ASSET PURCHASE AND SALE AGREEMENT
BETWEEN
TEREX CORPORATION,
as Seller
AND
PARTEK ACQUISITION COMPANY, INC.
as Buyer
Dated as of July 20, 2000
ASSET PURCHASE AND SALE AGREEMENT
ASSET PURCHASE AND SALE AGREEMENT ("Agreement"), dated as of July 20,
2000, between TEREX CORPORATION, a Delaware corporation ("Seller"), and PARTEK
ACQUISITION COMPANY, INC., a Wisconsin corporation ("Buyer").
RECITALS
WHEREAS, Seller, through its Princeton Division ("Princeton"), is
engaged in the production and distribution of self-propelled, truck-mountable
forklifts (such business, as conducted by Seller, is referred to hereinafter as
the "Princeton Business"), and Seller wishes to sell to Buyer, and Buyer wishes
to purchase from Seller, all of the assets and business of Seller involved in
the Princeton Business;
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE OF ASSETS
1.1 Sale and Purchase of Assets.
(a) Subject to the terms and conditions of this Agreement,
effective as of the Closing Time (as defined in Section 3.1(a)), Seller shall
sell, assign, convey, transfer and deliver to Buyer, and Buyer shall purchase
from Seller, for the consideration specified in Section 2.1, all of Seller's
right, title and interest in and to all of the assets, goodwill, rights and
properties owned by Seller and used primarily in connection with the conduct of
the Princeton Business as a going concern, as the same may exist at the Closing
Time, whether tangible or intangible, real, personal or mixed, accrued or
otherwise, (collectively, the "Princeton Assets"), including, without
limitation, all of Seller's right, title and interest in and to the following,
as the same may exist at the Closing Time:
(i) all machinery, equipment, vehicles, office
furniture, furnishings, tools, leasehold improvements, and
other tangible property, including, without limitation,
those items listed in Section 1.1(a)(i) of the disclosure
statement prepared by Seller and attached hereto (the
"Disclosure Statement");
(ii) all inventories of finished goods, raw materials,
work-in-process, spare parts, replacement and component
parts (including inventories held by customers on a
consignment basis) and office, packaging and other supplies;
(iii) all accounts receivables, prepaid expenses and
other current assets (other than cash and cash equivalents)
of Seller arising solely from the ownership and operation of
the Princeton Business;
(iv) all Intellectual Property Rights (as defined in
Section 4.17), including, without limitation, all Patent
Rights (as defined in Section 4.17) and the right to the
names "Princeton," "▇▇▇▇ Aap," and "Piggyback";
(v) subject to Section 1.1(b), all contracts, leases,
commitments, instruments, guarantees, bids, orders,
proposals and other agreements, whether written or oral, to
which Seller or any predecessor in interest is a party
primarily in connection with the Princeton Business
immediately prior to the Closing Time, including, without
limitation, those agreements to purchase materials,
contracts for services or to provide products listed in
Section 4.11 of the Disclosure Statement, but excluding all
corporate-wide purchasing arrangements which relate
generally to the Princeton Business and other divisions or
business units of Seller or any of its Affiliates (as
defined in Section 11.9) and any other arrangements with
other divisions or business units of Seller or any of its
Affiliates;
(vi) all licenses, permits, franchises, certificates of
authority or orders, certificates of occupancy, building,
safety, fire and health approval, or any waiver of the
foregoing (collectively, "Permits"), issued by any
Governmental Authority (as defined in Section 4.15(b)),
including, without limitation, those Permits listed in
Section 1.1(a)(vi) of the Disclosure Statement;
(vii) all business records (other than personnel
records unless consented to by the relevant employees),
files, ledgers, documents, correspondence, lists, plans,
drawings, creative materials, advertising and promotional
materials, studies, reports or other printed or written
materials used or held for use primarily in connection with
the Princeton Business;
(viii) all Owned Property (as defined in Section 4.16);
(ix) all computer software and programs including,
without limitation, executable code, source code, graphical
user interfaces, databases, all associated documentation,
whether electronic or paper copied form, which relate
primarily to the Princeton Business; and
(x) all prepaid rent, utilities, downpayments and/or
deposits from customers, and any other deposits and/or
prepaid items applicable primarily to the Princeton
Business.
(b) The Princeton Assets to be sold and transferred by Seller
at the Closing Time shall not include:
(i) cash, cash deposits and other cash equivalents,
including all bank accounts;
(ii) tax refunds;
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(iii) any assets located at the facilities of the
Princeton Business that are not owned by Seller, which
assets are identified in Section 1.1(b)(iii) of the
Disclosure Statement;
(iv) all rights of Seller under and pursuant to this
Agreement;
(v) any property, casualty, workers' compensation or
other insurance policy or related insurance service contract
relating to Seller or any of its Affiliates, and any rights
of Seller under any insurance policy or contract, including,
but not limited to, rights to any cancellation value;
(vi) proprietary or confidential non-technical business
information, books, files, papers, records, data and
policies of Seller or any of its Affiliates that do not
relate primarily to and are not material to continuing the
operation of the Princeton Business, including proprietary
business management software used by Seller or any of its
Affiliates, such as the corporate directories, management
procedures and guidelines, proprietary databases, accounting
and financial reporting formats, systems and procedures,
instructions and organization manuals;
(vii) any and all assets, rights and properties of
Seller or any of its Affiliates other than those used by the
Princeton Business in connection with the ownership and
operation of the Princeton Business;
(viii) subject to Section 4.17, all "Terex" marks,
including any and all trademarks or service marks, trade
names, registered and unregistered designs, slogans or other
like property or including the name "Terex," the Terex ▇▇▇▇
and/or logo, and any derivatives thereof; and
(ix) any accounts receivable that are written off in
accordance with the principles set forth on Exhibit A hereto
(such principles are referred to hereinafter as "Closing
GAAP").
(c) To the extent that any of the Princeton Assets are
non-assignable or non-transferable to Buyer, or non-assignable or
non-transferable without the consent of a third party, or shall be subject to
any option in any third party by virtue of a request for permission to assign or
transfer by reason of or pursuant to this Agreement or the transactions
contemplated hereby, this Agreement shall not constitute a contract to assign or
transfer the same if an attempted assignment or transfer would (i) constitute a
breach thereof or (ii) create rights in others not desired by Buyer. If Seller
shall have failed to procure consent to any such assignment or transfer or
waiver of such option prior to the Closing Time, Seller shall use its best
efforts (which shall not include the obligation to pay money or commence a legal
action) to make the use and benefit of such Princeton Asset available to Buyer
to the same extent, as nearly as may be possible, as if such impediment to
assignment or transfer did not exist. The provisions of this Section 1.1(c)
shall not in any way limit Buyer's rights under this Agreement in the event that
the Closing condition set forth in Section 7.1(i) is not satisfied.
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(d) Except as provided below in this Section 1.1(d) and
subject to Section 1.1(e), effective as of the Closing Time, Buyer shall assume
and become responsible for, and will thereafter pay, perform and discharge when
due all liabilities and obligations of Seller arising out of or relating to the
Princeton Assets, the Princeton Business, or the operation or ownership by
Seller (or any of its predecessors) of the Princeton Business, whether accrued,
absolute, contingent or otherwise (collectively, the "Assumed Princeton
Liabilities"). The Assumed Princeton Liabilities shall include, without
limitation, the following liabilities of Seller with respect to the Princeton
Business: (i) all of the obligations and liabilities of the Princeton Business
reflected on the Interim Balance Sheet (as defined in Section 4.8) which have
not been satisfied prior to the Closing Time, except for obligations and
liabilities relating to intercompany receivables or intercompany debt (the
liability for such intercompany receivables or intercompany debt being expressly
excluded from the liabilities assumed by Buyer under this Agreement); (ii) all
of the obligations and liabilities of the Princeton Business arising in the
ordinary course of business between the date of the Interim Balance Sheet and
the Closing Time, except for liabilities relating to intercompany receivables or
intercompany debt (the liability for such intercompany receivables or
intercompany debt being expressly excluded from the liabilities assumed by Buyer
under this Agreement); (iii) liabilities and obligations of Seller (relating to
the Princeton Business) under the contracts listed in Section 1.1(d) of the
Disclosure Statement, but only to the extent required to be paid, performed or
discharged after the Closing Time; (iv) liabilities and obligations of Seller
with respect to the employees of the Princeton Business which Buyer has agreed
to assume pursuant to this Agreement, excluding obligations of Seller under the
Terex Plans (as defined in Section 6.10) or under the "Seller Plans," as defined
in that certain Asset Purchase and Sale Agreement dated as of September 15, 1999
by and among Teledyne, Inc., Teledyne Princeton, Inc., ▇▇▇▇ USA, Inc., Teledyne
GmbH and Seller (the "1999 Purchase Agreement"); (v) liabilities or obligations
that are based upon products liability for products manufactured or sold by
Seller through the Princeton Business after the closing of the transactions
contemplated by the 1999 Purchase Agreement (the "1999 Closing"), except for
such liabilities or obligations that constitute Excluded Liabilities pursuant to
Section 1.1(e); (vi) all other debts, liabilities and obligations arising out of
or relating to events or transactions after the Closing Time in connection with
the operation of the Princeton Business or use of the Princeton Assets by Buyer,
but only to the extent not included in the Excluded Liabilities pursuant to
Section 1.1(e); (vii) the liabilities and obligations of Seller under the 1999
Purchase Agreement, but only to the extent such liabilities and obligations
under the 1999 Purchase Agreement constitute liabilities described in
subsections (i) through (vi) of this Section 1.1(d); (viii) any severance claims
made by Seller's employees working in the Princeton Business who are employed by
Buyer after the Closing Time and are terminated by Buyer within 120 days after
the Closing Date, except to the extent such claims are based on a contract right
or on a severance policy of Seller (the liability for any such claims based on a
contract right or severance policy of Seller being expressly excluded from the
liabilities assumed by Buyer under this Agreement); (ix) liabilities or
obligations under Environmental Laws (as defined in Section 4.18) which are
caused after the 1999 Closing; and (x) liabilities and obligations of the
Princeton Business reflected on the Closing Balance Sheet (as defined in Section
2.3(a)). Buyer understands and agrees that, from and after the Closing Time,
neither Seller nor any of its Affiliates including, without limitation,
Powerscreen International plc and PPM Deutschland GmbH, shall have any liability
or responsibility for any of the Assumed Princeton Liabilities, except only as
contemplated by Section 9.2(e).
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(e) Notwithstanding anything contained in this Agreement to
the contrary, Buyer shall not assume, and shall not be deemed to have assumed,
any of the following obligations or liabilities of Seller or of any Affiliate or
predecessor in interest of Seller, whether accrued, absolute, contingent or
otherwise:
(i) liabilities or obligations for Federal, state or
local income taxes payable by reason of or from the sale and
purchase of the Princeton Assets pursuant to this Agreement;
(ii) any liabilities or obligations under the Terex
Plans (as defined in Section 6.10) or the "Seller Plans" (as
defined in the 1999 Purchase Agreement);
(iii) any liabilities or obligations with respect to
taxes arising from the ownership or use of the Princeton
Assets and operation of the Princeton Business prior to the
Closing Time, except to the extent accrued on the Closing
Balance Sheet on a basis consistent with the 1999 Balance
Sheet (as defined in Section 4.8) and the Interim Balance
Sheet (as defined in Section 4.8);
(iv) any liabilities or obligations under Environmental
Laws (as defined in Section 4.18) which were caused prior to
the 1999 Closing, and any and all liabilities or obligations
under Environmental Laws which do not relate to operations
at the Owned Property or Leased Property (each as defined in
Section 4.16);
(v) any liabilities or obligations not related to the
ownership of the Princeton Assets or operation of the
Princeton Business;
(vi) subject to the terms, conditions and limitations
of this Agreement, any liabilities, costs and expenses
related to the transactions contemplated by this Agreement;
(vii) any liabilities or obligations with respect to
the litigation described in Section 4.15 of the Disclosure
Statement and any other litigation not described in Section
4.15 of the Disclosure Statement which is pending as of the
Closing Time;
(viii) any liabilities based upon products liability
related to products manufactured and sold prior to the 1999
Closing or sent out into the stream of commerce prior to the
1999 Closing;
(ix) any liabilities or obligations that (A) are based
upon products liability for products manufactured or sold
after the 1999 Closing and prior to the Closing Time and (B)
are based on accidents which occurred after the 1999 Closing
and prior to the Closing Time;
(x) all liabilities and obligations under the 1999
Purchase Agreement which do not constitute Assumed Princeton
Liabilities;
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(xi) any liabilities related to the noncompliance by
the parties hereto with any applicable bulk transfer law;
and
(xii) to the extent not already described in this
Section 1.1(e), those liabilities and obligations expressly
excluded from the definition of Assumed Princeton
Liabilities in subsections (i), (ii), (iii), (iv), (v),
(vi), (vii) and (viii) of Section 1.1(d).
The excluded liabilities and obligations described in this Section 1.1(e) (none
of which shall be assumed by Buyer) are collectively referred to hereinafter as
the "Excluded Liabilities."
ARTICLE 2
PURCHASE PRICE
2.1 The Purchase Price; Allocation. The aggregate purchase price for
the Princeton Assets shall be Fifty-One Million Eight Hundred Thousand U.S.
Dollars ($51,800,000) (the "Princeton Purchase Price"), subject to adjustment
pursuant to Section 2.3. The Princeton Purchase Price shall be allocated among
the Princeton Assets as set forth in Section 2.1 of the Disclosure Statement.
Buyer and Seller shall each report the federal, state and local income and other
tax consequences of the transactions contemplated by this Agreement in a manner
consistent with such allocation, including, without limitation, the preparation
and filing of Form 8594 (or any successor form or successor provision of any
future tax law) under section 1060 of the Internal Revenue Code of 1986, as
amended (the "IRC" or the "Code") with their respective federal income tax
returns for the taxable year that includes the date immediately preceding the
Closing Date, and neither Buyer nor Seller will take any position inconsistent
with such allocation unless otherwise required by applicable law. The Princeton
Purchase Price shall be payable as provided in Section 2.2.
2.2 Payment of Princeton Purchase Price. The Princeton Purchase Price
shall be paid in U.S. dollars no later than 2:00 p.m. United States eastern
standard time on the Closing Date (as defined in Section 3.1) in the following
manner: (a) an amount equal to Fifty-One Million Four Hundred Forty Thousand
U.S. Dollars ($51,440,000) shall be paid by wire transfer of immediately
available funds to an accounts or accounts designated in writing by Seller, and
(b) an amount equal to Three Hundred Sixty Thousand U.S. Dollars ($360,000)
shall be paid by wire transfer of immediately available funds into escrow in
accordance with the terms of the Escrow Agreement (as defined in Section 11.9).
2.3 Purchase Price Adjustment.
(a) On or before sixty (60) days following the Closing Date,
Buyer shall prepare and deliver to Seller a balance sheet of the Princeton
Business as of the close of business on the day immediately preceding the
Closing Date, which balance sheet shall be reported on by Buyer's independent
public accountants as having been properly prepared in accordance with Closing
GAAP (such balance sheet is referred to herein as the "Closing Balance Sheet").
