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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: October 17, 1997
(Date of earliest event reported)
CONTINENTAL GLOBAL GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 333-27665 31-1506889
(State or Other Jurisdiction of (Commission File (I.R.S. Employer
Incorporation or Organization) Number) Identification No.)
438 Industrial Drive
Winfield, Alabama 35594
(Address of Principal Executive Offices and Zip Code)
(205) 487-6492
(Registrant's Telephone Number, Including Area Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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On October 17, 1997, pursuant to a Worldwide Purchase and Sale
Agreement, Continental Conveyor International Inc. ("Continental"), a
wholly-owned subsidiary of Continental Conveyor & Equipment Company, a
wholly-owned subsidiary of the Registrant, acquired certain assets
and assumed certain liabilities of entities comprising the MECO Belt Group
from Joy Technologies Inc. ("Joy"), an affiliate of Harnischfeger Industries,
Inc. Specifically, Continental purchased the issued and outstanding stock of
Fletcher Sutcliffe Wild Limited in the United Kingdom and MECO McCallum Pty,
Limited in Australia, and purchased certain assets from and assumed certain
liabilities of America Longwell Roof Supports, Inc. in the United States and
Harnischfeger (South Africa) (Proprietary) Limited in South Africa.
The aggregate purchase price was approximately $7.2 million, including
the issuance of a $5.2 million note by Continental Conveyor & Equipment
Company, plus accrued liabilities of $5 million, and was negotiated between
Continental and Joy as the fair market value of acquired shares and net assets
of the MECO Belt Group. The acquisition was internally funded by the
Registrant and Continental.
The acquired assets were used by the MECO Belt Group to design and
manufacture intermediate belt structures, pulleys, and terminals for rigid rail
conveyors for the above and underground mining industry. Continental intends to
continue such activity and integrate the business of the MECO Belt Group into
its existing operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(a) Financial statements of business acquired
(b) Pro forma financial information
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Pursuant to Rule 3.05 and to Article 11 of Regulation S-X, audited financial
statements of the MECO Belt Group are not required for any period and pro forma
financial information is not required.
(c) Exhibits - See index of exhibits
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONTINENTAL GLOBAL GROUP, INC.
/s/ C. Edward Bryant, Jr.
DATE: NOVEMBER 3, 1997 By: _______________________________
C. Edward Bryant, Jr.
President
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CONTINENTAL GLOBAL GROUP, INC.
FORM 8-K
INDEX OF EXHIBITS
Exhibit
Number Description
2.0 World Wide Pruchase and Sale Agreement dated as of October 17, 1997,
by and among Continental Conveyor International Inc., Joy
Technologies Inc., and certain affiliates of Joy Technologies Inc.
(the "Purchase Agreement"). (All exhibits to the Purchase Agreement
have been omitted, and Registrant will furnish supplementally to the
Commission, upon request, a copy of any omitted exhibit.)
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Exhibit 2.0
JOY CONVEYOR BUSINESS
WORLDWIDE PURCHASE AND SALE AGREEMENT
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JOY CONVEYOR BUSINESS
WORLDWIDE PURCHASE AND SALE AGREEMENT
This AGREEMENT, together with the exhibits and schedules hereto (the
"Agreement") is made and entered into as of October 17, 1997 by and between Joy
Technologies Inc. ("Joy"), the Selling Companies and Continental Conveyor
International Inc. ("Buyer").
WHEREAS, the Business (as hereinafter defined) is conducted by American
Longwall Roof Supports, Inc., ("Longwall") in the United States; by
Harnischfeger (South Africa) (Proprietary) Limited ("Harnco SA"), in South
Africa; by Fletcher Sutcliffe Wild Limited ("FSW"), in the United Kingdom; and
by Meco McCallum Pty. Limited ("Meco"), in Australia;
WHEREAS, Joy, and certain other Affiliates of Joy desire to sell, and
Buyer desires to purchase, the Business on the terms of this Agreement by the
transfer of the shares of FSW and Meco and by the transfer of the assets and
liabilities of the Business in other countries;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties agree as follows:
SECTION 1 - DEFINITIONS.
The following terms shall have the following meanings when used in this
Agreement:
"AFFILIATE" of a specified entity or division shall mean any other
entity or division controlling, controlled by or under common control with such
specified entity or division.
"AUSTRALIAN BUSINESS" shall mean the Business as is conducted by Meco.
"AUSTRALIAN EXCLUDED ASSETS" shall have the meaning set forth in
Section 2.7.
"AUSTRALIAN INDEMNIFIED LIABILITIES" shall have the meaning set forth
in Section 3.13.
"AUSTRALIAN PLANT" shall mean the facilities located at Lot 51, Montore
Road, Minto, NSW 2566.
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"BOOKS AND RECORDS" Shall mean all lists, files, and documents to the
extent pertaining to the Business, wherever located, and all general ledgers and
underlying books of original entry and other financial records of the Business,
whether in written or electronic media form.
"BUSINESS" shall mean the design, manufacture, sale, repair and
rebuilding of all traditional FSW, Meco, Longwall Belts Division and Harnco SA
Belts Division products, as currently conducted by each company. "Business"
shall not mean (a) moving bed bunker technology to the extent used by American
Longwall AFC, Inc. for the sale of products solely in the United States (such
products sold outside the United States are included in the Business), (b)
Crawler Mounted Tailpieces, Waltzing Matildas, Mobile Boot Ends or other
advancing/retreating belt tailpieces that comprise part of a longwall or entry
development, other than tailends and loading sections currently manufactured by
the Selling Companies, and (c) material haulage systems that lead to the panel
belt.
"BUYER" shall mean Continental Conveyor International Inc. a Delaware
corporation.
"BUYER Indemnifiable Claim" shall have the meaning set forth in Section
9.1.
"BUYING COMPANIES" shall mean, collectively, the Buyer, Continental
Conveyor Equipment Pty. Ltd. and Lexshell 71 Investment Holdings (Proprietary)
Limited.
"CLOSING" and "Closing Date" shall have the respective meanings set
forth in Section 3.1.
"COMPOSITE MARK" shall mean any trademark, service mark, brand name,
certification mark, trade name, corporate name, or other indication of origin
that includes, in addition to other terms or symbols, a Joy Mark.
"CONFIDENTIALITY AGREEMENT" shall mean that certain Confidentiality
Agreement by and between Joy and Nesco Inc., dated as of May 13, 1996.
"CONTRACT" shall mean any contract, agreement, distribution agreement,
sales representation agreement, license, lease, sales order, purchase order or
other legally binding commitment, whether written or oral.
"DOLLARS" or "$" or "US $" shall mean the legal tender of the United
States of America.
"DOWTY" shall mean Dowty Technical Services Pty. Limited, a corporation
organized under the laws of Australia.
"ENVIRONMENTAL LAWS" shall mean the applicable common law and all
applicable federal, state, local, and foreign statutes or regulations, codes,
codes of practice, orders, decrees,
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guidance notes, judgments, or injunctions, to the extent the foregoing have the
force and effect of law, issued, promulgated, approved, or entered thereunder,
enacted and in effect on or prior to the date hereof imposing liability or
standards of conduct relating to pollution or protection of the environment,
including, but not limited to, laws relating to (i) the emission, discharge,
release, threatened release, spillage, entry or deposit of Hazardous Materials
into the environment (including, but not limited to, ambient air, surface water,
ground water, land surface, or subsurface strata), (ii) the production,
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport, recycling or handling of Hazardous Materials, and (iii)
underground storage tanks, and related piping, and emissions, discharges,
releases, or threatened releases therefrom.
"FINANCIAL STATEMENTS" shall mean the balance sheet and the statement
of income of the Business for the fiscal year ending October 31, 1996, attached
hereto as Exhibit "A", and the Reference Balance Sheet.
"FSW" shall mean Fletcher Sutcliffe Wild Limited, a corporation
organized under the laws of England and a wholly-owned subsidiary of HIL.
"FSW SHARES" shall mean two shares of FSW, which, when taken together
with the 50 shares issued pursuant to Section 11.8 shall constitute 100 percent
of the issued and outstanding shares of capital stock of FSW.
"GBP" or "POUND" shall mean the legal tender of England.
"HARNCO SA" shall mean Harnischfeger (South Africa) (Proprietary)
Limited, a corporation incorporated under the laws of the Republic of South
Africa.
"HAZARDOUS MATERIALS" shall mean any natural or artificial substance
(whether in solid or liquid form or in the form of a gas or vapor and whether
alone or in combination with any other substance) capable of causing harm to man
or any other living organism supported by the environment or damaging the
environment or public health, including without limitation any pollutants,
contaminants, chemicals, controlled, special, hazardous, toxic or dangerous
wastes, or industrial toxic or hazardous materials or substances, asbestos,
asbestos containing materials, polychlorinated byphenyls, petroleum, including
crude oil or any fraction thereof, or any petroleum product, or any other
wastes, chemicals, or substances regulated by an Environmental Law, applicable
to the Business, wherever located.
"HIL" shall mean Harnischfeger Industries Limited, a corporation
organized under the laws of England.
"INDEMNIFIED PARTY" shall mean, with respect to any Losses, the party
seeking indemnity hereunder.
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"INDEMNIFYING PARTY" shall mean, with respect to any Losses, the party
from whom indemnity is being sought hereunder.
"JOY" shall mean Joy Technologies Inc., a Delaware corporation.
"JOY MARKS" shall mean any trademark, service mark, brand name,
certification mark, trade name, corporate name, or other indication of origin
incorporating or based on the term "Joy", "Joy Technologies", "Meco", "Meco
McCallum", "Harnischfeger", "Harnischfeger Industries", "P&H" or the Joy, Meco,
Meco McCallum, Harnischfeger or P&H logo, Joy world design or any other similar
term or symbol.
"LONGWALL" shall mean American Longwall Roof Supports Inc., a New York
corporation.
"LOSSES" shall mean any and all costs and expenses (including, but not
limited to, reasonable professionals' fees), damages and losses actually
incurred, net of any insurance proceeds, which the Party actually receives by
virtue of such costs, expenses, damages and losses.
"MATERIAL" shall mean involving the sum of or creating an existing
liability or adverse financial effect in the amount of $100,000 or greater.
"MECO" Shall mean Meco McCallum Pty Limited, a corporation organized
under the laws of Australia and a wholly-owned subsidiary of Dowty.
"MECO SHARES" shall mean 600,000 ordinary shares of Meco, which
constitutes 100 percent of the issued and outstanding shares of capital stock of
Meco.
"NET BOOK VALUE" as of any specified date shall equal (i) the total
assets shown on the balance sheet as of such date (excluding, however, any Total
Excluded Assets) minus (ii) the total liabilities shown on the balance sheet
(excluding, however, any Total Excluded Liabilities).
"NONCOMPETITION AGREEMENT" shall mean a Covenant Not to Compete in the
form of Exhibit 3.4.
"NOTE" shall mean a Promissory Note, in the form attached as Exhibit
"B" hereto.
"PARTY" shall mean Joy, any of the Selling Companies, Buyer and any of
the Buying Companies, collectively, the "Parties".
"PERMITTED ENCUMBRANCES" shall mean (i) any liens accrued or reserved
against on the Reference Balance Sheet, but only to the extent so reserved; (ii)
with respect to the Australian Plant only, liens for Taxes, assessments and
other governmental charges not yet due and payable or due but being contested
in good faith by appropriate proceedings or not delinquent; (iii)
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mechanics', workmen's, repairmen's, warehousemen's, carriers', or other like
liens arising or incurred in the ordinary course of business, (iv) original
purchase price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business; (v) easements,
quasi-easements, licenses, covenants, rights-of-way and other similar
restrictions which would be shown by a current title report; and (vi) any
conditions that may be shown by a current survey or title report or physical
inspection including zoning, building and other similar restrictions.
