STOCK AND ASSET PURCHASE AND SALE AGREEMENT
AMONG
TEREX CORPORATION,
CMH ACQUISITION CORP.,
CMH ACQUISITION INTERNATIONAL CORP.,
XXXXX MATERIAL HANDLING INTERNATIONAL, INC.
AND
XXXXX MATERIAL HANDLING COMPANY
as Sellers
AND
CMHC ACQUISITION CORPORATION
as Buyer
Dated as of November 9, 1996
TABLE OF CONTENTS
Page
ARTICLE 1
SALE AND PURCHASE OF SHARES AND ASSETS
1.1 Sale and Purchase of Xxxxx Germany Shares. . . . 2
1.2 Sale and Purchase of CMH Acquisition Shares. . . 2
1.3 Sale and Purchase of CMHC Assets . . . . . . . . 2
1.4 Sale and Purchase of Xxxxx Korea Shares. . . . . 5
ARTICLE 2
PURCHASE PRICE
2.1 The Purchase Price . . . . . . . . . . . . . . . 5
2.2 Payment of Purchase Price. . . . . . . . . . . . 5
2.3 Purchase Price Adjustment. . . . . . . . . . . . 5
ARTICLE 3
CLOSING
3.1 Closing. . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLERS AND TEREX
4.1 Organization . . . . . . . . . . . . . . . . . . 8
4.2 Authorization. . . . . . . . . . . . . . . . . . 8
4.3 Corporate Records. . . . . . . . . . . . . . . . 8
4.4 Consents of Third Parties. . . . . . . . . . . . 8
4.5 Capitalization . . . . . . . . . . . . . . . . . 9
4.6 Ownership of Shares. . . . . . . . . . . . . . . 9
4.7 Title to CMHC Assets . . . . . . . . . . . . . . 10
4.8 Financial Statements . . . . . . . . . . . . . . 10
4.9 Absence of Certain Changes . . . . . . . . . . . 11
4.10 Liabilities. . . . . . . . . . . . . . . . . . . 12
4.11 Taxes. . . . . . . . . . . . . . . . . . . . . . 12
4.12 Material Contracts, etc. . . . . . . . . . . . . 13
4.13 Absence of Defaults. . . . . . . . . . . . . . . 14
4.14 Personnel and Employee Benefits. . . . . . . . . 14
4.15 Litigation; Compliance with Laws . . . . . . . . 16
4.16 Properties . . . . . . . . . . . . . . . . . . . 17
4.17 [Reserved] . . . . . . . . . . . . . . . . . . . 17
4.18 Patents and Trademarks . . . . . . . . . . . . . 18
4.19 Environmental Matters. . . . . . . . . . . . . . 18
4.20 Conflicts of Interest. . . . . . . . . . . . . . 20
4.21 Accounts Receivable; Inventory; Backlog. . . . . 21
4.22 Brokers and Finders. . . . . . . . . . . . . . . 21
4.23 Misleading Statements. . . . . . . . . . . . . . 22
4.24 Products Liability . . . . . . . . . . . . . . . 22
4.25 Insurance. . . . . . . . . . . . . . . . . . . . 22
4.26 Obligations to Register. . . . . . . . . . . . . 23
4.27 Renewal of Representations at Closing. . . . . . 23
4.28 Compliance with Covenants Prior to Closing . . . 23
4.29 Disclaimer . . . . . . . . . . . . . . . . . . . 23
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Organization . . . . . . . . . . . . . . . . . . 23
5.2 Authorization. . . . . . . . . . . . . . . . . . 24
5.3 Consents of Third Parties. . . . . . . . . . . . 24
5.4 Litigation . . . . . . . . . . . . . . . . . . . 24
5.5 Investment . . . . . . . . . . . . . . . . . . . 24
5.6 Brokers or Finders . . . . . . . . . . . . . . . 24
ARTICLE 6
FURTHER AGREEMENTS OF THE PARTIES
6.1 Conduct of the Business Pending Closing. . . . . 25
6.2 Access . . . . . . . . . . . . . . . . . . . . . 26
6.3 Commercially Reasonable Efforts; Other
Actions. . . . . . . . . . . . . . . . . . . . . 26
6.4 Expenses . . . . . . . . . . . . . . . . . . . . 27
6.5 Publicity. . . . . . . . . . . . . . . . . . . . 27
6.6 Transfer Taxes . . . . . . . . . . . . . . . . . 27
6.7 Preservation of Records. . . . . . . . . . . . . 27
6.8 Certain Excluded Obligations . . . . . . . . . . 28
6.9 Confidentiality. . . . . . . . . . . . . . . . . 28
6.10 Continuing Insurance Coverage. . . . . . . . . . 28
6.11 CMHC Cash and Intercompany Accounts at
Closing. . . . . . . . . . . . . . . . . . . . . 30
6.12 Drexel Note. . . . . . . . . . . . . . . . . . . 31
6.13 Employment and Employee Benefit Issues . . . . . 31
6.14 Change of Name . . . . . . . . . . . . . . . . . 32
6.15 Covenant Not to Compete. . . . . . . . . . . . . 33
6.16 Financial Information. . . . . . . . . . . . . . 33
6.17 Tax Assessments. . . . . . . . . . . . . . . . . 33
6.18 Transfer of Clarklift Washington Shares. . . . . 33
6.19 Consent to Assignment of Agreements. . . . . . . 34
6.20 Guaranties, Letters of Credit, Etc . . . . . . . 34
6.21 Buyer's Financing. . . . . . . . . . . . . . . . 35
6.22 Inspections. . . . . . . . . . . . . . . . . . . 37
6.23 Korean Fines and Penalties . . . . . . . . . . . 37
6.24 Retrospective Premiums . . . . . . . . . . . . . 37
6.25 Undertaking. . . . . . . . . . . . . . . . . . . 37
ARTICLE 7
CONDITIONS OF CLOSING;
DOCUMENTS DELIVERED AT CLOSING
7.1 Condition Precedent to Obligations of Buyer. . . 38
7.2 Conditions Precedent to Obligations of
Sellers. . . . . . . . . . . . . . . . . . . . . 38
7.3 Documents to be Delivered at Closing . . . . . . 39
ARTICLE 8
TERMINATION AND OTHER MATTERS
8.1 Termination by Mutual Consent. . . . . . . . . . 40
8.2 Termination Either by Sellers and Terex or
by Buyer . . . . . . . . . . . . . . . . . . . . 40
8.3 Termination by Sellers and Terex . . . . . . . . 41
8.4 Termination by Buyer . . . . . . . . . . . . . . 41
8.5 Effect of Termination. . . . . . . . . . . . . . 41
8.6 Standstill Agreement . . . . . . . . . . . . . . 41
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 Survival . . . . . . . . . . . . . . . . . . . . 42
9.2 Indemnification. . . . . . . . . . . . . . . . . 42
ARTICLE 10
TAX MATTERS
10.1 Tax Returns. . . . . . . . . . . . . . . . . . . 47
10.2 Liability for Taxes. . . . . . . . . . . . . . . 50
10.3 Certain Tax Payment Responsibility . . . . . . . 50
10.4 Tax Contests . . . . . . . . . . . . . . . . . . 51
10.5 Refunds, Tax Credits . . . . . . . . . . . . . . 52
10.6 Cooperation. . . . . . . . . . . . . . . . . . . 53
10.7 Indemnification for Post-Closing
Transactions . . . . . . . . . . . . . . . . . . 53
ARTICLE 11
MISCELLANEOUS
11.1 Transfer of Assets and Liabilities to Terex. . . 53
11.2 Entire Agreement . . . . . . . . . . . . . . . . 53
11.4 Bulk Transfer Laws . . . . . . . . . . . . . . . 54
11.5 Schedules; Tables of Contents and Headings . . . 54
11.6 Notices. . . . . . . . . . . . . . . . . . . . . 54
11.7 Severability . . . . . . . . . . . . . . . . . . 55
11.8 Extension; Waiver. . . . . . . . . . . . . . . . 55
11.9 Assignment; Binding Effect; Benefit. . . . . . . 56
11.10 Interpretation . . . . . . . . . . . . . . . . . 56
11.11 Amendment. . . . . . . . . . . . . . . . . . . . 56
11.12 Counterparts . . . . . . . . . . . . . . . . . . 56
STOCK AND ASSET PURCHASE AND SALE AGREEMENT
STOCK AND ASSET PURCHASE AND SALE AGREEMENT, dated as of November 9,
1996, among TEREX CORPORATION, a Delaware corporation ("Terex"), CMH ACQUISITION
CORP., a Delaware corporation and a wholly owned subsidiary of Terex ("CMH
Acquisition"), CMH ACQUISITION INTERNATIONAL CORP., a Delaware corporation and a
wholly owned subsidiary of Terex ("CMH International"), XXXXX MATERIAL HANDLING
COMPANY, a Kentucky corporation and a wholly owned subsidiary of CMH Acquisition
("CMHC"), XXXXX MATERIAL HANDLING INTERNATIONAL, INC., a Michigan corporation
and a wholly owned subsidiary of CMH Acquisition ("Xxxxx Michigan"; CMH
Acquisition, CMH International, CMHC and Xxxxx Michigan collectively, "Sellers"
and individually, a "Seller"), and CMHC ACQUISITION CORPORATION, a Delaware
corporation ("Buyer").
RECITALS
WHEREAS, CMH International wishes to sell to Buyer, and Buyer wishes
to purchase from CMH International, the shares (the "Xxxxx Germany Shares") of
Xxxxx Material Handling GmbH, an entity organized under the laws of Germany
("Xxxxx Germany"), owned by CMH International;
WHEREAS, Xxxxx Michigan wishes to sell to Buyer, and Buyer wishes to
purchase from Xxxxx Michigan, its sole asset, all of the shares (the "Xxxxx
Korea Shares") of capital stock of Xxxxx Forklift Korea, Inc., an entity
organized under the laws of South Korea ("Xxxxx Korea");
WHEREAS, CMH Acquisition wishes to sell to Buyer and Buyer wishes to
purchase from CMH Acquisition, (a) the shares of capital stock of Xxxxx Material
Handling of Canada, Ltd., a Canadian corporation ("Xxxxx Canada"), owned by it
(the "Xxxxx Canada Shares") and (b) the Xxxxx Germany Shares owned by it (Xxxxx
Canada, Xxxxx Germany and Xxxxx Korea are referred to individually as a
"Company" and together as the "Companies"); and
WHEREAS, CMHC wishes to sell to Buyer and Buyer wishes to purchase
from CMHC, all of the assets and business of CMHC, subject to liabilities as
provided for herein.
NOW, THEREFORE, in consideration of the foregoing, of the
representations, warranties, covenants and agreements contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE OF SHARES AND ASSETS
1.1 Sale and Purchase of Xxxxx Germany Shares. Subject to the terms and
conditions of this Agreement, at the closing referred to in Section 3.1 (the
"Closing"), CMH International shall sell, assign and transfer to Buyer, and
Buyer shall purchase from CMH International, the Xxxxx Germany Shares owned by
CMH International for the consideration specified in Section 2.1.
1.2 Sale and Purchase of CMH Acquisition Shares. Subject to the terms and
conditions of this Agreement, at the Closing, CMH Acquisition shall sell, assign
and transfer to Buyer, and Buyer shall purchase from CMH Acquisition, the Xxxxx
Canada Shares and the Xxxxx Germany Shares, owned by CMH Acquisition
(collectively, the "CMH Acquisition Shares"; together with the Xxxxx Germany
Shares owned by CMH International and the Xxxxx Korea Shares owned by Xxxxx
Michigan, the "Shares") for the consideration specified in Section 2.1.
1.3 Sale and Purchase of CMHC Assets. (a) Subject to the terms and
conditions of this Agreement, at the Closing, CMHC shall sell, assign, convey,
transfer and deliver to Buyer, and Buyer shall purchase from CMHC, for the
consideration specified in Section 2.1, all of CMHC's right, title and interest
in and to the assets and business of CMHC, as the same may exist on the Closing
Date (as defined in Section 3.1), whether tangible or intangible (collectively,
the "CMHC Assets"), including, without limitation, all of CMHC's right, title
and interest in and to the following, as the same may exist on the Closing Date:
(i) all machinery, equipment, tooling, parts,
dies, vehicles, office furniture, tools and other tangible
property;
(ii) all finished goods, raw materials, work-in-process, component
parts, inventories (including inventories held by customers on a
consignment basis) and supplies;
(iii) all accounts and notes receivable;
(iv) all Intellectual Property Rights and Patent Rights (each
capitalized term as defined in Section 4.18), including all of CMHC's
right, title and interest to the name "Xxxxx Material Handling Company";
(v) subject to paragraph (b) below, all contracts, contract
rights, leases, license agreements, purchase and sales orders, commitments
and other agreements to which CMHC is a party, including, without
limitation, agreements to purchase materials, contracts for services or to
provide products;
(vi) all franchises, licenses, permits, consents and certificates
of any regulatory, administrative or other governmental body or agency
issued to or held for use by CMHC necessary to the conduct of their
business, including, without limitation, all Environmental Permits;
(vii) all business records, files and data;
(viii) all Owned Property (as defined in Section 4.16);
(ix) all of the shares (the "Xxxxx Brazil Shares") of Xxxxx
Empilhadeiras Do Brasil Ltda, an entity organized under the laws of Brazil
("Xxxxx Brazil"), owned by CMHC; and
(x) the business of CMHC as a going concern and
all associated goodwill, if any.
The CMHC Assets to be sold and transferred by CMHC on the Closing shall not
include CMHC's (i) cash, cash deposits and other cash equivalents (other than
security deposits, including any security deposits relating to guaranties,
letters of credit, performance bonds or appeal bonds in effect on the Closing
Date, except as provided for in Section 6.11(b)), (ii) right to tax refunds,
(iii) stock books and ledgers, minute books and corporate seals and (iv) rights
under and pursuant to this Agreement (the assets referred to in clauses (i)
through (iv) are hereinafter referred to as the "Excluded Assets"). To the
extent permitted by law, CMHC retains the right to utilize any net operating
loss carrybacks and carryovers and unused tax credit carrybacks and
carryforwards available to it.
(b) To the extent that any of the CMHC 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 if an
attempted assignment or transfer would (i) constitute a breach thereof or (ii)
create rights in others not desired by Buyer. If CMHC shall have failed to
procure consent to any such assignment or transfer or waiver of such option
prior to the Closing Date, CMHC and Terex shall use their commercially
reasonable efforts to make the use and benefit of such CMHC 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.
(c) Except as specifically set forth elsewhere in this Agreement,
effective as of the Closing, Buyer shall assume and thereafter pay, perform and
discharge any and all liabilities and obligations of or arising out of or
relating to CMHC, its assets or business, or the operation or ownership by CMHC
of its assets or business, of whatever kind or nature, whether contingent or
absolute, whether arising prior to or on or after, and whether determined or
indeterminable on, the Closing Date, and whether or not specifically referred to
in this Agreement (such liabilities, the "CMHC Liabilities"). The CMHC
Liabilities to be assumed by the Buyer on the Closing shall not include any
liabilities or obligations of CMHC (i) for funded debt and indebtedness for
borrowed money, including, without limitation, its liabilities and obligations
(A) as a guarantor of, or otherwise in connection with, the 13.25% Senior
Secured Notes due 2002 of Terex (the "U.S. Trust Financing"), and (B) in
connection with the Loan and Security Agreement, dated as of May 9, 1995, among
Congress Financial Corporation and Foothill Capital Corporation, Foothill, as
agent for the Lenders, and Terex, CMHC, Koehring Cranes, Inc. and PPM Cranes,
Inc. (the "Congress Financing"), (ii) for Federal, state, local or foreign
income taxes or penalties, fines or interest with respect thereto payable with
respect to the ownership or operation of the CMHC Assets or payable by or with
respect to CMHC for any period prior to the Closing Date (including payments
pursuant to any tax indemnity or tax sharing agreement), (iii) to indemnify any
person by reason of the fact that such person was a director, officer, employee
or agent of any such entity or was serving at the request of any such entity as
a partner, trustee, director, officer, employee or agent of another entity, (iv)
which constitute a breach or violation by CMHC of any of the representations,
warranties, covenants or provisions of this Agreement, (v) with respect to the
Environmental Losses described in Section 4.19(c) of this Agreement, (vi) with
respect to any "employee benefit plan" within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), except to the
extent such liabilities or obligations arise from or relate to benefits provided
or accrued under such plans by virtue of employment with or by CMHC, (vii)
arising from costs and expenses related to the transactions contemplated by this
Agreement, (viii) criminal fines and penalties arising from or related to the
conduct of the business of Xxxxx Korea prior to Closing (the "Korean Fines and
Penalties"), (ix) for retrospective insurance premiums, if any, payable now or
in the future to Liberty Mutual Insurance Company of the type referred to in
item 1 of Schedule 4.10 hereto (the "Retrospective Premiums"), (x) for insurance
payments in excess of $431,420 payable to CIGNA or Xxxxx/Xxxxxxxxx-Xxxx related
to item 1 of Schedule 4.10 hereto and (ix) any liabilities of Terex, Sellers or
any of their respective affiliates (other than CMHC, the Companies and the
Subsidiaries) not related to the business of CMHC, the Companies or the
Subsidiaries (x) any liabilities of Terex, Sellers or any of their respective
affiliates (including CMHC, the Companies and the Subsidiaries) that (A) would
otherwise constitute CMHC Liabilities due to the membership of one or more of
CMHC, the Companies or the Subsidiaries in a consolidated group and (B) do not
relate to the business historically conducted by CMHC, the Companies or the
Subsidiaries (the liabilities and obligations referred to in clauses (i) through
(x) are collectively hereinafter referred to as the "Excluded Liabilities").
