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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
Dated as of July 21, 1997
By and Among
The ▇▇▇▇▇▇ Power Shovel Company,
▇▇▇▇▇▇ Power Shovel Pty. Ltd,
INTOOL International B.V., and
Global-GIX Canada Inc.,
(collectively, as Sellers)
and
Global Industrial Technologies, Inc., as Parent
and
Bucyrus International, Inc.,
Bucyrus (Australia) Proprietary Ltd.,
Bucyrus (Africa) (Proprietary) Limited, and
Bucyrus Canada Limited
(collectively, as Buyers)
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of July 21, 1997, by
and among (i) The ▇▇▇▇▇▇ Power Shovel Company, a Delaware corporation
("Marion USA"), (ii) ▇▇▇▇▇▇ Power Shovel Pty. Ltd., an Australian corporation
("▇▇▇▇▇▇ Australia"), (iii) INTOOL International B.V., a Netherlands corporation
having a South African branch ("▇▇▇▇▇▇ South Africa"), (iv) Global-GIX Canada
Inc., a Canadian corporation ("▇▇▇▇▇▇ Canada")(▇▇▇▇▇▇ USA, ▇▇▇▇▇▇ Australia,
▇▇▇▇▇▇ South Africa and ▇▇▇▇▇▇ Canada being heretofore referred to,
individually, as "Seller" and, collectively, as the "Sellers"), and (v) Global
Industrial Technologies, Inc., a Delaware corporation ("Parent"), and (vi)
Bucyrus International, Inc., a Delaware corporation ("Bucyrus USA"), (vii)
Bucyrus (Australia) Proprietary Ltd., an Australian corporation ("Bucyrus
Australia"), (viii) Bucyrus (Africa) (Proprietary) Limited, a South African
corporation ("Bucyrus South Africa"), and (ix) Bucyrus Canada Limited, a
Canadian corporation ("Bucyrus Canada") (Bucyrus USA, Bucyrus Australia,
Bucyrus South Africa and Bucyrus Canada being heretofore referred to,
individually, as "Buyer" and, collectively, as the "Buyers").
INTRODUCTORY STATEMENTS
A. Sellers are engaged in the business of designing, manufacturing and
selling draglines and power shovels for surface mining along with components and
spare parts therefor, as well as spare parts for previously manufactured drills
(such business being herein referred to as the "Business").
▇. ▇▇▇▇▇▇▇ are desirous of selling to Buyers, and Buyers are desirous
of purchasing, substantially all of Sellers' assets used in the Business, upon
the terms and conditions hereafter set forth.
ACCORDINGLY, in consideration of the premises and the mutual agreements,
covenants, representations and warranties hereafter set forth, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. For purposes of this Agreement, the terms
defined in this Article I shall have the meanings herein specified, unless the
context otherwise requires. Accounting terms used in this Agreement, including
those defined in this Article I, shall, except as otherwise provided for herein,
be construed in accordance with generally accepted accounting principles used in
the United States and as consistently applied by Sellers on a consolidated
basis.
"Addendum" shall have the meaning assigned to it in Section 3.08 of the
Agreement.
"Affiliate," as to any individual or entity ("Person"), shall mean any
other Person (i) who directly or indirectly controls such Person; (ii) who
beneficially owns ten (10%) percent or more
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of the voting stock of such other Person; (iii) ten (10%) or more of whose
voting stock is owned by such other Person; or (iv) that is an officer or
director of such other Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such other Person,
whether through the ownership of voting securities, by contract or otherwise.
"Assumed Liabilities" shall have the meaning assigned to it in Section 2.05
of this Agreement.
"Basis" shall have the meaning assigned to it in Section 3.07 of this
Agreement.
"Benefit Plans" shall mean any bonus, deferred compensation, incentive
compensation, stock purchase, stock option, profit sharing, pension, retirement,
severance, vacation, sickness, unemployment, disability, hospitalization,
medical, dental or life insurance plan, benefit, program or agreement, or any
other arrangement or understanding similar to the foregoing, whether or not
insured.
"▇▇▇▇ of Sale" shall have the meaning assigned to it in Section 3.02 of
this Agreement.
"Books and Records" shall mean all books and records of each Seller used in
connection with the Business of such Seller, including all computerized storage
media and the software. Books and Records shall not include the corporate seal,
minute books, bylaws, memoranda of association, articles of incorporation, stock
transfer records, federal income tax returns of Global Industrial Technologies,
Inc. and such other books and records as pertain to the organization, existence
or share capitalization of Sellers or as are necessary to enable Sellers to file
their respective tax returns and reports and perform their respective
obligations hereunder after the Closing Date or which Sellers are required to
keep confidential under terms of a written agreement with a third party.
"Bucyrus Australia" shall have the meaning assigned to it in the Preamble
to this Agreement.
"Bucyrus Canada" shall have the meaning assigned to it in the Preamble to
this Agreement.
"Bucyrus South Africa" shall have the meaning assigned to it in the
Preamble to this Agreement.
"Bucyrus USA" shall have the meaning assigned to it in the Preamble to this
Agreement.
"Business" shall have the meaning assigned to it in the Preamble to this
Agreement.
"Buyers" shall have the meaning assigned to it in the Preamble to this
Agreement.
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"Buyer Group" shall mean Buyers, their respective officers, directors,
employees, subsidiaries and Affiliates.
"Buyer Indemnity Claim" shall have the meaning assigned to it in
Section 11.01 of this Agreement.
"Closing" shall have the meaning assigned to it in Section 3.04 of
this Agreement.
"Closing Balance Sheet" shall have the meaning assigned to it in
Section 3.01(b) of this Agreement.
"Closing Date" shall have the meaning assigned to it in Section 3.04
of this Agreement.
"Code" shall mean the Internal Revenue Code.
"Damages" shall mean all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties, punitive and exemplary
damages, and reasonable attorneys' fees and expenses.
"Documents" shall mean all ancillary documents to be delivered to
Buyers by Sellers in connection with this Agreement.
"Encumbrances" shall mean any title defects or objections, mortgages,
liens, claims, restrictive covenants, use restrictions, charges, pledges,
security interests or other encumbrances of any nature whatsoever including,
without limitation, leases, chattel mortgages, conditional sales contracts,
collateral security arrangements and other title or interest retention
arrangements.
"Excluded Liabilities" shall have the meaning assigned to it in
Section 2.06 of this Agreement.
"Final Determination" shall be deemed to occur with respect to a
proposed or other adjustment forming the basis for a tax claim when (i) there is
a decision, judgment, decree or other order by any court of competent
jurisdiction, which decision, judgment, decree or other order has become final
with respect to the indemnitee (i.e., all allowable appeals have been exhausted
by either party to the action or the time period within which such appeal may be
filed has expired), (ii) there is a closing agreement made under Section 7121 of
the Code (or any analogous provision under the laws of any other jurisdiction)
binding in respect of the indemnitee or other administrative settlement with the
Internal Revenue Service or other governmental authority, (iii) the time for
instituting a claim for refund in respect of the indemnified claim has expired,
or, if a claim was filed, the time for instituting suit with respect thereto has
expired or (iv) the taxes which are the subject of a proposed or other
adjustment are paid, and, pursuant to written agreements between Sellers and the
Buyers, no claim for refund is filed, and no other contest of such proposed or
other adjustment is made.
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"Government Body" shall mean any federal, state, local, foreign or
other governmental agency, department, commission, board, bureau,
instrumentality or body.
"Historical Financial Statements" shall have the meaning assigned to
it in Section 4.01(e)(i) of this Agreement.
"Indemnitee" shall have the meaning assigned to it in Section 11.03(a)
of this Agreement.
"Indemnitee's Certificate" shall have the meaning assigned to it in
Section 11.03(a) of this Agreement.
"Indemnitor" shall have the meaning assigned to it in Section
11.03(a) of this Agreement.
"Instruments of Assignment" shall have the meaning assigned to it in
Section 3.02 of this Agreement.
"Intangible Assets" shall mean all patents, trademarks, trademark
licenses, trade names, copyrights, licenses, authorizations, inventions,
processes, know-how, formulas, trade secrets and other intangible assets,
including any and all associated goodwill (together with all pending
applications, parents, continuations, divisionals, continuations-in-part,
foreign counterpart patents, foreign counterpart patent applications, reissues
and extensions for any of the above) owned by any Seller or dedicated to the
Business. For the purpose of this definition, the phrase dedicated to the
Business (or any similar phrase) includes, without limitation, reliance upon
and/or acceptance of the rights, interests and privileges conferred on the
Business or any Seller by any of the Intangible Assets, regardless of whether
or not such Intangible Assets generate revenue or are presently exploited.
"Intercompany Payables" shall mean amounts owed by a Seller to
Parent.
"Intercompany Receivables" shall mean amounts owed to a Seller by
Parent.
"Interim Balance Sheet" shall have the meaning assigned to it in
Section 4.01(e)(ii) of this Agreement.
"Intracompany Payables" shall mean amounts owed by one Seller to
another Seller.
"Intracompany Receivables" shall mean amounts owed to one Seller by
another Seller.
"Interim Financial Statements" shall have the meaning assigned to it
in Section 4.01 (e)(ii) of this Agreement.
"Knowledge" shall mean with respect to matters relating to Sellers'
Knowledge or Buyers' Knowledge (i) those facts and matters actually known by any
one or more officers or directors of Sellers, Parent or Buyers, as the case may
be; and (ii) any fact or matter which
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reasonably should be known by any one or more of such officers or directors
after "due inquiry" by such person, taking into account any and all roles or
positions which such person may hold and any and all duties and
responsibilities he or she may have vis-a-vis the Business of such Seller,
Parent or Buyer, as the case may be. The phrase "to Sellers' Knowledge" shall
include the Knowledge of both Sellers and Parent.
"Laws" shall mean all applicable laws (statutory and otherwise),
rules, regulations, orders, ordinances, judgments, decrees, orders, writs and
injunctions of all governmental authorities (federal, state, local, foreign or
otherwise).
"Leases" shall mean all leases (including all amendments thereof and
modifications thereto) pursuant to which each Seller leases real or personal
property.
"Lease Assignments" shall have the meaning assigned to it in Section
3.02 of this Agreement.
"Leased Property" shall have the meaning assigned to it in Section
4.01(f)(ii) of this Agreement.
"Licenses" shall have the meaning assigned to it in Section 4.01(l)
of this Agreement.
"Limitation Period" shall have the meaning assigned to it in Section
11.04 of this Agreement.
"Manufacturing Burden" shall mean all manufacturing costs (i.e., all
costs that are included in inventory valuation under generally accepted
accounting principles), determined as of the time incurred, including all
indirect manufacturing costs, but excluding all costs for direct labor, direct
materials and selling, general, administrative and engineering expenses.
"▇▇▇▇▇▇ Australia" shall have the meaning assigned to it in the
Preamble to this Agreement.
"▇▇▇▇▇▇ Canada" shall have the meaning assigned to it in the Preamble
to this Agreement.
"▇▇▇▇▇▇ South Africa" shall have the meaning assigned to it in the
Preamble to this Agreement.
"Marion USA" shall have the meaning assigned to it in the Preamble to
this Agreement.
"Marion USA Facilities" shall have the meaning assigned to it in
Section 3.05(m) of this Agreement.
"Net Book Value" shall have the meaning set forth in Exhibit A hereto.
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"Other Instruments" shall have the meaning assigned to it in Section
3.02 of this Agreement.
"Parent" shall have the meaning assigned to it in the Preamble to this
Agreement.
"Permitted Encumbrances" shall mean Encumbrances which secure the
following obligations of Sellers arising in the ordinary course of the Business
of Sellers as historically conducted (other than obligations relating to
indebtedness for borrowed money) with respect to which Sellers are not in
default: (i) liens (including leases, title retention agreements under
installment sales and conditional sales contracts) securing liabilities or
obligations to the extent reflected in the Closing Balance Sheet, (ii)
liens for current taxes not yet due, (iii) mechanics' and materialmens' liens
arising under applicable laws securing obligations to the extent reflected in
the Closing Balance Sheet, and (iv) restrictions on use and transfer of
assets imposed by applicable laws such as those relating to protection of the
environment and zoning.
"Permits" shall mean all licenses, permits and authorizations issued
by any federal, state, local or foreign Government Body.
[THIS PROVISION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS SUBJECT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO 17 CFR SECTION 240.24b2]
"Retained Assets" shall have the meaning assigned to it in Section
2.03 of this Agreement.
"Selected Employees" shall mean those employees of Marion USA who
attain age 60 with 15 years of service, as determined for pension plan and
retiree medical purposes, during the period of June 23, 1997, through June 21,
1998.
"Sellers" shall have the meaning assigned to it in the Preamble to
this Agreement.
"Sellers' Employees" shall have the meaning assigned to it in Section
3.08(a) of this Agreement.
"Seller Group" shall mean Sellers, their respective officers,
directors, employees, subsidiaries and Affiliates.
"Seller Indemnity Claims" shall have the meaning assigned to it in
Section 11.02 of this Agreement.
"Settled Claims" shall have the meaning assigned to it in Section
11.05 of this Agreement.
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"Taxes" shall mean all federal, state, local, or foreign taxes,
excises, withholdings, assessments or levies on or measured by actual or deemed
income, revenue, gross receipts, payroll, the value or cost of real or personal
property, tangible or intangible, including, but not limited to, income, social
security, welfare, sales, use, occupancy, business, occupation, real estate,
capital stock and franchise taxes (including interest and penalties thereon and
including estimated taxes).
"Transferred Assets" shall have the meaning assigned to it in Section
2.02 of this Agreement.
[THIS PROVISION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS SUBJECT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO 17 CFR SECTION 240.24b2]
ARTICLE II
PURCHASE AND SALE OF ASSETS
SECTION 2.01 ASSETS TO BE SOLD. At the Closing, subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Sellers, Parent, and Buyers contained herein, Sellers shall sell,
assign, convey and transfer to Buyers the Transferred Assets. Sellers shall
retain the Retained Assets.
(a) ASSETS TO BE PURCHASED BY BUCYRUS USA. Bucyrus USA
shall purchase (i) all of the Transferred Assets of Marion USA, (ii)
the Intangible Assets of ▇▇▇▇▇▇ Australia, and (iii) the Intangible
Assets of ▇▇▇▇▇▇ South Africa dedicated to the Business of such
Seller.
(b) ASSETS TO BE PURCHASED BY BUCYRUS AUSTRALIA. Bucyrus
Australia shall purchase all of the Transferred Assets of ▇▇▇▇▇▇
Australia, except the Intangible Assets which shall be purchased by
Bucyrus USA (as described in Section 2.01(a), above).
(c) ASSETS TO BE PURCHASED BY BUCYRUS SOUTH AFRICA.
Bucyrus South Africa shall purchase all of the Transferred Assets of
▇▇▇▇▇▇ South Africa, except the Intangible Assets which shall be
purchased by Bucyrus USA (as described in Section 2.01(a), above).
(d) ASSETS TO BE PURCHASED BY BUCYRUS CANADA. Bucyrus
Canada shall purchase all of the Transferred Assets of ▇▇▇▇▇▇ Canada.
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(e) GOING CONCERN. Buyers and Sellers hereby acknowledge
that Buyers are purchasing the assets of a going concern with respect to the
Transferred Assets of Marion USA, ▇▇▇▇▇▇ Australia and ▇▇▇▇▇▇ South Africa.
