ASSET PURCHASE AGREEMENT
by and among
JOY TECHNOLOGIES INC.
and
OLDENBURG GROUP
INCORPORATED,
OLDENBURG AUSTRALASIA PTY. LTD.,
and
OLDENBURG MINING EQUIPMENT
(PROPRIETARY) LIMITED
Dated April 18, 2006
Table of Contents
Page
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Article I.
1.1
1.2
Article II
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
Article III
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
3.21
3.22
3.23
3.24
3.25
3.26
3.27
3.28
3.29
3.30
3.31
3.32
3.33
Article IV
4.1
4.2
4.3
4.4
Article V
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
Article VI
6.1
6.2
6.3
6.4
6.5
Article VII
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
7.10
7.11
Article VIII
8.1
8.2
8.3
8.4
8.5
8.6
8.7
Article IX
9.1
9.2
Article X
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
Article XI
11.1
11.2
11.3
11.4
11.5
11.6
11.7
11.8
11.9
11.10
11.11
Article XII.
12.1
12.2
12.3
12.4
12.5
12.6
Article XIII.
13.1
13.2
13.3
13.4
13.5
13.6
13.7
13.8
13.9
13.10
13.11
13.12
13.13
13.14
13.15
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DEFINITIONS AND USAGE
Definitions
Usage
SALE AND TRANSFER OF ASSETS; CLOSING
Assets to be Sold
Excluded Assets
Consideration
Liabilities
Allocation
Closing
Closing Obligations
Adjustment Amount and Payment
Adjustment Procedure
Consents
REPRESENTATIONS AND WARRANTIES OF SELLERS
Organization and Good Standing
Enforceability; Authority; No Conflict
Capitalization
Financial Statements and Financial Information
Books and Records
Sufficiency of Assets
Description of Millersburg Facility
Description of Leased Real Property
Title to Assets; Encumbrances
Condition of Facilities
Accounts Receivable and Accounts Payable
Inventories
No Undisclosed Liabilities
Taxes
No Material Adverse Change
Employee Benefits
Compliance with Legal Requirements; Governmental
Authorizations
Legal Proceedings; Orders
Absence of Certain Changes and Events
Contracts; No Defaults
Insurance
Environmental Matters
Employees
Labor Disputes; Compliance
Intellectual Property Assets
Product Warranties
Compliance with the Foreign Corrupt Practices Act and Export
Control and Antiboycott Laws
Relationships with Related Persons
Brokers or Finders
Territorial Restrictions
Solvency
Equipment Notes Payable
Disclosure
REPRESENTATIONS AND WARRANTIES OF BUYER
Organization and Good Standing
Authority; No Conflict
Certain Proceedings
Brokers or Finders
COVENANTS OF SELLERS PRIOR TO CLOSING
Access and Investigation
Operation of the Stamler Business
Negative Covenant
Required Approvals
Notification
No Solicitation
Commercially Reasonable Efforts
Interim Booking and Sales Reports
Payment of Liabilities
Current Evidence of Title/Surveys
Equipment Notes Payable
5 12 Components of Working Capital
COVENANTS OF BUYER PRIOR TO CLOSING
Required Approvals
Commercially Reasonable Efforts
Notification
Conduct of Due Diligence Review
Update by Buyer
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Accuracy of Representations
Sellers' Performance
Consents
Additional Documents
No Proceedings
No Legal Requirement or Injunction
Title Insurance/Surveys
Governmental Authorizations
Due Diligence
7 10 No Open Issues
7 11 Review of Financial Information
CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Accuracy of Representations
Buyer's Performance
Consents
Additional Documents
No Legal Requirement or Injunction
No Proceedings
No Open Issues
TERMINATION
Termination Events
Effect of Termination
ADDITIONAL COVENANTS
Employees and Employee Benefits
Payment of All Taxes Resulting from Sale of Assets by
Sellers
Payment of Other Retained Liabilities
Removing Excluded Assets
Reports and Returns
Assistance in Proceedings
Noncompetition and Nonsolicitation
Customer and Other Business Relationships
Retention of and Access to Records
Further Assurances
[Reserved]
Name Change
Insurance; Risk of Loss
Millersburg Facility
Pre-Closing Negotiation Periods
INDEMNIFICATION; REMEDIES
Survival
Indemnification and Reimbursement by Sellers
Indemnification and Reimbursement by Sellers--Environmental
Matters
Indemnification and Reimbursement by Buyer
Limitations on Amount--Sellers
Limitations on Amount--Buyer
Time Limitations
Right of Setoff
Third-Party Claims
Other Claims
Exclusive Remedy
CONFIDENTIALITY
Definition of Confidential Information
Restricted Use of Confidential Information
Exceptions
Legal Proceedings
Return or Destruction of Confidential Information
Attorney-Client Privilege
GENERAL PROVISIONS
Expenses
Public Announcements
Notices
Jurisdiction; Service Of Process; Waiver of Trial by Jury
Enforcement of Agreement
Waiver; Remedies Contained in Agreement Cumulative
Entire Agreement and Modification
Disclosure Letter
Assignments, Successors and No Third-Party Rights
Severability
Construction
Time Of Essence
Governing Law
Execution of Agreement
Representative of Seller Subsidiaries
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ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (“ Agreement ”) is
dated April 18, 2006, by and among Joy Technologies Inc, a Delaware
corporation (“ Buyer ”) and Oldenburg Group
Incorporated, a Wisconsin corporation (“ Oldenburg
Group ”); Oldenburg Australasia Pty. Ltd., an Australian
corporation (“ Oldenburg Australia ”); and
Oldenburg Mining Equipment (Proprietary) Limited, a South African
corporation (“ Oldenburg South Africa ” and,
together with Oldenburg Australia, the “ Seller
Subsidiaries ”).
RECITALS
WHEREAS,
Oldenburg Group and the Seller Subsidiaries (collectively, the
“ Sellers ”) operate a business that designs,
manufactures and sells equipment primarily for the mining of coal
under the brand names Stamler and Oldenburg Stamler and provides
services related to such equipment (the “ Stamler
Business ”);
WHEREAS,
the Sellers desire to sell, and Buyer desires to purchase, the
assets of the Sellers primarily used in the Stamler Business as a
going concern for the consideration and on the terms set forth in
this Agreement;
NOW
THEREFORE, the parties, intending to be legally bound, agree as
follows:
ARTICLE
I.
DEFINITIONS AND USAGE
1.1
Definitions
For
purposes of this Agreement, the following terms and variations
thereof have the meanings specified or referred to in this
Section 1.1 :
“Accounts
Receivable”—(a) all trade accounts receivable and other
rights to payment from customers with respect to the Stamler
Business and the full benefit of all security for such accounts or
rights to payment, including all trade accounts receivable
representing amounts receivable in respect of goods shipped or
products sold or services rendered to customers with respect to the
Stamler Business, (b) all other accounts or notes receivable of the
Sellers attributable to the Stamler Business and the full benefit
of all security for such accounts or notes and (c) any claim,
remedy or other right related to any of the foregoing.
“Active
Employee”— as defined in Section 10.1(a)
.
“Ancillary
Agreements”—the Transition Manufacturing Agreement, the
Transition Services Agreement, the Noncompetition Agreement, the
Assignment and Assumption Agreement and the Purchase Price
Allocation Agreement.
“Appurtenances”—all
privileges, rights, easements, hereditaments and appurtenances
belonging to or for the benefit of the Land, including all
easements appurtenant to and for the benefit of any Land (a “
Dominant Parcel ”) for, and as the primary means of
access between, the Dominant Parcel and a public way, or for any
other use upon which lawful use of the Dominant Parcel for the
purposes for which it is presently being used is dependent, and all
rights existing in and to any streets, alleys, passages and other
rights-of-way included thereon or adjacent thereto (before or after
vacation thereof) and vaults beneath any such streets.
“Assets”—as
defined in Section 2.1.
“Assigned
Contracts”—as defined in Section 2.1(e)
.
“Assignment
and Assumption Agreement”—as defined in Section
2.7(a)(ii) .
“Assumed
Liabilities”—as defined in Section 2.4(a)
.
“Audited
Financial Statements”—as defined in Section
7.11(a) .
“Balance
Sheet”—as defined in Section 3.4.
“Best
Efforts”—the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to achieve
that result as expeditiously as possible, provided, however, that a
Person required to use Best Efforts under this Agreement will not
be thereby required to take actions that would result in a material
adverse change in the benefits to such Person of this Agreement and
the Contemplated Transactions or to dispose of or make any change
to its business, expend any material funds or incur any other
material burden.
“Bill
of Sale”—as defined in Section
2.7(a)(i).
“Breach”—any
breach of, or any inaccuracy in, any representation or warranty or
any breach of, or failure to perform, any covenant or obligation,
in or of this Agreement or any other Contract, as applicable, or
any event which with the passing of time or the giving of notice,
or both, would constitute such a breach, inaccuracy or
failure.
“Bulk
Sales Laws”—as defined in Section 5.9.
“Business
Day”—any day other than (a) Saturday or Sunday or (b)
any other day on which banks in Milwaukee, Wisconsin are permitted
or required to be closed.
“Business
Names”—the “Stamler” name and all of
Sellers’ registered names, assumed fictional business names,
trade names, registered and unregistered trademarks, service marks
and applications in each case primarily used in the Stamler
Business (but excluding the names “Oldenburg,”
“Oldenburg Group,” “Lake Shore,”
“Lake Shore Mining,” “Lake Shore Mining
Equipment” and “Oldenburg Stamler”).
“Buyer”—as
defined in the first paragraph of this Agreement.
“Buyer
Indemnified Persons”—as defined in Section
11.2.
“Buyer
Notice”—as defined in Section 6.5.
“Buyer’s
Cap”—as defined in Section 11.6.
“Buyer’s
Closing Documents”—as defined in Section
4.2(a).
“Buyer’s
Deductible”—as defined in Section 11.6
.
“Closing”—as
defined in Section 2.6.
“Closing
Date”—the date on which the Closing actually takes
place.
“Closing
Net Asset Value”— shall mean the amount calculated by
subtracting the liabilities of the Stamler Business included in the
Assumed Liabilities from the assets of the Stamler Business
included in the Assets as of the Effective Time (without giving
effect to the consummation of the transactions contemplated
hereby).
“Closing
Net Asset Value Schedule”—as defined in Section
2.9(b) .
“COBRA”—as
defined in Section 3.16(e).
“Code”—the
Internal Revenue Code of 1986.
“Commercially
Reasonable Efforts”—the efforts that a reasonable
Person desirous of achieving a result would use in similar
circumstances to achieve that result, provided, however, that
“Commercially Reasonable Efforts” will not be deemed to
require a Person to undertake extraordinary or unreasonable
measures, including the payment of amounts in excess of normal and
usual filing fees and processing fees, if any, or other payments
with respect to any Contract that are significant in the context of
such Contract (or significant on an aggregate basis as to all
Contracts).
“Confidential
Information”—as defined in Section 12.1(a).
“Consent”—any
approval, consent, ratification, waiver or other
authorization.
“Consequential
Damages Provision”—any express provision stating that
the liabilities of the Stamler Business will or may include
consequential damages (i) contained in any Stamler Contract signed
by both parties and intended to constitute the final, definitive
comprehensive agreement of the parties or (ii) contained in a
document that forms part of an Assigned Contract or was received by
Sellers from a customer (e.g., a customer purchase order) and not
expressly contradicted or expressly disclaimed (including an
express disclaimer by Sellers of consequential damages) by another
document that forms part of such Assigned Contract or was delivered
by Sellers to the customer.
“Consulting
Accountants”—the major accounting firm engaged by Buyer
to assist in its evaluation of certain financial
matters.
“Contemplated
Transactions”—all of the transactions contemplated by
this Agreement.
“Contract”—any
agreement, contract, Lease, legally binding promise or legally
binding undertaking (whether written or oral and whether express or
implied).
“Copyrights”—as
defined in Section 3.25(a)(iii).
“Customary
Exceptions”—as defined in Section
2.4(a)(ii).
“Damages”—as
defined in Section 11.2.
