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Exhibit (2)(B)
AMENDMENT
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The undersigned hereby amend the Asset Purchase Agreement, dated as of
July 19, 1997 (the "Agreement"), by and among Figgie International Inc.
("Seller"), SKL Lift, Inc. ("Buyer") and the other parties named therein,
pursuant to and in accordance with Section 7.3 thereof. All capitalized terms
not defined herein are used as defined in the Agreement.
FIRST, Section 1.2(a) of the Agreement is hereby amended to read as
follows:
(a) Those current liabilities of Seller relating to
the Business set forth on Exhibit A hereto;
SECOND, Section 1.2(b) of the Agreement is hereby amended to read as
follows:
(b) All liabilities, obligations and costs of Seller
arising after the Closing Date under any Contract assigned to Buyer
pursuant to Section 1.1(a)(v) hereof or as to which arrangements have
been made pursuant to Section 5.4 hereof which is set forth in the
Seller Disclosure Schedule (or which is not required to be set forth
thereon), or which was entered into after the date hereof and prior to
the Closing Date in accordance with the provisions of this Agreement;
THIRD, Section 1.2(e) of the Agreement is hereby amended to read as
follows:
(e) Except as provided in Section 1.3(g) hereof,
liabilities and obligations attributable to or incurred in connection
with the Business prior to, on or after the Closing Date with respect
to Affected Employees (as hereafter defined) arising from, or relating
to, any incentive (other than bonuses referred to in Section 1.3(m)
hereof), de-
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ferred compensation, insurance, employment, performance, vacation,
retiree benefit plan, program, agreement or arrangement for the benefit
of any Affected Employee, including obligations under clause 4 of the
Xxxxx Service Agreement;
FOURTH, Section 1.3 of the Agreement is hereby amended to add the
following new subsections:
(m) All bonuses to employees of the Business for
periods of service ending on or prior to the Closing Date; and
(n) All liabilities, obligations and costs from or
relating to the matters described in the first sentence of Section
5.7(h).
FIFTH, Section 1.4 of the Agreement is hereby amended to read as
follows:
SECTION 1.4. CONSIDERATION.
(a) The amount payable at Closing shall be
$100,000,000 in cash (the "CLOSING CASH PAYMENT"), payable in
immediately available funds. The purchase price for the Assets (the
"PURCHASE PRICE") shall be the Closing Cash Payment plus an additional
amount, if any, (the "EARN-OUT AMOUNT") to be calculated as provided in
subsection (b) of this Section 1.4.
(b) The Earn-Out Amount will be determined as
follows:
(i) The Earn-Out Amount will be equal to
the sum of (A) the amount of Net Sales (as hereafter defined) of
Snorkel Products (as hereafter defined) during the twelve-month period
commencing on April 1, 1998 and ending on March 31, 1999 (the "EARN-OUT
PERIOD") in excess of the First Threshold Amount (as hereafter
defined), such amount not to exceed $20,000,000, plus (B) 70% of the
amount of
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Net Sales of Snorkel Products during the Earn-Out Period in excess of
the Second Threshold Amount (as hereafter defined), such amount not to
exceed $30,000,000. "NET SALES" means the gross sales of Snorkel
Products less rebates, discounts, invoice corrections, commissions,
freight-out, returns and allowances completed in the ordinary course of
business. "SNORKEL PRODUCTS" means products manufactured and sold by
the Division on the Closing Date and any successors to, or replacements
of, such products manufactured and sold by Buyer after the Closing
Date. The "FIRST THRESHOLD AMOUNT" shall be equal to $140,000,000, less
the Firefighting Adjustment (as hereafter defined), if any, and the
"SECOND THRESHOLD AMOUNT" shall be equal to $160,000,000, less the
Firefighting Adjustment, if any. The "FIREFIGHTING ADJUSTMENT" shall be
equal to the aggregate Net Sales of Snorkel Products used for
firefighting in the period commencing on November 1, 1996 and ending on
October 31, 1997 times the quotient of the number of days, if any,
during the Earn-Out Period that the Division no longer owns its
firefighting business, over 365.