SECTION 2.02 TRANSFERRED ASSETS. With respect to Marion USA and
▇▇▇▇▇▇ Australia, the term "Transferred Assets" shall mean (i) all assets and
properties owned by each such Seller as of the Closing Date; and (ii) all of
each such Seller s rights and interests in and to assets and properties not
owned by such Seller, but dedicated to the Business of such Seller as of the
Closing Date. With respect to ▇▇▇▇▇▇ South Africa and ▇▇▇▇▇▇ Canada, the term
"Transferred Assets" shall mean (i) all assets and properties owned by each such
Seller as of the Closing Date and dedicated to the Business of such Seller; and
(ii) all of each such Seller's rights and interests in and to assets and
properties not owned by such Seller, but dedicated to the Business of such
Seller. With respect to Marion USA and ▇▇▇▇▇▇ Australia, the Transferred
Assets include, but are not limited to, the assets, properties, rights, and
interests described in paragraphs (a) through (r), below, or listed as assets
of such Sellers in the Schedules and Exhibits to this Agreement, except the
Retained Assets and only to the extent that such assets do not constitute
Retained Assets. With respect to ▇▇▇▇▇▇ South Africa and ▇▇▇▇▇▇ Canada, the
Transferred Assets include, but are not limited to, the assets, properties,
rights, and interests described in paragraphs (a) through (r), below, dedicated
to the Business of such Sellers or listed as assets of such Sellers in the
Schedules and Exhibits to this Agreement, except the Retained Assets and only
to the extent that such assets do not constitute Retained Assets.
(a) all leasehold interests (the "Leased Property");
(b) all Intangible Assets;
(c) all accounts receivable and notes receivable;
(d) all Intracompany Receivables;
(e) the account receivable in connection with the Settlement
Agreement between Marion USA, Dresser Industries, Construction Mining Services,
Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (the "Receivable From
BMSI");
(f) all furniture and fixtures;
(g) all machinery, equipment, tools, dies, molds,
patterns, and all related spare, replacement and maintenance parts therefor;
(h) all automobiles, trucks and other vehicles;
(i) all inventory, including, without limitation, all raw
materials, work-in-process, finished products, goods in transit, office,
manufacturing and advertising supplies, containers
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and packaging and shipping materials, and all inventory in the hands of
suppliers for which each Seller is contractually committed as of the Closing
Date;
(j) all leasehold improvements;
(k) to the extent transferrable or assignable, all rights and
interests in, to, and under all leases, contracts, agreements, arrangements,
commitments and understandings (whether written or oral) to which any Seller is
a party, excluding those items set forth on Schedule 2.02(k) and excluding
insurance policies relating to the Transferred Assets;
(l) all rights, interests and claims under insurance policies for
damage to Transferred Assets to the extent that any damaged Transferred Assets
have not been repaired or replaced prior to Closing;
(m) to the extent transferrable or assignable, all Permits
relating to the Transferred Assets;
(n) all prepaid expenses related to tooling, patterns and
supplies;
(o) all Books and Records;
(p) all technical documentation owned by each Seller including,
without limitation, material and tooling specifications, purchasing
specifications, invention records, research records, inspection processes and
equipment lists;
(q) all claims and causes of action of each Seller relating to or
arising out of the Business of each Seller, except (i) those listed on Schedule
2.02(q) attached hereto, and (ii) any claim or cause of action against third
parties that can be used as a defense, counterclaim or offset against any suit
brought by third parties against each Seller, particularly with respect to any
Excluded Liabilities; and
(r) all right, title, and interest in and to the goodwill, going
concern value and proprietary know-how of the Business of each Seller.
SECTION 2.03 RETAINED ASSETS. The term "Retained Assets" shall mean
the specified assets of Sellers that are listed on Schedule 2.03.
SECTION 2.04 ALL ASSETS. The Transferred Assets shall constitute
substantially all of the assets dedicated to the Business of each Seller as of
the Closing Date.
SECTION 2.05 LIABILITIES ASSUMED. At the Closing, subject to the
terms and conditions herein set forth, Sellers shall assign to Buyers, and
Buyers shall assume from Sellers, certain liabilities of Sellers set forth on
Schedules 2.05(a) through (d) below (the "Assumed
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Liabilities"), but with respect to such liabilities, only to the extent (and
only in such amounts) that such liabilities are actually reflected on the
Closing Balance Sheet.
(a) LIABILITIES ASSUMED BY BUCYRUS USA. Marion USA shall
assign to Bucyrus USA, and Bucyrus USA shall assume from Marion USA,
the Assumed Liabilities of Marion USA specified on Schedule 2.05(a).
(b) LIABILITIES ASSUMED BY BUCYRUS AUSTRALIA. ▇▇▇▇▇▇
Australia shall assign to Bucyrus Australia, and Bucyrus Australia
shall assume from ▇▇▇▇▇▇ Australia, the Assumed Liabilities of ▇▇▇▇▇▇
Australia specified on Schedule 2.05(b).
(c) LIABILITIES ASSUMED BY BUCYRUS SOUTH AFRICA. ▇▇▇▇▇▇
South Africa shall assign to Bucyrus South Africa, and Bucyrus South
Africa shall assume from ▇▇▇▇▇▇ South Africa, the Assumed Liabilities
of ▇▇▇▇▇▇ South Africa specified on Schedule 2.05(c).
(d) LIABILITIES ASSUMED BY BUCYRUS CANADA. ▇▇▇▇▇▇ Canada
shall assign to Bucyrus Canada, and Bucyrus Canada shall assume from
▇▇▇▇▇▇ Canada, the Assumed Liabilities of ▇▇▇▇▇▇ Canada specified on
Schedule 2.05(d).
(e) ASSIGNMENT AND ASSUMPTION AGREEMENTS. Buyers'
assumption of the Assumed Liabilities shall be evidenced by the
documents of assignment and assumption specified on Schedule 2.05(e),
which shall be reasonably satisfactory to Buyers and Sellers in form
and substance. Buyers shall (a) timely pay and discharge and (b),
upon demand by Sellers, indemnify and defend Sellers and hold them
harmless from and against any Damages relating to or arising out of
any liability or obligation expressly assumed by Buyers hereunder.
SECTION 2.06 LIABILITIES NOT ASSUMED. Except for the Assumed
Liabilities, Buyers assume no past, present or future obligations or
liabilities (known, unknown, accrued, or contingent) of Sellers, and shall have
no liability or obligation with respect to any such liability or obligation of
Sellers other than the Assumed Liabilities (all such liabilities of Sellers
other than the Assumed Liabilities are herein referred to as the "Excluded
Liabilities"). The Excluded Liabilities include, without limitation, the
following: (i) any liabilities or obligations of Sellers arising from or
relating to any violation of Laws by Sellers including, but not limited to,
Laws relating to environmental conditions at any properties owned or used by
Sellers prior to the Closing Date and any liabilities or obligations of Sellers
under or pursuant to environmental laws arising from or relating to Sellers'
operations prior to the Closing Date; (ii) any liabilities or obligations of
Sellers related to any Benefit Plans maintained by Sellers prior to the Closing
Date, except, and only to the extent that, any such liabilities and obligations
have been expressly assumed by Buyers pursuant to the Addendum as provided in
Section 3.08; and (iii) [THIS PROVISION HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS SUBJECT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO 17 CFR SECTION 240.24b2] Sellers shall
(a) pay and discharge, and (b) Sellers and Parent, jointly and severally, shall
indemnify and defend Buyers and hold them harmless from and against any
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Damages relating to or arising out of the Excluded Liabilities. [THIS PROVISION
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AND IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO
17 CFR SECTION 240.24b2]
ARTICLE III
PRICE AND TERMS
SECTION 3.01 CONSIDERATION.
(a) PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, in consideration of the sale, conveyance, assignment, transfer and
delivery of the Transferred Assets and the Documents, and in addition to the
liabilities assumed and covenants made by Buyers hereunder, Buyers shall
deliver or cause to be delivered at the Closing in full payment for the
Transferred Assets the sum of Forty Million, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Dollars (US $40,120,000) (the "Purchase Price"); provided however, to
the extent Sellers are not required to provide enhanced benefits to the
Selected Employees, the Purchase Price shall be Forty Million United States
Dollars (U.S.$40,000,000). The Purchase Price shall be paid as set forth below
by wire transfer of federal or other immediately available funds to one or more
accounts designated in writing by Sellers. Subject to final adjustments
pursuant to Section 3.01(b) below, (i) Bucyrus USA shall pay to Marion USA at
the Closing Twenty Million Three Hundred Eighty Six Thousand United States
Dollars (U.S.$20,386,000) for the Transferred Assets of Marion USA, the
Intangible Assets of ▇▇▇▇▇▇ Australia and the Intangible Assets of ▇▇▇▇▇▇ South
Africa dedicated to the Business of such Seller, as described in Section
2.01(a), (ii) Bucyrus Australia shall pay to ▇▇▇▇▇▇ Australia at the Closing
Twelve ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars
(U.S.$12,274,000) for the Transferred Assets as described in Section 2.01(b),
(iii) Bucyrus South Africa shall pay to ▇▇▇▇▇▇ South Africa at the Closing ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars
(U.S.$1,838,000) for the Transferred Assets as described in Section 2.01(c),
and (iv) Bucyrus Canada shall pay to ▇▇▇▇▇▇ Canada at the Closing Five Million
Six Hundred Twenty Two Thousand United States Dollars (U.S.$5,622,000) for the
Transferred Assets as described in Section 2.01(d).
(b) PURCHASE PRICE ADJUSTMENT. Sellers and Buyers shall jointly,
within sixty (60) calendar days after the Closing Date, prepare (i) a
consolidated balance sheet of Sellers as of the Closing Date, (ii) a
consolidating balance sheet of Sellers as of the Closing Date, and (iii) a
balance sheet of each Seller as of the Closing Date (the "Closing Balance
Sheets"). For Purchase Price adjustment considerations, the Closing Balance
Sheets shall be prepared on a consistent basis with the accounting practices
and procedures applied by Sellers in the preparation of the Interim Balance
Sheet and, for purposes of this Section 3.01(b), in the absence of manifest
error (which shall not include any matters relating to practices and procedures
applied by Sellers in preparing the Interim Balance Sheet), the only
adjustments to accounting reserves and accruals reflected therein shall be
those made to reflect changes in such reserves and accruals between the date of
the Interim Balance Sheet and the date of the Closing Balance Sheet. In the
event of a dispute between the parties regarding the preparation of the Closing
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13
Balance Sheets, which dispute cannot be reconciled by the mutual agreement of
the parties within fifteen (15) business days after one of the parties has
notified the other party thereof, the parties shall together select a mutually
acceptable Big Six public accounting firm (which shall be unrelated to, and not
in any manner affiliated with, either Buyers or Sellers or Parent or their
respective shareholders, officers, or Affiliates, and not currently or within
the two-year period employed or engaged by either Buyers or Sellers or Parent
or their respective shareholders, officers, or Affiliates), which firm shall
make an independent determination of the disputed item or items consistent with
the criteria set forth in this Section 3.01(b). Such independent determination
shall (in the absence of fraud, bad faith, undue influence, or the like, or
manifest error) be final and binding on all of the parties hereto. All fees,
costs and expenses incurred in retaining such independent accounting firm shall
be paid in equal shares by Buyers and Sellers. Within ten (10) calendar days
after (i) the completion of mutually agreed upon Closing Balance Sheets or (ii)
the resolution of any dispute relating thereto submitted to an independent Big
Six public accounting firm, whichever the case may be, the following Purchase
Price Adjustment shall be paid by the parties:
A. ADJUSTMENT PAID TO SELLERS. If the Net Book Value of
the Transferred Assets minus the Assumed Liabilities
of a Seller as shown on the Closing Balance Sheet of
such Seller is greater by more than U.S.$10,000 than
the Net Book Value of the Transferred Assets minus
the Assumed Liabilities of such Seller as shown on
the Interim Balance Sheet, then the difference
between such Net Book Value amounts shall be paid to
such Seller by the Buyer who is purchasing the
Transferred Assets of such Seller.
B. ADJUSTMENT PAID TO BUYERS. If the Net Book Value of
the Transferred Assets minus the Assumed Liabilities
of a Seller as shown on the Closing Balance Sheet of
such Seller is less by more than U.S.$10,000 than the
Net Book Value of the Transferred Assets minus the
Assumed Liabilities of such Seller as shown on the
Interim Balance Sheet, then the difference between
such Net Book Value amounts shall be paid by such
Seller to the Buyer of such Seller's Transferred
Assets.
C. METHOD OF PAYMENT AND ALLOCATION. The payment by
either Sellers or Buyers under paragraphs A or B of
this Section 3.01(b) (the "Adjustment") shall be
made by wire transfer of immediately available funds
to a bank account designated in writing by the payee.
The Adjustment paid to or by any Buyer shall be
allocated to the Transferred Assets purchased by such
Buyer in the manner set forth in Section 3.07 hereof.
SECTION 3.02 DOCUMENTS OF SALE AND CONVEYANCE. The sale, conveyance,
assignment, transfer and delivery of the Transferred Assets shall be effected
by delivery by each Seller to each Buyer of (i) a duly executed ▇▇▇▇ of sale in
substantially the form as Exhibit B attached hereto (the "Bills of Sale"), (ii)
assignments with respect to any real or personal property leases
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14
included in the Transferred Assets in substantially the form as Exhibit C
attached hereto (the "Lease Assignments"), and assignments with respect to all
patents, trademarks, service marks, copyrights and all applications therefor
relating to the Business of Sellers in substantially the form as Exhibit D
attached hereto (the "Instruments of Assignment"), and (iii) such other good
and sufficient instruments of conveyance and transfer as shall be necessary to
vest in Buyers good and valid title to the Transferred Assets (the "Other
Instruments").
SECTION 3.03 BULK SALE; SALES AND TRANSFER TAXES. Bucyrus USA and
Marion USA have agreed not to comply with the bulk transfer provisions of the
Uniform Commercial Code Bulk Transfer laws as adopted in the State of Ohio and
with any similar article under the Uniform Commercial Code enacted in any other
jurisdiction in which any of the Transferred Assets are located. Except for
the Assumed Liabilities, there shall be no liability or obligation of Buyers to
Sellers' creditors arising from the sale by Sellers of the Transferred Assets
to Buyers under the provisions of this Agreement. Any sales, use or similar
transfer taxes, and any transfer, recording or similar fees and charges arising
in connection with the transfer of the Transferred Assets from Sellers to
Buyers (except those value added taxes for which Buyers would receive a full
refund through input credits or similar credits; and except as otherwise set
forth in Section 6.14) shall be borne by Sellers.
SECTION 3.04 CLOSING DATE. Within fifteen (15) business days after
the earlier of (i) expiration of the waiting period for completion of the
transactions contemplated by this Agreement imposed by Title II of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), or (ii)
termination of such waiting period prior to its expiration (each of clause (i)
and (ii) being hereinafter referred to as the "HSR Date"), and unless this
Agreement shall have been terminated and the transactions herein contemplated
shall have been abandoned pursuant to the provisions of Article X, a closing
with respect to the transactions contemplated by this Agreement (the "Closing")
shall take place at the offices of Global Industrial Technologies, Inc., ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Closing Date"). If
the Closing occurs later than five (5) calendar days after the HSR Date, Buyers
shall pay to Sellers at Closing interest on the Purchase Price from the sixth
(6th) calendar day after the HSR Date through either (A) the fifteenth (15th)
business day after the HSR Date or (B) the Closing Date, whichever first
occurs, at the rate set forth in Bucyrus USA's Commitment Letter from PPM
America Special Investments Fund, L.P. dated April 14, 1997.
