ASSET PURCHASE AGREEMENT
BY AND AMONG
AGCO CORPORATION,
CATERPILLAR INC.
AND
CATERPILLAR AGRICULTURAL PRODUCTS INC.
DECEMBER 16, 2001
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..................................................................................1
Section 1.1. Definitions..................................................................................1
Section 1.2. Other Definitions............................................................................7
ARTICLE II PURCHASE AND SALE............................................................................8
Section 2.1. Agreement to Purchase and Sell...............................................................8
Section 2.2. Assets.......................................................................................8
Section 2.3. Excluded Assets..............................................................................9
Section 2.4. Assumption of Assumed Liabilities...........................................................10
Section 2.5. Excluded Liabilities........................................................................10
ARTICLE III PURCHASE PRICE; MAKE WHOLE; ALLOCATIONS.....................................................11
Section 3.1. Purchase Price..............................................................................11
Section 3.2. Payment of Purchase Price...................................................................11
Section 3.3. Make Whole..................................................................................12
Section 3.4. Allocation of Purchase Price................................................................12
Section 3.5. Allocation of Certain Items.................................................................12
ARTICLE IV CLOSING.....................................................................................13
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................13
Section 5.1. Organization................................................................................13
Section 5.2. Authority...................................................................................13
Section 5.3. Absence of Restrictions and Conflicts.......................................................14
Section 5.4 Financial Performance.......................................................................14
Section 5.5 Absence of Certain Changes..................................................................14
Section 5.6. Licenses....................................................................................14
Section 5.7. Legal Proceedings...........................................................................15
Section 5.8. Title to Assets; Related Matters............................................................15
Section 5.9. Real Property...............................................................................15
Section 5.10. Environmental, Health and Safety Matters....................................................16
Section 5.11. Compliance With Laws Generally..............................................................17
Section 5.12. Employees...................................................................................17
Section 5.13. Benefit Plans...............................................................................18
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Section 5.14. Labor Relations.............................................................................19
Section 5.15. Intellectual Properties.....................................................................21
Section 5.16. Taxes.......................................................................................23
Section 5.17. Assumed Contracts...........................................................................23
Section 5.18. Significant Supplier and Dealer Relations...................................................25
Section 5.19. Nondisclosed Payments.......................................................................25
Section 5.20. No Broker Involved..........................................................................25
Section 5.21. Securities Issuance Representations.........................................................25
Section 5.22. Disclosure..................................................................................26
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BUYER................................................26
Section 6.1. Organization................................................................................26
Section 6.2. Authority...................................................................................26
Section 6.3. Absence of Restrictions and Conflicts.......................................................26
Section 6.4. SEC Filings; Financial Statements...........................................................27
Section 6.5. Capitalization..............................................................................28
Section 6.6. Shares......................................................................................28
Section 6.7. No Broker Involved..........................................................................28
ARTICLE VII CERTAIN COVENANTS AND AGREEMENTS...........................................................28
Section 7.1. Conduct of Business.........................................................................28
Section 7.2. Inspection and Access to Information........................................................31
Section 7.3. Notices of Certain Events...................................................................31
Section 7.4. Customary Monthly Management Reports........................................................32
Section 7.5. Reasonable Efforts; Further Assurances; Cooperation.........................................32
Section 7.6. Consents....................................................................................33
Section 7.7. Public Announcements........................................................................33
Section 7.8. Employees...................................................................................33
Section 7.9. Transfer Taxes; Expenses....................................................................36
Section 7.10. Non-Disclosure; Non-Competition.............................................................36
Section 7.11. Risk of Loss................................................................................37
Section 7.12. Resale Registration Statement; Limitations on Subsequent Transfers of the Shares; Legends...38
Section 7.13. Completion of Engineering as Designed.......................................................42
Section 7.14. Delay in Producing MT 700 and MT 800 Product Lines..........................................42
Section 7.15. Ancillary Documents.........................................................................42
Section 7.16. Post-Closing Marketing of the Buyer's Products..............................................43
Section 7.17 Delivery of Certain Financial Statements....................................................43
ARTICLE VIII CONDITIONS TO CLOSING.......................................................................43
Section 8.1. Conditions to Obligations of the Buyer......................................................43
Section 8.2. Conditions to Obligations of the Company....................................................45
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ARTICLE IX TERMINATION.................................................................................46
Section 9.1. Termination.................................................................................46
Section 9.2. Specific Performance and Other Remedies.....................................................47
Section 9.3. Effect of Termination.......................................................................47
ARTICLE X INDEMNIFICATION............................................................................47
Section 10.1. Indemnification Obligations of Caterpillar and the Company..................................47
Section 10.2. Indemnification Obligations of the Buyer....................................................49
Section 10.3. Indemnification Procedure...................................................................49
Section 10.4. Claims Period...............................................................................51
Section 10.5. Liability Limits............................................................................51
Section 10.6. Investigations..............................................................................52
Section 10.7. Certain Environmental Matters...............................................................52
ARTICLE XI MISCELLANEOUS...............................................................................52
Section 11.1. Notices.....................................................................................52
Section 11.2. Schedules and Exhibits......................................................................53
Section 11.3. Assignment; Successors in Interest..........................................................53
Section 11.4. Interpretation..............................................................................54
Section 11.5. Captions....................................................................................54
Section 11.6. Controlling Law; Amendment..................................................................54
Section 11.7. Severability................................................................................54
Section 11.8. Counterparts................................................................................54
Section 11.9. Enforcement of Certain Rights...............................................................54
Section 11.10. Waiver......................................................................................54
Section 11.11. Integration.................................................................................55
Section 11.12. Cooperation Following the Closing...........................................................55
Section 11.13. Transaction and Other Costs.................................................................55
Section 11.14. Consent to Jurisdiction, Etc................................................................55
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LIST OF SCHEDULES
Schedule 2.2(b) Assets
Schedule 2.3 Excluded Assets
Schedule 2.3(j) JV Agreements
Schedule 5.4 Financial Performance
Schedule 5.6 Licenses
Schedule 5.7 Legal Proceedings
Schedule 5.8(a) Sufficiency of Assets
Schedule 5.8(b) Title to Assets
Schedule 5.8(c) Property Owned by Others
Schedule 5.9(a) Owned Real Property
Schedule 5.10 Environmental Matters
Schedule 5.10(f) Privileged Environmental Documents
Schedule 5.11 Legal Compliance
Schedule 5.12 Employees
Schedule 5.13(a) Benefit Plans
Schedule 5.14 Labor Relations
Schedule 5.15(e) Owned Intellectual Property
Schedule 5.17 Assumed Contracts
Schedule 5.18(a) Significant Suppliers
Schedule 5.18(b) Significant Dealers
Schedule 6.4(a) Buyer SEC Reports
Schedule 7.8(e)(i) Administrative Employees
Schedule 7.13(a) Completion of Challenger MT 700 and MT 800 Engineering
Schedule 7.13(b) Marketing Literature
LIST OF EXHIBITS
Exhibit A Knowledge
Exhibit B Ancillary Document Term Sheets
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of December
16, 2001, is made and entered into by and among AGCO CORPORATION, a Delaware
corporation (the "Buyer"), CATERPILLAR INC., a Delaware corporation
("Caterpillar"), and CATERPILLAR AGRICULTURAL PRODUCTS INC., a Delaware
corporation and wholly-owned subsidiary of Caterpillar (the "Company"). The
Buyer, Caterpillar and the Company are sometimes individually referred to herein
as a "Party" and collectively as the "Parties."
WITNESSETH:
WHEREAS, Caterpillar, through the Company, is engaged in the Business
and the Retained Business (each as defined below);
WHEREAS, the Parties desire to enter into this Agreement pursuant to
which Caterpillar and the Company propose to sell to the Buyer, and the Buyer
proposes to purchase from Caterpillar and the Company (the "Acquisition"),
certain of the assets used or held for use by the Company in the conduct of the
Business, and the Buyer proposes to assume certain of the liabilities and
obligations of the Company related to the Business;
WHEREAS, concurrently with the Closing (as defined below), certain of
the Parties will enter into the Ancillary Documents (as defined below), each of
which will become effective upon the closing of the transactions contemplated by
this Agreement; and
WHEREAS, the Parties desire to make certain representations, warranties
and agreements in connection with the Acquisition.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement, and intending to be legally bound hereby, the Parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. The following terms, as used herein,
have the following meanings:
"ADA" means the United States Americans with Disabilities Act of 1990,
as amended.
"ADEA" means the United States Age Discrimination in Employment Act, as
amended.
"Affiliate" of any specified Person means any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
Control with such specified Person.
"Ancillary Documents" means any certificate, agreement, document or
other instrument, other than this Agreement, required to be executed and
delivered by any of the Parties in connection with the transactions contemplated
by this Agreement.
"Assumed Contracts" means those contracts listed on Schedule 5.17
(unless indicated to the contrary thereon); provided that Assumed Contracts
shall not include any insurance policies, purchase agreements, license
agreements, equipment leases and any other agreements to which Caterpillar or an
Affiliate is a party which are applicable both to the Company and to any other
division, subsidiary or operating unit of Caterpillar.
"Base Price" means $19,000,000 divided by the number of Shares.
"Benefit Plan" means each Employee Benefit Plan of Caterpillar or the
Company in respect of Business Employees.
"Business" means the design, testing, product development, manufacture
or sale by either Caterpillar or the Company of the MT 700 and MT 800 product
lines of rubber tracked tractors. It is acknowledged that "Business" does not
include components supplied by Caterpillar, other than the use and resale
thereof as part of the Business.
"Business Day" means any day except Saturday, Sunday or any day on
which banks are generally not open for business in Atlanta, Georgia or Chicago,
Illinois.
"Business Employees" means Hourly Production Employees and
Administrative Employees.
"Buyer Common Stock" means those certain common shares of the Buyer,
$.01 par value per share.
"Buyer Indemnified Parties" means the Buyer and its Affiliates, each of
their respective officers, directors, employees, agents and representatives and
each of the heirs, executors, successors and assigns of any of the foregoing.
"Buyer Intellectual Property Licensing Agreement" means that certain
agreement to be negotiated pursuant to Section 7.15.
"Buyer Losses" means the claims, liabilities, obligations, losses,
costs, expenses, penalties, fines, judgments and damages of the Buyer
Indemnified Parties as to which the Buyer Indemnified Parties are entitled to
indemnification under Section 10.1.
"Cap Price" means $21,000,000 divided by the number of Shares.
"CERCLA" means the United States Comprehensive Environmental Response,
Compensation and Liability Act.
"Claims Period" means the period during which a claim for
indemnification may be asserted under this Agreement by an Indemnified Party.
"Closing" means the consummation of the transactions contemplated by
this Agreement.
"Closing Date" means the date on which the Closing occurs.
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"COBRA Coverage" means continuation or group health plan coverage
required under Section 4980B of the Code and Part 6 of Title I of ERISA (or any
successor provisions thereto).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Indemnified Parties" means the Company and its Affiliates,
each of their respective officers, directors, employees, agents and
representatives and each of the heirs, executors, successors and assigns of any
of the foregoing.
"Company Losses" means the claims, liabilities, obligations, losses,
costs, expenses, penalties, fines, judgments and damages of Company Indemnified
Parties as to which the Company Indemnified Parties are entitled to
indemnification under Section 10.2.
"Components and Parts Supply Agreements" mean those certain Components
and Parts Supply Agreements to be negotiated pursuant to Section 7.15.
"Confidential Information" means all non-public, proprietary data or
information of the Company (including, without limitation, trade secrets) which
is valuable to the operation of the Business and treated by the Company as
confidential.
"Control" when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
"Conversion Price" means the average per share closing price of Buyer
Common Stock on the New York Stock Exchange (or on the principal national
exchange on which such common stock is then listed) for the ten (10) trading
days immediately preceding the two (2) trading days prior to the Closing Date.
"Employee Benefit Plan" means with respect to any Person, each material
plan, fund, program, agreement, arrangement or scheme, in each case, that is at
any time sponsored or maintained by such Person or to which such Person has any
obligation or liability for employee benefits or for the remuneration, direct or
indirect, of the employees, former employees, directors, officers, consultants,
independent contractors, contingent workers or leased employees of such Person
or the dependents of any of them (whether written or oral), including, without
limitation, each deferred compensation, bonus, incentive compensation, pension,
retirement, stock purchase, stock option and other equity compensation plan,
"welfare" plan (within the meaning of Section 3(1) of ERISA, determined without
regard to whether such plan is subject to ERISA); each "pension" plan (within
the meaning of Section 3(2) of ERISA, determined without regard to whether such
plan is subject to ERISA); each severance plan or agreement, health, vacation,
summer hours, supplemental unemployment benefit, hospitalization insurance,
medical, dental, legal and each other employee benefit plan, fund, program,
agreement or arrangement.
"Employment Agreements" means all written and all material oral
employment contracts, consulting agreements, termination or severance
agreements, change of control agreements or any other agreement or understanding
respecting the terms and conditions of employment (other than any collective
bargaining agreement) or of a consulting or independent contractor
3
relationship in respect to any current or former officer, employee, consultant
or independent contractor of the Business under which either Caterpillar or the
Company has any liability or obligation.
"Encoat Services Agreement" means that certain Coating Service Center
Agreement between the Company and Encoat Services Inc., dated August 16, 2000.
"Environmental Laws" means all local, state and federal laws, statutes,
regulations, ordinances, decrees, judgments, judicial or administrative orders
or permits relating to protection of the environment, pollution control and
Hazardous Materials currently applicable to the Business, the Assets or the Real
Property.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FLSA" means the United States Fair Labor Standards Act, as amended.
"FMLA" means the United States Family and Medical Leave Act, as
amended.
"GAAP" means generally accepted accounting principles as applied in the
United States.
"Governmental Entity" means any federal, state or local or foreign
government or any court, administrative or regulatory agency or commission or
other governmental authority or agency.
"Hazardous Materials" means any waste, pollutant, contaminant,
hazardous substance, toxic, ignitable, reactive or corrosive substance,
radioactive materials, asbestos in any form that is or could become friable,
hazardous waste, special waste, petroleum or petroleum-derived substance or
waste, or any constituent of any such substance or waste, the use, handling or
disposal of which by the Company is subject to regulation under any applicable
Environmental Law.
"Hourly Production Employees" means all hourly production employees of
the Business covered by a collective bargaining agreement between Caterpillar
and the Union.
"Indemnified Party" means a Buyer Indemnified Party or a Company
Indemnified Party, as the case may be.
"Intellectual Property Assignment Agreement" means that certain
Intellectual Property Assignment Agreement to be negotiated pursuant to Section
7.15.
"Knowledge" with respect to the Company means (i) all facts known on
the date hereof by any officer or director of the Company or those additional
individuals listed on Exhibit A after reasonable due inquiry and (ii) all facts
that any of the foregoing Persons should have known on the date hereof if such
Person had made reasonable due inquiry.
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"Labor Laws" means all laws, regulations and orders governing or
concerning labor relations, unions and collective bargaining, conditions of
employment, employment discrimination and harassment, wages, hours or
occupational safety and health, including, without limitation, ERISA, the
Immigration Reform and Control Act of 1986, the National Labor Relations Act,
the Civil Rights Act of 1964, the Equal Pay Act, ADEA, ADA, FMLA, WARN, the
Occupational Safety and Health Act, the Davis Bacon Act, the Walsh-Healy Act,
the Service Contract Act, Executive Order 11246, FLSA and the Rehabilitation Act
of 1973 and all regulations under such acts.
"Leased Real Property" means all parcels of real property used or held
for use in connection with the Business and leased by the Company (together with
all fixtures and improvements thereon).
"Licenses" means all notifications, licenses, permits (including,
without limitation, environmental, construction and operation permits),
franchises, certificates, approvals, exemptions, classifications, registrations
and other similar documents and authorizations issued by any Governmental
Entity, and applications therefor.
"Liens" mean all mortgages, liens, pledges, security interests,
charges, claims, restrictions and encumbrances of any nature whatsoever.
"Material Adverse Effect" means any state of facts, change, event,
effect or occurrence (when taken together with all other states of fact,
changes, events, effects or occurrences) that is or would be reasonably likely
to be materially adverse to the financial condition or results of operations of
the Business or the Assets or Assumed Liabilities. A Material Adverse Effect
shall also include any state of facts, change, event or occurrence that shall
have occurred that (when taken together with all other states of facts, changes,
events, effects or occurrences that have occurred) is likely to prevent or
materially delay the consummation of the transactions contemplated hereby.
Material Adverse Effect shall not include any state of facts, change, event,
effect or occurrence that is (A) caused by or results from (i) conditions
affecting the United States economy generally or the economy of any nation or
region in which the Business is conducted or the Assets are located, (ii)
conditions affecting the agricultural equipment industry generally, and (iii)
the announcement or pendency of this Agreement or the transactions contemplated
hereby or (B) disclosed in the Schedules hereto or expressly contemplated by
this Agreement or an Ancillary Document.
"Multiemployer Plan" means an employee benefit plan within the meaning
of Section 4001(3) of ERISA.
