EXHIBIT 2
EXECUTION COPY
PURCHASE AND SALE AGREEMENT
DATED AS OF JULY 7, 2003
AMONG
TRAK INTERNATIONAL, INC., AS SELLER,
TEXTRON INC., AS GUARANTOR,
JLG ACQUISITION CORPORATION, AS PURCHASER,
AND
JLG INDUSTRIES, INC.
TABLE OF CONTENTS
<Table>
ARTICLE I Purchase and Sale.......................................................................................1
1.1. Purchased Assets......................................................................................1
1.2. Excluded Assets.......................................................................................3
ARTICLE II Liabilities............................................................................................5
2.1. Assumption of Liabilities.............................................................................5
2.2. Retained Liabilities..................................................................................6
ARTICLE III Purchase Price........................................................................................7
3.1. Purchase Price........................................................................................7
3.2. Payment of Purchase Price.............................................................................8
ARTICLE IV Determination and Allocation of Adjusted Purchase Price...............................................8
4.1. Closing Statement of Net Assets Acquired..............................................................8
4.2. Review of Closing Statement of Net Assets Acquired....................................................8
4.3. Cooperation...........................................................................................9
4.4. Settlement of Adjusted Purchase Price................................................................10
4.5. Allocation of Purchase Price.........................................................................10
ARTICLE V Closing Matters........................................................................................10
5.1. The Closing..........................................................................................10
ARTICLE VI Transfer After the Closing............................................................................11
6.1. Further Instruments and Actions......................................................................11
6.2. Purchased Assets Requiring Consents..................................................................12
6.3. Novation of U.S. Government Contracts................................................................13
ARTICLE VII Actions Prior to Closing.............................................................................14
7.1. Obtaining of Consents................................................................................14
7.2. Actions of Seller and Conduct of Business............................................................15
7.3. Actions of Purchaser.................................................................................17
7.4. Public Announcements.................................................................................17
7.5. Remarketing Agreement................................................................................17
7.6. Access and Information; Additional Disclosure........................................................17
ARTICLE VIII Representations and Warranties of Seller............................................................18
8.1. Organization and Authority...........................................................................18
8.2. Corporate Action; No Conflict; Consent and Approval..................................................18
8.3. Reference Statement of Net Assets Acquired; Absence of Changes.......................................19
8.4. Real Property........................................................................................20
8.5. Purchased Assets.....................................................................................21
8.6. Contracts............................................................................................21
8.7. Litigation...........................................................................................22
8.8. Compliance with Law..................................................................................22
8.9. Employees and Employee Benefit Plans.................................................................22
8.10. Intellectual Property Rights......................................................................24
8.11. Environmental Matters.............................................................................27
8.12. Tax Matters.......................................................................................27
8.13. Labor Matters.....................................................................................27
8.14. Used Equipment....................................................................................28
8.15. Insurance.........................................................................................28
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8.16. Customers and Suppliers...........................................................................28
8.17. Product or Service Liability......................................................................28
8.18. Permits...........................................................................................28
8.19. Brokers...........................................................................................29
8.20. Product Warranties................................................................................29
ARTICLE IX Representations and Warranties of Purchaser...........................................................29
9.1. Organization and Authority...........................................................................29
9.2. Corporate Action; No Conflict; Consent and Approval..................................................29
9.3. Brokers..............................................................................................30
9.4. Funding of Purchase Price............................................................................30
ARTICLE X Conditions to Obligations of Purchaser.................................................................30
10.1. Representations and Warranties....................................................................30
10.2. Covenants; Adverse Change.........................................................................31
10.3. Officer's Certificate.............................................................................31
10.4. No Injunction.....................................................................................32
10.5. Consents; Permits.................................................................................32
10.6. Certain Other Closing Documents...................................................................32
10.7. Certificate of Good Standing......................................................................32
10.8. Receipt...........................................................................................33
10.9. Governmental Approvals............................................................................33
ARTICLE XI Conditions to Obligations of Seller...................................................................33
11.1. Representations and Warranties....................................................................33
11.2. Covenants.........................................................................................33
11.3. Officer's Certificate.............................................................................33
11.4. No Injunction.....................................................................................33
11.5. Certificate of Good Standing......................................................................34
11.6. Certain Other Closing Documents...................................................................34
11.7. Governmental Approvals............................................................................34
ARTICLE XII Employee Matters.....................................................................................34
12.1. Scope of Section..................................................................................34
12.2. Employment Status.................................................................................34
12.3. Former Employees..................................................................................35
12.4. Defined Contribution Plans........................................................................35
12.5. Union Contract(s).................................................................................35
12.6. Vacation and WARN Act Liability...................................................................35
12.7. Health Care Continuation Coverage.................................................................36
12.8. Welfare Benefit Plans - Interim Services..........................................................36
12.9. Wage and Tax Reporting............................................................................37
12.10. Worker's Compensation Claims......................................................................37
12.11. Long-Term Incentive Compensation..................................................................37
12.12. Retention Agreements..............................................................................37
ARTICLE XIII Obligations After Closing...........................................................................37
13.1. Non-Competition...................................................................................37
13.2. Access............................................................................................38
13.3. Tax Matters.......................................................................................38
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13.4. Ownership of the Business; Use of Purchased Records...............................................40
13.5. Further Assurances................................................................................40
13.6. Guarantee.........................................................................................40
13.7. Former Product Lines..............................................................................40
13.8. Post-Closing Payments.............................................................................40
13.9. Post-Closing Assistance...........................................................................41
13.10. TFC Matters.......................................................................................41
ARTICLE XIV Notices..............................................................................................42
ARTICLE XV Cooperation...........................................................................................42
15.1. Cooperation by Purchaser..........................................................................42
15.2. Cooperation by Seller.............................................................................42
15.3. Cooperation on Tax, Accounting and Other Matters..................................................43
ARTICLE XVI Indemnification......................................................................................43
16.1. Indemnification by Seller.........................................................................43
16.2. Indemnification by Purchaser......................................................................44
16.3. Environmental Procedures..........................................................................44
16.4. Indemnification Procedure.........................................................................46
16.5. Calculation of Losses.............................................................................47
16.6. Indemnity Payments................................................................................48
16.7. Closing Statement Claims Not Losses...............................................................48
16.8. Expiration........................................................................................48
ARTICLE XVII Textron and JLG Representations and Warranties; Guaranties..........................................48
17.1. Representations and Warranties of Guarantor.......................................................48
17.2. Textron Guaranty..................................................................................49
17.3. Representations and Warranties of JLG.............................................................50
17.4. JLG Guaranty......................................................................................51
ARTICLE XVIII Termination........................................................................................52
18.1. Termination.......................................................................................52
18.2. Procedure and Effect of Termination...............................................................53
ARTICLE XIX Miscellaneous........................................................................................53
19.1. Bulk Sales Act....................................................................................53
19.2. Expenses..........................................................................................53
19.3. Binding Agreement.................................................................................53
19.4. Entire Agreement..................................................................................54
19.5. Governing Law.....................................................................................54
19.6. No Rights of Third Parties........................................................................54
19.7. Counterparts......................................................................................54
19.8. Headings; Table of Contents.......................................................................54
19.9. Meaning of "Knowledge of Seller"..................................................................54
19.10. Survival..........................................................................................54
19.11. Limitation of Liability...........................................................................54
19.12. Disclosure........................................................................................55
19.13. Oakes, North Dakota Industrial Revenue Development Bonds..........................................55
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List of Schedules and Exhibits
Schedule 1.1(a)(ii) - Leases
Schedule 1.2(c) - Excluded Assets and Contracts
Schedule 1.2(i) - Retained Real Estate Interests
Schedule 1.2(l) - Shared and Insignificant Assets
Schedule 2.1(n) - Guaranteed Letter of Credit Obligations
Schedule 2.1(o) - Finance and Lease Transaction Liabilities
Schedule 2.2(k) - Liabilities to Affiliates of Seller
Schedule 5.1(c)(ii) - Vehicles and Titled Assets
Schedule 6.3(a) - Government Contracts
Schedule 7.1(c) - AT&T Equipment
Schedule 7.2(c)(ii) - Planned Closures
Schedule 7.2(c)(xii) - Capital Expenditures
Schedule 7.6(a) - Personnel Permitted Access
Schedule 8.2(a) - Conflicts
Schedule 8.2(b) - Seller Consents
Schedule 8.3(a) - Reference Statement of Net Assets Acquired; Income Statement;
Accounting Policies
Schedule 8.3(b) - Changes
Schedule 8.4(a)(i) - Owned Real Property
Schedule 8.4(b) - Lease Exceptions
Schedule 8.5 - Title; Locations
Schedule 8.6 - Material Contracts
Schedule 8.7 - Litigation
Schedule 8.8 - Compliance with Law
Schedule 8.9(a) - Employees
Schedule 8.9(b) - Plans
Schedule 8.10 - Intellectual Property
Schedule 8.10(a) - Owned Intellectual Property
Schedule 8.11 - Environmental Matters
Schedule 8.12 - Tax Matters
Schedule 8.13 - Labor Matters
Schedule 8.14 - Used Equipment
Schedule 8.15 - Insurance
Schedule 8.17 - Recalls, etc.
Schedule 8.18 - Permits
Schedule 8.20 - Product Warranties
Schedule 9.2(b) - Purchaser Consents
Schedule 10.5 - Consents, etc.
Schedule 12.2 - Employment Status
Schedule 12.3 - Assumed Liabilities for Former Employees
Schedule 12.6(c) - Insurance Coverage; Medical and Dental Benefits
Schedule 12.12 - Retention Agreements
Schedule 13.8 - Post-Closing Payments
Schedule 17.1(b)(i) - Guarantor Conflicts
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Schedule 17.1(b)(ii) - Guarantor Consents
Schedule 17.3(b)(i) - JLG Conflicts
Schedule 17.3(b)(ii) - JLG Consents
Exhibit A - Defined Terms
Exhibit B - Form of Intellectual Property License Agreement
Exhibit C - Form of Promissory Note
Exhibit D - Form of Real Property Lease
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PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of July 7, 2003
("Agreement"), by and among TRAK International, Inc., a Delaware corporation,
having its principal place of business at 40 Westminster Street, Providence,
Rhode Island 02903 ("Seller"), Textron Inc., a Delaware corporation, having its
principal place of business at 40 Westminster Street, Providence, Rhode Island
02903 ("Guarantor"), JLG Acquisition Corporation, a Delaware corporation, having
its principal place of business at 13224 Fountainhead Plaza, Hagerstown,
Maryland 21742-2678 ("Purchaser"), and JLG Industries, Inc., a Pennsylvania
corporation, having its executive offices at 13224 Fountainhead Plaza,
Hagerstown, Maryland 21742-2678 ("JLG").
WHEREAS, Seller is engaged in the design, manufacture and sale
of telescopic material handlers and related parts and services marketed and sold
by Seller principally under the Sky Trak and Lull brand names (the "Business");
WHEREAS, on the terms and conditions hereinafter set forth,
Seller desires to sell or to cause to be sold to Purchaser, and Purchaser
desires to purchase from Seller, subject to the assumption by Purchaser of the
Assumed Liabilities, all of the assets and properties used in, held for use in,
or otherwise relating to, the Business as a going concern, other than the
Excluded Assets; and
WHEREAS, capitalized terms used but not defined in this
Agreement shall have the meaning ascribed thereto in Exhibit A hereto.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements hereinafter set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1. Purchased Assets:
(a) On the terms and subject to the conditions set forth in
this Agreement, Seller hereby agrees to sell, transfer, convey, assign and
deliver to Purchaser, or cause to be sold, transferred, conveyed, assigned and
delivered to Purchaser, and Purchaser agrees to purchase from Seller, free and
clear of all Encumbrances, all of Seller's right, title and interest in, to and
under the assets and properties of every nature, kind and description, whether
real, personal or mixed, tangible or intangible, and used in, held for use in,
or pertaining to, the Business (other than the Excluded Assets), wherever
located, as the same shall exist immediately prior to the Closing (collectively,
the "Purchased Assets"), including, without limitation, the following:
(i) INTENTIONALLY LEFT BLANK
(ii) subject to Section 5.1(d) below, the real
property leases listed on Schedule 1.1(a)(ii) (collectively,
the "Leases"), together with all of Seller's interest in all
of the structures, fixtures and improvements located on the
real
property covered by such Leases (collectively, the "Leased
Real Property"; and, together with the Owned Real Property,
the "Real Property");
(iii) all machinery and equipment, including, without
limitation, all manufacturing, production, maintenance,
packaging, testing and other machinery, tooling (including
dies and molds) and equipment, rolling stock, vehicles, spare
or replacement parts, computer equipment, furniture, fixtures,
plant and office equipment, supplies and other tangible
personal property;
(iv) all inventories, including, without limitation,
raw materials, work-in-process, finished goods, component
parts, returned goods, stores and supplies, packaging,
shipping containers and other materials and including spare
parts inventory for the former mini-excavator product line and
used equipment including without limitation used Snorkel,
mini-excavator, and skid steer loader equipment obtained by
the Business through repossession or trade-in (collectively,
the "Purchased Inventories");
(v) all accounts and notes receivable of any nature
whatsoever, including, without limitation, receivables owed to
the Business by any Affiliate of Seller (collectively, the
"Purchased Receivables");
(vi) all prepaid expenses relating to the Assumed
Liabilities, including advances, credits and security, utility
and other deposits and all insurance policies and related
prepaid assets that relate to the Assumed Liabilities to the
extent transferable;
(vii) subject to Section 1.2(c) and Section 6.2
below, all rights in and under all contracts, arrangements,
licenses, personal property leases, commitments, purchase
orders, sales orders and other agreements, including, without
limitation, any right to receive payment for products sold or
services rendered, and to receive goods and services, pursuant
to such agreements, and to assert claims and take other
rightful actions in respect of breaches, defaults and other
violations thereof (collectively, the "Assigned Contracts");
(viii) subject to Section 1.2(d) and Section 1.2(k)
below, all operating records, data and other materials (in any
form or medium) maintained by the Business, including, without
limitation, all books, records, sales and sales promotional
data, advertising materials, customer lists and records,
credit information, cost and pricing information, supplier
lists and records, catalogs, price lists, correspondence,
mailing lists, distribution lists, photographs, production
data, engineering records, personnel and payroll records,
manufacturing and quality control records and procedures,
blueprints, research and development files, records, data and
laboratory books, Intellectual Property disclosures,
accounting records, plans, specifications, surveys, title
policies, property records, sales order files, manuals and
other materials related to any of the foregoing items, but
excluding such materials related exclusively to Snorkel or
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Seller's former skid steer loader product line (collectively,
the "Purchased Records");
(ix) subject to Section 1.2(g) below, all
Intellectual Property owned or used by Seller in the Business,
including, but not limited to, the name "OmniQuip"
(collectively, the "Purchased Rights");
(x) subject to Section 6.2 below, all Permits;
(xi) all rights, recoveries, refunds, counterclaims,
rights of set-off and other choses in action and Claims (known
or unknown, matured or unmatured, accrued or contingent),
against third parties or Affiliates, including, without
limitation, warranty and other contractual claims (express,
implied or otherwise) (collectively, the "Purchased Claims"),
other than any of the foregoing which relate solely to the
Excluded Assets or Retained Liabilities;
(xii) all telephone, telex, pager and telecopier
numbers, all website addresses and all listings in all
telephone books and directories (in any form or medium);
(xiii) all warranties, guarantees and letters of
credit received from vendors, suppliers or manufacturers to
the extent they relate to the Purchased Assets or Assumed
Liabilities;
(xiv) all stationery, purchase orders, forms, labels,
shipping material, catalogs, brochures, art work, photographs
and advertising material (in any form or medium);
(xv) all rights, title and interests in and under the
Trak International Union 401(k) Savings Plan (the "Union
Savings Plan") and the OmniQuip International Inc. 401(k)
Savings Plan (the "OmniQuip Savings Plan");
(xvi) subject to Section 1.2(l) below, all rights of
Seller to use facilities of, or receive goods, services or
other support from, any Affiliate of Seller to the extent that
such rights are currently used in the Business; and
(xvii) all goodwill of the Business.
1.2. Excluded Assets: There are excepted from the assets and properties
of the Business to be sold to Purchaser pursuant to this Agreement and the term
"Purchased Assets" does not mean or include the following assets (collectively,
the "Excluded Assets"):
(a) all cash and Cash Equivalents on hand or on deposit as of
the Closing Date of this Agreement;
(b) subject to Section 6.2, all federal, state and local
Permits relating to the Business to the extent they are not assignable or
transferable and are listed on Schedule 8.18;
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(c) the assets and contracts listed on Schedule 1.2(c);
(d) all stock and shareholder records, minute books and stock
transfer ledgers of Seller and all Returns of Seller, and all of Seller's equity
and other ownership interests in TRAK International Rhode Island Inc.;
(e) (i) rights to or claims for refunds, overpayments or
rebates of Taxes and other governmental charges for periods ending on or prior
to the Closing Date and for any period that includes but does not end on the
Closing Date, the pro rata portion of such refund, overpayment or rebate being
based on the number of days from the commencement of such period up to and
including the Closing Date, and (ii) the benefit of any Tax attributes of
Seller, including without limitation the benefit of any net operating loss and
Tax credit carryforwards and carrybacks or other Tax credits of Seller;
(f) all insurance policies and related prepaid assets other
than those that relate to the Assumed Liabilities;
(g) the right to use the name "Textron";
(h) all rights and interests arising from or relating to
financing or leasing transactions entered into prior to the Closing Date
involving TFC;
(i) all rights and interests, evidenced by contract or
otherwise, to use the real estate parcels identified on Schedule 1.2(i) (the
"Retained Real Estate Interests");
(j) all assets and properties of Seller not exclusively used
in, held for use in, or pertaining to, the Business, including without
limitation (i) the accounts and notes receivable relating to Snorkel and
Seller's former skid steer loader product line, and (ii) any assets and
properties, including spare parts inventory, for Snorkel or Seller's former skid
steer loader lines, except for used equipment as provided for in Section
1.1(a)(iv);
(k) all operating records, data and other materials (in any
form or medium) maintained by Seller and relating exclusively to Snorkel or
Seller's former skid steer loader product line, including, without limitation,
all books, records, sales and sales promotional data, advertising materials,
customer lists and records, credit information, cost and pricing information,
supplier lists and records, catalogs, price lists, correspondence, mailing
lists, distribution lists, photographs, production data, engineering records,
personnel and payroll records, manufacturing and quality control records and
procedures, blueprints, research and development files, records, data and
laboratory books, Intellectual Property disclosures, accounting records, plans,
specifications, surveys, title policies, property records, sales order files,
manuals and other materials related to any of the foregoing items;
(l) such other assets or rights of Seller as are shared with
any Affiliate of Seller and not used exclusively in the Business, to the extent
disclosed on Schedule 1.2(l) or that otherwise are insignificant to the
operations of the Business; and
(m) all real property owned by Seller listed on Schedule
8.4(a)(i), together with all appurtenances thereto (excluding machinery or
equipment included in Purchased Assets
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under Section 1.1(a)(iii)) and all buildings and other structures, fixtures and
improvements located thereon (collectively, the "Owned Real Property").
ARTICLE II
LIABILITIES
2.1. Assumption of Liabilities: Subject to the terms and conditions of
this Agreement, on the Closing Date Seller shall assign to Purchaser, and
Purchaser shall, except as set forth in Section 2.2 below, assume and agree to
perform and discharge the following liabilities and obligations of Seller (and
only the following liabilities and obligations of Seller) (collectively, the
"Assumed Liabilities"):
(a) obligations for the sale and delivery of products not
shipped prior to the close of business on the Closing Date under open sales
orders, open bids and sales contracts that are included in the Assigned
Contracts, or which were accepted or made in the ordinary course of business and
consistent with past practice of the Business and in accordance with Section 7.2
between the date of this Agreement and the Closing Date;
(b) obligations for the purchase of raw materials, supplies
and repair and maintenance materials not received prior to the close of business
on the Closing Date and not included in the Purchased Inventory under open
supply contracts, purchase orders and commitments that are included in the
Assigned Contracts, or which were given or made in the ordinary course of
business and consistent with past practice of the Business and in accordance
with Section 7.2 between the date of this Agreement and the Closing Date;
(c) liabilities and obligations under the Assigned Contracts
in accordance with their respective terms (i) arising prior to the Closing Date
if such liability or obligation is provided for on the Closing Statement of Net
Assets Acquired or is otherwise expressly assumed by Purchaser hereunder or (ii)
arising after the Closing Date;
(d) liabilities arising from obligations to Employees and
Former Employees to the extent set forth in Article XII of this Agreement;
(e) liability for Claims arising from actual or alleged harm,
injury or damage to persons, property or business by Products manufactured or
services provided by the Business and relating to or arising from events,
accidents, incidents or occurrences after the Closing Date or mini-excavator
parts sold or disposed of by Purchaser after the Closing Date;
(f) liability for express or implied warranties for Products
of the Business, including obligations to repair, replace, rework or to make
refunds of amounts paid for Products regardless of when such Products were
manufactured, sold or distributed or when defects became or become apparent;
(g) liability for the recall, notification, retrofit or other
postmanufacture remedial or corrective actions relating to Products, regardless
of when such Products were manufactured, sold or shipped;
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(h) liabilities for Claims involving the operations of the
Business by Purchaser or Purchaser's successor after the Closing Date;
(i) all liabilities and obligations for Taxes allocated to
Purchaser in accordance with Section 13.3 below;
(j) other liabilities not included in Subsections (a) through
(i) above but which either are reflected on the Closing Statement of Net Assets
Acquired or are expressly listed on any of the schedules or exhibits to this
Agreement as a liability to be assumed by Purchaser;
(k) all other liabilities arising from the operation of the
Business by Purchaser or Purchaser's successor after the Closing Date;
(l) liabilities in respect of workers' compensation as
provided in Section 12.10;
(m) notwithstanding any provision to the contrary in Section
6.2 below, all liabilities of Seller arising under the Bond Documents as defined
in Section 19.13 below;
(n) all liabilities arising from letter of credit obligations
guaranteed by the Guarantor and set forth on Schedule 2.1(n); ---------------
(o) all liabilities relating to or arising from the financing
or leasing transactions involving Products of the Business, but excluding
liabilities to TFC, existing as of the Closing Date and incurred in accordance
with the terms hereof in an aggregate amount not to exceed one hundred and ten
percent (110%) of the aggregate amount of the financing and leasing transactions
itemized on Schedule 2.1(o);
(p) all recourse obligations to TFC arising from financing
transactions for Products incurred in the ordinary course of business and
consistent with past practice and the terms of this Agreement that are funded by
TFC to Purchaser between the Closing Date and the third Business Day following
the Closing Date; provided, that TFC shall have exercised commercially
reasonable efforts to secure and collect those obligations from the underlying
customer debtor; and
(q) Pre-Closing Environmental Liability limited to no more
than the first one hundred thousand dollars ($100,000) with respect to any
individual Real Property; provided that any liability assumed by this Section
2.1(q) shall be deemed to be discharged to the extent of any payments made by
Purchaser pursuant to Section 16.3 in respect of Environmental Response Actions.
