[EXHIBIT 10.15]
Execution Copy
STOCK PURCHASE AGREEMENT
by and among
SDC INTERNATIONAL, INC.,
SDC PRAGUE, S.R.O.
And
TEREX CORPORATION
Dated as of
December 27, 2001
TABLE OF CONTENTS
Page
----
SECTION 1. Definitions and Usage.............................. 1
SECTION 2. Issuance of Company Shares; Sale of TATRA Shares... 2
2.1. The Issuance; the TATRA Purchase................... 2
2.2. The Closing........................................ 2
2.3. Actions at the Closing............................. 3
2.4. Additional Issuances, Purchase Price Adjustment.... 3
SECTION 3. Representations and Warranties of the Company...... 4
3.1. Organization and Good Standing; Power and
Authority; Qualifications.......................... 4
3.2. Authorization of the Documents..................... 4
3.3. Capitalization..................................... 5
3.4. Corporate Status and TATRA Shares.................. 5
3.5. SEC Reports........................................ 6
3.6. Financial Statements............................... 6
3.7. Litigation......................................... 7
3.8. Title to Properties; Insurance..................... 7
3.9. Consents........................................... 7
3.10. Holding Company Act and Investment Company Act..... 7
3.11. Taxes.............................................. 8
3.12. Employee Benefit Plans............................. 8
3.13. Intellectual Property Rights....................... 8
3.14. Possession of Franchises, Licences, Etc............ 10
3.15. Compliance with Laws............................... 10
3.16. Conflicting Agreements and Charter Provisions...... 10
3.17. Subsidiaries....................................... 11
3.18. Disclosure......................................... 11
3.19. Offering of Securities............................. 11
3.20. Brokers and Finders................................ 12
3.21. Authorization and Issuance of the Company Shares... 12
3.22. Corporate Status of SDC Prague..................... 12
3.23. Authorization of the Documents - SDC Prague........ 12
3.24. Prohibited Payments................................ 12
SECTION 4. Representations and Warranties of Purchaser........ 13
4.1. Organization and Qualification..................... 13
4.2. Due Authorization.................................. 13
4.3. Consents........................................... 13
4.4. Conflicting Agreements............................. 14
4.5. Acquisition for Investment......................... 14
4.6. Brokers or Finders................................. 14
4.7. Accredited Investor................................ 14
i
SECTION 5. Buy/Sell; Corporate Governance; Management Fees;
Shareholders Agreement............................. 14
5.1. Buy/Sell........................................... 14
5.2. Corporate Governance............................... 15
5.3. Management Fees.................................... 15
5.4. Shareholders Agreement............................. 15
5.5. Further Purchases.................................. 16
5.6. Cooperation........................................ 16
SECTION 6. Certain Taxes...................................... 16
SECTION 7. Legends; Exchanges; Lost, Stolen or Mutilated
Certificates....................................... 17
SECTION 8. Survival of Representations, Warranties,
Agreements and Covenants, Etc...................... 17
SECTION 9. Purchaser Director................................. 18
9.1. Right of the Purchaser to Designate Director....... 18
9.2. Board and Committee Notice Requirement............. 18
9.3. Reimbursement of Certain Expenses.................. 18
9.4. Directors' Indemnification; Insurance.............. 19
SECTION 10. Standstill......................................... 19
SECTION 11. Indemnification.................................... 20
11.1. General Indemnification............................ 20
11.2. Indemnification Principles......................... 21
11.3. Claim Notice....................................... 22
11.4. TATRA Indemnification.............................. 23
SECTION 12. Remedies........................................... 23
SECTION 13. Further Assurances................................. 23
SECTION 14. Successors and Assigns............................. 23
SECTION 15. Entire Agreement................................... 23
SECTION 16. Notices............................................ 24
SECTION 17. Amendments......................................... 25
SECTION 18. Counterparts....................................... 25
SECTION 19. Headings........................................... 25
SECTION 20. Nouns and Pronouns................................. 25
SECTION 21. Governing Law...................................... 25
SECTION 22. Severability....................................... 25
ii
SECTION 23. Definitions........................................ 26
SECTION 24. Currency........................................... 28
iii
Exhibits
Exhibit A Form of Opinion of Xxxxx & XxXxxxxx
Exhibit B TATRA Purchase Agreement
INDEX OF DEFINED TERMS
Term Section
---- -------
$.........................................................................24
Acquiring Affiliate...................................................5.5(b)
Additional TATRA Shares...............................................5.5(b)
Affiliate.................................................................23
Agreement...........................................................Preamble
Appraised Value..........................................................5-1
Beneficially Own..........................................................23
Beneficially Owned........................................................23
Beneficially Owning.......................................................23
Board....................................................................9.1
Board Approval...........................................................3.2
Buy/Sell Determination...................................................5.1
Buy/Sell Purchase Price..................................................5.1
Cap.....................................................................11.1
Claim Notice............................................................11.3
Closing...............................................................2.2(a)
Closing Date..........................................................2.2(a)
Code......................................................................23
Commission...............................................................3.5
Common Stock........................................................Recitals
Company.............................................................Preamble
Company Entities.........................................................3.1
Company Entity...........................................................3.1
Company Shares......................................................Recitals
Consideration.........................................................2.1(b)
Contract Shares...........................................................23
Contracts.................................................................23
Czech Pledges.............................................................23
CZK.......................................................................24
Employee Plan...........................................................3.12
Encumbrance...............................................................23
ERISA.....................................................................23
ERISA Affiliate...........................................................23
Exchange Act..............................................................23
First Note..........................................................Recitals
Fully Diluted Basis......................................................3.3
iv
GAAP.....................................................................3.6
Governmental Entity.......................................................23
Group.....................................................................23
Holder...................................................................5.1
Intellectual Property................................................3.13(e)
Knowledge.................................................................23
Law.......................................................................23
Loan Agreement......................................................Recitals
Losses..................................................................11.2
Material Adverse Change...................................................23
Material Adverse Effect...................................................23
Notes...............................................................Recitals
Notice Date..............................................................5.1
Person....................................................................23
Proposing-Holder.........................................................5.1
Purchaser...........................................................Preamble
Purchaser Designee.......................................................9.1
Purchaser Indemnitee....................................................11.1
Receiving Holder.........................................................5.1
Registration Rights Agreement.............................................23
SDC Prague..........................................................Preamble
SEC Reports..............................................................3.5
Second Note.........................................................Recitals
Securities...............................................................4.5
Securities Act..........................................................3.19
Shareholders Agreement...................................................5.4
Status Quo...............................................................5.5
Subsidiary................................................................23
Supervisory Board........................................................5.2
TATRA...............................................................Recitals
TATRA Purchase......................................................Recitals
TATRA Purchase Agreement..................................................23
TATRA Shares........................................................Recitals
Tax Return................................................................23
Taxes.....................................................................23
Third Note..........................................................Recitals
Voting Securities.........................................................23
v
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
December 27, 2001, by and among SDC International, Inc., a
Delaware corporation (the "Company"), SDC Prague, S.R.O., a
company organized under the laws of the Czech Republic ("SDC
Prague"), and Terex Corporation, a Delaware corporation (the
"Purchaser").
WITNESSETH:
WHEREAS, simultaneously herewith, the Company and the
Purchaser are entering into a Loan Agreement (the "Loan
Agreement"), dated as of December 27, 2001 pursuant to which the
Purchaser is loaning to the Company the sum of $4,834,400
pursuant to a 9.00% Convertible Note due March 1, 2002 in an
aggregate principal amount of $4,834,400 (the "First Note") and
the sum of $6,069,900 pursuant to a 9.00% Convertible Note due
December 31, 2004 in the aggregate principal amount of $6,069,900
(the "Second Note");
WHEREAS, the Purchaser intends to loan to the Company
pursuant to, and subject to the conditions set forth in, the Loan
Agreement, an amount equal to the Approved Expenses Amount (as
defined in the Loan Agreement) pursuant to a 9.00% Convertible
Note due December 31, 2004 (the "Third Note," and together with
the First Note and the Second Note, the "Notes,");
WHEREAS, the Company desires to issue to the Purchaser,
1,147,385 shares (the "Company Shares") of newly issued common
stock of the Company, par value $.001 per share (the "Common
Stock") in consideration of the Purchaser's current role as
strategic investor in the Company and for certain marketing and
technology consulting that may be rendered to the Company.
WHEREAS, the Company desires to sell and transfer to the
Purchaser, and the Purchaser desires to purchase from the Company
(the "TATRA Purchase") 8,407,161 Contract Shares ("TATRA
Shares"), which represent 40.61% of the issued and outstanding
equity interest and registered capital of TATRA a.s., a joint-
stock company established under the laws of the Czech Republic
("TATRA"); and
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties and agreements herein set
forth, the parties hereto agree as follows:
SECTION 1. Definitions and Usage. Unless the context
shall otherwise require, terms used herein and not otherwise
defined have the meanings assigned thereto in Section 23.
SECTION 2. Issuance of Company Shares; Sale of TATRA Shares.
2.1. The Issuance; the TATRA Purchase.
(a) Simultaneously with the execution and delivery of
this Agreement, the Company shall issue to the Purchaser the
Company Shares and shall deliver to the Purchaser certificates
representing the Company Shares registered in the name of the
Purchaser or its nominee.
(b) Subject to the terms and conditions set forth
herein, the Purchaser shall purchase from the Company, and the
Company shall sell to the Purchaser, the TATRA Shares in exchange
for the First Note (the "Consideration"). Following the exchange
of the TATRA Shares for the First Note, the First Note shall be
cancelled.