"NLRB" means the United States National Labor Relations Board.
"Non-Assignable Contracts" means Assumed Contracts which require third
party consents for assignment that have not been obtained by the Company as of
the Closing.
"Noncompete Period" means the period beginning on the Closing Date and
continuing for a period of ten (10) years from the Closing Date.
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"Owned Real Property" means all parcels of real property located at
12001 Barber-Greene Road, Dekalb, Illinois, including the Company's primary
manufacturing facility (together with all improvements thereon).
"OSHA" means the Occupational Safety and Health Administration.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means (i) Liens for taxes not yet due and payable or
being contested in good faith by appropriate proceedings, (ii) statutory Liens
of landlords, (iii) Liens of carriers, warehousemen, mechanics, materialmen and
repairmen incurred in the ordinary course of business consistent with past
practice and not yet delinquent and (iv) zoning, building, or other
restrictions, variances, covenants, rights of way, encumbrances, easements and
other minor irregularities in title, none of which, individually or in the
aggregate, (a) interfere in any material respect with the present use of or
occupancy of the affected parcel by the Company or (b) have more than an
immaterial effect on the value thereof or its use.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.
"Real Property" means the Owned Real Property together with the Leased
Real Property.
"Retained Business" means the business conducted by either Caterpillar
or the Company as it relates to the design, manufacture or sale of product lines
of rubber tracked tractors sold under the name "Challenger" prior to the
introduction of the MT 700 and MT 800 product lines of rubber tracked tractors.
"Ryder Logistics Agreement" means that certain Logistics Master
Agreement between the Company and Ryder Integrated Logistics, Inc. dated April
4, 2001.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Surviving Obligations" means the indemnification obligations described
in Sections 10.1(a) (Excluded Liabilities), 10.1(e) (fraud, willful misconduct
or bad faith of the Company), 10.1(f) (certain environmental liabilities),
10.1(h) (the Encoat Services Agreement and the Ryder Logistics Agreement) and
10.1(i) (any of the JV Agreements), the last paragraph of Section 10.1 (certain
environmental liabilities) and Section 11.13 (transaction and other costs).
"Surviving Representations" means the representations and warranties in
Section 5.2 (Authority), the third sentence of Section 5.8 (Title to Assets;
Related Matters) and the second sentence of Section 5.9(a) (Owned Real
Property).
"Taxes" means all taxes, assessments, charges, duties, fees, levies or
other charges (including interest, penalties or additions associated therewith),
including income, franchise, capital stock, real property, personal property,
tangible, withholding, employment, payroll, social
6
security (or similar), social contribution, unemployment compensation,
disability, transfer, sales, use, excise, gross receipts, value-added, license,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code Section 59A), customs duties profits, registration,
alternative or add-on minimum, estimated and all other taxes of any kind for
which the Company may have any liability whatsoever, including any interest,
penalty or addition thereto, whether disputed or not.
"Termination Date" means the date at or prior to the Closing when this
Agreement is terminated in accordance with Article IX.
"Territory" means the world.
"Tractor and Parts Supply Agreement" means that certain Tractor and
Parts Supply Agreement to be negotiated pursuant to Section 7.15.
"Trademark Licensing Agreement" means that certain Trademark Licensing
Agreement to be negotiated pursuant to Section 7.15.
"Transition Services Agreement" means that certain Transition Services
Agreement to be negotiated pursuant to Section 7.15.
"Union" means the International Association of Machinists and Aerospace
Workers.
"WARN" means the United States Worker Adjustment and Retraining
Notification Act, as amended.
Section 1.2. Other Definitions. Each of the following terms is
defined in the Section set forth opposite such term:
Term Section
- ---- -------
AAA..................................................................................................11.14
Acquisition..........................................................................................Recitals
Administrative Employees.............................................................................7.8(e)(i)
Agreement............................................................................................Preamble
Assets...............................................................................................2.2
Assumed Liabilities..................................................................................2.4(b)
Buyer................................................................................................Preamble
Buyer Basket.........................................................................................10.5(a)
Buyer Cap............................................................................................10.5(a)
Buyer SEC Reports....................................................................................6.4(a)
Collective Bargaining Agreements.....................................................................7.8(c)
Company Intellectual Property........................................................................5.15(b)
Company Software.....................................................................................5.15(f)
Copyrights...........................................................................................5.15(a)(ii)
Excluded Assets......................................................................................2.3
Excluded Liabilities.................................................................................2.5
HSR Act..............................................................................................5.3
Indemnified Environmental Losses.....................................................................10.7
7
Indemnifying Party...................................................................................10.3(a)
Intellectual Property................................................................................5.15(a)
JV Agreements........................................................................................2.3(j)
Leased Employees.....................................................................................7.8(e)(i)
Make Whole Period....................................................................................3.3(a)
Marks................................................................................................5.15(a)(v)
Mask Works...........................................................................................5.15(a)(v)
Patents..............................................................................................5.15(a)(i)
Parties..............................................................................................Preamble
Party................................................................................................Preamble
Purchase Price.......................................................................................3.1
Registration Statement...............................................................................7.12(a)
Shares...............................................................................................3.3
Software.............................................................................................5.15(a)(iii)
Trade Secrets........................................................................................5.15(a)(iv)
Transferred Employee.................................................................................7.8(e)(ii)
Transferred Production Employees.....................................................................7.8(a)
ARTICLE II
PURCHASE AND SALE
Section 2.1. Agreement to Purchase and Sell. Subject to the terms
and conditions of this Agreement, at the Closing and except as otherwise
specifically provided in this Article II, Caterpillar and the Company (as the
case may be) will grant, sell, assign, transfer and deliver to the Buyer, and
the Buyer will purchase and acquire from Caterpillar and the Company (as the
case may be), all right, title and interest of each of Caterpillar and the
Company in and to (a) the Business and (b) except for the Excluded Assets, all
of the Assets, free and clear of all Liens, and the Buyer will assume the
Assumed Liabilities.
Section 2.2. Assets. Except as otherwise expressly set forth in
Section 2.3, the "Assets" mean the following assets, properties and rights owned
by either Caterpillar or the Company used or held for use (exclusively in the
cases of clauses (f) through (k)) in the operation of the Business as of the
close of business on the Closing Date:
(a) the Owned Real Property;
(b) all machinery, equipment, tooling, dies, jigs,
fixtures, patterns, molds, tools, business machines, computer hardware,
vehicles, furniture, fixtures, parts and other tangible property
(including stock parts), located at 12001 Barber-Greene Road and 1600
East Lincoln Highway, Dekalb, Illinois and 614 Brickville Road,
Sycamore, Illinois or set forth on Schedule 2.2(b);
(c) all deposits, advances and credits;
(d) all rights of the Company under the Assumed
Contracts;
(e) all Intellectual Property, except Intellectual
Property related to components and parts supplied by Caterpillar and
Intellectual Property that is not
8
separable from or separately useable without Intellectual Property not
used exclusively in the Business;
(f) tooling, dies, jigs, fixtures, patterns, molds and
tools located at third-party suppliers;
(g) all rights to causes of actions, lawsuits, judgments,
claims and demands of any nature available to or being pursued by
either Caterpillar or the Company, whether arising by way of
counterclaim or otherwise;
(h) all rights in and under all express or implied
guarantees, warranties, representations, covenants, indemnities and
similar rights in favor of the Company;
(i) all Licenses to the extent that they are assignable,
including, without limitation, those set forth on Schedule 5.6 (unless
otherwise indicated thereon) and environmental permits and licenses
governing the operations of the Business;
(j) to the extent assignable under applicable law, all
information, files, correspondence, records, data, plans, reports,
contracts and recorded knowledge, including customer, supplier, price
and mailing lists, catalogs, brochures, credit files, product slides,
ad mats and other marketing material and all accounting or other books
and records of either Caterpillar or the Company in whatever media
retained or stored, including, without limitation, computer programs
and disks; and
(k) all other tangible and intangible assets of any kind
or description, wherever located, that are carried on the books of
either Caterpillar or the Company or which are owned by either
Caterpillar or the Company.
Section 2.3. Excluded Assets. Notwithstanding anything to the
contrary set forth in this Agreement, the Assets will not include the
following assets, properties and rights of either Caterpillar or the
Company (collectively, the "Excluded Assets"):
(a) cash, cash equivalents and marketable securities;
(b) all prepaid expenses, accounts receivable, notes
receivable and other receivables and any security therefor;
(c) all Leased Real Property;
(d) all Intellectual Property that is not Company
Intellectual Property, subject to the Buyer Intellectual Property
Licensing Agreement;
(e) all Marks (as defined in Section 5.15) owned or used
by the Company or its Affiliates, subject to the Trademark Licensing
Agreement;
(f) any License that by its terms is not transferable to
the Buyer, including those indicated on Schedule 5.6 as not being
transferable;
9
(g) the corporate seals, articles of incorporation,
bylaws, minute books, stock ledger records, income tax returns, books
of account or other constituent records relating to the corporate
organization of the Company;
(h) all ownership and other rights with respect to the
Benefit Plans;
(i) the rights that accrue to the Company under this
Agreement;
(j) any assets or rights under those certain joint
venture agreements or arrangements by and among either (i) Caterpillar,
the Company and/or any Affiliate, (ii) Claas KGaA, Claas Selbstfahrende
Erntemaschinen GmbH and/or any Affiliate and (iii) Caterpillar Claas
America LLC, Claas Caterpillar Europe GmbH & Co. KG and Claas
Caterpillar Europe Verwaltungs GmbH, including but not limited to the
agreements listed on Schedule 2.3(j) (collectively, the "JV
Agreements"); and
(k) those other assets, properties and rights listed on
Schedule 2.3.
Section 2.4. Assumption of Assumed Liabilities.
(a) Except to the extent specified in Section 2.4(b), the
Buyer will not assume any liability or obligation of either Caterpillar
or the Company whatsoever, and Caterpillar or the Company (as the case
may be) will retain responsibility for all of its liabilities and
obligations, including all liabilities and obligations arising from the
Business prior to the Closing, whether or not accrued and whether or
not disclosed.
(b) As the sole exception to the provisions in Section
2.4(a), effective as of the Closing, the Buyer will assume and agree to
pay, discharge or perform the liabilities and obligations of the
Company existing as of the Closing and arising out of the conduct of
the Business prior to or on the Closing Date (collectively, the
"Assumed Liabilities") relating to the Assumed Contracts to the extent
such obligations are not required to be performed prior to the Closing.
Section 2.5. Excluded Liabilities. Specifically, and without in
any way limiting the generality of Section 2.4(a), the Assumed Liabilities will
not include, and in no event will the Buyer assume, agree to pay, discharge or
perform or incur any liability or obligation under this Agreement or otherwise
become responsible in respect of, the following (together with all other
liabilities of either Caterpillar or the Company or any other Person that are
not Assumed Liabilities, the "Excluded Liabilities"):
(a) any liability relating to, resulting from or arising
out of (i) claims made in pending or future suits, actions,
governmental investigations, or other legal, governmental or
administrative proceedings or (ii) claims based on violations of law,
Environmental Law, rule or regulation as in effect on or prior to the
Closing or breach of contract or other legal obligation, in each case
arising out of or relating to events which shall have occurred, or
services performed, or the operation of the Business or the Retained
Business, prior to the Closing;
10
(b) any liability or obligation arising out of or with
respect to any third party or governmental claim pending on the Closing
Date or thereafter initiated, based on or arising out of the operation
of the Business or the Retained Business prior to the Closing;
(c) any liability or obligation of either Caterpillar or
the Company arising or incurred in connection with the negotiation,
preparation and execution of this Agreement and the transactions
contemplated by this Agreement and any fees and expenses of counsel,
accountants, brokers, financial advisors or other experts of either
Caterpillar or the Company;
(d) any liability for or relating to borrowed money;
(e) any liability pertaining to any Excluded Asset;
(f) any liability relating to, resulting from or arising
out of any former operations of either Caterpillar or the Company that
have been discontinued or disposed of prior to the Closing;
(g) except as set forth in Section 7.8, any liability
under or relating to any Benefit Plan, whether or not such liability or
obligation arises prior to or after the Closing Date;
(h) any liability for Taxes with respect to any period;
and
(i) any liability related to any of the JV Agreements or
the business relations between the parties thereto.
Such Excluded Liabilities shall also include all claims, actions, litigations
and legal proceedings relating to any or all of the foregoing and all costs and
expenses in connection therewith.
ARTICLE III
PURCHASE PRICE; MAKE WHOLE; ALLOCATIONS
Section 3.1. Purchase Price. Subject to the indemnification
obligations under Section 10.1, the aggregate amount to be paid by the Buyer for
the Assets and the covenants contained in Section 7.10 is Twenty Million Dollars
($20,000,000) (the "Purchase Price") payable in either Buyer Common Stock or
cash as set forth in Section 3.2. In addition to the foregoing payment, as
consideration for the grant, sale, assignment, transfer and delivery of the
Assets, the Buyer shall assume and discharge the Assumed Liabilities.
Section 3.2. Payment of Purchase Price. On the Closing Date, the
Buyer shall deliver to the Company the Purchase Price payable, at the option of
the Buyer in its sole discretion, in (i) immediately available United States
funds or (ii) shares of Buyer Common Stock valued at the Conversion Price. In
the event the Buyer determines to pay the Purchase Price in immediately
available funds, such United States funds may be wired to such bank account(s)
as shall be designated in writing by Caterpillar at least three (3) Business
Days prior to the Closing Date.
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Section 3.3. Make Whole. In the event the Buyer determines to pay
the Purchase Price in shares of Buyer Common Stock valued at the Conversion
Price (the "Shares") and:
(a) in compliance with Section 7.13, the Company sells
any of the Shares within ninety (90) days of the initial date of
effectiveness of the Registration Statement (provided that if it does
not remain continuously effective throughout such ninety (90) day
period, such ninety (90) day period shall be extended by the number of
days on which the Registration Statement is not effective) (the "Make
Whole Period") at a price per Share of less than the Base Price, the
Buyer shall pay to the Company the difference between the price per
Share at which the Shares were sold and the Base Price; and
(b) if the Company sells any of the Shares within the
Make Whole Period at a price per Share of greater than the Cap Price,
the Company shall pay to the Buyer the difference between the price per
Share at which the Shares were sold and the Cap Price.
To the extent that any Shares remain unsold following the Make Whole Period and
the average closing price of Buyer Common Stock on the New York Stock Exchange
(or the principal national exchange on which such Common Stock is then listed)
for the five (5) trading days ending on the last day of the Make Whole Period is
greater than the Cap Price, the Company shall pay to the Buyer the difference
between such average and the Cap Price multiplied by the number of unsold
shares.
Any payment to be made pursuant to this Section 3.3 shall be made one
time and as promptly as practicable after (i) the expiration of the ninety (90)
day period referenced above and (ii) receipt of a notice regarding any monies
owed. Any payment to be made by any Party pursuant to this Section 3.3 shall be
made in immediately available United States funds.
Section 3.4. Allocation of Purchase Price. The Parties agree that
within ninety (90) days of the Closing Date they will agree to an allocation of
the Purchase Price to the Assets in accordance with the rules under Section 1060
of the Code and the Treasury Regulations promulgated thereunder (such allocation
to be modified in accordance with such rules to take into account any adjustment
to the Purchase Price described in Section 3.3). The Parties agree to file all
Tax returns on the basis of such allocation.
Section 3.5. Allocation of Certain Items. With respect to certain
expenses incurred in the operation of the Business, the following allocations
will be made between the Parties:
(a) Taxes. Real and ad valorem property taxes will be
apportioned at the Closing based upon current tax bills if available;
and if not available, such apportionment will be based on the most
recent tax bills available, with appropriate subsequent adjustment when
bills for 2001 are received.
(b) Utilities. Utilities, water and sewer charges will be
apportioned based upon the number of operating days occurring before
and after the Closing Date during the billing period for each such
charge.
(c) Workers' Compensation. Pursuant to the provisions of
this Agreement, the Company will be responsible for and pay any and all
workers' compensation and
12
other similar claims asserted by or with respect to any employee or
former employee of the Company in respect of any injury or other
compensable event or occupational illness or disease which occurred or
is attributable to any event, state of facts or condition which existed
or occurred in whole prior to or on the Closing Date. The Buyer is
responsible for and will pay any and all workers' compensation and
other similar claims asserted by or with respect to any employee of the
Buyer in respect of any injury or other compensable event or
occupational illness or disease which occurred or is attributable to
any event, state of facts or condition which existed or occurred in
whole after the Closing Date. If any such injury or other compensable
event or occupational illness or disease of a person who was employed
both by the Company prior to or on the Closing Date and by the Buyer
after the Closing Date is attributable in part to causes occurring
prior to or on the Closing Date and in part to causes occurring
subsequent to the Closing Date and is the basis of a workers'
compensation or other similar claim asserted after the date hereof,
then liability for any such claim will be shared by the Company and the
Buyer in the proportion of the periods of employment of the employee
(i) by the Company prior to or on the Closing Date and (ii) by the
Buyer after the Closing Date, respectively.
