ASSET PURCHASE AGREEMENT
dated as of
June 2, 1995
among
FREIGHTLINER CHASSIS CORPORATION
a Delaware corporation,
FREIGHTLINER CORPORATION
a Delaware corporation
and
OSHKOSH TRUCK CORPORATION
a Wisconsin corporation
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
SALE OF ACQUIRED ASSETS AND TERMS OF PAYMENT
Section 2.1 Sale of Acquired Assets . . . . . . . . . . . . . . 9
Section 2.2 No Assumption of Liabilities . . . . . . . . . . . 10
Section 2.3 Consideration . . . . . . . . . . . . . . . . . . . 10
Section 2.4 Manner of Payment. . . . . . . . . . . . . . . . . 10
Section 2.5 April 30 Inventory Valuation . . . . . . . . . . . 10
Section 2.6 Purchase Price Adjustment . . . . . . . . . . . . . 11
Section 2.7 Spare Parts Inventory . . . . . . . . . . . . . . . 12
Section 2.8 Inventory Valuation Disputes . . . . . . . . . . . 12
Section 2.9 Sale of the Leased Equipment . . . . . . . . . . . 13
Section 2.10 Sale of Oshmex Shares . . . . . . . . . . . . . . . 13
ARTICLE III
THE CLOSING
Section 3.1 Time and Place of Closing . . . . . . . . . . . . . 15
Section 3.2 Deliveries by Oshkosh . . . . . . . . . . . . . . . 15
Section 3.3 Deliveries by Freightliner and Sub . . . . . . . . 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF OSHKOSH
Section 4.1 Corporate Organization, etc. . . . . . . . . . . . 16
Section 4.2 Authorization . . . . . . . . . . . . . . . . . . . 16
Section 4.3 Execution and Delivery . . . . . . . . . . . . . . 16
Section 4.4 Valid and Binding Agreement . . . . . . . . . . . . 17
Section 4.5 No Violation . . . . . . . . . . . . . . . . . . . 17
Section 4.6 Consents and Approvals . . . . . . . . . . . . . . 17
Section 4.7 Compliance with Law . . . . . . . . . . . . . . . . 18
Section 4.8 Financial Statements . . . . . . . . . . . . . . . 18
Section 4.9 No Undisclosed Liabilities . . . . . . . . . . . . 19
Section 4.10 Interim Operations . . . . . . . . . . . . . . . . 19
Section 4.11 Customers and Suppliers . . . . . . . . . . . . . 20
Section 4.12 Labor Difficulties . . . . . . . . . . . . . . . . 20
Section 4.13 Legal Proceedings, etc. . . . . . . . . . . . . . 20
Section 4.14 Properties and Related Matters . . . . . . . . . . 21
Section 4.15 Intellectual Property . . . . . . . . . . . . . . 21
Section 4.16 Employee Benefits . . . . . . . . . . . . . . . . 22
Section 4.17 Leases . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.18 Taxes; Tax Returns . . . . . . . . . . . . . . . . 24
Section 4.19 Contracts . . . . . . . . . . . . . . . . . . . . 25
Section 4.20 Licenses and Permits . . . . . . . . . . . . . . . 26
Section 4.21 Acquired Assets Necessary to the Chassis Business 27
Section 4.22 Environmental Matters . . . . . . . . . . . . . . 27
Section 4.23 Products Liability . . . . . . . . . . . . . . . . 28
Section 4.24 Affiliate Transactions . . . . . . . . . . . . . . 28
Section 4.25 Noncompetes . . . . . . . . . . . . . . . . . . . 29
Section 4.26 Compensation . . . . . . . . . . . . . . . . . . . 29
Section 4.27 Product Warranties; Recalls . . . . . . . . . . . 29
Section 4.28 Oshmex . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF FREIGHTLINER AND SUB
Section 5.1 Corporate Organization, etc. . . . . . . . . . . . 31
Section 5.2 Authorization . . . . . . . . . . . . . . . . . . . 31
Section 5.3 Execution and Delivery . . . . . . . . . . . . . . 31
Section 5.4 Valid and Binding Agreement . . . . . . . . . . . . 31
Section 5.5 No Violation . . . . . . . . . . . . . . . . . . . 32
Section 5.6 Consents and Approvals . . . . . . . . . . . . . . 32
ARTICLE VI
COVENANTS AND AGREEMENTS OF THE PARTIES
Section 6.1 Access and Cooperation . . . . . . . . . . . . . . 33
Section 6.2 Conduct of Chassis Business of Oshkosh . . . . . . 33
Section 6.3 Consents and Approvals, etc. . . . . . . . . . . . 34
Section 6.4 Reasonable Best Efforts . . . . . . . . . . . . . . 35
Section 6.5 Permit Transfer . . . . . . . . . . . . . . . . . . 35
Section 6.6 Collection of Accounts Receivable . . . . . . . . . 36
Section 6.7 Bulk Transfer Laws . . . . . . . . . . . . . . . . 36
Section 6.8 Covenant Not to Compete . . . . . . . . . . . . . . 36
Section 6.9 Employees . . . . . . . . . . . . . . . . . . . . . 37
Section 6.10 Expenses . . . . . . . . . . . . . . . . . . . . . 38
Section 6.11 Further Assurances . . . . . . . . . . . . . . . . 39
Section 6.12 Public Announcements . . . . . . . . . . . . . . . 39
Section 6.13 Inventory Storage . . . . . . . . . . . . . . . . 39
Section 6.14 Disclosure Supplements . . . . . . . . . . . . . . 39
Section 6.15 Warranty and Related Product Obligations . . . . . 40
Section 6.16 Use of Name; ALL STEER/TM/ . . . . . . . . . . . . 42
Section 6.17 Brokers . . . . . . . . . . . . . . . . . . . . . 44
Section 6.18 Liability Insurance . . . . . . . . . . . . . . . 44
Section 6.19 Assumption of IRB and IRB Documents . . . . . . . 44
ARTICLE VII
CLOSING CONDITIONS
Section 7.1 Conditions to Each Party's Obligations to Effect
the Transactions Contemplated Hereby . . . . . . . . . . . 45
Section 7.2 Conditions to the Obligations of Freightliner and
Sub to Effect the Transactions Contemplated Hereby . . . . 45
Section 7.3 Conditions to the Obligations of Oshkosh to Effect
the Transactions Contemplated Hereby . . . . . . . . . . . 47
Section 7.4 Certificates . . . . . . . . . . . . . . . . . . . 48
ARTICLE VIII
TERMINATION AND ABANDONMENT
Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . 48
Section 8.2 Procedure and Effect of Termination . . . . . . . . 48
ARTICLE IX
Page
TAX MATTERS
Section 9.1 General . . . . . . . . . . . . . . . . . . . . . . 49
Section 9.2 Sales, Use and Transfer Taxes . . . . . . . . . . . 49
Section 9.3 Federal, State and Local Taxes . . . . . . . . . . 49
Section 9.4 Cooperation and Exchange of Information . . . . . . 50
Section 9.5 Tax Records . . . . . . . . . . . . . . . . . . . . 50
Section 9.6 Withholding . . . . . . . . . . . . . . . . . . . . 50
Section 9.7 Purchase Price Allocation . . . . . . . . . . . . . 51
Section 9.8 FIRPTA Certificate . . . . . . . . . . . . . . . . 51
ARTICLE X
SURVIVAL AND INDEMNIFICATION
Section 10.1 Survival of Representations . . . . . . . . . . . 51
Section 10.2 Agreement to Indemnify . . . . . . . . . . . . . . 51
Section 10.3 Conditions of Indemnification . . . . . . . . . . 54
Section 10.4 Limitation on Remedies . . . . . . . . . . . . . . 54
ARTICLE XI
MISCELLANEOUS
Section 11.1 Headings . . . . . . . . . . . . . . . . . . . . . 55
Section 11.2 Notices . . . . . . . . . . . . . . . . . . . . . 55
Section 11.3 Assignment . . . . . . . . . . . . . . . . . . . . 57
Section 11.4 Complete Agreement . . . . . . . . . . . . . . . . 57
Section 11.5 Parties in Interest . . . . . . . . . . . . . . . 57
Section 11.6 Counterparts . . . . . . . . . . . . . . . . . . . 57
Section 11.7 Governing Law . . . . . . . . . . . . . . . . . . 57
Section 11.8 Severability . . . . . . . . . . . . . . . . . . . 57
Section 11.9 Amendments; Waivers . . . . . . . . . . . . . . . 57
INDEX OF DEFINED TERMS
"Acquired Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Affiliate Transactions" . . . . . . . . . . . . . . . . . . . . . . . 29
"Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Alliance Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Allocation Schedule" . . . . . . . . . . . . . . . . . . . . . . . . . 51
"Ancillary Agreements" . . . . . . . . . . . . . . . . . . . . . . . . 3
"April 30 Inventory Statement" . . . . . . . . . . . . . . . . . . . . 10
"April 30 Inventory Value" . . . . . . . . . . . . . . . . . . . . . . 10
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Assumed Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . . 10
"Assumption Agreement" . . . . . . . . . . . . . . . . . . . . . . . . 3
"Bentley Warehouse" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Bill of Sale" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Books and Records" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Bulk Transfer Laws" . . . . . . . . . . . . . . . . . . . . . . . . . 36
"Business Know-how" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Chassis Business" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Chassis Business Material Adverse Effect" . . . . . . . . . . . . . . 4
"Claim" or "Claims" . . . . . . . . . . . . . . . . . . . . . . . . . . 53
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Continuing Employees" . . . . . . . . . . . . . . . . . . . . . . . . 38
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Daimler-Benz" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Damages" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
"Deed" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Disclosure Schedule" . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
"Effective Date Inventory Statement" . . . . . . . . . . . . . . . . . 11
"Effective Date Inventory Value" . . . . . . . . . . . . . . . . . . . 11
"Effective Date Purchase Orders" . . . . . . . . . . . . . . . . . . . 26
"Employees" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Environmental Laws" . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Environmental Notice" . . . . . . . . . . . . . . . . . . . . . . . . 4
"EPA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Equipment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Equipment Lease" . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Equipment Lease Litigation" . . . . . . . . . . . . . . . . . . . . . 5
"Equipment Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . 13
"Equipment Purchase Price" . . . . . . . . . . . . . . . . . . . . . . 13
"ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"ERISA Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
"Excluded Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Exemptions" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
"February Balance Sheet" . . . . . . . . . . . . . . . . . . . . . . . 18
"Final Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . 11
"FIRPTA Certificate" . . . . . . . . . . . . . . . . . . . . . . . . . 51
"First Chicago" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Freightliner" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Freightliner DC Plan" . . . . . . . . . . . . . . . . . . . . . . . . 38
"Freightliner Group" . . . . . . . . . . . . . . . . . . . . . . . . . 51
"GAAP" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Gaffney Manufacturing Facility" . . . . . . . . . . . . . . . . . . . 6
"Governmental Body" . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Grantee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
"Grantor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
"Income Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
"Indemnified Party" . . . . . . . . . . . . . . . . . . . . . . . . . . 54
"Indemnifying Party" . . . . . . . . . . . . . . . . . . . . . . . . . 54
"Independent Accounting Firm" . . . . . . . . . . . . . . . . . . . . . 12
"Industrial Property Rights" . . . . . . . . . . . . . . . . . . . . . 6
"Initial Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . 10
"Inventory" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"IRB" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"IRB Documents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Lease" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Leased Equipment" . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Lemon Law Litigation" . . . . . . . . . . . . . . . . . . . . . . . . 40
"Liability" or "Liabilities" . . . . . . . . . . . . . . . . . . . . . 7
"License" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
"Licensed Trademark" . . . . . . . . . . . . . . . . . . . . . . . . . 42
"Licenses and Permits" . . . . . . . . . . . . . . . . . . . . . . . . 7
"Lien" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Loan Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Maximum Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
"Mexican GAAP" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
"Minimum Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
"Net Equipment Price" . . . . . . . . . . . . . . . . . . . . . . . . . 13
"OCD General Ledger" . . . . . . . . . . . . . . . . . . . . . . . . . 11
"Oshkosh" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Oshkosh DC Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
"Oshkosh Financial Statements" . . . . . . . . . . . . . . . . . . . . 18
"Oshkosh Group" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
"Oshmex" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Oshmex Audited Financial Statements" . . . . . . . . . . . . . . . . . 30
"Oshmex Manufacturing Facility" . . . . . . . . . . . . . . . . . . . . 7
"Oshmex Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Oshmex Shares Closing Date" . . . . . . . . . . . . . . . . . . . . . 14
"Oshmex Shares Purchase Price" . . . . . . . . . . . . . . . . . . . . 14
"Patents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Permitted Encumbrances" . . . . . . . . . . . . . . . . . . . . . . . 7
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Plans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
"Product Liability Claims" . . . . . . . . . . . . . . . . . . . . . . 40
"Product Warranties" . . . . . . . . . . . . . . . . . . . . . . . . . 40
"Recall Committee" . . . . . . . . . . . . . . . . . . . . . . . . . . 41
"Safety Recalls" . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
"Spare Parts Inventory" . . . . . . . . . . . . . . . . . . . . . . . . 8
"Special Review Financial Statements" . . . . . . . . . . . . . . . . . 30
"Sub" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Tax" or "Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Tax Returns" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Trademarks" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Transfer Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
"Transitional Services Agreement" . . . . . . . . . . . . . . . . . . . 8
"Vacation Accrual" . . . . . . . . . . . . . . . . . . . . . . . . . . 38
"Vacation Schedule" . . . . . . . . . . . . . . . . . . . . . . . . . . 38
"WARN" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of June 2, 1995 (the "Agree-
ment"), among Freightliner Corporation, a Delaware corporation
("Freightliner"), Freightliner Chassis Corporation, a Delaware corporation
and a wholly owned subsidiary of Freightliner ("Sub"), and Oshkosh Truck
Corporation, a Wisconsin corporation ("Oshkosh").
WHEREAS Freightliner and Oshkosh have previously entered into a
non-binding letter of intent providing for a comprehensive strategic
alliance, including the acquisition by Freightliner of the Chassis Busi-
ness (as hereinafter defined) of Oshkosh; and
WHEREAS Freightliner and Oshkosh have entered into an Alliance
Agreement dated as of the date hereof (the "Alliance Agreement"); and
WHEREAS the respective Boards of Directors of each of
Freightliner, Sub and Oshkosh have determined that the transactions
provided for in this Agreement are in the best interests of their respec-
tive companies and shareholders and have approved this Agreement and the
transactions contemplated hereby and the Management Board (Vorstand) of
Daimler-Benz Aktiengesellschaft, a stock corporation organized under the
laws of Germany and the parent of Freightliner ("Daimler-Benz"), has ap-
proved this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and
intending to be legally bound hereby, the parties hereto agree, subject to
the conditions herein contained, as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, each of
the following terms shall have the following meaning:
"Acquired Assets" shall mean all right, title and interest of Oshkosh
in, to and under the following:
(i) the Gaffney Manufacturing Facility;
(ii) the Inventory and the Spare Parts Inventory;
(iii) the Assumed Contracts;
(iv) all Leases and easements to which Oshkosh is a
party and which relate primarily to the Chassis Business;
(v) the Licenses and Permits;
(vi) all Patents described in Section 4.15(a)(i) to
the Disclosure Schedule (except for the Patent relating to ALL
STEER/TM/) and all Trademarks described in Section 4.15(a)(ii)
to the Disclosure Schedule (except for the Trademarks and logos
relating to ALL STEER/TM/ and Oshkosh);
(vii) all books, records, technology, manufacturing
know-how, formulas, computer software, production records,
manufacturing processes, quality control records, finished
product specifications, ingredient specifications, packaging
supplies specifications, product registrations, records relating
to the adoption and use of the Trademarks referred to in clause
(vi) above by Oshkosh and its predecessors and such records per-
taining to other related Trademarks, marketing plans, sales
records and histories, market research data, promotional, adver-
tising and marketing materials, radio and television commer-
cials, customer lists, label and shipping carton dies, designs,
films, artwork, photography, mechanical art, color separations,
prints, plates and graphic materials, permits and licenses and
inventory records in the possession of Oshkosh relating
primarily to either the Acquired Assets or the Chassis Business,
manufacturing, engineering and other drawings (including, if
available, as-built plans with respect to the Gaffney
Manufacturing Facility), engineering data and design and engi-
neering specifications with respect to the Gaffney Manufacturing
Facility and the Equipment and any and all proprietary rights,
records and materials now or formerly used or held for use
primarily in connection with the Acquired Assets or the Chassis
Business (hereinafter referred to as the "Business Know-how");
provided, however, that if any item of Business Know-how is also
used in businesses of Oshkosh other than the Chassis Business,
Oshkosh shall be deemed to have retained a nonexclusive royalty-
free and transferable right to use such item of Business Know-
how;
(viii) all Books and Records;
(ix) all other assets and properties primarily
relating to the Chassis Business of every kind and description,
wherever located; and
(x) any and all rights to any of the foregoing.
"Affiliate" shall mean, with respect to any Person, any other Person
which, directly or indirectly, controls or is controlled by, or is under
common control with, such Person. For purposes of this definition
"control" (including the correlative meanings of the terms "controlled by"
and "under common control with"), with respect to any Person, shall mean
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities or by contract or otherwise.
