ACQUISITION AGREEMENT
between
Volvo Construction Equipment N.V.
- and -
Champion Road Machinery Limited
DATED: as of February 20, 1997
TABLE OF CONTENTS
PAGE NO.
ARTICLE I
THE OFFER
1.1 Covenants of the Purchaser 1
1.2 Approval of the Corporation 3
1.3 Shareholder Lists 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
2.1 Corporate Organization 4
2.2 Enforceability of Agreement 4
2.3 Conflicting Provisions 4
2.4 Consents 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
3.1 Corporate Organization 5
3.2 Enforceability of Agreement 5
3.3 Conflicting Provisions 5
3.4 Consents 5
3.5 Public Disclosure 6
3.6 Absence of Changes 7
3.7 Absence of Litigation 7
3.8 Environmental Matters 7
ARTICLE IV
COVENANTS
4.1 Conduct of Business of the Corporation 8
4.2 Board of Directors 9
4.3 Access to Information 9
4.4 No Solicitation 9
4.5 Further Action; Reasonable Best Efforts 10
4.6 Public Announcements 10
4.7 Regulatory Approvals 10
4.8 Take Up and Payment 10
4.9 Increase in Consideration 11
ARTICLE V
TERMINATION, AMENDMENT AND WAIVER
5.1 Termination 11
5.2 Effect of Termination 12
5.3 Fees and Expenses 12
5.4 Waiver 12
2
ARTICLE VI
GENERAL PROVISIONS
6.1 Non-Survival of Representations, Warranties and Agreements 12
6.2 Notices 13
6.3 Certain Definitions and Rules of Construction 14
6.4 Severability 14
6.5 Entire Agreement; Assignment 15
6.6 Time 15
6.7 Currency 15
6.8 Amendments 15
6.9 Counterparts 15
6.10 Governing Law 15
SCHEDULE "B"
DEFINITIONS
3
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ACQUISITION AGREEMENT
ACQUISITION AGREEMENT, dated as of February 20, 1997 (this "Agreement"),
between Volvo Construction Equipment N.V., a corporation incorporated under the
laws of Holland (the "Purchaser") and Champion Road Machinery Limited, a
corporation incorporated under the CANADA BUSINESS CORPORATIONS ACT (the "CBCA")
(the "Corporation").
WHEREAS the Board of Directors of the Purchaser has approved this Agreement
and the transactions contemplated hereby;
WHEREAS the Board of Directors of the Corporation has approved this
Agreement and the transactions contemplated hereby;
WHEREAS certain of the shareholders of the Corporation have executed and
delivered a Lock-Up Agreement dated February 20, 1997 (the "Lock-Up Agreement")
with the Purchaser;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Purchaser and the Corporation hereby agree as follows:
ARTICLE
THE OFFER
COVENANTS OF THE PURCHASER
TIMING. The Purchaser agrees to cause a direct or indirect
wholly-owned subsidiary of AB Volvo (publ) (the "Offeror") to make an offer
(the "Offer") on the terms summarized in Schedule "A" forming part of this
Agreement for 100% of the Corporation's issued and outstanding common
shares, including any common shares which may become outstanding pursuant
to the exercise of outstanding options to acquire common shares of the
Corporation (the "Common Shares" or "Shares") at a cash price of $15.00 per
share on or before February 27, 1997 (the "Proposed Offer Date"), provided
that in the event that the Offeror shall not have been provided with such
of the lists referred to in paragraph 1.3 in order to allow the Offeror to
mail the Offer to holders of Common Shares or any of the conditions in
paragraph 1.1(d) has not been met to the satisfaction of the Offeror by the
Proposed Offer Date, the Proposed Offer Date shall be extended to the later
of: (a) the third business day following the obtaining of such lists and
(b) the third business day following the satisfaction of such conditions.
OFFER DOCUMENTS. The Purchaser shall prepare the Offer, the takeover
bid circular and the related letter(s) of transmittal and notice(s) of
guaranteed delivery (collectively, the "Offer Documents") with respect to
the Offer in compliance with the SECURITIES ACT (Ontario) (the "OSA") and
other applicable provincial securities laws, rules and regulations and
published policies thereunder and the securities laws, rules and
regulations and published policies thereunder of the United States and the
states thereof
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(collectively, the "Securities Laws"). The Corporation and its counsel
shall be given an opportunity to review the Offer Documents prior to their
being mailed to holders of record of Shares and filed with the applicable
securities regulatory authorities. The Purchaser shall provide each
Shareholder and the Corporation with a final copy of the Offer Documents
to be mailed to all shareholders. The Offeror shall file the Offer
Documents on a timely basis with the appropriate securities commissions and
other regulatory authorities in Canada and the United States (the
"Securities Authorities"). The Offer Documents, when filed with the
Securities Authorities and mailed to the Shareholders, shall contain all
information which is required to be included therein in accordance with any
applicable law, including, without limiting the generality of the
foregoing, the CANADA BUSINESS CORPORATIONS ACT (the "CBCA") and the
Securities Laws and shall in all material respects comply with the
requirements of applicable law, including the CBCA and Securities Laws.