2.2. Retained Liabilities: Seller shall retain, and shall remain
exclusively responsible for paying, performing and discharging when due, and
Purchaser shall not assume or have any liability, obligation or other
responsibility for any obligation, commitment or liability of Seller or
otherwise relating to the Purchased Assets or the Business other than the
Assumed Liabilities, (collectively, the "Retained Liabilities"). Without
limitation of the foregoing, the term "Retained Liabilities" shall include the
following:
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(a) all liabilities and obligations relating to or arising out
of the Excluded Assets;
(b) all liabilities and obligations for Taxes allocated to
Seller in accordance with Section 13.3 below;
(c) all Claims by and all liabilities and obligations to
Employees and Former Employees not specifically assumed by Purchaser pursuant to
Article XII of this Agreement;
(d) the performance of financial and other obligations under
any and all settlements, judgments, consent orders or administrative orders in
existence on the Closing Date, or arising from events, accidents, incidents or
occurrences on or prior to the Closing Date, whether undertaken voluntarily or
not, attributable to, caused by or relating to the Business;
(e) liability for Claims arising from actual or alleged harm,
injury or damage to persons, property or business by Products manufactured or
services provided by the Business and relating to or arising from events,
accidents, incidents or occurrences on or prior to the Closing Date;
(f) except as provided for in Section 2.1(q), any Pre-Closing
Environmental Liability;
(g) except as provided for in Section 2.1(c) above, any
obligations or liabilities under the Assigned Contracts to the extent such
obligations or liabilities relate to any period prior to the Closing Date;
(h) all other obligations and liabilities arising from the
operation of the Business or the ownership of the Purchased Assets on or prior
to the Closing Date;
(i) any liabilities of Seller to the extent not related
exclusively to the Business or the Purchased Assets;
(j) except as provided in Section 2.1(e) above, any
liabilities of Seller arising from assets, operations or lines of business sold,
vacated, or otherwise disposed of by Seller prior to the Closing Date, including
without limitation any liabilities relating to Snorkel, Seller's former
mini-excavator and Seller's former skid steer loader product lines; and
(k) except as set forth on Schedule 2.2(k), all liabilities of
Seller to any Affiliate of Seller, including without limitation liabilities to
TFC, arising from financing or leasing transactions involving Products that are
funded on or prior to the Closing Date.
ARTICLE III
PURCHASE PRICE
3.1. Purchase Price: The purchase price payable by Purchaser to Seller
for the Purchased Assets and Seller's non-competition covenants in Section 13.1
(the "Purchase Price") shall be One Hundred Million United States Dollars (U.S.
$100,000,000.00), subject to
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adjustment as provided in Article IV of this Agreement, plus the assumption by
Purchaser of the Assumed Liabilities.
3.2. Payment of Purchase Price: At the Closing, Purchaser shall (a)
transfer to a bank account designated by Seller an amount equal to Ninety
Million United States Dollars (U.S. $90,000,000.00) (the "Closing Payment") by a
wire transfer of immediately available funds in U.S. currency, and (b) deliver
to Seller the Promissory Note, which Promissory Note shall evidence Purchaser's
obligation to pay to Seller, on the second anniversary of the Closing Date, an
amount equal to Ten Million United States Dollars (U.S. $10,000,000.00),
together with interest thereon at the Applicable Rate (the "Note Payment").
ARTICLE IV
DETERMINATION AND ALLOCATION OF ADJUSTED
PURCHASE PRICE
4.1. Closing Statement of Net Assets Acquired: Within thirty (30)
calendar days after the Closing Date, Purchaser shall provide or cause to be
provided to Seller a draft of the Closing Statement of Net Assets Acquired, as
hereinafter defined, along with all data and supporting documentation necessary
for purposes of Seller's preparation of the final Closing Statement of Net
Assets Acquired. Within ninety (90) calendar days after the Closing Date, Seller
shall prepare, and shall deliver to Purchaser, an audited statement of Net
Assets Acquired (the "Closing Statement of Net Assets Acquired") of the Business
as at the Closing Date, which Closing Statement of Net Assets Acquired shall be
accompanied by a report of Ernst & Young LLP to the effect that, except as
otherwise specified in such report, the Closing Statement of Net Assets Acquired
has been prepared in accordance with GAAP and the Accounting Policies applied on
a basis consistent with that used in preparing the Reference Statement of Net
Assets Acquired. Provided, however, that (i) the following liabilities will not
be included on the Closing Statement of Net Assets Acquired: (a) product
liability in accordance with Section 2.2(e) above; (b) liability for litigation
in accordance with Section 2.2(h) above; and (c) liability for Taxes in
accordance with Section 2.2(b) above; and (ii) any goodwill or other intangible
impairment charges recorded subsequent to the Reference Statement of Net Assets
Acquired will not be included on the Closing Statement of Net Assets Acquired.
4.2. Review of Closing Statement of Net Assets Acquired: Purchaser
shall have the right to review the Closing Statement of Net Assets Acquired and
Seller shall provide Purchaser with access to the work papers used in connection
with the preparation of the Closing Statement of Net Assets Acquired. If
Purchaser does not notify Seller to the contrary within thirty (30) calendar
days after the date the Closing Statement of Net Assets Acquired is delivered to
Purchaser, then the Closing Statement of Net Assets Acquired delivered by Seller
shall be deemed to be final, conclusive and binding on the parties. If, however,
Purchaser notifies Seller in writing within such period that it believes the
Closing Statement of Net Assets Acquired was not prepared in accordance with
GAAP and the Accounting Policies on a basis consistent with that used in
preparing the Reference Statement of Net Assets Acquired and specifies (a) the
items as to which it believes the accounting policies used in preparing the
Closing Statement of Net Assets Acquired were not prepared in accordance with
GAAP and the Accounting Policies on a basis consistent with that used in
preparing the Reference Statement of Net Assets Acquired (b) the amount of the
adjustment it proposes with respect to each item, and (c) a brief statement
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of the basis for such belief, the parties will then attempt to resolve their
differences with respect thereto. Seller and Purchaser acknowledge and agree
that disputes pursuant to this Article IV ("Closing Statement Claims") are
limited to the types of disputes described in the immediately preceding
sentence. Purchaser shall not be entitled to dispute any individual item which
involves a proposed adjustment to the Closing Statement of Net Assets Acquired
of less than One Hundred Thousand United States Dollars (U.S. $100,000.00) and
the Closing Statement of Net Assets Acquired shall not be subject to any
adjustment unless and to the extent the aggregate of all adjustments (each of
which exceeds the One Hundred Thousand United States Dollars (U.S. $100,000.00)
threshold) exceeds Two Million United States Dollars (U.S. $2,000,000.00). At
any time by mutual consent of the parties (or, if the parties are not able to
resolve their disputes within sixty (60) days after the date the Closing
Statement of Net Assets Acquired is delivered to Purchaser, at any time
thereafter by either party with or without the consent of the other party),
disputes pursuant to this Article IV may be referred to Deloitte & Touche LLP,
certified public accountants (or if such firm is unable or unwilling to serve,
to another "Big Four" accounting firm selected by mutual agreement of Seller and
Purchaser) (the "Firm"), which Firm shall be asked to determine whether there
was an inconsistency in the application of the accounting policies between those
used in preparing the Reference Statement of Net Assets Acquired and those used
in preparing the Closing Statement of Net Assets Acquired and report to Seller
and Purchaser upon such remaining disputed items within sixty (60) calendar days
after such referral. Such referral shall be made in writing to the Firm, with a
copy of such referral sent to the other party hereto. The decision of the Firm
shall be final, conclusive and binding on the parties hereto, provided, however,
that the Firm may only resolve Closing Statement Claims pursuant to the
provisions of Article IV, and provided further that the only remedy the Firm
shall be permitted to impose are the determinations called for pursuant to
Article IV. The fees and expenses of the Firm shall be allocated between Seller
and Purchaser as follows: (i) Seller shall pay all or a portion of the Firm's
fees and expenses, as determined in accordance with the following formula:
AE x AA = SE
--
PA
where: "AE" means the Firm's total fees and expenses; "AA" means the aggregate
adjustment, if any, to the Closing Statement of Net Assets Acquired made in
Purchaser's favor by the Firm (if such adjustment is in Seller's favor, "AA"
shall be zero); "PA" means the aggregate adjustment to the Closing Statement of
Net Assets Acquired that would have resulted from resolution in Purchaser's
favor of all points of disagreement raised by Purchaser to the Firm and "SE"
means Seller's share of the Firm's fees and expenses; and (ii) Purchaser shall
pay the balance of the Firm's fees and expenses, if any.
4.3. Cooperation: Representatives of Seller shall be given access to
all pertinent books, records and other data of the Business for the purpose of
preparing the Closing Statement of Net Assets Acquired. Personnel of Purchaser
and Purchaser's Affiliates may be consulted by such representatives. Purchaser
and Purchaser's Affiliates shall provide preferential cooperation and support to
Seller and Seller's representatives in order to accommodate the deadlines set
forth in this Article IV.
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4.4. Settlement of Adjusted Purchase Price: Within ten (10) calendar
days after the final determination of the Closing Statement of Net Assets
Acquired, (a) in the event that the Net Assets Acquired of the Business as set
forth on the Closing Statement of Net Assets Acquired exceeds the Net Assets
Acquired of One Hundred Five Million Two Hundred Thousand Dollars (US
$105,200,000) as set forth on the Reference Statement of Net Assets Acquired,
Purchaser shall pay to Seller the amount of such excess, and (b) in the event
that the Net Assets Acquired of the Business as set forth on the Closing
Statement of Net Assets Acquired are less than the Net Assets Acquired of One
Hundred Five Million Two Hundred Thousand Dollars (US $105,200,000) as set forth
on the Reference Statement of Net Assets Acquired, Seller shall pay to Purchaser
the amount of such shortfall by reducing the principal of the Promissory Note as
of the date that is ten (10) calendar days after the final determination of the
Closing Statement of Net Assets Acquired by the amount of such shortfall. The
amount of the cash payments described in this Section 4.4 shall be paid with
interest thereon from the Closing Date to the date of such payment, calculated
at a rate equal to JLG's (in the case of payments by Purchaser) or the
Guarantor's (in the case of payments by Seller) blended borrowing rate on
interest-bearing debt for JLG's or the Guarantor's most recently completed
fiscal quarter, as applicable, in immediately available funds remitted by wire
transfer to a bank designated by payee.
4.5. Allocation of Purchase Price: Seller and Purchaser shall allocate
the Purchase Price, as adjusted pursuant to this Article IV, among the Purchased
Assets and the non-competition covenants contained in Section 13.1 in accordance
with Section 1060 of the Code and the Treasury Regulations promulgated
thereunder.
ARTICLE V
CLOSING MATTERS
5.1. The Closing:
(a) The closing of the purchase and sale (the "Closing")
contemplated under this Agreement shall take place at the offices of Seller,
located at 40 Westminster Street, Providence, Rhode Island, or at such other
place as the parties shall mutually agree upon, at 10:00 A.M. local time on a
date which is not later than two (2) business days after each of the conditions
set forth in Article X and Article XI hereof have been satisfied or waived, or
such other date as Purchaser and Seller may mutually agree. The date the Closing
takes place is herein referred to as the "Closing Date." The Closing shall be
effective as of midnight on the Closing Date.
(b) At the Closing, Purchaser shall transfer to a bank account
designated by Seller the Closing Payment in accordance with Section 3.2 above
and the Estimated Payment in accordance with Section 13.8 below.
(c) At the Closing and effective on the Closing Date, Seller
shall execute and deliver (or cause to be executed and delivered) the following
documents to Purchaser (collectively, the "Conveyance Instruments"):
(i) INTENTIONALLY LEFT BLANK
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(ii) certificates of title or origin (or like
documents) with respect to all vehicles included in the
Purchased Assets and other equipment for which a certificate
of title or origin is required in order for title thereto to
be transferred to Purchaser, each of which are listed on
Schedule 5.1(c)(ii); and
(iii) bills of sale, endorsements, assignments and
other good and sufficient instruments of sale, transfer,
conveyance and assignment, in form reasonably satisfactory to
Purchaser, as shall be effective to vest in Purchaser good and
marketable title, free and clear of all Encumbrances, to the
Purchased Assets.
(d) Subject to Section 6.2, this Agreement shall not
constitute an agreement to assign, and the Purchased Assets shall not include,
any contract, license, lease, commitment, sales order or purchase order or other
agreement if and to the extent that an assignment or attempted assignment of the
same without the consent of the other party thereto would constitute a breach
thereof or in any way impair the rights of Seller thereunder.
(e) Without limiting any provisions hereof, Seller agrees
that, effective as of the Closing Date, it will by appropriate instrument (the
"Power of Attorney") constitute and appoint Purchaser, its successors and
assigns, the true and lawful attorney of Seller with full power of substitution
in the name of Purchaser or in the name of Seller but for the benefit and at the
expense of Purchaser (i) to collect for the account of Purchaser all Purchased
Receivables and any other items to be sold and transferred or intended to be
sold and transferred to Purchaser as provided in this Agreement, (ii) to
institute and prosecute all proceedings which Purchaser may deem proper in order
to collect, assert or enforce any right or title of any kind in or to the
Purchased Assets, to defend or compromise any and all actions, suits or
proceedings in respect of any of the Purchased Assets and to do all such acts
and things in relation thereto as Purchaser shall deem advisable, and (iii) to
take all reasonable actions which Purchaser may deem proper in order to provide
for Purchaser the benefits under any contracts, licenses, leases, sales orders
or purchase orders where any required consent of another party to the assignment
thereof to Purchaser pursuant to this Agreement shall not have been obtained.
Seller acknowledges that the foregoing powers are coupled with an interest and
shall be irrevocable by Seller or by its subsequent dissolution or in any manner
or for any reason. Purchaser shall be entitled to retain for its own account any
amounts collected pursuant to the foregoing powers including any amounts payable
as interest in respect thereof.
(f) At the Closing, and effective on the Closing Date,
Purchaser shall execute and deliver (or cause to be executed and delivered) to
Seller an assignment and assumption agreement in a form reasonably satisfactory
to Seller evidencing the assumption by Purchaser of the Assumed Liabilities (the
"Assignment and Assumption Agreement").
ARTICLE VI
TRANSFER AFTER THE CLOSING
6.1. Further Instruments and Actions:
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(a) From time to time after the Closing Date, upon request of
Purchaser, Seller, without further consideration, shall cooperate with Purchaser
and shall duly execute, acknowledge and deliver all such further deeds,
assignments, transfers, conveyances and powers of attorney and take such other
actions and give such assurances as may be reasonably required to convey to and
vest in Purchaser and to protect its right, title and interest in and enjoyment
of all the Purchased Assets, all as may be appropriate otherwise to carry out
the transactions contemplated by this Agreement, and, upon request of Seller,
Purchaser shall cooperate with Seller and duly execute, acknowledge, and deliver
all such further assumptions, assignments, transfers, conveyances and powers of
attorney and take such other actions and give such assurances as may be
reasonably required to evidence Purchaser's assumption of the Assumed
Liabilities, all as may be appropriate otherwise to carry out the transactions
contemplated by this Agreement.
(b) After the Closing, if Seller or its Affiliates receive any
payment, refund or other amount which is attributable to, results from or is
related to a Purchased Asset or is otherwise properly due and owing to Purchaser
in accordance with the terms of this Agreement, Seller shall promptly remit or
shall cause to be remitted, such amount to Purchaser. Seller shall promptly
endorse and deliver to Purchaser any notes, checks, negotiable instruments,
letters of credit or other documents received on account of, attributable to or
otherwise relating to the Purchased Assets, and Purchaser shall have the right
and authority to endorse, without recourse, the name of Seller or any of its
Affiliates on any such instrument or document. After the Closing, if Purchaser
or its Affiliates receive any refund or other amount which is related to Claims
or other matters for which Seller is responsible hereunder, and which amount is
not attributable to, does not result from and is not otherwise related to a
Purchased Asset, or is otherwise properly due and owing to Seller in accordance
with the terms of this Agreement, Purchaser shall promptly remit, or cause to be
remitted, such amount to Seller. Purchaser shall promptly endorse and deliver to
Seller any notes, checks, negotiable instruments, letters of credit or other
documents received on account of, attributable to or otherwise relating to the
Excluded Assets, and Seller shall have the right and authority to endorse,
without recourse, the name of Purchaser or any of its Affiliates on any such
instrument or document.
6.2. Purchased Assets Requiring Consents: In the event any consent of a
third party is legally required for the sale, assignment or transfer to
Purchaser of any Purchased Asset (other than Government Contracts, which are
addressed in Section 6.3):
(a) Seller shall use its reasonable best efforts, at Seller's
sole cost and expense, to obtain such consent prior to the Closing Date but in
any event until such consent is obtained.
(b) If any such consent cannot be obtained prior to the
Closing Date and the Closing occurs, this Agreement and the related instruments
of transfer shall not constitute an assignment or transfer of the applicable
Purchased Asset, but Seller shall use its reasonable best efforts to obtain such
consent as soon as possible after the Closing Date. Purchaser will cooperate,
using its reasonable best efforts, with Seller in Seller's efforts to obtain
such consents. If any such consent shall not be obtained prior to Closing or
within ninety (90) days after Closing as provided below, then, at Purchaser's
option, (i) the applicable Purchased Asset shall be an Excluded Asset and
Purchaser shall not assume any liability relating thereto or arising thereunder
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or (ii) Seller shall use its reasonable best efforts to obtain for Purchaser
substantially all of the practical benefits and burdens of such property or
rights, including by (y) entering into appropriate and reasonable alternative
arrangements on terms mutually agreeable to Purchaser and Seller and (z) subject
to the consent and control of Purchaser, enforcement, at the cost and for the
account of Purchaser, of any and all rights of Seller 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 on terms
and conditions mutually acceptable to Seller and Purchaser within ninety (90)
days after the Closing Date, Purchaser shall have no obligation or liability
with respect to any such asset, and Seller shall provide Purchaser with an
equitable rebate (subject to Purchaser's obligation to mitigate its damages)
reflecting the diminution in value of the Purchased Assets, which rebate shall
be determined by the parties. If Purchaser receives an equitable rebate pursuant
to this paragraph, Purchaser shall not seek recovery relating to such asset
under any other provision of this Agreement.
(c) If any of the Permits included in the Purchased Assets are
not so assignable or transferable without obtaining a replacement Permit prior
to the Closing Date, this Agreement and the related instruments of transfer
shall not constitute an assignment or transfer thereof, and Seller shall
cooperate with Purchaser in its efforts to obtain replacement Permits issued in
Purchaser's name. If any replacement Permit cannot be obtained prior to the
Closing, Seller agrees to allow Purchaser to operate under its Permits if
permitted by applicable Laws or applicable Governmental Entities for a period of
up to three (3) months after the Closing (or such longer period as may be
reasonably necessary for Purchaser, using its reasonable best efforts to obtain
the replacement Permits) provided that Purchaser shall defend, indemnify and
hold Seller harmless in connection with any liability arising as a result of
Purchaser's operation of the Business under such Permits after the Closing.