2.2. The Closing.
(a) Closing. The closing of the TATRA Purchase (the
"Closing") shall take place at 10:00 a.m. New York time on the
business day following the date on which the closing conditions
set forth in Section 2.2(b) have been met, or waived by
Purchaser, in accordance with this Agreement, or on such other
date or at such other time as is agreed to in writing by the
parties (such date, the "Closing Date"). The Closing shall take
place at the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx,
Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(b) Closing Conditions. The obligation of Purchaser
to consummate the transactions contemplated herein at the Closing
are subject to and conditioned upon (unless waived by Purchaser):
(i) The registration of the TATRA Shares in the
name of the Company with the Securities Center (as defined in the
TATRA Purchase Agreement), together with such other conditions as
may be imposed by Czech law or the rules and regulations of the
Securities Center in order to consummate and evidence the
consummation of the transactions contemplated by the TATRA
Purchase Agreement, and the receipt of evidence, in a form
reasonably satisfactory to the Purchaser, of such registration
and the satisfaction of such other conditions.
(ii) The representations and warranties of the
Company in Section 3 hereof shall be true and correct when made
and at and as of the Closing Date with the same effect as though
such representations and warranties had been made at and as of
such date except (i) that any such representations and warranties
that are given as of a specified date and relate solely to a
specified date or period shall be true and correct only as of
such date or period, and to the extent any breach thereof,
individually or when aggregated with all such breaches, has not
had and is not reasonably likely to have a Material Adverse
Effect. For purposes of this Section 2.2(b)(ii), the truth or
correctness of any representation or warranty of the Company in
Section 3 hereof shall be determined without regard to any
materiality or "Material Adverse Effect" qualification set forth
in such representation and warranty. The Purchaser shall have
received at Closing a
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certificate to the foregoing effect, dated the Closing Date and signed
by the Chairman or President of the Company.
2.3. Actions at the Closing. Simultaneously with, or prior
to, the Closing, the following actions shall occur:
(a) The Company shall deliver to the Purchaser a
certificate executed by its secretary, dated as of the Closing
Date, certifying the following matters: (i) resolutions of the
Board of the Company authorizing the execution, delivery and
performance by the Company of each of the Transaction Documents
(as defined in the Loan Agreement), and any other agreement
entered into or instruments delivered by the Company in
connection herewith, (ii) copies of each governmental or third
party consent, approval or filing required to be obtained or made
in order to consummate the transactions contemplated by this
Agreement, (iii) incumbency matters, (iv) certified copy dated as
of the most recent practicable date prior to the Closing Date, of
the Certificate of Incorporation and a copy of the By-Laws of the
Company and (v) that the representations and warranties of the
Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has performed, satisfied,
and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by it at or before the Closing.
(b) Purchaser shall receive from Xxxxx & XxXxxxxx,
counsel for the Company and SDC Prague, an opinion addressed to
the Purchaser, dated as of the Closing Date, satisfactory in form
and substance to the Purchaser, which shall include the opinions
set forth in Exhibit A hereto.
(c) The Company shall transfer to Purchaser or its
nominee the TATRA Shares in a manner consistent with Czech law
and the rules and regulations of the Securities Center against
receipt at the Closing by the Company from Purchaser of the
Consideration.
(d) The Company shall have provided the Purchaser
with evidence that the Company Shares have been listed if
required pursuant to the rules of the National Association of
Securities Dealers and shall have filed a Form D with respect to
the Company Shares.
2.4. Additional Issuances; Purchase Price Adjustment.
(a) In lieu of any other indemnities in this
Agreement, in the event that at any time, the representation and
warranty set forth in the penultimate sentence of Section 3.3 is
determined not to have been true when made, the Company shall
issue to Purchaser, at no cost to Purchaser and as an adjustment
to the Consideration, an additional number of shares of Common
Stock such that, if such issuance of additional Common Stock were
made at the Closing, such representation and warranty would have
been true and accurate in all respects when made.
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(b) In lieu of any other indemnities in this
Agreement, in the event that at any time after the Closing, the
representation and warranty set forth in the last sentence of
Section 3.3 is determined not to have been true when made, SDC
Prague shall, and the Company shall cause SDC Prague to, transfer
to Purchaser, at no cost to Purchaser and as an adjustment to the
Consideration, an additional number of Contract Shares such that,
if such transfer of additional Contract Shares were made at
Closing, such representation would have been true and accurate in
all respects when made.
SECTION 3. Representations and Warranties of the Company.
The Company represents and warrants to the Purchaser as follows:
3.1. Organization and Good Standing; Power and Authority;
Qualifications. Each of the Company and its Subsidiaries (each a
"Company Entity," and together, the "Company Entities") (i) is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, (ii) has all
requisite corporate power and authority to own, lease and operate
its properties, to carry on its business as presently conducted
and as presently proposed to be conducted, except where failure
to do so would not have a Material Adverse Effect. Except as set
forth on Schedule 3.1, each Company Entity is qualified to
transact business as a foreign corporation in, and is in good
standing under the laws of each of the jurisdictions listed on
Schedule 3.1 which represents all the jurisdictions in which the
ownership or use of its assets or conduct of its business
requires it to be so qualified, except jurisdictions where
failure to be so qualified would not have a Material Adverse
Effect.
3.2. Authorization of the Documents. The Company has all
right, power and authority to enter into the Transaction
Documents to which it is a party and to consummate the
transactions contemplated thereby. The execution and delivery of
each of the Transaction Documents to which it is a party and the
sale of the Company Shares and TATRA Shares by the Company and
compliance by the Company with all the provisions of each of the
Transaction Documents and consummation by the Company of the
transactions contemplated hereby and thereby (i) are within the
corporate power and authority of the Company; (ii) do not and
will not require the approval or consent of the stockholders of
the Company (other than in connection with the Stockholder
Approval (as defined in the Loan Agreement)); and (iii) have been
authorized by all requisite corporate proceedings on the part of
the Company. This Agreement has been duly executed and delivered
by the Company and constitutes the valid and binding agreement of
the Company, enforceable in accordance with its terms, except
that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights, and (ii)
the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought. The Board has approved the transactions
contemplated hereby for the purposes of Section 203 of General
Corporation Law of the State of Delaware, pursuant to Section
203(a)(1) thereof (the "Board Approval"). The Company has
furnished to the Purchaser true and correct copies of the
Company's Certificate of Incorporation and By-Laws as in effect
on the date of this Agreement, as well as a copy of the
resolutions evidencing Board Approval.
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3.3. Capitalization. The authorized capital stock of the
Company consists of 25,000,000 shares of preferred stock, of
which, as of the date hereof, no shares were outstanding, and
25,000,000 shares of Common Stock, of which, as of December 20,
2001, 15,541,500 shares were outstanding. All of the outstanding
shares of Common Stock have been validly issued and are fully
paid and nonassessable. No class of capital stock of the Company
is entitled to preemptive rights. Except for the options and
warrants listed on Schedule 3.3, there are no outstanding
options, warrants, subscription rights, calls or commitments of
any character whatsoever relating to, or securities or rights
convertible into, shares of any class of capital stock of the
Company, or Contracts, by which the Company is or may become
bound to issue additional shares of its capital stock or options,
warrants or other rights to purchase or acquire any shares of its
capital stock. There are no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any securities
of the Company. Except as set forth in Schedule 3.3 there are no
stockholder agreements, voting trusts or other agreements or
understandings to which the Company is a party or to which the
Company is bound relating to the shares of capital stock of the
Company. The Company has no outstanding bonds, debentures, notes
or other obligations, the holders of which have the right to vote
(or convertible or exercisable for securities having the right to
vote) with the stockholders of the Company on any matter. Expect
as set forth in Schedule 3.3 hereto, the Company has not declared
or paid any dividend or made any other distribution of cash,
stock or other property to its stockholders or purchased or
otherwise redeemed any shares of its capital stock. Immediately
after the execution hereof, the Purchaser shall own, in the
aggregate, at least five percent (5%) of the issued and
outstanding shares of the Common Stock assuming (i) the
conversion or exchange of all securities convertible into or
exchangeable for Common Stock, including, without limitation, the
Notes, (ii) the exercise of all options or warrants to purchase
Common Stock outstanding as of the Closing Date and (iii) the
issuance of 1,750,000 shares reserved for issue under the
Company's 1997 Plan, 1998 Plan and 2000 Plan (as defined in the
Company's Annual Report on Form 10-KSB for the year ended
December 31, 2000 as filed with the SEC on March 12, 2001)
("Fully Diluted Basis"), and the voting power of such shares of
Common Stock shall represent, in the aggregate, no less than five
percent (5%) of the total number of votes able to be cast on any
matter by any Voting Securities on a Fully Diluted Basis upon and
immediately after the execution hereof. Immediately after the
Closing, the Purchaser shall own, in the aggregate, forty and
sixteen-hundredths percent (40.16%) of the registered capital of
TATRA, and the voting power of the TATRA Shares shall represent,
in the aggregate, no less than 40.16% of the total number of
votes able to be cast on any matter by any Voting Securities of
TATRA immediately after the Closing.
3.4. Corporate Status and TATRA Shares. (a) TATRA (x) is
a joint-stock company duly established and validly existing
under, and is in good standing under, the laws of the Czech
Republic, (y) has the full power and authority to conduct its
business and to own or lease and operate its properties as and in
the places where such business is now conducted and such
properties are now owned or leased and operated, with such
exceptions as, individually or in the aggregate, have not had and
are not reasonably likely to have a material adverse effect on
TATRA or Material Adverse Effect. TATRA is qualified or otherwise
authorized to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the
properties owned or held by it
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under lease or license or TATRA's business, as presently conducted,
requires such qualification or authorization, except where the
failure so to qualify or be authorized, individually or in the
aggregate, has not had and is not reasonably likely to have a
Material Adverse Effect or a material adverse effect on TATRA.