(ii) In the event that (i) Omniquip Products
(as hereinafter defined) and Snorkel Products are sold together during
the Earn-Out Period to National Account Customers (as hereafter
defined) pursuant to the same purchase order or sale agreement (each, a
"BUNDLED SALE"), (ii) the weighted-average discount, including rebate,
from list prices in effect on February 1, 1998 provided to National
Account Customers for Omniquip Products included in the Bundled Sale is
less than the weighted-average of the discount rates for such Omniquip
Products set forth in the Omniquip National Account Discount Schedule
(as hereafter defined) and (iii) the weighted-average discount,
including rebates, from list prices in effect on February 1, 1998 on
Snorkel Products sold in Bundled Sales during the Earn-Out Period are
greater than the weighted-average discount, including rebates, set
forth in the Snorkel National Account Discount Schedule (as hereafter
defined) then the discount, including rebates, from
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list prices in effect on February 1, 1998 used for the purpose of
calculating Net Sales of Snorkel Products included in such Bundled Sale
shall be equal to (x) the discount, including rebates, set forth in the
Snorkel National Account Discount Schedule increased by (y) the
percentage increase in the weighted-average discount, including
rebates, from list prices in effect on February 1, 1998 on such Bundled
Sale for Omniquip Products over the weighted-average discount,
including rebates, set forth in the Omniquip National Account Discount
Schedule. An example of the application of the provisions of the
preceding sentence to a hypothetical Bundled Sale is attached as
Exhibit B hereto. For purposes of this Agreement: the term "NATIONAL
ACCOUNT CUSTOMERS" shall mean any national account of Omniquip Products
and Snorkel Products, during the Earn-Out Period, which are sold as a
Bundled Sale; the term "SNORKEL NATIONAL ACCOUNT DISCOUNT SCHEDULE"
shall mean the discounts, including rebates, for each of the Snorkel
Products offered to National Account Customers for calendar year 1998
set forth on a schedule to be delivered by Seller to Buyer on or prior
to the date hereof; the term "OMNIQUIP NATIONAL ACCOUNT DISCOUNT
SCHEDULE" shall mean the discounts, including rebates, for each of the
Omniquip Products offered to National Account Customers for calendar
year 1998 set forth in a schedule to be delivered by Buyer to Seller on
or prior to the date hereof; and the term "OMNIQUIP PRODUCTS" shall
mean products manufactured and sold by Omniquip International, Inc. and
its Subsidiaries on the Closing Date and any successors to, or
replacements of, such products manufactured and sold by Omniquip
International, Inc. and its subsidiaries (other than Buyer) after the
Closing Date.
(iii) For purposes of determining the amount
of Net Sales of Snorkel Products during the month of April 1998, the
actual Net Sales of Snorkel Products during the months of March and
April 1998 shall be added and such sum shall be divided by two, with
the resulting number being deemed the amount of Net Sales of Snorkel
Products
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during the month of April 1998. For purposes of determining the amount
of Net Sales of Snorkel Products during the month of March 1999, the
actual Net Sales of Snorkel Products during the months of March and
April 1999 shall be added and such sum shall be divided by two, with
the resulting number being deemed the amount of Net Sales of Snorkel
Products during the month of March 1999.