"Ancillary Agreements" shall mean the Bill of Sale, the Assumption
Agreement and the Transitional Services Agreement.
"Assumed Contracts" means the contracts, leases and purchase orders
listed on Section 1.2 of the Disclosure Schedule.
"Assumption Agreement" shall mean the agreement to be entered into on
the Closing Date by Freightliner, Sub and Oshkosh pursuant to which
Freightliner and Sub shall assume the Assumed Liabilities, which agreement
shall be substantially in the form attached as Exhibit A hereto.
"Bentley Warehouse" shall mean the warehouse in Milwaukee, Wisconsin,
in which Oshkosh maintains the Spare Parts Inventory.
"Bill of Sale" shall mean the instrument substantially in the form
attached hereto as Exhibit B.
"Books and Records" shall mean all of the books and records of
Oshkosh (or true and complete copies thereof), including all computerized
books and records maintained by Oshkosh, which relate to the Chassis Busi-
ness and are necessary for Sub and Freightliner to operate the Chassis
Business after the Effective Date, including, without limitation, books of
account, general, financial, tax and personnel records, sales,
advertising, marketing and promotional records and literature and other
sales-related material, Contracts (including all amendments, corre-
spondence and related materials), Leases (including all amendments,
correspondence and related materials), Licenses and Permits (including all
correspondence, orders or related materials), correspondence and other
documents and any rights thereto.
"Chassis Business" shall mean the business of engineering, manu-
facturing, marketing, distributing and servicing chassis and chassis parts
(including spare parts) for motor homes, school buses, delivery vans and
shuttle buses conducted by Oshkosh and its predecessor, Deere & Co.;
provided, however, that the term Chassis Business shall not be deemed to
include the business conducted by Oshmex.
"Chassis Business Material Adverse Effect" shall mean any effect
resulting from an existing or incipient condition, fact, development or
other situation which effect is materially adverse to the business,
properties, assets, liabilities, results of operations or financial
condition of the Chassis Business taken as a whole.
"Closing" shall mean the completion of the transactions contemplated
by Article II hereof as provided in Section 3.1 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Contracts" shall mean all contracts, agreements, commitments,
purchase orders and undertakings to which any of Oshkosh or its Affiliates
is a party relating primarily to the Chassis Business.
"Disclosure Schedule" shall mean the written schedule of disclosures
which Oshkosh is delivering to Freightliner and Sub as contemplated by
this Agreement simultaneously with the execution and delivery hereof.
"Employees" shall mean those persons employed by Oshkosh who are
engaged or were engaged primarily in the Chassis Business prior to the
Effective Date.
"Environmental Laws" shall mean any applicable federal, state, local
and or other law, statute, ordinance, rule, regulation, common law,
permit, judgment, order, decree, or other binding requirement of, or bind-
ing agreement with, any Governmental Body, relating to the presence, re-
lease and threatened release of materials, energy or noise into the
environment or workplace, the protection of natural resources and the
environment, historic preservation, zoning or land use, and any judicial
ruling, court decree, order or judgment with respect thereto.
"Environmental Notice" means any written notice or claim by any
Person received by Oshkosh or known to Oshkosh alleging potential
liability (including, without limitation, potential liability for
investigatory costs, remedial costs, governmental costs, harm or damages
to a Person, property, natural resources or other, control or prevention
of nuisance and similar conduct, fines or penalties) arising out of, based
on or resulting from (i) the presence, release or threatened release of
any material or (ii) circumstances forming the basis of any violation, or
alleged violation, of any applicable Environmental Laws.
"EPA" shall mean the United States Environmental Protection Agency
and any successor Governmental Body.
"Equipment" shall mean all the machinery, equipment and other
property described on Section 4.14(b)(i) of the Disclosure Schedule, or
located at the Gaffney Manufacturing Facility, with such additions thereto
as shall have occurred prior to the Effective Date in the ordinary course
of business of the Chassis Business
"Equipment Lease" shall mean the Master Equipment Lease Agreement,
dated as of August 4, 1989, between First Chicago and Oshkosh, as amended
by Lease Supplement No. 1 dated August 31, 1989, Lease Supplement No. 2
dated October 2, 1989, Lease Supplement No. 3 dated November 10, 1989,
Lease Supplement No. 4 dated December 1, 1989 and Lease Supplement No. 5
dated December 15, 1989.
"Equipment Lease Litigation" means the litigation in the United
States District Court for the Eastern District of Wisconsin entitled
Oshkosh Truck Corporation v. First Chicago Leasing Corporation, Universal
Financial Services and Marshall & Stevens, Incorporated (Case No. 94-C-
1407) and any cases or actions arising out of or related to the
circumstances involved in such litigation.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" shall mean the following assets and properties of
Oshkosh which are not being sold to Sub:
(i) all accounts receivable of the Chassis Busi-
ness arising out of the Chassis Business on or prior to the
Effective Date;
(ii) all of Oshkosh's cash-on-hand arising out of
the Chassis Business;
(iii) any documents or records which Oshkosh is
required by law to retain in its possession (provided, however,
that copies of all such documents or records shall be provided
to Sub if such documents or records qualify as Books and
Records);
(iv) insurance policies and rights under or arising
from such policies;
(v) all rights of Oshkosh under this Agreement;
(vi) except as provided in Section 6.16 hereof, any
rights of Oshkosh to the names "Oshkosh" and "ALL STEER"/TM/ or
any variation thereof; and
(vii) all assets and properties of Oshkosh not
primarily relating to or used in the Chassis Business.
"First Chicago" shall mean First Chicago Leasing Corporation, a
Delaware corporation.
"GAAP" shall mean U.S. generally accepted accounting principles.
"Gaffney Manufacturing Facility" shall mean the land, buildings and
fixtures, which are described in Section 4.14(a)(i) to the Disclosure
Schedule and which constitute Oshkosh's 165,000 square foot chassis
manufacturing facility in Gaffney, South Carolina. Such term includes
without limitation all fixtures and Equipment which are used in such
facility, whether such items are reflected in the financial statements of
Oshkosh or the Chassis Business and whether such items are owned or leased
by Oshkosh.
"Governmental Body" shall mean any domestic or foreign national,
regional, state (including the District of Columbia and the Commonwealth
of Puerto Rico) or municipal or other local government or multi-national
body (including the European Union), any subdivision, agency, court,
commission, authority or instrumentality thereof, or any quasi-
governmental or arbitral tribunal or other private body exercising any
regulatory or taxing authority thereunder.
"Industrial Property Rights" shall mean (i) Patents, (ii) Trademarks
and (iii) Business Know-how.
"Inventory" shall mean all of the raw material, work in progress,
packaging materials and finished goods inventory owned or held by Oshkosh
as of the Effective Date for use in the Chassis Business, excluding the
Spare Parts Inventory.
"IRB" shall mean the Cherokee County, South Carolina Variable/Fixed
Rate Demand Industrial Revenue Bonds, Series 1989 (Oshkosh Truck
Corporation Project).
"IRB Documents" shall mean the Loan Agreement, dated as of August 1,
1989 between Cherokee County, South Carolina and Oshkosh and the Tax
Agreements (as such term is defined in said Loan Agreement).
"Lease" shall mean any agreement pursuant to which Oshkosh leases
real or personal property which is utilized primarily in connection with
the Chassis Business.
"Leased Equipment" shall mean the equipment and other assets listed
in Section 1.1 of the Disclosure Schedule which were formerly leased by
Oshkosh pursuant to the Equipment Lease.
"Liability" or "Liabilities" shall mean and include any present or
future direct or indirect indebtedness, expense, liability, claim, loss,
damage, deficiency, obligation or responsibility, whether known or
unknown, fixed or unfixed, conditional or unconditional, choate or
inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise.
"Licenses and Permits" shall mean the governmental permits,
authorizations, licenses, registrations, waivers, exemptions, applications
and reports held or filed by Oshkosh or issued by any Governmental Body to
Oshkosh and required for the lawful operation of, or appropriate with re-
spect to, the Chassis Business.
"Lien" shall mean any mortgage, security interest, lien (statutory or
other), pledge, escrow, option, right of first refusal, indenture, ease-
ment, licenses, security agreement, conditional sale agreement or encum-
brance of any kind or character.
"Loan Agreement" shall mean the Loan Agreement dated as of August 1,
1989, by and between Cherokee County, South Carolina and Oshkosh.
"Oshmex" shall mean Chasises y Autopartes Oshmex, S.A. de C.V.
"Oshmex Manufacturing Facility" means the manufacturing facility
located at Avenida Dos Numero 7, Fraccionamiento Industrial Cartejena,
54918 Tultitlan, Mexico.
"Oshmex Shares" shall mean the 45 shares of Series B common shares,
par value new Mex$1,000 per share, of Oshmex owned by Oshkosh.
"Patents" shall mean patents (including all reissues, divisions,
continuations and extensions thereof), patent applications and patent
disclosures docketed.
"Permitted Encumbrances" shall mean any Lien which is (i) a Lien for
current taxes not yet due and payable, (ii) related to a zoning or
building statute, ordinance, resolution or regulation not violated by
existing improvement on or the current use of the property or any portion
thereof subject thereto, (iii) inchoate mechanic and materialmen or
comparable Liens for construction in progress which, in the aggregate, do
not exceed $50,000, (iv) Liens which do not materially detract from the
value or interfere with the use of the property or asset subject thereto,
or (v) listed and described on Section 4.14 of the Disclosure Schedule.
"Person" means any natural person, corporation, partnership, limited
liability company, joint venture, trust, association, unincorporated
organization, Governmental Body or other entity.
"Spare Parts Inventory" shall mean all usable aftermarket spare
parts inventories owned or held by Oshkosh for use in the Chassis Business
wherever located.
"Tax" or "Taxes" shall mean any and all taxes, charges, fees,
imposts, levies, interest, penalties, additions to tax or other
assessments or fees of any kind (whether federal, state, local or
foreign), including without limitation income, corporate, capital, gross
receipts, profits, occupation, ad valorem, transfer, withholding, payroll,
employment, excise, property, sales, use, turnover, value added and
franchise taxes, deductions, withholdings and custom duties, imposed by
any Governmental Body.
"Tax Returns" shall mean any return, report, information return or
other document (including any related or supporting information) filed or
required to be filed with any Governmental Body in connection with the
determination, assessment, collection or administration of any Taxes or
the administration of any laws, regulations or administrative requirements
relating to any Taxes.
"Trademarks" shall mean trademarks, applications therefor and
registrations thereof.
"Transitional Services Agreement" shall mean the agreement to be
entered into on the Closing Date between Sub and Oshkosh with respect to
the provision of certain services by Oshkosh after the Closing, which
agreement will be substantially in the form attached as Exhibit C hereto.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural,
and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter.
ARTICLE II
SALE OF ACQUIRED ASSETS AND TERMS OF PAYMENT
Section 2.1 Sale of Acquired Assets.
(a) Upon the terms and subject to the conditions of
this Agreement and in reliance on the representations, warranties and
agreements of Freightliner and Sub contained herein, at the Closing
Oshkosh shall sell, convey, assign, transfer and deliver to Sub, and
Freightliner will cause Sub to accept and purchase from Oshkosh, the Ac-
quired Assets, other than the Spare Parts Inventory and the Oshmex Shares.
(b) Such sale, conveyance, assignment, transfer and
delivery shall be effected by:
(i) delivery by Oshkosh to Sub of (x) such
general and specific bills of sale, endorsements, assignments,
deeds and such other good and sufficient instruments of con-
veyance and transfer as shall be necessary to vest in Sub good
and marketable title to the Acquired Assets free and clear of
all Liens, except for Permitted Encumbrances, including without
limitation:
(1) a general warranty deed in the form attached
hereto as Exhibit D, transferring to Sub the real property and
improvements thereon comprising the Gaffney Manufacturing
Facility (the "Deed"); and
(2) assignments in recordable form of the Patents
described in Section 4.15(a)(i) of the Disclosure Schedule
(except for the Patent relating to ALL STEER/TM/) and the Trade-
marks described in Section 4.15(a)(ii) of the Disclosure
Schedule (except for the Trademarks and logos relating to ALL
STEER/TM/ and Oshkosh));
(3) the Bill of Sale;
and (y) all data relating to the Acquired Assets which it is re-
quired to deliver hereunder and which it has not previously
delivered to Sub or Freightliner. Simultaneously with such
delivery, Oshkosh will take all such steps as may be requisite
to put Sub in actual possession and operating control of the
Acquired Assets.
Section 2.2 No Assumption of Liabilities. Neither Freightliner
nor Sub is assuming any debt, liability or obligation of Oshkosh, whether
known or unknown, fixed or contingent (including, but not limited to, (i)
the payment of any Taxes, accounts payable or notes payable of Oshkosh,
(ii) any environmental liability of any nature originating or arising on
or prior to the Effective Date and (iii) any obligation or liability
relating to any current, former or retired employee of or consultant to
Oshkosh or the Chassis Business, including workers compensation, retiree
benefits, severance benefits, medical benefits, compensation or employee
benefits and including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of ERISA, sponsored, maintained, contributed to or
required to be contributed to by Oshkosh or any trade or business, whether
or not incorporated, which together with Oshkosh would be deemed a "single
employer" within the meaning of Section 4001 of ERISA (an "ERISA Affili-
ate")), except for (a) the liabilities to be paid or performed after the
Closing under the Assumed Contracts which are assigned to Sub at the
Closing, and (b) the liability directly associated with the Vacation
Accrual (collectively, the "Assumed Liabilities"). On the terms and
subject to the conditions set forth in this Agreement, on the Closing Date
Freightliner and Sub shall execute and deliver to Oshkosh the Assumption
Agreement.
Section 2.3 Consideration. Upon the terms and subject to the
conditions contained in this Agreement, in reliance upon the representa-
tions, warranties and agreements of Oshkosh contained herein, and in
consideration of the aforesaid sale, assignment, transfer and delivery of
the Acquired Assets, on the Effective Date Freightliner will cause Sub to
pay or cause to be paid to Oshkosh in cash the sum of (i) $6,700,000 and
(ii) the April 30 Inventory Value (determined in accordance with Section
2.5 hereof) (the "Initial Purchase Price"). The Initial Purchase Price
shall be subject to the adjustments provided for in Section 2.6 hereof.
Section 2.4 Manner of Payment. At the Closing Freightliner
shall cause Sub to pay the Initial Purchase Price to Oshkosh by wire
transfer of immediately available funds to an account to be designated
by Oshkosh not later than two business days prior to the Closing.
Section 2.5 April 30 Inventory Valuation. Oshkosh has taken a
physical count of the Inventory as of April 30, 1995. Section 2.5 of the
Disclosure Schedule sets forth a statement setting forth the value of the
Inventory as of the close of business on April 30, 1995 (the "April 30
Inventory Statement"), accompanied by a certificate of the Chief Financial
Officer of Oshkosh to the effect that the valuation set forth therein was
prepared in accordance with GAAP and the Inventory valuation methods set
forth on Exhibit E hereto. The value of the Inventory set forth on the
April 30 Inventory Statement is herein referred to as the "April 30
Inventory Value."
Section 2.6 Purchase Price Adjustment.
(a) Oshkosh shall adjust the Inventory account balances and
reserve accounts in the general ledger of Oshkosh relating to the Chassis
Business (the "OCD General Ledger") to the April 30 Inventory Value. From
May 1, 1995 through the Effective Date, Oshkosh shall record all Inventory
activities in a manner consistent with GAAP and the Inventory Valuation
methods set forth on Exhibit E hereto.
(b) As soon as practicable, but not more than 30 days after
the Effective Date, Freightliner shall deliver to Oshkosh a statement
setting forth the value of the Inventory as of the close of business on
the Effective Date (the "Effective Date Inventory Statement"). Such value
shall be determined by adjusting the April 30 Inventory Value in
accordance with the provisions of Section 2.6(a). The form of the
Effective Date Inventory Statement shall be substantially the same as the
form of the April 30 Inventory Statement and shall be accompanied by a
certificate of the Treasurer of Freightliner to the effect that the valua-
tion set forth therein was prepared in accordance with GAAP, the Inventory
valuation methods set forth on Exhibit E hereto and the procedures
referred to in Section 2.6(a) hereof. During the preparation of the
Effective Date Inventory Statement by Freightliner and during the period
of any dispute contemplated by Section 2.8 hereof, Freightliner shall
provide Oshkosh and its accountants full and complete access to the books,
records, work papers, facilities and employees of the Chassis Business, to
the extent required by them to complete their review of the Effective Date
Inventory Statement and to investigate the basis for any potential dispute
contemplated by Section 2.8. The Effective Date Inventory Statement shall
be final, binding and conclusive unless Oshkosh objects in writing thereto
in the manner and within the time period contemplated by Section 2.8. The
value of the Inventory set forth on the Effective Date Inventory
Statement when such statement has become final, binding and conclusive
pursuant to this Section 2.6 or Section 2.8 is herein referred to as the
"Effective Date Inventory Value."
(c) If the April 30 Inventory Value exceeds the Effective
Date Inventory Value, then Oshkosh shall pay to Freightliner an amount
equal to such excess. If the Effective Date Inventory Value exceeds the
April 30 Inventory Value, then Freightliner shall pay to Oshkosh an amount
equal to the excess.
