SHARE PURCHASE AND SALE AGREEMENT
AMONG
POWERSCREEN INTERNATIONAL plc
as Seller,
PARTEK CARGOTEC HOLDING LTD
as Buyer,
and for purposes of Article 9 only,
XXXXXXX ENGINEERING LIMITED
Dated as of July 20, 2000
SHARE PURCHASE AND SALE AGREEMENT
SHARE PURCHASE AND SALE AGREEMENT ("Agreement"), dated as of July 20,
2000, among POWERSCREEN INTERNATIONAL plc, a company incorporated under the laws
of England ("Seller"), PARTEK CARGOTEC HOLDING LTD, a company incorporated under
the laws of Ireland ("Buyer"), and for purposes of Article 9 only, XXXXXXX
ENGINEERING LIMITED, a company incorporated under the laws of Ireland
("Xxxxxxx").
RECITAL
WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase
from Seller, all of the issued and outstanding capital shares (the "Xxxxxxx
Shares") of Xxxxxxx;
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE OF XXXXXXX SHARES
1.1 Sale and Purchase of Xxxxxxx Shares. Subject to the terms and
conditions of this Agreement, effective at the Closing Time (as defined in
Section 3.1), Seller shall sell, assign and transfer to Buyer, and Buyer shall
purchase from Seller, the Xxxxxxx Shares for the consideration specified in
Section 2.1.
ARTICLE 2
PURCHASE PRICE
2.1 The Purchase Price. The aggregate purchase price for the Xxxxxxx
Shares shall be Sixty-Seven Million Five Hundred Fifty-Nine Thousand U.S.
Dollars ($67,559,000 U.S.) (the "Xxxxxxx Purchase Price"), subject to adjustment
pursuant to Section 2.3.
The Xxxxxxx Purchase Price shall be payable as provided in Section 2.2.
2.2 Payment of Xxxxxxx Purchase Price. The Xxxxxxx Purchase Price shall
be paid in U.S. dollars no later than 2:00 p.m. (United States eastern standard
time) on the Closing Date (as defined in Section 3.1) in the following manner:
(a) an amount equal to Sixty-Seven Million Eighty-Nine Thousand U.S. Dollars
($67,089,000 U.S.) shall be paid by wire transfer of immediately available funds
to an accounts or accounts designated in writing by Seller, and (b) an amount
equal to Four Hundred Seventy Thousand U.S. Dollars ($470,000 U.S.) shall be
paid by wire transfer of immediately available funds into escrow in accordance
with the terms of the Escrow Agreement (as defined in Section 11.9).
2.3 Purchase Price Adjustment.
(a) On or before sixty (60) days following the Closing Date,
Buyer shall prepare and deliver to Seller a consolidated balance sheet of
Xxxxxxx and its Subsidiaries (as defined in Section 4.1(b)) as of the close of
business on the Closing Date, which balance sheet shall be reported on by
Buyer's independent public accountants as having been properly prepared in
accordance with the principles set forth on Exhibit A attached hereto (such
principles are referred to herein as "Closing GAAP", and such consolidated
balance sheet referred to herein as the "Closing Date Balance Sheet").
(b) During the 45-day period following Seller's receipt of the
Closing Date Balance Sheet, Seller and its independent public accountants will
be permitted to review the working papers of Buyer and Buyer's independent
public accountants relating to the Closing Date Balance Sheet and any financial
records relevant to the preparation of the Closing Date Balance Sheet. Buyer and
Buyer's independent public accountants will also be available from time to time
to discuss questions raised by Seller and its independent public accountants.
The Closing Date Balance Sheet shall become final and binding upon the parties
on the 45th day following receipt thereof by Seller, unless Seller gives written
notice of its disagreement ("Notice of Disagreement") to Buyer prior to such
date. If Seller gives a Notice of Disagreement to Buyer, then within 15 days
thereafter, Seller shall give written notice (the "Second Notice") to Buyer
specifying in reasonable detail the nature of, and reasons for, any disagreement
so asserted. If a Notice of Disagreement is received by Buyer in a timely
manner, then the Closing Date Balance Sheet (as revised in accordance with
clause (x) or (y) below) shall become final and binding upon the parties on the
earlier of (x) the date the parties hereto resolve in writing any differences
they have with respect to any matter specified in the Notice of Disagreement or
(y) the date any disputed matters are finally resolved in writing by the
Arbitrator (as defined in Section 2.3(c)).
(c) During the 30-day period following the delivery of a
Second Notice, Seller and Buyer shall seek in good faith to resolve any
differences which they may have with respect to any matter specified in the
Notice of Disagreement. At the end of such 30-day period, Seller and Buyer shall
submit to an arbitrator (the "Arbitrator") for review and resolution any and all
matters which remain in dispute. The Arbitrator shall be Ernst & Young LLP, or
if such firm is unable or unwilling to act, such other person, entity or firm as
shall be agreed upon by Buyer and Seller. The Arbitrator shall render a decision
resolving the matters submitted to the Arbitrator within 30 days of receipt of
such submission. The cost of any arbitration (including the fees of the
Arbitrator) pursuant to this Section 2.3(c) shall be paid in the manner
specified in Section 11.10.
(d) Subject to the Materiality Thresholds (as defined in
Section 11.9), the Xxxxxxx Purchase Price shall be subject to adjustment in the
event that the Relevant Closing Balance Sheets (as defined in Section 11.9)
indicate that Total Equity (as defined in Section 11.9) as of the close of
business on the day before the Closing Date is greater than or less than the
Reference Amount (as defined in Section 11.9). The adjustment contemplated by
this Section 2.3(d), if any, shall be made in the manner set forth in Section
11.10.
2
ARTICLE 3
CLOSING
3.1 Closing.
(a) The closing of the sale and purchase of the Xxxxxxx Shares
provided for in Article 1 (the "Closing") shall take place at the offices of
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (or at such other place as the parties may agree in
writing), beginning at 10:00 a.m. on the later of (i) the 30th day after the
date of this Agreement (or the 45th day if prior to expiration of such 30-day
period, Seller receives a written notice from Buyer stating that despite Buyer's
good faith diligent efforts to complete its confirmatory due diligence (as
described in Section 6.2(a)), Buyer has been unable to complete such
confirmatory due diligence within such 30-day period, or (ii) the fifth business
day after the satisfaction or waiver of the conditions specified in Article 7.
The date on which the Closing is held is referred to hereinafter the "Closing
Date." The effective time of the Closing (the "Closing Time") shall be 11:59
p.m. Irish local time on the Closing Date.
(b) At the Closing, Seller shall deliver to Buyer a share
transfer form (in form reasonably satisfactory to Buyer) evidencing the transfer
of the Xxxxxxx Shares to Buyer, and Buyer shall deliver to Seller and the Escrow
Agent the Xxxxxxx Purchase Price in the manner set forth in Article 2.
(c) At the Closing, Seller shall cause any persons nominated
by Buyer to be validly appointed as additional directors of Xxxxxxx and the
Subsidiaries (with each such appointment being effective at the Closing Time),
and cause those persons serving as directors of Xxxxxxx and the Subsidiaries
immediately prior to such appointment to retire from office and from any
employment with Xxxxxxx or any Subsidiary (with each such retirement being
effective immediately after the appointment as directors of the persons
nominated by Buyer).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
4.1 Organization.
(a) Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation with all requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its business as now being
conducted.
3
(b) Section 4.1 of the disclosure statement prepared by Seller
and attached hereto (the "Disclosure Statement") sets forth a correct and
complete list of each subsidiary of Xxxxxxx (individually, a "Subsidiary," and
collectively, the "Subsidiaries"), the jurisdiction in which each such
Subsidiary was incorporated and the percentage ownership of such Subsidiary by
Xxxxxxx.
(c) Xxxxxxx and each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization with the requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on its business as
now being conducted. To the knowledge of Seller, neither Xxxxxxx nor any
Subsidiary has had a notice served on it by its auditors under Section 185 or
194 of the Irish Companies Xxx 0000 (the "1990 Act") and there have been no
investigations or directions with respect to the shares of Xxxxxxx or any
subsidiary under the 1990 Act. To the knowledge of Seller, neither Xxxxxxx nor
any Subsidiary has been struck off and subsequently restored to the register,
under Section 311(a) of the Companies Xxx 0000. Section 4.1 of the Disclosure
Statement sets forth a list of all officers and directors of Xxxxxxx and each
Subsidiary, as of the date of this Agreement.
(d) Two of the Subsidiaries, Xxxxxxx Iberica S.A. (Spain) and
Xxxxxxx Engineering GmbH (Germany) (together, the "Dormant Subsidiaries"), have
no operations, assets or rights that are used in or necessary for the operation
of Xxxxxxx'x business as currently conducted and conduct no business on behalf
of Xxxxxxx.
4.2 Authorization. The execution, delivery and performance of this
Agreement by Seller has been duly authorized by all requisite corporate action
of Seller. This Agreement constitutes the valid and binding obligation of
Seller, enforceable against it in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
in general and subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
4.3 Corporate Records. True and correct copies of the formation
documents (including the memorandum and articles of association) together with
true and correct copies of the statutory registers and minute books of Xxxxxxx
and each Subsidiary have previously been, or will be prior to the Closing,
delivered to Buyer.
4.4 Consents of Third Parties. Except as set forth in Section 4.4 of
the Disclosure Statement, the execution, delivery and performance of this
Agreement by Seller will not (a) violate or conflict with the memorandum and
articles of association or other constitutional documents, as the case may be,
of Seller, Xxxxxxx or any Subsidiary; (b) conflict with, or result in the breach
of, termination of, or give rise to any Lien (as defined in Section 4.6) or
constitute a default under or otherwise require prior written consent under, any
material agreement, understanding or commitment to which Seller, Xxxxxxx, or any
Subsidiary is a party or by which Seller, Xxxxxxx, or any Subsidiary is bound;
or (c) constitute a violation of any law, regulation, rule, judgment or decree
applicable to Seller, Xxxxxxx, or any Subsidiary, other than, in the case of
clauses (b) and (c) of this sentence which, individually or in the aggregate,
4
would not have a material adverse effect on the business or properties of
Xxxxxxx. No consent, approval or authorization of any Governmental Authority (as
defined in Section 4.15(b)) is required on the part of Seller, Xxxxxxx, or any
Subsidiary in connection with the execution, delivery and performance of this
Agreement, except (a) as set forth in Section 4.4 of the Disclosure Statement
and (b) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not have a material
adverse effect on the business or properties of Xxxxxxx.
4.5 Capitalization.
(a) Section 4.5 of the Disclosure Statement sets forth the
authorized share capital, if applicable, of Xxxxxxx and each Subsidiary and the
number of issued and outstanding shares of Xxxxxxx and each Subsidiary.
(b) All of the outstanding share capital of Xxxxxxx is owned
legally and beneficially by Seller. Except as set forth in Section 4.5 of the
Disclosure Schedule, all of the outstanding share capital of each Subsidiary is
owned legally and beneficially by Xxxxxxx. There are no outstanding options,
warrants, calls, subscriptions or other rights (including, without limitation,
preemptive rights), agreements or commitments obligating Xxxxxxx or any
Subsidiary to issue, transfer or sell any of the equity securities, or any
outstanding securities convertible into, exchangeable for or carrying the right
to acquire, equity securities of Xxxxxxx or any Subsidiary. There are no
restrictions of any kind on the transfer of the Xxxxxxx Shares.
4.6 Ownership of Shares. Seller is, and at the Closing Time will be,
the legal and beneficial owner of the Xxxxxxx Shares, in each case free and
clear of any claim, lien, security interest, right of first refusal, option to
purchase, charge, mortgage, debenture or other encumbrance (collectively,
"Liens"), except as disclosed on Section 4.6 of the Disclosure Statement. At the
Closing Time, Seller will transfer and deliver to Buyer legal and valid title to
all of the Xxxxxxx Shares, free and clear of all Liens other than Liens created
or suffered by Buyer and those listed on Section 4.6 of the Disclosure
Statement.
4.7 Title to Assets. Xxxxxxx and each Subsidiary has good title,
legally and beneficially, to all of its respective assets, free and clear of any
Liens, other than (a) Liens created by Buyer, (b) Liens disclosed in Sections
4.7 or 4.16 of the Disclosure Statement, (c) with respect to Owned Property,
reflected in any title insurance policies listed in Section 4.16 of the
Disclosure Statement (true and correct copies of which have been made available
to Buyer), (d) with respect to Owned Property, imperfections of title,
easements, pledges, charges, restrictions and encumbrances, including, without
limitation, survey matters, and Liens, if any, that do not materially detract
from the value of the property subject thereto or materially interfere with the
manner in which it is currently being used, and (e) Taxes (as defined in Section
4.10) and general and special assessments not in default and payable without
penalty or interest, provided that such Taxes and general and special
assessments are accrued in accordance with Closing GAAP on the Closing Date
Balance Sheet.
4.8 Financial Statements. Seller has delivered to Buyer copies of the
following financial statements (collectively, the "Financial Statements"): (a)
draft audited balance sheet and related income statement of Xxxxxxx and the
Subsidiaries as of and for the nine-month period ended December 31, 1999
(collectively, the "1999 Financial Statements"); and (b) the unaudited balance
5
sheet and related income statement of Xxxxxxx and the Subsidiaries as of and for
the four months ended April 30, 2000 (the unaudited balance sheet as of December
31, 1999 called, the "1999 Balance Sheet", and the unaudited balance sheet for
the four month period ended April 30, 2000 called, the "Interim Balance Sheet").
True and correct copies of the Financial Statements are set forth in Section 4.8
of the Disclosure Statement. The Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied and maintained throughout the periods indicated (except that the
Financial Statements for the four month period ended April 30, 2000 have been
prepared without footnote disclosures) and fairly present in all material
respects the financial position and results of operations for the entities
described therein at the dates and for the periods indicated therein (subject in
the case of Financial Statements as of April 30, 2000 to normal year-end
adjustments consistent with the 1999 Financial Statements). There have been no
material changes to the accounting principles used in the financial statements
of Xxxxxxx since November 11, 1999, other than those set forth in Section 4.8 of
the Disclosure Statement.
4.9 Absence of Certain Changes; Liabilities.
(a) Except as set forth in Section 4.9 of the Disclosure
Statement, since the date of the 1999 Balance Sheet, Xxxxxxx has not suffered
any material adverse change in its assets, results of operations or financial
condition.
(b) To the knowledge of Seller, there are no liabilities or
obligations of Xxxxxxx or any Subsidiary of a kind required in accordance with
GAAP to be reflected in the Financial Statements which are not so reflected,
except (i) liabilities reflected in the 1999 Financial Statements and Interim
Balance Sheet, (ii) liabilities or obligations which arose after the date of the
1999 Balance Sheet in the ordinary course of business, and (iii) liabilities
described in Section 4.9 of the Disclosure Statement.