(iv) As promptly as practicable after the
Earn-Out Period, Buyer shall prepare, and Price Waterhouse LLP,
independent auditors for Buyer ("PRICE WATERHOUSE") shall examine a
Statement of Net Sales of Snorkel Products for the Earn-Out Period and
shall calculate the Earn-Out Amount in accordance with the Earn-Out
Principles and Procedures attached as Exhibit C. Price Waterhouse shall
deliver a report setting forth the Earn-Out Amount (the "EARN-OUT
REPORT") to Seller as soon as possible after the end of the Earn-Out
Period, but in no event later than thirty (30) days after the end of
the Earn-Out Period. Seller and its independent auditors ("SELLER'S
AUDITORS") shall have the opportunity to (a) review records of the
Division, including sales journals, sales registers, invoices, credit
invoices, shipping records, backlog reports and customer purchase
orders, (b) review such of the worksheets and other documents created
or utilized by Price Waterhouse in connection with the preparation of
the Earn-Out Report as Seller shall reasonably request and (c) be
present at, observe and make inquiry as to the production, fulfillment
and shipping activities of the Division during the periods of March 15,
1998 through April 15, 1998 and March 15, 1999 through April 15, 1999.
Seller shall have 30 days following delivery to Seller of the Earn-Out
Report during which to notify Buyer of any dispute of the Earn-Out
Amount, which notice shall set forth in reasonable detail the basis for
such dispute. If Seller fails to notify Buyer of any such dispute
within such 30-day period, Price Waterhouse's calculation of the
Earn-Out Amount shall be deemed to be the agreed upon Earn-Out Amount
and such amount shall be paid to Seller not later than five (5) days
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following the end of such 30-day period. In the event that Seller shall
so notify Buyer of any dispute, Seller and Buyer shall cooperate in
good faith to resolve such dispute as promptly as possible.
(v) If Seller and Buyer are unable to
resolve any such dispute within 15 days (or such longer period as
Seller and Buyer shall mutually agree in writing) of Seller's delivery
of such notice, such dispute shall be resolved by the Independent
Accounting Firm (as hereafter defined), and such determination shall be
final and binding on the parties. Seller and Buyer shall mutually
select the Independent Accounting Firm, but if Seller and Buyer cannot
mutually agree on the identity of the Independent Accounting Firm, then
Seller and Buyer shall each submit to the other party's independent
auditor the name of a national accounting firm other than any firm that
has in the prior two years provided services to Seller, Buyer or any of
their respective Affiliates, and the Independent Accounting Firm shall
be selected by lot from these two firms by the independent auditors of
the two parties. (If no national accounting firm shall be willing to
serve as the Independent Accounting Firm, then an arbitrator shall be
selected to serve as such, such selection to be according to the above
procedures.) Any expenses relating to the engagement of the Independent
Accounting Firm shall be shared equally by Buyer and Seller. The
Earn-Out Amount shall then be determined by the Independent Accounting
Firm, which shall be instructed to use every reasonable effort to
perform its services within 15 days of submission of the dispute to it
and, in any case, as promptly as practicable after such submission. Not
later than five (5) days following such determination by the
Independent Accounting Firm, the Earn-Out Amount shall be paid to
Seller in cash.
(c) Any payments to Seller of the Earn-Out Amount
shall be by wire transfer in immediately available funds together with
interest thereon at a rate equal to the prime rate per annum on a date
immediately preceding the date on which payment is
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to be made, as quoted by First Union Bank, N.A., from the date which is
30 days after the end of the Earn-Out Period to the date of payment.
SIXTH, Section 1.6 of the Agreement is hereby amended to read as
follows:
SECTION 1.6 CLOSING. Subject to the terms and
conditions of this Agreement, the Closing shall occur not later than
November 19, 1997 (PROVIDED that Buyer shall use its best efforts to
close not later than noon on November 17, 1997), at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, (or at such other place as the parties may mutually
agree). If the Closing has not occurred by November 19, 1997, it shall,
subject to the conditions hereof, occur as soon as practicable
thereafter. If the Closing has not theretofore occurred, it shall occur
on December 1, 1997, subject to the conditions hereof.