(b) The registered capital of TATRA consists of CZK
5,174,381,500, divided into 4,418,055 bearer shares with a
nominal value of CZK 250 (ISIN 650005018456), and 16,279,471
bearer shares with a nominal value of CZK 250 (ISIN
770000001873). All of the TATRA Shares are owned beneficially and
of record by the Company, free and clear of any Encumbrances. All
of the TATRA Shares have been duly authorized and validly issued
and are fully paid and nonassessable. Except for rights created
pursuant to this Agreement, there are no outstanding options,
warrants, securities, rights (preemptive or other),
subscriptions, calls, or other agreements of any kind that give
any Person the right to purchase or otherwise receive any shares
of TATRA capital stock. There are no voting arrangements with
respect to any shares of TATRA capital stock, including the TATRA
Shares and there are no restrictions on the Company's ability to
transfer the TATRA Shares to Purchaser at the Closing free and
clear of any Encumbrances. Upon delivery of the Consideration,
Purchaser will acquire good and marketable title to the TATRA
Shares, free and clear of any Encumbrances.
3.5. SEC Reports. The Company has filed all proxy
statements, reports and other documents required to be filed by
it under the Exchange Act from and after December 31, 1997 and
has made available to the Purchaser true and complete copies of
all annual reports, quarterly reports, proxy statements and other
reports under the Exchange Act filed by the Company from and
after such date, each as filed with the Securities and Exchange
Commission (the "Commission") (collectively, the "SEC Reports").
Each SEC Report was in compliance in all material respects with
the requirements of its respective report form and did not on the
date of filing contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and as
of the date hereof there are no fact or facts not disclosed in
the SEC Reports which individually or in the aggregate may have a
Material Adverse Effect.
3.6. Financial Statements. The financial statements
(including any related schedules and/or notes) included in the
SEC Reports have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently followed
(except as indicated in the notes thereto) throughout the periods
involved and fairly present in all material respects the
consolidated financial condition, results of operations and
changes in stockholders' equity of the Company as of the
respective dates thereof and for the respective periods then
ended (in each case subject, as to interim statements, to changes
resulting from year-end adjustments, none of which were material
in amount or effect). Except as set forth in Schedule 3.6, the
Company has no liabilities or obligations, contingent or
otherwise, except (i) liabilities and obligations in the
respective amounts reflected or reserved against in the Company's
balance sheet as of December 31, 2000 included in the SEC Reports
or (ii) liabilities and obligations incurred in the ordinary
course of business since December 31, 2000 which individually or
in the aggregate do
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not have a Material Adverse Effect. Since December 31, 2000, the
Company has operated its business only in the ordinary course and
there has not been individually or in the aggregate any Material
Adverse Change, other than changes disclosed in the SEC Reports
or otherwise set forth in Schedule 3.6 hereto.
3.7. Litigation. Except as set forth in Schedule 3.7
hereto, there is no action, suit, investigation or proceeding
pending or, to the knowledge of the Company, threatened against
the Company or its Subsidiaries or any of their properties or
assets by or before any court, arbitrator or other Governmental
Entity.
3.8. Title to Properties; Insurance. Each Company Entity
has good and valid title to, or, in the case of property leased
by them as lessee, a valid and subsisting leasehold interest in,
its properties and assets, free of all liens and encumbrances
other than as set forth in Schedule 3.8 hereto and those referred
to in the financial statements of the Company (or the notes
thereto) for the year ended December 31, 2000 included in the SEC
Reports, except in each case for such defects in title and such
other liens and encumbrances which do not individually or in the
aggregate materially detract from the value to the Company of the
properties and assets of the Company and its Subsidiaries taken
as a whole. The assets and properties owned by, or leased to, the
Company and its Subsidiaries, are all of the assets and
properties necessary for the Company and its Subsidiaries to
operate their respective businesses as now being conducted and as
contemplated to be conducted. The Company and its Subsidiaries
maintain insurance in such amounts (to the extent available in
the public market), including self-insurance, retainage and
deductible arrangements, and of such a character as is reasonable
and customary for companies engaged in the same or similar
business.
3.9. Consents. Assuming the accuracy of the
representations of the Purchaser set forth in Sections 4.5 and
4.7, except as set forth on Schedule 3.9, the Company is not
required to obtain any consent, approval or authorization of, or
to make any declaration or filing with, any Governmental Entity
or any other Person as a condition to or in connection with the
valid execution and delivery of any of the Transaction Documents
to which the Company is a party or the valid offer, issue, sale
or delivery of the Securities, or the performance by the Company
of its obligations in respect of any of the Transaction Documents
to which the Company is a party, except for filings required
pursuant to state and federal securities laws to effect any
registration of any of the Securities pursuant to the
Registration Rights Agreement and except for the filings required
pursuant to Section 13 of the Exchange Act and Regulation D under
the Securities Act to report the consummation of the transaction
contemplated hereby.
3.10. Holding Company Act and Investment Company Act. No
Company Entity is: (i) a "public utility company" or a "holding
company," or an "affiliate" or a "subsidiary company" of a
"holding company," or an "affiliate" of such a "subsidiary
company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, or (ii) a "public utility," as
defined in the Federal Power Act, as amended, or (iii) an
"investment company" or an "affiliated person" thereof or an
"affiliated person" of any such "affiliated person," as such
terms are defined in the Investment Company Act of 1940, as
amended.
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3.11. Taxes. Each Company Entity has filed all Tax Returns
required to be filed. All such Tax Returns are true, correct and
complete, except for such instances which individually or in the
aggregate would not have or reasonably be expected to have a
Material Adverse Effect. All Taxes of any Company Entity which
are (i) shown as due on such Tax Returns, (ii) otherwise due and.
payable or (iii) claimed or asserted by any taxing authority to
be due, have been paid, except for those Taxes being contested in
good faith and for which adequate reserves have been established
in the financial statements included in the SEC Reports. No
Company Entity knows of any proposed or threatened Tax claims or
assessments which, if upheld, would individually or in the
aggregate have a Material Adverse Effect or a Material Adverse
Change. Each Company Entity has withheld and paid over to the
relevant Taxing authority all Taxes required to have been
withheld and paid in connection with payments to employees,
independent contractors, creditors, stockholders or other third
parties, except for such Taxes which individually or in the
aggregate would not have a Material Adverse Effect or a Material
Adverse Change.
3.12. Employee Benefit Plans. None of the Company Entities
nor any ERISA Affiliate presently sponsors, maintains,
contributes to, nor are any of the Company Entities or any ERISA
Affiliate required to contribute to, nor has any Company Entity
or any ERISA Affiliate ever sponsored, maintained, contributed
to, or been required to contribute to any "employee pension
benefit plan" (within the meaning of Section 3(2) of ERISA) or
any "multiemployer plan" (within the meaning of Section 3(37) or
Section 4001(a)(3) of ERISA). The execution of, and performance
of the transactions contemplated in, this Agreement will not
(either alone or upon the occurrence of any additional or
subsequent events (i) constitute an event that will or may result
in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect
to any employee, (or) (ii) result in the payment of an "excess
parachute payment" (within the meaning of Section 280G(b)(1) of
the Code). Each "employee benefit plan" (as defined in Section
3(3) of ERISA) maintained or contributed to by the Company for
the benefit of its employees (an "Employee Plan") has been
maintained in accordance with its terms and all provisions of
applicable law. To the best knowledge of the Company, no
"prohibited transaction" (within the meaning of Section 4975 of
the Code or Section 406 of ERISA) has occurred with respect to
any Employee Plan.
3.13. Intellectual Property Rights. (a) Each of the Company
Entities owns the entire right, title and interest in and to the
Intellectual Property free and clear of any claims, liens or
encumbrances of any kind, except as would not have or would not
reasonably be expected to have a Material Adverse Effect. All
patent, copyright and trademark registrations with respect to the
Intellectual Property are valid, subsisting, enforceable and in
full force and effect, and all patent applications, copyright
applications and trademark applications with respect to the
Intellectual Property are pending and in good standing, all
without challenge of any kind and no aspect thereof is subject to
any outstanding order, ruling, decree, judgment or stipulation by
or with any governmental authority or arbitrator, in each case,
except as would not have or would not reasonably be expected to
have a Material Adverse Effect. The Company Entities have each
taken and are presently taking all steps necessary to prevent any
impairment of its right to make use
-8-
of the Intellectual Property, and the Company Entities have filed
all appropriate renewals, extensions, affidavits of continued use
and/or incontestability and has paid all fees associated therewith,
necessary to maintain the Intellectual Property, except where such
failure would not have or would not reasonably be expected to have a
Material Adverse Effect. There is no claim or demand of any Person
or dispute with any Person with respect to any Intellectual
Property, except where such claim or demand would not have and
would not reasonably be expected to have a Material Adverse
Effect.
(b) To the best of the Company's knowledge, no
Company Entity has interfered with, infringed upon or
misappropriated any intellectual property right of any third
party nor does any interference, infringement, or
misappropriation result from the development, use, or sale of any
of the Company Entities' products. No Company Entity has received
any charge, complaint, claim, demand or notice alleging any such
interference, infringement or misappropriation (including any
claim that it must license or refrain from using any intellectual
property right of any third party), nor do any of the Company
Entities have knowledge or any basis for any such claim. To the
best knowledge of the Company Entities, no third party has
interfered with, infringed upon, misappropriated or otherwise
used (whether or not such use constitutes infringement) any
Intellectual Property, except where such interference,
infringement or misappropriation would not have or would not
reasonably be expected to have a Material Adverse Effect.