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(b) During the 45-day period following Seller's receipt of the
Closing Balance Sheet, Seller and its independent public accountants will be
permitted to review the working papers of Buyer and Buyer's independent public
accountants relating to the Closing Balance Sheet and any financial records
relevant to the preparation of the Closing Balance Sheet. Buyer and Buyer's
independent public accountants will also be available from time to time to
discuss questions raised by Seller and its independent public accountants. The
Closing Balance Sheet shall become final and binding upon the parties on the
45th day following receipt thereof by Seller, unless Seller gives written notice
of its disagreement ("Notice of Disagreement") to Buyer prior to such date. If
Seller gives a Notice of Disagreement to Buyer, then within 15 days thereafter,
Seller shall give written notice (the "Second Notice") to Buyer specifying in
reasonable detail the nature of, and reasons for, any disagreement so asserted.
If a Notice of Disagreement is received by Buyer in a timely manner, then the
Closing Balance Sheet (as revised in accordance with clause (x) or (y) below)
shall become final and binding upon the parties on the earlier of (x) the date
the parties hereto resolve in writing any differences they have with respect to
any matter specified in the Notice of Disagreement or (y) the date any disputed
matters are finally resolved in writing by the Arbitrator (as defined in Section
2.3(c)).
(c) During the 30-day period following the delivery of a
Second Notice, Seller and Buyer shall seek in good faith to resolve any
differences which they may have with respect to any matter specified in the
Notice of Disagreement. At the end of such 30-day period, Seller and Buyer shall
submit to an arbitrator (the "Arbitrator") for review and resolution any and all
matters which remain in dispute. The Arbitrator shall be Ernst & Young LLP, or
if such firm is unable or unwilling to act, such other person, entity or firm as
shall be agreed upon by Buyer and Seller. The Arbitrator shall render a decision
resolving the matters submitted to the Arbitrator within 30 days of receipt of
such submission. The decision of the Arbitrator shall be final and binding on
the parties absent manifest error. The cost of any arbitration (including the
fees of the Arbitrator) pursuant to this Section 2.3(c) shall be borne 50% by
Buyer and 50% by Seller.
(d) Subject to the materiality thresholds described in the
second and third sentences of this Section 2.3(d), the Princeton Purchase Price
shall be subject to adjustment pursuant to this Section 2.3 in the event that
the Relevant Closing Balance Sheets (as defined in Section 11.9) indicate that
Total Equity (as defined in Section 11.9) as of the close of business on the day
before the Closing Date is greater than or less than the Reference Amount (as
defined in Section 11.9). If the Relevant Closing Balance Sheets indicate that
Total Equity is less than the Reference Amount by more than One Hundred Thousand
U.S. Dollars ($100,000 U.S.), Seller shall pay or cause to be paid to Buyer (for
Buyer's own account and, to the extent necessary, as agent for Partek Cargotec
Holding Netherlands B.V. and Partek Cargotec Holding Ltd), an amount equal to
the amount by which the Reference Amount exceeds Total Equity. If the Relevant
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Closing Balance Sheets indicate that Total Equity is greater than the Reference
Amount by more than One Hundred Thousand U.S. Dollars ($100,000 U.S.), Buyer
shall pay or cause to be paid to Seller (for Seller's own account and, to the
extent necessary, as agent for Powerscreen International plc and Holland Lift
International B.V.), an amount equal to the amount by which Total Equity exceeds
the Reference Amount. Payment of the purchase price adjustment contemplated by
this Section 2.3, if any, shall be made within three (3) business days after
determination of the amount of the adjustment pursuant to this Section 2.3 by
wire transfer of immediately available funds. The parties acknowledge and agree
that (i) the Reference Amount is based on a targeted Princeton Net Asset Value
(as defined in Section 11.9) of Six Million Eight Hundred Thousand U.S. Dollars
($6,800,000), a targeted ▇▇▇▇▇▇▇ Net Equity (as defined in Section 11.9) of Two
Million Eight Hundred Sixty-Eight Thousand U.S. Dollars ($2,868,000), and a
targeted ▇▇▇▇ Net Equity (as defined in Section 11.9) of Four Million One
Hundred Nineteen Thousand U.S. Dollars ($4,119,000) (or $4,641,000 if the PPM
Assets (as defined in Section 11.9) are sold pursuant to the ▇▇▇▇ Purchase
Agreement at the same time as the closing of the purchase and sale of the shares
of Terex B.V. thereunder), and (ii) the amount of any purchase price adjustment
pursuant to this Section 2.3 shall be allocated among the selling parties under
this Agreement, the ▇▇▇▇▇▇▇ Purchase Agreement (as defined in Section 11.9) and
the ▇▇▇▇ Purchase Agreement (as defined in Section 11.9) or the purchasing
parties under each such agreement, as the case may be, in proportion to the
degree to which each of the actual Princeton Net Asset Value, actual ▇▇▇▇▇▇▇ Net
Equity, and actual ▇▇▇▇ Net Equity is greater than or less than the respective
targeted amount. Any disputes concerning the allocation of the purchase price
adjustment, if any, shall be submitted to the Arbitrator and, within 30 days of
receipt of such submission, the Arbitrator shall render a decision thereon. Such
decision shall be final and binding on the parties absent manifest error. The
cost of any arbitration (including the fees of the Arbitrator) pursuant to this
Section 2.3(d) shall be borne 50% by Buyer and 50% by Seller.
ARTICLE 3
CLOSING
3.1 Closing.
(a) The closing of the sale and purchase of the Princeton
Assets provided for in Article 1 (the "Closing") shall take place at the offices
of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or at such other place as the parties may agree in
writing), beginning at 10:00 a.m. on the later of (i) the 30th day after the
date of this Agreement (or the 45th day if prior to expiration of such 30-day
period, Sellers receive a written notice from Buyer stating that despite Buyer's
good faith diligent efforts to complete its confirmatory due diligence (as
described in Section 6.2), Buyer has been unable to complete such confirmatory
due diligence within such 30-day period, or (ii) the fifth business day after
the satisfaction or waiver of the conditions specified in Article 7. The date on
which the Closing is held is referred to hereinafter the "Closing Date." The
Closing shall be deemed effective at 11:59 p.m. United States eastern standard
time on the day immediately preceding the Closing Date, and such effective time
shall be referred to herein as the "Closing Time."
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(b) At the Closing, Seller shall deliver to Buyer duly
executed instruments of transfer and assignment of the Princeton Assets (in
forms reasonably satisfactory to Buyer), sufficient to vest in Buyer legal and
valid title to the Princeton Assets, and Buyer shall deliver to Seller and the
Escrow Agent (i) the Princeton Purchase Price in the manner set forth in Article
2 and (ii) duly executed instruments of assumption (in forms reasonably
satisfactory to Buyer) sufficient to effect the assumption of the Assumed
Princeton Liabilities.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
4.1 Organization. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation with all requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its business as now being
conducted. Section 4.1 of the Disclosure Statement sets forth the jurisdictions
in which employees of the Princeton Business or any material amount of assets
used or relating primarily to the Princeton Business are situated.
4.2 Authorization. The execution, delivery and performance of this
Agreement by Seller has been duly authorized by all requisite corporate action
of Seller. This Agreement constitutes a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
in general and subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
4.3 Reserved.
4.4 Consents of Third Parties. Except as set forth in Section 4.4 of
the Disclosure Statement, the execution, delivery and performance of this
Agreement by Seller will not (a) violate or conflict with the certificate of
incorporation or by-laws of Seller; (b) conflict with, or result in the breach
of, termination of, or give rise to any Lien (as defined in Section 4.7) or
constitute a default under, any material agreement, understanding or commitment
to which Seller is a party or by which Seller is bound; or (c) constitute a
violation of any law, regulation, rule, judgment or decree applicable to Seller,
other than, in the case of clauses (b) and (c) of this sentence which,
individually or in the aggregate, would not have a material adverse effect on
the Princeton Business. No consent, approval or authorization of any
Governmental Authority is required on the part of Seller in connection with the
execution, delivery and performance of this Agreement, except (a) filings
required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇
"▇▇▇ ▇▇▇") and filings in connection with the maintenance of qualification to do
business in other jurisdictions (collectively, the "Regulatory Filings"), (b) as
set forth in Section 4.4 of the Disclosure Statement, and (c) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not have a material adverse effect on the
Princeton Business.
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4.5 Reserved.
4.6 Reserved.
4.7 Title to Princeton Assets. Seller has good title, of record and
beneficially, to all of the Princeton Assets and at the Closing, Seller will
transfer and deliver to Buyer legal and valid title to the Princeton Assets,
free and clear of all claims, liens, security interests, rights of first
refusal, options to purchase or other encumbrances (collectively, the "Liens"),
other than (a) Liens created by Buyer, (b) Liens disclosed in Sections 4.7 or
4.16 of the Disclosure Statement, (c) with respect to Owned Property, reflected
in any title insurance policies listed in Section 4.16 of the Disclosure
Statement (true and correct copies of which have been made available to Buyer),
(d) with respect to Owned Property, imperfections of title, easements, pledges,
charges, restrictions and encumbrances, including, without limitation, survey
matters, and Liens, if any, that do not materially detract from the value of the
property subject thereto or materially interfere with the manner in which it is
currently being used, and (e) taxes and general and special assessments not in
default and payable without penalty or interest, provided that such taxes and
general and special assessments are accrued in accordance with Closing GAAP on
the Closing Balance Sheet.
4.8 Financial Statements. Seller has delivered to Buyer copies of the
following financial statements (collectively, the "Financial Statements"): (a)
unaudited balance sheet for the Princeton Business as of December 31, 1999,
income statement of the Princeton Business for the period between January 1,
1999 and July 31, 1999, and income statement of the Princeton Business for the
period between November 11, 1999 and December 31, 1999 (collectively, the "1999
Financial Statements"); and (b) the unaudited balance sheet and related income
statement of the Princeton Business as of and for the four months ended April
30, 2000 (the balance sheet as of December 31, 1999 called, the "1999 Balance
Sheet", and the unaudited balance sheet for the four-month period ended April
30, 2000 called, the "Interim Balance Sheet"). True and correct copies of the
Financial Statements are set forth in Section 4.8 of the Disclosure Statement.
The Financial Statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied and maintained
throughout the periods indicated (except that the Financial Statements as of
April 30, 2000 have been prepared without footnote disclosures) and fairly
present in all material respects the financial position and results of
operations for the entities described therein at the dates and for the periods
indicated therein (subject in the case of Financial Statements as of April 30,
2000 to normal year-end adjustments consistent with the 1999 Financial
Statements). There have been no material changes to the accounting principles
used in the financial statements of the Princeton Business since November 11,
1999 (the date of the 1999 Closing), other than those set forth in Section 4.8
of the Disclosure Statement.
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4.9 Absence of Certain Changes; Liabilities.
(a) Except as set forth in Section 4.9 of the Disclosure
Statement, since the date of the 1999 Balance Sheet, Seller in connection with
its operation of the Princeton Business has not suffered any material adverse
change in its assets, results of operations or financial condition.
(b) To the knowledge of Seller, there are no liabilities or
obligations of Seller in connection with its operation of the Princeton Business
of a kind required in accordance with GAAP to be reflected in the Financial
Statements which are not so reflected, except (i) liabilities reflected in the
1999 Financial Statements and Interim Balance Sheet, (ii) liabilities or
obligations which arose after the date of the 1999 Balance Sheet in the ordinary
course of business, and (iii) liabilities described in Section 4.9 of the
Disclosure Statement.
(c) Since the date of the 1999 Balance Sheet, Seller has
operated the Princeton Business in the ordinary course and consistent with
Seller's past practice and, except as set forth in Section 4.9 of the Disclosure
Statement, there has not been:
(i) with respect to the Princeton Business, any damage,
destruction or loss (whether or not covered by insurance)
that has had a material adverse effect on the Princeton
Business;
(ii) any material transaction by Seller in connection
with its operation of the Princeton Business other than in
the ordinary course of business or as otherwise permitted or
contemplated by this Agreement;
(iii) with the respect to the Princeton Business, any
increase in compensation or benefits payable under existing
employment agreements or severance or termination pay
policies with respect to of Seller's employees other than
(A) increases or bonuses in the ordinary course of business
and consistent with Seller's past practice, (B) increases or
grants required by contracts disclosed pursuant hereto or by
applicable law, or (C) increases, agreements and bonuses
disclosed in Sections 4.13 and 4.14 of the Disclosure
Statement;
(iv) any employment, bonus, deferred compensation, or
severance agreement entered into with any of the employees
of Seller working primarily in the Princeton Business, other
than employment agreements terminable at will and other than
as disclosed in Section 4.13 of the Disclosure Statement;
(v) any lease, transfer, assignment, abandonment or
other disposition of any material Princeton Asset outside
the ordinary course of business;
(vi) any intercompany loans or payments, dividends or
transfers of assets by Seller with respect to the Princeton
Business which are inconsistent with Seller's past practice
and Seller's overall corporate cash and tax management
practices or are otherwise outside the ordinary course of
business;
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(vii) any single capital expenditure or series of
related capital expenditures by Seller (with respect to the
Princeton Business) in excess of $100,000 U.S. other than in
the ordinary course of business;
(viii) any material change or modification of the
accounting methods or practices of Seller with respect to
the Princeton Business, or of the banking arrangements of
Seller with respect to the Princeton Business;
(ix) with respect to the five largest customers of the
Princeton Business for the period beginning on the date of
the 1999 Closing and ending on the date of this Agreement,
all of which customers are listed in Section 4.9(c)(ix) of
the Disclosure Statement, Seller has not received oral or
written notice or notices of any dispute or termination of
relationship which individually or in the aggregate would
have a material adverse effect on the Princeton Business;
(x) with respect to the five largest vendors of the
Princeton Business for the period beginning on the date of
the 1999 Closing and ending on the date of this Agreement,
each of which are listed in Section 4.9(c)(x) of the
Disclosure Statement, Seller has not received oral or
written notice or notices of any dispute or termination of
relationship which individually or in the aggregate would
have a material adverse effect on the Princeton Business;
(xi) any acceleration or delay in the manufacture,
shipment or sale of inventory, the collection of accounts
receivable or notes receivable, the payment of accounts or
notes payable, the sale of accounts receivable, or any other
action outside the ordinary course of business, which
acceleration, delay or other action is intended to
artificially increase the amount of cash in the Princeton
Business or artificially increase Princeton Net Asset Value
(as defined in Section 11.9) as calculated from the Closing
Balance Sheet; and
(xii) any agreement or commitment by Seller to do any
of the foregoing.
4.10 Taxes. Except as disclosed in Section 4.10 of the Disclosure
Statement, and except with respect to taxes or Tax Returns (defined below) which
individually involve $1,000 or less, as of the date hereof, (a) all federal,
state, local, domestic and foreign tax returns required to be filed with respect
to the Princeton Business (collectively, the "Tax Returns") have been filed in a
timely manner (taking into account all extensions of due dates), and all taxes
shown as due thereon have been paid; (b) there is no agreement, waiver or
consent providing for an extension of time with respect to the assessment of any
tax or deficiency against the Princeton Business; and (c) no deficiencies for
any income taxes in respect of the Princeton Business have been asserted in
writing against Seller, which remain unpaid. To the knowledge of Seller, except
with respect to taxes which individually involve $1,000 or less, the Tax Returns
reflect all taxes due and payable with respect to the periods covered thereby
and there are no other tax liabilities, deficiencies, interest or penalties
payable or asserted against Seller to the extent such liability, deficiency,
interest or penalty affects the Princeton Assets or the Princeton Business.
