Exhibit 10.2
CONTRIBUTION AGREEMENT,
PLAN AND AGREEMENT OF REORGANIZATION AND DISTRIBUTION
This Agreement is made as of __________, 2000, by APPLIED POWER INC., a
Wisconsin corporation, with offices at 0000 X. Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx
00000 ("API"), and APW LTD., a Bermuda corporation, with offices at X00 X00000
Xxxxxxxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxx 53188-1013 ("APW").
WHEREAS, API conducts its industrial business through the corporations and
other entities listed on Schedule 1 hereto (collectively, the "Industrial
Business") and its electronics or enclosure business through the corporations
and other entities listed on Schedule 2 ("Electronics Business").
WHEREAS, APW is a successor by merger/agreement of continuation to a
corporation formerly known as Xxxxxx Line Inc. and at one time an indirect
wholly-owned subsidiary of API. APW will serve to take title to assets
associated with the Electronics Business, including, without limitation, the
stock of the corporations and other entities described on Schedule 2 hereto and
certain assets of API and in limited cases of other subsidiaries of API listed
on Schedule 2, and assuming certain of the liabilities associated with the
Electronics Business, such that APW will own, directly or indirectly, all of the
assets, business and operations formerly and currently used and conducted by the
Electronics Business as generally described on Schedule 2 hereto;
WHEREAS, in order to separate API's Industrial Business from its
Electronics Business, API will or has undertaken the reorganization described in
Schedule 3 hereto;
WHEREAS, the parties wish to provide for the transfer of assets generally
listed on Schedule 2 as will be transferred and delivered to APW and its
subsidiaries;
WHEREAS, the parties wish to provide for the assumption by APW and its
subsidiaries of certain liabilities associated with the Electronics Business;
WHEREAS, API intends to distribute all of the common stock of APW, pro
rata, to the shareholders of API in accordance with resolutions of the Board of
Directors of API, and in accordance with the terms of a tax opinion obtained
from API's special tax counsel (the "Distribution"), so that after the
Distribution API will own no shares of stock representing the equity of APW and
APW will be a publicly traded corporation whose shares are listed and traded on
the New York Stock Exchange;
WHEREAS, the parties wish to provide for their agreements with respect to
certain matters pertaining to their business relationships following the
Distribution and other matters mutual to their interest;
NOW, THEREFORE, in furtherance of the foregoing purposes and in
consideration of the issuance of the common stock of APW to API as provided in
Section 3.1 and the mutual promises and undertakings herein contained and
contained in any agreement or other document executed in connection with this
Agreement, the parties agree as follows:
ARTICLE I
EFFECTIVE DATE AND CLOSING
Section 1.1 Unless otherwise provided in this Agreement, or in any
agreement to be executed in connection with this Agreement, the effective date
of each transfer of property, assumption of liability, license, undertaking, or
agreement in connection herewith shall be 12:01 a.m., Central Standard Time,
__________, 2000 (the "Effective Date"), or such other date as may be fixed by
the Board of Directors of API.
Section 1.2 This Agreement shall be void if the Board of Directors of API
refrains from declaring or proceeding with the Distribution.
Section 1.3 Unless otherwise provided herein, the closing of the
transactions contemplated hereunder shall occur by the lodging of each of the
executed instruments of transfer, assumptions of liability, undertakings,
agreements, instruments or other documents executed or to be executed in
connection with this Agreement with Xxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, attorneys for API, to be held in escrow for
delivery as provided in Section 1.4 of this Agreement.
Section 1.4 Upon receipt of a certificate from an officer of API in the
form attached to this Agreement as Exhibit A, Xxxxxxx & Xxxxx LLP shall deliver
to APW on behalf of API all of the items required to be delivered by API
hereunder lodged with it pursuant to Section 1.3 of this Agreement and each such
item shall be deemed to be delivered to APW as of the Effective Date upon
delivery of such certificate. Upon receipt of a certificate from an officer of
APW in the form attached to this Agreement as Exhibit B, Xxxxxxx & Xxxxx LLP
shall deliver to API on behalf of APW all of the items required to be delivered
by APW hereunder and each such item shall be deemed to be delivered to API as of
the Effective Date upon receipt of such certificate.