SECTION 3.05 DELIVERIES BY SELLERS. At the Closing, Sellers shall
deliver to Buyers (unless delivered previously), the following:
(a) copies of the resolutions of the board of directors
of Parent and each Seller, and the resolution of the
shareholders of each Seller authorizing the
execution, delivery and performance by such party of
this Agreement and the consummation by such party of
the transactions contemplated hereby, and authorizing
such party's officers, employees and agents to carry
out and perform the terms and provisions hereof and
thereof, certified by the corporate secretary of such
party;
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(b) a copy of the Certificate of Incorporation (or
comparable document) of Parent and each Seller, as
amended to date, certified by the applicable
government authority, and dated as of a date not more
than ten (10) calendar days prior to the Closing
Date, if such applicable government authority will
issue such a certificate;
(c) a certificate of good standing of Parent and each
Seller issued by the applicable governmental
authority for the jurisdiction in which such party is
incorporated or, as to each Seller, is required to
be qualified to transact business as a foreign
corporation, dated not more than ten (10) calendar
days prior to the Closing Date, if such applicable
governmental authority will issue such a certificate;
(d) duly executed Bills of Sale;
(e) duly executed Lease Assignments;
(f) duly executed Instruments of Assignment;
(g) duly executed Other Instruments;
(h) duly executed documents evidencing transfers
of Permits, if transferable;
(i) duly executed documents evidencing transfers of motor
vehicles and registrations thereof;
(j) the officers' certificates referred to in Sections
8.01(a), (b) and (c) hereof;
(k) the opinion of the General Counsel of Parent
substantially in the form of Exhibit E attached
hereto;
(l) the Books and Records of each Seller;
(m) a duly executed lease agreement, substantially in the
form of Exhibit G attached hereto, regarding the
facilities located at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ (collectively, the "▇▇▇▇▇▇
USA Facilities"); and
(n) all other duly executed instruments and documents
required by this Agreement to be delivered by Sellers
or Parent to Buyers, and such other instruments and
documents which Buyers or its counsel may reasonably
request not inconsistent with the provisions hereof,
so as to effectively transfer to Buyers all of
Sellers' right, title and interest in and to the
Transferred Assets as provided by this Agreement.
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16
SECTION 3.06 DELIVERIES BY BUYER. At the Closing, Buyers shall
deliver to Sellers (unless delivered previously) the following:
(a) copies of the resolutions of each Buyer's board of
directors authorizing the execution, delivery and
performance by each Buyer of this Agreement and the
consummation by each Buyer of the transactions
contemplated hereby, and authorizing each Buyer's
officers, employees and agents to carry out and
perform the terms and provisions hereof and thereof,
certified by the corporate secretary of each Buyer;
(b) a copy of the Certificate of Incorporation (or
comparable document) of each Buyer, as amended to
date, certified by the applicable government
authority, and dated as of a date not more than ten
(10) calendar days prior to the Closing Date, if such
applicable government authority will issue such a
certificate;
(c) a certificate of good standing of each Buyer issued
by the applicable governmental authority for each
jurisdiction in which each Buyer is incorporated or,
as to each Buyer other than Bucyrus USA, is required
to be qualified to transact business as a foreign
corporation, dated not more than ten (10) calendar
days prior to the Closing Date, if such applicable
governmental authority will issue such a certificate;
(d) the wire transfer or transfers referred to in Section
3.01 hereof;
(e) the officer's certificates referred to in Sections
9.01(a), (b) and (c) hereof;
(f) the opinion of Buyers' counsel, substantially in the
form of Exhibit F attached hereto;
(g) a duly executed lease agreement, substantially in the
form of Exhibit G attached hereto, regarding the
Marion USA Facilities; and
(h) all other duly executed instruments and documents
required by this Agreement to be delivered by Buyers
to Sellers, and such other instruments and documents
which Sellers or its counsel may reasonably request
not inconsistent with the provisions hereof.
SECTION 3.07 ALLOCATION OF PURCHASE PRICE. The sum of (i) the
Purchase Price, (ii) the Purchase Price Adjustments (described in Section
3.01(b) hereof), and (iii) the amount of the Assumed Liabilities reflected in
the Closing Balance Sheet (collectively, the "Basis") shall be allocated among
the Transferred Assets as set forth in Schedule 3.07 attached hereto. Such
allocation and Basis shall be conclusive and binding on both Buyers and Sellers
for purposes of
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17
their federal and, where applicable, foreign, state and local income tax
returns, and the parties hereto agree not to take positions on any tax return
inconsistent with such allocation and Basis. Bucyrus USA and Marion USA shall
prepare and timely file all such reports and returns as may be required by
Section 1060 of the Code to report such allocation and Basis.
SECTION 3.08 EMPLOYEE MATTERS.
(a) EMPLOYEES. On or prior to the Closing Date, each Seller shall
terminate or cause to be terminated as of the Closing Date the employment of
its respective employees (the "Sellers' Employees") or transfer them to other
employment with Parent or an Affiliate of Parent. Sellers agree to cooperate
with Buyers by permitting Buyers throughout the period prior to the Closing
Date (i) to meet with Sellers' Employees at such times as shall be approved by
a representative of Sellers; (ii) to have access to the personnel files of
Sellers' Employees; and (iii) to distribute to Sellers' Employees such forms
and other documents setting forth the terms and conditions upon which
employment, if any, by Buyers is offered and any other forms and documents
relating to employment after the Closing Date by Buyers as Buyers may request.
(b) SEVERANCE PAY. Sellers shall be responsible for all severance
pay, severance benefits, and similar obligations arising under Sellers' plans,
programs or contracts relating to the termination of such employees employment
with Sellers on or prior to the Closing Date including, but not limited to, any
and all severance pay and benefits provided for under any collective bargaining
agreements or addendums thereto and which are Sellers' obligations under the
addendum. Buyers agree not to permanently hire any of Sellers' Employees for a
four (4) month period from the date such employee is terminated by Buyers from
Buyers' temporary employment, unless Buyers reimburse Sellers for severance
payments made to such employees. Subject to the Addendum (as defined below),
determination as to the amount of severance pay and the eligibility
requirements of severance shall be at the sole discretion of Sellers.
(c) UNION EMPLOYEE COLLECTIVE BARGAINING AGREEMENTS. Bucyrus USA
agrees to assume as of the Closing Date the collective bargaining agreements
applicable to Marion USA union employees if such collective bargaining
agreements include substantially the same terms as provided in Exhibit H
attached hereto (the "Addendum"); provided, however, Bucyrus USA's assumption
shall be only with respect to those obligations to be undertaken by Bucyrus USA
(and not Sellers) under the terms of the Addendum. Bucyrus USA agrees to
defend, indemnify, and hold Sellers harmless from any and all Damages arising
out of the failure of Bucyrus USA to fulfill the express obligations of Bucyrus
USA under the Addendum. Prior to the date hereof, Sellers shall provide
Bucyrus USA with a list of all Sellers' union employees and their wage rates as
of June 22, 1997. Sellers shall defend, indemnify and hold Buyers harmless
from any and all Damages relating to or arising out of the collective
bargaining agreements and Addendum, except for the specific obligations
undertaken by Bucyrus USA above, or as Bucyrus USA may otherwise undertake in
writing.
(d) TEMPORARY EMPLOYEES. Prior to the Closing Date and subject to
the Addendum, Buyers shall identify those Sellers' Employees to whom Buyers
will offer temporary
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employment following the Closing Date. On or prior to the Closing Date, but
contingent upon consummation of the Closing, Buyers shall offer to temporarily
employ such employees as are identified by Buyers pursuant to the immediate
preceding sentence on such terms and conditions as Buyers shall in Buyers' sole
discretion determine (except that Bucyrus USA shall pay to Sellers or Sellers'
insurer for each such employee temporarily employed who elects COBRA coverage
under Sellers' medical plans, the COBRA premium for the periods such employee
is temporarily employed with Bucyrus USA) provided, however, that each such
employee shall be for all purposes, unless otherwise specified in this
Agreement, a new employee of Buyers (collectively, "Temporary Employees") and
each Temporary Employee's employment may be discontinued at the will of Buyers,
at any time and for any reason with or without cause. Sellers understand and
agree that Buyers will not assume, or accept any transfer of, any pension,
bonus, profit sharing, stock option, or employee benefit plans, policies,
programs or arrangements maintained by Sellers (or to which the Sellers
contribute or are required to contribute) or which, prior to the Closing Date,
cover any of Sellers' Employees. Further, Sellers shall retain sole
responsibility for all such plans, policies, programs or arrangements and their
related trusts, if any, and compliance with the provisions of ERISA, and all
other applicable laws, rules and regulations. Buyers shall be solely
responsible for the selection or non-selection of Sellers' Employees for offers
of temporary employment with Buyers. Buyers shall indemnify, defend and hold
harmless Sellers for any and all Damages relating to (i) selection or
non-selection by Buyers of any Seller's Employee for an offer of temporary
employment, or (ii) , without limiting any obligation of Sellers under this
Section 3.08, violation by Buyers of any laws applicable to the employment or
termination by Buyers of those Sellers' Employees who accept offers of
temporary employment by Buyers.
(e) PERMANENT EMPLOYEES. To the extent Buyers hire on a permanent
basis any of Sellers' Employees, Buyers shall be responsible for all future
obligations relating to such of Sellers' Employees, including, without
limitation, worker's compensation and future severance benefits. Buyers shall
be solely responsible for the selection or non-selection of Sellers' Employees
for offers of permanent employment with Buyers. Buyers shall indemnify, defend
and hold harmless Sellers for any and all Damages relating to (i) selection or
non-selection by Buyers of any Sellers' Employee for an offer of permanent
employment, or (ii), without limiting any obligations of Sellers under this
Section 3.08, violation by Buyers of any laws applicable to the employment or
termination by Buyers of those Sellers' Employees who accept offers of
permanent employment by Buyers.
(f) SELLERS' LIABILITY FOR SELLERS' EMPLOYEES. Sellers agree to
defend, indemnify and hold Buyers harmless from and against any and all Damages
which relate solely to periods of employment with Sellers, including
suspension, layoff, termination or other cessation of employment of, Sellers'
Employees with Sellers, including, without limitation, damages for wages,
overtime or premium pay, back pay, front pay, reinstatement, medical and dental
insurance, life insurance, worker's compensation or disability insurance,
unemployment compensation benefits, pension benefits, retirement benefits,
vacation or sick pay, severance pay or benefits, compensatory or punitive
damages, or any other type or form of compensation, benefit or damage of any
kind; provided, however, nothing herein is intended to relieve Buyers
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19
of their obligations under any law, including, without limitation, statutory,
common or other with respect to offering employment to Sellers' Employees, the
terms of such offer, the retention of such employees, or any promise or
commitment Buyers make to Sellers' Employees, including, without limitation,
crediting periods of employment with Sellers for purposes of eligibility and
amount of benefits under any employee benefit plans of Buyers. Buyers agree to
defend, indemnify and hold Sellers harmless from and against any and all
Damages which otherwise arise out of Buyers' obligations in the preceding
sentence.
(g) WARN NOTICES. Sellers shall, on behalf of Sellers and Buyers,
at least sixty (60) calendar days before closing the Marion USA Facilities,
provide notices under the Worker Adjustment and Retraining Notification Act
("WARN") to all of Sellers' Employees (and appropriate government agencies and
labor organizations) of a plant closing and loss of employment on the Closing
Date. Sellers shall defend, indemnify and hold Buyers harmless from any and
all Damages under WARN resulting from Sellers' termination of the employment of
Sellers' Employees not employed by Buyers to the extent Sellers fail to provide
the requisite sixty (60) day notice prior to the Closing Date or otherwise fail
to properly notify other aforementioned parties entitled to notice.
SECTION 3.09 MAIL RECEIVED AFTER CLOSING. On or after the Closing,
Buyers may receive and open all mail addressed to Sellers and deal with the
contents thereof in their discretion to the extent that such mail and the
contents thereof relate to the Business or any of the Assumed Liabilities.
Buyers agree to deliver or to cause to be delivered within seven (7) business
days of receipt to Sellers all other mail received which is addressed to
Sellers or Sellers' employees and which relates to Excluded Liabilities or
which does not relate to the Transferred Assets, the Business of Sellers or the
Assumed Liabilities.
SECTION 3.10 PRORATION OF LEASE PAYMENTS, UTILITY CHARGES AND OTHER
PAYMENTS. In any case where the Closing Date shall fall on a date other than
the date on which payments are due with respect to (i) any leases or (ii)
utility or similar regular periodic charges with respect to the Transferred
Assets for which a final billing has not been requested by Sellers, any
installment of rental payments and any such utility or similar charge payable
with respect to the current period in which the Closing Date occurs shall be
prorated between Sellers and Buyers on the basis of the actual number of days
elapsed from the first day of such period to the Closing Date.
SECTION 3.11 PRORATION OF TAXES. All property taxes and special
assessments payable, but not yet due, with respect to any of the Transferred
Assets shall be prorated between Sellers and Buyers on the basis of the actual
number of days elapsed between the commencement of the current fiscal tax year
and the Closing Date, based on a 365-day year and so reflected in the Closing
Balance Sheet; provided, however, that all such assessments which Sellers have
agreed to pay on an installment basis shall be paid in full at or prior to the
Closing Date to the extent such installments are then due. In connection with
such proration of taxes, in the event that actual tax figures for the year of
Closing are not available at the Closing Date, an estimated, provisional
proration of taxes shall be made using tax figures from the preceding year.
When actual tax figures for the year of the Closing become available, a
corrected and definitive
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20
proration of taxes shall be promptly made. In the event that taxes for the
year of the Closing exceed the amount estimated in such provisional proration,
Sellers shall pay Buyers their pro rata share of the amount by which the actual
taxes exceed the estimated taxes. Similarly, in the event that taxes from the
year of the Closing are less than the amount estimated in such provisional
proration, Buyers shall pay Sellers their pro rata share of the amount by which
the estimated taxes exceed the actual taxes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS AND PARENT
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF SELLERS AND PARENT.
For purposes of this Article IV, no specific representation or warranty shall
limit the applicability of a more general representation or warranty. Exhibit
I sets forth a complete and correct list of all officers and directors of
Sellers and Parent.
Sellers and Parent hereby represent and warrant (each Seller
represents and warrants individually only as to those matters pertaining to the
Business of such Seller, while Parent represents and warrants to all matters of
each such Seller) to Buyers the following:
(a) ORGANIZATION AND GOOD STANDING. Each Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction under which it was incorporated, and has all requisite corporate
power and authority to conduct the Business of such Seller as is now being
conducted and to own and lease the properties and assets it now owns and
leases. Each Seller is in good standing and is duly qualified or licensed as a
foreign corporation in each jurisdiction in which the properties owned or
leased by such Seller or the nature of the business of such Seller makes such
qualification or licensing necessary, except those jurisdictions wherein the
failure to so qualify would not have a material adverse effect on such Seller,
the Business of such Seller or any of the Transferred Assets.