Except as set forth in Section 4.10 of the Disclosure Statement, accruals for
taxes shown on the 1999 Balance Sheet cover liabilities for all taxes
attributable to periods ending on or before such date in accordance with GAAP,
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and since such date Seller has not incurred any liability for taxes with respect
to the Princeton Business that is unusual in nature or amount in any material
respect. No authority in a jurisdiction where Seller (with respect to the
Princeton Business) does not file Tax Returns has made a written claim or given
written notice that Seller (with respect to the Princeton Business) is subject
to taxation by that jurisdiction.
4.11 Material Contracts, Etc. Buyer has been provided access to, or
correct and complete copies of, and Section 4.11 of the Disclosure Statement
sets forth a list, as of the date of this Agreement, of (a) all commitments and
agreements for the purchase of any materials, supplies, machinery, capital
assets or services that involve an expenditure by Seller in connection with its
operation of the Princeton Business of more than $50,000 U.S. for any one
commitment or agreement or series of related commitments or agreements, other
than such commitments or agreements entered into in the ordinary course
consistent with past practice and which can be canceled by Seller without
liability, premium or penalty on 90 days' or less notice; (b) all personal
property leases under which Seller is either lessor or lessee in connection with
its operation of the Princeton Business and which involve annual payments or
receipts of $50,000 or more; (c) all other orders, leases, commitments,
agreements and instruments (including, but not limited to, mortgages, indentures
and other agreements and instruments relating to indebtedness for borrowed
money) affecting the Princeton Business or the Princeton Assets, in each case,
that involve annual payments or receipts by Seller in any 12-month period of
more than $50,000; (d) all government contracts; (e) any joint venture,
partnership or similar agreements to which Seller (with respect to the Princeton
Business) is a party; (f) contracts limiting the right of Seller (with respect
to its operation of the Princeton Business) to compete or do business in any
territory; (g) contracts and arrangements providing for any severance,
change-of-control, or stay in place payment, whether or not entered into as a
result of the transactions contemplated by this Agreement; (h) all license
agreements, assignments or contracts (whether as licensor, licensee, assignor,
assignee or otherwise) relating to any of the Intellectual Property Rights (as
defined in Section 4.17) to the extent not listed in Section 4.17 of the
Disclosure Statement; (i) any contract or agreement to which Seller (with
respect to the Princeton Business) is a party which relates to clean-up,
abatement, or any other actions in connections with the remediation of any
liabilities relating to Hazardous Materials, to the extent not listed in Section
4.18 of the Disclosure Statement; (j) any other agreement that is material to
the Princeton Business which involves the payment or receipt of consideration by
Seller in excess of $50,000 per annum; (k) any contract or agreement to which
Seller (with respect to the Princeton Business) is a party which relates to the
distribution of products and/or services of Seller with respect to the Princeton
Business; and (l) any modification of any of the foregoing. Notwithstanding the
foregoing, Section 4.11 of the Disclosure Statement shall not be required to
list orders for the purchase of raw materials, parts, components or inventories
or the sale of products, in each case, entered into in the ordinary course of
business and consistent with past practice.
4.12 Absence of Defaults. Each of the contracts listed or required to
be listed in Sections 4.11 and 4.13 of the Disclosure Statement (including each
contract that would be required to be listed in Section 4.11 or Section 4.13 of
the Disclosure Statement if it was not listed in Section 4.17 or Section 4.18 of
the Disclosure Statement), and each contract of a type described in Sections
4.11 and 4.13 of this Agreement (including each contract that would be required
to be listed in Section 4.11 or Section 4.13 of the Disclosure Statement if it
was not listed in Section 4.17 or Section 4.18 of the Disclosure Statement) that
is entered into on or after the date of this Agreement (each, a "Material
13
Contract") constitutes a valid and binding obligation of Seller and, to the
knowledge of Seller, the other parties thereto, and is in full force and effect.
Except as set forth in Section 4.12 of the Disclosure Statement, Seller (to the
extent such contract relates to the Princeton Business) is not in default in any
material respect under any Material Contract or under any material outstanding
vendor or customer orders and, to the knowledge of Seller, no event has occurred
or exists which, with or without the passage of time or the giving of notice or
both, would constitute such a material default or breach by Seller (to the
extent such contract relates to the Princeton Business). With respect to any
contract not listed in Section 4.11 or Section 4.13 of the Disclosure Statement
to which Seller (with respect to the Princeton Business) is a party, Seller is
not in default, nor do circumstances exist which, with or without the passage of
time or the giving of notice or both, would cause such a default, the result of
which is likely to have a Material Adverse Effect.
4.13 Agreements Regarding Employees. Except as set forth in Section
4.13 of the Disclosure Statement, as of the date of this Agreement, Seller in
connection with its operation of the Princeton Business is not a party to or
bound by any (a) pension, profit sharing, stock option, employee stock purchase
or other plan or arrangement providing for deferred or other compensation to the
employees of Seller working in the Princeton Business, or any other material
benefit plan or similar arrangement with the employees of Seller working in the
Princeton Business; (b) employment agreement, arrangement or understanding; or
(c) any collective bargaining or other labor agreement. Except as set forth in
Section 4.13 of the Disclosure Statement, there are no existing, or to the
knowledge of Seller threatened, (x) employee strikes, work stoppages, lockouts
or material labor disputes or (y) to the knowledge of Seller, any union
organizing activity or work slow-downs, involving the employees of Seller
working in the Princeton Business.
4.14 Employee Benefit Plans.
(a) Except as set forth in Section 4.14 of the Disclosure
Statement, as of the date of this Agreement there are no "employee benefit
plans" (as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended), pension, welfare benefit, stock option, stock
purchase, deferred compensation, severance incentive or other fringe benefit
plan or arrangement maintained or contributed to by Seller for the benefit of
employees of the Princeton Business.
(b) None of the assets of Seller (with respect to the
Princeton Business) are subject to any lien, constructive or otherwise, arising
under ERISA section 4068.
(c) Section 4.14 of the Disclosure Statement lists all plans,
agreements or programs to provide material fringe or other benefits to the
employees of Seller working primarily in the Princeton Business including, but
not limited to, section 125 cafeteria plans or flexible spending arrangements,
dependent care plans, vacation, holiday, sick leave, disability, retirement,
stock bonus, savings, thrift, bonus, stock appreciation, deferred compensation,
severance, employment, consulting, medical, hospitalization, welfare, life
insurance and other insurance plans, group insurance or other benefit plans,
agreements or programs.
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(d) Except as disclosed in Section 4.14 of the Disclosure
Statement, Seller (with respect to the Princeton Business) is not obligated to
contribute to any multi-employer plan within the meaning of ERISA section 3(37).
(e) Except as set forth in Section 4.14 of the Disclosure
Statement, and except as may otherwise be required by Part 6 of Title I of ERISA
or by applicable state law, neither Seller nor any employee benefit plan
maintained or contributed to by Seller, provides or has any obligation to
provide (or contribute towards the cost of) post-retirement welfare benefits
with respect to current or former employees of the Princeton Business or any
other entity, including, without limitation, post-retirement medical, dental,
life insurance, severance, or any other similar benefit, whether provided on an
insured or self insured basis.
4.15 Litigation; Compliance with Laws.
(a) Except as set forth in Section 4.15 of the Disclosure
Statement, there is no suit, litigation, proceeding or administrative action
pending, or to the knowledge of Seller, threatened in writing, or any order,
injunction or decree outstanding, against Seller in connection with its
operation of the Princeton Business that, if adversely determined, would have a
material adverse effect on the Princeton Business. There are no judicial or
administrative actions, proceedings or investigations pending or, to the
knowledge of Seller, threatened that question the validity of this Agreement or
the transactions contemplated hereby or that, if adversely determined, would
have a material adverse effect upon Seller's ability to enter into or perform
its obligations under this Agreement.
(b) Except as set forth in Section 4.15 of the Disclosure
Statement, and except with respect to compliance with Environmental Laws which
is dealt with exclusively in Section 4.18, as of the date hereof, Seller in
connection with its operation of the Princeton Business is and has been in
compliance in all material respects with all applicable federal, state, local
and foreign laws, ordinances, rules, regulations, judgments, decrees and orders
("Laws") of any governmental entity or authority having jurisdiction over the
Princeton Business and/or the Princeton Assets (each, a "Governmental
Authority"). To the knowledge of Seller, Seller (with respect to its operation
of the Princeton Business) has no liability (whether accrued, absolute,
contingent, direct or indirect) for past violations of any law, ordinance, code,
rule or regulation, except as would not have a material adverse effect on the
Princeton Business. All material reports and returns (other than Tax Returns
which are covered exclusively by Section 4.10) required to be filed by Seller
(with respect to the Princeton Business) with any Governmental Authority have
been filed and were accurate and complete in all material respects when filed.
To the knowledge of Seller, no payments of cash or other consideration have been
made to any person, entity or government by any agent, employee, officer,
director, shareholder or other person or entity on behalf of Seller which were
unlawful under the laws of the United States or any state or other Governmental
Authority.
4.16 Real Property.
(a) Section 4.16 of the Disclosure Statement sets forth a
correct and complete list of all real property (i) owned by Seller and used
15
primarily in the Princeton Business (the "Owned Property"), and (ii) leased by
Seller and used primarily in the Princeton Business (the "Leased Property").
Seller has good and marketable title to the Owned Property free and clear of all
Liens, other than (i) those reflected in any title insurance policies listed in
Section 4.16 of the Disclosure Statement (true and correct copies of which have
been made available to Buyer by Seller); (ii) imperfections of title, easements,
pledges, charges, restrictions and encumbrances, including, without limitation,
survey matters and Liens, if any, that do not materially detract from the value
of the property subject thereto or materially interfere with the manner in which
it is currently being used; (iii) taxes and general and special assessments not
in default and payable without penalty or interest and which are accrued on the
Closing Balance Sheet in accordance with Closing GAAP; and (iv) Liens disclosed
in Section 4.16 of the Disclosure Statement. Except as set forth in Section 4.16
to the Disclosure Statement, there are no leases, contracts, options or
agreements relating to or affecting the Owned Property to which Seller is a
party or by which Seller (with respect to the Owned Property) is bound or
affected, except those which are terminable on notice of 90 days or less without
liability, premium or penalty.
(b) Except as set forth in Section 4.16 of the Disclosure
Statement, there are no conditions on the Owned Property or the Leased Property
(including, without limitation, all buildings, systems, fixtures, structures and
improvements thereon) which (i) constitute a material health or safety hazard,
or (ii) materially reduce the value of any portion of the Owned Property or the
Leased Property to a prospective buyer with knowledge of the condition. All
buildings, systems, fixtures, structures and improvements leased or used by
Seller (in connection with the Princeton Business) are in working order and are
adequate in condition, quality and quantity for the normal operation of the
Princeton Business as presently conducted. Seller (with respect to Owned or
Leased Properties) possesses easements and rights, including without limitation,
easements for all utilities, services, roadways, and other means of ingress and
egress, necessary to conduct the Princeton Business as presently conducted. The
Owned Property and the Leased Property comply in all material respects and are
being operated in all material respects in compliance with all applicable
covenants, conditions and restrictions of record.
(c) Neither the whole or any portion of the Owned Property or
the Leased Property has been condemned, requisitioned or otherwise taken by any
public authority, no written notice of such condemnation, requisition or taking
has been served upon Seller (with respect to Owned or Leased Properties used
primarily by the Princeton Business) and, to the knowledge of Seller, no such
condemnation, requisition or taking is threatened or contemplated. To the
knowledge of Seller, there are no proposed actions by any governmental agencies
or authorities which have or may create a Lien on the Owned Property or the
Leased Property or any portion thereof. Except as reserved on the Financial
Statements or on the Closing Balance Sheet, there are no unpaid charges for
special assessments on any of the Owned Property. No public improvements have
been commenced and, to the knowledge of Seller, there are no public improvements
planned which have resulted or may reasonably be expected to result in special
assessments against or otherwise adversely affect the use of any of the Owned
Property. No governmental agency has issued any work order, and there are no
outstanding court orders, requiring repairs, alterations or corrections of any
condition on the Owned Property which are material in nature or amount. Seller
(with respect to Owned or Leased Properties) has not received nor does Seller
(with respect to Owned or Leased Properties) have knowledge of any written
16
notice from any department or division of federal, state or local government
relating to any violation of any fire, zoning, building, health or other statute
code, regulation or ordinance or other governmental rule with respect to the
Owned Property or Leased Property that has not previously been corrected other
than a violation which will not have a material adverse effect on the Princeton
Business.
(d) Section 4.16 of the Disclosure Statement sets forth (i) a
true and correct summary of capital expenditures made with respect to the
Princeton Business for fiscal year 1999 and for the four-month period ending
April 30, 2000, and (ii) a true and correct summary of budgeted capital
expenditures for fiscal year 2000 for the Princeton Business.
4.17 Patents and Trademarks. Seller has rights to use all patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, licenses and rights which are necessary for use in connection
with the Princeton Business (individually, an "Intellectual Property Right," and
collectively, the "Intellectual Property Rights"); provided, however, that with
respect to Intellectual Property Rights relating to products or components
supplied to Seller by third party vendors, Seller represents and warrants only
that, except as set forth in Section 4.17 of the Disclosure Statement, Seller
has been granted the right to use such products or components by the respective
vendors and that Seller has no knowledge that the use of such products and/or
components infringes on the rights of any person or entity. Seller has rights to
use all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and rights which are currently
being used in connection with the Princeton Business; provided, however, that
Seller makes no representation as to its ownership of the name "Piggyback" other
than in connection with truck mounted forklifts. Section 4.17 of the Disclosure
Statement sets forth a list of all material inventions which are the subject of
issued letters patent or applications therefor and all material trade and
service marks which have been registered or for which an application for
registration is pending, in each case which are owned and used or held for use
by Seller in connection with the Princeton Business (collectively, the "Patent
Rights"). Section 4.17 of the Disclosure Statement also lists all other items
comprising the Intellectual Property Rights. Except as set forth in Section 4.17
of the Disclosure Statement, Seller in connection with its operation of the
Princeton Business (a) is not a defendant in any claim, suit, action or
proceeding relating to their respective businesses which involves a claim of
infringement of any patents, trademarks or service marks, and (b) has no
knowledge of any existing infringement by another person of any of the material
Intellectual Property Rights. Except as disclosed in Section 4.17 of the
Disclosure Statement, no Intellectual Property Right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the
use thereof by Seller (in connection with the operation of the Princeton
Business) or restricting the licensing thereof by Seller to any person in any
material respect.
4.18 Environmental Matters. Except as described in Section 4.18 of the
Disclosure Statement, (a) to the knowledge of Seller, Seller in connection with
its operation of the Princeton Business has made all filings and possesses all
permits, licenses, other authorizations, registrations and other governmental
consents material to its business ("Environmental Permits") which are required
under any applicable Environmental Laws (as defined in this Section 4.18) and
all such Environmental Permits are in full force and effect; (b) to the
knowledge of Seller, there is no condition with respect to any of the Princeton
Assets which would reasonably be expected to subject Buyer to fines, penalties
17
or enforcement actions due to violations of Environmental Laws or Environmental
Permits or which would reasonably be expected to result in a material liability
to Buyer under any requirements of Environmental Laws or Environmental Permits;
(c) there are currently no lawsuits, orders, consent decrees, administrative
enforcement actions, environmental cleanup proceedings or written notices of
violation pending or, to the knowledge of Seller, threatened, with respect to
compliance or in connection with Environmental Laws affecting the Princeton
Assets; (d) the operation of the Princeton Business by Seller is, and within
applicable statutes of limitation, has been in compliance in all material
respects with applicable Environmental Laws; and (e) to the knowledge of Seller,
there are no Hazardous Materials (as defined in this Section 4.18) located in,
at, on, from or under the Owned Real Property or Leased Real Property that would
reasonably likely result in material liabilities of, or material losses,
material damages or material costs to Seller under any Environmental Law.