“Disclosure
Letter”—the disclosure letter delivered by Sellers to
Buyer pursuant to this Agreement and consisting of (i) the
Pre-Signing Parts originally delivered concurrently with the
execution and delivery of this Agreement and (ii) the Post-Signing
Parts to be agreed between Sellers and Buyer and delivered between
the date of this Agreement and the Closing Date.
“Dominant
Parcel”—as defined in the definition of
“Appurtenances.”
“Due
Diligence Notice”—as defined in Section
7.9.
“Due
Diligence Review”—as defined in Section
7.9.
“Effective
Time”—the time at which the Closing is
consummated.
“Employee
Plans”—as defined in Section 3.16(a)
.
“Encumbrance”—any
equitable interest, lien, option to purchase, pledge, security
interest, mortgage, right of way, easement, encroachment,
servitude, right of first option, right of first refusal or similar
restriction.
“Environment”—soil,
land surface or subsurface strata, surface waters (including
navigable waters and ocean waters), groundwaters, drinking water
supply, stream sediments, ambient air (including indoor air), plant
and animal life and any other environmental medium or natural
resource.
“Environmental
and Health Liabilities”—any violation of, or liability
arising under, any Environmental Law or Occupational Health Law
arising from facts, events or conditions occurring or in existence
on or before the Closing Date.
“Environmental
Law”—any Legal Requirement relating to pollution or
protection of the environment or protection of public health from
environmental hazards, which, except as required by Section
11.3(d) , is in effect on or prior to the Closing
Date.
“Equipment
Notes Payable”—means the notes payable set forth on
Part 3.32 .
“ERISA”—the
Employee Retirement Income Security Act of 1974, as
amended.
“Exchange
Act”—the Securities Exchange Act of
1934.
“Excluded
Assets”—as defined in Section .
“Excluded
Contracts”—means all of the Stamler Contracts listed on
Part 2.2(f) .
“Excluded
Contract Transition Agreement”—as defined in Section
2.7(b)(xiii) .
“Extended
Warranty”—a warranty having terms more favorable to the
customer than those set forth in Part 2.4(a)(ii)
.
“Facility
Redevelopment or Construction Project”—as defined in
Section 11.3(c)(viii) .
“Former
Subsidiaries”—as defined in Section 3.28
.
“GAAP”—generally
accepted accounting principles for financial reporting in the
United States.
“Governing
Documents”—with respect to any particular entity, (a)
if a corporation, the articles or certificate of incorporation and
the bylaws; (b) if a general partnership, the partnership agreement
and any statement of partnership; (c) if a limited partnership, the
limited partnership agreement and the certificate of limited
partnership; (d) if a limited liability company, the articles of
organization and operating agreement; (e) if another type of
Person, any other charter or similar document adopted or filed in
connection with the creation, formation or organization of the
Person; (f) all equityholders’ agreements, voting agreements,
voting trust agreements, joint venture agreements, registration
rights agreements or other agreements or documents relating to the
organization, governance or control of any Person or relating to
the rights, duties and obligations of the equityholders of any
Person; and (g) any amendment or supplement to any of the
foregoing.
“Governmental
Authorization”—any Consent, license, registration or
permit issued, granted, given or otherwise made available by or
under the authority of any Governmental Body or pursuant to any
Legal Requirement.
“Governmental
Body”—any:
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(a)
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nation, state, county, city,
town, borough, village, district or other jurisdiction;
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(b)
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federal, state, local, municipal,
foreign or other government;
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(c)
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governmental or
quasi-governmental authority of any nature (including any agency,
branch, department, board, commission, court, tribunal or other
entity exercising governmental or quasi-governmental
powers);
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(d)
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multinational organization or
body;
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(e)
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body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power; or
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(f)
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official of any of the
foregoing.
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“Hazardous
Activity”—the distribution, generation, handling,
importing, management, manufacturing, processing, production,
refinement, Release, Threat of Release, storage, transfer,
transportation, treatment or use (including any withdrawal or other
use of groundwater) of Hazardous Material.
“Hazardous
Material”—any substance, material or waste which is
regulated by any Governmental Body on or prior to the Closing Date,
including any material, substance or waste which is defined as a
“hazardous waste,” “hazardous material,”
“hazardous substance,” “extremely hazardous
waste,” “restricted hazardous waste,”
“contaminant,” “toxic waste” or
“toxic substance” under, or which is otherwise subject
to imposition of liability under, any provision of Environmental
Law, and including petroleum, petroleum products, asbestos,
presumed asbestos-containing material or asbestos-containing
material, urea formaldehyde and polychlorinated
biphenyls.
“HSR
Act”—the Hart-Scott-Rodino Antitrust Improvements
Act.
“Immaterial
Matters”—facts or circumstances which would constitute,
or would be reasonably likely to constitute, a Breach of any
representation or warranty referred to in Section 11.2(a) or
a Breach of a covenant or obligation referred to in Section
11.2(b) (but only as to covenants and obligations required to
be performed by the Sellers at or prior to the Closing), but for
the fact that they do not satisfy the materiality requirements (if
any) of the representation, warranty, covenant or obligation in
question.
“Improvements”—all
buildings, structures, fixtures and improvements at the Millersburg
Facility or included in the Assets, including those under
construction.
“Indemnified
Person”—as defined in Section 11.9 .
“Indemnifying
Person”—as defined in Section 11.9 .
“Independent
Accountants”—shall mean KPMG LLP.
“Initial
Net Asset Value”—as defined in Section 2.9(a)
.
“Initial
Net Asset Value Schedule”—as defined in Section
2.9(a) .
“Intellectual
Property Assets”—as defined in Section 3.25(a)
.
“Inventories”—all
inventories of any Seller primarily related to the Stamler
Business, wherever located, including all finished goods, work in
process, raw materials, spare parts and all other materials and
supplies to be used or consumed by any Seller in the production of
finished goods sold by the Stamler Business.
“IRS”—the
United States Internal Revenue Service and, to the extent relevant,
the United States Department of the Treasury.
“Key
Personnel”— as defined in Section
5.1(c).
“Knowledge”—an
individual will be deemed to have Knowledge of a particular fact or
other matter if that individual has actual knowledge of that fact
or matter after Reasonable Investigation. The Sellers will be
considered to have Knowledge of a particular fact or matter if any
of the following individuals has Knowledge of that fact or other
matter: Wayne Oldenburg, Charles Anderson, Sr., Grant Dail, Al
Ebert, Peter Fitch, Bette Hackett, Timothy Nerenz, Steven Rudenic,
Donald Williams and Joseph Wouters.
“Land”—the
parcels and tracts of land described in Item 1 of Part 3.7
.
“Lease”—any
real property lease or any lease or rental agreement, license,
right to use or installment and conditional sale agreement relating
to real property primarily used in the Stamler Business to which
any Seller is a party and any other Seller Contract pertaining to
the leasing or use of any Tangible Personal Property primarily
relating to the Stamler Business.
“Leased
Real Property”—the real property described in Part
3.8 in which any Seller has any right, title or interest
pursuant to a Lease which is an Assumed Contract.
“Leave
Policy” “— as defined in Section
10.1(c)(iii) .
“Legal
Requirement”— any federal, state, local, municipal,
foreign, international, multinational or other constitution, law,
ordinance, principle of common law, code, regulation, statute,
treaty or other legal requirement which, except as required by
Section 11.3(d) , is in effect on or prior to the Closing
Date.
“Liability”—with
respect to any Person, any liability of such Person of any kind,
character or description, whether known or unknown, absolute or
contingent, accrued or unaccrued, disputed or undisputed,
liquidated or unliquidated, secured or unsecured, joint or several,
and whether or not the same is required to be accrued on the
financial statements of such Person.
“Marks”—as
defined in Section 3.25(a)(i).
“Material
Consents”—as defined in Section 7.3.
“Material
Interest”—as defined in “Related
Persons.”
“Millersburg
Facility”—means the buildings located at 600 Main and
Stamler Streets, Millersburg, Kentucky, as further described in
Item 1 in Part 3.7 , and the property on which the building
is located.
“Named
Buyer Executive”—as defined in Section
6.5.
“Negotiation
Period”—as defined in Section 10.15 .
“Net
Name”—as defined in Section 3.25(a)(vi).
“Occupational
Health Law”—any Legal Requirement designed to provide
healthful working conditions and to reduce occupational health
hazards, including without limitation the Occupational Safety and
Health Act (to the extent applicable to workplace health as opposed
to workplace safety), which, except as required by Section
11.3(d)) , is in effect on or prior to the Closing
Date.
“Occupational
Safety Law”—any Legal Requirement in effect on or prior
to the Closing Date designed to provide safe working conditions and
to reduce occupational safety hazards, including without limitation
the Occupational Safety and Health Act (to the extent applicable to
workplace safety as opposed to workplace health).
“Oldenburg
Australia”—as defined in the first paragraph of this
Agreement.
“Oldenburg
Group”—as defined in the first paragraph of this
Agreement.
“Oldenburg
South Africa”—as defined in the first paragraph of this
Agreement.
“Open
Issues”—as defined in Section 10.15.
“Order”—any
order, injunction, judgment, decree, ruling or arbitration award of
any Governmental Body or arbitrator.
“Ordinary
Course of Business”—an action taken by Sellers will be
deemed to have been taken in the Ordinary Course of Business only
if that action:
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(a)
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is consistent in nature, scope,
timing and magnitude with the past practices of Sellers with
respect to the Stamler Business and is taken by Sellers in the
ordinary course of the normal, day-to-day operations of the Stamler
Business; and
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(b)
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does not require authorization by
the board of directors or shareholders of such Person (or by any
Person or group of Persons exercising similar
authority).
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“Outside
Date”—as defined in Section 7.9.
“Part”—a
part or Section of the Disclosure Letter.
“Patents”—as
defined in Section 3.25(a)(ii).
“Performance
Guarantee”—any (i) express written guaranty that
equipment will perform to a specified level (for example, tons of
coal handled per hour or minimum percentage of up time, but other
than rating capacity included in the normal specifications),
including a specified level of production or availability or a
specified useful life, or (ii) warranty of fitness for purpose
under an equipment contract that specifies a performance
level.
“Permitted
Encumbrances”—as defined in Section 3.9(b)
.
“Permitted
Non-Real Estate Encumbrances”—as defined in Section
3.9(b) .
“Permitted
Real Estate Encumbrances”—as defined in Section
3.9(a) .
“Person”—an
individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock
company, trust, unincorporated association, joint venture or other
entity or a Governmental Body.
“Post-Signing
Parts”—means all Parts of the Disclosure Letter other
than Pre-Signing Parts.
“Pre-Signing
Parts”—means the following Parts of the Disclosure
Letter: 2.2(f); 2.2(m); 2.2(s); 2.4(a)(ii)(A); 2.4(a)(ii)(B);
2.4(a)(vi); 3.4(a); 3.6; 3.7; 3.9(b)(ii); 3.11(a); 3.11(c); 3.12;
3.13; 3.14; 3.16(a); 3.16(c); 3.18(b); 3.19; 3.20(b); 3.22;
3.23(b); 3.23(d); 3.24(b); 3.25(c); 5.1(c); and
10.1(b)(i).
“Prime
Rate”— means the interest rate per annum announced by
Bank of America, N.A. as its prime rate on the Closing
Date.
“Proceeding”—any
action, arbitration, audit, hearing, investigation, litigation or
suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or
private) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Body or
arbitrator.
“Purchase
Price”—as defined in Section 2.3.
“Purchase
Price Allocation Agreement”—as defined in Section
2.5 .
“PWC”—as
defined in Section 2.9(b).
“PWC
Initial Income Statement Memorandum”—as defined in
Section 7.11(a) .
“PWC
Initial Net Asset Value Memorandum”—as defined in
Section 2.9(a) .
“Reasonable
Investigation”—with respect to any individual means (a)
reading this Agreement and the Disclosure Letter and (b) if such
individual believes that there is a reasonable likelihood that a
provision of this Agreement stated to be based on the Knowledge of
the Sellers is not consistent with the relevant facts, such further
investigation as such individual considers appropriate to satisfy
himself or herself that there is no such inconsistency;
provided that , such further investigation shall not
require a general review of the Seller Contracts.
“Record”—information
that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable
form.
“Related
Party Competing Business”—as defined in Section
3.28 .
