1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: November 23, 1998
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 53-0257888
(State of Incorporation) (I.R.S. Employer Identification No.)
280 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 922-1640
2
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
On November 23, 1998, Dover Corporation (the "Company") signed a definitive
purchase agreement (the "Purchase Agreement") with Thyssen Industrie AG and
Thyssen Elevator Holding Corporation (collectively, "Thyssen") pursuant to which
the Company agreed to sell its elevator business operations (the "Elevator
Business") to Thyssen. The Purchase Price for the Elevator Business is
US$1,100,000,000 (the "Purchase Price") plus the sharing of certain expenses
arising out of the transaction. The Purchase Price is payable in cash, with
US$1,080,000,000 payable at the First Tranche Closing and US$20,000,000 payable
at the Second Tranche Closing. The First Tranche Closing (covering primarily the
United States Elevator Business) is scheduled to occur upon clearance of the
transaction by United States regulatory authorities and the Second Tranche
Closing (covering primarily the Canadian Elevator Business) is scheduled to
occur upon clearance of the transaction by Canadian regulatory authorities. The
Purchase Price was determined by negotiation between the parties. This sale will
terminate the Company's plan, announced on May 8, 1998, to spin off its Elevator
Business to its stockholders.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro forma Condensed Consolidated Financial Information (Unaudited)
The following unaudited pro forma financial information is filed as
part of this report and is set forth in the pages attached hereto:
Pro forma Condensed Consolidated Financial Information.
Pro forma Condensed Consolidated Balance Sheet at September
30, 1998.
Pro forma Condensed Consolidated Statement of Earnings for the
nine months ended September 30, 1998.
Pro forma Condensed Consolidated Statement of Earnings for the
year ended December 31, 1997.
Notes to Pro forma Condensed Consolidated to Financial
Statements.
(c) Exhibits.
The following is a complete list of Exhibits filed as part of this report:
Exhibit 2.1 Purchase Agreement dated as of November 23, 1998
by and among Thyssen Industrie AG, Thyssen Elevator
Holding Corporation, as buyers, and Dover
Corporation, as seller (schedules omitted). Schedules
relating to Purchase Price Allocation, U.S. Federal
Income Taxes, Elevator Financial Statements and
Executive Employment Arrangements have been omitted,
but will be furnished supplementary to the Securities
and Exchange Commission upon request.
20 Dover Corporation Press Release dated November 23, 1998.
3
DOVER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following presents unaudited pro forma condensed financial information of
the Company, as adjusted to give effect to the sale of all of its elevator
business ("Divested Companies") to Thyssen Industrie AG, the receipt of sale
proceeds and retirement of short term debt. The financial information is
presented as of the beginning of the earliest period presented for statements of
earnings purposes and as of the end of the period presented for balance sheet
purposes. The historical financial information for Divested Companies has been
derived from the historical financial statements of the Company and is intended
only for presentation of the Company's pro forma financial information. This
data is presented for illustrative purposes only and is not necessarily
indicative of the financial position or results of operations of the Company or
Divested Companies which would have occurred had the sale actually been
consummated as of such dates, nor is this information indicative of the future
financial position or results of operations of the Company or Divested
Companies. The pro forma adjustments are described in the accompanying notes
presented herein.
FORWARD LOOKING STATEMENTS
This Report on Form 8-K contains forward looking statements within the meaning
of the Securities Act of 1933 (as amended) and the Securities Exchange Act of
1934 (as amended). Forward-looking statements are subject to inherent risks and
uncertainties and could be affected by general industry and market conditions
and growth rates, and general domestic and international economic conditions
including interest rate and currency exchange rate fluctuations. In light of
these risks and uncertainties, actual events and results may vary significantly
from those included in or contemplated or implied by such statements. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
4
DOVER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AT SEPTEMBER 30, 1998
(IN THOUSANDS)
Dover Dover
Corporation Elevator Pro Forma Corporation
Assets: Historical Business (1) Adjustments Pro Forma
- --------- ---------- ------------ ----------- ---------
Current Assets:
Cash & cash equivalents $ 92,327 $ 28,488 $1,100,000 (2) $ 732,782
(437,988) (3)
6,931 (5)
Receivables, net of allowance for
doubtful accounts 852,903 201,497 651,406
Inventories 664,860 81,842 583,018
Prepaid expenses 67,440 10,673 5,025 (4) 61,792
------------------------------------------------- ------------
Total current assets 1,677,530 322,500 673,968 2,028,998
------------------------------------------------- ------------
Property, plant & equipment (at cost) 1,409,151 151,331 1,257,820
Accumulated depreciation 775,064 81,853 693,211
------------------------------------------------- ------------
Net property, plant & equipment 634,087 69,478 - 564,609
------------------------------------------------- ------------
Intangible assets, net of amortization 1,473,616 32,461 1,441,155
Other intangible assets 10,368 3,009 7,359
Deferred charges & other assets 52,548 10,833 8,619 (4) 50,334
------------------------------------------------- ------------
$ 3,848,149 $ 438,281 $ 682,587 $4,092,455
================================================= ============
Liabilities:
Current Liabilities
Notes payable $ 437,988 - $(437,988) (3) $ -
Current maturities of long-term debt 861 - 861
Accounts payable 208,139 23,086 185,053
Accrued compensation & employee benefits 161,588 27,340 134,248
Accrued insurance 120,915 75,611 45,304
Other accrued expenses 267,688 49,903 45,000 (9) 262,785
Income taxes 1,226 - 271,463 (8) 277,714
5,025 (6)
------------------------------------------------- ------------
Total current liabilities 1,198,405 175,940 (116,500) 905,965
------------------------------------------------- ------------
Long-term debt 611,310 611,310
Payable to Dover Corporation 20,575 13,644 (4) -
6,931 (5)
Deferred taxes 40,149 - 8,619 (6) 48,768
Deferred compensation 81,069 15,795 65,274
Stockholders' equity:
Common stock 235,492 235,492
Subsidiary common stock 200 200 (1)
Additional paid-in surplus 17,149 17,149
Subsidiary additional paid-in surplus 2,425 2,425 (1)
Cumulative translation adjustments (22,808) (12,124) (10,684)
Unrealized holding gains (losses) 44 - 44
------------------------------------------------- ------------
Accumulated other comprehensive earnings (22,764) (12,124) - (10,640)
Retained earnings 1,921,527 531,798 (10) 2,453,325
Subsidiary Retained earnings 235,470 235,470 (1)
Less: Treasury stock 234,188 - 234,188
------------------------------------------------- ------------
Total stockholders' equity 1,917,216 225,971 769,893 2,461,138
------------------------------------------------- ------------
$ 3,848,149 $ 438,281 $ 682,587 $4,092,455
================================================= ============
See Notes to Pro Forma Condensed Consolidated Financial Statements.
5
DOVER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Dover Dover
Corporation Elevator Pro Forma Corporation
Historical Business (11) Adjustments Pro Forma
---------- ------------- ----------- ---------
Net sales $3,614,904 $ 657,532 $ 1,428 (12) $2,958,800
Cost of sales 2,377,105 479,833 1,428 (12) 1,898,700
-------------------------------------------------------- ------------
Gross profit 1,237,799 177,699 - 1,060,100
Selling & administrative expenses 782,698 120,096 662,602
-------------------------------------------------------- ------------
Operating profit 455,101 57,603 - 397,498
-------------------------------------------------------- ------------
Other deductions (income):
Interest expense 43,587 318 (18,067) (13) 25,202
Interest income (13,510) (419) (13,091)
Foreign exchange 1,952 582 1,370
All other, net (6,944) (3,571) (3,373)
-------------------------------------------------------- ------------
Total 25,085 (3,090) (18,067) 10,108
-------------------------------------------------------- ------------
Earnings before taxes on earnings 430,016 60,693 18,067 387,390
Federal & other taxes on earnings 145,995 21,723 6,865 (13) 131,137
-------------------------------------------------------- ------------
Net earnings from continuing operations 284,021 38,970 11,202 256,253
Earnings from discontinued operations 38,970 (14) 38,970
=============================================================================
Net earnings $284,021 $ 38,970 $ 50,172 $ 295,223
=============================================================================
Net earnings per common share - Basic:
- Continuing operations $ 1.27 $ 1.15
- Discontinued operations 0.17
----------- ------------
Net earnings $ 1.27 $ 1.32
=========== ============
Net earnings per common share - Diluted:
- Continuing operations $ 1.27 $ 1.15
- Discontinued operations 0.17
----------- ------------
Net earnings $ 1.27 $ 1.32
=========== ============
Weighted average number or common shares
outstanding during the period:
- Basic 223,028 223,028
- Diluted 224,440 224,440
See Notes to Pro Forma Condensed Consolidated Financial Statements.