"PURCHASE PRICE" shall have the meaning set forth in Section 3.2.
"REFERENCE BALANCE SHEET" shall mean the unaudited balance sheet of the
Business as of August 22, 1997, and attached hereto as EXHIBIT "C".
"RELEASE" SHALL mean any spilling, pumping, pouring, emitting,
emptying, placing, discharging, injecting, escaping, leaking, dumping, disposal,
or migration into the environment.
"SALE OF BUSINESS AGREEMENT" shall mean the agreement of even date
herewith transferring to Buyer the assets and liabilities of the South African
Business.
"SELLING COMPANIES" shall mean, collectively, Longwall, Harnco SA, HIL
and Dowty.
"SOUTH AFRICAN BUSINESS" shall mean the Business as is conducted by
Harnco SA in South Africa.
"SUPPLY AGREEMENT" shall mean a Supply Agreement in the form of Exhibit
3.5 hereto.
"TAX RETURNS" shall mean all reports and returns required to be filed
with respect to Taxes.
"TAXES" shall mean all federal, state, local or foreign taxes,
including but not limited to income, gross receipts, windfall profits, goods and
services, value added, severance, property, production, sales, use, license,
excise, franchise, employment, withholding or similar taxes, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.
"TRANSACTIONS" shall mean the transactions contemplated by this
Agreement.
"TRANSACTION DOCUMENTS" shall mean the documents referenced herein to
be executed by one or more of the Parties, the Sale of Business Agreement, and
those other agreements and documents (other than this Agreement) which are
necessary to effect the agreements set forth herein.
"TRANSITION SERVICES AGREEMENT" shall have the meaning set forth in
Section 8.1.6.
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"UK BUSINESS" shall mean the Business as is conducted by FSW.
"UK EXCLUDED ASSETS" shall have the meaning set forth in Section 2.7.
"UK INDEMNIFIED LIABILITIES" shall have the meaning set forth in
Section 3.11.
"UNION" shall mean United Mine Workers of America and/or any other
union or labor collective (i) representing any employees of each Business in
connection with their employment with Joy or any of its Affiliates or (ii) with
which Joy or any of its Affiliates has entered into an agreement with respect to
the employment of persons in each Business or at any facility owned, leased or
used in connection with the Business.
"U.S. BUSINESS" shall mean the Business as is conducted by the Belts
Division of Longwall.
"U.S. COLLECTIVE BARGAINING AGREEMENT" shall mean that certain
agreement by and among Joy and the Union with respect to the terms of Joy's
employment of certain of the Employees.
"U.S. EXCLUDED ASSETS" shall have the meaning set forth in Section 2.3.
"U.S. EXCLUDED LIABILITIES" shall have the meaning set forth in Section
3.8
"U.S. SUBJECT ASSETS" shall have the meaning set forth in Section 2.2.
"U.S. SUBJECT LIABILITIES" shall have the meaning set forth in Section
3.7.
"WAKEFIELD PLANT" shall mean the facilities of FSW located at Thornes
Works, Thornes Moor Road, Wakefield, West Yorkshire, England.
"WIGAN PLANT" shall mean the manufacturing facilities (but not
including the office facilities) of FSW located at Seaman Way, Ince, Wigan,
Lancashire, England.
"ZELIENOPLE PLANT" shall mean the facility located at Building #3,
Schreiber Industrial Park North, Zelienople, Pennsylvania 16063.
SECTION 2 - SALE OF BUSINESS.
2.1 SALE OF BUSINESS. Subject to the terms and conditions of this
Agreement, on the Closing Date, the Selling Companies shall sell and the Buying
Companies shall purchase the Business as follows: the Selling Companies shall
convey the U.S. Subject Assets, the assets of the
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South African Business (via the Sale of Business Agreement), the FSW Shares, and
the Meco Shares to the Buying Companies, and in exchange therefor the Buying
Companies shall assume the U.S. Subject Liabilities and liabilities of the South
African Business (via the Sale of Business Agreement), shall pay the Purchase
Price, and shall deliver the Note.
2.2 U.S. SUBJECT ASSETS. "U.S. Subject Assets" means the following
assets, properties and rights of Longwall as the same may exist on the Closing
Date:
2.2.1 PERSONAL PROPERTY.
2.2.1.1 All tangible personal property (i) located on the
premises of the Zelienople Plant, or (ii) held in the possession of a third
party and relating exclusively to the U.S. Business, including, machinery and
equipment, furniture, furnishings, office equipment, supplies, packaging
materials, maintenance parts, perishable or consumable personal property, parts,
deposits and tools and tooling;
2.2.1.2 Those leases relating to tangible personal property
located on the premises of the Zelienople Plant, including, but not limited to,
machinery and equipment, furniture and tools (a list of which as of the dates
indicated thereon, are set forth in SCHEDULE 2.2.1.2);
2.2.2 INVENTORY. All finished goods, work-in-process (whether
or not recorded on the books of Longwall), raw materials, spare parts (if any),
replacements (if any), and components (if any) located on the premises of the
Zelienople Plant, or in transit therefrom or thereto or held in the possession
of a third party and acquired or manufactured exclusively for use in the U.S.
Business (a list of which as of the dates indicated thereon is set forth in
SCHEDULE 2.2.2);
2.2.3 ACCOUNTS RECEIVABLE. All accounts receivable and notes
receivable (other than the Note) of Longwall to the extent arising out of sales
by the U.S. Business (the "U.S. Accounts Receivable") (a list of which as of the
dates indicated thereon is set forth in Schedule 2.2.3); 2.2.4 Prepaid Items and
Deposits. To the extent reflected on the Reference Balance Sheet, all prepaid
items and deposits paid by Longwall exclusively in connection with the operation
of the U.S. Business (a list of which as of the date indicated thereon is set
forth in SCHEDULE 2.2.4);
2.2.5 INTELLECTUAL PROPERTY. Trade secrets, design drawings
and proprietary know-how exclusively used or exclusively held for use in the
U.S. Business and any rights, claims or choses in action relating to or deriving
from any of the foregoing, together with any unregistered intellectual property
exclusively used or exclusively held for use in the U.S. Business (the "U.S.
Intellectual Property");
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2.2.6 SALES MATERIALS. Subject to the restrictions in Section
11.4, all catalogues, brochures, sales literature, promotional material located
on the premises of the Zelienople Plant and other selling material relating to
the products of the U.S. Business;
2.2.7 BOOKS AND RECORDS. All books and records (other than
personnel records relating to or containing performance reviews and similar
evaluations) and all files, documents, papers, customer lists and agreements
located on the premises of the Zelienople Plant to the extent pertaining to the
U.S. Subject Assets, the U.S. Subject Liabilities or the U.S. Business;
2.2.8 ASSIGNED CONTRACTS. The rights of Longwall under all
Contracts exclusively relating to the U.S. Business, other than the U.S.
Collective Bargaining Agreement, including but not limited to (i) the Contracts
listed on any of the schedules hereto and (ii) all transferable licenses for
computer software and other intellectual property owned by unaffiliated third
parties, except (in all cases) for any Contract that requires the consent to
assignment of a party thereto and for which such consent has not been obtained
pursuant to Section 6.2 prior to the Closing (the "U.S. Assigned Contracts");
2.2.9 PERMITS AND LICENSES. All transferable government
business licenses, permits and equivalent documents, exclusively used or held
for use in the U.S. Business;
2.2.10 VEHICLES. All vehicles whether or not reflected on the
Balance Sheet, exclusively used or held for use in the U.S. Business, and
whether or not owned or leased;
2.2.11 WARRANTY CLAIMS. All of Longwall's claims, to the
extent transferable, for breach of warranty in connection with products
purchased exclusively for use or resale by the U.S. Business; and
2.2.12 CASH AND CASH EQUIVALENTS. All cash on hand and cash
equivalents, petty cash and deposits with third parties generated by the U.S.
Business after August 22, 1997, less any cash transferred to the U.S. Business
by Longwall or its Affiliates since such date.
2.3 U.S. ASSETS NOT TRANSFERRED. Notwithstanding anything to the
contrary contained herein, the following assets and properties of Longwall are
specifically excluded from the U.S. Subject Assets and shall not be purchased or
acquired by the Buyer (the "U.S. Excluded Assets"):
2.3.1 REFUND CLAIMS. Rights to or claims for refunds of Taxes
and other governmental charges and the benefit of net operating loss
carry-forwards or other Tax or other governmental credits of Longwall;
2.3.2 UNRELATED CONFIDENTIAL INFORMATION. Proprietary or
confidential business or technical information, records and policies of Longwall
or any of its Affiliates to the extent not used in connection with the Business;
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2.3.3 JOY MARKS. Subject to Section 11.4, all rights to the
Joy Marks and the Composite Marks.
2.3.4 EMPLOYEE BENEFIT PLANS. All rights and assets related to
any and all employee benefit plans in which employees of Longwall are eligible
to participate, including the following retirement plans: "American Longwall
Inc. Retirement Plan" and "Joy Technologies Inc. 401(k) Plan."
2.3.5 The assets (including, without limitation, real
property, tangible personal property, intellectual property and contracts) of
all businesses conducted by Joy and its Affiliates other than the Business;
2.3.6 Interdivisional, intercompany or intracompany
receivables, assets or agreements resulting from or relating to transactions
with any division or Affiliate of Joy other than FSW, Meco, and the Belts
Division of Harnco SA;
2.3.7 All prepaid income taxes;
2.3.8 All Tax Returns of Longwall;
2.3.9 All Books and Records which Longwall or its Affiliates
are required by law to retain (but not including copies of the same, which shall
be provided to Buyer at the Closing).
2.3.10 LEASEHOLD INTEREST. The leasehold interest in
Zelienople plant including all improvements thereto.
2.3.11 All cash on hand and cash equivalents as of August 22,
1997, as well as any cash transferred to the U.S. Business by Longwall or its
affiliates since such date.
2.4 [Intentionally Deleted]
2.5 [Intentionally Deleted]
2.6 [Intentionally Deleted]
2.7 [Intentionally Deleted]
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SECTION 3
CLOSING, PURCHASE PRICE, ASSUMPTION OF LIABILITIES
3.1 CLOSING. The closing of the Transactions (the "Closing") shall take
place at the offices of Joy in Warrendale, Pennsylvania or at such other place
and at such date and time as Joy and Buyer may mutually agree (the "Closing
Date").
3.2 CLOSING PAYMENT, NOTE AND LIABILITIES. At Closing (i) the amount of
One Million Eight Hundred Thousand Dollars (U.S.) ($1,800,000) (the "Purchase
Price") shall be payable by Buyer to Joy by wire transfer of immediately
available funds to an account designated by Joy not less than two business days
in advance of the Closing Date, except as otherwise provided in the letter
attached as Exhibit 3.2; (ii) the fully-executed Note in the amount of
$5,244,000 shall be delivered to Joy; and (iii) the Buyer shall assume the U.S.
Subject Liabilities and the "Subject Liabilities" (as such term is defined in
the Sale of Business Agreement).
3.2.1 ALLOCATION OF PURCHASE PRICE. The sum of the Purchase
Price and the face amount of the Note shall be allocated in the amount of
$1,807,000 to the U.S. Subject Assets, $209,000 to the South African Subject
Assets, $2,488,000 to the FSW Shares and $2,749,000 to the Meco Shares. The
allocation of the Purchase Price under this Section 3.2.1 shall be binding on
the Parties to this Agreement for all purposes including all tax return filings.
3.3 CONVEYANCES OF BUSINESS. At the Closing:
3.3.1 U.S. Longwall shall transfer its right, title and
interest in and to the U.S. Subject Assets to one of the Buying Companies by
means of a Bill of Sale and Assignment substantially in the form of Exhibit
3.3.1(a). Buyer shall assume the U.S. Subject Liabilities by means of a duly
executed and delivered assumption agreement substantially in the form of Exhibit
3.3.1(b).