“Related
Person”— With respect to a particular
individual:
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(a)
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each other member of such
individual’s Family;
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(b)
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any Person that is directly or
indirectly controlled by any one or more members of such
individual’s Family;
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(c)
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|
any Person in which members of
such individual’s Family hold (individually or in the
aggregate) a Material Interest; and
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(d)
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any Person with respect to which
one or more members of such individual’s Family serves as a
director, officer, partner, executor or trustee (or in a similar
capacity).
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With respect to a specified
Person other than an individual:
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(a)
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|
any Person that directly or
indirectly controls, is directly or indirectly controlled by or is
directly or indirectly under common control with such specified
Person;
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|
(b)
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|
any Person that holds a Material
Interest in such specified Person;
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|
(c)
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|
each Person that serves as a
director, officer, partner, executor or trustee of such specified
Person (or in a similar capacity);
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(d)
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|
any Person in which such
specified Person holds a Material Interest; and
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(e)
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any Person with respect to which
such specified Person serves as a general partner or a trustee (or
in a similar capacity).
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For purposes of this definition,
(a) “control” (including “controlling,”
“controlled by,” and “under common control
with”) means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be construed as such term is used
in the rules promulgated under the Securities Act; (b) the
“Family” of an individual includes (i) the individual,
(ii) the individual’s spouse, (iii) any other natural person
who is related to the individual or the individual’s spouse
within the second degree and (iv) any other natural person who
resides with such individual; and (c) “ Material
Interest ” means direct or indirect beneficial ownership
(as defined in Rule 13d-3 under the Exchange Act) of voting
securities or other voting interests representing at least twenty
percent (20%) of the outstanding voting power of a Person or equity
securities or other equity interests representing at least twenty
percent (20%) of the outstanding equity securities or equity
interests in a Person.
“Release”—any
release, spill, emission, leaking, pumping, pouring, dumping,
emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration of a Hazardous Material on or into the
Environment or into or out of any property.
“Remedial
Action”—all actions, including any capital
expenditures, required (a) to clean up, remove, treat or in any
other way address any Hazardous Material; (b) to prevent the
Release or Threat of Release or to minimize the further Release of
any Hazardous Material so it does not migrate or endanger the
Environment; or (c) to bring all Stamler Facilities and the
operations conducted thereon into material compliance with
Environmental Laws and environmental Governmental Authorizations in
each case where the conduct of such actions is required: (x) under
Environmental Laws in effect as of the Closing Date; or (y) to
address conditions of contamination exceeding cleanup standards
applicable under Environmental Laws in effect as of the Closing
Date.
“Representative”—with
respect to a particular Person, any director, officer, manager,
employee, agent, consultant, advisor, accountant, financial
advisor, legal counsel or other representative of that
Person.
“Restricted
Material Contracts”—as defined in Section
2.10(a) .
“Retained
Liabilities”—as defined in Section 2.4(b)
.
“Securities
Act”— means the Securities Act of 1933, as
amended.
“Sellers”—as
defined in the first paragraph of this Agreement.
“Seller
Claims”—as defined in Section 10.13(a)
.
“Seller
Contract”—any Contract (a) under which any Seller is a
party or has actual or contingent rights or benefits; (b) under
which any Seller has any actual or contingent obligation or
Liability; or (c) by which any Seller or any of the Assets owned or
used by any Seller is, or may by the terms of such Contract become,
bound.
“Seller
Insurance Policies”—as defined in Section
10.13(a).
“Seller
Liabilities”—as defined in Section 10.13(a)
.
“Seller
Representative”—as defined in Section 13.15(a)
.
“Seller
Subsidiary”—as defined in the first paragraph of this
Agreement.
“Sellers’
Cap”—as defined in Section 11.5.
“Sellers’
Deductible”—as defined in Section 11.5
.
“Software”—all
computer software and subsequent versions thereof, including source
code, object, executable or binary code, objects, comments,
screens, user interfaces, report formats, templates, menus, buttons
and icons and all files, data, materials, manuals, design notes and
other items and documentation related thereto or associated
therewith.
“Soil
Removed Solely for Business Reasons”—as defined in
Section 11.3(c)(viii) .
“Special
Terms”—an order or quote for original equipment
contains “Special Terms” where such order or
quote:
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(i)
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reflects an Extended
Warranty;
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(ii)
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reflects (a) seller financing or
(b) extended payment terms beyond 60 days, other than customer
retentions or holdbacks in the Ordinary Course of Business which
are based on the passage of time (and not performance or other
conditions);
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(iii)
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involves a delivery commitment
that extends beyond twelve (12) months after the date of this
Agreement;
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(iv)
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is subject to an express penalty
provision for late delivery;
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(v)
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|
reflects a Performance Guarantee;
or
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(vi)
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reflects a Consequential Damages
Provision.
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“Special
Warranty Liability” means all warranty Liabilities paid or
incurred by any Buyer Indemnified Person in respect of any warranty
Liabilities not disclosed with reasonable specificity on the
certificate delivered by Sellers pursuant to Section
2.7(a)(xiv) .
“Stamler
Business”—as defined in the recitals to this
Agreement.
“Stamler
Contract”—any Seller Contract related primarily to the
Stamler Business.
“Stamler
Employee Plans”—as defined in Section
3.16(a).
“Stamler
Facilities”—the Millersburg Facility and the Leased
Real Property.
“Storefront
Properties/House” means the real property identified
generally on Item 2 of Part 3.7 and the buildings located
thereon.
“Subsidiary”—with
respect to any Person (the “ Owner ”), any
corporation or other Person of which securities or other interests
having the power to elect a majority of that corporation’s or
other Person’s board of directors or similar governing body,
or otherwise having the power to direct the business and policies
of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a
contingency that has not occurred), are held by the Owner or one or
more of its Subsidiaries.
“Tangible
Personal Property”—all machinery, equipment, tools,
furniture, office equipment, computer hardware, supplies,
materials, vehicles and other items of tangible personal property
(other than Inventories) of every kind owned or leased by the
Sellers (wherever located and whether or not carried on the
Sellers’ books) and primarily related to the Stamler
Business, together with any express or implied warranty by the
manufacturers or sellers or lessors of any item or component part
thereof and all maintenance records and other documents relating
thereto; provided that all tangible personal property located at
the Millersburg Facility shall constitute “Tangible Personal
Property” except items (i) not dedicated to the Stamler
Business together with (ii) items included on a list to be mutually
agreed upon between Oldenburg Group and Buyer prior to the
Closing.
“Tax”—any
income, gross receipts, license, payroll, employment, excise,
stamp, occupation, premium, property, windfall profit, customs,
vehicle, airplane, boat, vessel or other title or registration,
capital stock, franchise, employees’ income withholding,
foreign or domestic withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
value added, alternative, add-on minimum and other tax, fee,
assessment, levy, tariff, charge or duty of any kind whatsoever and
any interest, penalty, addition or additional amount thereon
imposed, assessed or collected by or under the authority of any
Governmental Body or payable under any tax-sharing
agreement.
“Tax
Return”—any return (including any information return),
report, statement, schedule, notice, form, declaration, claim for
refund or other document or information filed with or submitted to,
or required to be filed with or submitted to, any Governmental Body
in connection with the determination, assessment, collection or
payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.
“Third
Party”—a Person that is not a party to this
Agreement.
“Third-Party
Claim”—any claim against any Indemnified Person by a
Third Party, whether or not involving a Proceeding.
“Threat
of Release”—a reasonable likelihood of a Release that
would require action in order to prevent or mitigate damage to the
Environment that may result from such Release.
“Transition
Manufacturing Agreement”—as defined in Section
2.7(a)(viii) .
“Transition
Services Agreement”—as defined in Section
2.7(a)(ix) .
“Unaudited
Financial Statements”—as defined in Section
7.11(a) .
“WARN
Act”—as defined in Section 3.23(d).
1.2
Usage
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(a)
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Interpretation
. In this Agreement, unless a clear
contrary intention appears:
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(i)
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the singular number includes the
plural number and vice versa;
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(ii)
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reference to any Person includes
such Person’s successors and assigns but, if applicable, only
if such successors and assigns are not prohibited by this
Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity or
individually;
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(iii)
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reference to any gender includes
each other gender;
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(iv)
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reference to any agreement,
document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in
accordance with the terms thereof;
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(v)
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except as otherwise required by
Section 11.3(d) , reference to any Legal Requirement means
such Legal Requirement as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time on
or prior to the Closing Date, including rules and regulations
promulgated thereunder on or prior to the Closing Date, and
reference to any section or other provision of any Legal
Requirement means that provision of such Legal Requirement from
time to time in effect on or prior to the Closing Date and
constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other
provision;
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(vi)
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“hereunder,”
“hereof,” “hereto,” and words of similar
import shall be deemed references to this Agreement as a whole and
not to any particular Article, Section or other provision
hereof;
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(vii)
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“including” (and with
correlative meaning “include”) means including without
limiting the generality of any description preceding such
term;
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(viii)
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“or” is used in the
inclusive sense of “and/or”;
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(ix)
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with respect to the determination
of any period of time, “from” means “from and
including” and “to” means “to but
excluding”; and
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(x)
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references to documents,
instruments or agreements shall be deemed to refer as well to all
addenda, exhibits, schedules or amendments thereto in effect as of
the applicable time on or before the Closing Date.
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(b)
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Accounting Terms and
Determinations . Unless
otherwise specified herein, all accounting terms used herein shall
be interpreted and all accounting determinations hereunder shall be
made in accordance with GAAP.
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(c)
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Legal Representation of the
Parties . This Agreement
was negotiated by the parties with the benefit of legal
representation, and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted
against any party shall not apply to any construction or
interpretation hereof.
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(d)
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Documents or Information Made
Available . Unless
otherwise specified herein, where a representation in this
Agreement states that documents or information have been made
available to the other party, such statement shall mean that the
documents or information made available were current as of the time
the representation is made.
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ARTICLE II.
SALE AND TRANSFER OF ASSETS;
CLOSING
2.1 Assets
to be Sold
Upon
the terms and subject to the conditions set forth in this
Agreement, at the Closing, but effective as of the Effective Time,
the Sellers shall sell, convey, assign, transfer and deliver to
Buyer, and Buyer shall purchase and acquire from the Sellers, all
of the Sellers’ right, title and interest in and to all of
the Sellers’ property and assets, real, personal or mixed,
tangible and intangible, of every kind and description, wherever
located, which primarily relate to the Stamler Business as
currently conducted, as a going concern, including the following
(but excluding the Excluded Assets):
(a) the
Millersburg Facility and all right, title and interest of Sellers
in the Leased Real Property;
(b) all
Tangible Personal Property, including (i) those items described in
Part 2.1(b) , and (ii) the jigs and tooling located at
Oldenburg Group’s facilities in Iron River, Michigan and
Rhinelander, Wisconsin, to the extent dedicated to the Stamler
Business or included on a list to be mutually agreed between
Oldenburg Group and Buyer prior to the Closing;
(c) all
Inventories, including the Inventories in Iron River, Michigan and
Rhinelander, Wisconsin primarily related to the Stamler Business
and consisting of jobs in process and unique Stamler
parts;
(d) all
Accounts Receivable;
(e) all
Stamler Contracts (except Excluded Contracts), including those
listed in Part 3.20(a) , and all outstanding offers or
solicitations made by or to any Seller to enter into any Contract
primarily related to the Stamler Business together with all
security agreements executed by customers for the benefit of the
Stamler Business (collectively, the “ Assigned
Contracts ”);
(f) all
Governmental Authorizations related to the Stamler Facilities or
primarily related to the Stamler Business, and all pending
applications therefor or renewals thereof including those listed in
Part 3.17(b) , in each case to the extent transferable to
Buyer;
(g) all
data and Records primarily related to the Stamler Facilities or
primarily related to the operations of the Stamler Business,
including client and customer lists and Records, referral sources,
research and development reports and Records, production reports
and Records, service and warranty Records, equipment logs,
operating guides and manuals, financial and accounting Records,
creative materials, advertising materials, promotional materials,
studies, reports, correspondence and other similar documents and
Records and, subject to Legal Requirements, copies of all personnel
Records and other Records described in Section 2.2(g)
;
(h) all
of the Business Names, all Intellectual Property Assets primarily
related to the Stamler Business and all intangible rights and
property of the Sellers primarily related to the Stamler Business,
including going concern value, goodwill, telephone, telecopy and
listings and those items listed in Parts 3.25(d) ,
(e) , (f) and (g) which are primarily related
to the Stamler Business, except to the extent specifically excluded
under Sections 2.2(m) , 2.2(n) or 2.2(s)
;
(i) all
claims of the Sellers against third parties primarily relating to
the Assets, whether choate or inchoate, known or unknown,
contingent or noncontingent, except to the extent specifically
excluded under Section 2.2 ;
(j) all
rights of the Sellers relating to deposits and prepaid expenses,
claims for refunds and rights to offset in respect thereof
primarily related to the Stamler Business that are not listed in
Part 2.2(d) or excluded under Sections 2.2(d) ,
2.2(e) , 2.2(f), 2.2(h) , 2.2(i) ,
2.2(l) and 2.2(o) ; and
(k) all
other properties and assets of every kind, character and
description, tangible or intangible, owned by any Seller and used
or held for use primarily in connection with the Stamler Business,
whether or not similar to the items specifically set forth above,
and not specifically excluded under Section 2.2 .