(d) Any amount payable pursuant to Section 2.6(c) hereof
shall be paid by wire transfer of immediately available funds to a bank
account designated by Freightliner or Oshkosh, as the case may be, such
transfer to occur (i) five business days after the Effective Date
Inventory Statement has become final, binding and conclusive pursuant to
this Section 2.6 or Section 2.8 or (ii) such date as shall be mutually
agreed to in writing by Freightliner and Oshkosh. The final cash price
(hereinafter referred to as the "Final Purchase Price") shall be the sum
of (i) Initial Purchase Price as adjusted in accordance with the
provisions of this Section 2.6, (ii) the payment in respect of the Spare
Parts Inventory contemplated by Section 2.7(b) hereof, (iii) the Equipment
Purchase Price and (iv) the Oshmex Shares Purchase Price.
Section 2.7 Spare Parts Inventory.
(a) Oshkosh shall continue to administer and maintain the
Spare Parts Inventory at the Bentley Warehouse and shall continue to sell
Spare Parts Inventory in a manner consistent with its past practice.
Following the Effective Date, Oshkosh shall obtain the approval of Sub
prior to ordering any parts which would constitute Spare Parts Inventory,
other than in the ordinary course of business consistent with past
practice.
(b) Not later than thirty-six (36) months following the
Effective Date, Sub shall purchase the Spare Parts Inventory (the "Spare
Parts Inventory Purchase Date"). Sub shall give not less than 90 days'
notice of its intent to purchase such inventory. Following the delivery
of such notice, the parties shall negotiate and agree upon an orderly
transfer procedure pursuant to which Sub shall take physical possession of
the Spare Parts Inventory and remove it from the Bentley Warehouse on or
about the Spare Parts Inventory Purchase Date. Sub shall bear the expense
of packaging and moving the Spare Parts Inventory from the Bentley
Warehouse. The purchase price for the Spare Parts Inventory shall be
determined by mutual agreement of Sub and Oshkosh; such determination to
be based upon the Inventory valuation methods set forth on Exhibit F
hereto. If the parties are unable to agree on the valuation of the Spare
Parts Inventory, such valuation shall be determined by the Independent
Accounting Firm in accordance with the provisions of Section 2.8.
Section 2.8 Inventory Valuation Disputes. Oshkosh may dispute
any amounts reflected on the Effective Date Inventory Statement; provided
that Oshkosh shall notify Freightliner in writing of each disputed item,
and shall specify the amount thereof in dispute and the basis for such
dispute, within 10 business days of Oshkosh's receipt of the Effective
Date Inventory Statement. Oshkosh and Freightliner shall attempt to
reconcile their differences and any such resolution shall be in writing
and shall be final, binding and conclusive. In the event Freightliner and
Oshkosh are unable to agree on all disputed items within 10 business days
of Freightliner's receipt of Oshkosh's written objections, or if
Freightliner and Oshkosh are unable to agree upon the purchase price for
the Spare Parts Inventory pursuant to Section 2.7(b), then Freightliner
and Oshkosh shall submit the items in dispute for resolution to Coopers &
Lybrand LLP (the "Independent Accounting Firm"), which shall, within 10
calendar days after submission, determine such disputed items and report
to the parties, which report shall be final, binding and conclusive. The
fees and disbursements of the Independent Accounting Firm shall be allo-
cated equally between Freightliner and Oshkosh.
Section 2.9. Sale of the Leased Equipment.
(a) Oshkosh shall give prompt notice to Freightliner of the
settlement or other resolution of the Equipment Lease Litigation. Subject
to the conditions set forth below, on the tenth business day following
Freightliner's receipt of such notice (the "Equipment Purchase Date"),
Oshkosh shall sell, convey, assign, transfer and deliver to Sub and Sub
will accept and purchase from Oshkosh, all right, title and interest of
Oshkosh in the Leased Equipment, free and clear of all Liens. On the
Equipment Purchase Date, (i) Oshkosh shall convey the Leased Equipment to
Sub by delivery to Sub of such general and specific bills of sales,
assignments, deeds and other good and sufficient instruments of conveyance
and transfer as shall be necessary to vest in Sub good and marketable
title to the Leased Equipment free and clear of all Liens, including
without limitation such instruments and agreements executed and delivered
to Freightliner and Sub by First Chicago and/or United Financial Services
as Freightliner and its counsel may deem necessary or advisable and (ii)
Freightliner will cause Sub to pay or cause to be paid to Oshkosh in cash
the sum of $2.2 million; provided, however, that to the extent that the
settlement or other resolution of the Equipment Lease Litigation results
in a net purchase price (net of legal fees and other expenses incurred by
Oshkosh relating to the Equipment Lease Litigation) for the Leased
Equipment of an amount less than $2.2 million (such amount, the "Net
Equipment Price"), Freightliner shall cause Sub to pay or cause to be paid
to Oshkosh an amount equal to the Net Equipment Price plus one-half of the
difference between $2.2 million and the Net Equipment Price (the
"Equipment Purchase Price"). In no event shall Sub be required to pay
more than $2.2 million for the Leased Equipment. Notwithstanding the
foregoing, the obligations of Sub and Freightliner set forth in this
Section 2.9 are subject to the conditions that (i) Freightliner shall have
consented to the terms and conditions of the settlement or resolution of
the Equipment Lease Litigation, such consent not to be unreasonably
withheld or delayed, and (ii) Freightliner be satisfied in its reasonable
discretion that Sub will receive good and marketable title to the Leased
Assets, free and clear of all Liens. Notwithstanding the foregoing,
Freightliner shall have no right to participate in or control any
settlement negotations.
(b) Pending the conveyance of the Leased Equipment
contemplated by paragraph (a) above, Sub shall be entitled to use the
Leased Equipment at no cost to itself and Oshkosh shall take any action
necessary to ensure that Freightliner has the quiet enjoyment and
uninterrupted use of the Leased Equipment; provided, however, that Sub
shall bear the costs of operating and maintaining the Leased Equipment.
Section 2.10 Sale of Oshmex Shares. Subject to the conditions
set forth below, on or prior to the sixtieth day following the Effective
Date Oshkosh shall sell, convey, assign, transfer and deliver to Sub, and
Freightliner will cause Sub to accept and purchase from Oshkosh, the
Oshmex Shares (the date of such purchase and sale being herein referred to
as the "Oshmex Shares Closing Date"). Such sale, conveyance, assignment,
transfer and delivery shall be effected by (i) delivery by Oshkosh to Sub
of stock certificates representing the Oshmex Shares, duly endorsed in
blank or accompanied by stock transfer powers and with all requisite stock
transfer stamps attached and (ii) delivery by Sub to Oshkosh of $1.25
million by wire transfer of immediately available funds to a bank account
designated by Oshkosh (the "Oshmex Shares Purchase Price"). The
respective obligations of each party to effect the transaction contemplat-
ed by this Section 2.10 shall be subject to the fulfillment at or prior to
the Oshmex Shares Closing Date of the following conditions:
(a) No Governmental Body, and no national, federal, state or
local court of competent jurisdiction, shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary
or permanent) which is in effect and binding upon Freightliner, Sub or
Oshkosh and has the effect of making the transaction contemplated by this
Section 2.10 illegal or otherwise restricting, preventing or prohibiting
consummation of the transaction contemplated by this Section 2.10 or im-
pairing the ability of Freightliner or Sub to exercise all rights of
ownership represented by the Oshmex Shares.
(b) Freightliner, Sub or Oshkosh, as the case may be, shall
have received all consents and approvals required from any Governmental
Body and any other person or entity which are necessary for the assignment
to Sub of the Oshmex Shares, or which are otherwise necessary to enable
Freightliner and Sub to exercise all rights of ownership represented by
the Oshmex Shares.
The obligations of Freightliner and Sub to effect the transaction
contemplated by this Section 2.10 shall be further subject to the
fulfillment at or prior to the Oshmex Shares Closing Date of the following
conditions:
(a) The representations and warranties of Oshkosh set forth
in Section 4.28 of this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Oshmex
Shares Closing Date as though made at and as of the Oshmex Shares Closing
Date and Freightliner shall have received a certificate to that effect
signed by a Vice President of Oshkosh.
(b) Since the date of this Agreement there should not have
been any material adverse change to the business, properties, assets,
liabilities, results of operations or financial condition of Oshmex, taken
as a whole.
ARTICLE III
THE CLOSING
Section 3.1 Time and Place of Closing. Upon the terms and
subject to the conditions contained in this Agreement, the closing of the
transactions contemplated by this Agreement will take place at 10:00 A. M.
(Portland time) in the offices of Freightliner, 4747 North Channel Avenue,
Portland, Oregon, on the latest to occur of (i) June 2, 1995, (ii) the
date on which all of the conditions to each party's obligations hereunder
have been satisfied or waived, or (iii) at such other place or time or
both as the parties may agree. The end of the business day of the date on
which the Closing actually occurs and the transactions contemplated hereby
become effective is hereinafter referred to as the "Effective Date."
Section 3.2 Deliveries by Oshkosh. At the Closing, Oshkosh
(unless previously delivered) will deliver the following to Sub:
(a) the Bill of Sale;
(b) all the Books and Records of Oshkosh pertaining to the
Acquired Assets and the Chassis Business or, if Oshkosh is legally re-
quired to retain the original books and records or such Books and Records
are not separable from the Oshkosh records, copies of the originals
thereof, all as shall be reasonably requested by Sub within one year of
the Effective Date;
(c) all consents and approvals required for the transfer of
the Licenses and Permits, the Exemptions and the Assumed Contracts;
(d) the Deed;
(e) the certificates and other documents contemplated by
Sections 7.2 and 7.4 hereof;
(f) the cash payment contemplated by Section 6.15(a);
(g) the list of Effective Date Purchase Orders referred to
in Section 4.19; and
(h) all other documents, instruments and other items rea-
sonably requested by Sub or Freightliner to be delivered to Freightliner
or Sub at the Closing in connection with the transactions contemplated
herein.
Section 3.3 Deliveries by Freightliner and Sub. At the
Closing, Freightliner and Sub shall deliver to Oshkosh (unless previously
delivered) the following:
(a) the Initial Purchase Price;
(b) the Assumption Agreement;
(c) the certificates and other documents contemplated by
Sections 7.3 and 7.4 hereof; and
(d) all other documents, instruments and other items rea-
sonably requested by Oshkosh to be delivered to Oshkosh at the Closing in
connection with the transactions contemplated herein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF OSHKOSH
Oshkosh represents and warrants to Freightliner and Sub as fol-
lows:
Section 4.1 Corporate Organization, etc. Oshkosh is a corpora-
tion duly organized, validly existing and in good standing under the laws
of the State of Wisconsin and has full corporate power and authority to
own, operate and lease its properties and assets and to carry on its
business, including the Chassis Business, as now being conducted and to
execute and deliver this Agreement and the Ancillary Agreements and to
consummate the transactions contemplated hereby and thereby.
Section 4.2 Authorization. The execution and delivery of this
Agreement and the Ancillary Agreements and the consummation by Oshkosh of
the transactions contemplated hereby and thereby have been duly and unani-
mously authorized by the Board of Directors of Oshkosh. Except for such
authorization by the Board of Directors of Oshkosh, no other corporate act
or proceeding on the part of Oshkosh is necessary to authorize properly
and validly this Agreement and the Ancillary Agreements or any of the
transactions contemplated hereby or thereby.
Section 4.3 Execution and Delivery. This Agreement has been
duly and validly executed and delivered by Oshkosh, and the Ancillary
Agreements when executed and delivered at the Closing will have been duly
executed and delivered by Oshkosh.
Section 4.4 Valid and Binding Agreement. This Agreement
constitutes a legal, valid and binding agreement of Oshkosh, enforceable
against Oshkosh in accordance with its terms, and each of the Ancillary
Agreements, when executed and delivered at the Closing, will constitute a
legal, valid and binding agreement of Oshkosh enforceable against it in
accordance with their terms, except as in each case (i) such enforceabil-
ity may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedy of specific performance and injunc-
tive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
Section 4.5 No Violation. Except as set forth in Section 4.5
of the Disclosure Schedule, neither the execution and delivery of this
Agreement nor the Ancillary Agreements by Oshkosh, nor the consummation of
the transactions contemplated hereby or thereby by Oshkosh, nor compliance
by Oshkosh with any of the provisions hereof or thereof, will (i) violate,
conflict with or result in any breach of any provision of the articles of
incorporation or bylaws of Oshkosh, (ii) violate, conflict with, result in
a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under,
or result in the termination or in a right of termination or cancellation
of, or accelerate the performance required by, any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, lease, contract,
agreement or other instrument or commitment or obligation to which Oshkosh
or any of its properties may be bound or affected or to which Oshkosh is a
party or is bound or result in the creation of any Lien upon any of the
properties included in the Acquired Assets or (iii) violate any order,
writ, injunction, decree, judgment, ruling, law, notice of violation, rule
or regulation of any Governmental Body, applicable to Oshkosh or any of
the Acquired Assets, except in the cases of each of clauses (ii) and (iii)
above for violations, conflicts, breaches, defaults, terminations,
cancellations or accelerations that would not, individually or in the
aggregate, have a Chassis Business Material Adverse Effect.
Section 4.6 Consents and Approvals. Except as set forth in
Section 4.6 of the Disclosure Schedule and except as required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), no waiver by, consent, approval, permit or authorization of, or
notice to, or declaration, filing or registration with, any Governmental
Body-is required in connection with the execution, delivery or performance
by Oshkosh of this Agreement, the Ancillary Agreements or any of the instru-
ments or agreements herein or therein referred to, or the taking of any
action contemplated hereby or thereby or to the knowledge of Oshkosh is
required to enable Sub to conduct the Chassis Business after the Effective
Date in a manner which is in all material respects consistent with that in
which the Chassis Business is presently conducted.
Section 4.7 Compliance with Law.
(a) Except as set forth in Section 4.7(a) of the Disclosure
Schedule, to the knowledge of Oshkosh the operations of the Chassis
Business have been and are presently being conducted in all material
respects in accordance with all applicable laws, regulations and other
requirements of all Governmental Bodies having jurisdiction over the
Chassis Business, including, without limitation, all such laws, statutes,
orders, rules, regulations, policies and requirements relating to anti-
trust, environmental, employment and equal opportunity, affirmative
action, food and drug, health, occupational safety and pension matters.
There are no proceedings of record and no proceedings are pending or to
the knowledge of Oshkosh threatened by or on behalf of any Governmental
Bodies with respect to any such matters. To the knowledge of Oshkosh,
Oshkosh is not under investigation with respect to, nor has Oshkosh been
charged with or given notice of any violation of, any applicable law,
statute, order, rule, regulation, policy, guideline or requirement
promulgated, or judgment entered, by any Governmental Body relating
to the Chassis Business.
(b) Section 4.7(b) of the Disclosure Schedule list all re-
ports of inspections by representatives of all Governmental Bodies of the
Chassis Business during the period from January 1992 through the date of
this Agreement under all applicable employment and equal opportunity, food
and drug, health and occupational safety and environmental laws, copies of
which reports have heretofore been provided to Sub.
Section 4.8 Financial Statements. Section 4.8 of the
Disclosure Schedule sets forth the February 25, 1995, September 30, 1994
and September 25, 1993 Adjusted Balance Sheets of the Chassis Business, on
a separate company basis, and the related statements of operations for the
five months ended February 25, 1995 and fiscal years ended September 30,
1994 and September 25, 1993. Except as set forth in Section 4.8 of the
Disclosure Schedule, the financial information presented for fiscal years
1994 and 1993 has been derived from the audited financial statements of
Oshkosh filed with the Securities and Exchange Commission (the "Oshkosh
Financial Statements") and therefore present fairly in all material
respects the financial position of the Chassis Business, on a separate
company basis, at September 30, 1994 and September 25, 1993 and the
results of its operations for each of the two years in the period ended
September 30, 1994 all in conformity with GAAP consistently applied except
as noted therein. Except as set forth in Section 4.8 of the Disclosure
Schedule, the February 25, 1995 Adjusted Balance Sheet of the Chassis
Business (the "February Balance Sheet") of the Chassis Business and the
related Income Statement for the five month period ended February 25, 1995
set forth in Section 4.8 of the Disclosure Schedule include all necessary
adjustments, and therefore present fairly in all material respects, on a
separate company basis and on a basis consistent with the prior years'
Oshkosh Financial Statements, the financial position of the Chassis
Division at February 25, 1995 and the results of its operations for the
five month period ended February 25, 1995 in conformity with GAAP
consistently applied and subject to year-end adjustments which would not
be material in amount.
Section 4.9 No Undisclosed Liabilities. Except as and to the
extent disclosed in Section 4.9 of the Disclosure Schedule, Oshkosh does
not have any Liabilities with respect to the Chassis Business of any
nature (whether accrued, absolute, contingent or otherwise and whether due
or to become due) which are required by GAAP to be reflected on a balance
sheet which are not fully reflected or reserved against on the February
Balance Sheet, except for Liabilities incurred in the ordinary course of
business consistent with past practice since the date thereof; and the re-
serves reflected on the February Balance Sheet were adequate, appropriate
and reasonable as of the date of the February Balance Sheet. Oshkosh does
not know of any basis for the assertion against Oshkosh with respect to
the Chassis Business of any Liability of whatever nature reasonably likely
to have a Chassis Business Material Adverse Effect not reflected on the
February Balance Sheet or not disclosed in Section 4.9 of the Disclosure
Schedule.