1.4 Sale and Purchase of Xxxxx Korea Shares. Subject to the terms and
conditions of this Agreement, at the Closing, Xxxxx Michigan shall sell, assign
and transfer to Buyer, and Buyer shall purchase from Xxxxx Michigan, all of
Xxxxx Michigan's right, title and interest in and to the sole asset of Xxxxx
Michigan, the Xxxxx Korea Shares.
ARTICLE 2
PURCHASE PRICE
2.1 The Purchase Price. The aggregate purchase price (collectively, the
"Purchase Price") for the Shares and the CMHC Assets shall be $139,500,000 and
shall be allocated among the Shares and the CMHC Assets as set forth on Schedule
2.1. Such allocation of the Purchase Price shall be reported in a manner
consistent with such allocation with all federal, state and local and foreign
tax authorities by Sellers and Buyer. The Purchase Price shall be payable as
provided in Section 2.2.
2.2 Payment of Purchase Price. Payment of the Purchase
Price shall be in U.S. dollars, and shall be made by Buyer no
later than 2:00 p.m. on the Closing Date (as defined in Section
3.1) by wire transfer of immediately available funds to an
account or accounts designated at least two (2) business days
prior to the Closing Date by Terex.
2.3 Purchase Price Adjustment. (a) The Purchase Price, as set forth in
Section 2.1 shall be increased or decreased on a dollar-for-dollar basis to the
extent that the Closing Adjusted Working Capital (defined below) is greater or
less than $20,828,000 (the "Purchase Price Adjustment").
(b) As soon as practicable, but not later than 60 calendar days after
the Closing Date, Sellers will provide the Buyer with a Closing Adjusted Working
Capital calculation and a calculation of the amount of the Purchase Price
Adjustment, if any. The components of the Closing Adjusted Working Capital
calculation shall be accounted for in accordance with U.S. generally accepted
accounting principles ("GAAP") applied on a basis consistent with the Interim
Balance Sheet. Such calculations will be accompanied by a consolidated statement
of each of the components of the calculation of Closing Adjusted Working Capital
of CMHC, the Companies and the Subsidiaries prepared in accordance with GAAP
applied on a basis consistent with the Interim Balance Sheet and reported on by
Price Waterhouse LLP. Buyer shall allow Sellers and Price Waterhouse LLP full
and complete access to all books and records of CMHC and the Companies necessary
or desirable to allow the Closing Adjusted Working Capital calculation to be
properly made and the audit to be conducted. The Closing Adjusted Working
Capital calculation and the Purchase Price Adjustment calculation shall be
conclusive and binding on the parties hereto unless Buyer shall deliver to
Sellers and Terex notice in writing of an objection to any item contained in the
Closing Adjusted Working Capital calculation within 30 days following the
Buyer's receipt of those calculations detailing the nature of such objection and
quantifying the amount in dispute (the "Buyer's Notice"). If the Buyer timely
delivers a Buyer's Notice, the Buyer and Sellers and their respective
accountants shall attempt to resolve Buyer's objection. If no resolution is
reached within 15 days of receipt of Buyer's Notice, Buyer and Sellers shall,
within five business days after the end of that period, submit all relevant
issues to Coopers & Xxxxxxx LLP ("C & L"). C & L shall review those items in
dispute within 20 business days after submission is made to it, and the decision
of C & L will be conclusive and binding on the parties. Buyer and Sellers will
each pay one-half of any fees and expenses charged by C & L. Payment of the
Purchase Price Adjustment will be made by the Buyer or Sellers (who shall be
jointly and severally liable therefor), as the case may be, on (i) if the Buyer
makes no objection thereto, the 35th day after the Buyer receives the Closing
Adjusted Working Capital calculations, or (ii) if any objection has been made,
the second business day after the earlier of (A) the parties' resolution of, or
(B) the parties' receipt of the final decision of C & L with respect to, all
such objections made by the Buyer.
(c) For purposes of any calculation made pursuant to this Section 2.3,
(i) "Closing Adjusted Working Capital" shall mean the difference between the
following accounts of Terex's material handling business as of the Closing Date:
(A) the sum of trade receivables (less allowances), net inventories and other
current assets, minus (B) the sum of the current portion of each of capital
lease obligations, trade accounts payable, accrued compensation and benefits,
accrued warranty and product liability, customer deposits (if any) and other
current liabilities to the extent assumed (directly or indirectly through a
Company or Subsidiary), by the Buyer; and (ii) "Interim Balance Sheet" shall
mean the unaudited combined balance sheet as of September 30, 1996 referred to
in Section 4.8. For purposes of this Section 2.3, the accrued warranty and
products liability shall be computed as of the Closing Date in accordance with
reasonable past practice, but in no event shall such account be less than
$17,773,000.
ARTICLE 3
CLOSING
3.1 Closing. (a) The closing of the sale and purchase of the Shares and the
CMHC Assets provided for in Section 1.1 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 a date mutually designated by Sellers, on
the one hand, and Buyer, on the other hand, but in no event later than the later
of the (i) the fifth business day after the satisfaction or waiver of the last
to occur of the conditions specified in Article 7 and (ii) three days after
written notice from Buyer to Terex; provided, however, that the Closing shall
occur no later than December 12, 1996 unless a later date shall have been agreed
to by Sellers and Terex. The date on which the Closing is held is hereinafter
the "Closing Date."
(b) At the Closing, (i) CMH International shall deliver to Buyer a
notarial deed and other instruments required by applicable law to transfer the
Xxxxx Germany Shares it owns (together with all rights then or thereafter
attaching thereto), and Buyer shall deliver to CMH International the applicable
portion of the Purchase Price as set forth in Article 2, (ii) CMH Acquisition
shall deliver to Buyer (A) certificates representing the Xxxxx Canada Shares it
owns (together with all rights then or thereafter attaching thereto), with valid
stock powers attached, and (B) a notarial deed and other instruments required by
applicable law to transfer the Xxxxx Germany Shares it owns (together with all
rights then or thereafter attaching thereto), and Buyer shall deliver to CMH
Acquisition the applicable portion of the Purchase Price as set forth in Article
2, (iii) Xxxxx Michigan shall deliver to Buyer certificates representing the
Xxxxx Korea Shares (together with all rights then or thereafter attaching
thereto), with valid stock powers attached, and Buyer shall deliver to Xxxxx
Michigan the applicable portion of the Purchase Price as set forth in Article 2
and (iv) CMHC shall deliver to Buyer duly executed instruments of transfer and
assignment of the CMHC Assets, sufficient to vest in Buyer good title to the
CMHC Assets, and Buyer shall deliver to CMHC (A) the applicable portion of the
Purchase Price as set forth in Article 2 and (B) duly executed instruments of
assumption necessary to effect the assumption of the CMHC Liabilities. The
consummation of the transactions described in Sections 1.1, 1.2, 1.3 and 1.4 are
each conditioned upon the consummation of the others.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLERS AND TEREX
Each Seller and Terex jointly and severally represents and warrants to
Buyer that:
4.1 Organization. (a) Each Seller and Terex is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation with all requisite corporate power and authority
to own, lease and operate its properties and assets and to carry on its business
as now being conducted.
(b) Each Company and each Subsidiary has been duly organized and is
validly existing under the laws of the country of its organization with the
requisite corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as now being conducted.
(c) Schedule 4.1 sets forth a correct and complete list of each
subsidiary of each Company, their jurisdiction of incorporation and jurisdiction
of qualification for doing business, and the percentage ownership by such
Company. For purposes of this Agreement, a "Subsidiary" shall mean any
majority-owned subsidiary of a Company, and "Subsidiaries" shall mean all
majority-owned Subsidiaries of the Companies (i.e., Xxxxx Material Handling
France, Xxxxx Maquinaria, S.A. and Xxxxx Brazil). The parties hereto acknowledge
that certain information concerning the Subsidiaries has not been included in
the Schedules hereto. Terex and the Sellers represent that the information not
included in the Schedules hereto relating to the Subsidiaries is not material to
CMHC, the Companies and the Subsidiaries, taken as a whole.
4.2 Authorization. The execution, delivery and performance of this
Agreement by Terex and each Seller has been duly authorized by all requisite
corporate action of Terex and such Seller. This Agreement constitutes the valid
and binding obligation of each of Terex and each Seller, enforceable against it
in accordance with its terms.
4.3 Corporate Records. Copies of the formation documents
of the Companies and the Subsidiaries previously delivered to
Buyer are complete and correct.
4.4 Consents of Third Parties. Except as set forth in Schedule 4.4, the
execution, delivery and performance of this Agreement by Terex and each Seller
will not (i) violate or conflict with the articles of incorporation or by-laws
of Terex and such Seller; (ii) conflict with, or result in the breach of,
termination of, give rise to any lien or constitute a default under, or require
the consent of any other party to, any Material Contract (as hereinafter
defined) to which Terex, a Seller or a Company is a party or by which Terex, a
Seller or a Company or any of their assets is bound; (iii) constitute a
violation of any law, regulation, rule, judgment, decree, court order or plan of
reorganization applicable to Terex, any Seller or any Company. No consent,
approval or authorization of any governmental authority is required on the part
of Terex, the Sellers or the Companies in connection with the execution,
delivery and performance of this Agreement, except (i) filings in connection
with the maintenance of qualification to do business in other jurisdictions
(collectively, the "Regulatory Filings") and (ii) as set forth in Schedule 4.4.
4.5 Capitalization. (a) Schedule 4.5 sets forth the authorized capital
stock, if applicable, of each of the Companies and the Subsidiaries and the
number of issued and outstanding shares of each of the Companies and the
Subsidiaries. No voting agreement exists with respect to such issued and
outstanding shares, and such shares were issued free of preemptive rights.
(b) (i) The Xxxxx Germany Shares are all of the outstanding shares of
capital stock of Xxxxx Germany and are owned of record and beneficially by CMH
International and CMH Acquisition, (ii) the Xxxxx Canada Shares are all of the
outstanding shares of capital stock of Xxxxx Canada and are owned of record and
beneficially by CMH Acquisition, (iii) all of the outstanding shares of capital
stock of Xxxxx Brazil are owned of record and beneficially 99.9% by CMHC and
0.1% by Xxxxx Germany, and (iii) the Xxxxx Korea Shares are all of the
outstanding shares of capital stock of Xxxxx Korea and are owned of record and
beneficially by Xxxxx Michigan. All such shares were duly authorized for
issuance and are validly issued, fully paid and non-assessable. Other than as
set forth in Schedule 4.5, there are no outstanding options, warrants, calls,
subscriptions or other rights, agreements or commitments obligating any Company
or any Subsidiary to issue, transfer or sell any of their respective equity
securities, or any outstanding securities convertible into, exchangeable for or
carrying the right to acquire, equity securities of such Company or Subsidiary.
There are no restrictions of any kind on the transfer of the Shares, except (1)
as may be imposed by applicable federal and state securities laws and (2) as are
disclosed on Schedule 4.5 (which shall be released at or prior to Closing).
4.6 Ownership of Shares. CMH International is, and at the Closing will be,
the record and beneficial owner of the Xxxxx Germany Shares to be transferred by
it to Buyer hereunder, CMH Acquisition is, and at the Closing will be, the
record and beneficial owner of the CMH Acquisition Shares to be transferred by
it to Buyer hereunder, and Xxxxx Michigan is, and at the Closing will be, the
record and beneficial owner of the Xxxxx Korea Shares to be transferred by it to
Buyer hereunder, in each case free and clear of any claim, lien, security
interest or other encumbrance ("Liens"), except as disclosed on Schedule 4.6
(which shall be released at or prior to Closing). At the Closing, the applicable
Seller will transfer and deliver to Buyer legal and valid title to all of the
Shares owned by it, free and clear of all Liens, other than Liens created or
suffered by Buyer.
4.7 Title to CMHC Assets. CMHC has good legal title, of record and
beneficially, to all of the CMHC Assets and at the Closing, CMHC will transfer
and deliver to Buyer legal and valid title to the CMHC Assets, free and clear of
all Liens, other than (i) Liens created by Buyer, (ii) Liens disclosed on
Schedule 4.7 or Schedule 4.16, (iii) with respect to Owned Property, reflected
in any title insurance policies listed on Schedule 4.16, (iv) with respect to
Owned Property, imperfections of title, easements, pledges, charges,
restrictions and encumbrances, including, without limitation, survey matters,
and Liens, if any, that do not materially detract from the value of the property
subject thereto or materially interfere with the manner in which it is currently
being used and (v) taxes and general and special assessments not in default and
payable without penalty or interest. Liens on the CMHC Assets shall be released
at or prior to Closing to the extent such Liens relate to any Excluded
Liability, including, but not limited to, Liens created in connection with the
U.S. Trust Financing and the Congress Financing.
4.8 Financial Statements. Sellers have delivered to Buyer copies of the
following financial statements (collectively, the "Financial Statements"): (i)
audited combined balance sheet ("1995 Balance Sheet") and the related combined
statements of operations, stockholder's deficit and cash flow of Terex's
material handling business as of December 31, 1995 and 1994, and the results of
their operations and cash flows for each of the three years in the period ended
December 31, 1995 (collectively, the "1995 Financial Statements") and (ii) the
unaudited combined balance sheet as of September 30, 1996 and related
consolidating income statement for the nine months then ended of Terex's
material handling business (collectively, the "Interim Financial Statements").
The Interim Financial Statements are attached to Schedule 4.8. The Financial
Statements have been prepared from and are in accordance with the books and
records of the respective entity described therein, have been prepared in
accordance with GAAP (except that the unaudited Financial Statements have been
prepared without footnote disclosures) consistently applied 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 unaudited Financial Statements, to normal
year-end adjustments). There has been no change in the methodology used by the
Sellers, the Companies or the Subsidiaries to calculate any reserves reflected
in the Financial Statements from and after December 31, 1995 and such
methodology has been consistently applied in accordance with GAAP.
4.9 Absence of Certain Changes. (a) Except as set forth on Schedule 4.9,
since December 31, 1995, the Business (defined below) has not suffered a
Material Adverse Change. For all purposes of this Agreement, "Material Adverse
Change" shall mean a change affecting CMHC, the Companies, or the Subsidiaries,
taken as a whole ("the Business") which, singly or together with other changes
(both favorable and adverse), is, or with reasonable probability, will be,
materially adverse to the net assets, operating income, financial condition,
operations or future prospects of the Business measured as of, or from, December
31, 1995.