All of the property and assets to
be transferred to Buyer hereunder are herein referred to
collectively as the “ Assets .”
Notwithstanding the foregoing,
the transfer of the Assets pursuant to this Agreement shall not
include the assumption of any Liability or obligation related to
the Assets unless Buyer expressly assumes that Liability or
obligation pursuant to Section 2.4(a) .
2.2 Excluded
Assets
Notwithstanding
anything to the contrary contained in Section 2.1 or
elsewhere in this Agreement, the following assets of the Sellers
(collectively, the “ Excluded Assets ”) are not
part of the sale and purchase contemplated hereunder, are excluded
from the Assets and shall remain the property of the Sellers after
the Closing:
(a) all
cash, cash equivalents and short-term investments;
(b) all
minute books, stock Records and corporate seals;
(c) the
shares of capital stock of the Seller Subsidiaries owned by
Oldenburg Group;
(d) those
rights relating to deposits and prepaid expenses and claims for
refunds and rights to offset in respect thereof specifically listed
in Part 2.2(d) ;
(e) all
insurance policies and rights thereunder;
(f) all
of the Stamler Contracts listed in Part 2.2(f) ;
(g) all
Records of any Seller except to the extent included in the
Assets;
(h) all
claims for refund of Taxes and other governmental charges of
whatever nature;
(i) all
rights in connection with and assets of the Employee
Plans;
(j) all
rights of the Sellers under this Agreement, the Bill of Sale, the
Assignment and Assumption Agreement, the Transition Services
Agreement, the Transition Manufacturing Agreement and all other
agreements entered into between Buyer and any Seller in connection
with this Agreement;
(k) all
equipment, tangible personal property, fixtures and other assets
located at Oldenburg Group’s facilities in Rhinelander,
Wisconsin and Iron River, Michigan together with the inventories at
these locations, other than (1) the jigs and tooling located at
Oldenburg Group’s facilities in Iron River, Michigan and
Rhinelander, Wisconsin, to the extent (A) dedicated to the Stamler
Business or (B) mutually agreed between Oldenburg Group and Buyer
prior to the Closing, (2) the Inventories in Iron River, Michigan
and Rhinelander, Wisconsin primarily related to the Stamler
Business and consisting of jobs in process and unique Stamler parts
and (3) the items that are specified in Part 2.2(k)
;
(l) all
of Sellers’ accounts and notes receivable owing from any
Seller or any Related Person of a Seller;
(m) the
property and assets expressly designated in Part 2.2(m)
;
(n) all
rights in the internet web sites and internet domain names
“Oldenburg.com” and “OldenburgGroup.com”
and the email addresses ending with “@Oldenburg.com” or
“@Oldenburggroup.com”;
(o) life
insurance policies on Charles Anderson, Sr. and Wayne C. Oldenburg
and all proceeds and other rights and benefits relating to such
policies;
(p) the
Storefront Properties/House;
(q) all
Governmental Authorizations not related to the Stamler Facilities
or not primarily related to the Stamler Business, and all pending
applications therefor and renewals thereof;
(r)
Tangible Personal Property located at the Millersburg Facility, to
the extent dedicated to Oldenburg Group businesses other than the
Stamler Business or included on a list to be mutually agreed
between Oldenburg Group and Buyer prior to the Closing;
and
(s) the
“Oldenburg,” “Oldenburg Group,” “Lake
Shore,” “Lake Shore Mining,” “Lake Shore
Mining Equipment” and “Oldenburg Stamler” names
and other Intellectual Property Assets and intangible rights and
property of the Sellers listed in Part 2.2(s) .
2.3
Consideration
The
consideration for the Assets (the “ Purchase Price
”) will be (a) one hundred eighteen million dollars
($118,000,000), and (b) the assumption of the Assumed Liabilities.
In accordance with Section 2.7(b) , at the Closing, the
Purchase Price shall be delivered by Buyer as follows: (a) one
hundred and eighteen million dollars ($118,000,000) by wire
transfer to accounts designated by the Seller Representative (on
behalf of the Sellers) in accordance with Section 2.7(b) ;
and (b) the balance of the Purchase Price by the execution and
delivery of the Assignment and Assumption Agreement. The Purchase
Price shall be subject to adjustment pursuant to Section 2.8
and Section 2.9 .
2.4
Liabilities
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(a)
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Assumed Liabilities
. On the Closing Date, but effective
as of the Effective Time, Buyer shall assume and agree to discharge
only the following Liabilities and obligations of the Sellers (the
“ Assumed Liabilities ”), but only to the extent
not retained under Section 2.4(b)(i) through (xv):
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(i)
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all trade accounts payable and
notes payable incurred by a Seller in its conduct of the Stamler
Business which are included in the Closing Net Asset Value
(excluding in each case payables owing to any Seller or any Related
Person of any Seller or with respect to the Equipment Notes
Payable);
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(ii)
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any Liability or obligation to a
Seller’s customer under (A) such Seller’s standard
warranty in the form disclosed in Part 2.4(a)(ii)(A) , (B)
other warranties of the type generally disclosed in Part
2.4(a)(ii)(B) (the “Customary Exceptions”),
(C) Extended Warranties disclosed in Part 2.4(a)(ii)(C)
and (D) Performance Guarantees disclosed in
Part 2.4(a)(ii)(D) , in each case given by such Seller
to its customers in its conduct of the Stamler Business prior to
the Effective Time;
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(iii)
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any Liability or obligation due
under the Assigned Contracts, other than (A) any Liability or
obligation arising under the Stamler Contracts described on Part
2.4(a)(iii) or the Equipment Notes Payable, (B) any Liability
or obligation arising out of or relating to a Breach that occurred
prior to the Effective Time, and (C) except as provided in
Section 2.4(a)(ii) , any Liability or obligation under
warranties or Performance Guarantees;
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(iv)
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accrued liabilities for wages,
salary, vacation, sick leave, sales commissions and benefits
attributable to the Active Employees (including beneficiaries or
dependents) of the Stamler Business of the type contained in the
relevant accounts listed in Exhibit 2.9 (but in each case
only to the extent of the Liability therefor included in the
Closing Net Asset Value) or otherwise assumed under Section
10.1 and not required to be included in Closing Net Asset Value
under Section 2.9 ; provided , that , the
Assumed Liabilities shall not include liabilities for
workers’ compensation or health insurance claims; and
provided , further , that the Parties agree that with
respect to those benefits set forth in each account listed in
Exhibit 2.9 as a “reimbursement account,”
Buyer’s sole obligation under this Section 2.4(a)(iv)
shall be to reimburse Sellers for accrued but unpaid amounts in
such accounts as of the Closing Date (to the extent reflected in
the Closing Net Asset Value) if and when such amounts are remitted
to the Stamler Plan by the Sellers and Buyer shall not assume any
Liability under the Stamler Plan that corresponds to such
account;
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(v)
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those other current and long-term
liabilities and accrued liabilities incurred by a Seller in its
conduct of the Stamler Business in the Ordinary Course of Business
of the type contained in the relevant accounts listed in Exhibit
2.9 , but in each case only to the extent of the Liability
therefor included in the Closing Net Asset Value;
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(vi)
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those contingent liabilities of
Sellers specified in Part 2.4(a)(vi) ; and
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(vii)
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any Liability or obligation under
the Sellers Sick Bank benefit described on Part 2.4(a)(vii)
, but only to the extent of the Liability therefore included in the
Closing Net Asset Value.
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(b)
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Retained
Liabilities . The
Retained Liabilities shall remain the sole responsibility of and
shall be retained, paid, performed and discharged solely by the
Sellers. “ Retained Liabilities ” shall mean
every Liability or obligation of the Sellers other than the Assumed
Liabilities, including:
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(i)
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any Liability or obligation
arising out of or relating to products of any Seller, including
product liability damage to persons and property and warranty
obligations, to the extent sold prior to the Effective Time
(including any Liability or obligation relating to asbestos
contained in any product manufactured or sold by any Seller or any
of their predecessors), other than (A) for Liabilities or
obligations arising out of changes or modifications to such
products made by Buyer after the Effective Time or (B) warranty
obligations to the extent assumed under
Section 2.4(a)(ii) ;
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(ii)
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any Liability or obligation under
(A) any Assigned Contract (other than those Liabilities or
obligations assumed by Buyer under Section 2.4(a)(iii) ), or
(B) any Seller Contract not assumed by Buyer under Section
2.4(a) (including the Excluded Contracts);
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(iii)
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any Liability or obligation for
Taxes for which any Seller is liable under applicable law,
including (A) any Taxes arising as a result of the Sellers’
operation of their business or ownership of the Assets prior to the
Effective Time, (B) any income or capital gains Taxes that will
arise as a result of the sale of the Assets pursuant to this
Agreement, (C) any deferred Taxes of any nature and (D) all Taxes
payable by Sellers pursuant to Section 10.2 ;
provided , that , the Buyer shall be responsible for
Taxes to the extent set forth in Section 10.2(c)
.
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(iv)
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any Environmental and Health
Liabilities arising out of or relating to (A) any formerly owned or
operated property or facility or (B) any location utilized for the
offsite treatment, storage, disposal, arrangement for disposal, or
other management of Hazardous Materials prior to the Effective
Time;
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(v)
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any Liability or obligation under
the Stamler Employee Plans or relating to payroll, vacation, sick
leave, workers’ compensation, unemployment benefits, pension
benefits, employee stock option or profit-sharing plans, health
care plans or benefits or any other employee plans or benefits of
any kind for the Active Employees (including any beneficiaries or
dependents thereof), except to the extent specifically assumed
under Section 2.4(a)(iv) or Section ;
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(vi)
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any Liability or obligation under
any employment, severance, retention or termination agreement or
agreement to pay any bonus based upon the sale of the assets
described herein with any employee of any Seller or any Related
Person of any of them, except for agreements listed in Part
3.20(g) or as otherwise provided in Section 2.4(a)(iv)
or Section 10.1 ;
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(vii)
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any Liability or obligation
arising out of or relating to any employee grievance prior to the
Effective Time whether or not the affected employees are hired by
Buyer;
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(viii)
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any Liability or obligation of
any Seller to any Related Person of any Seller, other than any
Liability or obligation under purchase orders listed in Part
2.4(b)(viii) pursuant to which the Stamler Business will
purchase battery haulers from Oldenburg Group after the Effective
Time;
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(ix)
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any Liability or obligation to
indemnify, reimburse or advance amounts to any officer, director,
employee or agent of any Seller;
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(x)
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any Liability or obligation to
distribute to any of Oldenburg Group’s shareholders or
otherwise apply all or any part of the consideration received
hereunder;
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(xi)
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any Liability or obligation
arising out of any Proceeding pending as of the Effective
Time;
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(xii)
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any Liability or obligation with
respect to any employee or former employee (including any
beneficiaries or dependent thereof) of any Seller that is not an
Active Employee and any Liability or obligation under any Employee
Plan or other employee benefit plan, program or arrangement of any
kind that is not a Stamler Employee Plan;
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(xiii)
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any Liability or obligation of
any Seller under this Agreement or any other document, certificate
or instrument executed by any Seller in connection with the
Contemplated Transactions;
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(xiv)
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any Liability or obligation for
deferred compensation, except to the extent provided in Section
2.4(a)(iv) ; and
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(xv)
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any Liability or obligation
arising out of or relating to indebtedness for borrowed money of
the Sellers or guarantees of indebtedness for borrowed money of
Sellers, the Shareholder or any other Person.