Section 4.10 Interim Operations. Except as and to the extent
set forth in Section 4.10 of the Disclosure Schedule and except as
expressly contemplated by this Agreement, since February 25, 1995:
(a) Oshkosh has not conducted the business of the Chassis
Business other than in the ordinary course of business, consistent with
past practice;
(b) there has not been any Chassis Business Material Adverse
Effect or any condition which could reasonably be expected to have a
Chassis Business Material Adverse Effect;
(c) there have not been any expenditures or commitments,
including capital expenditures or commitments for capital expenditures,
made by Oshkosh with respect to the Chassis Business which exceed $25,000
individually or $150,000 in the aggregate;
(d) Oshkosh has not permitted or allowed any of the Acquired
Assets to be subjected to any Lien, except for Permitted Encumbrances;
(e) there has not been any destruction, damage to, or loss
of any Acquired Asset (whether or not covered by insurance) which could
reasonably be expected to have a Chassis Business Material Adverse Effect;
(f) Oshkosh has not sold, transferred or otherwise disposed
of any of the Acquired Assets, except in the ordinary course of business
and consistent with past practice;
(g) Oshkosh has not made any change in any policy, principle
or method of accounting or accounting practice applicable to the Chassis
Business; or
(h) Oshkosh has not agreed, whether in writing or otherwise,
to take any action described in this Section 4.10.
Section 4.11 Customers and Suppliers. Except to the extent set
forth in Section 4.11 of the Disclosure Schedule, in each of the last
three fiscal years of Oshkosh the Chassis Business has not had any cus-
tomer that accounted for more than five percent of its sales. Section
4.11 of the Disclosure Schedule sets forth a true and complete list of the
thirty largest (based on annual dollar purchases by category) suppliers to
the Chassis Business for each of the last three fiscal years. Except as
set forth in Section 4.11 of the Disclosure Schedule, since October 1,
1992, there has not been any material adverse change in the relationship
or course of dealing between the Chassis Business and any of its material
suppliers or material customers which supply goods and services to or
purchase goods and services from Oshkosh in connection with the Chassis
Business.
Section 4.12 Labor Difficulties. Except to the extent set
forth in Section 4.12 of the Disclosure Schedule, with respect to the
operations of the Chassis Business, (a) there is no unfair labor practice
complaint against Oshkosh pending before the National Labor Relations
Board; (b) no representation question exists respecting the Employees; (c)
no bargaining unit has been certified or recognized; (d) no grievance nor
any arbitration proceeding arising out of or under collective bargaining
agreements is pending and no claim therefor exists; (e) no collective
bargaining agreement which is binding on Oshkosh requires Freightliner or
Sub to recognize any labor organization or to negotiate with a labor
organization concerning wages, hours, and conditions of employment with
respect to the Employees; and (f) no charges with respect to or relating
to the Employees are pending before the Equal Employment Opportunity
Commission or any state or local agency responsible for the prevention of
unlawful employment practices or enforcement of wage and hour laws.
Section 4.13 Legal Proceedings, etc. Except as set forth in
Section 4.13 of the Disclosure Schedule, there are no actions, suits,
claims, proceedings or investigations pending, or, to the knowledge of
Oshkosh, threatened against, or otherwise affecting or which may affect
the Chassis Business or the Acquired Assets, before any Governmental Body.
Oshkosh is not subject to any judgment, order, decree, governmental
restriction or any other proceeding applicable to it which could result in
a Chassis Business Material Adverse Effect or which adversely affects the
ability of Oshkosh to conduct the Chassis Business.
Section 4.14 Properties and Related Matters.
(a) Section 4.14(a)(i) of the Disclosure Schedule sets forth
a complete list, by deed reference or otherwise, of all real property and
interests in real property owned, leased or used by Oshkosh principally in
connection with the Chassis Business. Oshkosh has, or will have on the
Closing Date, good, marketable and insurable title in fee simple to all
real property and interests in real property comprising the Gaffney
Manufacturing Facility, free and clear of all Liens, except for the Per-
mitted Encumbrances. None of such property or such interests are subject
to any covenant or other restriction preventing or limiting the right of
Oshkosh to convey its interest therein to Sub, except as expressly set
forth on Section 4.14(a)(ii) of the Disclosure Schedule. The Gaffney
Manufacturing Facility taken as a whole is in good operating condition and
fit for operation in the ordinary course of business, ordinary wear and
tear excepted. Except as set forth in Section 4.14(a)(iii) of the Dis-
closure Schedule, the uses for which the Gaffney Manufacturing Facility is
zoned do not materially restrict, or in any material manner impair, the
use of the Gaffney Manufacturing Facility for general manufacturing
purposes and, in particular, the production of products currently
manufactured there; and, to the knowledge of Oshkosh, the construction of
the Gaffney Manufacturing Facility complies in all material respects with
all applicable building codes, ordinances and rules and zoning ordinances.
(b) Section 4.14(b)(i) of the Disclosure Schedule contains a
list of all material Equipment owned, leased or used by Oshkosh primarily
in connection with the Chassis Business. Except as set forth in Section
4.14(b)(ii) of the Disclosure Schedule, Oshkosh has good and marketable
title to all personal (and mixed real and personal) property included in
the Acquired Assets (other than materials supplied by customers and any
such machinery, equipment or other personal property that is subject to a
lease), including, but not limited to, all such Equipment, free and clear
of all Liens except for the Permitted Encumbrances. Except as set forth
in Section 4.14(b)(iii) of the Disclosure Schedule, the Equipment, taken
as a whole, is in good operating condition and repair, is adequate for the
uses for which it is being used and is not in need of maintenance or re-
pairs, other than routine maintenance and repairs as a result of the wear
and tear of day-to-day operations. No such routine maintenance or repairs
have been deferred.
Section 4.15 Intellectual Property.
(a) Section 4.15(a)(i) of the Disclosure Schedule sets forth
a list of Patents owned by, or registered in the name of, Oshkosh or of
which Oshkosh is licensee or in which Oshkosh has any rights and which are
used in the Chassis Business. Section 4.15(a)(ii) of the Disclosure
Schedule sets forth a list of Trademarks owned by, or registered in the
name of, Oshkosh or of which Oshkosh is licensee or in which Oshkosh has
any rights and which are used in and are material to the Chassis Business.
Oshkosh owns outright, or will own outright on the Closing Date, on an
exclusive basis, such Patents and Trademarks free and clear of all Liens.
Oshkosh pays no royalty to anyone under any of such Patents and Trademarks
and has not licensed anyone to use any of them in any business which
competes with the Chassis Business.
(b) To the knowledge of Oshkosh, the operation of the
Chassis Business by Freightliner and Sub after the Closing Date in sub-
stantially the same manner as conducted by Oshkosh prior to the Closing
Date will not infringe any patent not listed in Section 4.15(a)(i) of the
Disclosure Schedule or the asserted rights of others with respect to the
trade dress or packaging of any of the products manufactured or sold by
the Chassis Business.
(c) No action, suit, arbitration, or legal, administrative
or other proceeding, or governmental investigation is pending or, to the
knowledge of Oshkosh, threatened which involves any of such Patents or
Trademarks. Oshkosh is not subject to any judgment, order, writ,
injunction or decree of any Governmental Body, or any arbitration, and has
not entered into and is not a party to any contract or agreement, whether
written or oral, which restricts or impairs the validity or enforceability
of any of such Patents or Trademarks, or which restricts or impairs the
use of any of such Patents or Trademarks.
(d) Except as set forth in Section 4.15(d) of the Disclosure
Schedule, Oshkosh owns, or will own on the Closing Date, the Business
Know-how free and clear of all Liens, and pays no royalty to anyone
relating thereto. There is no restriction or limitation on the right of
Oshkosh to transfer any Business Know-how to Sub, as herein contemplated.
To the knowledge of Oshkosh, the use of any Business Know-how and the
operation of the Chassis Business does not conflict with the rights of
others with respect of any Business Know-how, and Oshkosh has not received
any notice of such conflict.
(e) Oshkosh is the owner of the name and mark "Oshkosh" and
Oshkosh has the power and authority to grant a license of the scope set
forth in Section 6.16 of this Agreement.
Section 4.16 Employee Benefits.
(a) Section 4.16(a) of the Disclosure Schedule contains a
true and complete list of each written bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or
termination pay, hospitalization or other medical benefits, savings,
profit-sharing, pension or retirement plan or program, and each other
employee benefit plan, welfare plan or other program, policy, arrangement
or perquisite, currently sponsored, maintained or contributed to or re-
quired to be contributed to by Oshkosh or any ERISA Affiliate, for the
benefit of any employee or former employee of Oshkosh or any ERISA
Affiliate, whether formal or informal and whether legally binding or not
(the "Plans"). A true, correct and complete copy of all Plans that
provide benefits to Employees has been provided to Freightliner by
Oshkosh.
(b) Except as set forth in Section 4.16(b) of the Disclosure
Schedule, neither Oshkosh nor any ERISA Affiliate has ever made any con-
tribution (or been required to contribute) to any multiemployer plan as
defined in Section 3(37) of ERISA.
(c) Neither Freightliner nor any ERISA Affiliate will incur
any Liability under any Plan as a result of the consummation of the
transactions contemplated by this Agreement. There are no pending,
anticipated or threatened claims by or on behalf of any Plan by any
Employee or beneficiary covered under any Plan or otherwise involving any
Plan, other than routine claims for benefits. Except for the severance
policies or agreements of Oshkosh set forth on Section 4.16(c)(i) of the
Disclosure Schedule, there are no employment or severance agreements, con-
tracts or other arrangements between Oshkosh and any Employee providing
for continued employment or the payment of separation pay or separation
benefits to any Employee. The consummation of the transactions contem-
plated by this Agreement will not (i) entitle any Employee or officer of
Oshkosh or any ERISA Affiliate to severance pay, unemployment compensation
or any other payment, (ii) except as set forth on Section 4.16(c)(ii) of
the Disclosure Schedule, accelerate the time of payment or vesting, or in-
crease the amount, of compensation due any such employee or officer or
(iii) result in any prohibited transaction described in section 406 of
ERISA or section 4975 of the Code for which an exemption is not available.
(d) Except as described in Section 4.16(d) of the Disclosure
Schedule, there has been no (i) "reportable event" (as defined in Section
4043 of ERISA), or event described in Section 4041, 4042, 4062, 4063, 4064
or 4069 of ERISA except for such events as would not, individually or in
the aggregate, have a Chassis Business Material Adverse Effect, or (ii)
termination or partial termination, withdrawal or partial withdrawal with
respect to any of the Plans. Neither Oshkosh nor any ERISA Affiliate has
incurred any material liability under Title IV of ERISA with respect to
any of the Plans, other than liability for premiums due the Pension
Benefit Guaranty Corporation, which payments have been made or will be
made when due.
(e) All contributions with respect to all Plans that are
subject to Code Section 412 or ERISA Section 302 have been or will be
timely made and there is no lien under Code Section 412(n) except for such
liens which would not, individually or in the aggregate, have a Chassis
Business Material Adverse Effect.
(f) Neither Oshkosh, any ERISA Affiliate, any of the Plans,
any trust created thereunder nor, to the knowledge of Oshkosh, any trustee
or administrator thereof has engaged in a transaction or has taken or
failed to take any action in connection with which Oshkosh, any ERISA
Affiliate, any of the Plans, any such trust, any trustee or administrator
thereof, or any party dealing with the Plans or any such trust could be
subject to either a civil penalty assessed pursuant to section 409 or
502(i) of ERISA or a tax imposed pursuant to section 4975, 4976 or 4980B
of the Code, except for such instances of noncompliance as would not,
individually or in the aggregate, have a Chassis Business Material Adverse
Effect.
(g) Each of the Plans has been operated and administered in
all material respects in accordance with applicable laws, including but
not limited to ERISA and the Code, except for such instances of
noncompliance as would not, individually or in the aggregate, have a
Chassis Business Material Adverse Effect.
Section 4.17 Leases. Section 4.17 of the Disclosure Schedule
contains an accurate and complete list of all Leases. True, correct and
complete copies of all Leases (including all amendments thereto and
modifications thereof) have been delivered to Freightliner. Except as set
forth on Section 4.17 of the Disclosure Schedule, each of the Leases is a
valid and binding obligation of Oshkosh and to the knowledge of Oshkosh is
a valid and binding obligation of the other parties thereto and en-
forceable against them in accordance with its terms and is in full force
and effect; and to the knowledge of Oshkosh, there are no defaults there-
under, and no event has occurred which (whether with or without notice,
lapse of time or both) would constitute a default thereunder. Except as
set forth in Section 4.17 of the Disclosure Schedule, Oshkosh has not re-
ceived notice of any such default or event and there have been no threat-
ened cancellations thereof and there are no outstanding material disputes
thereunder. Except as set forth in Section 4.17 of the Disclosure Sched-
ule, Oshkosh's rights under the Leases are fully assignable without con-
sent of or notice to any party thereto or any third party and any such
assignment will not affect the respective rights of the parties to such
Leases.
Section 4.18 Taxes; Tax Returns.
(a) Oshkosh (i) has timely filed or caused to be filed, or
will file or cause to be filed, all Tax Returns required to be filed by it
with respect to or which include the Chassis Business or the Acquired
Assets on or prior to the Effective Date (all such returns being to the
knowledge of Oshkosh true, correct and complete) and (ii) has duly paid
(or has had paid on its behalf), or where payment is not yet due, has
established (or has had established on its behalf and for its sole benefit
and recourse) or will establish or cause to be established on or prior to
the Effective Date, an adequate accrual for the payment of, all Taxes due
or claimed to be due from it from any taxing authority with respect to or
imposed upon the Chassis Business or the Acquired Assets for any period
ending on or prior to the Effective Date, other than Taxes that are being
contested in good faith and for which an adequate accrual has been
established.
(b) The reserve for Taxes reflected in the balance sheet for
the year ended September 30, 1994 included in the Oshkosh Financial
Statements is adequate for the payment of all liabilities for Taxes with
respect to or imposed upon the Chassis Business through the date of such
balance sheet, other than for Taxes being contested in good faith through
appropriate proceedings. Any Taxes in respect of the period since the
date of such balance sheet have arisen in the ordinary course of business.
Except as set forth on Section 4.18 (b) of the Disclosure Schedule, there
are no ongoing audits or examinations of any of the Tax Returns of
Oshkosh. There are no Liens for Taxes upon any of the Acquired Assets
other than Liens for Taxes not yet due or payable.
(c) Except as set forth in Section 4.18(c) of the Disclosure
Schedule, none of the Acquired Assets (i) is property that is required to
be treated as owned by another Person pursuant to the "safe harbor lease"
provisions of former Section 168(f)(8) of the Code; or (ii) is "tax-exempt
use property" within the meaning of Section 168(h) of the Code. Except in
respect of the IRB and the IRB Documents, none of the Acquired Assets
directly or indirectly secures any debt the interest on which is tax
exempt under Section 103(a) of the Code.
(d) Oshkosh is not aware of any action or inaction on its
part that would adversely affect the tax-exempt status of the IRB, and
Oshkosh is not aware of any reason why interest on the IRB would not be
entitled to tax-exempt status for Federal income tax purposes.
(e) All amounts that are required to be collected or
withheld by Oshkosh, or with respect to Taxes of Oshkosh relating to the
Chassis Business or the Acquired Assets, have been duly collected or
withheld and all such amounts that are required to be remitted to any
taxing authority have been duly remitted.
Section 4.19 Contracts.
(a) Section 4.19(a)(i) of the Disclosure Schedule lists all
Contracts (except for purchase orders) relating to the Chassis Business to
which Oshkosh or any Affiliate of Oshkosh is a party. True, correct and
complete copies of all written, and complete and correct summaries of all
of the oral, Contracts (except for purchase orders) have heretofore been
delivered to or have been made available to Freightliner. Section
4.19(a)(ii) of the Disclosure Schedule lists all purchase orders in excess
of $1,000 relating to the Chassis Business that are outstanding on the
date hereof. On the Effective Date, Oshkosh will deliver to Freightliner a
list of all purchase orders in excess of $1,000 relating to the Chassis
Business that are outstanding on the Effective Date (the "Effective Date
Purchase Orders").
(b) Except as set forth in Section 4.19(b) of the Disclosure
Schedule, each of the Assumed Contracts is a valid and binding obligation
of Oshkosh, and to the knowledge of Oshkosh, the other parties thereto, is
enforceable in accordance with its respective terms, is in full force and
effect and has not been amended or terminated except in the ordinary
course of business. Oshkosh is, and to the knowledge of Oshkosh the other
parties to such Assumed Contracts are, in compliance with all material
terms thereof and there have been no threatened cancellations thereof nor
outstanding material disputes thereunder. Oshkosh has not received notice
that any party to any Assumed Contract intends to cancel or terminate such
Assumed Contract or to exercise or not exercise options or rights under
such Assumed Contract.
