ASSET PURCHASE AND SALE AGREEMENT
AMONG
PPM DEUTSCHLAND GMBH TEREX CRANES,
as Seller,
HIAB GMBH
as Buyer,
and for purposes of Section 2.3 only,
HOLLAND LIFT INTERNATIONAL B.V.,
PARTEK CARGOTEC HOLDING NETHERLANDS B.V., and
XXXX B.V.
Dated as of September 29, 2000
ASSET PURCHASE AND SALE AGREEMENT
ASSET PURCHASE AND SALE AGREEMENT ("Agreement"), dated as of September
29, 2000, among PPM DEUTSCHLAND GMBH TEREX CRANES, a company organized under the
laws of the Federal Republic of Germany ("Seller"), HIAB GMBH, a company
organized under the laws of the Federal Republic of Germany ("Buyer"), and for
purposes of Section 2.3 only, HOLLAND LIFT INTERNATIONAL B.V., a company
incorporated under the laws of the Netherlands, PARTEK CARGOTEC HOLDING
NETHERLANDS B.V., a company incorporated under the laws of the Netherlands, and
XXXX B.V., a company incorporated under the laws of the Netherlands.
RECITAL
WHEREAS, Seller has devoted a portion of its business and assets to the
sale and distribution of self propelled, truck mountable forklifts (such
business, as conducted by Seller, is referred to hereinafter as the "German
Truck-Mounted Business"), and Seller wishes to sell to Buyer, and Buyer wishes
to purchase from Seller, all of the assets and business of Seller involved in
the German Truck-Mounted Business;
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 ASSETS
1.1 Sale and Purchase of Assets.
(a) Subject to the terms and conditions of this Agreement,
effective as of the Closing Time (as defined in Section 3.1(a)), Seller shall
sell, assign, convey, transfer and deliver to Buyer, and Buyer shall purchase
from Seller, for the consideration specified in Section 2.1, all of Seller's
right, title and interest in and to all of the assets, goodwill, rights and
properties owned by Seller and used primarily in connection with the conduct of
the German Truck-Mounted Business as a going concern, as the same may exist at
the Closing Time, whether tangible or intangible, real, personal or mixed,
accrued or otherwise, (collectively, the "German Truck-Mounted Assets"),
including, without limitation, all of Seller's right, title and interest in and
to the following, as the same may exist at the Closing Time:
1
(i) all machinery, equipment, vehicles, office furniture,
furnishings, tools, leasehold improvements, and other tangible property,
including, without limitation, those items listed in Section 1.1(a)(i) of the
disclosure statement prepared by Seller and attached hereto (the "Disclosure
Statement");
(ii) all inventories of finished goods, spare parts,
replacement and component parts (including inventories held by customers on a
consignment basis), and office, packaging and other supplies;
(iii) all accunts receivables, prepaid expenses and other
current assets (other than cash and cash equivalents) of Seller arising solely
from the ownership and operation of the German Truck-Mounted Business;
(iv) all Intellectual Property Rights (as defined in Section
4.17), including, without limitation, all Patent Rights (as defined in Section
4.17) and any and all of the rights of Seller to the name "Xxxx Aap";
(v) subject to Section 1.1(b), all contracts, leases,
commitments, instruments, guarantees, bids, orders, proposals and other
agreements, whether written or oral, to which Seller or any predecessor in
interest is a party primarily in connection with the German Truck-Mounted
Business immediately prior to the Closing Time, including, without limitation,
those agreements to purchase materials, contracts for services or to provide
products listed in Section 4.11 of the Disclosure Statement, but excluding all
corporate wide purchasing arrangements which relate generally to the German
Truck-Mounted Business and other divisions or business units of Terex
Corporation ("Terex") or any of its Affiliates (as defined in Section 11.9) and
any other arrangements with other divisions or business units of Terex or any of
its Affiliates;
(vi) all licenses, permits, franchises, certificates of
authority or orders, certificates of occupancy, building, safety, fire and
health approval, or any waiver of the foregoing (collectively, "Permits"),
issued by any Governmental Authority (as defined in Section 4.15(b)), including,
without limitation, those Permits listed in Section 1.1(a)(vi) of the Disclosure
Statement;
(vii) all business records (other than personnel records
unless consented to by the relevant employees), files, ledgers, documents,
correspondence, lists, plans, drawings, creative materials, advertising and
promotional materials, studies, reports or other printed or written materials
used or held for use primarily in connection with the German Truck-Mounted
Business;
(viii) all computer software and programs including, without
limitation, executable code, source code, graphical user interfaces, databases,
all associated documentation, whether electronic or paper copied form, which
relate primarily to the German Truck-Mounted Business; and
(ix) all prepaid rent, utilities, downpayments and/or
deposits from customers, and any other deposits and/or prepaid items applicable
primarily to the German Truck-Mounted Business.
2
(b) The German Truck-Mounted Assets to be sold and transferred
by Seller at the Closing Time shall not include:
(i) cash, cash deposits and other cash equivalents,
including all bank accounts;
(ii) tax refunds;
(iii) any assets located at the facilities of the German
Truck-Mounted Business that are not owned by Seller, which assets are identified
in Section 1.1(b)(iii) of the Disclosure Statement;
(iv) all rights of Seller under and pursuant to this
Agreement;
(v) any property, casualty, workers' compensation or other
insurance policy or related insurance service contract relating to Seller or any
of its Affiliates, and any rights of Seller under any insurance policy or
contract, including, but not limited to, rights to any cancellation value;
(vi) proprietary or confidential non technical business
information, books, files, papers, records, data and policies of Seller or any
of its Affiliates that do not relate primarily to and are not material to
continuing the operation of the German Truck-Mounted Business, including
proprietary business management software used by Seller or any of its
Affiliates, such as the corporate directories, management procedures and
guidelines, proprietary databases, accounting and financial reporting formats,
systems and procedures, instructions and organization manuals;
(vii) any and all assets, rights and properties of Seller or
any of its Affiliates other than those used by Seller in connection with the
ownership and operation of the German Truck-Mounted Business;
(viii) subject to Section 4.17, all "Terex" marks, including
any and all trademarks or service marks, trade names, registered and
unregistered designs, slogans or other like property or including the name
"Terex," the Terex xxxx and/or logo, and any derivatives thereof; and
(ix) any accounts receivable that are written off in
accordance with the principles set forth on Exhibit A hereto (such principles
are referred to hereinafter as "Closing GAAP").
(c) To the extent that any of the German Truck-Mounted Assets
are non assignable or non transferable to Buyer, or non assignable or non
transferable without the consent of a third party, or shall be subject to any
option in any third party by virtue of a request for permission to assign or
transfer by reason of or pursuant to this Agreement or the transactions
contemplated hereby, this Agreement shall not constitute a contract to assign or
transfer the same
3
if an attempted assignment or transfer would (i) constitute a breach thereof or
(ii) create rights in others not desired by Buyer. If Seller shall have failed
to procure consent to any such assignment or transfer or waiver of such option
prior to the Closing Time, Seller shall use its best efforts (which shall not
include the obligation to pay money or commence a legal action) to make the use
and benefit of such German Truck-Mounted Asset available to Buyer to the same
extent, as nearly as may be possible, as if such impediment to assignment or
transfer did not exist. The provisions of this Section 1.1(c) shall not in any
way limit Buyer's rights under this Agreement in the event that the Closing
condition set forth in Section 7.1(i) is not satisfied.