(b) Since December 31, 1995, each Seller, Company and Subsidiary has
operated its business in the ordinary course consistent with reasonable past
practice and, except as set forth on Schedule 4.9, there has not been:
(i) any damage, destruction or loss to real or personal
property (A) not covered by insurance that has exceeded $500,000 (in the
aggregate) or (B) covered by insurance that results in a Material Adverse
Change;
(ii) any transaction between CMHC, any Company or any
Subsidiary, on the one hand, and any Seller or Terex, on the other hand,
except in the ordinary course of business consistent with reasonable past
practice;
(iii) any issuance of an option to purchase, or other right to
acquire, capital stock or any security or other instrument convertible into
capital stock of any class of the Companies or the Subsidiaries;
(iv) any issuance of shares of capital stock
(including treasury shares) of the Companies or the
Subsidiaries;
(v) any transaction by CMHC, any Company or any Subsidiary
other than in the ordinary course of business consistent with reasonable
past practice or as otherwise specifically permitted or contemplated by
this Agreement;
(vi) any incurrence, assumption or guarantee by CMHC, any
Company or any Subsidiary of any indebtedness or liability for or in
respect of borrowed money in excess of $50,000 (in the aggregate) or any
commitment to do the same, other than borrowings in the ordinary course of
business consistent with reasonable past practice and other than
indebtedness, liabilities or guarantees released at or prior to Closing;
(vii) any grant by CMHC, any Company or any Subsidiary of any
severance or termination pay to an executive officer, director or a group
of employees of CMHC, the Companies or the Subsidiaries or any increase in
compensation or benefits payable under existing employment agreements or
severance or termination pay policies with respect to any of their
respective employees, other than (a) increases or bonuses in the ordinary
course of business consistent with reasonable past practice, (b) increases
or grants required by contracts disclosed pursuant hereto or by applicable
law, or (c) increases, agreements and bonuses disclosed in Schedule 4.14;
(viii) any employment, bonus or deferred compensation agreement
entered into with any of the directors, officers or other employees of
CMHC, any Company or any Subsidiary, other than oral employment agreements
terminable at will and other than as disclosed in Schedule 4.14; or
(ix) any amendment of the articles of
incorporation or by-laws of any Company or any Subsidiary.
4.10 Liabilities. Except for liabilities and obligations (i) relating to
product liability and warranty claims and suits or (ii) (A) which have arisen in
the ordinary course of business since December 31, 1995 or (B) reflected or
disclosed in the Financial Statements or on Schedule 4.10 hereto, to the
knowledge of Terex and Sellers, none of CMHC, any Company or any Subsidiary has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise and whether due or to become due) that are material to
Sellers, the Companies and the Subsidiaries, taken as a whole.
4.11 Taxes. Except as set forth in Schedule 4.11, all federal, state, local
and foreign tax returns required to be filed on behalf of each Seller, Company
and Subsidiary have been duly filed (taking into account all extensions of due
dates), and all such returns are accurate in all material respects and such
companies have duly paid or made provisions for the payment of all taxes and
other amounts which are due and payable pursuant to such returns, or pursuant to
any assessment with respect to taxes in such jurisdictions, whether or not in
connection with such returns. The liability for taxes reflected in the 1995
Balance Sheet is sufficient for the payment of all unpaid taxes, accrued or
applicable for the period ended December 31, 1995 and for all years and periods
ended prior thereto except for taxes being disputed in good faith. The federal
income tax returns of each Seller have been audited by the Internal Revenue
Service, or the statutes of limitations with respect to federal income taxes
have all expired, for all fiscal years to and including 1986. State and foreign
income tax returns of each Seller, Company and Subsidiary have been audited by
appropriate tax authorities through the respective dates set forth on Schedule
4.11. Except as set forth in Schedule 4.11, all deficiencies asserted as a
result of the examinations referred to in the preceding two sentences have been
paid, fully settled or adequately provided for in the Financial Statements.
Except as set forth in Schedule 4.11, there are no claims asserted for taxes of
any Seller, Company or Subsidiary, nor are there outstanding agreements or
waivers extending the statutory period of limitation applicable to any tax
return of any Seller, Company or Subsidiary for any period. No Seller, Company
or Subsidiary, with regard to any property or assets held or acquired or to be
acquired by them at any time, has filed a consent to the application of Section
341(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code"). Amounts
have been withheld by each Seller, Company and Subsidiary from their respective
employees or other recipients of payments or distributions for all prior periods
in compliance with the tax withholding provisions of all applicable federal,
state, local and other laws. In all material respects, accurate and complete
federal, state, local and other returns have been filed on behalf of each
Seller, Company and Subsidiary for all periods for which returns were due with
respect to income tax withholding and social security and unemployment taxes;
and except as set forth in Schedule 4.11, the amounts shown on such returns to
be due and payable have been paid in full or adequate provision therefor has
been included in the Financial Statements. None of the CMHC Assets constitutes
an interest in an entity classified as a partnership for federal income tax
purposes.
4.12 Material Contracts, etc. Buyer has been provided access to correct and
complete copies of, and Schedule 4.12 lists, (a) all commitments and agreements
for the purchase of any materials, supplies, machinery, capital assets or
services that involve an expenditure by CMHC, any Company or any Subsidiary, as
the case may be, of more than $750,000 for any one commitment or agreement,
other than such commitments or agreements entered into in the ordinary course
consistent with reasonable past practice and (i) to be performed within a period
of 90 days or (ii) which can be canceled by CMHC, such Company or such
Subsidiary, as the case may be, without liability, premium or penalty on 90
days' or less notice; (b) all personal property leases under which CMHC, any
Company or any Subsidiary is either lessor or lessee and which involve annual
payments or receipts of $750,000 or more; (c) all other orders, leases,
commitments, agreements and instruments (including, but not limited to,
mortgages, indentures and other agreements and instruments relating to
indebtedness for borrowed money) to which CMHC, any Company or any Subsidiary is
a party or by which it or its properties are bound that require annual payments
by CMHC, such Company or such Subsidiary, as the case may be, in any 12-month
period and of more than $750,000, other than any agreements which are listed on
Schedule 4.16; (d) all government contracts and all other agreements with
customers that involve an annual payment to CMHC, any Company or any Subsidiary
of more than $750,000 for any one contract, other than such contracts or
agreements entered into in the ordinary course consistent with reasonable past
practice and (i) to be performed within a period of 90 days or (ii) which can be
canceled by CMHC, such Company or such Subsidiary, as the case may be, without
liability, premium or penalty on 90 days' or less notice. The agreements and
commitments referred to in subparagraphs (a), (b), (c) and (d) of this Section
4.12 are collectively hereinafter referred to as the "Material Contracts."
4.13 Absence of Defaults. Except as disclosed in Schedule 4.13, none of
CMHC, any Company or any Subsidiary is in default under the terms of any
Material Contract.
4.14 Personnel and Employee Benefits. (a) Schedule 4.14 sets forth a list
of all plans, contracts, agreements, programs and policies established or
maintained by or as to which CMHC, the Companies or the Subsidiaries contribute
or are a party, related to their employees', officers' and directors'
employment, compensation and fringe benefits, including bonuses, profit-sharing,
percentage compensation, deferred compensation, pensions, retirement, stock
option or other incentive, medical, vision, dental, hospitalization or other
health insurance, life insurance, disability insurance or any other employee
benefit plan (collectively, the "Employee Benefit Plans"). The Employee Benefit
Plans include each "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") (including
Employee Benefit Plans exempt from the provisions of ERISA) and any other plans
that provide for employee benefits under any other applicable foreign law,
statute, order, rule, code, or regulation.
(b) Except as set forth on Schedule 4.14, the Sellers, the Companies
and the Subsidiaries have paid in all material respects the amounts required, if
any, under applicable law or any Employee Benefit Plan or any agreement relating
to an Employee Benefit Plan to which it is a party, to be paid as contributions
to or benefits under any Employee Benefit Plan as of the last day of the most
recent fiscal year of such Employee Benefit Plan ended prior to the date hereof
(except for benefits payable on claims under Employee Benefit Plans that are
subject to review in the ordinary course of administration thereof). Except as
set forth on Schedule 4.14, the Sellers, the Companies and the Subsidiaries have
made adequate provision in the Financial Statements or on their books and
records for liabilities to make contributions or benefit payments with respect
to periods during the Employee Benefit Plans' current fiscal years up to the
date hereof.
(c) Sellers, the Companies and the Subsidiaries do not maintain a plan
and related trust intended to be qualified under Sections 401(a) and 501(a) of
the Code except for the Terex Corporation Employees' 401(k) Retirement Savings
Plan (the "401(k) Plan"). The most recent favorable determination letter issued
by the Internal Revenue Service as to the qualified status of the 401(k) Plan is
dated July 31, 1995, and a copy thereof has been furnished to Buyer. No act or
omission has occurred since July 31, 1995 with respect to the 401(k) Plan which
resulted or which Sellers, the Companies and the Subsidiaries believe would
result in a revocation of the Plan's tax qualified status. None of Sellers, the
Companies and the Subsidiaries has an obligation to pay contributions to a
multi-employer pension plan subject to ERISA.
(d) Except as set forth on Schedule 4.14, none of Sellers, the
Companies or the Subsidiaries is party to a collective bargaining agreement and
there are no labor strikes, slowdowns or stoppages taking place or, to the
knowledge of Sellers and Terex, threatened against or involving any Seller,
Company or Subsidiary. Except as set forth on Schedule 4.14, there is not
pending as of the date hereof any complaint against CMHC, any Company or any
Subsidiary issued by the National Labor Relations Board.
(e) To the knowledge of Sellers and Terex, there have been no
transactions with respect to the Employee Benefit Plans which would subject any
Seller, Company or Subsidiary to a tax, penalty or liability for a prohibited
transaction or breach of fiduciary duty under Section 406, 407, 409 or 502(i) of
ERISA or Section 4975 of the Code, and there have been no material failures to
comply with any applicable requirements of ERISA, the Code or other foreign
statutes, orders, rules or regulations with respect to the Employee Benefit
Plans. Except as set forth on Schedule 4.14, there is no pending litigation,
arbitration or adjudication proceeding with respect to the Employee Benefit
Plans, and none of Sellers and Terex is aware of any threatened litigation,
arbitration, adjudication proceeding or governmental investigation with respect
to the Employee Benefit Plans.
(f) Sellers and the Companies have delivered to Buyer or given Buyer
access to true, correct and complete copies of (A) all Employee Benefit Plans
and any related trust agreements, custodial agreements, investment management
agreements, insurance contracts or policies, and administrative service
contracts, all as in effect as of the date hereof, together with all amendments
thereto which will become effective at a later date; (B) the latest Summary Plan
Description and any modifications thereto for each Employee Benefit Plan
requiring same under ERISA; (C) the most recent Summary Annual Report for each
Employee Benefit Plan requiring same under ERISA; and (D) the most recent Form
5500 and/or Form 990 series filing (including required schedules and financial
statements) for each Employee Benefit Plan required to file such form. None of
Sellers, the Companies and the Subsidiaries nor any officer, employee
representative or agent thereof, has been authorized to make any written or oral
representations or statements to any current or former employees, dependents,
participants or beneficiaries or other persons which are inconsistent in any
material manner with the provisions of these documents.
(g) With respect to any of the Employee Benefit Plans which are "group
health plans" under Section 162(k) or Section 4980B of the Code and Section
607(1) of ERISA and related regulations (relating to the benefit continuation
rights imposed by the Consolidated Omnibus Budget Reconciliation Act of 1986
("COBRA"), as amended), there has been timely compliance in all material
respects with all requirements imposed by COBRA, as and when applicable to such
plans, so that Sellers, the Companies and the Subsidiaries have no (or will not
incur any) material loss, assessment, penalty, loss of federal income tax
deduction or other sanction arising out of or in respect of any failure to
comply with any COBRA benefit continuation requirement, which is capable of
being assessed or asserted directly or indirectly against Sellers, the Companies
and the Subsidiaries or other member of their corporate control group, with
respect to any such plan.
4.15 Litigation; Compliance with Laws. (a) Other than with respect to
product liability and warranty claims, suits or investigations, and except as
set forth on Schedule 4.15, (i) to the knowledge of Terex or Sellers, there is
no claim pending or threatened in writing against CMHC, the Companies or the
Subsidiaries and (ii) there is no action, suit, litigation, proceeding,
administrative action, arbitration or mediation pending, or to the knowledge of
Terex or Sellers, threatened, or any order, injunction or decree outstanding,
against CMHC, any Company or any Subsidiary.
(b) Except as set forth in Schedule 4.15, and except with respect to
compliance with Environmental Laws which is dealt with exclusively in Section
4.19, as of the date hereof, CMHC, the Companies and the Subsidiaries have been
in compliance in all material respects with all applicable federal, state, local
and foreign laws, ordinances, rules, regulations, judgments, decrees and orders
("Laws") of any governmental entity or authority having jurisdiction over CMHC,
the Companies and the Subsidiaries or their respective properties or assets
(each, a "Governmental Authority").
(c) A list of warranty litigation pending as of September 30, 1996 is
set forth in Schedule 4.15.
4.16 Properties. Except as set forth in Schedule 4.16, (i) each of CMHC,
the Companies and the Subsidiaries has good and marketable title to all real
property (the "Owned Property") and other property that they purport to own,
including the properties reflected in the Financial Statements (other than
inventory sold in the ordinary course of business and other items of personal
property which have been disposed of in the ordinary course of business since
December 31, 1995), (ii) all such properties are held free and clear of all
Liens and are not, in the case of real property, subject to any rights of way,
building or use restrictions, exceptions, variances, reservations or limitations
of any nature whatsoever, except, with respect to both clauses (i) and (ii),
other than (a) Liens reflected in any title insurance policies listed on
Schedule 4.16 and (b)(i) Liens for current taxes and assessments not due or
delinquent or which are being contested in good faith, (ii) minor imperfections
of title, liens, encumbrances and easements and (iii) mechanics', carriers',
workers', repairmen's and other similar liens, rights of way, building or use
restrictions, exceptions, variances, reservations and other limitations of any
kind, if any, which in the case of clause (b) do not materially detract from the
value of or materially interfere with the present use of any of the properties
subject thereto or affected thereby or otherwise materially impair the business
operations conducted by CMHC, any Company or any Subsidiary. Set forth on
Schedule 4.16 is a correct and complete list of all real property (i) owned by
CMHC, any Company or any Subsidiary in the conduct of its business and (ii)
leased by CMHC, any Company or any Subsidiary. Except as set forth in Schedule
4.16, to the knowledge of Sellers and Terex, all Owned Property, plants and
structures owned or leased by CMHC, any Company or any Subsidiary, and all
machinery and equipment owned or leased by CMHC, any Company or any Subsidiary,
which are material to their operations are in operating condition and repair
consistent with their past experience and are generally adequate for the uses to
which they are being put. Except as set forth in Schedule 4.16, none of CMHC,
any Company or any Subsidiary has received any written notice of any violation
of any building, zoning or other law, ordinance or regulation in respect of such
property or structures or their use thereof. Notwithstanding the foregoing,
Liens affecting Owned Property or such other properties shall be released at or
prior to Closing to the extent such Liens relate to liabilities not being
assumed by Buyer pursuant to this Agreement, including, the Excluded Liabilities
and the Company Excluded Liabilities (as defined in Section 6.8).
4.17 [Reserved].
4.18 Patents and Trademarks. CMHC, the Companies and the Subsidiaries have,
or have valid, legal rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
licenses and rights (collectively, the "Intellectual Property Rights") which are
necessary to their respective businesses. Schedule 4.18 sets forth a list of all
inventions which are the subject of issued letters patent or an application
therefor and all 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 CMHC, the Companies or the Subsidiaries (the "Patent
Rights"), specifying as to each, as applicable: (i) the patent number or
description of trade or service xxxx; (ii) the jurisdictions by or in which such
Patent Right has been issued or registered or in which an application for such
issuance or registration has been filed, including the respective registration
or application numbers; and (iii) material licenses, sublicenses and other
agreements to which CMHC, any Company or any Subsidiary is a party and pursuant
to which any person is authorized to use such Patent Right. Except as set forth
on Schedule 4.18, neither CMHC, the Companies nor the Subsidiaries (i) is 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, (ii) has any knowledge of any existing infringement by another
person of any of the Patent Rights belonging to CMHC, such Companies or such
Subsidiaries or (iii) has received written notice of the infringement by CMHC,
any Company or any Subsidiary of any infringement of the patent, trademark,
copyright or other intellectual property rights of a third party, except such
existing infringements, or claims, suits, actions or proceedings the adverse
determination of which would not alter in any material respect the manner in
which CMHC, any Company or any Subsidiary currently conducts its business or
manufactures its products. Except as disclosed on Schedule 4.18, no Patent Right
is subject to any outstanding order, judgment, decree, stipulation or agreement
restricting the use thereof by CMHC, the Companies or the Subsidiaries or
restricting the licensing thereof by CMHC, the Companies or the Subsidiaries to
any person.