6
DOVER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Dover Disposition of Dover
Corporation Elevator European Pro Forma Corporation
Historical Business (11) Elevator (15) Adjustments Pro Forma
---------- ------------- ----------------- ----------- ---------
Net sales $4,547,656 $ 852,871 $ 27,386 $ 2,170 (12) $ 3,669,569
Cost of sales 2,975,920 613,735 22,087 2,170 (12) 2,342,268
-------------------------------------------- ----------- -----------
Gross profit 1,571,736 239,136 5,299 - 1,327,301
Selling & administrative expenses 959,067 146,544 4,729 807,794
-------------------------------------------- ----------- -----------
Operating profit 612,669 92,592 570 - 519,507
-------------------------------------------- ----------- -----------
Other deductions (income):
Interest expense 46,888 715 394 (24,089) (13) 21,690
Interest income (9,918) (731) (77) (9,110)
Foreign exchange (4,566) 165 295 (5,026)
All other, net (36,571) 415 (32,577) (4,409)
-------------------------------------------- ----------- -----------
Total (4,167) 564 (31,965) (24,089) 3,145
-------------------------------------------- ----------- -----------
Earnings before taxes on earnings 616,836 92,028 32,535 24,089 516,362
Federal & other taxes on earnings 211,405 34,747 9,298 9,154 (13) 176,514
---------------------------------------------------------- ------------
Net earnings from continuing operations 405,431 57,281 23,237 14,935 339,848
Earnings from discontinued operations 816,905 (7) 612,316
(271,463) (8)
(13,644) (6)
80,518 (14)
-------------------------------------------- ----------- ------------
Net earnings $405,431 $57,281 $23,237 $ 627,251 $ 952,164
============================================ =========== ============
Net earnings per common share - Basic:
- Continuing operations $ 1.82 $ 1.52
- Discontinued operations including gain 2.75
----------- ------------
Net earnings $ 1.82 $ 4.27
=========== ============
Net earnings per common share - Diluted:
- Continuing operations $ 1.79 $ 1.50
- Discontinued operations including gain 2.70
----------- ------------
Net earnings $ 1.79 $ 4.20
=========== ============
Weighted average number or common shares
outstanding during the period:
- Basic 223,181 223,181
- Diluted 226,815 226,815
See Notes to Pro Forma Condensed Consolidated Financial Statements.
7
DOVER CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS)
1. - To eliminate the assets, liabilities and equity of divested companies
included in Dover's consolidated balance sheet as of September 30, 1998.
2. - To record the initial purchase price of $1,100,000.
3. - To record use of a portion of net proceeds to reduce short-term debt.
4 - To transfer deferred tax assets to Dover Corporation.
5. - To record payment of Payable to Dover Corporation.
6. - To expense deferred tax assets relating to the sale of divested companies.
7. - To record pre-tax gain on sale of divested companies.
8 - To record tax effect on gain from sale of divested companies at 38% tax
rate; net of 338 (h)(10) tax sharing agreement.
9. - To record transaction expenses.
10 - To record net equity effect of pro forma adjustments.
11.- To eliminate the revenues and expenses of divested companies for the
applicable periods.
12.- To reflect additional sales to divested companies previously recorded as
intercompany.
13.- To record decrease in interest expense at an average interest rate
of 5.5% for the year ended December 31, 1997 and nine months ended
September 30, 1998 resulting from the application of a portion of net
proceeds to reduce short-term debt. The effect of the adjustment was to
increase pro forma continuing diluted E.P.S. $.06 in 1997 and $.05 in 1998.
14 - To add back net earnings of discontinued operations.
15.- Effective June 1997 Dover sold its European elevator operations. The
amounts reported in the disposition column include the results of
operations up to the sale date and the gain on those sales and applicable
taxes.
8
Signatures
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 hereunto duly authorized.
DOVER CORPORATION
Date: December 7, 1998 /s/ George F. Meserole
--------------------------------------------------
George F. Meserole, Vice President, Controller and
Chief Accounting Officer
EXHIBIT INDEX
Exhibit Number Exhibit
- -------------- -------
2.1 Purchase Agreement dated as of November 23, 1998 by
and among Thyssen Industrie AG, Thyssen Elevator
Holding Corporation, as buyers, and Dover
Corporation, as seller. Schedules relating to
Purchase Price Allocation, U.S., Federal Income
Taxes, Elevator Financial Statements and Executive
Employment Arrangements have been omitted, but will
be furnished supplementary to the Securities &
Exchange Commission upon request.
20 Dover Corporation Press Release dated November 23, 1998.
1
[Conformed Copy]
PURCHASE AGREEMENT
DATED AS OF NOVEMBER 23, 1998
AMONG
THYSSEN INDUSTRIE AG,
As Buyer,
THYSSEN ELEVATOR HOLDING CORPORATION,
As Buyer
AND
DOVER CORPORATION,
As Seller
2
Page
----
TABLE OF CONTENTS
SECTION 1
Purchase and Sale of the Elevator Business................................ 2
1.1 Purchase and Sale............................................. 2
1.2 Purchase Price................................................ 3
1.3 Closing....................................................... 3
1.4 Deliveries.................................................... 4
(a) Deliveries by Seller.................................... 4
(b) Deliveries by Buyers.................................... 5
SECTION 2
Representations and Warranties of Seller.................................. 6
2.1 Organization and Enforceability............................... 6
2.2 Elevator Subsidiary Organization.............................. 6
2.3 Elevator Subsidiary Ownership of Assets....................... 7
2.4 Compliance with Applicable Law................................ 7
2.5 Taxes......................................................... 7
2.6 Capital Stock and Other Equity Interests...................... 8
2.7 Securities and Exchange Commission Filing..................... 8
2.8 Financial Statements.......................................... 8
2.9 Ordinary Course of Business................................... 8
2.10 Brokers and Finders........................................... 9
SECTION 3
Representations and Warranties of Buyers.................................. 9
3.1 Organization and Enforceability............................... 9
3.2 No Litigation................................................. 9
3.3 Compliance with Applicable Law................................ 10
3.4 Restricted Shares............................................. 10
3.5 Brokers and Finders........................................... 10
SECTION 4
Covenants................................................................. 10
4.1 Operation of the Elevator Business Prior to Closing........... 10
4.2 Confidential Information...................................... 12
4.3 Required Actions.............................................. 12
4.4 Reasonable Best Efforts....................................... 14
4.5 Reorganization and Delivery................................... 14
4.6 Section 338(h)(10) Elections.................................. 15
4.7 Employee Benefits............................................. 15
-i-
3
Page
----
4.8 Insurance Payments and Arrangements........................... 19
4.9 Directors' and Officers' Indemnification and Insurance........ 19
4.10 Access to Information; Use of Technical Information........... 20
4.11 Solicitation of Personnel..................................... 20
4.12 Non-Competition............................................... 20
SECTION 5
Conditions to the
Obligation of Buyers to Close............................................. 22
5.1 Representations and Warranties True........................... 22
5.2 Performance................................................... 22
5.3 Legal Opinion................................................. 22
5.4 Compliance with Required Actions.............................. 22
5.5 Second Tranche Closing........................................ 23
SECTION 6
Conditions to the
Obligation of Seller to Close............................................. 23
6.1 Representations and Warranties True........................... 23
6.2 Performance................................................... 23
6.3 Legal Opinion................................................. 23
6.4 Compliance with Required Actions.............................. 23
6.5 Second Tranche Closing........................................ 24
SECTION 7
Termination............................................................... 24
7.1 Termination................................................... 24
7.2 Effect of Termination......................................... 24
SECTION 8
Adjustments and Claims.................................................... 25
8.1 Closing Balance Sheet Adjustment.............................. 25
8.2 Survival of Representations and Warranties; Indemnification... 27
8.3 Limitation on Indemnification................................. 31
SECTION 9
Miscellaneous Provisions.................................................. 32
9.1 Dispute Resolution............................................ 32
9.2 Tax Returns; Tax Cooperation.................................. 34
9.3 Amendment..................................................... 36
9.4 Waiver of Compliance.......................................... 36
-ii-
4
Page
----
9.5 Notices....................................................... 36
9.6 Assignment.................................................... 37
9.7 No Third Party Beneficiaries.................................. 37
9.8 Expenses...................................................... 38
9.9 Public Announcements.......................................... 38
9.10 Counterparts.................................................. 38
9.11 Headings...................................................... 38
9.12 Further Action................................................ 38
9.13 Entire Agreement; Severability................................ 38
9.14 Buyers' Obligations, etc...................................... 39
9.15 Governing Law................................................. 39
Exhibit I: Defined Terms
Exhibit II: Elevator Subsidiaries
Exhibit A: IP License Agreement
Exhibit B.1: Assignment of Trademarks
Exhibit B.2: Patent Assignment
Exhibit B.3: Copyright Assignment
Exhibit C: Insurance Arrangements Agreement
Exhibit D: Form of FIRPTA Certificate
Exhibit E: Form of Note
Exhibit F: Form of Opinion of General Counsel to Seller
Exhibit G: Form of Opinion of General Counsel to each Buyer
Exhibit G-1: Form of Opinion of Buyer's General Counsel
Exhibit G-2: Form of Opinion of Buyer's General Counsel
-iii-
5
-iv-
6
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of November 23, 1998, by and among Thyssen
Industrie AG, a corporation organized and existing under the laws of the Federal
Republic of Germany ("Thyssen"), Thyssen Elevator Holding Corporation, a
corporation organized and existing under the laws of the State of Delaware,
U.S.A. ("Elevator Holding", and, together with Thyssen, each a "Buyer" and
collectively the "Buyers"), and Dover Corporation, a corporation organized and
existing under the laws of the State of Delaware, U.S.A. ("Seller").