(c) No Company Entity has disclosed any of its
proprietary information that, if disclosed; would materially
adversely affect its business other than (i) in the regular and
ordinary course of business, to employees and consultants having
"a need to know" the contents thereof in connection with the
performance of their duties to the Company, (ii) in connection
with entering into this Agreement, (iii) to governmental
authorities from time to time as requested or (iv) to other
Persons subject to agreements regarding the confidential
treatment thereof.
(d) All personnel, including employees, agents,
consultants and contractors, who have contributed to or
participated in the conception and development of the
Intellectual Property on behalf of the Company Entities either:
(1) have been party to a "work-for-hire" arrangement or agreement
with any of the Company Entities, in accordance with applicable
federal and state law, that has accorded any of the Company
Entities full, effective, exclusive, and original ownership of
all tangible and intangible property and rights thereby arising;
or (ii) have executed appropriate instruments of assignment in
favor of any Company Entity as assignee that have conveyed to the
Company Entities full, effective, and exclusive ownership of all
tangible and intangible property and rights thereby arising.
(e) As used in this Agreement, "Intellectual
Property" means all intellectual property owned, leased,
licensed, or used by the Company Entities, including without
limitation, (i) all worldwide inventions and discoveries (whether
patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent
applications and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions,
extensions and reexaminations thereof, (ii) all trademarks,
service marks, trade dress, logos, trade names and corporate
names,
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together with all translations, adaptations, derivations
and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, renewals and
derivative in connection therewith, (iii) all copyrightable
works, all copyrights and all applications, registrations and
renewals in connection therewith, (iv) all mask works and all
applications, registrations and renewals in connection therewith,
(v) all know-how, trade secrets and confidential business
information, whether patentable or unpatentable and whether or
not reduced to practice (including ideas, research and
development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, addresses,
phone numbers, pricing and cost information, and business and
marketing plans and proposals), (vi) all computer software and
computer programs, (vii) all other proprietary rights of any type
of description (regardless of whether the same have been formally
registered), (viii) all copies and tangible embodiments thereof
(in whatever form or medium) and (ix) all licenses, sublicenses
and agreements in connection with the foregoing.
3.14. Possession of Franchises, Licences, Etc. The Company
Entities possess all franchises, certificates, licenses, permits
and other authorizations from Governmental Entities and other
rights, free from burdensome restrictions, that are necessary for
the ownership, maintenance and operation of its respective
properties and assets, except for those the absence of which
would not individually or in the aggregate have or reasonably be
expected to have a Material Adverse Effect, and none of the
Company Entities is in violation of any thereof, except for
violations which individually or in the aggregate would not have
or reasonably be expected to have a Material Adverse Effect.
3.15. Compliance with Laws. The Company Entities are, and
at all times have been, in compliance with all applicable Laws
including, without limitation, those relating to protection of
the environment, employment opportunity and employee safety,
except where the failure to comply would not individually or in
the aggregate have or reasonably be expected to have a Material
Adverse Effect.
3.16. Conflicting Agreements and Charter Provisions. No
Company Entity is a party to any contract or subject to any
charter or by-law provision or any judgment or decree which
individually or in the aggregate has or is reasonably likely to
have a Material Adverse Effect. Neither the execution and
delivery of any of the Transaction Documents, nor the fulfillment
of or compliance with the terms and provisions hereof or thereof
will conflict with or result in a breach of the terms,
conditions, or provisions of, or give rise to a right of
termination under, or constitute a default under, or result in
any violation of, the certificate of incorporation or by-laws of
any of the Company Entities or any contract of any of the Company
Entities. Each of the Contracts of the Company Entities is a
legal and binding agreement of the Company Entity party thereto
enforceable in accordance with its terms and is in full force and
effect, except where such failure would not individually or in
the aggregate have or reasonably be expected to have a Material
Adverse Effect. Neither the Company nor its Subsidiaries is in
default under any outstanding indenture or other debt instrument
or with respect to the payment of the principal of or interest on
any outstanding obligations for borrowed money, or is in default
under any other Contracts, except for defaults under such other
Contracts which
-10-
would not individually or in the aggregate have or reasonably be
expected to have a Material Adverse Effect.
3.17. Subsidiaries. Except as set forth in Schedule 3.17,
the Company does not own, directly or indirectly, any capital
stock or other proprietary interest in any corporation, limited
liability company, association, trust, partnership, joint venture
or other entity. Except as set forth in Schedule 3.17, all of the
outstanding shares of capital stock of each Subsidiary are owned
by the Company. There are no outstanding options, warrants,
subscription rights, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into,
shares of any class of capital stock of any Subsidiary, or
Contracts by which any Subsidiary is or may become bound to issue
additional shares of its capital stock or options, warrants or
other rights to purchase or acquire any shares of its capital
stock. No Subsidiary has declared or paid any dividend or made
any other distribution of cash, stock or other property to its
stockholders or purchased or otherwise redeemed any shares of its
capital stock. Except as set forth in Schedule 3.17, there are no
stockholder agreements, voting trusts or other agreements or
understandings to which the Subsidiaries are a party or to which
the Subsidiaries are bound relating to the voting of any shares
of capital stock of any of the Subsidiaries.
3.18. Disclosure. Neither this Agreement nor any Schedule
hereto, nor any certificate furnished to Purchaser by or on
behalf of the Company in connection with the transactions
contemplated hereby, contains any untrue statement of a material
fact or, taken as a whole, omits to state a material fact
necessary in order to make the statements contained herein and
therein not misleading. There is no fact which the Company has
not disclosed to the Purchaser or its counsel in writing and of
which the Company is aware which materially and adversely affects
or which could reasonably be expected to materially and adversely
affect the Company or its Subsidiaries or the business, financial
condition, operations, property, or affairs of the Company or its
Subsidiaries or the ability of the Company or its Subsidiaries to
perform its obligations under this Agreement or any of the
Transaction Documents.
3.19. Offering of Securities. Assuming the accuracy of the
representations and warranties made by the Purchaser in Section
4, the offer and sale of the Company Shares as contemplated
hereby, the issuance and delivery of the shares of Company Common
Stock to the Purchaser upon the conversion of the Notes in
accordance with the terms of the Loan Agreement, and the offer
and sale of the TATRA Shares are each exempt from registration
under the Securities Act of 1933, as amended (the "Securities
Act") and under applicable state securities and "blue sky" laws,
as currently in effect. All shares of capital stock and other
securities issued by the Company prior to the Closing have been
issued in registered offerings or transactions exempt from
registration under the Securities Act, and all applicable state
securities or "blue sky" laws and the Company has not violated
the Securities Act or any applicable state securities or "blue
sky" laws in connection with the issuance of any shares of
capital stock or other securities prior to the Closing. The
Company has not offered any of its capital stock, or any other
securities, for sale to, or solicited any offers to buy any of
the foregoing from the Company, or otherwise approached or
negotiated with any other Person in respect thereof, in such a
manner as to require registration under the Securities Act or any
"blue sky" laws.
-11-
3.20. Brokers and Finders. Except as set forth in Schedule
3.20, no agent, broker, investment banker or other Person is or
will be entitled to any broker's fee or any other commission or
similar fee from the Company in connection with any of the
transactions contemplated by this Agreement. All amounts set
forth in Schedule 3.20 shall be paid by the Company.
3.21. Authorization and Issuance of the Company Shares. The
authorization, offer, issuance and delivery of the Company Shares
pursuant to this Agreement, have been duly authorized by all
requisite corporate action on the part of the Company, and when
issued and delivered in accordance with this Agreement, the
Company Shares will be validly issued and outstanding, fully paid
and nonassessable with no personal liability attaching to the
ownership thereof, free of any Encumbrances and not subject to
preemptive or similar rights of the stockholders of the Company
or others.
3.22. Corporate Status of SDC Prague. SDC Prague (x) is a
company duly established and validly existing under, and is in
good standing under, the laws of the Czech Republic, (y) has the
full power and authority to conduct its business and to own or
lease and operate its properties as and in the places where such
business is now conducted and such properties are now owned or
leased and operated, with such exceptions as, individually or in
the aggregate, have not had and are not reasonably likely to have
a material adverse effect on SDC Prague or Material Adverse
Effect. SDC Prague is qualified or otherwise authorized to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the properties owned or
held by it under lease or license or SDC Prague's business, as
presently conducted, requires such qualification or
authorization, except where the failure so to qualify or be
authorized, individually or in the aggregate, has not had and is
not reasonably likely to have a Material Adverse Effect or a
material adverse effect on SDC Prague.