3.3.2 UNITED KINGDOM. HIL shall deliver to one of the Buying
Companies duly completed and endorsed assignments of the FSW Shares in favor of
one of the Buying Companies, together with the relevant share certificates, the
resignations of all non-FSW employees from their offices as directors and/or
officers of FSW, and the resignation of the auditors of FSW.
3.3.3 SOUTH AFRICA. Harnco SA and one of the Buying Companies
shall enter into the Sale of Business Agreement.
3.3.4 AUSTRALIA. Dowty shall deliver to one of the Buying
Companies duly completed and endorsed assignments of the Meco Shares in favor of
one of the Buying Companies, together with the relevant share certificates, the
resignations of non-Meco employees
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from their offices as directors and/or officers of Meco, and the resignation of
the auditors of Meco.
3.4 NONCOMPETITION AGREEMENT. On the Closing Date, Joy shall execute
and deliver to Buyer the Noncompetition Agreement, in the form of Exhibit 3.4.
3.5 SUPPLY AGREEMENT. On the Closing Date, Buyer and Joy shall execute
and deliver to the other the Supply Agreement, in the form of Exhibit 3.5.
3.6 OTHER DOCUMENTS. On the Closing Date, the Buying Companies, Joy,
and the Selling Companies, shall execute and deliver to the other all other
documents reasonably necessary to consummate the Transactions.
3.7 U.S. SUBJECT LIABILITIES. "U.S. Subject Liabilities" means all
debts, liabilities, obligations and commitments of any nature (other than the
U.S. Excluded Liabilities) resulting from, arising out of or related to (i) the
conduct or operation of the U.S. Business at any time prior to, on or after the
Closing and (ii) the U.S. Subject Assets at any time prior to, on or after the
Closing, in each case, at law, in equity or otherwise, whether or not discussed
in the Financial Statements, whether known or unknown, absolute, accrued,
contingent, asserted, liquidated or otherwise, and whether due or to become due,
including those resulting from, arising out of or relating to:
3.7.1 All debts, liabilities, obligations and commitments (i)
reflected or reserved for on the Reference Balance Sheet and (ii) incurred after
the date of the Reference Balance Sheet;
3.7.2 Any and all debts, liabilities, obligations and
commitments arising out of or relating to the U.S. Assigned Contracts, whenever
arising, occurring or accrued (including all liability for breaches of
contract);
3.7.3 All violations of, or liabilities arising under,
Environmental Laws with respect to the operation of the U.S. Business after the
expiration or termination of the "Transition Period" (as such term is defined in
the Transition Services Agreement), including without limitation those relating
to the handling, treatment, storage, disposal, Release or threatened Release of
Hazardous Materials at or from any future property or facility of the U.S.
Business or any offsite waste treatment, storage, or disposal facility
associated with the U.S. Business;
3.7.4 All debts, liabilities, obligations and commitments
arising out of resulting from or relating to the litigation and claims set forth
in Schedule 3.7.4 (the "Scheduled U.S. Litigation");
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3.7.5 All obligations incurred by the U.S. Business to repair,
replace or exchange, or provide refunds or credits with respect to, any product
manufactured, sold or delivered on or prior to the Closing (the "U.S. Warranty
Obligations");
3.7.6 All liability arising from any product manufactured,
sold or delivered by Longwall in the operation of the U.S. Business on or prior
to the Closing (other than the U.S. Warranty Obligations) including liabilities
for personal injury, death or property damage (the "U.S. Product Liability") in
the amount of the reserve therefor set forth in the Reference Balance Sheet; and
3.7.7 Any and all debts, liabilities, obligations and
commitments with respect to the U.S. Business specifically undertaken by Buyer
pursuant to any other provision of this Agreement.
3.8 U.S. EXCLUDED LIABILITIES. "U.S. Excluded Liabilities" means the
following debts, liabilities, obligations or commitments of the U.S. Business,
whether contingent or non- contingent, liquidated or unliquidated, asserted or
unasserted:
3.8.1 All liabilities for Taxes (other than ad valorem real or
personal property taxes or payroll as stated on the Reference Balance Sheet)
imposed with respect to the taxable periods, or portions thereof, ending on or
before the Closing Date;
3.8.2 All liabilities with respect to litigation, claims filed
with a court or administrative agency, actions, proceedings, investigations or
arbitrations pending on the Closing Date, other than the Scheduled U.S.
Litigation;
3.8.3 All debts, liabilities, obligations and commitments
arising out of, resulting from or relating to claims for workers' compensation
arising from accidents, injury or illness of employees or former employees of
the U.S. Business occurring or existing on or prior to the Closing Date;
3.8.4 All violations of' or liabilities arising under,
Environmental Laws with respect to the ownership or operation of the U.S.
Business (including without limitation any offsite waste treatment, storage, or
disposal facility associated with the Zelienople Plant) prior to the expiration
or termination of the "Transition Period" (as such term is defined in the
Transition Services Agreement);
3.8.5 All liabilities, obligations and commitments arising out
of' resulting from or relating to the U.S. Collective Bargaining Agreement;
3.8.6 Any intercompany debt, liability, obligation or
agreement between the U.S. Business and Joy or any Affiliate of Joy, other than
trade liabilities to FSW, Meco and Harnco SA;
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3.8.7 U.S. Product Liability in excess of the reserve therefor
set forth in the Reference Balance Sheet;
3.8.8 All debts, liabilities, obligations and commitments
relating to the employment or termination of employment of employees of the U.S.
Business, including, but not limited to, disability benefits and retiree medical
and life benefits;
3.8.9 All liabilities (including without limitation
liabilities for excise taxes, interest and penalties) resulting from or under
any employee benefit plan, whether to current employees, former employees,
retired employees, alternative payees under Qualified Domestic Relations Orders,
or the beneficiaries of any of the foregoing, or to the Internal Revenue
Service, Department of Labor, Pension Benefit Guaranty Corporation or other
government agency, or to any multi-employer plan or fund, other than such
liability which is expressly assumed by Buyers herein;
3.8.10 (i) All liabilities (including liabilities for excise
taxes and other penalties) arising out of claims by employees whether or not
pending on the Closing Date for severance, redundancy, unemployment
compensation, unpaid wages, hours, violation of the U.S. Collective Bargaining
Agreement, unfair labor practices, working conditions, violation of equal
employment opportunity or civil rights laws, social security and similar taxes,
COBRA coverage, WARN Act violations, or pre-Closing medical treatment,
hospitalization or sick leave, or any statutory or other legal obligation to an
employee; and (ii) all liabilities arising from claims (other than workers'
compensation claims) brought by former employees of the U.S. Business.
3.9 [Intentionally Deleted)
3.10 [Intentionally Deleted]
3.11 UK INDEMNIFIED LIABILITIES. For purposes of this Agreement, "UK
Indemnified Liabilities" means the following debts, liabilities, obligations or
commitments of FSW, whether contingent or non-contingent, liquidated or
unliquidated, asserted or unasserted:
3.11.1 All liabilities for Taxes (other than stock transfer
taxes payable as a result of the transactions contemplated by this Agreement, ad
valorem real or personal property taxes or payroll as stated on the Reference
Balance Sheet) imposed with respect to the taxable periods, or portions thereof,
ending on or before the Closing Date;
3.11.2 All liabilities with respect to litigation, claims
filed with a court or administrative agency, actions, proceedings,
investigations or arbitrations pending on the Closing Date, other than those set
forth in Schedule 3.11.2;
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3.11.3 All debts, liabilities, obligations and commitments
arising out of; resulting from or relating to claims for workers' compensation
arising from accidents, injury or illness of emploYees or former employees of
the UK Business occurring or existing on or prior to the Closing Date;
3.11.4 All violations of; or liabilities arising under,
Environmental Laws with respect to the ownership or operation of the UK Business
(including without limitation any associated offsite waste treatment, storage,
or disposal facilities) prior to the Closing, except and to the extent, (i) that
the violation or liability has been caused wholly or partly or, (ii) that the
scale of any penalty or quantum of liability has been increased by the operation
of the UK Business by the Buyer after the Closing Date;
3.11.5 All liabilities, obligations and commitments arising
out of; resulting from or relating to the Wigan Collective Bargaining Agreement;
3.11.6 Any intercompany debt, liability, obligation or
agreement between the UK Business and Joy or any Affiliate of Joy, other than
trade liabilities to Meco, Harnco SA and Longwall;
3.11.7 Liability in excess of the reserve therefor set forth
in the Reference Balance Sheet arising from any product manufactured, sold or
delivered by FSW on or prior to the Closing including liabilities for personal
injury, death or property damage, but not including obligations to repair,
replace, exchange, or provide refunds or credits with respect to such products;
3.11.8 All liabilities (including without limitation, any
liabilities in respect of taxes, interest and penalties) resulting from or under
any occupational pension scheme or other arrangement for the provision of the
relevant benefits (within the meaning of Section 612(1) of the Income and
Corporation Taxes Act 1988) whether to or in respect of any current or former
employees, officers or directors or their dependents, the Pension Schemes Office
of the Inland Revenue, the Occupational Pensions Regulatory Authority or any
other individual, body or pension arrangement, other than any liability
expressly assumed by the Buyer herein; and
3.11.9 (i) All liabilities (including liabilities for excise
taxes and other penalties) arising out of claims by employees pending on the
Closing Date (or which arise after the Closing Date but are based on facts
occurring on or prior to the Closing Date) for wrongful dismissal, redundancy,
unfair dismissal, unpaid wages, hours, violation of the Wakefield or Wigan
Collective Bargaining Agreement, unfair labor practices, working conditions,
violations of equal employment opportunity or civil rights laws, social security
and similar taxes, Employment Rights Act violations or pre-Closing medical
treatment hospitalization or sick leave, holiday pay or any statutory or other
legal obligation to an employee, and (ii) all liabilities arising from claims
(other than workers' compensation claims) brought by former employees of the UK
Business, other than in either case any liability expressly assumed by the
Buyer.
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3.12 AUSTRALIAN INDEMNIFIED LIABILITIES. For purposes of this
Agreement, "Australian Indemnified Liabilities" means the following debts,
liabilities, obligations or commitments of Meco, whether contingent or
non-contingent, liquidated or unliquidated, asserted or unasserted:
3.12.1 All liabilities for Taxes (other than stock transfer
taxes payable as a result of the transactions contemplated by this Agreement, ad
valorem real or personal property taxes or payroll as stated on the Reference
Balance Sheet) imposed with respect to the taxable periods, or portions thereof,
ending on or before the Closing Date;
3.12.2 All liabilities with respect to litigation, claims
filed with a court or administrative agency, actions, proceedings,
investigations or arbitrations pending on the Closing Date, other than those
arising with respect to any Environmental Protection Law or those set forth in
Schedule 3.12.2;
3.12.3 All debts, liabilities, obligations and commitments
arising out of; resulting from or relating to claims for workers' compensation
arising from accidents, injury or illness of employees or former employees of
the Australian Business occurring or existing on or prior to the Closing Date;
3.12.4 Any intercompany debt, liability, obligation or
agreement between the Australian Business and Joy or any Affiliate of Joy, other
than trade liabilities to FSW, Longwall and Harnco SA;
3.12.5 Liability in excess of the reserve therefor set forth
in the Reference Balance Sheet arising from any product manufactured, sold or
delivered by Meco on or prior to the Closing including liabilities for personal
injury, death or property damage, but not including obligations to repair,
replace, exchange, or provide refunds or credits with respect to such products;
and
3.12.6 (i) All liabilities (including liabilities for excise
taxes and other penalties) arising out of claims by employees pending on the
Closing Date (or which arise after the Closing Date but are based on facts
occurring on or prior to the Closing Date) for wrongful dismissal, redundancy,
unfair dismissal, unpaid wages, hours, unfair labor practices, working
conditions, violations of equal employment opportunity or civil rights laws,
social security and similar taxes, employment law violations or pre-Closing
medical treatment hospitalization or sick leave, holiday pay or any statutory or
other legal obligation to an employee, and (ii) all liabilities arising from
claims (other than workers' compensation claims) brought by former employees of
the Australian Business, other than in either case any liability expressly
assumed by the Buyer.