(d) Except as provided below in this Section 1.1(d) and
subject to Section 1.1(e), effective as of the Closing Time, Buyer shall assume
and become responsible for, and will thereafter pay, perform and discharge when
due all liabilities and obligations of Seller arising out of or relating to the
German Truck-Mounted Assets, the German Truck-Mounted Business, or the operation
or ownership by Seller (or any of its predecessors) of the German Truck-Mounted
Business, whether accrued, absolute, contingent or otherwise (collectively, the
"Assumed German Liabilities"). The Assumed German Liabilities shall include,
without limitation, the following liabilities of Seller with respect to the
German Truck-Mounted Business: (i) all of the obligations and liabilities of the
German Truck-Mounted Business reflected on the Interim Balance Sheet (as defined
in Section 4.8) which have not been satisfied prior to the Closing Time, except
for obligations and liabilities relating to intercompany receivables or
intercompany debt (the liability for such intercompany receivables or
intercompany debt being expressly excluded from the liabilities assumed by Buyer
under this Agreement); (ii) all of the obligations and liabilities of the German
Truck-Mounted Business arising in the ordinary course of business between the
date of the Interim Balance Sheet and the Closing Time, except for liabilities
relating to intercompany receivables or intercompany debt (the liability for
such intercompany receivables or intercompany debt being expressly excluded from
the liabilities assumed by Buyer under this Agreement); (iii) liabilities and
obligations of Seller (relating to the German Truck-Mounted Business) under the
contracts listed in Section 1.1(d) of the Disclosure Statement, but only to the
extent required to be paid, performed or discharged after the Closing Time; (iv)
liabilities or obligations that are based upon products liability for products
sold by Seller through the German Truck-Mounted Business after 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 Seller (the "1999 Purchase Agreement"),
except for such liabilities or obligations that constitute Excluded German
Liabilities pursuant to Section 1.1(e); (v) all other debts, liabilities and
obligations arising out of or relating to events or transactions after the
Closing Time in connection with the operation of the German Truck-Mounted
Business or use of the German Truck-Mounted Assets by Buyer, but only to the
extent not included in the Excluded German Liabilities pursuant to Section
1.1(e); (vi) the liabilities and obligations of Seller under the 1999 Purchase
Agreement, but only to the extent such liabilities and obligations under the
1999 Purchase Agreement constitute liabilities described in subsections (i)
through (v) of this Section 1.1(d); (vii) with respect to each Employment
Contract (as defined in Section 6.10) in force as of the Closing Time, all
obligations and liabilities of the employer arising under such Employment
Contract after the Closing Time; (viii) any severance claims made by Seller's
employees working in the German Truck Mounted Business who are
4
employed by Buyer after the Closing Time and are terminated by Buyer within 120
days after the Closing Date, except to the extent such claims are based on a
contract right or on a severance policy of Seller (the liability for any such
claims based on a contract right or a severance policy of Seller being expressly
excluded from the liabilities assumed by Buyer under this Agreement), (ix)
liabilities or obligations under Environmental Laws (as defined in Section 4.18)
which are caused after the closing of the transactions contemplated by the 1999
Purchase Agreement; and (x) liabilities and obligations of the German
Truck-Mounted Business reflected on the Closing Balance Sheet (as defined in
Section 2.3(a)). Buyer understands and agrees that, from and after the Closing
Time, neither Seller nor any of its Affiliates including, without limitation,
Terex, Powerscreen International plc and Terex B.V., shall have any liability or
responsibility for any of the Assumed German Liabilities, except only as
contemplated by Section 9.2(e).
(e) Notwithstanding anything contained in this Agreement to
the contrary, Buyer shall not assume, and shall not be deemed to have assumed,
any of the following obligations or liabilities of Seller or of any Affiliate or
predecessor in interest of Seller, whether accrued, absolute, contingent or
otherwise:
(i) liabilities or obligations for income taxes payable by
reason of or from the sale and purchase of the German Truck-Mounted Assets
pursuant to this Agreement;
(ii) except only as provided in Section 1.1(d)(vii), (A) any
and all liabilities or obligations under the employee benefit plans, programs,
policies and arrangements sponsored or maintained by Seller for its employees
and (B) any and all liabilities or obligations under the "Seller Plans" (as
defined in the 1999 Purchase Agreement);
(iii) any liabilities or obligations with respect to Taxes
arising from the ownership or use of the German Truck-Mounted Assets and
operation of the German Truck-Mounted Business prior to the Closing Time, except
to the extent accrued on the Closing Balance Sheet on a basis consistent with
the 1999 Balance Sheet (as defined in Section 4.8) and the Interim Balance Sheet
(as defined in Section 4.8);
(iv) any liabilities or obligations under Environmental Laws
(as defined in Section 4.18) which were caused prior to the 1999 Closing, and
any and all liabilities or obligations under Environmental Laws which do not
relate to operations at the Leased Property (each as defined in Section 4.16);
(v) any liabilities or obligations not related to the
ownership of the German Truck-Mounted Assets or operation of the German
Truck-Mounted Business;
(vi) subject to the terms, conditions and limitations of
this Agreement, any liabilities, costs and expenses related to the transactions
contemplated by this Agreement;
5
(vii) any liabilities or obligations with respect to the
litigation described in Section 4.15 of the Disclosure Statement and any other
litigation not described in Section 4.15 of the Disclosure Statement which is
pending as of the Closing Time;
(viii) any liabilities based upon products liability related
to products sold prior to the 1999 Closing or sent out into the stream of
commerce prior to the 1999 Closing;
(ix) all liabilities and obligations under the Employment
Contracts (as defined in Section 6.10) with respect to periods prior to the
Closing Time, except to the extent reflected on the Closing Balance Sheet;
(x) any liabilities or obligations that (A) are based upon
products liability for products sold after the 1999 Closing and prior to the
Closing Time and (B) are based on accidents which occurred after the 1999
Closing and prior to the Closing Time;
(xi) all liabilities and obligations under the 1999 Purchase
Agreement which do not constitute Assumed German Liabilities;
(xii) any liabilities related to the noncompliance by the
parties hereto with any applicable bulk transfer law; and
(xiii) all liabilities and obligations related to the lease
agreement for the real property located at Alte Xxxxxxx 00 in Dortmund; and
(xiv) to the extent not already described in this Section
1.1(e), those liabilities and obligations expressly excluded from the definition
of Assumed German Liabilities in subsections (i), (ii), (iii), (iv), (v), (vi),
and (viii) of Section 1.1(d).
The excluded liabilities and obligations described in this Section 1.1(e) (none
of which shall be assumed by Buyer) are collectively referred to hereinafter as
the "Excluded German Liabilities."
ARTICLE 2
PURCHASE PRICE
2.1 The Purchase Price; Allocation. The aggregate purchase price for
the German Truck-Mounted Assets shall be Five Hundred Twenty-Two Thousand U.S.
Dollars ($522,000 U.S.) (the "Purchase Price"). The Purchase Price shall be
allocated among the German Truck-Mounted Assets as set forth in Section 2.1 of
the Disclosure Statement. Buyer and Seller shall each report the Tax
consequences of the transactions contemplated by this Agreement in a manner
consistent with such allocation, and neither Buyer nor Seller will take any
position inconsistent with such allocation unless otherwise required by
applicable law. The Purchase Price shall be payable as provided in Section 2.2.
6
2.2 Payment of Purchase Price. The 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) by wire transfer of immediately
available funds to an account designated in writing by Seller.
2.3 Purchase Price Adjustment.
(a) On or before sixty (60) days following the Closing Date,
Buyer shall prepare and deliver to Seller a balance sheet of the German
Truck-Mounted Business as of the close of business on the day immediately
preceding the Closing Date, which balance sheet shall be reported on by Buyer's
independent public accountants as having been properly prepared in accordance
with Closing GAAP (such balance sheet is referred to herein as the "Closing
Balance Sheet").
(b) During the 45 day period following Seller's receipt of the
Closing 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 Balance Sheet and any financial records
relevant to the preparation of the Closing 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 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 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 decision of the Arbitrator shall be final and binding on
the parties absent manifest error. The cost of any arbitration (including the
fees of the Arbitrator) pursuant to this Section 2.3(c) shall be paid 50% by
Buyer and 50% by Seller.
7
(d) Buyer and Seller acknowledge and agree that pursuant to
Section 6.16 of the Xxxx Purchase Agreement (as defined in Section 11.9), if the
Closing (as defined in Section 3.1(a)) occurs concurrently with the closing of
the transactions contemplated by the Xxxx Purchase Agreement, then the Terex
B.V. Purchase Price (as defined in the Xxxx Purchase Agreement) shall be reduced
to Twenty-Four Million One Hundred Nineteen Thousand U.S. Dollars ($24,119,000
U.S.) and the Reference Amount (as defined in Section 11.9) shall be increased
to Fourteen Million Three Hundred Nine Thousand U.S. Dollars ($14,309,000 U.S.).
Accordingly, to the extent that German Net Asset Value (as defined in Section
11.9) is greater than Five Hundred Twenty-Two Thousand U.S. Dollars ($522,000
U.S.) (the "German Reference Amount"), Xxxx Net Equity (as defined in the Xxxx
Purchase Agreement) shall be increased by the amount of such difference or,
alternatively, to the extent that German Net Asset Value is less than the German
Reference Amount, Xxxx Net Equity shall be reduced by the amount of such
difference. By agreeing to the provisions contained in this Section, the parties
intend that (i) any difference between German Net Asset Value and the German
Reference Amount be used solely for the purpose of determining the amount of the
purchase price adjustment contemplated by the Xxxx Purchase Agreement, and (ii)
that no separate adjustment will be made to the Purchase Price under this
Agreement.
