind River and its Subsidiaries does not conflict with
or infringe on the Intellectual Property of any other Person and no other
Person's operations conflict with or infringe the use of any material
Intellectual Property of Wind River or any of its Subsidiaries. There are no
Actions pending or,
- 25 -
to the knowledge of Wind River, threatened against or by Wind River or any of
its Subsidiaries (i) challenging the rights of Wind River or any of its
Subsidiaries to use or own any of its Intellectual Property or (ii) claiming a
conflict or infringement by Wind River or any of its Subsidiaries with any
Intellectual Property rights of any other Person or a conflict or infringement
by any other Person with any Intellectual Property rights of Wind River or its
Subsidiaries.
(c) Each of Wind River and its Subsidiaries has been and
is in material compliance with (i) all Laws concerning privacy or security, and
(ii) all of its internal policies and/or agreements with other Persons
concerning privacy or security.
Section 3.18. Brokers and Finders. Neither Wind River nor any
of its officers, directors, employees or Subsidiaries has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finders'
fees in connection with this Agreement or the Transactions.
Section 3.19. Actuarial Analyses. Section 3.19 of the
Disclosure Letter sets forth a list of all actuarial reports with respect to
Wind River or any Insurance Company relied upon by Wind River or any Insurance
Company or Governmental Authority since December 31, 1999, and all attachments,
addenda, supplements and modifications thereto (copies of which Wind River has
delivered to Cayman Purchaser or one of its Affiliates) (the "Actuarial
Analyses"). At the time each Actuarial Analysis was prepared, Wind River
believed in good faith that it was prepared using appropriate modeling and other
procedures accurately applied, if relevant, and in conformity with generally
accepted actuarial standards consistently applied, and that the projections
contained therein were properly prepared in accordance with the assumptions
stated therein. The information and data furnished by Wind River or any
Insurance Company to its independent actuaries in connection with the
preparation of the Actuarial Analyses were true, complete and accurate in all
material respects.
Section 3.20. Material Contracts. (a) Section 3.20 of the
Disclosure Letter lists the following as of the date of the Original Investment
Agreement:
(i) each Contract of Wind River or any of its
Subsidiaries that provides for aggregate payments of $150,000 over any
12-month period commencing on or after the date of the Original
Investment Agreement;
(ii) each Contract relating to the borrowing of money by
or indebtedness of Wind River or any of its Subsidiaries or the
guaranty by Wind River or any of its Subsidiaries of any obligation of
any Person (other than Wind River or another of its Subsidiaries);
(iii) each mortgage or other Contract providing for a Lien
on any material assets of Wind River or any of its Subsidiaries;
(iv) each Contract (other than this Agreement) that
restricts or purports to restrict in any material respect the ability
of Wind River or any of its Subsidiaries to (A) sell any products or
services to any other Person, (B) engage in any line of business or (C)
compete with any Person;
- 26 -
(v) each employment Contract and any other Contract with
any officer or director of Wind River or any of its Subsidiaries;
(vi) each Contract providing for the indemnification by
Wind River or any of its Subsidiaries of any Person, except for
Contracts entered in to in the ordinary course of business; and
(vii) each Contract pertaining to the voting, transfer or
holding of the shares of Wind River Common Stock or the capital stock
of any of its Subsidiaries.
(b) Each of the Contracts required to be set forth in
Section 3.20 of the Disclosure Letter together with each other contract that is
material to the business, financial condition, results of operations or
prospects of Wind River and its Subsidiaries, taken as a whole, (a "Material
Contract") is enforceable against either Wind River or the Subsidiary of Wind
River that is a party thereto and, to the knowledge of Wind River, against the
other parties thereto, in accordance with its terms and is in full force and
effect and, except for such Material Contracts that expire in accordance with
their terms, will be in full force and effect as of the Closing Date. A true,
correct and complete copy of each such written Material Contract, and a
reasonably detailed written description of any oral Material Contract, has been
made available by Wind River to Cayman Purchaser or one of its Affiliates.
Neither Wind River nor any of its Subsidiaries nor, to the knowledge of Wind
River, any other party is in material breach of or in material default under any
such Material Contract. To the knowledge of Wind River, neither Wind River nor
any of its Subsidiaries has received written notice of a cancellation of or an
intent to cancel any Material Contract. Except as provided in the certificate of
incorporation or bylaws or similar organization documents of Wind River or any
of its Subsidiaries, neither Wind River nor any of its Subsidiaries is party to
any Contract providing for indemnification of directors or executive officers of
Wind River or any of its Subsidiaries.
Section 3.21. Risk Management. Wind River and each of its
Subsidiaries have in place risk management policies and procedures sufficient in
scope and operation to protect against risks of the type and in amounts
reasonably expected to be incurred by Persons of similar size and in similar
lines of business as Wind River and each such Subsidiary.
Section 3.22. Derivatives. Neither Wind River nor any of its
Subsidiaries holds any derivative instruments, including swaps, caps, floors and
option agreements, whether entered into for Wind River's account, or for the
account of any of its Subsidiaries or their customers.
Section 3.23. Insurance Coverage. Wind River has delivered to
Cayman Purchaser or one of its Affiliates true, correct and complete copies of
all insurance policies (other than reinsurance contracts) and fidelity bonds
under which Wind River or any of its Subsidiaries is insured and relating to the
assets, business, operations, employees, officers or directors of Wind River or
any of its Subsidiaries. There are no material claims by Wind River or any of
its Subsidiaries pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds. All premiums payable under all such policies and bonds have
been timely paid. All such policies will, by their terms, remain in full force
and effect through and including July 31, 2003.
- 27 -
Section 3.24. Records. The Records have been maintained in
accordance with good business practices, and are true, correct and complete in
all material respects.
Section 3.25. Properties. (a) Neither Wind River nor any of
its Subsidiaries owns any real property.
(b) Section 3.25 of the Disclosure Letter identifies all
real property leased by Wind River or any of its Subsidiaries or subleased or
assigned to others as of the date of the Original Investment Agreement.
(c) Wind River and its Subsidiaries have good title to,
or in the case of leased property and assets has valid leasehold interests in,
all personal property and assets (whether tangible or intangible) reflected on
the Balance Sheet or acquired after the Balance Sheet Date, except for property
and assets sold or otherwise disposed of and leases terminated since the Balance
Sheet Date in the ordinary course of business.
Section 3.26. Environmental Matters. (a) No written notice,
request for information, order or complaint has been received, and there are no
judicial, administrative or other Actions pending, or to the knowledge of Wind
River, threatened that allege a material violation of any Environmental Law, in
each case relating to Wind River or any of its Subsidiaries and arising out of
any Environmental Law.
(b) Wind River and each of its Subsidiaries has all
Permits necessary for its operations to comply with all applicable Environmental
Laws in all material respects, and Wind River and each of its Subsidiaries are
in material compliance and have been in material compliance with the terms of
such Permits and with all other applicable Environmental Laws.
(c) There has been no written Phase I Assessments or
Environmental Compliance Audits conducted within the past five years by Wind
River or any of its Subsidiaries of any property leased by Wind River or any of
its Subsidiaries.
(d) Neither Wind River nor any of its Subsidiaries has
been involved in operations at any property that could reasonably be expected to
lead to the imposition on Wind River or any of its Subsidiaries of any material
liability under any Environmental Laws.
(e) Neither Wind River nor any of its Subsidiaries is
subject to any order from or agreement with any Governmental Authority or other
Person respecting liability for or the need to respond to an intentional or
unintentional spilling, leaking, disposing, discharging, emitting, depositing,
injecting, leaching, escaping, or any other release or threatened release as
defined in any Environmental Law, of any Hazardous Substance (a "Release"), and,
to the knowledge of Wind River, none of the present or past operations of Wind
River or any of its Subsidiaries is the subject of any investigation by any
Governmental Authority evaluating whether any remedial action is needed to
respond to a Release or threatened Release.
(f) To the knowledge of Wind River, none of the
properties leased by Wind River or any of its Subsidiaries contains any asbestos
or asbestos containing materials that are in a friable state or that do not
comply with Environmental Laws, and the expense of maintaining such materials in
compliance with Environmental Laws is not material.
- 28 -
Section 3.27. Investments. Wind River has provided Cayman
Purchaser or one of its Affiliates with a true, correct and complete list of all
bonds, stocks, mortgage loans and other investments that are carried on the
books and records of Wind River and its Subsidiaries as of the Balance Sheet
Date (such bonds, stocks, mortgage loans and other investments, together with
all bonds, stocks, mortgage loans and other investments acquired by Wind River
and the Subsidiaries between the date of the Original Investment Agreement and
the Closing Date, the "Investment Assets"). Except for Investment Assets sold in
the ordinary course of business consistent with past practice or as contemplated
by this Agreement, each of Wind River and its Subsidiaries, as applicable, has
good and marketable title to all of the Investment Assets it purports to own,
free and clear of all Liens.
Section 3.28. Reinsurance Agreements. (a) Section 3.28(a) of
the Disclosure Letter sets forth a true, correct and complete list of all
reinsurance and retrocession treaties and agreements (each, a "Reinsurance
Agreement") in force as of the date of the Original Investment Agreement to
which any Insurance Company is a party that are open to future cessions of
insurance risk by any Insurance Company, any terminated or expired treaty or
agreement under which there remains any known outstanding liability from one
reinsurer with respect to paid or unpaid case reserves and any treaty or
agreement with any Affiliate of Wind River or any of its Subsidiaries, the
effective date of each such treaty or agreement, and the termination date of any
treaty or agreement that has a definite termination date. Each Reinsurance
Agreement is valid, binding and enforceable against the Insurance Company that
is a party thereto and, to the knowledge of Wind River, against the other
parties thereto in accordance with their terms and are in full force and effect.
The Insurance Companies have performed all of the material obligations required
to be performed by them under the Reinsurance Agreements and neither the
Insurance Companies, nor, to the knowledge of Wind River, any of the other
parties thereto is in material breach or default under any Reinsurance
Agreement. As of the date of the Original Investment Agreement, Wind River is
not aware of any specific facts or circumstances that would reasonably be
expected to cause it to believe that any amounts due to Wind River or any of its
Subsidiaries under any Reinsurance Agreement are not fully collectible (net of
any reserves set forth on the Balance Sheet) by Wind River or its Subsidiaries.
(b) There are no unresolved disputes under any
Reinsurance Agreement.
Section 3.29. Insurance Brokers. (a) To the knowledge of Wind
River, each Person through which any Insurance Company has placed or sold
insurance since December 31, 1999 was duly licensed (to the extent such
licensing was required) to sell or place insurance in the jurisdictions where,
and at the time when, it did so on behalf of such Insurance Company. No Person
who is not an agent has any underwriting or binding authority on behalf of any
Insurance Company. To the knowledge of Wind River, as of the date of the
Original Investment Agreement, any amounts due to Wind River or any of its
Subsidiaries under any managing general agency contracts or similar arrangements
are fully collectible by Wind River or its Subsidiaries (net of any non-admitted
agents balances set forth in the balance sheet of each Insurance Company
included in the SAP Financial Statements).
(b) There are no unresolved disputes under any managing
general agency contract or similar arrangement.
- 29 -
Section 3.30. Disclosure. The representations and warranties
contained in this Article 3 do not contain any untrue statement of material fact
or omit to state any material fact necessary to make any statement contained in
this Article 3 not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE TRUSTS
Each Trust severally but not jointly represents and warrants
to Cayman Purchaser, Parent, U.S. Purchaser and the Company that as of the date
of the Original Investment Agreement (except as specifically indicated):
Section 4.01. Organization. Such Trust is a trust duly
organized, validly existing and, if applicable, in good standing under the laws
of its respective jurisdiction of organization, and has all requisite power and
authority to own, operate and lease its properties and assets and to carry on
its business as currently conducted.
Section 4.02. Authorization; Approvals. As of the date of this
Agreement, such Trust has all necessary power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement and
to consummate the Transactions. As of the date of this Agreement, the execution,
delivery and performance of this Agreement by such Trust, and the consummation
by such Trust of the Transactions, have been duly and validly authorized by all
necessary action, and no other proceedings on the part of such Trust are
necessary to authorize this Agreement or to consummate the Transactions. This
Agreement has been duly and validly executed and delivered by such Trust as of
the date of this Agreement and, assuming the due authorization, execution and
delivery by each other party, constitutes a legal, valid and binding obligation
of such Trust, enforceable against such Trust in accordance with its terms.
