SHARE PURCHASE AND SALE AGREEMENT
AMONG
HOLLAND LIFT INTERNATIONAL B.V.
as Seller,
PARTEK CARGOTEC HOLDING NETHERLANDS B.V.
as Buyer,
and for purposes of Article 9 only,
XXXX B.V.
Dated as of July 20, 2000
SHARE PURCHASE AND SALE AGREEMENT
SHARE PURCHASE AND SALE AGREEMENT ("Agreement"), dated as of July 20,
2000, among HOLLAND LIFT INTERNATIONAL B.V., a company incorporated under the
laws of the Netherlands ("Seller"), PARTEK CARGOTEC HOLDING NETHERLANDS B.V., a
company incorporated under the laws of the Netherlands ("Buyer"), and for
purposes of Article 9 only, XXXX B.V., a company incorporated under the laws of
The Netherlands ("Xxxx").
RECITAL
WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase
from Seller, all of the issued and outstanding shares (the "Terex B.V. Shares")
in the capital of Terex B.V., a company incorporated under the laws of the
Netherlands ("Terex B.V.");
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE OF TEREX B.V. SHARES
1.1 Sale and Purchase of Terex B.V. Shares. Subject to the terms and
conditions of this Agreement, effective at the Closing Time (as defined in
Section 3.1), Seller shall sell, assign and transfer to Buyer, and Buyer shall
purchase from Seller, the Terex B.V. Shares for the consideration specified in
Section 2.1.
ARTICLE 2
PURCHASE PRICE
2.1 The Purchase Price. The aggregate purchase price for the Terex B.V.
Shares shall be Twenty-Four Million Six Hundred Forty-One Thousand U.S. Dollars
($24,641,000 U.S.) (the "Terex B.V. Purchase Price"), subject to adjustment
pursuant to Section 2.3.
The Terex B.V. Purchase Price shall be payable as provided in Section 2.2.
2.2 Payment of Terex B.V. Purchase Price. The Terex B.V. Purchase Price
shall be paid in U.S. dollars no later than 2:00 p.m. (United States eastern
standard time) on the Closing Date (as defined in Section 3.1) in the following
manner: (a) an amount equal to Twenty-Four Million Four Hundred Seventy-One
Thousand U.S. Dollars ($24, 471,000 U.S.) shall be paid by wire transfer of
immediately available funds to an accounts or accounts designated in writing by
Seller, and (b) an amount equal to One Hundred Seventy Thousand U.S. Dollars
($170,000 U.S.) shall be paid by wire transfer of immediately available funds
into escrow in accordance with the terms of the Escrow Agreement (as defined in
Section 11.9).
2.3 Purchase Price Adjustment.
(a) On or before sixty (60) days following the Closing Date,
Buyer shall prepare and deliver to Seller a consolidated balance sheet of Terex
B.V. and its Subsidiaries (as defined in Section 4.1(b)) as of the close of
business on the Closing Date, which balance sheet shall be reported on by
Buyer's independent public accountants as having been properly prepared in
accordance with the principles set forth on Exhibit A attached hereto (such
principles are referred to herein as "Closing GAAP", and such consolidated
balance sheet referred to herein as the "Closing Date Balance Sheet").
(b) During the 45-day period following Seller's receipt of the
Closing Date Balance Sheet, Seller and its independent public accountants will
be permitted to review the working papers of Buyer and Buyer's independent
public accountants relating to the Closing Date Balance Sheet and any financial
records relevant to the preparation of the Closing Date Balance Sheet. Buyer and
Buyer's independent public accountants will also be available from time to time
to discuss questions raised by Seller and its independent public accountants.
The Closing Date Balance Sheet shall become final and binding upon the parties
on the 45th day following receipt thereof by Seller, unless Seller gives written
notice of its disagreement ("Notice of Disagreement") to Buyer prior to such
date. If Seller gives a Notice of Disagreement to Buyer, then within 15 days
thereafter, Seller shall give written notice (the "Second Notice") to Buyer
specifying in reasonable detail the nature of, and reasons for, any disagreement
so asserted. If a Notice of Disagreement is received by Buyer in a timely
manner, then the Closing Date Balance Sheet (as revised in accordance with
clause (x) or (y) below) shall become final and binding upon the parties on the
earlier of (x) the date the parties hereto resolve in writing any differences
they have with respect to any matter specified in the Notice of Disagreement or
(y) the date any disputed matters are finally resolved in writing by the
Arbitrator (as defined in Section 2.3(c)).
(c) During the 30-day period following the delivery of a
Second Notice, Seller and Buyer shall seek in good faith to resolve any
differences which they may have with respect to any matter specified in the
Notice of Disagreement. At the end of such 30-day period, Seller and Buyer shall
submit to an arbitrator (the "Arbitrator") for review and resolution any and all
matters which remain in dispute. The Arbitrator shall be Ernst & Young LLP, or
if such firm is unable or unwilling to act, such other person, entity or firm as
shall be agreed upon by Buyer and Seller. The Arbitrator shall render a decision
resolving the matters submitted to the Arbitrator within 30 days of receipt of
such submission. The cost of any arbitration (including the fees of the
Arbitrator) pursuant to this Section 2.3(c) shall be paid in the manner
specified in Section 11.10.
(d) Subject to the Materiality Thresholds (as defined in
Section 11.9), the Terex B.V. Purchase Price shall be subject to adjustment in
the event that the Relevant Closing Balance Sheets (as defined in Section 11.9)
indicate that Total Equity (as defined in Section 11.9) as of the close of
business on the day before the Closing Date is greater than or less than
Thirteen Million Seven Hundred Eighty-Seven Thousand U.S. Dollars ($13,787,000
U.S.) (such amount, which is subject to adjustment pursuant to Section 6.16, is
referred to herein as the "Reference Amount"). The adjustment to the Terex B.V.
Purchase Price contemplated by this Section 2.3(d), if any, shall be made in the
manner set forth in Section 11.10.
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ARTICLE 3
CLOSING
3.1 Closing.
(a) The closing of the sale and purchase of the Terex B.V.
Shares provided for in Article 1 (the "Closing") shall take place at the offices
of Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (or at such other place as the parties may agree in
writing), beginning at 10:00 a.m. on the later of (i) the 30th day after the
date of this Agreement (or the 45th day if prior to expiration of such 30-day
period, Seller receives a written notice from Buyer stating that despite Buyer's
good faith diligent efforts to complete its confirmatory due diligence (as
described in Section 6.2(a)), Buyer has been unable to complete such
confirmatory due diligence within such 30-day period, or (ii) the fifth business
day after the satisfaction or waiver of the conditions specified in Article 7.
The date on which the Closing is held is referred to hereinafter the "Closing
Date." The effective time of the Closing (the "Closing Time") shall be 11:59
p.m. Dutch local time on the Closing Date.
(b) At the Closing, (i) a notarial deed of transfer shall be
executed in accordance with the laws of the Netherlands (in form reasonably
satisfactory to Buyer), pursuant to which the transfer of the Terex B.V. Shares
from Seller to Buyer will occur, and (ii) Buyer shall deliver to Seller and the
Escrow Agent the Terex B.V. Purchase Price in the manner set forth in Article 2.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
4.1 Organization.
(a) Seller is a corporation duly incorporated and validly
existing under the laws of the Netherlands with all requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its business as now being conducted.
(b) Section 4.1 of the disclosure statement prepared by Seller
and attached hereto (the "Disclosure Statement") sets forth a correct and
complete list of each subsidiary of Terex B.V. (individually, a "Subsidiary,"
and collectively, the "Subsidiaries"), the jurisdiction in which each such
Subsidiary was organized and the percentage ownership of such Subsidiary by
Terex B.V. Xxxx has no subsidiaries.
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(c) Terex B.V. and each Subsidiary is a corporation duly
organized and validly existing under the laws of its jurisdiction of
organization with all requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its business as now being
conducted. Section 4.1 of the Disclosure Statement sets forth a list of all
officers and directors of Terex B.V. and each Subsidiary, as of the date of this
Agreement.
4.2 Authorization. The execution, delivery and performance of this
Agreement by Seller has been duly authorized by all requisite corporate action
of Seller. This Agreement constitutes the valid and binding obligation of
Seller, enforceable against it in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
in general and subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
4.3 Corporate Records. True and correct copies of the formation
documents of Terex B.V. and each Subsidiary have previously been, or will be
prior to Closing, delivered to Buyer.
4.4 Consents of Third Parties. Except as set forth in Section 4.4 of
the Disclosure Statement, the execution, delivery and performance of this
Agreement by Seller will not (a) violate or conflict with the articles of
association or by-laws or other organizational documents, as the case may be, of
Seller, Terex B.V. or any Subsidiary; (b) conflict with, or result in the breach
of, termination of, or give rise to any Lien (as defined in Section 4.6) or
constitute a default under, any material agreement, understanding or commitment
to which Seller, Terex B.V., or any Subsidiary is a party or by which Seller,
Terex B.V., or any Subsidiary is bound; or (c) constitute a violation of any
law, regulation, rule, judgment or decree applicable to Seller, Terex B.V., or
any Subsidiary, other than, in the case of clauses (b) and (c) of this sentence
which, individually or in the aggregate, would not have a material adverse
effect on the business or properties of Terex B.V. No consent, approval or
authorization of any governmental authority is required on the part of Seller,
Terex B.V., or any Subsidiary in connection with the execution, delivery and
performance of this Agreement, except (a) as set forth in Section 4.4 of the
Disclosure Statement and (b) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not have a material adverse effect on the business or properties of Terex
B.V.
4.5 Capitalization.
(a) Section 4.5 of the Disclosure Statement sets forth the
authorized share capital, if applicable, of Terex B.V. and each Subsidiary and
the number of issued and outstanding shares of Terex B.V. and each Subsidiary.
(b) All of the outstanding share capital of Terex B.V. is
owned legally and beneficially by Seller. All of the outstanding share capital
of Xxxx is owned legally and beneficially by Terex B.V. There are no outstanding
options, warrants, calls, subscriptions or other rights (including, without
limitation, preemptive rights), agreements or commitments obligating Terex B.V.
or any Subsidiary to issue, transfer or sell any of the equity securities, or
any outstanding securities convertible into, exchangeable for or carrying the
right to acquire, equity securities of Terex B.V. or any Subsidiary. There are
no restrictions of any kind on the transfer of the Terex B.V. Shares.
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4.6 Ownership of Shares. Seller is, and at the Closing Time will be,
the legal and beneficial owner of the Terex B.V. Shares, in each case free and
clear of any claim, lien, security interest, right of first refusal, option to
purchase, or other encumbrance (collectively, "Liens"), except as disclosed in
Section 4.6 of the Disclosure Statement. At the Closing Time, Seller will
transfer and deliver to Buyer legal and valid title to all of the Terex B.V.
Shares, free and clear of all Liens other than Liens created or suffered by
Buyer and those listed in Section 4.6 of the Disclosure Statement.
4.7 Title to Assets. Each of Terex B.V. and Xxxx has good title,
legally and beneficially, to all of its respective assets, free and clear of any
Liens, other than (a) Liens created by Buyer, (b) Liens disclosed in Sections
4.7 or 4.16 of the Disclosure Statement, (c) with respect to Owned Property,
reflected in any title insurance policies listed in Section 4.16 of the
Disclosure Statement (true and correct copies of which have been made available
to Buyer), (d) with respect to Owned Property, imperfections of title,
easements, pledges, charges, restrictions and encumbrances, including, without
limitation, survey matters, and Liens, if any, that do not materially detract
from the value of the property subject thereto or materially interfere with the
manner in which it is currently being used, and (e) Taxes (as defined in Section
4.10) and general and special assessments not in default and payable without
penalty or interest, provided that such Taxes and general and special
assessments are accrued in accordance with Closing GAAP on the Closing Date
Balance Sheet.
4.8 Financial Statements. Seller has delivered to Buyer copies of the
following financial statements (collectively, the "Financial Statements"): (a)
unaudited balance sheet and related income statement of Terex B.V. and the
Subsidiaries as of and for the year ended December 31, 1999 (collectively, the
"1999 Financial Statements"); and (b) the unaudited balance sheet and related
income statement of Terex B.V. and the Subsidiaries as of and for the four
months ended April 30, 2000 (the unaudited balance sheet as of December 31, 1999
called, the "1999 Balance Sheet", and the unaudited balance sheet for the
four-month period ended April 30, 2000 called, the "Interim Balance Sheet").
True and correct copies of the Financial Statements are set forth in Section 4.8
of the Disclosure Statement. The Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied and maintained throughout the periods indicated (except that the
Financial Statements have been prepared without footnote disclosures) and fairly
present in all material respects the financial position and results of
operations for the entities described therein at the dates and for the periods
indicated therein (subject in the case of Financial Statements as of April 30,
2000 to normal year-end adjustments consistent with the 1999 Financial
Statements). There have been no material changes to the accounting principles
used in the financial statements of Terex B.V. since November 11, 1999, other
than those set forth in Section 4.8 of the Disclosure Statement.
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4.9 Absence of Certain Changes; Liabilities.
(a) Except as set forth in Section 4.9 of the Disclosure
Statement, since the date of the 1999 Balance Sheet, Terex B.V. has not suffered
any material adverse change in its assets, results of operations or financial
condition.
(b) To the knowledge of Seller, there are no liabilities or
obligations of Terex B.V. or any Subsidiary of a kind required in accordance
with GAAP to be reflected in the Financial Statements which are not so
reflected, except (i) liabilities reflected in the 1999 Financial Statements and
Interim Balance Sheet, (ii) liabilities or obligations of Terex B.V. or a
Subsidiary which arose after the date of the 1999 Balance Sheet in the ordinary
course of business, and (iii) liabilities described in Section 4.9 of the
Disclosure Statement.