(b) AUTHORITY. Each Seller and Parent have all requisite
corporate power and corporate authority to execute, deliver and perform this
Agreement and any other instruments, documents or agreements to be executed or
delivered by them hereunder or in connection with the transactions contemplated
hereby, and to carry out the transactions contemplated hereby and their
obligations hereunder. Each Seller's Board of Directors and its sole
shareholder and Parent's Board of Directors have duly authorized the execution
and delivery of this Agreement by each Seller and Parent, respectively, and the
consummation by each Seller and Parent, respectively, of the transactions
contemplated hereby, and no other corporate action by any Seller or Parent is
required by law, their Certificate of Incorporation (or comparable document),
By-Laws or otherwise to authorize the execution and delivery by each Seller or
Parent of this Agreement or the consummation by each Seller or Parent of the
transactions contemplated hereby. This Agreement and any other agreement to be
executed or delivered hereunder by any Seller and/or Parent is, or will be, a
legal, valid and binding obligation of such Seller or Parent, enforceable
against it/them in accordance with its terms (subject to applicable bankruptcy,
insolvency, and similar laws affecting creditors' rights generally and subject
as to enforceability
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to general principles of equity (regardless whether enforcement is sought in a
proceeding in equity or at law)).
(c) NO VIOLATION. Neither the execution and delivery by Sellers
or Parent of this Agreement nor the consummation by Sellers or Parent of the
transactions contemplated hereby (i) will result in any violation of, or be in
conflict with, the Certificate of Incorporation (or comparable document) or
Bylaws of any Seller or Parent; (ii) will, to Sellers' Knowledge, result in any
breach of or default under any provision of, or give any third party the right
to cancel, any contract or agreement of any kind to which any Seller or Parent
is a party or which is applicable to any Seller, Parent, the Business of any
Seller, or the Transferred Assets; (iii) is prohibited by or requires any
Seller to obtain any consent, authorization or approval of, or make any filing
or registration with, any governmental or regulatory agency or authority which
has not been obtained, except for the approvals contemplated by Section 6.03
herein; (iv) will require the consent of any third party, except as set forth
on Schedule 4.01(c); or (v) will violate any judgment, decree, order, writ,
injunction, statute, regulation or rule of any court or governmental authority
having jurisdiction over any Seller or Parent, in each case ((ii) - (v)), if
such would have a material adverse effect on the Business of Sellers, taken as
a whole, or each Seller's ability to perform the terms of this Agreement.
(d) BROKERS. Neither Sellers nor Parent have employed any broker,
agent or finder in connection with any transaction contemplated by this
Agreement other than The Beacon Group.
(e) FINANCIAL STATEMENTS.
(i) Sellers have previously delivered to Buyers copies of
Sellers' unaudited consolidated balance sheets as of October 31, 1992, 1993,
1994, 1995 and 1996, and the related statements of income for the fiscal years
then ended. The aforesaid financial statements are hereinafter referred to
collectively as the "Historical Financial Statements." The Historical
Financial Statements have been extracted from the audited financial statements
of Parent, and, subject to the statements contained in the draft management
representation letter to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ attached hereto as Exhibit J, fairly
present the financial position of Sellers as of the effective dates of, and for
the periods covered by, such Historical Financial Statements.
(ii) Attached hereto as Schedule 4.01(e)(ii) is the
unaudited consolidated balance sheet of Sellers as of January 31, 1997 (the
"Interim Balance Sheet"), and the related statements of income, stockholders'
equity and changes in financial position of Sellers for the year to date and
month then ended (collectively, the "Interim Financial Statements").
(iii) The Historical Financial Statements: (A) have been
prepared from, and are consistent with, the books and records of Sellers and
have been prepared in accordance with U.S. generally accepted accounting
principles ("GAAP") as consistently applied by Sellers
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during the periods covered thereby; and (B) fairly present the financial
condition, results of operations and cash flows of Sellers, as a whole, as of
the dates and for the periods stated therein.
(f) TITLE TO PROPERTY AND RELATED MATTERS.
(i) Except as set forth in Schedule 4.01(f)(i), each
Seller will have, as of the Closing Date, good and marketable title to all of
such Seller's Transferred Assets which it owns or purports to own, including,
without limitation, the properties and assets reflected on the Closing Balance
Sheet, free and clear of any Encumbrances except Permitted Encumbrances.
(ii) Schedule 4.01(f)(ii) sets forth a complete and
correct list of all real property leases to which any Seller is a party (either
as lessee or lessor) and which are to be assigned to and assumed by Buyers)
(the "Leased Property"), together with a brief description of the property
leased and identifying the date and term of the lease, the amount and timing of
lease payments and any renewal or purchase options. Each Seller has previously
made available to Buyers complete and correct copies of each lease (and any
amendments thereto) listed in Schedule 4.01(f)(ii). Each such lease is in full
force and effect; all lease payments due to date on any such lease have been
paid, and neither Sellers nor, to Sellers' Knowledge, any other party is in
default in any material respect under any such lease, and no event has occurred
which constitutes, or with the lapse of time or the giving of notice or both
would constitute, a material default by any Seller or, to Sellers' Knowledge,
any other party under such lease; there are no disputes or disagreements
between any Seller and, to Sellers' Knowledge, any other party with respect to
any such lease. The structures, plants, improvements, systems (including,
without limitation, electrical, plumbing, fire prevention, lighting, air
conditioning, heating, ventilation, and elevator) and fixtures located on each
such parcel of Leased Property conform in all material respects with all
federal, state and local statutes and laws and all ordinances, rules,
regulations and similar governmental and regulatory requirements where the
failure to so conform has had, or could have, a material adverse effect, and
are in good operating condition and repair, ordinary wear and tear excepted.
Each such parcel of Leased Property, in view of the purposes for which it is
currently used, conforms with all material covenants or restrictions of record,
and current, valid certificates of occupancy (or equivalent governmental
approvals) have been issued for each item of Leased Property to the extent
required by law, and Sellers have no Knowledge of any proposed change in any
such governmental or regulatory requirements or in any such zoning
requirements. Each Seller has all material easements, rights-of-way and
similar rights necessary to conduct its business as presently conducted, and
(A) all such easements and rights are valid, binding and in full force and
effect, and neither Sellers nor, to Sellers' Knowledge, any other party thereto
is in default thereunder; and (B) there exists no event or condition affecting
Sellers or, to Sellers' Knowledge, any other party thereto, which, with the
passage of time or notice or both, would constitute a material default
thereunder. No such easement or right will be breached by, nor, to Sellers'
Knowledge, will any party thereto be given a right of termination as a result
of, the transactions contemplated by this Agreement.
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(iii) Except as set forth in Schedule 4.01(f)(iii), all
material items of equipment, machinery, vehicles, furniture, fixtures and other
tangible personal property owned or used by each Seller and to be transferred
to Buyers are adequate for the operations of the Business of such Seller as
presently conducted and are (A) in good operating condition and repair,
ordinary wear and tear excepted, and (B) owned outright by each Seller, or
validly leased by each Seller under one of the leases set forth in Schedule
4.01(f)(ii). Except as set forth in Schedule 4.01(f)(iii), no item of tangible
personal property owned or used by any Seller and to be transferred to Buyers
is subject to any conditional sale agreement, installment sale agreement or
title retention or security agreement or arrangement of any kind.
(iv) Schedule 4.01(f)(iv) sets forth a complete and
correct list and summary description of all tangible personal property leases
to which any Seller is a party (either as landlord or tenant) and which are to
be assigned to and assumed by Buyers. Each Seller has previously made
available to Buyers complete and correct copies of each lease (and any
amendments thereto) listed in Schedule 4.01(f)(iv). Except as set forth in
Schedule 4.01(f)(iv): (A) each such lease is in full force and effect; (B)
neither Sellers nor, to Sellers' Knowledge, any other party is in default in
any material respect under any such lease, and no event has occurred which
constitutes, or with the lapse of time or the giving of notice or both would
constitute, a material default by such Seller or, to Sellers' Knowledge, any
other party under such lease; and (C) there are no material disputes or
disagreements between such Seller and, to Sellers' Knowledge, any other party
with respect to any such lease.
(v) The Transferred Assets constitute all of the assets
required (other than the Retained Assets) for the Business of each Seller as
presently conducted.
(g) COMPLIANCE WITH APPLICABLE LAW. To Sellers' Knowledge, each
Seller has complied in all material respects with all laws (other than
environmental laws), rules, regulations, ordinances, codes, orders, judgments,
injunctions, writs or decrees of any court or governmental body which are
applicable to the Business of such Seller, the noncompliance with which would
have a material adverse effect on the Business of such Seller, taken as a
whole, or the Transferred Assets, or on such Seller's ability to perform the
terms of this Agreement. Neither Sellers nor Parent have received any notice
alleging any such violation, nor does any Seller or Parent have any Knowledge
of any inquiry, investigation or proceeding relating thereto.
(h) TAXES. Each Seller has (i) timely filed all returns and
reports required to be filed by it on or before the Closing Date with respect
of Taxes, (ii) paid or contested all Taxes shown to have become due pursuant to
such returns and (iii) paid or contested all other Taxes for which a notice of
assessment or demand for payment has been received, except to the extent that
the failure by such Seller to have done so could not have a material adverse
effect on the Business of Sellers, taken as a whole, or each Seller's ability
to perform the terms of this Agreement. Except as set forth in Schedule
4.01(h): (A) there are no actions or proceedings currently pending or, to
Sellers' Knowledge, threatened against such Seller by any governmental authority
for the assessment or collection of Taxes; (B) no claim for the assessment or
collection of Taxes has been asserted or, to Sellers' Knowledge, threatened,
against such Seller; and (C) there are no
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24
matters under discussion by such Seller with any governmental authority
regarding claims for the assessment or collection of Taxes against such Seller.
There are no agreements, waivers, or applications by such Seller for an
extension of time for the assessment or payment of any Taxes.
(i) CONTRACTS AND COMMITMENTS.
(i) Except as set forth in Schedule 4.01(i) (or in any
other Disclosure Schedule) no Seller is a party to,
or subject to:
(A) any contract, arrangement or understanding,
or series of related contracts, arrangements
or understandings, other than Sales Orders
and Purchase Orders (as hereinafter defined),
which involves annual expenditures or
receipts by any Seller of more than $10,000;
(B) any contract, arrangement or understanding
not made in the ordinary course of business
and consistent with past practice;
(C) any license agreement (other than those
listed on Schedule 4.01(j));
(D) any note, bond, indenture, credit facility,
mortgage, security agreement or other
instrument or document relating to or
evidencing indebtedness for money borrowed or
a security interest or mortgage in the assets
of any Seller;
(E) any warranty, indemnity or guaranty issued by
any Seller, except with regard to obligations
imposed as a matter of law;
(F) any contract, arrangement or understanding
granting to any person the right to use any
material item of property or property right
of any Seller;
(G) any outstanding offer or commitment to enter
into any contract or arrangement of the
nature described in subsections (A) through
(F) of this Section 4.01(i).
For purposes of this Agreement, the term "Sales Orders" shall mean
those purchase orders of each Seller's customers (including distributors) and
other contracts for the sale of each Seller's products and services received or
entered into by each Seller from or with its customers in the ordinary course
of business; and the term "Purchase Orders" shall mean those purchase orders of
each Seller and other contracts and commitments issued or entered into by such
Seller to or with its suppliers and vendors for the purchase of goods, products
and supplies in the ordinary course of business.
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25
(ii) Sellers have previously delivered to Buyers complete
and correct copies of each written contract or agreement (and any amendments
thereto) listed on Schedule 4.01(i) or identified in any other Disclosure
Schedule, and a complete and correct description of each oral contract to which
any Seller is a party or bound and which is listed on Schedule 4.01(i) or in
any other Disclosure Schedule. Except as set forth in Schedule 4.01(i): (A)
each such contract and all Sales Orders and Purchase Orders (the "Contracts")
are in full force and effect, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors rights generally; (B) neither Sellers nor, to Sellers' Knowledge,
any other party is in default under any such Contract in which such default is
likely to result in Damages to the non-defaulting party in excess of
U.S.$25,000, and no event has occurred which constitutes, or with the lapse of
time or the giving of notice or both would constitute, a material default by
any Seller or by any other party; and (C) there are no material disputes or
disagreements between any Seller and any other party with respect to any such
Contract.
(j) INTANGIBLE ASSETS. Schedule 4.01(j) sets forth a complete and
correct list of all Intangible Assets and all licenses and other agreements
allowing Sellers to use the intangible rights of third parties (the "Licensed
Intangible Rights") in the United States or foreign countries. Except as set
forth on Schedule 4.01(j) and except for those Intangible Assets that have
irretrievably lapsed, expired or been canceled as of the date of this
Agreement, including, without limitation, those Intangible Assets that have
irretrievably lapsed, expired or been canceled due to expiration of a time
limit for recordation of a transfer of ownership required in the respective
jurisdiction or county: (i) Sellers are the owner of, and have good and
marketable title to, all of the Intangible Assets free and clear of all
Encumbrances, and (ii) no governmental registration of any of the Intangible
Assets or Licensed Intangible Rights has lapsed, expired or been canceled,
opposed or become the subject of a re-examination request. Except as set forth
in Schedule 4.01(j): (A) there are no licenses, agreements or commitments
outstanding or effective granting any other person any right to use, operate
under, license or sublicense the Intangible Assets, and (B) to Sellers'
Knowledge, neither the use of the Intangible Assets, nor the use of the
Licensed Intangible Rights, infringes upon or conflicts with the intellectual
property rights of any person. Except as disclosed in Schedule 4.01(j): (X)
there are no unresolved claims, and, to Sellers' Knowledge, there is no basis
for any claim challenging the ownership, scope, validity or enforceability of
any of the Intangible Assets or Licensed Intangible Rights; and (Y) there are
no instances where it has been held, claimed, or alleged, whether directly or
indirectly, and there is no basis which in the good faith opinion of Sellers
are likely to prevail upon which a claim may be made, that any of the
Intangible Assets or Licensed Intangible Rights infringes upon or conflicts
with the rights of any third party, or that any activity of any third party
infringes upon or conflicts with any of the Intangible Assets or Licensed
Intangible Assets.
(k) LITIGATION. Except as set forth on Schedule 4.01(k), there
are no suits, proceedings (including, without limitation, arbitral and
administrative proceedings), claims, or actions pending or any governmental
inquiries, investigations or audits pending, and, to Sellers' Knowledge, none of
the foregoing are threatened against or affecting any Seller, the Transferred
Assets or the transactions contemplated hereby in any court or before any
arbitration panel of any kind or before or by any Governmental Body. Except as
set forth on Schedule 4.01(k), there
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26
is no judgment, order, writ, injunction, decree or award (whether issued by a
court, an arbitrator, a governmental body or agency thereof or otherwise) to
which any Seller is a party and involving the Transferred Assets, which is
unsatisfied or which requires continuing compliance therewith by any Seller.
(l) PERMITS, LICENSES, ETC. Schedule 4.01(l) sets forth all
material approvals, authorizations, consents, licenses, filings, orders and
permits of all governmental and regulatory authorities (collectively,
"Licenses") held by or granted to any Seller. Except as disclosed in Schedule
4.01(l), each of the Licenses is in full force and effect. Schedule 4.01(l)
indicates those Licenses which are assignable to Buyers without the consent of
the issuers thereof. Except as disclosed in Schedule 4.01(l), no Seller has
received a notice of any action to terminate or change any provision of any
License. The Licenses set forth in Schedule 4.01(l) include all such
approvals, authorizations, consents, licenses, filings, orders and permits
which are required for the ownership of the Transferred Assets and the conduct
of the Business of each Seller as it is presently conducted, the absence of any
of which, if not obtained, would have a material adverse effect on such Seller,
the Business or the Transferred Assets taken as a whole.