3.23. Authorization of the Documents - SDC Prague. SDC
Prague has all right, power and authority to enter into the
Transaction Documents to which it is a party and to consummate
the transactions contemplated thereby. The execution and delivery
of each of the Transaction Documents to which it is a party and
compliance by SDC Prague with all the provisions of each of the
Transaction Documents and consummation by SDC Prague of the
transactions contemplated hereby and thereby (i) are within the
power and authority of SDC Prague; (ii) do not and will not
require the approval or consent of the stockholders of SDC
Prague; and (iii) have been authorized by all requisite
proceedings on the part of SDC Prague. This Agreement has been
duly executed and delivered by SDC Prague and constitutes the
valid and binding agreement of SDC Prague, enforceable in
accordance with its terms, except that (i) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
3.24. Prohibited Payments. No Company Entity has, directly
or indirectly, (a) made or agreed to make any contribution,
payment or gift to any government official, employee or agent
where either the contribution, payment or gift or the purpose
thereof
-12-
was illegal under the laws of any federal, state, local or foreign
jurisdiction, (b) established or maintained any unrecorded fund
asset for any purpose or made any false entries on its records for
any reason, (c) made or agreed to make any contribution, or
reimbursed any political gift or contribution made by any other
Person, to any candidate for federal, state, local or foreign
public office or (d) paid or delivered any fee, commission or any
other sum of money or item of property however characterized to
any finder, agent, government official or other party, in the
United States or any other country, which in any manner relates
to the assets, business or operations of the Company, which the
Company knows or has reason to believe to have been illegal
under any federal, state or local laws (or any rules
or regulations thereunder) of the United States or any other
country having jurisdiction.
SECTION 4. Representations and Warranties of Purchaser.
The Purchaser represents and warrants to the Company as of the
date hereof as follows.
4.1. Organization and Qualification. The Purchaser is a
corporation duly organized and existing in good standing under
the laws of the State of Delaware and has the requisite power to
own its property and to carry on its business as now being
conducted and as contemplated to be conducted. The Purchaser is
duly qualified to do business and in good standing in every
jurisdiction in which the nature of the respective business
conducted or property owned by it makes such qualification
necessary, except where the failure to so qualify would not
prevent consummation of the transactions contemplated hereby or
have a material adverse effect on the Purchaser's ability to
perform its obligations hereunder.
4.2. Due Authorization. The Purchaser has all right, power
and authority to enter into this Agreement and the Registration
Rights Agreement and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement
and the Registration Rights Agreement by the Purchaser and the
compliance by the Purchaser with all of the provisions of this
Agreement and the Registration Rights Agreement and consummation
by the Purchaser of the transactions contemplated hereby and
thereby to which the Purchaser is a party have been duly
authorized by all necessary corporate action on behalf of the
Purchaser. This Agreement and the Transaction Documents to which
the Purchaser is a party have been duly executed and delivered by
the Purchaser and constitute the valid and binding agreements of
the Purchaser enforceable in accordance with their terms, except
that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights, and (ii)
the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought.
4.3. Consents. Except as set forth on Schedule 4.3 or as
may be required by Czech Law or the rules and regulations of the
Securities Center, the Purchaser is not required to obtain any
consent, approval or authorization of, or to make any declaration
or filing with, any Governmental Entity or any other Person as a
condition to or in connection with the valid execution and
delivery of this Agreement or the Transaction
-13-
Documents to which the Purchaser is a party or the performance by
the Purchaser of its obligations in respect hereof and thereof
except for filings that may be required by the Exchange Act.
4.4. Conflicting Agreements. Neither the execution and
delivery of this Agreement or any other Transaction Document to
which the Purchaser is a party nor the fulfillment of or
compliance with the terms and provisions hereof or thereof will
conflict with or result in a breach of the terms, conditions or
provisions of, or give rise to a right of termination under, or
constitute a default under, or result in any violation of the
organizational documents of the Purchaser or any contract to
which the Purchaser or any of its respective properties is
subject.
4.5. Acquisition for Investment. The Purchaser is
acquiring the TATRA Shares and Company Shares (together, the
"Securities") being purchased by it for its own account for the
purpose of investment and not with a view to or for sale in
connection with any distribution thereof except in compliance
with all applicable securities Laws. The Purchaser acknowledges
that the Securities have not been registered under the Securities
Act or any state securities laws, and may be sold or disposed of
in the absence of such registration only pursuant to an exemption
from such registration and, in the case of the TATRA Shares, in
accordance with this Agreement.
4.6. Brokers or Finders. No agent, broker, investment
banker or other Person is or will be entitled to any broker's fee
or any other commission or similar fee from the Purchaser in
connection with any of the transactions contemplated by this
Agreement or the Transaction Documents for which the Company will
be responsible.
4.7. Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 promulgated under the
Securities Act.
SECTION 5. Buy/Sell; Corporate Governance; Management
Fees; Shareholders Agreement.
5.1. Buy/Sell. Purchaser and SDC Prague (each, a "Holder")
each agree that if either party proposes to cause a buy/sell of
their Contract Shares as provided for in this Section 5.1, such
Holder (a "Proposing Holder") shall first deliver to the other
Holder (such Holder, a "Receiving Holder") a written notice of
the Proposing Holder's intent and each Holder shall then engage,
at its own expense, within 20 days from the date of delivery of
such notice (the "Notice Date"), an independent appraiser, who
shall work with the other Holder's independent appraiser to
determine the appraised value (the "Appraised Value") of 100% of
the registered capital of TATRA. If either Holder shall fail to
appoint an independent appraiser within such 20 day period, then
the appraiser appointed by the Holder that does so appoint an
appraiser shall make the determination of the Appraised Value for
all purposes hereof. If after 30 days from the Notice Date, the
Holders' respective independent appraisers cannot agree on the
Appraised Value, then the Holders' respective independent
appraisers shall engage at the Holders' mutual expense a mutually
acceptable third independent appraiser, who shall conclusively
determine the Appraised Value. If the two appraisers cannot
mutually agree on a third appraiser within
-14-
10 days, the president of the American Arbitration Association
shall be immediately requested by either of the Holders to select
the third appraiser, who shall make such determination of Appraised
Value, within 20 days after being selected. Upon determination of
the Appraised Value, the Receiving Holder shall determine, within
30 days from the date that the Appraised Value is finally
determined, whether to (x) sell all of its Contract Shares or
(y) purchase all of the Proposing Holder's Contract Shares (the
"Buy/Sell Determination"), in either case at a price per Contract
Share based on the Appraised Value (the "Buy/Sell Purchase Price"),
and notify the Proposing Holder of its determination in writing and
the Proposing Holder will be bound by such determination. Such
purchase or sale shall be consummated within 90 days from the
date the Receiving Holder notifies the Proposing Holder of its
determination. If the Proposing Holder does not receive the
Receiving Holder's Buy/Sell Determination within 30 days from the
date the Appraisal Value is determined, the Proposing Holder may
make a Buy/Sell Determination, by which the Receiving Holder will
be bound. At the closing of the purchase or sale, as the case may
be, the purchasing Holder shall cause to be paid to the selling
Holder the Buy/Sell Purchase Price with respect to the Contract
Shares being sold, by wire transfer of immediately available
funds, against delivery by the selling Holder of duly executed
transfer instruments (in form and substance reasonably
satisfactory to the purchasing Holder) transferring such Holder's
Contract Shares free and clear of all Encumbrances.
5.2. Corporate Governance. Each Holder agrees that it will
take any and all actions to ensure that as soon as possible after
the Closing (1) the supervisory board of TATRA (the "Supervisory
Board") shall be composed of one labor representative and one
representative of Purchaser and Xxxxxx X. Xxxxx, (ii) Xxxxxx X.
Xxxxx becomes Chairman of the Supervisory Board, (iii) the
relevant organizational documents of TATRA are amended to provide
that any change in the composition of the Supervisory Board will
require the affirmative vote of two-thirds of the registered
capital of TATRA until such time as the Purchaser shall, directly
or indirectly, have a majority interest in the registered capital
of TATRA, (iv) any members of the Board of Directors of TATRA who
are required to be citizens of the Czech Republic shall be
appointed by the Supervisory Board, which shall be composed of
three members, one of whose members shall be Xxxxxx Srkal, and
(v) Xxxxxx Srkal becomes chairman of the Board of Directors of
TATRA.
5.3. Management Fees. Each Holder agrees that it will
cause TATRA to reimburse Purchaser and the Company for actual
management-related services performed by Purchaser or the
Company, as the case may be, in accordance with terms and
conditions to be agreed upon between each Holder as soon as
practicable after the date hereof. After the first anniversary of
the date hereof, the management fees contemplated by this Section
5.3 shall be paid in amounts to be agreed upon by the Holders.
5.4. Shareholders Agreement. After the Closing, the
Holders agree to cause TATRA to adopt, as soon as is reasonably
possible, a shareholders agreement (the "Shareholders Agreement")
containing terms substantially similar to those contained in this
Section 5. Once the Shareholders Agreement is executed and
delivered by the Holders and adopted in accordance with Czech
law, this Section 5 shall be deemed to be
-15-
amended to conform to the terms of the Shareholders' Agreement.
The Company agrees that it shall cause SDC Prague to fulfill its
obligations pursuant to this Section 5.
5.5. Further Purchases. (a) In the event that additional
shares of the registered capital of TATRA are purchased pursuant
to a tender offer made pursuant to Section 183b of the Czech
Commercial Code, each Holder agrees to take all action necessary
to maintain the same proportionate ownership in the registered
capital of TATRA as shall exist on the Closing Date (the "Status
Quo").
(b) In the event that SDC Prague or the Company or
any Affiliate of SDC Prague or the Company (an "Acquiring
Affiliate") acquires additional shares of the registered capital
of TATRA ("Additional TATRA Shares"), SDC Prague, the Company or
the Acquiring Affiliate shall offer such number of the acquired
shares to Purchaser as is necessary to maintain the Status Quo at
the same price that SDC Prague, the Company or the Acquiring
Affiliate paid for the acquired shares. For purposes of this
Section 5.5(b), any Additional TATRA Shares held by an Acquiring
Affiliate will be deemed to be owned by SDC Prague.