The terms of the Offer shall comply with the terms of this Agreement. In
making the Offer, the Offeror shall comply in all material respects with
the provisions of applicable law, including Securities Laws.
DEALER MANAGER. The Purchaser shall appoint a dealer manager in
connection with the Offer and solicit acceptances of the Offer. The dealer
manager will be required to form a soliciting dealer group comprised of
members of the Investment Dealer Association of Canada and of the stock
exchanges in Canada to solicit acceptance of the Offer in Canada and the
United States.
CONDITIONS PRECEDENT. Notwithstanding paragraph 1.1(a), the Purchaser
shall not be required to cause the Offeror to make the Offer if at the time
the Offeror proposes to make the Offer and on the Proposed Offer Date (or
on any later day on which the Offer is required to be made under paragraph
1.1(a)):
any of the conditions set forth in paragraphs (e) to (g)
inclusive and paragraphs (i), (k) and (l) of section 3 of
Schedule "A" hereto have not been satisfied; or
any representation or warranty of the Corporation in Article III
shall not be, as of the date made, true and correct in all
respects which failure to be true and correct constitutes a
Material Adverse Effect, or the Corporation shall not have
performed in all respects any covenant or complied in all
respects with any agreement to be performed by the Corporation
under this Agreement prior to such date which failure to so
perform or comply constitutes a Material Adverse Effect.
The foregoing conditions are for the sole benefit of the Purchaser and may
be waived by the Purchaser in whole or in part at any time or from time to
time and shall be deemed to have been waived by the making of the Offer by
the Offeror.
APPROVAL OF THE CORPORATION
The Corporation hereby confirms that its Board of Directors, after
consultation with its advisers, by a resolution of such Board of Directors,
has unanimously (i)
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determined that the Offer is fair to the holders of the Shares from a
financial point of view and that this Agreement and the transactions
contemplated hereby are in the best interests of the Corporation and its
shareholders, (ii) approved this Agreement and the transactions
contemplated hereby, and (iii) resolved to recommend that the shareholders
of the Corporation accept the Offer and tender their Shares to the Offeror
thereunder.
The Corporation shall use its reasonable commercial efforts to mail,
concurrently with the mailing of the Offer Documents, to holders of record
of Shares, to each of the directors of the Corporation and to file with the
applicable securities regulatory authorities, a Directors' Circular
(together with all amendments, supplements and exhibits thereto, (the
"Directors' Circular") which shall reflect the determinations and
recommendation referred to in Section 1.2(a). The Corporation shall
comply with all Securities Laws in respect of the Offer. The Purchaser and
its counsel shall be given an opportunity to review the Directors' Circular
prior to its being mailed to holders of record of Shares and filed with the
applicable securities regulatory authorities. Each of the Purchaser and
the Corporation agrees to provide the other party and its counsel in
writing with any written comments, notice or communications either of them
or their respective counsel may receive from the Director under the CBCA
and the Securities Authorities with respect to the Offer, the Offer
Documents and the Directors' Circular promptly after the receipt of such
comments.
SHAREHOLDER LISTS - The Corporation shall or shall cause its transfer agent
to prepare a list of shareholders of the Corporation in accordance with section
21 of the CBCA and a list of holders of stock options and any other rights,
warrants or convertible or exchangeable securities currently outstanding (with
full particulars as to the purchase, exercise or conversion price and expiry
date), as well as a security position listing from each depositary including,
without limitation, The Canadian Depositary for Securities Limited and deliver
same to the Offeror as soon as practicable after the execution of this Agreement
and in as many days as possible before the expiry of the statutory ten day
period provided under the aforesaid section 21 of the CBCA, and to prepare
supplemental lists setting out any changes to the aforesaid lists for each
business day thereafter, and deliver same to the Offeror; all such aforesaid
deliveries shall be in both printed and computer readable form.
ARTICLE
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Corporation that:
CORPORATE ORGANIZATION - The Purchaser is, and the Offeror will be at the
date of the Offer, a corporation duly incorporated and validly existing under
the laws of its jurisdiction of incorporation and the Purchaser has, and the
Offeror will have at the date of the Offer, all necessary corporate power, and
authority, capacity and right, and the Purchaser has, and the Offeror will have
at the date of the Offer, received all requisite approvals (other than the
regulatory approvals referred to in paragraphs (b) and (c) of section 3 of
Schedule "A" hereto) to complete the transactions contemplated by this Agreement
and, in the case of the Purchaser, to enter into this Agreement.