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2.5 Allocation
The
Purchase Price shall be allocated in a manner to be agreed by Buyer
and Sellers (and their respective independent public accountants)
and set forth in a purchase price allocation agreement in customary
and reasonable form to be agreed by the parties (the “
Purchase Price Allocation Agreement ”). After the
Closing, the parties shall make consistent use of the allocation
principles embodied in the Purchase Price Allocation Agreement for
all Tax purposes and in all filings, declarations and reports with
the IRS in respect thereof, including the reports required to be
filed under Section 1060 of the Code. In any Proceeding related to
the determination of any Tax, neither Buyer nor any Seller shall
contend or represent that such allocation is not a correct
allocation, to the extent that such allocation is consistent with
the Purchase Price Allocation Agreement.
2.6
Closing
Unless
Buyer and Sellers otherwise agree, the purchase and sale provided
for in this Agreement (the “ Closing ”) will
take place at the offices of Buyer at 100 E. Wisconsin Avenue,
Milwaukee, Wisconsin, commencing at 10:00 a.m. (local time) on the
date that is ten (10) Business Days following the satisfaction of
the conditions set forth in Article VII and
Article VIII , unless the parties agree upon an earlier
date. Subject to the provisions of Article IX , failure to
consummate the purchase and sale provided for in this Agreement on
the date and time and at the place determined pursuant to this
Section 2.6 will not result in the termination of this
Agreement and will not relieve any party of any obligation under
this Agreement. In such a situation, the Closing will occur as soon
as practicable, subject to Article IX .
2.7 Closing
Obligations
In
addition to any other documents to be delivered under other
provisions of this Agreement, at the Closing:
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(a)
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Sellers shall deliver to
Buyer:
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(i)
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a bill of sale for all of the
Assets that are Tangible Personal Property in customary form and
substance reasonably acceptable to Buyer and Sellers (the “
Bill of Sale ”) executed by the Sellers;
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(ii)
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an assignment of all of the
Assets that are intangible personal property in customary form and
substance reasonably acceptable to Buyer and Sellers, which
assignment shall also contain Buyer’s undertaking and
assumption of the Assumed Liabilities (the “ Assignment
and Assumption Agreement ”) executed by the
Sellers;
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(iii)
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a recordable warranty deed and a
FIRPTA affidavit for each interest in the Millersburg Facility, and
for each leasehold interest in Leased Real Property, an Assignment
and Assumption of Lease in customary form and substance reasonably
acceptable to Buyer and Sellers or such other appropriate document
or instrument of transfer, as the case may require, each in form
and substance reasonably satisfactory to Buyer and its counsel and
executed by the applicable Seller(s);
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(iv)
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assignments of the Intellectual
Property Assets and separate assignments of all registered Marks,
Patents and Copyrights, in each case to the extent sold, conveyed,
assigned, transferred or delivered to Buyer pursuant to
Section 2.1, in customary form and substance reasonably
acceptable to Buyer and Sellers, executed by the applicable
Seller(s);
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(v)
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such other deeds, bills of sale,
assignments, certificates of title, documents and other instruments
of transfer and conveyance as may reasonably be requested by Buyer,
each in form and substance reasonably satisfactory to Buyer and its
legal counsel and executed by the applicable Seller(s);
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(vi)
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a noncompetition agreement in
customary form and substance reasonably acceptable to Buyer and
Sellers and consistent with the principles set forth in Section
10.7 , executed by Wayne C. Oldenburg and Sellers (the “
Noncompetition Agreement ”);
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(viii)
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a transition manufacturing
agreement in the form of Exhibit 2.7(a)(viii) (the “
Transition Manufacturing Agreement ”), executed by
Sellers;
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(ix)
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a transition services agreement
pursuant to which each party shall provide the others with
reasonable transition services necessary to operate the Stamler
Business and Sellers’ remaining businesses for a transitional
period following the Closing (in substantially the same manner as
operated by the Sellers prior to the Closing), in customary form
and substance reasonably acceptable to Buyer and Sellers (the
“ Transition Services Agreement ”), executed by
Sellers;
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(x)
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a certificate executed by each
Seller as to the accuracy of their representations and warranties
as of the Closing in accordance with Section 7.1 and as to
their compliance with and performance of their covenants and
obligations to be performed or complied with at or before the
Closing in accordance with Section 7.2 ;
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(xi)
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a certificate of the Seller
Representative certifying, as complete and accurate as of the
Closing, and attaching all requisite resolutions or actions of the
board of directors and shareholders of each Seller approving the
execution and delivery of this Agreement and the consummation of
the Contemplated Transactions and certifying to the incumbency and
signatures of the officers of each Seller executing this Agreement
and any other document relating to the Contemplated
Transactions;
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(xii)
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funds sufficient to pay all Taxes
payable in connection with the transfer or re-registration of title
to the Millersburg Facility and all vehicles included in the
Assets;
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(xiii)
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a Purchase Price Allocation
Agreement executed by Sellers;
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(xiv)
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a certificate setting forth a
list of all warranties in force at Closing on a machine-by-machine
basis; and
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(xv)
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the Non-Use Covenant (as defined
in Section 10.12 ) executed by Sellers.
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(b)
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Buyer shall deliver to the Seller
Representative:
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(i)
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one hundred and eighteen million
dollars ($118,000,000) to an account or accounts specified by the
Seller Representative in a writing delivered to Buyer at least
three (3) business days prior to the Closing Date;
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(iv)
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the Assignment and Assumption
Agreement executed by Buyer;
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(v)
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the Noncompetition Agreements
executed by Buyer;
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(vi)
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the Transition Manufacturing
Agreement executed by Buyer;
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(vii)
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the Transition Services Agreement
executed by Buyer;
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(viii)
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a certificate executed by Buyer
as to the accuracy of its representations and warranties as of the
Closing in accordance with Section 8.1 and as to its
compliance with and performance of its covenants and obligations to
be performed or complied with at or before the Closing in
accordance with Section 8.2 ;
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(ix)
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a certificate of the Secretary of
Buyer attaching and certifying, as complete and accurate as of the
Closing, all requisite resolutions or actions of Buyer’s
board of directors approving the execution and delivery of this
Agreement and the consummation of the Contemplated Transactions and
certifying to the incumbency and signatures of the officers of
Buyer executing this Agreement and any other document relating to
the Contemplated Transactions;
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(x)
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replacement letters of credit or
back-to-back letters of credit in customary form and substance
reasonably acceptable to Buyer and Sellers in each case with
respect to the letters of credit primarily related to the Stamler
Business which are listed on Item 1 of Part 2.4(a)(vi) (with
additions or deletions thereto as agreed to by the Parties prior to
Closing) and a replacement guarantee of the post-Closing Lease
obligations for the Leased Real Property located in
Australia;
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(xi)
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a Purchase Price Allocation
Agreement executed by Buyer;
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(xii)
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resale certificates for those
jurisdictions in which Buyer is taking possession of the Assets,
except jurisdictions where prohibited or not permitted by law;
and
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(xiii)
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if requested by Seller
Representative, an Excluded Contract Transition Agreement (the
“ Excluded Contract Transition Agreement”)
pursuant to which Buyer will contract with Sellers to complete
certain manufacturing required under the Excluded Contracts on
terms mutually acceptable to Buyer and Sellers (but which shall not
subject Buyer to any Liability or obligation with respect to
performance guarantees or other liabilities not typically assumed
by Buyer).
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2.8 Adjustment Amount and
Payment
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(a)
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Within five (5) days after the
final determination of the calculation of Closing Net Asset Value
(whether through failure of the Buyer to timely deliver a Dispute
Notice, agreement of the parties, or determination of the
Independent Accountants):
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(i)
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if Closing Net Asset Value is
less than Initial Net Asset Value, the Seller Representative (on
behalf of the Sellers) shall pay Buyer the difference;
or
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(ii)
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if Closing Net Asset Value is
more than Initial Net Asset Value, Buyer shall pay the Seller
Representative (on behalf of the Sellers) the excess.
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(b)
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All such payments shall be made
by wire transfer of immediately available funds to an account or
accounts designated in writing by the Seller Representative or
Buyer, as appropriate, which designation shall be made by the party
receiving such payment no later than one (1) business day prior to
the payment date.
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(c)
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All payments shall be made
together with interest at the Prime Rate, which interest shall
begin accruing on the Closing Date and end on the date that the
payment is made.
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2.9 Adjustment
Procedure
(a) The
net asset value of the Stamler Business as of December 31, 2005
(the “ Initial Net Asset Value ”) was
Thirty-Nine Million One Hundred Sixty-Two Thousand dollars
($39,162,000) as reflected in the calculation thereof shown on
Exhibit 2.9(a) (the “ Initial Net Asset Value
Schedule ”). The Initial Net Asset Value Schedule was
prepared by Sellers from the audited financial statements of
Oldenburg Group and its Subsidiaries as of December 31, 2005. The
Initial Net Asset Value Schedule includes any and all unbooked
December 31, 2005 audit adjustments related to the Stamler
Business, if any, as included within the workpapers of Price
WaterhouseCoopers LLP (“ PWC ”). PWC has (i)
reviewed the methodology used to derive the Initial Net Asset Value
Schedule, (ii) reconciled the Initial Net Asset Value Schedule to
the appropriate trial balances of the respective coal related
businesses, (iii) reviewed the reconciling items and (iv) prepared
a memorandum for their workpapers outlining their procedures (the
“ PWC Initial Net Asset Value Memorandum ”). The
PWC workpapers and the PWC Initial Net Asset Value Memorandum will
be made available to Buyer and the Consulting
Accountants.
(b) As
promptly as reasonably practicable after the Closing Date, and in
any event not later than ninety (90) days after the Closing Date,
Seller Representative shall deliver to Buyer a schedule setting
forth the calculation of Closing Net Asset Value (the
“Closing Net Asset Value Schedule ”). The
Closing Net Asset Value Schedule shall be prepared by Sellers from
the Oldenburg Group financial statements, prepared in accordance
with GAAP and prepared using the methodology consistent with the
preparation of the Initial Net Asset Value Schedule as of the
Closing Date, using the procedures set forth in Exhibit 2.9
. PWC will perform specific procedures on the Closing Net Asset
Value Schedule, the adequacy of which will be agreed upon by the
Buyer and Sellers prior to PWC commencing such procedures. The
specific procedures to be performed by PWC will be outlined in an
“Agreed Upon Procedures Letter” issued by PWC and
signed by Buyer and Sellers.
(c)
During its preparation of the Closing Net Asset Value Schedule, the
Seller Representative shall consult with Buyer and the Consulting
Accountants.
(d) Buyer
shall have thirty (30) days from the date the Seller Representative
delivers the Closing Net Asset Value Schedule (such period, the
“ Dispute Period ”) to notify the Seller
Representative, in writing, as to whether Buyer believes in good
faith that the Closing Net Asset Value Schedule contains errors or
has not been prepared in accordance with this Section 2.9
(such written notice, the “ Dispute Notice ”).
The Dispute Notice shall specify in reasonable detail the specific
items that are in dispute (the “Disputed Items
”). Any items not in dispute at the end of the Dispute Period
shall be deemed to be final and correct and shall be binding upon
each of the parties hereto. During the Dispute Period, Buyer and
the Consulting Accountants shall be permitted to review (during
regular business hours and upon reasonable prior notice) the
working papers of the Seller Representative and PWC relating to the
Disputed Items.
(e) If
Buyer fails to deliver a Dispute Notice to the Seller
Representative during the Dispute Period, the Seller
Representative’s calculation of Closing Net Asset Value shall
be deemed to be final and correct and shall be binding upon each of
the parties hereto.