ARTICLE 3
CLOSING
3.1 Closing.
(a) The closing of the sale and purchase of the German
Truck-Mounted Assets 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 date on
which the transactions contemplated by the Xxxx Purchase Agreement close, 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 Closing shall be deemed effective as
of the end of September 30, 2000 German local time on the Closing Date, and
such effective time shall be referred to herein as the "Closing Time."
(b) At the Closing, Seller shall deliver to Buyer duly
executed instruments of transfer and assignment of the German Truck-Mounted
Assets (in forms reasonably satisfactory to Buyer), sufficient to vest in Buyer
legal and valid title to the German Truck-Mounted Assets, and Buyer shall
deliver to Seller (i) the Purchase Price in the manner set forth in Article 2
and (ii) duly executed instruments of assumption (in forms reasonably
satisfactory to Buyer) sufficient to effect the assumption of the Assumed German
Liabilities.
8
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
4.1 Organization. Seller is a corporation duly incorporated and validly
existing under the laws of the Federal Republic of Germany 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. All of the German
Truck-Mounted Assets and all of the employees of Seller who work in the German
Truck-Mounted Business are located in Germany.
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 a valid and binding obligation of Seller,
enforceable against Seller 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 Nature of Business. The German Truck-Mounted Business, as conducted
by Seller, consists solely of the sale and distribution of Xxxx B.V. products in
the Federal Republic of Germany. Seller, in connection with its operation of the
German-Truck Mounted Business, does not engage in any manufacturing or service
activities.
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 organizational
documents of Seller; (b) conflict with, or result in the breach of, termination
of, or give rise to any Lien (as defined in Section 4.7) or constitute a default
under, any material agreement, understanding or commitment to which Seller is a
party or by which Seller is bound; or (c) constitute a violation of any law,
regulation, rule, judgment or decree applicable to Seller, 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 and
properties of Terex B.V. and of the German Truck-Mounted Business, taken as a
whole (collectively, the "Xxxx Business"). No consent, approval or authorization
of any Governmental Authority (as defined in Section 4.15(b)) is required on the
part of Seller 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 Xxxx Business.
4.5 Reserved.
9
4.6 Real Property Leases. With respect to each Assumed Lease (as
defined in Section 4.16(a)), Section 4.6 of the Disclosure Statement sets forth
(a) the current term of each such lease (start date and ending date); (b) the
termination period of each such lease; (c) the amount of deposits paid by Seller
to, and currently held by, the landlord; (d) a description of any material
damage to the premises for which Seller can reasonably expected to be liable to
the Landlord; and (e) a description of any obligation of Seller to rebuild,
repair or otherwise modify in any material respect the premises.
4.7 Title to German Truck-Mounted Assets. The German Truck-Mounted
Business was acquired by Seller in connection with the transactions described in
the 1999 Purchase Agreement. Seller has good title, legally and beneficially, to
all of the German Truck-Mounted Assets and at the Closing, Seller will transfer
and deliver to Buyer legal and valid title to the German Truck-Mounted Assets,
free and clear of all claims, liens, security interests, rights of first
refusal, options to purchase or other encumbrances (collectively, "Liens"),
other than (a) Liens created by Buyer, (b) Liens disclosed in Section 4.7 of the
Disclosure Statement, and (c) 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 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 for the German Truck-Mounted Business as of December 31,
1999, (the "1999 Balance Sheet"); and (b) the unaudited balance sheet and
related income statement of the German Truck-Mounted Business as of and for the
six months ended June 30, 2000 (the unaudited balance sheet as of June 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 as of June 30, 2000
have been prepared without footnote disclosures) and fairly present in all
material respects the financial position and results of operations for the
entities described therein at the dates and for the periods indicated therein
(subject in the case of Financial Statements as of June 30, 2000 to normal year
end adjustments consistent with the 1999 Balance Sheet). There have been no
material changes to the accounting principles used in the financial statements
of the German Truck-Mounted Business since November 11, 1999 (the date of the
1999 Closing), other than those set forth in Section 4.8 of the Disclosure
Statement.
4.9 Absence of Certain Changes; Liabilities.
(a) Except as set forth in Section 4.9 of the Disclosure
Statement, since the date of the 1999 Balance Sheet, Seller in connection with
its operation of the German Truck-Mounted Business has not suffered any material
adverse change in its assets, results of operations or financial condition.
10
(b) To the knowledge of Seller, there are no liabilities or
obligations of Seller in connection with its operation of the German
Truck-Mounted Business 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 Balance Sheet and Interim Balance Sheet, (ii)
liabilities or obligations which arose after the date of the 1999 Balance Sheet
in the ordinary course of business, and (iii) liabilities described in Section
4.9 of the Disclosure Statement.
(c) Since the date of the 1999 Balance Sheet, Seller has
operated the German Truck-Mounted Business in the ordinary course and consistent
with Seller's past practice and, except as set forth in Section 4.9 of the
Disclosure Statement, there has not been:
(i) with respect to the German Truck-Mounted Business, any
damage, destruction or loss (whether or not covered by insurance) that has had a
material adverse effect on the German Truck-Mounted Business;
(ii) any material transaction by Seller in connection with
its operation of the German Truck-Mounted Business other than in the ordinary
course of business or as otherwise permitted or contemplated by this Agreement;
(iii) with the respect to the German Truck-Mounted Business,
any increase in compensation or benefits payable under existing employment
agreements or severance or termination pay policies with respect to Seller's
employees 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;
(iv) any employment, bonus, deferred compensation, or
severance agreement entered into with any of the employees of Seller working
primarily in the German Truck-Mounted Business, other than employment agreements
terminable at will and other than as disclosed in Section 4.13 of the Disclosure
Statement;
(v) any lease, transfer, assignment, abandonment or other
disposition of any material German Truck-Mounted Asset outside the ordinary
course of business;
(vi) any intercompany loans or payments, dividends or
transfers of assets by Seller with respect to the German Truck-Mounted Business
which are inconsistent with Terex Corporation's past practice and the overall
corporate cash and tax management practices of Terex Corporation or are
otherwise outside the ordinary course of business;
11
(vii) any single capital expenditure or series of related
capital expenditures by Seller (with respect to the German Truck-Mounted
Business) in excess of $10,000 U.S. (or the equivalent amount of any other
currency) other than in the ordinary course of business;
(viii) any material change or modification of the accounting
methods or practices of Seller with respect to the German Truck-Mounted
Business, or of the banking arrangements of Seller with respect to the German
Truck-Mounted Business;
(ix) any acceleration or delay in the manufacture, shipment
or sale of inventory, the collection of accounts receivable or notes receivable,
the payment of accounts or notes payable, the sale of accounts receivable, or
any other action outside the ordinary course of business, which acceleration,
delay or other action is intended to artificially increase the amount of cash in
the German Truck-Mounted Business or artificially increase German Net Asset
Value as calculated from the Closing Balance Sheet; and
(x) any agreement or commitment by Seller 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
U.S. (or the equivalent amount of any other currency) or less, as of the date
hereof, (a) all federal, state, local, domestic and foreign tax returns required
to be filed with respect to the German Truck-Mounted Business (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 the German
Truck-Mounted Business; and (c) no deficiencies for any income taxes in respect
of the German Truck-Mounted Business have been asserted in writing against
Seller, which remain unpaid. To the knowledge of Seller, except with respect to
Taxes which individually involve $1,000 U.S. (or the equivalent amount of any
other currency) 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 or asserted against Seller to the
extent such liability, deficiency, interest or penalty affects the German
Truck-Mounted Assets or the German Truck-Mounted Business. 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
Seller has not incurred any liability for taxes with respect to the German
Truck-Mounted Business that is unusual in nature or amount in any material
respect. No authority in a jurisdiction where Seller (with respect to the German
Truck-Mounted Business) does not file Tax Returns has made a written claim or
given written notice that Seller (with respect to the German Truck-Mounted
Business) is subject to taxation by that jurisdiction.