(c) Since the date of the 1999 Balance Sheet, Xxxxxxx and each
Subsidiary has operated its business in the ordinary course and consistent with
past practice, and except as set forth in Section 4.9 of the Disclosure
Statement, there has not been:
(i) any damage, destruction or loss (whether or not covered
by insurance) that has had a material adverse effect on the
business or properties of Xxxxxxx and the Subsidiaries taken as a
whole;
(ii) any issuance of an option to purchase, or other right
to acquire, capital stock, shares or any security or other
instrument convertible into capital stock or shares of any class
of Xxxxxxx or any Subsidiary;
(iii) any issuance of shares of capital stock (including
treasury shares) of Xxxxxxx or any Subsidiary;
6
(iv) any material transaction by Xxxxxxx or any Subsidiary
other than in the ordinary course of business or as otherwise
permitted or contemplated by this Agreement;
(v) any agreement to grant any severance or termination pay
to an executive officer or director of Xxxxxxx or any Subsidiary
which shall not be paid prior the Closing Time or any increase in
compensation or benefits payable under existing employment
agreements or severance or termination pay policies with respect
to any employees of Xxxxxxx or any Subsidiary other than (A)
increases or bonuses in the ordinary course of business and
consistent with the past practice of Terex Corporation, (B)
increases or grants required by contracts disclosed pursuant
hereto or by applicable law, or (C) increases, agreements and
bonuses disclosed in Sections 4.13 and 4.14 of the Disclosure
Statement;
(vi) any employment, bonus, deferred compensation, or
severance agreement entered into with any of the directors,
officers or other employees of Xxxxxxx or any Subsidiary, other
than employment agreements terminable at will and other than as
disclosed in Section 4.13 of the Disclosure Statement;
(vii) any amendment of the articles of association or
by-laws or other constitutional documents, as the case may be, of
Xxxxxxx or any Subsidiary;
(viii) any indebtedness incurred by Xxxxxxx or any
Subsidiary for money borrowed, other than under existing lines of
credit in the ordinary course of business;
7
(ix) any intercompany loans or payments, dividends or
transfers of assets by Xxxxxxx or any Subsidiary inconsistent
with Terex Corporation's past practice and the overall corporate
cash and tax management practices of Terex Corporation, or
otherwise outside the ordinary course of business;
(x) any single capital expenditure or series of related
capital expenditures by Xxxxxxx or any Subsidiary in excess of
$100,000 U.S. other than in the ordinary course of business;
(xi) any material change or modification of the accounting
methods or practices of Xxxxxxx or any Subsidiary or of the
banking arrangements of Xxxxxxx or any Subsidiary;
(xii) any declaration or payment made of dividends or other
distributions to Xxxxxxx'x shareholders or upon or in respect of
any of its shares of capital stock, or redemption or obligation
to redeem any of its shares of capital stock or other securities,
except those consistent with the past practice of Terex
Corporation and overall corporate cash and tax management
practices of Terex Corporation;
(xiii) with respect to the five largest non-United States
customers of Xxxxxxx for the period beginning on July 27, 1999
and ending on the date of this Agreement, all of which customers
are listed in Section 4.9(c)(xiii) of the Disclosure Statement,
Xxxxxxx has not received oral or written notice or notices of any
dispute or termination of relationship which individually or in
the aggregate would have a material adverse effect on the
business or properties of Xxxxxxx;
(xiv) with respect to the five largest vendors of Xxxxxxx
for the period beginning on July 27, 1999 and ending on the date
of this Agreement, each of which are listed in Section
4.9(c)(xiv) of the Disclosure Statement, Xxxxxxx has not received
oral or written notice or notices of any dispute or termination
of relationship which individually or in the aggregate would have
a material adverse effect on the business or properties of
Xxxxxxx;
(xv) any acceleration or delay in the manufacture, shipment
or sale of inventory, the collection of accounts receivable or
notes receivable, the payment of accounts payable or notes
payable, the sale of accounts receivable, or any other action
outside the ordinary course of business, which acceleration,
delay or other action is inconsistent with past practice or is
intended to artificially increase the amount of cash in Xxxxxxx
and/or any Subsidiary, or artificially increase Xxxxxxx Net
Equity (as defined in Section 11.9) as calculated from the
Closing Date Balance Sheet; and
(xvi) any agreement or commitment by Xxxxxxx or any
Subsidiary to do any of the foregoing.
4.10 Taxes. Except as disclosed in Section 4.10 of the Disclosure
Statement, and except with respect to Taxes (as defined in this Section 4.10) or
Tax Returns (as defined in this Section 4.10) which individually involve $1,000
or less, as of the date hereof, (a) all domestic and foreign Tax returns,
reports, information returns and similar documents (including, without
limitation, Tax Returns required to be filed under the Taxes Consolidation Xxx
0000, as amended, and the Value Added Tax Xxx 0000, as amended) required to be
filed with respect to Xxxxxxx and each Subsidiary (collectively, the "Tax
Returns") have been filed in a timely manner (taking into account all extensions
of due dates) and are correct in all material respects and up to date, all Taxes
shown as due thereon have been paid, and all notices and items of information
that are or have been required to be made or given by Xxxxxxx or any Subsidiary
for Tax purposes have been made; (b) there is no agreement, waiver or consent
providing for an extension of time with respect to the assessment of any Tax or
deficiency against Xxxxxxx or any Subsidiary, and (c) no deficiencies for any
Taxes in respect of Xxxxxxx or any Subsidiary have been asserted in writing
against Xxxxxxx or any Subsidiary, which remain unpaid. To the knowledge of
Seller, except with respect to Taxes which individually involve $1,000 or less,
the Tax Returns reflect all Taxes due and payable with respect to the periods
covered thereby and there are no other Tax liabilities, deficiencies, interest
or penalties payable by or asserted against Xxxxxxx. Except as set forth in
Section 4.10 of the Disclosure Statement, accruals for Taxes shown on the 1999
Balance Sheet cover liabilities for all Taxes attributable to periods ending on
or before such date in accordance with GAAP, and since such date Xxxxxxx has not
incurred any liability for Taxes that is unusual in nature or amount in any
material respect. No authority in a jurisdiction where Xxxxxxx or any Subsidiary
does not file Tax Returns has made a written claim or given written notice that
Xxxxxxx or such Subsidiary, as the case may be, is subject to taxation by that
jurisdiction.
8
The term "Tax" or "Taxes," as used in this Agreement, means
all forms of taxation, duties, imposts and levies whether of Ireland, Northern
Ireland or elsewhere, including, without limitation, income tax, corporation
tax, corporation profits tax, advance corporation tax, capital gains tax,
capital acquisitions tax, dividend withholding tax, residential property tax,
wealth tax, value added tax, customs and other import and export duties, excise
duties, stamp duty, capital duty, social insurance, social welfare, "pay as you
earn" or other employment related levies or taxes or other similar contributions
in other amounts corresponding thereto whether payable in Ireland or elsewhere
and any charges, fees, levies or other assessments, interest, surcharge, penalty
or fine required to be paid in connection therewith. In this Agreement, any
reference to a liability with respect to any Tax shall include (x) a liability
to make payments of, or in respect of, or in relation to, such Tax (including
any penalties, interest or the like); (y) the loss, reduction, disallowance, use
or set-off against income, profits or gains earned, accrued or received on or
before the Closing of any relief which (i) is available or would (were it not
for the said loss, reduction, disallowance, use or set-off) have been available
to Xxxxxxx and/or any Subsidiary following the Closing and which has been taken
into account in computing any provision for Tax which is reflected in the
Closing Date Balance Sheet (or which, but for the presumed availability of such
relief, would have been reflected in the Closing Date Balance Sheet) or (ii)
which was treated as an asset of Xxxxxxx and/or any Subsidiary or otherwise
noted in the Closing Date Balance Sheet; and (z) set-off of any Buyer's relief
and circumstances where, but for such use or set-off, Xxxxxxx and/or any
Subsidiary would have had a liability with respect to Taxes in respect of which
Buyer would have been able to make a claim against Seller under this Agreement.
4.11 Material Contracts, etc. Buyer has been provided access to, or
correct and complete copies of, and Section 4.11 of the Disclosure Statement
sets forth a list, as of the date of this Agreement, of (a) all commitments and
agreements for the purchase of any materials, supplies, machinery, capital
assets or services that involve an expenditure by Xxxxxxx or any Subsidiary of
more than $50,000 U.S. (or the equivalent amount of any other currency) for any
one commitment or agreement or series of related commitments or agreements,
other than such commitments or agreements entered into in the ordinary course
consistent with past practice and which can be canceled by Xxxxxxx or such
Subsidiary, as the case may be, without liability, premium or penalty on 90
days' or less notice; (b) all personal property leases under which Xxxxxxx or
any Subsidiary is either lessor or lessee and which involve annual payments or
receipts of $50,000 U.S. (or the equivalent amount of any other currency) or
more; (c) all other orders, leases, commitments, agreements and instruments
(including, but not limited to, mortgages, indentures and other agreements and
instruments relating to indebtedness for borrowed money) to which Xxxxxxx or any
Subsidiary is a party or by which it or its properties are bound that involve
annual payments or receipts by Xxxxxxx or any Subsidiary in any 12-month period
and of more than $50,000 U.S. (or the equivalent amount of any other currency);
(d) all government contracts to which Xxxxxxx or any Subsidiary is a party; (e)
any joint venture, partnership or similar agreements to which Xxxxxxx or any
Subsidiary is a party; (f) contracts limiting the right of Xxxxxxx or any
Subsidiary to compete or do business in any territory; (g) contracts relating to
loans to officers, directors or Affiliates (as defined in Section 11.9) of
Xxxxxxx or any Subsidiary; (h) contracts and arrangements providing for any
severance, change-of-control, or stay in place payment, whether or not entered
into as a result of the transactions contemplated by this Agreement; (i)
contracts relating to loans to officers, directors or Affiliates of Xxxxxxx or
9
any Subsidiary to the extent not listed in Section 4.13 of the Disclosure
Statement; (j) all license agreements, assignments or contracts (whether as
licensor, licensee, assignor, assignee or otherwise) relating to any of the
Intellectual Property Rights (as defined in Section 4.17) to the extent not
listed in Section 4.17 of the Disclosure Statement; (k) any contract or
agreement to which Xxxxxxx or any Subsidiary is a party which relates to
clean-up, abatement, or any other actions in connection with the remediation of
any liabilities relating to Hazardous Materials to the extent not listed in
Section 4.18 of the Disclosure Statement; (l) any other agreement that is
material to the business and properties of Xxxxxxx or any Subsidiary which
involves the payment or receipt of consideration in excess of $50,000 U.S. (or
equivalent amount of any other currency) per annum; (m) any contract or
agreement to which Xxxxxxx or any Subsidiary is a party which relates to the
distribution of products and/or services of Xxxxxxx or any Subsidiary; and (n)
any modification of any of the foregoing. Section 4.11 of the Disclosure
Statement also describes the grants received by Xxxxxxx and/or any Subsidiary
which are administered by or provided through Forbairt or Enterprise Ireland or
are otherwise received by Xxxxxxx and/or any Subsidiary in connection with the
Industry Research and Development Initiative (individually, a "Grant").
Notwithstanding the foregoing, Section 4.11 of the Disclosure Statement shall
not be required to list orders for the purchase of raw materials, parts,
components or inventories or the sale of products, in each case, entered into in
the ordinary course of business and consistent with past practice.
4.12 Absence of Defaults. Each of the contracts listed or required to
be listed in Sections 4.11 and 4.13 of the Disclosure Statement (including each
contract that would be required to be listed in Section 4.11 or Section 4.13 of
the Disclosure Statement if it was not listed in Section 4.17 or Section 4.18 of
the Disclosure Statement), each contract of a type described in Sections 4.11
and 4.13 of this Agreement (including each contract that would be required to be
listed in Section 4.11 or Section 4.13 of the Disclosure Statement if it was not
listed in Section 4.17 or Section 4.18 of the Disclosure Statement) that is
entered into on or after the date of this Agreement (each, a "Material
Contract") constitutes a valid and binding obligation of Xxxxxxx and/or the
applicable Subsidiary, as the case may be, and to the knowledge of Seller, the
other parties thereto, and is in full force and effect. Except as set forth in
Section 4.12 of the Disclosure Statement, neither Xxxxxxx nor any Subsidiary is
in default in any material respect under any Material Contract or under any
material outstanding vendor or customer orders and, to the knowledge of Seller,
no event has occurred or exists which, with or without the passage of time or
the giving of notice or both, would constitute such a material default or breach
by Xxxxxxx or any Subsidiary. With respect to any contract not listed in Section
4.11 or Section 4.13 of the Disclosure Statement to which Xxxxxxx or any
Subsidiary is a party, neither Xxxxxxx nor any Subsidiary is in default, nor do
circumstances exist which, with or without the passage of time or the giving of
notice or both, would cause such a default, the result of which is likely to
have a Material Adverse Effect. With respect to each Grant required to be
described in Section 4.11 of the Disclosure Statement, Xxxxxxx, or, in the case
where a Subsidiary is a party to such grant, the Subsidiary (a) is in compliance
with all of the material terms and conditions of such Grant; (b) no event has
occurred or exists which, with or without the passage of time or the giving of
notice or both, would constitute grounds for revocation or cancellation of such
Grant, or for acceleration of any obligations under such Grant; and (c) Seller
has no reason to believe that any project which is the subject of any such Grant
will not meet any scheduled completion dates required under the terms of such
Grant.
10
4.13 Agreements Regarding Employees. Except as set forth in Section
4.13 of the Disclosure Statement, as of the date of this Agreement neither
Xxxxxxx nor any Subsidiary is a party to or bound by any (a) pension, profit
sharing, share option, employee share purchase or other plan or arrangement
providing for deferred or other compensation to the employees of Xxxxxxx, or any
other material benefit plan or similar arrangement with the employees of Xxxxxxx
or any Subsidiary; (b) employment agreement, arrangement or understanding; or
(c) any collective bargaining or other labor agreement. Except as set forth in
Section 4.13 of the Disclosure Statement, there are no existing, or to the
knowledge of Seller threatened, (x) employee strikes, work stoppages, lockouts
or material labor disputes; or (y) to the knowledge of Seller, any union
organizing activity or work slow-downs involving the employees of Xxxxxxx or any
Subsidiary.
4.14 Employee Benefit Plans. Except as set forth on Section 4.14 of the
Disclosure Statement, as of the date of this Agreement there are no employee
benefit plans, pension, welfare benefit, share option, share purchase, deferred
compensation, severance incentive, death-in-service, income continuation,
permanent health insurance, private medical insurance, bonus or other fringe
benefit plan or arrangement maintained or contributed to by Xxxxxxx or any
Subsidiary for the benefit of its employees.
4.15 Litigation; Compliance with Laws.
(a) Except as set forth in Section 4.15 of the Disclosure
Statement, there is no suit, litigation, proceeding, appeal or administrative
action (including, without limitation, any investigations under the 0000 Xxx)
pending, or to the knowledge of Seller, threatened in writing, judgment, order,
injunction or decree outstanding, against Xxxxxxx or any Subsidiary that, if
adversely determined, would have a material adverse effect on the business of
Xxxxxxx or the Subsidiaries taken as a whole. There are no judicial or
administrative actions, proceedings or investigations pending or, to the
knowledge of Seller, threatened that question the validity of this Agreement or
the transactions contemplated hereby or that, if adversely determined, would
have a material adverse effect upon Seller's ability to enter into or perform
its obligations under this Agreement. Neither Xxxxxxx nor any Subsidiary is
subject to any directions made under the 1990 Act.
(b) Except as set forth in Section 4.15 of the Disclosure
Statement, and except with respect to compliance with Environmental Laws which
is dealt with exclusively in Section 4.18, as of the date hereof, Xxxxxxx and
each Subsidiary is and has been in compliance in all material respects with all
applicable domestic and foreign laws, ordinances, rules, regulations, judgments,
decrees and orders ("Laws") of any governmental entity or authority having
jurisdiction over Xxxxxxx or its properties or assets or such Subsidiary or its
properties or assets (each, a "Governmental Authority"), including, without
limitation, the Local Government (Planning and Developments) Acts 1963 to 1999,
the Local Government (Sanitary Services) Acts 1878 to 1964, the Building Control
Xxx 0000, the Fire Services Xxx 0000, each as amended from time to time, and,
with respect to Xxxxxxx Sales & Service Limited, the Fair Employment and
Treatment (Northern Ireland) Order 1998. To the knowledge of Seller, neither
Xxxxxxx nor any Subsidiary has any liability (whether accrued, absolute,
contingent, direct or indirect) for past violations of any law, ordinance, code,
11
rule or regulation, except as would not have a material adverse effect on its
business or properties. All material reports and returns (other than Tax Returns
which are covered exclusively by Section 4.10) required to be filed by Xxxxxxx
and each Subsidiary with any Governmental Authority have been filed and were
accurate and complete in all material respects when filed. To the knowledge of
Seller, no payments of cash or other consideration have been made to any person,
entity or government by Xxxxxxx or any Subsidiary or by any agent, employee,
officer, director, shareholder or other person or entity on behalf of Xxxxxxx or
any Subsidiary which were unlawful under the laws of Ireland or any other
Governmental Authority.