W I T N E S S E T H :
WHEREAS, Seller, through certain of its direct and indirect subsidiaries,
divisions and joint ventures listed on Exhibit II hereto (the "Elevator
Subsidiaries"), conducts the business of manufacturing, selling, installing,
servicing, repairing and modernizing elevators and installing, servicing and
repairing escalators manufactured by others (such business, as more fully
described in the Form 10 (as hereinafter defined), being the "Elevator
Business");
WHEREAS, Elevator Holding is an indirect wholly owned subsidiary of
Thyssen AG, a corporation organized and existing under the laws of the Federal
Republic of Germany ("Parent"), and will purchase stock or assets to be
transferred in the First Tranche, and Thyssen is a majority owned subsidiary
controlled by Parent and the indirect parent of Northern Elevator Limited, a
corporation organized and existing under the laws of the Province of Ontario,
Canada ("NEL") that will purchase stock to be transferred in the Second Tranche.
WHEREAS, Seller desires to sell and transfer the Elevator Business to
Buyers, and Buyers desire to purchase and acquire the Elevator Business from
Seller, upon the terms and subject to the conditions set forth herein;
WHEREAS, Buyers, directly or through one of their indirect subsidiaries,
desire to purchase and Seller desires to sell, or cause: (1) the Equity Sellers
to sell the Transferred Equity to the Equity Buyers, and (2) Delaware Capital
Formation, Inc., a Delaware corporation ("DCF"), to sell or license certain
Intellectual Property to Elevator Holding;
WHEREAS, certain Intellectual Property associated with the Elevator
Business is excluded from the Elevator Assets to be transferred to the Buyer
Entities on the applicable Closing Date and Seller desires to cause DCF to
license such Intellectual Property to Buyers and Buyers desire to license such
Intellectual Property from DCF pursuant to the IP License Agreement; and
WHEREAS, defined terms used herein have the meanings set forth or referred
to in Exhibit I of this Agreement.
7
NOW, THEREFORE, in consideration of the covenants herein contained, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1
PURCHASE AND SALE OF THE ELEVATOR BUSINESS
1.1 PURCHASE AND SALE. Seller hereby agrees to sell, assign, convey,
transfer and deliver to Buyers, and Buyers hereby jointly and severally agree to
purchase from Seller, on the terms and subject to the conditions set forth in
this Agreement, all of the Elevator Business, including: (a) all the stock of
the Elevator Subsidiaries owned directly or indirectly by Seller, as indicated
on Exhibit II hereto, and (b) all the Elevator Assets and all the Liabilities of
the Elevator Business, but not including non-Elevator Assets.
Notwithstanding the foregoing: (i) the license of certain rights to the
use of the DOVER trademark and certain patents used in the Elevator Business
shall be governed solely by the terms of the Intellectual Property License
Agreement substantially in the form attached as Exhibit A hereto (the "IP
License Agreement"), and (ii) the purchase and sale of the Elevator Business
shall not include (A) the purchase or sale of Dover Elevators, Inc., a recently
organized Delaware corporation that does not, and will not as of either Closing
Date, own, license or lease any Elevator Assets or engage in the Elevator
Business or (B) any business Seller conducts, directly or indirectly, on the
date hereof, through its Rotary Lift division and through certain other
subsidiaries not currently part of the Elevator Business which manufacture and
sell certain valves, pumps, hydraulic actuators, motors and other products
suitable for use in elevators.
As clarification of the foregoing,
(a) On the First Tranche Closing Date (as hereinafter defined) and upon
the terms and conditions of this Agreement:
(i) Seller shall cause Delaware Capital Holdings, Inc., a Delaware
corporation ("DCH"), and Revod Corporation, a Delaware corporation ("Revod"), to
sell, assign, transfer, convey and deliver (or cause to be sold, assigned,
transferred, conveyed and delivered) to Elevator Holding and Elevator Holding
shall purchase and acquire, (A) all the stock of: (1) General Elevator Company,
Incorporated, a Maryland corporation, (2) East Coast Elevator Service, Inc., a
Florida corporation, (3) Dover Elevator International, Inc., a Delaware
corporation, (4) Empire Elevator Corporation, a Delaware corporation, (5) Hudson
Elevator Corp., a Delaware corporation, and (B) 80% of the stock of Dover
Australian Elevator Company Pty. Limited, an Australian corporation;
(ii) Seller shall cause DCF to sell, assign, transfer, convey and
deliver to Elevator Holding and Elevator Holding shall purchase and acquire, all
of the right, title and
- 2 -
8
interest of DCF in all Intellectual Property (other than the Licensed IP) used
in the Elevator Business and Seller shall cause DCF to execute the Assignment of
Trademarks, the Patent Assignment and the Copyright Assignment, substantially in
the forms attached as Exhibit B.1, Exhibit B.2 and Exhibit B.3 hereto,
respectively (collectively, the "IP Transfer Agreements"); and
(iii) DCF and the Buyers shall enter into the IP License Agreement
providing for the royalty free and, except with respect to the DOVER trademark,
perpetual license of the Licensed IP.
(b) On the Second Tranche Closing Date (as hereinafter defined) and upon
the terms and conditions of this Agreement, Seller shall cause Dover Corporation
(Canada) Holdings Limited, currently named Dover Corporation (Canada) Limited,
but to be so renamed before the Second Tranche Closing ("Dover Canada"), to
sell, assign, transfer, convey and deliver (or cause to be sold, assigned,
transferred, conveyed and delivered) to NEL, and Buyers shall cause NEL to
purchase and acquire, all the stock of Dover Corporation (Canada) Limited, a
Canadian corporation to be organized prior to the Second Tranche Closing and
identified as Canada Newco on Exhibit II ("Canada Newco").
1.2 PURCHASE PRICE. The purchase price for the Elevator Business (the
"Purchase Price") shall be One Billion One Hundred Million U.S. Dollars
(US$1,100,000,000) (with US$1,080,000,000 of the Purchase Price being designated
the "First Tranche Amount" and US$20,000,000 of the Purchase Price being
designated the "Second Tranche Amount") payable in cash on the applicable
Closing Date by wire transfer of immediately available funds to a bank account
designated by Seller in writing to Buyers not less than two Business Days prior
to the applicable Closing Date; provided, that if either Closing shall occur
sooner than five Business Days after the giving of the HSR Notice, the First
Tranche Amount and any amounts owed by Buyers to Seller in respect of expenses
as contemplated by Section 9.8 or the Second Tranche Amount, as the case may be,
may be paid by delivery of a promissory note of Parent in substantially the form
attached as Exhibit E hereto (the "Note"). The Purchase Price shall be allocated
as of the Closing Date in accordance with Schedule 1.2.
1.3 CLOSING. Subject to the terms and conditions of this Agreement, the
closing of the First Tranche (the "First Tranche Closing") and the closing of
the Second Tranche (the "Second Tranche Closing") shall take place at the
offices of Coudert Brothers, 1114 Avenue of the Americas, New York, New York
10036 (or at such other location as the parties shall mutually agree) on the
last Business Day of the month in which all conditions specified in Sections 5
and 6 have been satisfied (or the second next succeeding Business Day if such
conditions are satisfied on the last or second-to-last Business Day of such
month) (the "First Tranche Closing Date" and the "Second Tranche Closing Date",
respectively, and each a "Closing Date"). It is the parties' intention that, if
possible, the First Tranche Closing and the Second Tranche Closing occur on the
same day.
- 3 -
9
1.4 DELIVERIES.
(a) DELIVERIES BY SELLER. Subject to the terms and conditions of this
Agreement, Seller shall deliver or cause its subsidiaries to deliver to Buyers:
(i) upon the First Tranche Closing, the following:
(A) certificates, free of any restrictive legends,
representing (i) all the stock of: (a) General Elevator Company, Incorporated, a
Maryland corporation, (b) East Coast Elevator Service, Inc., a Florida
corporation, (c) Dover Elevator International, Inc., a Delaware corporation, (d)
Empire Elevator Corporation, a Delaware corporation, (e) Hudson Elevator Corp.,
a Delaware corporation, and (ii) 80% of the stock of Dover Australian Elevator
Company Pty. Limited, an Australian corporation, and in each case, registered in
the name of Elevator Holding;
(B) executed counterparts of the following agreements
(collectively, the "Related Agreements"):
(1) the IP License Agreement (provided, that if the
First and Second Tranche Closings do not occur on the same day, Dover Canada and
its direct and indirect subsidiaries shall have the right to use the
Intellectual Property covered by the IP License Agreement free of charge until
the Second Tranche Closing);
(2) the IP Transfer Agreements, executed by DCF
(provided, that if the First and Second Tranche Closings do not occur on the
same day, Dover Canada and its direct and indirect subsidiaries shall have the
right to use the Intellectual Property covered by the IP Transfer Agreements
free of charge until the Second Tranche Closing); and
(3) the Insurance Arrangements Agreement substantially
in the form attached as Exhibit C hereto;
(C) a copy, certified as of the First Tranche Closing Date by
an authorized officer of Seller, of the resolutions of the Board of Directors of
Seller authorizing the execution, delivery and performance of this Agreement by
Seller; and
(D) a certificate substantially in the form attached as
Exhibit D hereto certifying that DCH is not a "foreign person" within the
meaning of Section 1445 of the Internal Revenue Code of 1986, as amended (the
"Code").