12
The term "Tax" and "Taxes," as used in this Agreement, means
all forms of taxation, duties, imposts and levies whether of the Federal
Republic of Germany 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 Federal Republic of Germany
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 Seller following the Closing and which has been taken into
account in computing any provision for Tax which is reflected in the Closing
Balance Sheet (or which, but for the presumed availability of such relief, would
have been reflected in the Closing Balance Sheet) or (ii) which was treated as
an asset of Seller or otherwise noted in the Closing Balance Sheet; and (z) set
off of any Buyer's relief and circumstances where, but for such use or set off,
Seller 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 all contracts (written
or oral) to which Seller is a party and which are material to the German
Truck-Mounted Business.
4.12 Absence of Defaults. Each of the contracts listed or required to
be listed in Section 4.11 of the Disclosure Statement (each, a "Material
Contract") constitutes a valid and binding obligation of Seller 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, Seller (to the
extent such contract relates to the German Truck-Mounted Business) is not in
default in any material respect under any Material Contract, including 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 Seller (to the extent such contract relates to the German Truck-Mounted
Business). With respect to any contract not listed in Section 4.11 of the
Disclosure Statement to which Seller (with respect to the German Truck-Mounted
Business) is a party, Seller is not 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.
13
4.13 Agreements Regarding Employees. Except as set forth in Section
4.13 of the Disclosure Statement, as of the date of this Agreement, Seller in
connection with its operation of the German Truck-Mounted Business is not 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 Seller working in the German Truck-Mounted
Business, or any other material benefit plan or similar arrangement with the
employees of Seller working in the German Truck-Mounted Business; (b) employment
agreement, arrangement or understanding; or (c) any collective bargaining or
other labor agreement. Except as set forth in Section 4.13 of the Disclosure
Statement, there are no existing, or to the knowledge of Seller threatened, (x)
employee strikes, work stoppages, lockouts or material labor disputes or (y) to
the knowledge of Seller, any union organizing activity or work slow-downs,
involving the employees of Seller working in the German Truck-Mounted Business.
4.14 Employee Benefit Plans. Except as set forth in 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 plans or arrangements
maintained or contributed to by Seller for the benefit of employees of the
German Truck-Mounted Business.
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 Seller in connection with its
operation of the German Truck-Mounted Business that, if adversely determined,
would have a material adverse effect on the Xxxx Business. 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.
14
(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, Seller in
connection with its operation of the German Truck-Mounted Business is and has
been in compliance in all material respects with all applicable foreign and
domestic laws, ordinances, rules, regulations, judgments, decrees and orders
("Laws") of any governmental entity or authority having jurisdiction over the
German Truck-Mounted Business and/or the German Truck-Mounted Assets (each, a
"Governmental Authority"). To the knowledge of Seller, Seller (with respect to
its operation of the German Truck-Mounted Business) has no liability (whether
accrued, absolute, contingent, direct or indirect) for past violations of any
Law, except as would not have a material adverse effect on the Xxxx Business.
All material reports and returns (other than Tax Returns which are covered
exclusively by Section 4.10) required to be filed by Seller (with respect to the
German Truck-Mounted Business) 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 any agent, employee, officer, director,
shareholder or other person or entity on behalf of Seller which were unlawful
under the Laws of Germany or any other Governmental Authority.
4.16 Real Property.
(a) No real property owned by Seller is used in the German
Truck-Mounted Business. Section 4.16 of the Disclosure Statement sets forth a
correct and complete list of all real property leased by Seller and used
primarily in the German Truck-Mounted Business (the "Leased Property"). Section
4.16 of the Disclosure Statement also sets forth true and complete copies of the
leases at Leipzig and Muenster (the "Assumed Leases") to which Seller is a party
in connection with its operation of the German Truck-Mounted Business. To the
knowledge of Seller, except for terms required by applicable law and except as
set forth in Section 4.6 of the Disclosure Statement, there are no material
terms relating to Seller's lease of real property at Leipzig and Muenster other
than as expressly set forth in the Assumed Leases.
(b) Except as set forth in Section 4.16 of the Disclosure
Statement, there are no conditions on the Leased Property (including, without
limitation, all buildings, systems, fixtures, structures and improvements
thereon) which (i) constitute a material health or safety hazard, or (ii)
materially reduce the value of any portion of the Leased Property to a
prospective buyer with knowledge of the condition. All buildings, systems,
fixtures, structures and improvements leased or used by Seller (in connection
with the German Truck-Mounted Business) are in working order and are adequate in
condition, quality and quantity for the normal operation of the German
Truck-Mounted Business as presently conducted. Seller (with respect to the
Leased Property) possesses easements and rights, including without limitation,
easements for all utilities, services, roadways, and other means of ingress and
egress, necessary to conduct the German Truck-Mounted Business as presently
conducted. The Leased Properties 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 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
Seller (with respect to Leased Properties used primarily by the German
Truck-Mounted Business) 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 Leased Property or any portion thereof. Seller
(with respect to the Leased Properties) has not received nor does Seller (with
respect to the Leased Properties) have 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 Leased Property that has not previously
been corrected other than a violation which will not have a material adverse
effect on the Xxxx Business.
15
4.17 Patents and Trademarks. Seller 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 the German Truck-Mounted Business (individually, an "Intellectual Property
Right," and collectively, the "Intellectual Property Rights"); provided,
however, that with respect to Intellectual Property Rights relating to products
or components supplied to Terex or Seller by third party vendors, Seller
represents and warrants only that, except as set forth in Section 4.17 of the
Disclosure Statement, Seller 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. Seller 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 the German
Truck-Mounted 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 Seller in connection with the
German Truck-Mounted Business (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, Seller in connection with its operation of the German
Truck-Mounted Business (a) is not a defendant in any claim, suit, action or
proceeding relating to their respective businesses which involves a claim of
infringement of any patents, trademarks or service marks, and (b) has no
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 Seller (in connection with the operation of the German
Truck-Mounted Business) or restricting the licensing thereof by Seller to any
person in any material respect.
16
4.18 Environmental Matters. Except as described in Section 4.18 of the
Disclosure Statement, (a) to the knowledge of Seller, Seller in connection with
its operation of the German Truck-Mounted Business 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 the German
Truck-Mounted Assets which would reasonably be expected to subject Buyer 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 cleanup proceedings
or written notices of violation pending or, to the knowledge of Seller,
threatened, with respect to compliance or in connection with Environmental Laws
affecting the German Truck-Mounted Assets; (d) the operation of the German
Truck-Mounted Business by Seller 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 Leased Property that would reasonably likely result in material liabilities
of, or material losses, material damages or material costs to Seller under any
Environmental Law. Section 4.18 of the Disclosure Statement lists all
environmental audits, inspections, assessments, investigations or similar
reports in the possession of Seller or of which Seller is aware relating to the
Leased Property or any other assets of the German Truck-Mounted Business.
The term "Environmental Law" or "Environmental Laws," as used
in this Agreement, means all domestic and foreign laws, acts, statutes, rules,
regulations, 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 environmental laws of Germany (all as the same may have been
amended and as in effect from time to time through the Closing).
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 Seller in connection with the
operation of the German Truck-Mounted Business is of a quality and quantity
usable in the ordinary course of business of Seller 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 Interim Balance Sheet (as
adjusted for the passage of time) through the Closing Time in accordance with
GAAP and in accordance with Seller's past practice. Such inventory does not
include any raw materials or work-in-process. The value of all inventory items,
including finished goods has been recorded on the books of Seller (maintained
with respect to the German Truck-Mounted Business) 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 Seller in connection with the German Truck-Mounted Business.
17
4.20 Receivables. All receivables of Seller in connection with its
operation of the German Truck-Mounted Business which are 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
Seller 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 set forth in the Interim Balance
Sheet, as adjusted for the passage of time through the Closing Time in
accordance with GAAP and the past practice of Seller.
4.21 Brokers and Finders. Seller has not 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, Seller (with respect to the German Truck-Mounted Business)
does not owe any amount to, nor does it have any outstanding contract with or
commitment to, any of the shareholders, directors, officers, employees or
consultants of Seller (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 Seller with respect to the
German Truck-Mounted Business.
4.24 Books and Records. The books and financial records of the German
Truck-Mounted Business are complete and correct in all material respects and
since the date of the 1999 Closing have been maintained in all material respects
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 the German Truck-Mounted 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.
18
4.26 Product Warranty. Section 4.26 of the Disclosure Statement sets
forth a description of all warranties provided by Seller with respect to the
German Truck-Mounted Business and a statement of the aggregate cost of remedying
all warranty claims made by customers of the German Truck-Mounted Business for
the year ending December 31, 1999, together with a summary of outstanding
warranty claims as of April 30, 2000, which summary indicates the product
involved, the type of claims and the estimated cost of remedying the claims.