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ENFORCEABILITY OF AGREEMENT - Upon the due execution and delivery of this
Agreement by the Corporation, this Agreement shall be a legally valid and
binding agreement enforceable by the Corporation against the Purchaser in
accordance with its terms, subject, however, to the usual limitations with
respect to enforcement imposed by law in connection with bankruptcy or similar
proceedings and the availability of equitable remedies.
CONFLICTING PROVISIONS - The Purchaser is not, and the Offeror at the date
of the Offer will not be, a party to, bound or affected by or subject to, any
agreement, charter or by-law provision, statute, regulation, judgement, order,
decree or law which would be violated, contravened, breached by, or under which
default would occur as a result of, the execution and delivery or performance of
this Agreement and which default, violation, contravention or breach would
materially impair or would prevent the Purchaser or the Offeror from
consummating the transactions contemplated hereby.
CONSENTS - No consent, waiver, approval, authorization, exemption,
registration, license or declaration of or by, or filing (other than pursuant to
the Securities Laws) with, or notification to any governmental agency or other
regulatory authority or administrative agency or commission is required to be
made or obtained by the Purchaser or the Offeror in connection with (i) the
execution and delivery by the Purchaser of this Agreement, or (ii) the
consummation by the Purchaser and the Offeror of any of the transactions
provided for herein, except for or in connection with the regulatory approvals
referred to in paragraphs (b) and (c) of section 3 of Schedule "A" hereto.
SUFFICIENT FUNDS - The Offeror will have at the date of the Offer
sufficient funds or financing arrangements in place to provide sufficient funds
to purchase all Common Shares tendered under the Offer.
ARTICLE
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
The Corporation hereby represents and warrants to the Purchaser that:
CORPORATE ORGANIZATION - The Corporation is a corporation duly incorporated
and validly existing under the CBCA and has all necessary corporate power,
authority, capacity and right, to enter into this Agreement and to complete the
transactions contemplated hereby.
ENFORCEABILITY OF AGREEMENT - Upon due execution and delivery of this
Agreement by the Purchaser, this Agreement shall be a legally valid and binding
agreement enforceable by the Purchaser against the Corporation in accordance
with its terms, subject, however, to the usual limitations with respect to
enforcement, imposed by law in connection with bankruptcy or similar proceedings
and the availability of equitable remedies.
CONFLICTING PROVISIONS - The Corporation is not a party to, bound or
affected by or subject to, any agreement, charter or by-law provision, statute,
regulation, judgement, order, decree or law which would be violated,
contravened, breached by, or under which default would occur as a result of, the
execution and delivery or performance of this Agreement and which default,
violation, contravention or breach would constitute a Material Adverse Effect or
would
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prevent the Corporation from consummating the transactions contemplated hereby.
CONSENTS - No consent, waiver, approval, authorization, exemption,
registration, license or declaration of or by, or filing (other than pursuant to
the Securities Laws) with, or notification to any governmental agency or other
regulatory authority or administrative agency or commission is required to be
made or obtained by the Corporation in connection with (i) the execution and
delivery by the Corporation of this Agreement, or (ii) the consummation by the
Corporation of any of the transactions provided for herein, except for or in
connection with the regulatory approvals referred to in paragraphs (b) and (c)
of section 3 of Schedule "A" hereto.
PUBLIC DISCLOSURE
The Corporation has complied in all material respects with its
obligation to file all forms, reports, statements, schedules and documents
required to be filed with the Securities Authorities since April 12, 1994
(collectively, the "Reports"), each of which Reports complied in all
material respects with the applicable requirements of the Securities Laws,
as in effect on the date so filed. Except for the financial statements of
the Corporation as at and for the periods ended March 31, 1995 and June
30, 1995 which have been restated, none of such Reports (including any
financial statements, schedules, documents or exhibits included or
incorporated by reference therein) or the prospectus of the Corporation
dated April 12, 1994 when filed pursuant to the Securities Laws contained
any misrepresentation (as defined in the OSA). All such Reports,
(including any financial statements, schedules, documents or exhibits
included or incorporated by reference therein) and the prospectus of the
Corporation dated April 12, 1994 complied in all material respects with all
applicable requirements of law.