(c) The Purchaser agrees that it will not acquire
shares or other ownership interests of SDC Prague or TATRA (other
than pursuant to the Czech Pledges) if (x) after such
acquisition, the Company is unable to include results of TATRA,
on a consolidated basis, in its consolidated financial statements
under GAAP and (y) the Company has delivered to the Purchaser the
written opinion of KMPG to that effect.
5.6. Cooperation. Because the Purchaser will be a
shareholder of TATRA and a potential shareholder of SDC Prague,
the Purchaser has an economic incentive to encourage the growth
of the value of TATRA. As a result, the Purchaser will work with
TATRA in good faith to (a) explore reciprocal marketing
arrangements between TATRA and the Purchaser where selected
products of each company is marketed through the other's
distribution under a "TATRA-Terex" or similar badge, and (b)
explore in good faith the use of subsidiaries of TATRA as
component suppliers. With respect to the component supply
opportunity, in order for the TATRA Subsidiaries to receive the
Terex component supply orders, the TATRA Subsidiaries must be
competitive with alternative Purchaser suppliers with respect to
price and quality. The Purchaser will also explore the use of the
engineering and test capabilities of TATRA, further improving the
utilization of its personnel and capital resources. All
commercial transactions between TATRA and the Purchaser will be
on an arm's-length, negotiated basis.
SECTION 6. Certain Taxes. The Company agrees that it will
pay, and will hold the Purchaser harmless from, any and all
liability with respect to any transfer, transfer gains, stamp or
similar Taxes which may be determined to be payable in connection
with the execution and delivery and performance of this Agreement
or any modification, amendment or alteration of the terms or
provisions of this Agreement or any of the Transaction Documents.
-16-
SECTION 7. Legends; Exchanges; Lost, Stolen or Mutilated
Certificates. (a) Each certificate representing shares of
Securities shall bear a legend containing the following words:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT
OR SUCH LAWS."
The requirement that the first paragraph of the
foregoing legend be placed upon certificates evidencing any such
Securities shall cease and terminate upon the earliest of the
following events: (i) when such shares are transferred in a
public offering under the Securities Act, (ii) when such shares
are transferred pursuant to Rule 144 under the Securities Act or
(iii) when such shares are transferred in any other transaction
if the seller delivers to the Company an opinion of its counsel,
which counsel and opinion shall be reasonably satisfactory to the
Company, or a "no-action" letter from the staff of the
Commission, in either case to the effect that such legend is no
longer necessary in order to protect the Company against a
violation by it of the Securities Act upon any sale or other
disposition of such shares without registration thereunder. Upon
the occurrence of any event requiring the removal of a legend
hereunder, the Company, upon the surrender of certificates
containing such legend, shall, at its own expense, deliver to the
holder of any such shares as to which the requirement for such
legend shall have terminated, one or more new certificates
evidencing such shares not bearing such legend.
(b) Upon surrender by the Purchaser to the Company of
any certificate representing Common Stock purchased or acquired
hereunder, the Company at its expense will, within five business
days, issue in exchange therefor, and deliver to the Purchaser, a
new certificate or certificates representing such shares, in such
denominations as may be requested by the Purchaser. Upon receipt
of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of any certificate representing any
share of Common Stock purchased or acquired by the Purchaser
hereunder, and in case of any such loss, theft or destruction,
upon delivery of any indemnity agreement satisfactory to the
Company, or in any case of any such mutilation, upon surrender
and cancellation of such certificate, the Company at its expense
will, within five business days, issue and deliver to the
Purchaser a new certificate for such Common Stock of like tenor,
in lieu of such lost, stolen or mutilated certificate.
SECTION 8. Survival of Representations, Warranties,
Agreements and Covenants, Etc. All representations and
warranties hereunder shall be deemed to be made solely as of the
date of this Agreement and shall survive the Closing until each
of the Second Note and the Third Note shall have been redeemed,
or otherwise paid in full, other than the representations and
warranties made in the last two sentences of Section 3.3, which
shall survive indefinitely. None of the representations and
warranties shall be
-17-
affected by any knowledge possessed by, or investigation of the
subject matter thereof made by or on behalf of, the Purchaser. All
statements contained in any schedule to this Agreement or in any
certificate or other instrument delivered by the Company pursuant
to Section 2.3 shall constitute representations and warranties by
the Company under this Agreement. All covenants and agreements
contained herein shall survive indefinitely until, by their
respective terms, they are no longer operative.
SECTION 9. Purchaser Director.
9.1. Right of the Purchaser to Designate Director. At any
time after, and for so long as, the Purchaser holds at least
fifteen percent (15%) of the outstanding shares of Common Stock,
at the Purchaser's request, the Company shall cause one person
designated by the Purchaser to be nominated, and shall use its
best efforts to cause such person to be elected or appointed
(whether in connection with a newly created vacancy, removal or
otherwise) to the Board of Directors of the Company (the "Board")
effective, without any further action, within five days after
such person is designated by the Purchaser and at each annual
meeting of stockholders occurring thereafter (any person
designated by the Purchaser pursuant to this Section 9.1 from
time to time and elected or otherwise appointed, a "Purchaser
Designee"). In connection with any annual meeting of stockholders
at which the term of the Purchaser Designee is to expire, the
Company will take all necessary action to include the Purchaser
Designee as one of management's nominees for director and use the
same efforts to cause such Purchaser Designee to be elected to
the Board as are used with respect to management's other
nominees. In the event of any vacancy arising by reason of the
resignation, death, removal or inability to serve of any
Purchaser Designee, the Purchaser shall be entitled to designate
a successor to fill such vacancy for the unexpired term. The
Purchaser Designee shall be subject to the reasonable approval of
the Company except if the Purchaser Designee is a bona fide
employee of, or regular consultant to, Purchaser or any of its
Affiliates (in which case such approval shall not be necessary).
9.2. Board and Committee Notice Requirement. In addition
to any requirements specified in the By-Laws of the Company, the
Company shall notify the Purchaser Designee by telecopy of every
meeting (or action by written consent) of the Board and of any
committee of the Board, at least three days in advance of such
meeting (or distribution of written consents).
9.3. Reimbursement of Certain Expenses. The Company shall,
upon request therefor, promptly reimburse the Purchaser Designee
for all reasonable expenses incurred by him in connection with
his attendance at meetings of the Board or of committees of the
Board and any other activities undertaken by him in his capacity
as a director of the Company or any Subsidiary, as applicable to
the same extent as the Company would reimburse any other director
in respect of such activities. The foregoing shall be in addition
to, and not in lieu of (or in duplication of), any
indemnification or reimbursement obligations of the Company under
the Certificate of Incorporation Or By-Laws of the Company or by
Law.
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9.4. Directors' Indemnification; Insurance. (a) To the
extent commercially available, the Company shall at all times
maintain directors' and officers' liability insurance comparable
in terms and coverage to that maintained on the date hereof, and
the Purchaser Designee shall be covered under such insurance.
(b) The Certificate of Incorporation, By-Laws and
other organizational documents of the Company shall at all times,
to the fullest extent permitted by law, provide for
indemnification of, advancement of expenses to, and limitation of
the personal liability of, the members of the Board. Such
provisions may not be amended, repealed or otherwise modified in
any manner adverse to any member of the Board until at least six
years following the date that the Purchaser Designee is no longer
a member of the Board.
(c) The Purchase Designee is intended to be a third-
party beneficiary of the obligations of the Company pursuant to
this Section 9.4, and the obligations of the Company pursuant to
this Section 9.4 shall be enforceable by the Purchaser Designee.
SECTION 10. Standstill. (a) Except as otherwise
expressly provided in this Agreement or the Transaction Documents
or as specifically approved by a majority of the independent
directors (so long as such approval was not obtained by the
Purchaser in violation of this Agreement), during the period
commencing on the date hereof and continuing until December 31,
2003, Purchaser shall not, directly or indirectly, (i) by
purchase or otherwise, Beneficially Own, acquire, agree to
acquire or offer to acquire any Voting Securities or direct or
indirect rights or options to acquire Voting Securities other
than the Company Shares and shares of Common Stock issuable upon
conversion of the Notes, (ii) enter, propose to enter into,
solicit or support any merger or business combination or similar
transaction involving the Company or any of its Subsidiaries, or
purchase, acquire, propose to purchase or acquire or solicit or
support the purchase or acquisition of any portion of the
business or assets of the Company or any of its Subsidiaries
(except for proposals to purchase or acquire a non-material
portion of the assets of the Company or any of its Subsidiaries
that are not required to be publicly disclosed), (iii) initiate
or propose any securityholder proposal without the approval of
the Board granted in accordance with this Agreement or make, or
in any way participate in, any "solicitation" of "proxies" (as
such terms are used in the proxy rules promulgated by the
Commission under the Exchange Act) to vote, or seek to advise or
influence any Person with respect to the voting of, any Voting
Securities or request or take any action to obtain any list of
securityholders for such purposes with respect to any matter (or,
as to such matters, solicit any Person in a manner that would
require the filing of a proxy statement under Regulation 14A of
the Exchange Act), (iv) form, join or in any way participate in a
Group formed for the purpose of acquiring, holding, voting or
disposing of or taking any other action with respect to Voting
Securities that would be required under Section 13(d) of the
Exchange Act to file a statement on Schedule 13D with respect to
such Voting Securities, (v) deposit any Voting Securities in a
voting trust or enter into any voting agreement of arrangement
with respect thereto (other than this Agreement), (vi) seek
representation on the Board (other than as provided in this
Agreement), (vii) make any request to amend or waive any
provision of this Section 10, which request would require public
disclosure under applicable law, rule or regulation,
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(viii) disclose any intent, purpose, plan, arrangement or proposal
inconsistent with the foregoing (including any such intent,
purpose, plan, arrangement or proposal that is conditioned on or
would require the waiver, amendment, nullification or
invalidation of any of the foregoing) or take any action that
would require public disclosure of any such intent, purpose,
plan, arrangement or proposal, (ix) take any action challenging
the validity or enforceability of the foregoing or (x) assist,
advise, encourage or negotiate with any Person with respect to,
or seek to do, any of the foregoing.