6.3. Novation of U.S. Government Contracts:
(a) Seller and Purchaser recognize that, pursuant to FAR, the
U.S. Government will require the novation of the contracts between Seller (by
and through the Business) and the U.S. Government (including any agency,
authority or department thereof) set forth on Schedule 6.3(a) ("Government
Contracts"). Seller and Purchaser further recognize that, under FAR, such
novation will take place after the Closing Date. The parties hereto agree that
they will use their reasonable best efforts to cause any such required novations
to be approved, and will provide required releases, guarantees, bonds, and other
assurances that may be required by the U.S. Government in connection with any
such novations, as soon after the Closing as possible and will cooperate fully
with one another in such process. Pending the effectiveness of such novations,
Purchaser and Seller shall execute subcontracts or other agreements that shall,
to the extent legally permissible, require Purchaser to perform the obligations
of Seller under such Government Contracts and enable Purchaser to receive all
economic and other benefits and assume all required post-closing performance
risks under such Government Contracts.
(b) The parties further recognize that, pursuant to FAR or the
terms of any novation agreements with the U.S. Government, Seller may remain
liable to the U.S. Government for compliance by Purchaser with the terms and
conditions of one or more of the Government Contracts. Therefore, whether or not
novation of Government Contracts has been effected, in the event that Seller, by
Law or contract, shall retain any residual liability to the U.S.
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Government with respect to any Government Contracts, Purchaser agrees that after
the Closing Date:
(i) Purchaser shall faithfully perform all of the
obligations of Seller under the Government Contracts;
(ii) In the event that Seller receives notice from
the U.S. Government that Purchaser has not performed its
obligations under a Government Contract, and if, after notice
by Seller to Purchaser of such notice from the U.S.
Government, Purchaser has not remedied such nonperformance
within a reasonable period of time, then Seller shall have the
right to (A) perform such obligations itself or by an
Affiliate or to cause such obligations to be performed by a
third party, or (B) seek specific performance by Purchaser of
its obligations under such Government Contract; and
(iii) Purchaser shall indemnify Seller against, and
hold it harmless from, any and all damages, costs and expenses
(including reasonable attorneys' fees and expenses) arising
out of, or based upon, or in any way connected with (whether
such connection be proximate or remote, foreseeable or
unforeseeable as of the Closing Date), in whole or in part,
the failure of Purchaser to so perform its obligations under
the Government Contracts.
(c) Purchaser agrees that in the event that any Government
Contract, with respect to which Seller retains residual liability as set forth
in this Section 6.3, is sold, assigned or otherwise transferred by Purchaser to
another entity (hereinafter, the "Transferee Entity") without effecting a
release of any obligations of Seller to the U.S. Government under such
Government Contract, Purchaser shall (i) give Seller prior written notice of
such sale, assignment or transfer, and (ii) as a condition to such sale,
assignment or transfer, shall require such Transferee Entity to agree, in
writing, to be bound by the provisions of this Section 6.3, insofar as they
relate to the performance of continuing obligations under such Government
Contract after the date of such sale, assignment or transfer (the "Post Transfer
Obligations"), and to further agree that Seller shall be entitled to exercise
its rights pursuant to this Section 6.3 directly against such Transferee Entity
insofar as such rights relate to the Post Transfer Obligations. Except as
Purchaser and Seller may otherwise agree, neither such sale, assignment nor
transfer, nor such agreement of the Transferee Entity, shall relieve Purchaser
of its obligations to Seller pursuant to this Section 6.3.
ARTICLE VII
ACTIONS PRIOR TO CLOSING
7.1. Obtaining of Consents:
(a) Prior to the Closing Date, the parties shall cooperate in
the filing required by the HSR Act. The parties agree that the HSR Act filing
will be made not later than the first business day following the execution of
this Agreement. The HSR Act filing fee(s) shall be paid by Purchaser.
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(b) As promptly as practicable after the date hereof, Seller
shall make all other necessary filings with all Governmental Entities and shall
use reasonable best efforts to obtain all Permits and consents of all third
parties required for the sale, assignment or transfer to Purchaser of any of the
Purchased Assets and the Business and the consummation of any of the
transactions contemplated by this Agreement. Except as set forth in Section
7.1(a), Seller shall be responsible for the cost of complying with or obtaining
the consent to or approval of the transactions contemplated hereby of any
Governmental Entity or other third party, including without limitation, any such
approval or consent required by any safety, health, Environmental Law or other
applicable Law or regulation. Each party hereto shall provide to the other party
such information as the other party may reasonably request in order to enable it
to prepare such filings. Each party hereto shall also use its respective best
efforts to expedite any governmental or other third party review and to obtain
all necessary consents, approvals, licenses and Permits as promptly as
practicable.
(c) Prior to the Closing, Seller shall use commercially
reasonable efforts to assist Purchaser in obtaining AT&T Solutions Inc.'s
("AT&T's") consent to the continuation of the lease of the equipment described
on Schedule 7.1(c) for six (6) months after the Closing Date on substantially
the same terms as are available to Seller on the Closing Date and with direct
billing to Purchaser. After such time, should Purchaser elect not to obtain
technology services and management from AT&T similar to those in the Technology
Services and Management Agreement dated August 27, 1996 between Textron Inc. and
AT&T (the "TSMA"), Purchaser shall purchase the assets described in Schedule
7.1(c) at a price to be negotiated between AT&T and Purchaser, not to exceed One
Hundred Sixty Eight Thousand United States Dollars (U.S. $168,000.00). Promptly
after the Closing, Seller shall cause all invoices with respect to all third
party contracts and equipment to the extent related to the Business for which
AT&T acts as agent for Seller to be rendered directly to Purchaser.
7.2. Actions of Seller and Conduct of Business:
(a) Seller shall use reasonable best efforts to perform and
satisfy all conditions to Closing to be performed or satisfied by Seller under
this Agreement by the Closing Date or such other date by which performance is
required hereunder.
(b) From the date hereof through the Closing Date, unless
otherwise agreed in writing by Purchaser, Seller shall not, except as required
or expressly permitted pursuant to the terms hereof, make any material change in
the conduct of the Business or the Purchased Assets or enter into any material
transaction other than in the ordinary course of business and consistent with
past practice and shall continue to conduct the Business in the ordinary course
of business and consistent with past practice.
(c) Without limiting the generality of the foregoing, from the
date hereof through the Closing Date, unless otherwise agreed orally or in
writing by Purchaser, Seller shall, with respect to the Business:
(i) carry on its activities in the ordinary course of
business in substantially the same manner as heretofore
conducted;
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(ii) maintain and keep its plants and equipment in as
good repair, working order and condition as at present, except
for depreciation due to ordinary wear and tear and except for
planned plant closures, reconfigurations or restructurings
described on Schedule 7.2(c)(ii) (provided, however, that
Seller shall not be obligated to proceed with any such planned
plant closures, reconfigurations or restructurings);
(iii) keep in full force and effect insurance
comparable in amount and scope of coverage to that now
maintained;
(iv) perform all obligations under the Assigned
Contracts and any other documents relating to or materially
affecting the Purchased Assets or the Business;
(v) comply with all applicable Laws;
(vi) not enter into any contracts, agreements or
commitments other than (a) orders for the purchase of raw
materials or supplies in the ordinary course of business and
consistent with past practice, (b) orders for the sale of
finished goods or services to customers in the ordinary course
of business and consistent with past practice, (c) routine
maintenance contracts in the ordinary course of business and
consistent with past practice, or (d) any other agreement
entered into in the ordinary course of business and consistent
with past practice, having an unexpired term of twelve (12)
months or fewer and involving aggregate payments of less than
$100,000, and not amend, modify or terminate any of the
Assigned Contracts or waive compliance with any provision
thereof;
(vii) not enter into any new employee benefit plan,
program or arrangement or amend any existing employee benefit
plan, program or arrangement or grant any increases in any
employee's compensation or severance arrangement, except for
increases in compensation in the ordinary course of business
and consistent with past practice or as required by applicable
Law;
(viii) not enter into any third party financing or
leasing transactions involving Products of the Business other
than such transactions that as of the Closing Date would be
included in the Assumed Liabilities pursuant to Section 2.1(o)
(provided, that for the avoidance of doubt this clause (viii)
shall not prohibit financing or leasing transactions with TFC
involving Products of the Business);
(ix) not take, or fail to take, any other action
which could reasonably be expected to result in a breach or
inaccuracy in any of the representations and warranties of
Seller contained in this Agreement;
(x) not, except for the Owned Real Property,
mortgage, pledge or subject to any Encumbrance, any of its
assets, tangible or intangible, except in the ordinary course
of business and consistent with past practice or for possible
liens for current state and local property Taxes not in
default;
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(xi) not, except for the Owned Real Property but
subject to the applicable Port Washington Lease, except in the
ordinary course of business and consistent with past practice,
either sell or transfer any of its material fixed assets, or
sell, transfer, or grant any license with respect to any
Intellectual Property rights;
(xii) not make capital expenditures exceeding Fifty
Thousand United States Dollars (U.S. $50,000.00) in the
aggregate, except as described on Schedule 7.2(c)(xii);
(xiii) not, except for the divestiture of Seller's
mini-excavator parts business (which, for purposes of clarity,
shall not constitute part of the "Business" hereunder), enter
into any other transactions relating to the Business, other
than in the ordinary course of business and consistent with
past practice; and
(xiv) not authorize or agree or otherwise become
committed to do any of the foregoing.
7.3. Actions of Purchaser: Purchaser shall use reasonable best efforts
to perform and satisfy all conditions to Closing to be performed or satisfied by
Purchaser under this Agreement by the Closing Date or such other date by which
performance is required hereunder.
7.4. Public Announcements: Seller and Purchaser shall consult with each
other before issuing any press releases or otherwise making any public
statements with respect to this Agreement and the transactions contemplated
hereby. Neither Seller nor Purchaser nor any of their respective Affiliates
shall issue any press release or make any public statement prior to obtaining
the other party's approval, which approval will not be unreasonably withheld,
except that no such approval shall be necessary to the extent disclosure may be
required by Law.
7.5. Remarketing Agreement: Purchaser shall, and Seller shall cause TFC
to, use commercially reasonable efforts to negotiate and execute a mutually
acceptable remarketing agreement by which Purchaser would remarket on behalf of
TFC equipment obtained in connection with leasing and financing transactions
entered into by TFC prior to the Closing Date involving Products. Such
remarketing agreement shall provide that Purchaser, at TFC's election, shall
return to TFC or a third party designated by TFC any equipment that Purchaser
has not disposed of within sixty (60) days. Execution of such remarketing
agreement shall not be a condition to the closing of the transactions
contemplated by this Agreement.
7.6. Access and Information; Additional Disclosure.
(a) From the date hereof until the earlier of the Closing Date
or the termination of this Agreement, Seller shall permit Purchaser and its
representatives, subject to the terms of this Section 7.6(a), to make such
investigation of the Business and the Purchased Assets as Purchaser reasonably
deems necessary or desirable for purposes exclusively related to Purchaser's
integration planning in connection with the transactions contemplated hereby.
Such investigation shall include access to the directors, officers, employees,
agents and representatives (including legal counsel (subject to preservation of
applicable privileges) and independent accountants) of Seller and the
operations, properties, books and records of the Business. Except
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as may be limited by applicable Law, Seller shall furnish Purchaser and its
representatives with such financial, operating and other data and information,
and copies of documents with respect to the Business or any of the transactions
contemplated hereby, as Purchaser shall from time to time reasonably request for
purposes exclusively related to Purchaser's integration planning in connection
with the transactions contemplated hereby. Such access and investigation (i)
shall be made upon reasonable notice and at reasonable places and times, during
normal business hours and upon the prior approval of Randy Beaty, Jack Curran,
or Larry O'Connell, whose approval shall not be unreasonably withheld, and (ii)
shall be limited to the personnel and third party representatives of Purchaser
and JLG set forth on Schedule 7.6(a) and to such other Persons, if any, as the
parties may agree, such agreement not to be unreasonably withheld. Purchaser
shall exercise its rights under this Section 7.6(a) in a manner so as not to
interfere with the normal business operations of Seller, and Purchaser shall use
reasonable best efforts to organize its requests for additional information so
as to minimize the impact on Seller's operations.
(b) From the date hereof until the earlier of the Closing Date
and the termination of this Agreement, each party shall give prompt notice to
the other of (i) the occurrence, or failure to occur, of any event which could
reasonably be expected to cause any representation or warranty made by it in
this Agreement or any exhibit or schedule hereto to be untrue or inaccurate as
of the date hereof or as of the Closing Date, and (ii) any failure to comply
with or satisfy any covenant, condition or agreement required to be complied
with or satisfied by it under this Agreement or any exhibit or schedule hereto;
provided, however, that except as otherwise provided in this Agreement such
disclosure shall not be deemed to cure any breach of representation, warranty,
covenant or agreement or to satisfy any condition for purposes of determining
whether the conditions set forth in Article X have been satisfied.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as of the date hereof and
again as of the Closing Date as follows:
8.1. Organization and Authority: Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware, and Seller has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, to execute and deliver this Agreement and the Related Documents and
to perform the obligations to be performed by it hereunder and thereunder, and
to consummate the transactions contemplated hereby and thereby. Seller is duly
qualified to do business as a foreign corporation and is in good standing, in
all jurisdictions in which the character of the properties owned or leased by it
or the nature of the business conducted by it makes such qualification
necessary, except for any non-qualification which does not have a material
adverse effect on the Business or operations of the Business.
8.2. Corporate Action; No Conflict; Consent and Approval:
(a) The execution and delivery by Seller of this Agreement and
the Related Documents and Seller's performance of the transactions contemplated
hereby and thereby have been duly authorized by all requisite corporate action
of Seller. This Agreement has been duly
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and validly executed and delivered by Seller and is, and each of the Related
Documents when executed and delivered by Seller in accordance with its terms
will be, the valid and binding obligation of Seller, enforceable against Seller
in accordance with their respective terms, except as limited by bankruptcy,
insolvency, reorganization or similar Laws affecting creditors' rights
generally. Except as set forth in Schedule 8.2(a), neither the execution,
delivery or performance by Seller of this Agreement or any of the Related
Documents, nor the consummation by Seller of the transactions contemplated
hereby or thereby, nor compliance by Seller with any provision hereof or thereof
will (i) conflict with or result in a breach of any provision of the charter or
by-Laws of Seller, (ii) violate any provision of Law, statute, rule or
regulation, or any order, writ, injunction, permit, judgment or decree of any
court or other governmental or regulatory authority applicable to the Seller,
the Business or the Purchased Assets, (iii) conflict with, result in a default
or give rise to any right of termination, cancellation or acceleration under any
of the provisions of any note, bond, lease, mortgage, indenture, license,
franchise, permit, agreement or other instrument or obligation to which Seller
is a party, or by which Seller, the Business or any of the Purchased Assets may
be bound or affected, or (iv) result in the creation or imposition of any
Encumbrance upon any of the Purchased Assets.
(b) Except as set forth in Schedule 8.2(b), no filing with or
notice to, and no permit, authorization, consent or approval of, any court or
tribunal, or administrative, governmental or regulatory body, agency or
authority is necessary for the execution and delivery by Seller of this
Agreement or any Related Documents or the consummation by Seller of the
transactions contemplated hereby or thereby. Except as set forth in Schedule
8.2(b), no consent or approval by, or any notification of or filing with any
Person is required in connection with the execution, delivery, and performance
by Seller of this Agreement or any other Related Documents or the consummation
of the transactions contemplated hereby or thereby.
8.3. Reference Statement of Net Assets Acquired; Absence of Changes:
(a) Set forth on Schedule 8.3(a) hereto is a true and complete
copy of (i) the unaudited statement of Net Assets Acquired of the Business as at
March 29, 2003 (the "Reference Statement of Net Assets Acquired"), and (ii) the
unaudited income statement of the Business for the year ended December 28, 2002
(the "Income Statement"). Except as set forth on Schedule 8.3(a), the Reference
Statement of Net Assets Acquired was prepared from the books and records of the
Business and in accordance with GAAP and the accounting policies set forth on
Schedule 8.3(a) (the "Accounting Policies"), and presents fairly the financial
condition of the Business at the date thereof, and is true and correct in all
material respects. Except as set forth on Schedule 8.3(a), the Income Statement
was prepared from the books and records of the Business.
(b) Absence of Changes. Except as set forth in Schedule
8.3(b), since March 29, 2003, Seller has operated the Business in the ordinary
course of business and consistent with past practice, and there has not been:
(i) the loss of any significant customer or any other
material adverse change in the condition of the Purchased
Assets or the Assumed Liabilities;
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(ii) any obligation or liability (whether absolute,
accrued, contingent or otherwise, and whether due or to become
due) incurred by Seller, other than obligations under customer
contracts and current obligations and liabilities incurred in
the ordinary course of business and consistent with past
practice;
(iii) any payment, discharge or satisfaction of any
Claim or obligation of Seller, except in the ordinary course
of business and consistent with past practice;
(iv) any sale, assignment or other disposition of any
tangible asset of Seller (except for obsolete equipment or
inventory disposed of in the ordinary course of business and
consistent with past practice or as expressly permitted by
this Agreement) or any sale, assignment, license, transfer or
other disposition of any Intellectual Property or any other
intangible assets;
(v) any creation of any material Encumbrance on any
property of Seller;
(vi) except as set forth on Schedule 7.2(c)(xii), any
capital expenditure or commitment or addition to property,
plant or equipment of Seller, individually or in the
aggregate, in excess of $50,000; (vii) any increase in the
compensation of any employee, officer, shareholder, director,
consultant or agent of Seller other than in the ordinary
course of business and consistent with past practice;
(viii) any material damage, destruction or loss
(whether or not covered by insurance) affecting any Purchased
Asset;
(ix) any cancellation, delinquency or loss of any
material Permit;
(x) any amendment or modification of any material
Assigned Contract; or
(xi) any agreement or commitment, whether in writing
or otherwise, to take any of the actions specified in the
foregoing items (i) through (x).
8.4. Real Property:
(a) Schedule 8.4(a)(i) sets forth a list of all Owned Real
Property. Except for the Owned Real Property listed on said Schedule 8.4(a)(i),
Seller does not own any real property or interest therein that is used in, held
for use in or otherwise pertains to the Business.
(b) The Leases provide rights to use the only leased real
property that is used in, held for use in or otherwise pertains to the Business.
Except as set forth on said Schedule 8.4(b), (i) each Lease is in full force and
effect and all rent and other sums and charges payable thereunder by Seller are
current, (ii) no notice of default by Seller or termination under any Lease is
outstanding, and (iii) Seller has a good, valid and existing leasehold estate in
the Leased
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Real Property, free and clear of all Encumbrances affecting the use and
occupancy of such Leased Real Property. Seller has not entered into any
agreements that could reasonably be expected to affect materially and adversely
Purchaser's use or enjoyment of the Leased Real Property.
(c) Except as set forth on Schedule 8.4(c), the Retained Real
Estate Interests are not material to the continued operation of the Business in
the ordinary course of business and consistent with past practice immediately
prior to the Closing Date.
8.5. Purchased Assets: Except as set forth on Schedule 8.5, Seller has
good and marketable title to, or valid contract rights to, as applicable, all of
the Purchased Assets, free and clear of all Encumbrances. At the Closing,
Purchaser will acquire from Seller good and marketable title to, or valid
contract rights to, as applicable, all of the Purchased Assets, free and clear
of all Encumbrances. All tangible personal property included in the Purchased
Assets has been maintained in good operating condition and repair, subject to
ordinary wear and tear. Except for the Excluded Assets and the assets that are
set forth on Schedule 1.2(l), the Purchased Assets constitute all of the
properties, interests, assets and rights of Seller and constitute all those
necessary or useful to continue to operate the Business consistent with past
practice immediately prior to the execution of this Agreement and all such
Purchased Assets are located at one of the locations set forth on Schedule 8.5.
8.6. Contracts:
(a) Except as listed on Schedule 8.6 there are no contracts,
agreements, guarantees of payment or performance, licenses, leases of personal
property or conditional sales contracts relating to or affecting the Business
which extend beyond the Closing Date, other than (i) purchase orders and sales
orders entered into in the ordinary course of business, (ii) contracts which by
their terms terminate or are unconditionally terminable by Seller without
penalty within one year after the date hereof, and (iii) contracts that involve
payments by or to Seller of less than $100,000 in the aggregate.
(b) Seller has made available to Purchaser true and complete
copies of all of the material Assigned Contracts and any other Assigned
Contracts requested in writing by Purchaser or Purchaser's representatives. All
the Assigned Contracts are in full force and effect, constituting valid and
binding obligations of the parties thereto and enforceable in accordance with
their respective terms. Except as set forth on Schedule 8.6, Seller has in all
material respects performed all the obligations required to be performed by it
to date under, and there exists no default, or any event which upon notice or
the passage of time, or both, could reasonably be expected to give rise to any
default in the performance by Seller or by any other party under, any Assigned
Contract, except for possible defaults which do not in any material respect
impair the ability of the Business to conduct its operations as heretofore
conducted or do not give rise to any financial liability exceeding $50,000 in
the aggregate. Seller has not received any written or, to the Knowledge of
Seller, oral notice that any party to any of the Assigned Contracts intends to
cancel or terminate such contract. None of the rights of Seller under any
Assigned Contracts will be subject to termination or modification as a result of
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
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(c) Except as set forth on Schedule 8.6, no consent by any
third party is required under any of the material Assigned Contracts as a result
of or in connection with the execution and delivery of this Agreement or of the
Related Documents or the consummation of the transactions contemplated hereby
and thereby.