(m) BOOKS AND RECORDS. Each Seller maintains its books, accounts,
and records (including, but not limited to, those kept for financial reporting
purposes and for tax purposes) in accordance with good business practices and
in sufficient detail to reflect accurately and fairly the transactions and
dispositions of its assets, liabilities and equities.
(n) NO MATERIAL ADVERSE CHANGE.
(A) Since the date of the Interim Balance Sheet, each
Seller has carried on its business in the ordinary course and consistent with
past practice. Except as set forth in Schedule 4.01(n), and except to the
extent such would not have a material adverse effect of such Seller, the
Business of such Seller or the Transferred Assets taken as a whole, since the
date of the Interim Balance Sheet, no Seller has:
(i) incurred any obligation or liability (whether
absolute, accrued, contingent or otherwise), except
in the ordinary course of business and consistent
with past practice;
(ii) suffered any damage, destruction or loss, whether or
not covered by insurance, affecting its properties,
assets or business, exceeding $10,000 individually or
in the aggregate;
(iii) mortgaged, pledged or subjected to any lien, charge
or other encumbrance any of its assets, tangible or
intangible, except in the ordinary course of business
and consistent with past practice;
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27
(iv) sold or transferred any of its assets, except in the
ordinary course of business and consistent with past
practice, or canceled or compromised any material
debts or waived any claims or rights of a material
nature;
(v) leased, licensed or granted to any person or entity
any rights in any of its assets or properties outside
the ordinary course of business and inconsistent with
past practice;
(vi) made any change in any accounting principle or
practice or in its method of applying any such
principle or practice; or
(vii) entered into any agreement or commitment to do any of
the foregoing.
(B) Except as set forth in Schedule 4.01(n), and except
to the extent such would not have a material adverse effect on Sellers, the
Business of Sellers taken as a whole, or the Transferred Assets taken as a
whole, since the date of the Interim Balance Sheet, Sellers have not, taken as
a whole, experienced any material adverse change in their financial condition,
results of operations, cash flows, assets, liabilities, Business or operations.
(o) PRODUCT WARRANTIES AND PRODUCT LIABILITIES. Schedule 4.01(o)
contains a true, correct and complete copy of Sellers' standard warranty or
warranties for sales of the products of the Business of such Sellers. To
Sellers' Knowledge, Schedule 4.01(o) sets forth a complete and correct list of
each Seller's outstanding warranty obligations and claims on all of such
Seller's material machine contracts. Schedule 4.01(o) lists and describes in
summary form all claims made or, to Sellers' Knowledge, threatened during the
five (5) year period preceding the date of this Agreement alleging personal
injury or property damage relating to the products of the Business.
(p) ACCOUNTS RECEIVABLE. Except as set forth in Schedule 4.01(p),
all accounts receivable reflected in the Interim Balance Sheet or to be
reflected in the Closing Balance Sheet, represent valid claims for bona-fide,
arms-length sales of goods or services actually made by each Seller in the
ordinary course of such Seller's Business, and none of the accounts receivable
is subject to any set-off or counterclaim or is in dispute. Except as set
forth in Schedule 4.01(p), to Sellers' Knowledge, no accounts receivable to be
reflected in the Closing Balance Sheet will be past due according to their
terms and all accounts receivable will be collectible in the ordinary course of
business using normal collection practices at the aggregate recorded amounts
thereof (net of the allowance for uncollectible accounts).
(q) INVENTORY. The items comprising the inventory, whether
reflected in the Interim Balance Sheet or to be reflected in the Closing
Balance Sheet, are, or will be, accounted for on a lower of cost first-in,
first-out or market basis consistently applied. Except as set forth in
Schedule 4.01(q), the inventory of Sellers reflected in the Interim Balance
Sheet or to be reflected in the Closing Balance Sheet does not, and will not,
include any items which are obsolete or not usable or salable in the ordinary
course of such Seller's Business, except those
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items the values of which have been written down in the above-described balance
sheets to net realizable value or with respect to which adequate reserves have
been provided in the above-described balance sheets, in either case in
accordance with generally accepted accounting principles as consistently
applied by Sellers.
(r) TRANSACTIONS WITH AFFILIATES. Except for compensation to
officers and routine travel advances to officers and employees, Schedule
4.01(r) contains an accurate and complete list and description of all
agreements, arrangements and understandings (including outstanding
indebtedness) which are currently in effect between any Seller and any
Affiliate.
(s) RELIANCE. The representations and warranties of Sellers and
Parent made in this Agreement are made by Sellers and Parent with the knowledge
and expectation that Buyers are placing reliance thereon in entering into, and
performing their obligations under this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES BY BUYERS
SECTION 5.01 REPRESENTATIONS AND WARRANTIES BY BUYERS. Buyers hereby
represent and warrant the following:
(a) ORGANIZATION AND GOOD STANDING. Each Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it was incorporated. Each Buyer is duly qualified or
licensed as a foreign corporation in each jurisdiction in which the property
owned or leased by such Buyer or the nature of the business of such Buyer makes
such qualification or licensing necessary, except those jurisdictions wherein
the failure to so qualify could not have a material adverse effect on such
Buyer.
(b) AUTHORITY. Each Buyer has all requisite corporate power and
corporate authority to execute, deliver and perform this Agreement and any
other instruments, documents or agreements to be executed or delivered by it
hereunder or in connection with the transactions contemplated hereby, and to
carry out the transactions contemplated hereby and its obligations hereunder.
Each Buyer's board of directors has duly authorized the execution and delivery
of this Agreement by such Buyer and the consummation by such Buyer of the
transactions contemplated hereby, and no other corporate action by such Buyer
is required by law, its Certificate of Incorporation (or comparable document),
By-Laws or otherwise to authorize the execution and delivery by such Buyer of
this Agreement or the consummation by such Buyer of the transactions
contemplated hereby.
(c) NO VIOLATION. Neither the execution and delivery by any Buyer
of this Agreement nor the consummation by any Buyer of the transactions
contemplated hereby (i) will violate the Certificate of Incorporation (or
comparable document) or Bylaws of any Buyer, (ii) will result in any breach of
or default under any provision of any contract or agreement of any kind to
which any Buyer is a party or by which any Buyer is bound, (iii) is prohibited
by or requires any Buyer to obtain any consent, authorization or approval of,
or make any filing with,
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29
any governmental agency or authority which has not been obtained, except for
the approval contemplated by Section 7.01 herein, or (iv) will violate any
judgment, decree, order, writ, injunction, regulation or rule of any court or
governmental authority having jurisdiction over any Buyer, in each case in such
a way as would have a material adverse effect on any such Buyer's ability to
perform the terms of this Agreement. This Agreement and any other agreement to
be executed or delivered hereunder by any Buyer is, or will be, a legal, valid
and binding obligation of such Buyer, enforceable against it in accordance with
its terms (subject to applicable bankruptcy, insolvency, and similar laws
affecting creditors' rights generally and subject as to enforceability to
general principles of equity (regardless whether enforcement is sought in a
proceeding in equity or at law)).
(d) BROKERS. No Buyer has employed any broker, agent or finder in
connection with any transaction contemplated by this Agreement.
(e) FINANCIAL CAPABILITY. Each Buyer has, and will have as of the
Closing Date, the financial resources to perform its obligations under this
Agreement, including all necessary financial resources to pay the Purchase
Price and perform or meet any other obligations of each Buyer hereunder.
ARTICLE VI
AGREEMENTS BY SELLERS
SECTION 6.01 CONDUCT OF THE BUSINESS OF SELLERS PRIOR TO CLOSING.
Sellers covenant and agree with Buyers that, between the date hereof and the
Closing Date (except as otherwise agreed in writing by the Buyers):
(a) The Business of Sellers shall be conducted in the
ordinary course and consistent with past practice;
(b) Sellers shall use their best efforts to preserve the
assets, business and goodwill of Sellers, and shall
endeavor to keep available the services of the
present employees of Sellers, provided that Sellers
shall not be authorized (without the prior written
consent of Buyers) to make any commitment on behalf
of Buyers;
(c) Sellers shall not enter into any contract or
commitment, or series of related contracts or
commitments (except for Purchase Orders and Sales
Orders) unless each such contract or commitment, or
series of related contracts or commitments, (i)
arises in the ordinary course of business, or (ii)
involves expenditures or revenues of less than
$25,000 in the aggregate;
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(d) Sellers shall promptly, after obtaining Knowledge of
the following, advise Buyers in writing of (i) the
commencement or threat of any suit, proceeding or
investigation against, relating to, or involving
Sellers or which could otherwise affect the
Transferred Assets or the Business of Sellers,
whether or not covered by insurance; (ii) any
material adverse change in the assets, liabilities,
financial condition, business or operations of
Sellers; and (iii) any event, condition or state of
facts which will, or may, result in the failure to
satisfy any of the conditions in Article VIII
hereof;
(e) Sellers shall not create, or permit to become
effective, any Encumbrance on the assets, tangible or
intangible, of Sellers, except in the ordinary course
of business consistent with past practice;
(f) Sellers shall maintain their current liability,
casualty, property and other insurance coverages in
full force and effect without reduction in coverage;
(g) Sellers shall not make any change in the accounting
principles or practices reflected in the Interim
Balance Sheet or in their methods of applying such
principles or practices; and
(h) Sellers shall not enter into any agreement or
commitment to do any of the foregoing.
SECTION 6.02 SUPPLYING OF INFORMATION. Sellers shall promptly furnish
to, or provide access to, Buyers or their representatives, from time to time as
reasonably requested by Buyers, complete and accurate information in
cooperation with any audit, review, investigation or examination of the Books
and Records, assets and operations of Sellers. In connection therewith,
Sellers shall direct and authorize their accountants to make available to
Buyers and their accountants all working papers reasonably requested by Buyers.
Sellers shall also allow Buyers or their representatives to have full and
complete access to the assets and properties of Sellers, provided that Buyers'
investigation shall occur at such times and in such a manner as Sellers
reasonably determine to be appropriate to protect the confidentiality of the
transactions contemplated by this Agreement and to avoid unreasonable
disruption of the Business.
SECTION 6.03 ANTITRUST NOTIFICATION.
(a) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Sellers shall cooperate with
Buyers in filing, as promptly as practicable after the execution of this
Agreement, all reports, notifications and other information in connection with
this transaction pursuant to the HSR Act or any other applicable federal, state
or foreign notification requirement, and shall use their best efforts to
respond as promptly as practicable to all inquiries from Government Bodies
relating to the transactions contemplated by this Agreement and to cause an
early termination of the waiting period established by the HSR Act.
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31
(b) FOREIGN. Buyers and Sellers shall use their best
efforts to obtain, as soon as practicable after the date of this Agreement, all
approvals, authorizations or no-action letters in Australia and South Africa
in connection with the transactions contemplated herein with ▇▇▇▇▇▇ Australia
and ▇▇▇▇▇▇ South Africa, respectively.
SECTION 6.04 OTHER TRANSACTIONS. Prior to the Closing Date, neither
Sellers nor any of Sellers' officers, directors, stockholders or other
representatives, shall, directly or indirectly, solicit or initiate discussions
or negotiations with, or provide any information or assistance to, any
corporation, partnership, person, or other entity or group (other than Buyers
and their representatives) concerning any merger, sale of securities, sale of
substantial assets, investment proposals or similar transaction involving
Sellers.
SECTION 6.05 DISCHARGE OF LIENS. Sellers shall cause all Encumbrances
on any real or personal property owned by or leased to Sellers which is
included in the Transferred Assets (other than Permitted Encumbrances and
Encumbrances otherwise permitted by this Agreement such as related to the
Assumed Liabilities) to be terminated or otherwise discharged at or prior to
the Closing.
SECTION 6.06 NAME CHANGE. On the Closing Date, ▇▇▇▇▇▇ USA, ▇▇▇▇▇▇
Australia and ▇▇▇▇▇▇ South America, S.A., a Chilean corporation, shall each
change its corporate name so that it is not similar to its current corporate
name and shall terminate all of its assumed name filings. After the Closing
Date, Parent and Sellers shall cease using the name "▇▇▇▇▇▇" and any names
similar thereto.
SECTION 6.07 TAXES. Sellers shall be responsible for, and shall
promptly cause to be paid when due, all Taxes (including, but not limited to,
any reserve for Taxes accrued on Sellers' books) attributable to income or
other gain accrued, earned or otherwise generated by Sellers for all time
periods up to and including the Closing Date. Sellers shall be responsible
for, and shall pay when and if due, except as provided in Section 3.03 herein,
all applicable sales, transfer, excise, use, documentary stamps or any other
similar taxes or stamp duties which may be imposed in any jurisdiction, or by
any authority, in connection with, or arising from the sale of the Transferred
Assets. Except as provided in Section 3.03 herein, Sellers shall prepare and
file all appropriate sales, transfer, excise, use, documentary stamps and other
tax returns and other documents and shall make timely payment of any sales,
transfer, excise, use and other taxes due in any jurisdiction in connection
with the transactions contemplated hereunder.
SECTION 6.08 BEST EFFORTS. Sellers agree that, prior to the Closing,
they shall use their best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
SECTION 6.09 CONSENTS. At or prior to the Closing, Sellers shall
endeavor to obtain all written consents and releases from parties whose consent
is necessary to the assignment by Sellers to Buyers of the contracts,
agreements, and arrangements agreed to be assigned to and
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32
assumed by Buyers prior to Closing. In the case of contract rights which, at
the Closing Date, have not been effectively transferred due to the lack of
consent of third parties, Sellers shall, if such consents are unobtainable, use
their best efforts to make available to Buyers the benefits thereof in some
other manner.
SECTION 6.10 REPURCHASE OF ACCOUNTS RECEIVABLE. After the Closing,
Buyers agree to use their normal and customary collection procedures (excluding
institution of litigation) as in effect on the Closing Date, to collect the
accounts receivable of Sellers existing on the Closing Date and reflected on
the Closing Balance Sheet (the "Transferred Receivables"). In the event any
Transferred Receivables remain uncollected in whole or in part, above the
amount reserved for on the Closing Balance Sheet, on the later of one hundred
fifty calendar (150) days after (i) the Closing; or (ii) after the time which
such Transferred Receivable was due and payable according to its terms, Sellers
shall repurchase from Buyers such uncollected Transferred Receivables at a
purchase price equal to ninety percent (90%) of the difference between (x) the
aggregate uncollected face amount of the Transferred Receivables, minus (y) the
reserve for uncollectible receivables on the Closing Balance Sheet.
SECTION 6.11 BOOKS AND RECORDS. Parent and Sellers agree to permit
Buyers, upon the request of Buyers at any time within seven (7) years after the
Closing Date, to inspect and copy at Buyers' expense, all books and records not
included as part of the Books and Records during regular business hours in
order to permit Buyers to (i) prepare for, dispute or respond to any claim,
lawsuit or proceeding relating to Sellers' Business for which Buyers are
responsible under this Agreement, including, without limitation, audits in
connection with tax returns or proceedings under the Internal Revenue Code, and
(ii) comply with governmental requirements applicable to Buyers or any of their
Affiliates; provided, however, that any such inspection pursuant to this
Section 6.11 shall be conducted in such a manner so as not to unreasonably
disrupt Sellers' or Parent's business. Parent and Sellers also agree that they
shall not destroy any such books and records for a period of seven (7) years
after Closing without first notifying Buyers.
