TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement") is dated as of
March 30, 1998, by and between Harnischfeger Corporation, a Delaware corporation
("Harnco"), and Xxxxxx Material Handling, Inc., a Delaware corporation ("MMH").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Recapitalization Agreement dated
as of January 28, 1998, as amended to date, by and between MHE Investments,
Inc., Harnco and additional sellers named therein (the "Recapitalization
Agreement"), MHE Investments, Inc. will acquire a controlling interest in the
Companies;
WHEREAS, in connection therewith, MMH and Harnco desire that Harnco
provide the Companies located in the United States with certain transition
services as set forth herein; and
WHEREAS, capitalized terms used herein and not otherwise defined
herein have the meanings given to such terms in the Recapitalization Agreement;
NOW, THEREFORE, in consideration of the premises and covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Harnco and MMH agree as follows:
1. Transition Services. During the term of this Agreement as set
forth in Section 4 below (the "Transition Period"), Harnco shall provide, or
cause its Affiliates to provide, to the Companies and their Subsidiaries located
in the United States the services set forth on Annex A hereto for the periods of
time set forth on Annex A hereto, in each case in the manner and at a relative
level of service consistent in all material respects with that provided by
Harnco or its Affiliates to the Companies and their Subsidiaries immediately
prior to the date hereof. Such services shall be provided at the price set forth
on Annex A hereto. MMH shall not be responsible for any allocated software
amortization charges. Harnco and MMH shall each pay fifty percent (50%) of (i)
any amounts that are required to be paid to any licensors of software that is
used in connection with the provision of any services hereunder; and (ii) any
amounts that are required to be paid to any such licensors to obtain the consent
of such licensors to provide any of the services hereunder. Subject to the
immediately preceding sentence, Harnco shall use reasonable efforts to obtain
any consents that may be required from such licensors in order to provide any of
the services hereunder.
2. Billing and Payment. MMH shall promptly pay any bills and
invoices that it
receives from Harnco or its Affiliates for services provided pursuant to this
Agreement, subject to receiving appropriate support documentation for such bills
and invoices. Such charges will be billed at the end of each fiscal month during
the Transition Period. All invoices shall be paid not later than thirty (30)
days following receipt by MMH of Harnco's xxxx or invoice. Payments made after
thirty (30) days from receipt of bills or invoices shall bear interest at the
rate of 12% per annum.
3. General Intent. Harnco shall provide the transition services
which are set forth on Annex A hereto and such other transition assistance as
the parties may otherwise agree during the Transition Period. Nothing hereunder
shall be construed as a representation or warranty by Harnco that such services
shall be suitable or adequate for the conduct of the business of the Companies
by the MMH. Subject to Section 4 below, MMH shall cause the Companies and its
Subsidiaries to use reasonable commercial efforts to discontinue the use of such
assistance as soon as reasonably possible and (unless the parties otherwise
agree) in all events to discontinue such use with respect to each service
specified in Annex A hereto not later than the end of the period specified in
Annex A hereto (and any extensions thereto pursuant to Section 4) for the
provision of each such service.
4. Term of Agreement. Subject to Section 5, the term of this
Agreement shall commence on the Closing Date and shall continue with respect to
each service described on Annex A hereto for the term of the service period with
respect to such service set forth on Annex A hereto, provided that MMH may
extend any such service from month-to-month for a period not to exceed twelve
(12) months after the expiration of the "Service Period" for such Service as is
set forth in "Annex A", at a price to which Harnco and MMH have agreed
(following their reasonable good faith efforts to reach agreement). Failing such
agreement, no service term shall be extended. Notwithstanding the provisions of
the Separation Agreement, MMH shall be responsible for and shall reimburse
Harnco for the costs of setting up software interfaces and migrating data upon
the expiration or termination of the term of any service period hereunder.
5. Termination.
(a) Any service provided by Harnco or its Affiliates hereunder
may be terminated by MMH prior to the end of the period specified in Annex A
hereto upon twenty (20) days' prior written notice to Harnco. As soon as
reasonably practicable following receipt of any such notice, Harnco shall advise
MMH as to whether termination of such service will require the termination or
partial termination of, or otherwise affect the provision of, certain other
services specified in Annex A attached hereto because such other services cannot
be provided at the same cost or expense to Harnco following termination of such
service. If such is the case, MMH may withdraw its termination notice.
Otherwise, such termination shall be final.