(f) If
Buyer delivers a Dispute Notice to the Seller Representative during
the Dispute Period, the Seller Representative and Buyer shall, for
a period of forty-five (45) days from the date the Dispute Notice
is delivered to the Seller Representative (such period, the “
Resolution Period ”), use their respective
Commercially Reasonable Efforts to amicably resolve the Disputed
Items. Any Disputed Items so resolved by the parties shall be
deemed to be final and correct as so resolved and shall be binding
upon each of the parties hereto.
(g) If
the Sellers and Buyer are unable to resolve all of the Disputed
Items during the Resolution Period, then either Buyer, on the one
hand, or the Seller Representative, on the other hand, may refer
the remaining Disputed Items to the Independent Accountants. Such
referral shall be made in writing to the Independent Accountants,
copies of which shall concurrently be delivered to the
non-referring party hereto. The referring party shall furnish the
Independent Accountants, at the time of such referral, with the
Closing Net Asset Value Schedule and the Dispute Notice. The
parties shall also furnish the Independent Accountants with such
other information and documents as the Independent Accountants may
reasonably request in order for them to resolve the Disputed Items.
The parties hereto shall also, within ten (10) days of the date the
Disputed Items are referred to the Independent Accountants, provide
the Independent Accountants with a written notice (a “
Position Statement ”) describing in reasonable detail
their respective positions on the Disputed Items (copies of which
will concurrently be delivered to the other party hereto). If any
party fails to timely deliver its Position Statement to the
Independent Accountants, the Independent Accountants shall resolve
the Disputed Items solely upon the basis of the information
otherwise provided to them. The Independent Accountants shall
resolve all Disputed Items in a written determination to be
delivered to each of the parties hereto within forty-five (45) days
after such matter is referred to them; provided, however ,
that any delay in delivering such determination shall not
invalidate such determination or deprive the Independent
Accountants of jurisdiction to resolve the Disputed Items. The
decision of the Independent Accountants as to the Disputed Items
shall be final and binding upon the parties hereto and shall not be
subject to judicial review. The fees and expenses of the
Independent Accountants incurred in the resolution of any Disputed
Items shall be determined by the Independent Accountants and set
forth in their report and shall be allocated and paid by Buyer, on
the one hand, and Sellers, on the other hand, in inverse proportion
to the extent they prevailed on the Disputed Items.
2.10
Consents
(a) If
there are any Material Consents that have not yet been obtained (or
otherwise are not in full force and effect) as of the Closing, in
the case of each Seller Contract as to which such Material Consents
were not obtained (or otherwise are not in full force and effect)
(the “ Restricted Material Contracts ”), Buyer
may, in its sole discretion, waive the closing conditions as to any
such Material Consent and elect to have Sellers continue their
efforts to obtain the Material Consents for a period of up to 180
days following the Closing. If Buyer elects to waive any closing
condition as to any Material Consents and the Closing occurs,
notwithstanding Sections 2.1 and 2.4 , neither this
Agreement nor the Assignment and Assumption Agreement nor any other
document related to the consummation of the Contemplated
Transactions shall constitute a sale, assignment, assumption,
transfer, conveyance or delivery or an attempted sale, assignment,
assumption, transfer, conveyance or delivery of the Restricted
Material Contracts, and following the Closing, the parties shall
use Best Efforts, and cooperate with each other, to obtain the
Material Consent relating to each Restricted Material Contract as
quickly as practicable. Pending the obtaining of any Material
Consents relating to any Restricted Material Contract, the parties
shall cooperate with each other in any reasonable and lawful
arrangements designed to provide to Buyer the benefits of use of
the Restricted Material Contract for its term (or any right or
benefit arising thereunder, including the enforcement for the
benefit of Buyer of any and all rights of any Seller against a
third party thereunder). Buyer agrees to reimburse Sellers for all
out of pocket expenses actually incurred by Sellers after the
Closing Date to the extent such expenses are incurred in connection
with providing Buyer the benefits of the Restricted Material
Contracts after the Closing Date. Once a Material Consent for the
sale, assignment, assumption, transfer, conveyance and delivery of
a Restricted Material Contract is obtained, the applicable Seller
shall promptly assign, transfer, convey and deliver such Restricted
Material Contract to Buyer, and Buyer shall assume the obligations
under such Restricted Material Contract assigned to Buyer from and
after the date of assignment to Buyer pursuant to a special-purpose
assignment and assumption agreement substantially similar in terms
to those of the Assignment and Assumption Agreement (which
special-purpose agreement the parties shall prepare, execute and
deliver in good faith at the time of such transfer, all at no
additional cost to Buyer).
(b) If
there are any Consents other than the Material Consents necessary
for the assignment and transfer of any Assigned Contracts to Buyer
which have not yet been obtained (or otherwise are not in full
force and effect) as of the Closing, Buyer shall, in the case of
each of the Assigned Contracts as to which such Consents were not
obtained (or otherwise are not in full force and effect), accept
the assignment of such Assigned Contract, in which case, as between
Buyer and the Sellers, such Assigned Contract shall, to the maximum
extent practicable and notwithstanding the failure to obtain the
applicable Consent, be transferred at the Closing pursuant to the
Assignment and Assumption Agreement as elsewhere provided under
this Agreement.
ARTICLE
III.
REPRESENTATIONS AND WARRANTIES OF
SELLERS
The Sellers represent and
warrant, jointly and severally, to Buyer as follows:
3.1
Organization and Good Standing
(a)
Part 3.1(a) contains a complete and accurate list of each
Seller’s jurisdiction of incorporation and any other
jurisdictions in which any Seller is qualified to do business as a
foreign corporation with respect to the Stamler Business. Each
Seller is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation,
with full corporate power and authority to conduct its business as
it is now being conducted, to own or use the properties and assets
that it purports to own or use, and to perform all its obligations
under the Seller Contracts. Each Seller is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the
nature of the activities conducted by it, requires such
qualification and where the failure to be so qualified would
reasonably be expected to have a material adverse effect on the
Stamler Business. In 2004, Lake Shore, Lake Shore Mining and Lake
Shore Mining Equipment were merged with and into Oldenburg Group.
The Stamler Business does not include the vertical belt system
(VBS) business previously conducted by Lake Shore
Mining.
(b)
Sellers have no Subsidiaries which own assets used by, or conduct
any aspect of, the Stamler Business and do not own any shares of
capital stock or other securities of any other Person which is a
supplier to, customer of or other business relation of the Stamler
Business.
3.2
Enforceability; Authority; No Conflict
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(a)
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This Agreement constitutes the
legal, valid and binding obligation of each Seller, enforceable
against each of them in accordance with its terms, except that
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Legal Requirements
affecting creditors’ rights generally and by general
equitable principles. Upon the execution and delivery by Sellers of
each agreement to be executed and delivered by any or all of the
Sellers at the Closing (collectively, the “ Seller’s
Closing Documents ”), each of the Seller’s Closing
Documents will constitute the legal, valid and binding obligation
of each of the Sellers, enforceable against each of them in
accordance with its terms. Each Seller has the absolute and
unrestricted corporate right, power and authority to execute and
deliver this Agreement and the Seller’s Closing Documents to
which it is a party and to perform its obligations under this
Agreement and the Seller’s Closing Documents, and such action
has been duly authorized by all necessary action by each
Seller’s shareholders and board of directors.
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(b)
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Except as set forth in Part
3.2(b) , neither the execution and delivery of this Agreement
by Sellers nor the consummation or performance of any of the
Contemplated Transactions by Sellers will, directly or indirectly
(with or without notice or lapse of time):
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(i)
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Breach (A) any provision of any
of the Governing Documents of any Seller or (B) any resolution
adopted by the board of directors or the shareholders of any
Seller;
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(ii)
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Breach or give any Governmental
Body or other Person the right to challenge any of the Contemplated
Transactions or to exercise any legal remedy or obtain any relief
under any Legal Requirement or any Order to which any Seller or any
of the Assets are subject;
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(iii)
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contravene, conflict with or
result in a violation or breach of any of the terms or requirements
of, or give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate or modify, any Governmental
Authorization that is held by any Seller and that primarily relates
to the Assets or to the Stamler Business;
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(iv)
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with respect to those Assigned
Contracts for which any Consent is required, and after giving
effect to all Consents obtained, breach any provision of, or give
any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or payment
under, or to cancel, terminate or modify, any Assigned Contract;
or
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(v)
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result in the imposition or
creation of any Encumbrance upon or with respect to any of the
Assets other than a Permitted Encumbrance.
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(c)
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Except as set forth in Part
3.2(c) , no Seller is required to give any notice to or obtain
any Consent from any Person in connection with the execution and
delivery of this Agreement by Sellers or the consummation or
performance of any of the Contemplated Transactions by
Sellers.
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3.3 Capitalization
All
of the issued and outstanding equity securities of Oldenburg Group
are owned by Wayne C. Oldenburg (the “ Shareholder
”). The Shareholder is and will be on the Closing Date the
record and beneficial owner and holder of the shares of Oldenburg
Group. All of the issued and outstanding equity securities of the
Seller Subsidiaries are owned by Oldenburg Group. The Oldenburg
Group is and will be on the Closing Date the record and beneficial
owner and holder of the shares of the Seller
Subsidiaries.
3.4
Financial Statements and Financial Information
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(a)
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Attached hereto as Exhibit
3.4 are unaudited balance sheet information for the Stamler
Business as at December 31, 2005 (the “ Balance Sheet
”) and related statement of income information for the fiscal
year then ended (the Balance Sheet and related income statement
information shall be referred to herein as the “Unaudited
Financial Statements”). Such financial information fairly
presents in all material respects the financial condition and the
results of operations of the Stamler Business as at the respective
dates of and for the periods referred to in such financial
information, all in accordance with GAAP (except as disclosed in
Part 3.4(a) ). The financial information referred to in this
Section 3.4 reflects the consistent application of such
accounting principles throughout the periods involved, except as
disclosed in Part 3.4(a) . Except as set forth in Part
3.4(a) , the financial information referred to in this
Section 3.4 has been prepared from and are in accordance
with the accounting Records of the Sellers in all material
respects. There are no letters from Sellers’ auditors to
Oldenburg Group’s board of directors or the audit committee
thereof during the thirty-six (36) months preceding the execution
of this Agreement.
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(b)
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The following financial schedules
to be included in Part 3.4(b) will be correct and complete
in all material respects as of the Effective Time:
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(i)
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the schedule of original
equipment sales by customer for 2005 and year to date through March
31, 2006, stating the invoice price for each sale; and
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(ii)
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the schedule of backlog at March
31, 2006 by customer.
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3.5 Books and
Records
The
books of account and other financial Records from which the
financial information referenced in Section 3.4 has been
derived are complete and correct in all material respects and
represent actual, bona fide transactions.
3.6
Sufficiency of Assets
Except
as set forth in Part 3.6 , the Assets constitute all of the
assets, tangible and intangible, of any nature whatsoever,
necessary to operate the Stamler Business in the manner presently
operated by Sellers and/or reflected in the financial information
described in Section 3.4 .
3.7
Description of Millersburg Facility
Part 3.7 contains a correct legal description, street
address and tax parcel identification number of the Millersburg
Facility (which includes the house included in the Storefront
Properties/House).
3.8
Description of Leased Real Property
Part 3.8 contains a correct list by street address of the
Leased Real Property. Sellers have previously delivered to Buyer
copies of all Leases for the Leased Real Property.
3.9 Title to
Assets; Encumbrances
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(a)
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Each Seller owns good and, with
respect to the Millersburg Facility, marketable title to its
respective estates in the Stamler Facilities, free and clear of any
Encumbrances, other than:
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(i)
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liens for Taxes for the current
tax year which are not yet due and payable;
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(ii)
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those Encumbrances described in
Part 3.9(a) or items disclosed in the Prior Survey
(“Real Estate Encumbrances”);
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(iii)
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easements for public utilities
and other easements of record which do not impair the use,
occupancy or value of the Millersburg Facility in the operation of
the Stamler Business in each case subject to the matters described
in Section 3.9(a)(ii) and the Prior Survey;
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(iv)
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recorded building and use
restrictions that are not violated by the current use or occupancy
of the Millersburg Facility or the operation of the Stamler
Business (collectively clauses (i) – (iv), “
Permitted Real Estate Encumbrances”); and
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(v)
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such other Encumbrances that do
not (A) secure indebtedness or (B) interfere with the present or
future use of or materially detract from the value of the property
subject thereto or affected thereby or the Stamler
Business.