4.19 Environmental Matters. (a) Except as disclosed on Schedule 4.19, (i)
the Facilities, whether owned or leased, whether used for manufacturing, sales
or otherwise, are in compliance in all material respects with all applicable
Environmental Laws, (ii) each Seller, Company and Subsidiary has all necessary,
and is in compliance in all material respects with, such Environmental Permits,
(iii) there is no condition with respect to any of the Facilities which would
subject the Buyer, CMHC, the Companies or the Subsidiaries to fines, penalties
or enforcement actions due to violations of Environmental Laws or Environmental
Permits, (iv) Sellers and the Companies have provided to Buyer complete and
accurate copies of all inspection reports, compliance evaluations, or other
documents in their possession which describe (A) the condition of soil and
groundwater on the Facilities and (B) the environmental compliance status of the
Facilities, (v) there are no lawsuits, orders, consent decrees, administrative
enforcement actions, environmental cleanup proceedings or notices of violation
pending or, to the knowledge of Terex and Sellers, threatened, with respect to
compliance with Environmental Laws, (vi) none of the Facilities has been placed
on or is proposed to be placed on the National Priorities List ("NPL"), the
Comprehensive Environmental Response Compensation and Liability System
("CERCLIS") or state or foreign equivalents of such lists, including laws which
establish registers of historically contaminated sites and (vii) none of the
Facilities has above or underground storage tanks which are in a condition which
exposes the Buyer, CMHC, the Companies or the Subsidiaries to Environmental
Losses nor has there been a Release of Hazardous Substances from any such tanks
which exposes the Buyer, CMHC, the Companies or the Subsidiaries to
Environmental Losses.
(b) The execution, delivery and performance of this Agreement do not
and will not violate any Environmental Laws or Environmental Permits in any
material respects.
(c) Notwithstanding anything in this Agreement to the contrary, Buyer,
the Companies or the Subsidiaries shall not be liable or responsible for any
Environmental Losses arising from, in respect of, incurred as a consequence of
or in connection with any and all real property, business entities or assets,
whether domestic or foreign, not acquired pursuant to this Agreement (including
any property previously sold).
(d) For purposes of this Agreement, the following
definitions shall apply:
(i) "Environmental Laws" shall mean all present and future laws,
foreign and domestic statutes, ordinances, rules, regulations, orders,
consent decrees, policies and determinations of any governmental authority,
pertaining to health, protection of the environment, natural resources,
conservation, wildlife, waste management, regulation of activities
involving Hazardous Substances, as that term is defined in this Agreement,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601, et seq., as
amended; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
6901 et seq., as amended; the Federal Water Pollution Control Act as
amended by the Clean Water Act ("CWA") and subsequent amendments, 33 U.S.C.
1251 et seq.; the Clean Air Act ("CAA") 42 U.S.C. 7401 et seq., as amended;
the Toxic Substances Control Act ("TSCA"), 15 U.S.C. 2601 et seq., as
amended; the Hazardous Materials Transportation Act ("HMTA"), 49 U.S.C.
5101 et seq., as amended, and the Occupational Safety and Health Act, 29
U.S.C., 651 et seq., as amended and the regulations promulgated thereunder.
(ii) "Hazardous Substances" shall mean solid or hazardous waste, toxic
substance, hazardous chemical, pollutant, contaminant, radioactive
substance, or other material of whatever kind that is in any way regulated
by Environmental Laws or which will subject the Buyer, Sellers, the
Companies or the Subsidiaries to liability.
(iii) "Release" shall mean any spilling, emitting, leaking, pumping,
injecting, depositing, disposing, discharging, dispersing, leaching or
migrating into the environment of any Hazardous Substance whether through
the air, soil, surface water, groundwater or other medium.
(iv) "Environmental Permit" shall mean any approval, license, order,
permission, contract or similar authorization of, with or by any
governmental authority necessary for the ownership and operation of any of
the Facilities in compliance with Environmental Laws.
(v) "Facilities" shall mean the properties and assets to be acquired,
directly or indirectly, by Buyer pursuant to this Agreement, including,
without limitation, properties owned by the Companies and the Subsidiaries,
foreign and domestic real or personal property, whether owned, leased,
occupied or otherwise operated by Sellers, the Companies and the
Subsidiaries as of the Closing Date.
(vi) "Environmental Losses" shall mean any and all costs associated
with any actions, claims, lawsuits, orders, consent decrees, enforcement
actions, damages, defenses, demands, disbursements, expenses, fines,
judgments, liabilities, liens, obligations, penalties or proceedings,
including attorneys' and consultants' fees in connection with the
non-compliance with the Environmental Laws.
4.20 Conflicts of Interest. To the knowledge of Sellers and Terex, no
officer or director of Terex, any Seller, any Company or any Subsidiary has or
claims to have (i) any interest in the property, real or personal, tangible or
intangible, including, without limitation, intangibles, licenses, inventions,
technology, processes, designs, computer programs, know-how and formulae used in
the business of any Seller, any Company or any Subsidiary (ii) any contract,
commitment, arrangement or understanding with any Seller, any Company or any
Subsidiary, except (A) to the extent applicable, as a shareholder of Terex, any
Seller, any Company or any Subsidiary (B) as set forth in Schedule 4.20 or (C)
except for interests which employees may have in technology, processes, designs
and know-how under applicable law except to the extent such interests may be
modified by binding agreements.
Except as set forth on Schedule 4.20, to the knowledge of Sellers and
Terex, no officer or director of Terex, any Seller, any Company or any
Subsidiary has any ownership or stock interest in any other enterprise, firm,
corporation, trust or any other entity which is engaged in any line or lines of
business which are the same as, or competitive with, the line or lines of
business of any Seller, any Company or any Subsidiary. For purposes of this
representation, ownership of not more than 5% of the voting stock of any
publicly held company whose stock is listed on any recognized securities
exchange or traded over the counter shall be disregarded.
4.21 Accounts Receivable; Inventory; Backlog. (a) All accounts receivable
of each Seller, each Company and each Subsidiary represent sales actually made
in the ordinary course of business. There has not been any material adverse
change in the collectability of accounts receivable of each Seller, each Company
and each Subsidiary since December 31, 1995.
(b) The inventory of CMHC, the Companies and the Subsidiaries is of a
quality and quantity usable in the ordinary course of business of CMHC, the
Companies and the Subsidiaries in all material respects, except for obsolete,
damaged, defective or otherwise unsalable items as to which a provision
determined in a manner consistent with prior practice has been made on the books
of CMHC, the Companies and/or the Subsidiaries, as the case may be. The value of
all inventory items, including finished goods, work-in-process and raw
materials, has been recorded on the books of CMHC, the Companies and the
Subsidiaries at the lower of cost (determined in accordance with the accounting
inventory valuation methods of such entity) or fair market value.
(c) As of September 30, 1996, the amount of all unfilled firm orders
to purchase products of CMHC, the Companies and the Subsidiaries was
approximately $76,900,000.
4.22 Brokers and Finders. None of Terex, the Sellers, the Companies or the
Subsidiaries nor any of their officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage fees, commissions,
finders, fees or similar fees or expenses and no broker or finder has acted
directly or indirectly for any of them in connection with this Agreement or the
transactions contemplated hereby, other than Salomon Brothers Inc. No investment
banking, financial advisory or similar fees have been incurred or are or will be
payable by CMHC, any Company or any Subsidiary in connection with this Agreement
or the transactions contemplated hereby. Buyer shall have no liability for any
fees described herein or arising from the actions of Terex, the Sellers, the
Companies or the Subsidiaries under this Section 4.22.
4.23 Misleading Statements. Terex and the Sellers have, to their knowledge,
disclosed to Buyer all facts material to the business, operations, assets or
financial condition or future prospects of CMHC, the Companies and the
Subsidiaries, taken as a whole. No representation or warranty by Terex, any
Seller or any Company contained in this Agreement, and no statement contained in
any Schedule (including any supplement or amendment thereto) and the documents
to be delivered at the Closing by or on behalf of Terex, any Seller, any Company
or any of their representatives in connection with the transactions contemplated
hereby contains or will contain any untrue statement of a material fact, or
omits or will omit to state any material fact necessary, in light of the
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading.
4.24 Products Liability. (a) To the knowledge of Sellers and Terex, the
product liability claims presently pending against CMHC, the Companies and the
Subsidiaries do not present loss contingencies, which, in the aggregate, are
inconsistent with the loss contingency experience of CMHC, the Companies and the
Subsidiaries since July 31, 1992.
(b) Except as set forth in Schedule 4.24, Sellers and Terex are not
aware of any product liability claim which, in the last five years, has resulted
in a punitive damage award against CMHC, the Companies or the Subsidiaries.
(c) Sellers and Terex are not aware of any facts that indicate that
the reserves for product liability claims of CMHC, the Companies and the
Subsidiaries reflected in the Financial Statements are understated based upon
CMHC's, the Companies' and the Subsidiaries' historical method of establishing
such reserves.
(d) To Sellers' and Terex's knowledge, all agreements insuring CMHC,
the Companies or the Subsidiaries against claims for product liability, since
July 31, 1992, are in full force and effect.
(e) To Sellers' and Terex's knowledge, Schedule 4.24 contains, in all
material respects, a list, as of October 17, 1996, of all CMHC, the Companies or
the Subsidiaries pending and threatened product liability litigation and claims,
except for immaterial claims as to which such parties maintain no records.
4.25 Insurance. Buyer has been provided access to correct and complete
copies of all fire, liability and other insurance carried by Terex, CMHC, any
Company or any Subsidiary and insuring CMHC, any Company or any Subsidiary. All
such insurance is in full force and effect, and no notice of cancellation or
termination, or reduction of coverage or intention to cancel, terminate or
reduce coverage, has been received with respect to any policy for such
insurance. The insurance coverage provided by such policies of insurance will
not terminate or lapse by reason of the transactions contemplated by this
Agreement.
4.26 Obligations to Register. None of Terex, any Seller or any Company has
agreed to register or is otherwise under any obligation to register any Shares
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder.
4.27 Renewal of Representations at Closing. The representations and
warranties of Terex and Sellers contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date with the same
force and effect as though made at and as of the Closing Date, 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 of such date.
4.28 Compliance with Covenants Prior to Closing. Terex and Sellers 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 Terex
or Sellers prior to or at the Closing.
4.29 Disclaimer. BUYER ACKNOWLEDGES THAT SELLERS MAKE NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER, OTHER THAN THE
REPRESENTATIONS AND WARRANTIES OF SELLERS SPECIFICALLY SET FORTH IN THIS ARTICLE
4, AND THE CMHC ASSETS AND BUSINESS OF CMHC BEING SOLD TO BUYER AT CLOSING ARE
TO BE CONVEYED HEREUNDER "AS IS WHERE IS" ON THE CLOSING DATE, AND IN THEIR THEN
PRESENT CONDITION, AND BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF. IN ANY
EVENT, SELLERS MAKE NO WARRANTY 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.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
5.1 Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware with all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as now being conducted.
5.2 Authorization. The execution, delivery and performance of this
Agreement by Buyer have been duly authorized by all requisite corporate action
of Buyer. This Agreement constitutes the valid and binding obligation of Buyer
enforceable against it in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.3 Consents of Third Parties. The execution, delivery and performance of
this Agreement by Buyer will not (i) violate or conflict with the articles of
incorporation or by-laws of Buyer; (ii) 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; (iii) 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 (ii) and (iii) 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 the Regulatory Filings or as set forth in Schedule 5.3.
5.4 Litigation. There is no suit, litigation, proceeding or governmental
action pending, or to the knowledge of Buyer, threatened, or any order,
injunction or decree outstanding, against Buyer that, if adversely determined,
would materially adversely affect the ability of Buyer to consummate the
transactions contemplated by this Agreement in accordance with the terms hereof.
5.5 Investment. Buyer is purchasing the Shares for investment purposes and
not with a view to the resale or distribution of the Shares, and will not sell
the Shares in violation of applicable federal or state securities laws.
5.6 Brokers or Finders. Except as set forth in Schedule 5.6, neither the
Buyer nor any of its 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 Business Pending Closing. Except as specifically
contemplated by this Agreement, from the date hereof until the Closing, except
as approved by Buyer in writing in advance, Terex and Sellers covenant and agree
that:
(a) The Sellers, the Companies and the Subsidiaries shall operate
their respective businesses in the ordinary course of business consistent with
reasonable past practice;
(b) Other than as may be provided in any employment arrangement listed
on Schedule 4.14, and other than in its ordinary course of business, neither
CMHC nor any Company will (i) grant or agree to grant any (A) bonus to any
employee, (B) general increase in the rates of salaries or compensation of its
employees or (C) specific increase to any employee, except such as are in
accordance with regularly scheduled periodic increases, or (ii) provide for any
new pension, retirement or other employment benefits to any of its employees or
any increase in any existing benefits;
(c) Except for cash dividends and cash payments in respect of
intercompany accounts, CMHC will not declare, set aside or pay any dividends or
other distributions in respect of its capital stock or redeem, purchase or
otherwise acquire any of its capital stock, except in accordance with reasonable
past practice, which includes, without limitation, the continued implementation
of the current cash management practices of Terex and Sellers;
rch No Company or Subsidiary will amend its articles
of incorporation or by-laws, except as required by law;
(e) CMHC and each Company and Subsidiary will use reasonable efforts
to maintain and preserve intact its business, to keep available the services of
its present employees and to maintain its relationships with customers,
suppliers and others having business relationships with it;
(f) Except as set forth on Schedule 4.9, neither CMHC, the Companies
nor any Subsidiary shall sell, assign, voluntarily encumber, grant a security
interest in or license with respect to, or dispose of, any of their respective
assets or properties, tangible or intangible, having a fair market value of
$10,000 individually or $100,000 in the aggregate, or incur any material
liabilities (including, without limitation, liabilities with respect to capital
leases or guarantees thereof not exceeding $200,000 in the aggregate), 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 CMHC, the Companies or any Subsidiary from using
their existing borrowing or credit facilities in any manner and to the full
extent permitted thereunder;
(g) CMHC, the Companies and the Subsidiaries will collect their
accounts receivable in the ordinary course of business consistent with
reasonable past practice; and
(h) The Companies will not declare, set aside or pay any dividends or
other distributions in respect of their respective capital stock or redeem,
purchase or otherwise acquire any of their respective capital stock, including
but not limited to, any distribution of the proceeds of any sale of Flandres
Manutention S.A., or make any loans to or for the benefit of Terex and Sellers.
6.2 Access. From the date of this Agreement until the Closing Date, Sellers
will at reasonable times and upon reasonable notice furnish Buyer and its
representatives (including Xxxxxxxxx & Company, Inc., Bear, Xxxxxxx & Co., Inc.,
Citibank, N.A. and their respective representatives) with access to or copies of
(at Sellers' discretion) such financial and operating data and such other
information relating to CMHC, the Companies and the Subsidiaries as Buyer may
from time to time reasonably request. Any disclosure whatsoever during any
investigation by or on behalf of Buyer shall not constitute an enlargement of or
additional representations or warranties of Sellers and Terex 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 6.9.
6.3 Commercially Reasonable Efforts; Other Actions. (a) Subject to the
terms and conditions herein provided, each of the parties hereto agrees to (i)
use commercially reasonable 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; (ii) use commercially
reasonable 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 (iii) use commercially reasonable efforts to fulfill or
obtain the fulfillment of all conditions to the obligations of the other parties
to consummate the transactions contemplated by this Agreement, including,
without limitation, the execution and delivery of all agreements or other
documents contemplated hereunder to be so executed and delivered.
(b) Each party hereto agrees that from and after the Closing Date, if
reasonably requested by any other party hereto, it will execute and deliver to
the other parties such further instruments and documents as may be reasonably
necessary to carry out the provisions of this Agreement.