Section 4.03. Noncontravention. As of the date of this
Agreement, the execution, delivery and performance of this Agreement by such
Trust does not, and the consummation by such Trust of the Transactions will not,
constitute or result in (a) a breach or violation of, or a default under, the
organizational documents of such Trust or (b) assuming compliance with the
matters set forth in Section 3.07, 4.04 or 5.04, a breach or violation of, or
default under, any Law.
Section 4.04. Governmental Authorization. Other than the
reports, filings, registrations, consents, approvals, permits, authorizations,
applications, expiry of waiting periods and/or notices under the HSR Act and
under the insurance laws of Indiana, Pennsylvania and Wisconsin, no notices,
reports or other filings are required to be made by such Trust with, nor are any
consents, registrations, approvals, permits applications, expiry of waiting
periods or authorizations required to be obtained by such Trust from, any
Governmental Authority, in connection with the execution and delivery of this
Agreement by such Trust or the consummation by such Trust of the Transactions.
Section 4.05. Ownership of Wind River Common Stock. Such Trust
is the record and beneficial owner of all of the issued and outstanding shares
of capital stock of Wind
- 30 -
River set forth opposite its name of Schedule A, free and clear of any Liens.
Upon payment by the Company therefor at the Closing, such Trusts will transfer
and deliver to the Company good and marketable title to the number of shares of
Wind River Common Stock set forth opposite its name on Schedule A, free and
clear of any Liens except for Liens arising through the Company or any of its
Affiliates.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CAYMAN PURCHASER, PARENT, U.S.
PURCHASER AND THE COMPANY
Cayman Purchaser, Parent, U.S. Purchaser and the Company
jointly and severally represent and warrant to Wind River and the Trusts that:
Section 5.01. Organization. Each of Cayman Purchaser and
Parent was duly organized as an exempted company formed with limited liability
under the laws of the Cayman Islands and is validly existing and in good
standing under the laws of the Cayman Islands. Barbados Insurance Company, the
U.S. Purchaser, the Company and each other direct and indirect subsidiary of
Parent is an organization duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation, and each of Parent, Barbados
Insurance Company, U.S. Purchaser, the Company and each other direct and
indirect subsidiary of Parent has all requisite power and authority to own,
operate and lease its properties and assets and to carry on its business as
currently conducted or as proposed to be conducted following the completion of
the Transactions. Parent has delivered to the Trusts a true, correct and
complete copy of its memorandum and articles of association, as amended to date,
that is in full force and effect, and a true, correct and complete copy of the
charter, by-laws and other constituent documents of each of Parent's direct and
indirect subsidiaries, as amended to date, that are in full force and effect.
Section 5.02. Authorization; Approvals. Each of Cayman
Purchaser, Parent, U.S. Purchaser and the Company has all necessary power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement and to consummate the Transactions. The execution, delivery
and performance of this Agreement by each of Cayman Purchaser, Parent, U.S.
Purchaser and the Company, and the consummation by each of Cayman Purchaser,
Parent, U.S. Purchaser and the Company of the Transactions, have been duly and
validly authorized by all necessary action, and no other proceedings on the part
of Cayman Purchaser, Parent, U.S. Purchaser or the Company are necessary to
authorize this Agreement or to consummate the Transactions. This Agreement has
been duly and validly executed and delivered by each of Cayman Purchaser,
Parent, U.S. Purchaser and the Company and, assuming the due authorization,
execution and delivery by each other party, constitutes a legal, valid and
binding obligation of each of Cayman Purchaser, Parent, U.S. Purchaser and the
Company, enforceable against Cayman Purchaser, Parent, U.S. Purchaser and the
Company in accordance with its terms.
Section 5.03. Noncontravention. The execution, delivery and
performance of this Agreement by each of Cayman Purchaser, Parent, U.S.
Purchaser and the Company do not, and the consummation by each of Cayman
Purchaser, Parent, U.S. Purchaser and the Company
- 31 -
of the Transactions will not, constitute or result in a (i) breach or violation
of, or a default under, the organizational documents of Cayman Purchaser,
Parent, U.S. Purchaser or the Company or (ii) assuming compliance with the
matters set forth in Sections 3.07, 4.04 and 5.04, a breach or violation of, or
default under, any Law or Contract binding upon Cayman Purchaser, Parent, U.S.
Purchaser or the Company.
Section 5.04. Governmental Authorization. Other than the
reports, filings, registrations, consents, approvals, permits, authorizations,
applications, expiry of waiting periods and/or notices under the HSR Act and
with under the insurance laws of Indiana, Pennsylvania and Wisconsin, no
notices, reports or other filings are required to be made by Cayman Purchaser,
Parent, U.S. Purchaser or the Company with, nor are any consents, registrations,
approvals, permits applications, expiry of waiting periods or authorizations
required to be obtained by Cayman Purchaser, Parent, U.S. Purchaser or the
Company from, any Governmental Authority, in connection with the execution and
delivery of this Agreement by Cayman Purchaser, Parent, U.S. Purchaser or the
Company or the consummation by Cayman Purchaser, Parent, U.S. Purchaser or the
Company of the Transactions.
Section 5.05. Purchase for Investment. (a) Cayman Purchaser is
purchasing the Parent Shares for investment for its own account and not with a
view to, or for sale in connection with, any distribution thereof. Cayman
Purchaser (either alone or together with its advisors) has sufficient knowledge
and experience in financial and business matters so as to be capable of bearing
the economic risks of such investment.
(b) The Company and Parent are purchasing the shares of
Wind River Common Stock for investment for their own account and not with a view
to, or for sale in connection with, any distribution thereof. The Company and
Parent (either alone or together with their advisors) have sufficient knowledge
and experience in financial and business matters so as to be capable of
evaluating the merits and risks of their investment in the shares of Wind River
Common Stock and are capable of bearing the economic risks of such investment.
(c) The U.S. Purchaser is purchasing the shares of
Company Common Stock from the Trusts for investment for its own account and not
with a view to, or for sale in connection with, any distribution thereof. The
U.S. Purchaser (either alone or together with its advisors) has sufficient
knowledge and experience in financial and business matters so as to be capable
of bearing the economic risks of such investment.
Section 5.06. No Inducement or Reliance; Forecasts and
Projections. (a) Neither Cayman Purchaser, Parent, U.S. Purchaser nor the
Company has been induced by or has relied upon any representations, warranties
or statements, whether express or implied, made by Wind River or the Trusts, or
any of their respective Affiliates, that are not expressly set forth in this
Agreement, whether or not any such representations, warranties or statements
were made in writing or orally, and that (in the absence of fraud) neither
Cayman Purchaser, Parent, U.S. Purchaser nor the Company will have any right or
remedy arising out of any such representation, warranty or statement.
(b) Each of Cayman Purchaser, Parent, U.S. Purchaser and
the Company acknowledges that, except as expressly set forth in this Agreement,
neither Wind River nor any
- 32 -
Trust, nor any of their respective Affiliates, has made any representation,
warranty or statement, express or implied, as to the prospects of the Company or
Wind River or any of its Subsidiaries, or with respect to any forecasts or
projections provided by Wind River or the Trusts, or their respective Affiliates
and that (in the absence of fraud) Cayman Purchaser, Parent, U.S. Purchaser and
the Company will not have any right or remedy arising out of any such
representation, warranty or statement.
Section 5.07. Brokers and Finders. Neither Cayman Purchaser,
Parent, U.S. Purchaser, the Company nor any of their Affiliates nor any of their
respective directors, officers, or employees has employed any broker or finder
or incurred any liability for any brokerage fees, commissions or finders' fees
in connection with this Agreement or the Transactions other than as may be
payable to Credit Suisse First Boston LLC.
Section 5.08. Ownership of Parent; No Prior Activities. (a)
The authorized share capital of Parent consists of 900,000,000 common shares,
par value $0.0001 per share, of which 15,000 Parent Class B Common Shares are
outstanding, and 100,000,000 preferred shares, par value $0.0001 per share, of
which one series has been designated as Parent Preferred Shares, none of which
shall be issued and outstanding prior to consummation of the Transactions. All
of the issued and outstanding Parent Class B Common Shares have been duly
authorized and are validly issued, fully paid and nonassessable and not subject
to preemptive rights. Each such outstanding Parent Class B Common Share was sold
for $10 per share. Except as contemplated by this Agreement, there are no
outstanding (i) securities of Parent that are convertible into or exchangeable
for share capital of Parent or (ii) options or other rights to acquire from
Parent, or other obligation of Parent to issue other share capital, or other
securities convertible into or exchangeable for any share capital of Parent.
Except as contemplated by this Agreement, Parent has no commitments (including
contingent or conditional commitments) to issue or deliver any share capital.
There are no outstanding obligations of Parent to repurchase, redeem or
otherwise acquire any of Parent's share capital. The Parent Shares, when issued,
sold and delivered to the Trusts in accordance with the terms of this Agreement,
will be validly issued, fully paid and nonassessable. Parent is a wholly-owned
subsidiary of Cayman Purchaser, which is in turn wholly owned by Fox ▇▇▇▇▇
Capital Fund II International, L.P., Fox ▇▇▇▇▇ Capital Fund II Co-Investors
International, L.P., E&A `J' Trust and FPC International GP, which are
"side-by-side" partnerships of each other and their relative ownership
percentages in Cayman Purchaser are the same as their relative ownership
percentages in similar investments that they have jointly made.
(b) Except as provided in Section 5.08(a), (i) there is
no share capital or other equity or voting securities of Parent authorized,
reserved, issued or outstanding, (ii) Parent is not a party to any agreement
creating preemptive or other outstanding rights, subscriptions, options,
warrants, share appreciation rights, redemption rights, repurchase rights,
convertible securities or other agreements, arrangements or commitments of any
character relating to, or the value of which is determined by reference to, the
issued or unissued share capital or other equity interest of Parent, and (iii)
Parent is not a party to any agreement creating any other securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of Parent, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding. Parent does not have any outstanding bonds, debentures, notes or
other similar obligations.
- 33 -
(c) The direct and indirect subsidiaries of Parent are
each wholly owned by their respective parent entities and (i) no direct or
indirect subsidiary of Parent is a party to any agreement creating preemptive or
other outstanding rights, subscriptions, options, warrants, stock appreciation
rights, redemption rights, repurchase rights, convertible securities or other
agreements, arrangements or commitments of any character relating to, or the
value of which is determined by reference to, the issued or unissued share
capital or other equity interest of any direct or indirect subsidiary of Parent,
and (ii) no direct or indirect subsidiary of Parent is a party to any agreement
creating any other securities or obligations convertible or exchangeable into or
exercisable for, or giving any Person a right to subscribe for or acquire, any
securities of any direct or indirect subsidiary of Parent, and no securities or
obligations evidencing such rights are authorized, issued or outstanding. No
subsidiary of Parent has any outstanding bonds, debentures, notes or other
similar obligations.
(d) Each of Cayman Purchaser, Parent, Barbados Insurance
Company, U.S. Purchaser, the Company and any other direct or indirect
subsidiaries of Parent was formed for the purpose of engaging in the
Transactions, and, except for liabilities and obligations incurred in connection
with its organization or incorporation and pursuant to the terms of this
Agreement, neither Cayman Purchaser, Parent, Barbados Insurance Company, U.S.
Purchaser, the Company nor any other direct or indirect subsidiary of Parent has
incurred any obligations or liabilities or engaged in any business activities of
any type or kind whatsoever or entered into any agreements or arrangements with
any Person. Each of Parent and its direct and indirect subsidiaries has all
requisite power and authority and has all necessary approvals, licenses, permits
and authorization to own its properties and to carry on its business as
presently contemplated to be conducted as described in the draft Form S-1
registration statement of Parent dated as of the date of this Agreement and
delivered to the Trusts on the date of this Agreement (except that Barbados
Insurance Company is not currently licensed as an insurance company in
Barbados).