(c) Since the date of the 1999 Balance Sheet, Terex B.V. and
each Subsidiary has operated its business in the ordinary course and consistent
with past practice, and except as set forth in Section 4.9 of the Disclosure
Statement, there has not been:
(i) any damage, destruction or loss (whether or not
covered by insurance) that has had a material adverse effect
on the business or properties of Terex B.V. and the
Subsidiaries taken as a whole;
(ii) any issuance of an option to purchase, or other
right to acquire, capital stock or any security or other
instrument convertible into capital stock of any class of
Terex B.V. or any Subsidiary;
(iii) any issuance of shares of capital stock
(including treasury shares) of Terex B.V. or any Subsidiary;
(iv) any material transaction by Terex B.V. or any
Subsidiary other than in the ordinary course of business or
as otherwise permitted or contemplated by this Agreement;
(v) any agreement to grant any severance or termination
pay to an executive officer or director of Terex B.V. or any
Subsidiary which shall not be paid prior to the Closing Time
or any increase in compensation or benefits payable under
existing employment agreements or severance or termination
pay policies with respect to any employees of Terex B.V. or
any Subsidiary other than (A) increases or bonuses in the
ordinary course of business and consistent with the past
practice of Terex Corporation, (B) increases or grants
required by contracts disclosed pursuant hereto or by
applicable law, or (C) increases, agreements and bonuses
disclosed in Sections 4.13 and 4.14 of the Disclosure
Statement;
(vi) any employment, bonus, deferred compensation, or
severance agreement entered into with any of the directors,
officers or other employees of Terex B.V. or any Subsidiary,
other than employment agreements terminable at will and
other than as disclosed in Section 4.13 of the Disclosure
Statement;
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(vii) any amendment of the articles of association or
by-laws or other organizational documents, as the case may
be, of Terex B.V. or any Subsidiary;
(viii) any indebtedness incurred by Terex B.V. or any
Subsidiary for money borrowed, other than under existing
lines of credit in the ordinary course of business;
(ix) any intercompany loans or payments, dividends or
transfers of assets by Terex B.V. or any Subsidiary
inconsistent with Terex Corporation's past practice and the
overall corporate cash and tax management practices of Terex
Corporation, or otherwise outside the ordinary course of
business;
(x) any single capital expenditure or series of related
capital expenditures by Terex B.V. or any Subsidiary in
excess of $100,000 U.S. other than in the ordinary course of
business;
(xi) any material change or modification of the
accounting methods or practices of Terex B.V. or any
Subsidiary or of the banking arrangements of Terex B.V. or
any Subsidiary;
(xii) any declaration or payment made of dividends or
other distributions to Terex B.V.'s shareholders or upon or
in respect of any of its shares of capital stock, or
redemption or obligation to redeem any of its shares of
capital stock or other securities, except those consistent
with the past practice of Terex Corporation and overall
corporate cash and tax management practices of Terex
Corporation;
(xiii) with respect to the five largest non-United
States customers of Terex B.V. for the period beginning on
the date of the closing of the transactions contemplated by
that certain Asset Purchase and Sale Agreement dated as of
September 15, 1999 by and among Teledyne, Inc., Teledyne
Princeton, Inc. Xxxx USA, Inc., Teledyne GmbH and Terex
Corporation (the "1999 Closing") and ending on the date of
this Agreement, all of which customers are listed in Section
4.9(c)(xiii) of the Disclosure Statement, Terex B.V. has not
received oral or written notice or notices of any dispute or
termination of relationship which individually or in the
aggregate would have a material adverse effect on the
business or properties of Terex B.V.;
(xiv) with respect to the five largest vendors of Terex
B.V. for the period beginning on the date of the 1999
Closing and ending on the date of this Agreement, each of
which are listed in Section 4.9(c)(xiv) of the Disclosure
Statement, Terex B.V. has not received oral or written
notice or notices of any dispute or termination of
relationship which individually or in the aggregate would
have a material adverse effect on the business or properties
of Terex B.V.;
(xv) any acceleration or delay in the manufacture,
shipment or sale of inventory, the collection of accounts
receivable or notes receivable, the payment of accounts
payable or notes payable, the sale of accounts receivable,
or any other action outside the ordinary course of business,
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which acceleration, delay or other action is inconsistent
with past practice or is intended to artificially increase
the amount of cash in Terex B.V. and/or any Subsidiary, or
artificially increase Xxxx Net Equity (as defined in Section
11.9) as calculated from the Closing Date Balance Sheet; and
(xvi) any agreement or commitment by Terex B.V. or any
Subsidiary to do any of the foregoing.
4.10 Taxes. Except as disclosed in Section 4.10 of the Disclosure
Statement, and except with respect to Taxes (as defined in this Section 4.10) or
Tax Returns (as defined in this Section 4.10) which individually involve $1,000
or less, as of the date hereof, (a) all domestic and foreign Tax returns,
reports, information returns and similar documents required to be filed with
respect to Terex B.V. and each Subsidiary (collectively, the "Tax Returns") have
been filed in a timely manner (taking into account all extensions of due dates),
and all Taxes shown as due thereon have been paid; (b) there is no agreement,
waiver or consent providing for an extension of time with respect to the
assessment of any Tax or deficiency against Terex B.V. or any Subsidiary, and
(c) no deficiencies for any income taxes in respect of Terex B.V. or any
Subsidiary have been asserted in writing against Terex B.V. or any Subsidiary,
which remain unpaid. To the knowledge of Seller, except with respect to Taxes
which individually involve $1,000 or less, the Tax Returns reflect all Taxes due
and payable with respect to the periods covered thereby and there are no other
Tax liabilities, deficiencies, interest or penalties payable by or asserted
against Terex B.V. Except as set forth in Section 4.10 of the Disclosure
Statement, accruals for Taxes shown on the 1999 Balance Sheet cover liabilities
for all Taxes attributable to periods ending on or before such date in
accordance with GAAP, and since such date Terex B.V. has not incurred any
liability for Taxes that is unusual in nature or amount in any material respect.
No authority in a jurisdiction where Terex B.V. or any Subsidiary does not file
Tax Returns has made a written claim or given written notice that Terex B.V. or
such Subsidiary, as the case may be, is subject to taxation by that
jurisdiction.
The term "Tax" or "Taxes," as used in this Agreement, means
all forms of taxation, duties, imposts and levies whether of the Netherlands or
elsewhere, including, without limitation, income tax, corporation tax,
corporation profits tax, advance corporation tax, capital gains tax, capital
acquisitions tax, dividend withholding tax, residential property tax, wealth
tax, value added tax, customs and other import and export duties, excise duties,
stamp duty, capital duty, social insurance, social welfare, employment related
levies or taxes or other similar contributions in other amounts corresponding
thereto whether payable in the Netherlands or elsewhere and any charges, fees,
levies or other assessments, interest, surcharge, penalty or fine required to be
paid in connection therewith. In this Agreement, any reference to a liability
with respect to any Tax shall include (x) a liability to make payments of, or in
respect of, or in relation to, such Tax (including any penalties, interest or
the like); (y) the loss, reduction, disallowance, use or set-off against income,
profits or gains earned, accrued or received on or before the Closing of any
relief which (i) is available or would (were it not for the said loss,
reduction, disallowance, use or set-off) have been available to Terex B.V.
and/or any Subsidiary following the Closing and which has been taken into
account in computing any provision for Tax which is reflected in the Closing
Date Balance Sheet (or which, but for the presumed availability of such relief,
would have been reflected in the Closing Date Balance Sheet) or (ii) which was
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treated as an asset of Terex B.V. and/or any Subsidiary or otherwise noted in
the Closing Date Balance Sheet; and (z) set-off of any Buyer's relief and
circumstances where, but for such use or set-off, Terex B.V. and/or any
Subsidiary would have had a liability with respect to Taxes in respect of which
Buyer would have been able to make a claim against Seller under this Agreement.
4.11 Material Contracts, etc. Buyer has been provided access to, or
correct and complete copies of, and Section 4.11 of the Disclosure Statement
sets forth a list, as of the date of this Agreement, of (a) all commitments and
agreements for the purchase of any materials, supplies, machinery, capital
assets or services that involve an expenditure by Terex B.V. or any Subsidiary
of more than $50,000 U.S. (or the equivalent amount of any other currency) for
any one commitment or agreement or series of related commitments or agreements,
other than such commitments or agreements entered into in the ordinary course
consistent with past practice and which can be canceled by Terex B.V. or such
Subsidiary, as the case may be, without liability, premium or penalty on 90
days' or less notice; (b) all personal property leases under which Terex B.V. or
any Subsidiary is either lessor or lessee and which involve annual payments or
receipts of $50,000 U.S. (or the equivalent amount of any other currency) or
more; (c) all other orders, leases, commitments, agreements and instruments
(including, but not limited to, mortgages, indentures and other agreements and
instruments relating to indebtedness for borrowed money) to which Terex B.V. or
any Subsidiary is a party or by which it or its properties are bound that
involve annual payments or receipts by Terex B.V. or any Subsidiary in any
12-month period and of more than $50,000 U.S. (or the equivalent amount of any
other currency); (d) all government contracts to which Terex B.V. or any
Subsidiary is a party; (e) any joint venture, partnership or similar agreements
to which Terex B.V. or any Subsidiary is a party; (f) contracts limiting the
right of Terex B.V. or any Subsidiary to compete or do business in any
territory; (g) contracts relating to loans to officers, directors or Affiliates
(as defined in Section 11.9) of Terex B.V. or any Subsidiary; (h) contracts and
arrangements providing for any severance, change-of-control, or stay in place
payment, whether or not entered into as a result of the transactions
contemplated by this Agreement; (i) contracts relating to loans to officers,
directors or Affiliates of Terex B.V. or any Subsidiary to the extent not listed
in Section 4.13 of the Disclosure Statement; (j) all license agreements,
assignments or contracts (whether as licensor, licensee, assignor, assignee or
otherwise) relating to any of the Intellectual Property Rights (as defined in
Section 4.17) to the extent not listed in Section 4.17 of the Disclosure
Statement; (k) any contract or agreement to which Terex B.V. or any Subsidiary
is a party which relates to clean-up, abatement, or any other actions in
connection with the remediation of any liabilities relating to Hazardous
Materials to the extent not listed in Section 4.18 of the Disclosure Statement;
(l) any other agreement that is material to the business and properties of Terex
B.V. or any Subsidiary which involves the payment or receipt of consideration in
excess of $50,000 U.S. (or equivalent amount of any other currency) per annum;
(m) any contract or agreement to which Terex B.V. or any Subsidiary is a party
which relates to the distribution of products and/or services of Terex B.V. or
any Subsidiary; and (n) any modification of any of the foregoing.
Notwithstanding the foregoing, Section 4.11 of the Disclosure Statement shall
not be required to list orders for the purchase of raw materials, parts,
components or inventories or the sale of products, in each case, entered into in
the ordinary course of business and consistent with past practice.
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4.12 Absence of Defaults. Each of the contracts listed or required to
be listed in Sections 4.11 and 4.13 of the Disclosure Statement (including each
contract that would be required to be listed in Section 4.11 or Section 4.13 of
the Disclosure Statement if it was not listed in Section 4.17 or Section 4.18 of
the Disclosure Statement), each contract of a type described in Sections 4.11
and 4.13 of this Agreement (including each contract that would be required to be
listed in Section 4.11 or Section 4.13 of the Disclosure Statement if it was not
listed in Section 4.17 or Section 4.18 of the Disclosure Statement) that is
entered into on or after the date of this Agreement (each, a "Material
Contract") constitutes a valid and binding obligation of Terex B.V. and/or the
applicable Subsidiary, as the case may be, and to the knowledge of Seller, the
other parties thereto, and is in full force and effect. Except as set forth in
Section 4.12 of the Disclosure Statement, neither Terex B.V. nor any Subsidiary
is in default in any material respect under any Material Contract or under any
material outstanding vendor or customer orders and, to the knowledge of Seller,
no event has occurred or exists which, with or without the passage of time or
the giving of notice or both, would constitute such a material default or breach
by Terex B.V. or any Subsidiary. With respect to any contract not listed in
Section 4.11 or Section 4.13 of the Disclosure Statement to which Terex B.V. or
any Subsidiary is a party, neither Terex B.V. nor any Subsidiary is in default,
nor do circumstances exist which, with or without the passage of time or the
giving of notice or both, would cause such a default, the result of which is
likely to have a Material Adverse Effect.
4.13 Agreements Regarding Employees. Except as set forth in Section
4.13 of the Disclosure Statement, as of the date of this Agreement neither Terex
B.V. nor any Subsidiary is a party to or bound by any (a) pension, profit
sharing, stock option, employee stock purchase or other plan or arrangement
providing for deferred or other compensation to the employees of Terex B.V., or
any other material benefit plan or similar arrangement with the employees of
Terex B.V. or any Subsidiary; (b) employment agreement, arrangement or
understanding; or (c) any collective bargaining or other labor agreement. Except
as set forth on Section 4.13 of the Disclosure Statement, there are no existing,
or to the knowledge of Seller threatened, (x) employee strikes, work stoppages,
lockouts or material labor disputes or (y) to the knowledge of Seller, any union
organizing activity or work slow-downs, involving the employees of Terex B.V. or
any Subsidiary.
4.14 Employee Benefit Plans. Except as set forth on Section 4.14 of the
Disclosure Statement, as of the date of this Agreement there are no employee
benefit plans, pension, welfare benefit, stock option, stock purchase, deferred
compensation, severance incentive or other fringe benefit plan or arrangement
maintained or contributed to by Terex B.V. or any Subsidiary for the benefit of
its employees.
4.15 Litigation; Compliance with Laws.
(a) Except as set forth in Section 4.15 of the Disclosure
Statement, there is no suit, litigation, proceeding or administrative action
pending, or to the knowledge of Seller, threatened in writing, or any order,
injunction or decree outstanding, against Terex B.V. or any Subsidiary that, if
adversely determined, would have a material adverse effect on the business of
Terex B.V. and the Subsidiaries taken as a whole. There are no judicial or
administrative actions, proceedings or investigations pending or, to the
knowledge of Seller, threatened that question the validity of this Agreement or
the transactions contemplated hereby or that, if adversely determined, would
have a material adverse effect upon Seller's ability to enter into or perform
its obligations under this Agreement.
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(b) Except as set forth in Section 4.15 of the Disclosure
Statement, and except with respect to compliance with Environmental Laws which
is dealt with exclusively in Section 4.18, as of the date hereof, Terex B.V. is
and has been in compliance in all material respects with all applicable domestic
and foreign laws, ordinances, rules, regulations, judgments, decrees and orders
("Laws") of any governmental entity or authority having jurisdiction over Terex
B.V. or its properties or assets (each, a "Governmental Authority"). To the
knowledge of Seller, neither Terex B.V. nor any Subsidiary has any liability
(whether accrued, absolute, contingent, direct or indirect) for past violations
of any law, ordinance, code, rule or regulation, except as would not have a
material adverse effect on its business or properties. All material reports and
returns (other than Tax Returns which are covered exclusively by Section 4.10)
required to be filed by Terex B.V. and each Subsidiary with any Governmental
Authority have been filed and were accurate and complete in all material
respects when filed. To the knowledge of Seller, no payments of cash or other
consideration have been made to any person, entity or government by Terex B.V.
or any Subsidiary or by any agent, employee, officer, director, shareholder or
other person or entity on behalf of Terex B.V. or any Subsidiary which were
unlawful under the laws of the Netherlands or any other Governmental Authority.
Seller has complied in all material respects with its obligations under the
Works Councils Act ("Wet op de ondernemingsraden"), the Merger Code
("SER-Fusiegedragsregels") and the collective bargaining agreement described in
Section 4.13 of the Disclosure Statement.
4.16 Real Property.
(a) Section 4.16 of the Disclosure Statement sets forth a
correct and complete list of all real property (i) owned by Terex B.V. and/or
any Subsidiary (the "Owned Property") and (ii) leased by Terex B.V. and/or any
Subsidiary (the "Leased Property"). Terex B.V. and each Subsidiary has good and
marketable title to its Owned Property free and clear of all Liens, other than
(i) those reflected in any title insurance policies listed in Section 4.16 of
the Disclosure Statement (true and correct copies of which have been made
available to Buyer by Seller); (ii) imperfections of title, easements, pledges,
charges, restrictions and encumbrances, including, without limitation, survey
matters and Liens, if any, that do not materially detract from the value of the
property subject thereto or materially interfere with the manner in which it is
currently being used; (iii) Taxes and general and special assessments not in
default and payable without penalty or interest and which are accrued on the
Closing Date Balance Sheet in accordance with Closing GAAP; and (iv) Liens
disclosed in Section 4.16 of the Disclosure Statement. Except as set forth in
Section 4.16 of the Disclosure Statement, there are no leases, contracts,
options or agreements relating to or affecting the Owned Property to which Terex
B.V. or any Subsidiary is a party or by which Terex B.V. or any Subsidiary is
bound or affected, except those which are terminable on notice of 90 days or
less without liability, premium or penalty.
(b) Except as set forth in Section 4.16 of the Disclosure
Statement, there are no conditions on the Owned Property or the Leased Property
(including, without limitation, all buildings, systems, fixtures, structures and
12
improvements thereon) which (i) constitute a material health or safety hazard,
or (ii) materially reduce the value of any portion of the Owned Property or the
Leased Property to a prospective buyer with knowledge of the condition. All
buildings, systems, fixtures, structures and improvements leased or used by
Terex B.V. and each Subsidiary are in working order and are adequate in
condition, quality and quantity for the normal operation of the business of
Terex B.V. or such Subsidiary as presently conducted. Except as set forth in
Section 4.16 of the Disclosure Statement, to the knowledge of Seller, none of
the Owned Property or Leased Property is located in a governmentally recognized
wetland, flood-prone area, flood-risk area, flood plain or similarly restricted
area or is subject to any shoreland regulations. Terex B.V. possesses all
easements and rights, including without limitation, easements for all utilities,
services, roadways, and other means of ingress and egress, necessary to conduct
its business as presently conducted. The Owned Property and the Leased Property
comply in all material respects and are being operated in all material respects
in compliance with all applicable covenants, conditions and restrictions of
record.