ARTICLE II
CLOSING
Section 2.1 As of the Effective Date or such later date as specified, API
will or will cause an appropriate subsidiary to deliver to APW all of the
following:
(a) Duly executed General Assignment, Assumption and Agreement Regarding
Litigation, Claims and Other Liabilities (the "Assignment")
substantially in the form annexed as Exhibit D;
2
(b) Certificates representing the shares owned by API, indirectly or
directly, of the Electronics Business subsidiaries (as listed on
Schedule 2), which may be so delivered at any time prior to the
Effective Date, as may be agreed to by the parties;
(c) Duly executed assignments of the patents listed on Schedule 2.1(c),
and a duly executed Transitional Trademark Use and License Agreement
substantially in the form annexed as Exhibit E;
(d) Duly executed Insurance Matters Agreement substantially in the form
annexed as Exhibit F;
(e) Cash, as provided in the Assignment (subject to adjustment as set
forth in Section 3.3 herein and in other related documents);
(f) Duly executed bills of sale or titles as to the motor vehicles listed
on Schedule 2.1(f);
(g) A duly executed Employee Benefits and Compensation Agreement
substantially in the form annexed as Exhibit H;
(h) A duly executed Tax Sharing and Indemnification Agreement (the "Tax
Agreement") substantially in the form annexed as Exhibit I;
(i) Such documents or instructions as may be necessary to satisfy the
provisions of this Agreement;
(j) A duly executed Interim Administrative Services Agreement
substantially in the form annexed as Exhibit J;
(k) A duly executed Confidentiality and Non-Disclosure Agreement
substantially in the form annexed as Exhibit K;
(l) At the consummation of the Distribution, resignations of each person
employed by APW or its subsidiaries who is an officer or director of
API or its subsidiaries (excluding APW and its subsidiaries); and
(m) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes
hereof, including a Xxxx of Sale and Assumption of Liabilities in the
form annexed as Exhibit G and the option waivers and releases
substantially in the form annexed as Exhibit C.
Section 2.2 As of the Effective Date or such later date as specified, APW
will deliver to API all of the following:
3
(a) In each case where APW is a party to any agreement or instrument
referred to in Section 2.1, a duly executed counterpart of such
agreement or instrument;
(b) A certificate or certificates representing all of the outstanding
shares of the common stock of APW other than those already owned by
API, all as provided in Section 3.1;
(c) At the consummation of the Distribution, resignations of each person
employed by APW after the Effective Date who is an officer of API, or
any of its subsidiaries or affiliates not constituting part of the
Electronics Business, immediately prior to the Effective Date;
(d) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes
hereof.
ARTICLE III
THE DISTRIBUTION
Section 3.1 By the Effective Date, APW shall issue and deliver to API a
certificate or certificates registered in the name of API representing that
number of shares of the common stock of APW which, when taken together with the
shares of common stock already owned by API, will result in API owning, of
record and beneficially, all of the issued and outstanding shares of APW common
stock and a number such that API shall own one (1) share of the common stock of
APW for each one (1) share of the common stock of API issued and outstanding
(the "Distribution Ratio") on the Record Date for the Distribution (the "Record
Date"). Each share of the common stock of APW shall be validly issued, fully
paid, nonassessable and free of preemptive rights.
Section 3.2 Nothing contained in Section 3.1 or elsewhere in this
Agreement, including the Schedules, Exhibits, and Annexes hereto, shall be
construed to limit or alter the authority of the Board of Directors of API to
declare or refrain from declaring the Distribution, fixing or changing the
Record Date, fixing or changing the Effective Date, or fixing or changing all
the appropriate procedures in connection with the Distribution, including the
Distribution Ratio, and no rights shall have been created hereunder in favor of
any person, whether or not a party to this Agreement, in respect of the
Distribution.
Section 3.3 API and APW agree that APW will assume an amount of debt (as
generally described in Schedule 4 hereto) equal to the residual amount after API
retains an amount equal to four times the Industrial Business earnings before
income taxes, depreciation and amortization as calculated before the
Distribution and as set forth in Schedule 4 hereto.
4
ARTICLE IV
OTHER MATTERS
Section 4.1 API does not, in this Agreement or any other agreement,
instrument or document contemplated by this Agreement, make any representation
as to, warranty of or covenant with respect to:
(a) the value of any asset or thing of value to be transferred to APW;
(b) the freedom from encumbrance of any asset or thing of value to be
transferred to APW (except for encumbrances in favor of API and its
subsidiaries, excluding APW and its subsidiaries); or
(c) the absence of defenses or freedom from counterclaims with respect to
any claim, including accounts receivable, to be transferred to APW
(except defenses and counterclaims in favor of API and its
subsidiaries, excluding APW and its subsidiaries).
All assets to be transferred to APW shall be transferred "AS IS, WHERE IS."