SEVENTH, Section 2.4 of the Agreement is hereby amended to read as
follows:
SECTION 2.4. INTERCOMPANY ACCOUNTS. On the Closing
Date, all intercompany account balances including all accrued general
liability insurance, accrued worker's compensation insurance and
accrued benefit plan items then outstanding between the Division, on
the one hand, and Seller and its Affiliates (other than the
Division), on the other hand, shall be cancelled without any payment
being made with respect thereto. No adjustment shall be made to the
Purchase Price as a result of any such cancellation.
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EIGHTH, Section 2.6 of the Agreement is hereby amended to read as
follows:
SECTION 2.6. MISCELLANEOUS PURCHASE PRICE MATTERS.
(a) (i) Seller agrees that the Accounts Payable, as
defined in item A of Exhibit A, of the Division shall not exceed
$10,000,000 at Closing. In the event that Accounts Payable as of the
Closing Date exceed $10,000,000, the Purchase Price shall be reduced on
a dollar-for-dollar basis by the amount of such excess.
(ii) As promptly as practicable after the
Closing Date, Buyer will prepare a list of Accounts Payable as of the
Closing Date, supporting documentation and a statement of the
corresponding reduction of the Purchase Price, if any, and furnish such
materials to Seller. Seller shall have the opportunity to review
records and details supporting the list of Accounts Payable. Seller
shall have 30 days following delivery of the list of Accounts Payable
and statement of corresponding reduction of the Purchase Price, if any,
during which to notify Buyer of any dispute in the reduction of the
Purchase Price, which notice shall set forth in reasonable detail the
basis for such dispute. If Seller fails to notify Buyer of any such
dispute within such 30-day period, Buyer's calculation of the reduction
of the Purchase Price shall be deemed to be agreed upon and such amount
shall be paid to Buyer not later than five (5) days following the end
of such 30-day period. In the event that Seller shall so notify Buyer
of any dispute, Seller and Buyer shall cooperate in good faith to
resolve such dispute as promptly as possible.
(iii) If Seller and Buyer are unable to
resolve any such dispute within 15 days (or such longer period as
Seller and Buyer shall mutually agree in writing) of Seller's delivery
of such notice, such dispute shall be resolved by the Independent
Accounting Firm (as hereafter defined), and
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such determination shall be final and binding on the parties. Seller
and Buyer shall mutually select the Independent Accounting Firm, but if
Seller and Buyer cannot mutually agree on the identity of the
Independent Accounting Firm, then Seller and Buyer shall each submit to
the other party's independent auditor the name of a national accounting
firm other than any firm that has in the prior two years provided
services to Seller, Buyer or any of their respective Affiliates, and
the Independent Accounting Firm shall be selected by lot from these two
firms by the independent auditors of the two parties. (If no national
accounting firm shall be willing to serve as the Independent Accounting
Firm, then an arbitrator shall be selected to serve as such, such
selection to be according to the above procedures.) Any expenses
relating to the engagement of the Independent Accounting Firm shall be
shared equally by Buyer and Seller. The amount of Accounts Payable
shall then be determined by the Independent Accounting Firm, which
shall be instructed to use every reasonable effort to perform its
services within 15 days of submission of the dispute to it and, in any
case, as promptly as practicable after such submission. Not later than
five (5) days following such determination by the Independent
Accounting Firm, any amount required to be paid under subsection (a)(i)
of this Section 2.6 shall be paid to Seller in cash.
(iv) Any payments to Buyer of any amount
required to be paid under subsection (a)(i) of this Section 2.6 shall
be by wire transfer in immediately available funds together with
interest thereon at a rate equal to the prime rate per annum on a date
immediately preceding the date on which payment is to be made, as
quoted by First Union Bank, N.A., from the Closing Date.
(b) Recording fees, transfer taxes, and escrow fees
incurred in connection with the conveyance of the Shares, Property,
Real Property Leases, Subsidiary Real Property Leases (as hereafter
defined) or personal property, including such taxes as
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are imposed by the Australian and New Zealand taxing authorities, shall
be borne equally by Buyer and Seller. Costs associated with obtaining
title insurance of the Property shall be the responsibility of Buyer.