Section 4.18 of the Disclosure Statement lists all environmental audits,
inspections, assessments, investigations or similar reports in the possession of
Seller or of which Seller is aware relating to Owned Real Property, Leased Real
Property or any other assets of the Princeton Business.
The term "Environmental Law" or "Environmental Laws," as used
in this Agreement, means all foreign, federal, state and local laws, including
statutes, rules, regulations, and governmental orders and all applicable common
law relating to the discharge, release, emission, dispersal, spilling, leaking,
dumping or migration of Hazardous Materials or otherwise relating to the
protection of the environment, the management of Hazardous Materials or the
protection of employee health including, but not limited to, the Solid Waste
Disposal Act, the Clean Air Act, the Water Pollution Control Act, the Resource
Conservation and Recovery Act of 1976, the Comprehensive, Environmental
Response, Compensation, and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the Toxic Substances Control Act, and the Hazardous
Materials Transportation Act (all as the same may have been amended and as in
effect from time to time through the Closing).
The term "Hazardous Materials," as used in this Agreement,
means all hazardous or toxic substances, chemicals, liquids, gases, vapors,
fill, soils, wastes and materials; any pollutants, particulate matter,
effluents, emissions, or contaminants which are toxic or hazardous (including,
without limitation, petroleum products and asbestos); and any other similar
substances or materials which are regulated under Environmental Laws.
4.19 Inventory. The inventory of Seller in connection with the
operation of the Princeton Business is of a quality and quantity usable in the
ordinary course of business of Princeton, and none of which is obsolete, below
standard quality, damaged or defective, subject only to the reserve for
inventory write down set forth in the 1999 Financial Statements or the Interim
Balance Sheet (as adjusted for the passage of time) through the Closing Time in
accordance with GAAP and in accordance with Seller's past practice. The value of
all inventory items, including finished goods, work-in-process and raw
materials, has been recorded on the books of Seller (maintained with respect to
the Princeton Business) at the lower of cost or market in accordance with GAAP
consistently applied. Section 4.19 of the Disclosure Statement sets forth a
summary of the inventory valuation principles used by Seller in connection with
the Princeton Business.
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4.20 Receivables. All receivables of Seller in connection with its
operation of the Princeton Business which are reflected on the Financial
Statements and those existing as of the Closing Time represent valid claims from
bona fide, arm's length sales of goods and services actually made by Seller in
the ordinary course of business. To the knowledge of Seller, all such accounts
and notes receivable are collectable (or have been collected) in the ordinary
course of business using normal collection practices at the aggregate recorded
amounts thereof (net of reserves on the 1999 Financial Statements and Interim
Balance Sheet, as adjusted for the passage of time through the Closing Time in
accordance with GAAP and the past practice of Seller.
4.21 Brokers and Finders. Seller has not employed any broker or finder
or incurred any liability for any brokerage fees, commissions or finder's fees
in connection with this Agreement or the transactions contemplated herein.
4.22 Disclaimer. BUYER ACKNOWLEDGES THAT SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER,
OTHER THAN THE REPRESENTATIONS AND WARRANTIES OF SELLER SPECIFICALLY SET FORTH
IN THIS ARTICLE 4, AND BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF. IN ANY
EVENT, SELLER MAKES NO IMPLIED WARRANTIES OF MERCHANTABILITY, SUITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY, WITH RESPECT TO ANY OF THE
TANGIBLE ASSETS BEING SO SOLD, OR AS TO THE CONDITION OR WORKMANSHIP THEREOF OR
THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT.
4.23 Certain Transactions. Except as set forth in Section 4.23 of the
Disclosure Statement, Seller (with respect to the Princeton Business) does not
owe any amount to, nor does it have any outstanding contract with or commitment
to, any of the shareholders, directors, officers, employees or consultants of
Seller (other than compensation for current services not yet due and payable and
reimbursement of expenses arising in the ordinary course of business), and no
such person owes any amount to Seller with respect to the Princeton Business.
4.24 Books and Records. The books and financial records of the
Princeton Business are complete and correct in all material respects and since
the date of the 1999 Closing have been maintained in all material respects in
accordance with applicable sound business practices, laws and other
requirements.
4.25 Year 2000 Compliance. To the knowledge of Seller, except as set
forth in Section 4.25 of the Disclosure Statement, all software, computer,
communications, electronic or other hardware or equipment, including any
imbedded software or firmware, used in the Princeton Business (collectively,
"Year 2000 Assets") correctly recognize, calculate, sort, store, display and
otherwise process data involving dates prior to, during and after the Year 2000
A.D. and the operation and functionality of the Year 2000 Assets was and is in
no way adversely affected by the occurrence or passing of the calendar date
January 1, 2000.
4.26 Product Warranty. Section 4.26 of the Disclosure Statement sets
forth a description of all warranties provided by Seller with respect to the
Princeton Business and a statement of the aggregate cost of remedying all
warranty claims made by customers of Princeton for the year ending December 31,
19
1999, together with a summary of outstanding warranty claims as of April 30,
2000, which summary indicates the product involved, the type of claims and the
estimated cost of remedying the claims. Except as set forth in Section 4.26 of
the Disclosure Statement, there are no outstanding warranty claims with respect
to Princeton and Seller has no notice or knowledge of threatened or potential
warranty claims other than those arising in the ordinary course since the date
of the Interim Balance Sheet which are usual in nature and amount.
4.27 Sufficient Assets. There are no assets (including, without
limitation, leases and licenses) used in the Princeton Business which (a) are
material to the operation of the Princeton Business as presently conducted and
(b) are not included in the Princeton Assets transferred to Buyer hereunder.
4.28 Insurance. Section 4.28 of the Disclosure Statement sets forth a
list and brief description of all policies or binders of fire, liability
(including, without limitation, products liability), workers compensation,
vehicular, title and other insurance held by or on behalf of Seller with respect
to the Princeton Business. With respect to each such binder or policy so listed,
Section 4.28 of the Disclosure Statement also lists the limits, deductibles, and
term of coverage. Such policies and binders are outstanding and in full force
and effect. Seller is not in default in any material respect under any such
policy or binder so listed and, to the knowledge of Seller, no event has
occurred or exists which, with or without the passage of time or the giving of
notice or both, would constitute such a material default or breach by Seller
under such policy or binder. Seller has not received any notice of cancellation
or nonrenewal of, or disallowance of any claim under, any such policy or binder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
5.1 Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Wisconsin with all
requisite corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as now being conducted.
5.2 Authorization. The execution, delivery and performance of this
Agreement by Buyer have been duly authorized by all requisite corporate action
of Buyer. This Agreement constitutes the valid and binding obligation of Buyer
enforceable against it in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.3 Consents of Third Parties. The execution, delivery and performance
of this Agreement by Buyer will not (a) violate or conflict with the articles of
20
incorporation or by-laws of Buyer; (b) conflict with, or result in the breach
of, termination of, or give rise to any lien or constitute a default under, any
material agreement, understanding or commitment to which Buyer is a party or by
which Buyer is bound; (c) constitute a violation of any law, regulation, rule,
judgment or decree applicable to Buyer; or other than violations, conflicts,
breaches, terminations, accelerations, defaults and creations specified in the
foregoing clauses (b) and (c) of this sentence which will not, individually or
in the aggregate, materially adversely affect the ability of Buyer to consummate
the transactions contemplated by this Agreement in accordance with the terms
hereof. No consent, approval or authorization of any Governmental Authority is
required on the part of Buyer in connection with the execution, delivery and
performance of this Agreement except the Regulatory Filings or as set forth in
Section 5.3 of the disclosure statement prepared by Buyer and attached hereto
("Buyer's Disclosure Statement").
5.4 Litigation. There is no suit, litigation, proceeding or
governmental action pending, or to the knowledge of Buyer, threatened, or any
order, injunction or decree outstanding, against Buyer that, if adversely
determined, would materially adversely affect the ability of Buyer to consummate
the transactions contemplated by this Agreement in accordance with the terms
hereof.
5.5 Reserved.
5.6 Financing. Buyer has available to it all funds necessary to pay the
Princeton Purchase Price and related fees and expenses, and has the financial
capacity to perform all of its other obligations under this Agreement.
5.7 Brokers or Finders. Neither the Buyer nor any of its subsidiaries
or Affiliates has employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finder's fees in connection with this
Agreement or the transaction contemplated herein.
ARTICLE 6
FURTHER AGREEMENTS OF THE PARTIES
6.1 Conduct of the Princeton Business Pending Closing. Except as
contemplated by this Agreement, from the date hereof until the Closing, except
as approved in writing by Buyer, Seller covenants and agrees that:
(a) Seller shall operate the Princeton Business in the
ordinary course and consistent with Seller's past practice, as reflected on the
Financial Statements.
(b) Except as contractually required by any employment
arrangement listed in Section 4.13 of the Disclosure Statement and other than in
connection with actions generally taken by Seller with respect to all of its
operations and consistent with Seller's past practice, Seller will not (i) grant
or agree to grant any (A) bonus to any employee of Seller working primarily in
the Princeton Business, (B) general increase in the rates of salaries or
compensation of the employees of Seller working primarily in the Princeton
Business, or (C) specific increase to any employee of Seller working primarily
in the Princeton Business, except such as are in accordance with regularly
21
scheduled periodic increases, or (ii) provide for any new pension, retirement,
severance, retention or other employment benefits to any of the employees of
Seller working primarily in the Princeton Business or any increase in any
existing benefits.
(c) Seller will use reasonable efforts to maintain and
preserve intact the Princeton Business, to keep available the services of the
present employees of Seller working primarily in the Princeton Business and to
maintain Princeton's relationships with customers, suppliers and others having
business relationships with Princeton.
(d) Seller shall not sell, assign or license with respect to,
or dispose of, any material assets or properties of the Princeton Business,
tangible or intangible, or incur any material liabilities in connection with the
Princeton Business, except for sales and dispositions made or liabilities
incurred, including the creation of purchase money security interests, in the
ordinary course; provided, that nothing herein shall preclude Seller from using
its existing borrowing or credit facilities in a manner consistent with past
practice since owned by Seller.
(e) With respect to the Princeton Business, Seller shall not:
(i) create, incur, or assume any debt, liability or
obligation for borrowed money, direct or indirect, whether
accrued, absolute, contingent, or otherwise, relating to the
Princeton Business, other than under existing lines of
credit or in the ordinary course of business consistent with
Seller's past practice in the case of the Princeton
Business;
(ii) waive or release any rights of material value
relating to the Princeton Business;
(iii) transfer, sell or otherwise convey any of the
assets of the Princeton Business, other than sales of
products to customers and dispositions of immaterial or
obsolete assets, in each case, in the ordinary course of
business consistent with Seller's past practice;
(iv) enter into or terminate any material lease with
respect to the Princeton Business, or make any change in any
material leases, other than in the ordinary course of
business consistent with Seller's past practice;
(v) become obligated to make any capital expenditures
relating to the Princeton Business or enter into any
commitments therefor, except for capital expenditures not
exceeding $100,000 for any one commitment or series of
related commitments made in the ordinary course of business
consistent with Seller's past practice;
(vi) transfer, terminate or permit the lapse of or fail
to pay any fee that becomes due with respect to any of the
Intellectual Property Rights;
(vii) accelerate or delay the manufacture, shipment or
sale of inventory, the collection of accounts receivable or
notes receivable or the payment of accounts or notes
payable, sell any accounts receivable or take any action
outside the ordinary course of business if such
acceleration, delay or other action is intended to
artificially increase the amount of cash in the Princeton
22
Business or artificially increase Princeton Net Asset Value
as calculated from the Closing Balance Sheet;
(viii) enter into any product distribution, sales
representative, sales agency, supplier or sub-supplier
agreement without the prior written consent of Buyer, which
consent shall not be unreasonably withheld; or
(ix) agree or otherwise commit to take any of the
actions referred to in subsections (i)-(viii) above.
6.2 Access/Schedule Update.
(a) From the date of this Agreement until the Closing, Seller
will at reasonable times and upon reasonable notice, furnish Buyer with access
to or copies of such financial and operating data and such other information
relating to Princeton as Buyer may from time to time reasonably request. In
addition, from the date of this Agreement until the Closing, Seller shall permit
representatives of Buyer to have access at reasonable times and upon reasonable
notice to the Princeton Assets, the Owned Property, the Leased Property, and the
facilities and key employees of Princeton. Prior to the Closing, Buyer shall
have the right to complete, at the sole cost and expense of Buyer, Phase I
environmental studies on each parcel of Owned Property and Leased Property.
Buyer shall deliver to Seller a copy of any Phase I or other third party report
prepared in connection with any such environmental investigation; provided,
however, that no such Phase I or other environmental review by Buyer will
involve sampling, Phase II testing or invasive investigatory work without the
prior written consent of Seller, which consent shall not be unreasonably
withheld (it being agreed that it shall not be unreasonable for Seller to
withhold consent with respect to a particular property if the findings contained
in any Phase I testing at such property are not materially different in any
adverse respect from findings contained in any report or reports for such
property listed in Section 4.18 of the Disclosure Statement). Buyer will treat
any environmental review of the Owned Real Property or Leased Real Property as
confidential information, unless otherwise required by law. Any disclosure
whatsoever during any investigation by or on behalf of Buyer shall not
constitute an enlargement of or additional representations or warranties of
Seller beyond those specifically set forth in Article 4. All such information
and access shall be subject to the terms and conditions of the Confidentiality
Agreement referenced in Section 6.8. Buyer's rights under this Section 6.2 to
perform environmental testing is subject to the condition that the inspections
and testing to be conducted shall not (i) unreasonably interfere with the
business operations of Seller, (ii) damage any asset or property used in
connection with the Princeton Business, and (iii) cause Seller to be in material
breach of any lease or other agreement relating to any of the Owned Property or
Leased Property; provided, however, that Seller shall not be deemed to have
breached any representation or warranty, herein to the extent that such breach
was caused by Buyer's actions under this Section 6.2.
(b) Within 10 days following the execution of this Agreement,
Seller shall provide Buyer with written updates of Sections 4.1, 4.11, 4.13 and
4.14 of the Disclosure Statement; provided, however, that no such update shall
23
relieve Seller from liability to Buyer for any losses or diminution in value
suffered by Buyer in connection with the matters disclosed therein to the extent
that the failure to disclose such matters in the first instance results in a
breach of a representation or warranty of the Sellers, except to the extent (i)
such matter is reserved for on the Closing Balance Sheet or (ii) either (A) such
matter does not constitute an adverse change or a liability and, accordingly, no
reserve is appropriate or (B) such matter is an Excluded Liability.
6.3 Best Efforts; Other Actions. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to (a) use its best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done as
promptly as practicable, all things necessary, proper or advisable under
applicable laws to consummate and make effective the transactions contemplated
by this Agreement, including obtaining any governmental or other consents,
transfers, orders, qualifications, waivers, authorizations, exemptions and
approvals, providing all notices and making all registrations, filings and
applications necessary or desirable for the consummation of the transactions
contemplated herein, including under the HSR Act; (b) use its best efforts to
defend any lawsuits or other legal proceedings (whether judicial or
administrative) challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Authority
vacated or reversed; and (c) use its best efforts to fulfill or obtain the
fulfillment of all other conditions to Closing, including, without limitation,
the execution and delivery of all agreements or other documents contemplated
hereunder to be so executed and delivered. Buyer agrees to make all filings
required to be made by it under the HSR Act no later than 5 business days after
the date hereof.