(d) Method of Payment. Appropriate cash payments by the
Buyer or the Company, as the case may require, shall be made hereunder
from time to time as soon as practicable after the facts giving rise to
the obligation for such payments are known in the amounts necessary to
give effect to the allocations provided for in this Section 3.5.
ARTICLE IV
CLOSING
The Closing will occur within five (5) Business Days following the
satisfaction or waiver of the conditions set forth in Article VIII, or on such
other date as the Parties may agree. The Closing, to the extent practicable,
will be completed by facsimile and otherwise will take place at the offices of
Troutman Sanders LLP, 600 Peachtree Street, Atlanta, Georgia, or at such other
place as the Parties may agree.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyer that:
Section 5.1. Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own, operate and
lease its property and to carry on its business as now being conducted. The
Company is qualified to conduct business as a foreign corporation in Illinois
and in each other jurisdiction in which the ownership of the Assets or the
conduct of the Business requires such qualification.
Section 5.2. Authority. Each of Caterpillar and the Company has
the requisite power and authority to execute and deliver this Agreement and the
Ancillary Documents and to fully perform its respective obligations hereunder
and thereunder, and the execution and delivery of this Agreement and the
Ancillary Documents by each of Caterpillar and the Company and its
13
respective performance of the transactions contemplated herein and therein have
been duly authorized by all requisite corporate and stockholder action. This
Agreement has been, and each of the Ancillary Documents will be as of the
Closing Date, duly executed and delivered by each of Caterpillar and the Company
and do or will, as the case may be, constitute the valid and binding agreements
of each of Caterpillar and the Company, enforceable against each of Caterpillar
and the Company in accordance with their respective terms.
Section 5.3. Absence of Restrictions and Conflicts. The execution,
delivery and performance of this Agreement and the Ancillary Documents, the
consummation of the transactions contemplated by this Agreement and the
Ancillary Documents and the fulfillment of and compliance with the terms and
conditions of this Agreement and the Ancillary Documents do not or will not (as
the case may be), with the passing of time or the giving of notice or both,
violate or conflict with, constitute a breach of or default under, result in the
loss of any benefit under, permit the acceleration of any obligation under or
create in any party the right to terminate, modify or cancel, (a) any term or
provision of the Company's Charter or Bylaws, (b) except as indicated on
Schedule 5.17, any Assumed Contract or any other contract, will, agreement,
permit, franchise, license or other instrument applicable to any of the Assets
or the Business, (c) any judgment, decree or order of any court or governmental
authority or agency to which any of the Assets or the Business or by which any
of the Assets or the Business are bound or (d) any statute, law, rule,
regulation or arbitration award applicable to the Business, except in the case
of clause (c) or (d), as would not have a Material Adverse Effect on the
Business and Assets, taken as a whole. Except for such consents, approvals,
orders or authorizations the failure of which to obtain or make would not,
individually or in the aggregate, have a Material Adverse Effect, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required with respect to the Company in
connection with the execution, delivery or performance of this Agreement or the
Ancillary Documents or the consummation of the transactions contemplated hereby
or thereby other than as required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act").
Section 5.4. Financial Performance. Attached as Schedule 5.4 is
data supplied by the Company to the Buyer. Such data was derived from the books
and records of the Company and was prepared in good faith.
Section 5.5. Absence of Certain Changes. As of the date hereof,
the Company has not encountered any difficulties in the design, testing or
product development of the MT 700 or MT 800 product lines of rubber tracked
tractors that would cause a Material Adverse Effect prior to the Closing.
Section 5.6. Licenses. Schedule 5.6 is a true and complete list of
all Licenses used in connection with the Business or any of the Assets. All
Licenses used in connection with the Business or any of the Assets are valid,
binding and in full force and effect. The Company owns or possesses all of the
Licenses which are material to the operation of the Business as presently
conducted. The execution, delivery and performance of this Agreement and the
Ancillary Documents, the consummation of the transactions contemplated by this
Agreement and the Ancillary Documents and the fulfillment of and compliance with
the terms and conditions of this Agreement and the Ancillary Documents do not or
will not (as the case may be), with the passing of time or the giving of notice
or both, violate or conflict with, constitute a breach of or default
14
under, any License used in connection with the Business or any of the Assets.
The Company has taken all necessary action to maintain each License used in
connection with the Business or any of the Assets, except where the failure to
so act is not likely to have an adverse effect on any of the Assets or the
Business that cannot be reasonably promptly remedied at immaterial cost to the
Buyer. No loss or expiration of any License used in connection with the Business
or any of the Assets is threatened, pending, or reasonably foreseeable (other
than expiration upon the end of any term) that cannot be promptly remedied at
insignificant cost.
Section 5.7. Legal Proceedings. Except as set forth in Schedule
5.7, there are no suits, actions, claims, arbitration, proceedings or
investigations pending or, to the Knowledge of the Company, threatened against,
relating to or involving the Business or any of the Assets before any
Governmental Entity, except for routine litigation, claims and proceedings
(including, without limitation, product liability and warranty claims of
litigation, and workers compensation claims) in which the amount in controversy
does not exceed $10,000 for any individual matter or $100,000 in the aggregate
for any related matters. None of such suits, actions, claims, proceedings or
investigations, if finally determined adversely, are reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect. The Company
is not subject to any judgment, decree, injunction, rule or order of any court
or arbitration panel related to the Business or any of the Assets.
Section 5.8. Title to Assets; Related Matters. The Assets,
together with the matters which are the subject of the Ancillary Documents,
constitute all of the material assets (not including Real Property, which is
covered in Section 5.9) necessary and sufficient to conduct the Business in
substantially the same manner as the Company's past practices. Except as set
forth on Schedule 5.8(a), the Assets constitute all of the assets, properties
and rights of the Company exclusively used or held for use in connection with
the Business at any time since January 1, 2001. Except as set forth in Schedule
5.8(b), the Company has (and will convey to the Buyer at the Closing) good and
marketable title to the Assets (not including Real Property, which is covered in
Section 5.9), free and clear of all Liens. All equipment and other items of
tangible personal property and assets included in the Assets (a) are in adequate
operating condition and in a state of adequate maintenance and repair, ordinary
wear and tear excepted, (b) are usable in the regular and ordinary course of
business and (c) conform in all material respects to all laws, ordinances,
codes, rules and regulations applicable thereto. Except as set forth on Schedule
5.8(c), no Person other than the Company owns any equipment or other tangible
personal property or assets situated on the premises of the Company which are
necessary to the operation of the Business.
Section 5.9. Real Property.
(a) Schedule 5.9(a) sets forth the legal description of
the Owned Real Property. As of the Closing Date, the Company has good
and marketable title to the Owned Real Property, free and clear of all
Liens other than Permitted Liens.
(b) No portion of the Owned Real Property, or any of the
buildings and improvements located thereon, violates in any material
respect any material law, rule, regulation, ordinance or statute,
including those relating to zoning, building, land use,
15
fire, sanitation and noise control, but excluding environmental and
health and safety (which is covered by Section 5.10).
(c) To the Knowledge of the Company, the improvements and
fixtures on the Owned Real Property are in adequate operating condition
and in a state of adequate maintenance and repair, ordinary wear and
tear excepted, and are suitable for the purposes for which they are
presently being used. There are no condemnation or expropriation or
similar proceedings pending or, to the Knowledge of the Company,
threatened against the Owned Real Property or the improvements thereon.
Section 5.10. Environmental, Health and Safety Matters. Except as
set forth in Schedule 5.10, and except as would not reasonably be expected to
result in a Material Adverse Effect:
(a) The Company possesses all environmental permits,
licenses and authorizations, and is in full compliance with, all
Environmental Laws, including, without limitation, limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in those laws or
contained in any law, regulation, code, plan, order, decree, judgment,
notice, permit or demand letter issued, entered, promulgated or
approved thereunder in connection with the Business or the Assets;
(b) The Company has not received notice of actual or
threatened liability under CERCLA or any similar state or local statute
or ordinance from any Governmental Entity or any third party or, to the
Company's Knowledge, there are no facts or circumstances which could
reasonably form the basis for the assertion of any claim against the
Company under any Environmental Laws in connection with the Business or
the Assets including, without limitation, CERCLA or any similar local,
state or foreign law with respect to any on-site or off-site location;
(c) The Company has neither entered into or agreed to
enter into nor is in the process of negotiating any consent decree or
order under Environmental Laws in connection with the Business or the
Assets, and the Company is not subject to any judgment, decree or
judicial or administrative order relating to compliance with, or the
cleanup of Hazardous Materials under, any applicable Environmental Laws
in connection with the Business or the Assets;
(d) The Company has not been alleged in writing to be in
violation of, and has not been subject to any administrative or
judicial proceeding pursuant to, applicable Environmental Laws either
now or any time during the past five (5) years in connection with the
business or the Assets;
(e) To the Company's Knowledge, it is not subject to any
claim, obligation, liability, loss, damage or expense of whatever kind
or nature, contingent or otherwise, incurred or imposed or based upon
any provision of any Environmental Law or arising out of any act or
omission of the Company, or the Company's employees, agents or
representatives or arising out of the ownership, use, control or
operation by the Company
16
of any plant, facility, site, area or property (including, without
limitation, any plant, facility, site, area or property currently or
previously owned or leased by the Company) from which any Hazardous
Materials were released into the environment, in each such case in
connection with the operation of the Business (the term "release"
meaning any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into
the environment, and the term "environment" meaning any surface or
ground water, drinking water supply, soil, surface or subsurface strata
or medium, or the ambient air);
(f) The Company has heretofore made available to the
Buyer true, correct and complete copies of all reports, correspondence,
memoranda, computer data and the complete files relating to
environmental matters in connection with the Business or the Assets,
except those privileged documents identified in Schedule 5.10(f). The
Company has not paid any fines, penalties or assessments within the
last five (5) years with respect to environmental matters relating to
the Business, the Assets or the Real Property;
(g) To the Company's Knowledge, neither the Real
Property, improvements thereon nor equipment included within the Assets
contain any asbestos, PCBs, underground storage tanks or open or closed
pits; and
(h) The Company has not imported, manufactured, stored,
used, operated, transported, treated or disposed of any Hazardous
Materials in connection with the Business or the Assets other than in
compliance with all Environmental Laws.
Section 5.11. Compliance With Laws Generally. The Company in
compliance in all material respects with all applicable laws, ordinances and
regulations (excluding laws, ordinances and regulations covered by Sections 5.9
and 5.10, and orders of all Governmental Entities with respect to the Business
and the Assets). Except as set forth in Schedule 5.11, (a) the Company has not
been charged with and, to the Knowledge of the Company, is not now under
investigation with respect to, a violation of any applicable law, regulation,
ordinance, order or other requirement of a Governmental Entity with respect to
the Business or the Assets, (b) the Company is not a party to or bound by any
order, judgment, decree, injunction, rule or award of any Governmental Entity
with respect to the Business or the Assets and (c) the Company has filed all
material reports and permit applications and has all material licenses and
permits required to be filed with any Governmental Entity with respect to the
Business and the Assets on or before the date hereof.
Section 5.12. Employees. Schedule 5.12 contains a true and complete
list of all of the employees (whether full-time, part-time or otherwise) and
independent contractors of the Company exclusively or primarily engaged in the
operations of the Business. Except as set forth on Schedule 5.12, the Company is
not a party to or bound by any employment or consulting agreements with
individuals who are engaged in the operations of the Business. The Company has
not received written notice from any Governmental Entity to the effect that it
has improperly classified as an independent contractor any person named on
Schedule 5.12. Except as set forth on Schedule 5.12, the Company has not made
any verbal commitments to any Business Employees, consultants or independent
contractors with respect to compensation, promotion, retention, termination,
severance or similar matters in connection with the transactions
17
contemplated by this Agreement or otherwise that would be reasonably likely to
result in material liability to the Buyer.
Section 5.13. Benefit Plans.
(a) Schedule 5.13(a) contains a true and complete list of
each Benefit Plan that currently provides employee benefits for the
remuneration of the Business Employees.
(b) Except as set forth in Schedule 5.13(a):
(i) With respect to each Benefit Plan identified
on Schedule 5.13(a), either Caterpillar or the Company has heretofore
delivered or made available to the Buyer true and complete copies of
each such Benefit Plan, summary plan descriptions, booklets and any
other summaries thereof, the most recent determination letter received
from the Internal Revenue Service with respect to each such Benefit
Plan intended to qualify under Section 401 of the Code, the IRS Form
5500 (to the extent applicable) for the most recent year in respect of
each such Benefit Plan; and such other documentation with respect to
any such Benefit Plan as is reasonably requested by the Buyer.
(ii) At no time during the last six years has
Caterpillar or the Company (1) sponsored, maintained contributed to or
been required to contribute to any Employee Benefit Plan covering
Business Employees that is or was subject to Title IV of ERISA or
Section 412 of the Code, (2) contributed to or been required to
contribute on behalf of Business Employees to any Multiemployer Plan,
or (3) incurred any withdrawal liability to any Multiemployer Plan with
respect to Business Employees that remains unsatisfied. The PBGC has
not assessed any material liability with respect to any Employee
Benefit Plan against Caterpillar or the Company that has not been paid
by Caterpillar or the Company. Neither Caterpillar nor the Company has
incurred, and no facts exist that reasonably could be expected to
result in, a material liability as a result of a termination,
withdrawal or funding waiver with respect to a Benefit Plan that covers
or covered Business Employees.
(iii) To the Knowledge of Caterpillar or the
Company, no transaction contemplated in this Agreement will or is
likely to result in the imposition of withdrawal liability pursuant to
Subtitle E of Title IV of ERISA with respect to any Employee Benefit
Plan in which Business Employees participate or have participated.
(iv) Except as would not reasonably be expected
to result in material liability to the Company, Caterpillar or the
Company has satisfied in full any obligation to provide COBRA coverage
or COBRA notice in respect of any employee, former employee,
consultant, independent contractor, contingent worker or leased
employee, or the dependents of any of them, engaged in any respect in
the operations of the Business with respect to qualifying events on or
prior to the date hereof.
(c) Except as set forth on Schedule 5.13(a), the
execution, delivery and performance of, and consummation of the
transactions contemplated by this Agreement will not (1) entitle any
Business Employee to severance pay, unemployment
18
compensation or any other payment, or (2) accelerate the time of
payment of or vesting of benefits under an Benefit Plan, or increase
the amount of compensation due any such individual.
Section 5.14. Labor Relations. Except as set forth in Schedule
5.14:
(a) No Business Employee is represented by a labor
organization or group which was certified by any labor relations board,
including, without limitation, the NLRB, other Governmental Entity, or
voluntarily recognized by the Company;
(b) The Company is not a party to, is not a signatory to
or is not a successor to a collective bargaining agreement related to
the operations of the Business;
(c) To the Knowledge of the Company, the Company neither
is, nor is alleged to be, in violation of or in default of any
collective bargaining agreement related to the operations of the
Business, except as would not reasonably be expected to result in a
Material Adverse Effect;
(d) To the Knowledge of the Company, no representation,
election petition or application for certification with respect to any
Business Employees is pending with the NLRB or any other Governmental
Entity and, to the Knowledge of the Company, no union organizing
campaign or other attempt to organize or establish a labor union,
employee organization or labor organization or group involving any
Business Employees is in progress or, is threatened;
(e) To the Knowledge of the Company, the Company is not
engaged in any unfair labor practice related to the operations of the
Business and the Company is not aware of any pending or, to the
Knowledge of the Company, threatened labor board proceeding of any
kind, including any such proceeding against the Company by any person,
employee or trade union, labor union, employee organization or labor
organization representing or seeking to represent any Business
Employees;
(f) No material grievance or arbitration demand or
proceeding, whether or not filed pursuant to a collective bargaining
agreement, is currently pending or, to the Knowledge of the Company, is
threatened against the Company related to the operations of the
Business;
(g) No labor dispute, walk out, strike, slowdown, hand
billing, picketing or work stoppage (sympathetic or otherwise)
involving any Business Employees is in progress or, to the Knowledge of
the Company, has been threatened;
(h) To the Knowledge of the Company, no breach of
contract and/or denial of fair representation claim is pending or
threatened against the Company and/or any trade union, labor union,
employee organization or labor organization representing any Business
Employees;
(i) No claim, complaint, charge or investigation for
unpaid wages, bonuses, commissions, employment withholding taxes,
penalties, overtime, or other compensation,
19
benefits, child labor or record keeping violations under the Fair Labor
Standards Act, Davis-Bacon Act, Walsh-Healey Act, or Service Contract
Act or any other federal, state or local law regulation or ordinance
with respect to any Business Employees is pending or, to the Knowledge
of the Company, threatened;
(j) No discrimination and/or retaliation claim,
complaint, charge or investigation under the 1964 Civil Rights Act, the
Equal Pay Act, the ADEA, the ADA, the FMLA and the FLSA, ERISA or any
other federal law or comparable state fair employment practices act is
pending or, to the Knowledge of the Company, threatened against the
Company with respect to any Business Employees;
(k) No citation related to the operations of the Business
has been issued in the past year by OSHA against the Company and no
notice of contest, claim, complaint, charge, investigation, or other
administrative enforcement proceeding involving the Company in
connection with the operations of the Business is pending or, to the
Knowledge of the Company, is threatened against it under OSHA or any
other applicable law relating to occupational safety and health;
(l) No workers' compensation or retaliation claim,
complaint, charge or investigation involving any Business Employees is
pending against the Company in connection with the operations of the
Business;
(m) No enforcement proceeding is pending or, to the
Knowledge of the Company, is threatened with respect to any Business
Employees under federal or foreign immigration law;
(n) No wrongful discharge, retaliation, libel, slander or
other claim, complaint, charge or investigation that arises out of the
employment relationship between the Company and any Business Employees
is pending or, to the Knowledge of the Company, threatened against it
under any applicable law;
(o) The Company has maintained and currently maintains
insurance as required by applicable law with respect to workers'
compensation claims and unemployment benefits claims related to the
operations of the Business;
(p) To the Knowledge of the Company, the Company has no
outstanding liabilities, judgments, decrees, orders, arrearage of wages
or taxes, fines or penalties for failure to comply with any of the
Labor Laws or any collective bargaining agreement related to the
operations of the Business;
(q) The Company has paid or accrued all current
assessments related to the operations of the Business under workers'
compensation legislation, and the Company has not been subject to any
special or penalty assessment under such legislation which has not been
paid; and
(r) The Company has not taken any action relating to any
employees of the Business that would constitute a "mass layoff," "mass
termination" or "plant closing" within the meaning of WARN or otherwise
triggered notice requirements or liability
20
under any federal, local, state or foreign plant closing notice or
collective dismissal law, except as contemplated under this Agreement.