Sales and use taxes and all other similar taxes (other than income and
franchise taxes) and all interest and penalties thereon incurred in
connection with conveyance of the Property, Real Property Leases,
Subsidiary Real Property Leases or personal property shall be borne
equally by Buyer and Seller. Seller shall provide copies of the current
or most recent property tax bills for the Property and, if available,
for any leased properties, to Buyer prior to the Closing Date. After
the Closing Date, any bills or requests for payment received by either
Seller or Buyer in connection with the Business attributable to Taxes
which reflect in whole or part liabilities retained or assumed,
respectively, by Seller on the one hand, or Buyer on the other, shall
be allocated between Buyer and Seller in the manner described in
Sections 1.2(a) and 5.9 hereof, or as otherwise appropriate under the
terms of this Agreement; PROVIDED, HOWEVER, that neither party shall
pay such xxxx without the prior written consent of the other party,
which consent shall not be unreasonably withheld.
NINTH, Clause (a) of Section 3.6 of the Agreement is hereby amended to
read as follows:
(a) there has not been any material adverse change in
the Assets, liabilities, business, operations or condition (financial
or otherwise) of the Division (other than (i) changes resulting from
changes in general economic or financial conditions, (ii) changes
affecting generally the industry in which the Business operates and
(iii) changes in the financial and operating condition of the Business
between June 30, 1997 and October 30, 1997);
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TENTH, Section 5.7 of the Agreement is hereby amended to add the
following subsection (h):
(h) Seller shall be liable for all severance payments
due under plans, policies, agreements or laws in effect on the Closing
Date with respect to employees of the Division laid off prior to the
Closing Date by Seller, other than any such employees who are recalled
from layoff by the Division after the Closing Date. Seller has
delivered to Buyer a list of all employees of the Business who have
been laid off since June 30, 1997.
ELEVENTH, Article V of the Agreement is hereby amended to add the
following Section 5.16:
SECTION 5.16. DISMISSAL OF ACTION. Seller will
dismiss (without prejudice, with each party to bear its own fees and
expenses) the complaint filed in that certain action in the Chancery
Court of the State of Delaware in and for New Castle County entitled
FIGGIE INTERNATIONAL INC. V. OMNIQUIP INTERNATIONAL INC. AND SKL LIFT,
INC. (Civil Action No. 16006) (the "ACTION") no later than November 12,
1997. Seller agrees that such dismissal shall be conclusively deemed
for all purposes to be "with prejudice", subject to, and effective upon
the occurrence of, the Closing. At Closing, Seller will deliver to
Buyer a release, irrevocably releasing Buyer from the claims set forth
in the Action.
TWELFTH, Section 6.2(c) of the Agreement is hereby amended to read as
follows:
(c) During the period from July 19, 1997 to the
Closing Date, there shall not have occurred a Material Adverse Effect
(other than the change in the financial and operating condition of the
Business between July 19, 1997 and October 30, 1997).
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THIRTEENTH, Section 7.1(c) of the Agreement is hereby amended so that
the reference to "October 31, 1997" is changed to "the close of business on
December 1, 1997".
FOURTEENTH, the following clause (C) is hereby added to the end of
Section 7.5(b)(iv):
or (C) any matter relating to the operations or financial condition of
the business as of October 30, 1997 of which any of the persons listed
in Section 7.5(b)(iv) of the Seller Disclosure Schedule had actual and
specific knowledge.
FIFTEENTH, a substantially final update of the Seller Disclosure
Schedule proposed to be delivered at the Closing shall be delivered two calendar
days prior to Closing.
This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Amendment shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other party hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of November 9, 1997.
FIGGIE INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
SKL LIFT, INC.
By: /s/ X. Xxxxx Stiff
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Name: X. Xxxxx Stiff
Title: President and Chief
Executive Officer