SECTION 6.12 NON-COMPETITION. Parent and Sellers agree that for a
period of three (3) years following the Closing Date, none of them will
directly or indirectly engage anywhere throughout the world in any business
which competes with the Business. The preceding prohibition shall not prohibit
Parent or Sellers from (i) acquiring a competing business as part of a larger
acquisition, provided that the sales of the competing business constitute less
than twenty-five (25%) percent of the overall sales of the acquired business,
or (ii) selling parts or components of the type previously sold by Sellers, but
which were not manufactured by Sellers.
SECTION 6.13 ENVIRONMENTAL LIABILITIES. Sellers and Parent, jointly
and severally, agree to hold harmless, defend, and indemnify Buyers from and
against any and all Third Party Claims (as hereinafter defined) against Buyers,
and all Damages related thereto, against Buyers regarding environmental
liabilities and obligations arising from or directly or indirectly relating to
(i) Sellers' operation of the Business prior to the Closing Date; and (ii)
Buyers' temporary operation of the ▇▇▇▇▇▇ USA Facilities and the facilities
leased by ▇▇▇▇▇▇ Australia and ▇▇▇▇▇▇
- ▇▇ -
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ after the Closing, except (and only to the extent) such liabilities
or obligations (described in this clause (ii)) result from the failure of Buyers
to comply with any environmental laws applicable to activities of Buyers on the
premises of the ▇▇▇▇▇▇ USA Facilities or the leased facilities of ▇▇▇▇▇▇
Australia and ▇▇▇▇▇▇ South Africa. [THIS PROVISION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO 17 CFR SECTION 240.24b2
SECTION 6.14 INTANGIBLE ASSETS. Sellers shall promptly provide, or
cause to be provided, to Buyers all pertinent facts and documents relating to
the Intangible Assets and legal equivalents as may be known or accessible to
Sellers, and Sellers shall testify, at Buyers' expense, as to the same in any
interference, opposition, litigation or other proceeding related thereto and
shall promptly execute and deliver to Buyers or their legal representatives any
and all lawful recordable assignments (provided by Buyers to Sellers) required
to record all transfers of title and any owner name changes for the Intangible
Assets, including, but not limited to, any and all such assignments and name
changes required to record all transfers of title from the last recorded owner
to the Buyers with the appropriate governmental agencies, such as patent and
trademark offices worldwide. Sellers and Parent, jointly and severally, shall
indemnify Buyers for all costs including, but not limited to, attorney's fees,
foreign associate fees and government fees required for recording in the
respective governmental agencies all transfers of title and owner name changes
from the last recorded owner to the Sellers with respect to the Intangible
Assets being transferred to the Buyers (except for those Intangible Assets
which have irretrievably lapsed, expired or been canceled as of the date of
this Agreement, including, without limitation, those Intangible Assets that
have irretrievably lapsed, expired or been canceled due to expiration of a time
limit for recordation of a transfer of ownership required in the respective
jurisdiction or country).
ARTICLE VII
AGREEMENTS BY BUYERS
SECTION 7.01 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ANTITRUST NOTIFICATION. Buyers shall
cooperate with Sellers in filing, as promptly as practicable after the
execution of this Agreement, all reports, notifications and other information
required to be filed in connection with this transaction pursuant to the HSR
Act or any other applicable federal, state or foreign notification requirement
and shall use their best efforts to respond as promptly as practicable to all
inquiries from Government Bodies relating to the transactions contemplated by
this Agreement and to cause an early termination of the waiting period
established by the HSR Act.
SECTION 7.02 ACCESS TO PERSONNEL. After the Closing, Buyers and their
Affiliates shall allow Sellers and Sellers' accountants, counsel and other
representatives reasonable access from time to time during normal business
hours, at Sellers' sole cost and expense, to employees of Buyers, including
those employees of the Business of Sellers on the Closing Date who become
employees of Buyer after the Closing Date, for such reasonable purposes as
Sellers may request, including, without limitation, access to such personnel
for information, testimony, statements and other similar matters pertaining to
litigation, claims (including workers' compensation claims), proceedings, tax
contests, audits and other matters involving Sellers' operation of the
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Business of Sellers on or prior to Closing; provided, however, that such access
does not unreasonably disrupt Buyers' business.
SECTION 7.03 MAINTENANCE OF RECORDS. Buyers and their affiliates
shall keep and maintain, for a period of seven (7) years after the Closing
Date, all Books and Records relating to the Business acquired pursuant to the
transactions contemplated in this Agreement. Upon request, Buyers shall make
the Books and Records available to Sellers or their designated representatives
for inspection and copying, at Sellers' expense, during regular business hours
in order to permit Sellers to (i) prepare for, dispute or respond to any claim,
lawsuit or proceeding, including, without limitation, audits in connection with
tax returns or proceedings under the Internal Revenue Code and (ii) comply with
governmental requirements applicable to Sellers or any of their affiliates;
provided, however, that any such inspection pursuant to this Section 7.03 shall
be conducted in such a manner so as not to unreasonably disrupt Buyers'
business.
SECTION 7.04 BEST EFFORTS. Buyers agree that, prior to the Closing,
they shall use their best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
SECTION 7.05 [THIS PROVISION HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT
PURSUANT TO 17 CFR SECTION 240.24b2]
SECTION 7.06 [THIS PROVISION HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT
PURSUANT TO 17 CFR SECTION 240.24b2]
SECTION 7.07 PERFORMANCE GUARANTEES, ETC. Parent has issued in
connection with the Business of Sellers, the performance guarantees, surety
bonds and bank stand-by-letters of credit (collectively, "Parent's Instruments")
as set forth on Schedule 7.07. Buyers agree to (i) use their best efforts to
replace Parent s Instruments with performance guarantees, surety bonds and bank
stand-by-letters of credit of Buyers on the Closing Date and, (ii) subject to
the provisions of Sections 7.05 and 7.06, indemnify, defend and hold harmless
Parent from any and all claims made against Parent's Instruments after Closing.
SECTION 7.08 PRODUCT LIABILITY RESPONSIBILITIES. Buyers assume all
liabilities for property damage and personal injuries which are alleged to be
caused by or result from defects (including, but not limited to, design and
manufacturing defects) in products of the Business sold by Sellers prior to the
Closing Date for which the date of loss occurs after the Closing Date and shall
defend, indemnify and hold harmless Sellers with respect thereto (an "Assumed
Product Liability Claim"). Sellers and Parent assume all liabilities for
property damage and personal injuries which are alleged to be caused by or
result from defects (including, but not limited to, design and manufacturing
defects) in products of the Business sold by Sellers prior to the Closing Date
for which the date of loss occurred prior to the Closing Date and shall defend,
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indemnify and hold harmless the Buyers with respect thereto (a "Retained
Product Liability Claim"). Parent and/or Sellers shall notify Buyers in
writing and tender defense of each Assumed Product Liability Claim to Buyers by
the earlier of (a) fifteen (15) business days after obtaining Knowledge of the
Assumed Product Liability Claim or (b) within five (5) business days after
being served with a summons and complaint or similar documentation initiating
litigation with respect to the Assumed Product Liability Claim and shall
cooperate in the defense thereof. Buyers shall notify Parent and/or Sellers in
writing and tender defense of each Retained Product Liability Claim to Sellers
and/or Parent by the earlier of (a) fifteen (15) business days after obtaining
Knowledge of the Retained Product Liability Claim or (b) within five (5)
business days after being served with a summons and complaint or similar
documentation initiating litigation with respect to the Retained Product
Liability Claim and shall cooperate in the defense thereof. In the event any
party fails to timely comply with the preceding requirements, such party shall
indemnify and hold harmless the other party from any and all Damages incurred
as a result of such failure. Parent and Bucyrus USA shall cause the issuers of
their respective insurance policies to waive their rights of subrogation with
respect to losses for which each has assumed liability under this Section 7.08,
and each of them shall cause the other to be named as an additional insured
under their respective insurance policies to the extent of the liabilities so
assumed and the defense and indemnity obligations undertaken in this Section
7.08.
SECTION 7.09 SUPPLEMENTS TO DISCLOSURE SCHEDULES. Buyers agree that
from time to time after the execution of this Agreement and up to three (3)
business days prior to the Closing Date, Sellers shall supplement and/or amend
the Disclosure Schedules with respect to any matter hereafter arising which, if
existing on the date of this Agreement, would have been required to be set
forth or described in the Disclosure Schedules (such supplements and/or
amendments are hereinafter referred to as the "Disclosure Supplements"). In
the event any matter set forth in such Disclosure Supplements (i) would have a
material adverse effect on the Transferred Assets or the Assumed Liabilities,
or (ii) was known to Sellers and Parent on the date of this Agreement and
intentionally omitted by them from the Disclosure Schedules, Buyers shall have
the option not to proceed with the Closing and shall be entitled to
unilaterally terminate this Agreement in accordance with Article X herein;
provided however, Buyers provide to Sellers and Parent written notice of such
election to terminate this Agreement on the earlier of three (3) business days
after receipt of the Disclosure Supplement or the Closing Date.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYERS TO CLOSE
SECTION 8.01 CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYERS TO
CLOSE. The obligation of Buyers to consummate the transactions contemplated by
this Agreement shall be subject to the following conditions precedent:
(a) FULFILLMENT OF COVENANTS. Sellers and Parent shall have
performed and complied in all material respects with all covenants and
obligations set forth in this Agreement to be so performed or complied with by
them at or prior to the Closing, and Parent and each Seller shall
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deliver to Buyers a certificate so stating, dated as of the Closing Date and
executed by the President or any Vice President of such Seller or Parent.
(b) CORPORATE APPROVAL. Buyers shall have received a certified
copy of the resolutions of the shareholders and board of directors of each
Seller, certified by such Seller's Secretary or an Assistant Secretary, and a
resolution of the board of directors of Parent certified by its Secretary or an
Assistant Secretary, authorizing the execution of this Agreement and the
consummation of the transactions contemplated hereby.
(c) REPRESENTATIONS AND WARRANTIES. Each and every representation
and warranty of Parent and/or Sellers contained in this Agreement and the
Disclosure Schedules and Exhibits thereto, subject to the qualifications set
forth in the next sentence, shall be complete and accurate on the date when
made and as of and as though made on the Closing Date. Each Seller and Parent
shall deliver to Buyers a certificate, dated as of the Closing Date and
executed by the President or any Vice President of such Seller or Parent
stating that such representations and warranties are complete and accurate as
of and as though made on the Closing Date except (i) for any changes expressly
permitted by the terms of this Agreement (including the Disclosure Supplements),
or (ii) where the inaccuracy of the representation and warranty would not
have a material adverse effect on the Business of Sellers, taken as a whole.
The preceding qualifications of the representations and warranties of Parent
and Sellers relate solely to Buyers' obligation to close and shall in no way
limit or diminish the rights of Buyers pursuant to the terms of this Agreement
to recover Damages for the breach or inaccuracy of any representation or
warranty of Sellers or Parent (but in no event shall Buyers seek indirect,
special or consequential damages due to the effects of any matter set forth in
any Disclosure Supplement).
(d) NO PROCEEDING OR LITIGATION. No statute, rule or regulation
shall have been enacted or promulgated which would make any of the transactions
contemplated by this agreement illegal or would otherwise prevent the
consummation thereof. There shall not be instituted or pending any suit,
action, investigation, inquiry, order, judgment, decree, writ, injunction or
other proceeding by or before any court or governmental or other regulatory or
administrative agency or commission requesting an order, judgment, decree, writ
or injunction which (a) restrains or prohibits the consummation of the
transactions contemplated hereby, (b) if adversely determined, would have a
material adverse effect on Buyers' ability to exercise control over or manage
the Business of Sellers after the Closing, or (c) if adversely determined,
would have a material adverse effect on the Transferred Assets or on the
operations, condition (financial or otherwise), liabilities, assets, earnings
or prospects of the Business of Sellers taken as a whole.
(e) DELIVERY OF CLOSING DOCUMENTS. Sellers shall have delivered
to Buyers the documents referred to in Section 3.05 hereof, in form and
substance reasonably satisfactory to Buyers and their counsel.
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(f) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT. The waiting period shall have expired
or early termination shall have been granted pursuant to the HSR Act, as more
particularly described in Section 6.03 hereof.
(g) APPROVALS, PERMITS, ETC. All material consents,
authorizations, approvals, exemptions, licenses or permits of, or
registrations, qualifications, declarations or filings with, any governmental
body or agency thereof that are required in connection with the sale and
transfer of the Transferred Assets to Buyers pursuant to this Agreement and the
consummation of the transactions contemplated hereby, other than any required
under the antitrust laws of jurisdictions other than the United States, shall
have been duly obtained or made in form and substance reasonably satisfactory
to Buyers and their counsel and shall be effective at, and as of, the Closing
Date. Adequate arrangements satisfactory to Buyers shall have been made to
obtain any third party or other governmental consents, approvals or permits
after the Closing, except to the extent that the failure to obtain the same
would not have material adverse effect on Sellers, the Business or the
Transferred Assets taken as a whole.
(h) NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the financial condition, results of operations, cash flows,
assets, liabilities, business or operations (collectively, "Financial
Condition") of Sellers, as a whole, during the period between May 31, 1997 and
the Closing Date, provided, that if the Financial Condition of Sellers, as a
whole, between the date of the Interim Balance Sheet and May 31, 1997 was not
substantially as set forth in the financial reports and presentations furnished
to Bucyrus USA on June 24, 1997, (or did not favorably differ therefrom), the
period for determining whether a material adverse change in the Financial
Condition of Sellers, as a whole, shall be the period between the date of the
Interim Balance Sheet and the Closing Date.
ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS TO CLOSE
SECTION 9.01 CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS TO
CLOSE. The obligation of Sellers to consummate the transactions contemplated
by this Agreement shall be subject to the following conditions precedent:
(a) FULFILLMENT OF COVENANTS. Each Buyer shall have performed and
complied in all material respects with all covenants and obligations set forth
in this Agreement to be so performed or complied with by it at or prior to the
Closing, and each Buyer shall deliver to Sellers a certificate so stating,
dated as of the Closing Date and executed by the President or any Vice
President of such Buyer.
(b) CORPORATE APPROVAL. Sellers shall have received a certified
copy of the resolutions of the board of directors of each Buyer, certified by
such Buyer's Secretary or an Assistant Secretary, authorizing the execution of
this Agreement and the consummation of the transactions contemplated hereby.
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(c) REPRESENTATIONS AND WARRANTIES. Each and every representation
and warranty of each Buyer contained in this Agreement shall be complete and
accurate in all material respects on the Closing Date to the same extent as if
made on such date, except for any changes expressly permitted by the terms of
this Agreement. Each Buyer shall deliver to Sellers a certificate to such
effect, dated as of the Closing Date and executed by the President or any Vice
President of such Buyer.
(d) NO INJUNCTION. There shall be no injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction which is in effect on the Closing Date and which directs
that the transactions provided for herein or any of them may not be consummated
as so provided.
(e) DELIVERY OF CLOSING DOCUMENTS. Sellers shall have received
the documents referred to in Section 3.06 hereof in form and substance
reasonably satisfactory to Sellers and their counsel.
(f) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT. The waiting period shall have expired
or early termination shall have been granted pursuant to the HSR Act, as more
particularly described in Section 7.01 hereof.