(b) Nothing in this Section 10 shall (i) prohibit or
restrict the Purchaser from responding to any inquiries from any
stockholders of the Company as to the Purchaser's intention with
respect to the voting of any Voting Securities Beneficially Owned
by the Purchaser so long as such response is consistent with the
terms of this Agreement; (ii) restrict the right of Purchaser's
Designee to vote on any matter as such individual believes
appropriate in light of his or her duties as a director or
committee member or restrict the manner in which Purchaser's
Designee may participate in his or her capacity as a director in
deliberations or discussions at meetings of the Board or as a
member of any committee thereof; (iii) prohibit Purchaser from
Beneficially Owning Voting Securities issued as dividends or
distributions in respect of, or issued upon conversion, exchange
or exercise of, securities which the Purchaser is permitted to
Beneficially Own under this Section 10; (iv) prohibit any
officer, director, employee or agent of the Purchaser from
purchasing or otherwise acquiring Voting Securities so long as he
or she is not a member of a Group that includes the Purchaser or
is not otherwise acting on behalf of Purchaser or (v) prohibit
Purchaser from compliance with law, including any Commission
rules or regulations.
(c) Notwithstanding anything to the contrary set
forth in this Section 10, if, at any time following the
consummation of a bankruptcy proceeding involving the Company,
any Person (other than the Company) is permitted by law or the
bankruptcy court in which the proceeding is pending to propose a
plan of reorganization for the Company, the Purchaser shall be
permitted to propose a plan of reorganization for the Company;
provided, that no plan of reorganization shall be proposed by the
Purchaser prior to the expiration or termination of the
exclusivity period for the Company's filing of a plan of
reorganization, as such exclusivity period may be extended from
time to time (it being understood and agreed that the Purchaser
shall not object to any extension of the Company's exclusivity
period and shall not initiate or otherwise support any proceeding
to terminate or shorten the length of the Company's exclusivity
period).
SECTION 11. Indemnification.
11.1. General Indemnification. The Company shall indemnify,
defend and hold Purchaser and each of its respective officers,
directors, partners, managing directors, Affiliates, employees,
agents, consultants, representatives, successors and assigns
(each a "Purchaser Indemnitee") harmless from and against all
Losses incurred or suffered by a Purchaser Indemnitee arising out
of, relating to or resulting from (i) any breach of any of the
representations or warranties made by the Company in this
Agreement or in any certificate or other instrument delivered
pursuant hereto including, without limitation, the Transaction
Documents, and (ii) any breach of any of the covenants or
agreements made
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by the Company in this Agreement or in any certificate or other
instrument delivered pursuant hereto including, without limitation,
the Transaction Documents. Purchaser shall indemnify, defend and
hold the Company, its Affiliates, and each of their respective
officers, directors, employees, agents, consultants,
representatives, successors and assigns harmless against all
Losses arising from the breach of any of the covenants or
agreements of the Purchaser in this Agreement or in any certificate
or other instrument delivered pursuant hereto including, without
limitation, the Transaction Documents. Notwithstanding anything to
the contrary in this Agreement, (a) any and all payments by the
Company pursuant to this Section 11 with respect to breach of
representations or warranties shall be limited to, in the aggregate,
an amount equal to the aggregate principal amount of the Notes when
issued (the "Cap"), which Cap shall be reduced by and to the extent
that the Second Note and Third Note are redeemed or paid (other than
by way of conversion), and no indemnification payment by the Company
with respect to any such Losses otherwise payable hereunder shall
be payable until such time as all such Losses (exclusive of
attorneys' fees or other expenses of investigation or defense)
shall aggregate to more than $250,000, and then only to the
extent that such Losses, in the aggregate, exceed such amount;
provided that neither of the foregoing limitations on indemnity
shall apply to or count Losses arising with respect to (A) the
breaches of the representations and warranties in Section 3.11 as
they relate to Taxes or to (B) the matters set forth in Section
11.4; and (b) the Company shall not be liable for any Losses
incurred by the Purchaser as a result of a breach of the
representation and warranty set forth in the last two sentences
of Section 3.3, to the extent that such Losses are eliminated as
a result of a purchase price adjustment pursuant to Section 2.4.
In determining whether a Purchaser Indemnitee is entitled to
recover under this Section 11 for any Losses, the representations
and warranties of the Company shall not be deemed qualified by
any references to materiality contained therein and any breaches
thereof shall be determined without regard to whether such breach
constitutes a Material Adverse Effect or Material Adverse Change.
11.2. Indemnification Principles. For purposes of this
Agreement, "Losses" shall mean each and all of the following
items: claims, losses (excluding losses of earnings or similar
consequential or indirect losses), liabilities, obligations,
payments, damages (excluding indirect or similar damages),
charges, judgments, fines, penalties, amounts paid in settlement,
costs and expenses (including, without limitation, interest which
may be imposed in connection therewith, reasonable costs and
expenses of investigation, actions, suits, proceedings, demands,
assessments and reasonable fees, expenses and disbursements of
counsel, consultants and other experts); provided, however, that
for purposes of calculating Losses pursuant to this Section 11,
Losses of the Company shall be calculated net of any reduction to
the Tax liability of the Company actually realized as a result of
any such item giving rise to a Tax deduction to the Company. Any
indemnification payment by the Company to any Purchaser
Indemnitee pursuant to this Section 11 shall include an
additional amount so that the Purchaser Indemnitee does not,
directly or indirectly, bear any portion of such payment made by
the Company with respect to such payment on account of the
Purchaser Indemnitee's direct or indirect investment in the
Company. To the extent permitted by law, any payment by the
Company to Purchaser pursuant to this Section 11 shall be treated
for all income Tax
-21-
purposes as an adjustment to the price paid by the Purchaser for
the TATRA Shares and Company Shares pursuant to this Agreement.
11.3. Claim Notice. Any claim for indemnification pursuant
to this Section 11 must be made before the expiration of the
survival periods set forth in Section 8 of this Agreement. No
party shall be entitled to indemnification against a Loss arising
from the breach of any representations or warranties of any other
party unless the party seeking indemnification shall have given
to the party from whom indemnification is being sought a claim
notice relating to such Loss (a "Claim Notice") prior to
expiration of the representation or warranty upon which the claim
is based. The Claim Notice shall be given reasonably promptly
(but, in the case of a third party claim against the indemnified
party, within 15 days after the indemnified party has received
written notification of such claim) after the party seeking
indemnity becomes aware of the facts indicating that a claim for
indemnification may be warranted. Each Claim Notice shall specify
in reasonable detail (to the extent known) the nature of the
claim, the applicable provision(s) of this Agreement or other
instrument under which the claim for indemnity arises, and, if
possible, the amount or the estimated amount thereof. The failure
of any indemnified party to give a Claim Notice shall not relieve
the indemnifying party of its obligations under this Section 11,
except to the extent that the indemnified or indemnifying party
is actually materially prejudiced by failure to give such Claim
Notice. The indemnifying party may, through counsel of its own
choosing and reasonably satisfactory to the indemnified party,
assume the defense thereof or other indemnification obligation
with respect thereto; provided, however, that (a) any indemnified
party shall be entitled to participate in any such claim with
counsel of its own choice but at its own expense and (b) any
indemnified party shall be entitled to participate in any such
claim with counsel of its own choice at the expense of the
indemnifying party if representation of both parties by the same
counsel is otherwise inappropriate under applicable standards of
professional conduct or the indemnified party is otherwise
adversely affected thereby. In any event, if the indemnifying
party fails to take reasonable steps necessary to defend
diligently the action or proceeding within 20 days after
receiving the notice from such indemnified party that the
indemnifying party has failed to do so, the indemnified party may
assume such defense or other indemnification obligation and the
fees and expenses of its attorneys will be covered by the
indemnity provided for in this Section 11. Notwithstanding
anything in this Section 11 to the contrary, the indemnifying
party shall not, without the written consent of the indemnified
party, settle or compromise any pending or threatened action or
claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) or consent to
the entry of any judgment (1) which does not, to the extent that
an indemnified party may have any liability with respect to such
action or claim, include as an unconditional term thereof the
delivery by the claimant or plaintiff to the indemnified party of
a written release from all liability in respect of such action or
claim, (ii) which includes any statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any
indemnified party, or (iii) in any manner that involves any
injunctive relief against the indemnified party or may materially
and adversely affect the indemnified party. Notwithstanding
anything in this Section 11 to the contrary, the indemnified
party may not compromise or settle any claim without the prior
written consent of the indemnifying party (which consent shall
not be unreasonably
-22-
withheld or delayed), unless the sole relief granted is equitable
relief for which the indemnifying party would have no liability
or to which the indemnifying party would not be subject.