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF JOY
As an inducement for Buyer to enter into this Agreement, Joy represents
and warrants to Buyer that each of the following statements is true and correct
as of the date hereof, and shall be true and correct as of the Closing Date.
4.1 ORGANIZATION, CORPORATE POWER, AND AUTHORITY. Longwall and Joy are
corporations duly organized, validly existing and in good standing under the
laws of New York and Delaware, respectively, and Harnco SA, FSW and Meco are
corporations duly organized and validly existing under the laws of South Africa,
England and Australia, respectively, and are duly qualified to do business in
the jurisdictions in which they conduct the Business. Longwall, Harnco SA; FSW
and Meco have all requisite corporate power and authority to own, operate and
lease the assets of the Business and to conduct the Business. The Selling
Companies have all requisite corporate power and authority to execute and
deliver the Transaction Documents and to perform their obligations hereunder and
thereunder.
4.2 AUTHORIZATION OF AGREEMENTS. The execution, delivery and
performance by Joy and the Selling Companies of the Transaction Documents, and
the consummation by them of the Transactions, have been duly authorized by all
necessary corporate action. This Agreement has been, and each of the Transaction
Documents will be at the Closing, duly executed and delivered by Joy and the
Selling Companies, and constitute, or will, when delivered, constitute, the
legal, valid and binding obligations of Joy and the Selling Companies,
enforceable against it in accordance with their respective terms except as may
be limited by bankruptcy, insolvency, reorganization, moratorium, and other
similar laws and equitable principles relating to or limiting creditors' rights
generally.
4.3 EFFECT OF AGREEMENT. The execution, delivery and performance by Joy
and the Selling Companies of the Transaction Documents, and the consummation by
them of the Transactions, will not (i) violate the Articles of Incorporation or
By-laws of Joy and the Selling Companies or any court order or applicable law
(including without limitation the Hart-Scott-Rodino Improvements Act of 1976),
or any material indenture, material agreement or other material instrument to
which Joy and the Selling Companies are a party, or by which Joy and the Selling
Companies or the Total Subject Assets are bound, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under, any such indenture, agreement or other instrument, (iii) result in the
creation or imposition of any lien, charge, security interest or encumbrance of
any nature whatsoever upon any of the assets of the Business.
4.4 GOVERNMENTAL APPROVALS. Except as set forth in SCHEDULE 4.4, no
approval, authorization, consent or order or action of or filing with any court,
administrative agency or other governmental authority is required to be obtained
by the Selling Companies for the execution and delivery by the Selling Companies
of the Transaction Documents or the
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consummation by it of the Transactions. None of Longwall, FSW, Harnco SA or Meco
have contracts with the United States Government for the sale of products of the
Business which will require novations, consents or notice filings in connection
with the consummation of the Transactions.
4.5 FINANCIAL STATEMENTS. The Financial Statements of the UK Business
and Australian Business have been prepared in accordance with generally accepted
accounting principles of England and Australia, respectively consistently
applied throughout the periods involved. The Financial Statements fairly present
the financial condition and results of operation of the Business as of such
balance sheet date or the period then ending, as the case may be.
4.6 TITLE TO PROPERTY. The Selling Companies have good and marketable
title to and possession of all of the assets of the Business (except for such
inventory as has been sold in the ordinary course of business) and good and
marketable title to and the possession of the FSW Shares and Meco Shares, in
each case free and clear of any liens, restrictions, encumbrances, rights, title
and interests of others, except for Permitted Encumbrances.
SECTION 5 - REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement for Joy to enter into this Agreement, Buyer represents
and warrants to Joy that each of the following statements is true and correct as
of the date hereof, and shall be true and correct as of the Closing Date:
5.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and is duly qualified to do business as a foreign corporation
in the jurisdictions in which Buyer conducts its business, except where the
failure so to qualify will not have a material adverse effect on Buyer's ability
to perform its obligations under the Transaction Documents and, after the
Closing, to use the assets acquired hereunder, and operate the Business. Buyer
has all requisite corporate power and authority to acquire, own, lease and
operate the assets acquired hereunder, to conduct the business of the Business,
to execute and deliver the Transaction Documents to which it is a party and to
perform its obligations thereunder.
5.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and performance
by Buyer of the Transaction Documents to which it is a party, and the
consummation by it of the Transactions, have been duly authorized by all
necessary corporate action by Buyer. This Agreement has been, and each other
Transaction Document to which Buyer is a party will be at the Closing, duly
executed and delivered by Buyer and constitute, or will, when delivered,
constitute, the legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws and equitable principles relating to or limiting creditors' rights
generally.
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5.3 EFFECT OF AGREEMENT. The execution, delivery and performance by
Buyer of the Transaction Documents to which it is a party, and the consummation
by it of the Transactions, will not violate the Certificate of Incorporation or
By-laws of Buyer or any judgment, award or decree or any material indenture,
material agreement or other material instrument to which Buyer is a party, or by
which Buyer or its properties or assets are bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under, any such indenture, agreement or other instrument, or result in the
creation or imposition of any lien, charge, security interest or encumbrance of
any nature whatsoever upon any of the properties or assets of Buyer, except to
the extent the effect thereof will not be materially adverse to Buyer's ability
to fulfill its obligations under the Transaction Documents to which it is a
party and, after the Closing, to use the assets acquired hereunder and operate
the business of the Business.
5.4 GOVERNMENTAL APPROVALS. Except as set forth in SCHEDULE 5.4 no
approval, authorization, consent or order or action of or filing with any court,
administrative agency or other governmental authority is required to be obtained
by Buyer for the execution and delivery by Buyer of the Transaction Documents to
which it is a party or the consummation by it of the Transactions.
SECTION 6 - COVENANTS OF SELLING COMPANIES
6.1 ACCESS TO M.I.S. The Selling Companies shall provide Buyer
continuous access to the management information system presently used by the
Selling Companies, for a reasonable period after Closing and at Buyer's cost.
Such service shall continue until Buyer provides an acceptable substitute, but
not longer than 18 months.
6.2 PERMITS AND CONSENTS. The Selling Companies and Buyer shall use
reasonable efforts to obtain such consents to the assignment of the Contracts as
may be required. Notwithstanding anything herein to the contrary, the parties
hereto acknowledge and agree that at the Closing, the Selling Companies will not
assign to Buyer any Contract that by its terms requires, prior to such
assignment, the consent of any other contracting party thereto unless such
consent has been obtained prior to the Closing Date. With respect to each such
Contract not assigned on the Closing Date, after the Closing Date, the Selling
Companies shall continue to deal with the other contracting party(ies) to such
Contract as the prime contracting party, and Buyer, Joy and the Selling
Companies shall use reasonable efforts to obtain the consent of all required
parties to the assignment of such Contract. Such Contract shall be promptly
assigned by Joy or the appropriate Selling Company to Buyer after receipt of
such consent after the Closing Date, and thereafter shall be deemed to be an
Assigned Contract for all purposes hereunder. Notwithstanding the absence of any
such consent, Buyer shall be entitled to the benefits of such Contract accruing
after the Closing Date to the extent that the Selling Companies may provide
Buyer with such benefits without violating the terms of such contract; Buyer
agrees to perform at its sole expense all of the obligations of the Selling
Companies to be performed under such
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Contract after the Closing Date to the extent Buyer receives the benefits
thereof If Buyer cannot obtain the on-going benefits of such a contract in the
method contemplated hereby, Buyer may insist upon the true assignment of such
contract.
6.3 COVENANT OF THE SELLER. Joy and HIL shall be responsible for any
payments made by the Buyer to any of the employees of the UK Business who are
employed at the Wigan Plant prior to Closing and whose contracts of employment
transfer to the Buyer at Closing pursuant to the Transfer of Undertakings
(Protection of Employment) Regulations 1981 by way of redundancy payments for
redundancies which occur within 180 days of the Closing Date but limited to One
Hundred Fifty Percent (1 50%) of the statutory redundancy entitlement of such
employees based on the relevant employee's age, salary and length of service.
Buyer's Affiliate may set off against its payment obligations under the Note any
amounts which Seller fails to pay to Buyer hereunder.
6.4 COLLECTION OF ACCOUNTS RECEIVABLE. The Buyer and its designees
shall have full power and authority to collect for its account all U.S. Accounts
Receivable and the receivables of FSW and Meco and to endorse, in the name of
Longwall, FSW, or Meco, as applicable, any checks or other instruments of
payment received on account of payment of the U.S. Accounts Receivable and the
receivables of FSW and Meco, provided further that if Longwall, HIL or Dowty
receives any payment on account of any U.S. Accounts Receivable or the
receivables of FSW or Meco, Longwall, HIL or Dowty shall transfer and deliver
such payment (endorsed where necessary) to Buyer or its designees promptly upon
receipt.
SECTION 7 -[INTENTIONALLY DELETED]
SECTION 8 - CONDITIONS PRECEDENT
8.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligations of
Buyer under this Agreement are subject, at the option of Buyer, to the
satisfaction or waiver of each of the following conditions on or prior to the
Closing Date:
8.1.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Joy contained in this Agreement (as amended or
supplemented through the Closing Date pursuant to Section 12.4 hereof) or in any
certificate delivered to Buyer pursuant hereto shall be true and correct on and
as of the Closing Date as though made at and as of that date (except where such
representation and warranty is made as of a date specifically set forth
therein), and Joy shall have delivered to Buyer a certificate to that effect;
8.1.2 MATERIAL DISCLOSURE. No disclosure schedule which has
been amended or supplemented by Joy pursuant to Section 12.4 shall disclose
matters which existed as of the date hereof but were not disclosed on any
disclosure schedule hereto as of the date hereof, except for any such matter
which will not have a Material adverse effect on the business of the Business;
8.1.3 COMPLIANCE WITH COVENANTS. The Selling Companies shall
in all material respects have performed and complied with all terms, agreements,
covenants and conditions of
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this Agreement to be performed or complied with by them at the Closing Date, and
Joy shall have delivered to Buyer a certificate to that effect;
8.1.4 LEGAL ACTIONS OR PROCEEDINGS. No legal action or
proceeding shall have been instituted or overtly threatened by any governmental
agency seeking to restrain, prohibit, invalidate or otherwise affect the
consummation of the Transactions;
8.1.5 CONSENTS OBTAINED. Each party hereto shall have obtained
all material consents and approvals required to be obtained from any
governmental authority, except where the failure to obtain such consents or
approvals is a result of a breach by Buyer;
8.1.6 TRANSITION SERVICES AGREEMENT. Joy shall have executed
and delivered to Buyer the Transition Services Agreement in the form of EXHIBIT
8.1.6.
8.1.7 OTHER TRANSACTION DOCUMENTS. The Selling Companies shall
have executed and delivered to Buyer original counterparts of each Transaction
Document to which it is a party.
8.1.8 LEASEHOLD INTERESTS AND SUBLEASE. The Selling Companies
shall have received a written consent from the Lessor of the South African Plant
for the sublease by the Selling Companies to Buyer of such leasehold interest on
the same terms and conditions as contained in the lease for such leasehold
interests, which consent shall specifically include, but not be limited to,
rights to all options to renew or extend such leasehold interest. Joy shall have
executed and delivered to Buyer the lease of the Wigan Plant in the form of
Exhibit 8.1.8(i) (the "Wigan Lease") and the sublease of the South African Plant
in the form of Exhibit 8.1. 8(ii).