(c) Neither the whole or any portion of the Owned Property or
the Leased Property has been condemned, requisitioned or otherwise taken by any
public authority, no written notice of such condemnation, requisition or taking
has been served upon Terex B.V. and, to the knowledge of Seller, no such
condemnation, requisition or taking is threatened or contemplated. To the
knowledge of Seller, there are no proposed actions by any governmental agencies
or authorities which have or may create a Lien on the Owned Property or the
Leased Property or any portion thereof. Except as reserved on the Financial
Statements or on the Closing Date Balance Sheet, there are no unpaid charges for
special assessments on any of the Owned Property. No public improvements have
been commenced and, to the knowledge of Seller, there are no public improvements
planned which have resulted or may reasonably be expected to result in special
assessments against or otherwise adversely affect the use of any of the Owned
Property. No governmental agency has issued any work order, and there are no
outstanding court orders, requiring repairs, alterations or corrections of any
condition on the Owned Property which are material in nature or amount. Neither
Terex B.V. nor any Subsidiary has received nor does Seller have any knowledge of
any written notice from any department or division of government relating to any
violation of any fire, zoning, building, health or other statute code,
regulation or ordinance or other governmental rule with respect to the Owned
Property or Leased Property that has not previously been corrected other than a
violation which will not have a material adverse effect on the business or
properties of Terex B.V. and the Subsidiaries taken as whole.
(d) Section 4.16 of the Disclosure Statement sets forth (i) a
true and correct summary of capital expenditures made with respect to Terex B.V.
for fiscal year 1999 and for the four-month period ending April 30, 2000, and
(ii) a true and correct summary of aggregate budgeted capital expenditures for
the period beginning on June 1, 2000 and ending on December 31, 2000 for Terex
B.V. and the Subsidiaries.
4.17 Patents and Trademarks. Terex B.V. and each Subsidiary has rights
to use all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and rights which are necessary
for use in connection with its business (individually, an "Intellectual Property
Right," and collectively, the "Intellectual Property Rights"); provided,
13
however, that with respect to Intellectual Property Rights relating to products
or components supplied to Terex B.V. or any Subsidiary by third party vendors,
Seller represents and warrants only that, except as set forth in Section 4.17 of
the Disclosure Statement, Terex B.V. or such Subsidiary, as the case may be, has
been granted the right to use such products or components by the respective
vendors and that Seller has no knowledge that the use of such products and/or
components infringes on the rights of any person or entity. Terex B.V. and each
Subsidiary has rights to use all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses and
rights which are currently being used in connection with its business. Section
4.17 of the Disclosure Statement sets forth a list of all material inventions
which are the subject of issued letters patent or applications therefor and all
material trade and service marks which have been registered or for which an
application for registration is pending, in each case which are owned and used
or held for use by Terex B.V. and each Subsidiary (collectively, the "Patent
Rights"). Section 4.17 of the Disclosure Statement also lists all other items
comprising the Intellectual Property Rights. Except as set forth in Section 4.17
of the Disclosure Statement, neither Terex B.V. nor any Subsidiary (a) is a
defendant in any claim, suit, action or proceeding relating to its business
which involves a claim of infringement of any patents, trademarks or service
marks, and (b) has knowledge of any existing infringement by another person of
any of the material Intellectual Property Rights. Except as disclosed in Section
4.17 of the Disclosure Statement, no Intellectual Property Right is subject to
any outstanding order, judgment, decree, stipulation or agreement restricting
the use thereof by Terex B.V. or any Subsidiary or restricting the licensing
thereof by Terex B.V. or any Subsidiary to any person in any material respect.
For purposes of this Section 4.17, any reference to the knowledge of Terex B.V.
or any Subsidiary shall include the knowledge of the Seller.
4.18 Environmental Matters. Except as described in Section 4.18 of the
Disclosure Statement, (a) to the knowledge of Seller, Terex B.V. and each
Subsidiary has made all filings and possesses all permits, licenses, other
authorizations, registrations and other governmental consents material to its
business ("Environmental Permits") which are required under any applicable
Environmental Laws (as defined in this Section 4.18) and all such Environmental
Permits are in full force and effect; (b) to the knowledge of Seller, there is
no condition with respect to any of Terex B.V.'s assets or any assets of a
Subsidiary which would reasonably be expected to subject Buyer, Terex B.V., or
any Subsidiary to fines, penalties or enforcement actions due to violations of
Environmental Laws or Environmental Permits or which would reasonably be
expected to result in a material liability to Buyer under any requirements of
Environmental Laws or Environmental Permits; (c) there are currently no
lawsuits, orders, consent decrees, administrative enforcement actions,
environmental clean-up proceedings or written notices of violation pending or,
to the knowledge of Seller, threatened, with respect to compliance or in
connection with Environmental Laws affecting the assets of Terex B.V. or any
Subsidiary; (d) the operation of the business of Terex B.V. is, and within
applicable statutes of limitation, has been in compliance in all material
respects with applicable Environmental Laws; and (e) to the knowledge of Seller,
there are no Hazardous Materials (as defined in this Section 4.18) located in,
at, on, from or under the Owned Real Property or Leased Real Property that would
reasonably likely result in material liabilities of, or material losses,
material damages or material costs to Seller, Terex B.V., any Subsidiary, or
Buyer under any Environmental Law. Section 4.18 of the Disclosure Statement
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lists all environmental audits, inspections, assessments, investigations or
similar reports in the possession of Seller, Terex B.V. or any Subsidiary, or of
which Seller, Terex B.V. or any Subsidiary is aware relating to Owned Real
Property, Leased Real Property or any other assets of Terex B.V.
or any Subsidiary.
The term "Environmental Law" or "Environmental Laws," as used
in this Agreement, means all domestic and foreign laws, acts, statutes, rules,
regulations, and governmental orders and all applicable common law (whether
criminal, civil or administrative), relating to the discharge, release,
emission, dispersal, spilling, leaking, dumping or migration of Hazardous
Materials or otherwise relating to the protection of the environment, the
management of Hazardous Materials or the protection of employee health
including, but not limited to, all Laws of the Netherlands comparable to the
Solid Waste Disposal Act, the Clean Air Act, the Water Pollution Control Act,
the Resource Conservation and Recovery Act of 1976, the Comprehensive,
Environmental Response, Compensation, and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the Toxic Substances Control Act, and the
Hazardous Materials Transportation Act (all as the same may have been amended
and as in effect from time to time through the Closing Time).
The term "Hazardous Materials," as used in this Agreement,
means all hazardous or toxic substances, chemicals, liquids, gases, vapors,
fill, soils, wastes and materials; any pollutants, particulate matter,
effluents, emissions, or contaminants which are toxic or hazardous (including,
without limitation, petroleum products and asbestos); and any other similar
substances or materials which are regulated under Environmental Laws.
4.19 Inventory. The inventory of Terex B.V. and each Subsidiary is of a
quality and quantity usable in the ordinary course of business of Terex B.V. and
such Subsidiary, and none of which is obsolete, below standard quality, damaged
or defective, subject only to the reserve for inventory write down set forth in
the 1999 Financial Statements or the Interim Balance Sheet (as adjusted for the
passage of time) through the Closing Time in accordance with GAAP and in
accordance with past practice. The value of all inventory items, including
finished goods, work-in-process and raw materials, has been recorded on the
books of Terex B.V. and each Subsidiary at the lower of cost or market in
accordance with GAAP consistently applied. Section 4.19 of the Disclosure
Statement sets forth a summary of the inventory valuation principles used by
Terex B.V. and each Subsidiary.
4.20 Receivables. All receivables of Terex B.V. and the Subsidiaries
reflected on the Financial Statements and those existing as of the Closing Time
represent valid claims from bona fide, arm's length sales of goods and services
actually made by Terex B.V. and each of the Subsidiaries, as the case may be, in
the ordinary course of business. To the knowledge of Seller, all such accounts
and notes receivable are collectable (or have been collected) in the ordinary
course of business using normal collection practices at the aggregate recorded
amounts thereof (net of reserves on the 1999 Financial Statements and Interim
Balance Sheet, as adjusted for the passage of time through the Closing Time in
accordance with GAAP and the past practice of Terex B.V.
15
4.21 Brokers and Finders. Neither Seller nor Terex B.V. nor any
Subsidiary has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finder's fees in connection with this Agreement
or the transactions contemplated herein.
4.22 Disclaimer. BUYER ACKNOWLEDGES THAT SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER,
OTHER THAN THE REPRESENTATIONS AND WARRANTIES OF SELLER SPECIFICALLY SET FORTH
IN THIS ARTICLE 4, AND BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF. IN ANY
EVENT, SELLER MAKES NO IMPLIED WARRANTIES OF MERCHANTABILITY, SUITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY, WITH RESPECT TO ANY OF THE
TANGIBLE ASSETS BEING SO SOLD, OR AS TO THE CONDITION OR WORKMANSHIP THEREOF OR
THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT.
4.23 Certain Transactions. Except as set forth in Section 4.23 of the
Disclosure Statement, neither Terex B.V. nor any Subsidiary owes any amount to,
nor does Terex B.V. or any Subsidiary have any outstanding contract with or
commitment to, any of the shareholders, directors, officers, employees or
consultants of Terex B.V. or any Subsidiary (other than compensation for current
services not yet due and payable and reimbursement of expenses arising in the
ordinary course of business), and no such person owes any amount to Terex B.V.
or any Subsidiary.
4.24 Books and Records. The books and all corporate records (including
minute books and stock record books) and financial records of Terex B.V. and
each Subsidiary are complete and correct in all material respects and since the
acquisition of Terex B.V. by an Affiliate of Terex Corporation have in all
material respects been maintained in accordance with applicable sound business
practices, laws and other requirements.
4.25 Year 2000 Compliance. To the knowledge of Seller, except as set
forth in Section 4.25 of the Disclosure Statement, all software, computer,
communications, electronic or other hardware or equipment, including any
imbedded software or firmware, used in Terex B.V.'s business and each
Subsidiary's business (collectively, "Year 2000 Assets") correctly recognize,
calculate, sort, store, display and otherwise process data involving dates prior
to, during and after the Year 2000 A.D. and the operation and functionality of
the Year 2000 Assets was and is in no way adversely affected by the occurrence
or passing of the calendar date January 1, 2000.
4.26 Product Warranty. Section 4.26 of the Disclosure Statement sets
forth a description of all warranties provided by Terex B.V. and each Subsidiary
and a statement of the aggregate cost of remedying all warranty claims made by
customers of Terex B.V. and each Subsidiary for the period beginning on January
1, 1999 and ending on July 31, 1999 and for the period beginning on September 1,
1999 and ending on January 1, 2000, together with a summary of outstanding
warranty claims as of July 16, 2000, which summary indicates the product
involved, the type of claims and the estimated cost of remedying the claims.
Except as set forth in Section 4.26 of the Disclosure Statement, there are no
outstanding warranty claims with respect to the business of Terex B.V. and of
each Subsidiary and Seller has no notice or knowledge of threatened or potential
warranty claims other than those arising in the ordinary course since the date
of the Interim Balance Sheet which are usual in nature and amount.
16
4.27 Sufficient Assets. Terex B.V. and each Subsidiary owns,
leases or licenses all assets and rights that are material to the operation of
its business as presently conducted.
4.28 Insurance. Section 4.28 of the Disclosure Statement sets forth a
list of all policies or binders of fire, liability (including, without
limitation, products liability), workers compensation, vehicular, title and
other insurance held by or on behalf of Terex B.V. and each of the Subsidiaries.
With respect to each such policy or binder so listed, Section 4.28 of the
Disclosure Statement also lists the insurance limits, deductible(s), and term of
coverage. Such policies and binders are outstanding and in full force and
effect. Neither Terex B.V. nor any Subsidiary is in default in any material
respect under any such policy or binder so listed and, to the knowledge of
Seller, no event has occurred or exists which, with or without the passage of
time or the giving of notice or both, would constitute such a material default
or breach by Seller or Terex B.V. under such policy or binder. Neither Terex
B.V. nor any Subsidiary has received any notice of cancellation or nonrenewal
of, or disallowance of any claim under, any such policy or binder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
5.1 Organization. Buyer is a corporation duly incorporated and validly
existing under the laws of the Netherlands with all requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its business as now being conducted.
5.2 Authorization. The execution, delivery and performance of this
Agreement by Buyer have been duly authorized by all requisite corporate action
of Buyer. This Agreement constitutes the valid and binding obligation of Buyer
enforceable against it in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.3 Consents of Third Parties. The execution, delivery and performance
of this Agreement by Buyer will not (a) violate or conflict with the articles of
association or by-laws or other organizational documents of Buyer; (b) conflict
with, or result in the breach of, termination of, or give rise to any lien or
constitute a default under, any material agreement, understanding or commitment
to which Buyer is a party or by which Buyer is bound; (c) constitute a violation
of any law, regulation, rule, judgment or decree applicable to Buyer; or other
than violations, conflicts, breaches, terminations, accelerations, defaults and
creations specified in the foregoing clauses (b) and (c) of this sentence which
will not, individually or in the aggregate, materially adversely affect the
ability of Buyer to consummate the transactions contemplated by this Agreement
17
in accordance with the terms hereof. No consent, approval or authorization of
any Governmental Authority is required on the part of Buyer in connection with
the execution, delivery and performance of this Agreement, except as set forth
in Section 5.3 of the disclosure statement prepared by Buyer and attached hereto
("Buyer's Disclosure Statement").
5.4 Litigation. There is no suit, litigation, proceeding or
governmental action pending, or to the knowledge of Buyer, threatened, or any
order, injunction or decree outstanding, against Buyer that, if adversely
determined, would materially adversely affect the ability of Buyer to consummate
the transactions contemplated by this Agreement in accordance with the terms
hereof.
5.5 Investment. Buyer is purchasing the Terex B.V. Shares for
investment purposes and not with a view to the resale or distribution of the
Terex B.V. Shares, and will not sell the Terex B.V. Shares in violation of
applicable securities laws.
5.6 Financing. Buyer has available to it all funds necessary to pay the
Terex B.V. Purchase Price and related fees and expenses, and has the financial
capacity to perform all of its other obligations under this Agreement.
5.7 Brokers or Finders. Neither Buyer nor any of its subsidiaries or
Affiliates has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finder's fees in connection with this Agreement
or the transaction contemplated herein.
ARTICLE 6
FURTHER AGREEMENTS OF THE PARTIES
6.1 Conduct of Business Pending the Closing Time. Except as
contemplated by this Agreement, from the date hereof until the Closing Time,
except as approved in writing by Buyer, Seller covenants and agrees that:
(a) Terex B.V. and each Subsidiary shall operate its business
in the ordinary course and consistent with its past practice, in each case as
reflected on the Financial Statements.
(b) Except as contractually required by any employment
arrangement listed on Section 4.13 of the Disclosure Statement and other than in
connection with actions generally taken by Terex Corporation with respect to all
of its operations and consistent with Terex Corporation's past practice, neither
Terex B.V. nor any Subsidiary will (i) grant or agree to grant any (x) bonus to
any employee, (y) general increase in the rates of salaries or compensation of
its employees or (z) specific increase to any employee, except such as are in
accordance with regularly scheduled periodic increases, or (ii) provide for any
new pension, retirement, severance, retention or other employment benefits to
any of its employees or any increase in any existing benefits.