Section 5.15. Intellectual Properties.
(a) Definition of Intellectual Property. The term
"Intellectual Property" means:
(i) all patents (including all reissues,
divisions, continuations, continuations in part, and extensions
thereof), patent applications, and inventions and discoveries that may
be patentable (collectively, the "Patents");
(ii) all copyrights in both published and
unpublished works (including all U.S. and foreign registrations and
applications for registration of the foregoing) (collectively, the
"Copyrights");
(iii) all computer software (in both source code
and object code), including (A) any and all software implementations of
algorithms, models and methodologies, whether in source code or object
code, (B) databases and compilations, including any and all data and
collections of data, whether machine readable or otherwise, (C)
descriptions, flow-charts and other work product used to design, plan,
organize and develop any of the foregoing, and (D) all documentation,
including system documentation, user manuals and training materials,
relating to any of the foregoing (collectively, "Software");
(iv) all know-how, trade secrets, confidential
information, customer lists, technical documentation, technical
information, data, plans, drawings, schematics, compilations, devices,
formulas, designs, prototypes, methods, techniques, processes,
procedures, programs, or codes, whether tangible or intangible
(collectively, "Trade Secrets"); and
(v) all rights in mask works and registrations
and applications for registration thereof (collectively, "Mask Works");
but expressly excluding all trademarks, service
marks, trade dress, brand names, domain names, logos, trade dress and
all other indicators of source or origin whether registered or
unregistered (collectively, the "Marks").
(b) Ownership of Intellectual Property. The Company owns,
or has the right to use pursuant to license, sublicense, agreement, or
permission, all Intellectual Property that is material to the operation
of the Business and that is used exclusively in the operation of the
Business as of the close of business on the Closing Date (the "Company
Intellectual Property"); provided that, the Company Intellectual
Property does not include Intellectual Property related to components
and parts supplied by Caterpillar and Intellectual Property that is not
separable from or separately useable without Intellectual Property not
used exclusively in the Business. The Company has taken all reasonable
actions to maintain and protect the Company Intellectual Property owned
or used by it, including the protection of Trade Secrets therein and
the making of all material filings
21
and recordations with respect to the Company Intellectual Property
required in order to maintain and protect the Company's interests
therein.
(c) Infringement of Third Party Intellectual Property
Rights. To the Knowledge of the Company, neither the Company, nor the
operation of the Business, has committed any material infringement or
misappropriation of any Intellectual Property of any third party.
Except as set forth in Schedule 5.11, the Company has not received any
charge, complaint, claim, demand, or notice alleging any such
infringement or misappropriation in connection with the operation of
the Business (including any claim that the Company must license or
refrain from using any Intellectual Property of any third party) that
was not resolved thereafter, or if decided adversely to the Company,
would result in a material expense to the Company.
(d) Infringement of Company Intellectual Property Rights.
To the Knowledge of the Company, no third party (including any present
or former employee or consultant) has materially infringed or
misappropriated any of the Company Intellectual Property.
(e) Owned Intellectual Property. Schedule 5.15(e) lists
each Patent that has been issued and is included in the Company
Intellectual Property and is owned by the Company, and identifies each
application for Patent that the Company has made with respect to any
Company Intellectual Property owned by the Company. Schedule 5.15(e)
also identifies all Software programs owned by the Company (whether or
not the Copyright therein has been registered) and included in the
Company Intellectual Property. With respect to each item of Company
Intellectual Property required to be identified in Schedule 5.15(e):
(i) The Company or Caterpillar (as the case may
be) possesses all right, title, and interest in and to the item, free
and clear of any Lien, other than Permitted Liens.
(ii) The item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge.
(iii) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to
the Knowledge of the Company, threatened which challenges the legality,
validity, enforceability, use, or ownership of the item.
(iv) The Company is not currently obligated to
indemnify any Person for or against any infringement or
misappropriation with respect to the item, except for product
warranties in the ordinary course of business.
(v) The Company is not under any obligation to
grant any right, license or permission to use such item.
(vi) To the Knowledge of the Company, all
registrations and applications for Patents are currently in compliance
with all formal legal requirements, are valid, subsisting and
enforceable, and are not subject to any maintenance fees or taxes
22
or actions falling due within ninety (90) days after the Closing Date
other than those that will be paid or taken by the Company or
Caterpillar.
(f) Software. The Software owned by the Company and
included in the Company Intellectual Property (the "Company Software")
was either (A) developed by employees of the Company within the scope
of their employment, (B) developed by independent contractors or
consultants who have assigned all of their rights in and to the Company
Software to the Company pursuant to written agreements, or (C)
otherwise acquired by the Company from a third party pursuant to a
written assignment of rights to the Company.
(g) Trade Secrets. The Company has obtained or entered
into written agreements with employees of the Company and into written
agreements with third parties restricting the disclosure of Trade
Secrets owned by the Company and included in the Company Intellectual
Property.
(h) Agreements with Employees. To the Knowledge of the
Company, no material employee of the Company has entered into any
agreement that requires the employee to transfer, assign or disclose
Trade Secrets owned by the Company and included in the Company
Intellectual Property to anyone other than the Company.
Section 5.16. Taxes. The Company or Caterpillar has filed all
material tax returns in connection with, and has timely paid all taxes
attributable to, the Business and has paid all Taxes shown as due on such
returns.
Section 5.17. Assumed Contracts. Schedule 5.17 sets forth a true,
correct and complete list of the following contracts related to the Assets or
related to or utilized in the Business, listed in the categories set forth below
(other than the Employment Agreements set forth on Schedule 5.12, the Benefit
Plans set forth on Schedule 5.13(a), contracts related to the Excluded Assets or
the Excluded Liabilities and contracts covered by the second sentence of the
definition of Assumed Contracts):
(a) all leases or licenses involving an annual commitment
or payment of more than $25,000 individually by the Company;
(b) all contracts or agreements which limit or restrict
the Company or any officers or key employees of the Company from
engaging in the Business in any jurisdiction;
(c) any contract or agreement for capital expenditures or
the acquisition or construction of fixed assets;
(d) any contract that provides for an increased payment
or benefit, or accelerated vesting, upon the execution of this
Agreement or the Closing or in connection with the transactions
contemplated hereby;
(e) any contract or agreement granting any Person a Lien;
23
(f) any contract or agreement for the cleanup, abatement
or other actions in connection with any Hazardous Materials, the
remediation of any existing environmental condition or relating to the
performance of any environmental audit or study;
(g) any contract or agreement granting to any Person an
option or a first refusal, first-offer or similar preferential right;
(h) any contract or agreement that is not terminable
without penalty on thirty (30) calendar days' or less notice;
(i) any material contract or agreement for the granting
or receiving of a license (including any material license of Company
Intellectual Property except for off-the shelf or commercially
available Software licenses), sublicense or franchise or under which
any Person is obligated to pay or has the right to receive a royalty,
license fee, franchise fee or similar payment;
(j) any contract providing for the indemnification or
holding harmless of any Person;
(k) any joint venture or partnership contract or other
contract providing for the sharing of any profits;
(l) any customer contract for the provision of goods or
services or providing for any cooperative advertising;
(m) any vendor buying agreement or similar arrangement
with any product manufacturer;
(n) any outstanding power of attorney empowering any
Person to act on behalf of the Company; and
(o) all existing contracts and commitments (other than
those described in subparagraphs (a) through (n) of this Section 5.17)
to which the Company is a party or by which any of its respective
properties or assets are bound (i) involving an annual commitment or
annual payment to or from the Company of more than $10,000 individually
or which is otherwise material to the Business or (ii) that is material
to the Business, individually or in the aggregate.
True, correct and complete copies of all Assumed Contracts have been made
available to the Buyer. The Assumed Contracts are legal, valid, binding and
enforceable in accordance with their respective terms with respect to the
Company and each other party to such Assumed Contracts. There are no existing
material defaults or material breaches of the Company under any Assumed Contract
(or events or conditions which, with notice or lapse of time or both would
constitute a material default or material breach) and, to the Knowledge of the
Company, there are no such material defaults (or events or conditions which,
with notice or lapse of time or both, would constitute a material default or
material breach) with respect to any third party to any Assumed Contract. Except
as set forth in Schedule 5.17, the Company is not participating in any
discussions or negotiations regarding modification of or amendment to any
Assumed Contract or
24
entry in any new material contract applicable to the Business or the Assets.
Schedule 5.17 identifies with an asterisk each Assumed Contract set forth
therein that requires the consent of or notice to the other party thereto to
avoid any material breach, material default or violation of such contract,
agreement or other instrument in connection with the transactions contemplated
hereby, including the assignment of such Assumed Contract to the Buyer.
Section 5.18. Significant Supplier and Dealer Relations. Schedule
5.18(a) contains a complete and accurate list of the names and addresses of the
suppliers that are expected to be the ten (10) largest suppliers of the Business
following the Closing (excluding Caterpillar). Schedule 5.18(b) contains a
complete and accurate list of the names and addresses of the Retained Business'
ten (10) largest dealer distributors (on the basis of units ordered or
purchased) for the eleven (11) months ended November 30, 2001. To the Knowledge
of the Company, no event has occurred that would materially and adversely affect
relations with the entities listed on Schedule 5.18(b) and the Company has no
Knowledge to the effect that any entity listed on either Schedule 5.18(a) or
Schedule 5.18(b) may terminate or materially alter its business relationship
with the Business as a result of the transactions contemplated by this
Agreement.
Section 5.19. Nondisclosed Payments. Neither the Company, any of
its officers or directors, nor anyone acting on behalf of any of them, has made
or received any payments not correctly categorized and fully disclosed in the
Company's books and records in connection with or in any way relating to or
affecting the Business.
Section 5.20. No Broker Involved. Neither the Company, nor any
officer, director, employee or Affiliate of the Company, has employed any
broker, finder or investment banker or incurred any liability for any investment
banking fees, financial advisory fees, brokerage fees or finders' fees in
connection with the transactions contemplated by this Agreement.
Section 5.21. Securities Issuance Representations.
(a) The Company understands that the Shares have not
been, and, until the effectiveness of the Registration Statement
contemplated by Section 7.12, will not be registered under the
Securities Act and that in issuing the Shares to the Company hereunder
the Buyer is relying on the private offering exemption from the
registration requirements of the Securities Act afforded by Section
4(2) thereof and Regulation D promulgated thereunder.
(b) The Company is an "accredited investor" within the
meaning of Rule 501 of the Securities Act or that it has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Shares.
(c) The Company is acquiring the Shares for its own
account for investment and not with a view to any public distribution
or public offering within the meaning of the Securities Act except as
contemplated by Section 7.12 hereof.
(d) The Company understands that the receipt of the
Shares hereunder is a speculative investment which involves a high
degree of risk of loss of its investment
25
therein. It is able to bear the economic risk of its investment in the
Shares for an indefinite period of time, including the risk of a
complete loss of its investment in such securities.
(e) The Company acknowledges that it has received and has
had an opportunity to review prior to executing this Agreement the
Buyer SEC Reports (as defined herein).
(f) The Company acknowledges that the Buyer has made
available to it at a reasonable time prior to its execution of this
Agreement the opportunity to ask questions and receive answers
concerning the terms and conditions of this Agreement and to obtain any
additional information which the Buyer possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy
of the information referred to in (e) above.
Section 5.22. Disclosure.
(a) Prior to the execution of this Agreement, the Company
has made available to the Buyer true and complete copies of each of the
Assumed Contracts, documents evidencing any of the Company Intellectual
Property, and all Liens on the Assets, and any other documents or
instruments identified or referred to in the Schedules.
(b) Except as expressly set forth in this Agreement, the
Company is making no representation or warranty whatsoever, express or
implied, with respect to the Company, the Business, the Assets, the
Assumed Liabilities or otherwise.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Company that:
Section 6.1. Organization. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own, operate and
lease its property and to carry on its business as now being conducted.
Section 6.2. Authority. The Buyer has the requisite power and
authority to execute and deliver this Agreement and the Ancillary Documents and
to fully perform its obligations hereunder and thereunder, and the execution and
delivery of this Agreement and the Ancillary Documents by the Buyer and its
performance of the transactions contemplated herein and therein have been duly
authorized by all requisite corporate and stockholder action. This Agreement has
been, and each of the Ancillary Documents will be as of the Closing Date, duly
executed and delivered by the Buyer and do or will, as the case may be,
constitute the valid and binding agreements of the Buyer, enforceable against
the Buyer in accordance with their respective terms.
Section 6.3. Absence of Restrictions and Conflicts. The execution,
delivery and performance of this Agreement and the Ancillary Documents, the
consummation of the
26
transactions contemplated by this Agreement and the Ancillary Documents and the
fulfillment of and compliance with the terms and conditions of this Agreement
and the Ancillary Documents do not or will not (as the case may be), with the
passing of time or the giving of notice or both, violate or conflict with,
constitute a breach of or default under, result in the loss of any benefit
under, permit the acceleration of any obligation under or create in any party
the right to terminate, modify or cancel, (a) any term or provision of the
Buyer's Charter or Bylaws, (b) any contract to which the Buyer is a party, (c)
any judgment, decree or order of any Governmental Entity to which the Buyer is a
party or by which the Buyer or any of its properties is bound or (d) any
statute, law, rule, regulation or arbitration award applicable to the Buyer,
except in the case of clause (c) or (d), as would not have a Material Adverse
Effect on the Business and Assets, taken as a whole. Except for such consents,
approvals, orders or authorizations the failure of which to obtain or make would
not, individually or in the aggregate, have a Material Adverse Effect, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required with respect to the Company in
connection with the execution, delivery or performance of this Agreement or the
Ancillary Documents or the consummation of the transactions contemplated hereby
or thereby.
Section 6.4. SEC Filings; Financial Statements.
(a) The Buyer or its predecessor corporation has filed all forms,
reports and documents required to be filed with the SEC and has made
available to the Company (i) its Annual Report on Form 10-K for the
fiscal year ended December 31, 2000, (ii) its Quarterly Report on Form
10-Q for the period ended September 30, 2001 and (iii) all proxy
statements relating to the Buyer's meetings of stockholders (whether
annual or special) held since January 1, 2001, (iv) all other reports
or registration statements (other than Reports on Form 10-Q not
referred to in clause (ii) above) filed by the Buyer with the SEC since
January 1, 2001, and (v) all amendments and supplements to all such
reports and registration statements filed by the Buyer with the SEC
since January 1, 2001 (collectively, the "Buyer SEC Reports"). Except
as disclosed in Schedule 6.4(a), the Buyer SEC Reports (i) were
prepared in all material respects in accordance with the requirements
of the Securities Act or the Exchange Act, as the case may be, and (ii)
did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. None of the Buyer's
subsidiaries is required to file any forms, reports or other documents
with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the
Buyer SEC Reports was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto), and each fairly presents in all
material respects the consolidated financial position of the Buyer and
its subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which were
not or are not expected to be material in amount.
27
Section 6.5. Capitalization. The Buyer's authorized capital stock
consists of 150,000,000 shares of common stock and 1,000,000 shares of preferred
stock. As of September 30, 2001, the number of shares outstanding was as
specified in the Buyer SEC Reports, and from that date until the date hereof the
only issuances of new shares of capital stock of the Buyer have been pursuant to
employee benefit plans.