Section 4.2 Each of API and APW will execute and deliver such further
instruments of conveyance, transfer and assignment and will take such other
actions as either of them may reasonably request of the other in order to
effectuate the purposes of this Agreement and to carry out the terms hereof. At
the request of APW and without further consideration, API will execute and
deliver to APW such other instruments of transfer, conveyance, assignment,
assumption, novation, substitution and confirmation and take such action as APW
may reasonably deem necessary or desirable in order to more effectively to
transfer, convey and assign to APW and, subject to the provisions of Section
4.1, confirm APW's title to all of the assets, rights and other things of value
contemplated to be transferred to APW hereunder, to place APW in actual
possession and operating control thereof and to permit APW to exercise all
rights with respect thereto (including, without limitation, rights under
contracts and other arrangements as to which the consent of any third party to
the transfer thereof shall not have previously been obtained). At the request
of API and without further consideration, APW will execute and deliver to API
all instruments, assumptions, novations, undertakings, substitutions or other
documents and take such other action as API may reasonably deem necessary or
desirable in order to have APW fully and unconditionally assume and discharge
the liabilities contemplated to be assumed by APW under this Agreement or any
document in connection herewith and to relieve API of any liability or
obligation with respect thereto and evidence the same to third parties. Neither
API nor APW shall be obligated, in connection with the foregoing, to expend
money other than reasonable out-of-pocket expenses, attorneys' fees and
recording or similar fees.
API and APW will use their reasonable efforts to obtain any consent,
substitution, approval or amendment required to novate or assign all agreements,
leases, licenses and other rights of any nature whatsoever relating to the
assets, rights and other things of value being transferred to
APW and all liabilities and obligations being assumed by APW or its
subsidiaries; provided, however, that neither API nor APW shall be obligated to
pay any consideration therefor (except for filing fees and other similar
charges) to the third party from whom such consents, approvals, substitutions
and amendments are requested. If API or APW is unable to obtain any such
required consent, approval, substitution or amendment, API shall continue to be
bound by such agreements, leases, licenses and other rights and obligations and,
unless not permitted by law or the terms thereof, APW shall, as agent for API or
as subcontractor, pay, perform and discharge fully all the obligations of API
thereunder from and after the Effective Date and indemnify and hold harmless API
from and against all losses, claims, damages, liabilities and expenses
whatsoever arising out of or in connection with APW's performance of, or
omission to perform, its obligations thereunder. APW will not be responsible for
or indemnify API for any claims, damages, liabilities, and expenses whatsoever
arising out of or in connection with API's performance of or omissions to
perform any of its obligations under such agreements, leases, licenses and other
rights thereof which API and APW have agreed will be performed by API. API
shall, without further consideration, pay, transfer or remit, as the case may
be, to APW promptly all money, rights and other consideration received in
respect of such performance. API shall exercise its rights and options under all
such agreements, leases, licenses and other rights and obligations referred to
in this Section 4.2 only as reasonably directed by APW and at APW's expense. If
and when any such consent shall be obtained or such agreement, lease, license or
other rights shall otherwise become assignable or able to be novated, API shall
promptly assign all its rights and obligations thereunder to APW without payment
of further consideration and APW shall, without the payment of any further
consideration, assume such rights and obligations. To the extent that the
assignment of any contract or agreement or the proceeds thereof pursuant to this
Section 4.2 is prohibited by law, the assignment provisions of this paragraph
shall operate to create a subcontract with APW to perform each relevant,
unassignable contract or agreement, and the subcontract price paid to APW shall
be equal to the money, rights and other consideration received by API with
respect to the performance by APW under such subcontract.
Section 4.3 APW and API agree to cooperate to determine the amount of
sales, transfer or other similar taxes or fees (including, but not limited to,
all real estate, patent, copyright transfer taxes and recording fees) payable in
connection with the transactions contemplated by this Agreement. API and APW
agree to file promptly and timely returns for such taxes with the appropriate
taxing authorities and remit payment thereof in accordance with the terms of the
Tax Agreement.
Section 4.4 APW shall make a timely application to the New York Stock
Exchange and use its reasonable efforts to have the common stock of APW quoted
for trading on the New York Stock Exchange and shall arrange for such stock to
trade on a "when issued" basis as promptly as practicable following the
declaration of the Distribution. API shall provide reasonable assistance to APW
in obtaining such listing. The parties agree to take whatever reasonable steps
are necessary so that APW may use the ticker symbol "APW" on the New York Stock
Exchange.
Section 4.5 The parties agree that Schedule 4.5 sets forth the banks
maintaining lock boxes or similar deposit arrangements and maintained by API in
connection with the Electronics Business
6
prior to the Effective Date. As of the Effective Date, API will terminate any
arrangement whereby funds directed to such lock boxes or similar arrangements
are consolidated with other funds of API or otherwise made available to API. API
shall, as of the Effective Date, take all necessary steps to remove all persons
who are not employees of APW who are signatories or holders of powers-of-
attorney with respect to such lock boxes or other arrangements from the list of
such signatories and holders and otherwise extinguish their signing authority
with respect thereto. As of the Effective Date, API shall do such things as may
be required to deliver to APW full authority with respect to such lock boxes or
other arrangements. Each of API and APW hereby grants the other a limited
irrevocable power-of-attorney to endorse, deposit and negotiate all checks,
drafts or other forms of payment made in respect of any invoice representing a
receivable payable to either of them but which are sent by the payor to a lock
box maintained by the other ("Misdirected Payments") or is made payable to the
either of them or any of their subsidiaries but which is the payment of a
receivable which is a receivable of the other ("Mispayee Items"). API and APW
shall develop procedures reasonably satisfactory to them whereby they reconcile
Misdirected Payments and Mispayee Items monthly and make appropriate and timely
payments to each other in respect thereof.