(c) Except as set forth in Section 4.19(c) of the Disclosure
Schedule, Oshkosh's rights under the Assumed Contracts are fully assign-
able without consent of or notice to any party thereto or any third party
and any such assignment will not affect the respective rights of the
parties to such contracts.
Section 4.20 Licenses and Permits.
(a) Section 4.20(a) of the Disclosure Schedule lists all Li-
censes and Permits, and all exemptions from requirements to obtain or
apply for Licenses and Permits, on which Oshkosh relies ("Exemptions").
Oshkosh has delivered to Freightliner true, complete and correct copies of
and material documentation relating to the Licenses and Permits and Exemp-
tions and notices received from any Governmental Body with respect there-
to. Section 4.20(a) of the Disclosure Schedule also includes a list of
all pending applications filed by Oshkosh with any Governmental Body with
respect to the Chassis Business, true, complete and correct copies of
which have been made available to Freightliner. Except as specifically
noted in Section 4.20(a) of the Disclosure Schedule, all Licenses and
Permits and Exemptions are in full force and effect and the construction
and operation of the Gaffney Manufacturing Facility and the Chassis Busi-
ness are in full compliance therewith. Except as specifically set forth
in Section 4.20(a) of the Disclosure Schedule, no event is pending, and to
the knowledge of Oshkosh no event has occurred or is the basis for a
potential threat with respect to any of the Licenses and Permits or Exemp-
tions which (i) permits, or after notice or lapse of time or both would
permit, revocation, suspension, termination or cancellation thereof or
would result in any other material impairment of the rights of Oshkosh as
holder thereof, which either individually or in the aggregate could
reasonably be expected to have a Chassis Business Material Adverse Effect
or (ii) could reasonably be expected to cause any of the Licenses and
Permits or Exemptions not to be renewed or applicable in the ordinary
course of business or the assignment of them to Sub, as contemplated by
the Agreement, not to be approved.
(b) Except as set forth in Section 4.20(b) of the Disclosure
Schedule, Oshkosh's rights under the Licenses and Permits and Exemptions
are fully assignable without consent of or notice to any party thereto or
any third party and any such assignment will not affect the respective
rights of the parties to such Licenses and Permits and Exemptions.
Section 4.21 Acquired Assets Necessary to the Chassis Business.
Except as set forth in Section 4.21 of the Disclosure Schedule, the
Acquired Assets include all rights, properties, Leases, Licenses and
Permits, Contracts and Equipment and other assets necessary to permit Sub
to carry on the Chassis Business as presently conducted, and, other than
the Acquired Assets being transferred at the Closing to Sub by Oshkosh,
and the Excluded Assets, there are no other assets or properties owned by
Oshkosh, any Affiliate of Oshkosh, any stockholder or any third party
which are reasonably necessary to carry on the Chassis Business as
presently conducted. Oshkosh has, and on the Effective Date will have and
will convey to Sub, all Inventories necessary for the conduct of the
Chassis Business consistent with past practices.
Section 4.22 Environmental Matters.
(a) Except as provided in Section 4.22(a) of the Disclosure
Schedule, or as would not have a Chassis Business Material Adverse Effect,
the Chassis Business is in compliance with all Environmental Laws as pres-
ently in effect which are applicable to its property or business. Oshkosh
(i) holds all material Licenses and Permits required to be held pursuant
to Environmental Laws as presently in effect for the current use, occupan-
cy or operation of the Chassis Business and the Acquired Assets, and (ii)
is in material compliance with each such License and Permit.
(b) Except as provided in Section 4.22(b) of the Disclosure
Schedule, or as would not have a Chassis Business Material Adverse Effect,
there is no Environmental Notice pending or threatened against Oshkosh
with respect to the Chassis Business or, to Oshkosh's knowledge, against
any Person whose liability for such Environmental Notice may have been re-
tained or assumed by or could be imputed or attributed to Oshkosh.
(c) Except as provided in Section 4.22(c) of the Disclosure
Schedule, or as would not have a Chassis Business Material Adverse Effect,
there are no past or present actions, activities, circumstances, condi-
tions, events or incidents, that could form the basis of any Environmental
Notice against or with respect to the Chassis Business or, to Oshkosh's
knowledge, against or with respect to any Person whose liability for any
such Environmental Notice may have been retained or assumed by or could be
imputed or attributed to Oshkosh with respect to the Chassis Business.
(d) Except as provided in Section 4.22(d) of the Disclosure
Schedule, (i) there are not at the present time, and there never have been
at any time in the past, any underground storage tanks located at the
Gaffney Manufacturing Facility, (ii) no part or operation of the Gaffney
Manufacturing Facility is or has been regulated as a treatment, storage or
disposal site under the Federal Resource Conservation and Recovery Act or
any similar state law, and (iii) the Chassis Business has not disposed of
materials on any property owned, leased or operated by Oshkosh with
respect to the Chassis Business, nor has it transported or arranged for
the disposal of materials except in compliance with Environmental Laws
applicable at the time of such disposal and except for de minimis
disposals that individually or in the aggregate could not form the basis
for any liability.
(e) Except as provided in Section 4.22(e) of the Disclosure
Schedule, (i) there is no friable asbestos present which would require
removal and abatement under applicable Environmental Laws at and no
asbestos has been used in manufacturing at the Gaffney Manufacturing
Facility, and (ii) no polychlorinated biphenyls (PCB's) are or have been
used or stored at the Gaffney Manufacturing Facility.
(f) All environmental studies relating to the Gaffney
Manufacturing Facility and all environmental studies in the possession and
control of Oshkosh or to which Oshkosh has access relating to any property
with respect to which Oshkosh may have incurred liability with respect to
the Chassis Business have been delivered to Freightliner.
(g) Except as provided in Section 4.22(g) of the Disclosure
Schedule, to the knowledge of Oshkosh, as of the date of this Agreement,
there are no pending, required or, proposed changes in Environmental Laws
(including any standards, criteria or guidance used by a Governmental Body
to enforce such laws) with respect to which the Chassis Business may be
required to incur any costs outside the ordinary course of business
(including, without limitation, for capital expenditures, process changes
and changes in materials usage) in order to achieve or ensure compliance
with such laws.
Section 4.23 Products Liability. Except as set forth on
Section 4.23 of the Disclosure Schedule, no claims have been asserted
against Oshkosh with respect to the Chassis Business for injury to any
person or damage to property suffered as a result of the manufacture or
sale of any product or performance of any service by Oshkosh, including,
but not limited to, claims arising out of the defective or unsafe nature
of the products, designs, product warnings and labels or services of the
Chassis Business.
Section 4.24 Affiliate Transactions. Section 4.24 of the
Disclosure Schedule sets forth a complete and correct list of all
contracts, agreements or other arrangements (including the parties, the
dollar amount of each transaction and the date thereof) with respect to
the Chassis Business pursuant to which Oshkosh or any of its Affiliates
are, will be or has been a party at any time since January 1992 (the "Af-
filiate Transactions") and copies of all written contracts, or detailed
summaries in the case of oral agreements, agreements or other arrangements
have heretofore been delivered to Freightliner. All Affiliate Transac-
tions listed in Section 4.24 of the Disclosure Schedule were, or in the
case of ongoing transactions and agreements are, or will be, on terms at
least as favorable to the Chassis Business as the terms which would be
available with independent third parties at arms-length, and no Affiliate
Transactions have been or, prior to the Effective Date, will be entered
into by Oshkosh or any of their Affiliates, except as otherwise expressly
contemplated by this Agreement.
Section 4.25 Noncompetes. Except as set forth on Schedule
4.25, Oshkosh is not a party to any agreement, contract or covenant
(whether written or oral) limiting or otherwise restricting the Chassis
Business from competing in any line of business or with any person or
other entity in any geographic area.
Section 4.26 Compensation. Section 4.26 of the Disclosure
Schedule lists the current job title and total remuneration (including,
without limitation, salary, commissions and bonuses) for each Employee.
Section 4.27 Product Warranties; Recalls.
(a) Except for the written product warranties set forth in
Section 4.27(a) of the Disclosure Schedule, neither Oshkosh nor any prede-
cessor has made any contractual warranties relating to the products
manufactured or sold by the Chassis Business.
(b) Oshkosh has given Freightliner full access to all mate-
rials relating to warranty claims made or existing on or after February
25, 1992, or, to the knowledge of Oshkosh threatened, by customers with
respect to products manufactured or sold by the Chassis Business.
(c) Except as set forth on Section 4.27(c) of the Disclosure
Schedule, since February 25, 1994, there have been no product recalls with
respect to the products manufactured or sold by the Chassis Business, no
such recalls are pending and, to the knowledge of Oshkosh, there is no
condition, fact, development or other situation that could reasonably be
expected to make it necessary or appropriate that any products to be
manufactured according to designs of Oshkosh by the Chassis Business after
the Effective Date be recalled.
Section 4.28 Oshmex.
(a) Oshkosh is the record and beneficial owner of, and has
the right to transfer to Sub, the Oshmex Shares, free and clear of all
Liens or restrictions of any kind. On the Oshmex Closing Date , Oshkosh
shall deliver to Sub beneficial and legal, valid and marketable title to
the Oshmex Shares, free and clear of all Liens. Except for the provisions
of Section VIII of the Joint Venture Agreement, dated January 19, 1993 by
and between Mexicana de Autobuses S.A. de C.V., Oshkosh and Microbuses y
Refacciones, S.A. de C.V., the Oshmex Shares are not subject to any
contract, agreement, arrangement, commitment or understanding, including
any such contract, agreement, arrangement, commitment or understanding
restricting or otherwise relating to the voting, dividend rights or
disposition of the Oshmex Shares.
(b) Section 4.28(b) of the Disclosure Schedule contains a
true and complete copy of the balance sheet of Oshmex as of December 31,
1993 and the related statements of income, changes in stockholders' equity
and statements of changes in financial position for the period of April
26, 1993 through December 31, 1993, together with a statement of reconcil-
iation of the balance sheet and income statement in accordance with
Mexican generally accepted accounting principles ("Mexican GAAP") and the
reports thereon of Price Waterhouse (together, the "Oshmex Audited Finan-
cial Statements"). To the knowledge of Oshkosh, the Oshmex Audited Finan-
cial Statements fairly present in all material respects the financial
position of Oshmex as of December 31, 1993 and the results of operations
for the period from April 26, 1993 in conformity with Mexican GAAP.
Section 4.28(b) of the Disclosure Schedule sets forth a true and complete
copy of the balance sheet of Oshmex as of September 30, 1994 and the
related statement of income for the nine months then ended, together with
the special review report of Price Waterhouse (together, the "Special
Review Financial Statements"). To the knowledge of Oshkosh, the Special
Review Financial Statements fairly present in all material respects the
financial position of Oshmex as of September 30, 1994 and the results of
operations for the nine months then ended in conformity with GAAP applied
on a consistent basis with the Oshmex Audited Financial Statements.
(c) To the knowledge of Oshkosh, Oshmex has good and
marketable title in fee simple to the Oshmex Manufacturing Facility, free
and clear of all Liens except Permitted Encumbrances.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF FREIGHTLINER AND SUB
Freightliner and Sub hereby jointly and severally represent and
warrant to Oshkosh, as follows:
Section 5.1 Corporate Organization, etc.
Each of Freightliner and Sub is a corporation duly orga-
nized, validly existing and in good standing under the laws of the State
of Delaware and has full corporate power and authority to own, operate and
lease its properties and assets and to carry on its business as now being
conducted, to execute and deliver this Agreement and the Ancillary
Agreements and to consummate the transactions contemplated hereby and
thereby and has the financial resources to consummate such transactions or
has a commitment from one of its financially capable Affiliates to provide
such resources.
Section 5.2 Authorization. The execution and delivery of this
Agreement and the Ancillary Agreements and the consummation by Sub and
Freightliner of the transactions contemplated hereby and thereby have been
duly and unanimously authorized by the Board of Directors and stockholders
of Sub and Freightliner. Except for such authorizations, no other corpo-
rate act or proceeding on the part of Freightliner or Sub is necessary to
authorize properly and validly this Agreement and the Ancillary Agreements
or any of the transactions contemplated hereby or thereby.
Section 5.3 Execution and Delivery. This Agreement has been
duly and validly executed and delivered by each of Freightliner and Sub,
and the Ancillary Agreements when executed and delivered at the Closing
will have been duly executed and delivered by Freightliner and Sub.
Section 5.4 Valid and Binding Agreement. This Agreement
constitutes a legal, valid and binding agreement of each of Freightliner
and Sub, enforceable against it in accordance with its terms, and each of
the Ancillary Agreements, when executed and delivered at the Closing, will
constitute a legal, valid and binding agreement of each of Freightliner
and Sub, enforceable against it in accordance with their terms, except as
in each case (i) such enforceability may be limited by applicable bank-
ruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights, and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
Section 5.5 No Violation. Neither the execution and delivery
of this Agreement nor the Ancillary Agreements by Freightliner or Sub, nor
the consummation of the transactions contemplated hereby or thereby by
Freightliner or Sub, nor compliance by Freightliner or Sub with any of the
provisions hereof or thereof, will (i) violate, conflict with or result in
any breach of any provision of the certificate of incorporation or bylaws
of Freightliner or Sub, (ii) violate, conflict with, result in a breach of
any provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in
the termination or in a right of termination or cancellation of, or
accelerate the performance required by, any note, bond, mortgage, inden-
ture, deed of trust, license, franchise, permit, lease, contract,
agreement or other instrument or commitment or obligation to which
Freightliner or Sub or any of any of their respective properties may be
bound or affected or to which Freightliner or Sub is a party or is bound
or (iii) violate any order, writ, injunction, decree, judgment, ruling,
law, notice of violation, rule or regulation of any court or Governmental
Body, applicable to Freightliner or Sub, except in the cases of each of
clauses (ii) and (iii) above for violations, conflicts, breaches,
defaults, terminations, cancellations or accelerations that would not have
a material adverse effect on the ability of Freightliner to consummate the
transactions contemplated by this Agreement.
Section 5.6 Consents and Approvals. Except for applicable
requirements of the HSR Act, the Bank Holding Company Act of 1956, as
amended, and the International Banking Act of 1978, as amended, and the
rules and regulations promulgated under such Acts, which have been or will
be complied with no waiver by, consent, approval, permit or authorization
of, or notice to, or declaration, filing or registration with, any Govern-
mental Body is required in connection with the execution, delivery or
performance by Freightliner or Sub of this Agreement, the Ancillary
Agreements or any of the instruments or agreements herein or therein
referred to, or the taking of any action contemplated hereby or thereby,
except for such waivers, consents, approvals, permits, authorizations,
notices, declarations, filings or registrations, for which the failure to
obtain or make them would not prevent or delay consummation of the
transactions contemplated by this Agreement or otherwise prevent
Freightliner from performing its obligations under this Agreement.
ARTICLE VI
COVENANTS AND AGREEMENTS OF THE PARTIES
Section 6.1 Access and Cooperation.
(a) During the period from the date of this Agreement to
the Effective Date, Oshkosh shall afford to Freightliner and its counsel,
accountants and other authorized representatives reasonable access during
business hours to the plants and properties of the Chassis Business and to
the Books and Records in order that Freightliner may have full opportunity
to make such reasonable inspections and investigations as it shall desire
to make of the affairs of the Chassis Business and Oshkosh shall cause its
officers and employees to furnish such additional financial and operating
data and other information as Freightliner shall from time to time reason-
ably request.
(b) During the period from the date of this Agreement to
the Effective Date, Oshkosh shall confer, to the extent reasonably
practicable, with Freightliner on a regular basis and report on signif-
icant operational matters and decisions affecting the business and opera-
tions of the Chassis Business. During the period from the date of this
Agreement to the Effective Date, Oshkosh will notify Freightliner of any
change in the normal course of the business and operations of the Chassis
Business or any adverse change in the properties, assets, financial condi-
tion or property of Oshkosh with respect to the Chassis Business, and of
any complaints, investigations or hearings of any Governmental Bodies (or
communications indicating that the same may be contemplated), or the
institution or threat or settlement of significant litigation, in each
case relating to or involving the Chassis Business, and to keep
Freightliner fully informed of such events.
Section 6.2 Conduct of Chassis Business of Oshkosh. Except as
contemplated by this Agreement, during the period from the date of this
Agreement to the Effective Date, Oshkosh will conduct the business and
operations of the Chassis Business according to its ordinary and usual
course of business and will use its reasonable best efforts (i) to
maintain the Gaffney Manufacturing Facility, the Equipment and the other
Acquired Assets in good working order, (ii) to preserve substantially
intact its business organization and (iii) to preserve its current rela-
tionships with the its customers, suppliers and other persons with which
it has significant business relations. Without limiting the generality of
the foregoing, prior to the Effective Date, except as otherwise expressly
provided in this Agreement or as previously consented to in writing by
Freightliner, Oshkosh will not with respect to the Chassis Business:
(a) terminate or amend, or fail to use all reasonable best
efforts to perform material obligations under any Assumed Contract;
(b) make or become obligated to make any capital
expenditures in excess of $25,000 for any single project or $150,000 in
the aggregate or enter into any commitments therefor;
(c) materially revalue any assets;
(d) (A) increase the compensation payable or to become
payable to any Employee, other than regular, scheduled compensation
increases, or (B) make any increase in any bonus plan, insurance, pension
or other employee plan, payment or arrangement made to, for or with any
Employee other than pursuant to the terms of any such plan or as a result
of a regularly scheduled compensation increase;
(e) permit or allow any of the Acquired Assets to become
subject to any Lien, except for Permitted Encumbrances;
(f) sell, transfer or otherwise dispose of any of the
Acquired Assets other in the ordinary course of business and consistent
with past practice;
(g) make any change in any policy, principle or method of
accounting or accounting practice; or
(h) agree, whether in writing or otherwise, to take any
action described in this Section 6.2.