8.7. Litigation: Schedule 8.7 lists all Claims, actions,
investigations, proceedings or suits pending against Seller or any Affiliate of
Seller affecting the Business, Purchased Assets or Assumed Liabilities, at Law
or in equity or before or by any court or other governmental agency or
instrumentality, domestic or foreign, or any arbitral body. Except as set forth
on Schedule 8.7, there are no Claims, actions, investigations, proceedings or
suits pending, or to the Knowledge of Seller, threatened against Seller or any
Affiliate of Seller affecting the Business, Purchased Assets or Assumed
Liabilities, or as to the transactions contemplated by this Agreement, at Law or
in equity or before or by any court or other governmental agency or
instrumentality, domestic or foreign, or any arbitral body an adverse outcome of
which would have a material adverse effect on the Purchased Assets or the
Business, taken as a whole.
8.8. Compliance with Law: Except as listed on Schedule 8.8 or Schedule
8.11, Seller has not received notice that it is in violation of any Law
applicable to the operation of the Business or the Purchased Assets where the
consequences of such violation would have a material adverse effect on the
Purchased Assets or the Business, taken as a whole.
8.9. Employees and Employee Benefit Plans:
(a) Schedule 8.9(a) contains a list of (i) each employee of
Seller with an annual base salary greater than $90,000, including the employee's
title, salary or wage rate, commissions for past fiscal year, accrued leave and
severance and/or stay-on bonus obligation and (ii) all written contracts,
agreements or other instruments (including employment and consulting agreements)
between Seller on one hand, and any current or former employee, independent
contractor, or consultant of Seller on the other. To the Knowledge of Seller, no
employee, independent contractor or consultant is a party to, or is otherwise
bound by, any agreement or arrangement, including any confidentiality,
noncompetition, or proprietary rights agreement that would forbid the
performance of his duties in a similar capacity with Purchaser.
(b) Except as set forth on Schedule 8.9(b), Seller does not
sponsor, maintain, or otherwise have any obligation to contribute to any Plans.
Each plan, program, agreement or policy listed on Schedule 8.9(b) that
constitutes an "employee pension benefit plan" as defined in Section 3(2) of
ERISA is identified as such and further indicates whether such plan is a
"multiemployer plan" as defined in Section 3(37) of ERISA. Seller does not
sponsor, maintain, or otherwise have any obligation to contribute to any Plan
subject to the requirements of Section 412 of the Code or Section 302 of ERISA.
Seller does not sponsor, maintain, or otherwise have an obligation to contribute
to any Plan providing retiree health, medical, life insurance, or other welfare
benefits to any current employees of Seller.
(c) For each Plan, Seller has heretofore made available to
Purchaser or Purchaser's counsel (i) a true, complete and correct copy of the
Plan (and, if applicable, related trust agreements, annuity contracts, insurance
contracts, and summary plan descriptions) with all amendments thereto, (ii) the
most recent IRS determination letter (if any), (iii) the most recently
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available actuarial valuation and statement of assets (if any); and (iv) the
most recent annual report (including Form 5500 and any applicable schedules
thereto) required to be prepared in connection with such Plan. Seller has
heretofore made available to Purchaser or Purchaser's counsel a true, complete
and correct copy of each agreement listed on Schedule 12.12.
(d) Except as set forth on Schedule 8.9(d), each Plan has been
established, maintained and administered in compliance with its terms and all
applicable Laws or regulations. There are no Claims (other than routine claims
for benefits) pending, or, to the Knowledge of Seller, threatened, with respect
to any Plan or the assets of any Plan, and, to the Knowledge of Seller, no facts
exist which could reasonably be expected to give rise to any such Claims (other
than routine claims for benefits). All contributions due with respect to any of
the ERISA Plans including, without limitation, the Union Savings Plan and the
OmniQuip Savings Plan, have been made as required under ERISA and have been
accrued on Seller's financial statements, as of the end of Seller's most recent
fiscal year preceding the date of this Agreement, in accordance with GAAP.
(e) Seller has provided, or will have provided, to individuals
entitled thereto all required notices within the applicable time period and all
required coverage pursuant to Section 4980B of the Code with respect to any
"qualifying event" (as defined in Section 4980B(f)(3) of the Code) occurring
prior to and including the Closing Date, and no Tax payable on account of
Section 4980B of the Code has been incurred with respect to any Employee or
Former Employee of the Business.
(f) With respect to each ERISA Plan that is an "employee
pension benefit plan" as defined in Section 3(2) of ERISA: (i) neither any ERISA
Plan nor any fiduciary of Seller or any ERISA Plan has engaged in a "prohibited
transaction" as defined in Section 406 of ERISA; (ii) all filings and reports as
to each ERISA Plan required to have been made on or before the Closing Date to
the Internal Revenue Service (the "IRS") or the United States Department of
Labor (the "DOL") have been or will be made on or before such date; (iii) except
as disclosed on Schedule 8.7, there is no litigation, audit, governmental
proceeding or investigation pending or to the Knowledge of Seller threatened
with respect to any ERISA Plan, its related trusts, or any fiduciary,
administrator or sponsor of any such ERISA Plan in said capacity; and there has
not been any (iv) termination, or determination of the Secretary of the Treasury
of partial termination, of any ERISA Plan, (v) commencement of any proceeding to
terminate any ERISA Plan pursuant to ERISA, or (vi) written notice given to
Seller or to the Business of the intention to commence or seek the commencement
of any such proceeding with respect to any ERISA Plan, which, under subparagraph
(iv), resulted or, under subparagraph (v) or (vi), would result in an
insufficiency of plan assets necessary to satisfy benefits guaranteed under
section 4022 of ERISA;
(g) With respect to an ERISA Plan maintained, sponsored,
contributed to, or required to be contributed to by Seller or any ERISA
Affiliate that is a "multiemployer plan" as defined in Section 3(37) of ERISA:
(i) there has never been a "complete withdrawal" or a "partial withdrawal," as
such terms are respectively defined in Sections 4203 and 4205 of ERISA, by
Seller or any ERISA Affiliate; (ii) such ERISA Plan has never asserted that
there has been a "complete withdrawal" or a "partial withdrawal," as such events
are respectively determined under Sections 4203 and 4205 of ERISA, by Seller or
any of its ERISA Affiliates,
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(iii) no event has occurred that, alone or with the passage of time, presents a
material risk of a complete withdrawal or partial withdrawal with respect to
Seller or any of its ERISA Affiliates, (iv) neither Seller nor any of its ERISA
Affiliates is delinquent in making any contribution required to be made to each
such ERISA Plan, (v) there is no pending dispute between such ERISA Plan and
Seller or any of its ERISA Affiliates, and (vi) if Seller and/or its ERISA
Affiliates completely withdrew from such ERISA Plan (as determined under Section
4203 of ERISA) on the date hereof, there would be no basis for that ERISA Plan
to assess against Purchaser any amount of withdrawal liability under Part 1 of
Subtitle E of Title IV of ERISA.
(h) With respect to each ERISA Plan which is subject to
Section 401(a) of the Code: (i) Seller has received a favorable determination
letter as to qualification of each such ERISA Plan under Section 401(a) of the
Code; (ii) each ERISA Plan has been funded in accordance with its governing
documents, ERISA and the Code, and there has been no accumulated funding
deficiency, as defined in Section 412 of the Code whether or not waived, at any
time; (iii) there has been no "Reportable Event" within the meaning of section
4043 of ERISA (without regard to whether the Pension Benefit Guaranty
Corporation ("PBGC") has waived the requirement to report the occurrence of such
event); and (iv) all filings, premium payments, reports and notices as to each
ERISA Plan required to have been made on or before the Closing Date to the PBGC
have been or will be duly made on or before that date.
(i) The consummation of the transactions contemplated by this
Agreement will not, except as otherwise expressly set forth in Article XII of
this Agreement or any Retention Agreement listed on Schedule 12.12 and provided
to Purchaser or Purchaser's counsel as required by Section 8.9(c) hereto, (i)
entitle any employee of Seller to severance pay or termination benefits for
which Purchaser or any of its Affiliates may become liable or (ii) accelerate
the time of payment or vesting, or increase the amount of compensation due to
any such employee or former employee of Seller for which Purchaser or any of its
Affiliates may become liable.
(j) Without limiting the generality of any other
representation contained herein, there exists no Encumbrance, and to the
Knowledge of Seller no facts exist which could reasonably be expected to give
rise to an Encumbrance, against any Purchased Assets arising under Sections
302(f) or 4068(a) of ERISA or Section 412(n) of the Code.
(k) No "payment in the nature of compensation" (as such term
is defined in Section 280G(b) of the Code), whether in cash or property or the
vesting of the right to receive cash or property, or the acceleration of the
timing of the receipt of cash or property, has been made or may be made to or
for the benefit of any director, officer, employee, shareholder, independent
contractor, or consultant of the Seller that would be characterized as an
"excess parachute payment" (as such term is defined in Section 280G(b)(1) of the
Code), and no such person is entitled to receive any additional payment from the
Purchaser or Seller in the event that the excise tax required by Section 4999(a)
of the Code is imposed on such person.
8.10. Intellectual Property Rights: Except as set forth in Schedule
8.10:
(a) Seller owns, possesses, or has the right to use the
patents, trademarks and tradenames listed in Schedule 8.10(a). The Purchased
Rights constitute all the
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Intellectual Property necessary for Purchaser to design, manufacture, sell and
service telescopic material handlers and component parts in substantially the
same manner as designed, manufactured, sold and serviced by Seller in the
ordinary course of the Business consistent with past practice immediately prior
to the execution of this Agreement and otherwise to conduct the Business as
presently conducted by Seller with customers of the Business, and the
consummation of the transactions contemplated hereby will not alter or impair
any such rights, except to the extent such rights are transferred to Purchaser
pursuant to this Agreement.
(b) The rights of Seller in and to each item of Purchased
Rights are owned outright by Seller free and clear of any Encumbrance and all of
Seller's rights in and to the Intellectual Property are freely assignable in
Seller's own name, including the right to create derivatives, and Seller is not
under any obligation to pay any royalty or other compensation to any third party
or to obtain any approval or consent for use of any of the Purchased Rights.
(c) None of the Purchased Rights are subject to any
outstanding judgment, order, decree, stipulation, injunction, Claim or charge.
Seller has not received any written notice regarding any, and to the Knowledge
of Seller there is no threatened, charge, complaint, action, suit, proceeding,
hearing, investigation, Claim, demand or threat challenging the legality,
validity, enforceability, use or ownership of any of the Purchased Rights.
(d) No material breach or default (or event which with notice
or lapse of time or both would result in a breach or default) by Seller exists
under any agreement pursuant to which Seller uses any Purchased Rights, and the
consummation of the transactions contemplated by this Agreement will not violate
or conflict with or constitute a breach or default (or an event which, with
notice or lapse of time or both, would constitute a breach or default) or result
in a forfeiture under, or constitute a basis for termination of, any such
agreement.
(e) To the Knowledge of Seller, no Purchased Right owned by
Seller, and no Product offered, licensed, sold or under development by Seller
for the Business, infringes any Intellectual Property right, right of privacy or
other proprietary right of any Person or would give rise to an obligation to
render an accounting to any Person as a result of co-authorship, co-invention or
an express or implied contract for any use or transfer. Seller has not received
any written notice of any Person alleging or threatening to assert that Seller's
use of the Purchased Rights as used in the conduct of the Business infringes
upon or is in conflict with the Intellectual Property or proprietary rights of
such Person.
(f) Seller has not sent or otherwise communicated to any other
Person any notice, charge, claim or assertion of, nor to the Knowledge of Seller
is there, any present, impending or threatened infringement by any other Person
of any of the Purchased Rights.
(g) To the Knowledge of Seller, no current or former employees
or independent contractors of Seller have any lawful and valid claims or rights
to any of the Purchased Rights.
(h) Seller has not sold, licensed, leased or otherwise
transferred or granted any interest or rights to any Purchased Right (except for
licenses, leases, transfers or grants of interests or rights to any Purchased
Right which are no longer in effect).
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(i) The Purchased Assets include documentation of all material
designs, specifications, and production processes of all products manufactured
by the Business. Such documentation is in a form that is consistent with
industry standards. Seller makes no representation or warranty regarding
Purchaser's ability after the Closing to produce products manufactured by the
Business of the same quality or for the same cost as produced by the Business
prior to the Closing.
8.11. Environmental Matters: Except as disclosed in Schedule 8.11, (i)
the present and historical operations of Seller (since Seller acquired the
Business) and the operation, use and maintenance of the Purchased Assets (since
Seller acquired the Business) are not and have not been in any violation of any
applicable Environmental Law that would constitute a material liability as of
the Closing, and to the Knowledge of Seller the operation, use and maintenance
of the Purchased Assets prior to their acquisition by Seller have not been in
violation of any applicable Environmental Law that would constitute a material
liability as of the Closing; (ii) since the acquisition of the Business by
Seller, no inspection or investigation by any Governmental Entity at or about
the Real Property or in connection with any of the Purchased Assets has resulted
in a request for information, citation, complaint, notice of violation, suit,
proceeding or letter demanding cleanup of Hazardous Substances pursuant to any
Environmental Law, nor, to the Knowledge of Seller, is any such request for
information, citation, complaint, notice of violation, or letter threatened, nor
to the Knowledge of Seller does any condition exist with respect to any such
Real Property or Purchased Assets which could reasonably be expected to result
in any such request for information, citation, complaint, notice of violation or
letter; (iii) Seller has not disposed of any Hazardous Substances at, on or
under the Real Property since the Seller acquired the Business and, to the
Knowledge of Seller, prior to the acquisition there has been no release, spill,
disposal or leak of any Hazardous Substances at, on or under the Real Property,
(iv) since Seller acquired the Business, and to the Knowledge of Seller, prior
to the acquisition, there has been no non-compliance with Environmental Laws
relating to the generation, storage, handling, treatment, recycling, removal,
emission, release, cleanup, transport or disposal of Hazardous Substances at, on
under or from the Real Property and otherwise with respect to the Business that
has caused, or reasonably could cause, a material liability; (v) to the
Knowledge of Seller, there are no Hazardous Substances present at the surface or
subsurface levels of the Real Property, or present in the air above, or the air
and water immediately surrounding or the groundwater under such property which
are in excess of any concentration levels or standards prescribed or permitted
by any applicable Environmental Law or would require remediation pursuant to any
Environmental Law nor, to the Knowledge of Seller, does any condition exist at,
on, about or under the Real Property that would now or in the future require
remedial investigation, remediation, corrective action or closure under the
provisions of any Environmental Law or that would constitute a nuisance or other
violation of any Environmental Law, (vi) to the Knowledge of Seller there are no
underground storage tanks located at any Real Property; (vii) Seller has not, in
the course of the Business, sent or disposed of, otherwise had taken or
transported, arranged for the taking or disposal of (on behalf of itself, a
customer or any other Person) or in any other manner participated or been
involved in the taking of or disposal or release of a Hazardous Substance to or
at a site that pursuant to any Environmental Law, (A) has been placed on the
"National Priorities List," the "CERCLIS" list, or any similar state or federal
list, or (B) is subject to or the source of a Claim, an administrative order or
other request to take "removal," "remedial," "corrective" or any other
"response" action, as defined in any Environmental Law, or to pay for the costs
of any such action at the site; and
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(viii) Seller has not received (and has no basis to reasonably expect to
receive) notice of any Claims from any Person relating to property damage,
natural resource damage, or to personal injuries from exposure to any Hazardous
Substance.
8.12. Tax Matters: Except as set forth on Schedule 8.12: Seller has
paid all material Taxes due and payable prior to the Closing Date arising out of
or relating to the operation of the Business or the Purchased Assets, whether or
not shown on any Return, except for any Taxes which Seller is contesting in good
faith and for which adequate reserves have been established. Seller has timely
filed or caused to be filed all material Returns that are required to have been
filed by it prior to the Closing Date (other than those for which extensions
shall have been granted prior to the Closing Date) relating to any Taxes arising
out of or relating to the operation of the Business or the Purchased Assets and
all such Returns are true, correct and complete in all material respects. None
of the Purchased Assets is subject to any Encumbrance arising in connection with
the failure or alleged failure to pay any Tax. Seller is not a foreign person
within the meaning of Section 1445(f)(3) of the Code. None of the Purchased
Assets is "tax-exempt use property" within the meaning of Section 168(h) of the
Code. Purchaser shall have no transferee liability for any material Taxes due or
to become due from Seller, regardless of whether such Taxes arise out of or
relate to the operation of the Business or the Purchased Assets. Seller has
withheld and paid all material Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, creditor, independent
contractor or other third party.
8.13. Labor Matters: Except as disclosed on Schedule 8.13, (a) Seller
is not a party to or subject to any contract, commitment, agreement,
understanding or other arrangement with any labor organization, nor work rules
or practices agreed to with any labor organization or employee association,
applicable to the Seller's employees, nor is Seller a party to or bound by any
collective bargaining or similar agreement; (b) there are no agreements with
labor unions, work councils or associations representing employees of the
Business; (c) there are no current or, to the Knowledge of Seller, threatened,
strikes, slowdowns, picketing, work stoppages, lockouts or other occurrences,
events or conditions of a similar character in which any of said employees are
participating, and during the last three (3) years there has not been any such
action; (d) there are no union claims to represent the employees of Seller nor
have there been any such claims within the last three (3) years; (e) there is,
and within the last three (3) years has been, no representation of the employees
by any labor organization and, to the Knowledge of Seller, there are no union
organizing activities among the employees; (f) Seller has not engaged in any
material unfair labor practices as defined in the National Labor Relations Act
or other applicable Law and Seller is, and has for the past three (3) years
been, in compliance in all material respects with all applicable Laws respecting
employment and employment practices, terms and conditions of employment, wages,
hours of work and occupational safety and health; (g) there is no unfair labor
practice charge or complaint against Seller pending or, to the Knowledge of
Seller, threatened before the National Labor Relations Board or any other
Governmental Entity; (h) there is no grievance pending or, to the Knowledge of
Seller, threatened against Seller arising out of any collective bargaining
agreement or other grievance procedure; (i) there are no charges with respect to
or relating to Seller pending or, to the Knowledge of Seller, threatened before
the Equal Employment Opportunity Commission or any other Governmental Entity
responsible for
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the prevention of unlawful employment practices; (j) Seller has not received
notice of the intent of any Governmental Entity responsible for the enforcement
of labor or employment Laws to conduct an investigation with respect to or
relating to Seller and no such investigation is in progress; and (k) no
complaints, lawsuits or other proceedings are pending or, to the Knowledge of
Seller, threatened in any forum by or on behalf of any employee or former
employee of Seller, any applicant for employment or classes of the foregoing
alleging breach of any express or implied contract, commitment, agreement,
understanding or other arrangement for employment, any Law governing employment
or the termination thereof or other discriminatory, wrongful or tortious conduct
in connection with any employment relationship.
8.14. Used Equipment. Schedule 8.14 contains an inventory of each item
of used equipment as of the last practicable date prior to the date hereof.
8.15. Insurance. Schedule 8.15 contains a true and complete list of all
policies of casualty, liability, theft, fidelity, life and other forms of
insurance relating to the Business or the Purchased Assets. Each such policy is
valid and binding, and is and has been in effect during the last three (3)
years. All insurance policies are in the name of Seller and all premiums with
respect to such policies are currently paid. Seller has not received notice of
cancellation or termination of any such policy, nor has it been denied or had
revoked or rescinded any policy of insurance, nor borrowed against any such
policies.
8.16. Customers and Suppliers. None of the twenty largest suppliers or
customers of the Business has canceled or otherwise terminated, or made any
written threat to Seller to cancel or otherwise terminate, such entity's
relationship with Seller or has during the last twelve (12) months decreased
materially (other than decreases consistent with the state of the economy
generally or the markets served by the Business), or made any threat or
indication of intent to Seller to decrease materially (other than decreases
consistent with the state of the economy generally or the markets served by the
Business), such entity's services or supplies to Seller or such entity's
purchase of Products, as the case may be. To the Knowledge of Seller, the
transactions contemplated by this Agreement will not adversely affect the
business relationship with any such supplier or customer.
8.17. Product or Service Liability. Except as set forth on Schedule
8.17, there is no Claim pending or, to the Knowledge of Seller, threatened
against or involving Seller, the Purchased Assets or the Business relating to
any services performed by Seller and alleged to have been defective or
improperly rendered, or any Products delivered by or sold by Seller which are
alleged to be defective or not in compliance with contractual requirements or
applicable standards or Laws. Except as set forth on Schedule 8.17, Seller has
not instituted, undertaken or contemplated, since 1999, and has no liability or
obligation to institute, undertake or contemplate, any recall, notification,
retrofit, field safety, service bulletin, or other remedial or corrective
actions relating to any Products or services performed therefor.