(c) Neither Terex B.V. nor any Subsidiary will amend its
articles of incorporation or by-laws or other organizational documents, except
as required by law or in such other manner as is not materially adverse to Terex
B.V. or such Subsidiary, provided, however, that Buyer shall be given notice of
any amendment permitted under this Section 6.1(c) prior to such amendment being
made.
18
(d) Seller will use reasonable efforts to maintain and
preserve intact Terex B.V.'s business and each Subsidiary's business, to keep
available the services of Terex B.V.'s and each Subsidiary's present employees
and to maintain Terex B.V.'s and each Subsidiary's relationships with customers,
suppliers and others having business relationships with Terex B.V. or such
Subsidiary.
(e) Neither Terex B.V. nor any Subsidiary shall sell, assign,
voluntarily encumber, grant a security interest in or license with respect to,
or dispose of, any of its material assets or properties, tangible or intangible,
or incur any material liabilities, except for sales, dispositions made or
liabilities, encumbrances or security interests incurred, including the creation
of purchase money security interests, in the ordinary course; provided, that
nothing herein shall preclude Terex B.V. or any Subsidiary from using its
existing borrowing or credit facilities in a manner consistent with its past
practice since owned by Terex Corporation.
(f) Neither Terex B.V. nor any Subsidiary shall:
(i) create, incur, or assume any debt, liability or
obligation for borrowed money, direct or indirect, whether
accrued, absolute, contingent, or otherwise, other than
under existing lines of credit or in the ordinary course of
business consistent with its past practice;
(ii) waive or release any rights of material value
relating to its business;
(iii) transfer, sell or otherwise convey any of the
assets of Terex B.V., other than sales of products to
customers and dispositions of immaterial or obsolete assets,
in each case, in the ordinary course of business consistent
with past practice;
(iv) enter into or terminate any material lease with
respect to its business, or make any change in any material
leases, other than in the ordinary course of business
consistent with its past practice;
(v) become obligated to make any capital expenditures
or enter into any commitments therefor, except for capital
expenditures not exceeding $100,000 for any one commitment
or series of related commitments made in the ordinary course
of business consistent with past practice;
(vi) transfer, terminate or permit the lapse of or fail
to pay any fee that becomes due with respect to any of the
Intellectual Property Rights;
(vii) accelerate or delay the manufacture, shipment or
sale of inventory, the collection of accounts receivable or
notes receivable or the payment of accounts or notes
payable, sell any accounts receivable or take any action
outside the ordinary courses of business, if such
acceleration, delay or other action is inconsistent with
past practice or is intended to artificially increase the
amount of cash at Terex B.V. or at any Subsidiary or
artificially increase Terex B.V. Net Equity (as defined in
Section 11.9), as calculated from the Closing Date Balance
Sheet;
19
(viii) enter into any product distribution, sales
representative, sales agency, supplier or sub-supplier
agreement without the prior written consent of Buyer, which
consent shall not be unreasonably withheld; or
(ix) agree or otherwise commit to take any of the
actions referred to in subsections (i)-(viii) above.
6.2 Access/Schedule Update.
(a) From the date of this Agreement until the Closing Time,
Seller will at reasonable times and upon reasonable notice, furnish Buyer with
access to or copies of such financial and operating data and such other
information relating to Terex B.V. and the Subsidiaries as Buyer may from time
to time reasonably request. In addition, from the date of this Agreement until
the Closing Time, Seller shall permit representatives of Buyer to have access at
reasonable times and upon reasonable notice to the Owned Property, the Leased
Property, and the facilities and key employees of Terex B.V. and each
Subsidiary. Prior to the Closing Time, Buyer shall have the right to complete,
at the sole cost and expense of Buyer, Phase I environmental studies on each
parcel of Owned Property and Leased Property. Buyer shall deliver to Seller a
copy of any Phase I or other third party report prepared in connection with any
such environmental investigation; provided, however, that, except as provided in
Section 6.17, no such Phase I or other environmental review by Buyer will
involve sampling, Phase II testing or invasive investigatory work without the
prior written consent of Seller, which consent shall not be unreasonably
withheld (it being agreed that it shall not be unreasonable for Seller to
withhold consent with respect to a particular property if the findings contained
in any Phase I testing at such property are not materially different in any
adverse respect from findings contained in any report or reports for such
property listed in Section 4.18 of the Disclosure Statement). Buyer will treat
any environmental review of the Owned Real Property or Leased Real Property as
confidential information, unless otherwise required by law. Any disclosure
whatsoever during any investigation by or on behalf of Buyer shall not
constitute an enlargement of or additional representations or warranties of
Seller beyond those specifically set forth in Article 4. All such information
and access shall be subject to the terms and conditions of the Confidentiality
Agreement referenced in Section 6.8. Buyer's rights under this Section 6.2 to
perform environmental testing is subject to the condition that the inspections
and testing to be conducted shall not (i) unreasonably interfere with the
business operations of Seller, Terex B.V. or any Subsidiary, (ii) damage any
asset or property used in connection with the business of Seller, Terex B.V. or
any Subsidiary and (iii) cause Seller, Terex B.V. or any Subsidiary to be in
material breach of any lease or other agreement relating to any of the Owned
Property or Leased Property; provided, however, that Seller shall not be deemed
to have breached any representation or warranty herein to the extent that such
breach was caused by Buyer's actions under this Section 6.2.
20
(b) Within 10 days following the execution of this Agreement,
Seller shall provide Buyer with written updates of Sections 4.1, 4.11, 4.13 and
4.14 of the Disclosure Statement; provided, however, that no such update shall
relieve Seller from liability to Buyer for any losses or diminution in value
suffered by Buyer in connection with the matters disclosed therein to the extent
that the failure to disclose such matters in the first instance results in a
breach of a representation or warranty of Seller, except to the extent (i) such
matter is reserved for on the Closing Date Balance Sheet or (ii) such matter
does not constitute an adverse change or a liability and, accordingly, no
reserve is appropriate.
6.3 Best Efforts; Other Actions. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to (a) use its best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done as
promptly as practicable, all things necessary, proper or advisable under
applicable laws to consummate and make effective the transactions contemplated
by this Agreement, including obtaining any governmental or other consents,
transfers, orders, qualifications, waivers, authorizations, exemptions and
approvals, providing all notices and making all registrations, filings and
applications necessary or desirable for the consummation of the transactions
contemplated herein; (b) use its best efforts to defend any lawsuits or other
legal proceedings (whether judicial or administrative) challenging this
Agreement or the consummation of the transactions contemplated hereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Authority vacated or reversed; and (c) use its best efforts
to fulfill or obtain the fulfillment of all other conditions to Closing,
including, without limitation, the execution and delivery of all agreements or
other documents contemplated hereunder to be so executed and delivered.
6.4 Expenses. Except as otherwise specifically provided in this
Agreement, Buyer, on the one hand, and Seller, on the other hand, shall bear its
own expenses incurred in connection with this Agreement and in connection with
all obligations required to be performed by each of them under this Agreement.
6.5 Publicity. Buyer shall consult with Seller, and Seller shall
consult with Buyer, before issuing any press release concerning the transactions
contemplated by this Agreement and, except as may be required by applicable law,
will not issue any such press release without the prior written consent of
Seller or Buyer, as the case may be. If Buyer or Seller is so required to issue
such press release, it shall use its best efforts to inform Seller or Buyer, as
the case may be, prior thereto and to consult with such party as to the contents
thereof, and the contents thereof shall be reasonably acceptable to Seller or
Buyer, as the case may be.
6.6 Transfer Taxes. Any sales, stock transfer taxes, real property
transfer taxes, personal property transfer taxes, real property conveyance taxes
(other than income taxes, capital gains taxes or similar taxes on Seller's
income or appreciation) or other like taxes or recording fees payable in
connection with the sale of the Terex B.V. Shares shall be paid one-half by
Buyer and one-half by Seller. If any Tax Returns or other documents are required
to be filed in a jurisdiction with respect to any of the foregoing, then as
between Buyer and Seller, the party responsible for preparing such Tax Returns
or other documents under the laws of such jurisdiction shall be responsible for
the filing thereof.
21
6.7 Preservation of Records. Buyer agrees that it shall, at its own
expense, preserve and keep the records of Terex B.V. and the Subsidiaries
delivered to Buyer pursuant to this Agreement for a period of seven years from
the Closing Date, or, if requested by Seller, for any longer periods as may be
required by any government agency or ongoing litigation, and shall make such
records available to Seller as may be reasonably required by Seller in
connection with, among other things, any insurance claim, legal proceeding,
environmental matter or governmental investigation relating to Seller, Terex
B.V. or any Subsidiary. In the event Buyer wishes to destroy such records after
that time, it shall first give 60 days' prior written notice to Seller, and
Seller shall have the right at its option and expense to take possession of the
records within 90 days thereafter.
6.8 Confidentiality. The letter agreement, dated as of February 16,
2000, between Terex Corporation and Buyer (the "Confidentiality Agreement") is
hereby incorporated by reference herein in its entirety and shall continue in
full force and effect until the Closing, at which time such Confidentiality
Agreement (other than provisions therein dealing with information and other
matters concerning Terex Corporation and not Terex B.V. or any of the
Subsidiaries, which provisions shall continue in full force and effect) and the
obligations of Buyer under this Section 6.8 shall terminate. If this Agreement
is, for any reason, terminated prior to the Closing, the Confidentiality
Agreement shall continue in full force and effect.
6.9 Cash at Closing.
(a) Seller shall be entitled, prior to the Closing Time, to
collect and retain or cause to be collected and retained the proceeds of all
items received in any bank account of Terex B.V. and of each Subsidiary
(collectively, the "Bank Accounts") or otherwise in respect of Terex B.V. and
each Subsidiary (including the amount of any checks received by Terex B.V. and
each Subsidiary), and all other cash on hand, through the close of business on
the Closing Date (the "Pre-Closing Cash"); provided, however, that Seller may at
its option not collect but leave in any of the Bank Accounts or other locations
of Terex B.V. and each Subsidiary all or any portion of the Pre-Closing Cash,
and the aggregate amount of such uncollected Pre-Closing Cash, calculated, in
the case of foreign cash, at the exchange rate at the close of business on the
business day immediately preceding the Closing Date as reported in The Wall
Street Journal, shall be paid to Seller together with and in the same manner as
the Terex B.V. Purchase Price. If after the Closing it is determined by mutual
agreement of the parties that the amount of Pre-Closing Cash is greater or less
than the sum of the amount, if any, that was collected by Seller and the amount,
if any, that was uncollected and paid together with the Terex B.V. Purchase
Price, Buyer shall pay Seller or Seller shall pay Buyer, as applicable, the
difference between the two amounts promptly after such determination (but in no
event shall such payment be made later than five business days after the
determination is made). If the parties disagree as to whether a payment must be
made pursuant to this Section 6.9(a), or if the parties disagree as to the
amount of such payment, then such dispute shall be submitted to the Arbitrator.
Such submission shall be made at the same time a dispute is submitted to the
Arbitrator pursuant to Section 2.3(c), or if no dispute is submitted to the
Arbitrator pursuant to Section 2.3, then any submission pursuant to this Section
shall be made within five days after the expiration of the 30-day period
referenced in the first sentence of Section 2.3(c). The Arbitrator shall render
22
a decision resolving the matter within 30 days after its receipt of such
submission. The Arbitrator's decision on the matter shall be final and binding
on the parties absent manifest error. The cost of any arbitration pursuant to
this Section 6.9(a), including, without limitation, the fees of the Arbitrator,
shall be borne 50% by Buyer and 50% by Seller.
(b) All intercompany accounts and intercompany notes between
Seller or any of Seller's Affiliates, on the one hand, and Terex B.V., Xxxx or
any Subsidiary, on the other hand, shall be canceled at the Closing Time, except
for amounts payable with respect to goods provided by Seller or any of Seller's
Affiliates to Xxxx in the ordinary course of business and listed on Section
6.9(b) of the Disclosure Statement.
6.10 Reserved.
6.11 Change of Name. As soon as possible following the Closing (but in
no event more than 30 days following the Closing), Buyer shall cause Terex B.V.
to change its corporate name to a new name without "Terex" and bearing no
resemblance to its present name so as to make the present name of Terex B.V.
available to Terex from and after the Closing. Buyer shall file such certificate
or other documents in order to effectuate such change of name at or promptly
after the Closing.
6.12 Litigation Support; Records Retention; Transitional Services.
(a) In the event and for so long as any party is actively
investigating, contesting, defending against or prosecuting any charge,
complaint, action, suit, contract appeal, proceeding, hearing, investigation,
claim, demand or audit (including routine audits and contract close-outs) in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction prior to the
Closing Time involving Terex B.V. and/or any Subsidiary, the other party will
cooperate with the contesting or defending party and its counsel in the contest
or defense, make available its personnel and provide such testimony and access
to its books and records as may be reasonably necessary in connection with the
contest or defense. Buyer acknowledges that Teledyne, Inc., a Delaware
corporation, Teledyne Princeton, Inc., an Ontario corporation, Xxxx USA, Inc., a
Georgia corporation, and Teledyne GmbH, a German corporation (collectively, the
"Teledyne Entities") shall have the right to control any litigation on behalf of
Terex B.V. (f/k/a Teledyne B.V.) and Xxxx arising from any disputes arising
under the Stock Purchase Agreement dated January 2, 1995 among Terex B.V. (f/k/a
Teledyne B.V.), Xxxx Beheer B.V. and Xxxx (the "Xxxx Stock Purchase Agreement"),
subject to the benefit of the indemnification and other rights of Terex B.V.
thereunder. Buyer agrees to cause Terex B.V. to assert claims for
indemnification and other rights under the Xxxx Stock Purchase Agreement to the
extent reasonably requested by Seller or any of the Teledyne Entities and at the
sole expense of the requesting party and for the benefit of Seller to the extent
that such claims and rights relate to periods prior to the Closing; provided
that Seller shall use commercially reasonable efforts to maintain the
confidentiality of such information and, at the request of Buyer, shall request
courts to take appropriate action to protect the confidentiality of such
information. Notwithstanding the foregoing, Seller shall indemnify and hold
Buyer harmless against any liabilities, costs and/or counterclaims, and
cross-claims arising in connection with such claims and/or assertions, and Buyer
23
shall not have any obligation to take any such action to the extent it is
unlawful.
(b) Subject to the provisions of Section 6.12(c), after the
Closing Date, the parties will each provide reasonable assistance and
cooperation to the other upon request in connection with such matters relating
to the pre-closing operations of Terex B.V. and the Subsidiaries as:
(i) the completion and delivery of the financial
statements and the general ledger of Terex B.V. and the
Subsidiaries as of the Closing Date to Seller;
(ii) the preparation of quarterly, semi-annual and
annual reports required to be prepared by Seller or Buyer,
as the case may be, (either by Law or in accordance with the
Seller's or Buyer's internal reporting systems and
procedures) in connection with the operation of Terex B.V.'s
business and the business of each Subsidiary prior to the
Closing Time and with the transactions provided for herein;
(iii) the preparation of audit information packages
required to be prepared by Seller or Buyer (either by Law or
in accordance with Seller's or Buyer's internal reporting
systems and procedures) in connection with the operation of
Terex B.V.'s business and the business of each Subsidiary
prior to the Closing Time, the transactions provided for in
this Agreement and the parties' year-end financial audits;
and
(iv) such other assistance as Seller or Buyer may
reasonably request incidental to the orderly transfer of the
Terex B.V. Shares to Buyer.
(c) All requests for assistance and cooperation under Section
6.12(b) will be made during normal business hours and with adequate lead time so
as to not impose any unreasonable burden upon the party receiving the request or
to unreasonably interfere with the conduct of business by such party. The
parties acknowledge that the assistance and cooperation to be provided hereunder
is merely an accommodation and that the providing party will have no liability
with respect to any information or assistance provided hereunder. The requesting
party further agrees to hold the party receiving the request harmless from and
against any and all liabilities and losses with respect to such information or
assistance provided hereunder. In the event either party reasonably deems in
good faith any requested cooperation to be unduly burdensome, such party may
offer the requesting party reasonable access to such information as the
requesting party may need to complete any required task in lieu of performing
any services for such party.