(ii) upon the Second Tranche Closing, a certificate representing all
the stock of Canada Newco, free of any restrictive legends and registered in the
name of NEL; and
- 4 -
10
(iii) upon each Closing, the following:
(A) a certificate, dated the applicable Closing Date and
executed by Seller, as to the matters set forth in Sections 5.1 and 5.2;
(B) the written opinion of the General Counsel of Seller
required by Section 5.3 hereof; and
(C) an acknowledgment of receipt by Seller of the portion of
the Purchase Price and the other items delivered by Buyers at the applicable
Closing.
(b) DELIVERIES BY BUYERS. Subject to the terms and conditions of
this Agreement, Buyers shall deliver to Seller:
(i) upon the First Tranche Closing, the following:
(A) payment of the First Tranche Amount and the expenses
specified in Section 9.8 hereof in accordance with Section 1.2;
(B) executed counterparts of each of the Related Agreements to
which either Buyer or any affiliate of Buyers is a party; and
(C) a copy, certified as of the First Tranche Closing Date by
an authorized officer of each Buyer, of the resolutions of the Board of
Directors of such Buyer authorizing the execution, delivery and performance of
this Agreement by such Buyer;
(ii) upon the Second Tranche Closing, payment of the Second Tranche
Amount in accordance with Section 1.2; and
(iii) upon each Closing, the following:
(A) a certificate, dated as of the applicable Closing Date and
executed by each Buyer, as to the matters set forth in Sections 6.1 and 6.2;
(B) the written opinion of the general counsel of each Buyer
as required by Section 6.3 hereof; and
(C) an acknowledgment of receipt of the items to be delivered
by Seller at the applicable Closing.
- 5 -
11
SECTION 2
Representations and Warranties of Seller
Seller makes no representations or warranties other than as set forth in
this Section 2; provided, however, that each representation and warranty set
forth in this Section 2 (other than in Section 2.5) is qualified by any
information to the contrary: (i) disclosed in the Form 10, (ii) disclosed in any
report filed by Seller with the Securities and Exchange Commission after the
filing of the Form 10 and before the date of this Agreement, or (iii) otherwise
disclosed to or agreed to by Buyers in writing; provided, further, that,
notwithstanding anything to the contrary contained herein, to the extent any
representation or warranty is made with respect to Canada Newco, such
representation or warranty shall speak only as of the time immediately prior to
the Second Tranche Closing and shall survive to the extent contemplated in
Section 8.2. Subject to the foregoing, and as an inducement to Buyers to enter
into this Agreement, Seller hereby represents and warrants to Buyers as follows:
2.1 ORGANIZATION AND ENFORCEABILITY.
(a) Each of Seller and each Seller Entity is a corporation or other
entity, duly organized or formed and in good standing, as the case may be, and
validly existing under the laws of the jurisdiction of its organization or
formation.
(b) Each of this Agreement and the Related Agreements constitutes,
or will constitute when signed, the legal, valid and binding agreement of each
of the Seller Companies party thereto, enforceable against such party in
accordance with its terms, subject to applicable bankruptcy, insolvency and
other laws affecting creditors' rights generally and to general principles of
equity.
(c) The execution and the delivery of this Agreement and the Related
Agreements, and the consummation of the transactions contemplated hereby and
thereby, have been, or will prior to signing be, duly authorized by all
requisite corporate or other action on the part of each Seller Company party
thereto.
2.2 ELEVATOR SUBSIDIARY ORGANIZATION.
(a) Each of the Elevator Subsidiaries is a corporation or other
entity duly organized or formed, as the case may be, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation
and has all necessary power under its organizational documents and the law
pursuant to which it was organized or formed to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on the
Elevator Business as it is currently conducted by such Elevator Subsidiary.
(b) Each of the Elevator Subsidiaries which is a joint venture is
established pursuant to an agreement or agreements which, under their governing
laws, are legal, valid
- 6 -
12
and enforceable against all parties thereto in accordance with their terms,
subject to applicable bankruptcy, insolvency and other laws affecting creditors'
rights generally and to general principles of equity and public policy.
2.3 ELEVATOR SUBSIDIARY OWNERSHIP OF ASSETS. The Seller Entities, directly
or through an Elevator Subsidiary, own (or, prior to the applicable Closing
Date, will own), license or lease all Elevator Assets and Licensed IP, and all
such properties and assets which are so owned by such Seller Entities are (or,
prior to the applicable Closing Date, will be) owned free of any Encumbrances,
except where the failure to so own, license or lease could not reasonably be
expected to have a Material Adverse Effect. The Seller Entities have the right
and ability to consummate the transfers of the Elevator Assets and Licensed IP
contemplated by this Agreement and the Related Agreements, without such
transfers giving rise to any Encumbrances and without incurring any penalty or
other adverse consequence, including, without limitation, any increases in
rentals, royalties or licenses or other fees imposed as a result of or arising
from such transfers except for any such Encumbrances, penalties or adverse
consequences which could not reasonably be expected to have a Material Adverse
Effect.
2.4 COMPLIANCE WITH APPLICABLE LAW. None of the Seller Companies is in
violation of any applicable foreign or domestic laws, rules, regulations,
ordinances, codes, judgments, orders, injunctions, writs or decrees of any
Federal, state, local or foreign court or governmental body or agency thereof
(including, without limitation, environmental, health and safety requirements
and requirements for product safety, product design and product recall to
correct any failure to so comply) to which it may be subject and which could
reasonably be expected to have a Material Adverse Effect or which would prevent
such Seller Company from consummating the transactions contemplated in this
Agreement or any Related Agreement to which it is or is to be a party.
2.5 TAXES. All returns and reports relating to Taxes which are required to
be filed with respect to the Elevator Subsidiaries or the Elevator Business on
or before the date hereof or which will be required to be filed on or before the
applicable Closing Date have been, or will be, duly and timely filed and all
such returns and reports are, or will be, complete and correct in all material
respects, insofar as they relate to the Elevator Business. Except as disclosed
in Schedule 2.5: (i) all Taxes imposed on or with respect to the Elevator
Subsidiaries or the Elevator Business which have become due and payable on or
before the applicable Closing Date have been, or will be prior to the applicable
Closing Date, paid in a timely manner or shall be adequately reflected on the
Closing Balance Sheet; (ii) there are no actions or proceedings currently
pending or, to the knowledge of Seller, threatened against any Elevator
Subsidiary or with respect to the Elevator Business by any governmental
authority for the assessment or collection of Taxes (with respect to the
Elevator Business); (iii) no claim for the assessment or collection of Taxes
(with respect to the Elevator Business) has been asserted or, to the knowledge
of Seller, threatened against any Elevator Subsidiary or with respect to the
Elevator Business; (iv) there are no matters under discussion by Seller or, to
the knowledge of Seller, any Seller Entity or any Elevator
- 7 -
13
Subsidiary with any governmental authority regarding claims for the assessment
or collection of Taxes with respect to any Elevator Subsidiary or with respect
to the Elevator Business; (v) there are no agreements, waivers or applications
by an Elevator Subsidiary or with respect to the Elevator Business for an
extension of time for the assessment or payment of any Taxes; and (vi) there are
no Tax liens on any of the assets of the Elevator Subsidiaries or with respect
to the Elevator Business (other than any liens for current Taxes not yet due and
payable). No consent under Section 341(f) of the Code has been filed with
respect to any Elevator Subsidiary.
2.6 CAPITAL STOCK AND OTHER EQUITY INTERESTS. All of the Transferred
Equity that constitutes capital stock has been validly issued and is fully paid
and nonassessable. Each of the Seller Entities directly or indirectly owns the
Transferred Equity in the amounts and percentages set forth on Exhibit II, in
each case free and clear of any material Encumbrances. Except as indicated on
Exhibit II, the Transferred Equity constitutes all of the issued and outstanding
capital stock and other equity interests of each Elevator Subsidiary. There are
no outstanding options, warrants or other rights to subscribe for or purchase
from any Seller Company, or any plans, contracts or commitments providing for
the issuance of, or the granting of rights to acquire, (i) any capital stock or
other similar ownership interests in any Elevator Subsidiary or (ii) any
securities convertible into or exchangeable for any capital stock or other
ownership interests in any Elevator Subsidiary, and there are no outstanding
contractual obligations of any Seller Company to repurchase, redeem or otherwise
acquire any outstanding shares of capital stock or other similar ownership
interests in any of the Elevator Subsidiaries.
2.7 SECURITIES AND EXCHANGE COMMISSION FILING. The Form 10 Registration
Statement filed on July 8, 1998 by Dover Elevators, Inc. (File No. 001-14285)
with the Securities and Exchange Commission, including the Information Statement
included as Exhibit 99 thereto (the "Form 10"), did not, as of its date and
subject to completion as contemplated therein, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
2.8 FINANCIAL STATEMENTS. Attached as Schedule 2.8 hereto are the
consolidated balance sheet (the "Elevator Balance Sheet"), income statement and
statement of cash flows of the Elevator Business at September 30, 1998
(unaudited) (together with the Financial Statements included in Exhibit 99 to
the Form 10, including the notes thereto, the "Elevator Financial Statements").
The Elevator Financial Statements have been prepared in accordance with United
States generally accepted accounting principles ("U.S. GAAP") (except with
respect to footnotes) applied on a consistent basis, except as otherwise stated
therein, and present fairly the financial condition of the Elevator Business at
the dates, and the results of operations of the Elevator Business for the
periods, stated therein.