Except as set forth in Section 4.26 of the Disclosure Statement, there are no
outstanding warranty claims with respect to the German Truck-Mounted Business
and Seller has no notice or knowledge of threatened or potential warranty claims
other than those arising in the ordinary course since the date of the Interim
Balance Sheet which are usual in nature and amount.
4.27 Sufficient Assets. There are no assets (including, without
limitation, leases and licenses) used in the German Truck-Mounted Business which
(a) are material to the operation of the German Truck-Mounted Business as
presently conducted and (b) are not included in the German Truck-Mounted Assets
transferred to Buyer hereunder.
4.28 Insurance. Section 4.28 of the Disclosure Statement sets forth a
list and brief description 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 Seller with respect
to the German Truck-Mounted Business. With respect to each such binder or policy
so listed, Section 4.28 of the Disclosure Statement also lists the limits,
deductibles, and term of coverage. Such policies and binders are outstanding and
in full force and effect. Seller is not 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
under such policy or binder. Seller has not 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 Federal Republic of Germany 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).
19
5.3 Consents of Third Parties. The execution, delivery and performance
of this Agreement by Buyer will not (a) violate or conflict with the
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 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 Reserved.
5.6 Financing. Buyer has available to it all funds necessary to pay the
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 the German Truck-Mounted Business Pending Closing.
Except as contemplated by this Agreement, from the date hereof until the
Closing, except as approved in writing by Buyer, Seller covenants and agrees
that:
(a) Seller shall operate the German Truck-Mounted Business in
the ordinary course and consistent with Seller's past practice, as reflected on
the Financial Statements.
20
(b) Except as contractually required by any employment
arrangement listed in Section 4.13 of the Disclosure Statement and other than in
connection with actions generally taken by Terex with respect to all of its
operations and consistent with the past practice of Terex, Seller will not (i)
grant or agree to grant any (A) bonus to any employee of Seller working
primarily in the German Truck-Mounted Business, (B) general increase in the
rates of salaries or compensation of the employees of Seller working primarily
in the German Truck-Mounted Business, or (C) specific increase to any employee
of Seller working primarily in the German Truck-Mounted Business, 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 the employees of Seller working primarily in the German
Truck-Mounted Business or any increase in any existing benefits. In addition,
Seller shall not hire any additional employees to work in the German
Truck-Mounted Business.
(c) Seller will use reasonable efforts to maintain and
preserve intact the German Truck-Mounted Business, to keep available the
services of the present employees of Seller working primarily in the German
Truck-Mounted Business and to maintain Seller's relationships with customers,
suppliers and others having business relationships with the German Truck-Mounted
Business.
(d) Seller shall not sell, assign or license with respect to,
or dispose of, any material assets or properties of the German Truck-Mounted
Business, tangible or intangible, or incur any material liabilities in
connection with the German Truck-Mounted Business, except for sales and
dispositions made or liabilities incurred, including the creation of purchase
money security interests, in the ordinary course; provided, that nothing herein
shall preclude Seller from using its existing borrowing or credit facilities in
a manner consistent with past practice since owned by Seller.
(e) With respect to the German Truck-Mounted Business, Seller
shall not:
(i) create, incur, or assume any debt, liability or
obligation for borrowed money, direct or indirect, whether accrued, absolute,
contingent, or otherwise, relating to the German Truck-Mounted Business, other
than under existing lines of credit or in the ordinary course of business
consistent with Seller's past practice in the case of the German Truck-Mounted
Business;
(ii) waive or release any rights of material value relating
to the German Truck-Mounted Business;
(iii) transfer, sell or otherwise convey any of the assets
of the German Truck-Mounted Business, 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 Seller's past practice;
21
(iv) enter into or terminate any material lease with respect
to the German Truck-Mounted Business, or make any change in any material leases,
other than in the ordinary course of business consistent with Seller's past
practice;
(v) become obligated to make any capital expenditures
relating to the German Truck-Mounted Business or enter into any commitments
therefor, except for capital expenditures not exceeding $10,000 U.S. (or
equivalent amount of any other currency) for any one commitment or series of
related commitments made in the ordinary course of business consistent with
Seller's past practice;
(vi) transfer, terminate or permit the lapse of or fail to
pay any fee that becomes due with respect to any of the Intellectual Property
Rights;
(vii) accelerate or delay the manufacture, shipment or sale
of inventory, the collection of accounts receivable or notes receivable or the
payment of accounts or notes payable, sell any accounts receivable or take any
action outside the ordinary course of business if such acceleration, delay or
other action is intended to artificially increase the amount of cash in the
German Truck-Mounted Business or artificially increase German Net Asset Value as
calculated from the Closing Balance Sheet;
(viii) enter into any product distribution, sales
representative, sales agency, supplier or sub supplier agreement without the
prior written consent of Buyer, which consent shall not be unreasonably
withheld; or
(ix) agree or otherwise commit to take any of the actions
referred to in subsections (i) (viii) above.
6.2 Access.
22
(a) From the date of this Agreement until the Closing, 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 German Truck-Mounted Business as Buyer may from time to time
reasonably request. In addition, from the date of this Agreement until the
Closing, Seller shall permit representatives of Buyer to have access at
reasonable times and upon reasonable notice to the German Truck-Mounted Assets,
the Leased Property, the facilities used primarily in the German Truck-Mounted
Business and key employees of Seller working primarily in the German
Truck-Mounted Business. Prior to the Closing, Buyer shall have the right to
complete, at the sole cost and expense of Buyer, Phase I environmental studies
on each parcel of Leased Property. Buyer shall deliver to Seller a copy of any
Phase I or other third party report prepared in connection with any such
environmental investigation; provided, however, that no such Phase I or other
environmental review by Buyer will involve sampling, Phase II testing or
invasive investigatory work without the prior written consent of Seller, which
consent shall not be unreasonably withheld (it being agreed that it shall not be
unreasonable for Seller to withhold consent with respect to a particular
property if the findings contained in any Phase I 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 Leased 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 are subject to the condition that the inspections
and testing to be conducted shall not (i) unreasonably interfere with the
business operations of Seller, (ii) damage any asset or property used in
connection with the German Truck-Mounted Business, and (iii) cause Seller to be
in material breach of any lease or other agreement relating to any of the 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.
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.
23
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
the 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) or other like taxes or recording fees payable in
connection with the sale of the German Truck-Mounted Assets 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.
6.7 Preservation of Records. Buyer agrees that it shall, at its own
expense, preserve and keep the records of German Truck-Mounted Business
delivered to it pursuant to this Agreement for the maximum holding period for
such records required under German law 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. 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 Partek Corporation (the "Confidentiality
Agreement") is hereby incorporated by reference herein in its entirety and it
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 the German
Truck-Mounted Business, 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
24
(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 Seller relating to the German
Truck-Mounted Business (collectively, the "Bank Accounts") or otherwise in
respect of Seller relating to the German Truck-Mounted Business (including the
amount of any checks received by Seller relating to the German Truck-Mounted
Business), and all other cash on hand, through the close of business on the day
immediately preceding 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 Seller relating to the German Truck-Mounted
Business 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 Purchase Price. If after
the Closing Time 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 Purchase Price, Buyer shall pay Seller or Seller
shall pay Buyer, as applicable, the difference between the two amounts promptly
after such determination (but in no event shall such payment be made later than
five business days after the determination is made). If the parties disagree as
to whether a payment must be made pursuant to this Section 6.9(a), or if the
parties disagree as to the amount of such payment, then such dispute shall be
submitted to the Arbitrator. Such submission shall be made at the same time a
dispute is submitted to the Arbitrator pursuant to Section 2.3(c) or if no
dispute is submitted to the Arbitrator pursuant to Section 2.3(c), then any
submission pursuant to this Section shall be made within five days after the
expiration of the 30 day period referenced in the first sentence of Section
2.3(c). The Arbitrator shall render a decision resolving the matter within 30
days after its receipt of such submission. The Arbitrator's decision on the
matter shall be final and binding on the parties absent manifest error. The cost
of any arbitration pursuant to this Section 6.9(a) 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 the German
Truck-Mounted Business, on the other hand, shall be canceled as of the Closing
Time, except for amounts payable with respect to goods provided by Seller or any
of its Affiliates to the German Truck-Mounted Business in the ordinary course of
business and listed in Section 6.9(b) of the Disclosure Statement.