The audited consolidated financial statements of the Corporation
(including any related notes thereto) for the fiscal year ended December
31, 1996 which have previously been furnished to the Purchaser, have been
prepared in accordance with Canadian generally accepted accounting
principles, applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto) and fairly present the
consolidated financial position of the Corporation and its subsidiaries at
the date thereof and the consolidated results of its operations and changes
in cash flows for the period indicated.
Except as and to the extent set forth on or contemplated by the
consolidated balance sheet of the Corporation and its subsidiaries at
December 31, 1996, including the notes to the financial statements of the
Corporation for its fiscal year then ended, neither the Corporation nor any
of its subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which would be
required to be reflected on a balance sheet or in the notes thereto
prepared in accordance with Canadian generally accepted accounting
principles, except for liabilities or obligations incurred in the ordinary
course of business since December 31, 1996 which could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
ABSENCE OF CHANGES - Since December 31, 1996, except as set forth in the
Reports, there has not been:
any change in the financial condition, operations (including
inventories) or prospects of the Corporation constituting a Material
Adverse Effect; or
any damage, destruction, loss, labour trouble or other event,
development or condition of any character (whether or not covered by
insurance) constituting a Material Adverse Effect.
ABSENCE OF LITIGATION - Except as disclosed to the Purchaser in writing
there are no suits, claims, actions, proceedings or investigations pending or,
to the knowledge of the Corporation, threatened against the Corporation or any
of its subsidiaries, or any properties, assets or rights of the Corporation or
any of its subsidiaries, before any court, arbitrator or administrative,
governmental or regulatory authority or body, that (i) individually or in the
aggregate, constitute a Material Adverse Effect or (ii) seek to delay or prevent
the consummation of the transactions contemplated hereby or by the Lock-Up
Agreements, and, to the knowledge of the Corporation, there are no bases or
grounds on which such a suit, claim, action, proceeding or investigation could
be commenced with a reasonable likelihood of success. As of the date hereof,
neither the Corporation nor any of its subsidiaries nor any of their respective
properties or assets is or are subject to any order, writ, judgment, injunction,
decree, determination or award which is a Material Adverse Effect or which could
prevent or delay the consummation of the transactions contemplated hereby.
ENVIRONMENTAL MATTERS - Except as disclosed to the Purchaser in writing and
except with respect to the facilities located in Charlotte, North Carolina which
are leased by the Corporation (in respect of which the Corporation has no
knowledge of environmental matters):
to the knowledge of the Corporation all operations of the Corporation
conducted on the owned and leased real properties of the Corporation and
such properties themselves are in compliance with all Environmental Laws
except where the failure to comply does not constitute a Material Adverse
Effect.
All Environmental Approvals required to be held by the Corporation
have been obtained, are valid and in full force and effect, except where
any failure to obtain such Environmental Approval or the failure of such
Environmental Approval to be valid and in full force and effect does not
constitute a Material Adverse Effect and there have been and are no
proceedings commenced or threatened to revoke or amend any Environmental
Approvals.
Neither the Corporation nor any of its operations has been or is now
the subject of any Remedial Order, nor does the Corporation have any
knowledge of any investigation or evaluation commenced as to whether any
such Remedial Order is necessary nor has any threat of any such Remedial
Order been made.
To the knowledge of the Corporation no part of the owned or leased
real properties of the Corporation (including properties previously owned
or leased) or any other assets of the Corporation has ever been used as a
landfill or for the disposal of waste.
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The Corporation has no knowledge of any Hazardous Substance in, on or
under the owned or leased real properties of the Corporation (including
properties previously owned or leased) at levels which exceed
decommissioning or remediation standards under any Environmental Laws or
standards published or administered by those Governmental Authorities
responsible for establishing or applying such standards.
The Corporation has no knowledge of any Hazardous Substance
originating from any neighbouring or adjoining properties which has
migrated onto, or is migrating towards any of the owned or leased real
properties of the Corporation at levels which exceed decommissioning or
remediation standards under any Environmental Laws or standards published
or administered by those Governmental Authorities responsible for
establishing or applying such standards.
ARTICLE
COVENANTS
CONDUCT OF BUSINESS OF THE CORPORATION - The Corporation covenants and
agrees that, during the period from the date of this Agreement to the time (the
"Effective Time") of the first appointment or election to the Board of Directors
of the Corporation (the "Board") of persons designated by the Purchaser, who at
the time of the designation, represent the Applicable Percentage (as defined in
Section 4.2) of the directors of the Corporation, except pursuant to the terms
hereof, or unless the Purchaser shall otherwise agree in writing, the businesses
of the Corporation and its subsidiaries shall be conducted only in, and the
Corporation and its subsidiaries shall not take any action except in, the
ordinary course of business and in a manner substantially consistent with past
practice and in compliance with applicable laws; and the Corporation and its
subsidiaries shall each use its reasonable efforts to preserve intact the
business organization of the Corporation and its subsidiaries and to preserve
the present relationships of the Corporation and its subsidiaries with
customers, suppliers and other persons with which the Corporation or any of its
subsidiaries has business relations. By way of amplification and not limitation,
neither the Corporation nor any of its subsidiaries shall, between the date of
this Agreement and the Effective Time, directly or indirectly do, or propose or
commit to do, anything which would cause any of the conditions set forth in
section 3 of Schedule "A" to not be satisfied.