ARTICLE 6
COVENANTS OF WIND RIVER AND THE TRUSTS
Wind River and the Trusts jointly and severally agree that:
Section 6.01. Conduct of Business. From the date of this
Agreement until the Closing Date, the Trusts shall cause Wind River and each of
its Subsidiaries to, and Wind River shall, and shall cause each of its
Subsidiaries to, conduct its businesses in the ordinary course consistent with
past practice and to use commercially reasonable efforts to preserve intact its
business organizations, goodwill and relationships with its employees and third
parties (including their respective relationships with policyholders, insureds,
reinsurers, agents, underwriters, brokers and investment customers) and to keep
available the services of their key employees and maintain their current rights
and franchises. Without limiting the generality of the foregoing, from the date
of this Agreement until the Closing Date, without the prior written consent of
Cayman Purchaser, the Trusts shall not permit Wind River or any of its
Subsidiaries to, and Wind River shall not, and shall not permit any of its
Subsidiaries to:
(a) adopt or propose any change in its certificate of
incorporation or bylaws, or comparable organizational documents;
- 34 -
(b) merge or consolidate with any other Person or acquire
a material amount of assets from any other Person;
(c) split, combine, subdivide, redeem or reclassify its
capital stock;
(d) issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting
securities or any securities convertible into any rights, warrants or
options to acquire, any such capital stock, voting securities or
convertible securities (including stock appreciation rights);
(e) declare, set aside, make or pay any dividend or
distribution in respect of its capital stock or other equity interests;
provided, however, that Wind River will, prior to the Closing Date,
distribute its interests in Little Round Top to the Trusts;
(f) liquidate or dissolve, or adopt any plan of
liquidation or dissolution;
(g) sell, lease, license or otherwise dispose of any
assets or property (not including investment securities) having a fair
market value in excess of $50,000 individually or $250,000 in the
aggregate;
(h) discharge or satisfy any material Lien or compromise
or settle any material Action pending against Wind River or any of its
Subsidiaries (other than first party contractual and coverage claims
under insurance policies issued by the Insurance Companies and Actions
under "direct action" statutes of various states, in each case, in the
ordinary course of the insurance operations of Wind River and its
Subsidiaries) or, except in the ordinary course of business consistent
with past practice, pay or satisfy any material obligation or liability
(whether fixed or contingent);
(i) enter into any non-competition or other agreement
placing current or future limitations on the conduct of its business;
(j) other than in the ordinary course of business
consistent with past practice or as permitted by Section 6.01(w),
terminate, cancel, surrender, modify or amend, assign or give notice of
intent to terminate, cancel, modify, amend or assign any Material
Contract set forth in Section 3.20(a) of the Disclosure Letter or enter
into any new Material Contract that would have been required to have
been set forth in Section 3.20(a) of the Disclosure Letter had such
Material Contract been in effect as of the date of the Original
Investment Agreement;
(k) assume, guarantee or endorse, or otherwise become
responsible for, any obligations of any other Person, or make any loans
or advances to any other Person;
(l) enter into any new (i) agency agreement that provides
or permits: (A) a premium volume limitation greater than $5 million;
(B) a projected annual reinsurance ceded written premium greater than
$5 million; (C) policy limits of liability of greater than $5 million
per occurrence; or (D) a per policy retention of more than $600,000 per
occurrence; or (ii) Reinsurance Agreement with ceded written premium in
excess of $5 million, except in
- 35 -
situations where the new Reinsurance Agreement is essentially a renewal
of an existing agreement with substantially similar terms and
conditions;
(m) engage in any transaction with any officer or
director of Wind River or its Subsidiaries, or any Affiliate thereof
other than pursuant to insurance policies written for the benefit of
such persons outstanding as of the date of the Original Investment
Agreement, or otherwise contemplated by this Agreement;
(n) (i) change its tax, reinsurance, reserving, financial
or accounting policies, practices or methods, or make any change in the
underwriting, marketing, pricing, claim processing, payment and risk
management practices or policies, except, in each case, as required by
Law or by reason of a concurrent change in GAAP or SAP, or (ii) make or
rescind any material Tax election or settle or compromise any material
Tax contest or other material Tax matter;
(o) change its independent public accountants;
(p) make, or enter into any commitment to make, any
capital expenditures exceeding $100,000 individually, or $300,000 in
the aggregate;
(q) incur or guarantee any indebtedness, except for any
drawing under any existing credit facility that is repaid within ten
business days;
(r) increase in any manner the compensation, employee
benefits or fringe benefits of any of its employees, enter into any
commitment to pay any pension, retirement or severance benefits to any
of its employees; commit itself to, or enter into, any employment or
change of control agreement; adopt or commit itself to any new Employee
Plan; grant any phantom stock, phantom stock options, incentive
compensation or similar rights or opportunities to earn compensation,
to any employee; or amend, supplement, terminate or accelerate the
timing of payments, the funding of benefits or the vesting of rights
and benefits under, or otherwise amend, supplement or terminate, any
Employee Plan (other than as may be required by applicable Law);
provided, that the foregoing shall not be considered to preclude (i)
increases in the base salaries of employees in the ordinary course of
business and consistent with past practice both as to timing and
amount, (ii) payment of compensation and benefits pursuant to the
currently existing terms of Plans or binding contracts in effect as of
the date of the Original Investment Agreement or (iii) payment of
severance not in excess of two months' base pay, in exchange for a
release of claims, in the ordinary course of business consistent with
past practice;
(s) forfeit, abandon, modify, waive, terminate or
otherwise change any of its material insurance licenses;
(t) terminate, cancel or amend any insurance coverage
maintained by or on behalf of Wind River or any of its Subsidiaries
that is not replaced by a comparable amount of insurance coverage,
except as permitted by Section 6.01(w);
(u) conduct transactions in investments except in
material compliance with the investment policy of Wind River and its
Subsidiaries a true, correct and complete copy of
- 36 -
which as in effect on the date of the Original Investment Agreement has
previously been delivered to Cayman Purchaser or one of its Affiliates,
or modify or amend such investment policy in any material respect;
(v) enter into, negotiate, terminate, cancel, surrender,
modify or amend, assign or give notice of intent to enter into,
negotiate, terminate, cancel, modify, amend or assign any collective
bargaining agreement;
(w) cancel or vary materially any material agency
agreement or any reinsurance treaty, or any course of dealing
thereunder, except for those agreements and treaties set forth in
Section 6.01(w) of the Disclosure Letter; or
(x) agree or commit to do any of the foregoing.
The Trusts shall not take, and shall not permit Wind River to
take, any action that would make any representation or warranty of the Trusts or
Wind River under this Agreement inaccurate such that the closing condition set
forth in Section 10.02(b) shall not be satisfied as of the Closing Date.
Section 6.02. Access to Information. (a) From the date of this
Agreement until the Closing Date, Wind River and the Trusts shall (i) give
Cayman Purchaser, its counsel, financial advisors, independent accountants and
other authorized representatives reasonable access (subject to, among other
things, reasonable restrictions necessary to comply with applicable antitrust
laws and regulations) during normal business hours and upon reasonable advance
notice to Wind River to the personnel, offices, properties and Records relating
to Wind River or any of its Subsidiaries, (ii) furnish to Cayman Purchaser, its
counsel, financial advisors, independent accountants and other authorized
representatives such financial and operating data and other information relating
to Wind River or any of its Subsidiaries as such Persons may reasonably request
and (iii) instruct the employees, counsel and financial advisors of the Trusts
or Wind River or any of its Subsidiaries to cooperate with Cayman Purchaser in
its investigation of Wind River and its Subsidiaries. Any investigation pursuant
to this Section 6.02 shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of Wind River or any of its
Subsidiaries.
(b) At the Closing, or within three business days
thereof, the Trusts shall deliver, or cause to be delivered, to Wind River all
Records of Wind River and any of its Subsidiaries, and all other original
agreements, documents, books and records relating to Wind River or any of its
Subsidiaries in the possession of the Trusts to the extent not in the possession
of Wind River or any of its Subsidiaries; provided, however, that the Trusts
shall retain the original federal Tax Returns of Wind River and its Subsidiaries
for the taxable years 1997 through Closing and the work papers relating thereto,
and the Trusts shall provide copies of such federal and state Tax Returns and
related work papers to Cayman Purchaser.
(c) Anything in this Section 6.02 or elsewhere in this
Agreement to the contrary notwithstanding, effective as of the Closing, each of
Cayman Purchaser, Parent, U.S. Purchaser and the Company waives, and, effective
at Closing, Wind River and its Subsidiaries waive all rights that Cayman
Purchaser, Parent, U.S. Purchaser the Company, Wind River or its
- 37 -
Subsidiaries may have, if any, to any notes, work product or communications
within the attorney-client privilege (collectively, the "Attorney Materials") to
or from the Trusts or any of their Affiliates prepared or received by Drinker
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇▇ & ▇▇▇▇▇▇ in the course
of their representation of the Trusts and Wind River in connection with and
solely relating to the Transactions to the extent any such right would arise as
a result of Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ or ▇▇▇▇▇▇ &
▇▇▇▇▇▇ also having been engaged by or receiving payments from Wind River or any
of its Subsidiaries in connection with the Transactions; provided that such
waivers shall be null and void and of no effect with respect to Attorney
Materials that are not protected by the attorney-client privilege if it is
asserted.
Section 6.03. Notices of Certain Events. The Trusts and Wind
River shall promptly notify Cayman Purchaser of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the Transactions;
(b) any notice or other communication from any
Governmental Authority in connection with the Transactions;
(c) the commencement of any Action relating to the Trusts
or Wind River in connection with the Transactions;
(d) the occurrence of any event or the existence of any
condition known to Wind River that would reasonably be expected to
cause it to believe that any amounts due to Wind River or any of its
Subsidiaries under any Reinsurance Agreement are not fully collectible
(net of any reserves set forth on the Balance Sheet) by Wind River or
its Subsidiaries; and
(e) the occurrence of any event or the existence of any
condition known to Wind River that causes any representation or
warranty contained in Article 3 or Article 4 to become inaccurate such
that the closing condition set forth in Section 10.02(b) would not
reasonably be expected to be satisfied.
Section 6.04. Resignations. The Trusts shall deliver to Cayman
Purchaser the resignations, effective as of the Closing Date, of the directors
and officers of Wind River requested by Cayman Purchaser at least 5 days prior
to the Closing Date.
Section 6.05. Nonsolicitation. Prior to the Closing, until the
termination of this Agreement, the Trusts shall not, and shall not permit Wind
River or its Subsidiaries, or any Affiliate thereof, to (a) solicit any
inquiries or proposals for, or enter into or continue or resume any discussions
with respect to or enter into any agreement with respect to, any acquisition of
shares of capital stock of, or any substantial part of the assets of, Wind River
or any of its Subsidiaries, or (b) furnish or cause to be furnished any
non-public information concerning the business of Wind River or any of its
Subsidiaries to any Person in connection with any discussions or proposed
discussions regarding any acquisition of shares of capital stock of, or any
substantial part of the assets of, Wind River or any of its Subsidiaries. If at
any time prior to the Closing, any Trust, Wind River or any of its Subsidiaries,
or any Affiliate thereof, is
- 38 -
approached by any Person regarding any proposal of the type described in clause
(a) of this Section 6.05, the Trusts shall promptly disclose to Cayman Purchaser
the nature of such contact and identity of such Person.
Section 6.06. Intercompany Accounts. Except for those
Contracts and insurance policies set forth on Section 6.06 of the Disclosure
Letter, all intercompany Contracts between the Trusts or any of their Affiliates
(other than Wind River and its Subsidiaries), on the one hand, and Wind River or
any of its Subsidiaries, on the other, shall be terminated on or prior to the
Closing Date; provided, however, that each of the insurance policies written by
any Subsidiary of Wind River for the benefit of AMCP or AMC Group or any of
their respective subsidiaries outstanding as of the date of this Agreement shall
remain in effect in accordance with its terms and conditions after the Closing.
All intercompany loans, advances, payables and receivables between the Trusts or
their Affiliates, on the one hand, and Wind River or any of its Subsidiaries, on
the other, shall be settled in full as of the Closing (other than the Senior
Notes).