8.1.9 CORPORATE DOCUMENTS. Joy shall have delivered to Buyer
resolutions of the boards of directors of Joy, Longwall, Harnco SA; HIL and
Dowty authorizing them to enter into the transactions contemplated hereby;
incumbency certificates of the officers of each entity executing any agreement
or document delivered at Closing, and certificates of the Secretary of State of
Delaware and other certifying bodies as to the legal existence and good standing
of Joy and Longwall in their places of incorporation.
8.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLING COMPANIES. The
obligations of the Selling Companies under this Agreement are subject, at the
option of the Selling Companies, to the satisfaction or waiver of each of the
following conditions at or prior to the Closing Date:
8.2.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Buyer contained in this Agreement (as amended
or supplemented through the Closing Date pursuant to Section 12.4 hereof) or in
any certificate delivered to the Selling Companies pursuant hereto shall be true
and correct in all material respects on and as of the Closing Date as though
made at and as of that date (except where such representation and
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warranty is made as of a date specifically set forth therein), and Buyer shall
have delivered to Joy a certificate to that effect.
8.2.2 COMPLIANCE WITH COVENANTS. Buyer shall in all material
respects have performed and complied with all terms, agreements, covenants and
conditions of this Agreement to be performed or complied with by it at the
Closing Date, and Buyer shall have delivered to Joy a certificate to that
effect.
8.2.3 CORPORATE DOCUMENTS. Buyer shall have delivered to Joy
certified resolutions of the board of directors of Buyer and each Buying Company
authorizing them to enter into the transactions contemplated hereby; incumbency
certificates of officers of the Buyer and the Buying Companies executing any
agreement or document delivered at Closing; and certificates of the Secretaries
of State of the states of incorporation of Buyer and those Buying Companies that
are U.S. Corporations as to the legal existence and good standing of such
entities in such states.
8.2.4 LEGAL ACTIONS OR PROCEEDINGS. No legal action or
proceeding shall have been instituted or overtly threatened by any governmental
agency seeking to restrain, prohibit, invalidate or otherwise affect the
consummation of the Transactions.
8.2.5 PURCHASE PRICE. Buyer shall have delivered the Purchase
Price and the Note in accordance with Section 3.2
8.2.6 TRANSITION SERVICES AGREEMENT; SUBLEASE. Buyer shall
have executed and delivered to Joy the Transition Services Agreement, the Wigan
Lease and the sublease of the South African Plant.
8.2.7 OTHER TRANSACTION DOCUMENTS. Buyer shall have executed
and delivered to Joy original counterparts of each Transaction Document to which
it is a party.
SECTION 9 - SURVIVAL OF REPRESENTATIONS; INDEMNIFICATIONS
9.1 AGREEMENTS TO INDEMNIFY.
9.1 1 JOY INDEMNITY. Joy covenants and agrees to defend,
indemnify and hold the Buyer and the Buying Companies and their officers,
directors, employees, agents, advisors, representatives and Affiliates
(collectively, the "Buyer Indemnitees") harmless from and against and subject to
the provisions of this Section 9, agrees to promptly reimburse Buyer Indemnitees
for any and all Losses which the Buyer Indemnitees may at any time suffer or
incur, or become subject to, as a result of or in connection with (hereinafter
referred to as "Buyer Indemnifiable Claims"):
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(a) a breach of or inaccuracy in any representation, warranty or
covenant of Joy or the Selling Companies made in Section 4 of this Agreement;
(b) any U.S. Excluded Liabilities, South African Excluded Liabilities,
UK Indemnified Liabilities, and Australian Indemnified Liabilities;
(c) failure of Joy or the Selling Companies to comply with the bulk
transfer provisions of the Uniform Commercial Code of any state, or any similar
statute, with respect to the Transactions;
(d) any failure by the Selling Companies and Joy to carry out, perform,
satisfy and discharge any of their covenants, agreements, undertakings,
liabilities or obligations under this Agreement or under any of the documents
and materials required to be delivered by the Selling Companies and Joy pursuant
to this Agreement; and
(e) any suit, action or other proceeding brought by any person arising
out of, or in any way related to, any of the matters referred to in Sections
9.1.1(a), 9.1.1(b), 9.1.1(c), and 9.1.1(d).
9.1.2 BUYER'S INDEMNITY. The Buyer covenants and agrees to
defend, indemnify, and hold the Selling Companies and Joy, their officers,
directors, employees, agents, advisors, representatives and Affiliates
(collectively, the "Seller Indemnitees") harmless from and against and subject
to the provisions of this Section 9, agrees to promptly reimburse the Seller
Indemnitees for any and all Losses which the Seller Indemnities may at any time
suffer or incur, or become subject to, as a result of or in connection with
(hereinafter referred to as "Seller's Indeninifiable Claims"):
(a) any breach of, or inaccuracy in, any of the representations and
warranties made by the Buyer in Section 5 of this Agreement;
(b) any failure by the Buying Companies to assume, pay, honor or
discharge when due the U.S. Subject Liabilities, the South African Subject
Liabilities, the liabilities of FSW (other than the UK Indemnified Liabilities)
or the liabilities of Meco (other than the Australian Indemnified Liabilities);
(c) any failure by the Buying Companies to carry out, perform, satisfy
and discharge any of their covenants, agreements, undertakings, liabilities or
obligations under this Agreement or under any of the documents and materials
required to be delivered by any of the Buying Companies pursuant to this
Agreement; and
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(d) any suit, action or other proceeding brought by any person arising
out of, or in any way related to, any of the matters referred to in Sections
9.1.2(a), 9.1.2(b), and 9.1.2(c).
9.1.3 ASSUMPTION OF AUSTRALIAN ENVIRONMENTAL RESPONSIBILITY,
LIABILITY AND INDEMNITY.
(a) The Buyer agrees it will assume, from the Closing Date and without
limitation, all:
(i) responsibility; and
(ii) liability, whether actual or potential and
including liability arising by acts or omissions occurring before the Closing
Date,
for and arising out of the Australian Business and the Australian Plant.
(b) Without limiting the operation of clause 9.1.3(a), the Buyer agrees
that it will assume, without limitation all:
(i) responsibility; and
(ii) liability, whether actual or potential and
including liability arising by acts or omissions occurring before the Closing
Date,
for compliance with the requirements of any Environment Protection Law.
(c) The Buyer indemnifies Joy and Dowty in respect of any matter
arising out of clauses 9.1.3(a) and/or (b) above and in respect of any
non-compliance with any Environment Protection Law relating to the operation of
the Australian Business or to the Australian Plant.
(d) The Buyer acknowledges that in entering into this agreement it has
not relied on any:
(i) representation; or
(ii) warranty;
from Joy or any of its Affiliates relating to the compliance of the Australian
Business or the Australian Plant with any law, including any Environment
Protection Law, and that Joy gives no warranty or indemnity in this regard.
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The following definition of "Environment Protection Law" is appropriate
for the purposes of this clause:
"ENVIRONMENT PROTECTION LAW" means any law of the Commonwealth of
Australia or any Australian State which regulates and controls the
activities of persons that impact upon the environment, and any
regulation, order, ordinance or bylaw made pursuant to that law, and
includes (but is not limited to):
(a) Clean Air Act 1961;
(b) Clean Waters Act 1970;
(c) Dangerous Goods Act 1975;
(d) Environmental Offenses and Penalties Act 1989;
(e) Environmental Planning and Assessment Act 1979;
(f) Environmentally Hazardous Chemicals Act 1985;
(g) Local Government Act 1993;
(h) Marine Pollution Act 1988;
(i) National Environment Protection Council (NSW) Act 1995;
(j) Noise Control Act 1975;
(k) Occupational Health and Safety Act 1983;
(1) Ozone Protection Act 1989;
(m) Pollution Control Act 1970;
(n) Protection of the Environment (Administration) Act 1991;
(o) Waste Disposal Act 1970; and
(p) Waste Minimization and Management Act 1995.
9.2. SUBROGATION. If the Indemnifying Party makes any payment under
this Section 9 in respect of any Losses, the Indemnifying Party shall be
subrogated, to the extent of such payment, to the rights of the Indemnified
Party against (a) any insurer or (b) third party with respect to such Losses;
PROVIDED, HOWEVER, that the Indenmifying Party shall not have any rights of
subrogation with respect to the other party hereto or any of its Affiliates or
any of its or its Affiliates' officers, directors, agents or employees.
9.3 CONDITIONS OF INDEMNIFICATION. The respective obligations and
liabilities of the Indemnifying Party to the Indemnified Party under Section 9.1
shall be subject to the following terms and conditions:
9.3.1 NOTICE. Within 15 days after receipt of notice of
commencement of any action or the assertion of any claim by a third party (but
in any event at least ten days preceding the date on which an answer or other
pleading must be served in order to prevent a judgment by default in favor of
the party asserting the claim), the Indemnified Party shall give the
Indemnifying Party written notice thereof together with a copy of such claim,
process or other legal pleading, and the Indemnifying Party shall have the right
to undertake the defense thereof by representatives
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of its own choosing that are reasonably satisfactory to the Indemnified Party
provided, however, that failure to provide such notice on a timely basis shall
not release the Indemnifying Party from any of its obligations under this
Section 9 except to the extent the Indemnifying Party is prejudiced by such
failure. Notwithstanding the Indemnifying Party's undertaking of such defense,
the Indemnified Party shall have the right to engage its own counsel, at its own
expense, and participate in the defense of the claim; PROVIDED, HOWEVER, that
the Indemnifying Party shall retain the right in its sole and absolute
discretion to make all decisions with respect to the defense, settlement or
compromise of such claim, provided that the Indemnifying Party remains liable
for any payments due under any such settlement or compromise.
9.3.2 FAILURE TO ASSUME DEFENSE. If the Indemnifying Party, by
the thirtieth day after receipt of notice of any such claim does not elect to
defend against such claim, the Indemnified Party will (upon further notice to
the Indemnifying Party) have the right to undertake the defense, compromise or
settlement of such claim on behalf of; at the expense of; and for the account
and risk of the Indemnifying Party; provided, however, that the Indemnified
Party shall not settle or compromise such claim without the Indemnifying Party's
consent, and provided further that, the Indemnifying Party shall have the right
to assume the defense of such claim with counsel of its own choosing at any time
prior to settlement, compromise or final determination thereof.
9.3.3 CLAIM ADVERSE TO INDEMNIFYING PARTY. Notwithstanding
anything to the contrary in this Section 9,3, if there is a reasonable
probability that a claim may materially adversely affect the Indemnified Party
other than as a result of money damages or other money payments, the
Indemnifying Party shall have the right, at its own cost and expense, to
compromise or settle such claim, but the Indemnifying Party shall not, without
the prior written consent of the Indemnified Party, settle or compromise any
claim or consent to the entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party a release from all liability in respect of such claim.
9.3.4 COOPERATION. In connection with any such
indemnification, the Indemnified Party will cooperate in all reasonable requests
of the Indemnifying Party.
9.3.5 SPECIAL PROCEDURES FOR BUYER INDEMNIFIABLE CLAIMS FOR
U.S. AND UK ENVIRONMENTAL MATTERS. Upon receipt of notice of a Buyer
Indemnifiable Claim in connection with any matter described in Section 3.9.4 or
3.12.4 hereof; which notice complies with Section 9.3.1 hereof; Joy shall have
the right, at its option, to undertake control over all aspects of such matter
(including, without limitation, retention of consultants, selection of remedial
measures, negotiations and agreements with interested government agencies and
third parties). The parties shall keep one another apprised of major
developments relating to such matter and shall, subject to applicable legal
privileges, make all final reports, filings, and other documents relating to
such matter available for inspection by one another upon request. Any costs
incurred by Buyer relating to oversight of activities undertaken hereunder by
Joy shall not be subject to indemnification hereunder. The Buyer shall take all
reasonable steps to avoid or mitigate any facts, events or
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conditions which might give rise to a Buyer Indemnifiable Claim. Joy shall have
no obligation to undertake any investigatory or remedial action, or provide
indemnification with respect to any matter governed hereunder, unless, and then
only to the extent that, investigation or remediation is required by
Environmental Laws based upon continued industrial use of the subject facility
("Closing Date Environmental Standards"). Any obligation of Joy to conduct any
investigation or remediation, or provide indemnification with respect to any
matters governed hereunder shall be deemed conclusively satisfied upon
completion of a remediation in a manner which attains Closing Date Environmental
Standards or is otherwise acceptable to applicable governmental authorities. The
parties agree to reasonably cooperate with one another in connection with any
matter governed hereunder and to generally conduct themselves in a cost
effective manner with respect thereto.