8.18. Permits. Schedule 8.18 lists all Permits and such schedule
specifies which of the Permits can be transferred to Purchaser only with the
consent of a third party. Seller is in compliance with the terms of all of the
Permits in all material respects and the Permits are in full force and effect.
No proceeding is pending or, to the Knowledge of Seller, threatened, to cancel,
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suspend, revoke or limit any of the Permits and, to the Knowledge of Seller,
there is no basis for any such proceeding.
8.19. Brokers. No agent, broker, investment banker, Person or firm
acting on behalf of Seller or under the authority of Seller is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
directly or indirectly from any of the parties hereto in connection with any of
the transactions contemplated hereby.
8.20. Product Warranties. Except as set forth on Schedule 8.20, to the
Knowledge of Seller each Product has been designed, manufactured and sold in
conformity with all applicable contractual commitments, standards, Laws and all
express and implied warranties. Except for implied warranties, Schedule 8.20
includes the standard forms of all product warranties and guarantees issued by
Seller during the past three (3) years in connection with the operation of the
Business, and no Product is subject to any guaranty, warranty, or other
indemnity beyond the terms set forth in such standard forms.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as of the date hereof and
again as of the Closing Date as follows:
9.1. Organization and Authority: Purchaser is a corporation duly
organized, validly existing and in good standing under the Laws of its State of
formation, and Purchaser has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, to execute and deliver this Agreement and the Related Documents and
to perform the obligations to be performed by it hereunder and thereunder, and
to consummate the transactions contemplated hereby and thereby. Purchaser is
duly qualified to do business as a foreign corporation and is in good standing,
in all jurisdictions in which the character of the properties owned or leased by
it or the nature of the business conducted by it makes such qualification
necessary, except for any non-qualification which does not have a material
adverse effect on the business or operations of Purchaser.
9.2. Corporate Action; No Conflict; Consent and Approval:
(a) The execution and delivery by Purchaser of this Agreement
and the Related Documents to be delivered by Purchaser and Purchaser's
performance of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action of Purchaser. This Agreement has
been duly and validly executed and delivered by Purchaser and is, and each of
the Related Documents when executed and delivered by Purchaser in accordance
with its terms will be, the valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with their respective terms, except
as limited by bankruptcy, insolvency, reorganization or similar Laws affecting
creditors' rights generally. Neither the execution, delivery or performance by
Purchaser of this Agreement or any of the Related Documents, nor the
consummation by Purchaser of the transactions contemplated hereby or thereby,
nor compliance by Purchaser with any provision hereof or thereof will (i)
conflict with or result in a breach of any provision of the charter or by-Laws
of Purchaser, or (ii) violate any provision of
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Law, statute, rule or regulation, or any order, writ, injunction, permit,
judgment or decree of any court or other governmental or regulatory authority
applicable to the Purchaser. Notwithstanding the foregoing, Purchaser makes no
representation or warranty as to the enforceability of the Deed Restriction.
(b) Except as set forth in Schedule 9.2(b), no filing with or
notice to, and no permit, authorization, consent or approval of, any court or
tribunal, or administrative, governmental or regulatory body, agency or
authority is necessary for the execution and delivery by Purchaser of this
Agreement or any other documents contemplated by this Agreement or the
consummation by Purchaser of the transactions contemplated hereby or thereby.
Except as set forth in Schedule 9.2(b), no consent or approval by, or any
notification of or filing with any Person is required in connection with the
execution, delivery, and performance by Purchaser of this Agreement or any other
documents contemplated by this Agreement or the consummation of the transactions
contemplated hereby or thereby.
9.3. Brokers. No agent, broker, investment banker, Person or firm
acting on behalf of Purchaser or under the authority of Purchaser is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
directly or indirectly from any of the parties hereto other than Purchaser in
connection with any of the transactions contemplated hereby.
9.4. Funding of Purchase Price. JLG has senior credit lines totaling
$175,000,000. Consent of the lender parties to such credit lines is required to
consummate the transactions contemplated by this Agreement. Assuming such
consent is obtained, such credit lines together with JLG's existing cash
balances are sufficient to enable JLG to fund Purchaser's obligation to pay the
Closing Payment and the Note Payment. Purchaser has no reason to believe that
the requisite consent of the lender parties to the credit lines will not be
obtained on a timely basis to permit consummation of the transactions
contemplated by this Agreement.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are, at its
option, subject to the fulfillment, on or before the Closing Date, of the
following conditions precedent:
10.1. Representations and Warranties. The representations and
warranties of Seller and Guarantor contained herein that are qualified by
materiality or subject to thresholds shall be true and correct in all respects
and the representations and warranties of Seller that are not so qualified
contained herein shall be true and correct in all material respects as of the
date hereof and (a) with respect to the representations and warranties contained
in Sections 8.1, 8.2, 8.3(a), 8.4, 8.5, 8.6 (except for Section 8.6(a)(iii)),
8.8, 8.9, 8.10, 8.13, and 8.18, as of the Closing Date as if made on and as of
the Closing Date, (b) with respect to the representations and warranties
contained in Section 8.3(b)(i), as of the Closing Date as if made on and as of
the Closing Date; provided, that (i) subject to clause (iii) below, the loss of
any customer to the telescopic material handler industry generally (e.g., as a
result of such customer's bankruptcy or dissolution), as opposed to the loss of
such customer by the Business in particular, shall not be deemed material for
purposes of this Section 10.1, (ii) the loss of any customer of the Business
shall not be deemed material for purposes of this Section 10.1 in the event that
such customer shifts
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substantially all of the business such customer conducted with the Business to
JLG, and (iii) the loss of any customer accounting for more than ten percent
(10%) of the Business' revenues, based on the revenues of the Business for
then-most recent twelve full months, shall be deemed material for purposes of
this Section 10.1, and (c) with respect to the representations and warranties
contained in Sections 8.3(b)(v) and 8.3(b)(viii), as of the Closing Date as if
made on and as of the Closing Date; provided, that in the event that such
representations and warranties contained in Sections 8.3(b)(v) and 8.3(b)(viii)
are not true and correct in all material respects on and as of the Closing Date,
the Closing Date may be delayed by no more than ten (10) Business Days to afford
Seller an opportunity to cure any violation of such representations and
warranties.
10.2. Covenants; Adverse Change. Seller and Guarantor shall have
performed and complied in all material respects with all covenants and
agreements required to be performed or complied with on or prior to the Closing
Date. As of the Closing Date, there shall have been no material adverse change
in the condition (financial or otherwise), assets, liabilities, or operations of
Seller, the Purchased Assets or the Business; provided, however, that the
presence of a material adverse change in the Business attributable to or
resulting from (a) an adverse change in the construction equipment industry; (b)
the public announcement of the transactions contemplated hereby; (c) any act or
omission of Seller taken with the prior written consent of Purchaser; or (d)
actions taken by Seller at the specific written request of James H. Woodward,
Jr. or Thomas D. Singer shall not be a material adverse change in the condition
of the Business for purposes of this Section 10.2.
10.3. Officer's Certificate. Purchaser shall have received
certificates, dated as of the Closing Date, duly executed by an authorized
officer of Seller and Guarantor, respectively, certifying that:
(a) the conditions set forth in Sections 10.1 and 10.2 have
been fulfilled;
(b) all documents to be executed by Seller or Guarantor, as
applicable, and delivered at the Closing have been executed by a duly authorized
officer of Seller or Guarantor, as applicable;
(c) (A) the articles of incorporation and bylaws of Seller or
Guarantor, as applicable, attached to the certificate, are true and complete,
(B) such organizational documents have been in full force and effect in the form
attached since the date of the adoption of the resolutions referred to in clause
(C) below and no amendment to such organizational documents has occurred since
the date of the last amendment annexed thereto, and (C) the resolutions adopted
by the board of directors of Seller or Guarantor, as applicable (or a committee
thereof duly authorized) authorizing the execution, delivery and performance of
this Agreement, attached to the certificate, were duly adopted at a duly
convened meeting thereof, at which a quorum was present and acting throughout or
by unanimous written consent, remain in full force and effect, and have not been
amended, rescinded or modified, except to the extent attached thereto; and
(d) the officer of Seller or Guarantor, as applicable,
executing this Agreement is an incumbent officer, and the specimen signature on
such certificate is a genuine signature.
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10.4. No Injunction. No Law shall have been enacted, entered,
promulgated or enforced by any Governmental Entity that prohibits the
consummation of all or any part of the transactions contemplated hereby, and no
action or proceeding shall be pending or threatened by any Governmental Entity
or other Person seeking any such order or decree or seeking to recover any
damages or obtain other relief as a result of the consummation of such
transactions.
10.5. Consents; Permits. Purchaser shall have received duly executed,
valid, enforceable and delivered copies of all waivers, consents, terminations
and approvals from third parties required for the consummation of the
transactions contemplated hereby and for the conduct of the Business by
Purchaser in the manner presently conducted, including the transfer of the
material Assigned Contracts and, to the extent transferable under applicable
Law, the material Permits, in each case as set forth on Schedule 10.5.
10.6. Certain Other Closing Documents. Seller shall have delivered or
caused to be delivered to Purchaser:
(a) duly executed copies of the Conveyance Instruments and the
Power of Attorney;
(b) a duly executed Intellectual Property License Agreement in
substantially the form of Exhibit B hereto;
(c) an assignment, in recordable form, for each of the Leases,
together with (i) any required consent of the lessor thereunder and (ii) an
executed estoppel certificate from the lessor thereunder in form and substance
reasonably satisfactory to Purchaser;
(d) assignments for the registrations and applications
included in the Purchased Rights in such form or forms as shall be recordable in
the United States Patent and Trademark Office, the Library of Congress, and any
applicable foreign jurisdiction in which such registrations have been made or
such applications have been filed;
(e) all such other bills of sale, assignments, lien releases
and other similar documents and agreements as shall be requested by Purchaser to
vest in Purchaser good and marketable title to all of the Purchased Assets, free
and clear of all Encumbrances;
(f) a certificate, as described in Treasury Regulations
Section 1.1445-2(b), certifying that Seller is not a foreign person as defined
in Section 1445(f)(3) of the Code; and
(g) duly executed Port Washington Lease in substantially the
form of Exhibit D hereto.
10.7. Certificate of Good Standing. Purchaser shall have received a
certificate of good standing in respect of Seller and Guarantor certified by the
Secretary of State or other appropriate official of the State of Delaware, dated
as of a date not more than ten (10) days prior to the Closing Date.
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10.8. Receipt. Seller shall have delivered to Purchaser a receipt
acceptable to Purchaser acknowledging receipt of the Closing Payment in
satisfaction in full of Purchaser's obligation to make the Closing Payment
pursuant to Section 3.2.
10.9. HSR Act Approval. The waiting period required under the HSR Act
shall have expired or been terminated, without the initiation of legal action by
the Federal Trade Commission or the Department of Justice.
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are, at its
option, subject to the fulfillment, on or before the Closing Date, of each of
the following conditions precedent:
11.1. Representations and Warranties. The representations and
warranties of Purchaser contained herein that are qualified by materiality or
subject to thresholds shall be true and correct in all respects and the
representations and warranties of the Purchaser that are not so qualified
contained herein shall be true and correct in all material respects as of the
date hereof and as of the Closing Date as if made on and as of the Closing Date.
11.2. Covenants. Purchaser shall have performed and complied in all
material respects with all covenants and agreements required to be performed or
complied with on or prior to the Closing Date.
11.3. Officer's Certificate. Seller shall have received a certificate,
dated as of the Closing Date, duly executed by an authorized officer of
Purchaser, certifying that:
(a) the conditions set forth in Sections 11.1 and 11.2 have
been fulfilled;
(b) all documents to be executed by Purchaser and delivered at
the Closing have been executed by a duly authorized officer of Purchaser;
(c) (A) Purchaser's articles of incorporation and bylaws,
attached to the certificate, are true and complete, (B) such organizational
documents have been in full force and effect in the form attached since the date
of the adoption of the resolutions referred to in clause (C) below and no
amendment to such organizational documents has occurred since the date of the
last amendment annexed thereto, and (C) the resolutions adopted by the board of
directors of Purchaser (or a committee thereof duly authorized) authorizing the
execution, delivery and performance of this Agreement, attached to the
certificate, were duly adopted at a duly convened meeting thereof, at which a
quorum was present and acting throughout or by unanimous written consent, remain
in full force and effect, and have not been amended, rescinded or modified,
except to the extent attached thereto; and
(d) Purchaser's officer executing this Agreement is an
incumbent officer, and the specimen signature on such certificate is a genuine
signature.
11.4. No Injunction. No Law shall have been enacted, entered,
promulgated or enforced by any Governmental Entity that prohibits the
consummation of all or any part of the
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transactions contemplated hereby, and no action or proceeding shall be pending
or threatened by any Governmental Entity or other Person seeking any such order
or decree or seeking to recover any damages or obtain other relief as a result
of the consummation of such transactions.
11.5. Certificate of Good Standing. Seller shall have received a
certificate of status or other similar document in respect of Purchaser
certified by the Secretary of State or other appropriate official of the State
of Delaware, dated as of a date not more than ten (10) days prior to the Closing
Date.
11.6. Certain Other Closing Documents. Purchaser shall have delivered
or caused to be delivered to Seller:
(a) payment of the Closing Payment by wire transfer of
immediately available funds directly to the account designated by Seller in
accordance with Section 3.2 (or such other method of funds transfer as may be
agreed upon by Purchaser and Seller);
(b) a duly executed Assignment and Assumption Agreement;
(c) a duly executed Intellectual Property License Agreement in
substantially the form of Exhibit B hereto;
(d) resale exemption certificates on the forms prescribed by
the taxing authorities of the states of Wisconsin, North Dakota and Minnesota
certifying that Seller's acquisition of the Purchased Inventories qualifies for
exemption from sales Tax in such states;
(e) the Promissory Note; and
(f) duly executed Port Washington Lease in substantially the
form of Exhibit D hereto.
11.7. HSR Act Approval. The waiting period required under the HSR Act
shall have expired or been terminated, without the initiation of legal action by
the Federal Trade Commission or the Department of Justice.
ARTICLE XII
EMPLOYEE MATTERS
12.1. Scope of Section: This Article XII contains the covenants and
agreements of the parties with respect to (a) the status of employment of the
Employees, and (b) employee benefit plans.
12.2. Employment Status: Purchaser shall offer employment, on terms
that Purchaser believes are reasonably comparable or superior to those currently
provided by Seller, to all of the Employees who are actively employed in the
Business on the Closing Date, it being agreed that employees who are on layoff
and who have a right to return to work in the Business or who are on short-term
(up to six months) medical disability (including pregnancy leave) (and who are
listed on Schedule 12.2) are to be considered actively employed but that
employees on long-term medical disability (and who are listed on Schedule 12.2)
and employees whose employment has
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terminated or will terminate prior to the Closing Date without any right to
return to work are not to be considered actively employed. For the purposes of
this Agreement (i) the terms "layoff", "right to return to work", "short-term
disability", "long-term disability", and "pregnancy leave" shall be construed in
accordance with the personnel policies of the Business and the collective
bargaining agreements covering Employees as of the Closing Date, and (ii)
Employees who are actively employed in the Business on the Closing Date shall be
referred to as "Included Employees." Employees who accept Purchaser's offer of
employment are hereinafter collectively called "Transferred Employees." Seller
agrees to use reasonable efforts to cause the Transferred Employees to become
employees of Purchaser as of the Closing Date, which reasonable efforts shall
include affording Purchaser reasonable opportunities to review employment and
personnel records of Employees, to discuss with Employees terms and conditions
of employment with Purchaser as of the Closing Date and to distribute to the
Transferred Employees forms and documents relating to employment with Purchaser.
Seller shall deliver to Purchaser as of the Closing Date all personnel files
relating to Transferred Employees.
12.3. Former Employees: Purchaser shall assume the benefits liabilities
for Former Employees (including Employees who are on long-term disability as of
the Closing Date) to the extent described on Schedule 12.3, being consistent
with those benefits provided by Seller or an Affiliate of Seller prior to the
Closing Date. Schedule 12.3 contains a true and complete list of all Former
Employees eligible for welfare benefits of any kind (including, without
limitation, retiree health or life insurance, severance benefits, and
continuation coverage under Section 4980B of the Code and Sections 601 through
608 of ERISA and similar state Laws), and a complete description of the benefits
such Former Employees are eligible to receive from and after the Closing Date.
Seller shall retain all other liabilities for Former Employees (including
Employees on long-term disability as of the Closing Date).
12.4. Defined Contribution Plans: As of the Closing Date, Purchaser
shall assume the sponsorship and assets and liabilities related to the Union
Savings Plan and the OmniQuip Savings Plan. Seller agrees to use reasonable best
efforts to assist Purchaser in assuming the sponsorship and assets and
liabilities related to such plans, including adoption of any amendments to such
plans and related trust agreements, annuity contracts, or other funding
vehicles.
12.5. Union Contract(s): Seller shall perform all obligations under all
collective bargaining agreements between Seller and any labor organization that
are included in the Assigned Contracts that are required to be performed prior
to the Closing Date. All such collective bargaining agreements are identified on
Schedule 8.13. Purchaser acknowledges that at Closing it will become a successor
employer under such collective bargaining agreements and agrees to assume,
perform and discharge all obligations of Seller arising under such agreements
after the Closing Date.
12.6. Vacation and WARN Act Liability: Purchaser shall assume,
discharge, pay and be solely liable for all obligation, cost or expense for:
(a) any earned vacation or holiday pay relating to Transferred
Employees actively employed in the Business on the Closing Date and reflected on
the Closing Statement of Net
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Assets Acquired, together with any salaried employees holiday pay for such
Transferred Employees;
(b) any Claim or liability relating to Included Employees
actively employed in the Business on the Closing Date under the Worker
Adjustment and Retraining Notification ("WARN") Act, arising from or relating to
actions required by this Agreement, and any Claim or liability under the WARN
Act relating to Transferred Employees terminated by Purchaser after the Closing
Date; and
(c) any health, disability or life insurance coverage and any
medical and dental benefits payable at any time to Transferred Employees
actively employed in the Business on the Closing Date and their eligible
dependents to the extent disclosed on Schedule 12.6(c).
12.7. Health Care Continuation Coverage: Purchaser shall assume,
discharge, pay and be solely liable for any and all of Seller's obligations for
continued health coverage under Section 4980B of the Code and Sections 601
through 608 of ERISA and similar state Laws (and any proposed, temporary or
final rules and regulations issued thereunder) with respect to (i) Transferred
Employees and (ii) Former Employees listed on Schedule 12.3.
12.8. Welfare Benefit Plans - Interim Services: Seller agrees, as an
accommodation to Purchaser and if requested by Purchaser at the Closing, to
continue to operate its medical, dental, life insurance and disability plans
(except for union employee medical and dental benefits provided by Midwest
Security, which contract shall be assumed by Purchaser as of the Closing) for
the benefit of the Former Employees and Transferred Employees during an interim
period (the "Interim Period") commencing on the Closing Date, or, if later, the
date the Employee becomes a Transferred Employee and ending, for each such
benefit, on the earlier of a date specified by Purchaser for each benefit or
December 31, 2003. The purpose of this arrangement is to facilitate benefit
coverage until Purchaser is able to establish successor plans for the
Transferred Employees. The parties agree that Purchaser is fully responsible for
all liabilities and benefits which arise after the Closing Date as the result of
the continued operation of these plans for the Business, including, for the
avoidance of doubt, payment of all such benefits that are payable after the
Closing. Therefore, it is the intent of the parties that the financial
obligations of Seller under this Section 12.8 shall be measured as of the
Closing Date as if this continuation provision did not exist except as otherwise
set forth in this Agreement. Further, this Section 12.8 shall not be construed
to impose upon Seller any liability or responsibility under Seller's or the
Business' plans except as expressly set forth in this Agreement. Any such plans
operated by Seller shall be provided to all eligible Transferred Employees.
These benefits shall be identical to the benefits afforded such individuals
under the applicable Seller's plans immediately prior to the Closing Date except
as may be required by Law. During the Interim Period, such benefits shall be
provided to those individuals through Seller's and, as applicable, the Business'
existing plans. Purchaser agrees to pay Seller, or if so determined by Seller,
any administrative representative of Seller, the premium rates and other direct
costs actually payable or incurred under, or contributions made to, Seller's or
the Business' welfare benefit plans maintained by Seller at the request of
Purchaser under this Section 12.8 for the Transferred Employees plus any
reasonable third party administrative service fees related to such premiums or
direct costs as well as any reasonable and necessary related expenses incurred
by Guarantor for any such continued coverage thereunder.
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12.9. Wage and Tax Reporting: In accordance with the "Alternate
Procedure" provided in Section 5 of Revenue Procedure 96-60, 1996-2 C.B. 399,
with respect to filing and furnishing Internal Revenue Service Forms W-2, W-3
and 941, from and after the Closing Date (a) Seller and Purchaser shall report
on a "predecessor-successor" basis with respect to the Transferred Employees,
(b) Seller shall be relieved of furnishing Internal Revenue Service Forms W-2 to
such Transferred Employees to whom it would have been obligated to furnish such
forms for the calendar year of the Closing, and (c) Purchaser shall assume the
obligations of Seller to furnish such forms to such Transferred Employees for
such calendar year.