6.10 Employment and Employee Benefit Issues. Section 6.10(a)(i) of the
Disclosure Statement sets forth a complete list of all employees of Seller
working primarily in the German Truck-Mounted Business (collectively, the
"German Truck-Mounted Employees"), indicating the name, current position, fixed
gross salary, location of employment, and notice period for termination for each
such employee. A true and correct copy of the employment contract between Seller
and each German Truck-Mounted Employee has previously been furnished to Buyer
(collectively, the "Employment Contracts").
6.11 Reserved.
6.12 Litigation Support; Records Retention; Transitional Services.
25
(a) In the event and for so long as any party is actively
investigating, contesting, defending against or prosecuting any charge,
complaint, action, suit, contract appeal, proceeding, hearing, investigation,
claim, demand or audit (including routine audits and contract close outs) in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Time involving the German Truck-Mounted Business, the other party
will cooperate with the contesting or defending party and its counsel in the
contest or defense, make available its personnel and provide such testimony and
access to its books and records as may be reasonably necessary in connection
with the contest or defense.
(b) Seller and Buyer agree that Buyer will purchase
substantially all of the property used in the German Truck-Mounted Business, and
in connection therewith Buyer will offer employment to individuals who
immediately before the Closing Time were employed in such trade or German
Truck-Mounted Business by Seller. Accordingly, provided that Seller provides
Buyer with all necessary payroll records for the calendar year which includes
the day immediately preceding the Closing Date, Buyer will furnish any and all
forms required by any Governmental Authority to each employee employed by Buyer
who had been employed by Seller, disclosing all wages and other compensation
paid for such calendar year, and taxes withheld therefrom, and Seller will be
relieved of the responsibility to do so.
(c) Buyer will maintain all original books, records, files,
documents, papers and agreements pertaining to the German Truck-Mounted Assets,
the Assumed German Liabilities or otherwise relating to the German Truck-Mounted
Business as conducted before the Closing Time for such period as may be required
by Law. Seller agrees to maintain all original books, records, files, documents,
papers and agreements relating to any of the German Truck-Mounted Assets which
are not included in the German Truck-Mounted Assets for such period as may be
required by Law. Seller and Buyer agree that before destroying or discarding any
materials required to be retained pursuant to this Section 6.12(c), it will
notify the other in writing (which notice will include a description of the
materials to be destroyed or discarded) and such other party may, at its
expense, remove or make copies of such materials within 90 days following the
date of such written notice. In the event the other party has not removed such
materials within such 90 day period, the party desiring to destroy or discard
such materials may proceed with such action without any liability to the other.
(d) Subject to the provisions of Section 6.12(e), after the
Closing Time, the parties will each provide reasonable assistance and
cooperation to the other upon request in connection with such matters relating
to the pre closing operations of the German Truck-Mounted Business as:
(i) the completion and delivery to Seller of the financial
statements and the general ledger of the German Truck-Mounted Business as of the
day immediately preceding the Closing Date;
(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 the German Truck-Mounted
Business prior to the Closing Time and with the transactions provided for
herein;
26
(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 the German Truck-Mounted Business 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 German Truck-Mounted Business
and the German Truck-Mounted Assets to Buyer.
(e) All requests for assistance and cooperation under Section
6.12(d) 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 will remove the name "Terex" and any and
all derivations thereof from all exterior signs located at the Leased Property
as soon as practicable but in any event within two months after the Closing
Date. Buyer may not use publicly any business records described in Section
1.3(b)(vi) without first removing therefrom, or obliterating all portrayals or
references to, any of Terex's trade names, trademarks or service marks or other
intangible property contained in such records, unless Seller consents in writing
to such usage as soon as practicable after the Closing Date and in any event
within one month 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 that are required to be
obtained by Seller in connection with the transactions contemplated by this
Agreement. 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
security to a contracting third party in order to obtain such approval, consent,
novation or waiver.
27
6.15 Noncompetition. Neither Seller nor any Affiliate shall, for a
period of two years from the Closing Date, directly or indirectly, (a) engage as
a manufacturer, seller, distributor or marketer of self propelled, truck mounted
forklifts (the "Competitive Business") in any territory in which Seller has
sold, within the one-year period preceding the date of this Agreement,
self-propelled truck-mounted forklifts or (b) induce, solicit, aid or assist any
other person to induce or solicit employees, customers or suppliers of the
German Truck-Mounted Business to terminate, curtail or otherwise limit their
employment or other business relationships with the German Truck-Mounted
Business, except for general solicitations for employment that are not intended
or designed to specifically target employees of the German Truck-Mounted
Business; 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 two years after the Closing Date, Seller
shall, in a commercially reasonable manner, promptly thereafter diligently
pursue the divestiture of that portion of such business which constitutes a
Competitive Business; and
(z) as long as the distribution network of Seller
or any Affiliate of Seller does not become directly involved with any product
line which constitutes a Competitive Business, then Seller and each Affiliate of
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 two
years after the Closing Date, Seller shall, in a commercially reasonable manner,
promptly thereafter diligently pursue divestiture of that portion of the assets
which is used in or otherwise constitutes a Competitive Business.
Seller acknowledges and agrees that irreparable injury to
Buyer will result if Seller or any Affiliate of Seller breaches this Section
6.15 and that the remedy at law for the breach of any such covenant will be
inadequate. Accordingly, if Seller or any Affiliate of Seller engages in an act
in violation of this Section 6.15, Buyer shall be entitled, in addition to such
other remedies and damages as may be available by law or under this Agreement,
to injunctive relief to enforce the provisions of this Agreement.
28
6.16 Account Debtors. From and after the Closing, Buyer shall have the
right and authority to (a) endorse, without recourse, the name of Seller on any
check or any other evidence of indebtedness payable to Seller on account of any
accounts receivable of the German Truck-Mounted Business sold to Buyer hereunder
and (b) deposit the same into Buyer's accounts. Seller shall promptly remit to
Buyer all items and sums received by Seller after the Closing Time with respect
to the accounts receivable of the German Truck-Mounted Business sold to Buyer
hereunder. From and after the Closing Time, Buyer shall promptly remit to Seller
all items and sums received by Buyer on or after the Closing Time with respect
to accounts receivable of the German Truck-Mounted Business that constitute
excluded assets pursuant to Section 1.3(b)(ix).
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 German Truck-Mounted Assets under this
Agreement is subject to the fulfillment, prior to or at the Closing, of each of
the following conditions, any of which may be waived in writing by Buyer:
(a) The representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and the Closing Time with the same force and effect as though
made at and as of the Closing Time, except for any representation or warranty
made or given as of a specified date, which shall have been true and correct in
all material respects as at such date. For purposes of this Section 7.1(a), the
representations and warranties of Seller in this Agreement shall be true and
correct in all material respects unless the facts, events or circumstances
giving rise to any untruths or inaccuracies in such representations or
warranties have the same effect as a Material Adverse Effect (as defined in
Section 11.9);
(b) Seller shall have performed and complied in all material
respects with the agreements and covenants required by this Agreement to be
performed or complied with by Seller prior to or at the Closing;
(c) Buyer shall have been furnished with a certificate, dated
the Closing Date, of a director of Seller certifying that the conditions
specified in Sections 7.1(a), 7.1(b), and 7.1(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;
29
(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) The waiting period applicable to the consummation of the
transactions contemplated hereby under any applicable Law (including, without
limitation, any waiting period in connection with the filing made with the
Federal Cartel Office) shall have expired or been terminated;
(g) Seller shall have executed and delivered to Buyer the
documents identified in Section 7.3;
(h) Seller shall have delivered or provided Buyer with access
to the German Truck-Mounted Assets;
(i) Buyer shall have received evidence satisfactory to Buyer
that Seller has obtained all third party consents described in Section 4.4 of
the Disclosure Statement;
(j) On the Closing Date, the Truck Mounted Transactions (as
defined in Section 11.9) shall have been consummated previously hereto or
simultaneously herewith;
(k) Seller shall have caused to be executed and delivered to
Buyer a guaranty in substantially the form of Exhibit B attached hereto; and
(l) Buyer's environmental due diligence shall not have
indicated liabilities and/or to the extent reasonably likely to occur, potential
liabilities that constitute or can reasonably be expected to constitute a
Material Adverse Effect.