9.4 DAMAGES. No Party (or its Affiliates) shall, in any event, be
liable to the other Party (or its Affiliates) for any consequential damages,
including, but not limited to, loss of revenue or income, cost of capital, or
loss of business reputation or opportunity relating to the termination of this
Agreement. Each party agrees that it will not seek punitive damages as to any
matter under, relating to or arising out of the Transactions.
9.5 LIMITATIONS ON JOY LIABILITY. Notwithstanding anything to the
contrary contained in this Agreement:
9.5.1 Joy shall not be required to indemnify the Buyer
Indemnitees with respect to any Buyer's Indemnifiable Claim unless and until the
aggregate amount of all Indemnifiable Claims against Joy exceeds $50,000, and
then only to the extent such aggregate amount exceeds $50,000.
9.5.2 Joy shall not be liable under the indemnification
provisions hereof or otherwise have any liability for any misrepresentation or
breach of warranty under this Agreement to the extent that such breach of
warranty or the falsity of the representation is (A) disclosed (1) in any
agreement or document delivered to Buyer in connection with the consummation of
the transactions contemplated in this Agreement, or (2) in this Agreement, the
Disclosure Schedules, any Exhibit attached hereto or any other schedule attached
hereto; or (B) within the actual knowledge or Buyer, its Affiliates, or the
officers, directors, employees, agents, advisors or representatives of any of
them.
9.5.3 In the event that Joy becomes liable to Buyer with
respect to any Buyer's Indemnifiable Claim, in no event shall the aggregate
amount of such liability of Joy (including any liabilities of Joy for costs,
expenses and attorneys' fees paid or incurred in connection therewith) exceed
the sum of the amount of the Purchase Price and the amount of the Note.
9.5.4 SURVIVAL OF JOY'S INDEMNITIES. The indemnities of Joy
with respect to any Buyer's Indemnifiable Claim shall expire eighteen (18)
months following the Closing Date
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provided, however, that the indemnities of Joy with respect to any Buyer's
Indemnifiable Claim for Losses suffered or incurred as a result of or in
connection with the liabilities described in Sections 3.9.1,3.9.3,3.9.4,
3.9.5,3.9.8,3.9.9, 3.9.10,3.11.10,3.12.1, 3.12.3, 3.12.4, 3.12.5,
3.12.8,3.12.9,3.13.1, 3.13.3,3.13.7, 11.11.1 and 6.3, shall remain in effect
indefinitely. Joy shall have no liability with respect to any Buyer's
Indemnifiable Claim unless Buyer gives written notice to Joy of such claim,
setting forth in reasonable detail the specific facts and circumstances
pertaining thereto (i) with respect to Losses arising from Sections 3.9.1,
3.9.3, 3.9.4, 3.9.5, 3.9.8, 3.9.9,3.9.10,3.11.10, 3.12.1,3.12.3,3.12.4,
3.12.5,3.12.8, 3.12.9,3.13.1,3.13.3, 3.13.7, 11.11.1 and 6.3, promptly upon
Buyer's actual knowledge thereof, and (ii) with respect to all other Losses,
before the expiration of such eighteen (18) month period.
9.6 LIMITATIONS ON BUYER LIABILITY. Notwithstanding anything to the
contrary contained in this Agreement:
9.6.1 Buyer shall not be required to indemnify the Seller
Indemnitees with respect to any Seller's Indemnifiable Claim unless and until
the aggregate amount of all Indemnifiable Claims against Buyer exceeds $50,000,
and then only to the extent such aggregate amount exceeds $50,000.
9.6.2 Buyer shall not be liable under the indemnification
provisions hereof or otherwise have any liability for any misrepresentation or
breach of warranty under this Agreement to the extent that such breach of
warranty or the falsity of the representation is (A) disclosed (1) in any
agreement or document delivered to Joy in connection with the consummation of
the transactions contemplated in this Agreement, or (2) in this Agreement, the
Disclosure Schedules, any Exhibit attached hereto or any other schedule attached
hereto; or (B) within the actual knowledge of Joy, its Affiliates, or the
officers, directors, employees, agents, advisors or representatives of any of
them.
9.7 LIMITATION OF REMEDY.
9.7.1 Except as provided in Section 12.13, Buyer's sole remedy
with respect to any Buyer's Indemnifiable Claim or any claim against Joy or its
Affiliates arising out of the execution of this Agreement and the consummation
of the transactions contemplated hereunder shall be limited to a monetary claim
for indemnification pursuant to this Section 9 and Buyer shall not be entitled
to a rescission of this Agreement. Without limiting the foregoing, Buyer
understands and agrees that, except for its right to indemnification set forth
in Section 9.3.5 with respect to matters described in Sections 3.8.4 and 3.11.4,
it shall have no right of indemnification or any other right or remedy against
Joy or the Selling Companies with respect to any environmental, health or safety
matters (including without limitation all matters arising under CERCLA or any
other Environmental Laws) arising from this Agreement, the transactions
contemplated thereby, or the Business (collectively "Environmental, Health and
Safety Matters") and hereby waives and releases Joy and the Selling Companies,
their officers, directors, employees
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and agents from any and all claims, demands, causes of action, liabilities,
costs or expenses with respect to environmental, health and safety matters.
9.7.2 Except as provided in Section 12.13, Joy's sole remedy
with respect to any Seller's Indemnifiable Claims or any claim against Buyer or
its Affiliates arising out of the execution of this Agreement or the
consummation of the transactions contemplated hereunder shall be limited to a
monetary claim for indemnification pursuant to this Section 9 and Joy shall not
be entitled to a rescission of this Agreement.
SECTION 10 - [INTENTIONALLY DELETED]
SECTION 11 - OTHER COVENANTS AND AGREEMENTS
11.1 ANNOUNCEMENTS. Each Party agrees not to make, nor cause to be
made, any news releases or other public announcements pertaining to the
Transactions without first consulting the other Party and attempting to
formulate a mutually satisfactory arrangement for such disclosure, except that
announcements may be made without the consent of the other only to the extent
required by applicable law.
11.2 EMPLOYMENT AND BENEFIT MATTERS.
11.2.1 Buyer will take such steps as are required so that,
except for pension plans/schemes, all employees of FSW, Meco and the South
African Business who become employees of the Buying Companies become
participants in employee benefit plans and schemes comparable in the aggregate
to the Selling Companies benefit plans.
11.2.2 All employees of the Australian Business and the South
African Business will be entitled to participate in pension plans or schemes on
the same basis as other similarly situated employees in the same or comparable
countries of the Buyer. All of these employees will be credited at the cost of
Buyer for eligibility and vesting purposes with all of their years of past
service with Dowry and Harnco SA (or any of their predecessors to the extent
such companies are obligated to credit past service under acquisition
agreements).
11.2.3 FSW and Meco have entered into service agreements with
two (2) senior executives, copies of which have been furnished to Buyer (the
"Executive Agreements"). Buyer shall honor all Executive Agreements, except that
Joy shall reimburse Buyer for the loyalty payments made under such agreements to
John Malcolm McCallum and Howard Parsons in the amounts of GBP 60,000 and GBP
10,000, respectively. Joy shall make such reimbursement promptly upon notice
that Buyer has made such payments.
11.3 COOPERATION. Each Party hereto agrees, both before and after the
Closing, to execute any and all further documents and writings and to perform
such other reasonable actions
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which may be or become necessary or expedient to effectuate and carry out the
Transactions (which shall not include any obligation to make payments).
11.4 USE OF CORPORATE NAME AND SYMBOL; TRANSITION LICENSE. The Parties
shall execute and deliver at Closing the Trademark License Agreement attached as
Exhibit 11.4. Except as set forth in the Trademark License Agreement, after the
Closing, Buyer shall not use the Joy Marks or the Composite Marks.
11.5 TOTAL EXCLUDED ASSETS. If, after the Closing Date, U.S. Excluded
Assets, including, but not limited to, proprietary information of Joy, shall
remain on the premises utilized by or under the control of Buyer, then Buyer
shall take reasonable efforts to deliver such U.S. Excluded Assets to Joy at the
expense of Joy and, so long as such information shall remain on said premises,
Buyer shall exercise the same reasonable degree of care with respect thereto as
it does with respect to its own property.
11.6 GOOD FAITH. Each Party will use its good faith efforts (excluding
the institution of litigation) to cause all conditions to its obligations
hereunder to be timely satisfied and to perform and fulfill all obligations on
its part to be performed and fulfilled under this Agreement to the end that the
Transactions shall be effected substantially in accordance with the terms of
this Agreement as soon as reasonably practicable. In addition, each party will
use reasonable efforts to ensure that its representations and warranties remain
true and correct in all respects as of the Closing Date.
11.7 RECORDS; EMPLOYEES.
11.7.1 DEFINITIONS. As used in this Section 11.7, the
following terms shall have the meanings specified:
11.7.1.1 "Termination Date" shall mean December 3 1, 2007.
11.7.1.2 "Information" shall mean any and all information that
either Party (directly or through their employees, agents or representatives)
furnishes to the other pursuant to the provisions of this Section 11.7, whether
orally or in writing or gathered by inspection and regardless of whether
specifically identified as "confidential", together with analyses, compilations,
studies or other documents prepared by the Party receiving the information or
its agents, representatives (including attorneys, accountants, consultants,
bankers and financial advisors) or employees which contain or otherwise reflect
such information.
11.7.2 RECORDS IN BUYER'S POSSESSION. Until the Termination
Date the Buyer agrees to permit Joy and the Selling Companies, and their
officers, employees, attorneys, accountants, agents and designees, such access
to, and right to copy, the Books and Records in the possession of the Buyer as
Joy and the Selling Companies may deem reasonably necessary or reasonably
desirable. Any such examination and copying shall be at the expense of Joy and
the
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Selling Companies, shall be performed at the place where the Books and Records
are regularly maintained by the Buyer and shall not unreasonably interfere with
the normal business activities of the Buyer or the Business. The Buyer shall
notify Joy, at any time prior to the Termination Date, that it intends to
destroy any or all of the Books and Records in its possession, and Joy shall
have the right to review and remove at Joy's expense any of such records the
Buyer intends to destroy.
11.7.3 RECORDS IN THE SELLING COMPANIES' POSSESSION. Until the
Termination Date the Selling Companies agree to permit the Buyer, and its
officers, employees, attorneys, accountants, agents and designees, such access
to, and right to copy, the Books and Records in the possession of the Selling
Companies as the Buyer may deem reasonably necessary or reasonably desirable.
Any such examination and copying shall be at the expense of the Buyer, shall be
performed at the place where the Books and Records are regularly maintained by
the Selling Companies and shall not unreasonably interfere with the normal
business activities of the Selling Companies. The Selling Companies shall notify
the Buyer, at any time prior to the Termination Date, that either or them
intends to destroy any or all of the Books and Records in its possession, and
the Buyer shall have the right to review and remove at the Buyer's expense any
of such records the Selling Companies intend to destroy.