6.13 Signage and Labels. Buyer shall remove the name "Terex" and any
and all derivations thereof from all exterior signs located at the Owned
Property and Leased Property as soon as practicable but in any event within two
months after the Closing Date.
6.14 Notices and Consents. Seller shall, prior to the Closing Time,
give all notices to third parties and use reasonable efforts at its expense to
obtain all third party consents, novations and waivers (including, for the
avoidance of doubt, waivers of third party termination rights) that are required
24
to be obtained by Seller in connection with the transactions contemplated by
this Agreement, including, without limitation, those consents identified in
Section 4.4 of the Disclosure Statement. Buyer agrees to cooperate with Seller
in its efforts to obtain such third party consents and where necessary will give
or procure the giving of reasonable security to a contracting third party in
order to obtain such approval, consent, novation or waiver.
6.15 Noncompetition. During the Noncompetition Period (as defined in
this Section 6.15), neither Seller nor any Affiliates of Seller shall, directly
or indirectly, (a) engage as a manufacturer, seller, distributor or marketer of
self-propelled, truck mounted forklifts anywhere in the world (the "Competitive
Business") or (b) induce, solicit, aid or assist any other person to induce or
solicit employees, customers or suppliers of Terex B.V. to terminate, curtail or
otherwise limit their employment or other business relationships with Terex
B.V., except for general solicitations for employment that are not intended or
designed to specifically target employees of Terex B.V.; provided however, that
notwithstanding the foregoing:
(x) as long as neither the personnel nor the distribution
network of Seller or any Affiliate of Seller becomes involved with any product
line which constitutes a Competitive Business, then Seller and each Affiliate of
Seller may make or thereafter maintain a less than 50% investment in any
business as long as the assets used in the portion of such business which
constitutes a Competitive Business, if any, have an aggregate value that is less
than 20% of the total value of the assets or revenues of such business;
(y) as long as the distribution network of Seller or any
Affiliate of Seller does not become directly involved with any product line
which constitutes a Competitive Business, then Seller and each Affiliate of
Seller may make or thereafter maintain a controlling investment in any business
as long as the assets used in any portion of such business which constitutes a
Competitive Business have an aggregate value which is less than 20% of the total
value of the assets or revenues of such business, provided that if any such
investment occurs within the first three years after the Closing Date (two years
after the Closing Time in the case of an action by Buyer to enforce the
provisions of this Section 6.15 in a court in Ireland), Seller shall, in a
commercially reasonable manner, promptly thereafter diligently pursue the
divestiture of that portion of such business which constitutes a Competitive
Business; and
(z) as long as the distribution network of Seller or any
Affiliate of Seller does not become directly involved with any product line
which constitutes a Competitive Business, then each Seller and each Affiliate of
any Seller may make an acquisition of assets as long as the portion of the
acquired assets which is used in carrying on the Competitive Business, if any,
has an aggregate value which is less than 20% of the total value of the assets
or revenues acquired, provided that if the acquisition occurs within the first
three years after the Closing Date (two years after the Closing Time in the case
of an action by Buyer to enforce the provisions of this Section 6.15 in a court
in Ireland), the Seller shall, in a commercially reasonable manner, promptly
thereafter diligently pursue divestiture of that portion of the assets which are
used in or otherwise constitute a Competitive Business.
The term "Noncompetition Period," as used in this Agreement,
means the period of time beginning on the Closing Date and ending on the fifth
anniversary of the Closing Date, except in the case of an action by Buyer to
25
enforce the provisions of this Section 6.15 in a court in Ireland, in which
event the term "Noncompetition Period" for activities in Ireland shall mean the
period of time beginning on the Closing Date and ending on the second
anniversary of the Closing Date.
Seller acknowledges and agrees that irreparable injury to
Buyer will result if Seller or any Affiliate of Seller breaches this Section
6.15 and that the remedy at law for the breach of any such covenant will be
inadequate. Accordingly, if Seller or any Affiliate of Seller engages in an act
in violation of this Section 6.15, Buyer shall be entitled, in addition to such
other remedies and damages as may be available by law or under this Agreement,
to injunctive relief to enforce the provisions of this Agreement.
6.16 Purchase and Sale of Certain Assets Owned by PPM Deutschland GmbH.
Each of the parties hereto agrees to use commercially reasonable efforts prior
to the Closing to negotiate the terms of the sale by PPM Deutschland GmbH
("PPM") to Xxxx GmbH (or such other entity as Buyer may, in its sole discretion,
designate) (in any such case, the "German Buyer") of assets owned by PPM and
used primarily in Xxxx'x German operations (collectively, the "PPM Assets"). The
PPM Assets are reflected on the balance sheet set forth in Section 6.16 of the
Disclosure Statement. The terms of the transaction will include (a) the
employment by the German Buyer of those employees of PPM listed in Section 6.16
of the Disclosure Statement, (ii) the assignment to, and the assumption by, the
German Buyer of the real estate leases described in Section 6.16 of the
Disclosure Statement, (iii) the assumption by the German Buyer of liabilities of
PPM incurred in the ordinary course of business solely in connection with the
Xxxx operations in which the PPM Assets are used; (iv) indemnification of the
German Buyer for excluded liabilities in a manner consistent with the
indemnification provided by Terex Corporation under the Princeton Purchase
Agreement; and (v) such other arrangements that are generally consistent with
the approaches taken in the Princeton Purchase Agreement and as are mutually
agreeable to the parties. If the sale of the PPM Assets contemplated by this
Section 6.16 occurs at the same time as the Closing of the purchase and sale of
the Terex B.V. Shares, (i) the Terex B.V. Purchase Price shall be reduced to
$24,119,000 and the purchase price for the PPM Assets shall be Five Hundred
Twenty Two Thousand U.S. Dollars ($522,000 U.S.) and (ii) the Reference Amount
shall be increased to Fourteen Million Three Hundred Nine Thousand U.S. Dollars
($14,309,000).
6.17 Release of Liens. At or prior to or at the Closing, Seller shall
cause the release of all Liens, guaranties and indemnities granted or made by
Terex B.V. or any Subsidiary to the extent such Liens, guarantees and/or
indemnities secure or guaranty any debts or obligations of Seller.
6.18 Phase II at Vrouwenparochie, the Netherlands. Prior to the
Closing, Seller and Buyer shall jointly hire Xxxxxxxx & Xxxxxx ("Consultant"),
at Buyer's cost, to conduct Phase II subsurface testing with respect to certain
portions of the Xxxx assembly site in Vrouwenparochie, the Netherlands (the
"Site"), identified in the Dames & Xxxxx draft Phase 2 Contamination Assessment
and Exploratory Survey, dated October 18, 1994 (the "Report"). In particular,
the parties agree that the testing shall be limited to the following portions of
the Site with respect to the substance(s) listed within the parentheses
immediately following each such portion: portions beneath the factory floor
26
(mineral oil); at and below the former degreasing pit (mineral oil, benzene and
VOCl's); an oil collection spill pan area (mineral oil); along a former below
ground pipeline for diesel oil (mineral oil); the "northeastern backyard" (at
W32 and W33 indicated in the Report) (BTEX); the "northern section of the Site"
(at B9 and B25 indicated in the Report) (chlorinated hydrocarbons); and the berm
that separates the site from adjacent property (mercury (Hg) and PAH's). In each
case the testing shall be conducted in the same approximate location as the
boreholes indicated in the Report. Any reports prepared by Consultant with
respect to the Site shall be submitted at the same time to both Seller and
Buyer. Any testing pursuant to this Section 6.17 will not unreasonably interfere
with the business operations of Seller or the Subsidiaries. If the Phase II
prepared by Consultant reveals a condition that requires remedial action under
applicable law, Consultant shall prepare a report for Seller and Buyer
estimating the cost of remediation and Seller and Buyer shall jointly decide on
the appropriate course of action. If Consultant's estimate of the cost of
remediation exceeds $5 million, Seller shall have the right to terminate this
Agreement. If the Phase II prepared by Consultant recommends additional Phase II
investigation to further define the nature and extent of contamination, Seller
and Buyer shall jointly determine the scope of further investigation to be made.
6.19 Powers of Attorney. Prior to the Closing, Buyer and Seller shall
each have executed such powers of attorney and other documents (in forms
reasonably satisfactory to the executing party) as are necessary to permit a
civil law notary to execute the notarial deed on behalf of Buyer and Seller.
ARTICLE 7
CONDITIONS OF CLOSING;
DOCUMENTS DELIVERED AT CLOSING
7.1 Conditions Precedent to Obligations of Buyer. The obligation of
Buyer to consummate the purchase of the Terex B.V. Shares under this Agreement
is subject to the fulfillment, prior to or at the Closing, of each of the
following conditions, any of which may be waived in writing by Buyer:
(a) The representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and the Closing Time with the same force and effect as though
made at and as of the Closing Time, except for any representation or warranty
made or given as of a specified date, which shall have been true and correct in
all material respects as at such date. For purposes of this Section 7.1(a), the
representations and warranties of Seller in this Agreement shall be true and
correct in all material respects unless the facts, events or circumstances
giving rise to any untruths or inaccuracies in such representations or
warranties have the same effect as a Material Adverse Effect (as defined in
Section 11.9);
(b) Seller shall have performed and complied in all material
respects with the agreements and covenants required by this Agreement to be
performed or complied with by Seller prior to or at the Closing;
27
(c) Buyer shall have been furnished with a certificate, dated
the Closing Date, of a director of Seller certifying that the conditions
specified in Sections 7.1(a), 7.1(b), 7.1(d) and 7.1(1) have been satisfied;
(d) There shall not be in effect any injunction or restraining
order issued by a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement, and there shall
not be any action, suit or proceeding pending or threatened before any court of
competent jurisdiction, arbitrator or Governmental Authority wherein an
unfavorable injunction, judgment, order, decree, ruling or change would (i)
prevent consummation of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation;
(e) No statute, rule or regulation shall have been enacted by
any Governmental Authority which prohibits the consummation of the transactions
contemplated herein or makes such consummation illegal;
(f) Any waiting periods applicable to the consummation of the
transactions contemplated hereby under applicable Law shall have expired or been
terminated, and all required approvals from competition authorities shall have
been obtained;
(g) Seller shall have executed and delivered to Buyer the
documents identified in Section 7.3 hereof;
(h) Buyer shall have received evidence satisfactory to Buyer
that Seller has obtained all third-party consents described in Section 4.4 of
the Disclosure Statement;
(i) Seller shall have delivered to Buyer duly executed
resignations of all officers, directors and employee benefit plan trustees of
Terex B.V. and each Subsidiary effective as of the Closing Time;
(j) On the Closing Date, the other Truck Mounted Transactions
(as defined in Section 11.9) shall have been consummated simultaneously
herewith;
(k) Buyer's environmental due diligence shall not have
indicated changes in the findings set forth in any of the environmental reports
listed in Section 4.18 of the Disclosure Statement which, individually or in the
aggregate, indicates liabilities and/or to the extent reasonably likely to
occur, potential liabilities that constitute or can reasonably be expected to
constitute a Material Adverse Effect.
7.2 Conditions Precedent to Obligations of Seller. The obligation of
Seller to consummate the sale of the Terex B.V. Shares under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions, any of which may waived by Seller:
(a) The representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and the Closing Time with the same effect as though made at and
as of the Closing Time, except for any representation or warranty made or given
as of a specified date, which shall have been true and correct in all material
respects as at such date;
28
(b) Buyer shall have performed and complied in all material
respects with the agreements and covenants required by this Agreement to be
performed or complied with by it prior to or at the Closing;
(c) Seller shall have been furnished with a certificate, dated
the Closing Date, of a director of Buyer certifying that the conditions
specified in Sections 7.2(a), 7.2(b) and 7.2(d) have been satisfied;
(d) There shall not be in effect any injunction or restraining
order issued by a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement, and there shall
not be any action, suit or proceeding pending or threatened before any court of
competent jurisdiction, arbitrator or Governmental Authority wherein an
unfavorable injunction, judgment, order, decree, ruling or change would (i)
prevent consummation of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation;
(e) No statute, rule or regulation shall have been enacted by
any Governmental Authority which prohibits the consummation of the transactions
contemplated herein or makes such consummation illegal;
(f) Any waiting periods applicable to the consummation of the
transactions contemplated hereby under any applicable Law shall have expired or
been terminated, and all required approvals from competition authorities shall
have been obtained;
(g) Buyer shall have executed and delivered to Seller the
documents identified in Section 7.3 hereof;
(h) Buyer shall have delivered the Terex B.V. Purchase Price
to Seller in accordance with Section 2.2 hereof;
(i) On the Closing Date, the other Truck Mounted Transactions
shall have been consummated simultaneously herewith.
7.3 Documents to be Delivered at Closing.
(a) At the Closing, Seller shall deliver, or cause to be
delivered, to Buyer the following (all of which shall be in forms reasonably
satisfactory to Buyer):
(i) a copy of resolutions of the board of directors of
Seller authorizing the execution, delivery and performance
of this Agreement by Seller and a certificate of an officer
or director of Seller, dated the Closing Date, that such
resolutions were duly adopted and are in full force and
effect;
29
(ii) the certificate referred to in Section 7.1(c);
(iii) the written resignations of the directors of
Terex B.V. and each Subsidiary;
(iv) the Escrow Agreement;
(v) any Taxes and recording and filing fees required to
be paid by Seller pursuant to Section 6.6; and
(vi) such other documents, instruments and writings as
Buyer may reasonably request in order to effectuate the
transactions contemplated by this Agreement.
(b) At the Closing, Buyer shall deliver to Seller the
following:
(i) payment of the Terex B.V. Purchase Price and
evidence of the wire transfer referred to in Section 2.2;
(ii) a copy of the resolutions of the board of
directors of Buyer authorizing the execution, delivery and
performance of this Agreement by Buyer, and a certificate of
an officer or director of Buyer dated the Closing Date, that
such resolutions were duly adopted and are in full force and
effect;
(iii) the certificate referred to in Section 7.2(c);
(iv) the Escrow Agreement;
(v) the notarial deed described in Section 3.1(b); and
(vi) evidence of the appointment by Buyer of the
directors of Terex B.V. and each Subsidiary.
ARTICLE 8
TERMINATION
8.1 Termination by Mutual Consent. This Agreement may be terminated at
any time prior to the Closing by the mutual written consent of Buyer and Seller.
8.2 Termination Either by Seller or by Buyer. This Agreement may be
terminated either by Seller or by Buyer if a United States federal or state
court of competent jurisdiction or United States federal or state governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable.
30
8.3 Other Grounds for Termination.
(a) This Agreement may be terminated by Buyer at any time
prior to the Closing if the Closing shall not have occurred as a result of a
breach by Seller of any representation, warranty, or covenant contained in this
Agreement in any material respect; provided, that Buyer may not terminate this
Agreement unless Buyer provides Seller with notice of such breach and Seller
fails to cure such breach within 10 days of such notice. For purposes of this
Section 8.3, the representations, and warranties of Seller in this Agreement
shall be true and correct or complied with in all material respects unless the
facts, events or circumstances giving rise to any untruths or inaccuracies in
such representations or warranties have the same effect as a Material Adverse
Effect.
(b) This Agreement may be terminated by Seller at any time
prior to the Closing if the Closing shall not have occurred as a result of a
breach by Buyer of any representation, warranty or covenant contained in this
Agreement in any material respect; provided, that Seller may not terminate this
Agreement unless Seller provides Buyer with notice of such breach and Buyer
fails to cure such breach within 10 days of such notice. In addition, Seller may
terminate this Agreement as provided in Section 6.18.