Section 6.07. Covenant Not to Compete; Nonsolicitation of
Employees. (a) In consideration of the benefits of this Agreement to the Trusts
and in order to induce U.S. Purchaser to enter into this Agreement, each Trust
covenants and agrees that until the later of (i) the third anniversary of the
Closing Date and (ii) one year from date that the Trusts shall cease to have the
right to appoint an individual to the Board of Directors of the Company under
the Shareholders Agreement (such period, the "Noncompetition Period"), neither
the Trusts nor any of their respective Affiliates shall engage in the business
of underwriting or placing insurance in competition with any of the businesses
of Wind River or any of its Subsidiaries as conducted as of the Closing Date
without the express written consent of Parent.
(b) The parties intend that the covenant contained in
this Section 6.07 shall be deemed a series of separate covenants for each
appropriate jurisdiction and for each year of the three year term. If, in any
judicial proceeding, a court of competent jurisdiction shall refuse to enforce
all the separate covenants deemed included in this Section 6.07 on grounds that,
taken together, they cover too extensive a geographic area or extend for too
long of a period of time, the parties intend that those covenants (taken in
order of the least populous jurisdictions with respect to geography) that, if
eliminated, would permit the remaining separate covenants to be enforced in that
proceeding, shall, for the purpose of such proceeding, be deemed eliminated from
the provisions of this Section 6.07.
(c) Each Trust covenants and agrees that during the
Noncompetition Period it shall not, and shall cause its Affiliates not to,
solicit, induce or attempt to persuade any employee or agent of the Company,
Wind River or any of its Subsidiaries to terminate his or her employment or
agency relationship; provided, however, that nothing contained in this Agreement
shall prohibit any Trust or any Affiliate thereof from placing a general
advertisement or from employing individuals who respond to any such
advertisement whether or not such individuals are then employed by Wind River or
any of its Subsidiaries, or from employing any individual who contacts such
Trust or any of its Affiliates on an unsolicited basis.
(d) Of the amount payable by U.S. Purchaser to the Trusts
for Company Common Stock, $10,000 shall be allocated to this Section 6.07.
- 39 -
Section 6.08. Adjustment of Principal of Senior Notes. (a)
[Intentionally omitted.]
(b) Wind River and its Subsidiaries shall use
commercially reasonable efforts to enter into settlement arrangements with the
Obligors with respect to each agreement between Wind River or any of its
Subsidiaries and such Obligor as soon as reasonably practicable following the
date of this Agreement on such terms as Wind River and the Trusts shall in good
faith determine. The gross proceeds to Wind River and its Subsidiaries from such
settlement arrangements received following the Balance Sheet Date, together with
any other amounts received following the Balance Sheet Date in respect to the
recoverables of Wind River or any its Subsidiaries from the Obligors, are
referred to as the "Obligor Proceeds," and the excess (if any) of the Obligor
Proceeds over the Senior Note Adjustment Base Amount is referred to as the
"Senior Note Adjustment Amount;" provided, that in no event shall the Senior
Note Adjustment Amount be greater than $15 million. From and after the Closing
Date, the Company shall provide the Trusts with a quarterly report detailing the
receipt of any Obligor Proceeds.
(c) From and after the Closing Date, the principal
amounts of the Senior Notes shall be adjusted on a quarterly basis by adding to
principal amount of each Senior Note an amount equal to one half of the increase
in the Senior Note Adjustment Amount from the Closing Date (or from the date of
any prior adjustment pursuant to this sentence) through the date of such
adjustment multiplied by a fraction (i) the numerator of which is the principal
amount of such Senior Note as of the date of such adjustment, and (ii) the
denominator of which is the aggregate principal amount of all Senior Notes as of
the date of such adjustment. If, at any time after the Senior Notes are no
longer outstanding, Wind River and its Subsidiaries receive Obligor Proceeds
that would have resulted in one half of any Senior Note Adjustment Amount being
added to the principal amount of the Senior Notes had the Senior Notes been
outstanding, Wind River shall instead pay or cause to be paid to each Trust its
pro rata share thereof in cash.
Section 6.09. Certain Employee Benefits. Wind River and the
Trusts shall ensure that all individuals who are employees of Wind River or any
of its Subsidiaries immediately prior to the Closing shall be fully vested, as
of the Closing, in all of their accrued benefits (if any) under the American
Manufacturing Corporation 401(k) Plan (the "AMC Savings Plan") and American
Manufacturing Corporation and Subsidiaries Pension Plan (the "AMC Pension
Plan").
Section 6.10. Non-Marketable Securities. Prior to the Closing,
AMCD shall purchase from Wind River and its Subsidiaries all Non-Marketable
Securities for a cash price equal to carrying value thereof set forth on the
UNIC March 31, 2003 statutory statement. Notwithstanding anything to the
contrary, the aggregate purchase price for the Non-Marketable Securities shall
be at least $1,000. The Trusts shall cause Wind River and its Subsidiaries to be
reimbursed for any capital contributions made by Wind River or any of its
Subsidiaries in respect of the Non-Marketable Securities after March 31, 2003
and on or prior to the Closing Date, and Wind River and its Subsidiaries shall
pay to the Trusts or their designee an amount equal to any distributions in
respect the Non-Marketable Securities received by Wind River or any of its
Subsidiaries after March 31, 2003 and on or prior to the Closing.
- 40 -
Section 6.11. Data Security. Wind River shall, and shall cause
its Subsidiaries to, use commercially reasonable efforts to continue to
implement, as soon as reasonably practicable following the date of this
Agreement, such practices regarding the security of their internal and external
computer networks as may be appropriate given the nature of the information
contained on such computer networks and the businesses operated by Wind River
and its Subsidiaries, including, as may be applicable, (a) safeguards against
the destruction, loss or alteration of data, (b) Internet access, (c) firewall
protection, (d) DMZs, (e) password protection, (f) detection controls, (g)
disaster recovery/business continuity plans and (h) the implementation of
security policies and procedures.
ARTICLE 7
COVENANTS OF CAYMAN PURCHASER, PARENT, U.S. PURCHASER AND THE COMPANY
Each of Cayman Purchaser, Parent, U.S. Purchaser and the
Company agrees that:
Section 7.01. Confidentiality. (a) Prior to the Closing Date
and after any termination of this Agreement, if the Closing does not occur,
Cayman Purchaser, Parent, U.S. Purchaser, the Company and their respective
Affiliates will, except as required by Law, hold, and will cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold any nonpublic information (other than information
that (i) is or becomes generally available to the public, (ii) becomes available
to Cayman Purchaser, Parent, U.S. Purchaser or the Company on a non-confidential
basis from a source other than Wind River or the Trusts or (iii) is
independently developed by Cayman Purchaser, Parent, U.S. Purchaser or the
Company) provided by Wind River or the Trusts ("Confidential Information")
confidential.
(b) Wind River and the Trusts are not waiving, and will
not be deemed to have waived or diminished any attorney work product
protections, attorney-client privileges, or similar protections and privileges
as a result of disclosing any Confidential Information (including Confidential
Information relating to pending or threatened litigation) to Cayman Purchaser,
Parent, U.S. Purchaser, the Company or their respective Affiliates and their
respective representatives, regardless of whether Wind River or the Trusts have
asserted or are presently entitled to assert such privileges and protections.
The parties (i) share common legal and commercial interests in all of the
Confidential Information, (ii) are or reasonably anticipate that they may become
joint defendants in an Action and (iii) intend that such privileges and
protections remain intact should any party become subject to any action or
threatened Action. In furtherance of the foregoing, neither Cayman Purchaser,
Parent, U.S. Purchaser, the Company, their respective Affiliates nor their
representatives shall claim or contend in Actions between the parties to this
Agreement that Wind River or the Trusts waived any attorney work product
protections, attorney-client privileges, or similar protections and privileges
with respect to any information, documents, or other material not disclosed to
Cayman Purchaser, Parent, U.S. Purchaser, the Company, their respective
Affiliates and their respective representatives as a result of Wind River or the
Trusts disclosing any Confidential Information (including Confidential
Information related to pending or threatened litigation) to Cayman Purchaser,
Parent, U.S. Purchaser, the Company, their respective Affiliates or their
respective representatives.
- 41 -
(c) Notwithstanding anything to the contrary contained in
this Agreement, from the commencement of discussions with respect to the
Transactions, each party (and each employee, representative or other agent of
such party) may disclose to any and all persons, without limitation of any kind,
the "tax treatment" and "tax structure" (as those terms are defined in Treasury
Regulation Section 1.6011-4) of the Transactions, and all materials of any kind
(including opinions or other tax analyses) that are provided to any party
relating to such tax treatment and tax structure. The authorization in the
immediately preceding sentence does not extend to (i) disclosure of the
identities of the parties, or (ii) to the extent not inconsistent with the
preceding sentence, disclosure of (A) any pricing information or (B) any other
term or detail not relating to the tax treatment or tax structure of the
Transactions.
Section 7.02. Directors' and Officers' Indemnification and
Insurance. (a) The provisions relating to the indemnification of directors and
officers in the certificate or articles of incorporation and bylaws, or any
other organizational documents, as appropriate, of Wind River and its
Subsidiaries shall not be amended, repealed or otherwise modified until the
sixth anniversary of the Closing Date in any manner that would adversely affect
in any material respect the rights thereunder of individuals who at any time
prior to the Closing Date were directors or officers of Wind River or one of its
Subsidiaries in respect of actions or omissions occurring at or prior to the
Closing Date (including the Transactions), unless such modification is required
by law.
(b) Until the sixth anniversary of the Closing Date,
Cayman Purchaser, Parent, U.S. Purchaser and the Company shall cause Wind River
to use its commercially reasonable efforts to include those individuals who were
directors and officers of Wind River or any of its Subsidiaries prior to the
Closing in any liability insurance policies for directors and officers
maintained by Wind River or the Company (or any successor thereto) during such
period; provided that such liability insurance shall only extend to matters
arising prior to the Closing.
(c) The provisions of this Section 7.02 are intended to
be for the benefit of, and shall be enforceable by, each of the individuals who
at any time prior to the Closing Date were directors or officers of Wind River
or any one of its Subsidiaries and his or her heirs and legal representatives,
and shall be in addition to any other rights any such individual may have.
Section 7.03. Notices of Certain Events. Each of Cayman
Purchaser, Parent, U.S. Purchaser and the Company shall promptly notify Wind
River and the Trusts of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in connection
with the Transactions;
(b) any notice or other communication from any
Governmental Authority in connection with the Transactions;
(c) the commencement of any Action relating to Cayman
Purchaser, Parent, U.S. Purchaser or the Company in connection with the
Transactions; and
(d) the occurrence of any event or the existence of any
condition known to Cayman Purchaser, Parent, U.S. Purchaser or the Company that
causes any representation or
- 42 -
warranty contained in Article 5 to become inaccurate such that the Closing
condition set forth in Section 10.03(b) would not reasonably be expected to be
satisfied.
Section 7.04. Observer Rights. For so long as the Trusts, any
Affiliates of the Trusts and the principal (i.e. corpus) beneficiaries of any
Trust hold Related Senior Notes (as defined in the Senior Notes) with an
aggregate outstanding Principal Amount (as defined in the Senior Notes) that
equals at least 50% of the aggregate Principal Amount of the Related Senior
Notes as of the Closing Date, the Trusts shall have the right to appoint an
individual to be an observer of Parent's Board of Directors (the "Board"), which
individual shall initially be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Senior Notes Observer").
The Senior Notes Observer shall have the right to attend and participate in all
meetings of the Board and any committees thereof and to receive all notices and
information that is provided to the Board and any committee thereof in the same
manner and at the same time as such notices and information are provided to the
Board or any Board committee, but shall not have the right to vote on any
matters presented to the Board or any Board committee.