Section 4.6 At all times the management of API will cause the Electronics
Business before the Effective Date to continue to ship products, invoice
customers and pay payables in the ordinary course of business consistent with
past practices and will not undertake or permit any arrangement with any third
party which is intended to or has the effect of delaying the payment of any
account receivable beyond the Effective Date or accelerating the payment of any
account payable before the Effective Date.
Section 4.7 APW shall authorize the execution and cause the authorized
officers of APW to execute all documents, notes and undertakings and to do such
other things required in connection with the irrevocable and unconditional
assumption by APW without any recourse whatsoever to API of all obligations of
API relating to the Electronics Business and required to be assumed by APW
pursuant to the terms hereof.
Section 4.8 APW shall, in addition to its obligations under the Tax
Agreement, cooperate with API and special tax counsel to API in obtaining an
opinion from the special tax counsel to the effect that the Distribution should
be tax-free to API shareholders. In that regard, APW agrees that it will
authorize, cause to be executed and comply with any and all undertakings,
representations or agreements required in connection with obtaining special tax
counsel's opinion.
Section 4.9 API and APW agree that the expenses associated with
preparation of this Agreement, the transfers contemplated hereunder, matters
related to the organization of APW, the Distribution and related employment
matters shall be borne by API and APW as set forth on Schedule 4.9 annexed
hereto.
Section 4.10 API and APW shall cause their foreign subsidiaries to execute
such assignments, assumptions, novations and other documents as shall be
necessary to carry out the plan of reorganization described in the Exhibits
hereto to effect the purposes of this Agreement with respect to their respective
operations outside the United States.
ARTICLE V
MISCELLANEOUS
Section 5.1 This Agreement, including the Schedules, Annexes and Exhibits
hereto, and the agreements and other documents referred to herein, shall
constitute the entire Agreement between API and APW with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter, provided however, in the event of
conflict between this Agreement and any other agreement executed in connection
herewith, the provisions of such other agreement, including the Schedules,
Annexes, and Exhibits hereto, shall prevail.
Section 5.2 This Agreement shall be governed and construed and enforced in
accordance with the internal laws of the State of Wisconsin as to all matters,
including without limitation, matters of validity, construction, effect,
performance and remedies.
Section 5.3 This Agreement may be amended, modified or supplemented only
by a written agreement of the parties.
Section 5.4 This Agreement and all the provisions hereof shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either party without the prior
written consent of the other party.
Section 5.5 This Agreement is solely for the benefit of the parties and is
not intended to confer upon any person except the parties any rights or remedies
hereunder. There are no third party beneficiaries to this Agreement.
Section 5.6 This Agreement, and any other agreement to be executed in
connection herewith, may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
Section 5.7 If any section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, such determination
shall not affect the validity or enforceability of any other section, paragraph
or provision hereof.
8
IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their duly authorized officers this _____ day of __________, 2000.
APPLIED POWER INC. APW LTD.
By: ________________________ By: ________________________
President and Chief Executive Officer President and Chief Executive
Officer
9
LIST OF EXHIBITS AND SCHEDULES
Description Exhibit or Schedule Number
----------- --------------------------
Certificate of Secretary of API Exhibit A
Certificate of Secretary of APW Exhibit B
Release of Option Holder Exhibit C
General Assignment, Assumption and Agreement
Regarding Litigation, Claims and Other
Liabilities Exhibit D
Transitional Trademark Use and License Agreement Exhibit E
Insurance Matters Agreement Exhibit F
Xxxx of Sale and Assumption of Liabilities Exhibit G
Employee Benefits and Compensation Agreement Exhibit H
Tax Agreement Exhibit I
Interim Administrative Services Agreement Exhibit J
Confidentiality and Non-Disclosure Agreement Exhibit K
List of Industrial Business Entities Schedule 1
List of Electronics Business Entities; Description of
Electronics Business Schedule 2
Reorganization Steps Schedule 3
List of Borrowings being Assumed Schedule 4
Assignment of Patents and List of Patents Schedule 2.1(c)
Motor Vehicles being Assigned Schedule 2.1(f)
List of Banks Maintaining Electronics Business Accounts Schedule 4.5
Allocation of Expenses Relating to Distribution Schedule 4.9
10