Section 6.3 Consents and Approvals, etc.
(a) Oshkosh and Freightliner shall use their reasonable best
efforts to obtain all necessary consents, waivers, authorizations and
approvals of all Governmental Bodies, and of all other persons, firms or
corporations required to be obtained by them in connection with the execu-
tion, delivery and performance by them of, and the consummation of the
transactions contemplated by, this Agreement.
(b) Freightliner and Oshkosh will file or cause to be filed
with the United States Federal Trade Commission and the Antitrust Division
of the United States Department of Justice pursuant to the HSR Act all
requisite documents and notifications in connection with the transactions
contemplated hereby and will use their respective best efforts to insure
that the applicable waiting period under the HSR Act expires or is
terminated as soon as is reasonably possible. Each of Freightliner and
Oshkosh will make or cause to be made all such other filings and
submissions under laws and regulations that may be applicable to each of
them, respectively, if any, as may be required for each of them,
respectively, to consummate the transactions contemplated by this Agree-
ment. Freightliner and Oshkosh will cooperate and coordinate with one
another in exchanging such information and assistance as the other may
request in connection with all of the foregoing. Freightliner and Oshkosh
shall share equally the filing fee payable in respect of the
prenotification filing pursuant to the HSR Act.
(c) To the extent that any Assumed Contract for which
assignment to Sub is provided for herein is not assignable without the
consent of another party, this Agreement shall not constitute an
assignment or an attempted assignment thereof if such assignment or at-
tempted assignment would constitute a breach thereof. Oshkosh shall use
its reasonable best efforts to obtain the consent of such other party to
the assignment of any such Assumed Contract to Sub in all cases in which
such consent is or may be required for such assignment. If such consent
shall not be obtained, Oshkosh agrees to cooperate with Sub in any
reasonable arrangement designed to provide for Sub the benefits under any
such Assumed Contract, including enforcement at the cost and for the
account of Sub of any and all right of Oshkosh against the other party
thereto arising out of the breach or cancellation thereof by such other
party or otherwise. If and to the extent that such arrangement cannot be
made, neither Freightliner nor Sub shall have any obligation with respect
to any such Assumed Contract.
Section 6.4 Reasonable Best Efforts. Upon the terms and sub-
ject to the conditions of this Agreement, Oshkosh and Freightliner shall
each use their reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable, consistent with applicable law, to consummate the transactions
contemplated hereby in the most expeditious manner.
Section 6.5 Permit Transfer. Immediately following the
execution hereof, Oshkosh shall provide to Freightliner all information
necessary for Sub to file the necessary applications requesting the
approval of any Governmental Bodies to the assignment of the Licenses and
Permits and Exemptions to Sub with respect to which Oshkosh has not
received approvals. To the extent that the terms of such Licenses and
Permits do not allow assignment thereof, Sub shall apply for such equiv-
alent licenses and permits and Exemptions as may be required for Sub to
operate the Chassis Business as presently conducted. Oshkosh and
Freightliner agree to prosecute all such applications with all reasonable
diligence, to amend the applications as may be required, and otherwise to
use their reasonable best efforts to obtain a grant of the applications as
expeditiously as practicable. Such efforts by Freightliner and Oshkosh
shall include, if any of the applications are rejected, dismissed, denied
or found to be unacceptable for filing, and if so elected by Freightliner,
the filing of new applications for the granting new licenses and permits
to replace the relevant Licenses and Permits and Exemptions.
Section 6.6 Collection of Accounts Receivable. Following the
Effective Date, Sub shall exercise its reasonable best efforts to collect
any unpaid accounts receivable of the Chassis Business retained by
Oshkosh; provided, however, that Sub shall not be obligated to institute
any legal proceedings with respect to the collection of such account. Sub
shall promptly forward to Oshkosh the full amount of any monies actually
received by Sub in respect of any such account, less the out of pocket
expenses, if any, incurred by Sub in collecting such account. Any monies
actually received by Sub shall be applied to the unpaid accounts
receivable of such customer (other than those with respect to which valid
offsets have been claimed by such customer for promotions payable and
customary customer cash discounts, to the extent of such valid offsets),
in order of the dates of the invoices therefor (i.e., the earliest dated
invoices will be deemed to have been paid first). Notwithstanding the
immediately preceding sentence, if a customer designates in writing a
different application at the time of payment or submits with a payment a
different invoice of such customer, or a different application is clearly
established from the timing and amount of a payment, then the application
of such payment shall be as so designated or to the accounts receivable
evidenced by such different invoice or as so clearly established, as the
case may be. Sub shall provide Oshkosh with a monthly aging of such
accounts receivable on the last day of each month. Sub and Oshkosh shall
consult in good faith prior to the initiation by Oshkosh of any action or
litigation against customers with unpaid accounts retained by Oshkosh.
Section 6.7 Bulk Transfer Laws. Sub hereby waives compliance
by Oshkosh with the provisions of any so-called Bulk Transfer Law of any
jurisdiction (collectively, "Bulk Transfer Laws") in connection with the
sale of the Acquired Assets to Sub. Oshkosh shall indemnify and hold
harmless Freightliner and Sub against any and all Liabilities which may be
asserted against Freightliner or Sub as a result of noncompliance by any
party hereto with any Bulk Transfer Laws.
Section 6.8 Covenant Not to Compete.
(a) In order that Freightliner and Sub may have and enjoy
the full benefit of the Acquired Assets, Oshkosh agrees that, for a period
of five years following the Effective Date, it will not, directly or indi-
rectly, anywhere in the world (i) own, manage, operate, finance or
participate in the ownership, management, operation or financing of, any
business which is competitive with the Chassis Business, (ii) engage in
any other manner in any business which is competitive with the Chassis
Business, or (iii) induce or attempt to induce any customers, suppliers or
distributors of the Chassis Business to terminate their relationships with
the Chassis Business; provided, however, that this Section 6.8(a) shall
not prohibit the manufacture and sale by Oshkosh of component parts and
provided, further, that the provisions of this Section 6.8(a) shall not
prohibit the ownership by Oshkosh of not more than 5% of any outstanding
class of equity securities of any publicly held corporation.
Freightliner, Sub and Oshkosh agree that the duration and geographic scope
for which the covenant not to compete set forth in this Section 6.8(a) is
to be effective are reasonable. However, in the event that any court
determines that the duration or geographic scope, or both of them, are
unreasonable and that such covenant is to that extent unenforceable,
Freightliner, Sub and Oshkosh agree that the covenant shall remain in full
force and effect for the greatest time period not longer than that dura-
tion and for the greatest area within the geographic scope set forth in
this Section 6.8(a) that would not render it unenforceable. Freightliner,
Sub and Oshkosh agree that the covenant not to compete shall be deemed a
series of separate covenants, one for each and every state, country,
county and province within the entire world.
(b) Following the Effective Date, Oshkosh will, and will
cause its officers, directors and employees to, keep secret and retain in
confidence, and not at any time or for any reason, directly or indirectly
(including but not limited to, acting by, through or with any subsidiary,
affiliate, or any other person firm, corporation, joint venture or agent),
use, publish or except as required by law disclose, any non-public and
confidential information relating to the Chassis Business. Oshkosh will
not use or exploit such information for its own benefit or with or for the
benefit of others.
(c) Oshkosh will not, for a period of two years following
the Effective Date, directly or indirectly, solicit the employment of,
make an offer of employment to, or hire any individual then employed by
the Chassis Business without Freightliner's prior written consent;
provided, however, help wanted advertising made in the ordinary course of
business shall not be deemed to be solicitation.
(d) For purposes of this Section 6.8, the "Chassis Business"
shall mean the business of engineering, manufacturing, marketing,
distributing and servicing chassis and chassis parts (including spare
parts) for motor homes, school buses, delivery vans and shuttle buses
conducted by Oshkosh in Gaffney, South Carolina as of the Effective Date.
Section 6.9 Employees.
(a) Sub may, in its sole discretion, offer to all or any of
the Employees the opportunity to become employees of Sub or Freightliner
on the Closing Date; provided, that, Sub shall offer employment, on terms
and conditions solely within Sub's discretion, to a sufficient number of
Employees at the Gaffney Manufacturing Facility such that the number of
such Employees who are not offered employment will not constitute a "plant
closing" as that term is defined under the federal Worker Adjustment and
Retraining Notification Act ("WARN") and the regulations promulgated
thereunder or any similar law of South Carolina. Nothing expressed or im-
plied in this Agreement is intended to confer upon any Employee or his
legal representatives any rights or remedies, including, without limita-
tion, (i) any rights of employment for any specified period, or (ii) any
employee benefits, severance or other compensation, in either case of any
nature or kind whatsoever under or by reason of this Agreement. Oshkosh
shall provide Freightliner reasonable access to the Employees prior to the
Effective Date in order for Freightliner to interview any Employee
regarding potential future employment with Freightliner. Oshkosh hereby
waives any non-competition or confidentiality provision which may
otherwise apply to the employment of any Employee offered employment by
Freightliner, effective as of the date of any such hiring. Freightliner
and Sub will make severance payments to those employees of the Chassis
Business at Gaffney, S.C. to whom Sub does not make an offer of
employment. The amount of such severance payments shall be determined by
Freightliner in accordance with Freightliner's standard severance policy.
Notwithstanding the foregoing, Freightliner and Sub shall not be required
to make a severance payment to Mike Petersen.
(b) Sub shall assume the liability of Oshkosh directly
associated with the accrual of vacation time as of the Effective Date by
Employees that become employees of Freightliner or Sub ("Continuing
Employees") pursuant to the preceding clause (a), to the extent such time
has been accrued in accordance with the vacation policy and guidelines of
Oshkosh (the "Vacation Accrual"). At the Closing, Oshkosh shall deliver
to Freightliner a schedule setting forth the accrued vacation time of each
Employee as of the Effective Date (the "Vacation Schedule") and shall pay
Freightliner an amount in cash equal to the value of the Vacation Accrual.
Oshkosh shall indemnify and hold Freightliner harmless against any claim
of any Continuing Employee for vacation time accrued prior to the
Effective Date that is in excess of the accrual for such Continuing
Employee on the Vacation Schedule.
(c) Upon the Effective Date, each Continuing Employee shall
become entitled to participate in the Freightliner Employee Retirement
Savings Plan (the "Freightliner DC Plan") subject to the terms set forth
in this paragraph 6.9(c) and the terms and conditions of the Freightliner
DC Plan. The Continuing Employees shall receive credit for past services
with Oshkosh for purposes of eligibility and vesting (and for no other
purposes) in respect of the Freightliner DC Plan but only to the extent
such service was credited under the Oshkosh Truck Corporation Tax-Deferred
Investment Plan (the "Oshkosh DC Plan") and except to the extent that
benefits accruing to a Continuing Employee may be duplicated.
Section 6.10 Expenses. Except as otherwise specifically
provided in this Agreement, all costs and expenses incurred by Sub and
Freightliner in connection with this Agreement and the transactions
contemplated hereby will be paid by Sub or Freightliner, and all costs and
expenses incurred by Oshkosh in connection with this Agreement and the
transactions contemplated hereby will be paid by Oshkosh.
Section 6.11 Further Assurances. From time to time after the
Effective Date, without further consideration from the other party, each
of Freightliner and Oshkosh will at their own expense execute and deliver
such other and further documents as the other may reasonably request in
order more effectively to consummate and complete the transactions
contemplated hereby.
Section 6.12 Public Announcements. Neither Freightliner nor
Oshkosh shall issue any press release or otherwise make any public
statement with respect to any of the transactions contemplated by this
Agreement without the prior written consent of the other party hereto,
except as may be required by applicable law.
Section 6.13 Inventory Storage. Any item included in the
Inventory sold to Sub pursuant to this Agreement which, on the Effective
Date, is located at a facility owned or operated by Oshkosh after the
Effective Date, may be stored by Sub at such facility without charge for a
period of 90 days after the Effective Date. Sub agrees to remove all such
items of Inventory stored at facilities owned or operated by Oshkosh prior
to the end of such 90-day period. Sub shall pay applicable public ware-
house storage rates after the Effective Date for any items included in the
Inventory which, on the Effective Date, are located at public warehouse
facilities. Sub shall pay all applicable freight, handling and insurance
costs in connection with the shipment after the Effective Date of any
items included in the Inventory.
Section 6.14 Disclosure Supplements. From time to time prior
to the Effective Date, Oshkosh will promptly supplement or amend the
Disclosure Schedule and the sections of the Disclosure Schedule referred
to in Article IV with respect to any matter hereafter arising which, if
existing or occurring at or prior to the date of this Agreement, would
have been required to be set forth or described in the Disclosure
Schedule. For purposes of determining the accuracy of the representations
and warranties of Oshkosh contained in Article IV in order to determine
the fulfillment of the conditions set forth in Section 7.2 hereof, the
Disclosure Schedule shall be deemed to include only that information con-
tained therein on the date the Disclosure Schedule is originally delivered
and shall be deemed to exclude any information contained in any subsequent
supplement or amendment thereto.
Section 6.15 Warranty and Related Product Obligations. (a)
Subject to the provisions of this Section 6.15, Oshkosh shall indemnify,
defend and hold harmless the Freightliner Group from and against all
Damages asserted against, resulting to, imposed upon or incurred by the
Freightliner Group or any member thereof, directly or indirectly, by
reason of or resulting from: (i) the contractual product warranties
(including field campaigns and policy warranty adjustments or
expenditures) made by the Chassis Business (the "Product Warranties"),
(ii) safety related product recalls made in accordance with applicable
law, including without limitation, the rules and regulations of the NHTSA
("Safety Recalls"), (iii) litigation arising from the application of the
so-called Lemon Laws or similar laws of any jurisdiction ("Lemon Law
Litigation"), and (iv) any claim, action, suit or proceeding to the
extent based on a claim that a product or products was or were defectively
or improperly designed or manufactured, or contained or provided defective
or insufficient warnings ("Product Liability Claims"), in the case of each
of clauses (i) through (iv) of this sentence which arise from or involve
products manufactured or sold by the Chassis Business prior to the
Effective Date or are based upon the design of products which were
designed by the Chassis Business on or prior to the Effective Date
(whether such designed products are manufactured or sold prior to, on or
after the Effective Date); provided, however, Oshkosh shall have no
liability under this Section 6.15(a) with respect to Damages arising from
the Product Warranties unless and until the aggregate amount of such
Damages exceeds $4.2 million (at which point Oshkosh shall promptly
indemnify and hold the Freightliner Group harmless against the amount of
such Damages which are in excess of $4.2 million) and in no case shall
Oshkosh be liable for such Damages in an amount greater than $5.7 million.
Freightliner and Sub shall be responsible for and shall indemnify the
Oshkosh Group against the amount of the Damages arising from the Product
Warranties (i) which do not exceed $4.2 million and (ii) which are in
excess of $5.7 million. As soon as practicable after the Effective Date
(but in no event later than 18 months after the Effective Date), Sub shall
conduct comprehensive design reviews of the products manufactured by the
Chassis Business and shall as promptly as practical make such design
and/or component changes, if any, as such reviews may indicate to be
necessary. Upon the completion of such design or component changes (or
upon the completion of such design reviews, if such reviews indicated no
such changes to be necessary), the liability of Oshkosh pursuant to this
Section 6.15(a) for Chassis Business products designed on or prior to the
Effective Date shall terminate. In no event shall Oshkosh have any
liability pursuant to this Section 6.15(a) for Chassis Business products
designed on or prior to the Effective Date but manufactured by Sub after
the second anniversary of the Effective Date.
(b) From and after the Effective Date, Freightliner and Sub
shall be responsible for administering and shall control the
administration of the Product Warranties and in consideration therefor
Oshkosh shall make payments to Sub in the amounts and at the times set
forth on Section 6.15(a) to the Disclosure Schedule. Freightliner and Sub
shall administer, satisfy and discharge the Product Warranties (including
early intervention) in a manner consistent with the past practice of the
Chassis Business. Sub shall offer employment pursuant to Section 6.9
hereof to at least a majority of the 22 Oshkosh employees that currently
comprise the Customer Service and Support Group of the Chassis Business
and shall use such employees to administer the Product Warranties.
Freightliner and Sub shall provide Oshkosh with open access to its
personnel who are involved with warranty administration, and reasonable
participation in, the administration of the Product Warranties and shall
make reasonably available its records and interpretations of such records.