ARTICLE X
TERMINATION OF AGREEMENT
SECTION 10.01 TERMINATION OF AGREEMENT. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written agreement of Parent, Sellers and
Buyers; or
(b) by Buyers, pursuant to Section 7.09 herein; or
(c) by either Buyers or Parent and Sellers if the Closing
shall not have occurred by September 15, 1997.
SECTION 10.02 PROCEDURE UPON TERMINATION. In the event of termination
of this Agreement by Sellers and Buyers pursuant to Section 10.01 above written
notice thereof shall forthwith be given to the other party or parties, and the
agreement and the transactions contemplated thereby this Agreement shall become
null and void, without further action by either party or parties. If the
transactions contemplated by this Agreement are terminated as provided in this
Section 10.01:
(a) each of Parent, Sellers and Buyers shall return all documents,
work papers and other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to the party furnishing the same; and
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(b) there shall be no liability on the part of any party hereto or
their affiliates, except that such termination shall not in any way limit or
restrict the rights and remedies of any party hereto against any other party
which has breached any of the agreements or other provisions of this Agreement
prior to termination hereof.
ARTICLE XI
INDEMNIFICATION
SECTION 11.01 PARENT AND SELLERS' AGREEMENT TO INDEMNIFY. Subject to
the terms and conditions of this Article XI, Sellers and Parent, jointly and
severally, agree to indemnify, defend and hold harmless the Buyer Group from and
against all Damages, asserted against, relating to, imposed upon or incurred by
the Buyer Group or any member thereof, directly or indirectly, arising out of,
based upon, or resulting from (i) any inaccuracy in or any breach of any
representation and warranty of Sellers or Parent contained in this Agreement,
the Disclosure Schedules, or any of the Documents, or any certificate or other
written instrument or document delivered by Sellers or Parent pursuant hereto or
thereto, (ii) any breach or nonfulfillment of, or any failure to perform, any of
the covenants, agreements or undertakings of Sellers or Parent contained in, or
made pursuant to, this Agreement (including, without limitation, the failure of
Sellers to pay or discharge the Excluded Liabilities) and any of the Documents,
or any certificate or other written instrument or document delivered by Sellers
or Parent pursuant hereto, (iii) any liabilities or obligations arising out of
any and all actions, claims, suits, proceedings, demands, assessments,
judgments, recoveries, damages, costs and expenses or deficiencies incident to
any matter which is the subject of indemnification under this Article XI ("Buyer
Indemnity Claim"), (iv) all interest, penalties, costs and expenses (including,
without limitation, all out-of-pocket expenses, reasonable investigation
expenses and reasonable fees and disbursements of accountants and counsel)
arising out of, or related to, any such Buyer Indemnity Claims, and (v) any
claim or liability for brokerage commissions or finders fees incurred by reason
of any action taken by Sellers or Parent.
SECTION 11.02 BUYERS' AGREEMENT TO INDEMNIFY. Subject to the terms
and conditions of this Article XI, Buyers, jointly and severally, agree to
indemnify, defend and hold harmless the Seller Group from and against all
Damages asserted against, relating to, imposed upon or incurred by the Seller
Group or any member thereof, directly or indirectly, arising out of, based
upon, or resulting from (i) any inaccuracy in, or any breach of, any
representation and warranty of Buyers contained in this Agreement or any of the
Documents, or any certificate or other written instrument or document delivered
by Buyers pursuant hereto or thereto; (ii) any breach or nonfulfillment of, or
failure to perform, any of the covenants, agreements or undertakings of Buyers
contained in, or made pursuant to this Agreement (including, without
limitation, the failure of Buyers to pay or discharge the Assumed Liabilities)
or any other of the Documents, or any certificate or other written instrument
or document delivered by Buyers pursuant hereto or thereto; (iii) any
obligations or liabilities arising out of any and all actions, claims, suits,
proceedings, demands, assessments, judgments, recoveries, damages, costs and
expenses or deficiencies incident to any matter which is the subject of
indemnification under this Article XI ("Seller Indemnity Claims"); (iv) all
interest, penalties, costs and expenses (including, without
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limitation, all out-of-pocket expenses, reasonable investigation expenses and
reasonable fees and disbursements of counsel and accountants) arising out of,
or related to, any Seller Indemnity Claims asserted under this Section 11.02;
and (v) any claim or liability for brokerage commissions or finder's fees
incurred by reason of any action taken by Buyers.
SECTION 11.03 PROCEDURES FOR RESOLUTION AND PAYMENT OF CLAIMS FOR
INDEMNIFICATION.
(a) If, prior to the expiration of any applicable limitation
period described in Section 11.04 hereof (the "Limitation Period"), a person or
entity entitled to be indemnified under this Article XI (the "Indemnitee")
shall incur any Damages or determine that it is likely to incur any Damages,
including without limitation, Third Party Claims as described in Section
11.03(d) hereof, and believes that it is entitled to be indemnified against
such Damages by a party hereunder (the "Indemnitor"), such Indemnitee shall
deliver (as promptly as reasonably practical) to the Indemnitor a certificate
(an "Indemnitee's Certificate") signed by the Indemnitee, which shall:
(i) state that the Indemnitee has paid or properly
accrued Damages, or anticipates that it will incur Damages for which
such Indemnitee is entitled to indemnification pursuant to this
Agreement; and
(ii) specify in reasonable detail each individual item of
Damages included in the amount so stated, the date such item was paid
or properly accrued, the basis for any anticipated liability, the
basis upon which the claim for indemnification is being made, and a
computation of the amount to which such Indemnitee claims to be
entitled hereunder (including, without limitation, the Indemnitee's
good faith estimate of the costs and expenses, including reasonable
attorney's fees, expected to be incurred in connection therewith).
(b) In case the Indemnitor shall object to the indemnification of
an Indemnitee in respect of any claim or claims specified in any Indemnitee's
Certificate, the Indemnitor shall, within thirty (30) calendar days after
receipt by the Indemnitor of such Indemnitee's Certificate, deliver to the
Indemnitee a written notice to such effect and the Indemnitor and the
Indemnitee shall, within the thirty (30) day period beginning on the date of
receipt by the Indemnitee of such written objection, attempt in good faith to
agree upon the rights of the respective parties with respect to each of such
claims to which the Indemnitor shall have so objected. If the Indemnitee and
the Indemnitor shall succeed in reaching agreement on their respective rights
with respect to any of such claims, the Indemnitee and the Indemnitor shall
promptly prepare and sign a memorandum setting forth such agreement. Should
the Indemnitee and the Indemnitor be unable to agree as to any particular item
or items or amount or amounts, then the Indemnitee and the Indemnitor shall
employ the arbitration procedure set forth in Section 12.06 to resolve such
dispute.
(c) Claims for Damages specified in any Indemnitee's Certificate
to which an Indemnitor shall not object in writing, claims for Damages covered
by a memorandum of
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agreement of the nature described in Section 11.03(b) above, claims for Damages
the validity and amount of which have been the subject of arbitration as
described in Section 11.03(b) above, and claims for Damages the validity and
amount of which shall have been the subject of a final judicial determination
are hereinafter referred to, collectively, as "Agreed Claims".
(d) Promptly after the assertion by any third party of any claim
(a "Third Party Claim") against any Indemnitee that, in the judgment of such
Indemnitee, may result in such Indemnitee incurring Damages for which such
Indemnitee would be entitled to indemnification pursuant to this Agreement,
such Indemnitee shall deliver to the Indemnitor a written notice describing in
reasonable detail such claim, and such Indemnitor may, at its option, assume
the defense of the Indemnitee against such claim (including the employment of
counsel, who shall be reasonably satisfactory to such Indemnitee, and the
payment of expenses thereto). Failure to receive notice from the Indemnitee of
a Third Party Claim shall not relieve the Indemnitor of any liability which it
might otherwise have to the Indemnitee under Sections 11.01 or 11.02 or 11.03
hereof, unless (and only to the extent that) such failure or delay actually
prejudices the ability of the Indemnitor to defend such Third Party Claim. The
burden of proving the actual prejudice described in the preceding sentence
shall lie with the Indemnitor. The Indemnitee shall cooperate with and make
available to the Indemnitor such assistance and materials as may be reasonably
requested of the Indemnitee. Any Indemnitee shall have the right to employ
separate counsel in any such action or claim and to participate in the defense
thereof, however, the Indemnitor shall not be responsible for the fees and
expenses of such counsel unless (i) the Indemnitor shall have failed, within a
reasonable time after having been notified by the Indemnitee of the existence
of such claim as provided in the preceding sentence, to assume the defense of
such claim, (ii) the employment of such counsel has been specifically
authorized by the Indemnitor, (iii) the named parties to any such action
(including any impleaded parties) include both such Indemnitee and Indemnitor,
and such Indemnitee shall have furnished the Indemnitor an opinion of counsel
to the effect that there may be one or more legal defenses available to the
Indemnitee which are different from or additional to those available to
Indemnitor, in which event the Indemnitor shall only be responsible for the
fees and expenses of one separate firm of attorneys for all Indemnitees, or
(iv) the proceeding involves a matter solely of concern to the Indemnitee in
addition to the claim(s) for which indemnification under this Article XI is
being sought.
(e) The Indemnitor shall have the right to settle and compromise
any Third Party Claim with respect to which it controls the defense only with
the consent of the Indemnitee, which consent shall not be unreasonably withheld
or delayed. If the proceeding involves a matter solely of concern to the
Indemnitee in addition to the claim for which indemnification under this
Article XI is being sought, the Indemnitee shall have the right to control the
defense and settlement of such additional claim in its own discretion and with
its own counsel. If the Indemnitor, within a reasonable time after notice of
any Third Party Claim, fails to defend the Indemnitee against such claim, or
notifies the Indemnitee of its refusal to conduct a defense against a Third
Party Claim, or does not have the right to assume such defense, the Indemnitee
shall (upon further notice to the Indemnitor) have the right to conduct a
defense against such claim and shall have the right to settle and compromise
such claim without the consent of the
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Indemnitor (except as provided in Section 11.04(f)). Except as otherwise
herein provided, no Indemnitor shall be liable to indemnify any Indemnitee for
any settlement of any such action or claim effected without the consent of the
Indemnitor; but if settled with the written consent of the Indemnitor, or if
there be a final judgment for the plaintiff or claimant in any such action, the
Indemnitor shall indemnify and hold harmless each Indemnitee from and against
any loss or liability by reason of such settlement or judgment.
(f) Notwithstanding anything to the contrary in the foregoing,
Buyers shall have the right to control the defense of any Third Party Claim,
provided, that Buyers shall keep Sellers reasonably informed as to the nature
and conduct of such claim and Sellers shall be afforded an opportunity to
monitor developments in connection therewith. Buyers shall have the right to
settle any such matter with the consent of Sellers, such consent not to be
unreasonably withheld or delayed.
(g) Notwithstanding anything in this Section 11.03 to the
contrary, (i) if there is a reasonable probability that a Third Party Claim may
materially and adversely affect the Indemnitee other than as a result of money
damages or other money payments, the Indemnitee shall have the right, at its
own cost and expense, to defend, compromise or settle such claim; provided,
however, that if such claim is settled without the Indemnitor's prior written
consent (which consent shall not be unreasonably withheld or delayed), the
Indemnitee shall be deemed to have waived all rights hereunder against the
Indemnitor for money damages arising out of such claim, and (ii) the Indemnitor
shall not, without the prior written consent of the Indemnitee (which consent
shall not be unreasonably withheld or delayed), settle or compromise any claim
or consent to the entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnitee of a release from all liability in respect to such claim.
SECTION 11.04 DURATION.
(a) REPRESENTATIONS AND WARRANTIES. Except as otherwise provided
in this Agreement, all representations and warranties of the parties contained
in, or made pursuant to, this Agreement shall be true, complete and correct as
of the Closing Date as though such representations and warranties were made at
and as of the Closing Date, and the rights of the parties to seek
indemnification with respect thereto shall survive the Closing; provided
however, that, except in respect of any claims for indemnification as to which
an Indemnitee's Certificate shall have been duly given prior to the relevant
expiration date set forth below, if any (which notice shall preserve such claim
pending resolution thereof pursuant to the terms hereof), the following
representations and warranties, and the right to make any indemnification
claims relating thereto, shall expire on the following dates:
(i) in the case of any claims relating to any breach of
the representations and warranties set forth in Section 4.01(h) (Taxes), the
date of expiration of the relevant statute of limitations, including any
extensions thereof (whether by wavier or otherwise); provided that,
notwithstanding anything to the contrary in the foregoing, the indemnity
obligations of Sellers
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and Parent hereunder shall survive with respect to any and all costs, expenses
and liabilities (including, without limitation, reasonable attorney's fees and
investigation expenses) incurred by any member of the Buyer Group as
applicable, in establishing or in seeking to establish, whether in a judicial
proceeding or otherwise, that the underlying matter giving rise to such claim
for indemnification is time-barred under the applicable statute of
limitations, whether or not such efforts are successful;
(ii) in the case of any claims of Buyers relating to
breaches of representations or warranties, other than claims relating to any
breach of the representations and warranties set forth in Section 4.01(h)
(Taxes) or Sections 4.01(a), (b), (c), (e), (f), (i), (j), and (k) (such
representations and warranties (other than those relating to Section 4.01(h))
being collectively referred to as "Sellers' Special Representations"), on the
second anniversary of the Closing Date; and
(iii) in the case of any claims of Sellers, relating to
breaches of representations or warranties, other than claims relating to any
breach of the representations and warranties set forth in Sections 5.01(a),
(b), and (c) (such representations and warranties being collectively referred
to as "Buyers' Special Representations"), on the second anniversary of the
Closing Date.
The parties acknowledge and agree that the Sellers' Special
Representations and the Buyers' Special Representations shall survive
indefinitely, and that any claims in respect thereof may be made at any time
following the Closing.
(b) COVENANTS, AGREEMENTS AND UNDERTAKINGS. Except as otherwise
provided in this Agreement, the rights of the parties to seek indemnification
pursuant to this Agreement for any breach or nonfulfillment of, or any failure
to perform, any of the covenants, agreements or undertakings of the parties
contained in, or made pursuant to, this Agreement and any of the Documents, or
any certificate or other written instrument or documents delivered by the
parties pursuant hereto shall survive indefinitely and any claims thereof may
be made at any time following the Closing.
SECTION 11.05 LIMITATIONS.
(a) Any claim by an Indemnitee against an Indemnitor with
respect to the breach or inaccuracy of any representation or warranty under
this Agreement shall be payable by the Indemnitor only in the event that the
accumulated amount of all claims with respect to the breach or inaccuracy of
all representations or warranties that have been Definitively Resolved (as
hereinafter defined) (for purposes hereof, "Settled Claims") against all such
Indemnitors in the Seller Group, if the claim is against a Seller, or all such
claims against Indemnitors in the Buyer Group, if the claim is against a Buyer,
shall exceed the amount of Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate (the "Indemnification Threshold"). At such time as the aggregate
amount of Settled Claims (involving breaches and/or inaccuracies of
representations or warranties under this Agreement) against Indemnitors that
constitute the
- 42 -
44
Seller Group or the Buyer Group, as the case may be, shall exceed the
Indemnification Threshold, such party shall then be liable on a dollar-
for-dollar basis for the amount of all claims which exceed the Indemnification
Threshold. The Indemnification Threshold shall not apply to any claims other
than those involving a breach or inaccuracy of a representation or warranty
under this Agreement.