4.16 Real Property.
(a) Section 4.16 of the Disclosure Statement sets forth a
correct and complete list of all real property (i) owned by Xxxxxxx and/or any
Subsidiary (the "Owned Property") and (ii) leased by Xxxxxxx and/or any
Subsidiary (the "Leased Property"). Xxxxxxx and each Subsidiary has good and
marketable title to its Owned Property free and clear of all Liens, other than
(i) those reflected in any title insurance policies listed in Section 4.16 of
the Disclosure Statement (true and correct copies of which have been made
available to Buyer by Seller); (ii) imperfections of title, easements, pledges,
charges, restrictions and encumbrances, including, without limitation, survey
matters and Liens, if any, that do not materially detract from the value of the
property subject thereto or materially interfere with the manner in which it is
currently being used; (iii) Taxes and general and special assessments not in
default and payable without penalty or interest and which are accrued on the
Closing Date Balance Sheet in accordance with Closing GAAP; and (iv) Liens
disclosed in Section 4.16 of the Disclosure Statement. With respect to the Owned
Property, Xxxxxxx and the Subsidiaries have all deeds and documents of title and
all material planning documents necessary to prove title. Except as set forth in
Section 4.16 of the Disclosure Statement, there are no leases, contracts,
options or agreements relating to or affecting the Owned Property to which
Xxxxxxx or any Subsidiary is a party or by which Xxxxxxx or any Subsidiary is
bound or affected, except those which are terminable on notice of 90 days or
less without liability, premium or penalty.
(b) Except as set forth in Section 4.16 of the Disclosure
Statement, there are no conditions on the Owned Property or the Leased Property
(including, without limitation, all buildings, systems, fixtures, structures and
improvements thereon) which (i) constitute a material health or safety hazard,
or (ii) materially reduce the value of any portion of the Owned Property or the
Leased Property to a prospective buyer with knowledge of the condition. All
buildings, systems, fixtures, structures and improvements leased or used by
Xxxxxxx and each Subsidiary are in working order and are adequate in condition,
quality and quantity for the normal operation of the business of Xxxxxxx or such
Subsidiary as presently conducted. Xxxxxxx possesses all easements and rights,
including without limitation, easements for all utilities, services, roadways,
and other means of ingress and egress, necessary to conduct its business as
presently conducted. The Owned Property and the Leased Property comply in all
material respects and are being operated in all material respects in compliance
with all applicable covenants, conditions and restrictions of record.
12
(c) Neither the whole or any portion of the Owned Property or
the Leased Property has been condemned, requisitioned or otherwise taken by any
public authority for any purpose, no written notice of such condemnation,
requisition or taking has been served upon Xxxxxxx and, to the knowledge of
Seller, no such condemnation, requisition or taking is threatened or
contemplated. To the knowledge of Seller, there are no proposed actions by any
governmental agencies or authorities which have or may create a Lien on the
Owned Property or the Leased Property or any portion thereof. Except as reserved
on the Financial Statements or on the Closing Date Balance Sheet, there are no
unpaid charges for special assessments on any of the Owned Property. No public
improvements have been commenced and, to the knowledge of Seller, there are no
public improvements planned which have resulted or may reasonably be expected to
result in special assessments against or otherwise adversely affect the use of
any of the Owned Property. No governmental agency has issued any work order, and
there are no outstanding court orders, requiring repairs, alterations or
corrections of any condition on the Owned Property which are material in nature
or amount. Neither Xxxxxxx nor any Subsidiary has received nor does Seller have
any knowledge of any written notice from any department or division of federal,
state or local government relating to any violation of any fire, zoning,
building, health or other statute code, regulation or ordinance or other
governmental rule with respect to the Owned Property or Leased Property that has
not previously been corrected other than a violation which will not have a
material adverse effect on the business or properties of Xxxxxxx and the
Subsidiaries taken as a whole.
(d) Section 4.16 of the Disclosure Statement sets forth (i) a
true and correct summary of capital expenditures made with respect to Xxxxxxx
for fiscal year 1999 and for the four-month period ending April 30, 2000, and
(ii) a true and correct summary of aggregate budgeted capital expenditures for
fiscal year 2000 for Xxxxxxx and the Subsidiaries.
4.17 Patents and Trademarks. Xxxxxxx and each Subsidiary has rights to
use all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and rights which are necessary
for use in connection with its business (individually, an "Intellectual Property
Right," and collectively, the "Intellectual Property Rights"); provided,
however, that with respect to Intellectual Property Rights relating to products
or components supplied to Xxxxxxx or any Subsidiary by third party vendors,
Seller represents and warrants only that, except as set forth in Section 4.17 of
the Disclosure Statement, Xxxxxxx or such Subsidiary, as the case may be, has
been granted the right to use such products or components by the respective
vendors and that Seller has no knowledge that the use of such products and/or
components infringes on the rights of any person or entity. Xxxxxxx and each
Subsidiary has rights to use all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses and
rights which are currently being used in connection with its business. Section
4.17 of the Disclosure Statement sets forth a list of all material inventions
which are the subject of issued letters patent or applications therefor and all
material trade and service marks which have been registered or for which an
application for registration is pending, in each case which are owned and used
or held for use by Xxxxxxx and each Subsidiary (collectively, the "Patent
Rights"). Section 4.17 of the Disclosure Statement also lists all other items
comprising the Intellectual Property Rights. Except as set forth in Section 4.17
of the Disclosure Statement, neither Xxxxxxx nor any Subsidiary (a) is a
defendant in any claim, suit, action or proceeding relating to its business
13
which involves a claim of infringement of any patents, trademarks, copyrights or
service marks, and (b) has knowledge of any existing infringement by another
person of any of the material Intellectual Property Rights. Except as disclosed
in Section 4.17 of the Disclosure Statement, no Intellectual Property Right is
subject to any outstanding order, judgment, decree, stipulation or agreement
restricting the use thereof by Xxxxxxx or any Subsidiary or restricting the
licensing thereof by Xxxxxxx or any Subsidiary to any person in any material
respect. For purposes of this Section 4.17, any reference to the knowledge of
Xxxxxxx or any Subsidiary shall include the knowledge of Seller.
4.18 Environmental Matters. Except as described in Section 4.18 of the
Disclosure Statement, (a) to the knowledge of Seller, (i) Xxxxxxx and each
Subsidiary has made all filings and possesses all permits, licenses, other
authorizations, registrations and other governmental consents material to its
business ("Environmental Permits") which are required under any applicable
Environmental Laws (as defined in this Section 4.18); (ii) all such
Environmental Permits are in full force and effect; and (iii) to the knowledge
of Seller, no amendment has been proposed to one or more of the Environmental
Permits, the result of which would have a material adverse effect on the
business or properties of Xxxxxxx and the Subsidiaries taken as a whole; (b) to
the knowledge of Seller, there is no condition with respect to any of Xxxxxxx'x
assets or any assets of a Subsidiary which would reasonably be expected to
subject Buyer, Xxxxxxx, or any Subsidiary to fines, penalties or enforcement
actions due to violations of Environmental Laws or Environmental Permits and/or
which would reasonably be expected to result in a material liability to Buyer
under any requirements of Environmental Laws or Environmental Permits; (c) there
are currently no lawsuits, orders, consent decrees, administrative enforcement
actions, environmental cleanup proceedings or written notices of violation
pending or, to the knowledge of Seller, threatened, with respect to compliance
or in connection with Environmental Laws affecting the assets of Xxxxxxx or any
Subsidiary; (d) the operation of the business of Xxxxxxx is, and within
applicable statutes of limitation, has been in compliance in all material
respects with applicable Environmental Laws; and (e) to the knowledge of Seller,
there are no Hazardous Materials (as defined in this Section 4.18) located in,
at, on, from or under the Owned Real Property or Leased Real Property that would
reasonably likely result in material liabilities of, or material losses,
material damages or material costs to Seller, Xxxxxxx, any Subsidiary, or Buyer
under any Environmental Law. There are no environmental audits, inspections,
assessments, investigations or similar reports in the possession of Seller,
Xxxxxxx or any Subsidiary, or of which Seller, Xxxxxxx or any Subsidiary is
aware relating to Owned Real Property, Leased Real Property or any other assets
of Xxxxxxx or any Subsidiary.
The term "Environmental Law" or "Environmental Laws," as used
in this Agreement, means all applicable domestic and foreign laws, regulations,
common law, statutes, statutory instruments, directives, regulations, by-laws,
orders, codes, judgments and other legal measures having the force of law
(whether criminal, civil or administrative) relating to the discharge, release,
emission, dispersal, spilling, leakage, dumping or migration of Hazardous
Materials or otherwise concerning the protection of the environment including,
without limitation, the Public Health (Ireland) Xxx 0000, the Air Pollution Xxx
0000, the Local Government (Water Pollution) Acts 1977 to 1990, the Safety
Health and Welfare at Work Xxx 0000, the Safety and Industry Xxx 0000, the
Factories Xxx 0000, the Local Government (Planning and Developments) Acts 1963
to 1999, the Waste Management Xxx 0000, the Environmental Protection Agency Xxx
0000, the Xxxxxxxx Xxxxxxxxxxx Xxx 0000, the Fisheries Acts 1959-1991, the
14
Dangerous Substances Acts 1972-1979, and all regulations, by-laws, orders,
decisions and codes made thereunder (all as the same may have been amended and
as in effect from time to time through the Closing Time).
The term "Hazardous Materials," as used in this Agreement,
means all hazardous or toxic substances, chemicals, liquids, gases, vapors,
fill, soils, wastes and materials; any pollutants, particulate matter,
effluents, emissions, or contaminants which are toxic or hazardous (including,
without limitation, petroleum products and asbestos); and any other similar
substances or materials which are regulated under Environmental Laws.
4.19 Inventory. The inventory of Xxxxxxx and each Subsidiary is of a
quality and quantity usable in the ordinary course of business of Xxxxxxx and
such Subsidiary, and none of which is obsolete, below standard quality, damaged
or defective, subject only to the reserve for inventory write down set forth in
the 1999 Financial Statements or the Interim Balance Sheet (as adjusted for the
passage of time) through the Closing Time in accordance with GAAP and in
accordance with past practice. The value of all inventory items, including
finished goods, work-in-process and raw materials, has been recorded on the
books of Xxxxxxx and each Subsidiary at the lower of cost or market in
accordance with GAAP consistently applied. Section 4.19 of the Disclosure
Statement sets forth a summary of the inventory valuation principles used by
Xxxxxxx and each Subsidiary.
4.20 Receivables. All receivables of Xxxxxxx and the Subsidiaries
reflected on the Financial Statements and those existing as of the Closing Time
represent valid claims from bona fide, arm's length sales of goods and services
actually made by Xxxxxxx and each of the Subsidiaries, as the case may be, in
the ordinary course of business. To the knowledge of Seller, all such accounts
and notes receivable are collectable (or have been collected) in the ordinary
course of business using normal collection practices at the aggregate recorded
amounts thereof (net of reserves on the 1999 Financial Statements and Interim
Balance Sheet, as adjusted for the passage of time through the Closing Time in
accordance with GAAP and the past practice of Xxxxxxx.
4.21 Brokers and Finders. Neither Seller nor Xxxxxxx nor any Subsidiary
has employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finder's fees in connection with this Agreement or the
transactions contemplated herein.
4.22 Disclaimer. BUYER ACKNOWLEDGES THAT SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER,
OTHER THAN THE REPRESENTATIONS AND WARRANTIES OF SELLER SPECIFICALLY SET FORTH
IN THIS ARTICLE 4, AND BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF. IN ANY
EVENT, SELLER MAKES NO IMPLIED WARRANTIES OF MERCHANTABILITY, SUITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY, WITH RESPECT TO ANY OF THE
TANGIBLE ASSETS BEING SO SOLD, OR AS TO THE CONDITION OR WORKMANSHIP THEREOF OR
THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT.
15
4.23 Certain Transactions. Except as set forth in Section 4.23 of the
Disclosure Statement, neither Xxxxxxx nor any Subsidiary owes any amount to, nor
does Xxxxxxx or any Subsidiary have any outstanding contract with or commitment
to, any of the shareholders, directors, officers, employees or consultants of
Xxxxxxx or any Subsidiary (other than compensation for current services not yet
due and payable and reimbursement of expenses arising in the ordinary course of
business), and no such person owes any amount to Xxxxxxx or any Subsidiary.
4.24 Books and Records. The books and all corporate records (including
minute books and stock record books) and financial records of Xxxxxxx and each
Subsidiary are complete and correct in all material respects and since the
acquisition of Xxxxxxx by an Affiliate of Terex Corporation have in all material
respects been maintained in accordance with applicable sound business practices,
laws and other requirements.
4.25 Year 2000 Compliance. To the knowledge of Seller, except as set
forth in Section 4.25 of the Disclosure Statement, all software, computer,
communications, electronic or other hardware or equipment, including any
imbedded software or firmware, used in Xxxxxxx'x business and each Subsidiary's
business (collectively, "Year 2000 Assets") correctly recognize, calculate,
sort, store, display and otherwise process data involving dates prior to, during
and after the Year 2000 A.D. and the operation and functionality of the Year
2000 Assets was and is in no way adversely affected by the occurrence or passing
of the calendar date January 1, 2000.
4.26 Product Warranty. Section 4.26 of the Disclosure Statement sets
forth a description of all warranties provided by Xxxxxxx and each Subsidiary
and a statement of the aggregate cost of remedying all warranty claims made by
customers of Xxxxxxx and each Subsidiary for the year ending December 31, 1999,
together with a summary of outstanding warranty claims as of April 30, 2000,
which summary indicates the product involved, the type of claims and the
estimated cost of remedying the claims. Except as set forth in Section 4.26 of
the Disclosure Statement, there are no outstanding warranty claims with respect
to the business of Xxxxxxx and of each Subsidiary and Seller has no notice or
knowledge of threatened or potential warranty claims other than those arising in
the ordinary course since the date of the Interim Balance Sheet which are usual
in nature and amount.
4.27 Sufficient Assets. Xxxxxxx and each Subsidiary owns, leases or
licenses all assets and rights that are material to the operation of its
business as presently conducted.
4.28 Insurance. Section 4.28(a) of the Disclosure Statement sets forth
a list of all policies or binders of fire, liability (including, without
limitation, products liability), workers compensation, vehicular, title and
other insurance held by or on behalf of Xxxxxxx and each of the Subsidiaries.
With respect to each such policy or binder so listed, Section 4.28 of the
Disclosure Statement also lists the insurance limits, deductible(s), and term of
coverage. Such policies and binders are outstanding and in full force and
effect. Neither Xxxxxxx nor any Subsidiary is in default in any material respect
under any such policy or binder so listed and, to the knowledge of Seller, no
event has occurred or exists which, with or without the passage of time or the
giving of notice or both, would constitute such a material default or breach by
Seller or Xxxxxxx under such policy or binder. Neither Xxxxxxx nor any
16
Subsidiary has received any notice of cancellation or nonrenewal of, or
disallowance of any claim under, any such policy or binder. Section 4.28(b) of
the Disclosure Statement lists all policies or binders of products liability
insurance in effect through December 1, 1999 (individually, a "Product Liability
Policy"). Each Product Liability Policy is fully paid and in full force and
effect with respect to occurrences covered by such policy during the coverage
period stated therein.
4.29 Insolvency. No order has been made, petition presented, resolution
passed or meeting convened for the winding up of, or making any administration
order for, Xxxxxxx or any of the Subsidiaries. No receiver or examiner has been
appointed over the whole or any part of the property or assets of Xxxxxxx or any
of the Subsidiaries. No composition in satisfaction of debts, nor any compromise
or arrangement with creditors or members (or any class of creditors or members)
has been proposed, sanctioned or approved in relation to Xxxxxxx or any of the
Subsidiaries.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
5.1 Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of Ireland with all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as now being conducted.