8.4 Effect of Termination. In the event of termination of this
Agreement pursuant to this Article 8, all obligations of the parties hereto
shall terminate, except the obligations of the parties pursuant to this Section
8.4 and except for the provisions of Sections 6.4, 6.5, 11.1, 11.2, 11.3, 11.6,
11.8, 11.9, 11.11 and 11.12 and the Confidentiality Agreement referred to in
Section 6.8. Moreover, in the event of termination of this Agreement pursuant to
Section 8.3, nothing herein shall prejudice the ability of the non-breaching
party to seek damages from any other party for any breach of this Agreement,
including without limitation, reasonable attorneys' fees, or to pursue any
remedy at law or in equity; provided, however, in no event shall any party be
entitled to, and each party hereby unconditionally waives any right to seek,
consequential damages for any Losses (as defined in Section 9.2(a)) that may
arise under or as a result of this Agreement or the transactions contemplated
hereby.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 Survival. The representations and warranties of Seller and Buyer
contained in this Agreement shall survive the Closing for the applicable periods
set forth in this Section 9.1. All of the representations and warranties of
Seller contained in this Agreement and all claims and causes of action with
respect thereto shall terminate upon expiration of 22 months after the Closing
Date, except that (a) the representations and warranties in Sections 4.2, 4.6
and 4.7 shall have no expiration date; (b) the representations and warranties in
Sections 4.10 and 4.14 shall survive until the applicable statute of limitations
has run; and (c) the representations and warranties in Section 4.18 shall
terminate upon the expiration of 50 months after the Closing Date; it being
31
understood that in the event notice of any claim for indemnification under
Section 9.2(a) shall have been given (within the meaning of Section 11.6) within
the applicable survival period, the representations and warranties that are the
subject of such indemnification claim shall survive with respect to such claim
only until such time as such claim is fully resolved. All of the representations
and warranties of Buyer contained in this Agreement and all claims and causes of
action with respect thereto shall terminate upon expiration of 22 months after
the Closing Date; it being understood that in the event notice of any claim for
indemnification under Section 9.3(a) shall have been given (within the meaning
of Section 11.6) within the applicable survival period, the representations and
warranties that are the subject of such indemnification claim shall survive with
respect to such claim only until such time as such claim is finally resolved.
9.2 Indemnification Provisions for Benefit of the Buyer.
(a) If the Closing shall occur and Seller breaches any of its
representations, warranties (a breach is to be determined for purposes of this
Section 9.2 without regard to the requirements relating to "Material Adverse
Effect" contained in Article 7 and Article 8) or covenants contained in this
Agreement and provided that Buyer, within any applicable survival period set
forth in Section 9.1, makes a written claim for indemnification against Seller
setting forth in reasonable detail the circumstances regarding the claim and, if
ascertainable, an estimate of the amount thereof, then, subject to Sections 9.1
and 9.8, Seller shall indemnify, defend and hold Buyer harmless from and against
any losses, expenses, costs, fees (including, without limitation, reasonable
attorney's fees), damages, fines, penalties and other liabilities (collectively,
"Losses") Buyer or any of its Affiliates, or any of their respective directors,
officers, employees, agents or representatives (collectively, the "Buyer
Indemnified Parties"), suffer to the extent such Losses result from, arise out
of or are caused by such breach. Claims related to breaches of the
representations and warranties in Section 4.18 shall also be subject to Section
9.6.
(b) Reserved.
(c) Without restriction as to time, Seller further agrees to
indemnify, defend and hold Buyer Indemnified Parties harmless from and against
the entirety of all Losses with respect to, resulting from, arising out of, or
caused by, any of the following:
(i) claims based upon products liability related to
Xxxx products manufactured and sold prior to the 1999
Closing or sent out into the stream of commerce prior to the
1999 Closing;
(ii) claims based upon products liability for Xxxx
products manufactured or sold after the 1999 Closing and
prior to the Closing Time, but only to the extent such
claims are based on occurrences prior to the Closing Time;
(iii) claims based on liabilities or obligations of
Xxxx under Environmental Laws, to the extent such
liabilities or obligations were caused prior to the 1999
Closing which the parties agree shall include, for purposes
of this Agreement and without limitation, any Losses
resulting from conditions disclosed or remediated as a
result of the matters referred to in Section 6.18;
32
(iv) claims based on liabilities or obligations of Xxxx
with respect to the litigation described in Section 4.15 of
the Disclosure Statement and any other litigation not
described on Section 4.15 of the Disclosure Statement which
is pending as of the Closing Time; and
(v) severance claims made by Xxxx employees listed in
Section 9.2(c) of the Disclosure Statement under any
employment or severance contract or pursuant to any
severance policy of Terex B.V. and/or Xxxx (including,
without limitation, payments made by Terex B.V. and/or Xxxx
and any benefits granted by Terex B.V. and/or Xxxx to any
such listed employee during any notice period which is
required by contract, Law or policy in connection with the
termination of such employee's employment with Xxxx), except
for severance claims made by any such listed employee who
remains employed by Buyer for at least 90 days after the
Closing Date; and
(vi) claims based on a breach by Seller of any of its
covenants and agreements contained in Sections 10.1(a),
10.1(c), 10.1(e), 10.2(a) and 10.5.
(d) Except as otherwise provided in the last sentence of this
Section 9.2(d), Seller shall not have any obligation to indemnify Buyer
Indemnified Parties from and against any Losses (i) until Buyer Combined Losses
(as defined in Section 11.9) exceed $750,000, after which point Seller will be
obligated to indemnify Buyer Indemnified Parties from and against only those
additional Losses suffered by Buyer Indemnified Parties; or (ii) to the extent
Sellers' Combined Indemnification Payments (as defined in Section 11.9) exceed
an amount equal to $20,000,000 (excluding, for purposes of such calculation, all
Section 6.15 Losses (as defined in Section 11.9) and all Teledyne Indemnified
Losses (as defined in Section 11.9)), after which point Seller will have no
obligation to indemnify Buyer Indemnified Parties from and against further
Losses in excess of such amount. Notwithstanding the foregoing, (A) this
Agreement shall not limit Buyer's right to seek remedies at law to cause Seller
to pay, perform and discharge any matters described in Section 9.2(c); (B) the
$750,000 limitation and the $20,000,000 cap on recovery shall not apply to, or
include, any Losses incurred with respect to any matters described in Section
9.2(c), all of which shall be paid by Seller without minimum recovery limitation
or cap; and (C) the $20,000,000 cap on recovery shall not apply to, or include,
any Losses incurred as a result of Seller's breach of any of the representations
and warranties contained in Sections 4.6 and 4.7 which shall be paid by Seller
without cap.
(e) Notwithstanding the limitations described in Section
9.2(d), Seller further agrees to indemnify, defend and hold Buyer Indemnified
Parties harmless from and against, but only to the extent of the assets held in
escrow pursuant to the Escrow Agreement, all Losses and other costs (including,
without limitation, the cost of insurance deductibles and liability in excess of
insurance limits) which (i) are not accrued on the Closing Date Balance Sheet,
(ii) are not paid by insurance, and (iii) are incurred with respect to, result
from, arise out of, or are caused by the operation of the business of Terex B.V.
or any Subsidiary prior to the Closing Time, including, without limitation, the
following Losses: (y) Losses relating to products manufactured and sold by Terex
B.V. or any Subsidiary prior to the Closing Time; and (z) Losses based on
liabilities or obligations of Terex B.V. or any Subsidiary under Environmental
Laws, to the extent such Losses are based on conditions or occurrences that
existed or occurred prior to the Closing Time.
33
(f) The assets held in escrow pursuant to the Escrow Agreement
shall be used to satisfy Seller's indemnification obligations under this Article
9 in the following manner:
(i) With respect to indemnification claims made under
Section 9.2(a) or 9.2(c), Buyer shall be required to proceed
first against the assets held in escrow pursuant to the
Escrow Agreement, until such time as either (A) Seller has
paid to Buyer Indemnified Parties, out of the assets held in
escrow, the amount of Five Hundred Thousand U.S. Dollars
($500,000 U.S.) or (B) all assets held in escrow have
otherwise been distributed pursuant to the terms of the
Escrow Agreement.
(ii) With respect to claims made under Section 9.2(e),
Buyer's sole recourse shall be against the assets held in
escrow pursuant to the Escrow Agreement.
(iii) After the occurrence of either condition
described in the subsections (A) and (B) of Section
9.2(f)(i), Buyer Indemnified Parties shall be entitled to
proceed directly against Seller for all claims for
indemnification under Section 9.2(a) or 9.2(c).
Notwithstanding the foregoing, if Buyer's obligation under
Section 9.2(f)(i) terminates by reason of the occurrence of
the condition specified in subsection (A) of Section
9.2(f)(i), Buyer shall nevertheless have the right, but not
the obligation, to proceed against assets held in escrow in
connection with additional claims for indemnification under
Section 9.2(a) or 9.2(c) until such time as all assets held
in escrow have been distributed pursuant to the terms of the
Escrow Agreement.
9.3 Indemnification Provisions for Benefit of Seller.
(a) If the Closing shall occur and Buyer breaches any of its
representations, warranties or covenants contained in this Agreement, and
provided that Seller, within any applicable survival period set forth in Section
9.1, makes a written claim for indemnification against Buyer setting forth in
reasonable detail the circumstances regarding the claim and, if ascertainable,
an estimate of the amount thereof, then, subject to Section 9.3(c), Buyer and
Xxxx agree to jointly and severally indemnify, defend and hold Seller and its
Affiliates harmless from and against any Losses Seller or any of its Affiliates,
or any of their respective directors, officers, employees, agents or
representatives (collectively, "Seller Indemnified Parties"), suffer to the
extent such Losses result from, arise out of or are caused by such breach.
(b) Without restriction as to time, Buyer and Xxxx agree to
jointly and severally indemnify, defend and hold Seller Indemnified Parties
harmless from and against the entirety of any Losses Seller Indemnified parties
suffer to the extent such Losses (i) are with respect to, result from or arise
out of Buyer's ownership or operation of the respective businesses of Terex B.V.
and the Subsidiaries after the Closing Time, except for those matters for which
Buyer Indemnified Parties are entitled to indemnification under Section 9.2; or
(ii) are based on a breach by Buyer of any of its covenants and agreements
contained in Sections 10.1(b), 10.1(c), 10.1(d), 10.2(b) and 10.5.
34
(c) Except as otherwise provided in the last sentence of this
Section 9.3(c), Buyer shall not have any obligation to indemnify Seller
Indemnified Parties from and against any Losses (i) until Seller Combined Losses
(as defined in Section 11.9) exceed $750,000, after which point Buyer, Terex
B.V. and the Subsidiaries will be obligated to indemnify Seller Indemnified
Parties from and against only those additional Losses suffered by Seller
Indemnified Parties; or (ii) to the extent Buyers' Combined Indemnification
Payments (as defined in Section 11.9) exceed an amount equal to $20,000,000
after which point Buyer will have no obligation to indemnify Seller Indemnified
Parties from and against further Losses in excess of such amount.
Notwithstanding the foregoing, (A) this Agreement shall not limit Seller's right
to seek remedies at law to cause Buyer to pay, perform and discharge any of any
liabilities of Terex B.V.; (B) the $750,000 limitation and the cap on recovery
shall not apply to, or include, any claim for indemnification under Section
9.3(b) hereof, which shall be paid by Buyer without minimum recovery limitation
or cap; and (C) the $20,000,000 cap on recovery shall not apply to, or include,
any Losses incurred as a result of the Buyer's breach of any of the
representations and warranties contained in Section 5.2.
9.4 Matters Involving Third Parties.
(a) If any third party notifies any party hereto (the
"Indemnified Party") with respect to any matter which may give rise to a claim
for indemnification against the other party hereto (the "Indemnifying Party")
under this Section 9, then the Indemnified Party will notify the Indemnifying
Party thereof in writing promptly and in any event within 10 days after
receiving any written notice from a third party stating the nature and basis of
any claim made by the third party; provided that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party will relieve the
Indemnifying Party from any obligation hereunder unless, and then solely to the
extent that, the Indemnifying Party is prejudiced thereby. The Indemnified Party
shall provide to the Indemnifying Party on request all information and
documentation reasonably necessary to support and verify any Losses which the
Indemnified Party believes give rise to a claim for indemnification hereunder
and shall give the Indemnifying Party reasonable access to all books, records
and personnel in the possession or under the control of the Indemnified Party
which would have bearing on such claim. In the event the Indemnifying Party
notifies the Indemnified Party within 30 days after the date the Indemnified
Party has given notice of the matter that the Indemnifying Party is assuming the
defense of such matter (i) the Indemnifying Party will defend the Indemnified
Party against the matter with counsel of its choice reasonably satisfactory to
the Indemnified Party, (ii) the Indemnified Party may retain separate counsel at
its sole cost and expense (except that the Indemnifying Party will be
responsible for the fees and expenses of such separate co-counsel to the extent
the Indemnified Party reasonably concludes in good faith that the Indemnified
Party has defenses available to it that may conflict with those of the
Indemnifying Party), (iii) the Indemnified Party will not consent to the entry
of a judgement or enter into any settlement with respect to the matter without
the written consent of the Indemnifying Party (not to be withheld or delayed
unreasonably), and (iv) the Indemnifying Party will not consent to the entry of
a judgement with respect to the matter or enter into any settlement which does
not include a provision whereby the plaintiff or claimant in the matter releases
the Indemnified Party from all liability with respect thereto, without the
written consent of the Indemnified Party (not to be withheld or delayed
unreasonably). If the Indemnifying Party does not assume the defense of such
matter, the Indemnified Party may defend against the matter in any manner it
35
reasonably may deem appropriate, and (i) the Indemnified Party will defend the
matter with counsel of its choice reasonably satisfactory to the Indemnifying
Party, (ii) the Indemnifying Party may retain separate counsel at its sole cost
and expense, and (iii) the Indemnified Party will not consent to the entry of a
judgement or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party (not to be withheld or delayed
unreasonably).
(b) The provisions of paragraph (a) of this Section 9.4 shall
apply to all claims for indemnification hereunder except indemnification claims
which involve Tax matters pertaining to Terex B.V. and/or the Subsidiaries,
which claims shall be governed by Article 10.
9.5 Other Indemnification Matters.
(a) In no event shall any party hereto be liable for loss of
profits or consequential damages hereunder.
(b) The right of recovery by Buyer Indemnified Parties or
Seller Indemnified Parties with respect to any matter covered by this Article 9
shall be net of any insurance proceeds received by the Buyer Indemnified Parties
or Seller Indemnified Parties, as the case may be, as a result of any Losses.
(c) Notwithstanding anything in this Agreement to the
contrary, Seller shall not be responsible for any liability or obligation as a
result of Buyer's or Terex B.V.'s or any Subsidiary's failure to comply with
applicable law after the Closing Time even if Terex B.V. and the Subsidiaries
are owned or operated after the Closing Time in the manner owned or operated
prior to Closing, except to the extent that the manner of ownership or operation
prior to the Closing Time constitutes a breach of a representation or warranty
contained in this Agreement.
(d) Upon making any payment to an Indemnified Party for any
indemnification claim pursuant to this Article 9, the Indemnifying Party shall
be subrogated, to the extent of such payment, to any rights which the
Indemnified Party may have against any other parties with respect to the subject
matter underlying such indemnification claim.