BOARD OF DIRECTORS - Provided that at least a majority of the outstanding
Shares on a fully-diluted basis are acquired pursuant to the Offer, if requested
by the Purchaser, the Corporation shall, following the first take-up of and
payment for the Shares to be purchased pursuant to the Offer use all reasonable
efforts to cause the Applicable Percentage (as defined below) of directors (and
of members of each committee of the Board and members of the boards of directors
of each subsidiary) (rounded in each case to the next highest director or
member) of the Corporation to consist of persons designated or selected by the
Purchaser (whether, at the request of the Purchaser, by means of increasing the
size of the Board or seeking the resignation of directors and causing the
Purchaser's designees to be nominated for election). The "Applicable
Percentage" means the ratio of (i) the total voting power of all Shares accepted
for payment and taken up and paid for pursuant to the Offer to (ii) the total
voting power of the outstanding voting securities of the Corporation, rounded to
the nearest whole number and expressed as a percentage. The Purchaser intends
to proceed as expeditiously as is practicable to cause the
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Board of Directors of the Corporation (and the board of directors of each
subsidiary of the Corporation) to consist of persons designated or selected by
the Purchaser.
ACCESS TO INFORMATION - For the purpose resolving any issues which have
arisen during the course of the Purchaser's investigation of the business and
affairs of the Corporation, subject to the confidentiality agreement dated
February 12, 1997 between the Purchaser and the Corporation (the
"Confidentiality Agreement") following commencement of the Offer, the
Corporation shall, and shall cause its subsidiaries, officers and directors to,
and request its auditors and legal counsel to, afford the officers, employees,
auditors and other agents of the Purchaser, reasonable access at reasonable
times to its officers and facilities, as necessary, and to its books and
records, and shall furnish the Purchaser and such other persons with such
financial, operating and other data and information as the Purchaser, through
its officers, employees or agents, may from time to time reasonably request.
NO SOLICITATION - Neither the Corporation nor any of its subsidiaries
shall, nor shall it authorize or permit any of its officers, directors or
employees or any investment banker, financial adviser, lawyer, accountant or
other representative retained by it or any of its subsidiaries to initiate,
solicit or encourage any inquiries, submissions or offers as to or in connection
with the making of, or provide information to, or respond to any person making,
any offer or proposal with respect to a Transaction Proposal, provided that
nothing in this Agreement shall prohibit the board of directors of the
Corporation from (i) considering, negotiating, approving or recommending to
Shareholders, or providing information to a potential acquiror pursuant to, or
taking any necessary steps to implement any bona fide written Transaction
Proposal at a price exceeding $15.00 per Common Share which the Board determines
in good faith would, if consummated in accordance with its terms, result in a
transaction more favourable to all Shareholders than the consummation of the
Offer, or (ii) taking such action as may be required to fulfil its fiduciary or
statutory duties; PROVIDED, FURTHER, that the Board shall promptly inform the
Purchaser of the terms and conditions of such proposal and the identity of the
person making it.
FURTHER ACTION; REASONABLE BEST EFFORTS - Upon the terms and subject to the
conditions hereof, each of the parties hereto shall use its reasonable best
efforts to take, or cause to be taken, all appropriate action, and to do or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including:
cooperation in the preparation and filing of the Offer Documents and
the Directors' Circular and any required filings under the Competition Act,
and any amendments to any such filings; and
to diligently make all required regulatory filings and applications
and to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to
contracts with the Corporation and its subsidiaries as are necessary for
the consummation of the transactions contemplated by this Agreement and to
fulfil the conditions to the Offer.
PUBLIC ANNOUNCEMENTS - Prior to any announcement of a Transaction Proposal,
the
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Purchaser and the Corporation agree to consult with each other before issuing
any press release or otherwise making any public statements with respect to the
Offer. The Corporation further agrees not to make any public statements at any
time with respect to the business plans of the Purchaser for the Corporation
without the prior written consent of the Purchaser.