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True and complete copies of (A)
all existing title insurance policies and surveys of or pertaining
to the Millersburg Facility and (B) all instruments, agreements and
other documents evidencing, creating or constituting any Real
Estate Encumbrances have been delivered to Buyer. Sellers warrant
to Buyer that, at the time of Closing, the Millersburg Facility
shall be free and clear of all Encumbrances other than Permitted
Real Estate Encumbrances.
(b)
Sellers own good title to all of the other Assets free and clear of
any Encumbrances other than those described in Part
3.9(b)(i) (“ Non-Real Estate Encumbrances
”). Sellers warrant to Buyer that, at the time of Closing,
all of the other Assets shall be free and clear of all Encumbrances
other than those Non-Real Estate Encumbrances identified on Part
3.9(b)(ii) and Non-Real Estate Encumbrances of the type
identified in Section 3.9(a)(v) (“ Permitted
Non-Real Estate Encumbrances ” and, together with the
Permitted Real Estate Encumbrances, “ Permitted
Encumbrances ”).
3.10
Condition of Facilities
(a) Use
of the Stamler Facilities for the various purposes for which it is
presently being used is permitted as of right under all applicable
zoning requirements and is not subject to “permitted
nonconforming” use or structure classifications. Except as
set forth on Part 3.10 , all Improvements are in compliance
with all applicable Legal Requirements, including those pertaining
to zoning, building and the disabled, are in all material respects
in good repair and in good condition, ordinary wear and tear
excepted. Except as set forth on Part 3.10 , no part of any
Improvement encroaches on any real property not included in the
Stamler Facilities, and there are no buildings, structures,
fixtures or other Improvements primarily situated on adjoining
property which encroach on any part of the Land. The Land for the
Millersburg Facility abuts on and has direct vehicular access to a
public road or has access to a public road via a permanent,
irrevocable, appurtenant easement benefiting such Land and
comprising a part of the Stamler Facilities, is supplied with
public or quasi-public utilities and other services appropriate for
the operation of the facilities located thereon and is not located
within any flood plain or area subject to wetlands regulation or
any similar restriction. There is no existing or, to the Knowledge
of Sellers, proposed plan to modify or realign any street or
highway or any existing or proposed eminent domain proceeding that
would result in the taking of all or any part of any Stamler
Facility or that would prevent or hinder the continued use of any
Stamler Facility as heretofore used in the conduct of the Stamler
Business.
(b)
Except as set forth in Part 3.10(b) , each item of Tangible
Personal Property which has a fair market value in excess of twenty
thousand dollars ($20,000) is in all material respects in good
repair and good operating condition, ordinary wear and tear
excepted, and is suitable for continued use in the Ordinary Course
of Business. Except as disclosed in Part 3.10(b) , all
material Tangible Personal Property used in the Stamler Business is
in the possession of Sellers.
3.11
Accounts Receivable and Accounts Payable
(a) All
Accounts Receivable that are reflected on the Balance Sheet or on
the accounting Records of Sellers as of the Closing Date represent
or will represent valid obligations arising from sales actually
made or services actually performed by Sellers in the Ordinary
Course of Business. Except to the extent paid prior to the Closing
Date, such Accounts Receivable are or will be as of the Closing
Date collectible net of the respective reserves shown on the
Balance Sheet or on the Closing Net Asset Value Schedule delivered
pursuant to Section 2.9 (which reserves are calculated
consistent with past practice). There is no material contest,
claim, defense or right of setoff, other than returns in the
Ordinary Course of Business of the Stamler Business, with any
account debtor of an Account Receivable relating to the amount or
validity of such Account Receivable. Part 3.11(a) contains a
complete and accurate list of the Accounts Receivable outstanding
for more than sixty (60) days as of the date of the Balance Sheet,
including aging of such Accounts Receivable.
(b)
Except as set forth on Part 3.11(b) , since December 31,
2005, there has been no material change in the number of days
payable outstanding to vendors of the Stamler Business. Since
December 31, 2004, Sellers have not changed its practices or
procedures with respect to the payment of trade accounts
payable.
(c)
Except as set forth on Part 3.11(c) , all of the trade
accounts payable and notes payable included in the Closing Net
Asset Value were incurred by Sellers in the conduct of the Stamler
Business in the Ordinary Course of Business. The trade accounts
payable and notes payable included in the Initial Net Asset Value
did not include any amounts for which the Sellers had issued checks
or wired funds as of December 31, 2005. The trade accounts payable
and notes payable included in the Closing Net Asset Value will not
include any amounts for which the Sellers will have issued checks
or wired funds as of the Effective Time.
3.12
Inventories
Except
as set forth in Part 3.12 , all items included in the
Inventories consist of a quality and quantity usable and, with
respect to finished goods, saleable, in the Ordinary Course of
Business of the Stamler Business except for obsolete items and
items of below-standard quality, all of which have been written off
or written down to the lower of cost or market in the Balance Sheet
or on the accounting Records of the Sellers as of the Closing Date,
as the case may be using the procedures described in Part
3.12 . Except as set forth on Part 3.12 , the Sellers
are not in possession of any inventory not owned by Sellers,
including goods already sold. All of the Inventories have been
valued at the lower of cost or market value on a first in, first
out basis. Inventory now on hand that were purchased after the date
of the Balance Sheet were purchased in the Ordinary Course of
Business of the Stamler Business at a cost not exceeding market
prices prevailing at the time of purchase. The quantities of
Inventory (whether raw materials, work-in-process or finished
goods) are not excessive but are reasonable in the present
circumstances of the Stamler Business.
3.13 No
Undisclosed Liabilities
Except
as set forth in Part 3.13 , Sellers have no Liability with
respect to the Stamler Business except for (a) Liabilities
reflected or reserved against in the Balance Sheet, (b) Liabilities
arising under the Stamler Contracts (other than for Breach), (c)
Liabilities incurred in the Ordinary Course of Business of the
Stamler Business since the date of the Balance Sheet that in the
aggregate are not material to the Stamler Business, and (d) other
Liabilities which individually and in the aggregate are not
material.
3.14
Taxes
Sellers
have paid, or made provision for the payment of, all Taxes with
respect to the Stamler Business that have or may have become due
for all periods prior to the Effective Date, or pursuant to any
assessment received by any Seller with respect to the Stamler
Business for periods prior to the Effective Date, except such
Taxes, if any, as are listed in Part 3.14 and are being
contested in good faith and as to which adequate reserves
(determined in accordance with GAAP) have been provided in the
Balance Sheet. There are no Encumbrances on any of the Assets that
arose in connection with any failure (or alleged failure) to pay
any Tax when due, and Sellers have no Knowledge of any basis for
assertion of any claims attributable to Taxes which, if adversely
determined, would result in any such Encumbrance.
3.15 No
Material Adverse Change
Since
the date of the Balance Sheet, there has not been any material
adverse change in the business, operations, assets, results of
operations or condition (financial or other) of the Stamler
Business taken as a whole, and no event has occurred or
circumstance exists that would reasonably be expected to result in
such a material adverse change; provided, however , that in
no event shall any of the following constitute a material adverse
change in the business, operations, assets, results of operations
or condition (financial or other) of the Stamler Business: (i) any
change resulting from compliance by Sellers or Buyer with the terms
of, or the taking of any action contemplated by, this Agreement or
any Ancillary Agreement, (ii) changes in the global economy, the
U.S. economy or other economies in which the Sellers operate, (iii)
changes in the coal mining equipment industry in general, (iv)
changes resulting from the identity of the Buyer or the
Buyer’s plans for the customers, suppliers or employees of
the Stamler Business, (v) changes with respect to GAAP after the
date of this Agreement or (vi) changes in Legal Requirements after
the date of this Agreement.
3.16
Employee Benefits
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(a)
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All “employee benefit
plans” as defined by Section 3(3) of ERISA, all specified
fringe benefit plans as defined in Section 6039D of the Code, and
all other bonus, incentive-compensation, deferred-compensation,
profit-sharing, stock-option, stock-appreciation-right,
stock-bonus, stock-purchase, employee-stock-ownership, savings,
severance, change-in-control, supplemental-unemployment, layoff,
salary-continuation, retirement, pension, health, life-insurance,
disability, accident, group-insurance, vacation, holiday,
sick-leave, fringe-benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice,
commitment, contract or understanding (whether qualified or
nonqualified, currently effective or terminated, written or
unwritten) and any trust, escrow or other agreement related thereto
that (i) is maintained or contributed to by any Seller or any other
corporation or trade or business controlled by, controlling or
under common control with any Seller (within the meaning of Section
414 of the Code or Section 4001(a)(14) or 4001(b) of ERISA)
(“ ERISA Affiliate ”) or has been maintained or
contributed to in the last six (6) years by any Seller or any ERISA
Affiliate, or with respect to which any Seller or any ERISA
Affiliate has or may have any liability, and (ii) provides
benefits, or describes policies or procedures applicable to any
current or former director, officer, employee or service provider
of any Seller or any ERISA Affiliate, or the dependents of any
thereof, regardless of how (or whether) liabilities for the
provision of benefits are accrued or assets are acquired or
dedicated with respect to the funding thereof shall collectively be
known as the “ Employee Plans .” Part
3.16(a) identifies as such any Employee Plan that is (w) a
“defined benefit plan” (as defined in Section 3(35) of
ERISA) or any other plan that is subject to the funding
requirements of Section 412 of the Code or Section 302 of ERISA
other than a Multiemployer Plan; (x) a plan intended to meet the
requirements of Section 401(a) of the Code; or (y) a
“Multiemployer Plan” (as defined in Section 3(37) of
ERISA). Part 3.16(a) identifies as “Stamler
Employee Plans ” all Employee Plans which cover or
provide benefits for employees or former employees (including any
beneficiaries or dependents thereto) of the Stamler Business. Also
set forth on Part 3.16(a) is a complete and correct list of
all ERISA Affiliates of any Seller during the last six (6)
years.
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(b)
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Sellers have delivered or made
available to Buyer true, accurate and complete copies of (i) the
documents comprising each Stamler Employee Plan (or, with respect
to any Stamler Employee Plan which is unwritten, a detailed written
description of eligibility, participation, benefits, funding
arrangements, assets and any other matters which relate to the
obligations of any Seller or any ERISA Affiliate); (ii) all trust
agreements, insurance contracts or any other funding instruments
related to the Stamler Employee Plans; (iii) all rulings,
determination letters, no-action letters or advisory opinions from
the IRS, the U.S. Department of Labor, the Pension Benefit Guaranty
Corporation (“ PBGC ”) or any other Governmental
Body that pertain to each Stamler Employee Plan and any open
requests therefor; (iv) the most recent actuarial and financial
reports (audited and/or unaudited) and the annual reports filed
with any Government Body with respect to the Stamler Employee Plans
during the current year and each of the three preceding years; (v)
all collective bargaining agreements pursuant to which
contributions to any Employee Plan(s) have been made or obligations
incurred (including both pension and welfare benefits) by any
Seller or any ERISA Affiliate, and all collective bargaining
agreements pursuant to which contributions are being made or
obligations are owed by such entities; (vi) all securities
registration statements filed with respect to any Stamler Employee
Plan; (vii) all contracts with third-party administrators,
actuaries, investment managers, consultants and other independent
contractors that relate to any Stamler Employee Plan, (viii) with
respect to Stamler Employee Plans that are subject to Title IV of
ERISA, the Form PBGC-1 filed for each of the three most recent plan
years; and (ix) all summary plan descriptions, summaries of
material modifications and memoranda, employee handbooks and other
written communications regarding the Stamler Employee
Plans.