7.2 Conditions Precedent to Obligations of Seller. The obligation of
Seller to consummate the sale of the German Truck-Mounted Assets 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 in writing by Seller:
(a) The representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and the Closing Time with the same effect as though made at and
as of the Closing Time, except for any representation or warranty made or given
as of a specified date, which shall have been true and correct in all material
respects as at such date;
(b) Buyer shall have performed and complied in all material
respects with the agreements and covenants required by this Agreement to be
performed or complied with by it prior to or at the Closing;
30
(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) The waiting period applicable to the consummation of the
transactions contemplated hereby under any applicable Law (including, without
limitation, any waiting period in connection with the filing made with the
Federal Cartel Office) shall have expired or been terminated;
(g) Buyer shall have executed and delivered to Seller the
documents identified in Section 7.3;
(h) Buyer shall have delivered the Purchase Price to Seller in
accordance with Section 2.2; and
(i) On the Closing Date, the other Truck Mounted Transactions
shall have been consummated previously hereto or 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) bills of sale, assignments and assumptions of leases,
assignments and assumptions of contracts, and other instruments of transfer and
assignment of the German Truck-Mounted Assets;
(ii) a copy of resolutions of the managing directors of
Seller authorizing the execution, delivery and performance of this Agreement by
Seller and a certificate of the secretary or assistant secretary of Seller,
dated the Closing Date, that such resolutions were duly adopted and are in full
force and effect;
31
(iii) the certificate referred to in Section 7.1(c);
(iv) the escrow agreement attached hereto as Exhibit C (the
"Escrow Agreement"); and
(v) 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 Purchase Price and evidence of the wire
transfer referred to in Section 2.2;
(ii) instruments of assumption of the Assumed German
Liabilities (collectively, the "Assumption") in form reasonably satisfactory to
the parties;
(iii) a copy of the resolutions of the managing directors of
Buyer authorizing the execution, delivery and performance of this Agreement by
Buyer, and a certificate of its secretary or assistant secretary, dated the
Closing Date, that such resolutions were duly adopted and are in full force and
effect;
(iv) the certificate referred to in Section 7.2(c);
(v) the Escrow Agreement; and
(vi) any taxes and recording and filing fees required to be
paid by Buyer pursuant to Section 6.6.
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 court of competent jurisdiction or
any governmental, regulatory or administrative agency or commission of competent
jurisdiction shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and non appealable.
8.3 Other Grounds for Termination.
32
(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.
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, 11.4,
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.
33
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 and 4.7
shall have no expiration date; (b) the representations and warranties in
Sections 4.10 and 4.14 shall survive until the applicable statute of limitations
has run; and (c) the representations and warranties in Section 4.18 shall
terminate upon the expiration of 50 months after the Closing Date; it being
understood that in the event notice of any claim for indemnification under
Section 9.2(a) shall have been given (within the meaning of Section 11.6) within
the applicable survival period, the representations and warranties that are the
subject of such indemnification claim shall survive with respect to such claim
only until such time as such claim is fully resolved. All of the representations
and warranties of Buyer contained in this Agreement and all claims and causes of
action with respect thereto shall terminate upon expiration of 22 months after
the Closing Date; it being understood that in the event notice of any claim for
indemnification under Section 9.3(a) shall have been given (within the meaning
of Section 11.6) within the applicable survival period, the representations and
warranties that are the subject of such indemnification claim shall survive with
respect to such claim only until such time as such claim is finally resolved.
9.2 Indemnification Provisions for Benefit of 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 any "Material Adverse Effect" qualification
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 Without restriction as to time, Seller further agrees to
indemnify, defend and hold Buyer Indemnified Parties harmless from and against
the entirety of any Losses Buyer Indemnified Parties suffer to the extent such
Losses are with respect to, result from, arise out of, or are caused by any of
the Excluded German Liabilities. The administration of claims with respect to
Excluded German Liabilities that fall under the definition of "Environmental
Losses" (as defined in Section 9.6) shall also be subject to the terms of
Section 9.6.
(c Reserved.
34
(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(b); (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(b), 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 Section 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 (as defined in Section 11.9), 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 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 German Truck-Mounted Business prior to the Closing, including,
without limitation, the following Losses: (y) Losses relating to products
manufactured and sold by Seller prior to the Closing; and (z) Losses based on
liabilities or obligations of Seller under Environmental Laws, to the extent
such Losses are based on conditions or occurrences that existed or occurred
prior to the Closing.
(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:
(i0 With respect to indemnification claims made under
Section 9.2(a) or 9.2(b), Buyer shall be required to proceed first against the
assets held in escrow pursuant to the Escrow Agreement, until such time as
either (A) the Buyer Indemnified Parties have been paid, 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.
(ii0 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.
(iii0 After the occurrence of either condition described in
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(b). 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(b) 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.
35
(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 agrees
to 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 further agrees to
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 are with respect to, result from or arise out of the Assumed German
Liabilities or Buyer's ownership or operation of the German Truck-Mounted Assets
after the Closing, except for those matters for which Buyer Indemnified Parties
are entitled to indemnification under Section 9.2.
(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 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 the Assumed German Liabilities; (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.
36
9.4 Matters Involving Third Parties. 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 (d) the Indemnifying Party will not
consent to the entry of a judgement with respect to the matter or enter into any
settlement which does not include a provision whereby the plaintiff or claimant
in the matter releases the Indemnified Party from all liability with respect
thereto, without the written consent of the Indemnified Party (not to be
withheld or delayed unreasonably). If the Indemnifying Party does not assume the
defense of such matter, the Indemnified Party may defend against the matter in
any manner it reasonably may deem appropriate, and (a) the Indemnified Party
will defend the matter with counsel of its choice reasonably satisfactory to the
Indemnifying Party, (b) the Indemnifying Party may retain separate counsel at
its sole cost and expense and (c) 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).
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 failure, in connection with its operation of the German Truck-Mounted
Business, to comply with applicable law after the Closing even if the German
Truck-Mounted Business is owned and operated after the Closing in the manner
owned and operated prior to the Closing, except to the extent that the manner of
ownership or operation prior to the Closing constitutes a breach of a
representation or warranty contained in this Agreement.
37
(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
Leased Property, or arising from, under or pursuant to violations of any
Environmental Law, in any case, arising prior to the 1999 Closing (even if not
asserted until after the Closing), for which Buyer seeks indemnity as an
Excluded German Liability or as a result of a breach of a representation or
warranty under Section 4.18 in connection with the operation of the German
Truck-Mounted Business or the Leased Property pursuant to Section 9.2 (for
purposes of this Section 9.6, "Environmental Losses"), Buyer shall provide
notice to Seller pursuant to Section 11.6 specifying in reasonable detail, to
the extent known, the nature of the Environmental Losses and the estimated
amount to remediate or respond to the condition giving rise to the Environmental
Losses, to the extent it is then known (which estimate shall not be conclusive
of the final amount of any Environmental Losses).
(b Seller shall have the right to control and investigate,
remediate, and/or resolve any condition giving rise to a claim or demand for
indemnification by Buyer under this Agreement with respect to any Environmental
Losses; provided, however, that Seller must consult with Buyer regarding such
investigation, remediation or resolution and provided further that if after
written notice and a reasonable opportunity to cure the Sellers 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. The Sellers shall use all reasonable efforts to minimize
disruption to Buyer's business as a result of conducting any such investigation
or remediation.
38
(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 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 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. 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 any Seller to submit information that in Buyer's
opinion would not be legally sufficient. To the extent reasonably possible under
the circumstances, Buyer shall give Seller prompt written notice of, and Seller
and/or its representatives shall have the right to participate in, any phone
call or meeting with any Governmental Authority at which any environmental
condition for which Buyer is claiming indemnification from Seller hereunder is
to be discussed or addressed in any manner. Except to the extent required by Law
after notice to Buyer, Seller shall not submit documents to any Governmental
Authority or conduct meetings or phone calls with any Governmental Authority
regarding the environmental conditions at any Leased Property without the prior
consent of Buyer, which consent shall not be unreasonably withheld.