(b) In addition, this Agreement may be terminated in its
entirety at any time as follows:
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(i) by the mutual written agreement of the parties
hereto;
(ii) at the election of Harnco (such election to be made
in writing), in the event of a material default by MMH of its
obligations hereunder, which shall not have been cured within
sixty (60) days after written notice given by Harnco to MMH
or, in the event of a breach of a payment obligation, thirty
(30) days after written notice given by Harnco to MMH; or
(iii) at the election of MMH (such election to be made
in writing), in the event of a material default by Harnco of
its obligations hereunder, which shall not have been cured
within sixty (60) days after written notice given by MMH to
Harnco.
(c) No termination of this Agreement, in whole or in part,
shall discharge, affect or otherwise modify in any manner the rights and
obligations of the parties hereto which have accrued or have been incurred prior
to such termination, including, the obligation of MMH to pay to Harnco any and
all amounts payable hereunder in respect of Services theretofore provided, or of
Harnco to resolve pursuant to the terms hereof any claims identified by MMH.
6. Assignment. This Agreement may not be assigned by either party
and shall not inure to the benefit of any third party without the prior written
consent of the other party, and any attempted assignment shall be null and void,
except that Harnco may assign this Agreement to any entity into which it merges
or reorganizes or to any current or future Harnco affiliate.
The foregoing notwithstanding, MMH (and any permitted successor or
assign) may assign or transfer its rights hereunder (except for any rights to
the services described at Annex A, Sections (B)(1) and (B)(3) or any other
services which would permit access to any proprietary information of Harnco or
its Affiliates, which shall terminate upon any assignment or transfer) as part
of a merger or consolidation with, or the sale, exchange or other transfer of
all or substantially all of its assets to, any Person other than an HII
Competitor (as defined below). As used in this Agreement, "HII Competitor" means
any Person which engages in a business or enterprise which competes with (i) any
business or enterprise conducted by HII or its Subsidiaries immediately after
the Closing or (ii) any other business or enterprise conducted by HII or its
Subsidiaries in the future (other than as a result of the acquisition of HII by
a third party). Harnco shall have the right to terminate this Agreement on 90
days prior written notice at any time after an HII Competitor (x) acquires more
than 50% of MMH's (or its direct or indirect parent's) voting stock (or more
than 50% of the voting stock of a permitted successor or assign) or (y)
acquires, directly or indirectly, the power to direct or cause the direction of
MMH's (or a permitted successor's or assign's) management or policies (whether
through ownership of
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securities or partnership or other ownership interests, by contract or
otherwise).
7. Confidentiality. Each party shall cause each of its Affiliates
and each of their officers, directors and employees to hold all information
relating to the business of the other party disclosed to it by reason of this
Agreement confidential and will not disclose any of such information to any
party unless legally compelled to disclose such information; provided, however,
that to the extent that any of them may become so legally compelled they may
only disclose such information if they shall first have used reasonable efforts
to, and, if practicable, shall have afforded the other party the opportunity to
obtain, an appropriate protective order or other satisfactory assurance of
confidential treatment for the information required to be so disclosed.
8. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Wisconsin, without regard
to its conflicts of law principles.
9. LIMITATION OF LIABILITY. HARNCO SHALL HAVE NO LIABILITY TO MMH
WITH RESPECT TO THE PROVISION OF SERVICES HEREUNDER FOR LOST PROFITS OR FOR
SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES OF ANY KIND WHETHER
ARISING IN CONTRACT, TORT, PRODUCT LIABILITY OR OTHERWISE, EVEN IF ADVISED OF
THE POSSIBILITY OF SUCH LOST PROFITS OR DAMAGES. IN NO EVENT SHALL HARNCO BE
LIABLE TO MMH FOR ANY DAMAGES WHATSOEVER IN EXCESS OF THE PRICE OF SERVICES AT
ISSUE PROVIDED HEREUNDER, OTHER THAN DAMAGES CAUSED BY HARNCO'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
In the event that any warranty of Harnco fails of its essential purpose,
or is held to be invalid or unenforceable for any reason, in consideration of
the other provisions of this Agreement, the parties understand and agree that
all limitations of liability for special, incidental, and consequential damages
will nevertheless remain in effect.
10. Dispute Resolution; Submission to Jurisdiction.
(a) In the event of any dispute or disagreement between Harnco and
MMH as to the interpretation of any provision of this Agreement (or the
performance of obligations hereunder), the matter, upon written request of
either party, shall be referred to representatives of the parties for decision,
each party being represented by a senior executive officer who has no direct
operational responsibility for the matters contemplated by this Agreement (the
"Representatives"). The Representatives shall promptly meet in a good faith
effort to resolve the dispute. If the Representatives do not agree upon a
decision within 30 calendar days after reference of the matter to them, each of
Harnco and MMH shall be free to exercise the remedies available to it under
applicable law, subject to clause (b) below.