5.2 Authorization. The execution, delivery and performance of this
Agreement by Buyer have been duly authorized by all requisite corporate action
of Buyer. This Agreement constitutes the valid and binding obligation of Buyer
enforceable against it in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.3 Consents of Third Parties. The execution, delivery and performance
of this Agreement by Buyer will not (a) violate or conflict with the memorandum
and articles of association and other constitutional documents of Buyer; (b)
conflict with, or result in the breach of, termination of, or give rise to any
lien or constitute a default under, any material agreement, understanding or
commitment to which Buyer is a party or by which Buyer is bound; (c) constitute
a violation of any law, regulation, rule, judgment or decree applicable to
Buyer; or other than violations, conflicts, breaches, terminations,
accelerations, defaults and creations specified in the foregoing clauses (b) and
(c) of this sentence which will not, individually or in the aggregate,
materially adversely affect the ability of Buyer to consummate the transactions
contemplated by this Agreement in accordance with the terms hereof. No consent,
approval or authorization of any Governmental Authority is required on the part
of Buyer in connection with the execution, delivery and performance of this
Agreement, except as set forth in Section 5.3 of the disclosure statement
prepared by Buyer and attached hereto ("Buyer's Disclosure Statement").
17
5.4 Litigation. There is no suit, litigation, proceeding or
governmental action pending, or to the knowledge of Buyer, threatened, or any
order, injunction or decree outstanding, against Buyer that, if adversely
determined, would materially adversely affect the ability of Buyer to consummate
the transactions contemplated by this Agreement in accordance with the terms
hereof.
5.5 Investment. Buyer is purchasing the Xxxxxxx Shares for investment
purposes and not with a view to the resale or distribution of the Xxxxxxx
Shares, and will not sell the Xxxxxxx Shares in violation of applicable
securities laws.
5.6 Financing. Buyer has available to it all funds necessary to pay the
Xxxxxxx Purchase Price and related fees and expenses, and has the financial
capacity to perform all of its other obligations under this Agreement.
5.7 Brokers or Finders. Neither Buyer nor any of its subsidiaries or
Affiliates has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finder's fees in connection with this Agreement
or the transaction contemplated herein.
ARTICLE 6
FURTHER AGREEMENTS OF THE PARTIES
6.1 Conduct of Business Pending the Closing Time. Except as
contemplated by this Agreement, from the date hereof until the Closing Time,
except as approved in writing by Buyer, Seller covenants and agrees that:
(a) Xxxxxxx and each Subsidiary shall operate its business in
the ordinary course and consistent with its past practice, in each case as
reflected on the Financial Statements.
(b) Except as contractually required by any employment
arrangement listed on Section 4.13 of the Disclosure Statement and other than in
connection with actions generally taken by Terex Corporation with respect to all
of its operations and consistent with Terex Corporation's past practice, neither
Xxxxxxx nor any Subsidiary will (i) grant or agree to grant any (x) bonus to any
employee, (y) general increase in the rates of salaries or compensation of its
employees or (z) specific increase to any employee, except such as are in
accordance with regularly scheduled periodic increases, or (ii) provide for any
new pension, retirement, severance, retention or other employment benefits to
any of its employees or any increase in any existing benefits.
(c) Neither Xxxxxxx nor any Subsidiary will amend its
memorandum and articles of association or other constitutional documents, except
as required by law or in such other manner as is not materially adverse to
Xxxxxxx or such Subsidiary, provided, however, that Buyer shall be given notice
of any amendment permitted under this Section 6.1(c) prior to such amendment
being made.
18
(d) Seller will use reasonable efforts to maintain and
preserve intact Xxxxxxx'x business and each Subsidiary's business, to keep
available the services of Xxxxxxx'x and each Subsidiary's present employees and
to maintain Xxxxxxx'x and each Subsidiary's relationships with customers,
suppliers and others having business relationships with Xxxxxxx or such
Subsidiary.
(e) Neither Xxxxxxx nor any Subsidiary shall sell, assign,
voluntarily encumber, grant a security interest in or license with respect to,
or dispose of, any of its material assets or properties, tangible or intangible,
or incur any material liabilities, except for sales, dispositions made or
liabilities, encumbrances or security interests incurred, including the creation
of purchase money security interests, in the ordinary course; provided, that
nothing herein shall preclude Xxxxxxx or any Subsidiary from using its existing
borrowing or credit facilities in a manner consistent with its past practice
since owned by Terex Corporation.
(f) Neither Xxxxxxx nor any Subsidiary shall:
(i) create, incur, or assume any debt, liability or
obligation for borrowed money, direct or indirect, whether
accrued, absolute, contingent, or otherwise, other than under
existing lines of credit or in the ordinary course of business
consistent with its past practice;
(ii) waive or release any rights of material value relating
to its business;
(iii) transfer, sell or otherwise convey any of the assets
of Xxxxxxx, other than sales of products to customers and
dispositions of immaterial or obsolete assets, in each case, in
the ordinary course of business consistent with past practice;
(iv) enter into or terminate any material lease with respect
to its business, or make any change in any material leases, other
than in the ordinary course of business consistent with its past
practice;
(v) become obligated to make any capital expenditures or
enter into any commitments therefor, except for capital
expenditures not exceeding $100,000 U.S. for any one commitment
or series of related commitments made in the ordinary course of
business consistent with past practice;
(vi) transfer, terminate or permit the lapse of or fail to
pay any fee that becomes due with respect to any of the
Intellectual Property Rights;
(vii) accelerate or delay the manufacture, shipment or sale
of inventory, the collection of accounts receivable or notes
receivable or the payment of accounts or notes payable, sell any
accounts receivable or take any action outside the ordinary
course of business if such acceleration, delay or other action is
19
inconsistent with past practice or is intended to artificially
increase the amount of cash at Xxxxxxx or at any Subsidiary or
artificially increase Xxxxxxx Net Equity (as defined in Section
11.9), as calculated from the Closing Date Balance Sheet;
(viii) enter into any product distribution, sales
representative, sales agency, supplier or sub-supplier agreement
without the prior written consent of Buyer, which consent shall
not be unreasonably withheld; or
(ix) agree or otherwise commit to take any of the actions
referred to in subsections (i)-(viii) above.
6.2 Access/Schedule Update.
(a) From the date of this Agreement until the Closing Date,
Seller will at reasonable times and upon reasonable notice, furnish Buyer with
access to or copies of such financial and operating data and such other
information relating to Xxxxxxx and the Subsidiaries as Buyer may from time to
time reasonably request. In addition, from the date of this Agreement until the
Closing Date, Seller shall permit representatives of Buyer to have access at
reasonable times and upon reasonable notice to the Owned Property, the Leased
Property, and the facilities and key employees of Xxxxxxx and each Subsidiary.
Prior to the Closing Date, Buyer shall have the right to complete, at the sole
cost and expense of Buyer, Phase I environmental studies on each parcel of Owned
Property and Leased Property. Buyer shall deliver to Seller a copy of any Phase
I or other third party report prepared in connection with any such environmental
investigation; provided, however, that no such Phase I or other environmental
review by Buyer will involve sampling, Phase II testing or invasive
investigatory work without the prior written consent of Seller, which consent
shall not be unreasonably withheld (it being agreed that it shall not be
unreasonable for Seller to withhold consent with respect to a particular
property if the findings contained in any Phase I investigation at such property
do not indicate that there is a reasonable likelihood that a material unremedied
violation of Environmental Law exists. Buyer will treat any environmental review
of the Owned Real Property or Leased Real Property as confidential information,
unless otherwise required by law. Any disclosure whatsoever during any
investigation by or on behalf of Buyer shall not constitute an enlargement of or
additional representations or warranties of Seller beyond those specifically set
forth in Article 4. All such information and access shall be subject to the
terms and conditions of the Confidentiality Agreement referenced in Section 6.8.
Buyer's rights under this Section 6.2 to perform environmental testing is
subject to the condition that the inspections and testing to be conducted shall
not (i) unreasonably interfere with the business operations of Seller, Xxxxxxx
or any Subsidiary, (ii) damage any asset or property used in connection with the
business of Seller, Xxxxxxx or any Subsidiary and (iii) cause Seller, Xxxxxxx or
any Subsidiary to be in material breach of any lease or other agreement relating
to any of the Owned Property or Leased Property; provided, however, that Seller
shall not be deemed to have breached any representation or warranty herein to
the extent that such breach was caused by Buyer's actions under this Section
6.2.
20
(b) Within 10 days following the execution of this Agreement,
Seller shall provide Buyer with written updates of Sections 4.1, 4.11, 4.13 and
4.14 of the Disclosure Statement; provided, however, that no such update shall
relieve Seller from liability to Buyer for any losses or diminution in value
suffered by Buyer in connection with the matters disclosed therein to the extent
that the failure to disclose such matters in the first instance results in a
breach of a representation or warranty of Seller, except to the extent (i) such
matter is reserved for on the Closing Date Balance Sheet or (ii) such matter
does not constitute an adverse change or a liability and, accordingly, no
reserve is appropriate.
6.3 Best Efforts; Other Actions. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to (a) use its best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done as
promptly as practicable, all things necessary, proper or advisable under
applicable laws to consummate and make effective the transactions contemplated
by this Agreement, including obtaining any governmental or other consents,
transfers, orders, qualifications, waivers, authorizations, exemptions and
approvals, providing all notices and making all registrations, filings and
applications necessary or desirable for the consummation of the transactions
contemplated herein; (b) use its best efforts to defend any lawsuits or other
legal proceedings (whether judicial or administrative) challenging this
Agreement or the consummation of the transactions contemplated hereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Authority vacated or reversed; and (c) use its best efforts
to fulfill or obtain the fulfillment of all other conditions to Closing,
including, without limitation, the execution and delivery of all agreements or
other documents contemplated hereunder to be so executed and delivered.
6.4 Expenses. Except as otherwise specifically provided in this
Agreement, Buyer, on the one hand, and Seller, on the other hand, shall bear its
own expenses incurred in connection with this Agreement and in connection with
all obligations required to be performed by each of them under this Agreement.
6.5 Publicity. Buyer shall consult with Seller, and Seller shall
consult with Buyer, before issuing any press release concerning the transactions
contemplated by this Agreement and, except as may be required by applicable law,
will not issue any such press release without the prior written consent of
Seller or Buyer, as the case may be. If Buyer or Seller is so required to issue
such press release, it shall use its best efforts to inform Seller or Buyer, as
the case may be, prior thereto and to consult with such party as to the contents
thereof, and the contents thereof shall be reasonably acceptable to Seller or
Buyer, as the case may be.
6.6 Transfer Taxes. Any sales, share transfer taxes, real property
transfer taxes, personal property transfer taxes, real property gains or
conveyance taxes (other than income, capital gains or similar taxes on Seller's
income or appreciation) or other like taxes including, without limitation, any
stamp duty arising under the Stamp Duties Consolidation Xxx 0000 in connection
with the transactions contemplated by this Agreement, or recording fees payable
in connection with the sale of the Xxxxxxx Shares shall be paid one-half by
Buyer and one-half by Seller. If any Tax Returns or other documents are required
to be filed in a jurisdiction with respect to any of the foregoing, then as
between Buyer and Seller, the party responsible for preparing such Tax Returns
or other documents under the laws of such jurisdiction shall be responsible for
the filing thereof.
21
6.7 Preservation of Records. Buyer agrees that it shall, at its own
expense, preserve and keep the records of Xxxxxxx and the Subsidiaries delivered
to Buyer pursuant to this Agreement for a period of seven years from the Closing
Date, or, if requested by Seller, for any longer periods as may be required by
any government agency or ongoing litigation, and shall make such records
available to Seller as may be reasonably required by Seller in connection with,
among other things, any insurance claim, legal proceeding, environmental matter
or governmental investigation relating to Seller, Xxxxxxx or any Subsidiary. In
the event Buyer wishes to destroy such records after that time, it shall first
give 60 days' prior written notice to Seller, and Seller shall have the right at
its option and expense to take possession of the records within 90 days
thereafter.
6.8 Confidentiality. The letter agreement, dated as of February 16,
2000, between Terex Corporation and Buyer (the "Confidentiality Agreement") is
hereby incorporated by reference herein in its entirety and shall continue in
full force and effect until the Closing, at which time such Confidentiality
Agreement (other than provisions therein dealing with information and other
matters concerning Terex Corporation and not Xxxxxxx or any of the Subsidiaries,
which provisions shall continue in full force and effect) and the obligations of
Buyer under this Section 6.8 shall terminate. If this Agreement is, for any
reason, terminated prior to the Closing, the Confidentiality Agreement shall
continue in full force and effect.
6.9 Cash at Closing.
(a) Seller shall be entitled, prior to the Closing Time, to
collect and retain or cause to be collected and retained the proceeds of all
items received in any bank account of Xxxxxxx and of each Subsidiary
(collectively, the "Bank Accounts") or otherwise in respect of Xxxxxxx and each
Subsidiary (including the amount of any checks received by Xxxxxxx and each
Subsidiary), and all other cash on hand, through the close of business on the
Closing Date (the "Pre-Closing Cash"); provided, however, that Seller may at its
option not collect but leave in any of the Bank Accounts or other locations of
Xxxxxxx and each Subsidiary all or any portion of the Pre-Closing Cash, and the
aggregate amount of such uncollected Pre-Closing Cash, calculated, in the case
of foreign cash, at the exchange rate at the close of business on the business
day immediately preceding the Closing Date as reported in The Wall Street
Journal, shall be paid to Seller together with and in the same manner as the
Xxxxxxx Purchase Price. If after the Closing it is determined by mutual
agreement of the parties that the amount of Pre-Closing Cash is greater or less
than the sum of the amount, if any, that was collected by Seller and the amount,
if any, that was uncollected and paid together with the Xxxxxxx Purchase Price,
Buyer shall pay Seller or Seller shall pay Buyer, as applicable, the difference
between the two amounts promptly after such determination (but in no event shall
such payment be made later than five business days after the determination is
made). If the parties disagree as to whether a payment must be made pursuant to
this Section 6.9(a), or if the parties disagree as to the amount of such
payment, then such dispute shall be submitted to the Arbitrator. Such submission
shall be made at the same time a dispute is submitted to the Arbitrator pursuant
to Section 2.3(c), or if no dispute is submitted to the Arbitrator pursuant to
Section 2.3(c), then any submission pursuant to this Section shall be made
22
within five days after the expiration of the 30-day period referenced in the
first sentence of Section 2.3(c). The Arbitrator shall render a decision
resolving the matter within 30 days after its receipt of such submission. The
Arbitrator's decision on the matter shall be final and binding on the parties
absent manifest error. The cost of any arbitration pursuant to this Section
6.9(a), including, without limitation, the fees of the Arbitrator, shall be
borne 50% by Buyer and 50% by Seller.
(b) All intercompany accounts and intercompany notes between
Seller or any of Seller's Affiliates, on the one hand, and Xxxxxxx or any
Subsidiary, on the other hand, shall be canceled at the Closing Time, except for
amounts payable with respect to goods provided by Seller or any of Seller's
Affiliates to Xxxxxxx in the ordinary course of business and listed on Section
6.9(b) of the Disclosure Statement.
6.10 Reserved.
6.11 Reserved.
6.12 Litigation Support; Records Retention; Transitional Services.
(a) In the event and for so long as any party is actively
investigating, contesting, defending against or prosecuting any charge,
complaint, action, suit, contract appeal, proceeding, hearing, investigation,
claim, demand or audit (including routine audits and contract close-outs) in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Time involving Xxxxxxx and/or any Subsidiary, the other party
will cooperate with the contesting or defending party and its counsel in the
contest or defense, make available its personnel and provide such testimony and
access to its books and records as may be reasonably necessary in connection
with the contest or defense.