6.4 Expenses. Except as otherwise specifically provided in this Agreement,
Buyer, on the one hand, and Sellers and Terex, on the other hand, shall bear
their own respective expenses incurred in connection with this Agreement and in
connection with all obligations required to be performed by each of them under
this Agreement.
6.5 Publicity. Terex and Buyer shall consult with each other 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 the other.
6.6 Transfer Taxes. Any sales, stock transfer taxes, real property transfer
taxes, personal property transfer taxes, real property gains or conveyance taxes
(other than income taxes) or other like taxes or recording fees payable in
connection with the sale of the Shares or the CMHC Assets shall be paid equally
by Buyer on the one hand, and Sellers, on the other.
6.7 Preservation of Records. Buyer agrees that it shall, at its own
expense, preserve and keep the records of CMHC, the Companies and the
Subsidiaries delivered to it pursuant to this Agreement for a period of seven
years from the Closing Date, or for any longer periods as may be required by any
government agency or ongoing litigation, and shall make such records available
to Sellers as may be reasonably required by Sellers in connection with, among
other things, any insurance claim, legal proceeding, environmental matter or
governmental investigation relating to Sellers, the Companies or the
Subsidiaries; provided, however, that records relating to products liability
matters will be preserved and kept by Buyer for a time period consistent with
the reasonable past practice of CMHC. In the event Buyer wishes to destroy such
records after that time, it shall first give 60 days' prior written notice to
Terex and Terex shall have the right at its option and expense to take
possession of the records within 100 days thereafter.
6.8 Certain Excluded Obligations. Sellers and Terex acknowledge that Buyer
and the Companies shall have no obligation or responsibility for (a) any
liabilities arising out of or relating to Drexel Industries, Inc., or the
assets, business, operations or ownership thereof, except that Buyer shall
assume the obligations of CMHC under Section 6.12, 6.13 and 6.14 of the Amended
and Restated Stock Purchase Agreement (the "Drexel Agreement"), dated April 15,
1994, by and between CMH Acquisition Corp. and DAC Acquisition Corp., (b) the
Korean Fines and Penalties, (c) civil damages, costs and expenses or claims of
Xxxxx Korea employees arising from the Korean Fines and Penalties, (d)
liabilities or obligations of the Companies for the U.S. Trust Financing and the
Congress Financing, (e) liabilities or obligations which arise from a breach or
violation by Terex or a Seller of any of the representations, warranties,
covenants or provisions of this Agreement, (f) liabilities or obligations of the
Companies and the Subsidiaries with respect to any "employee benefit plan"
within the meaning of ERISA or any other employee benefit plans, including
bonuses, profit-sharing, percentage compensation, deferred compensation,
pensions, retirement, stock option or other incentive, medical, vision, dental,
hospitalization or other health insurance, life insurance, disability insurance
or any other employee benefit plan, except to the extent such liabilities or
obligations arise from or relate to benefits provided or accrued under such
plans by virtue of employment with or by any Company or any Subsidiary, (g)
liabilities or obligations which arise from costs and expenses incurred by a
Company or any Subsidiary related to the transactions contemplated by this
Agreement and (h) with respect to the Environmental Losses described in Section
4.19(c) of this Agreement (the liabilities and obligations referred to in
clauses (a) through (h) are collectively herein referred to as the "Company
Excluded Liabilities").
6.9 Confidentiality. The letter agreement, dated as of March 20, 1996,
between Terex and [Citicorp Venture Capital, Ltd.] (the "Confidentiality
Agreement") is hereby incorporated by reference herein in its entirety and shall
continue in full force and effect until the Closing, at which time such
Confidentiality Agreement (other than provisions therein dealing with
information and other matters concerning Terex and not CMHC or the Companies,
which provisions shall continue in full force and effect) and the obligations of
Buyer under this Section 6.9 shall terminate. If this Agreement is, for any
reason, terminated prior to the Closing, the Confidentiality Agreement shall
continue in full force and effect.
6.10 Continuing Insurance Coverage. (a) From and after the Closing Date,
Buyer shall procure, or shall caused to be procured, at its own expense and
shall maintain in full force and effect (with reputable and financially sound
U.S. domestic insurance companies having a rating of A or better by A.M. Best &
Company as of their respective latest evaluation dates and otherwise acceptable
to Terex, or with such other insurance companies acceptable to Terex) the
insurance coverage in the amounts, of the types and the characteristics set
forth in this Section 6.10 and Schedule 6.10 attached hereto (each an "Insurance
Policy", and collectively, the "Insurance Policies").
(b) Buyer shall deliver to Terex, on the Closing Date and at least 45
days prior to each anniversary of the Closing Date, a certificate of authorized
officers of Buyer (i) confirming that all of the Insurance Policies are in full
force and effect on and as of such date and, with respect to such certificates
being delivered in respect of an anniversary date, that all of such Insurance
Policies will be in full force and effect on and as of such anniversary date,
(ii) confirming the names of the companies issuing such Insurance Policies,
(iii) confirming the amounts, the effective dates and the expiration dates of
such Insurance Policies, (iv) confirming that all premiums in respect of such
Insurance Policies have been paid in full and (v) certifying that such Insurance
Policies fully comply with the requirements of this Section 6.10. Such
certificate shall be accompanied by a certificate of a licensed insurance agent,
broker or insurer approved by Terex (which approval shall not be unreasonably
withheld) confirming the matters specified in the preceding sentence. In the
event Buyer shall at any time fail to procure or maintain any of the Insurance
Policies required hereby, Terex or any of its subsidiaries or affiliates may
(but shall not be obligated to) procure and maintain such Insurance Policies in
its own name or in the name of Buyer, CMHC or the Companies, as Terex shall
elect, and Buyer shall and shall cause the Companies jointly and severally to
reimburse Terex and its subsidiaries and affiliates for all costs and expenses
(including, without limitation, all premiums) incurred or paid by Terex or any
of its subsidiaries or affiliates in respect of such Insurance Policies.
(c) Promptly upon receipt thereof and in any event within 30 days
after the Closing Date, Buyer shall deliver to Terex a duplicate copy, certified
by a licensed insurance agent, broker or insurer approved by Terex (which
approval shall not be unreasonably withheld) of each Insurance Policy, each
bearing a notation evidencing payment in full of the premium therefor listing
Terex and Xxxxx Equipment Company, a Delaware corporation ("CEC") and their
respective past, present and future subsidiaries, affiliates and successors
(including CMHC and the Companies) as additional insureds and stating that Terex
is to be notified in writing in advance if the policy or policies are cancelled
or coverage amounts reduced. Not less than 45 days prior to the expiration date
of any Insurance Policy, Buyer shall deliver to Terex a certificate of insurance
or binder of insurance with respect to each renewal policy in respect thereof,
certified in each case by a licensed insurance agent, broker or insurer approved
by Terex (which approval shall not be unreasonably withheld) listing Terex and
CEC and their respective past, present and future subsidiaries, affiliates and
successors (including CMHC and the Companies) as additional insureds and stating
that Terex is to be notified in writing in advance if the policy or policies are
cancelled or coverage amounts reduced. Promptly after receipt thereof and in any
event within 30 days after the effective date of any such renewal policy, Buyer
shall deliver to Terex a duplicate copy, certified by a nationally recognized
insurance broker approved by Terex, of each such renewal policy, each bearing a
notation evidencing payment in full of the premium therefor.
(d) All of the Insurance Policies shall be written on an "occurrence"
basis, unless otherwise agreed in writing by Terex, and shall (i) name Terex and
CEC and their respective past, present and future subsidiaries, affiliates and
successors (including CMHC and the Companies) as additional insureds, (ii)
insure the interests of Terex, CEC and their respective subsidiaries, affiliates
and successors regardless of any change in ownership of all or any portion of
the Companies or any of their respective businesses or assets, (iii) waive any
right of subrogation of the insurer(s) against Terex, CEC and their respective
subsidiaries, affiliates and successors, (iv) waive any right of the insurer(s)
to any set-off or counterclaim or any other deduction and (v) include a
severability of interest and cross liability clause.
(e) Buyer shall promptly notify Terex on a monthly basis of (i) any
loss covered by any Insurance Policy and (ii) any material change in coverage
under any of the Insurance Policies including, but not limited to, any reduction
in coverage or amount, any increase in deductibles or self-insured retentions,
or any change of insurer(s); provided that no alteration of any of the terms or
conditions of any Insurance Policy which adversely affects Terex's, CEC's or any
of their respective subsidiaries', affiliates' or successors (or any of their
respective past, present or future directors', officers', employees' or agents')
coverage thereunder (including, without limitation, any reduction in the scope
or limit of coverage or any increase in deductibles or self-insured retentions)
may be made to any of the Insurance Policies without the prior written consent
of Terex which shall not be unreasonably withheld or delayed; provided further
that any change to Insurance Policies shall be deemed not to adversely affect
Terex, CEC or such other parties if it meets or exceeds the standards sets forth
in Schedule 6.10.
xxxx CMHC Cash and Intercompany Accounts at Closing. (a) CMHC shall be
entitled, prior to the Closing, to collect and retain or cause to be collected
and retained the proceeds of all items received in any bank account of CMHC
(collectively, the "Bank Accounts") or otherwise in respect of CMHC, (including
the amount of any checks received by CMHC), 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 CMHC may at its option not collect
but leave in any of the Bank Accounts or other locations of CMHC, all or any
portion of the Pre-Closing Cash, and the aggregate amount of such uncollected
Pre-Closing Cash shall be paid to CMHC together with and in the same manner as
the Purchase Price. If after the Closing it is determined that the amount of
Pre-Closing Cash is greater or less than the sum of the amount, if any, that was
collected by CMHC and the amount, if any, that was uncollected and paid together
with the Purchase Price, Buyer shall pay CMHC or CMHC shall pay Buyer, as
applicable, the difference between the two amounts promptly after such
determination.
(b) At the Closing, Buyer shall cause the release of Terex and all
Sellers from any and all of their liabilities and obligations (contingent or
otherwise) with respect to any and all guaranties, letters of credit,
performance bonds and appeal bonds in effect on the Closing Date relating to the
business, properties and/or assets of CMHC. CMHC has the right to retain, or
Buyer shall cause to be paid to CMHC, (i) the lesser of $326,500 or 50% of the
cash which is collateralizing or securing the guaranties, letters of credit,
performance bonds and appeal bonds in effect on the date hereof relating to the
business, properties and/or assets of CMHC and (ii) all cash which is
collateralizing or securing any such guaranties, letters of credit, performance
bonds and appeal bonds put into effect after the date hereof.
(c) All intercompany accounts between Terex or any Seller, on the one
hand, and any Company or any Subsidiary, on the other hand, shall be cancelled
prior to the Closing Date, except accounts related to the purchase of equipment,
goods or materials.
6.12 Drexel Note. Notwithstanding anything contained to the contrary in
this Agreement, (i) Sellers shall retain the notes receivable issued in
connection with the sale of Drexel pursuant to the Drexel Agreement (the "Drexel
Note") and (ii) the Drexel Note shall not be included in any calculation of
Adjusted Working Capital pursuant to Section 2.3 of this Agreement.
6.13 Employment and Employee Benefit Issues. (a) Buyer shall offer
employment, commencing on the Closing Date, to all salaried and hourly employees
of CMHC on the Closing Date, at substantially the same salary and wages which
each such employee was receiving at such time from CMHC, other than those
executive employees set forth on Schedule 6.13. Those employees who accept
employment at the Closing Date or thereafter, are hereinafter referred to
collectively as the "Transferred Employees." Buyer shall indemnify CMHC and its
affiliates for any claims by any Transferred Employee (i) for severance pay or
other compensation or benefits alleged to be owing by reason of the transactions
contemplated hereby pursuant to any of the plans or policies referred to in
Schedule 4.14 and (ii) under the Worker Adjustment Retraining and Notification
Act, X.X. 100-379, as amended ("WARN"). Nothing contained herein shall (i)
confer any third-party beneficiary right (actual or implied) upon any
Transferred Employee or obligate Buyer to continue any Transferred Employee in
its employ for any specified period of time or at any specified salary, wages or
benefits after the Closing Date or (ii) create any liability or obligation on
the part of Buyer, the Companies or the Subsidiaries with respect to the
agreements referred to in item 1 of Schedule 4.9, all of which obligations shall
be solely the responsibility of Terex or its affiliates (other than the
Companies or the Subsidiaries).
(b) Buyer shall establish or provide for the Transferred Employees
hospitalization, medical, surgical, life insurance, severance, vacation plans
and other employee benefit plans and programs similar to those that such
Transferred Employees were receiving from CMHC immediately prior thereto. Buyer
also shall credit Transferred Employees with their past service with CMHC for
purposes of determining eligibility for vacation, severance payments and other
employee benefits to the same extent such service was recognized under the
corresponding plans of CMHC. Buyer will waive the eligibility and waiting
periods normally applicable to its employee benefit plans and will also waive
actively at work and preexisting conditions exclusions except to the extent such
exclusions are applicable to the particular Transferred Employee under CMHC's
employee benefit plans. Buyer shall be responsible for all benefits earned by
Transferred Employees through service with CMHC prior to the Closing Date
including, without limitation, vacation time.
6.14 Change of Name. (a) On or prior to the Closing, CMHC shall deliver to
Buyer a duly executed and acknowledged certificate of amendment to its
certificate of incorporation or other appropriate documents in form and
substance suitable to Buyer for filing with the Secretary of State of the
Commonwealth of Kentucky, which are required to change CMHC's corporate name to
a new name bearing no resemblance to its present name so as to make the present
name of CMHC available to Buyer from and after the Closing. Buyer is hereby
authorized to file such certificate or other documents in order to effectuate
such change of name at or after the Closing as Buyer shall elect.
(b) On or prior to the Closing, CMHC shall deliver to Buyer a duly
executed and acknowledged certificate of amendment to the certificate of
incorporation or other appropriate documents in form and substance suitable to
Buyer for filing with the Secretary of State of the State of Michigan, which are
required to change the corporate name of Clarklift of Western Michigan, Inc. to
a new name bearing no resemblance to its present name. Buyer is hereby
authorized to file such certificate or other documents in order to effectuate
such change of name at or after the Closing as Buyer shall elect.
6.15 Covenant Not to Compete. From and after the Closing Date, without the
prior written consent of Buyer, each of Terex, CMHC, and each Seller will not
(i) directly or indirectly, engage in any business, activity or operation
competitive with Buyer's conduct of the current business of CMHC and the
Companies, (ii) manufacture, market or sell anywhere in the world any products
currently being manufactured, marketed or sold by CMHC or the Companies or any
product presently under development by CMHC or the Companies or (iii) directly
or indirectly, induce, solicit, aid or assist any other person to induce or
solicit, employees, salespersons, agents, consultants, distributors,
representatives, advisors, customers or suppliers of such business to terminate,
curtail or otherwise limit their employment or business relationships with the
business of CMHC and the Companies conducted by Buyer; provided, however, that
notwithstanding anything else contained in this Section 6.15 to the contrary,
from and after the Closing Date, Terex, each Seller and any affiliates thereof
(excluding CHMC and the Companies) ("Affiliates") shall be permitted to (i)
engage in any business, activity or operation that Terex, any Seller or their
Affiliates are currently engaged or (ii) manufacture, market or sell any
products that Terex, any Seller or any Affiliate currently manufactures, markets
or sells or any product currently under development by any of them. This
covenant not to compete shall extend for a period of ten years from the Closing
Date.
6.16 Financial Information. Sellers shall deliver to Buyer copies of the
Statutory 1995 financial statements of Xxxxx Germany when such financial
statements are filed with the applicable governmental authorities.
6.17 Tax Assessments. Sellers and Terex shall cause the
tax assessment referred to on Schedule 4.11 to be paid or
otherwise satisfied prior to Closing.