ARTICLE 8
MUTUAL COVENANTS
The parties agree that:
Section 8.01. Maintenance and Preservation of Records. Through
the Closing Date, the Trusts shall cause Wind River to maintain or cause to be
maintained the Records in all material respects in the same manner and with the
same care that the Records have been maintained prior to the execution of this
Agreement. Each of Cayman Purchaser, Parent, U.S. Purchaser and the Company
agrees that it shall preserve and keep the Records of Wind River and its
Subsidiaries existing as of the Closing Date for a period of six years from the
Closing Date or any longer period as may be required under Law, and shall make
such Records available to the Trusts for any reasonable purpose, at the Trusts'
expense, as may be reasonably requested by the Trusts. If Cayman Purchaser,
Parent, U.S. Purchaser or the Company wishes to destroy such Records after that
time, it shall first give 30 days' prior written notice to the Trusts and the
Trusts shall have the right at their option and at their expense, upon prior
written notice given to Cayman Purchaser within such 30-day period, to take
possession of such Records within 60 days after the date of such notice to
Cayman Purchaser. In addition, following the Closing Date, the Trusts shall
allow Cayman Purchaser, Parent, U.S. Purchaser, the Company and their
representatives (including its independent public accountants and counsel)
reasonable access upon reasonable notice and during regular business hours, to
Records that remain in the Trusts' possession. If the Trusts wish to destroy
such Records, they shall first give 30 days' prior written notice to each of
Cayman Purchaser, Parent, U.S. Purchaser and the Company, and each of Cayman
Purchaser, Parent, U.S. Purchaser and the Company shall have the right at its
option and at its expense upon written notice given to the Trusts within said
30-day period, to take possession of said Records within 60 days after the date
of such notice to the Trusts.
Section 8.02. Regulatory and Other Authorizations. (a) Cayman
Purchaser, Parent, U.S. Purchaser, the Company, Wind River and the Trusts shall
cooperate with each other and (i) shall use their respective commercially
reasonable efforts promptly to prepare and to file
- 43 -
all necessary documentation, and to effect all applications, notices, petitions
and filings, with each Person that are necessary or advisable to consummate the
Transactions, and (ii) shall use their respective commercially reasonable
efforts to obtain as promptly as practicable any Permit of such Person that is
necessary or advisable to consummate the Transactions.
(b) Without limiting the generality of the foregoing, as
soon as reasonably practicable after execution and delivery of this Agreement,
Cayman Purchaser, Parent, U.S. Purchaser, the Company, Wind River and the Trusts
shall make any filings required under the HSR Act. Cayman Purchaser, Parent,
U.S. Purchaser, the Company, Wind River and the Trusts will each furnish all
information as may be required by and will each respond as promptly as
practicable to all inquiries and requests received from any other state
regulatory agency properly asserting jurisdiction or by the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the HSR Act in order that the requisite approvals for the Transactions be
obtained or to cause any applicable waiting periods to expire.
(c) Cayman Purchaser, Parent, U.S. Purchaser, the
Company, Wind River and the Trusts shall, upon request, furnish each other with
all information concerning themselves, their subsidiaries, directors, officers
and stockholders and such other matters as may be reasonably necessary in
connection with any statement, filing, notice or application made by or on
behalf of Cayman Purchaser, Parent, U.S. Purchaser, the Company, Wind River or
any of their respective Affiliates to any Governmental Authority in connection
with the Transactions (except to the extent that such information would be, or
relates to information that would be, filed under a claim of confidentiality).
Section 8.03. Further Assurances. At any time and from time to
time after the Closing, the parties shall use commercially reasonable efforts to
take such actions to execute and deliver such other documents, instruments of
transfer or assignment, and do all such further acts and things as may be
necessary or desirable to carry out the Transactions. Each party shall, on or
prior to the Closing Date, use its commercially reasonable efforts to fulfill or
obtain the fulfillment of the conditions precedent set forth in Article 10,
including the execution and delivery of any documents, certificates, instruments
or other papers that are reasonably required for the consummation of the
Transactions.
Section 8.04. Employee Benefit Matters. (a) Wind River and its
Subsidiaries shall make contributions to the AMC Savings Plan with respect to
their employees' benefits up to and including the Closing Date in accordance
with the arrangements in effect as of the date of this Agreement. Wind River and
its Subsidiaries shall have no obligation to make, and shall not make, any
contributions to the AMC Pension Plan or any payments to AMCP, the Trusts or any
of their respective Affiliates with respect to the AMC Pension Plan at any time
after the date of the Original Investment Agreement, except in the ordinary
course of business consistent with past practices and not in amounts to exceed
$300,000.
(b) The Trusts and their Affiliates (other than Wind
River and it Subsidiaries) shall remain solely responsible for claims for the
type of benefits described in Section 3(1) of ERISA (whether or not covered by
ERISA) ("Welfare Benefits") that are incurred by or with respect to employees of
Wind River and its Subsidiaries and their beneficiaries and dependents on or
before the Closing Date and claims relating to COBRA Coverage attributable to
- 44 -
"qualifying events" with respect to any employees of Wind River and its
Subsidiaries and their beneficiaries and dependents that occur on or before the
Closing Date. For purposes of the foregoing, a medical/dental claim shall be
considered incurred when the services are rendered, the supplies are provided or
medication is prescribed, and not when the condition arose; provided that claims
relating to a hospital confinement that begins on or before the Closing Date but
continues thereafter shall be treated as incurred on or before the Closing Date.
A disability claim shall be considered incurred on or before the Closing Date if
the injury or condition giving rise to the claim occurs on or before the Closing
Date. Wind River and its Subsidiaries shall pay AMCP for the provision of
Welfare Benefits up to and including the Closing Date in accordance with the
cost-sharing arrangements in effect as of the date of this Agreement.
(c) As of the Closing Date, employees of Wind River and
its Subsidiaries shall cease to participate in all Employee Plans other than the
Wind River Plans.
(d) (i) As of or as soon as practicable after the Closing
Date, Wind River shall establish a defined contribution savings plan intended to
qualify under Sections 401(a) and 401(k) of the Code (the "Wind River Savings
Plan"). Upon the compliance by Wind River with the requirements of Section
8.04(d)(ii), the Trusts shall cause the sponsor of the AMC Savings Plan to
direct the trustee of the AMC Savings Plan to transfer to the trust under the
Wind River Savings Plan liability for the account balance of each participant in
the AMC Savings Plan who is an employee of Wind River or any of its Subsidiaries
(the "Wind River Participants"), together with cash, cash equivalents or other
mutually acceptable property, the value of which on such transfer date is equal
to the liability; provided, that any outstanding participant loans to Wind River
Participants shall be transferred in kind. Wind River shall cause the Wind River
Savings Plan to continue to administer the outstanding participant loans which
are transferred in kind in accordance with the transferred amortization
schedules to which they are subject. Wind River shall timely submit the Wind
River Savings Plan to the IRS for a favorable determination letter with respect
to the qualification thereof under Sections 401(a) and 401(k) of the Code and
shall make such changes as the IRS may required in order to issue such a
determination letter and shall provide the Trusts with evidence of such
submission and of receipt of a favorable determination letter.
(ii) Wind River shall provide the Trusts with written
evidence of (A) the adoption of the Wind River Savings Plan by Wind River and
(B) the creation of the trust thereunder. Wind River, the Trusts and the Trusts'
Affiliates shall cooperate in the filing of any IRS Forms 5310 required by the
transfer of assets and liabilities described in this Agreement, and anything
contained in this Section 8.04(d) to the contrary notwithstanding, the transfer
of assets and liabilities described in this Section 8.04(d) shall not take place
until the 31st day following the filing of all required IRS Forms 5310. In
addition, Wind River, the Trusts and the Trusts' Affiliates shall cooperate in
(I) making all other filings required under the Code or ERISA and any applicable
securities laws, (II) implementing all appropriate communications with
participants, (III) transferring appropriate records and (IV) taking all such
other actions as may be necessary and appropriate to implement the provisions of
this Section 8.04(d) in a timely manner.
- 45 -
ARTICLE 9
TAX MATTERS
Section 9.01. Indemnification by the Trusts. (a) The Trusts
shall jointly and severally indemnify and hold harmless Cayman Purchaser,
Parent, U.S. Purchaser, Company, Wind River and each Subsidiary against the
following Taxes and Tax Detriments and, except as otherwise provided in Section
9.05, against any loss, damage, liability or expense, including reasonable fees
for attorneys and other outside consultants, incurred in contesting or otherwise
in connection therewith (individually or in the aggregate, "Tax Contest
Expenses"): (i) any Taxes of the Trusts, Wind River or any Subsidiary that are
allocable or that relates to a Pre-Closing Tax Period to the extent such Taxes
exceed any accrual or reserves in respect thereof (not taking into account any
accrual for deferred Taxes); (ii) any Taxes of any Person other than Wind River
or any of its Subsidiaries for which Wind River or any Subsidiary may be liable
under Treasury Regulation Section 1.1502-6 (or any comparable provision of
state, local or non-U.S. law), as a transferee or successor, by contract or
otherwise; (iii) any Taxes imposed on Cayman Purchaser or any Affiliate thereof
(including Wind River or any of its Subsidiaries) resulting from a breach of any
representation or warranty contained in Section 3.16; (iv) any Taxes imposed on
Cayman Purchaser or any of its Affiliates (including Wind River and its
Subsidiaries) arising out of a breach of any covenant or agreement made in this
Article 9 by any of the Trusts; (v) any and all Taxes and Tax Detriments
suffered by Cayman Purchaser or any Affiliate thereof (including Wind River or
any of its Subsidiaries) as a result of any action by or transaction involving
Wind River or any of its Subsidiaries between January 1, 2003 and the Closing
Date; and (vi) the excess, if any, of $19.5 million over the amount of federal
income Tax refund actually received by Wind River and its Subsidiaries within
two years of the Closing Date as a result of the carrying back of net operating
losses and capital losses from the taxable year ending December 31, 2002.
(b) The Trusts shall indemnify and hold harmless, as
appropriate, Cayman Purchaser and each of its Affiliates (including Wind River
and its Subsidiaries) from any and all transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees incurred in connection with the
Transactions ("Transfer Taxes"), regardless of the Person responsible for such
Taxes under applicable law.
(c) For purposes of this Section 9.01, in the case of any
Taxes (other than Transfer Taxes) that are payable for a taxable period that
includes (but does not end on) the Closing Date, the portion of such Tax related
to the portion of such taxable period ending on the Closing Date shall (i) in
the case of Property Taxes, be deemed to be the amount of such Tax for the
entire taxable period (or, in the case of such Property Taxes determined on an
arrears basis, the amount of such Tax for the immediately preceding period)
multiplied by a fraction, the numerator of which is the number of days in the
taxable period ending on the Closing Date and the denominator of which is the
number of days in the entire taxable period and (ii) in the case of any Taxes
(other than Property Taxes), be deemed equal to the amount that would be payable
if the relevant taxable period ended on the Closing Date.
(d) Any payment pursuant to this Section 9.01 shall be
made in immediately available funds not later than two business days before the
date payment of the Taxes to which
- 46 -
such payment relates is due, or, if no Tax is payable, within 15 days after
written demand is made for such payment. Notwithstanding any provision to the
contrary in this Agreement, any and all indemnification payments made pursuant
to this Article 9 shall be made to the party that actually incurred the Tax loss
and shall be made net of any Tax benefits actually realized by such party as a
result of such Tax loss.
Section 9.02. Filing of Tax Returns. All Tax Returns required
to be filed by Wind River or any of its Subsidiaries on or after the Closing
Date with respect to any taxable period ending on or prior to the Closing Date
will be filed by Wind River or the applicable Subsidiary when due (taking into
account extensions). Any such Tax Return shall be prepared or caused to be
prepared by the Trusts, in a manner consistent with past practices (including
any elections and accounting methods, except to the extent required by Law or to
the extent counsel for the Trusts renders a legal opinion, in form and substance
reasonably satisfactory to Cayman Purchaser and the Trusts, that a Tax Return
cannot be so prepared and filed without being subject to penalties) and shall be
submitted by the Trusts to Cayman Purchaser (together with schedules, statements
and, to the extent requested by Cayman Purchaser, supporting documentation,
including any Tax Returns, statements and supporting documentation prepared on a
pro forma basis for any Subsidiary that is included in a Tax Return filed on a
consolidated, combined or unitary basis for such taxable period at least 20
business days prior to the due date (including extensions) of such Tax Return.