39
(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 directly relating to a use of the facilities that is
not substantially a continuation of the operation of the German Truck-Mounted
Business as conducted on the Closing Date, or (ii) 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, 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 OR WITH RESPECT TO ANY LOSSES RESULTING FROM, ARISING
OUT OF, OF CAUSED BY EXCLUDED GERMAN LIABILITIES. THE PROVISIONS OF THIS ARTICLE
9 WILL NOT RESTRICT THE RIGHT OF ANY PARTY TO SEEK SPECIFIC PERFORMANCE OR OTHER
EQUITABLE REMEDIES IN CONNECTION WITH ANY BREACH OF ANY OF THE COVENANTS
CONTAINED IN THIS AGREEMENT OR ANY OF THE ANCILLARY AGREEMENTS. BUYER
ACKNOWLEDGES THAT IT HAS NO RIGHTS TO RESCIND THIS AGREEMENT EITHER FOR A BREACH
OF CONTRACT OF FOR NEGLIGENT OR INNOCENT MISREPRESENTATION. NOTWITHSTANDING ANY
OTHER PROVISIONS OF THE AGREEMENT, THE PROVISIONS OF THIS SECTION 9.7 SHALL NOT
APPLY TO EXCLUDE OR LIMIT THE LIABILITY OF THE SELLERS 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 prior to the Closing or for any other Excluded
German Liability.
ARTICLE 10
[RESERVED]
40
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 recitals 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 Bulk Transfer Laws. Buyer hereby waives compliance by Seller with
the provisions of any so called bulk transfer law in any jurisdiction in
connection with the transactions contemplated hereby.
11.5 Schedules; Tables of Contents and Headings. If a matter is
disclosed on any Section of the Disclosure Statement, such disclosure shall
suffice, without specific repetition and without cross-reference, as a response
to any other section of the Disclosure Statement, but only to the extent such
disclosure is made in such a way that Buyer would be reasonably expected to
determine the applicability of such disclosure to such other section. If a
matter is disclosed on any Section of Buyer's Disclosure Statement, such
disclosure shall suffice, without specific repetition and without cross
reference, as a response to any other section of Buyer's Disclosure Statement,
but only to the extent such disclosure is made in such a way the Seller 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.
41
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:
PPM Deutschland GmbH Terex Cranes
c/o 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:
Hiab GmbH
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
42
With a copy to:
Reinhart, Boerner, Van Deuren, Xxxxxx
& Rieselbach, s.c.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000 0000
11.7 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
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) Buyer's Xxxxxxx Indemnification Payments, as
defined in the Xxxxxxx Purchase Agreement, plus (ii) Buyer's Xxxx
Indemnification Payments, as defined in the Xxxx Purchase Agreement, plus (iii)
amounts paid by Buyer to Seller Indemnified Parties for Losses pursuant to the
indemnification provisions contained in this Agreement, plus (iv) 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) Buyer's Xxxxxxx Losses, as defined in the Xxxxxxx Purchase
Agreement, plus (ii) Buyer's Xxxx Losses, as defined in the Xxxx Purchase
Agreement, plus (iii) 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, plus (iv) Buyer's Princeton
Losses, as defined in the Princeton Purchase Agreement.
43
(d The term "Escrow Agreement" means the escrow agreement
among Buyer, Seller, Partek Cargotec Holding Netherlands B.V., Holland Lift
International B.V., Partek Cargotec Holding Ltd, Powerscreen International plc,
and the Escrow Agent (as defined in Section 11.9(e)), in substantially the form
of Exhibit F attached to the Princeton Purchase Agreement.
(e The term "Escrow Agent" means the party serving as escrow
agent under the Escrow Agreement.
(f The term "German Net Asset Value" means the amount by which
the value of the German Truck-Mounted Assets as reflected on the Closing Balance
Sheet exceeds the liabilities of the German Truck-Mounted Business assumed by
Buyer and reflected on the Closing Balance Sheet (including reserves reflected
on the Closing Balance Sheet).
(g 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 the financial
manager of the German Truck-Mounted Business) of those persons who are listed in
Section 11.9 of the Disclosure Statement.
(h The term "Xxxx Purchase Agreement" means the Share Purchase
and Sale Agreement dated of even date herewith among Partek Cargotec Holding
Netherlands B.V., Holland Lift International B.V., and for purposes of Article 9
thereof only, Xxxx B.V., pursuant to which Partek Cargotec Holding Netherlands
B.V. agreed to acquire from Holland Lift International B.V. all of the issued
and outstanding shares of Terex B.V.
(i 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 the German Truck-Mounted Business,
the Princeton Business, Xxxxxxx Engineering Limited and its subsidiaries, and
Terex B.V. and its subsidiaries, taken as a whole.
(j 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 agreed to acquire from Powerscreen International plc all of the
issued and outstanding shares of Xxxxxxx Engineering Limited.
(k The term "Princeton Purchase Agreement" means the Asset
Purchase and Sale Agreement dated as of July 20, 2000 between Partek Acquisition
Company, Inc. and Terex Corporation, pursuant to which Partek Acquisition
Company, Inc. agreed to acquire from Terex Corporation all of the assets and
business of Terex Corporation's Princeton division.
44
(l The term "Reference Amount" has the same meaning as set
forth in the Xxxx Purchase Agreement.
(m The term "Section 6.15 Losses" means the sum of the
following: (i) Xxxxxxx Section 6.15 Losses, as defined in the Xxxxxxx Purchase
Agreement, plus (ii) Xxxx Section 6.15 Losses, as defined in the Xxxx Purchase
Agreement, plus (iii) 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, plus (iv) Princeton Section 6.15 Losses, as defined in the
Princeton Purchase Agreement.
(n The term "Seller Combined Losses" means the sum of the
following: (i) Seller's Xxxxxxx Losses, as defined in the Xxxxxxx Purchase
Agreement, plus (ii) Seller's Xxxx Losses, as defined in the Xxxx Purchase
Agreement, plus (iii) all Losses suffered by Seller Indemnified Parties by
reason of breaches under this Agreement, plus (iv) Seller's Princeton Losses, as
defined in the Princeton Purchase Agreement.
(o The term "Sellers' Combined Indemnification Payments" means
the sum of the following: (i) Seller's Xxxxxxx Indemnification Payments, as
defined in the Xxxxxxx Purchase Agreement, plus (ii) Seller's Xxxx
Indemnification Payments, as defined in the Xxxx Purchase Agreement, plus (iii)
all amounts paid by Seller to Buyer Indemnified Parties for Losses pursuant to
the indemnification provisions contained in this Agreement, plus (iv) Seller's
Princeton Indemnification Payments, as defined in the Princeton Agreement.
(p The term "Teledyne Indemnified Losses" means any and all
payments for "Losses" (or portions thereof) as that term is defined in this
Agreement, the Xxxx Purchase Agreement, and the Princeton Purchase Agreement,
for which (i) "Buyer Indemnified Parties" under the Princeton Purchase Agreement
are indemnified against under the Princeton Purchase Agreement, (ii) "Buyer
Indemnified Parties" under the Xxxx Purchase Agreement are indemnified against
under the Xxxx Purchase Agreement, or (iii) Buyer Indemnification Parties are
indemnified against under this Agreement, and in each case for which Terex
Corporation receives payments pursuant to the indemnification provisions of the
1999 Purchase Agreement.
(q The term "Truck Mounted Transactions" shall mean the
following transactions: (i) the purchase by Partek Cargotec Holding Netherlands
B.V. of all of the issued and outstanding capital shares of Terex B.V. pursuant
to the terms of the Xxxx Purchase Agreement, (ii) the purchase by Partek
Acquisition Company, Inc. of substantially all of the assets and business of the
Princeton division of Terex Corporation pursuant to the terms of the Princeton
Purchase Agreement; and (iii) 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.
45
11.10 Reserved.
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.]
46
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.
PPM DEUTSCHLAND GMBH TEREX CRANES
By: /s/ Xxxx X Xxxxx
Name: Xxxx X Xxxxx
Title: Director and by
Power of Attorney
HIAB GMBH
By:/s/ Veli-Xxxxx Xxxxxxxxx
Name: Veli-Xxxxx Xxxxxxxxx
Title:
FOR PURPOSES OF SECTION 2.3 ONLY:
HOLLAND LIFT INTERNATIONAL B.V.
By: /s/ Xxxx X Xxxxx
Name: Xxxx X Xxxxx
Title: Director
PARTEK CARGOTEC HOLDING
NETHERLANDS B.V.
By: /s/ Matts Junger
Name: Matts Junger
Title:Director
XXXX B.V.
By: /s/ Xxxx X Xxxxx
Name: Xxxx X Xxxxx
Title: Director
47
List of Exhibits:
Exhibit A - Closing GAAP
Exhibit B - Form of Guaranty
Exhibit C - Form of Escrow Agreement