Section 6.6. Shares. The issuance of the Shares has been validly
authorized, and when issued in accordance with the terms hereof, the Shares will
be validly issued, fully paid and nonassessible.
Section 6.7. No Broker Involved. Neither the Buyer, nor any
officer, director, employee or Affiliate of the Buyer, has employed any broker,
finder or investment banker or incurred any liability for any investment banking
fees, financial advisory fees, brokerage fees or finders' fees in connection
with the transactions contemplated by this Agreement.
ARTICLE VII
CERTAIN COVENANTS AND AGREEMENTS
Section 7.1. Conduct of Business. From the date hereof until the
Closing Date, the Company shall, except as expressly required or contemplated by
this Agreement and except as otherwise consented to in advance in writing by the
Buyer:
(a) conduct the Business in the ordinary course on a
basis consistent with past practice and not enter into any material
agreement, transaction or activity or make any material commitment with
respect to the Business or the Assets except those in the ordinary
course of business and not otherwise prohibited under this Section 7.1;
(b) use its reasonable best efforts to preserve intact
the goodwill and business organization of the Business, keep key
employees and consultants of the Company who engage in any respect in
the operations of the Business available to the Buyer, and preserve the
relationships and goodwill of the Business with key customers,
distributors, suppliers and others having material business relations
related to the Business;
(c) maintain the existence and good standing of the
Company in its jurisdiction of organization and in each jurisdiction in
which the conduct of the Business requires such qualification;
(d) duly and timely file or cause to be filed all reports
and returns relating to the Business or the Assets required to be filed
with any Governmental Entity and promptly pay or cause to be paid when
due all Taxes, assessments and governmental charges relating to the
Business or the Assets, including interest and penalties levied or
assessed, unless contested in good faith by appropriate proceedings;
(e) maintain in existing condition and repair (ordinary
wear and tear excepted), consistent with past practices, all buildings,
offices, shops and other structures located on the Owned Real Property,
and all equipment, fixtures and other tangible personal property
included in the Assets;
28
(f) not dispose of (other than licenses or other
dispositions in the ordinary course of business) or permit to lapse any
Company Intellectual Property or disclose to any Person, any Trade
Secret owned by the Company and included in the Company Intellectual
Property other than subject to an agreement or understanding of
confidentiality;
(g) not (i) sell or transfer any Assets, other than
finished goods sold in the ordinary course of business, (ii) create,
incur or assume any indebtedness secured by any of the Assets, (iii)
grant, create, incur or suffer to exist any Liens on any of the Assets
which did not exist on the date hereof, other than Permitted Liens,
(iv) incur any Assumed Liability except in the ordinary course of
business consistent with past practice, (v) write-down the value of any
Asset on the books or records of the Company, except for depreciation
and amortization in the ordinary course of business and consistent with
past practice, (vi) cancel any debt or waive any claims or rights
related to the Business that are included in the Assets, (vii) make any
commitment related to the Business for any capital expenditure to be
made on or after the Closing Date in excess of $25,000 in the case of
any single expenditure or $50,000 in the case of all capital
expenditures that will be an Assumed Liability or (viii) enter into any
material Assumed Contract;
(h) other than in connection with any agreement by the
Company or Caterpillar relating to any obligation of the Company or
Caterpillar to bargain with the Union or any bargaining with the Union
voluntarily undertaken by the Company or Caterpillar and related to the
cessation of production in connection with any part of the Business,
not increase in any manner the base compensation of, or enter into any
new bonus or incentive agreement or arrangement with, any Business
Employees or consultants of the Company who are primarily engaged in
the operations of the Business, or make any bonus or similar payment to
any of such parties, except in the ordinary course of business
consistent with past practice or as otherwise required by applicable
law, collective bargaining or other union agreement, or Employment
Agreement;
(i) other than in connection with any agreement by the
Company or Caterpillar relating to any obligation of the Company or
Caterpillar to bargain with the Union or any bargaining with the Union
voluntarily undertaken by the Company or Caterpillar and related to the
cessation of production in connection with any part of the Business,
not pay or agree to pay any additional pension, retirement allowance or
other employee benefit under any Benefit Plan to any Business Employees
or consultants of the Company who are primarily engaged in the
operations of the Business, whether past or present, except in the
ordinary course of business to the extent consistent with past practice
or as otherwise required by applicable law, collective bargaining or
other union agreement, or Employment Agreement;
(j) other than in connection with any agreement by the
Company or Caterpillar relating to any obligation of the Company or
Caterpillar to bargain with the Union or any bargaining with the Union
voluntarily undertaken by the Company or Caterpillar and related to the
cessation of production in connection with any part of the Business and
except in the ordinary course of business consistent with past practice
with respect to any Business Employees or consultants of the Company
who are primarily
29
engaged in the operations of the Business, not adopt, amend or
terminate any Benefit Plan or increase the benefits provided under any
Benefit Plan, or promise or commit to undertake any of the foregoing in
the future, except as otherwise required by applicable law, collective
bargaining or other union agreement, or Employment Agreement;
(k) other than in connection with any agreement by the
Company or Caterpillar relating to any obligation of the Company or
Caterpillar to bargain with the Union or any bargaining with the Union
voluntarily undertaken by the Company or Caterpillar and related to the
cessation of production in connection with any part of the Business,
not amend or terminate any existing employment, severance, consulting,
or other compensation agreement primarily related to any Business
Employees or enter into any new employment, severance, consulting or
other compensation agreement primarily relating to any Business
Employees, except in the ordinary course of business consistent with
the past practice or as otherwise required by applicable law,
collective bargaining or other union agreement, or Employment
Agreement;
(l) maintain supplies and inventory related to the
Business at levels that are in the ordinary course of business and
consistent with past practice;
(m) continue to extend customers of the Business credit,
collect accounts receivable relating to the Business and pay accounts
payable and similar obligations relating to the Business in the
ordinary course of business consistent with past practice;
(n) perform its obligations under all, and not default or
suffer to exist any event or condition which with notice or lapse of
time or both would constitute a default under, any Assumed Contract
(except those being contested in good faith) and not enter into, assume
or amend any contract or commitment that is or would be an Assumed
Contract other than ordinary course of business consistent with past
practice;
(o) not increase any reserves for contingent liabilities
related to the Business (excluding any adjustment to bad debt reserves
in the ordinary course of business consistent with past practice);
(p) maintain in full force and effect customary policies
of insurance for a business of its nature;
(q) continue to maintain the books and records related to
the Business in accordance with GAAP consistently applied and on a
basis consistent with the Company's past practice, except to the extent
that it is appropriate for the Business as a discontinued operation;
and
(r) not authorize, or commit or agree to take, any of the
foregoing actions.
In connection with the continued operation of the Business between the date
hereof and the Closing Date, to the extent permitted by applicable law, the
Company will confer in good faith on a regular and frequent basis with the Buyer
regarding operational matters and the general status of on-going operations of
the Company and the Business. The Company acknowledges that the Buyer does not
and will not waive any rights it may have under this Agreement as a
30
result of such consultations. The Company shall not take any action that would,
or that could reasonably be expected to, result in any of their representations
and warranties set forth in this Agreement becoming untrue.
Section 7.2. Inspection and Access to Information. From the date
hereof to the Closing Date, or until this Agreement is terminated as provided in
Article IX, to the extent permitted by applicable law, the Company will (and
will cause its directors, officers, employees, auditors and agents to), provide
the Buyer and its accountants, investment bankers, counsel, environmental
consultants and other authorized representatives full access, during reasonable
business hours and under reasonable circumstances and upon reasonable prior
notice, to any and all of its premises, employees (including executive
officers), properties, contracts, commitments, books, records and other
information related to the Business (including, solely to the extent relating to
the Business, Tax returns filed and those in preparation) and will cause its
representatives to furnish to the Buyer and its authorized representatives, as
promptly as practicable upon reasonable request therefor, any and all financial,
technical and operating data and other information pertaining to the Business
and otherwise fully cooperate with the conduct of due diligence by the Buyer and
its representatives.
Section 7.3. Notices of Certain Events. The Company shall promptly
notify the Buyer and the Buyer shall promptly notify the Company of:
(a) any changes or events which, individually or in the
aggregate, have resulted, or are reasonably expected to or will result
in, the failure to satisfy the condition set forth in Section 8.1(c) or
8.1(e) in the case of the Company or Section 8.2(c) in the case of the
Buyer;
(b) any written notice or other written communication
from any Person alleging that the consent of such Person is or may be
required in connection with the transactions contemplated by this
Agreement;
(c) any written notice or other communication from any
Governmental Entity concerning the transactions contemplated by this
Agreement;
(d) in the case of the Company, any actions, suits,
claims, investigations or proceedings commenced or, to the Knowledge of
the Company, threatened against, involving or otherwise affecting the
Business that, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 5.7;
(e) in the case of the Company, the damage or destruction
by fire or other casualty of any of the Assets or part thereof or that
any of the Assets or part thereof has becomes the subject of any
proceeding or, to the Knowledge of the Company, threatened proceeding
for the taking thereof or any part thereof or of any right relating
thereto by condemnation, eminent domain or other similar governmental
action; and
(f) each Party acknowledges that each Party does not and
will not waive any rights it may have under this Agreement as a result
of such notifications from the other Party.
31
Section 7.4. Customary Monthly Management Reports. As promptly as
practicable after each month, the Company will deliver to the Buyer those
portions of the monthly report package customarily prepared by the Company that
are related to the MT 700 and MT 800 product lines.
Section 7.5. Reasonable Efforts; Further Assurances; Cooperation.
Subject to the other provisions of this Agreement, the Parties will each use
their reasonable, good faith efforts to perform their obligations under this
Agreement and to take, or cause to be taken, and do, or cause to be done, all
things necessary, proper or advisable under applicable law to obtain all
consents required as described on Schedule 5.17 and all regulatory approvals and
to satisfy all conditions to their respective obligations under this Agreement
and to cause the transactions contemplated in this Agreement to be effected as
soon as practicable in accordance with the terms of this Agreement and will
cooperate fully with each other and their respective officers, directors,
employees, agents, counsel, accountants and other designees in connection with
any steps required to be taken as a part of their respective obligations under
this Agreement, including, without limitation:
(a) Each of the Buyer and Caterpillar shall as promptly
as practicable, but in no event later than ten (10) Business Days
following the date hereof, file with the United States Federal Trade
Commission and the United States Department of Justice, the
notification and report form under the HSR Act required for the
transactions contemplated hereby and any supplemental information
requested in connection therewith pursuant to the HSR Act. Each of the
Buyer and Caterpillar shall as promptly as practicable comply with any
other laws of any country which are applicable to any of the
transactions contemplated hereby and pursuant to which any consent,
approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity or any other Person in connection
with such transactions is necessary. Each of the Buyer and Caterpillar
shall furnish to the other such necessary information and reasonable
assistance as the other may request in connection with its preparation
of any filing, registration or declaration which is necessary under the
HSR Act or any other such laws. The Buyer and Caterpillar shall keep
each other apprised of the status of any communications with, and any
inquiries or requests for additional information from, any Governmental
Entity, and shall comply promptly with any such inquiry or request.
(b) In the event any claim, action, suit, investigation
or other proceeding by any Governmental Entity or other Person is
commenced which questions the validity or legality of the Acquisition
or any of the other transactions contemplated by this Agreement or
seeks damages in connection therewith, the Parties agree to cooperate
and use all reasonable efforts to defend against such claim, action,
suit, investigation or other proceeding and, if an injunction or other
order is issued in any such action, suit or other proceeding, to use
all reasonable efforts to have such injunction or other order lifted
and to cooperate reasonably regarding any other impediment to the
consummation of the transactions contemplated by this Agreement.
(c) The Company will give any notices to third parties
and use its reasonable best efforts (in consultation with the Buyer) to
obtain any third party consents (other than in connection with any
labor organization) (i) necessary to consummate the transactions
32
contemplated by this Agreement, (ii) disclosed or required to be
disclosed in the Schedules to this Agreement, including, without
limitation, the consents described in Schedule 5.17, (iii) required to
avoid a breach of or default under any Assumed Contracts in connection
with the consummation of the transactions contemplated by this
Agreement or (iv) required to prevent a Material Adverse Effect,
whether prior to or after the Closing.
Section 7.6. Consents. The Company shall, during the remaining
term of the Non-Assignable Contracts, use its reasonable best efforts to (a)
obtain the consent of the applicable third party, (b) make the benefit of such
Non-Assignable Contracts available to the Buyer, and (c) enforce, at the request
of the Buyer, any rights of the Company arising from such Non-Assignable
Contracts against the other party or parties thereto (including the right to
elect or terminate any such Non-Assignable Contracts in accordance with the
terms thereof). The Company will not take any action or suffer any omission
which would limit or restrict or terminate in any material respect the benefits
to the Buyer of such Non-Assignable Contracts unless, in good faith and after
consultation with and prior written notice to the Buyer, the Company is ordered
orally or in writing to do so by a Governmental Entity of competent jurisdiction
or the Company is otherwise required to do so by law, rule, regulation or
judicial or administrative process; provided that if any such order is
appealable, the Company will take such actions as are reasonably requested by
the Buyer to file and pursue such appeal and to obtain a stay of such order.
With respect to any such Non-Assignable Contract as to which the necessary
approval or consent for the assignment or transfer to the Buyer is obtained
following the Closing, the Company shall transfer such Non-Assignable Contract
to the Buyer by execution and delivery of an instrument of conveyance reasonably
satisfactory to the Parties within three (3) Business Days following receipt of
such approval or consent. Notwithstanding the foregoing, the Buyer shall be
indemnified to the extent of any losses which result from (i) the Company's
failure to take any lawful action in accordance with the Buyer's reasonable
instructions or (ii) the Company's gross negligence or willful misconduct.
Section 7.7. Public Announcements. The timing and content of all
announcements regarding any aspect of this Agreement to the financial community,
government agencies, employees or the general public shall be mutually agreed
upon in advance (unless any of the Parties reasonably determines that any such
announcement or other disclosure not mutually agreed upon in advance is required
to be made by law or applicable rule of the New York Stock Exchange, and then
only after consulting with the other party and making reasonable efforts to
comply with the provisions of this Section).
Section 7.8. Employees.
(a) On the Closing Date, the Company will terminate the
employment of all of the Hourly Production Employees in connection with
its cessation of production in connection with the Business. Prior to
or on the Closing Date, the Buyer shall offer employment on an at will
basis to all of the Hourly Production Employees active on the Closing
Date (including those on vacation and short-term disability) and, as
additional employees are needed, will give preference to those
individuals who were on leave of absence or layoff on the Closing Date.
Those Business Employees who accept Buyer's
33
offer of employment and commence working for Buyer shall be referred to
as "Transferred Production Employees."
(b) It is agreed that prior to, or in connection with,
the Closing, the Buyer shall take no action to cause the Company to
terminate the employment of any Administrative Employees (as defined
below) who shall remain employed by the Company and may be subject to
the Transition Services Agreement.
(c) The Buyer acknowledges that the Company is bound by a
collective bargaining agreement with the Union, which is listed on
Schedule 5.14 (the "Collective Bargaining Agreement"). The Buyer agrees
to recognize the Union as the exclusive representative for the
bargaining unit covered by the Collective Bargaining Agreement.
(d) Neither the Buyer nor the Company shall, at any time
prior to ninety (90) days after the Closing Date, effectuate a "plant
closing" or "mass layoff", as those terms are defined in WARN,
affecting in whole or in part any site of employment, facility,
operating unit or employee, without notifying the Company in advance
and without complying with the notice requirements and other provisions
of WARN and any similar state or local law, rule or regulation.
(e) (i) Caterpillar shall, as of the Closing Date,
continue to employ all salaried, non-union employees who are engaged
exclusively or primarily in the operations of the Business, as set
forth on Schedule 7.8(e)(i) (the "Administrative Employees"). Between
the date hereof and the fifth (5th) Business Day prior to the Closing,
the Buyer shall inform the Company in writing which Administrative
Employees it desires to lease for a period of up to two (2) years after
the Closing Date. Administrative Employees who are leased to the Buyer
at any time during such two (2) year period are referred to herein as
the "Leased Employees." The Buyer shall reimburse Caterpillar for the
compensation (excluding severance costs) and benefits (based upon COBRA
rates for the items covered by COBRA) provided to the Leased Employees,
and shall indemnify, defend and hold harmless Caterpillar for all
claims (including, but not limited to, workers compensation and other
related labor claims) that any Leased Employee may make against
Caterpillar with respect to the services provided to the Business
following the Closing other than due to Caterpillar's or the Company's
bad faith, willful misconduct or violation of law. The full terms of
the administration, compensation and provision of benefits to the
Leased Employees, as well as the Buyer's reimbursement of the costs
thereof and of the employee leasing arrangements, shall be set forth
more fully in the Transition Services Agreement.