Freightliner and Sub will provide periodic reports to Oshkosh in a form to
be agreed upon. Notwithstanding the provisions of Section 6.15(a) above,
Freightliner and Sub shall bear the overhead expenses (salary, benefits,
occupancy costs) directly incurred by it in connection with administering
such liabilities.
(c) For a period of eighteen months following the
Effective Date, Oshkosh shall (at its sole expense) continue to administer
and control the administration of the Lemon Law Litigation and the Safety
Recalls (subject to the provisions of Section 6.15 (d)). Following such
eighteen month period, Sub shall be responsible for administering and
shall control the administration of the Lemon Law Litigation and the
Safety Recalls; provided however, that with respect to products for which
Oshkosh may have any obligation under this Section 6.15, Sub shall provide
Oshkosh with open access to its personnel who are involved with, and
reasonable participation in the administration of any Lemon Law Litigation
or Safety Recalls. Notwithstanding the provisions of section 6.15(a)
above, after such eighteen month period, Sub shall bear the overhead
expense (salary, benefits, occupancy costs) directly incurred by it in
connection with administering such liabilities. Sub shall provide Oshkosh
with timely notice of all potential claims for which Oshkosh may have
liability under Lemon Laws, which notice shall include, but not
necessarily be limited to a facsimile copy transmisson by the end of the
next business day following receipt of any written complaint of a motor
home owner, an attorney on behalf of such an owner or a communication from
any governmental agency having responsibility for motor home lemon law
administration or, in the event of a complaint that alleges a persistent
failure to fix the motor home, which is not written, a reasonably detailed
summary of such complaint.
(d) All decisions relating to Safety Recalls shall be made
by a committee (the "Recall Committee") to be established by Freightliner
and Oshkosh promptly following the Effective Date. The Recall Committee
shall consist of an equal number of representatives of each of Oshkosh and
Freightliner who shall be designated by each to the other in writing. The
Recall Committee may take action only by unanimous vote or by a written
action signed by all the members thereof. The Recall Committee shall meet
whenever either Freightliner or Oshkosh gives written notice to the other
of a meeting.
(e) When Sub determines in its good faith judgment that all
Liabilities arising pursuant to clause (i) of Section 6.15(a) have been
incurred, Sub shall give notice to Oshkosh of the amount of Damages
incurred by Freightliner and Sub in respect thereof. To the extent such
Damages incurred by Sub or Freightliner are less than $5.4 million,
Oshkosh shall promptly pay to Sub in cash an amount equal to 50% of the
difference between $5.4 million and the greater of (i) $4.2 million and
(ii) the aggregate amount of claims paid by Freightliner or Sub in
respect of the Product Warranty matters referred to in clause (i) of
Section 6.15(a).
Section 6.16 Use of Name; ALL STEER/TM/.
(a) License Grant. Oshkosh grants to Freightliner and Sub a
license to use for a period of five years from the Effective Date the
trademark "Oshkosh" and the related logo (the "Licensed Trademark") in
connection with the operation of the Chassis Business (the "License").
(b) Quality. Oshkosh shall have the right to exercise quality
control over Freightliner's use of the Licensed Trademark to a degree
necessary to maintain the validity of the Licensed Trademark and to pro-
tect the goodwill associated therewith. Oshkosh acknowledges that the
quality of the Chassis Business products and product packaging sold by
Oshkosh under the Licensed Trademark prior to the Closing is adequate for
this purpose.
(c) Inspection. Oshkosh shall have the right to inspect upon
reasonable notice and during normal business hours such premises of
Freightliner and Sub where applicable activities relating to the manufac-
ture of products bearing the Licensed Trademark are conducted, subject to
appropriate confidentiality restrictions reasonably requested by
Freightliner, in order to assure the quality of the products bearing the
Licensed Trademark. In addition, Freightliner shall, upon reasonable re-
quest by Oshkosh, make available to Oshkosh at Gaffney, South Carolina
representative samples of promotional or publicly distributed materials
bearing the Licensed Trademark which are then currently sold or distrib-
uted by Freightliner. In the event that Oshkosh finds that such samples
or the quality of the products bearing the Licensed Trademark materially
deviate from the quality standards set forth herein, or that such promo-
tional or publicly distributed materials misuse the Licensed Trademark in
any material respect, Freightliner shall, upon notice from Oshkosh,
promptly take steps which are necessary to correct such deviations or
misrepresentations in, or misuse of, the respective items.
(d) Use of Trademarks. Freightliner shall comply with all
applicable laws and regulations in the manufacture, sale, distribution and
marketing of products bearing the Licensed Trademark, and Freightliner
shall use all legends, notices, and markings as required by law.
(e) Extent of License. The rights granted to Freightliner in
this section 6.16 shall be royalty-free and worldwide and shall not be
transferable without Oshkosh's prior written consent. Oshkosh shall have
the right to use the Licensed Trademark or to license its use to any other
designee, provided that any such use of the Licensed Trademark or license
to use the Licensed Trademark does not conflict with Freightliner's or
Sub's operation of the Chassis Business and is not in connection with
products that are competitive with the Chassis Business.
(f) Ownership of Trademarks. Freightliner and Sub acknowledge
that the Licensed Trademark and all rights therein (with the exception of
those rights expressly granted to Freightliner hereunder) and the goodwill
pertaining thereto belong exclusively to Oshkosh. Sub's and
Freightliner's use of the Licensed Trademark shall inure to the benefit of
Oshkosh for all purposes, including trademark registration. Freightliner
shall not challenge the validity of Oshkosh's ownership of the Licensed
Trademark or any registration or application for registration thereof or
contest the fact that Freightliner's rights under this Agreement are
solely those of a licensee. After termination of this License (and expi-
ration of any applicable sell-off period) or expiration of this License,
Freightliner agrees that it will cease use of the Licensed Trademark and
not use the Licensed Trademark or any mark which is confusingly similar to
the Licensed Trademark in commerce without Oshkosh's consent.
(g) Termination. In the event that either party commits a
material breach of this License, the non-breaching party shall notify the
breaching party of the breach in writing. If the breaching party fails to
cure the breach within thirty (30) days from its receipt of such notice,
the non-breaching party may, upon written notice effective upon receipt,
terminate this License. Notwithstanding the foregoing provisions of this
subsection 6.16(g), Freightliner may sell its inventory of the products
bearing the Licensed Trademark that exists at the termination of this
License for a period of 12 months following the termination of this
License (the "Sell-Off Period"), provided such inventory has been main-
tained in the ordinary course of business. Freightliner shall observe all
the terms and conditions of this Section 6.16 during the Sell-Off Period.
After the Sell-Off Period or expiration of this License, Freightliner
shall cease all use of the Licensed Trademark or of any trademark confus-
ingly similar thereto.
(h) ALL STEER/TM/. Oshkosh hereby agrees to sell to Sub and
Freightliner all ALL STEER/TM/ components as may be requested by Sub and
Freightliner. All sales by Oshkosh to Sub and Freightliner of such All
Steer components shall be on a preferred customer basis.
Section 6.17 Brokers. Oshkosh represents and warrants to
Freightliner, and Freightliner represents and warrants to Oshkosh, that
neither it nor any party acting on its behalf has incurred any liability,
either express or implied, to any "broker" or "finder" or similar person
in respect of any of the transactions contemplated hereby. Freightliner
agrees to indemnify Oshkosh against, and hold it harmless from, and
Oshkosh agrees to indemnify Freightliner against, and hold it harmless
from, any liability, cost or expense (including, but not limited to, fees
and disbursements of counsel) resulting from any agreement, arrangement or
understanding made by such party with any third party for brokerage or
finders' fees or other commissions in connection with this Agreement or
the transactions contemplated hereby. Oshkosh shall pay the fees and
disbursements of CS First Boston Corporation for its services rendered
relating to this Agreement and the transactions contemplated hereby.
Section 6.18 Liability Insurance. Oshkosh shall maintain
comprehensive general liability insurance, including contractual liability
and product liability coverages, to protect Freightliner and Sub against
any Damages, Lien or other obligation for which Oshkosh is required to
indemnify Freightliner or Sub pursuant to Section 6.15(a)(iv) hereof.
Such insurance coverage shall be subject to reasonable and customary
deductibles or self insurance retentions and shall be in the amount of
$50 million. Such insurance shall be written by a financially responsible
carrier or carriers and Oshkosh shall furnish Freightliner with a
certificate of insurance from such carrier or carriers evidencing such
coverage and showing Freightliner as an additional named insured. Such
insurance shall provide that the carrier will not cancel or materially
change such insurance coverage without providing Freightliner with written
notice at least 30 days in advance of any such cancellation or material
charge.
Section 6.19 Assumption of IRB and IRB Documents. Pursuant to
the Assumption Agreement, Sub and Freightliner will assume the IRB
Documents. Freightliner and Sub agree and covenant that no action shall
be taken or shall be permitted to be taken for the period commencing on
the Closing Date and ending six months thereafter which would constitute a
retirement or deemed retirement of the IRB for purposes of Section 1001 of
the Code.
ARTICLE VII
CLOSING CONDITIONS
Section 7.1 Conditions to Each Party's Obligations to Effect
the Transactions Contemplated Hereby. The respective obligations of each
party to effect the transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Effective Date of the following
conditions:
(a) The applicable waiting period under the HSR Act shall
have expired or been terminated.
(b) No Governmental Body, and no national, federal, state or
local court of competent jurisdiction, shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary
or permanent) which is in effect and binding upon Freightliner, Sub or
Oshkosh and has the effect of making the transactions contemplated hereby
illegal or otherwise restricting, preventing or prohibiting consummation
of the transactions contemplated by the Agreement or impairing the ability
of Freightliner or Sub to conduct the Chassis Business as presently con-
ducted by Oshkosh.
Section 7.2 Conditions to the Obligations of Freightliner and
Sub to Effect the Transactions Contemplated Hereby. The obligations of
Freightliner and Sub to effect the transactions contemplated hereby shall
be further subject to the fulfillment at or prior to the Effective Date of
the following conditions, which may be waived by Freightliner and Sub:
(a) Oshkosh shall have performed and complied in all
material respects with the agreements contained in this Agreement required
to be performed and complied with by it at or prior to the Effective Date,
and the representations and warranties of Oshkosh set forth in this
Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Effective Date as though made at and
as of the Effective Date (except as otherwise contemplated by this Agree-
ment) and Freightliner shall have received certificates to that effect
signed by a Vice President of Oshkosh.
(b) Freightliner or Sub shall have received all consents and
approvals required from any Governmental Body and any other person or
entity which are necessary for the assignment to it of the Licenses and
Permits, the Assumed Contracts and the Oshmex Shares, or which are other-
wise necessary to enable Freightliner and Sub to continue to carry on the
Chassis Business as presently conducted after consummation of the sale of
the Acquired Assets and the other transactions contemplated hereby. All
consents or waivers of other parties to the contracts, leases, franchises,
and agreements to which Oshkosh is a party which are necessary to permit
the consummation of the transactions contemplated hereby shall have been
obtained. All Licenses and Permits which are necessary for the operation
of the Chassis Business shall have been obtained.
(c) Oshkosh shall have executed and delivered the Ancillary
Agreements.
(d) Since the date of this Agreement there shall not have
been any Chassis Business Material Adverse Effect or any condition which
could reasonably be expected to have a Chassis Business Material Adverse
Effect.
(e) All of the conditions to the closing of the transactions
contemplated under the Alliance Agreement shall have been satisfied or
waived, and such closing shall be occurring simultaneously with the Clos-
ing hereunder.
(f) Sub shall have received with respect to the Gaffney
Manufacturing Facility, at the expense of Oshkosh, which Oshkosh agrees to
use its reasonable best efforts to obtain, fee owner's title insurance
policies or commitments, including all endorsements and affirmative cover-
age reasonably requested by Sub or Freightliner, issued on American Land
Title Association standard form policies (most recent form of revised
coverage) from a national title insurance company or companies to be
selected by Freightliner, naming Sub as the insured party, and showing no
encumbrances, other than the Permitted Encumbrances, in form, substance
and amount reasonably satisfactory to Freightliner and Sub, and
Freightliner shall have received a possession "As Built" on the ground
instrument survey in compliance with the American Land Title Association
1986 standards of such real properties in Gaffney, South Carolina, certi-
fied to Freightliner and such title insurance company or companies by
surveyors licensed to practice in the State of South Carolina, locating
all improvements, easements, rights of way, utilities, rights and other
matters (whether above or below ground) of record encumbering or affecting
such real property and showing the absence of any encroachments, which
shall be satisfactory to such title insurance company or companies and
reasonably satisfactory to Freightliner. The fees and disbursements of
such surveyors shall be paid by Oshkosh.
(g) Sub shall have received from Oshkosh original or
certified copies of Certificates of Occupancy (or their equivalent) in the
final form for the buildings, improvements and facilities comprising the
Gaffney Manufacturing Facility, which have been issued by each Govern-
mental Body having jurisdiction thereof and which Certificates shall be
without any violations thereunder, together with original or certified
copies of all licenses, permits and governmental authorizations relating
thereto.
(h) Freightliner shall have received a UCC search conducted
by a recognized search agency at the appropriate filing offices in the
jurisdictions listed on Section 7.2(h) of the Disclosure Schedule confirm-
ing the absence of UCC financing statements showing Oshkosh as debtor and
relating to the Acquired Assets other than UCC financing statements
relating to Assumed Contracts and UCC financing statements as to which a
continuation or termination statement, signed by the secured party and
excepting Acquired Assets from such security interest or terminating such
security interest, shall have been delivered to Freightliner.
(i) Sub shall have received from Oshkosh the FIRPTA
Certificate contemplated by Section 9.8 hereof; provided, however, that if
Oshkosh shall fail to deliver such FIRPTA Certificate, Sub shall withhold
at the Closing and pay over to the appropriate taxing authority an amount
equal to 10 percent of the total "amount realized," as defined in section
1445 of the Code.
Section 7.3 Conditions to the Obligations of Oshkosh to Effect
the Transactions Contemplated Hereby. The obligations of Oshkosh to
effect the transactions contemplated hereby shall be further subject to
the fulfillment at or prior to the Effective Date of the following condi-
tions, which may be waived by Oshkosh:
(a) Each of Freightliner and Sub shall have performed and
complied in all material respects with the agreements contained in this
Agreement required to be performed and complied with by it at or prior to
the Effective Date, and the representations and warranties of each of
Freightliner and Sub set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and as of the
Effective Date as though made at and as of the Effective Date (except as
otherwise contemplated by this Agreement), and Oshkosh shall have received
a certificate to that effect signed by a Vice President of Freightliner.
(b) Freightliner and Sub shall have executed and delivered
the Ancillary Agreements.
(c) All of the conditions to the closing of the transactions
contemplated under the Alliance Agreement shall have been satisfied or
waived, and such closing shall be occurring simultaneously with the Clos-
ing hereunder.
Section 7.4 Certificates. Each of the parties hereto will
furnish to the other party such certificates of such party's officers or
others and such other documents to evidence fulfillment of the conditions
set forth in this Article VII as the other party may reasonably request.
ARTICLE VIII
TERMINATION AND ABANDONMENT
Section 8.1 Termination. This Agreement may be terminated at
any time prior to the Effective Date:
(a) by mutual consent of Oshkosh, Freightliner and Sub;
(b) by Oshkosh or by Freightliner and Sub, if by September
30, 1995, the Closing shall not have occurred;
(c) by Oshkosh or by Freightliner and Sub if there shall be
any law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if any judgment,
injunction, order or decree enjoining Freightliner, Sub or Oshkosh from
consummating the transactions contemplated hereby is entered and such
judgment, injunction, order or decree shall become final and nonappeal-
able;
(d) by Freightliner and Sub, if there has been a material
violation or breach by Oshkosh of any agreement, representation or
warranty contained in this Agreement which has rendered the satisfaction
of any condition to the obligations of Freightliner and Sub impossible and
such violation or breach has not been waived by Freightliner and Sub;
(e) by Oshkosh, if there has been a material violation or
breach by Freightliner or Sub of any agreement, representation or warranty
contained in this Agreement which has rendered the satisfaction of any
condition to the obligations of Oshkosh impossible and such violation or
breach has not been waived by Oshkosh; or
(f) by Oshkosh or by Freightliner and Sub, if the Alliance
Agreement has been terminated in accordance with the terms thereof.
Section 8.2 Procedure and Effect of Termination. In the event
this Agreement is terminated pursuant to Section 8.1 hereof, written
notice thereof shall forthwith be given to the other party or parties
hereto and this Agreement shall terminate without liability or further
obligation of any party to another, except for Sections [6.10, 6.12, and
6.18] which shall survive termination and except that nothing herein shall
relieve any party from liability for willful breach hereof.