6.18 Transfer of Clarklift Washington Shares. Subject to compliance with
the terms and conditions of this Agreement, and subject further to compliance
with the terms of that certain Agreement, dated April 1, 1982, among Clarklift
of Washington/Alaska, Inc., C.T. Xxxxxxxx, X.X. Xxxxxxx, Xx. and Xxxxx Equipment
Company (as assignee of Xxxxx Equipment Credit Corporation ("Clarklift
Washington Shareholders Agreement"), at the Closing, CMH Acquisition shall
transfer and assign to Buyer, and Buyer shall accept from CMH Acquisition, all
of the shares of Clarklift Washington/Alaska, Inc. (the "Xxxxx Xxxxxxxxxx
Shares") owned by CMH Acquisition, for no additional consideration; provided
that, if prior to Closing, CMH Acquisition shall have sold the Clarklift
Washington Shares, CMH Acquisition, at the Closing, shall remit the net proceeds
of sale received by it to Buyer in lieu of transferring and assigning the
Clarklift Washington Shares. If CMH Acquisition is unable to comply with the
terms of the Clarklift Washington Shareholders Agreement and effect the transfer
and assignment of the Clarklift Washington Shares to Buyer, at the Closing, CMH
Acquisition shall have no obligation to transfer and assign the Clarklift
Washington Shares to Buyer and the Purchase Price specified in Section 2.1 shall
not be reduced; provided that in lieu thereof, CMH Acquisition shall assign to
Buyer, at Closing, all of its rights to receive payment or other distributions
with respect to those shares and otherwise reasonably provide Buyer with all of
the benefits, risks, liabilities and burdens of ownership of the Xxxxx
Xxxxxxxxxx Shares.
6.19 Consent to Assignment of Agreements. Terex and Sellers agree to obtain
the consent required of any third parties to the assignment to Buyer of the
agreement listed on Schedule 6.19(c) on or prior to the Closing Date.
Notwithstanding the foregoing or anything to the contrary contained herein,
Buyer acknowledges and agrees that none of the Sellers or Terex will obtain
consent of any third parties to the assignment to Buyer of the agreements listed
on Schedule 6.19 as a condition to Closing hereunder; provided, however, such
acknowledgment and agreement does not constitute a waiver by Buyer of any of its
rights to indemnification pursuant to Article 9.
6.20 Guaranties, Letters of Credit, Etc. (a) At the Closing, Buyer shall
cause the release of Terex and all Sellers from any and all of their liabilities
and obligations (contingent or otherwise) with respect to any and all
guaranties, letters of credit, performance bonds and appeal bonds disclosed to
Buyer and relating to the business, properties and/or assets of any of the
Companies or the Subsidiaries. If the Buyer is unable to obtain a release of any
guaranty of Terex or any Seller after use of all commercially reasonable efforts
by Buyer, such inability shall not constitute a breach of this Section 6.20,
provided that Buyer shall deliver to Terex or Seller, as the case may be, a
guaranty in favor of Terex or Seller, as the case may be, substantially in the
form of such guaranty continuing after the Closing and otherwise reasonably
acceptable to Terex and the Sellers.
(b) After the Closing, Buyer shall use commercially reasonable efforts
to promptly cause the release of Terex and all Sellers from any and all of their
liabilities and obligations (contingent or otherwise) with respect to any and
all guaranties of Terex or the Sellers continuing after the Closing Date
pursuant to clause 6.20(a) above and any and all guaranties, letters of credit,
performance bonds and appeal bonds determined to exist after the Closing which
relate to the business, properties and/or assets of any of the Companies or the
Subsidiaries as soon as practicable after the Closing Date.
6.21 Buyer's Financing. (a) Sellers and Terex shall cooperate with Buyer in
respect of any proposed public offering or private placement of securities and
arrangements of other financing by Buyer, a portion of the proceeds of which are
to be used to finance the Purchase Price by Buyer, working capital and fees and
expenses in connection therewith (the "Financing"); provided, however, that
neither Sellers nor Terex shall be obligated to participate in the Financing or
incur any liability with respect thereto. Each party providing all or a portion
of the Financing shall be entitled to rely in connection therewith on the
documents delivered in accordance with Section 7.3(a). Buyer shall use
commercially reasonable efforts to complete the Financing prior to or on
December 12, 1996.
(b) Buyer shall give Sellers and Terex a reasonable opportunity to
review any references to Sellers, Terex, this Agreement or the transactions
contemplated hereby in any registration statement or private placement
memorandum relating to the Financing (the "Offering Documentation") and any
amendments or supplements thereto by providing to Sellers and Terex drafts of
such Offering Documentation or any amendments or supplements thereto prior to
filing such documents with the Securities and Exchange Commission or
distributing such documents to potential purchasers of privately placed
securities and allowing Sellers and Terex a reasonable opportunity to review and
comment thereon.
(c) Buyer acknowledges and agrees that the cooperation by Sellers and
Terex provided for in clause (a) hereof and any review of any Offering
Documentation and any comments thereon provided by Sellers and Terex pursuant to
clause (b) hereof shall not render Sellers or Terex in any way responsible for
such Offering Documentation, or the accuracy or completeness thereof.
(d) As an inducement to Sellers and Terex to cooperate with Buyer
under this Section 6.21, (i) Buyer will, and hereby does, indemnify and hold
harmless each of Terex and the Sellers (each, a "Terex Entity" and collectively,
the "Terex Entities"), and each of their respective directors, officers,
partners, counsel, employees, agents and affiliates and each other person or
entity, if any, who controls each Terex Entity within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (together with the Terex
Entities, the "Indemnified Party"), to the fullest extent from and against
losses, claims, damages, or liabilities, joint or several, to which such
Indemnified Party may become subject under the Securities Act, the Exchange Act
or any other federal, state or common law rule or regulation, or otherwise,
insofar as such losses, claims, damages or liabilities, joint or several (or
actions or proceedings, whether commenced or threatened, in respect thereof),
arise out of, are based upon or relate to the Financing and the Offering
Documentation, and Buyer will reimburse each Indemnified Party for any legal or
other expenses incurred by them in connection with investigating, preparing or
defending any such loss, claim, liability, action or proceeding, whether or not
in connection with litigation in which any Indemnified Party is a party;
provided, however, that Buyer shall not be liable in any such case to the extent
that any such loss, claim, damage or liability (or action or proceeding, in
respect thereof) or expense is based upon an untrue statement or omission made
or alleged untrue statement or omission made in reliance on and in conformity
with written information furnished to Buyer, including, but not limited to, the
representations and warranties contained in this Agreement.
(ii) If for any reason the foregoing indemnity is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party harmless, then
Buyer, to the fullest extent permitted by law, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
liabilities, actions, proceedings or expenses (A) in such proportion as is
appropriate to reflect the relative fault of Buyer on the one hand and the Terex
Parties on the other, which resulted in such losses, claims, liabilities,
actions, proceedings or expenses, as well as any other relevant equitable
considerations, or (B) if allocation provided by clause (A) is not permitted
under applicable law, in such proportion as is appropriate to reflect not only
the relative fault but also the relative benefits received by Buyer on the one
hand and the Terex Parties on the other, as well as any relevant equitable
considerations. Buyer and Terex and Sellers agree that it would not be just and
equitable if the contribution were determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to herein.
(iii) The provisions of this Section 6.21 shall (A) remain in full
force regardless of any investigation made by or on behalf of any Indemnified
Party, (B) survive both the termination of this Agreement pursuant to Article 8
hereof and the Closing and have no expiration date, (C) be in addition to any
liability that Buyer might otherwise have under this Agreement and (D) be
binding upon any successors or assigns of Buyer and successors and assigns to
all or substantially all of Buyer's business and assets.
6.22 Inspections. Between the date of execution of this Agreement and
Closing, Buyer shall have the right to perform an inspection consistent with the
current standards of environmental due diligence of the Facilities, including
both an inspection equivalent to that described in ASTM Standard E 1527-94 and
an adequate regulatory compliance assessment. The Buyer shall conduct such tests
of soil, groundwater and evaluations of the environmental compliance of the
Facilities as Buyer deems necessary in its reasonable judgment. Sellers and
Terex shall provide Buyer and its agents reasonable access to the Facilities
during normal business hours upon reasonable notice to conduct such inspections
and tests. Buyer shall promptly inform Seller of the results of its tests and
evaluations. Buyer's rights under this Section 6.22 are subject to the condition
that the inspections and testing to be conducted shall not (i) unreasonably
interfere with the business operations of Terex, any Seller, any Company or any
Subsidiary, (ii) damage any asset or property of Terex, any Seller, any Company
or any Subsidiary and (iii) cause Terex, any Seller, any Company or any
Subsidiary to be in material breach of any lease or other agreement relating to
the Facilities; provided, however, that neither Terex nor any Seller shall be
deemed to have breached any representation or warranty herein to the extent that
such breach was caused (as opposed to discovered) by Buyer's actions under this
Section 6.22.
6.23 Korean Fines and Penalties. Buyer agrees to use commercially
reasonable efforts to take, and cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws to minimize any Korean Fines and Penalties. Buyer shall not take any action
to, and shall cause no action to be taken to, directly or indirectly, cause any
increase in any Korean Fines and Penalties.
6.24 Retrospective Premiums. Buyer shall provide Terex and the Sellers with
such information and records, and use such commercially reasonable efforts, as
may be necessary or desirable to assist Terex in researching, substantiating and
defending any claim for payment of Retrospective Premiums by Terex or any
Seller.
6.25 Undertaking. (a) Sellers and Terex agree to undertake any action
necessary to cause the Companies and the Subsidiaries to comply with the
covenants set forth in this Article 6, to the extent applicable to the Companies
and the Subsidiaries, as the case may be.
(b) To the extent permitted, Sellers shall cause Buyer and any
permitted assignee under this Agreement to be listed as "named insureds" on all
insurance policies carried by the Sellers and the Companies.
ARTICLE 7
CONDITIONS OF CLOSING;
DOCUMENTS DELIVERED AT CLOSING
7.1 Condition Precedent to Obligations of Buyer. The obligation of Buyer to
consummate the purchase of the Shares and the CMHC 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 by Buyer:
(a) 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.
(b) 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.
(c) All Liens related to Excluded Liabilities, the Company Excluded
Liabilities and any other liability not assumed by Buyer hereunder, including
Liens marked with a double asterisk on Schedules 4.6, 4.7 and 4.16 shall have
been released or removed.
(d) Buyer having received the proceeds of the Financing required to
effect the transactions contemplated by this Agreement and to pay related fees
and expenses on such terms and conditions as are reasonably satisfactory to
Buyer in an amount equal to at least $145,000,000, prior to or at the Closing.
7.2 Conditions Precedent to Obligations of Sellers. The obligation of CMH
International to consummate the sale of the Xxxxx Germany Shares owned by it,
CMH Acquisition to consummate the sale of the CMH Acquisition Shares owned by
it, CMHC to consummate the sale of the CMHC Assets and Xxxxx Michigan to
consummate the sale of the Xxxxx Korea Shares under this Agreement is subject to
the fulfillment, prior to or at the Closing, of each of the following
conditions, any of which may waived by Sellers:
(a) 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.
(b) 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.
(c) 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.
7.3 Documents to be Delivered at Closing. (a) At the
Closing, Terex and Sellers shall deliver, or cause to be
delivered, to Buyer the following:
(i) certificates representing the Shares (together with all
rights then or thereafter attaching thereto), with valid stock powers
attached or, with respect to the Xxxxx Germany Shares, a notarial deed or
deeds;
(ii) bills of sale, assignments and assumptions of leases,
assignments and assumptions of contracts, a deed for the Owned Property and
such other instruments of transfer and assignment of the CMHC Assets;
(iii) a copy of resolutions of the board of directors of Terex
and each Seller authorizing the execution, delivery and performance of this
Agreement by Terex and such Seller and a certificate of the secretary or
assistant secretary of Terex and each Seller, dated the Closing Date, that
such resolutions were duly adopted and are in full force and effect;
(iv) a certificate, dated the Closing Date, of the President or
a Vice President of Terex and each Seller certifying that the
representations and warranties specified in Sections 4.27 and 4.28 are true
and correct; it being understood that (A) for the purposes of the
certificate delivered pursuant to this Section 7.3(a)(iv), the
representations and warranties of Terex and Sellers specified in Sections
4.27 and 4.28 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 are such as to result in a Material
Adverse Change and (B) the foregoing standard of materiality shall not
apply in connection to any claims for indemnification by Buyer under
Article 9 hereof;
(v) an affidavit of Sellers required by Section
1445(b)(2) of the Code;
(vi) opinion of general counsel of Terex in the
form attached hereto as Exhibit A;
(vii) the written resignations of the directors and officers of
each of the Companies and Subsidiaries as Buyer shall request at least five
business days prior to Closing;
(viii) stock powers, notarial deeds and other instruments
necessary to transfer to Buyer or its nominees, without additional
consideration, Shares owned by any person other than the Sellers,
including, but not limited to, the directors and employees of the Companies
referenced on Schedule 4.5; and
(ix) an agreement relating to the distribution of parts through
the Terex Distribution Center substantially in the form attached as Exhibit
B.
(b) At the Closing, Buyer shall deliver to Terex and
Sellers 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 CMHC
Liabilities (collectively, the "Assumption"); and
(iii) a copy of the resolutions of the board of directors of
Buyer authorizing the execution, delivery and performance of this Agreement
by Buyer, and a certificate of its secretary or assistant secretary, dated
the Closing Date, that such resolutions were duly adopted and are in full
force and effect.
ARTICLE 8
TERMINATION AND OTHER MATTERS
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, on the one
hand, and Sellers and Terex, on the other hand.
8.2 Termination Either by Sellers and Terex or by Buyer. This Agreement may
be terminated either by Sellers and Terex, on the one hand, or by Buyer, on the
other hand, if a United States federal or state court of competent jurisdiction
or United States federal or state governmental, regulatory or administrative
agency or commission shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and non-appealable.
8.3 Termination by Sellers and Terex. This Agreement may be terminated by
Sellers and Terex at any time prior to the Closing if: (a) the Closing shall not
have occurred on or prior to December 12, 1996, and the parties hereto agree
that time is of the essence with respect to such date; (b) there has been a
material breach of any representation or warranty of Buyer contained in this
Agreement; and (c) there has been a material breach of any of the covenants or
agreements contained in this Agreement on the part of Buyer, which breach is not
curable or, if curable, is not cured within the earlier of (i) 30 days after
written notice of such breach is given by Terex or any Seller to Buyer and (ii)
December 12, 1996.
8.4 Termination by Buyer.
(a) This Agreement may be terminated by Buyer at any time prior to the
Closing, if (i) the Closing shall not have occurred on or prior to December 12,
1996 or (ii) the conditions to Closing set forth in Section 7.1 shall not have
been satisfied or waived.
(b) In the event that Buyer fails to consummate the purchase of the
Shares and the CMHC Assets under this Agreement for any reason other than (i)
termination by Buyer as permitted pursuant to Sections 8.1 or 8.2, (ii) the
failure by Terex and Sellers to satisfy the conditions precedent as set forth in
Sections 7.1 (a), (b) and (c), (iii) the failure to satisfy the conditions
precedent as set forth in Sections 7.2(b) or (c), or (iv) the failure of Terex
and the Sellers, at the Closing, to deliver, or cause to be delivered, to Buyer,
the respective documents and instruments required to be delivered by them
pursuant to Section 7.3(a), Buyer shall pay to Terex and Sellers as liquidated
damages an amount equal to $5,000,000 (the "Buyer Payment") as compensation, and
not as a penalty, for any and all losses, costs, damages and expenses, whether
foreseen or unforeseen, all or a part of which may be incapable of accurate
measurement. Buyer acknowledges that the right of Terex and Sellers to receive
liquidated damages was specifically bargained for by Terex and Sellers and
constitutes a material inducement to Terex and Sellers to enter into this
Agreement. The payment by Buyer of the Buyer Payment and Terex's and Sellers'
right to receive such payments shall constitute full and final satisfaction of
all liabilities and obligations of Buyer to Terex, Sellers, the Companies and
the Subsidiaries under this Agreement and shall constitute the sole remedy of
Terex, Sellers, the Companies and the Subsidiaries with respect to Buyer's
failure to consummate the transactions contemplated by this Agreement.
8.5 Effect of Termination. In the event of termination of this Agreement
pursuant to this Article 8, all rights and obligations of the parties hereto
shall terminate, except the rights and obligations of the parties pursuant to
the provisions of Sections 6.4, 6.5, 8.4(b), 11.1, 11.2, 11.3, 11.5, 11.7, 11.8,
11.9 and the Confidentiality Agreement referred to in Section 6.9.