(ii) Notwithstanding the foregoing, (A) if at any
time during the two-year leasing period the Buyer offers employment to
any Leased Employee, and such Leased Employee accepts such offer of
employment, such Leased Employee shall be referred to as a "Transferred
Employee" for purposes of this Agreement, and (B) from time-to-time
(but not more often than monthly), on thirty (30) days' advance written
notice, the Buyer may terminate the lease with respect to individual
Leased Employees.
34
(f) COBRA Coverage. Caterpillar or the Company shall be
solely responsible for offering and providing any COBRA Coverage with
respect to any Business Employee who is also a "qualified beneficiary"
who is covered by a Benefit Plan that is a "group health plan" (as
defined under COBRA) and who experiences a qualifying event on or prior
to the Closing Date. The Buyer shall be solely responsible for offering
and providing any COBRA Coverage required with respect to any
Transferred Employees (or other "qualified beneficiaries") who become
covered by a group health plan sponsored or contributed to by the Buyer
and who experience a "qualifying event" after the Closing Date.
"Qualified beneficiary," "group health plan" and "qualifying event" are
as defined in Section 4980B of the Code.
(g) Information. The Company shall provide the Buyer with
all information relating to each Transferred Employee as the Buyer may
reasonably request in connection with its employment of such persons,
including, without limitation, initial employment dates, termination
dates, reemployment dates, hours of service, compensation and tax
withholding history in a form that will be reasonably usable by the
Buyer and the Company shall use its reasonable best efforts to cause
such information to be true and correct in all material respects.
(h) 401(k) Plan. The Company shall take whatever action
it deems reasonably necessary (and permitted by applicable law) to
cause the Business Employees who are participants in the Caterpillar
Inc. Tax Deferred Savings Plan to terminate their active participation
in the 401(k) plan at such time as the Business Employees become
Transferred Employees, and to cause the 401(k) Plan to permit a
distribution to such participants of their vested account balances as
soon as practicable after such time as the Business Employees become
Transferred Employees (subject to the repayment of any loans from the
401(k) plan to any such participants to the extent required to be
repaid under the terms of the 401(k) plan). The Buyer's 401(k) plan
shall accept rollover contributions (excluding any outstanding loans),
attributable to distributions from Caterpillar's 401(k) plan, made by
or on behalf of Transferred Employees eligible to participate in
Caterpillar's 401(k) plan; provided, however, that Caterpillar or
the Company provides the Buyer with reasonable evidence of the
qualified status of Caterpillar's 401(k) plan.
(i) Labor Indemnification. The Buyer shall indemnify,
defend and hold the Company harmless from and against any and all
claims, actions, suits, back pay demands, charges, proceedings, losses,
expenses, damages, obligations and liabilities (including costs of
collection, attorney's fees and other costs of defense) arising out of
or otherwise in respect of any acts or omissions of the Buyer at any
time relating to the employment or potential employment of any Hourly
Production Employees by the Buyer, including but not limited to any
claim that the Buyer failed to comply with any statutory, contractual
or other obligations to the Hourly Production Employees or their
representatives, or, with respect to any violations of the ADA, the
fact that any Hourly Production Employee who is employed by the Company
immediately prior to the Closing is not employed by the Buyer.
35
Section 7.9. Transfer Taxes; Expenses. All sales and real estate
taxes payable as a result of the Acquisition or any other action contemplated by
this Agreement will be paid by the Company. All stamp, documentary, filing,
recording, transfer, gains or similar fees or taxes or governmental charged
(including, without limitation, UCC-3 filing fees and motor vehicle registration
fees, title recording or filing fees and other amounts payable in respect of
transfer filing) payable as a result of the Acquisition or any other action
contemplated by this Agreement (other than any federal, state, local or foreign
taxes measured by the Company based upon income or gains imposed upon the Buyer)
will be shared equally by the Parties. The Parties will cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees and any similar taxes which become payable in
connection with the transactions contemplated hereby that are required or
permitted to be filed on or before the Closing.
Section 7.10. Non-Disclosure; Noncompetition.
(a) Confidential Information. Each of the Parties agrees
that it and its Affiliates shall hold in confidence at all times after
the date hereof all Confidential Information, and shall not disclose,
publish or make use of Confidential Information at any time after the
date hereof without the prior written consent of the other Parties.
(b) Noncompetition.
(i) Each of Caterpillar and the Company hereby
acknowledges that each of them conducts the Business throughout the
Territory. Each of Caterpillar and the Company acknowledges that to
protect adequately the interest of the Buyer, it is essential that any
noncompete covenant with respect thereto cover the Business throughout
the entire Territory.
(ii) Each of Caterpillar and the Company hereby
agrees that neither it, nor any of its Affiliates, shall, during the
Noncompete Period, in any manner, directly or indirectly engage in the
Business within the Territory or have an equity or profit interest in
any enterprise that engages, in whole or in part, in the Business in
the Territory; provided, however, that Caterpillar and the Company
shall not be in violation of this Section 7.10(b) as a result of (A)
beneficially owning less than five percent (5%) of the outstanding
voting securities of a Person, the voting securities of which are
traded on a national securities exchange, the Nasdaq National Market
System or an internationally recognized securities exchange (such as
the London or Tokyo Stock Exchange), (B) engaging in a business
combination with one or more Persons not primarily engaged in the
manufacture of agriculture equipment or a business combination with one
or more Persons in which the aggregate consideration (including assumed
debt) exceeds $2 billion, (C) subsequent to the fifth anniversary of
the Closing, engaging in any business combination with one or more
Persons or (D) solely for purposes of this Section 7.10(b), performing
its obligations under the JV Agreements. For purposes of this Section
7.10(b)(ii), "business combination" shall include stock acquisitions,
asset acquisitions, mergers, consolidations, formations of joint
ventures and similar transactions.
36
(c) Employee Nonsolicitation. Each of Caterpillar and the
Company hereby agrees that neither it, nor any of its Affiliates,
shall, prior to the second (2nd) anniversary of the Closing Date, in
any manner, directly or indirectly or by assisting others, recruit or
hire away or attempt to recruit or hire away, on its behalf or on
behalf of any other Person, any employee of the Company who is hired by
the Buyer in connection with this Agreement.
(d) Customer Nonsolicitation. Each of Caterpillar and the
Company hereby agrees that during the Noncompete Period neither it, nor
any of its Affiliates, shall for its own benefit or the benefit of
others, other than for the Buyer, solicit a customer of the Business
for the purpose of supplying such customer goods or services that are
similar to the goods or services to be provided by the Buyer in
connection with this Agreement.
(e) Supplier Non-Interference. Each of Caterpillar and
the Company hereby agrees that neither it, nor any of its Affiliates,
shall, directly or indirectly or by assisting others, interfere with
the relationship between the suppliers of the Buyer following the
Closing, except in a manner consistent with the best interests of the
Buyer.
(f) Severability. If a judicial or arbitral determination
is made that any of the provisions of this Section 7.10 constitutes an
unreasonable or otherwise unenforceable restriction against either
Caterpillar or the Company or any of its Affiliates (as the case may
be), the provisions of this Section 7.10 shall be rendered void only to
the extent that such judicial or arbitral determination finds such
provisions to be unreasonable or otherwise unenforceable. In this
regard, the Parties hereby agree that any judicial authority construing
this Agreement shall be empowered to sever any portion of the
Territory, any prohibited business activity or any time period from the
coverage of this Section 7.10 and to apply the provisions of this
Section 7.10 to the remaining portion of the Territory, the remaining
business activities and the remaining time period not so severed by
such judicial or arbitral authority. Moreover, notwithstanding the fact
that any provision of this Section 7.10 is determined not to be
specifically enforceable, the Buyer shall nevertheless be entitled to
recover monetary damages as a result of the breach of such provision.
The time period during which the prohibitions set forth in this Section
7.10 shall apply shall be tolled and suspended for a period equal to
the aggregate time during which either Caterpillar or the Company
violates such prohibitions in any respect.
(g) Injunctive Relief. Each of Caterpillar and the
Company hereby agrees that any remedy at law for any breach of the
provisions contained in this Section 7.10 shall be inadequate and that
the Buyer shall be entitled to injunctive relief in addition to any
other remedy the Buyer might have under this Agreement in law, in
equity or otherwise.
Section 7.11. Risk of Loss. The risk of loss with respect to the
Assets shall remain with the Company until the Closing. If, before the Closing,
any of the Assets are lost, damaged or destroyed and the loss, damage or
destruction has caused a Material Adverse Effect, then:
(a) the Buyer may terminate this Agreement in accordance
with the provisions of Section 9.1(d); or
37
(b) the Buyer may require the Company to assign to the
Buyer the proceeds of any insurance payable as a result of the
occurrence of such loss, damage or destruction and to reduce the
Purchase Price by the amount of the replacement cost of the Assets
which were lost, damaged or destroyed less the amount of any proceeds
of insurance payable as a result of the occurrence.
Section 7.12. Resale Registration Statement; Limitations on
Subsequent Transfers of the Shares; Legends.
(a) The Buyer agrees to file with the SEC, no later than
fifteen (15) days after the Closing Date, a registration statement (the
"Registration Statement") under the Securities Act with respect to the
resale or distribution of the Shares by the Company and/or an
Affiliate. The registration provided by this Section 7.12 shall be
effected by the filing of a registration statement on Form S-3 or, if
such form is unavailable, Form S-1 or Form S-4, which shall provide for
sales to be made on a continuous basis pursuant to Rule 415 under the
Securities Act (or any similar rule that may be adopted by the SEC).
The Buyer agrees to keep the Registration Statement filed pursuant to
this Section 7.12 continuously effective and current for a period to
expire upon the earlier of (i) six (6) months following the initial
date such Registration Statement is declared effective by the SEC, or
(ii) the date that all of the shares covered by the Registration
Statement have been sold or distributed thereunder. The Buyer also
agrees that it will use reasonable best efforts to maintain its status
as a company that is listed on the New York Stock Exchange for so long
as the Company owns the Shares. In connection with the preparation of
the Registration Statement, the Company agrees to provide any and all
information regarding the Company and the resale or distribution of the
Shares required to be included in the Registration Statement.
(b) The Company agrees that during the Make Whole Period
it will sell the Shares only in a manner designed to maximize the
proceeds therefrom consistent with commercially reasonable trade
execution practices.
(c) The Company agrees that neither it nor any Affiliate
will sell, distribute or otherwise transfer (or consent to any sale,
distribution or transfer of), or enter into any agreement or commitment
to undertake any of the foregoing, any of the Shares other than:
(i) pursuant to the Registration Statement; or
(ii) in a manner exempt from registration, in
which event it shall have delivered to the Buyer an opinion of counsel
reasonably acceptable to the Buyer and its counsel that registration is
not required under the Securities Act or under any applicable
securities laws of any jurisdiction.
(d) All expenses incident to the Buyer's performance of
or compliance with this Section 7.12, including without limitation all
registration and filling fees, fees for listing the securities on New
York Stock Exchange, fees and expenses of compliance with securities or
blue sky laws, printing expenses, fees and disbursements of custodians
38
and all independent certified public accountants, and other Persons
retained by the Buyer, shall, except as otherwise agreed in writing by
the Parties, be borne by the Buyer. The expenses of the Company,
including the cost of its legal counsel and brokerage and other
transaction fees, shall be borne by the Company.
(e) (i) The Buyer agrees to indemnify, to the extent
permitted by law, each Person selling or distributing securities under
the Registration Statement, such Person's officers, directors,
partners, agents and Affiliates and each other Person that controls
such Person (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof and whether or not
such Indemnified Party is a party thereto) and expenses, including
without limitation the reasonable fees, disbursements and other charges
of legal counsel and reasonable costs of investigation, to which such
indemnitee may become subject under the Securities Act or otherwise,
insofar as losses are caused by (x) any untrue or alleged untrue
statement of material fact contained in the Registration Statement (or
any prospectus included therein) or any amendment thereof or supplement
thereto, (y) any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (z) any violation or alleged violation by
the Buyer of the Securities Act or Exchange Act, except in each case
insofar as the same are caused by or contained in any information
furnished in writing to the Buyer by such Person expressly for use
therein or by such Person's failure to deliver a copy of the
Registration Statement (or prospectus included therein) or any
amendments or supplements thereto after the Buyer has furnished such
Person with a sufficient number of copies of the same.
(ii) Each Person (including, without limitation,
the Company) that is selling or distributing securities under the
Registration Statement shall furnish to the Buyer in writing such
information concerning such Person and the distribution of the Shares
as the Buyer reasonably requests for use in connection with such
Registration Statement and, to the extent permitted by law, shall
indemnify the Buyer, its directors and officers and each Person who
controls the Buyer (within the meaning of the Securities Act) against
any losses, claims, damages, liabilities and expenses resulting from
(x) any untrue or alleged untrue statement of material fact contained
in the Registration Statement (or any prospectus included therein) or
any amendment thereof or supplement thereto, (y) any omission or
alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (z) any
violation or alleged violation by the Buyer of the Securities Act or
Exchange Act, but only to the extent that such untrue statement,
omission or violation is contained in or directly results from any
information so furnished in writing by such Person; provided that the
obligation to indemnify shall be individual, not joint and several, for
each such Person and shall be limited to the net amount of proceeds
received by such Person from the sale or distribution of securities
pursuant to such Registration Statement.
(iii) The indemnification provided for under this
Section 7.12(e) shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and
shall survive the transfer of the Shares. The Buyer also agrees to make
such
39
provisions, as are reasonably requested by any indemnified party, for
contribution to such party in the event the Buyer's indemnification is
unavailable for any reason such that such provisions provide the same
obligations and benefits to the indemnified party as those which would
have been applicable had the indemnification provisions set forth above
had been available.
(f) Contribution. If the indemnification provided for in
Section 7.12(e) shall for any reason be unavailable to an indemnified
party under subsection (i) or (ii) of Section 7.12(e) in respect of any
Loss, then, in lieu of the amount paid or payable under subsection (i)
or (ii) of Section 7.12(e), the indemnified party and the indemnifying
party under subsection (i) or (ii) of Section 7.12(e) shall contribute
to the aggregate losses (including legal or other expenses reasonably
incurred in connection with investigating the same) (i) in such
proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Buyer on the other hand which resulted
in such loss or action in respect thereof, with respect to the
statements, omissions or action which resulted in such loss or action
in respect thereof, as well as any other relevant equitable
considerations, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Buyer, on the other hand, from the sale of the
Shares; provided, that, for purposes of this clause (ii), the relative
benefits received by the Company shall be deemed not to exceed the
amount received by the Company. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. In addition, no
Person shall be obligated to contribute hereunder any amounts in
payment for any settlement of any action or loss effected without such
Person's consent.
(g) The Company agrees and acknowledges that the
certificates representing the Shares, and any other securities issued
in respect thereto or any other securities not registered under the
Securities Act, shall be stamped or otherwise imprinted with
restrictive legends in customary form. Any such legends shall be
removed upon the sale of the Shares pursuant to the Registration
Statement or an exemption from registration under the Securities Act.
(h) Effective Registration Statement. The Registration
Statement shall not be deemed to be effective:
(i) unless it has been declared effective by the
SEC and remains effective in compliance with the provisions of the
Securities Act and the laws of any state or other jurisdiction
applicable to the disposition of the Shares covered by the Registration
Statement until such time as all of such Shares have been disposed of
in accordance with such Registration Statement.
(ii) if, after it has become effective, such
Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC or other Governmental Entity
for any reason other than a violation of applicable law solely
40
by the Company and/or an Affiliate of the Company and has not
thereafter become effective.
(i) Registration Procedures. The Buyer shall, as
expeditiously as possible:
(i) prepare and file with the SEC such
amendments and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to keep the
Registration Statement effective and to comply with the provisions of
the Securities Act and the Exchange Act with respect to the disposition
of all Shares covered by the Registration Statement until such time as
all of the Shares have been disposed of in accordance with the method
of disposition set forth in the Registration Statement;
(ii) furnish to the Company and/or an Affiliate
of the Company covered by the Registration Statement such number of
copies of such drafts and final conformed versions of the Registration
Statement and of each such amendment and supplement thereto (in each
case including all exhibits and any documents incorporated by
reference), such number of copies of such drafts and final versions of
the prospectus contained in the Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents,
as the Company and/or an Affiliate of the Company may reasonably
request in writing;
(iii) use its reasonable best efforts (A) to
register or qualify all Shares and other securities covered by the
Registration Statement under such other securities or blue sky laws of
such states or other jurisdictions of the United States of America as
the Company and/or an Affiliate of the Company covered by the
Registration Statement shall reasonably request in writing, (B) to keep
such registration or qualification in effect for so long as the
Registration Statement remains in effect and (C) to take any other
action that may be reasonably necessary or advisable to enable the
Company and/or an Affiliate of the Company to consummate the
disposition in such U.S. jurisdictions as the Company and/or an
Affiliate of the Company shall reasonably request, except that the
Buyer shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction wherein it
would not but for the requirements of this subsection (iii) be
obligated to be so qualified, to subject itself to taxation in such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(iv) notify the Company upon discovery that, or
upon the happening of any event as a result of which, the prospectus
included in such Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made, and promptly prepare and furnish to the Company a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of the Shares, such prospectus, as supplemented or amended,
shall not include an untrue statement of a material fact or omit to
state a material fact required to
41
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstance under which they were made;
and
(v) enter into such customary agreements and
take such other actions as the Company shall reasonably request in
order to expedite or facilitate the disposition of such Shares.