ARTICLE IX
TAX MATTERS
Section 9.1 General. Except as may otherwise be provided in
Section 9.2, (i) Oshkosh shall be liable for, and shall indemnify
Freightliner and Sub and hold them harmless from and against, all Taxes of
Oshkosh or otherwise relating to the Chassis Business and the Acquired
Assets attributable to all taxable periods ending on or before the Effec-
tive Date; (ii) Freightliner shall be liable for and shall indemnify
Oshkosh and hold it harmless from and against all Taxes relating to the
Chassis Business and the Acquired Assets attributable to taxable periods
beginning after the Effective Date; (iii) for all taxable periods that in-
clude (but do not begin or end on) the Effective Date, Oshkosh shall be
responsible for the payment of Taxes relating to the Chassis Business and
the Acquired Assets that are attributable to such taxable periods up to
and including the Effective Date, and Freightliner shall be responsible
for the payment of Taxes relating to the Chassis Business and the Acquired
Assets attributable to the day immediately following the Effective Date to
the end of such taxable period; provided, however, that Taxes on real
property shall be prorated and apportioned in accordance with Section
164(d) of the Code. The party that has the primary obligation to do so
under applicable law shall file any Tax Return that is required to be
filed in respect of Taxes described in this Section 9.1, and that party
shall pay the Taxes shown on such Tax Return and the other party shall
reimburse the paying party for its share of such Taxes by wire transfer of
immediately available funds no later than ten days after receipt of writ-
ten notice that such Taxes have been paid to the applicable Governmental
Body.
Section 9.2 Sales, Use and Transfer Taxes. Oshkosh shall bear
the liability for all sales, value added, use, transfer, registration,
stamp, real estate gains or transfer and similar Taxes ("Transfer Taxes")
incurred with respect to the transactions contemplated by this Agreement.
Oshkosh shall prepare and file the required Tax Returns and other required
documents with respect to Transfer Taxes required to be paid by Oshkosh in
paragraph Section 9.2.
Section 9.3 Federal, State and Local Taxes. For purposes of
Taxes based upon or measured by net income ("Income Taxes"), Oshkosh shall
include the net income attributable to the Chassis Business and the
Acquired Assets in its income through the Effective Date and shall file
the appropriate Tax Returns, and Freightliner shall thereafter include the
net income relating to the Chassis Business and the Acquired Assets in its
income. Oshkosh shall be responsible for the payment of all Income Taxes
imposed on Oshkosh as a result of the transfer of the Chassis Business and
the Acquired Assets to Sub.
Section 9.4 Cooperation and Exchange of Information. Oshkosh
and Freightliner shall provide each other, and shall cause their
respective Affiliates to provide each of them, with such cooperation and
information as either of them reasonably may request of the other in
filing any Tax Return with respect to the Chassis Business or the Acquired
Assets, amended return or claim for refund, determining a liability for
Taxes or a right to refund of Taxes or in conducting any audit or other
proceeding in respect of Taxes with respect to the Chassis Business or the
Acquired Assets. Such cooperation and information shall include, without
limitation, providing copies of all relevant portions of Tax Returns with
respect to the Chassis Business, together with accompanying schedules and
related work papers, documents relating to rulings or other determinations
by taxing authorities and records concerning the ownership and tax basis
of property, which either party may possess. Each party shall provide
timely notice to the other in writing of any pending or threatened audits
or assessments relating to Taxes imposed on or in respect of the Chassis
Business or the Acquired Assets. Each party shall make its employees
available on a mutually convenient basis to provide explanation of any
documents or information provided hereunder. Any information obtained
under this Section 9.4 shall be kept confidential, except as may be
otherwise necessary in connection with the filing of returns or claims for
refund or in conducting any audit or other Section proceeding.
Section 9.5 Tax Records. For a period of six years from the
Effective Date, neither Freightliner nor Sub, on the one hand, nor
Oshkosh, on the other hand, shall dispose of or destroy any business
records or files relating to Taxes or Tax Returns pertaining to the
Chassis Business and the Acquired Assets, and none of Freightliner, Sub or
Oshkosh shall dispose of or destroy such records without first offering to
turn over possession thereof to Freightliner (at Freightliner's expense)
or Oshkosh (at Oshkosh's expense), as the case may be, by written notice
to Freightliner or Oshkosh, as the case may be, at least 30 days prior to
the proposed date of such disposition or destruction.
Section 9.6 Withholding. Oshkosh shall transfer to Freightliner
any records (including, but not limited to, Forms W-4 and Employee
Withholding Allowance Certificates) relating to withholding and payment of
income and employment taxes (Federal, state and local) and FICA taxes with
respect to wages paid by Oshkosh during the 1995 calendar year to any
employees retained by Freightliner. Oshkosh and Freightliner shall, to
the extent permitted by applicable law, provide such employees with Forms
W-2, Wage and Tax Statements for the 1995 calendar year setting forth the
wages and taxes withheld with respect to such employees for the 1995
calendar year by Oshkosh and Freightliner as predecessor and successor
employers, respectively. Oshkosh and Freightliner shall also comply with
the filing requirements set forth in Revenue Procedure 84-77, 1984-2 C.B.
753, to implement this Section.
Section 9.7 Purchase Price Allocation. The Purchase Price
shall be allocated pursuant to Section 1060 of the Code, in accordance
with the fair market values for the Acquired Assets as reflected on a
schedule to be prepared by Freightliner, subject to the agreement of
Oshkosh, on or promptly following the Effective Date (the "Allocation
Schedule"). Unless otherwise agreed in writing by Freightliner and
Oshkosh, Freightliner and Oshkosh shall (i) reflect the Acquired Assets in
their books for tax reporting purposes in accordance with the Allocation
Schedule, and (ii) file all Tax Returns (including Form 8594) in accor-
dance with and based upon such allocation.
Section 9.8 FIRPTA Certificate. Oshkosh shall deliver to
Freightliner on or before the Closing Date a certification of non-foreign
status of Oshkosh (the "FIRPTA Certificate") (as provided for in Section
1445 of the Code and the regulations promulgated thereunder). Oshkosh
acknowledges and agrees that Freightliner shall, if requested, deliver
copies of the certification to the Internal Revenue Service and
Freightliner shall incur no liability, and the rights and obligations of
Freightliner and Oshkosh hereunder shall not be affected, as a result of
any such delivery.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
Section 10.1 Survival of Representations. Each representation
and warranty of Freightliner, Sub and Oshkosh shall survive the Effective
Date for two years following the Effective Date regardless of any
investigation made by or on behalf of any party hereto, except that the
representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4,
4.18, 5.1, 5.2, 5.3, and 5.4 shall survive indefinitely. Notwithstanding
the previous sentence, any representation or warranty in respect of which
indemnity may be sought under Section 10.2 shall survive the time at which
it would otherwise terminate pursuant to the preceding sentence, if notice
of the specific inaccuracy or breach thereof giving rise to such right to
indemnity shall have been given to the party against whom such indemnity
may be sought prior to such time.
Section 10.2 Agreement to Indemnify.
(a) Upon the terms and subject to the conditions of this
Article X, Oshkosh hereby agrees to indemnify, defend and hold harmless
Freightliner, Sub and their respective Affiliates and the directors and
officers of Freightliner, Sub and their respective Affiliates (the
"Freightliner Group") from and against all demands, claims, actions or
causes of action, assessments, losses, damages, Liabilities, costs and
expenses, including, without limitation, interest, penalties and reason-
able attorneys' fees and expenses (collectively, "Damages"), asserted
against, resulting to, imposed upon or incurred by the Freightliner Group
or any member thereof, directly or indirectly, by reason of or resulting
from:
(i) the inaccuracy of any representation and warranty
made by Oshkosh in or pursuant to this Agreement with respect to
which Freightliner or Sub shall have given written notice to Oshkosh
prior to the expiration of the survival of such representation and
warranty pursuant to Section 10.1; provided, however, Oshkosh shall
have no liability under this clause (i) unless and until (and then
only to the extent that) the aggregate of all Damages exceeds
$138,000 (the "Minimum Amount") and in no case shall Oshkosh be lia-
ble in an amount greater than the Final Purchase Price (the "Maximum
Amount");
(ii) any and all Liabilities and obligations of, or
claims against, Oshkosh or any Affiliate of Oshkosh, whatsoever and
whenever arising, excluding the Assumed Liabilities, including
without limitation:
(x) any and all orders, notices, claims, suits,
proceedings, investigations or actions at law or in equity against or
affecting the Chassis Business or the Acquired Assets, Oshkosh or any
property or assets of Oshkosh relating to the Chassis Business or the
Acquired Assets which are pending or threatened as of the Effective
Date, or arising from acts, omissions or circumstances occurring or
existing on or prior to the Effective Date; and
(y) the ownership or operation of any property or
plant by Oshkosh or any Affiliate thereof on or prior to the
Effective Date;
(iii) any Liabilities arising from or related to the
employment or engagement on or prior to the Effective Date of any
current, former or retired employee of or consultant to Oshkosh or
the Chassis Business, including without limitation, any claims for
benefits under any Plan or any claims arising under Title VII of the
Civil Rights Act of 1964, as amended;
(iv) any Liabilities arising as a result of non-
compliance by any party hereto with Bulk Transfer Laws;
(v) any Liability for trademark or trade name
infringement that arises as a result of use by Freightliner or Sub of
the name and mark "Oshkosh" pursuant to the license set forth in
Section 6.16 of this Agreement;
(vi) any Liability arising from or related to the
Equipment Lease Litigation or the matters therein involved, including
without limitation, any Liabilities arising out of any claim, action,
suit, or proceeding against Freightliner, Sub, the Chassis Business,
the Leased Equipment or the Acquired Assets brought by or on behalf
of First Chicago or any Affiliate thereof; and
(vii) any Liability arising from Oshkosh's obligations
under the IRB and the IRB Documents for all periods (or portions
thereof) ending on or prior to the Closing Date, including, without
limitation, any such Liability arising from Oshkosh's breach of the
representations set forth in Section 4.18(d) hereof or any action by
Oshkosh or any persons related thereto which caused the IRB to lose
its tax-exempt status during any period (or portion thereof) prior to
the Closing Date.
Notwithstanding the foregoing, the provisions of this Article X shall not
apply to any Damages arising as a result of Product Warranties, Safety
Recalls, Lemon Law Litigation or Product Liabilities, which Damages are
the subject of Section 6.15.
(b) Upon the terms and subject to the conditions of this
Article X, Freightliner and Sub hereby jointly and severally agree to
indemnify, defend and hold harmless Oshkosh and any Affiliate thereof or
any of its directors or officers (the "Oshkosh Group") from and against
all Damages asserted against, resulting to, imposed upon or incurred by
the Oshkosh Group or any member thereof, directly or indirectly, by reason
of or resulting from:
(i) the inaccuracy of any representation and warranty
made by Freightliner or Sub in or pursuant to this Agreement with re-
spect to which Oshkosh shall have given written notice to
Freightliner prior to the expiration of the survival of such
representation and warranty pursuant to Section 10.1; provided,
however, Freightliner and Sub shall have no liability under this
clause (b) unless and until (and then only to the extent that) the
aggregate of all Damages exceeds the Minimum Amount and in case shall
Freightliner and Sub be liable in an amount greater than the Maximum
Amount;
(ii) any Assumed Liability; and
(iii) any Liability arising with respect to the use of
the name "Oshkosh" by Freightliner or Sub pursuant to Section 6.16
hereof.
(c) Each matter for which Oshkosh or Freightliner and Sub
has agreed to provide indemnification pursuant to Section 10.2(a) or
Section 10.2(b) hereof is hereinafter referred to as "Claim" and collec-
tively as "Claims."
Section 10.3 Conditions of Indemnification. The obligations of
Oshkosh, on the one hand, and Freightliner and Sub, on the other hand,
under Section 10.2 hereof with respect to Claims shall be subject to the
following terms and conditions:
(a) The person seeking indemnification (the "Indemnified
Party") will give the person providing indemnification (the "Indemnifying
Party") prompt notice of any such Claim, which notice shall set forth the
details of the Claim and the specific provisions of this Agreement
relating thereto, and the Indemnifying Party will undertake the defense
thereof by representatives chosen by it. The notice shall set forth the
details of the Claim and the specific provisions of this Agreement
relating thereto.
(b) If the Indemnifying Party, within a reasonable time
after notice of any such Claim, fails to defend the Indemnified Party, the
Indemnified Party (upon further notice to the Indemnifying Party) will
have the right to undertake the defense, compromise or settlement of such
Claim on behalf of and for the account and risk of the Indemnifying Party.
(c) Anything in this Section 10.3 to the contrary notwith-
standing, (i) if there is a reasonable probability that a Claim may
materially and adversely affect the Indemnified Party other than as a
result of money damages or other money payments, the Indemnified Party
shall have the right to defend, compromise or settle such Claim; provided,
however, that no settlement which would require indemnification by the
Indemnifying Party shall be entered into without the consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed, and (ii) the Indemnifying Party shall not, without written con-
sent of the Indemnified Party, settle or compromise any Claim or consent
to the entry of any judgment which does not include, as an unconditional
term thereof, the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such
Claim.
Section 10.4 Limitation on Remedies. Each of the parties
hereto hereby acknowledges and agrees that its sole and exclusive remedy
with respect to any and all claims relating to the representations and
warranties in this Agreement, shall be pursuant to the indemnification
provisions set forth in this Article X, and each party agrees not to seek
any remedies other than those set forth herein.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only
and are not meant in any way to affect the meaning or interpretation of
this Agreement.
Section 11.2 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given
(and shall be deemed to have been duly given upon receipt) by delivery in
person, by cable, facsimile transmission, telegram or telex, or by regis-
tered or certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:
if to Freightliner, to:
(by hand):
Freightliner Corporation
4747 North Channel Avenue
Portland, Oregon 97217-7699
(by mail):
Freightliner Corporation
P.O. Box 33849
Portland, Oregon 97208-3849
Attention: James T. Hubler, Esq.
General Counsel
Telephone: 503-735-8000
Facsimile: 503-735-8192
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022-3897
Attention: J. Michael Schell
Telephone: 212-735-3150
Facsimile: 212-735-2000
if to Oshkosh, to:
(by hand):
Oshkosh Truck Corporation
2307 Oregon Street
Oshkosh, Wisconsin 54903-2566
(by mail):
Oshkosh Truck Corporation
P.O. Box 2566
Oshkosh, Wisconsin 54903-2566
Attention: R. Eugene Goodson
Chairman and Chief Executive Officer
Telephone: 414-233-9328
Facsimile: 414-233-9624
with copies to:
Dempsey, Magnusen, Williamson & Lampe
One Pearl Avenue
Oshkosh, Wisconsin 54901
Attention: Timothy M. Dempsey
Telephone: 414-235-7300
Facsimile: 414-235-2011
and
Foley & Lardner
Firstar Center
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Attention: Michael W. Grebe
Telephone: 414-297-5614
Facsimile: 414-297-4900
or to such other address as the person to whom notice is given has
previously furnished to the others in writing in the manner set forth
above.
Section 11.3 Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other party. Notwithstanding the foregoing Sub may
assign its rights and obligations hereunder to Freightliner or to any
wholly owned subsidiary of Freightliner without the consent of Oshkosh.
Section 11.4 Complete Agreement. This Agreement, including the
Schedules hereto and the Disclosure Schedule, the Ancillary Agreements and
any other documents specifically referred to herein, contains the entire
understanding of the parties with respect to the transactions contemplated
hereby and supersedes all prior arrangements or understandings with
respect thereto. There are no agreements, promises, warranties, covenants
or undertakings other than those expressly set forth herein. Each of the
parties to this Agreement acknowledges that no party to this agreement
has made any representation and warranties concerning the subject matter
of this Agreement that are not set forth in this Agreement or in any
certificate delivered pursuant hereto.
Section 11.5 Parties in Interest. Nothing in this Agreement is
intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties hereto and their respec-
tive successors and permitted assigns.
Section 11.6 Counterparts. This Agreement may be executed in
two or more counterparts all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
Section 11.7 Governing Law. This Agreement shall be governed
by the laws of the State of Delaware (regardless of the laws that might be
applicable under its principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction, effect and
performance.
Section 11.8 Severability. In the event that any part of this
Agreement is declared by any court or other judicial or administrative
body to be null, void or unenforceable, said provision shall survive to
the extent it is not so declared, and all of the other provisions of this
Agreement shall remain in full force and effect.
Section 11.9 Amendments; Waivers. This Agreement may be
amended or modified, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written
instrument executed by the parties hereto or their respective successors
or assigns, or in the case of a waiver, by the party waiving compliance.
Any waiver by any party of any condition, or of the breach of any
provision, term, covenant, representation or warranty contained in this
Agreement, in any one or more instances, shall not be deemed to be nor
construed as a further or continuing waiver of any such condition, or of
the breach of any other provision, term, covenant, representation or war-
ranty of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto have caused their
duly authorized officers to execute this Agreement, as of the day and year
first above written.
OSHKOSH TRUCK CORPORATION
By/s/ Fred S. Schulte
Name: Fred S. Schulte
Title: Chief Financial Officer
FREIGHTLINER CORPORATION
By/s/ James L. Hebe
Name: James L. Hebe
Title: President
FREIGHTLINER CHASSIS CORPORATION
By/s/ James L. Hebe
Name: James L. Hebe
Title: Chief Executive Officer
Pursuant to Item 601(b)(2) of Regulation S-K, the following are not
filed herewith, and Oshkosh agrees to furnish supplementally a copy of any
of the following to the Commission upon request:
Exhibit A - Assumption Agreement
Exhibit B - Bill of Sale
Exhibit C - Transitional Services Agreement
Exhibit D - Deed
Exhibit E - Valuation of Inventory