11.7.4 BUYER'S EMPLOYEES. Until the Termination Date, the
Buyer shall afford Joy and the Selling Companies access to those employees of
the Buyer or any Affiliate of the Buyer who are familiar with the business of
the Business. Any such access shall be: (i) at the request of Joy and the
Selling Companies; (ii) scheduled and provided on a reasonable basis taking into
account the business requirements of the Buyer; and (iii) for any proper
business purpose of Joy and the Selling Companies including the defense of any
legal proceedings and the preparation, filing and execution of any Tax Returns.
Joy shall pay all reasonable out-of-pocket expenses, excluding wages, salaries,
overhead or burden, incurred by the Buyer or its Affiliates, in connection with
this Subsection 11.7.4.
11.7.5 THE SELLING COMPANIES' EMPLOYEES. Until the Termination
Date, the Selling Companies shall afford the Buyer access to those employees of
the Selling Companies who are familiar with the business of the Business. Any
such access shall be: (i) at the request of the Buyer; (ii) scheduled and
provided on a reasonable basis taking into account the business requirements of
the Selling Companies; and (iii) for any proper business purpose of the Buyer
including the defense of any legal proceedings and the preparation, filing and
execution of any Tax returns. The Buyer shall pay all reasonable out-of-pocket
expenses, excluding wages, salaries, overhead or burden, incurred by the Selling
Companies in connection with this Subsection 11.7.5.
11.7.6 CONFIDENTIALITY. The Parties agree that any information
disclosed pursuant to this Section will not be used in any way detrimental to
the Party disclosing the information and that the information shall be kept
confidential and not disclosed without the prior written consent of the
disclosing Party unless otherwise required by law. The directors, officers,
employees, agents and representatives of each Party shall be informed of the
confidential nature of such
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information and shall be directed to treat such information confidentially in
accordance with this Agreement. Each Party shall, at its sole expense, take all
reasonable measures, including court proceeding, to restrain its directors,
officers, representatives, agents, employees and former employees from
unauthorized disclosure or use of the information.
11.8 OVERDRAFT. Prior to Closing, FSW shall issue to HIL 50 additional
shares of common stock in exchange for a capital contribution by HIL in an
amount equal to the face value of the Note, which capital contribution shall be
paid by FSW to HIL, which HIL shall in turn pay to National Westminster Bank in
satisfaction of FSW's obligation thereto as of August 22, 1997.
11.9 FURTHER ASSURANCES. From time to time after the Closing, as the
case may be, at Buyer's request and without further consideration, Joy and the
Selling Companies shall execute and deliver such other and further instruments
of conveyance, assignment and transfer, and take such other action, as Buyer may
reasonably require for the more effective conveyance and transfer of the assets
and shares hereunder to Buyer and the Buying Companies. From time to time after
the Closing, at Joy's request and without further consideration, Buyer and the
Buying Companies will execute and deliver such other and further instruments of
assumption and take such other action as Joy may reasonably require for the more
effective assumption by Buyer and the Buying Companies of the U.S. Subject
Liabilities and the South African Subject Liabilities.
11.10 UK BUSINESS PENSION PROVISIONS.
11.10.1 DEFINITIONS. For purposes of this Section 11.10 the
following expressions have the following meanings:
11.10.1.1 "Buyer's Scheme" The retirement benefits
scheme to be established by the Buyer in accordance with the provisions of
Section 11.10.2.
11.10.1.2 "Employees" All those persons who at the
Closing Date are employed by FSW.
11.10.1.3 "ICTA" The Income and Corporation Taxes Act
1988.
11.10.1.4 "Interest" Interest at the annual rate of 1
percent above the base lending rate from time to time of National Westminster
Bank Plc, accruing on a daily basis until payment is made, whether before or
after any judgment.
11.10.1.5 "Interim Period" The period commencing on
the day following the Closing Date and expiring on the day immediately preceding
the Transfer Date.
11.10.1.6 "Joy's Actuary" Adrian Matthias of Watson
Wyatt, Cardinal House, 10 St. Mary's Parsonage, Manchester M3 2LY.
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11.10.1.7 "Pension Scheme" The Dobson Park Pension
Scheme.
11.10.1.8 "Relevant Employees" Such of the Employees
as are members of the Pension Scheme in pensionable service as at the Closing
Date.
11.10.1.9 "Transfer Date" The day six months after
the Closing Date or such earlier date as Buyer advises Joy in writing upon five
days' notice.
11.10.1.10 "Transferring Employees" Those of the
Relevant Employees as are members of the Pension Scheme in pensionable service
on the Transfer Date.
11.10.1.7 "Trustees" The trustees for the time being
of the Pension Scheme.
11.10.2 BUYER'S UNDERTAKINGS. The Buyer undertakes that:
11.10.2.1 It will cause the Buyer's Scheme to be
established such that on expiry of the Interim Period, the Transferring
Employees will be eligible to participate in it, in accordance with its
provisions.
11.10.2.2 The Buyer's Scheme will be approved by the
Board of the Inland Revenue for the purposes of Chapter I or Chapter IV of Part
XIV of ICTA (or capable of treatment as an exempt approved scheme for the
purposes of ICTA).
11.10.2.3 With effect from the Transfer Date the
Buyer will offer membership of the Buyer's Scheme to the Transferring Employees
(and any other Employees who satisfy the eligibility requirements of the Buyer's
Scheme) and will provide benefits under the Buyer's Scheme in respect of service
by the Transferring Employees (and any other Employees eligible for membership
of the Buyer's Scheme) on and from the Transfer Date.
11.10.3 INTERIM PERIOD. The following provisions will apply in
respect of the Interim Period.
11.10.3.1 Joy will procure that the Relevant
Employees (for so long as they remain in the employment of FSW) and FSW are
permitted to continue to participate in the Pension Scheme (subject to any
requirements of the Inland Revenue Pension Schemes Office or the Contributions
Agency) for pension benefits only, and excluding life assurance benefits which
would otherwise be provided pursuant to Rule 5.1.1 of the Definitive Trust Deed
and Rules of the Pension Scheme dated October 1, 1995, during the Interim Period
as active members and as if it were an associated employer respectively.
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11.10.3.2 The Buyer will procure the prompt monthly
payment by FSW to the Trustees of members' and employer's contributions as set
out in Schedule 11.10.3.2, at such intervals during the Interim Period as the
Trustees shall require in respect of each of the Relevant Employees for so long
as he or she remains in active membership of the Pension Scheme.
11.10.3.3 In the event that contributions payable in
accordance with paragraph 11.10.3.2 are received by the Trustees after the due
date for payment an amount equal to the contribution plus Interest thereon shall
be payable by FSW from the due payment date to the date of actual payment.
11.10.3.4 The Buyer will procure that FSW complies
during the Interim Period with the provisions of the Pension Scheme insofar as
they apply to FSW as if it were an associated employer and in particular procure
that FSW shall:
11.10.3.4.1 Comply with all requirements of
the Pensions Act 1995 applicable to it and nominate the principal employer of
the Pension Scheme as the employer capable of agreeing the schedule of
contributions for the purposes of that Act.
11.10.3.4.2 Not exercise any right, power or
discretion conferred on FSW as a participating employer in the Pension Scheme
without the prior written consent of Joy.
11.10.3.4.3 Not increase the remuneration
above 3% of pensionable salary per annum of any of the Relevant Employees except
on such terms as to payment of additional contributions to the Pension Scheme as
Joy and the Trustees may require.
11.10.3.5 The Buyer will procure that FSW does not
take any actions (other than pursuant to clause 11.10.3.4.3, with the written
consent of the Trustees) which lead to (or could lead to) an increase in the
liabilities of the Pension Scheme. In the event FSW takes any such actions, the
Buyer will procure that FSW will pay such contributions to the Pension Scheme as
the Trustees may reasonably require to meet the cost to the Pension Scheme of
such liabilities.
11.10.3.6 On and after the Closing Date in the event
that any Relevant Employees other than those set forth in Schedule 11.10.3.5
claim early retirement pensions following termination of their contracts of
employment by FSW, the Buyer and/or FSW will make such additional contributions
to the Pension Scheme as Joy and the Trustees may reasonably require to cover
the additional cost to the Pension Scheme.
11.10.4 JOY'S UNDERTAKINGS.
11.10.4.1 Joy undertakes with the Buyer that upon any
of the Relevant Employees ceasing to be in active membership of the Pension
Scheme they will be provided with
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such benefits and options as may be provided for them as deferred members in
accordance with the Rules of the Pension Scheme.
11.10.4.2 Joy undertakes with the Buyer that between
the Closing Date and the Transfer Date neither it nor the Principal Employer (as
defined in the Definitive Trust Deed and Rules of the Pension Scheme dated
October 1, 1995) of the Pension Scheme will take any actions, without the prior
agreement of FSW (such agreement not to be unreasonably withheld), where such
actions relate to the Relevant Employees, which would result in either:
11.10.4.2.1 a reduction in the level of
benefits which the Relevant Employees have accrued or are entitled to accrue
under the Pension Scheme for so long as FSW shall continue to make contributions
to the Pension Scheme for and on behalf of the Relevant Employees; or
11.10.4.2.2 without prejudice to the
provisions of clauses 11.10.3.4.3 and 11.10.3.5, increase the contributions
payable by FSW and/or the Relevant Employees to the Pension Scheme under clause
11.10.3.
11.10.5 Buyer's Indemnities. The Buyer will indemnify Joy and
the Trustees and keep them indemnified against any claim made in respect of any
of the Relevant Employees for the payment of a cash lump sum upon the death of a
Relevant Employee (in accordance with Rule 5.1.1 of the Definitive Trust Deed
and Rules of the Pension Scheme dated October 1, 1995) whilst in Pensionable
Service (as defined in the provisions of the Pension Scheme) during the period
commencing on and including the Closing Date until and including the Transfer
Date.
11.10.6 JOY'S INDEMNITIES.
11.10.6.1 Joy will indemnify the Buyer and FSW (but
not to the extent of indemnifying both the Buyer and FSW in respect of the same
liability) in respect of any liability which FSW may suffer under the provisions
of Section 75 of the Pensions Act 1995. This indemnity shall include any
reasonable costs and expenses incurred by either the Buyer or FSW in relation to
such liability.
11.10.6.2 Joy shall indemnify the Buyer and FSW (but
not to the extent of indemnifying both the Buyer and FSW in respect of the same
liability), in respect of any other liability relating to any act or omission by
Joy, FSW, the Principal Employer of the Pension Scheme (as defined in the
Definitive Trust Deed and Rules of the Pension Scheme dated October 1, 1995), or
the Trustees or any event occurring or referable to a date prior to the Closing
Date, which FSW may suffer either before or after the Closing Date in relation
to:
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11.10.6.2.1 the participation of FSW as an
employer in the Pension Scheme (other than any liability FSW and the Buyer have
specifically agreed to meet under clause 11.10 of this Agreement); or
11.10.6.2.2 any other promise made to any
Employee, director or officer of FSW or former employee, director or officer of
FSW in relation to retirement benefits, other than via the Pension Scheme; which
(without prejudice to the generality of the forgoing) shall include in relation
to both 11.10.6.2.1 and 11.10.6.2.2 any liability arising in respect of Article
119 of the EEC Treaty in respect of obligations under the EEC Treaty known as at
the Closing Date. This indemnity shall include any reasonable costs and expenses
incurred by either the Buyer or FSW in relation to such liabilities.
11.11 UK TAX MATTERS. For purposes of this Section 11.11, the term
income tax" shall include the UK corporation tax based on income.