2.9 ORDINARY COURSE OF BUSINESS. Since September 30, 1998 through the date
of this Agreement: (i) the Elevator Business has been operated only in the
ordinary course of
- 8 -
14
business consistent with past practice in all material respects, (ii) there has
not occurred any event that has had or could reasonably be expected to have a
Material Adverse Effect or would materially impair or delay the ability of the
Seller Companies to consummate the transactions contemplated by, or perform
their obligations under, this Agreement and the Related Agreements, and (iii) no
Seller Company has entered into or adopted, as the case may be, any of the
Spin-off Documents, except for the Dover Elevators, Inc. Retirement Savings
Plan.
2.10 BROKERS AND FINDERS. Other than Goldman, Sachs & Co., no broker,
finder or investment banker has been retained by Seller or is entitled by any
commitment from Seller to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement or the Related
Agreements. Seller is solely responsible for the fees and expenses of Goldman,
Sachs & Co.
SECTION 3
Representations and Warranties of Buyers
Neither Buyer makes any representations or warranties other than as set
forth in this Section 3. As an inducement to Seller to enter into this
Agreement, Buyers hereby represent and warrant to Seller as follows:
3.1 ORGANIZATION AND ENFORCEABILITY.
(a) Each Buyer and each Buyer Entity is an Aktiengesellschaft or
other corporation and is validly existing and in good standing under the laws of
the jurisdiction of its organization.
(b) Each of this Agreement and the Related Agreements constitutes
the legal, valid and binding agreement of each Buyer or Buyer Entity which is a
party hereto or thereto, enforceable against such party in accordance with its
terms, subject to applicable bankruptcy, insolvency and other laws affecting
creditors' rights generally and to general principles of equity.
(c) The execution and the delivery of this Agreement and the Related
Agreements, and the consummation of the transactions contemplated hereby and
thereby, will not violate any provision of the Certificate of Incorporation or
bylaws or other similar constituent documents of either Buyer or any Buyer
Entity party hereto or thereto and have been duly authorized by all necessary
corporate action.
3.2 NO LITIGATION. There are no suits, actions, proceedings (including,
without limitation, arbitral or administrative proceedings), claims or
governmental investigations pending or, to the knowledge of Buyers, threatened
against either Buyer or any Buyer Entity
- 9 -
15
that could reasonably be expected to prevent or require the rescission of the
transactions contemplated by this Agreement or any Related Agreement to which
such Buyer or Buyer Entity is a party, or, to the knowledge of Buyers, could
reasonably be expected to challenge the validity or propriety of, or have a
material adverse effect, on the ability of Buyers or such Buyer Entity to
consummate the transactions contemplated by this Agreement or such Related
Agreements.
3.3 COMPLIANCE WITH APPLICABLE LAW. Neither Buyer nor any of the Buyer
Entities is in violation of any applicable foreign or domestic laws, rules,
regulations, ordinances, codes, judgments, orders, injunctions, writs or decrees
of any Federal, state, local or foreign court or governmental body or agency
thereof to which it may be subject which are applicable to and which could
reasonably be expected to prevent Buyers or such Buyer Entity from consummating
the transactions contemplated by this Agreement or the Related Agreements to
which such Buyer or such Buyer Entity is or will be a party.
3.4 RESTRICTED SHARES. The Buyer Entities are purchasing the Transferred
Equity for their own accounts for investment and not with a view toward the
resale or distribution to others. The Buyer Entities are aware that the
Transferred Equity has not been registered under any securities laws.
3.5 BROKERS AND FINDERS. Other than Merrill Lynch & Co., no broker, finder
or investment banker has been retained by Buyers or is entitled by any
commitment from Buyers to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement or the Related
Agreements. Buyers are solely responsible for the fees and expenses of Merrill
Lynch & Co.
SECTION 4
Covenants
4.1 OPERATION OF THE ELEVATOR BUSINESS PRIOR TO CLOSING.
(a) Buyers and their respective officers, employees and authorized
agents shall have reasonable access to the employees, facilities, books and
records of the Seller Companies relating to the Elevator Business and shall be
entitled to copies of such financial and operating data and other information
concerning the Elevator Business as they may reasonably request, provided, that
(i) any such access shall not unreasonably interfere with the Elevator Business,
(ii) any such access shall be only with prior notice to and in coordination with
Seller, (iii) in the opinion of Seller, the providing of any such access will
not cause Seller to be in violation of any law, and (iv) Buyers shall comply
with their confidentiality obligations under Section 4.2 with respect to any
information obtained.
(b) Seller agrees that, except for the Reorganization and except for
amounts
- 10 -
16
which will be reflected in the Due to (from) Amount pursuant to Section 8.1,
until the Second Tranche Closing it shall cause the Seller Companies to operate
the Elevator Business only in the ordinary course of business consistent with
past practice and use their reasonable best efforts to preserve intact the
Elevator Subsidiaries' present business organizations and keep available the
services of their present officers and customers, suppliers and others having
business relationships with them, except as shall be necessary to amend the
Dover Elevators, Inc. Retirement Savings Plan to reflect the transactions
contemplated in this Agreement or as shall be required pursuant to Section
4.7(c). Without limiting the foregoing, Seller shall cause the Seller Companies
to not, without the prior written consent of the Buyers, which consent shall not
be unreasonably withheld:
(i) make any material changes in the customary methods of operations
of the Elevator Business, including, without limitation, practices and policies
relating to manufacturing, purchasing, inventories, marketing, selling and
pricing;
(ii) amend, terminate, cancel or compromise any material claims of
the Elevator Business or waive any other rights of substantial value to the
Elevator Business;
(iii) amend, modify or consent to the termination of any material
contract or any of the rights of the Elevator Business thereunder;
(iv) with respect to the Elevator Business, terminate, discontinue,
close or dispose of any material plant, facility or other business operation, or
lay off any employees (other than layoffs of less than 50 employees in any
six-month period in the ordinary course of business consistent with past
practice) or implement any early retirement, separation or program providing
early retirement window benefits within the meaning of Section 1.401(a)-4 of
ERISA or announce or plan any such action or program for the future;
(v) permit any Elevator Subsidiary to make any capital expenditures
or other financial investments of any kind which are in excess of $500,000 or
which would require approval of the management and/or the board of directors of
Seller in accordance with the past practice of the Elevator Business;
(vi) other than intercompany debt and other amounts which will be
reflected in the Due to (from) Amount and adjusted after the First Tranche
Closing Date as provided in Section 8.1, permit any Elevator Subsidiary to make
any loan to, guarantee any debt of or otherwise incur any debt on behalf of any
person or entity;
(vii) sell, transfer, lease, sublease, license or otherwise dispose
of any of the Intellectual Property used in the Elevator Business;
(viii) make any change in any method of accounting or accounting
practice or policy used by the Elevator Business other than such changes
required by U.S. GAAP;
- 11 -
17
(ix) enter into any material contract with any Elevator Subsidiary
except in the ordinary course of business; or
(x) issue or grant any options, warrants or other rights to
subscribe for or purchase from any Seller Company, or make or enter into any
plans, contracts or commitments providing for the issuance of, or the granting
of rights to acquire, (i) any capital stock or other similar ownership interests
in any Elevator Subsidiary or (ii) any securities convertible into or
exchangeable for any capital stock or other ownership interests in any Elevator
Subsidiary.
4.2 CONFIDENTIAL INFORMATION. Each Buyer and Seller will, and will
instruct their respective affiliates, employees, agents and representatives to,
hold in strict confidence all Confidential Information, and, without the prior
written consent of the other party or parties, will not, and will instruct their
respective affiliates, employees, agents and representatives not to, use,
directly or indirectly or through any subsidiary, for any purpose other than the
evaluation and consummation of the transactions contemplated hereby or disclose
to any person, any such Confidential Information, unless compelled to disclose
any such Confidential Information by judicial or administrative process or, in a
written opinion of its counsel, a copy of which is delivered to the other party
or parties hereto, by other requirements of any law. Upon consummation of the
transactions contemplated by this Agreement, any Confidential Information
relating to the Elevator Business and the Elevator Subsidiaries may be retained
by Buyers and may be used as Buyers deem fit. If this Agreement is terminated,
each party shall promptly destroy (and certify in writing to the other party or
parties that it has destroyed) or return to the other party or parties all
documents (including all copies thereof) furnished to such other party and its
affiliates, employees, agents and representatives in connection with the
transactions contemplated by this Agreement containing such Confidential
Information and make no further use whatsoever of any Confidential Information.
For purposes of this Agreement, "Confidential Information" shall mean all
information of any kind concerning Buyers, the Buyer Entities, Seller, the
Seller Entities and any Elevator Subsidiary or the Elevator Business, wherever
obtained, except information: (i) ascertainable or obtained from public or
published information, (ii) received from a third party not known to the party
receiving such information to be under an obligation to the other party hereto
to keep such information confidential, (iii) which is or becomes known to the
public (other than through a breach of this Agreement), (iv) which the party in
possession of such information can demonstrate was in its possession prior to
the disclosure thereof to such party in connection with this Agreement or the
Related Agreements and the consummation of the transactions contemplated hereby
or thereby, or (v) which the party in possession of such information can
demonstrate was independently developed by it.