8.6 Standstill Agreement. Terex has been in negotiations with other parties
concerning a possible sale of the Business and such other parties have obtained
certain information relating thereto. Terex and Sellers each agree to
immediately terminate, and to cause their representatives, agents, officers,
employees, lawyers and accountants to terminate, all negotiations and
communications with or on behalf of other parties and, after the date of
execution of this Agreement up to the date of Closing, agree not to, and to
cause their representatives, agents, officers, employees, lawyers and
accountants not to, directly or indirectly, solicit, communicate, negotiate or
enter into other discussions with, or on behalf of, any parties relating to the
sale of all or any part of the Business except Buyer, and further agree, without
limitation of the foregoing, not to provide this Agreement or any financial or
operating information to any other party. Buyer shall be entitled to pursue any
and all remedies to which it may be entitled at law or in equity for violations
of this Section 8.6. Terex and the Sellers agree that Buyer will suffer
irreparable damage in the event that any of the provisions of this Section 8.6
were not performed in accordance with its terms or was otherwise breached. It is
accordingly agreed that Buyer shall be entitled to the remedy of specific
performance of the terms of this Section 8.6 and injunctive relief preventing
any breach of the terms of this Section 8.6, by Terex, Sellers, the Companies
and the Subsidiaries this being in addition to any other remedy to which Buyer
may be entitled at law or in equity. Sellers and Terex agree to cause the
Companies and the Subsidiaries to comply with all of the terms of this Section
8.6.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 Survival. The representations and warranties of Terex, Sellers and the
Companies contained in this Agreement shall survive the Closing for the period
set forth in this Section 9.1. All of the representations and warranties of
Sellers and Terex contained in this Agreement and all claims and causes of
action with respect thereto shall terminate upon expiration of 16 months after
the Closing Date, except that (a) the representations and warranties in Sections
4.2, 4.6, 4.7, 4.22 and 4.27 shall have no expiration date and (b) the
representation and warranty in Section 4.11 shall survive, with respect to any
Tax Return, until the applicable statute of limitations has run for any such Tax
Return required to be filed on or before the date of this Agreement. 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 16 months after the Closing Date, except that the representations and
warranties in Sections 5.2, 5.5 and 5.6 shall have no expiration date; it being
understood that in the event notice of any claim for indemnification under
Section 9.2(a)(i) or Section 9.2(b)(i)(x) hereof shall have been given (within
the meaning of Section 11.5) 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. The covenants and agreements of Terex, Sellers, the
Companies and Buyer contained in this Agreement shall survive the Closing and
have no expiration date. No investigation by Buyer or on its behalf heretofore
or hereafter conducted shall affect the representations, warranties or covenants
of Sellers and Terex set forth in this Agreement.
9.2 Indemnification. (a) If the Closing shall occur, subject to the
provisions of this Article 9, Sellers and Terex shall jointly and severally
indemnify Buyer and its affiliates (including the Companies and the
Subsidiaries) and hold each of them harmless from and against, and in respect
of, any damages, claims, losses, charges, actions, suits, proceedings,
deficiencies, taxes, interest, penalties, and reasonable costs and expenses
(including without limitation reasonable attorneys' fees and expenses)
(collectively, "Losses") which are incurred or suffered by any of them (i) by
reason of the breach of any of the representations or warranties made by Terex
and Sellers herein for the period such representation or warranty survives, (ii)
by reason of the failure by Terex or Sellers to perform or comply with any of
the covenants or agreements contained in this Agreement to be performed or
complied with by Terex or Sellers, (iii) with respect to the Excluded
Liabilities and the Company Excluded Liabilities or (iv) by reason of failure to
obtain the consents to assignment referenced in Schedules 6.19. Any recovery by
Buyer and its affiliates for a Loss incurred or suffered by reason of a breach
of any of (x) the representations and warranties made by Terex and Sellers or
(y) the covenants and agreements of Terex and Sellers pursuant to Sections
6.1(a), 6.1(e) and 6.19, shall be limited as follows: (1) Buyer and its
affiliates shall not be entitled to any recovery unless a claim for
indemnification is made within the time period of survival set forth in Section
9.1; (2) Buyer and its affiliates shall not be entitled to recover any amount
for indemnification claims under this Section 9.2(a) unless and until the amount
which Buyer and its affiliates are entitled to recover in respect of such claims
exceeds, in the aggregate, $2,000,000, in which event (subject to clause (3)
below) the entire amount which Buyer and its affiliates are entitled to recover
in respect of such claims less the amount of $1,000,000 shall be payable; and
(3) the maximum aggregate amount recoverable by Buyer and its affiliates for all
indemnification claims under this Section 9.2(a) shall in the aggregate be equal
to $25,000,000; provided, however, that (x) with respect to Losses resulting
from the assignment of the item listed on Schedule 6.19(a) the limitation set
forth in clause (2) of this Section 9.2(a) shall not apply and (y) with respect
to Losses resulting from Excluded Liabilities or Company Excluded Liabilities
the limitations set forth in clauses (2) and (3) of this Section 9.2(a) shall
not apply.
(b) If the Closing shall occur:
(i) Buyer, the Companies and the Subsidiaries shall jointly and
severally indemnify Sellers and Terex and their respective affiliates and
hold each of them harmless from and against all Losses which are incurred
or suffered by any of them (x) by reason of the breach by Buyer of any of
the representations or warranties made by Buyer herein for the period such
representation or warranty survives or (y) by reason of the failure by
Buyer (and from and after the Closing, the Companies and the Subsidiaries)
to perform or comply with any of the covenants or agreements contained in
this Agreement or in the Assumption to be performed or complied with by any
of them at or after the Closing, provided, however, that Sellers and Terex
and their respective affiliates shall not be entitled to any recovery
unless a claim for indemnification is made in accordance with paragraph
(d)(i) of this Section 9.2 and within the time period of survival set forth
in Section 9.1.
(ii) Buyer, the Companies and the Subsidiaries shall, without
restriction as to time, minimum or maximum, jointly and severally indemnify
Sellers and Terex and their respective affiliates and hold each of them
harmless from and against all Losses which are incurred or suffered by any
of them with respect to or arising out of the CMHC Assets, the CMHC
Liabilities and the respective businesses of the Companies and the
Subsidiaries (except for Losses with respect to or arising out of the
Excluded Liabilities or the Company Excluded Liabilities) (whether the
event or occurrence giving rise to such Loss occurs prior to or after the
Closing), including, without limitation, Losses relating to Environmental
Laws, product liability, relations with customers or creditors, third party
claims, employee benefit matters, insurance matters, Owned Property, Leased
Property or Intellectual Property Rights. The indemnification provided
herein by Buyer, the Companies and the Subsidiaries in favor of Terex shall
not expand the scope or amount of the indemnification obligations that
Buyer, the Companies and the Subsidiaries would otherwise have pursuant to
this Article 9.
(iii) Without limiting the generality of clauses (i) and (ii) of
this Section 9.2(b), with respect to any actions, suits and proceedings
against, and any Losses (as hereinafter defined) and other liabilities of
CMHC, the Companies or the Subsidiaries arising out of events or
circumstances occurring or existing prior to the Closing Date which are
covered by existing insurance policies of Sellers, Terex, the Companies or
the Subsidiaries except as may relate to Excluded Liabilities (each, a
"Covered Liability"), the Buyer, the Companies and the Subsidiaries jointly
and severally, shall indemnify Sellers and Terex for all deductibles,
self-insured retentions, exclusions and other amounts, losses and expenses
to the full extent not paid, for whatever reason, under such policies.
Buyer shall or shall cause the Companies and the Subsidiaries to prosecute
and defend each such Covered Liability in a timely and prudent fashion. The
Buyer may, and may cause the Companies and the Subsidiaries to, settle or
compromise any such Covered Liabilities without Terex's prior written
consent only so long as the Sellers and Terex are indemnified fully
hereunder. All out-of-pocket costs of prosecuting, defending and
administering such Covered Liabilities and all costs incurred in settlement
or by judgment or order or otherwise in respect thereof, including but not
limited to amounts necessary to maintain claim funds, and the allocable
share of all increased retrospective premiums (excluding the Retrospective
Premiums) payable under such insurance policies, shall be the joint and
several responsibility of Buyer, the Companies and the Subsidiaries, and
such responsible parties shall promptly, reimburse Sellers and Terex for
any amounts which are advanced by Sellers and Terex for these purposes, it
being understood that Sellers and Terex shall be under no obligation to
make any such advance.
(iv) Buyer, on the one hand, and Sellers and Terex, on the other
hand, agree that the amount of any Covered Liability referred to in Section
9.2(b)(iii) which is not payable or paid under any insurance policy
referred to in Section 9.2(b)(iii) because (w) it is part of the deductible
or self-insured retention, (x) it exceeds the maximum coverage under any
such policy, (y) of the inability or refusal of the insurance carrier(s) to
pay such Covered Liability or (z) for any other reason, shall be the joint
and several obligation and responsibility of Buyer, the Companies and the
Subsidiaries unless the reason for non-payment arises from any action or
inaction of the Sellers, Terex or any Company on or prior to the Closing
Date.
Notwithstanding anything to the contrary contained in this Article 9, Xxxxx
Germany shall be required to indemnify hereunder only to the extent that its
obligations to indemnify are lawful under applicable law and do not result in
material adverse tax consequences. In the event of the sale of Xxxxx Germany to
one or more entities that are not affiliates of Buyer, Xxxxx Germany shall be
relieved of its indemnification obligations hereunder, provided that the
proceeds of sale of Xxxxx Germany are retained by Buyer for use in the business,
including, without limitation, the payment of funded indebtedness.
(c) Sellers and Terex shall jointly and severally indemnify Buyer and
its officers, directors, employees, agents, advisors, representatives or
controlling persons and hold each of them harmless from any Losses that arise
after the date of this Agreement with respect to any claim, action, suit or
proceeding relating to the Stock and Asset Purchase and Sale Agreement among
Terex Corporation, CMH Acquisition Corp., CMH Acquisition International Corp.,
Xxxxx Material Handling International, Inc. Xxxxx Material Handling Company and
Xxxxx Acquisition Corp. dated as of July 24, 1996 or the termination thereof.
(d) (i) In the event that any party shall incur or suffer any Losses
in respect of which indemnification may be sought by such party pursuant to the
provisions of this Section 9.2, the party seeking to be indemnified hereunder
(the "Indemnitee") shall assert a claim for indemnification by written notice (a
"Notice") to the party from whom indemnification is sought (the "Indemnitor")
stating the nature and basis of such claim. In the case of Losses arising by
reason of any third party claim, the Notice shall be given within 30 days of the
filing or other written assertion of any such claim against the Indemnitee, but
the failure of the Indemnitee to give the Notice within such time period shall
not relieve the Indemnitor of any liability that the Indemnitor may have to the
Indemnitee except to the extent that the Indemnitor is prejudiced thereby.
(ii) The Indemnitee shall provide to the Indemnitor on request
all information and documentation reasonably necessary to support and verify any
Losses which the Indemnitee believes give rise to a claim for indemnification
hereunder and shall give the Indemnitor reasonable access to all books, records
and personnel in the possession or under the control of the Indemnitee which
would have bearing on such claim.
(iii) In the case of third party claims for which
indemnification is sought, the Indemnitor shall have the option (x) to conduct
any proceedings or negotiations in connection therewith, (y) to take all other
steps to settle or defend any such claim and (z) to employ counsel to contest
any such claim or liability in the name of the Indemnitee or otherwise. In any
event, the Indemnitee shall be entitled to participate at its own expense and by
its own counsel in any proceedings relating to any third party claim. The
Indemnitor shall, within 45 days of receipt of the Notice, notify the Indemnitee
of its intention to assume the defense of such claim. Until the Indemnitee has
received notice of the Indemnitor's election whether to defend any claim, the
Indemnitee shall take reasonable steps to defend (but may not settle) such
claim. If the Indemnitor shall decline to assume the defense of any such claim,
or shall fail to notify the Indemnitee within 45 days after receipt of the
Notice of the Indemnitor's election to defend such claim, the Indemnitee shall
defend against such claim (provided that the Indemnitee shall not settle such
claim without the consent of the Indemnitor, which consent shall not be
unreasonably withheld). The expenses of all proceedings, contests or lawsuits in
respect of such claims (other than those incurred by the Indemnitee which are
referred to in the second sentence of this subparagraph (iii)) shall be borne by
the Indemnitor but only if the Indemnitor is responsible pursuant hereto to
indemnify the Indemnitee in respect of the third party claim and, if applicable,
only to the extent required by the second sentence of Section 9.2(a). Regardless
of which party shall assume the defense of the claim, the parties agree to
cooperate fully with one another in connection therewith. In the case of a claim
for indemnification made under Section 9.2(a) or 9.2(b)(i), (a) if (and to the
extent) the Indemnitor is responsible pursuant hereto to indemnify the
Indemnitee in respect of the third party claim, then within 10 days after the
occurrence of a final non-appealable determination with respect to such third
party claim, the Indemnitor shall pay the Indemnitee, in immediately available
funds, the amount of any Losses (or such portion thereof as the Indemnitor shall
be responsible for pursuant to the provisions hereof, including, without
limitation, the second sentence of Section 9.2(a)), and (b) in the event that
any Losses incurred by the Indemnitee do not involve payment by the Indemnitee
of a third party claim, then, if (and to the extent) the Indemnitor is
responsible pursuant hereto to indemnify the Indemnitee against such Losses, the
Indemnitor shall within 10 days after agreement on the amount of Losses or the
occurrence of a final non-appealable determination of such amount pay to the
Indemnitee, in immediately available funds, the amount of such Losses (or such
portion thereof as the Indemnitor shall be responsible for pursuant to the
provisions hereof, including, without limitation, the second sentence of Section
9.2(a)).
of The provisions of paragraph (d) of this Section 9.2 shall apply to
all claims for indemnification hereunder except indemnification claims which
involve tax matters pertaining to any of the Companies, which claims shall be
governed by Article 10.
(f) If the Closing shall occur, the indemnification provided in this
Section 9.2 shall be the sole and exclusive remedy of Buyer, Sellers, Terex and
the Companies under this Agreement for any inaccuracy or breach of any
representation or warranty of Buyer or Sellers or Terex or any failure of Buyer
or Sellers or Terex to comply with any of the covenants or agreements contained
herein. All amounts payable by one party in indemnification of the other shall
be considered an adjustment to the Purchase Price.
(g) In no event shall Sellers, Terex, the Companies, the Subsidiaries
or Buyer be liable for loss of profits or consequential damages under this
Article 9.
ARTICLE 10
TAX MATTERS
10.1 Tax Returns. (a) Subject to Section 10.1(c), Terex, CMH Acquisition
and CMH International (individually, a "Parent Company" and together the "Parent
Companies") shall be responsible for the preparation and timely filing of any
return, report, information return or other document (including any related or
supporting information) filed or required to be filed with any taxing authority
in connection with the determination, assessment, collection, administration or
imposition of any Taxes (as hereinafter defined) (collectively, "Tax Returns")
of the Companies and the Subsidiaries relating to any taxable year or period
that ends on or before the Closing Date (a "Pre-Closing Period"). Tax Returns
relating to a Pre-Closing Period are hereinafter referred to as "Pre-Closing Tax
Returns." Pre- Closing Tax Returns shall be filed on or before their respective
due dates (including extensions). Such Tax Returns shall be prepared on a basis
consistent with Tax Returns prepared for prior taxable periods, except as
otherwise required by law or regulation. If any such Tax Returns cannot be
completed and filed by a Parent Company until after the Closing Date, Buyer
shall cause the relevant officer(s) of the Companies and Subsidiaries to sign
and file such Tax Returns after they have been completed by such Parent Company
(and before the due date of such Tax Returns), and each Parent Company agrees
that such post- Closing execution shall not detract from or otherwise affect
such Parent Company's liability for any Taxes shown on such Tax Returns to the
extent provided in Section 10.2(a). "Taxes" shall mean all taxes, charges, fees,
levies or other assessments, including, without limitation, income, excise,
employment, property, sales, franchise, use and gross receipts taxes and
withholding taxes imposed by the United States or any state, county, local or
foreign government or subdivision or agency thereof, and shall also include any
interest, penalties or additions to tax attributable to such assessments.