6.4 Expenses. Except as otherwise specifically provided in this
Agreement, Buyer, on the one hand, and Seller, on the other hand, shall bear its
own expenses incurred in connection with this Agreement and in connection with
all obligations required to be performed by each of them under this Agreement.
6.5 Publicity. Buyer shall consult with Seller, and Seller shall
consult with Buyer, before issuing any press release concerning the transactions
contemplated by this Agreement and, except as may be required by applicable law,
will not issue any such press release without the prior written consent of
Seller or Buyer, as the case may be. If Buyer or Seller is so required to issue
such press release, it shall use its best efforts to inform Seller or Buyer, as
the case may be, prior thereto and to consult with such party as to the contents
thereof, and the contents thereof shall be reasonably acceptable to Seller or
the Buyer, as the case may be.
6.6 Transfer Taxes. Any sales, stock transfer taxes, real property
transfer taxes, personal property transfer taxes, real property conveyance taxes
(other than income taxes) or other like taxes or recording fees payable in
connection with the sale of the Princeton Assets shall be paid one-half by Buyer
and one-half by Seller. If any Tax Returns or other documents are required to be
filed in a jurisdiction with respect to any of the foregoing, then as between
Buyer and Seller, the party responsible for preparing such Tax Returns or other
documents under the laws of such jurisdiction shall be responsible for the
filing thereof.
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6.7 Preservation of Records. Buyer agrees that it shall, at its own
expense, preserve and keep the records of Princeton delivered to it pursuant to
this Agreement for a period of seven years from the Closing Date, or, if
requested by Seller, for any longer periods as may be required by any government
agency or ongoing litigation, and shall make such records available to Seller as
may be reasonably required by Seller in connection with, among other things, any
insurance claim, legal proceeding, environmental matter or governmental
investigation relating to Seller. In the event Buyer wishes to destroy such
records after that time, it shall first give 60 days' prior written notice to
Seller, and Seller shall have the right at its option and expense to take
possession of the records within 90 days thereafter.
6.8 Confidentiality. The letter agreement, dated as of February 16,
2000, between Seller and Buyer (the "Confidentiality Agreement") is hereby
incorporated by reference herein in its entirety and shall continue in full
force and effect until the Closing, at which time such Confidentiality Agreement
(other than provisions therein dealing with information and other matters
concerning Seller and not Princeton, which provisions shall continue in full
force and effect) and the obligations of Buyer under this Section 6.8 shall
terminate. If this Agreement is, for any reason, terminated prior to the
Closing, the Confidentiality Agreement shall continue in full force and effect.
6.9 Cash at Closing
(a) Seller shall be entitled, prior to the Closing Time, to
collect and retain or cause to be collected and retained the proceeds of all
items received in any bank account of Seller relating to the Princeton Business
(collectively, the "Bank Accounts") or otherwise in respect of Seller relating
to the Princeton Business (including the amount of any checks received by Seller
relating to the Princeton Business), and all other cash on hand, through the
close of business on the day immediately preceding the Closing Date (the
"Pre-Closing Cash"); provided, however, that Seller may at its option not
collect but leave in any of the Bank Accounts or other locations of Seller
relating to the Princeton Business all or any portion of the Pre-Closing Cash,
and the aggregate amount of such uncollected Pre-Closing Cash, calculated, in
the case of foreign cash, at the exchange rate at the close of business on the
business day immediately preceding the Closing Date as reported in The Wall
Street Journal, shall be paid to Seller together with and in the same manner as
the Princeton Purchase Price. If after the Closing Time it is determined by
mutual agreement of the parties that the amount of Pre-Closing Cash is greater
or less than the sum of the amount, if any, that was collected by Seller and the
amount, if any, that was uncollected and paid together with the Princeton
Purchase Price, Buyer shall pay Seller or Seller shall pay Buyer, as applicable,
the difference between the two amounts promptly after such determination (but in
no event shall such payment be made later than five business days after the
determination is made). If the parties disagree as to whether a payment must be
made pursuant to this Section 6.9(a), or if the parties disagree as to the
amount of such payment, then such dispute shall be submitted to the Arbitrator.
Such submission shall be made at the same time a dispute is submitted to the
Arbitrator pursuant to Section 2.3(c) or if no dispute is submitted to the
Arbitrator pursuant to Section 2.3(c), then any submission pursuant to this
Section shall be made within five days after the expiration of the 30-day period
referenced in the first sentence of Section 2.3(c). The Arbitrator shall render
25
a decision resolving the matter within 30 days after its receipt of such
submission. The Arbitrator's decision on the matter shall be final and binding
on the parties absent manifest error. The cost of any arbitration pursuant to
this Section 6.9(a) shall be borne 50% by Buyer and 50% by Seller.
(b) All intercompany accounts and intercompany notes between
Seller or any of Seller's Affiliates, on the one hand, and Princeton, on the
other hand, shall be canceled as of the Closing Time, except for amounts payable
with respect to goods provided by Seller or any of its Affiliates to Princeton
in the ordinary course of business and listed in Section 6.9(b) of the
Disclosure Statement.
6.10 Employment and Employee Benefit Issues.
(a) Section 6.10(a)(i) of the Disclosure Statement sets forth
a complete list of all salaried and hourly employees of Princeton as of the date
hereof. With respect to the salaried and hourly employees of Princeton as of the
Closing Time, other than any executive employee(s) set forth in Section
6.10(a)(ii) of the Disclosure Statement, Buyer shall offer employment to each
such employee, commencing as of the Closing Time, at substantially the same
wages that each such employee was receiving at such time from Princeton. With
respect to any executive employee listed in Section 6.10(a)(ii) of the
Disclosure Statement, if Buyer notifies Seller in writing of its intention not
to hire such executive employee not less than 14 days prior to Closing, Seller
will retain and assume and hold Buyer harmless from and against any and all
liability with respect to such person's employment and any termination thereof,
including any severance or termination claims of any nature. Buyer's offer of
employment shall also include the benefits set forth in Section 6.10(a)(iii) of
the Disclosure Statement. Nothing in this Agreement shall confer any third-party
beneficiary right (actual or implied) upon any person or obligate Buyer to
continue to employ any person for any specified period of time for any specified
salary, wages or benefits after the Closing Time. Buyer acknowledges and agrees
that Seller makes no representation or warranty that any of the employees will
accept employment with Buyer and the acceptance by employees of offers of
employment with Buyer shall not constitute a condition to Buyer's obligation to
complete the transactions contemplated by this Agreement. Those employees who
accept employment as of the Closing Time or thereafter, are hereinafter referred
to collectively as the "Transferred Employees." Buyer agrees that, if during the
period of sixty (60) days after the Closing Time, it causes any of the
Transferred Employees (including those on leave, disability or workers
compensation) to suffer "employment loss" for purposes of the Worker Adjustment
and Retraining Notification Act, 29 U.S.C. ss.ss.2101-2109, and related
regulations (the "WARN Act"), and if such action could create any liability for
Seller, then Buyer will either (i) deliver notices under the WARN Act in such a
manner and at such a time that Seller bears no liability with respect thereto or
(ii) indemnify and hold Seller harmless for any liability under the WARN Act
which may be created as a result thereof.
(b) As of the Closing Time, the Transferred Employees shall
cease to participate in the employee benefit plans, programs, policies and
arrangements sponsored or maintained by Seller (the "Terex Plans") and shall be
entitled to participate in the employee benefit plans, programs, policies and
arrangements sponsored or maintained by Buyer ("Buyer's Plans"). Periods of
employment with Seller (including periods of employment with any other employer,
to the extent recognized under Seller Plans) immediately prior to the Closing
Time, shall be taken into account for purposes of determining, as applicable,
26
eligibility and vesting under Buyer's Plans. Buyer shall be responsible for all
accrued vacation time of Transferred Employees the employment of whom may be
deemed terminated by reasons of the transactions contemplated by the terms of
this Agreement, provided that such accrued vacation time is accrued on the
Closing Balance Sheet in accordance with Closing GAAP.
(i) Without limiting the generality of the foregoing,
Buyer shall cause Buyer's medical and prescription drug,
dental, life insurance, disability and other health plans to
immediately, and without any waiting period, but subject to
any premium payment generally required of all employees of
the Buyer under Buyer's Plans, be available to cover each
Transferred Employee (and his or her eligible dependents) as
of the Closing Time, and cause such plans to waive any
limitation of coverage of Transferred Employees (and their
eligible dependents) due to pre-existing conditions. Any
claims incurred with regard to any Transferred Employees
before or on the Closing Time and which are covered under
Seller Plans shall be payable under the terms of the Seller
Plans. All claims incurred after the Closing Time with
regard to any Transferred Employees and which are covered
under the Buyer's Plans shall be payable under the terms of
the applicable plan of Buyer.
(ii) Buyer shall assume all liabilities for accrued
wages in respect of the Transferred Employees whether
arising before or after the Closing Time, provided that such
wages are accrued on the Closing Balance Sheet in accordance
with Closing GAAP.
(c) For purposes of the COBRA continuation of coverage
provisions set forth in Section 4980B(f) of the Internal Revenue Code and
Sections 601 through 608 of ERISA, and the regulations promulgated thereunder
(the "COBRA Provisions"), the Transferred Employees shall be considered to have
experienced an employment termination with Seller as of the Closing Time. It is
the understanding and intention of Seller and Buyer that no group health plans
maintained by Buyer shall constitute a successor plan to any of Seller's group
health plans, that Buyer is not a successor employer with respect to any of
Seller's group health plans, that Seller is not a predecessor employer with
respect to Buyer's group health plans within the meaning of the COBRA Provisions
and that neither Buyer nor Buyer's group health plans shall have any obligations
to any employee or former employees of Seller under the COBRA Provisions. It is
the further understanding and intention of Seller and Buyer, however, that the
group health plan coverage to be provided to the Transferred Employees of Buyer
shall be coverage that, pursuant to Section 602(2)(D)(i) of ERISA, terminates
any rights to continuation coverage under the COBRA Provisions if a Transferred
Employee (and eligible dependents) actually becomes covered under Buyer's health
plan.
(d) As soon as reasonably practicable after the Closing Time,
Seller shall cause to be transferred from the Terex Corporation and Affiliates'
401(k) Retirement Savings Plan (the "Seller 401k Plan") to the 401(k) Plan
sponsored by Buyer (the "Buyer's 401k Plan") an amount in cash equal to the
aggregate account balances of all participants in the Seller 401k Plan who are
Transferred Employees, except that all outstanding promissory notes reflecting
participant loans from Seller 401k Plan participants shall be transferred in
kind. Seller and Buyer agree to cooperate fully with respect to any governmental
27
filing, including but not limited to, the filing of any Internal Revenue Service
Form 5310A reporting obligations and information necessary to effect the
transactions contemplated herein.
(e) Buyer shall not assume any of Seller's "employee benefit
plans" (as defined in ERISA section 3(3)) or fringe benefit plans (including
cafeteria plans established under Code section 125) maintained by Seller, or any
liabilities thereunder. In addition, Buyer shall not assume any severance pay
claims, agreements or arrangements maintained or offered by Seller to its
employees or any liabilities thereunder.
6.11 Reserved.
6.12 Litigation Support; Records Retention; Transitional Services.
(a) In the event and for so long as any party is actively
investigating, contesting, defending against or prosecuting any charge,
complaint, action, suit, contract appeal, proceeding, hearing, investigation,
claim, demand or audit (including routine audits and contract close-outs) in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Date involving the Princeton Business, the other party will
cooperate with the contesting or defending party and its counsel in the contest
or defense, make available its personnel and provide such testimony and access
to its books and records as may be reasonably necessary in connection with the
contest or defense.
(b) Seller and Buyer agree that Buyer will purchase
substantially all of the property used in the Princeton Business, and in
connection therewith Buyer will offer employment to individuals who immediately
before the Closing Time were employed in such trade or Princeton Business by
Seller. Accordingly, provided that Seller provides Buyer with all necessary
payroll records for the calendar year which includes the day immediately
preceding the Closing Date, Buyer will furnish any and all forms required by any
Governmental Entity, including without limitation, a Form W-2 and a Form T-4 to
each employee employed by Buyer who had been employed by Seller, disclosing all
wages and other compensation paid for such calendar year, and taxes withheld
therefrom, and Seller will be relieved of the responsibility to do so.
(c) Buyer will maintain all original books, records, files,
documents, papers and agreements pertaining to the Princeton Assets, the Assumed
Princeton Liabilities or otherwise relating to the Princeton Business as
conducted before the Closing Time for at least seven years following the Closing
Date or such longer period as may be required by Law. Seller agrees to maintain
all original books, records, files, documents, papers and agreements relating to
any of the Princeton Assets which are not included in the Princeton Assets for
at least seven years following the Closing Date or such longer period as may be
required by Law. Seller and Buyer agree that before destroying or discarding any
materials required to be retained pursuant to this Section 6.12(c), it will
notify the other in writing (which notice will include a description of the
materials to be destroyed or discarded) and such other party may, at its
expense, remove or make copies of such materials within 90 days following the
28
date of such written notice. In the event the other party has not removed such
materials within such 90-day period, the party desiring to destroy or discard
such materials may proceed with such action without any liability to the other.
(d) Subject to the provisions of Section 6.12(e), after the
Closing Time, the parties will each provide reasonable assistance and
cooperation to the other upon request in connection with such matters relating
to the pre-closing operations of the Princeton Business as:
(i) the completion and delivery to Seller of the
financial statements and the general ledger of the Princeton
Business as of the day immediately preceding the Closing
Date;
(ii) the preparation of quarterly, semi-annual and
annual reports required to be prepared by Seller or Buyer,
as the case may be (either by Law or in accordance with the
Seller's or Buyer's internal reporting systems and
procedures), in connection with the operation of the
Princeton Business prior to the Closing Time and with the
transactions provided for herein;
(iii) the preparation of audit information packages
required to be prepared by Seller or Buyer (either by Law or
in accordance with Seller's or Buyer's internal reporting
systems and procedures) in connection with the operation of
the Princeton Business prior to the Closing Time, the
transactions provided for in this Agreement and the parties'
year-end financial audits; and
(iv) such other assistance as Seller or Buyer may
reasonably request incidental to the orderly transfer of the
Princeton Business and the Princeton Assets to Buyer.
(e) All requests for assistance and cooperation under Section
6.12(d) will be made during normal business hours and with adequate lead time so
as to not impose any unreasonable burden upon the party receiving the request or
to unreasonably interfere with the conduct of business by such party. The
parties acknowledge that the assistance and cooperation to be provided hereunder
is merely an accommodation and that the providing party will have no liability
with respect to any information or assistance provided hereunder. The requesting
party further agrees to hold the party receiving the request harmless from and
against any and all liabilities and losses with respect to such information or
assistance provided hereunder. In the event either party reasonably deems in
good faith any requested cooperation to be unduly burdensome, such party may
offer the requesting party reasonable access to such information as the
requesting party may need to complete any required task in lieu of performing
any services for such party.