12.10. Worker's Compensation Claims: Schedule 12.10 contains a true and
complete list of all Claims pending as of the Closing Date resulting from
work-related actual or alleged harm or injury to Transferred Employees or Former
Employees. Purchaser shall assume liability for all Claims listed on Schedule
12.10 , together with any such Claims commenced after the Closing Date resulting
from incidents or accidents occurring either before or after the Closing Date.
12.11. Long-Term Incentive Compensation: Seller shall retain liability
for payment of incentive compensation to Transferred Employees pursuant to
Textron's Long-Term Incentive Plan of 1999 paid in Seller's sole discretion for
periods ending prior to the Closing.
12.12. Retention Agreements: After the Closing Date Purchaser shall
assume liability for any payments required to be made pursuant to the agreements
listed on Schedule 12.12 and provided to Purchaser or Purchaser's counsel as
required by Section 8.9(c).
ARTICLE XIII
OBLIGATIONS AFTER CLOSING
13.1. Non-Competition:
(a) Seller, for itself and its Affiliates, agrees for a period
of two years following the Closing Date, not to carry on or be engaged in the
manufacture or sale of telescopic material handlers of the type manufactured or
sold by the Business prior to the Closing Date (the "Restricted Business").
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Seller or any Affiliate of Seller, from (i) acquiring not more than ten
percent of the outstanding voting capital stock of a Person engaged in the
Restricted Business, whose stock is traded on a national securities exchange or
through the automated quotation system of a registered securities association;
(ii) acquiring greater than ten percent of the outstanding capital voting stock
of a Person engaged in the Restricted Business where the revenues derived by the
acquired party from the Restricted Business do not exceed twenty-five percent of
the acquired party's annual revenues or twenty-five million dollars annually,
whichever is greater; (iii) selling or providing products or services of a kind
currently sold or provided by Seller or any Affiliate of Seller other than the
Business; (iv) selling or providing products of a kind sold or provided by the
Business that have been repossessed, taken in trade-in or otherwise recovered
pursuant to any type of financing agreement or arrangement; (v) to the extent
excluded pursuant to the terms of Section 6.2, lease, sale, licensing, or other
transfer of any Excluded Asset; or (vi) acquiring any Person engaged in the
Restricted Business so long as Purchaser is given an immediate and continuing
option for an option period of one hundred
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twenty (120) calendar days, to commit to acquire such portion of the acquired
business engaged in the Restricted Business from Seller or its Affiliate. If
Purchaser so commits, closing shall occur within thirty (30) calendar days
thereafter. If Purchaser does not so commit or close the transaction within such
30-day period, Seller or its Affiliate may continue to operate such business
without being in violation of this Section 13.1. The exercise price for such
option shall be an amount equal to the aggregate purchase price, including
liabilities assumed, paid by Seller or its Affiliate for its interest in the
Person engaged in the Restricted Business, multiplied by a fraction, the
numerator of which shall be the net operating profit or other mutually
acceptable measure of value of the portion of the acquired business engaged in
the Restricted Business during the most recently completed fiscal year prior to
the date of Seller's or Seller's Affiliate's acquisition and the denominator of
which shall be the net operating profit or other mutually acceptable measure of
value of the entirety of the acquired business during the same period. The
purchase by Purchaser would be subject to the execution by Seller or its
Affiliate and Purchaser of a mutually satisfactory definitive agreement for such
purchase.
(b) It is agreed by the parties that the foregoing covenants
in this Section 13.1 impose a reasonable restraint on the Seller.
(c) The covenants in this Section 13.1 are severable and
separate, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time or territorial restrictions
set forth are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent which the court deems reasonable,
and the Agreement shall thereby be reformed.
13.2. Access: In connection with any of the Retained Liabilities or any
financial audit of Seller or any Claim or other governmental investigation of
Seller for any matter relating to any period prior to the Closing, or for any
other reasonable and lawful purpose, Purchaser shall, upon request, permit
Seller and its representatives to have access, at reasonable times during normal
business hours and in a manner which is not unreasonably disruptive to the
operations of Purchaser, to the Purchased Records and work papers, books and
records of Purchaser relating to the Business. Purchaser shall maintain in an
orderly manner, and shall not dispose of, the Purchased Records or such work
papers, books and records during the six year period beginning with the Closing
without Seller's consent. Following the expiration of such six-year period,
Purchaser may dispose of the Purchased Records or such work papers, books and
records at any time upon giving 90 calendar days' prior written notice to
Seller, unless Seller agrees to take possession thereof within such 90 calendar
days at no expense to Purchaser.
13.3. Tax Matters:
(a) Allocation of Taxes. Except as expressly set forth in
Section 13.3(b) and Section 13.3(c), Seller shall be responsible for, and will
cause to be included in its Returns, all liabilities of Seller for Taxes,
including, but not limited to, all Taxes arising out of or relating to the
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operation of the Business or the Purchased Assets for all periods or portions
thereof ending on or before the Closing Date (a "Pre-Closing Tax Period") .
Except as expressly set forth in Section 13.3(b) and Section 13.3(c), Purchaser
shall be responsible for, and will cause to be included in its Returns, all
liabilities of Purchaser for Taxes arising out of or relating to the operation
of the Business or the Purchased Assets for all periods or portions thereof
commencing after the Closing Date (a "Post-Closing Tax Period"). For purposes of
determining each party's liability for Taxes arising out of or relating to the
operation of the Business or the Purchased Assets, the Closing Date shall be
treated as the last day of a taxable period, whether or not the taxable period
in fact ends on the Closing Date.
(b) Property Taxes.
(i) Apportionment. For purposes of this Agreement, real and
personal property Taxes and similar ad valorem Taxes (collectively,
"Property Taxes") for a period that includes but does not end on the
Closing Date (a "Straddle Period") shall be apportioned between Seller
and Purchaser based upon the number of days of such period that are in
the Pre-Closing Tax Period (which period shall include the Closing
Date) and the number of days of such period that are in the
Post-Closing Tax Period. In performing such apportionment, all Property
Taxes shall be pro-rated based on an equal amount of Property Tax being
applied to each day of the Straddle Period, notwithstanding the billing
or payment of any installment payments. Seller shall be liable for all
such Property Taxes apportioned to the Pre-Closing Tax Period and
Purchaser shall be liable for all such Property Taxes apportioned to
the Post-Closing Tax Period
(ii) Return Filing and Payment Responsibility. With respect to
any Property Tax Return for a Straddle Period, Purchaser shall prepare
and file any such Property Tax Return and pay any Property Tax
reflected on such Property Tax Return; provided, however, that Seller
shall promptly reimburse Purchaser for any Property Tax for a
Pre-Closing Tax Period (calculated in accordance with Section
13.3(b)(i)) reflected on such Property Tax Return. Purchaser shall
permit Seller and its advisors to review and comment on each such
Property Tax Return prior to filing and shall make such revisions to
such Property Tax Returns as are reasonably requested by Seller.
(c) Transfer and Sales Taxes. Purchaser shall pay all transfer
Taxes, sales Taxes and other similar Taxes (collectively, "Transfer Taxes")
incurred by reason of the transfer of the Purchased Assets by Seller to
Purchaser hereunder up to an amount not to exceed $25,000. Seller shall pay all
Transfer Taxes in excess of such amount. The parties shall cooperate in
providing any information and documentation necessary to obtain any available
exemptions from such Transfer Taxes. Solely for purposes of recording the
transfers of the Real Property included among the Purchased Assets, filing any
related Real Property Transfer Tax Returns and determining any related Real
Property Transfer Tax, Seller and Purchaser agree to treat the net book values
of such Real Property as determined for purposes of the Reference Statement of
Net Assets Acquired as the consideration for such Real Property. Solely for
purposes of recording the transfers of the Real Property included among the
Purchased Assets, filing any related Real Property Transfer Tax Returns and
determining any related Real Property Transfer Tax, Seller and Purchaser agree
to treat the net book values of such Real Property as determined for purposes of
the Reference Statement of Net Assets Acquired as the consideration for such
Real Property.
(d) Survival of Covenants. Notwithstanding anything herein to
the contrary, the covenants contained in Section 4.5, this Section 13.3 and
Section 15.3, the representations
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and warranties contained in Section 8.12 and the indemnification obligations
with respect thereto shall survive until thirty (30) days after the expiration
of the applicable statute of limitations (including any applicable extensions
thereof).
13.4. Ownership of the Business; Use of Purchased Records: Except as
permitted in the next succeeding sentence, neither Seller nor Purchaser shall,
after the Closing Date, expressly or impliedly convey the impression that Seller
continues to own the Business. Purchaser agrees that, no later than 60 calendar
days after the Closing Date, it will not distribute any Purchased Records
without over-printing or stickering the same to show Purchaser as the owner and
source thereof. Purchaser shall produce its own trade literature, brochures,
bulletins, labels, stationery, websites, molds, and/or dies which do not contain
the name "Textron" as soon as practicable and in any event within six months
after the Closing Date. In addition to any other indemnification provisions
contained herein, Purchaser specifically agrees to indemnify Seller and Seller's
Affiliates against and hold it harmless from any damage, loss, claim, or suit
(and related expenses) arising from the use by Purchaser of trade literature,
brochures, bulletins, labels, stationery, and promotional content contained on
websites to the extent the foregoing is included in the Purchased Assets.
13.5. Further Assurances: From time to time after the Closing, without
further consideration, the parties shall cooperate with each other and shall
execute and deliver instruments of transfer or assignment, or such other
documents to the other party as such other party reasonably may request to
evidence or perfect Purchaser's right, title and interest to the Purchased
Assets, and otherwise carry out the transactions contemplated by this Agreement.
13.6. Guarantee: Purchaser shall use all commercially reasonable
efforts to terminate the Textron guarantee identified on Schedule 2.1(n), a true
and complete copy of which has been provided to Purchaser, and arrange for
Purchaser to assume Textron's obligations under the guarantee as soon as
possible after the Closing Date.
13.7. Former Product Lines: Seller shall use reasonable best efforts
prior to the Closing to remove from the Purchased Assets any proprietary
information related to Seller's former Snorkel and skid steer loader product
lines, and shall, prior to the Closing, cause all services in respect of such
product lines performed by any Included Employee to be performed by other
personnel of Seller or an Affiliate of Seller. Purchaser covenants and agrees
that, in the event that Seller inadvertently fails to remove any such
proprietary information from the Purchased Assets, Purchaser and its Affiliates,
as applicable, will return such information to Seller upon its discovery and
shall not, to the knowledge of Purchaser's officers or sales and marketing
personnel, make use of such proprietary information or disclose such proprietary
information to third parties.
13.8. Post-Closing Payments: At the Closing, Purchaser shall pay Seller
the amounts set forth on Schedule 13.8, which amounts represent Seller's
estimate (the "Estimated Payment") for the first month following the Closing
Date of payments to be made by Seller relating to obligations assumed by
Purchaser hereunder, as set forth in detail on Schedule 13.8. For the applicable
time periods set forth on such Schedule 13.8, Purchaser shall pay Seller an
amount equal to the then-applicable portion of the Estimated Payment (as such
estimate may be revised from time to time by Seller) each month after the
Closing Date no later than the fifteenth day of
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the month. Seller shall revise the Estimated Payment from time to time to
account for differences between Estimated Payments made by Purchaser and actual
payments made by Seller on Purchaser's behalf for Assumed Liabilities, and the
parties shall true up the balance of payments on a quarterly basis. Estimated
Payments not received by Seller by the fifteenth day of each month shall bear
interest through the date that Seller receives the Estimated Payment at a rate
equal to JLG's blended borrowing rate on interest-bearing debt for Purchaser's
most recently completed fiscal quarter. Notwithstanding anything herein to the
contrary, no more frequently than every thirty (30) days, (a) Purchaser shall be
entitled to charge Seller for (and may offset such amounts against any Estimated
Payments or any other payments due Seller hereunder) any payments made by
Purchaser or Purchaser's Affiliates relating to obligations retained by Seller
hereunder (including without limitation any payments in respect of any Retained
Liabilities), and (b) Seller shall be entitled to charge Purchaser for (and may
offset such amounts against any payments due Purchaser hereunder) any payments
made by Seller or Seller's Affiliates relating to obligations assumed by
Purchaser hereunder (including without limitation any payments in respect of any
Assumed Liabilities) other than such obligations that are included in the
Estimated Payment.
13.9. Post-Closing Assistance. Purchaser shall promptly forward to
Seller any amounts received by Purchaser or its Affiliates in respect of the
accounts and notes receivable relating to Snorkel and Seller's former skid steer
loader product line within 180 days after the Closing Date; provided, that
neither Purchaser nor any of Purchaser's Affiliates shall have any liability or
obligation to undertake any collection activity of such accounts and notes
receivable on Seller's behalf.
13.10. TFC Matters. Purchaser and Purchaser's Affiliates shall be
prohibited from selling any Products other than spare parts to any debtor to TFC
who is and remains in payment default not disputed by the debtor in good faith
for more than thirty (30) calendar days after notice is delivered by TFC to such
debtor and to Purchaser with respect to any and all amounts due to TFC pursuant
to financing provided by TFC to said debtor related to the prior sale of
Seller's or Snorkel's product. The prohibition contained in the preceding
sentence shall be effective only after Purchaser has received actual notice of
such debtor's continued delinquency following such thirty (30) calendar day
period.
13.11. Delivery of Financial Statements. Promptly following the
Closing, Seller shall furnish, or shall cause Ernst & Young LLP (or another "Big
Four" accounting firm selected by mutual agreement of Seller and Purchaser) to
furnish, to JLG, at JLG's expense, (a) an audited consolidated balance sheet and
audited statements of net income and cash flow of the Business as of and for the
period ended December 28, 2002, in each case prepared in accordance with GAAP,
(b) such quarterly unaudited consolidated balance sheets and unaudited
statements of net income and cash flow of the Business as JLG may reasonably
request, in each case prepared in accordance with GAAP (subject to year-end
adjustments and excluding footnotes), and (c) such consents and approvals as JLG
may reasonably request with respect to the foregoing in order to enable JLG to
include such financial statements in any filings made pursuant to applicable
Laws. Seller shall provide the information that Ernst & Young LLP (or such other
"Big Four" accounting firm) advises is required by JLG, and Seller shall have no
liability to JLG for any Loss incurred by JLG from any Claim made by or against
JLG arising from any use by JLG of financial statements provided pursuant to
this Section 13.11.
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ARTICLE XIV
NOTICES
All notices, consents, approvals or other notifications
required of the parties under this Agreement shall be in writing and shall be
deemed properly served if delivered personally or sent by registered or
certified mail (return receipt requested), facsimile or nationally-recognized
courier or overnight delivery service addressed to such other party at the
address set forth below, or at such other address as may hereafter be designated
by either party in writing, and shall be deemed delivered (i) five business days
after being sent by mail or (ii) when actually delivered if sent by facsimile,
courier or overnight delivery service (or the next business day if delivered
after regular business hours or on a Saturday, Sunday or holiday).
(a) If to Seller or Guarantor:
c/o Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Attention: Executive Vice President and
General Counsel
Facsimile: (401) 457-3666
(b) If to Purchaser or JLG:
c/o JLG Industries, Inc.
13224 Fountainhead Plaza
Hagerstown, Maryland 21742-2678
Attention: Senior Vice President and General
Counsel
Facsimile: (240) 313-1807
with a copy, which shall not constitute
notice, to:
Covington & Burling
1201 Pennsylvania Avenue, NW
Washington, DC 20004
Attention: W. Andrew Jack, Esq.
Facsimile: (202) 662-6291
ARTICLE XV
COOPERATION
15.1. Cooperation by Purchaser: In the event Seller is required to
defend against, or desires to prosecute, any action, suit or proceeding arising
out of a claim pertaining to the business or operations of the Business prior to
the Closing Date, Purchaser shall provide such assistance and cooperation,
including, without limitation, witnesses and documentary or other evidence as
may reasonably be requested by Seller in connection with its defense. Seller
shall reimburse Purchaser for its reasonable out-of-pocket expenses incurred in
providing such assistance and cooperation.
15.2. Cooperation by Seller: In the event Purchaser is required to
defend against, or desires to prosecute, any action, suit or proceeding arising
out of a claim pertaining to a liability
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assumed or asset acquired by Purchaser pursuant to this Agreement relating to
the business or operations of the Business, Seller shall provide such assistance
and cooperation, including without limitation, witnesses and documentary or
other evidence, as may reasonably be requested by Purchaser in connection with
its defense. Purchaser shall reimburse Seller for its reasonable out-of-pocket
expenses incurred in providing such assistance.
15.3. Cooperation on Tax, Accounting and Other Matters:
(a) Purchaser and Seller agree to furnish or cause to be
furnished to each other, upon request, as promptly as practicable, such
information (including access to books and records) and assistance relating to
the Business as is reasonably necessary for the filing of any Return, for the
making of any election relating to Taxes, for the preparation for any audit, for
the prosecution or defense of any claim relating to Taxes, for year-end
accounting requirements, for any reports or documents to be filed with any
regulatory agency or for any other reasonable purpose.
(b) Purchaser and Seller agree to retain or cause to be
retained all books and records attributable to the Business (including the
Returns, documents and records relating to the assets and properties of both)
until thirty (30) days after the applicable statute of limitations under
applicable Law (giving effect to any and all properly claimed and valid
extensions or waivers) has expired, and to abide by or cause the compliance with
all record retention agreements entered into with any governmental or taxing
authority. Purchaser and Seller agree to give each other reasonable written
notice prior to transferring, destroying or discarding such books and records
and, if the other party so requests, the Purchaser or Seller, as the case may
be, shall allow the other, at its own cost and expense, the opportunity to
remove and take possession of such books and records.
(c) Purchaser and Seller shall cooperate with each other in
the conduct of any audit or other proceedings involving the Business for any
Tax.
(d) Seller will reimburse Purchaser for all
out-of-pocket-costs which the Purchaser may reasonably incur pursuant to this
Section 15.3 in assisting Seller and Purchaser will reimburse Seller for all
out-of-pocket-costs which the Seller may reasonably incur pursuant to this
Section 15.3 in assisting Purchaser.
ARTICLE XVI
INDEMNIFICATION
16.1. Indemnification by Seller: Except as otherwise provided in this
Agreement, Seller shall defend, indemnify and hold harmless Purchaser and its
directors, shareholders, officers, employees, agents, consultants,
representatives, Affiliates, successors and assigns (each, a "Purchaser
Indemnified Party") from and against any and all Losses which any of them may
incur arising out of or in connection with:
(a) any misrepresentation or breach of any representation or
warranty of Seller contained in this Agreement or any certificate, instrument or
other document delivered by Seller hereunder or thereunder or in connection with
the consummation of the transactions contemplated hereby and thereby;
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(b) the non-fulfillment of any covenant or agreement made by
Seller in this Agreement;
(c) the failure of Seller to comply with any Laws applicable
to the transactions contemplated by this Agreement;
(d) the Retained Liabilities; and
(e) any liability arising from, related to or connected with
any Environmental Law or Restoration Covenant and relating to or arising from or
in connection with (A) the ownership, lease, use or operation by Seller (or any
previous owner or operator) of the Real Property or Purchased Assets, (B) any
Hazardous Substance at, on or under any Real Property on or before the Closing
Date or at, on or under any other property owned, operated, used or leased by
Seller in connection with the Business, and (C) any Contamination existing and
caused by or allegedly caused by any Hazardous Substance migrated from,
generated at, or transferred, disposed, released or transported at or from the
Real Property, or any other property owned, leased, used or operated by Seller
in connection with the Business, or otherwise caused or contributed to by Seller
regardless, in each case, whether Seller knew or had reason to know of the
events, conditions or circumstances causing or allegedly causing such liability
("Pre-Closing Environmental Liability") provided, however, that Seller shall
have no obligation under this section 16.1(e) to indemnify Purchaser for
Contamination that Seller demonstrates was caused after the closing date by
Purchaser or its agent.
16.2. Indemnification by Purchaser: Purchaser shall indemnify and hold
harmless Seller and its directors, shareholders, officers, employees, agents,
consultants, representatives, Affiliates, successors and assigns (each, a
"Seller Indemnified Party") from and against any and all Losses which any of
them may incur arising out of or in connection with:
(a) any misrepresentation or breach of any representation or
warranty of Purchaser contained in this Agreement or any certificate, instrument
or other document delivered by Purchaser hereunder or thereunder or in
connection with the consummation of the transactions contemplated hereby and
thereby;
(b) the non-fulfillment of any covenant or agreement made by
Purchaser in this Agreement;
(c) the failure of Purchaser to comply with any Laws
applicable to the transactions contemplated by this Agreement; and
(d) the Assumed Liabilities.