REGULATORY APPROVALS - The Purchaser shall, and shall cause the Offeror to
diligently pursue, all of the regulatory approvals referred to or contemplated
by paragraphs (b) and (c) of section 3 of Schedule "A" hereto, and shall keep
the Corporation informed with respect to the status of applications for all such
approvals, including providing all relevant documentation to the Corporation to
allow it to assess the status of such applications.
TAKE UP AND PAYMENT - Subject to the terms and conditions hereof, the
Purchaser agrees to cause the Offeror to take up the Common Shares deposited
under the Offer and pay for such Common Shares in accordance with applicable
Securities Laws.
INCREASE IN CONSIDERATION - The Purchaser covenants that, in the event the
Offeror increases the consideration per Common Share offered under the Offer
(but for greater certainty, excluding any greater consideration paid as a result
of any proceeding in respect of fair value under the CBCA or any other
subsequent acquisition transaction), the Offeror will pay such increased
consideration to each holder of Shares tendered, by such holder, notwithstanding
that such Common Shares have previously been taken up and paid for by the
Offeror.
ARTICLE
TERMINATION, AMENDMENT AND WAIVER
TERMINATION - This Agreement shall terminate at the Effective Time and may
be earlier terminated at any time prior to the Effective Time:
by the Corporation or the Purchaser if any court of competent
jurisdiction or other governmental body located or having jurisdiction
within Canada or the United States, shall have issued a final order, decree
or ruling or taken any other final action restraining, enjoining or
otherwise prohibiting the Offer and such order, decree, ruling or other
action is or shall have become final and nonappealable; PROVIDED that such
right of termination shall not be available to any party if such party
shall have failed to make reasonable efforts to prevent or contest the
imposition of such injunction or action and such failure materially
contributed to such imposition;
by the Corporation if the Offer has not been made by the date
required in paragraph 1.1(a) hereof; the Offer (or any amendment thereto
other than as specifically contemplated by Schedule "A" hereto) does not
conform in all material respects with the description in Schedule "A"; or
Common Shares deposited under the Offer have not, for any reason whatsoever
been taken up and paid for on or before the earlier of (A) May 26, 1997,
and (B) 90 days after the date of mailing of the Offer to Shareholders of
the Corporation.
by the Purchaser if (i) the Offer has been terminated, withdrawn or
otherwise expires in accordance with its terms; or (ii) there shall have
been a material breach of any
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representation or warranty on the part of the Corporation contained herein;
for this purpose, a material breach is a breach that, individually or in
the aggregate, constitutes a Material Adverse Effect; (iii) there shall
have been a breach of any covenant or agreement on the part of the
Corporation contained herein which individually or in the aggregate,
constitutes a Material Adverse Effect (PROVIDED that in such case the
Purchaser shall give not less than five days prior notice to allow the
Corporation to cure any breach before exercising its right of termination);
or (iv) the Board shall have withdrawn or modified (including by amendment
of the Directors' Circular) in a manner determined by the Purchaser to be
adverse to the Purchaser or the Offeror its approval or recommendation of
the Offer, this Agreement or the transactions contemplated hereby or by the
Lock-Up Agreements or shall have approved or recommended a Transaction
Proposal, or shall have resolved to effect any of the foregoing.
EFFECT OF TERMINATION - In the event of the termination of this Agreement
pursuant to Section 5.1, this Agreement shall forthwith become void and there
shall be no liability on the part of any party hereto; PROVIDED, HOWEVER, that
nothing herein shall relieve any party from liability for any breach of any
provision of this Agreement which occurred on or before the date of such
termination. Notwithstanding the foregoing, if this Agreement is terminated,
the Corporation shall remain liable to the Purchaser pursuant to section 5.3.
The termination of this Agreement shall not affect the obligations of the
parties under the Confidentiality Agreement.
FEES AND EXPENSES - Provided that the Offer is made and is not withdrawn or
allowed to expire, other than as a result of the failure to satisfy any of the
conditions set forth in section 3 of Schedule "A" hereto, and a Transaction
Proposal is announced, commenced or made at any time prior to 90 days after the
date of mailing the Offer to the shareholders of the Corporation and is
thereafter completed (whether before or after the ninetieth day after the date
of mailing the Offer to the shareholders of the Corporation) the Corporation
will pay to the Purchaser forthwith upon the completion of such Transaction
Proposal a fee of $5,000,000. Except as otherwise set forth in this section
5.3, each party shall bear its own expenses in connection with this Agreement
and the transactions contemplated hereby.
WAIVER - At any time prior to the Effective Time, any party hereto may (a)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
ARTICLE
GENERAL PROVISIONS
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS - The
representations, warranties and agreements in this Agreement shall terminate at
the Effective Time or upon the termination of this Agreement pursuant to Section
5.1, as the case may be, except as set forth in Section 5.2.