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(b) Each of Harnco and MMH consents to the exclusive jurisdiction of
the federal courts of the Eastern District of Wisconsin for any legal action,
suit or proceeding arising out of or in connection with this Agreement, and
agrees that any such action, suit, or proceeding may be brought only in such
courts. If such forum is not available, MMH and Harnco consent to the exclusive
jurisdiction of the Milwaukee County Circuit Court for any such action, suit or
proceeding. Each of Harnco and MMH further waives any objection to the laying of
venue for any suit, action or proceeding in such courts. Each party agrees to
accept and acknowledge service of any and all process that may be served in any
suit, action or proceeding. Each party agrees that any service of process upon
it mailed by registered or certified mail, return receipt requested to such
party at the address provided in Section 12 below shall be deemed in every
respect effective service of process upon such party in any such suit, action or
proceeding. Each party agrees to waive any right it might have to a trial by
jury in any such suit, action or proceeding.
11. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
12. Notices. Unless otherwise indicated herein, all notices,
requests, demands or other communications to the respective parties hereto shall
be deemed to have been given or made when deposited in the mails, registered or
certified mail, return receipt requested, postage prepaid, or by means of
overnight delivery service when delivered to such service addressed or by
facsimile to the respective party at the following address:
To Harnco: Harnischfeger Corporation
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxxxx
Vice President, General Counsel and Secretary
To MMH: Xxxxxx Material Handling, Inc.
000 X. Xxxxxx Xxxx Xxxxxx
Xxx Xxxxx, XX 00000-0000
Attn: General Counsel
with a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxx, Xx.
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13. Modification, Nonwaiver, Severability. No alleged waiver,
modification or amendment to this Agreement or to Annex A attached hereto shall
be effective against either party hereto, unless in writing, signed by the party
against which such waiver, modification or amendment is asserted, and referring
specifically to the provision hereof alleged to be waived, modified or amended.
The failure or delay of either party to insist upon the other party's strict
performance of the provisions in this Agreement or to exercise in any respect
any right, power, privilege, or remedy provided for under this Agreement shall
not operate as a waiver or relinquishment thereof, nor shall any single or
partial exercise of any right, power, privilege, or remedy preclude other or
further exercise thereof, or the exercise of any other right, power, privilege,
or remedy; provided, however, that the obligations and duties of either party
with respect to the performance of any term or condition in this Agreement shall
continue in full force and effect.
14. Interpretation. The headings and captions contained in this
Agreement and in Annex A attached hereto are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. The
use of the word "including" herein shall mean "including without limitation."
15. No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
person.
16. Entire Agreement. This Agreement and the Recapitalization
Agreement contain the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, whether written or oral, relating to such subject
matter.
17. Relationship of Parties. Harnco shall perform all of the
services hereunder as an independent contractor and none of the parties shall
act or represent or hold itself out as having authority to act as an agent or
partner of the other parties, or in any way bind or commit the other party to
any obligations. Nothing contained in this Agreement shall be construed as
creating a partnership, joint venture, agency, trust or other association of any
kind, each party being individually responsible only for its obligations as set
forth in this Agreement.
18. Force Majeure. If Harnco is prevented from complying, either
totally or in part, with any of the terms or provisions of this Agreement by
reason of fire, flood, storm, strike, lockout or other labor trouble, any law,
order, proclamation, regulation, ordinance, demand or requirement of any
governmental authority, riot, war, rebellion or other causes beyond the
reasonable control of Harnco or other acts of God, then upon written notice to
MMH, the affected provisions and/or other requirements of this Agreement shall
be suspended during the period of such disability and Harnco shall have no
liability to MMH or any other party in
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connection therewith, other than using commercially reasonable efforts to
provide an alternative, if possible, and at the end of such suspended period to
continue to provide any affected services for the balance of the term and at the
price therefor as set forth in "Annex A".
19. Effectiveness. The parties' obligations under this Agreement are
conditional upon the closing of the Recapitalization Agreement (the "Closing"),
the occurrence of which is subject to various conditions set forth in the
Recapitalization Agreement. This Agreement shall become operative if and when
the Closing occurs and shall be null and void if the Closing does not occur for
any reason. Nothing in this Agreement shall constitute a representation or
promise that any party hereto shall proceed with the Closing or obligate any
party to do so.
* * * * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date and year first
set forth above.
HARNISCHFEGER CORPORATION
By: /s/ Xxxx Xxxxxxx
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Title: Assistant Secretary
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XXXXXX MATERIAL HANDLING, INC.
By: /s/ Xxxxx X. Xxxxx
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Title: Vice President
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