16.3. Environmental Procedures.
(a) With respect to any Environmental Response Actions at or
in connection with any Real Property for which Seller is required under this
Article XVI to indemnify, Seller shall retain control of any activities related
to investigative or remedial actions that are Seller's responsibility under this
Agreement including, without limitation, reporting to Government Entities,
retention of any environmental consultants, and selection of the method of
investigation
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and remediation so long as Seller's actions are in compliance with applicable
Environmental Laws and provided that Seller takes reasonable measures so as to
limit the impact of its activities on the operation of the Business and not
unreasonably interfere with the operation of the Business, and provided,
further, that Purchaser may refuse access for activities that would require the
shutdown of the Business. Purchaser shall cooperate with Seller and support
Seller's efforts by:
(i) providing Seller (and its agents and contractors)
with reasonable access, including use of utilities, to the
Real Property to conduct investigative and remedial
activities, including the installation and maintenance of
equipment;
(ii) coordinating with Seller any redevelopment or
alteration that may impact any equipment installed by Seller
in connection with an Environmental Response Action so as to
mitigate any impact on the Seller's activities and by
otherwise not intentionally taking any action that would
exacerbate environmental conditions at the Real Property,
provided that Seller takes reasonable measures so as to limit
the impact of its activities on the operation of the Business
and Seller will not unreasonably interfere with the operation
of the Business and that Purchaser may refuse access for
activities that would require the shutdown of the Business;
and
(iii) providing Seller with any relevant records or
documents requested by the Seller.
(b) Seller's indemnity obligations under this section shall
extend only to Environmental Response Actions to the extent required to comply
with the conditions of the Lease (in accordance with the terms of such Lease as
of the Closing Date), with Environmental Laws, with the requirements of state
and federal regulatory agencies, or with the requirements of any judicial or
administrative order or any settlement agreement to which Seller or Sellers
affiliate is a party or that has been approved by Seller or Sellers affiliate,
such approval not to be unreasonably withheld; provided, however, that Purchaser
agrees that it will not seek the application of non-commercial or industrial
remediation standards to any such Environmental Response Action.
(c) Purchaser agrees that it will not precipitate the
commencement of a claim for which indemnification is required under this Article
by conducting excavation or soil or groundwater sampling, but nothing herein
shall preclude Purchaser from conducting excavation as it determines in its
reasonable discretion is needed for the conduct of the Business or to comply
with applicable Law; provided that such excavation shall be done in accordance
with the applicable Lease and Purchaser shall use its best reasonable efforts to
minimize the extent of the excavation.
(d) Notwithstanding any other provision of the Agreement,
Seller shall have no responsibility (i) to perform, nor financial liability in
connection with, the first one hundred thousand dollars ($100,000) in
Environmental Response Actions at any individual Real Property that would
otherwise be the obligation of the Seller hereunder, and such work shall be
performed by Purchaser and such costs shall be borne by or on behalf of
Purchaser; (ii) to indemnify
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Purchaser with respect to a Pre-Closing Environmental Liability affecting or
arising from an individual Leased Real Property initially raised in a Notice of
Claim delivered after the first anniversary of the termination of such Lease,
(iii) to indemnify Purchaser for any Loss solely attributable to diminution in
market value of Purchaser's leasehold interest in such Real Property, or (iv) to
indemnify Purchaser to the extent that the Contamination giving rise to the
liability was caused by Purchaser, or an agent or Affiliate of Purchaser. With
respect to Environmental Response Actions that are controlled by Purchaser
hereunder Purchaser shall consult with Seller prior to committing to or
implementing such Environmental Response Actions and shall reasonably consider
Seller's comments in connection therewith. With respect to Environmental
Response Actions that are controlled by Seller hereunder Seller shall provide
Purchaser reports concerning the progress of such Environmental Response Actions
upon Purchaser's reasonable request.
(e) Seller's indemnification obligations in respect of
Pre-Closing Environmental Liabilities under this Article shall be enforceable by
a transferee of Purchaser's interest in any Real Property only to the extent
that such transferee adheres in all respects to the terms of this Section 16.3.
(f) The provisions under this Article shall be Purchaser's
exclusive remedy against Seller under this Agreement with regard to
Environmental Response Actions during the periods prescribed in Section 16.3
(d).
(g) The obligations of Seller under this Article XVI are
conditioned upon Purchaser's substantial compliance with Sections 16.3(a)(ii),
16.3(b), and 16.3(c). In addition to any other remedies available to Seller,
Purchaser shall be liable to Seller for any incremental cost to Seller due to
Purchaser's failure to comply with any other provision of this Section 16.3.
(h) Except as specifically provided for in this Section 16.3,
nothing in this Section 16.3 shall diminish or otherwise limit Seller's
obligations with respect to Pre-Closing Environmental Liability.
16.4. Indemnification Procedure:
(a) Any party seeking indemnification hereunder (the "Indemnitee")
shall notify the parties liable for such indemnification (each an "Indemnitor")
in writing of any event, omission or occurrence which the Indemnitee has
determined has given or could give rise to Losses which are indemnifiable
hereunder (such written notice being hereinafter referred to as a "Notice of
Claim"). Such notice shall be given promptly after the Indemnitee becomes aware
of its own claim or that of a third party; provided, that the failure of any
Indemnitee to give notice as provided in this Section 16.4 shall not relieve the
Indemnitor of its obligations under this Article XVI unless such failure shall
materially prejudice the defense of any such Loss. A Notice of Claim shall
specify in reasonable detail the nature and any particulars of the event,
omission or occurrence giving rise to a right of indemnification. The Indemnitor
shall satisfy its obligations hereunder, as the case may be, within 30 calendar
days of its receipt of a Notice of Claim; provided, however, that so long as the
Indemnitor is in good faith defending a claim pursuant to Section 16.4(b) below,
its obligation to indemnify the Indemnitee with respect thereto shall be
suspended.
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(b) With respect to any third party claim, demand, suit, action or
proceeding which is the subject of a Notice of Claim, the Indemnitor shall, in
good faith and at its own expense, defend, contest or otherwise protect against
any such claim, demand, suit, action or proceeding with legal counsel of its own
selection. The Indemnitee shall have the right, but not the obligation, to
participate, at its own expense, in the defense thereof through counsel of its
own choice and shall have the right, but not the obligation, to assert any and
all cross claims or counterclaims it may have; provided, that if in the
reasonable opinion of counsel for such Indemnitee there is a reasonable
likelihood of a conflict of interest between the Indemnitor and the Indemnitee,
the Indemnitor shall be responsible for the reasonable fees and expenses of one
counsel to such Indemnitee in connection with such defense. So long as the
Indemnitor is defending in good faith any such third party claim, demand, suit,
action or proceeding, the Indemnitee shall at all times cooperate, at its own
expense, in all reasonable ways with, make its relevant files and records
available for inspection and copying by, and make its employees available or
otherwise render reasonable assistance to, the Indemnitor. In the event that the
Indemnitor fails to timely defend, contest or otherwise protect against any such
third party claim, demand, suit, action or proceeding, the Indemnitee shall have
the right, but not the obligation, to defend, contest, assert cross claims or
counterclaims, or otherwise protect against, the same and may make any
compromise or settlement thereof and be entitled to all amounts paid as a result
of such third party claim, demand, suit or action or any compromise or
settlement thereof. The Indemnitor shall not, except with the consent of the
Indemnitee, enter into any settlement that does not include as an unconditional
term thereof the giving by the Person or Persons asserting such claim to all
Indemnitees of an unconditional release from all liability with respect to such
claim or consent to entry of a judgment.
16.5. Calculation of Losses. The term "Losses" as used in this Article
XVI is not limited to matters asserted by third parties, but includes Losses
incurred or sustained by an Indemnitee in the absence of any third party claims.
The amount of any Losses shall be calculated (a) net of insurance proceeds paid
with respect thereto or any indemnification or contribution received from and
third person and (b) after the effect of any net Tax benefits actually realized
in connection with such Losses. The amount of any Losses shall be increased to
take account of any net Tax costs incurred by the Indemnitee arising from the
receipt of any payment hereunder (grossed up for such increase). The Indemnitee
expressly agrees to promptly notify the applicable insurance carrier of any such
claim or loss and tender defense thereof to such carrier, and shall also
promptly notify any potential third party indemnitor or contributor which may be
liable for any portion of such losses or claims. The Indemnitee agrees to
pursue, at the cost and expense of the Indemnitor, such claims diligently and to
reasonably cooperate, at the costs and expense of the Indemnitor, with each
applicable insurance carrier and third party indemnitor or contributor. The
Indemnitee shall use all commercially reasonable efforts to seek recoveries
under insurance policies and shall reimburse the Indemnitor for any Losses
indemnified by it which are subsequently recovered by the Indemnitee under any
such insurance. For purposes of this Agreement, an Indemnified Party shall be
deemed to have actually realized a net Tax benefit or incurred a net Tax cost to
the extent that, and at such time as, the amount of Taxes payable by such
Indemnitee is reduced below or increased above, as the case may be, the amount
of Taxes that such Indemnitee would be required to pay but for the accrual or
receipt of, the suffering or incurrence of, or payment of such Losses, each as
the case may be.
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16.6. Indemnity Payments. Any payment of Losses hereunder shall be
treated as an adjustment to Purchase Price. Any payment by Seller hereunder
shall first be made by reducing the outstanding principal, interest, and
penalties (if any) due pursuant to the Promissory Note.
16.7. Closing Statement Claims Not Losses: Notwithstanding the
foregoing, neither Purchaser nor Seller shall have any obligation pursuant to
this Article XVI to defend, indemnify or hold harmless any Purchaser Indemnified
Party or Seller Indemnified Party, as applicable, from or against any Losses
that any of them may incur that also constitute Closing Statement Claims, and
neither party shall have any obligations to the other with respect to any
Closing Statement Claim other than pursuant to Article IV hereof.
16.8. Expiration. Except as otherwise provided in Section 16.3,
Seller's indemnification and reimbursement obligations arising out of this
Article XVI shall expire sixty (60) days after the expiration of the applicable
statute of limitations, or upon the expiration of the applicable representation
or warranty in the case of an alleged breach thereof not asserted prior to such
expiration.
ARTICLE XVII
TEXTRON AND JLG REPRESENTATIONS AND WARRANTIES; GUARANTIES
17.1. Representations and Warranties of Guarantor. Guarantor represents
and warrants to Purchaser as of the date hereof and again as of the Closing Date
as follows:
(a) Organization and Authority: Guarantor is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Delaware, and Guarantor has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted, to execute and deliver this Agreement and to perform the
obligations to be performed by it hereunder, and to consummate the transactions
contemplated hereby. Guarantor is duly qualified to do business as a foreign
corporation and is in good standing, in all jurisdictions in which the character
of the properties owned or leased by it or the nature of the business conducted
by it makes such qualification necessary, except for any non-qualification which
does not have a material adverse effect on its business or operations.
(b) Corporate Action; No Conflict; Consent and Approval:
(i) The execution and delivery by Guarantor of this
Agreement and Guarantor's performance of the transactions
contemplated hereby have been duly authorized by all requisite
corporate action of Guarantor. This Agreement has been duly
and validly executed and delivered by Guarantor and is the
valid and binding obligation of Guarantor, enforceable against
Guarantor in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization or similar Laws
affecting creditors' rights generally and by the application
of principles of equity by an applicable court. Except as set
forth in Schedule 17.1(b)(i), neither the execution, delivery
or performance by Guarantor of this Agreement, nor the
consummation by Guarantor of the transactions contemplated
hereby, nor compliance by Guarantor with any provision hereof
will (i) conflict with or result in a breach of any provision
of the charter or by-Laws of Guarantor,
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(ii) violate any provision of Law, statute, rule or
regulation, (iii) violate any order, writ, injunction, permit,
judgment or decree of any court or other governmental or
regulatory authority applicable to the Guarantor, or (iv)
conflict with, result in a default or give rise to any right
of termination, cancellation or acceleration under any of the
provisions of any note, bond, lease, mortgage, indenture,
license, franchise, permit, agreement or other instrument or
obligation to which Guarantor is a party, or by which
Guarantor may be bound or affected.
(ii) Except as set forth in Schedule 17.1(b)(ii), no
filing with or notice to and no permit, authorization, consent
or approval of any, court or tribunal, or administrative,
governmental or regulatory body, agency or authority is
necessary for the execution and delivery by Guarantor of this
Agreement or the consummation by Guarantor of the transactions
contemplated hereby. Except as set forth in Schedule
17.1(b)(ii), no consent or approval by, or any notification of
or filing with any Person is required in connection with the
execution, delivery, and performance by Guarantor of this
Agreement or the consummation of the transactions contemplated
hereby.
17.2. Textron Guaranty.
(a) Guarantor hereby irrevocably, absolutely and
unconditionally guarantees the full and punctual payment of any amount or
amounts due and payable by, and the performance of any and all obligations by,
Seller under this Agreement, including without limitation Article XVI hereof.
Upon any failure by Seller to pay punctually any such amount or perform any such
obligation, Guarantor shall forthwith on demand of Purchaser pay the amount not
so paid or perform the obligation not to performed; provided however that any
and all defenses as counterclaims available to Seller shall also be available to
Guarantor.
(b) The obligations of Guarantor under this Agreement shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of Seller, by
operation of Law or otherwise, unless and to the extent
Purchaser consents to any such extension, renewal, settlement,
compromise, waiver or release;
(ii) any modification or amendment of or supplement
to this Agreement or any document entered into in connection
herewith;
(iii) any change in the corporate existence,
structure or ownership of Seller, or any insolvency,
bankruptcy, reorganization or other similar proceeding
affecting Seller or its assets or any resulting release or
discharge of any obligation of Seller;
(iv) the existence of any claim, set-off or other
right which Guarantor may have at any time against Seller;
provided, that nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory counterclaim;
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(v) any invalidity or unenforceability of this
Agreement or any document entered into in connection herewith
relating to or against Seller for any reason, or any provision
of any legal requirement purporting to prohibit the
performance by Seller of its obligations under this Agreement
or such other document; or
(vi) any other act or omission to act or delay of any
kind by Seller, Purchaser or any other Person or any other
circumstance whatsoever which might, but for the provisions of
this paragraph, constitute a legal or equitable discharge of
Guarantor's obligations hereunder.
(c) If at any time any payment made by or on behalf of Seller
with respect to any obligation under this Agreement, including without
limitation Article XVI hereof, is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of Seller or
otherwise, Guarantor's obligations hereunder with respect to such payment shall
be reinstated as though such payment had been due but not made at such time.
(d) Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not expressly provided for herein,
as well as any requirement that at any time any action be taken by Purchaser or
any other Person against Seller or any other Person.
(e) Upon making any payment hereunder with respect to Seller,
Guarantor shall be subrogated to the rights of the payee against Seller with
respect to such payment.
17.3. Representations and Warranties of JLG. JLG represents and
warrants to Seller as of the date hereof and again as of the Closing Date as
follows:
(a) Organization and Authority: JLG is a corporation duly
organized, validly existing and in good standing under the Laws of the
Commonwealth of Pennsylvania, and JLG has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, to execute and deliver this Agreement and to perform the
obligations to be performed by it hereunder, and to consummate the transactions
contemplated hereby. JLG is duly qualified to do business as a foreign
corporation and is in good standing, in all jurisdictions in which the character
of the properties owned or leased by it or the nature of the business conducted
by it makes such qualification necessary, except for any non-qualification which
does not have a material adverse effect on its business or operations.
(b) Corporate Action; No Conflict; Consent and Approval:
(i) The execution and delivery by JLG of this
Agreement and JLG's performance of the transactions
contemplated hereby have been duly authorized by all requisite
corporate action of JLG. This Agreement has been duly and
validly executed and delivered by JLG and is the valid and
binding obligation of JLG, enforceable against JLG in
accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization or similar Laws affecting
creditors' rights generally, and by the application of
principles of equity by an applicable court. Except as set
forth in Schedule 17.3(b)(i), neither the execution, delivery
or performance by JLG of this Agreement, nor the consummation
by JLG of the
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transactions contemplated hereby, nor compliance by JLG with
any provision hereof will (i) conflict with or result in a
breach of any provision of the charter or by-Laws of JLG, (ii)
violate any provision of Law, statute, rule or regulation,
(iii) violate any order, writ, injunction, permit, judgment or
decree of any court or other governmental or regulatory
authority applicable to the JLG, or (iv) conflict with, result
in a default or give rise to any right of termination,
cancellation or acceleration under any of the provisions of
any note, bond, lease, mortgage, indenture, license,
franchise, permit, agreement or other instrument or obligation
to which JLG is a party, or by which JLG may be bound or
affected.
(ii) Except as set forth in Schedule 17.3(b)(ii), no
filing with or notice to and no permit, authorization, consent
or approval of any, court or tribunal, or administrative,
governmental or regulatory body, agency or authority is
necessary for the execution and delivery by JLG of this
Agreement or the consummation by JLG of the transactions
contemplated hereby. Except as set forth in Schedule
17.3(b)(ii), no consent or approval by, or any notification of
or filing with any Person is required in connection with the
execution, delivery, and performance by JLG of this Agreement
or the consummation of the transactions contemplated hereby.
17.4. JLG Guaranty.
(a) JLG hereby irrevocably, absolutely and unconditionally
guarantees the full and punctual payment of any amount or amounts due and
payable by Purchaser pursuant to this Agreement, the Port Washington Lease, or
the Promissory Note. Upon any failure by Purchaser to pay punctually any such
amount to Seller, JLG shall forthwith on demand of Seller pay the amount not so
paid; provided however that any and all defenses as counterclaims available to
Purchaser shall also be available to JLG.
(b) The obligations of JLG under this Agreement shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of Purchaser,
by operation of Law or otherwise, unless and to the extent
Seller consents to any such extension, renewal, settlement,
compromise, waiver or release;
(ii) any modification or amendment of or supplement
to this Agreement or any document entered into in connection
herewith;
(iii) any change in the corporate existence,
structure or ownership of Purchaser, or any insolvency,
bankruptcy, reorganization or other similar proceeding
affecting Purchaser or its assets or any resulting release or
discharge of any obligation of Purchaser;
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(iv) the existence of any claim, set-off or other
right which JLG may have at any time against Seller; provided,
that nothing herein shall prevent the assertion of any such
claim by separate suit or compulsory counterclaim.
(v) any invalidity or unenforceability of this
Agreement or any document entered into in connection herewith
relating to or against Purchaser for any reason, or any
provision of any legal requirement purporting to prohibit the
performance by Purchaser of its obligations under this
Agreement or such other document; or
(vi) any other act or omission to act or delay of any
kind by Purchaser, Seller or any other Person or any other
circumstance whatsoever which might, but for the provisions of
this paragraph, constitute a legal or equitable discharge of
JLG's obligations hereunder.
(c) If at any time any payment made by or on behalf of
Purchaser with respect to any obligation to Seller under this Agreement is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of Purchaser or otherwise, JLG's obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
(d) JLG irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not expressly provided for herein, as well as any
requirement that at any time any action be taken by Seller or any other Person
against Purchaser or any other Person.
(e) Upon making any payment hereunder with respect to
Purchaser, JLG shall be subrogated to the rights of the payee against Purchaser
with respect to such payment.
ARTICLE XVIII
TERMINATION
18.1. Termination. This Agreement shall terminate on the earlier to
occur of any of the following events:
(a) the mutual written agreement of Purchaser and Seller;
(b) by Notice of Termination of Seller, if the Closing shall
not have occurred prior to the close of business on the one hundred and
twentieth (120th) calendar day after the date hereof (other than as a result of
the failure on the part of the party seeking to terminate this Agreement to
comply with or perform its covenants, agreements and obligations under this
Agreement);
(c) by Notice of Termination of Purchaser, if the Closing
shall not have occurred prior to the close of business on the one hundred and
eightieth (180th) calendar day after the date hereof (other than as a result of
the failure on the part of the party seeking to terminate this Agreement to
comply with or perform its covenants, agreements and obligations under this
Agreement);
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(d) by Notice of Termination of Purchaser to Seller, if Seller
shall have materially breached any of its representations, warranties,
covenants, agreements or obligations hereunder and such breach shall not have
been cured within twenty (20) days following Seller's receipt of notice thereof;
or
(e) by Notice of Termination of Seller to Purchaser, if
Purchaser shall have materially breached any of its representations, warranties,
covenants, agreements or obligations hereunder and such breach shall not have
been cured within twenty (20) days following Purchaser's receipt of notice
thereof.
18.2. Procedure and Effect of Termination.
(a) Notice of Termination. Any termination by either party
shall be communicated by a written notice to the other party (the "Notice of
Termination"). The Notice of Termination shall indicate the termination
provision in this Agreement claimed to provide a basis for termination of this
Agreement. Termination of this Agreement pursuant to the terms and subject to
the conditions of Section 18.1 shall be effective upon and as of the date of
delivery of a Notice of Termination.
(b) Certain Effects of Termination. Nothing in this Article
shall relieve either party of any liability for a breach of this Agreement prior
to the termination hereof. Except as provided in the foregoing sentence, (A)
upon the termination of this Agreement, all rights and obligations of the
parties under this Agreement shall terminate, except their respective
obligations under Article XVII, this Section 18.2(b), and Sections 19.2, 19.5,
19.6, and 19.10, which shall survive the termination of this Agreement except as
specifically provided in such sections, and (B) neither of the parties hereto
nor any of their respective partners, directors, officers, shareholders,
employers, agents or Affiliates (each, a "Related Party") shall have any
liability or further obligation to the other party or any of their respective
Related Parties pursuant to this Agreement with respect to which termination has
occurred, except in respect of the rights and obligations identified in clause
(A) above, which shall survive as provided in this Section 18.2(b).