NOTICES - Any notice or other communication which may or is required to be
given
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pursuant to this Agreement shall be in writing and shall be sufficiently given
or made if delivered personally or sent by facsimile, in the case of:
the Purchaser or the Offeror, addressed as follows:
Volvo Construction Equipment N.V.
Coencoop 55
NL-2741 PH Waddinxveen
The Netherlands
Attention: The President
Telephone No.: 00 0 000 0000
Telecopy No.: 32 2 675 1532
with a copy to:
Osler, Xxxxxx & Harcourt
P.O. Box 50,
First Canadian Place,
Toronto, Ontario.
M5X 1B8
Attention: Xxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
the Corporation, addressed as follows:
Champion Road Machinery Limited
Xerox Building, Suite 2204
000 Xxxxxxxx Xx. X.
Xxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
Telephone No. : (000) 000-0000
with a copy to:
Sequoia Associates
0000 Xxxx Xxxx Xxxx
Xxxxxxxx XX, Xxxxx 000
Xxxxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
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and to:
Blake, Xxxxxxx & Xxxxxxx
Box 25, Commerce Court West
Toronto, Ontario
M5L 1A9
Attention: Xxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this section. Any notice that is delivered
shall be deemed to be delivered on the date of delivery to such address if
delivered on a business day prior to 5:00 p.m. (local time at the place of
receipt) or on the next business day if delivered after 5:00 p.m. or on a
non-business day. Any notice telecopied shall be deemed to be delivered on the
date of transmission (for which confirmed receipt is provided to the sender) if
delivered on a business day prior to 5:00 p.m. (local time at the place of
receipt) or the next business day if delivered after 5:00 p.m. or on a
non-business day.
CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION
For purposes of this Agreement, the terms defined in Schedule "B"
forming part of this Agreement shall have the meanings ascribed
thereto in Schedule "B".
The words "included", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation".
Unless otherwise specified, all references to money amounts are to
Canadian currency.
SEVERABILITY - If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
ENTIRE AGREEMENT; ASSIGNMENT - This Agreement, together with the
Confidentiality Agreement constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior agreements
and undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be assigned by
operation of law or otherwise, except that the Purchaser may assign all or any
of its rights and obligations hereunder to any direct or indirect wholly-owned
subsidiary of AB Volvo
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(publ), PROVIDED that no such assignment shall relieve the Purchaser of its
obligations hereunder if such assignee does not perform such obligations.
TIME. Time shall be of the essence of this Agreement.
CURRENCY. All sums of money referred to in this Agreement shall mean
Canadian funds.
AMENDMENTS. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
COUNTERPARTS. This Agreement may be executed in one or more counterparts
which together shall be deemed to constitute one valid and binding agreement and
delivery of the counterparts may be effected by means of a telecopied
transmission. This Agreement may be executed by facsimile signature, and
execution thereby will constitute an original hereof.
GOVERNING LAW.
LAWS OF ONTARIO - This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
SUBMISSION TO JURISDICTION - The parties hereto irrevocably submit to
the non-exclusive jurisdiction of the courts of the Province of Ontario
solely in respect of the interpretation and enforcement of the provisions
of this Agreement, and in respect of the transactions contemplated herein,
and hereby waive, and agree not to assert, as a defense in any action for
the interpretation or enforcement hereof or of any such document, that it
is not subject thereto or that such action may not be brought or is not
maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be enforced
in or by such courts, and the parties hereto irrevocably agree that final
judgment in any suit, action or proceeding brought in such a court shall be
conclusive and binding upon the parties and may be enforced in any other
court to the jurisdiction of which a party is subject by a suit upon such
judgment, provided that service of process is effected upon the parties in
a manner permitted by law; PROVIDED, HOWEVER, that the parties do not
waive, and the foregoing provisions of this clause shall not constitute or
be deemed to constitute a waiver of, (i) any right to appeal any such
judgment, to seek any stay or otherwise to seek reconsideration or review
of any such judgment or (ii) any stay of execution or levy pending an
appeal from, or a suit, action or proceeding for reconsideration or review
of, any such judgment.
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PROCEEDINGS IN OTHER JURISDICTION - Nothing in this section shall,
however, limit the right of any party to bring proceedings against any
party in the courts of any jurisdiction or jurisdictions.
IN WITNESS WHEREOF, the Purchaser and the Corporation have caused this
Agreement to be executed as of the date first written above by their respective
duly authorized officers.
VOLVO CONSTRUCTION EQUIPMENT N.V.