11.11.1 HIL shall be responsible for preparing and filing any
UK income tax returns of FSW for the periods ended prior to August 22, 1997 and
shall pay any UK income taxes shown on such returns. Joy shall indemnify Buyer
for any increased income taxes due on these returns caused by adjustments which
will not reverse in future periods (including the loss of any group relief
claimed on these returns). Buyer and FSW shall be responsible for the payment of
all other taxes of FSW for all periods. FSW and Buyer shall agree to any
election or consent reasonably requested by Joy, in connection with the income
tax returns of FSW to be filed by HIL, provided that Joy shall reimburse FSW for
any increased taxes paid as a result of such election or consent. FSW and the
Buyer shall cooperate in the submission of signing of any documentation in
respect of the claiming or surrender of group relief or advance corporation tax
("ACT") for any period during which FSW were at any time part of the
Harnischfeger Industries, Inc. group. To the extent that group relief is
surrendered to FSW in accordance with this clause, the Buyer or FSW shall pay to
the surrendering company promptly upon filing the tax return for such year an
amount equal to the amount of tax saved as a result of losses surrendered as
group relief. To the extent that ACT is surrendered to FSW in accordance with
this clause, the Buyer or FSW shall pay to the surrendering company promptly
upon filing the tax return for such year an amount equal to the amount of ACT
surrendered.
11.11.2 Joy, FSW and Buyer shall use their best efforts to
cooperate with each other, as each may reasonably request, in computing amounts,
filing returns, elections or other documents or reports and responding to any
governmental inquiry, examination or proceeding including, without limitation,
by providing or executing tax returns, powers of attorney, consents, waivers of
statutes of limitations, requests for competent authority, closing agreements or
any other documents which each shall reasonably request. Each party shall bear
all expenses related to requests by such party.
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11.11.3 All UK tax returns of FSW for periods which end after
the Closing Date shall be prepared and filed by FSW or Buyer.
11.11.4 FSW and Buyer shall furnish all tax information to Joy
required for (i) preparation of the UK income tax returns of FSW which HIL are
responsible for filing; and (ii) the claiming or surrender of group relief or
ACT for any period during which FSW was at any time part of the Harnischfeger
Industries, Inc. group.
11.12 STOCK TRANSFER TAXES. Buyer shall assume the obligation for and
indemnify Joy from and against any taxes or fees arising as a result of the
transfer hereunder of the FSW Shares and the Meco Shares.
SECTION 12 - MISCELLANEOUS
12.1 BULK TRANSFER LAWS. Subject to Section 9.1, each Party hereby
waives compliance by the other party with any applicable bulk transfer laws,
including, but not limited to, the bulk transfer provisions of the Uniform
Commercial Code of any state, or any similar statute, with respect to the
transactions contemplated hereby.
12.2 EXPENSES. Whether or not the Transactions are consummated, none of
the Parties hereto shall have any obligation to pay any of the fees and expenses
of the other Party incident to the negotiation, preparation and execution of the
Transaction Documents, or the closing of the Transactions, including, but not
limited to, any lenders commitment fees and the fees and expenses of legal
counsel, accountants, investment bankers, appraisers, consultants and other
experts.
12.3 WAIVERS. Any Party may, by written notice to the other party, (a)
extend the time for the performance of any of the obligations or other actions
an other Party under this Agreement; (b) waive any inaccuracies in the
representations or warranties another Party contained in this Agreement or in
any certificates delivered pursuant to this Agreement; (c) waive compliance with
any of the conditions or covenants of the other contained in this Agreement; or
(d) waive performance of any of the obligations of the other under this
Agreement. With regard to any power, remedy or right provided herein or
otherwise available to any party hereunder, (i) no waiver or extension of time
will be effective unless expressly contained in a writing signed by the waiving
party, and (ii) no alteration, modification or impairment will be implied by
reason of any previous waiver, extension of time, or delay or omission in
exercise of rights or other indulgence.
12.4 AMENDMENTS, SUPPLEMENTS. This Agreement may be amended or
supplemented at any time by the mutual written consent of the Parties.
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12.5 CONSENTS. Buyer recognizes that certain consents to the
Transactions may have been or may be required from third parties. The Selling
Companies agree to use their best efforts (excluding the expenditure of funds or
the institution of litigation) to obtain such consents.
12.6 ENTIRE AGREEMENT. This Agreement, the Confidentiality Agreement,
the Transaction Documents, and all documents incorporated by reference herein or
therein, constitute the entire agreement between the Parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral and written, between the parties hereto with respect to the subject matter
hereof. No representation, warranty, promise, inducement or statement of
intention has been made by Party that is not embodied in this Agreement, the
Confidentiality Agreement, a Transaction Document, or a document incorporated by
reference herein or therein, and no Party shall be bound by, or be liable for,
any alleged representation, warranty, promise, inducement or statement of
intention not embodied herein or therein.
12.7 BINDING EFFECT, BENEFITS. This Agreement shall inure to the
benefit of and be binding upon the Parties and their respective permitted
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the Parties or their respective permitted
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
12.8 ASSIGNABILITY. Neither this Agreement nor any of the Parties'
rights hereunder shall be assignable by any Party without the prior written
consent of the other Parties, which consent shall not be unreasonably withheld.
Notwithstanding the receipt of written consent to such an assignment, neither
party hereto shall be relieved of its obligations under this Agreement except as
otherwise expressly provided in such written consent.
12.9 NOTICES. All notices under this Agreement shall be in writing and
shall be delivered by personal service or telegram, telecopy or certified mail
(if such service is not available, then by first class mail), postage prepaid,
or overnight courier to such address as may be designated from time to time by
the relevant party, and which will initially be as set forth below. All notices
shall be deemed given when received. Notices shall be addressed as follows or to
such other address as the party to whom the game is directed will have specified
in conformity with the foregoing:
If to Buyer: Continental Conveyor International Inc.
6140 Parkland Boulevard
Mayfield Heights, Ohio 44124
Attention: Chairman
WITH DUPLICATE NOTICE TO: David A. Zagore
Squire, Sanders & Dempsey
4900 Key Tower
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127 Public Square
Cleveland, OH 44114-1304
If to Joy: Joy Mining Machinery
177 Thorn Hill Road
Warrendale, PA 15086
Attention: President
WITH DUPLICATE NOTICE TO: Harnischfeger Industries, Inc.
3600 S. Lake Drive
St. Francis, WI 53235
Attention: Kim R. Kodousek
12.10 GOVERNING LAW: JURISDICTION.
12.10.1 This Agreement has been negotiated and entered into in
the Commonwealth of Pennsylvania, and all questions with respect to the
Agreement and the rights and liabilities of the parties will be governed by the
laws of that state, regardless of the choice of laws provisions of the
Commonwealth of Pennsylvania or any other jurisdiction and excluding, if
applicable, the United Nations Convention on Contracts for the International
Sales of Goods. Any and all disputes between the parties which may arise
pursuant to this Agreement will be heard and determined in arbitration in
Philadelphia, Pennsylvania pursuant to the provisions of Section 12.11 hereof.
12.10.2 Certain terms and conditions set forth herein may also
be embodied in certain other agreements relevant to the transactions set forth
herein to which some or all of the Parties are parties, which other agreements
are controlled by the laws of England, Australia and South Africa (collectively,
the "Non-U.S. Agreements"). This Agreement shall control and take precedence
over any provisions of the Non-U.S. Agreements which conflict or are
inconsistent with the provisions of this Agreement, and the Non-U.S. Agreements
shall not in any event be construed as diminishing or otherwise affecting the
obligations of the Parties set forth herein.
12.11 ARBITRATION. Any and all disputes between the Parties arising out
of or relating to this Agreement including, but not limited to, any claim
relating to the validity, enforceability or breach of this Agreement, or breach
of covenant, express or implied, which is not settled by agreement between the
Parties, shall be settled by arbitration in Philadelphia, Pennsylvania pursuant
to the model arbitration rules of the American Arbitration Association then in
effect. In consideration of each Party's agreement to submit all such disputes
to arbitration, and in consideration of the anticipated expedition and
minimization of expense of this arbitration remedy, each Party agrees that the
arbitration provisions of this Agreement shall provide it with its sole and
exclusive remedy and each party expressly waives any right it might have to seek
redress in any other forum except that injunctive relief may be sought in any
court having appropriate subject matter and personal jurisdiction as set forth
in Section 12.13. During the course of the
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proceeding, the expenses of the arbitrator, the costs of transcripts and other
expenses of the arbitration proceedings shall be divided equally between (i) the
Buyer and (ii) Joy and each Party shall bear the expense of any witnesses it
calls. However, the arbitrator(s) may include arbitration fees as part of their
award. Any decision and award or order of the arbitrator shall be binding upon
the Parties and judgment thereon may be entered in any state or federal court
which would otherwise qualify to have jurisdiction.
12.12 ATTORNEYS' FEES. As to any litigation or arbitration (including
any proceedings in a bankruptcy court) between the Parties or their
representatives concerning any provision of this Agreement or the rights and
duties of any person or entity hereunder, solely as between the Parties or their
successors, each party shall bear its own attorneys' fees and expenses.
12.13 EQUITABLE REMEDIES. The Parties acknowledge that the remedy at
law for any breach, or threatened breach, of their respective covenants to
consummate the Transactions will be inadequate and, accordingly, each covenants
and agrees that, with respect to any such breach or threatened breach, the other
will, in addition to any other rights or remedies that it may have and
regardless of whether such other rights or remedies have been previously
exercised, be entitled to such injunctive relief as may be available from any
appropriate court referred to in Section 12.11, but to no other equitable
relief. Notwithstanding the foregoing sentence, any monetary damages which are
all or a portion of any equitable relief granted hereunder shall be subject to
the limitations set forth in Section 9.
12.14 RULES OF CONSTRUCTION.
12.14.1 HEADINGS. The section headings in this Agreement are
inserted only as a matter of convenience, and in no way define, limit, or extend
or interpret the scope of this Agreement or of any particular section.
12.14.2 TENSE AND CASE. Throughout this Agreement, as the
context may require, references to any word used in one tense or case shall
include all other appropriate tenses or cases.
12.14.3 SEVERABILITY. The validity, legality or enforceability
of the remainder of this Agreement will not be affected even if one or more of
the provisions of this Agreement will be held to be invalid, illegal or
unenforceable in any respect.
12.14.4 OTHER LANGUAGE. Whenever the term "including" is used
in this Agreement in connection with a listing of items included within a prior
or subsequent reference, such listing shall be interpreted to be illustrative
only, and shall not be interpreted as a limitation on or an exclusive listing of
the items included within the prior or subsequent reference.
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12.15 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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* * * *
IN WITNESS WHEREOF, this Asset Purchase Agreement has been duly executed
and delivered by the duly authorized officers of the parties hereto as of the
date first above written.
CONTINENTAL CONVEYOR
INTERNATIONAL INC.
By:
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Its:
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JOY TECHNOLOGIES INC.
By:
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Its:
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AMERICAN LONGWALL ROOF SUPPORTS, INC.
By:
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Its:
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HARNISCHFEGER INDUSTRIES LIMITED
By:
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Its:
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DOWTY TECHNICAL SERVICES PTY. LIMITED
By:
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Its:
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JOINDER OF CONTINENTAL CONVEYOR & EQUIPMENT COMPANY
Continental Conveyor & Equipment Company ("CC&E") joins in the execution
of this agreement for the purpose of acknowledging the terms hereof, and by its
execution hereof, hereby guarantees to Joy and Joy's permitted assigns, the
performance by Buyer of all Buyer's obligations under the terms of this
Agreement and any other agreements or instruments entered into or executed by
Buyer pursuant to the terms hereof, such that CC&E shall be jointly and
severally liable with Buyer for the performance of such obligations; provided,
however, notwithstanding the above, that Joy and Joy's permitted assigns must
have first made demand for performance by Buyer ten days in advance of any
demand for performance by CC&E and Buyer must have failed to perform within such
period; and further provided, that this joinder shall not be deemed to grant or
establish rights in any third parties against Buyer, CC&E, Joy, or Joy's
permitted assigns.
CONTINENTAL CONVEYOR & EQUIPMENT
COMPANY
By:
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Its:
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