Cayman Purchaser shall have the right to review all work papers and procedures
used to prepare any such Tax Return. If Cayman Purchaser, within 10 business
days after delivery of a copy of such Tax Return, notifies the Trusts in writing
that it objects to any items in such Tax Return (approval not to be unreasonably
withheld), the disputed items shall be resolved (within a reasonable time,
taking into account the deadline for filing such Tax Return) by KPMG LLP
(Philadelphia Office) or Deloitte & Touche LLP (Philadelphia Office), such firm
to be chosen by and mutually acceptable to both Cayman Purchaser and the Trusts.
Upon resolution of all such items, the relevant Tax Return shall be adjusted to
reflect such resolution and shall be binding upon the parties without further
adjustment. The final Tax Return will then be submitted to Wind River to execute
and file. The costs, fees and expenses of such accounting firm shall be borne
equally by Cayman Purchaser and the Trusts. The Trusts shall not cause Wind
River or any Subsidiary to file any amended Tax Return without the prior written
consent of Cayman Purchaser. All Tax Returns required to be filed by Wind River
or any of its Subsidiaries for any taxable period ending after the Closing Date
shall be prepared at the direction of Cayman Purchaser; provided, that, in the
case of any taxable period that begins before and ends after the Closing Date,
(i) the Trusts shall be entitled to review and approve such Tax Returns, such
approval not to be unreasonably withheld, conditioned or delayed and (ii) any
dispute relating to such Tax Returns shall be resolved in the manner described
in this Section 9.02. Anything in this Section 9.02 to the contrary
notwithstanding, except as otherwise required by Law, any income Tax Return of
Wind River for the "S short year" (as defined in Section 1362(e) of the Code)
shall be prepared on the basis of a closing of the books and Wind River and the
Trusts will execute any elections or consents required in connection with the
filing of such Tax Returns on such basis.
Section 9.03. Tax Refunds. Any refund with respect to Taxes of
Wind River or any of its Subsidiaries shall be the property of Wind River or the
applicable Subsidiary.
- 47 -
Section 9.04. Cooperation. Wind River, Cayman Purchaser and
the Trusts shall furnish or cause to be furnished to each other, upon request,
as promptly as practicable, such information (including access to Records) and
assistance relating to Wind River and its Subsidiaries as is reasonably
necessary for the filing of any Tax Return, for the preparation for any audit,
and for the prosecution or defense of any claim, suit or proceeding relating to
any proposed adjustment. Each of Cayman Purchaser and the Trusts shall make its
(or its Affiliates') employees available on a basis mutually convenient to both
parties to provide explanations of any documents or information provided under
this Agreement and shall retain or cause to be retained all Records related to
Taxes in its possession pertinent to Wind River and its Subsidiaries until the
applicable period for assessment under applicable Law (giving effect to any
extensions or waivers) has expired, and to abide by (or cause any party in
possession thereof to abide by) all record retention agreements entered into
with any Tax Authority. Prior to Cayman Purchaser, the Trusts or any Affiliates
of either Cayman Purchaser or the Trusts disposing of any Records related to
Taxes, notice shall be given to the other party providing reasonable terms
allowing such other party, at its sole expense, to take possession of such
Records. Any information obtained under this Section 9.04 shall be kept
confidential, except as may be necessary in connection with the filing of Tax
Returns or the conduct of any audit or other proceeding relating to Taxes. The
Trusts, Affiliates of the Trusts, Cayman Purchaser and Wind River and its
Subsidiaries will cooperate in the filing of all necessary Tax Returns and other
documentation with respect to the Transactions.
Section 9.05. Contests. (a) If any Tax Authority asserts a Tax
Claim with respect to Wind River or any of its Subsidiaries, then the party
first receiving notice of such Tax Claim promptly shall provide written notice
thereof to the other party or parties; provided, however, that the failure of
such party to give such prompt notice shall not relieve the other party of any
of its obligations under this Article 9, except to the extent that the other
party is actually prejudiced thereby. Such notice shall specify in reasonable
detail the basis for such Tax Claim and shall include a copy of the relevant
portion of any correspondence received from the Tax Authority.
(b) The Trusts shall have the right to control, at their
own expense, any audit, examination, contest, litigation or other proceeding
with respect to Taxes by or against any Tax Authority (a "Tax Proceeding") in
respect of Wind River or any of its Subsidiaries for any taxable period that
ends on or before the Closing Date but only to the extent that such Tax
Proceeding relates to a potential adjustment for which the Trusts have
acknowledged in writing their liability under this Agreement to hold Cayman
Purchaser, Wind River and its Subsidiaries harmless against the full amount of
any adjustment that may be made as a result of such Tax Proceeding (or in the
case of any taxable year that includes the Closing Date, against that portion of
any adjustment allocable to the Pre-Closing Tax Period under Section 9.01(a)).
If the Trusts do not expressly assume the defense of any such Tax Proceeding by
providing Cayman Purchaser with written notice of the Trusts' intent to control
such Tax Proceeding within 45 days after first receiving notice of such Tax
Proceeding, Cayman Purchaser may defend the same in such manner as it may deem
appropriate; provided, that such 45-day period shall be extended for such
additional period as may be reasonably necessary (but not to exceed an
additional 45 days) in order to allow the Trusts to determine whether they
should acknowledge liability as provided in this Section 9.05(b); and provided
further, that the Trusts shall reimburse Cayman Purchaser for its reasonable
fees for attorneys and other outside consultants incurred during such additional
- 48 -
period. Notwithstanding the foregoing, in the event that issues relating to a
potential adjustment for which the Trusts have acknowledged their liability are
required to be dealt with in the same Tax Proceeding as separate issues relating
to a potential adjustment for which Cayman Purchaser, Wind River or any of its
Subsidiaries would be liable, Cayman Purchaser shall have the right to control
the Tax Proceeding in accordance with the principles set forth in Section
9.05(c). Any Tax Proceeding controlled by the Trusts shall be conducted as
follows: (i) the Trusts shall provide Cayman Purchaser with a timely and
reasonably detailed account of each stage of such Tax Proceeding; (ii) the
Trusts shall consult with Cayman Purchaser before taking any significant action
in connection with such Tax Proceeding; (iii) the Trusts shall consult with
Cayman Purchaser and offer Cayman Purchaser an opportunity to comment before
submitting any written materials prepared or furnished in connection with such
Tax Proceeding; (iv) the Trusts shall defend such Tax Proceeding diligently and
in good faith as if they were the only parties in interest in connection with
such Tax Proceeding; (v) Cayman Purchaser shall be entitled to participate, at
its own expense, in such Tax Proceeding and receive copies of any written
materials relating to such Tax Proceeding received from the relevant Tax
Authority (except that all Tax Contest Expenses relating to an item described in
Section 9.01(a)(v) shall be borne by the Trusts and the Trusts agree to
indemnify and hold harmless Cayman Purchaser and Wind River and its Subsidiaries
for any such costs); and (vi) the Trust shall not settle, compromise or abandon
any such Tax Proceeding, if such action could have an adverse impact on Cayman
Purchaser, any Affiliate of Cayman Purchaser (including Wind River or any of its
Subsidiaries), without obtaining the prior written consent of Cayman Purchaser,
which consent shall not be unreasonably withheld or delayed.
(c) In the case of a Tax Proceeding for a taxable year or
period of Wind River or any of its Subsidiaries beginning on or before and
ending after the Closing Date, Cayman Purchaser shall have the right to control
such Tax Proceeding; provided, however, that (i) Cayman Purchaser shall provide
the Trusts with a timely and reasonably detailed account of each stage of such
Tax Proceeding; (ii) Cayman Purchaser shall consult with the Trusts before
taking any significant action in connection with such Tax Proceeding; (iii)
Cayman Purchaser shall consult with the Trusts and offer the Trusts an
opportunity to comment before submitting any written materials prepared or
furnished in connection with such Tax Proceeding; (iv) Cayman Purchaser shall
defend such Tax Proceeding diligently and in good faith as if it were the only
party in interest in connection with such Tax Proceeding; (v) the Trusts shall
be entitled to participate in such Tax Proceeding, at their own expense, if such
Tax Proceeding could have an adverse impact on the Trusts or any of their
Affiliates; and (vi) Cayman Purchaser shall not settle, compromise or abandon
any such Tax Proceeding without obtaining the prior written consent, which
consent shall not be unreasonably withheld or delayed, of the Trusts if such
settlement, compromise or abandonment could have an adverse impact on the Trusts
or any of its Affiliates.
(d) Cayman Purchaser shall have the exclusive right to
control any Tax Proceeding involving Wind River or any of its Subsidiaries
(other than any Tax Proceeding described in Section 9.05(b) or (c)).
Section 9.06. Coordination. Notwithstanding any other
provision of this Agreement, claims for indemnification with respect to Taxes
and the procedures with respect thereto shall be governed exclusively by this
Article 9.
- 49 -
Section 9.07. Miscellaneous. (a) The parties agree to treat
all payments made by them to or for the benefit of the other (including any
payments to Wind River or any Subsidiary) under this Article 9, under other
indemnity provisions of this Agreement and for any misrepresentations or
breaches of warranties or covenants as adjustments to the purchase price paid by
U.S. Purchaser to the Trusts or as capital contributions for Tax purposes, as
appropriate, and that such treatment shall govern for purposes of this Agreement
except to the extent that the Laws of a particular jurisdiction provide
otherwise, in which case such payments shall be made in an amount sufficient to
indemnify the relevant party on an after-Tax basis.
(b) All payments payable under any Tax sharing agreement
to which Wind River or any Subsidiary is a party for any taxable period ending
on or prior to the Closing Date shall be calculated on a basis consistent with
that used to date and be payable in full on the Closing Date (or a reasonable
estimate thereof), notwithstanding any later time for payment set forth in any
such agreement. Except as provided in the preceding sentence, all such Tax
sharing agreements shall be terminated and shall be of no further force or
effect (with respect to any past, present or future period) as of the Closing
Date, and there shall be no liability of Wind River or any Subsidiary as of the
Closing Date under any such Tax sharing agreements.
(c) For purposes of the indemnification provided by
Section 9.01 and notwithstanding any provision to the contrary, references to
Cayman Purchaser shall be deemed to include the direct and indirect shareholders
of Cayman Purchaser.
Section 9.08. No Election under Section 338(h)(10). No
election under Section 338(h)(10) of the Code shall be made with respect to the
Transactions.
ARTICLE 10
CONDITIONS
Section 10.01. Mutual Conditions. The obligations of each
party to consummate the Transactions are subject to the satisfaction or waiver
on or prior to the Closing of the following conditions:
(a) The applicable waiting period (and any extension
thereof) under the HSR Act relating to the Transactions shall have
expired or been terminated.
(b) All consents, authorizations, orders and approvals
set forth on Schedule D shall have been obtained and shall be in full
force and effect and all statutory waiting periods in respect thereof
shall have expired.
(c) No provision of any applicable Law and no judgment,
injunction, order or decree of any Governmental Authority shall, and no
Action shall have been commenced seeking to, prohibit the consummation
of the Transactions.
Section 10.02. Conditions to Obligations of Cayman Purchaser,
Parent, U.S. Purchaser and the Company. The obligations of Cayman Purchaser,
Parent, U.S. Purchaser and the Company to consummate the Transactions are
subject to the satisfaction or waiver on or prior to the Closing of the
following further conditions:
- 50 -
(a) Each of the Trusts shall have performed in all
material respects all of its obligations under this Agreement required
to be performed by it on or prior to the Closing Date, and Cayman
Purchaser shall have received a certificate signed by a trustee of each
Trust to the foregoing effect.
(b) Wind River shall have performed in all material
respects all of its obligations under this Agreement required to be
performed by it on or prior to the Closing Date, and Cayman Purchaser
shall have received a certificate signed by each officer of Wind River
and its Subsidiaries listed on Schedule E to the foregoing effect.