6.13 Signage and Labels. Buyer will remove the name "Terex" and any and
all derivations thereof from all exterior signs located at the Owned Property
and the Leased Property as soon as practicable but in any event within two
months after the Closing Date. Buyer may use the name "Terex Princeton" on
finished goods inventory which constitutes part of the Princeton Assets but will
change or otherwise replace the stamps and dies bearing Seller's name as soon as
29
reasonably practicable after the Closing Date, but in any event within three
months of the Closing Date. Buyer may not use publicly any business records
described in Section 1.3(b)(vi) without first removing therefrom, or
obliterating all portrayals or references to, any of Seller's trade names,
trademarks or service marks or other intangible property contained in such
records, unless Seller consents in writing to such usage as soon as practicable
after the Closing Date and in any event within one month after the Closing Date.
6.14 Notices and Consents. Seller shall, prior to the Closing Time,
give all notices to third parties and use reasonable efforts at its expense to
obtain all third party consents, novations and waivers that are required to be
obtained by Seller in connection with the transactions contemplated by this
Agreement. Buyer agrees to cooperate with Seller in its efforts to obtain such
third party consents and where necessary will give or procure the giving of
security to a contracting third party in order to obtain such approval, consent,
novation or waiver.
6.15 Noncompetition. During the Noncompetition Period (as defined in
this Section 6.15), neither Seller nor any Affiliate of Seller shall, directly
or indirectly, (a) engage as a manufacturer, seller, distributor or marketer of
self-propelled, truck mounted forklifts anywhere in the world (the "Competitive
Business") or (b) induce, solicit, aid or assist any other person to induce or
solicit employees, customers or suppliers of the Princeton Business to
terminate, curtail or otherwise limit their employment or other business
relationships with the Princeton Business, except for general solicitations for
employment that are not intended or designed to specifically target employees of
the Princeton Business; provided however, that notwithstanding the foregoing:
(x) as long as neither the personnel nor the distribution
network of Seller or any Affiliate of Seller becomes involved with any product
line which constitutes a Competitive Business, then Seller and each Affiliate of
Seller may make or thereafter maintain a less than 50% investment in any
business as long as the assets used in the portion of such business which
constitutes a Competitive Business, if any, have an aggregate value that is less
than 20% of the total value of the assets or revenues of such business;
(y) as long as the distribution network of Seller or any
Affiliate of Seller does not become directly involved with any product line
which constitutes a Competitive Business, then Seller and each Affiliate of
Seller may make or thereafter maintain a controlling investment in any business
as long as the assets used in any portion of such business which constitutes a
Competitive Business have an aggregate value which is less than 20% of the total
value of the assets or revenues of such business, provided that if any such
investment occurs within the first three years after the Closing Time (two years
after the Closing Time in the case of an action by Buyer to enforce the
provisions of this Section 6.15 in any court in Ireland), Seller shall, in a
commercially reasonable manner, promptly thereafter diligently pursue the
divestiture of that portion of such business which constitutes a Competitive
Business; and
(z) as long as the distribution network of Seller or any
Affiliate of Seller does not become directly involved with any product line
which constitutes a Competitive Business, then Seller and each Affiliate of
Seller may make an acquisition of assets as long as the portion of the acquired
assets which is used in carrying on the Competitive Business, if any, has an
aggregate value which is less than 20% of the total value of the assets or
30
revenues acquired, provided that if any such acquisition occurs within the first
three years after the Closing Time (two years after the Closing Time in the case
of an action by Buyer to enforce the provisions of this Section 6.15 in any
court in Ireland), Seller shall, in a commercially reasonable manner, promptly
thereafter diligently pursue divestiture of that portion of the assets which are
used in or otherwise constitute a Competitive Business.
The term "Noncompetition Period," as used in this Agreement,
means the period of time beginning on the Closing Date and ending on the fifth
anniversary of the Closing Date, except in the case of an action by Buyer to
enforce the provisions of this Section 6.15 in any court in Ireland, in which
event the term "Noncompetition Period" for activities in Ireland shall mean the
period of time beginning on the Closing Date and ending on the second
anniversary of the Closing Date.
Seller acknowledges and agrees that irreparable injury to
Buyer will result if Seller or any Affiliate of Seller breaches this Section
6.15 and that the remedy at law for the breach of any such covenant will be
inadequate. Accordingly, if Seller or any Affiliate of Seller engages in an act
in violation of this Section 6.15, Buyer shall be entitled, in addition to such
other remedies and damages as may be available by law or under this Agreement,
to injunctive relief to enforce the provisions of this Agreement.
6.16 Account Debtors. From and after the Closing, Buyer shall have the
right and authority to (a) endorse, without recourse, the name of Seller on any
check or any other evidence of indebtedness payable to Seller on account of any
accounts receivable of the Princeton Business sold to Buyer hereunder and (b)
deposit the same into Buyer's accounts. Seller shall promptly remit to Buyer all
items and sums received by Seller after the Closing Time with respect to the
accounts receivable of the Princeton Business sold to Buyer hereunder. From and
after the Closing Time, Buyer shall promptly remit to Seller all items and sums
received by Buyer on or after the Closing Time with respect to accounts
receivable of the Princeton Business that constitute excluded assets pursuant to
Section 1.3(b)(ix).
6.17 Delivery of Financial Statements. Prior to the Closing, Seller
shall deliver to Buyer a true and correct copy of the income statement of the
Princeton Business for the twelve month period ended December 31, 1999.
ARTICLE 7
CONDITIONS OF CLOSING;
DOCUMENTS DELIVERED AT CLOSING
7.1 Conditions Precedent to Obligations of Buyer. The obligation of
Buyer to consummate the purchase of the Princeton Assets under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions, any of which may be waived in writing by Buyer:
(a) The representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and the Closing Time with the same force and effect as though
31
made at and as of the Closing Time, except for any representation or warranty
made or given as of a specified date, which shall have been true and correct in
all material respects as at such date. For purposes of this Section 7.1(a), the
representations and warranties of Seller in this Agreement shall be true and
correct in all material respects unless the facts, events or circumstances
giving rise to any untruths or inaccuracies in such representations or
warranties have the same effect as a Material Adverse Effect (as defined in
Section 11.9);
(b) Seller shall have performed and complied in all material
respects with the agreements and covenants required by this Agreement to be
performed or complied with by Seller prior to or at the Closing;
(c) Buyer shall have been furnished with a certificate, dated
the Closing Date, of the President or a Vice President of Seller certifying that
the conditions specified in Sections 7.1(a), 7.1(b), 7.1(d) and 7.1(1) have been
satisfied;
(d) There shall not be in effect any injunction or restraining
order issued by a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement, and there shall
not be any action, suit or proceeding pending or threatened before any court of
competent jurisdiction, arbitrator or Governmental Authority wherein an
unfavorable injunction, judgment, order, decree, ruling or change would (i)
prevent consummation of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation;
(e) No statute, rule or regulation shall have been enacted by
any Governmental Authority which prohibits the consummation of the transactions
contemplated herein or makes such consummation illegal;
(f) The waiting period applicable to the consummation of the
transactions contemplated hereby under the HSR Act shall have expired or been
terminated;
(g) Seller shall have executed and delivered to Buyer the
documents identified in Section 7.3 hereof;
(h) Seller shall have delivered or provided Buyer with access
to the Princeton Assets;
(i) Buyer shall have received evidence satisfactory to Buyer
that Seller has obtained all third-party consents described in Section 4.4 of
the Disclosure Statement;
(j) On the Closing Date, the other Truck Mounted Transactions
(as defined in Section 11.9) shall have been consummated simultaneously
herewith;
(k) Buyer's environmental due diligence shall not have
indicated changes in the findings set forth in any of the environmental reports
listed in Section 4.18 of the Disclosure Statement which, individually or in the
aggregate, indicates liabilities and/or to the extent reasonably likely to
occur, potential liabilities that constitute or can reasonably be expected to
constitute a Material Adverse Effect; and
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(l) Seller shall have executed and delivered to Buyer a
guaranty in substantially the form of Exhibit B attached hereto.
7.2 Conditions Precedent to Obligations of Seller. The obligation of
Seller to consummate the sale of the Princeton Assets under this Agreement is
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions, any of which may waived by Seller:
(a) The representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects at and as of
the date hereof and the Closing Time with the same effect as though made at and
as of the Closing Time, except for any representation or warranty made or given
as of a specified date, which shall have been true and correct in all material
respects as at such date;
(b) Buyer shall have performed and complied in all material
respects with the agreements and covenants required by this Agreement to be
performed or complied with by it prior to or at the Closing;
(c) Seller shall have been furnished with a certificate, dated
the Closing Date, of the President or any Vice President of Buyer certifying
that the conditions specified in Sections 7.2(a), 7.2(b) and 7.2(d) have been
satisfied;
(d) There shall not be in effect any injunction or restraining
order issued by a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement, and there shall
not be any action, suit or proceeding pending or threatened before any court of
competent jurisdiction, arbitrator or Governmental Authority wherein an
unfavorable injunction, judgment, order, decree, ruling or change would (i)
prevent consummation of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation;
(e) No statute, rule or regulation shall have been enacted by
any Governmental Authority which prohibits the consummation of the transactions
contemplated herein or makes such consummation illegal;
(f) The waiting period applicable to the consummation of the
transactions contemplated hereby under the HSR Act shall have expired or been
terminated;
(g) Buyer shall have executed and delivered to Seller the
documents identified in Section 7.3 hereof;
(h) Buyer shall have delivered the Princeton Purchase
Price to Seller in accordance with Section 2.2 hereof;
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(i) On the Closing Date, the other Truck Mounted Transactions
shall have been consummated simultaneously herewith; and
(j) Buyer shall have caused the execution and delivery by
Cargotec Holding Company, Inc. to Seller of a guaranty in substantially the form
of Exhibit C attached hereto.
7.3 Documents to be Delivered at Closing.
(a) At the Closing, Seller shall deliver, or cause to be
delivered, to Buyer the following (all of which shall be in forms reasonably
satisfactory to Buyer):
(i) bills of sale, assignments and assumptions of
leases, assignments and assumptions of contracts, a limited
warranty deed for the Owned Property, assignments of
Intellectual Property and such other instruments of transfer
and assignment of the Princeton Assets;
(ii) a copy of resolutions of the board of directors of
Seller authorizing the execution, delivery and performance
of this Agreement by Seller and a certificate of the
secretary or assistant secretary of Seller, dated the
Closing Date, that such resolutions were duly adopted and
are in full force and effect;
(iii) the certificate referred to in Section 7.1(c);
(iv) the Escrow Agreement;
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(v) the legal opinion of ▇▇▇▇ ▇ ▇▇▇▇▇, counsel to
Seller, dated the Closing Date and addressed to Buyer,
covering the matters listed on Exhibit D attached hereto;
and
(vi) such other documents, instruments and writings as
Buyer may reasonably request in order to effectuate the
transactions contemplated by this Agreement.
(b) At the Closing, Buyer shall deliver to Seller the
following:
(i) payment of the Princeton Purchase Price and
evidence of the wire transfer referred to in Section 2.2;
(ii) instruments of assumption of the Princeton
Liabilities (collectively, the "Assumption") in form
reasonably satisfactory to the parties;
(iii) a copy of the resolutions of the board of
directors of Buyer authorizing the execution, delivery and
performance of this Agreement by Buyer, and a certificate of
its secretary or assistant secretary, dated the Closing
Date, that such resolutions were duly adopted and are in
full force and effect;
(iv) the certificate referred to in Section 7.2(c);
(v) the Escrow Agreement;
(vi) the legal opinion of Reinhart, Boerner, Van
Deuren, ▇▇▇▇▇▇ & Rieselbach, s.c., counsel to Buyer, dated
the Closing Date and addressed to Seller, and covering the
matters listed on Exhibit E attached hereto; and
(vii) any taxes and recording and filing fees required
to be paid by Buyer pursuant to Section 6.6.
ARTICLE 8
TERMINATION
8.1 Termination by Mutual Consent. This Agreement may be terminated at
any time prior to the Closing by the mutual written consent of Buyer and Seller.
8.2 Termination Either by Seller or by Buyer. This Agreement may be
terminated either by Seller or by Buyer if a United States federal or state
court of competent jurisdiction or United States federal or state governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable.
8.3 Other Grounds for Termination.
(a) This Agreement may be terminated by Buyer at any time
prior to the Closing if the Closing shall not have occurred as a result of a
breach by Seller of any representation, warranty, or covenant contained in this
Agreement in any material respect; provided, that Buyer may not terminate this
Agreement unless Buyer provides Seller with notice of such breach and Seller
fails to cure such breach within 10 days of such notice. For purposes of this
Section 8.3, the representations, and warranties of Seller in this Agreement
shall be true and correct or complied with in all material respects unless the
facts, events or circumstances giving rise to any untruths or inaccuracies in
such representations or warranties have the same effect as a Material Adverse
Effect.
(b) This Agreement may be terminated by Seller at any time
prior to the Closing if the Closing shall not have occurred as a result of a
breach by Buyer of any representation, warranty or covenant contained in this
Agreement in any material respect; provided, that Seller may not terminate this
Agreement unless Seller provides Buyer with notice of such breach and Buyer
fails to cure such breach within 10 days of such notice.
8.4 Effect of Termination. In the event of termination of this
Agreement pursuant to this Article 8, all obligations of the parties hereto
shall terminate, except the obligations of the parties pursuant to this Section
8.4 and except for the provisions of Sections 6.4, 6.5, 11.1, 11.2, 11.3, 11.4,
11.6, 11.8, 11.9, 11.11 and 11.12 and the Confidentiality Agreement referred to
35
in Section 6.8. Moreover, in the event of termination of this Agreement pursuant
to Section 8.3, nothing herein shall prejudice the ability of the non-breaching
party to seek damages from any other party for any breach of this Agreement,
including without limitation, reasonable attorneys' fees, or to pursue any
remedy at law or in equity; provided, however, in no event shall any party be
entitled to, and each party hereby unconditionally waives any right to seek,
consequential damages for any Losses (as defined in Section 9.2(a)) that may
arise under or as a result of this Agreement or the transactions contemplated
hereby.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 Survival. The representations and warranties of Seller and Buyer
contained in this Agreement shall survive the Closing for the applicable periods
set forth in this Section 9.1. All of the representations and warranties of
Seller contained in this Agreement and all claims and causes of action with
respect thereto shall terminate upon expiration of 22 months after the Closing
Date, except that (a) the representations and warranties in Sections 4.2 and 4.7
shall have no expiration date; (b) the representations and warranties in
Sections 4.10 and 4.14 shall survive until the applicable statute of limitations
has run; and (c) the representations and warranties in Section 4.18 shall
terminate upon the expiration of 50 months after the Closing Date; it being
understood that in the event notice of any claim for indemnification under
Section 9.2(a) shall have been given (within the meaning of Section 11.6) within
the applicable survival period, the representations and warranties that are the
subject of such indemnification claim shall survive with respect to such claim
only until such time as such claim is fully resolved. All of the representations
and warranties of Buyer contained in this Agreement and all claims and causes of
action with respect thereto shall terminate upon expiration of 22 months after
the Closing Date; it being understood that in the event notice of any claim for
indemnification under Section 9.3(a) shall have been given (within the meaning
of Section 11.6) within the applicable survival period, the representations and
warranties that are the subject of such indemnification claim shall survive with
respect to such claim only until such time as such claim is finally resolved.