By:
Name:
Title:
By:
Name:
Title:
CHAMPION ROAD MACHINERY LIMITED
By:
Name:
Title:
By:
Name:
Title:
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SCHEDULE "B"
DEFINITIONS
"affiliate" has the meaning ascribed thereto in the CBCA;
"associate" has the meaning ascribed thereto in the CBCA;
"business day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in Toronto are authorized or required by law,
regulation or executive order to close;
"Canadian generally accepted accounting principles" shall mean the
generally accepted accounting principles in Canada from time to time approved by
the Canadian Institute of Chartered Accountants;
"disclosed to the Purchaser in writing" means (i) disclosure set forth in
this Agreement, or the Corporation's filings (other than any filing made on a
confidential basis) with the Ontario Securities Commission made, and available
generally to the public, on or before the date hereof and (ii) disclosure set
forth in any written disclosure letter or notice addressed to the Purchaser and
received in the period from January 1, 1997 to February 19, 1997 by any officer
or employee of the Purchaser identified in the letter of even date herewith from
the Purchaser to the Corporation, to the extent such letter or notice on its
face discloses a specific breach of an express representation or warranty of the
Corporation in Article III of the Acquisition Agreement.
"Environment" means the environment or natural environment as defined in
any Environmental Law and includes, without limitation, air, surface, water,
ground water, land surface, soil, subsurface strata, a sewer system and the
environment in the workplace;;
"Environmental Approvals" means all permits, certificates, licences,
authorizations, consents, instructions, registrations, directions or approvals
issued or required by Governmental Authorities pursuant to Environmental Laws
with respect to the operation of the Corporation or its assets and includes,
without limitation, any sewer surcharge agreement;
"Environmental Laws" means all laws relating in full or in part to the
protection of the Environment, product liability, and employee and public health
and safety, and includes, without limitation, those Environmental Laws relating
to the storage, generation, use, handling, manufacture, processing, labelling,
advertising, sale, display, transportation, treatment, Release and disposal of
Hazardous Substances;
"Governmental Authorities" means any government, regulatory authority,
governmental department, agency, commission, board, tribunal, crown corporation,
or court or other law, rule or regulation-making entity having or purporting to
have jurisdiction on behalf of any nation, or province or state or other
subdivision thereof or
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any municipality, district or other subdivision thereof;
"Hazardous Substances" means any pollutant, contaminant, waste of any
nature, hazardous substance, hazardous material, toxic substance, dangerous
substance or dangerous good as defined, judicially interpreted or identified in
any Environmental Law;
"Material Adverse Effect" means any condition, event or development which is,
or could reasonably be expected to result in or represent, a material adverse
effect or material adverse change (or any condition, event or development
involving a prospective material adverse change) individually or in the
aggregate on or in the business, affairs, operations, assets, capitalization,
financial condition, rights, results of operations, or liabilities (including
without limitation any contingent liabilities that may arise through
outstanding, pending or threatened litigation or otherwise), whether contractual
or otherwise, of the Corporation and its subsidiaries considered as a whole
provided that none of the following shall either alone or in aggregate
constitute a Material Adverse Effect: (i) any change in general economic or
grader industry conditions; (ii) the payment by the Corporation of its regular
dividend of $0.05 per Common Share in Xxxxx, 0000, (xxx) payments of cash
bonuses to participants in the Corporation's employee stock option and deferred
profit sharing plans (the "Plans") in lieu of the granting of stock options and
the making of deferred profit sharing plan contributions in respect of such
Plans for the year ended December 31, 1996 in an aggregate amount not to exceed
$1.2 million, and (d) any departure from the Corporation of fewer than five of
the executive officers of the Corproation or its subsidiaires;
"Release" has the meaning prescribed in any Environmental Law and includes,
without limitation, any release, spill, leak, pumping, pouring, emission,
emptying, discharge, injection, escape, leaching, disposal, dumping, deposit,
spraying, burial, abandonment, incineration, seepage, or placement;
"Remedial Order" means any administrative complaint, direction, order or
sanction issued, filed or imposed by any Governmental Authority pursuant to any
Environmental Laws and includes, without limitation, any order requiring any
remediation or clean-up of any Hazardous Substance, or requiring that any
Release or any other activity be reduced, modified or eliminated;
"Reports" has the meaning ascribed thereto in Section 3.5; and
"Transaction Proposal" means any take-over bid, tender offer or exchange
offer other than the Offer, (which bid or offer, solely for purposes of section
5.3, is for at least a majority of the outstanding Shares on a fully diluted
basis) merger, amalgamation, plan of arrangement, reorganization, consolidation,
business combination, reverse take-over, sale of assets (other than in the
ordinary course of business), sale of securities, recapitalization, liquidation,
dissolution, winding-up, or similar transaction involving the Corporation or any
of its subsidiaries.