(j) In connection with the preparation and filing of the
Registration Statement under the Securities Act pursuant to this
Agreement, the Buyer shall give the Company, its counsel and
accountants the reasonable opportunity to participate in the
preparation of the Registration Statement, each prospectus included
therein, or filed with the SEC, and each amendment thereof or
supplement thereto, and shall give each of them reasonable access to
its books and records and such reasonable opportunities to discuss the
business of the Buyer with its officers and the independent public
accountants who have certified its financial statements as shall be
necessary, in the reasonable opinion of the Company, to conduct a
reasonable investigation within the meaning of the Securities Act.
Section 7.13. Completion of Engineering as Designed. Each of
Caterpillar and the Company agrees that at its sole expense it will continue the
engineering program as described in Schedule 7.13(a) and will cause the
engineering of each of the MT 700 and MT 800 "Challenger" product lines of
rubber tracked tractors to (i) fulfill and pass the "Nebraska Test" and
homologation in Europe and (ii) in all material respects, meet the
specifications and claims contained in the marketing literature attached as
Schedule 7.13(b). The Buyer will cooperate with the Company and Caterpillar to
the extent reasonably requested by either the Company or Caterpillar to
accomplish the tasks set forth in clauses (i) and (ii) in the preceding
sentence.
Section 7.14. Delay in Producing MT 700 and MT 800 Product Lines.
(a) If the MT 700 product line has not been released for
production by the Closing Date, either Caterpillar or the Company shall
pay the Buyer $100,000 for each week after the Closing Date until the
MT 700 product line is released for production.
(b) If the MT 800 product line has not been released for
production by July 1, 2002, and such product line remains unreleased
for a period of thirty (30) days thereafter, either Caterpillar or the
Company shall pay the Buyer $100,000 for each week after August 1, 2002
until the MT 800 product line is released for production.
(c) Any payment to be made to the Buyer pursuant to this
Section 7.14 shall be made in immediately available United States funds
and shall be made as promptly as practicable after the expiration of
each week referenced above.
Section 7.15. Ancillary Documents. Each of the Parties agrees to
finalize and negotiate in good faith, prior to the Closing, the following
Agreements:
(a) the Components and Parts Supply Agreements;
(b) the Tractor and Parts Supply Agreement;
42
(c) the Trademark Licensing Agreement;
(d) the Transition Services Agreement;
(e) the Buyer Intellectual Property Licensing Agreement;
and
(f) the Intellectual Property Assignment Agreement.
In each case, the Ancillary Documents listed above shall contain terms
consistent with the term sheet therefore attached hereto as part of Exhibit B.
Section 7.16. Post-Closing Marketing of the Buyer's Products. The
Buyer agrees to offer to all Caterpillar dealers in North America and Australia
the opportunity to become a dealer of the Buyer and distribute products
manufactured by the Business. Should any dealer decline such offer, the Buyer
will notify Caterpillar in writing and Caterpillar shall in good faith attempt
to encourage the dealer to sell such products. If said dealer(s) continue to
decline such offer after thirty (30) days, the Buyer may appoint a competing
dealer to sell its products. Caterpillar agrees not to discourage any of its
dealers from becoming dealers of the Buyer.
Section 7.17. Delivery of Certain Financial Statements. In the
event that prior to the Closing, the Buyer has not been able to obtain written
confirmation from its independent auditors that, in connection with the
transactions contemplated by this Agreement, financial statements of the Company
satisfying the requirements of Regulation S-X, Items 3-01 and 3-02, are not
required, not later than thirty (30) days following the Closing, Caterpillar and
the Company shall provide the Buyer with audited financial statements for the
business of which the Business is a part. Such audited financial statements
shall satisfy the requirements of Regulation S-X, Items 3-01 and 3-02. The Buyer
shall reimburse Caterpillar and the Company for reasonable fees paid to their
independent auditors with respect to the auditing of such financial statements.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1. Conditions to Obligations of the Buyer. The
obligations of the Buyer to consummate the transactions contemplated by this
Agreement will be subject to the fulfillment at or prior to the Closing of each
of the following conditions:
(a) Injunction. There will be no effective injunction,
writ or preliminary restraining order or any order of any nature issued
by a Governmental Entity of competent jurisdiction to the effect that
the Acquisition may not be consummated as provided in this Agreement,
no proceeding or lawsuit will be pending by any Governmental Entity for
the purpose of obtaining any such injunction, writ or preliminary
restraining order and no written notice will have been received from
any Governmental Entity indicating an intent to restrain, prevent,
materially delay or restructure the transactions contemplated by this
Agreement, in each case where the Closing would (or would be reasonably
likely to) result in a material fine or penalty payable by the Buyer or
any of its Affiliates or to impose any restraint or restriction on
Buyer's operation of the Business following the Closing.
43
(b) Governmental Consents. The waiting period under the
HSR Act shall have expired or been terminated; and all other consents,
approvals, orders or authorizations of, or registrations, declarations
or filings with, any Governmental Entity required in connection with
the execution, delivery or performance of this Agreement will have been
obtained or made, except where the failure to have obtained or made any
such consent, approval, order, authorization, declaration or filing
would not result in a material fine or penalty payable by the Buyer or
any of its Affiliates or any adverse effect on the assets, liabilities,
results of operations, business or prospects of the Business after the
Closing.
(c) Representations and Warranties. The representations
and warranties of the Company set forth in Article V shall have been
true and correct in all material respects as of the date hereof and
shall be true and correct in all material respects as of the Closing
Date as though made on and as of the Closing Date, except that those
representations and warranties that by their terms are qualified by
materiality shall be true and correct in all respects.
(d) Performance of Obligations of the Company. The
Company shall have performed in all material respects all covenants and
agreements required to be performed by it under this Agreement on or
prior to the Closing Date.
(e) No Material Adverse Effect. Between the date hereof
and the Closing Date, there shall not have occurred any Material
Adverse Effect.
(f) Officer Certificate. The Company shall have delivered
to the Buyer an executed certificate of an authorized officer as to
compliance with the conditions set forth in Sections 8.1(c), (d) and
(e).
(g) Consents. The Company shall have obtained and
delivered to the Buyer the written consents (or waivers with respect
thereto) as described on Schedule 5.17 (all such consents and waivers
shall be in full force and effect).
(h) Release of Liens. The Company shall have delivered to
the Buyer satisfactory evidence that all Liens affecting the Assets
(other than Permitted Liens) have been released.
(i) Ancillary Documents. Each of Caterpillar and the
Company shall have delivered, or caused to be delivered, to the Buyer
the following documents duly executed by all parties other than the
Buyer:
(i) the Components and Parts Supply Agreements;
(ii) the Tractor and Parts Supply Agreement;
(iii) the Trademark Licensing Agreement;
(iv) the Transition Services Agreement;
44
(v) the Buyer Intellectual Property Licensing
Agreement;
(vi) the Intellectual Property Assignment
Agreement;
(vii) executed deeds, bills of sale, instruments
of assignment, certificates of title and other conveyance documents,
dated as of the Closing Date, transferring to the Buyer all of the
Company's right, title and interest in and to the Assets;
(viii) documents evidencing the assignment of the
Assumed Contracts and the assignment of any assignable Licenses; and
(ix) a certificate by the Secretary or any
Assistant Secretary of each of Caterpillar and the Company (as
applicable), dated as of the Closing Date, as to (1) the good standing
of the Company in its jurisdiction of incorporation and in Illinois and
(2) the effectiveness of the resolutions of the board of directors and
shareholders of the Company authorizing the execution, delivery and
performance of this Agreement and the transactions contemplated thereby
by the Company.
(j) Title Insurance. The Buyer shall have received a
policy of title insurance issued by a title company reasonably
satisfactory to the Buyer insuring the title to the Owned Real
Property, subject only to Permitted Liens.
Section 8.2. Conditions to Obligations of the Company. The
obligations of the Company to consummate the transactions contemplated by this
Agreement will be subject to the fulfillment at or prior to the Closing of each
of the following conditions:
(a) Injunction. There will be no effective injunction,
writ or preliminary restraining order or any order of any nature issued
by a Governmental Entity of competent jurisdiction to the effect that
the Acquisition may not be consummated as provided in this Agreement,
no proceeding or lawsuit will be pending by any Governmental Entity for
the purpose of obtaining any such injunction, writ or preliminary
restraining order and no written notice will have been received from
any Governmental Entity indicating an intent to restrain, prevent,
materially delay or restructure the transactions contemplated by this
Agreement, in each case where the Closing would (or would be reasonably
likely to) result in a material fine or penalty payable by either
Caterpillar or the Company or a material restriction on either
Caterpillar or the Company's operations as a result of such matter.
(b) Governmental Consents. All consents, approvals,
orders or authorizations of, or registrations, declarations or filings
with, any Governmental Entity required in connection with the
execution, delivery or performance of this Agreement will have been
obtained or made, except where the failure to have obtained or made any
such consent, approval, order, authorization, declaration or filing
would not result in a material fine or penalty payable by the Company
or a material restriction on the Company's operations.
(c) Representations and Warranties. The representations
and warranties of the Buyer set forth in Article VI shall have been
true and correct in all material respects as of the date hereof and
shall be true and correct in all material respects as of the Closing
Date
45
as though made on and as of the Closing Date, except that those
representations and warranties that by their terms are qualified by
materiality shall be true and correct in all respects.
(d) Performance of Obligations by the Buyer. The Buyer
shall have performed in all material respects all covenants and
agreements required to be performed by it under this Agreement on or
prior to the Closing Date.
(e) Officer Certificate. The Buyer shall have delivered
to each of Caterpillar and the Company an executed certificate of an
authorized officer as to compliance with the conditions set forth in
Sections 8.2(c) and (d).
(f) Ancillary Documents. The Buyer shall have delivered,
or caused to be delivered, to either Caterpillar or the Company the
following documents duly executed by the Buyer:
(i) documents evidencing the assumption of the
Assumed Contracts and the Assumed Liabilities;
(ii) a certificate by the Secretary or any
Assistant Secretary of the Buyer, dated as of the Closing Date, as to
(1) the good standing of the Buyer in its jurisdiction of incorporation
and (2) the effectiveness of the resolutions of the board of directors
of the Buyer or committee thereof authorizing the execution, delivery
and performance of this Agreement by the Buyer and the transactions
contemplated thereby;
(iii) the Components and Parts Supply Agreements;
(iv) the Tractor and Parts Supply Agreement;
(v) the Trademark Licensing Agreement;
(vi) the Transition Services Agreement;
(vii) the Buyer Intellectual Property Licensing
Agreement; and
(viii) the Intellectual Property Assignment
Agreement.
ARTICLE IX
TERMINATION
Section 9.1. Termination. This Agreement may be terminated:
(a) in writing by mutual consent of the Parties;
(b) by written notice from either Caterpillar or the
Company to the Buyer, if the Buyer (i) fails to perform in any material
respect any of its agreements contained in this Agreement required to
be performed by it on or prior to the Closing Date or (ii) materially
breaches any of its representations and warranties contained in this
Agreement,
46
which failure or breach is not cured within thirty (30) days after
either Caterpillar or the Company has notified the Buyer in writing of
such breach or failure;
(c) by written notice from the Buyer to either
Caterpillar or the Company, if the Company (i) fails to perform in any
material respect any of its agreements contained in this Agreement
required to be performed by it on or prior to the Closing Date or (ii)
materially breaches any of its representations and warranties contained
in this Agreement, which failure or breach is not cured within thirty
(30) days after the Buyer has notified either Caterpillar or the
Company of such breach or failure;
(d) by written notice from the Buyer to the Company under
the circumstances described in Section 7.11; or
(e) by written notice by the Company to the Buyer or the
Buyer to the Company, as the case may be, if the Closing has not
occurred on or prior to May 31, 2002 for any reason other than delay or
nonperformance of the Party seeking such termination.
Section 9.2. Specific Performance and Other Remedies. The Parties
each acknowledge that the rights of each Party to consummate the transactions
contemplated by this Agreement are special, unique and of extraordinary
character and that, in the event that any Party violates or fails or refuses to
perform any covenant or agreement made by it in this Agreement, the
non-breaching Party may be without an adequate remedy at law. The Parties agree,
therefore, that in the event that any Party violates or fails or refuses to
perform any covenant or agreement made by such Party in this Agreement, the
non-breaching Party or Parties may, subject to the terms of this Agreement and
in addition to any remedies at law for damages or other relief, institute and
prosecute an action in any court of competent jurisdiction to enforce specific
performance of such covenant or agreement or seek any other equitable relief.
Section 9.3. Effect of Termination. In the event of termination of
this Agreement pursuant to this Article IX, this Agreement will forthwith become
void and there will be no liability on the part of any Party or its respective
partners, officers, directors or stockholders, except for obligations under
Section 7.7 (Public Announcements), Section 11.1 (Notices), Section 11.6
(Controlling Law; Amendment), Section 11.13 (Transaction and Other Costs),
Section 11.14 (Consent to Jurisdiction, Etc.) and this Section 9.3, all of which
will survive the Termination Date. Notwithstanding the foregoing, nothing
contained in this Agreement will relieve any Party from liability for any breach
of this Agreement.
ARTICLE X
INDEMNIFICATION
Section 10.1. Indemnification Obligations of Caterpillar and the
Company. Caterpillar and the Company, jointly and severally, agree to indemnify,
defend and hold harmless the Buyer Indemnified Parties from, against and in
respect of any and all claims, liabilities, obligations, losses, costs,
expenses, penalties, fines and judgments (at equity or at law) and damages of
any kind or nature whenever arising or incurred (including, without limitation,
amounts paid in
47
settlement, reasonable costs of investigation and reasonable attorneys' fees and
expenses) arising out of or relating to:
(a) any liability or obligation of the Company or any of
its Affiliates of any nature whatsoever, except the Assumed Liabilities
and except as otherwise expressly covered by Sections 10.1(b) through
(i);
(b) product liability resulting from the design of the MT
700 and MT 800 product lines of rubber tracked tractors (other than due
to failure of components thereof manufactured by Caterpillar, which
liability shall be governed by applicable law or contract other than
this Agreement);
(c) any breach or inaccuracy of any representation or
warranty made by the Company in this Agreement or in any of the
Ancillary Documents;
(d) any breach of any covenant, agreement or undertaking
made by the Company or any of its Affiliates in this Agreement or in
any of the Ancillary Documents;
(e) any fraud, willful misconduct or bad faith of the
Company or any of its Affiliates in connection with this Agreement or
in any of the Ancillary Documents;
(f) any provision of any Environmental Law and arising
out of or relating to (i) any act or omission of the Company, or any of
its directors, officers, employees, agents, representatives or
Affiliates and any of such Affiliate's respective directors, officers,
employees, agents or representatives or (ii) the ownership, use,
control or operation or any plant, facility, site, area or property
used in the business of the Company (whether currently or previously
owned or leased by the Company) during the period of time owned, used,
controlled or operated by the Company or any of its Affiliates,
including, without limitation, arising from any release of any
Hazardous Materials or off-site shipment of any Hazardous Materials at
or from the Real Property or any such plant, facility, site, area or
property;
(g) non-compliance by any of the Parties with any
applicable bulk sales law;
(h) the Encoat Services Agreement or the Ryder Logistics
Agreement (including, with respect to the foregoing agreements, the
business relations between the parties thereto); or
(i) any of the JV Agreements (including, but not limited
to, the business relations between the parties thereto).
To the extent that the Buyer Indemnified Parties incur any claim,
liability, obligation, loss, cost, expense, penalty, fine or judgment (at equity
or at law) or damages of any kind or nature whenever arising or incurred
(including without limitation, amounts paid in settlement, cost of investigation
and reasonable attorneys' fees and expenses) arising out of any provision of any
Environmental Law and arising or relating to (i) any act or omission of any
Person relating to the ownership, use, control or operation of any Real Property
or any plant, facility, site, area or property used in the business of the
Company (whether currently or previously owned or leased
48
by the Company) prior to the period of time such property was owned, used,
controlled or operated by the Company or one of its Affiliates, including
without limitation, arising from any release of Hazardous Materials or off-site
shipment of any Hazardous Materials at or from the Real Property or any such
plant, facility, site, area or property, then the Company will either (i) assign
to the Buyer any rights that the Company might have (whether contractual or
otherwise) against a prior owner, user, controller or operator with respect to
indemnification, contribution or otherwise arising from such matter or (ii) to
the extent that such assignment would invalidate the right, indemnify the Buyer
to the fullest extent that the Company is entitled to, and successful in, making
a claim against such prior owner, user, controller or operator (which the
Company undertakes to assert at the written request and expense of the Buyer and
to pursue in accordance with the reasonable directions of the Buyer). It is
acknowledged by the Parties that the foregoing claims, liabilities, obligations,
losses, costs, expenses, penalties, fines or judgments referenced in this
paragraph are not covered by Sections 10.1(a) through 10(i) above.