11.4. TATRA Indemnification. The Company agrees to
indemnify, defend and hold harmless the Purchaser Indemnitees
from and against all Losses incurred or suffered by a Purchaser
Indemnitee arising out of (x) any breach of any of the
representations, warranties or covenants made in the TATRA
Purchase Agreement, as in effect as of the date hereof, or (y)
any of the matters listed in Section 10.2 of the TATRA Purchase
Agreement, as in effect as of the date hereof. A copy of the
TATRA Purchase Agreement, as in effect as of the date hereof, is
attached hereto as Exhibit B. The Company agrees that, to the
extent any amounts are paid to the Company by the Seller (as
defined in the TATRA Purchase Agreement) pursuant to Article 10
of the TATRA Purchase Agreement, as in effect as of the date
hereof, the Company shall immediately pay an identical amount to
Purchaser; provided, however, that any payment made pursuant to
this sentence in respect of indemnification made pursuant to
Section 10.2(a) of TATRA Purchase Agreement shall be net of the
amount of any costs or expenses actually paid by the Company for
any remediation of the Original Environmental Liabilities (as
defined in the TATRA Purchase Agreement).
SECTION 12. Remedies. In case any one or more of the
covenants and/or agreements set forth in this Agreement shall
have been breached by the Company, the Purchaser may proceed to
protect and enforce its rights either by suit in equity and/or by
action at law, including, but not limited to, an action for
damages as a result of any such breach and/or an action for
specific performance of any such covenant or agreement contained
in this Agreement; provided, however, that the indemnification
provisions set forth in Section 11 hereof shall be the sole and
exclusive monetary damages remedy for any breach of this
Agreement or the Transaction Documents during the period ending
two years from the date hereof, other than for breaches involving
fraud or bad faith.
SECTION 13. Further Assurances. At any time or from time
to time after the Closing, the Company, on the one hand, and the
Purchaser, on the other hand, agree to cooperate with each other,
and at the request of the other party, to execute and deliver any
further instruments or documents and to take all such further
action as the other party may reasonably request in order to
evidence or effectuate the consummation of the transactions
contemplated hereby relating to the TATRA Purchase and to
otherwise carry out the intent of the parties hereunder.
SECTION 14. Successors and Assigns. This Agreement shall
bind and inure to the benefit of the Company, SDC Prague and the
Purchaser and the respective successors, assigns, heirs and
personal representatives of the Company, SDC Prague and the
Purchaser. The Company acknowledges that, subject to compliance
with applicable securities laws, Purchaser may transfer, all or
part of, the securities acquired by it hereunder and assign, all
or part of, its rights and obligations under this Agreement.
SECTION 15. Entire Agreement. This Agreement and the
other writings referred to herein or delivered pursuant hereto,
including the Transaction Documents, which form
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a part hereof contain the entire agreement among the parties
with respect to the subject matter hereof and supersede all
prior and contemporaneous arrangements or understandings with
respect thereto.
SECTION 16. Notices. All notices, requests, consents and
other communications hereunder to any party shall be deemed to be
sufficient if contained in a written instrument delivered in
person or sent by confirmed transmission by telecopy, or five (5)
days (or earlier if received) after deposit with a nationally
recognized overnight courier or first class registered or
certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or such
other address as may hereafter be designated in writing by such
party to the other parties:
if to the Company or SDC Prague, to:
SDC International, Inc.
000 X. Xxxxxxx, 0xx Xxxxx Xxxx,
X. Xxxx Xxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxx, Chairman/CEO
with a copy to:
Xxxxx & XxXxxxxx
0000 Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx Xxxxx, Esq.
and
if to Purchaser, to:
Terex Corporation
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X Xxxxx, Esq.
with copies to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
-24-
All such notices, requests, consents and other
communications shall be deemed to have been given when received.
SECTION 17. Amendments. The terms and provisions of this
Agreement may be modified or amended, or any of the provisions
hereof waived, temporarily or permanently, pursuant to the
written consent of the Company and the Purchaser.
SECTION 18. Counterparts. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof
shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
SECTION 19. Headings. The headings of the sections of
this Agreement have been inserted for convenience of reference
only and shall not be deemed to be a part of this Agreement.
SECTION 20. Nouns and Pronouns. Whenever the context may
require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of
names and pronouns shall include the plural and vice versa.
SECTION 21. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York without giving effect to the principles of
conflicts of law. Each of the parties hereto hereby irrevocably
and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and of the
United States of America, in each case located in the County of
New York, 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), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to its respective
address set forth in this Agreement, or such other address as may
be given by one or more parties to the other parties in
accordance with the notice provisions of Section 16, shall be
effective service of process for any litigation brought against
it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the
laying of venue of any litigation arising out of this Agreement
or the transactions contemplated hereby in the courts of the
State of New York or the United States of America, in each case
located in the County of New York, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in
any such court that any such litigation brought in any such court
has been brought in an inconvenient forum.
SECTION 22. Severability. If any term, provision,
covenant or restriction of this Agreement or any exhibit hereto
is held by a court of competent jurisdiction to be invalid, void
or unenforceable, (i) such provision shall be deemed to be
restated to reflect as nearly as possible the original intentions
of the parties in accordance with applicable law and (ii) the
remainder of the terms, provisions, covenants and restrictions of
this Agreement and such exhibits shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
-25-
SECTION 23. Definitions. For purposes of this Agreement:
"Affiliate" shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.
Any Person shall be deemed to "Beneficially Own" or to
be "Beneficially Owning" any securities (which securities shall
also be deemed "Beneficially Owned" by such Person) that such
Person is deemed to "beneficially own" within the meaning of Rule
13d-3 and 13d-5 under the Exchange Act as in effect on the date
of this Agreement; provided that, any Person shall be deemed to
Beneficially Own any securities that such Person has the right to
acquire, whether or not such right is exercisable immediately.
"Code" shall mean the Internal Revenue Code of 1986,
as amended.
"Contracts" shall mean all agreements, contracts,
leases, purchase orders, arrangements, commitments and licenses
to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary is bound.
"Contract Shares" means bearer shares in book-entry
form, each with a current nominal value of CZK 250, with such
nominal value being decreased to CZK 100, of the registered
capital of TATRA.
"Czech Pledges" has the meaning set forth in the Loan
Agreement.
"Encumbrance" means any security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or otherwise), charge against or
interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever that has the same
practical effect as a security interest, to secure payment of a
debt or performance of an obligation.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended and any regulations promulgated or
proposed thereunder.
"ERISA Affiliate" means each business or entity which
is a member of a "controlled group of corporations, under "common
control" or an "affiliated service group" with the Company within
the meaning of Section 414(b), (c) or (m) of the Code, or
required to be aggregated with the Company under Section 414(o)
of the Code, or is under "common control" with the Company,
within the meaning of Section 4001(a)(14) of ERISA.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, or any successor federal statute, and the rules
and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
"Governmental Entity" means any supernational,
national, foreign, federal, state or local judicial, legislative,
executive, administrative or regulatory body or authority.
-26-
"Group" has the meaning set forth in Section 13(d) of
the Exchange Act as in effect on the date of this Agreement.
"Knowledge" means the knowledge of a director or
executive officer (as such term is defined in Rule 16a-1 of the
Exchange Act) of the Company of a particular fact or matter after
reasonable inquiry.
"Law" includes any foreign, federal, state, or local
law, statute, ordinance, rule, regulation, order, judgment or
decree.
"Material Adverse Change" means a change, individually
or in the aggregate that has or may reasonably be expected to
have a Material Adverse Effect.
"Material Adverse Effect" means any event, change or
occurrence which has had, or is reasonably likely to have,
individually or together with any other event, change or
occurrence a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or the results
of operations of the Company and its Subsidiaries taken as a
whole.
"Person" means any individual, corporation, limited
liability company, partnership, limited partnership, syndicate,
person, trust, association or entity or government, political
subdivision, agency or instrumentality of a government.
"Registration Rights Agreement" has the meaning set
forth in the Loan Agreement.
"Subsidiary" means, with respect to any Person, any
company, corporation, partnership, limited liability company or
other entity (A) of which shares of capital stock or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other similar managing body
of such company, corporation, partnership, limited liability
company or other entity are at the time owned or controlled,
directly or indirectly, by such Person or (B) the management of
which is otherwise controlled, directly or indirectly, through
one or more intermediaries by such Person. TATRA shall be deemed
to be a Subsidiary of the Company.
"TATRA Purchase Agreement" means the Share Purchase
Agreement between Ceska Konsolidacni Agentura and the Company and
SDC Prague attached as Exhibit B hereto.
"Tax Return" means any return, report or similar
statement required to be filed with respect to any Tax (including
any attached schedules), including, without limitation, any
information return, claim for refund, amended return or
declaration of estimated Tax.
"Taxes" means all federal, state, local or foreign
taxes, including but not limited to income, gross receipts,
windfall profits, value added, severance, property, production,
sales, use, license, excise, franchise, employment, withholding
or similar
-27-
taxes, together with any interest, additions or penalties with
respect thereto and any interest in respect of such additions or
penalties.
"Voting Securities" means the Common Stock and any
other securities of the Company or any Subsidiary of the Company
(or any other corporation or joint stock company) which are then
entitled to vote generally in the election of directors of the
Company or such Subsidiary of the Company (or such other
corporation or joint stock company).
SECTION 24. Currency. The term "$" means United States
Dollars. The term "CZK" means Czech crowns, the official currency
of the Czech Republic.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have duly
executed this Stock Purchase Agreement as of the date first above
written.
SDC International, Inc.
By: /s/
----------------------------------------------
Name:
Title:
Terex Corporation
By: /s/
----------------------------------------------
Name:
Title:
SDC Prague, S.R.O.
By: /s/
----------------------------------------------
Name:
Title:
-29-