ARTICLE XIX
MISCELLANEOUS
19.1. Bulk Sales Act: Purchaser waives compliance by Seller with any
bulk sales Law which may be applicable to the transactions contemplated by this
Agreement; provided, however that Seller agrees to indemnify Purchaser and hold
it harmless from any loss, damage, liability, and expenses (including reasonable
legal fees) resulting from such noncompliance.
19.2. Expenses: Except as otherwise provided for in this Agreement,
each of the parties hereto shall pay its own expenses in connection with the
negotiation and preparation of this Agreement and the Related Documents.
19.3. Binding Agreement: This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, provided that neither party shall assign this Agreement without the
prior written consent of the other party hereto, and in no event will any
assignment relieve the assigning party of its obligations hereunder.
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Notwithstanding the foregoing, or any other provision in this Agreement,
Purchaser may assign any or all of its rights hereunder to any Affiliate, and
Seller's indemnity obligations and Guarantor's obligations hereunder are
transferable to a subsequent purchaser, assignee, or successor in interest to
any of the Purchased Assets upon notice to Seller, without the consent of
Seller.
19.4. Entire Agreement: This Agreement (including the Exhibits and
Schedules hereto) together with that certain Confidentiality Agreement among the
parties hereto, dated February 12, 2003 and countersigned on February 18, 2003,
(a) constitutes the entire agreement between the parties hereto with respect to
the purchase and sale of the Purchased Assets and the other transactions
contemplated hereby, (b) supersedes all prior negotiations and oral or written
understandings, if any, and (c) may not be amended or supplemented except by an
instrument in writing signed by both parties hereto. Neither party makes any
representation or warranty except as provided herein.
19.5. Governing Law: This Agreement shall be governed by and construed
in accordance with the substantive Laws of the State of Delaware.
19.6. No Rights of Third Parties: Nothing in this Agreement is intended
to confer any right on any Person other than the parties to it and their
respective successors and assigns; nor is anything in this Agreement intended to
modify or discharge the obligation or liability of any third Person to any party
to this Agreement, nor shall any provision give any third Person any right of
subrogation or action over against any party to this Agreement.
19.7. Counterparts: This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
19.8. Headings; Table of Contents: The headings of the sections of this
Agreement and the table of contents at the forepart of this Agreement are
inserted for convenience only and shall not constitute a part hereof nor affect
the rights of the parties hereto.
19.9. Meaning of "Knowledge of Seller": For purposes of this Agreement
the phrases "to the Knowledge of Seller" and "to Seller's knowledge" shall mean,
and be limited to, the actual knowledge of any of Jack Curran, Jon Carlson,
Randy Beaty, Larry Skaff, Jim Wisnoski, Tom Rice, Diane Galarneau, Mary Anne
Velnetske, and Michelle Larson.
19.10. Survival: The representations and warranties made by Seller in
this Agreement or in any Related Document shall survive for a period ending on
the first anniversary of the Closing Date.
19.11. Limitation of Liability: Purchaser acknowledges that, except as
specifically set forth in this Agreement or any Related Document, the Purchased
Assets are being sold in an AS-IS, WHERE-IS condition and that except as
specifically set forth in this Agreement or any Related Document, SELLER MAKES
NO REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, QUALITY OR MERCHANTABILITY,
WITH RESPECT TO THE PURCHASED ASSETS. Neither Purchaser nor Seller shall make a
claim
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against the other party for Losses resulting from the untruth or breach of the
representations and warranties set forth in Articles VIII and IX of this
Agreement or for incidental and consequential damages unless the aggregate
Losses of such party exceed Two Hundred Fifty Thousand United States Dollars
(U.S. $250,000.00) (in which case such party shall be entitled to the full
amount of such losses, liability, damages or expenses), nor shall Purchaser or
Seller make any claim for Losses resulting from the untruth or breach of the
representations and warranties set forth in Articles VIII and IX of this
Agreement which individually does not exceed Twenty Five Thousand United States
Dollars (U.S. $25,000.00). In no event shall Seller's or Purchaser's liability
to the other party for Losses resulting from the untruth or breach of the
representations and warranties set forth in Articles VIII and IX of this
Agreement or for consequential and incidental damages exceed Seven Million Five
Hundred Thousand United States Dollars (U.S. $7,500,000.00) in the aggregate. In
addition, Seller shall have no liability to Purchaser for any loss or damages
solely attributable to diminution in market value of Purchaser's interest in
Real Property arising from any Pre-Closing Environmental Liability.
19.12. Disclosure: Notwithstanding that certain Confidentiality
Agreement among the parties hereto, dated February 12, 2003 and countersigned on
February 18, 2003, or anything herein to the contrary, Seller or Purchaser may
disclose the Tax treatment and Tax structure of the transactions contemplated by
this Agreement to any Person, provided that such disclosure would not violate
applicable U.S. federal or state securities Laws. The preceding sentence is
intended to cause the transactions contemplated by this Agreement not to be
treated as having been subject to conditions of confidentiality for purposes of
Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Code, and the exception to the
confidentiality obligations set forth herein shall be construed in such a manner
limited to and consistent with such purpose.
19.13. Oakes, North Dakota Industrial Revenue Development Bonds:
(a) Seller and Purchaser acknowledge that Seller's former
affiliate, HBWP Inc. (formerly OmniQuip Textron Inc.) is the underlying obligor
and Sublessee under those certain $4,515,000 City of Oakes, North Dakota
Industrial Development Revenue Bonds (OmniQuip International, Inc. Project)
Series 1999 (the "Bonds") relating to acquisition of equipment and construction
of a 50,000 square foot addition to a certain manufacturing facility (such
equipment, addition and facility being called the "Facility") leased by Oakes
Enhancement, Inc., a North Dakota non-profit corporation ("Lessee") from the
City of Oakes, North Dakota ("Issuer") pursuant to a Lease Agreement dated as of
February 1, 1999 ("Lease"), which Bonds are issued and outstanding under that
certain Indenture of Trust between the Issuer and NorWest Bank Minnesota,
National Association ("Trustee") dated as of February 1, 1999 (the "Indenture").
The Lessee leased the Facility to HBWP Inc. pursuant to a Sublease Agreement
dated as of February 1, 1999 and the Issuer and the Lessee assigned the Lease
and rents and granted a mortgage and security interest in the Facility as
security for the Bonds pursuant to an Assignment of Lease and Rents dated as of
February 1, 1999 ("Assignment") and a Mortgage, Security Agreement and Fixture
Financing Statement Short-Term Mortgage Redemption dated as of February 1, 1999
(the "Mortgage"). The Lease, Sublease, Indenture, Mortgage, Assignment and all
other documents, instruments and agreements executed and delivered in connection
therewith are called the "Bond Documents."
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(b) Pursuant to an agreement between Textron Inc. and HBWP,
Inc. intended to enable Seller the continued use of the Facility, Textron Inc.
agreed to cause Seller to hold HBWP, Inc. harmless against any and all costs and
liabilities associated with the Bond Documents so long as HBWP, Inc. remains the
underlying obligor and sublessee. Seller and Purchaser acknowledge that the
Bonds cannot be redeemed at this time, but that Seller shall vacate the Facility
on the Closing Date and that Seller and Seller's Affiliates shall have no
further liability under the Bonds or any of the other Bond Documents and no
right, title or any interest in and to the Facility or any property located
therein or used in connection therewith including without limitation any
equipment acquired with the proceeds of the Bonds or any interest in and to any
funds, deposits or any other benefits now or hereafter existing under or in
connection with the Indenture or any other Bond Documents.
(c) Purchaser agrees that from and after the Closing, at the
request of the Seller, Purchaser will take any and all other actions reasonably
requested by Seller in order to effect the above referenced understandings in
connection with the Bonds and the Bond Documents including without limitation
assignment of any right, title or interest of HBWP, Inc. in the Bonds, Bond
Documents, Facility and funds under the Indenture, termination or amendment of
any Bond Documents, actions in connection with any contemplated redemption or
defeasance of the Bonds and Purchaser will retain any and all documents,
instruments or agreements and books and records relating to the Bonds and the
transactions occurring in connection therewith at any time for a period of at
least three years after the Closing Date and provide Seller and its employees
and agents with access thereto during normal business hours and upon reasonable
notice together with the rights to make and retain copies thereof.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
TRAK INTERNATIONAL, INC.
BY /s/ John R. Curran
----------------------------
Name: John R. Curran
Title: Vice President
TEXTRON INC.
BY /s/ John R. Curran
----------------------------
Name: John R. Curran
Title: Vice President
JLG Acquisition Corporation
BY /s/ James H. Woodward, Jr.
----------------------------
Name: James H. Woodward, Jr.
Title: Vice President
JLG INDUSTRIES, INC.
BY /s/ James H. Woodward, Jr.
----------------------------
Name: James H. Woodward, Jr.
Title: Executive Vice President
and Chief Financial Officer
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EXHIBIT A - DEFINED TERMS
Certain Definitions. As used in this Agreement:
"Accounting Policies" has the meaning set forth in Section
8.3(a).
"Affiliate" means, with respect to any Person, any other
Person which, directly or indirectly, controls, is controlled by, or is under
common control with, the specified Person. For purposes of this definition, the
term "control" as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management of
that Person, whether through ownership of voting securities or otherwise.
"Applicable Rate" means 8 1/4%.
"Assigned Contracts" has the meaning set forth in Section
1.1(a)(vii).
"Assignment and Assumption Agreement" has the meaning set
forth in Section 5.1(f).
"Assumed Liabilities" has the meaning set forth in Section
2.1.
"Business" has the meaning set forth in the Recitals.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than 90 days from the date of acquisition, (ii) time deposits and certificates
of deposit of any domestic commercial bank of recognized standing having capital
and surplus in excess of $500,000,000, with maturities of not more than 90 days
from the date of acquisition, (iii) commercial paper issued by the parent
corporation of any domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 and commercial paper rated at
least A-1 or the equivalent thereof by Standard & Poor's Corporation or at least
P-1 or the equivalent thereof by Moody's Investor Services, Inc. and in each
case maturing within 90 days after the date of acquisition, and (iv)
investments, classified in accordance with GAAP as current assets, in money
market mutual funds (as defined by Rule 2a-7 of the Investment Company Act of
1940, as amended) registered under the Investment Company Act of 1940, as
amended, which are administered by reputable financial institutions having
capital of at least $500,000,000 and which have the highest credit rating by any
two of Standard & Poor's Corporation, Moody's Investor Services, Inc., and Fitch
Ratings Services.
"Claims" means any civil, criminal, administrative,
arbitration or other claims, actions, suits, proceedings or investigations.
"Closing" has the meaning set forth in Section 5.1(a).
"Closing Date" has the meaning set forth in Section 5.1(a).
"Closing Payment" has the meaning set forth in Section 3.2.
"Closing Statement Claims" has the meaning set forth in
Section 4.2.
"Closing Statement of Net Assets Acquired" has the meaning set
forth in Section 4.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contamination" means the emission, discharge, release, or
threatened emission, discharge or release of any Hazardous Substance at or into
the environment (including, without limitation, land, subsoil, surface waters,
groundwaters, and ambient air) and the effects of such emission, discharge,
release, or threatened emission, discharge or release.
"Conveyance Instruments" has the meaning set forth in Section
5.1(c).
"Copyrights" means any copyright or any work , whether or not
registered in the United Sates or elsewhere, that incorporates, is based upon,
derived from or otherwise uses any Intellectual Property, including, but not
limited to mechanical and electronic design drawings (including computer aided
design files), specifications, software (including documentation and object and
source code listing), processes, technical or engineering data, test procedures,
schematics, writings, materials, products, artwork, packaging and advertising
materials.
"DOL" has the meaning set forth in Section 8.9(f).
"Employees" means the employees of Seller employed in the
Business.
"Encumbrance" means, collectively, all security interests,
judgments, liens (other than for current Taxes not yet due and payable),
pledges, escrows, Claims, mortgages and other encumbrances.
"Environmental Law" means any Law or common Law, whether now
existing or hereafter enacted, relating to (i) pollution or protection of the
environment, including natural resources, including without limitation any Law
or common Law relating to the presence, use, production, manufacturing,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any Hazardous Substance, or relating to noise or
radiation or to the discharge and treatment of stormwater or sanitary and
industrial wastewater; (ii) health and safety, including exposure of employees
or other persons to Hazardous Substances; (iii) protection of the public health
or welfare from the effects of by-products, wastes, emissions, discharges or
releases of any chemical or other substances from industrial or commercial
activities; or (iv) regulation of the manufacture, use or introduction into
commerce of chemical or other substances, including their manufacture,
importation, exportation, formulation, labeling, distribution, transportation,
handling, storage, treatment, recycling, removal and disposal, specifically
including petroleum and petroleum derived products.
"Environmental Response Actions" shall mean the investigation,
cleanup or remediation of Contamination, or other conditions not in compliance
with Environmental Law, on or at any Real Property.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means, with respect to Seller, any entity
considered part of Seller's controlled group or under common control with Seller
under Sections 414(b) and (c), respectively, of the Code.
"ERISA Plans" means any "employee benefit plan" as defined in
Section 3(3) of ERISA, or any "multiemployer plan," as defined in Section 3(37)
of ERISA.
"Estimated Payment" has the meaning set forth in Section 13.8.
"Excluded Assets" has the meaning set forth in Section 1.2.
"FAR" means United States Federal Acquisition Regulations.
"Firm" has the meaning set forth in Section 4.2.
"Former Employees" means any Person who was employed in the
Business by Seller or an Affiliate of Seller and whose employment terminated on
or before the Closing Date (whether by retirement or otherwise and including
Employees on long-term disability as of the Closing Date).
"GAAP" means generally accepted accounting principles,
consistently applied, as applied in the United States of America.
"Government Contracts" has the meaning set forth in Section
6.3(a).
"Governmental Entity" means any Federal, state, local or
foreign government, legislature, governmental or administrative agency or
commission, or any court or other tribunal of competent jurisdiction.
"Hazardous Substance" means, whether naturally occurring and
whether alone or in combination, and whether solid, liquid or gaseous (1) any
and all chemicals, pollutants, contaminants, wastes, polychlorinated biphenyls,
asbestos, lead-based paint, crude oil and its derivatives, natural or synthetic
gas, oil and gas exploration and production wastes, and pesticides, whether or
not identified as a hazardous substance or hazardous waste under any
Environmental Law, and (2) any and all of the foregoing and of any other
materials or sources of pollution or contamination or terms of similar import
(i) which are identified, listed, regulated, potentially regulated, licensed,
prohibited or controlled under any Environmental Law or (ii) the presence,
existence or threat of which may form the basis for or give rise to liability
under any Environmental Law, including any obligation to take remedial action.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Included Employees" has the meaning set forth in Section
12.2.
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"Income Statement" has the meaning set forth in Section
8.3(a).
"Indemnitee" has the meaning set forth in Section 16.4(a).
"Indemnitor" has the meaning set forth in Section 16.4(a).
"Intellectual Property" shall mean all Know-How, Patents,
Copyrights, Trademarks, trade secret rights, inventions and all other
proprietary or Intellectual Property rights or forms of protection of a similar
nature or having equivalent or similar effect to any of these rights.
"Interim Period" has the meaning set forth in Section 12.8.
"IRS" has the meaning set forth in Section 8.9(f).
"Know-How" shall mean all technical, scientific, and other
know-how and information, trade secrets, knowledge, technology, means, methods,
processes, practices, formulas, instructions, skills, techniques, procedures,
experiences, ideas, technical assistance, designs, drawings, assembly
procedures, computer programs, apparatuses, specifications, books, records,
production data, publications, databases, reports, manuals, data, results and
other material, in written, electronic, or any other form.
"Law" means any constitution, statute, code, regulation, rule,
injunction, judgment, order, decree, ordinance, ruling, charge, formal or
informal interpretation, or other restriction or requirement of any applicable
Governmental Entity.
"Leased Real Property" has the meaning set forth in Section
1.1(a)(ii).
"Leases" has the meaning set forth in Section 1.1(a)(ii).
"Loss" means any Claims, liabilities, obligations, losses,
costs, expenses, fees (including without limitation attorneys' fees),
litigation, proceedings, fines, Taxes, levies, imposts, duties, deficiencies,
assessments, charges, penalties, allegations, demands, damages, settlements and
judgments of any kind or nature whatsoever.
"Note Payment" has the meaning set forth in Section 3.2.
"Notice of Claims" has the meaning set forth in Section
16.3(b).
"Notice of Termination" has the meaning set forth in Section
18.2(a).
"OmniQuip Savings Plan" has the meaning set forth in Section
1.1(a)(xv).
"Owned Real Property" has the meaning set forth in Section
1.2(m).
"Patents" shall mean all United States patents, patent
applications, divisionals, continuations, reissues, renewals, registrations,
confirmations, re-examinations, extensions, and the like, and any provisional
applications, of any such patents or patent applications, and any foreign or
international equivalent of any of the foregoing that cover or claim any
invention.
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"Permits" means all permits, approvals, franchises,
concessions, licenses or other governmental authorizations of every character
whatsoever that are used or held for use in or are necessary for the lawful
ownership or operation of the Business or the Purchased Assets.
"Person" means any individual, group, corporation, partnership
or other organization or entity, including any Governmental Entity.
"Plan" means any ERISA Plan, or any pension, retirement,
savings, deferred compensation, or profit-sharing plan or any stock option,
stock appreciation, stock purchase, performance share, bonus or other incentive
plan, severance plan, health, group insurance, short or long-term disability,
supplemental unemployment, fringe benefit, sick pay, vacation pay or other
welfare plan, or other plan, program, agreement or policy applicable to Seller's
employees and under which Seller has any current or future obligation or
liability or under which any Employee or Former Employee (or any dependent,
beneficiary or alternate payee of any Employee or Former Employee) of Seller has
or may have any current or future right to benefits on account of employment
with Seller.
"Port Washington Lease" shall mean the real property lease for
the two parcels comprising the Owned Real Property.
"Post-Closing Tax Period" has the meaning set forth in Section
13.3(a).
"Post Transfer Obligations" has the meaning set forth in
Section 6.3(c).
"Power of Attorney" has the meaning set forth in Section
5.1(e).
"Pre-Closing Environmental Liability" has the meaning set
forth in Section 16.1(e).
"Pre-Closing Tax Period" has the meaning set forth in Section
13.3(a).
"Products" means products, including parts or components,
manufactured, sold or shipped by the Business.
"Promissory Note" means the unsecured, subordinated Promissory
Note in substantially the form of Exhibit C hereto.
"Property Taxes" has the meaning set forth in Section
13.3(b)(i).
"Purchase Price" has the meaning set forth in Section 3.1.
"Purchased Assets" has the meaning set forth in Section
1.1(a).
"Purchased Claims" has the meaning set forth in Section
1.1(a)(xi).
"Purchased Inventories" has the meaning set forth in Section
1.1(a)(iv).
"Purchased Receivables" has the meaning set forth in Section
1.1(a)(v).
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"Purchased Records" has the meaning set forth in Section
1.1(a)(viii).
"Purchased Rights" has the meaning set forth in Section
1.1(a)(ix).
"Real Property" has the meaning set forth in Section
1.1(a)(ii).
"Reference Statement of Net Assets Acquired" has the meaning
set forth in Section 8.3(a).
"Related Documents" means all agreements, instruments and
documents to be delivered by Seller hereunder.
"Related Party" has the meaning set forth in Section 18.2(b).
"Restricted Business" has the meaning set forth in Section
13.1(a).
"Restoration Covenant" means any obligation under any Lease
other than the Port Washington Lease to comply with any Environmental Law or to
restore any Leased Real Property to a condition other than that existing on the
Closing Date.
"Retained Liabilities" has the meaning set forth in Section
2.2.
"Retained Real Estate Interests" has the meaning set forth in
Section 1.2(i).
"Returns" (and individually, "Return") means returns, reports,
information statements and other documentation (including any additional or
supporting materials) filed, or required to be filed, in connection with the
calculation, determination, assessment or collection of any Tax, including any
amended returns.
"Snorkel" means Seller's former Snorkel product line and its
business conducted in connection therewith.
"Straddle Period" has the meaning set forth in Section
13.3(b)(i).
"Taxes" (and individually, "Tax") means all income taxes
(including any tax on or based upon net income, or gross income, or income as
specially defined, or earnings, or profits, or selected items of income,
earnings or profits) and all gross receipts, sales, use, ad valorem, transfer,
franchise, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes, real property tax,
alternative or add-on minimum taxes, customs duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any
governmental authority.
"TFC" means Textron Financial Corporation.
"Trademarks" shall include any word, name, symbol, color,
designation or device or any combination thereof, including any United States
registered or pending trademark, trade
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dress, service mark, service name, trade name, brand name, logo or business
symbol and any foreign or international equivalent of any of the foregoing, and
all goodwill associated therewith.
"Transfer Taxes" has the meaning set forth in Section 13.3(c).
"Transferee Entity" has the meaning set forth in Section
6.3(c).
"Transferred Employees" has the meaning set forth in Section
12.2.
"Union Savings Plan" has the meaning set forth in Section
1.1(a)(xv).
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