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(c)
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Except as disclosed in Part
3.16(c) , full payment has been timely made of all amounts that
are required under the terms of each Stamler Employee Plan or as
required under applicable law (including the Code and ERISA) to be
paid as contributions with respect to all periods prior to and
including the last day of the most recent fiscal year of such
Stamler Employee Plan ended on or before the date of this Agreement
and all periods thereafter prior to the Closing Date. No
accumulated funding deficiency or liquidity shortfall (as those
terms are defined in Section 302 of ERISA and Section 412 of the
Code) has been incurred with respect to any Employee Plan, whether
or not waived. Sellers are not required to provide security to a
Stamler Employee Plan under Section 401(a)(29) of the Code. Sellers
have paid in full all required insurance premiums, subject only to
normal retrospective adjustments in the ordinary course, with
regard to the Stamler Employee Plans for all policy years or other
applicable policy periods ending on or before the Closing
Date.
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(d)
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No Stamler Benefit Plan is a
“defined benefit plan” (as defined in Section 3(35) of
the ERISA) or any other plan that is subject to the funding
requirements of Section 412 of the Code or Section 302 of ERISA or
a “Multiemployer Plan” (as defined in Section
4001(a)(3) of ERISA). No assets of the Stamler Business are subject
to any lien under Code Section 401(a)(29), ERISA Section 302(f) or
Code Section 412(n), ERISA Section 4068 or arising out of any
action filed under ERISA Section 4201(b). Neither Seller nor any
ERISA Affiliate has incurred any liability which could subject
Buyer or any Asset of the Stamler Business to liability under
Section 412 of the Code or Title IV of ERISA.
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(e)
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Each Seller has, at all times,
complied, and currently complies, in all material respects with the
applicable continuation requirements for its welfare benefit plans,
including (1) Section 4980B of the Code (as well as its predecessor
provision, Section 162(k) of the Code) and Sections 601 through
608, inclusive, of ERISA, which provisions are hereinafter referred
to collectively as “COBRA ” and (2) any
applicable state statutes mandating health insurance continuation
coverage for employees.
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(f)
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The form and operation of all
Stamler Employee Plans is in material compliance with the
applicable terms of ERISA, the Code, and any other applicable laws,
including the Americans with Disabilities Act of 1990, the Family
Medical Leave Act of 1993 and the Health Insurance Portability and
Accountability Act of 1996, and such plans have been operated in
compliance with such laws and the written Stamler Employee Plan
documents. Neither any Seller nor any fiduciary of a Stamler
Employee Plan has violated the requirements of Section 404 of
ERISA. All required reports and descriptions of the Stamler
Employee Plans (including Internal Revenue Service Form 5500 Annual
Reports, Summary Annual Reports and Summary Plan Descriptions and
Summaries of Material Modifications) have been (when required)
timely filed with the IRS, the U.S. Department of Labor or other
Governmental Body and distributed as required, and all notices
required by ERISA or the Code or any other Legal Requirement with
respect to the Stamler Employee Plans have been appropriately
given.
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(g)
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Each Stamler Employee Plan that
is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the IRS, and Sellers
have no Knowledge of any circumstances that will or could result in
revocation of any such favorable determination letter. Each trust
created under any Stamler Employee Plan has been determined to be
exempt from taxation under Section 501(a) of the Code, and to
Sellers’ Knowledge, there is no circumstance that will or
could result in a revocation of such exemption. Each Employee
Welfare Benefit Plan (as defined in Section 3(1) of ERISA) that
utilizes a funding vehicle described in Section 501(c)(9) of the
Code or is subject to the provisions of Section 505 of the Code has
been the subject of a notification by the IRS that such funding
vehicle qualifies for tax-exempt status under Section 501(c)(9) of
the Code or that the plan complies with Section 505 of the Code,
unless the IRS does not, as a matter of policy, issue such
notification with respect to the particular type of plan. With
respect to each Stamler Employee Plan, no event has occurred or
condition exists that will or could give rise to a loss of any
intended tax consequence or to any Tax under Section 511 of the
Code.
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(h)
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There is no material pending or
threatened Proceeding relating to any Stamler Employee Plan, nor is
there any basis for any such Proceeding. Neither any Seller nor any
fiduciary of an Employee Plan has engaged in a transaction with
respect to any Stamler Employee Plan that, assuming the taxable
period of such transaction expired as of the date hereof, could
subject any Seller or Buyer to a Tax or penalty imposed by either
Section 4975 of the Code or Section 502(l) of ERISA or a violation
of Section 406 of ERISA. The Contemplated Transactions will not
result in the potential assessment of a Tax or penalty under
Section 4975 of the Code or Section 502(l) of ERISA nor result in a
violation of Section 406 of ERISA.
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(i)
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With respect to the Stamler
Business, Sellers have maintained workers’ compensation
coverage as required by applicable state law through purchase of
insurance and not by self-insurance or otherwise except as
disclosed to Buyer on Part 3.16(i) .
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(j)
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Except as required by Legal
Requirements and as provided in Section 10.1(d) , the
consummation of the Contemplated Transactions will not accelerate
the time of vesting or the time of payment, or increase the amount,
of compensation due to any director, employee, officer, former
employee or former officer of any Seller. There are no contracts or
arrangements providing for payments that could subject any person
to liability for tax under Section 4999 of the Code.
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(k)
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Except for the continuation
coverage requirements of COBRA and except as set forth on Part
3.16(k) , Sellers have no obligations or potential liability
for benefits to employees, former employees or their respective
dependents following termination of employment or retirement under
any of the Stamler Employee Plans that are Employee Welfare Benefit
Plans.
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(l)
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Except as provided in Section
10.1(d) , none of the Contemplated Transactions will result in
an amendment, modification or termination of any of the Employee
Plans. No written or oral representations have been made to any
employee or former employee of any Seller promising or guaranteeing
any employer payment or funding for the continuation of medical,
dental, life or disability coverage for any period of time beyond
the end of the current plan year (except to the extent of coverage
required under COBRA). No written or oral representations have been
made to any employee or former employee of any Seller concerning
the employee benefits of Buyer.
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(m)
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With respect to the Stamler
Business in Australia, South Africa and the United
Kingdom:
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(i)
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no Active Employee in the United
Kingdom is covered by an enhanced redundancy scheme;
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(ii)
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with respect to Active Employees
employed by Sellers in Australia, South Africa and the United
Kingdom, Sellers have complied or will timely comply with all
applicable Legal Requirements regarding consultation with or
notification to employees in connection with the Contemplated
Transactions; and
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(iii)
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Sellers have no Liability arising
out of or related to non-compliance with applicable Legal
Requirements relating to employment law with respect to Active
Employees employed by Sellers in Australia, South Africa and the
United Kingdom.
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3.17 Compliance with Legal
Requirements; Governmental Authorizations
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(a)
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Except as set forth in Part
3.17(a) :
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(i)
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Sellers and the Stamler Business
are, and at all times since January 1, 2004, have been, in
compliance in all material respects with each Legal Requirement
(including without limitation each Occupational Safety Law) that is
or was applicable to it or to the conduct or operation of the
Stamler Business or the ownership or use of any of its
assets;
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(ii)
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to the Knowledge of Sellers, no
event has occurred or circumstance exists that (with or without
notice or lapse of time) (A) would reasonably be expected to
constitute or result in a material violation by any Seller of, or a
failure on the part of any Seller to comply with, any Legal
Requirement with respect to the Stamler Business or (B) would
reasonably be expected to give rise to any obligation on the part
of any Seller to undertake, or to bear all or any portion of the
cost of, any material remedial action of any nature with respect to
the Stamler Business; and
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(iii)
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Sellers have not received, at any
time since January 1, 2004, any written notice, or to the Knowledge
of Sellers any oral notice, from any Governmental Body or any other
Person regarding (A) any actual or alleged violation of, or failure
to comply with, any Legal Requirement with respect to the Stamler
Business (excluding violations or failures to comply with any Legal
Requirement that would not reasonably be expected to result in a
fine exceeding $25,000 or more or otherwise be material to the
Stamler Business) or (B) any actual or alleged obligation on the
part of any Seller to undertake, or to bear all or any portion of
the cost of, any remedial action of any nature with respect to the
Stamler Business.
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(b)
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Part 3.17(b)
contains a complete and accurate
list of each Governmental Authorization that is held by any Seller
and that primarily relates to the Stamler Business or the Assets.
Each Governmental Authorization listed or required to be listed in
Part 3.17(b) is valid and in full force and effect. Except
as set forth in Part 3.17(b) :
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(i)
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Sellers and the Stamler Business
are, and at all times since January 1, 2004, have been, in
compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be identified
in Part 3.17(b), except where the failure to so comply would
not reasonably be expected to have a material adverse effect on the
Stamler Business;
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(ii)
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to the Knowledge of Sellers, no
event has occurred or circumstance exists that would reasonably be
expected to (with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a material violation
of or failure to comply with any term or requirement of any
Governmental Authorization listed or required to be listed in
Part 3.17(b) or (B) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation or termination of,
or any material modification to, any Governmental Authorization
listed or required to be listed in Part 3.17(b) ;
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(iii)
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Sellers have not received, at any
time since January 1, 2004, any written notice, or to the Knowledge
of Sellers any oral notice, from any Governmental Body or any other
Person regarding (A) any actual or alleged violation of or failure
to comply with any term or requirement of any Governmental
Authorization listed in Part 3.17(b) (excluding violations
or failures to comply with any Governmental Authorization that
would not reasonably be expected to result in a fine exceeding
$25,000 or more or otherwise be material to the Stamler Business)
or (B) any actual or proposed revocation, withdrawal, suspension,
cancellation, termination of or modification to any Governmental
Authorization listed in Part 3.17(b) ; and
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(iv)
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all applications required to have
been filed for the renewal of the Governmental Authorizations
listed or required to be listed in Part 3.17(b) have been
duly filed on a timely basis with the appropriate Governmental
Bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on
a timely basis with the appropriate Governmental Bodies.
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The
Governmental Authorizations listed in Part 3.17(b)
collectively constitute all of the Governmental Authorizations
necessary to permit Sellers to lawfully conduct and operate the
Stamler Business in the manner in which they currently conduct and
operate such business and to permit Sellers to own and use the
Stamler Business assets in the manner in which they currently own
and use such assets.
The
representations and warranties in this Section 3.17 do not
cover the topic of compliance with Environmental Laws,
Environmental and Health Liabilities, Remedial Actions, Hazardous
Activities, Hazardous Material or other matters relating to the
Environment (which topics are instead covered by Section
3.22 ).
3.18 Legal
Proceedings; Orders
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(a)
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Except as set forth in Part
3.18(a) , there is no pending Proceedings or, to the Knowledge
of Sellers, threatened Proceeding (other than threatened
Proceedings which are immaterial individually and in the
aggregate):
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(i)
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by or against any Seller that
relates to or would reasonably be expected to affect the Stamler
Business or any of the Assets; or
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(ii)
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that challenges, or that would
reasonably be expected to have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the
Contemplated Transactions.
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To the Knowledge of Sellers, no
event has occurred or circumstance exists that is reasonably likely
to give rise to the commencement of any such Proceeding. Sellers
have made available to Buyer copies of all pleadings,
correspondence and other documents relating to each Proceeding
listed in Part 3.18(a) .
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(b)
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Except as set forth in Part
3.18(b) :
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(i)
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there is no Order to which the
Stamler Business or any of the Assets is subject; and
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(ii)
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to the Knowledge of Sellers, no
officer, director, agent or employee of any Seller is subject to
any Order that prohibits such officer, director, agent or employee
from engaging in or continuing any conduct, activity or practice
relating to the Stamler Business.
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(c)
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Except as set forth in Part
3.18(c) :
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(i)
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Sellers are, and, at all times
since January 1, 2004, have been in material compliance with all of
the terms and requirements of each Order to which the Stamler
Business or any of the Assets is or has been subject;
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(ii)
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to the Knowledge of Sellers, no
event has occurred or circumstance exists that is reasonably likely
to constitute or result in (with or without notice or lapse of
time) a material violation of or material failure to comply with
any term or requirement of any Order to which the Stamler Business
or any of the Assets is subject; and
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(iii)
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Sellers have not received, at any
time since January 1, 2004, any written notice, or to the Knowledge
of Sellers any oral notice, from any Governmental Body or any other
Person regarding any actual or alleged material violation of, or
material failure to comply with, any term or requirement of any
Order to which the Stamler Business or any of the Assets is or has
been subject.
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3.19 Absence of Certain Changes
and Events
Except
as set forth in Part 3.19 , since the date of the Balance
Sheet, Sellers have conduc