(b) Subject to the provisions of Section 6.12(c), after the
Closing Time, the parties will each provide reasonable assistance and
cooperation to the other upon request in connection with such matters relating
to the pre-closing operations of Xxxxxxx and the Subsidiaries as:
(i) the completion and delivery of the financial statements
and the general ledger of Xxxxxxx and the Subsidiaries as of the
Closing Date to Seller;
(ii) the preparation of quarterly, semi-annual and annual
reports required to be prepared by Seller or Buyer, as the case
may be, (either by Law or in accordance with the Seller's or
Buyer's internal reporting systems and procedures) in connection
with the operation of Xxxxxxx'x business and the business of each
Subsidiary prior to the Closing Date and with the transactions
provided for herein;
(iii) the preparation of audit information packages required
to be prepared by Seller or Buyer (either by Law or in accordance
with Seller's or Buyer's internal reporting systems and
23
procedures) in connection with the operation of Xxxxxxx'x
business and the business of each Subsidiary prior to the Closing
Time, the transactions provided for in this Agreement and the
parties' year-end financial audits; and
(iv) such other assistance as Seller or Buyer may reasonably
request incidental to the orderly transfer of the Xxxxxxx Shares
to Buyer.
(c) All requests for assistance and cooperation under Section
6.12(b) will be made during normal business hours and with adequate lead time so
as to not impose any unreasonable burden upon the party receiving the request or
to unreasonably interfere with the conduct of business by such party. The
parties acknowledge that the assistance and cooperation to be provided hereunder
is merely an accommodation and that the providing party will have no liability
with respect to any information or assistance provided hereunder. The requesting
party further agrees to hold the party receiving the request harmless from and
against any and all liabilities and losses with respect to such information or
assistance provided hereunder. In the event either party reasonably deems in
good faith any requested cooperation to be unduly burdensome, such party may
offer the requesting party reasonable access to such information as the
requesting party may need to complete any required task in lieu of performing
any services for such party.
6.13 Signage and Labels. Buyer shall remove the name "Terex" and any
and all derivations thereof from all exterior signs located at the Owned
Property and Leased Property as soon as practicable but in any event within two
months after the Closing Date.
6.14 Notices and Consents. Seller shall, prior to the Closing Date,
give all notices to third parties and use reasonable efforts at its expense to
obtain all third party consents, novations and waivers (including, for the
avoidance of doubt, waivers of third party termination rights) that are required
to be obtained by Seller in connection with the transactions contemplated by
this Agreement, including, without limitation, those consents identified in
Section 4.4 of the Disclosure Statement. Buyer agrees to cooperate with Seller
in its efforts to obtain such third party consents and where necessary will give
or procure the giving of reasonable security to a contracting third party in
order to obtain such approval, consent, novation or waiver.
6.15 Noncompetition. Neither Seller nor any Affiliates of Seller shall,
for a period of two years from the Closing Date, directly or indirectly, (a)
engage as a manufacturer, seller, distributor or marketer of self-propelled,
truck mounted forklifts anywhere in the world (the "Competitive Business") or
(b) induce, solicit, aid or assist any other person to induce or solicit
employees, customers or suppliers of Xxxxxxx to terminate, curtail or otherwise
limit their employment or other business relationships with Xxxxxxx, except for
general solicitations for employment that are not intended or designed to
specifically target employees of Xxxxxxx; provided however, that notwithstanding
the foregoing:
(x) as long as neither the personnel nor the distribution
network of Seller or any Affiliate of Seller becomes involved with any product
line which constitutes a Competitive Business, then Seller and each Affiliate of
Seller may make or thereafter maintain a less than 50% investment in any
business as long as the assets used in the portion of such business which
constitutes a Competitive Business, if any, have an aggregate value that is less
than 20% of the total value of the assets or revenues of such business;
24
(y) as long as the distribution network of Seller or any
Affiliate of Seller does not become directly involved with any product line
which constitutes a Competitive Business, then Seller and each Affiliate of
Seller may make or thereafter maintain a controlling investment in any business
as long as the assets used in any portion of such business which constitutes a
Competitive Business have an aggregate value which is less than 20% of the total
value of the assets or revenues of such business, provided that if any such
investment occurs within the first two years after the Closing Date, Seller
shall, in a commercially reasonable manner, promptly thereafter diligently
pursue the divestiture of that portion of such business which constitutes a
Competitive Business; and
(z) as long as the distribution network of Seller or any
Affiliate of Seller does not become directly involved with any product line
which constitutes a Competitive Business, then each Seller and each Affiliate of
any Seller may make an acquisition of assets as long as the portion of the
acquired assets which is used in carrying on the Competitive Business, if any,
has an aggregate value which is less than 20% of the total value of the assets
or revenues acquired, provided that if any such acquisition occurs within the
first two years after the Closing Date, the Seller shall, in a commercially
reasonable manner, promptly thereafter diligently pursue divestiture of that
portion of the assets which are used in or otherwise constitute a Competitive
Business.
Seller acknowledges and agrees that irreparable injury to
Buyer will result if Seller or any Affiliate of Seller breaches this Section
6.15 and that the remedy at law for the breach of any such covenant will be
inadequate. Accordingly, if Seller or any Affiliate of Seller engages in an act
in violation of this Section 6.15, Buyer shall be entitled, in addition to such
other remedies and damages as may be available by law or under this Agreement,
to injunctive relief to enforce the provisions of this Agreement.
6.16 Release of Liens, Guarantees and Indemnities. At or prior to the
Closing, Seller shall cause the release of all Liens, guaranties and indemnities
granted or made by Xxxxxxx or any Subsidiary to the extent such Liens,
guarantees and/or indemnities secure or guaranty any debts or obligations of
Seller.
6.17 Release of Guarantee. At or prior to the Closing, Buyer and Seller
shall use their reasonable best efforts to effectuate the release of that
certain Guarantee dated June 9, 2000 (the "XXX Guarantee") executed by Terex
Corporation in favor of the Industrial Development Agency (Ireland). In
furtherance of the foregoing, Buyer shall offer to provide, or cause an
Affiliate of Buyer which is reasonably acceptable to the Industrial Development
Agency (Ireland) to provide, a replacement guarantee to the XXX Guarantee on
terms and conditions substantially similar to the terms and conditions of the
XXX Guaranty or on such other terms and conditions as are reasonably acceptable
to Buyer.
25
6.18 Capital Expenditures. Seller shall either cause the completion of
the Emergency Lighting and Fire Alarm project set forth in Section 4.16 of the
Disclosure statement prior to Closing or shall reserve the cost of completing
such project on the Closing Balance Sheet.
6.19 XXXXXX Audit. Prior to Closing, Seller shall pay the balance owed
with respect to the Xxxxxx Audit described in Section 4.10 of the Disclosure
Statement.
6.20 Product Liability Coverage. To the extent Seller maintains product
liability insurance coverage that would cover Xxxxxxx and/or its Subsidiaries
with respect to claims relating to occurrences prior to December 1, 1997, Seller
shall use its reasonable best efforts to make such coverage available to Buyer,
Xxxxxxx and the Subsidiaries.
ARTICLE 7
CONDITIONS OF CLOSING;
DOCUMENTS DELIVERED AT CLOSING
7.1 Conditions Precedent to Obligations of Buyer. The obligation of
Buyer to consummate the purchase of the Xxxxxxx Shares under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions, any of which may be waived in writing by Buyer:
(a) The representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and the Closing Time with the same force and effect as though
made at and as of the Closing Time, except for any representation or warranty
made or given as of a specified date, which shall have been true and correct in
all material respects as at such date. For purposes of this Section 7.1(a), the
representations and warranties of Seller in this Agreement shall be true and
correct in all material respects unless the facts, events or circumstances
giving rise to any untruths or inaccuracies in such representations or
warranties have the same effect as a Material Adverse Effect (as defined in
Section 11.9);
(b) Seller shall have performed and complied in all material
respects with the agreements and covenants required by this Agreement to be
performed or complied with by Seller prior to or at the Closing;
(c) Buyer shall have been furnished with a certificate, dated
the Closing Date, of a director of Seller certifying that the conditions
specified in Sections 7.1(a), 7.1(b), 7.1(d) and 7.1(1) have been satisfied;
(d) There shall not be in effect any injunction or restraining
order issued by a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement, and there shall
not be any action, suit or proceeding pending or threatened before any court of
competent jurisdiction, arbitrator or Governmental Authority wherein an
unfavorable injunction, judgment, order, decree, ruling or change would (i)
prevent consummation of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation;
26
(e) No statute, rule or regulation shall have been enacted by
any Governmental Authority which prohibits the consummation of the transactions
contemplated herein or makes such consummation illegal;
(f) Any waiting periods applicable to the consummation of the
transactions contemplated hereby under applicable Law, shall have expired or
been terminated, and without limiting the foregoing, with respect to the
Mergers, Take-overs and Monopolies (Control) Xxx 0000, as amended (the "Mergers
Act"), either (i) the Minister of Enterprise, Trade and Employment (the
"Minister") shall have stated in writing that he or she does not intend to make
an order under Section 9 of the Mergers Act in relation to the transactions
contemplated by this Agreement, or (ii) if the Minister makes such an order
subject to conditions, Buyer shall have accepted such conditions, or (iii) if
the Minister does not make such an order and does not state in writing that he
or she does not intend to make such an order, the applicable time period under
Section 6 of the Mergers Act shall have lapsed;
(g) Seller shall have executed and delivered to Buyer the
documents identified in Section 7.3 hereof;
(h) Seller shall have delivered the Xxxxxxx Shares to Buyer;
(i) Buyer shall have received evidence satisfactory to Buyer
that Seller has obtained all third-party consents described in Section 4.4 of
the Disclosure Statement;
(j) Seller shall have delivered to Buyer resignations of all
officers, directors and employee benefit plan trustees of Xxxxxxx and each
Subsidiary, each effective as of the Closing Time and duly executed under seal
and confirming that they have no claim against Xxxxxxx and/or its Subsidiaries
for loss of office or otherwise;
(k) On the Closing Date, the other Truck Mounted Transactions
(as defined in Section 11.9) shall have been consummated simultaneously
herewith;
(l) Buyer's environmental due diligence shall not have
indicated liabilities and/or to the extent reasonably likely to occur, potential
liabilities that constitute or can reasonably be expected to constitute a
Material Adverse Effect;
(m) Seller shall have caused the dissolution of the Dormant
Subsidiaries or, alternatively, the transfer of the shares of the Dormant
Subsidiaries to an Affiliate of Seller without recourse to Xxxxxxx, in each case
in a manner reasonably acceptable to Buyer and without any liability to Xxxxxxx
or Buyer with respect to the pre- or post-closing operations of the Dormant
Subsidiaries; and
27
(n) Seller shall have transferred to Buyer, in a manner
reasonably acceptable to Buyer, all shares of Xxxxxxx Sales and Service Limited,
a Northern Ireland company, that are owned by Seller.
7.2 Conditions Precedent to Obligations of Seller. The obligation of
Seller to consummate the sale of the Xxxxxxx Shares under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions, any of which may waived by Seller:
(a) The representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and the Closing Time with the same effect as though made at and
as of the Closing Time, except for any representation or warranty made or given
as of a specified date, which shall have been true and correct in all material
respects as at such date;
(b) Buyer shall have performed and complied in all material
respects with the agreements and covenants required by this Agreement to be
performed or complied with by it prior to or at the Closing;
(c) Seller shall have been furnished with a certificate, dated
the Closing Date, of a director of Buyer certifying that the conditions
specified in Sections 7.2(a), 7.2(b) and 7.2(d) have been satisfied;
(d) There shall not be in effect any injunction or restraining
order issued by a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement, and there shall
not be any action, suit or proceeding pending or threatened before any court of
competent jurisdiction, arbitrator or Governmental Authority wherein an
unfavorable injunction, judgment, order, decree, ruling or change would (i)
prevent consummation of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation;
(e) No statute, rule or regulation shall have been enacted by
any Governmental Authority which prohibits the consummation of the transactions
contemplated herein or makes such consummation illegal;
(f) Any waiting periods applicable to the consummation of the
transactions contemplated hereby under any applicable Law shall have expired or
been terminated, and without limiting the foregoing, with respect to the
Mergers, Take-overs and Monopolies (Control) Xxx 0000, as amended (the "Mergers
Act"), either (i) the Minister of Enterprise, Trade and Employment (the
"Minister") shall have stated in writing that he or she does not intend to make
an order under Section 9 of the Mergers Act in relation to the transactions
contemplated by this Agreement, or (ii) if the Minister makes such an order
subject to conditions, Buyer shall have accepted such conditions, or (iii) if
the Minister does not make such an order and does not state in writing that he
or she does not intend to make such an order, the applicable time period under
Section 6 of the Mergers Act shall have lapsed;
28
(g) Buyer shall have executed and delivered to Seller the
documents identified in Section 7.3 hereof;
(h) Buyer shall have delivered the Xxxxxxx Purchase Price to
Seller in accordance with Section 2.2 hereof;
(i) On the Closing Date, the other Truck Mounted Transactions
shall have been consummated simultaneously herewith; and
(j) Terex Corporation shall have been released from its
obligations under the Guarantee described in Section 6.17.
7.3 Documents to be Delivered at Closing.
(a) At the Closing, Seller shall deliver, or cause to be
delivered, to Buyer the following (all of which shall be in forms reasonably
satisfactory to Buyer):
(i) a share transfer form for the Xxxxxxx Shares (together
with all rights then or thereafter attaching thereto), duly
executed by the registered holder thereof in favor of Buyer (or
as Buyer may otherwise direct) together with the related share
certificate(s) or, in the case of any lost share certificate, an
indemnity in a form reasonably satisfactory to Buyer;
(ii) a copy of resolutions of the board of directors of
Seller authorizing the execution, delivery and performance of
this Agreement by Seller and a certificate of the secretary or
assistant secretary of Seller, dated the Closing Date, that such
resolutions were duly adopted and are in full force and effect;
(iii) the certificate referred to in Section 7.1(c);
(iv) the written resignations of the directors of Xxxxxxx
and each Subsidiary as referred to in Section 7.1(j);
(vi) the Escrow Agreement;
(vii) any Taxes and recording and filing fees required to be
paid by Seller pursuant to Section 6.6;
(viii) a certificate or certificates of the kind described
in paragraph 11(6) of Schedule H to the Capital Gains Tax Xxx
0000;
(ix) the title deeds to the Owned Property and Leased
Property;
(x) all statutory and other corporate books, certificates of
incorporation and common seals, and all financial and accounting
books and records, for Xxxxxxx and each Subsidiary which are in
the possession or under the control of Seller;
29
(xi) share certificates for each Subsidiary's issued share
capital (or indemnities in the case of any lost share
certificates, in forms reasonably satisfactory to Buyer) and the
share transfer forms (executed in favor of Buyer or as Buyer may
otherwise direct) for any shares in a Subsidiary held by any
person or entity other than Xxxxxxx; and
(xii) such other documents, instruments and writings as
Buyer may reasonably request in order to effectuate the
transactions contemplated by this Agreement.
(b) At the Closing, Buyer shall deliver to Seller the
following:
(i) payment of the Xxxxxxx Purchase Price and evidence of
the wire transfer referred to in Section 2.2;
(ii) a copy of the resolutions of the board of directors of
Buyer authorizing the execution, delivery and performance of this
Agreement by Buyer, and a certificate of its secretary or
assistant secretary, dated the Closing Date, that such
resolutions were duly adopted and are in full force and effect;
(iii) the certificate referred to in Section 7.2(c); and
(iv) the Escrow Agreement.
ARTICLE 8
TERMINATION
8.1 Termination by Mutual Consent. This Agreement may be terminated at
any time prior to the Closing by the mutual written consent of Buyer and Seller.
8.2 Termination Either by Seller or by Buyer. This Agreement may be
terminated either by Seller or by Buyer if a United States federal or state
court or Irish court of competent jurisdiction or United States federal or state
or an Irish governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and non-appealable.
8.3 Other Grounds for Termination.
(a) This Agreement may be terminated by Buyer at any time
prior to the Closing if the Closing shall not have occurred as a result of a
breach by Seller of any representation, warranty, or covenant contained in this
Agreement in any material respect; provided, that Buyer may not terminate this
Agreement unless Buyer provides Seller with notice of such breach and Seller
fails to cure such breach within 10 days of such notice. For purposes of this
Section 8.3, the representations, and warranties of Seller in this Agreement
30
shall be true and correct or complied with in all material respects unless the
facts, events or circumstances giving rise to any untruths or inaccuracies in
such representations or warranties have the same effect as a Material Adverse
Effect.