4.3 REQUIRED ACTIONS.
(a) Buyers agree to take, or cause to be taken as provided in this
Section 4.3, all action, and to do, or cause to be done, all things necessary or
required by any
- 12 -
18
applicable Antitrust Law as a result of or in order to permit the consummation
of the transactions contemplated by this Agreement, on or before September 29,
1999, and to pay all filing and other governmental fees relating thereto,
whether assessed on Buyers, Seller or any Seller Company. After execution of
this Agreement, Buyers and Seller shall make filings on or before November 30,
1998 under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), the Competition Act (Canada), the Investment Canada Act (if
required) and any other applicable Antitrust Laws. If either Buyer or Seller or
any of their respective affiliates receives a request for additional information
or documentary material from any such governmental authority with respect to the
transactions contemplated by this Agreement, then such party shall make, or
cause to be made, as soon as reasonably practicable and after consultation with
the other party, an appropriate response in compliance with such request. Buyers
shall advise Seller, and Seller shall advise Buyers, promptly in respect of any
understandings, undertakings or agreements (oral or written) which it proposes
to make or enter into with the United States Federal Trade Commission (the
"FTC"), the United States Department of Justice (the "DOJ") or any other
governmental authority in connection with the transactions contemplated hereby,
provided, that any such understanding, undertaking or agreement by Seller shall
be subject to the consent of Buyers, which consent shall not be unreasonably
withheld. Buyers agree to take whatever action may be necessary to resolve on or
before September 29, 1999, such objections, if any, as may be asserted under the
Antitrust Laws with respect to the transactions contemplated hereby (including,
without limitation, agreeing to hold separate or to divest any of the
businesses, products or assets of (i) Buyers or any of their affiliates or (ii)
the Elevator Business) as may be required (A) by the applicable governmental
authority (including, without limitation, the Antitrust Division of the DOJ or
the FTC) in order to resolve such objections as such governmental authority may
have to such transactions under such Antitrust Law, or (B) by any court or
similar tribunal, in any suit brought by a private party or governmental
authority challenging the transactions contemplated hereby as violative of any
Antitrust Law, in order to avoid the entry of, or to effect the dissolution of,
any non-appealable permanent injunction or other final judgment that has the
effect of preventing the consummation of any of such transactions.
Notwithstanding anything in this Agreement to the contrary, no action taken by
Buyers pursuant to this Section 4.3 shall entitle Buyers to any diminution of
the Purchase Price, and Seller shall not be required to divest or hold separate
any assets or business or otherwise take or commit to take any action that
limits its freedom of action with respect to any of Seller's direct or indirect
assets, businesses or product lines; provided, that if Seller's consent is
required before the applicable Closing with respect to actions by Buyers at or
after such Closing, Seller shall so consent.
(b) Buyers and Seller shall promptly inform the other of any
material communication from any governmental authority regarding any of the
transactions contemplated hereby and shall permit the other to review in advance
any proposed communication to any governmental authority. Unless required by a
governmental authority, Seller shall not agree to participate in any meeting
with such governmental authority in respect of any filing, investigation or
other inquiry unless it is requested to do so by Buyers. Buyers shall not agree
to participate in any such meeting unless they notify Seller in advance.
- 13 -
19
Subject to Section 4.2 hereof, Buyers and Seller will coordinate and cooperate
fully with each other in exchanging such information and providing such
assistance as the other may reasonably request in connection with the foregoing
(including providing access to knowledgeable employees at the regional and local
level and assisting in potential litigation) and in seeking early termination of
any applicable waiting periods under the Antitrust Laws, provided, that the
parties will only seek such early termination at Buyers' election. Subject to
Section 4.2 hereof, Seller and Buyers will provide the other with copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between it or any of its representatives, on the one hand,
and any governmental authority or members of its staff, on the other hand, with
respect to this Agreement and the transactions contemplated hereby.
(c) For purposes of this Agreement, "Antitrust Laws" shall mean and
include the Sherman Antitrust Act of 1890, as amended, the Clayton Act of 1914,
as amended, the HSR Act, the Federal Trade Commission Act, as amended, the
Competition Act (Canada), the Investment Canada Act and all other U.S. Federal,
state and applicable foreign statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines, and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization, restraint of trade or limitation of competition.
4.4 REASONABLE BEST EFFORTS. Subject to the terms and conditions of this
Agreement, Seller and Buyers agree to use their respective reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement.
4.5 REORGANIZATION AND DELIVERY.
(a) Seller agrees, at Seller's cost, to do all things necessary to
reorganize the Elevator Business such that, upon consummation of the
transactions contemplated hereby, Buyers and the Buyer Entities shall be
delivered the entire Elevator Business and all assets and, except as otherwise
provided in this Agreement, Liabilities thereof (the "Reorganization"),
including, without limitation, to: (i) establish Canada Newco and cause Dover
Canada to transfer its Elevator Assets to Canada Newco, (ii) cause the Elevator
Assets (other than Intellectual Property to be transferred under the IP Transfer
Agreement or licensed under the IP License Agreement) not held by an Elevator
Subsidiary to be transferred to the applicable Elevator Subsidiaries prior to
the applicable Closing Date and (iii) cause title and possession of all
non-Elevator Assets to be transferred to Seller or Seller's designee prior to
the applicable Closing Date. With respect to clause (i), Seller agrees to report
such transfer for Tax and book purposes at the fair market value of such assets
in a manner consistent with Schedule 1.2. Buyers agree that the non-Elevator
Assets shall not be included in the sale of the Elevator Business contemplated
hereby.
- 14 -
20
(b) Seller covenants to deliver to Buyers, at the applicable
Closing, Seller's entire interest in the Transferred Equity owned by it, as
represented to Buyers in Section 2.6 hereof.
4.6 SECTION 338(h)(10) ELECTIONS.
(a) The parties shall make joint elections under Section 338(h)(10)
of the Code and the regulations thereunder and any similar elections under state
or local law (each a "Section 338(h)(10) Election") and shall cooperate with
each other with respect to the timely making of any such elections, including
executing any documents which may be required in connection therewith. Buyers
shall not make any election under Section 338 of the Code with respect to Canada
Newco or any direct or indirect subsidiary of Canada Newco.
(b) Buyers shall be responsible for the preparation of the first
draft of all forms and documents required in connection with the Section
338(h)(10) Elections and, not later than 90 days prior to the due date for
filing of the Section 338(h)(10) Elections, shall submit such first drafts to
Seller, for Seller's review and comments. The parties shall use their best
efforts, acting reasonably and in good faith, to reach agreement with respect to
such forms and documents, including (i) Form 8023, (ii) all attachments required
to be filed therewith pursuant to applicable Treasury Regulations and (iii) any
comparable forms and attachments with respect to any applicable state or local
elections being made pursuant to the elections; provided, however, that
notwithstanding Section 9.1 or any other provision of this Agreement, any
Section 338(h)(10) Elections made hereunder shall be made on a timely basis.
Buyers shall be responsible for the filing of the Section 338(h)(10) Elections
in accordance with the provisions of this Section 4.6.
4.7 EMPLOYEE BENEFITS.
(a) With respect to each employee benefit plan, program, arrangement
and contract (including, without limitation, any "employee benefit plan", as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) that is sponsored, maintained or contributed to by Seller
or any Elevator Subsidiary for the benefit of any employees or former employees
of the Elevator Business, or with respect to which any Elevator Subsidiary is
likely to incur liability under Section 4069, 4212(c) or 4204 of ERISA (the
"Benefit Plans"), within 10 Business Days of the date hereof, Seller shall
provide Buyers a true and correct copy of each of the following not previously
delivered to Buyers: (i) such Benefit Plan and the most recent summary plan
description related to each Benefit Plan for which a summary plan description is
required, (ii) each trust agreement or other funding arrangement relating to
such Benefit Plan, if any, (iii) the most recent annual report (Form 5500) filed
with the Internal Revenue Service (the "IRS"), including all schedules thereto,
(iv) the most recent actuarial report or financial statement relating to a
Benefit Plan and (v) the most recent determination letter issued by the IRS with
respect to any Benefit Plan qualified under Section 401(a) of the Code. Seller
also agrees to provide Buyers and their agents, in a complete, diligent and
timely manner, with all census, actuarial
- 15 -
21
or other data (including, without limitation, information regarding all claims,
benefits, designations, elections, notices, requests, domestic relations orders,
documents and information about current and former employees of the Elevator
Business, their dependents and beneficiaries) as shall be in the possession of
Seller or its affiliates and as shall be reasonably necessary to calculate
benefits after the First Tranche Closing Date or the Second Tranche Closing Date
under any Benefit Plan and to provide all reasonable and practical assistance
relating to the administration, establishment or continuation of any Benefit
Plan in accordance with the provisions of this Section 4.7.