(b) For purposes hereof, a claim shall be deemed to have
been "Definitively Resolved" when any of the following events has occurred:
(i) a claim is settled by mutual agreement of
Buyers and Sellers;
(ii) a final judgment, order or award of a court
of competent jurisdiction deciding such claim has been rendered, as evidenced
by a certified copy of such judgment, provided that such judgment is not
appealable or the time for taking an appeal has expired; or
(iii) a claim is the subject of a "Final
Determination."
SECTION 11.06 REMEDIES EXCLUSIVE. Except as expressly provided to the
contrary in this Agreement, the indemnification rights described in this
Article XI shall constitute the exclusive remedies of the parties against each
other with respect to disputes arising out of or related in any way to this
Agreement and the Documents and the transactions contemplated by this Agreement
and the Documents.
SECTION 11.07 [THIS PROVISION HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT
PURSUANT TO 17 CFR SECTION 240.24b2]
SECTION 11.08 LOSSES, NET OF INSURANCE AND TAXES. In determining the
amount of any claim by an Indemnitee, for all purposes hereunder, there shall
be taken into account any federal, state or local income or other tax benefit
or insurance proceeds which the Indemnitee may actually have received or be
entitled to receive (if in the future, at its present value) as a result of the
Damages forming the basis of such claim, and there shall also be taken into
account any income or other tax cost which the Indemnitee would incur as a
result of its receipt of any indemnification payment from the Indemnitor
(including any such indemnification payment which the Indemnitee would be
entitled to receive but for the provisions of Section 11.05). In addition,
Buyers and Sellers each agree to provide the other with the benefit of its
insurance, if any, with respect to claims for which one of the parties is
indemnified, and each agrees to name the other as an additional insured (where
insurance policies are in place and where it is possible to name the other
party as an additional insured) for this specific purpose.
ARTICLE XII
MISCELLANEOUS
- 43 -
45
SECTION 12.01 REFORMATION AND SEVERABILITY. If any provision of
this Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof
(a) in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible which is legal, valid and
enforceable; and
(b) the legality, validity and enforceability of the
remaining provisions hereof shall not in any way be affected or
impaired thereby.
SECTION 12.02 FURTHER ASSURANCES. Each party hereto shall, from time
to time after the Closing, at the request of any other party hereto and without
further consideration, execute and deliver such other instruments of
conveyance, assignment, transfer and assumption, and take such other actions,
as such other party may reasonably request to more effectively consummate the
transactions contemplated by this Agreement.
SECTION 12.03 NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be sent by
certified mail, return receipt requested (or by the most nearly comparable
method if mailed from or to a location outside of the United States), or by
cable, telex, telegram or facsimile transmission, or delivered by hand or by
overnight or similar delivery service, fees prepaid, to the party to whom it is
to be given at the address of such party set forth below or to such other
address for notice as such party shall provide in accordance with the terms of
this section. Except as otherwise specifically provided in this Agreement,
notice so given shall, in the case of notice given by certified mail (or by
such comparable method) be deemed to be given and received three (3) business
days after the time of certification thereof (or comparable act), in the case
of notice so given by overnight delivery service, on the date of actual
delivery, and, in the case of notice so given by cable, telegram, facsimile
transmission, telex or personal delivery, on the date of actual transmission
or, as the case may be, personal delivery.
If to any Buyer: Bucyrus International, Inc.
Attn: Chief Financial Officer
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ S.C.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Suite 2100
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- 44 -
46
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Seller: The ▇▇▇▇▇▇ Power Shovel Company
Attention: President
c/o Global Industrial Technologies, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Global Industrial Technologies, Inc.
Attention: General Counsel
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 12.04 HEADINGS. The headings of sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
SECTION 12.05 WAIVER. The failure of any party to insist, in any one
or more instances, upon performance of any of the terms, covenants or
conditions of this Agreement shall not be construed as a waiver or a
relinquishment of any right or claim granted or arising hereunder or of the
future performance of any such term, covenant, or condition, and such failure
shall in no way affect the validity of this Agreement or the rights and
obligations of the parties hereto. Any failure by any of the parties hereto to
comply with any obligation, covenant or agreement or to fulfill any condition
herein may be waived only by a written notice from the party entitled to the
benefits thereof.
SECTION 12.06 ARBITRATION; CHOICE OF LAW.
(a) Any dispute, controversy, difference or claim arising
out of or in connection with this Agreement, or the breach,
termination or validity thereof, which cannot be amicably resolved by
the parties within thirty (30) calendar days after receipt by a party
of written notice from any other party that such a dispute,
controversy, difference or claim exists shall be settled by final and
binding arbitration conducted in Atlanta, Georgia in accordance with
the International Arbitration Rules of the American Arbitration
Association (the "AAA Rules"). The disputes shall be settled by three
arbitrators; the Buyer Group and the Seller Group each shall select an
arbitrator, which two arbitrators shall then select the third
arbitrator and appoint the presiding arbitrator. Should the third
arbitrator fail to be appointed within thirty (30) calendar days after
the date of the appointment of the last arbitrator selected by the
Buyer Group and the Seller Group, the American Arbitration Association
domiciled in Atlanta, Georgia, may choose any person whom it deems
suitable. In the event that either the Buyer Group or the Seller
Group fails to nominate its respective arbitrator within thirty (30)
calendar days of receipt
- 45 -
47
of notice for arbitration issued by the other, such arbitrator shall be
nominated by the American Arbitration Association upon request.
(b) The parties agree that the award of the arbitral tribunal
(the "Arbitration Award"): (i) shall be conclusive, final and binding upon
the parties; (ii) shall be the sole and exclusive remedy between the
parties regarding any and all claims and counterclaims presented to the
arbitral tribunal; and (iii) if containing elements of injunctive relief as
provided in Section 12.08, may be made in such interim manner (pending
final resolution of the controversy presented) as the arbitral tribunal may
deem appropriate to protect the interests of any aggrieved or potentially
aggrieved party.
(c) The Arbitration Award shall be based on the provisions of
this Agreement and the Documents; provided, however, that to the extent
that the subject matter for the Arbitration Award is not set forth within
this Agreement or the Documents, it shall be based on the laws of the State
of Delaware. In addition, in the case of any conflict between the
provisions of the AAA Rules and the provisions of this Agreement or the
Documents, the provisions of this Agreement or the Documents shall govern.
(d) The parties further agree: (i) that their mutual decision to
resolve their disputes by arbitration as provided in this Agreement is an
explicit waiver of immunity against enforcement and execution of the
arbitration award and any judgment thereon; and (ii) that the Arbitration
Award and any judgment thereon, if unsatisfied, may be entered in and shall
be enforceable by the courts of any state having jurisdiction over the
person or property of the party against whom the Arbitration Award has been
rendered; and (iii) that any right they may have under applicable law to
have the Arbitration Award reviewed is hereby waived, whether such review
would relate to matters of substantive law, procedural law, conduct of the
proceedings, of fundamental fairness or otherwise.
(e) All notices to be given in connection with the arbitration
shall be as provided in Section 12.03 of this Agreement.
(f) In the event any party to this Agreement commences legal
proceedings to enforce the Arbitration Award, the expense of such
litigation (including reasonable attorneys' fees and costs of court) shall
be borne by the party or parties not prevailing therein.
(g) Notwithstanding the foregoing, the parties shall obtain the
agreement of arbitrators to the following: (i) the arbitrators shall
provide a written ruling, stating in separate sections the findings of fact
and conclusions of law on which their ruling is based, and (ii) their
ruling shall be due no later than ninety (90) calendar days after their
final hearing and within twelve (12) months after commencement of the
arbitration.
SECTION 12.07 ATTORNEY'S FEES AND COSTS. All costs of arbitration and
enforcement thereof, including reasonable attorney's fees and court costs, costs
of expert witnesses,
- 46 -
48
transportation, lodging and meal costs of the parties and witnesses, costs of
transcript preparation and other reasonable and necessary direct and incidental
costs shall be apportioned by a majority of the arbitrators selected pursuant
to Section 12.06 hereof.
SECTION 12.08 SPECIFIC PERFORMANCE. In the event of any breach by a
party of the terms of this Agreement or the Documents which would cause any
nonbreaching party to be irreparably harmed or for which such nonbreaching
party could not be made whole by monetary damages, then in such circumstances
such nonbreaching party, in addition to any other remedy to which it may be
entitled at law or in equity, shall be entitled to compel specific performance
of this Agreement or the Documents and in any action instituted in any court of
applicable jurisdiction to enforce any interim or final Arbitration Award
rendered pursuant to Section 12.06.
SECTION 12.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all of which together shall constitute one and the same instrument,
notwithstanding that all parties are not signatories to each counterpart.
SECTION 12.10 ASSIGNABILITY AND BINDING EFFECT. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
rights, duties or obligations shall be assigned by any party hereto (other than
to an Affiliate or in connection with the transfer of substantially all of the
assets of such party) without the prior written consent of the other parties,
and any attempted assignment or transfer without such prior written consent
shall be null and void. No transfer or assignment shall relieve a party of its
liabilities or obligations under this Agreement.
SECTION 12.11 AMENDMENTS. This Agreement may not be modified, amended
or supplemented nor may performance of any provision hereof be waived, except
by an agreement in writing signed by all of the parties hereto.
SECTION 12.12 EXPENSES. Except as otherwise provided herein, each of
the parties hereto shall pay all fees and expenses incurred by it or any of its
affiliates or subsidiaries in connection with this Agreement.
SECTION 12.13 THIRD PARTIES. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person other than
the parties hereto and their successors or permitted assigns, any rights or
remedies under or by reason of this Agreement.
SECTION 12.14 NUMBER AND GENDER OF WORDS. When the context so
requires in this Agreement, words of gender shall include either or both
genders and the singular number shall include the plural.
SECTION 12.15 ENTIRE AGREEMENT. This Agreement and the executed
Documents, the forms of which are attached hereto as Exhibits or referred to
herein, together with the Schedules
- 47 -
49
hereto and thereto, shall constitute the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and shall supersede
all prior negotiations, understandings and agreements.
SECTION 12.16. MONIES OWED. Unless otherwise provided for in this
Agreement, to the extent one party owes any monies to another party pursuant to
this Agreement, the party owing such money shall pay, within thirty (30)
calendar days after receipt of an invoice from the other party, such monies
owed. The parties agree that any amounts ultimately determined to be owed
which were not paid within such initial thirty (30) day period shall, from the
end of such thirty (30) day period until the date of actual payment, bear
interest at the rate or rates which would be paid by such party had it borrowed
a like amount under a credit facility of under which borrowings the owing party
constitute senior indebtedness.
[The remainder of this page intentionally blank]
- 48 -
50
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
SELLERS:
THE ▇▇▇▇▇▇ POWER SHOVEL COMPANY (Marion USA)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
▇▇▇▇▇▇ POWER SHOVEL PTY LTD (▇▇▇▇▇▇ Australia)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Director
INTOOL INTERNATIONAL B.V. (▇▇▇▇▇▇ South Africa)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director
GLOBAL-GIX CANADA INC. (▇▇▇▇▇▇ Canada)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
PARENT:
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
- 49 -
51
BUYERS:
BUCYRUS INTERNATIONAL, INC. (Bucyrus USA)
By: /s/ ▇▇▇▇▇▇ ▇. Smoke
------------------------------------------
▇▇▇▇▇▇ ▇. Smoke
Vice President and Chief Financial Officer
BUCYRUS (AUSTRALIA) PROPRIETARY LTD.
(Bucyrus Australia)
By: /s/ ▇▇▇▇▇▇ ▇. Smoke
------------------------------------------
▇▇▇▇▇▇ ▇. Smoke
Assistant Secretary
BUCYRUS (AFRICA) (PROPRIETARY) LIMITED
(Bucyrus South Africa)
By: /s/ ▇▇▇▇▇▇ ▇. Smoke
------------------------------------------
▇▇▇▇▇▇ ▇. Smoke
Secretary
BUCYRUS CANADA LIMITED (Bucyrus Canada)
By: /s/ ▇▇▇▇▇▇ ▇. Smoke
------------------------------------------
▇▇▇▇▇▇ ▇. Smoke
Secretary
- 50 -
52
EXHIBIT LIST
Exhibit A- Net Book Values on Adjusted Interim Balance Sheet
Exhibit B- Form of ▇▇▇▇ of Sale
Exhibit C- Form of Lease Assignment
Exhibit D- Form of Patent and Trademark Assignment
Exhibit E- Form of Legal Opinion - Legal Opinion of General Counsel
Exhibit F- Form of Legal Opinion - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ S.C.
Exhibit G- Form of Lease Agreement
Exhibit H- Collective Bargaining Agreement Addendum
Exhibit I- List of Officers and Directors of Sellers and Parent
Exhibit J- Draft of Management Representation Letter to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
53
BUCYRUS INTERNATIONAL, INC. - THE ▇▇▇▇▇▇ POWER SHOVEL COMPANY
ASSET PURCHASE AGREEMENT
DISCLOSURE SCHEDULES TO THE ASSET PURCHASE AGREEMENT
1. Schedule 2.02(k) - Excluded Contracts
2. Schedule 2.02(q) - Claims Not Transferred to Buyers
3. Schedule 2.03 - Retained Assets
4. Schedule 2.05(a) - Liabilities Assumed by Bucyrus USA
5. Schedule 2.05(b) - Liabilities Assumed by Bucyrus Australia
6. Schedule 2.05(c) - Liabilities Assumed by Bucyrus South Africa
7. Schedule 2.05(d) - Liabilities Assumed by Bucyrus Canada
8. Schedule 2.05(e) - Assignment and Assumption Agreements
9. Schedule 3.07 - Allocation of Purchase Price
10. Schedule 4.01(c) - No Violation
11. Schedule 4.01(e)(ii) - Financial Statements Interim Balance Sheet
12. Schedule 4.01(f)(i) - Title to Property and Related Matters
13. Schedule 4.01(f)(ii) - Real Property Leases
14. Schedule 4.01(f)(iii) - Material Obsolete Tangible Personal Property
15. Schedule 4.01(f)(iv) - Personal Property Leases
16. Schedule 4.01(h) - Taxes
17. Schedule 4.01(i) - Contracts and Commitments
18. Schedule 4.01(j) - Intangible Assets
19. Schedule 4.01(k) - Litigation
54
20. Schedule 4.01(l) - Permits and Licenses
21. Schedule 4.01(n) - No Material Adverse Change
22. Schedule 4.01(o) - Product Warranty and Product Liability
23. Schedule 4.01(p) - Accounts Receivable
24. Schedule 4.01(q) - Inventory
25. Schedule 4.01(r) - Transactions with Related Parties
26. Schedule 7.07 - Parent's Instruments
EXHIBITS TO THE ASSET PURCHASE AGREEMENT
1. Exhibit A - Net Book Values on Adjusted Interim Balance Sheet
2. Exhibit B - Form of ▇▇▇▇ of Sale
3. Exhibit C - Form of Lease Assignment
4. Exhibit D - Form of Patent and Trademark Assignment
5. Exhibit E - Form of Legal Opinion - Sellers' Counsel
6. Exhibit F - Form of Legal Opinion - Buyers' Counsel
7. Exhibit G - Form of Lease Agreement
8. Exhibit H - Collective Bargaining Agreement Addendum
9. Exhibit I - List of Officers and Directors of Sellers and Parent
10. Exhibit J - Draft of Management Representation Letter to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Registrant hereby undertakes to furnish to the Commission copies of any of
the above-listed Schedules and Exhibits upon request.