(b) This Agreement may be terminated by Seller at any time
prior to the Closing if the Closing shall not have occurred as a result of a
breach by Buyer of any representation, warranty or covenant contained in this
Agreement in any material respect; provided, that Seller may not terminate this
Agreement unless Seller provides Buyer with notice of such breach and Buyer
fails to cure such breach within 10 days of such notice.
8.4 Effect of Termination. In the event of termination of this
Agreement pursuant to this Article 8, all obligations of the parties hereto
shall terminate, except the obligations of the parties pursuant to this Section
8.4 and except for the provisions of Sections 6.4, 6.5, 11.1, 11.2, 11.3, 11.6,
11.8, 11.9, 11.11 and 11.12 and the Confidentiality Agreement referred to in
Section 6.8. Moreover, in the event of termination of this Agreement pursuant to
Section 8.3, nothing herein shall prejudice the ability of the non-breaching
party to seek damages from any other party for any breach of this Agreement,
including without limitation, reasonable attorneys' fees, or to pursue any
remedy at law or in equity; provided, however, in no event shall any party be
entitled to, and each party hereby unconditionally waives any right to seek,
consequential damages for any Losses (as defined in Section 9.2(a)) that may
arise under or as a result of this Agreement or the transactions contemplated
hereby.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 Survival. The representations and warranties of Seller and Buyer
contained in this Agreement shall survive the Closing for the applicable periods
set forth in this Section 9.1. All of the representations and warranties of
Seller contained in this Agreement and all claims and causes of action with
respect thereto shall terminate upon expiration of 22 months after the Closing
Date, except that (a) the representations and warranties in Sections 4.2, 4.6
and 4.7 shall have no expiration date; (b) the representations and warranties in
Sections 4.10 and 4.14 shall survive until the applicable statute of limitations
has run; and (c) the representations and warranties in Section 4.18 shall
terminate upon the expiration of 50 months after the Closing Date; it being
understood that in the event notice of any claim for indemnification under
Section 9.2(a) shall have been given (within the meaning of Section 11.6) within
the applicable survival period, the representations and warranties that are the
subject of such indemnification claim shall survive with respect to such claim
only until such time as such claim is fully resolved. All of the representations
and warranties of Buyer contained in this Agreement and all claims and causes of
action with respect thereto shall terminate upon expiration of 22 months after
the Closing Date; it being understood that in the event notice of any claim for
indemnification under Section 9.3(a) shall have been given (within the meaning
of Section 11.6) within the applicable survival period, the representations and
warranties that are the subject of such indemnification claim shall survive with
respect to such claim only until such time as such claim is finally resolved.
31
9.2 Indemnification Provisions for Benefit of the Buyer.
(a) If the Closing shall occur and Seller breaches any of its
representations, warranties (a breach is to be determined for purposes of this
Section 9.2 without regard to the requirements relating to "Material Adverse
Effect" contained in Article 7 and Article 8) or covenants contained in this
Agreement and provided that Buyer, within any applicable survival period set
forth in Section 9.1, makes a written claim for indemnification against Seller
setting forth in reasonable detail the circumstances regarding the claim and, if
ascertainable, an estimate of the amount thereof, then, subject to Sections 9.1
and 9.8, Seller shall indemnify, defend and hold Buyer harmless from and against
any losses, expenses, costs, fees (including, without limitation, reasonable
attorney's fees), damages, fines, penalties and other liabilities (collectively,
"Losses") Buyer or any of its Affiliates, or any of their respective directors,
officers, employees, agents or representatives (collectively, the "Buyer
Indemnified Parties"), suffer to the extent such Losses result from, arise out
of or are caused by such breach. Claims related to breaches of the
representations and warranties in Section 4.18 shall also be subject to Section
9.6.
(b) Reserved.
(c) Without restriction as to time, Seller further agrees to
indemnify, defend and hold Buyer Indemnified Parties harmless from and against
the entirety of all Losses with respect to, resulting from, arising out of, or
caused by, any of the following:
(i) claims based upon products liability for Xxxxxxx
products sold in locations other than the United States, and
claims based solely (i.e., without intervening negligence on the
part of Cargotec Inc. or Buyer) upon design defect or improper
manufacture or assembly for products sold in the United States,
which in either case are based on occurrences between November
30, 1999 and the Closing Time;
(ii) claims based on liabilities or obligations of Xxxxxxx
with respect to the litigation described on Section 4.15 of the
Disclosure Statement and any other litigation not described on
Section 4.15 of the Disclosure Statement which is pending as of
the Closing Time;
(iii) severance claims made by Xxxxxxx employees listed in
Section 9.2(c) of the Disclosure Statement under any employment
or severance contract or pursuant to any severance policy of
Xxxxxxx (including, without limitation, payments made by Xxxxxxx
and any benefits granted by Xxxxxxx to any such listed employee
during any notice period which is required by contract, Law or
policy in connection with the termination of such employee's
employment with Xxxxxxx), except for severance claims made by any
such listed employee who remains employed by Buyer for at least
90 days after the Closing Date;
(iv) claims based on a breach by Seller of any of its
covenants and agreements contained in Sections 10.1(a), 10.1(c),
10.1(e), 10.2(a) and 10.5;
(v) claims for any liability in excess of the reserve set
forth on the Closing Date Balance Sheet with respect to the
guarantee executed in favor of Gorica Egypt Group (which
guarantee is more particularly described in Section 4.11 of the
Disclosure Statement); and
32
(vi) the Dormant Subsidiaries.
(d) Except as otherwise provided in the last sentence of this
Section 9.2(d), Seller shall not have any obligation to indemnify Buyer
Indemnified Parties from and against any Losses (i) until Buyer Combined Losses
(as defined in Section 11.9) exceed $750,000, after which point Seller will be
obligated to indemnify Buyer Indemnified Parties from and against only those
additional Losses suffered by Buyer Indemnified Parties; or (ii) to the extent
Sellers' Combined Indemnification Payments (as defined in Section 11.9) exceed
an amount equal to $20,000,000 (excluding, for purposes of such calculation, all
Section 6.15 Losses (as defined in Section 11.9) and all Teledyne Indemnified
Losses (as defined in Section 11.9)), after which point Seller will have no
obligation to indemnify Buyer Indemnified Parties from and against further
Losses in excess of such amount. Notwithstanding the foregoing, (A) this
Agreement shall not limit Buyer's right to seek remedies at law to cause Seller
to pay, perform and discharge any matters described in Section 9.2(c); (B) the
$750,000 limitation and the $20,000,000 cap on recovery shall not apply to, or
include, any Losses incurred with respect to any matters described in Section
9.2(c), all of which shall be paid by Seller without minimum recovery limitation
or cap; and (C) the $20,000,000 cap on recovery shall not apply to, or include,
any Losses incurred as a result of Seller's breach of any of the representations
and warranties contained in Sections 4.5(b), 4.6 and 4.7 which shall be paid by
Seller without cap.
(e) Notwithstanding the limitations described in Section
9.2(d), Seller further agrees to indemnify, defend and hold Buyer Indemnified
Parties harmless from and against, but only to the extent of the assets held in
escrow pursuant to the Escrow Agreement, all Losses and other costs (including,
without limitation, the cost of insurance deductibles and liability in excess of
insurance limits) which (i) are not accrued on the Closing Date Balance Sheet,
(ii) are not paid by insurance, and (iii) are incurred with respect to, result
from, arise out of, or are caused by the operation of the business of Xxxxxxx
prior to the Closing Time, including, without limitation, the following Losses:
(y) Losses relating to products manufactured and sold by Xxxxxxx prior to the
Closing Time; and (z) Losses based on liabilities or obligations of Xxxxxxx
under Environmental Laws, to the extent such Losses are based on conditions or
occurrences that existed or occurred prior to the Closing Time.
(f) The assets held in escrow pursuant to the Escrow Agreement
shall be used to satisfy Seller's indemnification obligations under this Article
9 in the following manner:
(i) With respect to indemnification claims made under
Section 9.2(a) or 9.2(c), Buyer shall be required to proceed
first against the assets held in escrow pursuant to the Escrow
Agreement, until such time as either (A) Seller has paid to Buyer
Indemnified Parties, out of the assets held in escrow, the amount
of Five Hundred Thousand U.S. Dollars ($500,000 U.S.) or (B) all
assets held in escrow have otherwise been distributed pursuant to
the terms of the Escrow Agreement.
33
(ii) With respect to claims made under Section 9.2(e),
Buyer's sole recourse shall be against the assets held in escrow
pursuant to the Escrow Agreement.
(iii) After the occurrence of either condition described in
the subsections (A) and (B) of Section 9.2(f)(i), Buyer
Indemnified Parties shall be entitled to proceed directly against
Seller for all claims for indemnification under Section 9.2(a) or
9.2(c). Notwithstanding the foregoing, if Buyer's obligation
under Section 9.2(f)(i) terminates by reason of the occurrence of
the condition specified in subsection (A) of Section 9.2(f)(i),
Buyer shall nevertheless have the right, but not the obligation,
to proceed against assets held in escrow in connection with
additional claims for indemnification under Section 9.2(a) or
9.2(c) until such time as all assets held in escrow have been
distributed pursuant to the terms of the Escrow Agreement.
9.3 Indemnification Provisions for Benefit of Seller.
(a) If the Closing shall occur and Buyer breaches any of its
representations, warranties or covenants contained in this Agreement, and
provided that Seller, within any applicable survival period set forth in Section
9.1, makes a written claim for indemnification against Buyer setting forth in
reasonable detail the circumstances regarding the claim and, if ascertainable,
an estimate of the amount thereof, then, subject to Section 9.3(c), Buyer and
Xxxxxxx agree to jointly and severally indemnify, defend and hold Seller and its
Affiliates harmless from and against any Losses Seller or any of its Affiliates,
or any of their respective directors, officers, employees, agents or
representatives (collectively, "Seller Indemnified Parties"), suffer to the
extent such Losses result from, arise out of or are caused by such breach.
(b) Without restriction as to time, Buyer and Xxxxxxx agree to
jointly and severally indemnify, defend and hold Seller Indemnified Parties
harmless from and against the entirety of any Losses Seller Indemnified parties
suffer to the extent such Losses (i) are with respect to, result from or arise
out of Buyer's ownership or operation of the respective businesses of Xxxxxxx
and the Subsidiaries after the Closing Time, except for those matters for which
Buyer Indemnified Parties are entitled to indemnification under Section 9.2; or
(ii) are based on a breach by Buyer of any of its covenants and agreements
contained in Sections 10.1(b), 10.1(c), 10.1(d), 10.2(b) and 10.5.
(c) Except as otherwise provided in the last sentence of this
Section 9.3(c), Buyer shall not have any obligation to indemnify Seller
Indemnified Parties from and against any Losses (i) until Seller Combined Losses
(as defined in Section 11.9) exceed $750,000, after which point Buyer, Xxxxxxx
and the Subsidiaries will be obligated to indemnify Seller Indemnified Parties
from and against only those additional Losses suffered by Seller Indemnified
Parties; or (ii) to the extent Buyers' Combined Indemnification Payments (as
defined in Section 11.9) exceed an amount equal to $20,000,000 after which point
Buyer will have no obligation to indemnify Seller Indemnified Parties from and
against further Losses in excess of such amount. Notwithstanding the foregoing,
(A) this Agreement shall not limit Seller's right to seek remedies at law to
cause Buyer to pay, perform and discharge any of any liabilities of Xxxxxxx; (B)
the $750,000 limitation and the cap on recovery shall not apply to, or include,
any claim for indemnification under Section 9.3(b) hereof, which shall be paid
by Buyer without minimum recovery limitation or cap; and (C) the $20,000,000 cap
34
on recovery shall not apply to, or include, any Losses incurred as a result of
the Buyer's breach of any of the representations and warranties contained in
Section 5.2.
9.4 Matters Involving Third Parties.
(a) If any third party notifies any party hereto (the
"Indemnified Party") with respect to any matter which may give rise to a claim
for indemnification against the other party hereto (the "Indemnifying Party")
under this Section 9, then the Indemnified Party will notify the Indemnifying
Party thereof in writing promptly and in any event within 10 days after
receiving any written notice from a third party stating the nature and basis of
any claim made by the third party; provided that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party will relieve the
Indemnifying Party from any obligation hereunder unless, and then solely to the
extent that, the Indemnifying Party is prejudiced thereby. The Indemnified Party
shall provide to the Indemnifying Party on request all information and
documentation reasonably necessary to support and verify any Losses which the
Indemnified Party believes give rise to a claim for indemnification hereunder
and shall give the Indemnifying Party reasonable access to all books, records
and personnel in the possession or under the control of the Indemnified Party
which would have bearing on such claim. In the event the Indemnifying Party
notifies the Indemnified Party within 30 days after the date the Indemnified
Party has given notice of the matter that the Indemnifying Party is assuming the
defense of such matter (i) the Indemnifying Party will defend the Indemnified
Party against the matter with counsel of its choice reasonably satisfactory to
the Indemnified Party, (ii) the Indemnified Party may retain separate counsel at
its sole cost and expense (except that the Indemnifying Party will be
responsible for the fees and expenses of such separate co-counsel to the extent
the Indemnified Party reasonably concludes in good faith that the Indemnified
Party has defenses available to it that may conflict with those of the
Indemnifying Party), (iii) the Indemnified Party will not consent to the entry
of a judgement or enter into any settlement with respect to the matter without
the written consent of the Indemnifying Party (not to be withheld or delayed
unreasonably), and (iv) the Indemnifying Party will not consent to the entry of
a judgement with respect to the matter or enter into any settlement which does
not include a provision whereby the plaintiff or claimant in the matter releases
the Indemnified Party from all liability with respect thereto, without the
written consent of the Indemnified Party (not to be withheld or delayed
unreasonably). If the Indemnifying Party does not assume the defense of such
matter, the Indemnified Party may defend against the matter in any manner it
reasonably may deem appropriate, and (i) the Indemnified Party will defend the
matter with counsel of its choice reasonably satisfactory to the Indemnifying
Party, (ii) the Indemnifying Party may retain separate counsel at its sole cost
and expense, and (iii) the Indemnified Party will not consent to the entry of a
judgement or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party (not to be withheld or delayed
unreasonably).
(b) The provisions of paragraph (a) of this Section 9.4 shall
apply to all claims for indemnification hereunder except indemnification claims
which involve Tax matters pertaining to Xxxxxxx, which claims shall be governed
by Article 10.
9.5 Other Indemnification Matters.
35
(a) In no event shall any party hereto be liable for loss of
profits or consequential damages hereunder.
(b) The right of recovery by Buyer Indemnified Parties or
Seller Indemnified Parties with respect to any matter covered by this Article 9
shall be net of any insurance proceeds received by the Buyer Indemnified Parties
or Seller Indemnified Parties, as the case may be, as a result of any Losses.
(c) Notwithstanding anything in this Agreement to the
contrary, Seller shall not be responsible for any liability or obligation as a
result of Buyer's or Xxxxxxx'x or any Subsidiary's failure to comply with
applicable law after the Closing Time even if Xxxxxxx and the Subsidiaries are
owned or operated after the Closing Time in the manner owned or operated prior
to Closing, except to the extent that the manner of ownership or operation prior
to Closing Time constitutes a breach of a representation or warranty contained
in this Agreement.
(d) Upon making any payment to an Indemnified Party for any
indemnification claim pursuant to this Article 9, the Indemnifying Party shall
be subrogated, to the extent of such payment, to any rights which the
Indemnified Party may have against any other parties with respect to the subject
matter underlying such indemnification claim.