(b) Until the expiration of not less than the twenty-four (24) month
period following the First Tranche Closing Date or the Second Tranche Closing
Date, as applicable (or such longer period if required by law) (the "Benefits
Continuation Period"), Buyers shall cause the Elevator Subsidiaries to provide
employees who are employed by the Elevator Subsidiaries immediately prior to the
First Tranche Closing Date or the Second Tranche Closing Date, as applicable
("Post-Closing Employees"), with overall employee compensation and benefits that
are at least as favorable in the aggregate as those in effect for such employees
immediately prior to the applicable Closing Date, excluding for such purpose any
benefits provided under any equity-related plans of Seller or the Elevator
Subsidiaries. Consistent with the foregoing, Buyers shall use their reasonable
best efforts in consultation with management of the Elevator Business, to the
extent practicable, to cause the Elevator Subsidiaries to provide compensation
and benefits that are as similar as possible to those in effect for the
Post-Closing Employees prior to the applicable Closing Date. Post-Closing
Employees and their eligible dependents shall be given credit for service with
Seller and the Elevator Subsidiaries (and their affiliates and predecessors) for
all purposes under the employee benefit plans and compensation programs to be
provided after the applicable Closing Date by Buyers or the Elevator
Subsidiaries (unless such credit would result in a duplication of benefits) to
the extent such service was credited under the comparable benefit plans and
compensation programs of Seller and the Elevator Subsidiaries immediately prior
to the applicable Closing Date. Notwithstanding the foregoing, Buyers shall
perform their obligations as set forth in Schedule 4.7. Buyers shall continue to
maintain in the Dover Elevators, Inc. Retirement Savings Plan the ability of
each participant to continue to invest his or her account under the plan in
common stock of Seller, but only to the extent that any such investment
constitutes or relates to stock which was held in a participant's account as of
the applicable Closing Date.
(c) Buyers shall cause the Elevator Subsidiaries to adopt as soon as
administratively practicable following, but effective as of, the First Tranche
Closing Date, defined benefit pension plans, as hereinafter provided (the
"Elevator Pension Plans"), which shall assume the liabilities and obligations of
the Dover Corporation Salaried Pension Plan and the Dover Corporation Hourly
Pension Plan (respectively, the "Seller Salaried Pension Plan" and the "Seller
Hourly Pension Plan" and collectively, the "Seller Pension Plans") to, or
relating to, Post-Closing Employees and former employees of the Elevator
Business (the "Elevator Pension Participants").
- 16 -
22
The Elevator Pension Plans shall consist of the "Elevator Salaried Pension
Plan", which shall be substantially identical to the Seller Salaried Pension
Plan to the extent applicable to the participation of Elevator Pension
Participants therein, and the "Elevator Hourly Pension Plan", which shall be
substantially identical to the Seller Hourly Pension Plan to the extent
applicable to the participation of Elevator Pension Participants therein.
Seller shall cause a transfer from each of the Seller Pension Plans to the
corresponding Elevator Pension Plan of (i) the Liabilities and obligations under
the Seller Pension Plans to, or relating to, the Elevator Pension Participants
and (ii) the assets determined as described below (the "Transfer Amount").
Seller shall provide the Elevator Subsidiaries and Buyers with the identity of
each Elevator Pension Participant as to whom Liabilities and assets are to be
transferred as described above. Buyers shall present, in a form reasonably
acceptable to counsel for Seller, an opinion of counsel to the effect that the
terms of the Elevator Pension Plans meet all of the requirements of Section
401(a) of the Code and, assuming that the Seller Pension Plans meet the
requirements of Section 401(a) of the Code, that the transfer of assets
described herein will not adversely affect the tax-qualified status of the
Elevator Pension Plans.
The Transfer Amount shall be determined under Section 414(l) of the Code
and shall be calculated by Seller's actuary by applying the Pension Benefit
Guaranty Corporation (the "PBGC") interest rate for determining the present
value of annuity benefits for terminating pension plans, as set forth in
Appendix B to Part 4044 of the regulations adopted by the PBGC pursuant to ERISA
for single-employer plans, as such rate is in effect for the month in which the
First Tranche Closing Date occurs, and all other actuarial assumptions used to
calculate the present value of accrued benefits, as set forth in the actuarial
report prepared by Watson Wyatt Worldwide as of January 1, 1998 in connection
with each of the respective Seller Pension Plans. The Transfer Amount shall be
subject to review by Buyers' actuary for the purpose of confirming that the
Transfer Amount was calculated in accordance with this Section 4.7(c).
An initial amount equal to approximately 80% of the Transfer Amount (based
upon the estimated Transfer Amount as shall be mutually agreed upon by Seller's
actuary and Buyers' actuary not less than ten (10) days prior to the First
Tranche Closing Date) shall be transferred to a trust designated by Buyers,
which trust is exempt from income Tax pursuant to Section 501(a) of the Code and
otherwise meets the requirements of Section 401(a) of the Code. Such initial
transfer shall be made as soon as administratively practicable after the First
Tranche Closing Date, but in no event later than the later of fifteen (15) days
after the First Tranche Closing Date or five (5) Business Days after Seller's
receipt of written instructions from Buyers with respect to the transfer of such
assets. The remainder of the Transfer Amount shall be transferred as soon as
administratively practicable after Seller's actuary has completed its
calculations of the Transfer Amount, Buyers' actuary has confirmed that such
calculations are in accordance with this Section 4.7(c) and, if necessary,
Seller's actuary and Buyers' actuary have agreed to any adjustments with respect
to such calculations. The remainder of the Transfer Amount shall be adjusted to
include investment
- 17 -
23
earnings for the period between the First Tranche Closing Date and the actual
date of transfer of the remainder of the Transfer Amount at the actual rate of
investment return of each of the Seller Pension Plans through the last day of
the month prior to the date the remaining assets are transferred to the Elevator
Pension Plans and interest at the rate of 8% per annum from the last day of the
month preceding the transfer to the date of transfer, and shall be reduced by a
pro rata portion of the expenses incurred in the operation of the Seller Pension
Plans and any benefit payments to or with respect to Elevator Pension
Participants during such period.
The initial and remaining portions of the Transfer Amount shall be
transferred in cash or, with the mutual consent of Seller and Buyers, in
marketable securities or other property held in the trusts established with
respect to the Seller Pension Plans.
Seller and Buyers shall cooperate in the preparation and filing of all
documentation required to be filed with or requested by the IRS, the U.S.
Department of Labor, the PBGC or any other applicable governmental agency.
In transferring the assets and Liabilities from the Seller Pension Plans
to the Elevator Pension Plans, Seller and Buyers shall comply with all
applicable requirements of Sections 411(d)(6), 414(l) and 401(a)(12) of the
Code, and Buyers shall cause the Elevator Subsidiaries to comply with such
requirements in the administration of such plans after the Closing Date. The
Elevator Pension Plans shall honor the provisions of the domestic relations
orders with respect to the Elevator Pension Participants which were received and
deemed qualified by Seller pursuant to Section 206(d)(3) of ERISA and Section
414(p) of the Code prior to the First Tranche Closing Date and shall administer
such orders in accordance with their terms.
Notwithstanding any of the foregoing to the contrary, in the event that,
by virtue of the limitations set forth in Section 414(l) of the Code, the
Transfer Amount is less than the amount determined with respect to the Elevator
Pension Participants by applying the PBGC interest rate for determining the
present value of annuity benefits for terminating pension plans referenced above
and all other actuarial assumptions referenced above, Seller shall pay Buyers an
amount in cash equal to the difference between the amount so calculated and the
Transfer Amount and Buyers agree to promptly cause the contribution of such
amount to the Elevator Pension Plans as promptly as permissible under Section
404 of the Code.
Effective as of the First Tranche Closing Date, the Elevator Subsidiaries
shall also establish a non-qualified supplemental pension plan, which shall
assume all obligations and Liabilities of Seller and the Dover Corporation
Supplemental Executive Retirement Plan with respect to Elevator Pension
Participants who participate therein.
(d) Seller and Buyers acknowledge that certain employee benefit
plans (including the Dover (Canada) Limited Salaried Pension Plan (the "Canadian
Pension Plan")) cover employees of each of Dover Canada and Canada Newco
(collectively, the "Canadian
- 18 -
24
Entities"). Seller and Buyers agree to (i) cooperate in developing and
commencing as soon as is administratively practicable after the date of this
Agreement, a reasonable and equitable plan of action to divide such employee
benefit plans into separate plans, transfer such employee benefit plans to
either of the Canadian Entities and/or implement new or revised employee benefit
plans as necessary to provide coverage to all of the affected employees of each
of the Canadian Entities (and, if applicable, their spouses and other dependents
and beneficiaries), (ii) implement such plan of action prior to the Second
Tranche Closing Date or as soon thereafter as reasonably practicable, (iii)
provide for the reasonable allocation of costs with respect to the provisions
hereof and (iv) enter into such additional documentation and take such other
actions as shall be reasonably necessary to accomplish the actions intended
pursuant to this Section 4.7(d). If Seller and Buyers are unable to complete the
implementation of such plan of action prior to the Second Tranche Closing Date,
Seller and Buyers agree to develop such transitional programs and services as
shall be reasonably necessary to protect the affected employees; provided,
however, that in any event the implementation of such plan of action shall be
completed no later than 180 days following the Second Tranche Closing Date,
except as shall otherwise be necessary to comply with any law or regulatory
proceeding or as the parties shall otherwise mutually agree. In addition, it is
the intent of Seller and Buyers that the amount of assets and Liabilities of the
Canadian Pension Plan to be transferred to a new plan or plans to be established
by Canada Newco in respect of those current and former employees of the Canadian
Entities who were employed in the Elevator Business shall be determined on a
basis consistent with the allocation of assets in the historical records
maintained, and consistent with the methodology historically employed, by Dover
Canada, except to the extent that a different amount is required to be
transferred by the relevant Canadian regulatory authorities. In the event that
the amount of such assets to be transferred either exceeds or is less than the
amount determined in the manner described in the preceding sentence by more than
US$50,000, Seller shall pay (or cause to be paid) to Buyers, if the amount is
less, and Buyers shall pay (or cause to be paid) to Seller, if the amount
exceeds, an amount equal to the difference between the amount transferred and
the amount determined pursuant to the historical records of Dover Canada.