9.2 Indemnification Provisions for Benefit of the Buyer.
(a) If the Closing shall occur and Seller breaches any of its
representations, warranties (a breach is to be determined for purposes of this
Section 9.2 without regard to any "Material Adverse Effect" qualification
contained in Article 7 and Article 8) or covenants contained in this Agreement
and provided that Buyer, within any applicable survival period set forth in
Section 9.1, makes a written claim for indemnification against Seller setting
forth in reasonable detail the circumstances regarding the claim and, if
ascertainable, an estimate of the amount thereof, then, subject to Sections 9.1
and 9.8, Seller shall indemnify, defend and hold Buyer harmless from and against
any losses, expenses, costs, fees (including, without limitation, reasonable
attorney's fees), damages, fines, penalties and other liabilities (collectively,
"Losses") Buyer or any of its Affiliates, or any of their respective directors,
officers, employees, agents or representatives (collectively, the "Buyer
Indemnified Parties"), suffer to the extent such Losses result from, arise out
of or are caused by such breach. Claims related to breaches of the
representations and warranties in Section 4.18 shall also be subject to Section
9.6.
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(b) Without restriction as to time, Seller further agrees to
jointly and severally indemnify, defend and hold Buyer Indemnified Parties
harmless from and against the entirety of any Losses Buyer Indemnified Parties
suffer to the extent such Losses are with respect to, result from, arise out of,
or are caused by any of the Excluded Liabilities. The administration of claims
with respect to Excluded Liabilities that fall under the definition of
"Environmental Losses" (as defined in Section 9.6) shall also be subject to the
terms of Section 9.6.
(c) Reserved.
(d) Except as otherwise provided in the last sentence of this
Section 9.2(d), Seller shall not have any obligation to indemnify Buyer
Indemnified Parties from and against any Losses (i) until Buyer Combined Losses
(as defined in Section 11.9) exceed $750,000, after which point Seller will be
obligated to indemnify Buyer Indemnified Parties from and against only those
additional Losses suffered by Buyer Indemnified Parties; or (ii) to the extent
Sellers' Combined Indemnification Payments (as defined in Section 11.9) exceed
an amount equal to $20,000,000 (excluding, for purposes of such calculation, all
Section 6.15 Losses (as defined in Section 11.9) and all Teledyne Indemnified
Losses (as defined in Section 11.9)), after which point Seller will have no
obligation to indemnify Buyer Indemnified Parties from and against further
Losses in excess of such amount. Notwithstanding the foregoing, (A) this
Agreement shall not limit Buyer's right to seek remedies at law to cause Seller
to pay, perform and discharge any matters described in Section 9.2(b); (B) the
$750,000 limitation and the $20,000,000 cap on recovery shall not apply to, or
include, any Losses incurred with respect to any matters described in Section
9.2(b), all of which shall be paid by Seller without minimum recovery limitation
or cap; and (C) the $20,000,000 cap on recovery shall not apply to, or include,
any Losses incurred as a result of Seller's breach of any of the representations
and warranties contained in Section 4.7 which shall be paid by Seller without
cap.
(e) Notwithstanding the limitations described in Section
9.2(d), Seller further agrees to indemnify, defend and hold Buyer Indemnified
Parties harmless from and against, but only to the extent of the assets held in
escrow pursuant to the Escrow Agreement, all Losses and other costs (including,
without limitation, the cost of insurance deductibles and liability in excess of
insurance limits) which (i) are not accrued on the Closing Balance Sheet, (ii)
are not paid by insurance, and (iii) are incurred with respect to, result from,
arise out of, or are caused by the operation of the Princeton Business prior to
the Closing, including, without limitation, the following Losses: (y) Losses
relating to products manufactured and sold by Seller prior to the Closing; and
(z) Losses based on liabilities or obligations of Seller under Environmental
Laws, to the extent such Losses are based on conditions or occurrences that
existed or occurred prior to the Closing.
(f) The assets held in escrow pursuant to the Escrow Agreement
shall be used to satisfy Seller's indemnification obligations under this Article
9 in the following manner:
(i) With respect to indemnification claims made under
Section 9.2(a) or 9.2(b), Buyer shall be required to proceed
first against the assets held in escrow pursuant to the
Escrow Agreement, until such time as either (A) Seller has
37
paid to Buyer Indemnified Parties, out of the assets held in
escrow, the amount of Five Hundred Thousand U.S. Dollars
($500,000 U.S.) or (B) all assets held in escrow have
otherwise been distributed pursuant to the terms of the
Escrow Agreement.
(ii) With respect to claims made under Section 9.2(e),
Buyer's sole recourse shall be against the assets held in
escrow pursuant to the Escrow Agreement.
(iii) After the occurrence of either condition
described in subsections (A) and (B) of Section 9.2(f)(i),
Buyer Indemnified Parties shall be entitled to proceed
directly against Seller for all claims for indemnification
under Section 9.2(a) or 9.2(b). Notwithstanding the
foregoing, if Buyer's obligation under Section 9.2(f)(i)
terminates by reason of the occurrence of the condition
specified in subsection (A) of Section 9.2(f)(i), Buyer
shall nevertheless have the right, but not the obligation,
to proceed against assets held in escrow in connection with
additional claims for indemnification under Section 9.2(a)
or 9.2(b) until such time as all assets held in escrow have
been distributed pursuant to the terms of the Escrow
Agreement.
9.3 Indemnification Provisions for Benefit of Seller.
(a) If the Closing shall occur and Buyer breaches any of its
representations, warranties or covenants contained in this Agreement, and
provided that Seller, within any applicable survival period set forth in Section
9.1, makes a written claim for indemnification against Buyer setting forth in
reasonable detail the circumstances regarding the claim and, if ascertainable,
an estimate of the amount thereof, then, subject to Section 9.3(c), Buyer agrees
to indemnify, defend and hold Seller and its Affiliates harmless from and
against any Losses Seller or any of its Affiliates, or any of their respective
directors, officers, employees, agents or representatives (collectively, "Seller
Indemnified Parties"), suffer to the extent such Losses result from, arise out
of or are caused by such breach.
(b) Without restriction as to time, Buyer further agrees to
indemnify, defend and hold Seller Indemnified Parties harmless from and against
the entirety of any Losses Seller Indemnified parties suffer to the extent such
Losses are with respect to, result from or arise out of the Assumed Princeton
Liabilities or Buyer's ownership or operation of the Princeton Assets after the
Closing, except for those matters for which Buyer Indemnified Parties are
entitled to indemnification under Section 9.2.
(c) Except as otherwise provided in the last sentence of this
Section 9.3(c), Buyer shall not have any obligation to indemnify Seller
Indemnified Parties from and against any Losses (i) until Seller Combined Losses
(as defined in Section 11.9) exceed $750,000, after which point Buyer will be
obligated to indemnify Seller Indemnified Parties from and against only those
additional Losses suffered by Seller Indemnified Parties; or (ii) to the extent
Buyers' Combined Indemnification Payments (as defined in Section 11.9) exceed an
amount equal to $20,000,000 after which point Buyer will have no obligation to
indemnify Seller Indemnified Parties from and against further Losses in excess
of such amount. Notwithstanding the foregoing, (A) this Agreement shall not
limit Seller's right to seek remedies at law to cause Buyer to pay, perform and
discharge any of the Assumed Princeton Liabilities; (B) the $750,000 limitation
38
and the cap on recovery shall not apply to, or include, any claim for
indemnification under Section 9.3(b) hereof, which shall be paid by Buyer
without minimum recovery limitation or cap; and (C) the $20,000,000 cap on
recovery shall not apply to, or include, any Losses incurred as a result of the
Buyer's breach of any of the representations and warranties contained in Section
5.2.
9.4 Matters Involving Third Parties. If any third party
notifies any party hereto (the "Indemnified Party") with respect to any matter
which may give rise to a claim for indemnification against the other party
hereto (the "Indemnifying Party") under this Section 9, then the Indemnified
Party will notify the Indemnifying Party thereof in writing promptly and in any
event within 10 days after receiving any written notice from a third party
stating the nature and basis of any claim made by the third party; provided that
no delay on the part of the Indemnified Party in notifying the Indemnifying
Party will relieve the Indemnifying Party from any obligation hereunder unless,
and then solely to the extent that, the Indemnifying Party is prejudiced
thereby. The Indemnified Party shall provide to the Indemnifying Party on
request all information and documentation reasonably necessary to support and
verify any Losses which the Indemnified Party believes give rise to a claim for
indemnification hereunder and shall give the Indemnifying Party reasonable
access to all books, records and personnel in the possession or under the
control of the Indemnified Party which would have bearing on such claim. In the
event the Indemnifying Party notifies the Indemnified Party within 30 days after
the date the Indemnified Party has given notice of the matter that the
Indemnifying Party is assuming the defense of such matter (i) the Indemnifying
Party will defend the Indemnified Party against the matter with counsel of its
choice reasonably satisfactory to the Indemnified Party, (ii) the Indemnified
Party may retain separate counsel at its sole cost and expense (except that the
Indemnifying Party will be responsible for the fees and expenses of such
separate co-counsel to the extent the Indemnified Party reasonably concludes in
good faith that the Indemnified Party has defenses available to it that may
conflict with those of the Indemnifying Party), (iii) the Indemnified Party will
not consent to the entry of a judgement or enter into any settlement with
respect to the matter without the written consent of the Indemnifying Party (not
to be withheld or delayed unreasonably) and (d) the Indemnifying Party will not
consent to the entry of a judgement with respect to the matter or enter into any
settlement which does not include a provision whereby the plaintiff or claimant
in the matter releases the Indemnified Party from all liability with respect
thereto, without the written consent of the Indemnified Party (not to be
withheld or delayed unreasonably). If the Indemnifying Party does not assume the
defense of such matter, the Indemnified Party may defend against the matter in
any manner it reasonably may deem appropriate, and (a) the Indemnified Party
will defend the matter with counsel of its choice reasonably satisfactory to the
Indemnifying Party, (b) the Indemnifying Party may retain separate counsel at
its sole cost and expense and (c) the Indemnified Party will not consent to the
entry of a judgement or enter into any settlement with respect to the matter
without the written consent of the Indemnifying Party (not to be withheld or
delayed unreasonably).
9.5 Other Indemnification Matters.
(a) In no event shall any party hereto be liable for loss of
profits or consequential damages hereunder.
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(b) The right of recovery by Buyer Indemnified Parties or
Seller Indemnified Parties with respect to any matter covered by this Article 9
shall be net of any insurance proceeds received by the Buyer Indemnified Parties
or Seller Indemnified Parties, as the case may be, as a result of any Losses.
(c) Notwithstanding anything in this Agreement to the
contrary, Seller shall not be responsible for any liability or obligation as a
result of Buyer's failure, in connection with its operation of the Princeton
Business, to comply with applicable law after the Closing even if the Princeton
Business is owned and operated after the Closing in the manner owned and
operated prior to the Closing, except to the extent that the manner of ownership
or operation prior to the Closing constitutes a breach of a representation or
warranty contained in this Agreement.
(d) Upon making any payment to an Indemnified Party for any
indemnification claim pursuant to this Article 9, the Indemnifying Party shall
be subrogated, to the extent of such payment, to any rights which the
Indemnified Party may have against any other parties with respect to the subject
matter underlying such indemnification claim.
9.6 Environmental Matters.
(a) With respect to any Losses relating to the presence of, or
any release of, Hazardous Materials at, on, in, upon, under, or from any of the
Owned Property or Leased Property, or arising from, under or pursuant to
violations of any Environmental Law, in any case, arising prior to the 1999
Closing (even if not asserted until after the Closing), for which Buyer seeks
indemnity as an Excluded Liability or as a result of a breach of a
representation or warranty under Section 4.18 in connection with the operation
of the Princeton Business, the Owned Real Property or the Leased Real Property
pursuant to Section 9.2 (for purposes of this Section 9.6, "Environmental
Losses"), Buyer shall provide notice to Seller pursuant to Section 11.6
specifying in reasonable detail, to the extent known, the nature of the
Environmental Losses and the estimated amount to remediate or respond to the
condition giving rise to the Environmental Losses, to the extent it is then
known (which estimate shall not be conclusive of the final amount of any
Environmental Losses).
(b) Seller shall have the right to control and investigate,
remediate, and/or resolve any condition giving rise to a claim or demand for
indemnification by Buyer under this Agreement with respect to any Environmental
Losses; provided, however, that Seller must consult with Buyer regarding such
investigation, remediation or resolution and provided further that if after
written notice and a reasonable opportunity to cure the Sellers do not exercise
such right, Buyer may exercise such right. Seller and its employees,
contractors, representatives and agents shall have reasonable access at
reasonable times to the facilities for the purpose of conducting any
investigation and/or remediation, including any sampling or monitoring required
to be performed by Seller, which may include intrusive investigations or
remedial action, after the Closing Date or at any time thereafter; provided that
if Seller requests such access then Seller shall provide Buyer with written
notice of such request. The Sellers shall use all reasonable efforts to minimize
disruption to Buyer's business as a result of conducting any such investigation
or remediation.
40
(c) Buyer shall use reasonable efforts to cooperate with
Seller to minimize costs with respect to Environmental Losses. Nothing in this
Agreement shall require Seller to perform any environmental remediation
activities or other environmental testing, sampling or monitoring activities
beyond the minimum required to comply with applicable Environmental Laws
(including those measures required to be implemented by Governmental Authorities
after reasonable opportunity to object to and/or appeal such requirement) and to
permit the use of the Owned or Leased Property consistent with its current use;
provided, however, that Buyer shall not be required to accept or execute, nor
shall Seller or its agents seek or execute, any deed, well, soil, or water
notice or restriction of any kind, or any other Lien, encumbrance, notice or
restriction that may be imposed on or recorded against any of the Owned or
Leased Property due to the presence of Hazardous Materials if doing so would, in
Buyer's reasonable judgment, result in any material diminution in the value or
marketability of such property, and in no event will Buyer's agreement to allow
any such alternative to remediation relieve Seller of the obligation to effect
further remediation if subsequently required by any Governmental Authority or
otherwise required by any Environmental Law.
(d) Buyer shall give prompt written notice to Seller of any
report or other document that Buyer seeks to submit, whether voluntarily or by
requirement of a Governmental Authority, to a Governmental Authority which
describes any environmental condition existing prior to the Closing. To the
extent reasonably possible under the circumstances, Seller shall have the right
to review and comment upon any submission to a Governmental Authority which
describes or addresses any environmental condition for which Buyer is claiming
indemnification from Seller hereunder (and Seller will cooperate with Buyer in
preparing such submissions, including making available all relevant records in
its possession or under its control), and Buyer shall revise such submission in
accordance with Seller's reasonable comments thereon, except that in no event
shall Buyer be requested by any Seller to submit information that in Buyer's
opinion would not be legally sufficient. To the extent reasonably possible under
the circumstances, Buyer shall give Seller prompt written notice of, and Seller
and/or its representatives shall have the right to participate in, any phone
call or meeting with any Governmental Authority at which any environmental
condition for which Buyer is claiming indemnification from Seller hereunder is
to be discussed or addressed in any manner. Except to the extent required by Law
after notice to Buyer, Seller shall not submit documents to any Governmental
Authority or conduct meetings or phone calls with any Governmental Authority
regarding the environmental conditions at any Owned Property or Leased Property
without the prior consent of Buyer, which consent shall not be unreasonably
withheld.