(c) The representations and warranties of the Trusts in
this Agreement shall be true and correct (without regard to any
qualification as to materiality) in all material respects when made and
at and as of the Closing Date, as if made at and as of such date
(except for representations and warranties that speak as of a specific
date (without giving effect to the reference to the date of the
Original Investment Agreement in the introductory provision of Articles
III and IV), which shall be true and correct in all material respects
as of such date), and Cayman Purchaser shall have received a
certificate signed by a trustee of each Trust to the foregoing effect.
(d) The representations and warranties of Wind River in
this Agreement shall be true and correct (without regard to any
qualification as to materiality) in all material respects when made and
at and as of the Closing Date, as if made at and as of such date
(except for representations and warranties that speak as of a specific
date (without giving effect to the reference to the date of the
Original Investment Agreement in the introductory provision of Article
III), which shall be true and correct in all material respects as of
such date), and Cayman Purchaser shall have received a certificate
signed by each officer of Wind River and its Subsidiaries listed on
Schedule E to the foregoing effect.
(e) From and after the date of this Agreement, there
shall not have occurred any Material Adverse Change.
(f) Each of the Trusts shall have delivered to Cayman
Purchaser a duly executed certificate, in form and substance
satisfactory to Cayman Purchaser, to the effect that such party is not
a "foreign person" as defined in Section 1445(f) of the Code.
(g) Each Employment Agreement shall have been executed
and delivered and be in full force and effect, enforceable in
accordance with its terms.
(h) Except as permitted by Section 6.01(w), neither Wind
River nor any of its Subsidiaries shall have cancelled any agency
agreement or any reinsurance treaty, other than in the ordinary course
of business consistent with past practice.
(i) A.M. Best shall not have downgraded any of the
Insurance Companies below a rating of "A" (without any negative outlook
or similar qualification).
(j) Cayman Purchaser shall have received confirmation
from A.M. Best that, following the consummation of the Transactions,
the Insurance Companies will be rated as least "A" (without any
negative outlook or similar qualification).
- 51 -
(k) The Insurance Companies shall have received
commitments for an amount of collateral from their reinsurance partners
equal to at least $650 million in the aggregate.
(l) Cayman Purchaser shall have received a certificate
signed by the Chief Financial Officer of UNIC certifying on behalf of
UNIC that in his good faith judgment (i) the Adjusted Statutory Surplus
of UNIC will not be less than $240 million as of the Closing Date, and
(ii) except as indicated thereon, he is not aware of any specific facts
or circumstances applicable to any reinsurance companies that would
lead him to believe that any amounts due to Wind River or any of its
Subsidiaries under any Reinsurance Agreement are not fully collectible
(net of any reserves) by Wind River or its Subsidiaries and no such
amounts are disputed, and Cayman Purchaser shall not have reasonably
objected to the factual matters or calculations contained in such
certificate, or on which such certificate is based.
(m) Neither the Trusts nor Wind River or any of its
Subsidiaries shall have taken any action to terminate any Employee Plan
that is subject to Title IV or Section 302 of ERISA or Section 412 or
4971 of the Code, and no such Employee Plan shall have otherwise been
terminated.
Section 10.03. Conditions to Obligations of Wind River and the
Trusts. The obligations of Wind River and the Trusts to consummate the
Transactions are subject to the satisfaction or waiver on or prior to the
Closing Date of the following further conditions:
(a) Each of Cayman Purchaser, Parent, U.S. Purchaser and
the Company shall have performed in all material respects all of its
obligations under this Agreement required to be performed by it on or
prior to the Closing Date, and Wind River and the Trusts shall have
received a certificate signed by an appropriate officer of each of
Cayman Purchaser, Parent, U.S. Purchaser and the Company to the
foregoing effect.
(b) The representations and warranties of each of Cayman
Purchaser, Parent, U.S. Purchaser and the Company in this Agreement
shall be true and correct (without regard to any qualification as to
materiality) in all material respects when made and at and as of the
Closing Date, as if made at and as of such date (except for
representations and warranties that speak as of a specific date, which
shall be true and correct in all material respects as of such date),
and Wind River and the Trusts shall have received a certificate signed
by an appropriate officer of each of Cayman Purchaser, Parent, U.S.
Purchaser and the Company to the foregoing effect.
ARTICLE 11
SURVIVAL; INDEMNIFICATION
Section 11.01. Survival. (a) The representations and
warranties of the parties contained in this Agreement or in any certificate or
other writing delivered pursuant to or in connection with this Agreement shall
not survive the Closing; provided, however, that the representations and
warranties contained in Sections 3.13 (Employee Benefits) and 3.26
(Environmental Matters) shall survive until the third anniversary of the Closing
Date, the
- 52 -
representations and warranties contained in Section 3.16 (Taxes) (but solely to
the extent applicable to income Taxes) shall survive until 30 days after
expiration of the statute of limitations applicable to the matters covered
thereby (giving effect to any waiver, mitigation or extension thereof), and the
representations and warranties contained in Sections 3.01 (Organization, Good
Standing and Qualification), 3.02 (Corporation Authorization; Approvals), 3.04
(Capital Structure), 4.01 (Organization), 4.02 (Authorization; Approvals), 4.05
(Ownership of Wind River Common Stock), 5.01 (Organization), 5.02
(Authorization; Approvals), 5.05 (Purchase for Investment) and 5.08 (Ownership
of Parent; No Prior Activities) shall survive indefinitely. Notwithstanding the
preceding sentence, any representation or warranty in respect of which indemnity
may be sought under this Agreement shall survive the time at which it would
otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy or breach thereof giving rise to such right of indemnity, providing
reasonable detail of such inaccuracy or breach, shall have been given to the
party against whom such indemnity may be sought prior to such time.
(b) The obligations under this Agreement that by their
terms contemplate performance after the Closing (including those set forth in
Section 11.02) shall survive the Closing Date until the performance thereof.
Section 11.02. Indemnification. (a) The Trusts shall, jointly
and severally (other than with respect to Sections 4.01, 4.02 and 4.05,
indemnification obligations with respect to which shall be several and not
joint), indemnify Cayman Purchaser, Wind River, each of the Subsidiaries, and
their respective officers, directors, employees, Affiliates and their respective
successors and assigns (the "Indemnified Persons") against and hold each
Indemnified Person harmless from any damage, loss (including, with respect to
Cayman Purchaser, any loss in the value of its investment in Wind River),
liability and expense (including reasonable expenses of investigation and
reasonable attorneys' fees and expenses in connection with any Action)
("Damages") incurred or suffered by any Indemnified Person arising out or
otherwise in respect of (i) any misrepresentation or breach of representation,
warranty, covenant or agreement made or to be performed by Wind River or the
Trusts pursuant to this Agreement (without regard to any qualification as to
materiality or Material Adverse Change in such representation, warranty,
covenant or agreement) and that survives the Closing pursuant to Section 11.01,
(ii) any operations of Wind River not related to the insurance and related
businesses and activities carried on by AIS and its Subsidiaries, including Wind
River's investment in Little Round Top and (iii) any and all liabilities arising
under or relating to any of the Title IV Plans or the Employee Plans (other than
the SAR Agreements and the other Wind River Plans), whether incurred before, on
or after the Closing, including liabilities under Title IV or Section 302 of
ERISA or Section 412 or Section 4971 of the Code, and liabilities resulting from
a failure to comply with the continuation coverage requirements of Sections 601
et seq. of ERISA and Section 4980B of the Code or the group health plan
requirements of Sections 9801 et seq. of the Code and Sections 701 et seq. of
ERISA.
(b) Any indemnification payment due from the Trusts under
Section 11.02(a) to Wind River or any of its Subsidiaries shall be paid in the
following manner following written notice thereof from Cayman Purchaser to the
Trusts: (i) such indemnification shall be deducted first from any accrued but
unpaid interest on the Senior Notes, then from the then outstanding principal
amount of the Senior Notes and (ii) if the principal amount of the Senior Notes
shall be
- 53 -
zero, such indemnification payment shall be paid by the Trusts. To the extent of
any offset of any indemnification payment against the Senior Notes, such offset
shall constitute satisfaction in full of the Trusts' obligation to make such a
payment and no Indemnified Person shall have any right to recover such payment
directly from the Trusts. If the amount of any indemnification payment offset
against the Senior Notes as provided in this Section 11.02(b) is determined to
have been in excess of the proper amount or the Claim relating thereto is
determined to be invalid, Wind River shall reinstate the principal amount of the
Senior Notes in their proper amount, or repay the proper amount to the Trusts in
cash.
(c) This Section 11.02 shall not apply to indemnification
for Taxes, which shall be governed by Article 9.
Section 11.03. Procedures. (a) Each Indemnified Person shall
give prompt notice to the party against whom indemnity is sought (the
"Indemnifying Party") of the assertion of any claim, or the commencement of any
Action ("Claim") in respect of which indemnity may be sought under Section 11.02
and to provide the Indemnifying Party such information with respect thereto that
the Indemnifying Party may reasonably request. The failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations
under Section 11.02, except to the extent such failure shall have actually
prejudiced the Indemnifying Party.
(b) The Indemnifying Party shall be entitled to
participate in the defense of any Claim asserted by any Person not a party to
this Agreement ("Third Party Claim") and, subject to the limitations set forth
in this Section 11.03, shall be entitled to control and appoint lead counsel for
such defense, in each case at its expense. Within 30 days following the receipt
of notice by the Indemnifying Party of any Third Party Claim and such
documentation relating to such Third Party Claim in the possession of the
Indemnified Person that the Indemnifying Party reasonably requests, the
Indemnifying Party shall provide notice to the Indemnified Person of its
election to assume control of the defense of such Third Party Claim in
accordance with the provisions of this Section 11.03.
(c) If the Indemnifying Party assumes the control of the
defense of any Third Party Claim in accordance with the provisions of this
Section 11.03, (i) the Indemnified Person (A) will not admit any liability with
respect to, or settle, compromise or discharge, any Third Party Claim without
the Indemnifying Party's prior written consent (such consent not to be
unreasonably withheld or delayed) and (B) will agree to any settlement of such
Third Party Claim if such settlement fully, completely and unconditionally
releases the Indemnified Person from all liabilities and obligations with
respect to such Third Party Claim and does not impose any injunctive or other
equitable relief against the Indemnified Person (and, without the Indemnified
Person's consent (which consent shall not be unreasonably withheld or delayed)
the Indemnifying Party will not enter into any settlement which does not satisfy
such criteria) and (ii) the Indemnified Person shall be entitled to participate
in the defense of such Third Party Claim and to employ separate counsel of its
choice for such purpose at its own expense and shall not be responsible for any
attorneys' fees of the Indemnifying Party; provided, however, that the
Indemnified Person shall have the right to employ, at the Indemnifying Party's
expense, one counsel of its choice in each applicable jurisdiction (if more than
one jurisdiction is involved) to represent the Indemnified Person if, in the
Indemnified Person's reasonable judgment, there
- 54 -
exists an actual or potential conflict of interest between the Indemnified
Person and the Indemnifying Party or if the Indemnifying Party (A) elects not to
defend, compromise or settle a Third-Party Claim, (B) fails to notify the
Indemnified Person within the required time period of its election as provided
in this Section 11.03 or (C) having timely elected to defend a Third-Party
Claim, fails, in the reasonable judgment of the Indemnified Person, after at
least 30 days' notice to the Indemnifying Party, to adequately prosecute or
pursue such defense, and in each such case the Indemnified Person may defend
such Third-Party Claim on behalf of and for the account and risk of the
Indemnifying Party; provided, that the Indemnified Person shall defend the Third
Party Claim in good faith and shall not enter into any settlement of such Third
Party Claim without the prior consent of the Indemnifying Party (such consent
not to be unreasonably withheld, conditioned or delayed); and provided, further,
that the Indemnifying Party may resume within a reasonable period of time under
the circumstances its right to defend, compromise or settle a Third Party Claim
upon providing written notice thereof to the Indemnified Person and thereafter
shall not be liable for the fees and expenses of the Indemnified Person's
counsel (except for such fees and expenses as are incurred in the transition of
such defense to the Indemnifying Party).
(d) Each party shall cooperate, and cause their
respective Affiliates to cooperate, in the defense or prosecution of any Third
Party Claim and shall furnish or cause to be furnished such records, information
and testimony, and attend such conferences, discovery proceedings, hearings,
trials or appeals, as may be reasonably requested in connection therewith.