Section 10.2. Indemnification Obligations of the Buyer. The Buyer
will indemnify and hold harmless the Company Indemnified Parties from, against
and in respect of any and all claims, liabilities, obligations, losses, costs,
expenses, penalties, fines and judgments (at equity or at law) and damages of
any kind or nature whenever arising or incurred (including, without limitation,
amounts paid in settlement, reasonable costs of investigation and reasonable
attorneys' fees and expenses) arising out of or relating to:
(a) the Buyer's failure to perform, discharge or satisfy
the Assumed Liabilities;
(b) any breach or inaccuracy of any representation or
warranty made by the Buyer in this Agreement or in any of the Ancillary
Documents;
(c) any breach of any covenant, agreement or undertaking
made by the Buyer or any of its Affiliates in this Agreement or in any
of the Ancillary Documents;
(d) any fraud, willful misconduct or bad faith of the
Buyer or any of its Affiliates in connection with this Agreement or in
any of the Ancillary Documents; or
(e) any liability or obligation of the Buyer or any of
its Affiliates of any nature whatsoever arising subsequent to the
Closing which is not expressly covered by an indemnification obligation
of the Company or Caterpillar to the Buyer pursuant to Section 10.1,
which shall include, without limitation, for purposes of this Section
10.2(e), all product liabilities referred to in Section 10.1(b) as to
which a claim for indemnification under Section 10.3 is not made prior
to the expiration of the Claims Period specified in Section 10.4(b).
Section 10.3. Indemnification Procedure.
(a) Promptly after receipt by an Indemnified Party of
notice by a third party (including any Governmental Entity) of any
complaint or the commencement of any audit, investigation, action or
proceeding with respect to which such Indemnified Party may be entitled
to receive payment from the other Party for any Buyer Losses or the
Company Losses (as the case may be), such Indemnified Party will notify
the Buyer or
49
Caterpillar, as the case may be (the "Indemnifying Party"), promptly
following the Indemnified Party's receipt of such complaint or of
notice of the commencement of such audit, investigation, action or
proceeding; provided, however, that the failure to so notify the
Indemnifying Party will relieve the Indemnifying Party from liability
under this Agreement with respect to such claim only if, and only to
the extent that, the Indemnifying Party is actually prejudiced by such
failure to notify. The Indemnifying Party will have the right, upon
written notice delivered to the Indemnified Party within ten (10)
business days thereafter to assume the defense of such audit,
investigation, action or proceeding, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the
payment of the fees and disbursements of such counsel. In the event,
however, that the Indemnifying Party declines or fails to assume the
defense of the audit, investigation, action or proceeding on the terms
provided above or to employ counsel reasonably satisfactory to the
Indemnified Party, in either case within such ten (10) business day
period, then such Indemnified Party may employ counsel to represent or
defend it in any such audit, investigation, action or proceeding and
the Indemnifying Party will pay the reasonable fees and disbursements
of such counsel as incurred. In any audit, investigation, action or
proceeding for which the Indemnifying Party has assumed the defense,
the Indemnified Party will have the right to participate in such matter
and to retain its own counsel at the Indemnified Party's own expense.
The Indemnifying Party and the Indemnified Party will at all times use
reasonable efforts to keep the other reasonably apprised of the status
of the defense of any matter the defense of which has been assumed by
such party and to cooperate in good faith with each other with respect
to the defense of any such matter.
(b) No Indemnified Party may settle or compromise any
claim or consent to the entry of any judgment with respect to which
indemnification is being sought hereunder without the prior written
consent of the Indemnifying Party, unless (i) the Indemnifying Party
fails to assume and maintain the defense of such claim pursuant to
Section 10.3(a) or (ii) such settlement, compromise or consent includes
an unconditional release of the Indemnifying Party and its officers,
directors, employees and Affiliates from all liability arising out of
such claim. An Indemnifying Party may not, without the prior written
consent of the Indemnified Party, settle or compromise any claim or
consent to the entry of any judgment with respect to which
indemnification is being sought hereunder unless (x) such settlement,
compromise or consent includes an unconditional release of the
Indemnified Party and its officers, directors, employees and Affiliates
from all liability arising out of such claim, (y) does not contain any
admission or statement suggesting any wrongdoing or liability on behalf
of the Indemnified Party and (z) does not contain any equitable order,
judgment or term which in any manner affects, restrains or interferes
with the business of the Indemnified Party or any of the Indemnified
Party's Affiliates.
(c) In the event an Indemnified Party claims a right to
payment pursuant to this Agreement, such Indemnified Party will send
written notice of such claim to the appropriate Indemnifying Party.
Such notice will specify the basis for such claim. As promptly as
possible after the Indemnified Party has given such notice, such
Indemnified Party and the appropriate Indemnifying Party will establish
the merits and amount of such claim (by mutual agreement, litigation,
arbitration or otherwise) and, within five (5)
50
Business Days of the final determination of the merits and amount of
such claim, the Indemnifying Party will pay to the Indemnified Party
immediately available funds in an amount equal to such claim as
determined hereunder.
(d) The calculation of any amount payable pursuant to
this Article X by an Indemnifying Party shall be decreased by (x) any
insurance proceeds received or receivable or receivable by the
Indemnified Party under any insurance policy and (y) any cash tax
benefits received or receivable by the Indemnified Party in the year of
the payment.
Section 10.4. Claims Period. The Claims Periods under this
Agreement shall begin on the date hereof and terminate as follows:
(a) with respect to Buyer Losses arising (i) under
Section 10.1(c) with respect to any breach or inaccuracy of any
Surviving Representations or (ii) with respect to the Surviving
Obligations, the Claims Period shall continue until the expiration of
any applicable statute of limitations;
(b) with respect to Buyer Losses arising under Section
10.1(b), the Claims Period shall terminate on the date that is one (1)
year after the Closing Date;
(c) with respect to Company Losses arising under Sections
10.2(a), 10.2(c), 10.2(d) or 10.2(e), the Claims Period shall continue
until the expiration of any applicable statute of limitations; and
(d) with respect to all other Buyer Losses or Company
Losses arising under this Agreement, the Claims Period shall terminate
on the date that is three (3) years after the Closing Date.
Notwithstanding the foregoing, if, prior to the close of business on the last
day of the applicable Claims Period, an Indemnifying Party shall have been
properly notified of a claim for indemnity hereunder and such claim shall not
have been finally resolved or disposed of at such date, such claim shall
continue to survive and shall remain a basis for indemnity hereunder until such
claim is finally resolved or disposed of in accordance with the terms hereof.
Section 10.5. Liability Limits.
(a) Notwithstanding anything to the contrary set forth
herein, the Buyer Indemnified Parties shall not make a claim against
Caterpillar for indemnification under this Article X for Buyer Losses
unless and until the aggregate amount of such Buyer Losses exceeds
Three Hundred Fifty Thousand Dollars ($350,000) (the "Buyer Basket"),
in which event the Buyer Indemnified Parties may claim indemnification
for all Buyer Losses in excess of Three Hundred Fifty Thousand Dollars
($350,000). The total aggregate amount of Caterpillar's liability for
Buyer Losses shall be limited to Ten Million Dollars ($10,000,000) (the
"Buyer Cap"); provided, however, Section 10.1(b), the Surviving
Obligations and the Surviving Representations shall not be subject to
the Buyer Cap.
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(b) In computing Buyer Losses and Company Losses, lost
profits and opportunity costs shall not be recoverable, and recoverable
actual damages shall include the amount necessary to return the
Indemnified Party to the same economic position it would have been in,
with respect to out-of-pocket costs and expenditures, including the
purchase price hereunder, absent the condition or event creating the
loss, but otherwise shall not include consequential damages. By way of
example, (i) if the Owned Real Property was required to be temporarily
closed due to an occurrence described in Section 10.1(f), Buyer
Losses would include not only the cost of remediation, but also, for
example, the cost of maintaining the facility during the closure, the
cost of compensating non-productive employees during the closure and
damages due third parties for non-performance by the Buyer as a result
of the closure, and (ii) if the Buyer had to permanently stop operating
the Business due to a breach of a representation by the Company, Buyer
Losses might include, for example, the original purchase price
hereunder plus out-of-pocket expenses incurred by the Buyer in
operating the Business.
Section 10.6. Investigations. The respective representations and
warranties of the Parties contained in this Agreement or in any certificate or
other document delivered by any Party prior to the Closing and the rights to
indemnification set forth in Article X will not be deemed waived or otherwise
affected by any investigation made by a Party to this Agreement.
Section 10.7. Certain Environmental Matters. Regarding any claim,
liability, obligation, loss, cost, expense, penalty, fine, judgment (at law or
equity), or damage of any kind or nature under or relating to Environmental Laws
that would otherwise be subject to indemnification under this Article X
("Indemnified Environmental Losses"), such Indemnified Environmental Losses
shall be subject to indemnification only to the extent consistent with the
Buyer's reasonable efforts to mitigate such Indemnified Environmental Losses.
This Article X constitutes the Buyer's sole remedy regarding any claim,
liability, obligation, loss, cost, expense, penalty, fine, judgment (at law or
equity), or damage of any kind or nature under or relating to Environmental Laws
and Buyer waives any other remedy it might have under Environmental Laws.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Notices. All notices, communications and deliveries
hereunder shall be made in writing signed by or on behalf of the party making
the same, shall specify the Section hereunder pursuant to which it is given or
being made, and shall be delivered personally or by telecopy transmission or
sent by registered or certified mail (return receipt requested) or by any
national overnight courier service (with postage and other fees prepaid) as
follows:
52
If to the Buyer: AGCO Corporation
4205 River Green Parkway
Duluth, Georgia 30096-2568
Attention: General Counsel
Telecopy No.: (770) 813-6599
With a copy to: Troutman Sanders LLP
600 Peachtree Street
Atlanta, Georgia 30308-2216
Attention: Robert W. Grout
Telecopy No.: (404) 962-6789
If to Caterpillar or the Company: Caterpillar Inc.
100 N.E. Adams Street
Peoria, Illinois 61629
Attention: Chief Financial Officer
Telecopy No.: (309) 675-4010
With a copies to: Caterpillar Inc.
100 N.E. Adams Street
Peoria, Illinois 61629
Attention: General Counsel
Telecopy No.: (309) 675-1795
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3909
Attention: Paul B. Ford Jr.
Peter J. Gordon
Telecopy No.: (212) 455-2502
or to such other address or to such other person or persons designated in
writing by such party or counsel, as the case may be. Any such notice,
communication or delivery shall be deemed given or made (a) on the date of
delivery if delivered in person, (b) on the first (1st)business day after
delivery to a national overnight courier service, (c) upon transmission by
facsimile if receipt is confirmed by telephone or (d) on the fifth (5th)
business day after it is mailed by registered or certified mail.
Section 11.2. Schedules and Exhibits. The Schedules and Exhibits to
this Agreement are hereby incorporated into this Agreement and are hereby made a
part of this Agreement as if set out in full in this Agreement.
Section 11.3. Assignment; Successors in Interest. No assignment or
transfer by any Party of such Party's rights and obligations under this
Agreement will be made except with the prior written consent of the other
Parties; provided that the Buyer shall, without the obligation to obtain the
prior written consent of any other Party to this Agreement, be entitled to
assign this Agreement or all or any part of its rights or obligations hereunder
to one (1) or more Affiliates of the Buyer and further provided that, in such
event, the Buyer shall not be released from its obligations hereunder. This
Agreement will be binding upon and will inure to the benefit of the
53
Parties and their successors and permitted assigns, and any reference to a Party
will also be a reference to a successor or permitted assign.
Section 11.4. Interpretation. Whenever the context so requires, the
singular number will include the plural and the plural will include the
singular, and the gender of any pronoun will include the other genders. Whenever
used in this Agreement, the words "including", "includes" or "included" shall be
deemed to be followed by the words "without limitation."
Section 11.5. Captions. The titles, captions and table of contents
contained in this Agreement are inserted in this Agreement only as a matter of
convenience and for reference and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision of this Agreement.
Unless otherwise specified to the contrary, all references to Articles and
Sections are references to Articles and Sections of this Agreement and all
references to Schedules or Exhibits are references to Schedules and Exhibits,
respectively, to this Agreement.
Section 11.6. Controlling Law; Amendment. This Agreement will be
governed by and construed and enforced in accordance with the laws of the State
of Illinois applicable to contracts made and performed therein. This Agreement
may not be amended, modified or supplemented except by written agreement of the
Parties.
Section 11.7. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction will
not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by law, the Parties waive any provision of law which
renders any such provision prohibited or unenforceable in any respect.
Section 11.8. Counterparts. This Agreement may be executed in two
(2) or more counterparts, each of which will be deemed an original, and it will
not be necessary in making proof of this Agreement or the terms of this
Agreement to produce or account for more than one (1) of such counterparts.
Section 11.9. Enforcement of Certain Rights. Nothing expressed or
implied in this Agreement is intended, or will be construed, to confer upon or
give any Person other than the Parties, and their successors or permitted
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, or result in such Person being deemed a third party beneficiary
of this Agreement. Notwithstanding anything set forth in this Section 11.9 (or
Section 11.3) to the contrary, in no event may any Party assign any rights or
remedies to any current or former director, employee, independent contractor,
consultant or any other individual or entity whose relationship with any Party
hereto is employment-related.
Section 11.10. Waiver. Any agreement on the part of a Party to any
extension or waiver of any provision of this Agreement will be valid only if set
forth in an instrument in writing signed on behalf of such Party. A waiver by a
Party of the performance of any covenant, agreement, obligation, condition,
representation or warranty will not be construed as a waiver of
54
any other covenant, agreement, obligation, condition, representation or
warranty. A waiver by any Party of the performance of any act will not
constitute a waiver of the performance of any other act or an identical act
required to be performed at a later time.
Section 11.11. Integration. This Agreement and the documents
executed pursuant to this Agreement supersede all negotiations, agreements and
understandings among the Parties with respect to the subject matter of this
Agreement, except for that certain Confidentiality Agreement, dated November 13,
2001, by and between the Buyer and Caterpillar, and constitutes the entire
agreement between the Parties.
Section 11.12. Cooperation Following the Closing. Following the
Closing, each of the Parties shall deliver to the others such further
information and documents and shall execute and deliver to the others such
further instruments and agreements as the other Party shall reasonably request
to consummate or confirm the transactions provided for in this Agreement, to
accomplish the purpose of this Agreement or to assure to the other Party the
benefits of this Agreement.
Section 11.13. Transaction and Other Costs. Except as provided above
or as otherwise expressly provided herein, (a) the Buyer will pay its own fees,
costs and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement, including the fees, costs and
expenses of its financial advisors, accountants and counsel, and (b) each of
Caterpillar and the Company will pay the fees, costs and expenses of Caterpillar
and the Company incurred in connection with this Agreement and the transactions
contemplated by this Agreement, including the fees, costs and expenses of (i)
its financial advisors, accountants and counsel and (ii) satisfying the covenant
contained in Sections 7.13 and 7.14. Notwithstanding the foregoing, the Parties
shall share equally the cost of making any filing pursuant to the HSR Act in
connection with the transactions contemplated hereby.
Section 11.14. Consent to Jurisdiction, Etc. The Parties hereby
irrevocably consent and agree that disputes under this agreement shall be
resolved exclusively pursuant to arbitration in Chicago, Illinois, according to
the commercial rules and practices of the American Arbitration Association
("AAA"). Arbitration hereunder shall be by three independent and impartial
arbitrators. Each Party shall appoint one arbitrator within ten (10) days after
initiation of arbitration and the two arbitrators so appointed shall select a
third arbitrator within thirty (30) days after initiation of arbitration. If the
Parties or the arbitrators fail to select arbitrators as aforesaid, the AAA
shall select such arbitrators. The AAA shall have the authority to disqualify
any arbitrator who it determines not to be independent and impartial. The
arbitrators shall be entitled to a fee commensurate with their fees for
professional services requiring similar time and effort. The Parties agree that
this submission and agreement to arbitrate shall be governed by and specifically
enforceable in accordance with the laws of the State of Illinois. The Parties
agree to abide by all decisions and determinations rendered in such proceedings.
Such decisions and determinations shall be final and binding on the Parties.
Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All costs and expenses incurred in connection with any
arbitration relating to the interpretation or enforcement of any provision of
this Agreement, including, without limitation, attorney's fees, shall be paid by
the nonprevailing party in the arbitration.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed effective as of the day and year first above written.
AGCO CORPORATION
/s/ R. J. Ratliff
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Name: R. J. Ratliff
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Office: Executive Chairman
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CATERPILLAR INC.
/s/ Gerald L. Shaheen
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Name: Gerald L. Shaheen
-------------------------------------
Office: Group President
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CATERPILLAR AGRICULTURAL PRODUCTS INC.
/s/ Robert R. Macier
--------------------------------------------
Name: Robert R. Macier
-------------------------------------
Office: Chairman of the Board
-------------------------------------