9.6 Environmental Matters.
(a) With respect to any Losses relating to the presence of, or
any release of, Hazardous Materials at, on, in, upon, under, or from any of the
Owned Property or Leased Property, or arising from, under or pursuant to
violations of any Environmental Law, in any case, arising prior to the closing
of the transactions contemplated by that certain Asset Purchase and Sale
Agreement dated as of September 15, 1999 by and among Teledyne, Inc., Teledyne
Princeton, Inc. Xxxx USA, Inc., Teledyne GmbH and Terex Corporation (even if not
asserted until after the Closing Time), for which Buyer seeks indemnity as a
result of a breach of a representation or warranty under Section 4.18 in
connection with the operation of the business of Xxxxxxx or any Subsidiary, the
Owned Real Property or the Leased Real Property pursuant to Section 9.2 (for
purposes of this Section 9.6, "Environmental Losses"), Buyer shall provide
notice to Seller pursuant to Section 11.6 specifying in reasonable detail, to
the extent known, the nature of the Environmental Losses and the estimated
amount to remediate or respond to the condition giving rise to the Environmental
Losses, to the extent it is then known (which estimate shall not be conclusive
of the final amount of any Environmental Losses).
(b) Seller shall have the right to control and investigate,
remediate, and/or resolve any condition giving rise to a claim or demand for
indemnification by Buyer under this Agreement with respect to any Environmental
Losses; provided, however, that Seller must consult with Buyer regarding such
investigation, remediation or resolution and provided further that if after
written notice and a reasonable opportunity to cure Seller do not exercise such
right, Buyer may exercise such right. Seller and its employees, contractors,
representatives and agents shall have reasonable access at reasonable times to
the facilities for the purpose of conducting any investigation and/or
remediation, including any sampling or monitoring required to be performed by
36
Seller, which may include intrusive investigations or remedial action, after the
Closing Date or at any time thereafter; provided that if Seller requests such
access then Seller shall provide Buyer with written notice of such request.
Seller shall use all reasonable efforts to minimize disruption to Buyer's
business as a result of conducting any such investigation or remediation.
(c) Buyer shall use reasonable efforts to cooperate with
Seller to minimize costs with respect to Environmental Losses. Nothing in this
Agreement shall require Seller to perform any environmental remediation
activities or other environmental testing, sampling or monitoring activities
beyond the minimum required to comply with applicable Environmental Laws
(including those measures required to be implemented by Governmental Authorities
after reasonable opportunity to object to and/or appeal such requirement) and to
permit the use of the Owned or Leased Property consistent with its current use;
provided, however, that Buyer shall not be required to accept or execute, nor
shall Seller or its agents seek or execute, any deed, well, soil, or water
notice or restriction of any kind, or any other Lien, encumbrance, notice or
restriction that may be imposed on or recorded against any of the Owned or
Leased Property due to the presence of Hazardous Materials if doing so would, in
Buyer's reasonable judgment, result in any material diminution in the value or
marketability of such property, and in no event will Buyer's agreement to allow
any such alternative to remediation relieve Seller of the obligation to effect
further remediation if subsequently required by any Governmental Authority or
otherwise required by any Environmental Law.
(d) Buyer shall give prompt written notice to Seller of any
report or other document that Buyer seeks to submit, whether voluntarily or by
requirement of a Governmental Authority, to a Governmental Authority which
describes any environmental condition existing prior to the Closing Time. To the
extent reasonably possible under the circumstances, Seller shall have the right
to review and comment upon any submission to a Governmental Authority which
describes or addresses any environmental condition for which Buyer is claiming
indemnification from Seller hereunder (and Seller will cooperate with Buyer in
preparing such submissions, including making available all relevant records in
its possession or under its control), and Buyer shall revise such submission in
accordance with Seller's reasonable comments thereon, except that in no event
shall Buyer be requested by Seller to submit information that in Buyer's opinion
would not be legally sufficient. To the extent reasonably possible under the
circumstances, Buyer shall give Seller prompt written notice of, and Seller
and/or its representatives shall have the right to participate in, any phone
call or meeting with any Governmental Authority at which any environmental
condition for which Buyer is claiming indemnification from Seller hereunder is
to be discussed or addressed in any manner. Except to the extent required by Law
after notice to Buyer, Seller shall not submit documents to any Governmental
Authority or conduct meetings or phone calls with any Governmental Authority
regarding the environmental conditions at any Owned Property or Leased Property
without the prior consent of Buyer, which consent shall not be unreasonably
withheld.
(e) Seller shall not have any obligation to indemnify any
Buyer Indemnified Party from and against (i) any Environmental Losses to the
extent directly arising from or relating directly to a use of the facilities
that is not substantially a continuation of the operation of Xxxxxxx'x business
as conducted on the Closing Date, (ii) any Environmental Losses arising from or
37
related to any change in the use of the Owned Property from industrial use, or
(iii) any Environmental Losses to the extent arising from or related to any
amendment to or change in any Environmental Law from that which is in effect on
the date hereof. Notwithstanding anything to the contrary contained herein,
Seller shall not have any obligation to indemnify Buyer Indemnified Parties from
and against any Environmental Losses to the extent (w) they do not relate to an
environmental condition caused, created or in existence prior to the Closing,
(x) arising with respect to any release of a Hazardous Material by Buyer, its
agents, or invitees after the Closing, or (y) arising from the gross negligence
or recklessness of Buyer, its agents, or invitees, or from the exacerbation by
physical action of any environmental condition by Buyer, its agent, or invitees.
Buyer acknowledges that nothing contained herein absolves it of any obligation
under any Environmental Law for Environmental Losses with respect to violations
of Environmental Laws by Buyer, its employees, contractors, representatives or
agents. Notwithstanding anything contained in this Agreement to the contrary,
Buyer shall not be construed as reckless, negligent, or to have exacerbated an
environmental condition if, with respect to any such environmental condition,
either (i) Buyer fails to take an action Buyer reasonably believed was the
responsibility of Seller (but only to the extent Buyer has provided Seller with
written notice of such condition) or (ii) Buyer has no knowledge that any action
is required.
(f) If, after the Closing Time, Buyer undertakes environmental
remediation activities or other environmental testing, sampling or monitoring
activities in connection with Environmental Losses which are not required or
requested by a Governmental Authority or in response to a third party claim
asserting liability for an environmental condition at the facilities, subject to
Buyer's indemnification rights contained in Section 9.2(e), Seller shall not be
obligated to indemnify the Buyer in respect of such Environmental Losses.
9.7 EXCLUSIVE REMEDY. THE INDEMNIFICATION PROVISIONS CONTAINED IN THIS
ARTICLE 9 SHALL CONSTITUTE THE SOLE AND EXCLUSIVE RECOURSE AND REMEDY OF THE
PARTIES FOR MONETARY DAMAGES WITH RESPECT TO ANY BREACH OF ANY OF THE
REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED IN THIS AGREEMENT OR ANY OF
THE ANCILLARY AGREEMENTS. THE PROVISIONS OF THIS ARTICLE 9 WILL NOT RESTRICT THE
RIGHT OF ANY PARTY TO SEEK SPECIFIC PERFORMANCE OR OTHER EQUITABLE REMEDIES IN
CONNECTION WITH ANY BREACH OF ANY OF THE COVENANTS CONTAINED IN THIS AGREEMENT
OR ANY OF THE ANCILLARY AGREEMENTS. BUYER ACKNOWLEDGES THAT IT HAS NO RIGHTS TO
RESCIND THIS AGREEMENT EITHER FOR A BREACH OF CONTRACT OF FOR NEGLIGENT OR
INNOCENT MISREPRESENTATION. NOTWITHSTANDING ANY OTHER PROVISIONS OF THE
AGREEMENT, THE PROVISIONS OF THIS SECTION 9.7 SHALL NOT APPLY TO EXCLUDE OR
LIMIT THE LIABILITY OF SELLER TO THE EXTENT THAT ANY CLAIM ARISES BY REASON OF
ANY FRAUD OR FRAUDULENT MISREPRESENTATION OF ANY SUCH PARTY.
9.8 Minimizing Losses. Each party agrees to use all commercially
reasonable efforts to minimize all Losses (including Losses that are defined for
purposes of Section 9.6 as "Environmental Losses") for which it may seek
38
indemnification from the other party pursuant to this Article 9, and to minimize
the amount of such indemnification obligation by reasonably pursuing the maximum
possible insurance recovery or recovery from other available sources with
respect to such Losses and nothing herein will in any way diminish each party's
common law duty to mitigate its Loss. Notwithstanding the foregoing, in no event
shall Buyer be required to purchase product liability insurance for products
manufactured or sold by Seller, Xxxxxxx or any Subsidiary prior to the Closing
Time.
ARTICLE 10
TAX MATTERS
10.1 Preparation of Tax Returns.
(a) Subject to Section 10.1(c), Seller shall be responsible
for the preparation and timely filing of any return, report, information return
or other document (including any related or supporting information) filed or
required to be filed with any taxing authority in connection with the
determination, assessment, collection, administration or imposition of any Taxes
(as defined in Section 4.10) (for purposes of this Article 10 only,
individually, a "Return" and collectively, "Returns") of Xxxxxxx and the
Subsidiaries relating to any taxable year or period ending on or before the
Closing Date (a "Pre-Closing Tax Return"). Pre-Closing Tax Returns shall be
filed on or before their respective due dates (including extensions). Such
Returns shall be prepared on a basis consistent with Returns prepared for prior
taxable periods, except as otherwise required by law or regulation. At least 15
days prior to the filing of a Pre-Closing Tax Return, Seller shall provide Buyer
with a copy of such Pre-Closing Tax Return for Buyer's review and comment. If
any such Returns cannot be completed and filed by Seller until after the Closing
Date, Buyer shall cause the relevant officer(s) of Xxxxxxx and each Subsidiary
to sign and file such Returns after they have been completed by Seller (and
before the due date of such Returns).
(b) Buyer shall be responsible for the preparation and timely
filing of all Returns of Xxxxxxx and the Subsidiaries for all taxable periods
commencing after the Closing Date (the "Post-Closing Tax Returns"). The
Post-Closing Tax Returns shall be prepared on a basis consistent with the
Pre-Closing Tax Returns unless a different treatment is required by law or
regulation. If Buyer takes any position or uses any methodology on any such
Return that is inconsistent with any position or methodology taken or used by
Xxxxxxx, any Subsidiary, or Seller in prior periods (unless Buyer's position or
methodology giving rise to the inconsistency is required (i) by a law or
regulation, or (ii) in the opinion (reasonably acceptable to Seller and its
counsel) of a reputable law firm (the "Law Firm") satisfactory to Seller and its
counsel, by other applicable legal authorities in effect for the taxable period
covered by such Return), then Buyer shall be responsible for, and shall
indemnify and hold harmless, on an after-tax basis, Seller against, any increase
in Taxes with respect to any Pre-Closing Tax Return resulting from such
inconsistent position or methodology. Buyer shall not make any assertion or make
any election the effect of which would be to exclude Xxxxxxx or any Subsidiary,
to the extent otherwise eligible therefor, from any consolidated Return of
Xxxxxxx (or any consolidated or combined Return of Seller's consolidated group)
for any Pre-Closing Tax Return unless required by law or regulation.
39
(c) Notwithstanding anything to the contrary contained in
Section 10.1(a), Buyer shall be responsible for the preparation and timely
filing of any Returns of Xxxxxxx and the Subsidiaries for taxable periods, if
any, that begin before the Closing Date and end after the Closing Date
("Straddling Returns"). The Straddling Returns shall be prepared on a basis
consistent with Pre-Closing Tax Returns unless a different treatment is required
by law or regulation. Notwithstanding anything to the contrary contained in this
Article 10, at least 15 days prior to the filing of any Straddling Returns
required to be caused to be filed by Buyer hereunder, Buyer shall submit copies
of such returns to Seller for its review and approval. In the event of any
dispute with respect to any Straddling Returns, Buyer shall file the final form
of such returns prior to the due date therefor without prejudice to Seller's
right to dispute the amount of Taxes for the tax period covered thereby. Seller
shall be responsible for, and shall indemnify and hold Buyer harmless against,
so much of any Tax liability shown on a Straddling Return as is properly
allocable to a pre-Closing period, net of any current Tax savings directly or
indirectly received by Buyer as a result of paying such Tax liability. The
portion of Xxxxxxx'x and each Subsidiary's taxable income, gain, loss and any
resulting Tax shown on a Straddling Return which is properly allocated to a
pre-Closing period shall be determined by (i) assuming that Xxxxxxx'x and each
Subsidiary's taxable year ends as of the close of business on the Closing Date,
(ii) allocating to the pre-Closing period any other income, gain, loss or
deduction of Xxxxxxx and each Subsidiary from any source, by closing, on an
actual basis (or if an actual closing is not feasible, on a pro forma basis
taking into account extraordinary items, allocated solely to the pre-Closing
period) the books of Xxxxxxx and each Subsidiary as of the close of business on
the Closing Date, and (iii) preparing Returns based on the income, gain and
losses determined on a basis consistent with the methodology and elections
employed by Xxxxxxx and each Subsidiary in prior years as adjusted to reflect
any subsequent adjustments to such returns.
(d) Except as otherwise required by any then effective law or
regulation or, in the opinion (reasonably acceptable to Seller and its counsel)
of the Law Firm, by other applicable legal authorities, without the prior
written consent of Seller (which consent shall not, in any case, be unreasonably
withheld), Buyer shall not make or cause Xxxxxxx or any Subsidiary to make any
election, change an annual accounting period or adopt or change any accounting
method if any such election, change or adoption would have the effect of
increasing the Tax liability of Xxxxxxx or any Subsidiary with respect to any
Pre-Closing Tax Return.
(e) If, consistent with the provisions of this Article 10,
Seller desires to amend a Pre-Closing Tax Return, Buyer shall cooperate in such
matter to the extent reasonable. Seller shall indemnify and hold Xxxxxxx, each
Subsidiary, and Buyer harmless, on an after-tax basis, against any increase in
any Taxes with respect to Post-Closing Tax Returns directly resulting from any
adjustments to items of income, gain, deduction, loss or credit reflected in
such amendment.
(f) Seller shall retain all books, records, returns,
schedules, documents and all papers or relevant items of information relating to
the Federal, state, foreign or other Tax liability of Xxxxxxx and the
Subsidiaries for any Pre-Closing Tax Return, until the expiration of all
statutes of limitations for claims to which such documents may pertain; provided
that if the statute of limitations for such claims survive indefinitely (for
example, with respect to net operating losses), Seller shall retain the
40
documents pertaining to such claims for a period of seven years after the
Closing Date. Thereafter, Seller shall have the right to dispose of or destroy
any such items; provided that, prior to such disposal or destruction, Seller
shall provide Buyer with written notice of its intent to do so. For a period of
30 days after its receipt of such notice, Buyer shall have the right, at its
sole cost and expense, promptly to remove or obtain copies (or, if necessary,
originals) of such items and take whatever action Buyer may desire with respect
to such items. Notwithstanding the foregoing, Seller shall reasonably cooperate
with Buyer and furnish copies of any such items to Buyer, at Buyer's sole cost
and expense, upon written request.
10.2 Liability for Taxes. Seller and Buyer hereby covenant and agree
that, as between Seller, on the one hand, and Buyer, on the other hand, and
subject to the provisions of Section 10.3:
(a) Except as otherwise provided in Section 10.1(b), Seller
shall be liable for and shall pay (i) all Taxes payable by or with respect to
Xxxxxxx, the Subsidiaries, or Seller for Pre-Closing Tax Returns and (ii) such
Taxes as are allocable to the period prior to the Closing Time in connection
with a Straddling Return prepared in accordance with Section 10.1(c).
(b) Except as otherwise provided in Sections 10.1(c) and
10.2(a), Buyer shall be liable for and shall pay, or shall cause Xxxxxxx or the
Subsidiaries, as applicable, to pay, and Seller shall not be required to pay or
reimburse Buyer or Xxxxxxx or the Subsidiaries for, all Taxes payable by Xxxxxxx
and each Subsidiary for all Returns other than Pre-Closing Tax Returns.
10.3 Certain Tax Payment Responsibility. Notwithstanding anything in
this Article 10 to the contrary, Each party agrees that it shall not set off,
offset or recoup any amounts due to another party pursuant to this Article 10
and shall not defend any failure to make payment when due in accordance with
this Article 10 by reason of the alleged failure of such other party to
indemnify and hold harmless such party in accordance with the provisions of
Article 9.