Section 11.04. Calculation of Damages. The amount of any
Damages for which an Indemnifying Party may be liable under Section 11.02 shall
be reduced by any amounts actually received by an Indemnified Person or any of
its Affiliates with respect thereto under any insurance coverage or from any
other Person alleged to be responsible therefor and by the amount of the net Tax
benefit, if any, realized by the Indemnified Person as a result of the event
giving rise to Damages, and shall be increased to take account of the net Tax
cost, if any, incurred by the Indemnified Person arising from the receipt of
indemnity payments under this Agreement (grossed up for such increases), in each
case when and as such Tax benefit or Tax cost is actually realized through a
reduction or increase in Taxes otherwise due. If an Indemnified Person or any of
its Affiliates receives an amount under insurance coverage or from such other
party with respect to Damages at any time subsequent to any indemnification
provided by an Indemnifying Party pursuant to Section 11.02, then such
Indemnified Person shall promptly reimburse the Indemnifying Party.
Section 11.05. Exclusivity. From and after the Closing, the
rights of the Indemnified Persons under Article 9 and this Article 11 shall be
the sole and exclusive rights and remedies with respect to any Claims such
Indemnified Person may have against the Trusts or any of their Affiliates
relating to the subject matter of this Agreement (including any Claim for breach
of representation, warranty, covenant or agreement), whether at law or in
equity, and Cayman Purchaser, Parent, U.S. Purchaser and the Company waive any
other rights and remedies. Notwithstanding the foregoing, it is understood that
nothing in this Agreement shall prohibit any party from exercising its rights to
seek specific performance or injunctive or similar relief for a breach of any
covenant or agreement.
- 55 -
Section 11.06. Trust Arrangements. (a) Each of the Trusts
covenants and agrees that such Trust shall not distribute any Senior Notes or
Parent Shares held by such Trust until the date that is the fourth anniversary
of the Closing Date; provided, that if any Claim shall be pending on such date
and the aggregate outstanding principal amount of the Senior Notes (together
with accrued but unpaid interest thereon) shall be less than the amount of such
Claim, the Trusts shall be restricted from distributing any Parent Shares until
such Claim shall have been resolved (such period, the "Indemnity Period").
(b) Notwithstanding Section 11.06(a) but subject to any
restrictions set forth in the Shareholders Agreement or in the Senior Notes, any
Trust may, during the Indemnity Period, distribute Senior Notes or Parent Shares
held by such Trust (i) following five business days' notice to Cayman Purchaser,
to another Trust, an Affiliate of the Trusts or to the principal (i.e. corpus)
beneficiaries of any Trust if prior thereto such transferee assumes all of the
obligations of such Trust under Article 11 and Section 9.01 and covenants to
satisfy the requirements of this Section 11.06, in each case in form and
substance reasonably satisfactory to Cayman Purchaser or (ii) to any other
Person; provided that the written consent of Cayman Purchaser with respect
thereto is obtained prior to such distribution, which consent shall not be
unreasonably withheld or delayed as long as such other Person assumes all of the
obligations of such Trust under Article 11 and Section 9.01 and covenants to
satisfy the requirements of this Section 11.06, in each case in form and
substance reasonably satisfactory to Cayman Purchaser and Cayman Purchaser
reasonably believes that its rights under Article 11 and Section 9.01 would not
be adversely affected by such distribution.
ARTICLE 12
TERMINATION
Section 12.01. Grounds for Termination. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written agreement of the Trusts and Cayman
Purchaser;
(b) by either the Trusts or Cayman Purchaser if the
Closing shall not have occurred on or before September 30, 2003;
provided, that the failure of the Closing to have occurred on or before
such date did not result from the material breach of the party seeking
to terminate this Agreement of its obligations under this Agreement;
(c) by Cayman Purchaser if there has been a material
breach of any of the obligations, representations and warranties of
Wind River or the Trusts such that Section 10.02(a), (b), (c) or (d)
will not be satisfied;
(d) by the Trusts if there has been a material breach of
any of the obligations, representations and warranties of Cayman
Purchaser, Parent, U.S. Purchaser or the Company such that Section
10.03(a) or (b) will not be satisfied; or
(e) by either the Trusts or Cayman Purchaser if
consummation of the Transactions would violate any final nonappealable
order, decree or judgment of any Governmental Authority.
- 56 -
The party desiring to terminate this Agreement shall give written notice of such
termination to each other party, which notice shall be effective upon receipt.
Section 12.02. Effect of Termination. If this Agreement is
terminated as permitted by Section 12.01, such termination shall be without
liability of any party to the other parties; provided that if such termination
shall result from the deliberate (a) failure of any party to fulfill a condition
of performance of the obligations of any other party under this Agreement, (b)
failure of any party to perform a material obligation under this Agreement or
(c) material breach by any party of any representation or warranty contained in
this Agreement, and, at the time of termination the terminating party was not in
breach of its obligations under this Agreement such that the non-terminating
party would have been entitled to terminate this Agreement, such non-terminating
party shall be fully liable for any Damages incurred or suffered by the other
parties as a result of such failure or breach. Upon termination, this Agreement
shall become void and be without further force and effect and the Transactions
shall be abandoned by the parties without further action; provided, that the
provisions of this Section 12.02 and Sections 13.03, 13.05, 13.06 and 13.07
shall survive any such termination.
ARTICLE 13
MISCELLANEOUS
Section 13.01. Notices. All notices, requests and other
communications to any party in connection with this Agreement shall be in
writing and delivered personally, sent by documented overnight delivery service
and shall be given,
if to Cayman Purchaser, Parent, U.S. Purchaser or the Company,
to:
c/o Fox ▇▇▇▇▇ & Company, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
if to Wind River, to:
Wind River Investment Corporation
c/o American Manufacturing Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
- 57 -
with a copy to:
The AMC Group, L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
with a copy to:
Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
One ▇▇▇▇▇ Square
▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to any Trust, to the address set forth opposite the name of such Trust on
Schedule A. All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient if received prior to 5 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
Section 13.02. Amendments and Waivers. (a) Any provision of
this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each party,
or in the case of a waiver, by the party against whom such waiver is to be
effective.
(b) No failure or delay by any party in exercising any
right, power or privilege under this Agreement shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege under
this Agreement.
Section 13.03. Expenses. All costs and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such cost or expense; provided, however, that (a) Wind River shall pay
all filing fees under the HSR Act incurred by Cayman Purchaser or its Affiliates
in connection with the Transactions, and (b) if the Transactions are
consummated, the Company shall reimburse Cayman Purchaser and its applicable
Affiliates for all reasonable out-of-pocket expenses incurred by Cayman
Purchaser and such Affiliates in connection with the Transactions.
Section 13.04. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns; provided, that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the written consent of each other party.
Section 13.05. Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York
applicable to contracts made and wholly-performed within such state, without
regard to the conflicts of law principles of such state.
- 58 -
Section 13.06. Jurisdiction. Except as otherwise set forth in
this Agreement, any Action seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the Transactions
shall be brought in the United States District Court for the Southern District
of New York or any New York State court sitting in the Borough of Manhattan, so
long as one of such courts shall have subject matter jurisdiction over such
Action, and each of the parties irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such Action
and irrevocably waives, to the fullest extent permitted by Law, any objection
that it may now or hereafter have to the laying of the venue of any such Action
in any such court or that any such Action that is brought in any such court has
been brought in an inconvenient forum. Process in any such Action may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 13.01 shall be deemed
effective service of process on such party.
Section 13.07. WAIVER OF JURY TRIAL. EACH PARTY IRREVOCABLY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS.
Section 13.08. Counterparts; Third Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if such signatures were upon the same
instrument. A facsimile or photocopied signature (which may be delivered by
facsimile) shall be deemed to be the functional equivalent of an original for
all purposes. This Agreement shall become effective when each party shall have
received a counterpart of this Agreement signed by the other party. Except as
provided in Section 7.02(c), no provision of this Agreement is intended to
confer and shall not confer upon any Person other than the parties any rights or
remedies.
Section 13.09. Entire Agreement. This Agreement constitutes
the entire agreement among the parties with respect to the subject matter of
this Agreement and supersedes all prior agreements and understandings, both oral
and written, among the parties with respect to the subject matter of this
Agreement, including the letter of intent dated as of March 8, 2003 by and
between Fox ▇▇▇▇▇ and Wind River and the Original Investment Agreement.
Section 13.10. Captions. The captions are included in this
Agreement for convenience of reference only and shall be ignored in the
construction or interpretation of this Agreement. All references to Sections or
Articles contained in this Agreement shall be to Sections or Articles of this
Agreement unless otherwise stated.
Section 13.11. Specific Performance. The parties acknowledge
and agree that irreparable damage would occur if any party fails to consummate
the Transactions in accordance with the terms of this Agreement and that the
parties shall be entitled to specific performance in such event, in addition to
any other remedy at law or in equity.
Section 13.12. Severability. If this Agreement, or any of its
provisions, or the performance of any provision, is found to be illegal or
unenforceable, the parties shall be excused from the performance of such
portions of this Agreement as shall be found to be illegal or unenforceable
without affecting the validity of the remaining provisions of this Agreement;
- 59 -
provided, however, that the remaining provisions of this Agreement shall in
their totality constitute a commercially reasonable agreement.
Section 13.13. Publicity. Prior to the earlier of the
termination of this Agreement and the Closing the parties shall use reasonable
best efforts to coordinate and agree, prior to the issuance or release thereof,
upon any public release or announcement regarding the Transactions to be issued
by the parties, and, except to the extent required by Law, no such public
release or announcement shall be issued or released by either party without the
prior written consent of the other party.
Section 13.14. Trustees. All actions under or pursuant to this
Agreement by the Trustees are in their respective capacities as trustees under
the Trusts and not as individuals.
Section 13.15. Waiver of Conflict. Cayman Purchaser, Parent,
U.S. Purchaser and the Company waive for itself and on behalf of Wind River and
its Subsidiaries any right to disqualify the counsel of the Trusts in connection
with any dispute arising under this Agreement or any agreement executed and
delivered in connection with this Agreement.
[Signature pages follow]
- 60 -
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective authorized officers or trustees as of the
day and year first above written.
U.N. HOLDINGS (CAYMAN), LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
VIGILANT INTERNATIONAL, LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
U.N. HOLDINGS II, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Treasurer and Secretary
U.N. HOLDINGS LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Treasurer and Secretary
U.N. HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Treasurer and Secretary
WIND RIVER INVESTMENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO AMENDED AND RESTATED INVESTMENT AGREEMENT]
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES U/W OF
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., AS APPOINTED BY
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. F/B/O ▇▇▇▇▇▇▇ ▇.
▇▇▇▇, III
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES U/W OF
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., AS APPOINTED BY
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. F/B/O
▇▇▇▇▇▇ ▇. ▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES U/A/T OF
▇▇▇▇▇ ▇. ▇▇▇▇; DATED 2/9/67, AS
APPOINTED BY ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
F/B/O ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES U/A/T OF
▇▇▇▇▇ ▇. ▇▇▇▇; DATED 2/9/67, AS
APPOINTED BY ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
F/B/O ▇▇▇▇▇▇ ▇. ▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
[SIGNATURE PAGE TO AMENDED AND RESTATED INVESTMENT AGREEMENT]
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES
U/A/T OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.;
DATED 11/9/67
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES
U/A/T OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.;
DATED 6/9/69
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES
U/A/T OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.;
DATED 1/29/70
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES
U/A/T OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.;
DATED 1/24/73
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
PNC BANK, N.A., TRUSTEES
U/A/T OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.; DATED
12/22/76 F/B/O ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
[SIGNATURE PAGE TO AMENDED AND RESTATED INVESTMENT AGREEMENT]
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III, ▇▇▇▇▇▇ ▇.
▇▇▇▇, PNC BANK, N.A., TRUSTEES
U/A/T OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.; DATED
12/22/76 F/B/O ▇▇▇▇▇▇ ▇. ▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Title: Trustee
[SIGNATURE PAGE TO AMENDED AND RESTATED INVESTMENT AGREEMENT]