9.6 Environmental Matters.
(a) With respect to any Losses relating to the presence of, or
any release of, Hazardous Materials at, on, in, upon, under, or from any of the
Owned Property or Leased Property, or arising from, under or pursuant to
violations of any Environmental Law, in any case, arising prior to the closing
of the transactions evidenced by that certain Asset Purchase and Sale Agreement
dated as of September 15, 1999 by and among Teledyne, Inc., Teledyne Princeton,
Inc. Xxxx USA, Inc., Teledyne GmbH and Terex Corporation (even if not asserted
until after the Closing Time), for which Buyer seeks indemnity as a result of a
breach of a representation or warranty under Section 4.18 in connection with the
operation of the business of Terex B.V. or any Subsidiary, the Owned Real
Property or the Leased Real Property pursuant to Section 9.2 (for purposes of
this Section 9.6, "Environmental Losses"), Buyer shall provide notice to Seller
pursuant to Section 11.6 specifying in reasonable detail, to the extent known,
the nature of the Environmental Losses and the estimated amount to remediate or
respond to the condition giving rise to the Environmental Losses, to the extent
it is then known (which estimate shall not be conclusive of the final amount of
any Environmental Losses).
36
(b) Seller shall have the right to control and investigate,
remediate, and/or resolve any condition giving rise to a claim or demand for
indemnification by Buyer under this Agreement with respect to any Environmental
Losses; provided, however, that Seller must consult with Buyer regarding such
investigation, remediation or resolution and provided further that if after
written notice and a reasonable opportunity to cure Seller do not exercise such
right, Buyer may exercise such right. Seller and its employees, contractors,
representatives and agents shall have reasonable access at reasonable times to
the facilities for the purpose of conducting any investigation and/or
remediation, including any sampling or monitoring required to be performed by
Seller, which may include intrusive investigations or remedial action, after the
Closing Date or at any time thereafter; provided that if Seller requests such
access then Seller shall provide Buyer with written notice of such request.
Seller shall use all reasonable efforts to minimize disruption to Buyer's
business as a result of conducting any such investigation or remediation.
(c) Buyer shall use reasonable efforts to cooperate with
Seller to minimize costs with respect to Environmental Losses. Nothing in this
Agreement shall require Seller to perform any environmental remediation
activities or other environmental testing, sampling or monitoring activities
beyond the minimum required to comply with applicable Environmental Laws
(including those measures required to be implemented by Governmental Authorities
after reasonable opportunity to object to and/or appeal such requirement) and to
permit the use of the Owned or Leased Property consistent with its current use;
provided, however, that Buyer shall not be required to accept or execute, nor
shall Seller or its agents seek or execute, any deed, well, soil, or water
notice or restriction of any kind, or any other Lien, encumbrance, notice or
restriction that may be imposed on or recorded against any of the Owned or
Leased Property due to the presence of Hazardous Materials if doing so would, in
Buyer's reasonable judgment, result in any material diminution in the value or
marketability of such property, and in no event will Buyer's agreement to allow
any such alternative to remediation relieve Seller of the obligation to effect
further remediation if subsequently required by any Governmental Authority or
otherwise required by any Environmental Law.
(d) Buyer shall give prompt written notice to Seller of any
report or other document that Buyer seeks to submit, whether voluntarily or by
requirement of a Governmental Authority, to a Governmental Authority which
describes any environmental condition existing prior to the Closing Time. To the
extent reasonably possible under the circumstances, Seller shall have the right
to review and comment upon any submission to a Governmental Authority which
describes or addresses any environmental condition for which Buyer is claiming
indemnification from Seller hereunder (and Seller will cooperate with Buyer in
preparing such submissions, including making available all relevant records in
its possession or under its control), and Buyer shall revise such submission in
accordance with Seller's reasonable comments thereon, except that in no event
shall Buyer be requested by Seller to submit information that in Buyer's opinion
would not be legally sufficient. To the extent reasonably possible under the
circumstances, Buyer shall give Seller prompt written notice of, and Seller
37
and/or its representatives shall have the right to participate in, any phone
call or meeting with any Governmental Authority at which any environmental
condition for which Buyer is claiming indemnification from Seller hereunder is
to be discussed or addressed in any manner. Except to the extent required by Law
after notice to Buyer, Seller shall not submit documents to any Governmental
Authority or conduct meetings or phone calls with any Governmental Authority
regarding the environmental conditions at any Owned Property or Leased Property
without the prior consent of Buyer, which consent shall not be unreasonably
withheld.
(e) Seller shall not have any obligation to indemnify any
Buyer Indemnified Party from and against (i) any Environmental Losses to the
extent directly arising from or relating directly to a use of the facilities
that is not substantially a continuation of the operation of Terex B.V.'s
business as conducted on the Closing Date, (ii) any Environmental Losses arising
from or related to any change in the use of the Owned Property from industrial
use, or (iii) any Environmental Losses to the extent arising from or related to
any amendment to or change in any Environmental Law from that which is in effect
on the date hereof. Notwithstanding anything to the contrary contained herein,
Seller shall not have any obligation to indemnify Buyer Indemnified Parties from
and against any Environmental Losses to the extent (w) they do not relate to an
environmental condition caused, created or in existence prior to the Closing,
(x) arising with respect to any release of a Hazardous Material by Buyer, its
agents, or invitees after the Closing, or (y) arising from the gross negligence
or recklessness of Buyer, its agents, or invitees, or from the exacerbation by
physical action of any environmental condition by Buyer, its agent, or invitees.
Buyer acknowledges that nothing contained herein absolves it of any obligation
under any Environmental Law for Environmental Losses with respect to violations
of Environmental Laws by Buyer, its employees, contractors, representatives or
agents. Notwithstanding anything contained in this Agreement to the contrary,
Buyer shall not be construed as reckless, negligent, or to have exacerbated an
environmental condition if, with respect to any such environmental condition,
either (i) Buyer fails to take an action Buyer reasonably believed was the
responsibility of Seller (but only to the extent Buyer has provided Seller with
written notice of such condition) or (ii) Buyer has no knowledge that any action
is required.
(f) If, after the Closing Time, the Buyer undertakes
environmental remediation activities or other environmental testing, sampling or
monitoring activities in connection with Environmental Losses which are not
required or requested by a Governmental Authority or in response to a third
party claim asserting liability for an environmental condition at the
facilities, subject to Buyer's indemnification rights contained in Section
9.2(e), Seller shall not be obligated to indemnify the Buyer in respect of such
Environmental Losses.
9.7 EXCLUSIVE REMEDY. THE INDEMNIFICATION PROVISIONS CONTAINED IN THIS
ARTICLE 9 SHALL CONSTITUTE THE SOLE AND EXCLUSIVE RECOURSE AND REMEDY OF THE
PARTIES FOR MONETARY DAMAGES WITH RESPECT TO ANY BREACH OF ANY OF THE
REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED IN THIS AGREEMENT OR ANY OF
THE ANCILLARY AGREEMENTS. THE PROVISIONS OF THIS ARTICLE 9 WILL NOT RESTRICT THE
RIGHT OF ANY PARTY TO SEEK SPECIFIC PERFORMANCE OR OTHER EQUITABLE REMEDIES IN
CONNECTION WITH ANY BREACH OF ANY OF THE COVENANTS CONTAINED IN THIS AGREEMENT
38
OR ANY OF THE ANCILLARY AGREEMENTS. BUYER ACKNOWLEDGES THAT IT HAS NO RIGHTS TO
RESCIND THIS AGREEMENT EITHER FOR A BREACH OF CONTRACT OF FOR NEGLIGENT OR
INNOCENT MISREPRESENTATION. NOTWITHSTANDING ANY OTHER PROVISIONS OF THE
AGREEMENT, THE PROVISIONS OF THIS SECTION 9.7 SHALL NOT APPLY TO EXCLUDE OR
LIMIT THE LIABILITY OF SELLER TO THE EXTENT THAT ANY CLAIM ARISES BY REASON OF
ANY FRAUD OR FRAUDULENT MISREPRESENTATION OF ANY SUCH PARTY.
9.8 Minimizing Losses. Each party agrees to use all commercially
reasonable efforts to minimize all Losses (including Losses that are defined for
purposes of Section 9.6 as "Environmental Losses") for which it may seek
indemnification from the other party pursuant to this Article 9, and to minimize
the amount of such indemnification obligation by reasonably pursuing the maximum
possible insurance recovery or recovery from other available sources with
respect to such Losses and nothing herein will in any way diminish each party's
common law duty to mitigate its Loss. Notwithstanding the foregoing, in no event
shall Buyer be required to purchase product liability insurance for products
manufactured or sold by Seller, Terex B.V. or any Subsidiary prior to the
Closing Time.
ARTICLE 10
TAX MATTERS
10.1 Preparation of Tax Returns.
(a) Subject to Section 10.1(c), Seller shall be responsible
for the preparation and timely filing of any return, report, information return
or other document (including any related or supporting information) filed or
required to be filed with any taxing authority (for purposes of this Article 10
only, individually, a "Return" and collectively, the "Returns") in connection
with the determination, assessment, collection, administration or imposition of
any Taxes of Terex B.V. and the Subsidiaries relating to any taxable year or
period ending on or before the Closing Time (a "Pre-Closing Tax Return").
Pre-Closing Tax Returns shall be filed on or before their respective due dates
(including extensions). Such Returns shall be prepared on a basis consistent
with Returns prepared for prior taxable periods, except as otherwise required by
law or regulation. At least 15 days prior to the filing of a Pre-Closing Tax
Return, Seller shall provide Buyer with a copy of such Pre-Closing Tax Return
for Buyer's review and comment. If any such Returns cannot be completed and
filed by Seller until after the Closing Time, Buyer shall cause the relevant
officer(s) of Terex B.V. and each Subsidiary to sign and file such Returns after
they have been completed by Seller (and before the due date of such Returns).
(b) Buyer shall be responsible for the preparation and timely
filing of all Returns of Terex B.V. and the Subsidiaries for all taxable periods
commencing after the Closing Time (the "Post-Closing Tax Returns"). The
Post-Closing Tax Returns shall be prepared on a basis consistent with the
Pre-Closing Tax Returns unless a different treatment is required by law or
regulation. If Buyer takes any position or uses any methodology on any such
Return that is inconsistent with any position or methodology taken or used by
39
Terex B.V., any Subsidiary, or Seller in prior periods (unless Buyer's position
or methodology giving rise to the inconsistency is required (i) by a law or
regulation, or (ii) in the opinion (reasonably acceptable to Seller and its
counsel) of a reputable law firm (the "Law Firm") satisfactory to Seller and its
counsel, by other applicable legal authorities in effect for the taxable period
covered by such Return), then Buyer shall be responsible for, and shall
indemnify and hold harmless, on an after-tax basis, Seller against, any increase
in Taxes with respect to any Pre-Closing Tax Return resulting from such
inconsistent position or methodology. Buyer shall not make any assertion or make
any election the effect of which would be to exclude Terex B.V. or any
Subsidiary, to the extent otherwise eligible therefor, from any consolidated
Return of Terex B.V. (or any consolidated or combined Return of Seller's
consolidated group) for any Pre-Closing Tax Return unless required by law or
regulation.
(c) Notwithstanding anything to the contrary contained in
Section 10.1(a), Buyer shall be responsible for the preparation and timely
filing of any Returns of Terex B.V. and the Subsidiaries for taxable periods, if
any, that begin before the Closing Time and end after the Closing Time
("Straddling Returns"). The Straddling Returns shall be prepared on a basis
consistent with Pre-Closing Tax Returns unless a different treatment is required
by law or regulation. Notwithstanding anything to the contrary contained in this
Article 10, at least 15 days prior to the filing of any Straddling Returns
required to be caused to be filed by Buyer hereunder, Buyer shall submit copies
of such returns to Seller for its review and approval. In the event of any
dispute with respect to any Straddling Returns, Buyer shall file the final form
of such returns prior to the due date therefor without prejudice to Seller's
right to dispute the amount of Taxes for the tax period covered thereby. Seller
shall be responsible for, and shall indemnify and hold Buyer harmless against,
so much of any Tax liability shown on a Straddling Return as is properly
allocable to a pre-Closing Time period, net of any current Tax savings directly
or indirectly received by Buyer as a result of paying such Tax liability. The
portion of Terex B.V.'s and each Subsidiary's taxable income, gain, loss and any
resulting Tax shown on a Straddling Return which is properly allocated to a
pre-Closing period shall be determined by (i) assuming that Terex B.V.'s and
each Subsidiary's taxable year ends as of the close of business on the Closing
Date, (ii) allocating to the pre-Closing period any other income, gain, loss or
deduction of Terex B.V. and each Subsidiary from any source, by closing, on an
actual basis (or if an actual closing is not feasible, on a pro forma basis
taking into account extraordinary items, allocated solely to the pre-Closing
period) the books of Terex B.V. and each Subsidiary as of the close of business
on the Closing Date, and (iii) preparing Returns based on the income, gain and
losses determined on a basis consistent with the methodology and elections
employed by Terex B.V. and each Subsidiary in prior years as adjusted to reflect
any subsequent adjustments to such Returns.
(d) Except as otherwise required by any then effective law or
regulation or, in the opinion (reasonably acceptable to Seller and its counsel)
of the Law Firm, by other applicable legal authorities, without the prior
written consent of Seller (which consent shall not, in any case, be unreasonably
withheld), Buyer shall not make or cause Terex B.V. or any Subsidiary to make
any election, change an annual accounting period or adopt or change any
accounting method if any such election, change or adoption would have the effect
of increasing the Tax liability of Terex B.V. or any Subsidiary with respect to
any Pre-Closing Tax Return.
40
(e) If, consistent with the provisions of this Article 10,
Seller desires to amend a Pre-Closing Tax Return, Buyer shall cooperate in such
matter to the extent reasonable. Seller shall indemnify and hold Terex B.V.,
each Subsidiary, and Buyer harmless, on an after-tax basis, against any increase
in any Taxes with respect to Post-Closing Tax Returns directly resulting from
any adjustments to items of income, gain, deduction, loss or credit reflected in
such amendment.
(f) Seller shall retain all books, records, returns,
schedules, documents and all papers or relevant items of information relating to
the Federal, state, foreign or other Tax liability of Terex B.V. and the
Subsidiaries for any Pre-Closing Tax Return, until the expiration of all
statutes of limitations for claims to which such documents may pertain; provided
that if the statute of limitations for such claims survive indefinitely (for
example, with respect to net operating losses), Seller shall retain the
documents pertaining to such claims for a period of seven years after the
Closing Date. Thereafter, Seller shall have the right to dispose of or destroy
any such items; provided that, prior to such disposal or destruction, Seller
shall provide Buyer with written notice of its intent to do so. For a period of
30 days after its receipt of such notice, Buyer shall have the right, at its
sole cost and expense, promptly to remove or obtain copies (or, if necessary,
originals) of such items and take whatever action Buyer may desire with respect
to such items. Notwithstanding the foregoing, Seller shall reasonably cooperate
with Buyer and furnish copies of any such items to Buyer, at Buyer's sole cost
and expense, upon written request.
10.2 Liability for Taxes. Seller and Buyer hereby covenant and agree
that, as between Seller, on the one hand, and Buyer, on the other hand, and
except as otherwise provided in Section 10.3:
(a) Except as otherwise provided in Section 10.1(b), Seller
shall be liable for and shall pay (i) all Taxes payable by or with respect to
Terex B.V., the Subsidiaries, or Seller for Pre-Closing Tax Returns and (ii)
such Taxes as are allocable to the period prior to the Closing Time in
connection with any Straddling Return prepared in connection with Section
10.1(c).
(b) Except as provided in Sections 10.1(c) and 10.2(a), Buyer
shall be liable for and shall pay, or shall cause Terex B.V. or the
Subsidiaries, as applicable, to pay, and Seller shall not be required to pay or
reimburse Buyer or Terex B.V. or the Subsidiaries for, all Taxes payable by
Terex B.V. and each Subsidiary for all Returns other than Pre-Closing Tax
Returns.