10.4 Tax Contests.
(a) Seller and its duly appointed representatives shall have
the sole right to supervise or otherwise coordinate any examination process and
to negotiate, resolve, settle or contest any asserted Tax deficiencies or assert
and prosecute any claim for refund with respect to Pre-Closing Tax Returns. Each
party hereto shall within 14 days after it has knowledge of the assertion or
commencement thereof notify the other party of the written assertion of any
claim or the commencement of any suit, action, proceeding, investigation or
audit (any of which may be hereinafter referred to as a "Tax Contest") with
respect to any Pre-Closing Tax Returns (but only if such Tax Contest would
affect the Tax liability of the other party), and shall provide the other party
with copies (subject to deletion of unrelated information) of all correspondence
relating to such Tax Contest. The costs of such Tax Contest shall be borne by
Seller.
(b) Buyer and its duly appointed representatives shall have
the sole right and the obligation to supervise or otherwise coordinate any
examination process and to negotiate, resolve, settle or contest any asserted
Tax deficiencies or assert and prosecute any claim for refund with respect to
41
Post-Closing Tax Returns. Each party hereto shall within 14 days after it has
knowledge thereof notify the other party of the written assertion or the
commencement of a Tax Contest with respect to any Post-Closing Tax Returns (but
only if such Tax Contest would affect the Tax liability of the other party), and
shall provide the other party with copies (subject to deletion of unrelated
information) of all correspondence relating to such Tax Contest. The costs of
such Tax Contest shall be borne by Buyer.
(c) Buyer and its duly appointed representatives shall have
the sole right and the obligation to supervise or otherwise coordinate any
examination process and to negotiate, resolve, settle or contest any asserted
Tax deficiencies or assert and prosecute any claim for refund with respect to
Straddling Returns. Each party hereto shall within fourteen days after it has
knowledge thereof notify the other party of the written assertion or the
commencement of Tax Contest with respect to any Straddling Return (but only if
such Tax Contest would effect the Tax liability of the other party), and shall
provide the other party with copies (subject to deletion of unrelated
information) of all correspondence to such Tax Contest. The cost of such Tax
Contest shall be borne by Buyer.
10.5 Refunds, Tax Credits. To the extent that Buyer receives a refund
of, or an offset with respect to, Taxes or a Tax credit arising from or with
respect to the Pre-Closing Tax Returns or a Straddling Return to the extent
applicable to a pre-Closing Time period as determined in accordance with Section
10.1(c) (net of a proportionate amount of any costs incurred by Buyer in
connection with obtaining such refund, offset or Tax credit), Buyer shall pay to
or reimburse, or shall cause Xxxxxxx or a Subsidiary, as applicable, to pay to
or reimburse, Seller for the amount of any such Tax refund, offset or credit
received net of any Taxes payable by Buyer, Xxxxxxx or the Subsidiaries as a
result of such Tax refund or credit. To the extent that Seller receives a refund
of, or an offset with respect to, Taxes or a Tax credit arising from or with
respect to any of the Post-Closing Tax Returns or any Straddling Returns, Seller
shall reimburse Buyer, Xxxxxxx and the Subsidiaries for the amount of any such
Tax refund or credit received net of any Taxes payable by Seller on such Tax
refund, offset or credit, but only to the extent allocable to a post-Closing
Time period.
10.6 Cooperation. After the Closing Date, Buyer, on the one hand, and
Seller, on the other hand, shall make available to the other, as reasonably
requested, and to any taxing authority, all information, records or documents
relating to Tax liabilities or potential Tax liabilities of Xxxxxxx and the
Subsidiaries and shall preserve all such information, records and documents
until the expiration of any applicable statute of limitations or extensions
thereof.
10.7 Reserved.
10.8 No Extensions. Seller shall ensure that neither Xxxxxxx nor any
Subsidiary consents prior to the Closing Time to any waiver or extension of any
statute of limitations with respect to any taxable year of Xxxxxxx or any
Subsidiary.
42
ARTICLE 11
MISCELLANEOUS
11.1 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any New York Court (as
hereinafter defined), this being in addition to any other remedy to which they
may be entitled at law or in equity.
11.2 Entire Agreement. This Agreement, the exhibits hereto, the
Disclosure Statement, Buyer's Disclosure Statement, the introductory language
and recital set forth above, the Confidentiality Agreement and any other
documents delivered by the parties in connection with this Agreement constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings (oral and written) among
the parties with respect thereto.
11.3 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to its rules
of conflict of laws. Each Seller and Buyer hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the United States District Court for the Southern District of New York (the
"New York Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such courts), waives any objection to
the laying of venue of any such litigation in the New York Courts and agrees not
to plead or claim that such litigation brought in any New York Court has been
brought in an inconvenient forum.
11.4 Reserved.
11.5 Schedules; Tables of Contents and Headings. If a matter is
disclosed on any Section of the Disclosure Statement, such disclosure shall
suffice, without specific repetition and without cross-reference, as a response
to any other Section of the Disclosure Statement, but only to the extent such
disclosure is made in such a way that Buyer would be reasonably expected to
determine the applicability of such disclosure to such other Section. If a
matter is disclosed on any Section of Buyer's Disclosure Statement such
disclosure shall suffice, without specific repetition and without
cross-reference, as a response to any other section of Buyer's Disclosure
Statement, but only to the extent such disclosure is made in such a way that
Buyer would be reasonably expected to determine the applicability of such
disclosure to such other section. The table of contents and section headings of
this Agreement and titles given to Sections of the Disclosure Statement to this
Agreement are for reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement.
11.6 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given (a) when delivered if by hand or
overnight courier, (b) three days after mailing by first-class registered mail,
return receipt requested, postage prepaid, or (c) when telecopied, provided that
concurrently therewith a copy is mailed by first-class registered mail, return
receipt requested, postage prepaid, to the parties at the following addresses
(or to such address as a party may have specified by notice given to the other
party pursuant to this provision):
43
If to Seller to:
Terex Corporation
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx X Xxxxx, Esq.
Senior Vice President, Secretary
and General Counsel
Fax No.: (000) 000-0000
With a copy to:
Xxxxxxxx Xxxxxxxxx Xxxxxx
Aronsohn & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
If to Buyer, to:
Partek Cargotec Holding Ltd
x/x Xxxxxx Xxxxxxxxxxx
Xxxxxxxxxx xxxxxxxx 00
X.X. Xxx 00, XXX-00000 Xxxxxxxx, Xxxxxxx
Attn: General Counsel
Tel. No.: 000-000-00-00
Fax No.: 000-000-00-0000
With a copy to:
Reinhart, Boerner, Van Deuren, Xxxxxx
& Rieselbach, s.c.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
11.7 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
44
11.8 Extension; Waiver. The parties may: (a) extend the time for
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations or warranties contained herein
and (c) waive compliance with any of the agreements, covenants or conditions
contained herein. Any such extension or waiver shall be valid only if in a
writing executed by the party against whom such extension or waiver is sought to
be enforced.
11.9 Certain Definitions. The following terms, whenever used in
this Agreement, shall have the following meanings:
(a) The term "Affiliate" means, with respect to any
individual, corporation, partnership, firm, joint venture, association, trust or
other entity (each a "Person"), any Person who controls, is controlled by, or is
under common control with, such Person.
(b) The term "Buyers' Combined Indemnification Payments" means
the sum of the following: (i) amounts paid by Buyer to Seller Indemnified
Parties for Losses pursuant to the indemnification provisions contained in this
Agreement (such amounts described in this subsection (i) shall be referred to as
"Buyer's Xxxxxxx Indemnification Payments"), plus (ii) Buyer's Xxxx
Indemnification Payments, as defined in the Xxxx Purchase Agreement, plus (iii)
Buyer's Princeton Indemnification Payments, as defined in the Princeton Purchase
Agreement
(c) The term "Buyer Combined Losses" means the sum of the
following: (i) all Losses suffered by Buyer Indemnified Parties by reason of
breaches under this Agreement, determined without regard to any otherwise
applicable "Material Adverse Effect" qualification (such Losses described in
this subsection (i) shall be referred to as "Buyer's Xxxxxxx Losses"), plus (ii)
Buyer's Xxxx Losses, as defined in the Xxxx Purchase Agreement, plus (iii)
Buyer's Princeton Losses, as defined in the Princeton Purchase Agreement.
(d) The term "Escrow Agreement" means the escrow agreement
among Buyer, Seller, Partek Cargotec Holding Netherlands B.V., Holland Lift
International B.V., Partek Holding Inc., Terex Corporation, and the Escrow Agent
(as defined in Section 11.9(e)), in substantially the form of Exhibit B attached
hereto.
(e) The term "Escrow Agent" means the party serving as escrow
agent under the Escrow Agreement.
(f) The phrase "to the knowledge of Seller" (or words of
similar import, whether expressed in the positive or negative) shall mean only
the actual knowledge after reasonable inquiry into the relevant subject matter
of those persons who are listed in Section 11.9(f) of the Disclosure Statement.
For purposes of the foregoing definition, "reasonable inquiry" shall include,
but not be limited to, inquiry of the Managing Director and Director of Finance
at Xxxxxxx (or if such positions do not exist, the persons holding comparable
positions at Xxxxxxx).
45
(g) The term "Xxxx Purchase Agreement" means the Share
Purchase and Sale Agreement dated of even date herewith among Partek Cargotec
Holding Netherlands B.V., Holland Lift International B.V., and for purposes of
Article 9 only, Xxxx B.V., pursuant to which Partek Cargotec Holding Netherlands
B.V. has agreed to acquire from Holland Lift International B.V. all of the
issued and outstanding capital shares of Terex B.V.
(h) The term "Material Adverse Effect" shall mean any material
adverse effect on, or any circumstances or events which individually or in the
aggregate are reasonably likely to result in a material adverse effect on the
assets, the current or foreseeable future results of operations or the current
or foreseeable future financial condition of Xxxxxxx, the Subsidiaries, Terex
Corporation's Princeton division, Xxxx B.V. and the subsidiaries of Xxxx B.V.,
taken as a whole.
(i) The term "Materiality Thresholds" means the $100,000
(U.S.) materiality thresholds described in the second and third sentences of
Section 2.3(d) of the Princeton Purchase Agreement.
(j) The term "Princeton Purchase Agreement" means the Asset
Purchase and Sale Agreement dated of even date herewith between Partek Holding
Inc. and Terex Corporation, pursuant to which Partek Acquisition Company, Inc.
has agreed to acquire from Terex Corporation substantially all of the assets and
business of Terex Corporation's Princeton division.
(k) The term "Reference Amount" has the same meaning as set
forth in the Xxxx Purchase Agreement.
(l) The term "Relevant Closing Balance Sheets" means the
Closing Date Balance Sheet, the closing balance sheet prepared pursuant to
Section 2.3 of the Princeton Purchase Agreement, and the closing date balance
sheet prepared pursuant to Section 2.3 of the Xxxx Purchase Agreement.
(m) The term "Section 6.15 Losses" means the sum of the
following: (i) any and all payments for Losses incurred by Buyer in connection
with the breach by Seller or any Affiliate of Seller of any of the provisions of
Section 6.15 (such payments described in this subsection (i) shall be referred
to as "Xxxxxxx Section 6.15 Losses"), plus (ii) Xxxx Section 6.15 Losses, as
defined in the Xxxx Purchase Agreement, plus (iii) Princeton Section 6.15
Losses, as defined in the Princeton Purchase Agreement.
(n) The term "Seller Combined Losses" means the sum of the
following: (i) all Losses suffered by Seller Indemnified Parties by reason of
breaches under this Agreement (such Losses described in this subsection (i)
shall be referred to as "Seller's Xxxxxxx Losses"), plus (ii) Seller's Xxxx
Losses, as defined in the Xxxx Purchase Agreement, plus (iii) Seller's Princeton
Losses, as defined in the Princeton Purchase Agreement.
46
(o) The term "Sellers' Combined Indemnification Payments"
means the sum of the following: (i) all amounts paid by Seller to Buyer
Indemnified Parties for Losses pursuant to the indemnification provisions
contained in this Agreement (such amounts described in this subsection (i) shall
be referred to as "Seller's Xxxxxxx Indemnification Payments"), plus (ii)
Seller's Xxxx Indemnification Payments, as defined in the Xxxx Purchase
Agreement, plus (iii) Seller's Princeton Indemnification Payments, as defined in
the Princeton Purchase Agreement.
(p) The term "Teledyne Indemnified Losses" means any and all
payments for "Losses" (or portions thereof) as that term is defined in each of
the Princeton Purchase Agreement and the Xxxx Purchase Agreement, for which (i)
"Buyer Indemnified Parties" under the Xxxx Purchase Agreement are indemnified
against under the Xxxx Purchase Agreement or (ii) "Buyer Indemnified Parties"
under the Princeton Purchase Agreement are indemnified against under the
Princeton Purchase Agreement and in either case for which Terex Corporation
receives payments pursuant to the indemnification provisions of that certain
Asset Purchase and Sale Agreement dated as of September 15, 1999 by and among
Teledyne, Inc., Teledyne Princeton, Inc., Xxxx USA, Inc., Teledyne GmbH and
Terex Corporation.
(q) The term "Total Equity" means the sum of the following:
(i) the amount by which (A) the value of the assets of Xxxxxxx and the
Subsidiaries, as reflected on the Closing Date Balance Sheet, exceeds (B) the
liabilities of Xxxxxxx and the Subsidiaries, as reflected on the Closing Date
Balance Sheet (including reserves reflected on the Closing Date Balance Sheet),
plus (ii) Xxxx Net Equity, as defined in the Xxxx Purchase Agreement, plus (iii)
Princeton Net Asset Value, as defined in the Princeton Purchase Agreement. The
amount referred to in the foregoing Section 11.9(n)(i) is referred to herein as
"Xxxxxxx Net Equity."
(r) The term Truck Mounted Transactions" shall mean the
following transactions: (i) the purchase by Partek Cargotec Holding Netherlands
B.V. of all of the issued and outstanding capital shares of Terex B.V. pursuant
to the terms of the Xxxx Purchase Agreement, (ii) the purchase by Partek Holding
Inc. of substantially all of the assets and business of Terex Corporation's
Princeton division pursuant to the terms of the Princeton Purchase Agreement;
and (iii) the purchase by Buyer of all of the issued and outstanding capital
shares of Xxxxxxx Engineering Limited pursuant to the terms of this Agreement.
11.10 Payment of Certain Arbitration Costs; Manner of Making
Adjustment. The cost of any arbitration (including the fees of the Arbitrator)
pursuant to Section 2.3(c) shall be paid in the manner specified in Section
2.3(c) of the Princeton Purchase Agreement. The adjustment contemplated by
Section 2.3(d) shall be made in the manner specified in Section 2.3(d) of the
Princeton Purchase Agreement.
11.11 Assignment; Binding Effect; Benefit. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
47
anything contained in this Agreement to the contrary, nothing in this Agreement,
express or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
11.12 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa. Any reference in this Agreement to an Irish law, statute, rule,
regulation, or other statutory provision shall, with respect to any Subsidiary
incorporated outside of Ireland, be deemed to be a reference to the equivalent
law, statute, rule, regulation or other statutory provision in the jurisdiction
in which that Subsidiary is incorporated.
11.13 Amendment. This Agreement may be amended by the parties hereto at
any time. This Agreement may not be amended or modified except by an instrument
in writing signed by or on behalf of each of the parties hereto.
11.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same Agreement.
11.15 Waiver Seller hereby waives any and all preemption rights to
which it may be entitled under the memorandum and articles of association of
Xxxxxxx or otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf as of the day and year first
written above.
POWERSCREEN INTERNATIONAL plc
By: /s/ Xxxxxx X. XxXxx
Name: Xxxxxx X. XxXxx
Title:
PARTEK CARGOTEC HOLDING LTD
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title:
48
FOR THE PURPOSES OF ARTICLE 9 ONLY:
XXXXXXX ENGINEERING LIMITED
By:/s/ Xxxxxx X. XxXxx
Name: Xxxxxx X. XxXxx
Title:
49
List of Exhibits:
Exhibit A-Closing GAAP
Exhibit B-Form of Escrow Agreement
50