(e) Seller shall not have any obligation to indemnify any
Buyer Indemnified Party from and against (i) any Environmental Losses to the
extent directly arising from or directly relating to a use of the facilities
that is not substantially a continuation of the operation of the Princeton
Business as conducted on the Closing Date, (ii) any Environmental Losses arising
from or related to any change in the use of the Owned Property from industrial
use, or (iii) any Environmental Losses to the extent arising from or related to
any amendment to or change in any Environmental Law from that which is in effect
on the date hereof. Notwithstanding anything to the contrary contained herein,
Seller shall not have any obligation to indemnify Buyer Indemnified Parties from
and against any Environmental Losses to the extent (w) they do not relate to an
41
environmental condition caused, created or in existence prior to the Closing,
(x) arising with respect to any release of a Hazardous Material by Buyer, its
agents, or invitees after the Closing, or (y) arising from the gross negligence
or recklessness of Buyer, its agents, or invitees, or from the exacerbation by
physical action of any environmental condition by Buyer, its agent, or invitees.
Buyer acknowledges that nothing contained herein absolves it of any obligation
under any Environmental Law for Environmental Losses with respect to violations
of Environmental Laws by Buyer, its employees, contractors, representatives or
agents. Notwithstanding anything contained in this Agreement to the contrary,
Buyer shall not be construed as reckless, negligent, or to have exacerbated an
environmental condition if, with respect to any such environmental condition,
either (i) Buyer fails to take an action Buyer reasonably believed was the
responsibility of Seller (but only to the extent Buyer has provided Seller with
written notice of such condition) or (ii) Buyer has no knowledge that any action
is required.
(f) If, after the Closing, the Buyer undertakes environmental
remediation activities or other environmental testing, sampling or monitoring
activities in connection with Environmental Losses which are not required or
requested by a Governmental Authority or in response to a third party claim
asserting liability for an environmental condition at the facilities, subject to
Buyer's indemnification rights contained in Section 9.2(e), Seller shall not be
obligated to indemnify the Buyer in respect of such Environmental Losses.
9.7 EXCLUSIVE REMEDY. THE INDEMNIFICATION PROVISIONS CONTAINED IN THIS
ARTICLE 9 SHALL CONSTITUTE THE SOLE AND EXCLUSIVE RECOURSE AND REMEDY OF THE
PARTIES FOR MONETARY DAMAGES WITH RESPECT TO ANY BREACH OF ANY OF THE
REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED IN THIS AGREEMENT OR ANY OF
THE ANCILLARY AGREEMENTS OR WITH RESPECT TO ANY LOSSES RESULTING FROM, ARISING
OUT OF, OF CAUSED BY EXCLUDED LIABILITIES. THE PROVISIONS OF THIS ARTICLE 9 WILL
NOT RESTRICT THE RIGHT OF ANY PARTY TO SEEK SPECIFIC PERFORMANCE OR OTHER
EQUITABLE REMEDIES IN CONNECTION WITH ANY BREACH OF ANY OF THE COVENANTS
CONTAINED IN THIS AGREEMENT OR ANY OF THE ANCILLARY AGREEMENTS. BUYER
ACKNOWLEDGES THAT IT HAS NO RIGHTS TO RESCIND THIS AGREEMENT EITHER FOR A BREACH
OF CONTRACT OF FOR NEGLIGENT OR INNOCENT MISREPRESENTATION. NOTWITHSTANDING ANY
OTHER PROVISIONS OF THE AGREEMENT, THE PROVISIONS OF THIS SECTION 9.7 SHALL NOT
APPLY TO EXCLUDE OR LIMIT THE LIABILITY OF THE SELLERS TO THE EXTENT THAT ANY
CLAIM ARISES BY REASON OF ANY FRAUD OR FRAUDULENT MISREPRESENTATION OF ANY SUCH
PARTY.
9.8 Minimizing Losses. Each party agrees to use all commercially
reasonable efforts to minimize all Losses (including Losses that are defined for
purposes of Section 9.6 as "Environmental Losses") for which it may seek
indemnification from the other party pursuant to this Article 9, and to minimize
the amount of such indemnification obligation by reasonably pursuing the maximum
possible insurance recovery or recovery from other available sources with
respect to such Losses and nothing herein will in any way diminish each party's
common law duty to mitigate its Loss. Notwithstanding the foregoing, in no event
shall Buyer be required to purchase product liability insurance for products
manufactured or sold by Seller prior to the Closing or for any other Excluded
Liability.
42
ARTICLE 10
[RESERVED]
ARTICLE 11
MISCELLANEOUS
11.1 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any New York Court (as
hereinafter defined), this being in addition to any other remedy to which they
may be entitled at law or in equity.
11.2 Entire Agreement. This Agreement, the exhibits hereto, the
Disclosure Statement, Buyer's Disclosure Statement, the introductory language
and recitals set forth above, the Confidentiality Agreement and any other
documents delivered by the parties in connection with this Agreement constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings (oral and written) among
the parties with respect thereto.
11.3 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to its rules
of conflict of laws. Each Seller and Buyer hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the United States District Court for the Southern District of New York (the
"New York Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such courts), waives any objection to
the laying of venue of any such litigation in the New York Courts and agrees not
to plead or claim that such litigation brought in any New York Court has been
brought in an inconvenient forum.
11.4 Bulk Transfer Laws. Buyer hereby waives compliance by Seller with
the provisions of any so-called bulk transfer law in any jurisdiction in
connection with the transactions contemplated hereby.
11.5 Schedules; Tables of Contents and Headings. If a matter is
disclosed on any Section of the Disclosure Statement, such disclosure shall
suffice, without specific repetition and without cross-reference, as a response
to any other section of the Disclosure Statement, but only to the extent such
disclosure is made in such a way that Buyer would be reasonably expected to
determine the applicability of such disclosure to such other section. If a
matter is disclosed on any Section of Buyer's Disclosure Statement, such
disclosure shall suffice, without specific repetition and without cross
43
reference, as a response to any other section of Buyer's Disclosure Statement,
but only to the extent such disclosure is made in such a way the Seller would be
reasonably expected to determine the applicability of such disclosure to such
other Section. The table of contents and section headings of this Agreement and
titles given to Sections of the Disclosure Statement to this Agreement are for
reference purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
11.6 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given (a) when delivered if by hand or
overnight courier, (b) three days after mailing by first-class registered mail,
return receipt requested, postage prepaid, or (c) when telecopied, provided that
concurrently therewith a copy is mailed by first-class registered mail, return
receipt requested, postage prepaid, to the parties at the following addresses
(or to such address as a party may have specified by notice given to the other
party pursuant to this provision):
If to Seller to:
Terex Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇ ▇▇▇▇▇, Esq.
Senior Vice President, Secretary
and General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Aronsohn & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer, to:
Partek Acquisition Company, Inc.
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇, ▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attn: General Counsel
Tel. No.: ▇▇▇-▇▇▇-▇▇-▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇-▇▇▇▇
44
With a copy to:
Reinhart, Boerner, Van Deuren, ▇▇▇▇▇▇
& Rieselbach, s.c.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
11.7 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
11.8 Extension; Waiver. The parties may: (a) extend the time for
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations or warranties contained herein
and (c) waive compliance with any of the agreements, covenants or conditions
contained herein. Any such extension or waiver shall be valid only if in a
writing executed by the party against whom such extension or waiver is sought to
be enforced.
11.9 Certain Definitions. The following terms, whenever used
in this Agreement, shall have the following meanings:
(a) The term "Affiliate" means, with respect to any
individual, corporation, partnership, firm, joint venture, association, trust or
other entity (each a "Person"), any Person who controls, is controlled by, or is
under common control with, such Person.
(b) The term "Buyers' Combined Indemnification Payments" means
the sum of the following: (i) Buyer's ▇▇▇▇▇▇▇ Indemnification Payments, as
defined in the ▇▇▇▇▇▇▇ Purchase Agreement, plus (ii) Buyer's ▇▇▇▇
Indemnification Payments, as defined in the ▇▇▇▇ Purchase Agreement, plus (iii)
amounts paid by Buyer to Seller Indemnified Parties for Losses pursuant to the
indemnification provisions contained in this Agreement (such amounts described
in this subsection (iii) shall be referred to as "Buyer's Princeton
Indemnification Payments").
(c) The term "Buyer Combined Losses" means the sum of the
following: (i) Buyer's ▇▇▇▇▇▇▇ Losses, as defined in the ▇▇▇▇▇▇▇ Purchase
Agreement, plus (ii) Buyer's ▇▇▇▇ Losses, as defined in the ▇▇▇▇ Purchase
Agreement, plus (iii) all Losses suffered by Buyer Indemnified Parties by reason
of breaches under this Agreement, determined without regard to any otherwise
applicable "Material Adverse Effect" qualification (such Losses described in
this subsection (iii) shall be referred to as "Buyer's Princeton Losses").
45
(d) The term "Escrow Agreement" means the escrow agreement
among Buyer, Seller, Partek Cargotec Holding Netherlands B.V., Holland Lift
International B.V., Partek Cargotec Holding Ltd, Powerscreen International plc,
and the Escrow Agent (as defined in Section 11.9(e)), in substantially the form
of Exhibit F attached hereto.
(e) The term "Escrow Agent" means the party serving as escrow
agent under the Escrow Agreement.
(f) The phrase "to the knowledge of Seller" (or words of
similar import, whether expressed in the positive or negative) shall mean only
the actual knowledge after reasonable inquiry into the relevant subject matter
(including, without limitation, inquiry of the general manager and the financial
manager of the Princeton Business) of those persons who are listed in Section
11.9 of the Disclosure Statement.
(g) The term "▇▇▇▇ Purchase Agreement" means the Share
Purchase and Sale Agreement dated of even date herewith among Partek Cargotec
Holding Netherlands B.V., Holland Lift International B.V., and for purposes of
Article 9 thereof only, ▇▇▇▇ B.V., pursuant to which Partek Cargotec Holding
Netherlands B.V. has agreed to acquire from Holland Lift International B.V. all
of the issued and outstanding shares of Terex B.V.
(h) The term "Material Adverse Effect" shall mean any material
adverse effect on, or any circumstances or events which individually or in the
aggregate are reasonably likely to result in a material adverse effect on the
assets, the current or foreseeable future results of operations or the current
or foreseeable future financial condition of the Princeton Business, ▇▇▇▇▇▇▇
Engineering Limited and its subsidiaries, and Terex B.V. and its subsidiaries,
taken as a whole.
(i) The term "▇▇▇▇▇▇▇ Purchase Agreement" means the Share
Purchase and Sale Agreement dated of even date herewith among Partek Cargotec
Holding Ltd, Powerscreen International plc, and for purposes of Article 9
thereof only, ▇▇▇▇▇▇▇ Engineering Limited, pursuant to which Partek Cargotec
Holding Ltd has agreed to acquire from Powerscreen International plc all of the
issued and outstanding shares of ▇▇▇▇▇▇▇ Engineering Limited.
(j) The term "PPM Assets" has the same meaning as set forth in
the ▇▇▇▇ Purchase Agreement.
(k) The term "Reference Amount" has the same meaning as set
forth in the ▇▇▇▇ Purchase Agreement.
(l) The term "Relevant Closing Date Balance Sheets" means the
Closing Balance Sheet, the closing date balance sheet prepared pursuant to
Section 2.3 of the ▇▇▇▇▇▇▇ Purchase Agreement, and the closing date balance
sheet prepared pursuant to Section 2.3 of the ▇▇▇▇ Purchase Agreement.
(m) The term "Section 6.15 Losses" means the sum of the
following: (i) ▇▇▇▇▇▇▇ Section 6.15 Losses, as defined in the ▇▇▇▇▇▇▇ Purchase
Agreement, plus (ii) ▇▇▇▇ Section 6.15 Losses, as defined in the ▇▇▇▇ Purchase
46
Agreement, plus (iii) all payments for Losses incurred by Buyer in connection
with the breach by Seller or any Affiliate of Seller of any of the provisions of
Section 6.15 (such payments described in this subsection (iii) shall be referred
to as "Princeton Section 6.15 Losses").
(n) The term "Seller Combined Losses" means the sum of the
following: (i) Seller's ▇▇▇▇▇▇▇ Losses, as defined in the ▇▇▇▇▇▇▇ Purchase
Agreement, plus (ii) Seller's ▇▇▇▇ Losses, as defined in the ▇▇▇▇ Purchase
Agreement, plus (iii) all Losses suffered by Seller Indemnified Parties by
reason of breaches under this Agreement (such Losses described in this
subsection (iii) shall be referred to as "Seller's Princeton Losses").
(o) The term "Sellers' Combined Indemnification Payments"
means the sum of the following: (i) Seller's ▇▇▇▇▇▇▇ Indemnification Payments,
as defined in the ▇▇▇▇▇▇▇ Purchase Agreement, plus (ii) Seller's ▇▇▇▇
Indemnification Payments, as defined in the ▇▇▇▇ Purchase Agreement, plus (iii)
all amounts paid by Seller to Buyer Indemnified Parties for Losses pursuant to
the indemnification provisions contained in this Agreement (such payments
described in this subsection (iii) shall be referred to as "Seller's Princeton
Indemnification Payments").
(p) The term "Teledyne Indemnified Losses" means any and all
payments for "Losses" (or portions thereof) as that term is defined in this
Agreement and in the ▇▇▇▇ Purchase Agreement, for which (i) Buyer Indemnified
Parties are indemnified against under this Agreement or (ii) "Buyer Indemnified
Parties" under the ▇▇▇▇ Purchase Agreement are indemnified against under the
▇▇▇▇ Purchase Agreement, and in either case for which Terex Corporation receives
payments pursuant to the indemnification provisions of the 1999 Purchase
Agreement.
(q) The term "Total Equity" means the sum of the following:
(i) ▇▇▇▇▇▇▇ Net Equity, as defined in the ▇▇▇▇▇▇▇ Purchase Agreement, plus (ii)
▇▇▇▇ Net Equity, as defined in the ▇▇▇▇ Purchase Agreement, plus (iii) the
amount by which (A) the value of the Princeton Assets, as reflected on the
Closing Balance Sheet, exceeds (B) the liabilities of Princeton assumed by Buyer
and reflected on the Closing Balance Sheet (including reserves reflected on the
Closing Balance Sheet). The amount referred to in the foregoing Section
11.9(n)(iii) shall be referred to as "Princeton Net Asset Value."
(r) The term Truck Mounted Transactions" shall mean the
following transactions: (i) the purchase by Partek Cargotec Holding Netherlands
B.V. of all of the issued and outstanding capital shares of Terex B.V. pursuant
to the terms of the ▇▇▇▇ Purchase Agreement, (ii) the purchase by Buyer of
substantially all of the assets and business of Seller's Princeton division
pursuant to the terms of this Agreement; and (iii) the purchase by Partek
Cargotec Holding Ltd of all of the issued and outstanding capital shares of
▇▇▇▇▇▇▇ Engineering Limited pursuant to the terms of the ▇▇▇▇▇▇▇ Purchase
Agreement.
11.10 Reserved.
47
11.11 Assignment; Binding Effect; Benefit. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
express or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
11.12 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
11.13 Amendment. This Agreement may be amended by the parties hereto at
any time. This Agreement may not be amended or modified except by an instrument
in writing signed by or on behalf of each of the parties hereto.
11.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same Agreement.
[Signatures on the following page.]
48
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf as of the day and year first
written above.
TEREX CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
PARTEK ACQUISITION COMPANY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title:
49
List of Exhibits:
Exhibit A - Closing GAAP
Exhibit B - Form of Seller Guaranty
Exhibit C - Form of Buyer Guaranty
Exhibit D - Matters to be addressed in Opinion of Seller's Counsel
Exhibit E - Matters to be addressed in Opinion of Buyer's Counsel
Exhibit F - Form of Escrow Agreement