10.3 Certain Tax Payment Responsibility. Notwithstanding anything in
this Article 10 to the contrary, Each party agrees that it shall not set off,
offset or recoup any amounts due to another party pursuant to this Article 10
and shall not defend any failure to make payment when due in accordance with
this Article 10 by reason of the alleged failure of such other party to
indemnify and hold harmless such party in accordance with the provisions of
Article 9.
10.4 Tax Contests.
(a) Seller and its duly appointed representatives shall have
the sole right to supervise or otherwise coordinate any examination process and
to negotiate, resolve, settle or contest any asserted Tax deficiencies or assert
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and prosecute any claim for refund with respect to Pre-Closing Tax Returns. Each
party hereto shall within 14 days after it has knowledge of the assertion or
commencement thereof notify the other party of the written assertion of any
claim or the commencement of any suit, action, proceeding, investigation or
audit (any of which may be hereinafter referred to as a "Tax Contest") with
respect to any Pre-Closing Tax Returns (but only if such Tax Contest would
affect the Tax liability of the other party), and shall provide the other party
with copies (subject to deletion of unrelated information) of all correspondence
relating to such Tax Contest. The costs of such Tax Contest shall be borne by
Seller.
(b) Buyer and its duly appointed representatives shall have
the sole right and the obligation to supervise or otherwise coordinate any
examination process and to negotiate, resolve, settle or contest any asserted
Tax deficiencies or assert and prosecute any claim for refund with respect to
Post-Closing Tax Returns. Each party hereto shall within 14 days after it has
knowledge thereof notify the other party of the written assertion or the
commencement of a Tax Contest with respect to any Post-Closing Tax Returns (but
only if such Tax Contest would affect the Tax liability of the other party), and
shall provide the other party with copies (subject to deletion of unrelated
information) of all correspondence relating to such Tax Contest. The costs of
such Tax Contest shall be borne by Buyer.
(c) Buyer and its duly appointed representatives shall have
the sole right and the obligation to supervise or otherwise coordinate any
examination process and to negotiate, resolve, settle or contest any asserted
Tax deficiencies or assert and prosecute any claim for refund with respect to
Straddling Returns. Each party hereto shall within fourteen days after it has
knowledge thereof notify the other party of the written assertion or the
commencement of Tax Contest with respect to any Straddling Return (but only if
such Tax Contest would effect the Tax liability of the other party), and shall
provide the other party with copies (subject to deletion of unrelated
information) of all correspondence to such Tax Contest. The cost of such Tax
Contest shall be borne by Buyer.
10.5 Refunds, Tax Credits. To the extent that Buyer receives a refund
of, or an offset with respect to, Taxes or a Tax credit arising from or with
respect to the Pre-Closing Tax Returns or a Straddling Return to the extent
applicable to a pre-Closing Time period as determined in accordance with Section
10.1(c) (net of a proportionate amount of any costs incurred by Buyer in
connection with obtaining such refund, offset or Tax credit), Buyer shall pay to
or reimburse, or shall cause Terex B.V. or a Subsidiary, as applicable, to pay
to or reimburse, Seller for the amount of any such Tax refund, offset or credit
received net of any Taxes payable by Buyer, Terex B.V. or the Subsidiaries as a
result of such Tax refund or credit. To the extent that Seller receives a refund
of, or an offset with respect to, Taxes or a Tax credit arising from or with
respect to any of the Post-Closing Tax Returns or any Straddling Returns, Seller
shall reimburse Buyer, Terex B.V. and the Subsidiaries for the amount of any
such Tax refund or credit received net of any Taxes payable by Seller on such
Tax refund, offset or credit, but only to the extent allocable to a post-Closing
Time period.
10.6 Cooperation. After the Closing Time, Buyer, on the one hand, and
Seller, on the other hand, shall make available to the other, as reasonably
requested, and to any taxing authority, all information, records or documents
relating to Tax liabilities or potential Tax liabilities of Terex B.V. and the
Subsidiaries and shall preserve all such information, records and documents
until the expiration of any applicable statute of limitations or extensions
thereof.
42
10.7 Reserved.
10.8 No Extensions. Seller shall ensure that neither Terex B.V.
nor any Subsidiary consents prior to the Closing Time to any waiver or extension
of any statute of limitations with respect to any taxable year of Terex B.V. or
any Subsidiary.
ARTICLE 11
MISCELLANEOUS
11.1 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any New York Court (as
hereinafter defined), this being in addition to any other remedy to which they
may be entitled at law or in equity.
11.2 Entire Agreement. This Agreement, the exhibits hereto, the
Disclosure Statement, Buyer's Disclosure Statement, the introductory language
and recital set forth above, the Confidentiality Agreement and any other
documents delivered by the parties in connection with this Agreement constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings (oral and written) among
the parties with respect thereto.
11.3 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to its rules
of conflict of laws. Each Seller and Buyer hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the United States District Court for the Southern District of New York (the
"New York Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such courts), waives any objection to
the laying of venue of any such litigation in the New York Courts and agrees not
to plead or claim that such litigation brought in any New York Court has been
brought in an inconvenient forum.
11.4 Reserved.
11.5 Schedules; Tables of Contents and Headings. If a matter is
disclosed on any Section of the Disclosure Statement, such disclosure shall
suffice, without specific repetition and without cross-reference, as a response
to any other Section of the Disclosure Statement, but only to the extent such
disclosure is made in such a way that Buyer would be reasonably expected to
determine the applicability of such disclosure to such other Section. If a
matter is disclosed on any Section of Buyer's Disclosure Statement such
disclosure shall suffice, without specific repetition and without
43
cross-reference, as a response to any other section of Buyer's Disclosure
Statement, but only to the extent such disclosure is made in such a way that
Buyer would be reasonably expected to determine the applicability of such
disclosure to such other section. The table of contents and section headings of
this Agreement and titles given to Sections of the Disclosure Statement to this
Agreement are for reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement.
11.6 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given (a) when delivered if by hand or
overnight courier, (b) three days after mailing by first-class registered mail,
return receipt requested, postage prepaid, or (c) when telecopied, provided that
concurrently therewith a copy is mailed by first-class registered mail, return
receipt requested, postage prepaid, to the parties at the following addresses
(or to such address as a party may have specified by notice given to the other
party pursuant to this provision):
If to Seller to:
Terex Corporation
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx X Xxxxx, Esq.
Senior Vice President, Secretary
and General Counsel
Fax No.: (000) 000-0000
With a copy to:
Xxxxxxxx Xxxxxxxxx Xxxxxx
Aronsohn & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
If to Buyer, to:
Partek Cargotec Holding Netherlands B.V.
x/x Xxxxxx Xxxxxxxxxxx
Xxxxxxxxxx xxxxxxxx 00
X.X. Xxx 00, XXX-00000 Xxxxxxxx, Xxxxxxx
Attn: General Counsel
Tel. No.: 000-000-00-00
Fax No.: 000-000-00-0000
44
With copies to:
Reinhart, Boerner, Van Deuren, Xxxxxx
& Rieselbach, s.c.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
11.7 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
11.8 Extension; Waiver. The parties may: (a) extend the time for
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations or warranties contained herein
and (c) waive compliance with any of the agreements, covenants or conditions
contained herein. Any such extension or waiver shall be valid only if in a
writing executed by the party against whom such extension or waiver is sought to
be enforced.
11.9 Certain Definitions. The following terms, whenever used in
this Agreement, shall have the following meanings:
(a) The term "Affiliate" means, with respect to any
individual, corporation, partnership, firm, joint venture, association, trust or
other entity (each a "Person"), any Person who controls, is controlled by, or is
under common control with, such Person.
(b) The term "Buyers' Combined Indemnification Payments" means
the sum of the following: (i) amounts paid by Buyer to Seller Indemnified
Parties for Losses pursuant to the indemnification provisions contained in this
Agreement (such amounts described in this subsection (i) shall be referred to as
"Buyer's Xxxx Indemnification Payments"), plus (ii) Buyer's Xxxxxxx
Indemnification Payments, as defined in the Xxxxxxx Purchase Agreement, plus
(iii) Buyer's Princeton Indemnification Payments, as defined in the Princeton
Purchase Agreement.
(c) The term "Buyer Combined Losses" means the sum of the
following: (i) all Losses suffered by Buyer Indemnified Parties by reason of
breaches under this Agreement, determined without regard to any otherwise
applicable "Material Adverse Effect" qualification (such Losses described in
this subsection (i) shall be referred to as "Buyer's Xxxx Losses"), plus (ii)
Buyer's Xxxxxxx Losses, as defined in the Xxxxxxx Purchase Agreement, plus (iii)
Buyer's Princeton Losses, as defined in the Princeton Purchase Agreement.
45
(d) The term "Escrow Agreement" means the escrow agreement
among Buyer, Seller, Partek Cargotec Holding Ltd, Powerscreen International plc,
Partek Holding Inc., Terex Corporation, and the Escrow Agent (as defined in
Section 11.9(e)), in substantially the form of Exhibit B attached hereto.
(e) The term "Escrow Agent" means the party serving as escrow
agent under the Escrow Agreement.
(f) The phrase "to the knowledge of Seller" (or words of
similar import, whether expressed in the positive or negative) shall mean only
the actual knowledge after reasonable inquiry into the relevant subject matter
(including, without limitation, inquiry of the general manager and finance
director of Xxxx) of those persons who are listed in Section 11.9(f) of the
Disclosure Statement.
(g) The term "Material Adverse Effect" shall mean any material
adverse effect on, or any circumstances or events which individually or in the
aggregate are reasonably likely to result in a material adverse effect on the
assets, the current or foreseeable future results of operations or the current
or foreseeable future financial condition of Terex B.V., the Subsidiaries, Terex
Corporation's Princeton division, Xxxxxxx Engineering Limited and the
subsidiaries of Xxxxxxx Engineering Limited, taken as a whole.
(h) The term "Materiality Thresholds" means the $100,000
(U.S.) materiality thresholds described in the second and third sentences of
Section 2.3(d) of the Princeton Purchase Agreement.
(i) The term "Xxxxxxx Purchase Agreement" means the Share
Purchase and Sale Agreement dated of even date herewith among Partek Cargotec
Holding Ltd, Powerscreen International plc and for purposes of Article 9 thereof
only, Xxxxxxx Engineering Limited, pursuant to which Partek Cargotec Holding Ltd
has agreed to acquire from Powerscreen International plc all of the issued and
outstanding capital shares of Xxxxxxx Engineering Limited.
(j) The term "Princeton Purchase Agreement" means the Asset
Purchase and Sale Agreement dated of even date herewith between Partek
Acquisition Company, Inc. and Terex Corporation, pursuant to which Partek
Holding Inc. has agreed to acquire from Terex Corporation substantially all of
the assets and business of Terex Corporation's Princeton division.
(k) The term "Relevant Closing Balance Sheets" means the
Closing Date Balance Sheet, the closing balance sheet prepared pursuant to
Section 2.3 of the Princeton Purchase Agreement, and the closing date balance
sheet prepared pursuant to Section 2.3 of the Xxxxxxx Purchase Agreement.
(l) The term "Section 6.15 Losses" means the sum of the
following: (i) any and all payments for Losses incurred by Buyer in connection
with the breach by Seller or any Affiliate of Seller of any of the provisions of
Section 6.15 (such payments described in this subsection (i) shall be referred
to as "Xxxx Section 6.15 Losses"), plus (ii) Xxxxxxx Section 6.15 Losses, as
defined in the Xxxxxxx Purchase Agreement, plus (iii) Princeton Section 6.15
Losses, as defined in the Princeton Purchase Agreement.
46
(m) The term "Seller Combined Losses" means the sum of the
following: (i) all Losses suffered by Seller Indemnified Parties by reason of
breaches under this Agreement (such Losses referred to in this subsection (i)
shall be referred to as "Seller's Xxxx Losses"), plus (ii) Seller's Xxxxxxx
Losses, as defined in the Xxxxxxx Purchase Agreement, plus (iii) Seller's
Princeton Losses, as defined in the Princeton Purchase Agreement.
(n) The term "Sellers' Combined Indemnification Payments"
means the sum of the following: (i) all amounts paid by Seller to Buyer
Indemnified Parties for Losses pursuant to the indemnification provisions
contained in this Agreement (such amounts described in this subsection (i) shall
be referred to as "Seller's Xxxx Indemnification Payments"), plus (ii) Seller's
Xxxxxxx Indemnification Payments, as defined in the Xxxxxxx Purchase Agreement,
plus (iii) Seller's Princeton Indemnification Payments, as defined in the
Princeton Purchase Agreement.
(o) The term "Teledyne Indemnified Losses" means any and all
payments for "Losses" (or portions thereof) as that term is defined in this
Agreement and in the Princeton Purchase Agreement for which (i) Buyer
Indemnified Parties are indemnified against under this Agreement or (ii) "Buyer
Indemnified Parties" under the Princeton Purchase Agreement are indemnified
against under the Princeton Purchase Agreement and in either case for which
Terex Corporation receives payments pursuant to the indemnification provisions
of that certain Asset Purchase and Sale Agreement dated as of September 15, 1999
by and among Teledyne, Inc., Teledyne Princeton, Inc., Xxxx USA, Inc., Teledyne
GmbH and Terex Corporation.
(p) The term "Total Equity" means the sum of the following:
(i) the amount by which (A) the value of the assets of Terex B.V. and the
Subsidiaries, as reflected on the Closing Date Balance Sheet, exceeds (B) the
liabilities of Terex B.V. and the Subsidiaries, as reflected on the Closing Date
Balance Sheet (including reserves reflected on the Closing Date Balance Sheet),
plus (ii) Xxxxxxx Net Equity, as defined in the Xxxxxxx Purchase Agreement, plus
(iii) Princeton Net Asset Value, as defined in the Princeton Purchase Agreement.
The amount referred to in the foregoing Section 11.9(n)(i) shall be referred to
as "Xxxx Net Equity."
(q) The term Truck Mounted Transactions" shall mean the
following transactions: (i) the purchase by Partek Cargotec Holding Ltd of all
of the issued and outstanding capital shares of Xxxxxxx Engineering Limited
pursuant to the terms of the Xxxxxxx Purchase Agreement, (ii) the purchase by
Partek Acquisition Company, Inc. of substantially all of the assets and business
of Terex Corporation's Princeton division pursuant to the terms of the Princeton
Purchase Agreement; and (iii) the purchase by Buyer of all of the issued and
outstanding capital shares of Terex B.V. pursuant to the terms of this
Agreement.
11.10 Payment of Certain Arbitration Costs: Manner of Making
Adjustment. The cost of any arbitration (including the fees of the Arbitrator)
pursuant to Section 2.3(c) shall be paid in the manner specified in Section
2.3(c) of the Princeton Purchase Agreement. The adjustment contemplated by
Section 2.3(d) shall be made in the manner specified in Section 2.3(d) of the
Princeton Purchase Agreement.
47
11.11 Assignment; Binding Effect; Benefit. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
express or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
11.12 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
11.13 Amendment. This Agreement may be amended by the parties hereto at
any time. This Agreement may not be amended or modified except by an instrument
in writing signed by or on behalf of each of the parties hereto.
11.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same Agreement.
[Signatures on the following page.]
48
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf as of the day and year first
written above.
HOLLAND LIFT INTERNATIONAL B.V.
By:/s/ Xxxxxx X. XxXxx
Name:Xxxxxx X. XxXxx
Title:
PARTEK CARGOTEC HOLDING
NETHERLANDS B.V.
By:/s/ Xxxx Xxxxxxx
Name:Xxxx Xxxxxxx
Title:
FOR PURPOSES OF ARTICLE 9 ONLY:
XXXX B.V.
By:/s/ Xxxxxx X. XxXxx
Name: Xxxxxx X. XxXxx
Title:
49
List of Exhibits:
Exhibit A Closing GAAP
Exhibit B Form of Escrow Agreement