(b) Buyer shall be responsible for the preparation and timely filing
of all Tax Returns of the Companies and the Subsidiaries for all taxable periods
commencing after the Closing Date (the "Post-Closing Period"). If Buyer takes
any position or uses any methodology on any such Tax Return that is inconsistent
with any position or methodology taken or used by the Companies, the
Subsidiaries or any Parent Company in prior periods (unless Buyer's position or
methodology giving rise to the inconsistency is required (i) by a law or
regulation, or (ii) in the opinion (reasonably acceptable to Parent Companies
and their counsel) of a reputable law firm (the "Law Firm") reasonably
satisfactory to Parent Companies and their counsel, by other applicable legal
authorities in effect for the taxable period covered by such Tax Return), then
Buyer shall be responsible for, and shall indemnify and hold harmless, on an
after-tax basis, Parent Companies against, any increase in Taxes with respect to
any Pre-Closing Period resulting from such inconsistent position or methodology.
Buyer shall not make any assertion or make any election the effect of which
would be to exclude the Companies or the Subsidiaries, to the extent otherwise
eligible therefor, from any Parent Company's consolidated federal Tax Return (or
any consolidated or combined state, county or local Tax Return of such Parent
Company's consolidated group) for any Pre-Closing Period unless required by law
or regulation.
(c) Notwithstanding anything to the contrary contained in Section
10.1(a), Buyer shall be responsible for the preparation and timely filing of any
Tax Returns of the Companies and the Subsidiaries for taxable periods, if any,
that begin before the Closing Date and end on or after the Closing Date
("Straddling Returns"). Straddling Returns shall be prepared on a basis
consistent with Tax Returns prepared for prior taxable periods (except as
otherwise required (i) by law or regulation, or (ii) in the opinion (reasonably
acceptable to Parent Companies and their counsel) of the Law Firm, by other
applicable legal authorities). Notwithstanding anything to the contrary
contained in this Article 10, at least 15 days prior to the filing of any
Straddling Returns required to be caused to be filed by Buyer hereunder, Buyer
shall submit copies of such returns to Parent Companies for their review and
approval and Parent Companies shall have 10 days after receipt of such returns
to approve or state all objections to such returns. In the event of any dispute
with respect to any Straddling Returns, Buyer shall file the final form of such
returns prior to the due date therefor without prejudice to Seller's right to
dispute the amount of Taxes for the tax period covered thereby. Seller shall pay
to Buyer, as and when required to do so under Section 10.3(a), so much of any
Tax liability shown on a Straddling Return as is properly allocable to a
Pre-Closing Period, net of any current Tax savings directly or indirectly
received by Buyer as a result of paying such Tax liability. The portion of each
Company's and each Subsidiary's taxable income, gain, loss and any resulting Tax
shown on a Straddling Return which is properly allocated to a Pre-Closing Period
shall be determined by (i) assuming that each Company's and each Subsidiary's
taxable year ends as of the close of business on the Closing Date, (ii)
allocating to the Pre- Closing Period any other income, gain, loss or deduction
of each Company and each Subsidiary's from any source, by closing, on an actual
basis (or if an actual closing is not feasible, on a pro forma basis taking into
account extraordinary items, allocated solely to the Pre-Closing Period) on the
books of the Companies and the Subsidiaries as of the close of business on the
Closing Date, and (iii) preparing Tax Returns based on the income, gain and
losses determined on a basis consistent with the methodology and elections
employed by the Companies and the Subsidiaries in prior years as adjusted to
reflect any subsequent adjustments to such returns.
(d) Except as otherwise required by any then effective law or
regulation or, in the opinion (reasonably acceptable to Parent Companies and
their counsel) of the Law Firm by other applicable legal authorities, without
the prior written consent of Parent Companies, (i) Buyer and its affiliates
shall not make or cause the Companies or the Subsidiaries to make any election,
change an annual accounting period or adopt or change any accounting method if
any such election, adoption or change would have the effect of increasing the
Tax liability of the Companies or the Subsidiaries with respect to any
Pre-Closing Period or (ii) Buyer and its affiliates shall not engage in or cause
any of the Companies or the Subsidiaries to engage in, any transactions or
activities on the Closing Date that are outside the ordinary course of business
that would have the effect of increasing the Tax liability of any of Terex or
the Sellers or any of their Affiliates.
(e) If, consistent with the provisions of this Article 10, a Parent
Company desires to amend a Pre-Closing Tax Return, Buyer shall cooperate in such
matter to the extent reasonable. Each Parent Company shall indemnify and hold
the Companies, the Subsidiaries and Buyer harmless, on an after-tax basis,
against any increase in any Taxes with respect to Post- Closing Periods
resulting from any such amendment.
(f) Each Parent Company shall retain all books, records, returns,
schedules, documents and all papers or relevant items of information relating to
the Federal, state, foreign or other Tax liability of the Companies and the
Subsidiaries for any Pre-Closing Period, until the expiration of all statutes of
limitations for claims to which such documents may pertain; provided that if the
statute of limitations for such claims survive indefinitely (for example, with
respect to net operating losses), such Parent Company shall retain the documents
pertaining to such claims for a period of seven years after the Closing Date.
Thereafter, such Parent Company shall have the right to dispose of or destroy
any such items; provided that, as to any items identified by Buyer, Buyer shall
have the right, at its sole cost and expense, promptly to remove or obtain
copies (or, if necessary, originals) of such items and take whatever action
Buyer may desire with respect to such items. Notwithstanding the foregoing, each
Parent Company shall reasonably cooperate with Buyer and furnish copies of any
such items to Buyer, at Buyer's sole cost and expense, upon written request.
10.2 Liability for Taxes. Parent Companies and Buyer hereby covenant and
agree that, as between Parent Companies, on the one hand, and Buyer, on the
other hand, and except as otherwise provided in Section 10.3:
(a) Except as otherwise provided in Section 10.1(b), Parent Companies
shall be liable for all Taxes payable by or with respect to the Companies, the
Subsidiaries or Parent Companies (i) for the Pre-Closing Periods, and (ii) for
the portion of periods covered by Straddling Returns that are properly allocated
to Pre-Closing Periods under Section 10.1(c).
(b) Buyer shall be liable for and shall pay, or shall cause the
Companies or the Subsidiaries, as applicable, to pay, and Parent Companies shall
not be required to pay or reimburse Buyer or the Companies or Subsidiaries for,
all Taxes payable by the Companies and the Subsidiaries for all periods, other
than Taxes for which either Parent Company is responsible pursuant to Sections
10.1(e) and 10.2(a).
10.3 Certain Tax Payment Responsibility. Notwithstanding
anything in this Article 10 to the contrary:
(a) If a Parent Company is liable under Section 10.2(a) for any Taxes
that are required to be reported on a Tax Return prepared by such Parent
Company, such Parent Company shall be responsible for paying such Taxes to the
relevant taxing authorities on or before the date that such Taxes are due. If
Buyer is liable under Section 10.2(b) for any Taxes that are required to be
reported on a Tax Return prepared by Buyer, Buyer shall be responsible for
paying such Taxes to the relevant taxing authorities on or before the date such
Taxes are due. If one party (the "Payor") is liable for a Tax pursuant to
Section 10.2 and such tax is required to be reported on a Tax Return prepared by
the other party (the "Preparer") under Section 10.1, including any Tax imposed
as a result of any subsequent adjustment, the Payor shall pay such Tax to the
Preparer on or before the later of (i) five days before the date the Preparer
intends to pay the Tax, provided the Preparer's request for payment is in a
writing signed by an officer of the Preparer and is accompanied by a copy of the
applicable Tax Return and, if necessary, a statement reflecting the calculation
of the amount of the Tax for which the Payor is liable, and, where applicable,
(ii) the date by which the Parent Companies are required to approve or object to
the Tax Return under the procedures described in Section 10.1(c). If there is an
objection to a Straddling Period return which is not resolved prior to the due
date for the Tax in questions, Seller shall pay the undisputed portion of such
tax no later than such due date. The dispute with regard to the balance of such
Tax shall be resolved by C & L whose fee shall be paid in equal shares by Seller
and Buyer. Seller shall, within two days after C & L decision pay the balance of
tax due from Seller, if any, together with interest based on the statutory
interest rate applicable to deficiencies of such Tax. The Preparer shall remit,
or cause to be remitted, any amount paid to the Preparer by the Payor to the
appropriate taxing authority within two days after the Preparer receives such
payment (but in no event after the due date), and, if the Preparer does not so
remit the funds, such Tax shall become a liability of the Preparer for purposes
of this Agreement, and the Payor shall have no further liability hereunder with
respect to such Tax.
(b) Buyer agrees that it shall not set off, offset or recoup any
amounts due to a Parent Company pursuant to this Section 10.3 and shall not
defend any failure to make payment when due in accordance with this Section 10.3
by reason of the alleged failure of such Parent Company to indemnify and hold
harmless Buyer in accordance with the provisions of Section 9.1(a).
10.4 Tax Contests. (a) Each Parent Company and its duly appointed
representatives shall have the sole right to supervise or otherwise coordinate
any examination process and to negotiate, resolve, settle or contest any
asserted Tax deficiencies or assert and prosecute any claim for refund with
respect to Pre- Closing Periods, including, for purposes of this Section
10.4(a), the entire taxable period (whether or not occurring on, before or after
the Closing Date) with respect to any asserted Tax deficiencies that would
increase the tax for which Seller is liable as to Straddling Returns. Each party
hereto shall within 14 days after it has knowledge of the assertion or
commencement thereof notify the other party of the written assertion of any
claim or the commencement of any suit, action, proceeding, investigation or
audit (any of which may be hereinafter referred to as a "Tax Contest") with
respect to any Pre-Closing Periods (but only if such Tax Contest would affect
the Tax liability of the other party), and shall provide the other party with
copies (subject to deletion of unrelated information) of all correspondence
relating to such Tax Contest. The costs of such Tax Contest shall be borne by
Seller.
(b) Buyer and its duly appointed representatives shall have the sole
right and the obligation to supervise or otherwise coordinate any examination
process and to negotiate, resolve, settle or contest any asserted Tax
deficiencies or assert and prosecute any claim for refund with respect to Post-
Closing Periods. Each party hereto shall within 14 days after it has knowledge
thereof notify the other party of the written assertion or the commencement of a
Tax Contest with respect to any Post-Closing Periods (but only if such Tax
Contest would affect the Tax liability of the other party), and shall provide
the other party with copies (subject to deletion of unrelated information) of
all correspondence relating to such Contest. The costs of such Tax Contest shall
be borne by Buyer.
10.5 Refunds, Tax Credits. To the extent that Buyer receives a refund of,
or an offset with respect to, Taxes or a Tax credit arising from or with respect
to the Pre-Closing Periods, Buyer shall pay to or reimburse, or shall cause the
Companies or the Subsidiaries, as applicable, to pay to or reimburse, Parent
Companies for the amount of any such Tax refund or credit received net of any
Taxes payable by Buyer, the Companies or the Subsidiaries on such Tax refund or
credit. To the extent that a Parent Company receives a refund of, or an offset
with respect to, Taxes or a Tax credit arising from or with respect to any of
the Post-Closing Periods, such Parent Company shall reimburse Buyer, the
Companies and the Subsidiaries for the amount of any such Tax refund or credit
received net of any Taxes payable by such Parent Company on such Tax refund or
credit. This provision does not apply to any tax benefit that Buyer may realize
through the utilization of any net operating loss or tax credit carryovers of
the Companies or the Subsidiaries arising from any pre-closing period.
10.6 Cooperation. After the Closing Date, Buyer, on the one hand, and
Parent Companies, on the other hand, shall make available to the other, as
reasonably requested, and to any taxing authority, all information, records or
documents relating to tax liabilities or potential tax liabilities of the
Companies and the Subsidiaries and shall preserve all such information, records
and documents until the expiration of any applicable statute of limitations or
extensions thereof.
10.7 Indemnification for Post-Closing Transactions. Buyer agrees to
indemnify each Parent Company for any additional Tax owed by such Parent Company
(including Taxes owed by such Parent Company due to this indemnification
payment) resulting from any transaction not in the ordinary course of business
occurring on the Closing Date after Buyer's purchase of the Shares.
10.8 Tax information for employees. CMHC and Buyer agree to follow the
Standard Procedure specified in Rev. Proc. 84-77, 1984-2 C.B 753, whereby, among
other things, each will be responsible for the reporting duties with respect to
its own payment of wages and compensation to employees. Buyer will provide
Seller and CMHC with access to all information necessary or desirable to comply
with the foregoing.
ARTICLE 11
MISCELLANEOUS
11.1 Transfer of Assets and Liabilities to Terex. Notwithstanding anything
to the contrary herein contained, between the date hereof and the Closing Date,
Sellers and Terex shall have the right, exercisable in their sole discretion, to
transfer all or any portion of the CMHC Assets, the CMHC Liabilities and/or the
Shares from a Seller to Terex, whether by merger, dividend, distribution, sale
or otherwise. In the event of such transfer, all references herein to Sellers
shall include Terex and Terex shall be responsible for, and shall perform, all
obligations of the Sellers under this Agreement with respect to the transferred
assets and liabilities.
11.2 Entire Agreement. This Agreement, the Schedules hereto and the
Confidentiality Agreement and any 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 jurisdiction of any federal, state or county court
sitting in the State 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 Courts has been brought in an inconvenient forum. Each
Seller and Buyer agrees that service of process or notice in any action, suit or
proceeding shall be effective if in writing and sent by certified or registered
mail, return receipt postage requested, prepared to the address set forth in
Section 11.6.
11.4 Bulk Transfer Laws. Buyer hereby waives compliance by CMHC with the
provisions of any so-called bulk transfer law in any jurisdiction in connection
with the transactions contemplated hereby. Sellers and Terex shall jointly and
severally indemnify Buyer and its affiliates (including the Companies and the
Subsidiaries) and hold them harmless from and against any Losses incurred or
suffered by any of them by reason of Buyer's waiver of compliance with the
provisions of any such so-called bulk transfer laws; provided, however, that the
foregoing shall in no way affect or limit Buyer obligations with respect to the
CMHC Liabilities to be assumed by Buyer pursuant to the terms of this Agreement.
11.5 Schedules; Tables of Contents and Headings. Any matter disclosed on
any Schedule to this Agreement shall be deemed to have been disclosed on all
other Schedules to this Agreement to the extent that it should have been
disclosed on such other Schedules, but shall expressly not be deemed to
constitute an admission by Sellers or to otherwise imply that any such matter is
material for the purposes of this Agreement. The table of contents and section
headings of this Agreement and titles given to Schedules to this Agreement are
for reference purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
11.6 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given (i) when delivered if by hand or
overnight courier, (ii) three days after mailing by first-class registered mail,
return receipt requested, postage prepaid, or (iii) 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 any Seller or to Terex to:
Terex Corporation
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, 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
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
If to Buyer, to:
CMHC Acquisition Corporation
c/o Citicorp Venture Capital Ltd.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
With a copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: G. Xxxxxx X'Xxxxxxx, 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 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. Notwithstanding the foregoing, Buyer may
assign some or all of its rights under this Agreement to one or more persons
that it controls, is controlled by or is under common control with ("Assignee"),
provided that notwithstanding such assignment, (i) Buyer shall remain fully
liable for the performance of all of its obligations under this Agreement and
(ii) each such Assignee shall be deemed to be a "Buyer" for all purposes under
this Agreement. Subject to the preceding sentences, 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.
11.10 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. Whenever used in this Agreement, "to the knowledge of Terex and Sellers"
(or words of similar import, whether expressed in the positive or negative)
shall mean only the actual knowledge, after reasonable inquiry, of those persons
who are listed on Schedule 11.9.
11.11 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.
11.12 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.
(Intentionally Left Blank)
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.
TEREX CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President
CMH ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CMH ACQUISITION INTERNATIONAL CORP.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX MATERIAL HANDLING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXX MATERIAL HANDLING
INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CMHC ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Name: Xx. Xxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
Exhibits and Schedules Omitted