4.8 INSURANCE PAYMENTS AND ARRANGEMENTS. Seller and Buyers will enter into
the Insurance Arrangements Agreement which provides the arrangements between the
parties with respect to certain insurance policies of Seller. During the period
from the date of this Agreement to the First Tranche Closing, the parties will
cooperate reasonably with each other with respect to claims and in dealing with
insurance and service providers.
4.9 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE. After the
First Tranche Closing or the Second Tranche Closing, as applicable, and for the
benefit of the directors and officers of the Elevator Subsidiaries transferred
at such Closing, Buyers shall maintain the directors' and officers'
indemnification policy (set forth in the charter and/or bylaws) of the relevant
Elevator Subsidiaries, or a substantially similar policy subject to terms and
conditions no less advantageous, together with appropriate liability insurance,
for all officers and directors of the Elevator Subsidiaries who are such on the
date hereof and (other than with respect to insurance) for all persons who have
been such officers or
- 19 -
25
directors within one year prior to the date hereof, for seven years after the
applicable Closing Date to cover acts and omissions of such current and former
directors and officers of the Elevator Subsidiaries in their capacities as such
occurring prior to the applicable Closing Date in the course of their employment
by, or service as director with, the Elevator Subsidiaries. Seller agrees that
the insurance requirement of this provision shall be satisfied by Buyer's
purchasing and maintaining a non-cancelable, seven (7) year run-off policy.
4.10 ACCESS TO INFORMATION; USE OF TECHNICAL INFORMATION. At Seller's
request, Buyers agree to grant Seller after the applicable Closing Date access,
for review and copying, to all information related to the Elevator Business and
the Elevator Subsidiaries, including, without limitation, any books, records,
vendor lists, advertising material, general business policies and standard
operating procedures, organization charts, position descriptions, accounts and
business files and information pertaining to the Elevator Business and
reasonably necessary for use by Seller for Tax, litigation, handling third party
claims or accounting purposes or for any purpose incident to this Agreement.
Buyers agree to retain all such documents until the later of (i) six years from
the date hereof (but permanently for personnel-related records) and (ii) the
completion of any IRS or state audits of Seller, or to notify Seller of any
intention to dispose of any such documents. If, within 60 days of any such
notice, Seller requests the return of any such documents, Buyers shall return
them to Seller at Seller's expense. Except as set forth in Section 8.2(d) and
(e), at Seller's request, Buyers also agree to cooperate with Seller in the
resolution of third-party claims and litigation relating to the Elevator
Business by making available to Seller employees of Buyers to be used as
witnesses and in such cases Seller shall reimburse Buyers for any reasonable out
of pocket costs and expenses incurred by reason of such cooperation.
4.11 SOLICITATION OF PERSONNEL. Buyers and Seller agree that for the
period of five (5) years from the date hereof, neither of them nor any of their
affiliates shall directly or indirectly hire, offer to hire, or otherwise
interfere with the employment of, any person who on or after the date hereof is
an officer or other employee (other than secretarial and clerical employees) of
the other party except that, from and after the applicable Closing Date, Buyers
may do so with respect to employees of the Elevator Business, or solicit or
induce any of such persons to leave for any reason whatsoever the employment of
any of such entities; provided, however, that neither party shall be precluded
from employing any person who contacts them on his or her own initiative or as a
result of a general solicitation not specifically directed at such person.
4.12 NON-COMPETITION. (a) For a period commencing on the First Tranche
Closing Date and ending five (5) years thereafter or, if the Second Tranche
Closing occurs, five (5) years after the Second Tranche Closing Date (the
"Restricted Period"), Seller shall not, without the prior written consent of
Buyers, directly or indirectly, own, manage, operate or control, or participate
in the ownership, management, operation or control of, or permit the use of its
name by, any business or activity within the Territory (as hereinafter defined)
which is or becomes during the Restricted Period directly or indirectly
competitive with the Elevator Business in the Territory, as the same is carried
out as of the date hereof; provided,
- 20 -
26
however, that, for purposes of this Section 4.12, ownership of securities having
no more than five percent of the outstanding voting power of any competitor
which are listed on any national securities exchange or traded actively in the
national over-the-counter market shall not be deemed to be in violation of this
Section 4.12 so long as the person or entity owning such securities has no other
connection or relationship with such competitor. As used in this Agreement, the
term "Territory" means: (i) from and after the First Tranche Closing, the United
States of America, its territories, possessions, protectorates and dependencies,
and any other jurisdiction in which any Elevator Subsidiary transferred at the
First Tranche Closing conducts business, and (ii) from and after the Second
Tranche Closing, all locations specified in clause (i) and, in addition, Canada
and each other jurisdiction in which any Elevator Subsidiary transferred at the
Second Tranche Closing conducts business.
(b) Notwithstanding the foregoing provisions of this Section 4.12,
nothing in this Section 4.12 shall restrict, in any manner whatsoever, Seller's
freedom to: (i) manage, develop and expand (by acquisition, entry into new
product lines other than elevators or otherwise) any business it conducts,
directly or indirectly, on the date hereof but which is not part of the Elevator
Business, including, without limitation, the businesses conducted by Seller's
Rotary Lift division and by certain other subsidiaries not currently part of the
Elevator Business which manufacture and sell certain valves, pumps, hydraulic
actuators, motors and other products suitable for use in elevators, and (ii)
acquire any business which, individually or together with other businesses owned
by Seller or any of its affiliates, manufactures products which are components
used in the manufacture of elevators (other than any business which manufactures
or sells elevators, kits for the assembly of elevators or any business which
exclusively manufactures components for elevators).
(c) The Restricted Period shall be extended by the length of any
period during which Seller is in breach of the terms of this Section 4.12.
(d) Seller acknowledges that the covenants of Seller set forth in
this Section 4.12 are an essential element of this Agreement and that, but for
the agreement of Seller to comply with these covenants, Buyers would not have
entered into this Agreement. Seller has independently consulted with its counsel
and, after such consultation, agrees that the covenants set forth in this
Section 4.12 are reasonable and appropriate.
(e) Within two weeks after the First Tranche Closing, Seller will
either dissolve Dover Elevators, Inc., a Delaware corporation, or change its
name to eliminate any reference to elevators or the Elevator Business.
- 21 -
27
SECTION 5
Conditions to the
Obligation of Buyers to Close
The obligations of Buyers to consummate the transactions contemplated
hereunder shall be subject to the satisfaction of the applicable conditions
below at or prior to the First Tranche Closing or the Second Tranche Closing, as
applicable, unless waived by Buyers in writing. Subject to the terms and
conditions of this Agreement, Buyers shall be obligated to consummate the
transactions contemplated hereunder notwithstanding: (i) the failure of any
board, shareholder, management or other approval with respect to either Buyer,
or (ii) except as set forth in Section 5.4 below, the failure to obtain any
regulatory approvals (provided that the applicable Closing may be delayed until
any injunction can be lifted).
5.1 REPRESENTATIONS AND WARRANTIES TRUE. Except as could not reasonably be
expected to have a Material Adverse Effect and without giving effect to any
materiality qualifications contained in the text thereof, all of the
representations and warranties of Seller contained in Sections 2.1, 2.2, 2.3,
2.5 and 2.6 and, to the knowledge of Seller, Section 2.4 shall be true and
correct in all respects on the applicable Closing Date as though such
representations and warranties were made on such date.
5.2 PERFORMANCE. Except as could not reasonably be expected to have a
Material Adverse Effect and without giving effect to any materiality
qualifications contained in the text thereof, Seller shall have performed and
complied with the covenant contained in Section 4.5 hereof.
5.3 LEGAL OPINION. Seller shall have furnished Buyers with the opinion of
its General Counsel dated the applicable Closing Date in substantially the form
attached as Exhibit F hereto.
5.4 COMPLIANCE WITH REQUIRED ACTIONS.
(a) With respect to the First Tranche Closing, the filing and
waiting period requirements of the HSR Act and all other requirements of the
Antitrust Laws relating to the consummation of the transactions contemplated by
this Agreement, other than requirements applicable to the Second Tranche
Closing, shall have been complied with and there shall be no existing injunction
by any court or governmental authority prohibiting or preventing the
consummation of the transactions contemplated by this Agreement; provided that
this Section 5.4 shall not relieve Buyers of any of their obligations under
Section 4.3.
(b) With respect to the Second Tranche Closing, the filing and
waiting period requirements of the HSR Act and all other requirements of the
Antitrust Laws relating to the consummation of the Second Tranche Closing shall
have been complied with and there shall be no existing injunction by any court
or governmental authority prohibiting or
- 22 -
28
preventing the consummation of the transactions contemplated by this Agreement;
provided that this Section 5.4 shall not relieve Buyers of any of their
respective obligations under Section 4.3.
5.5 SECOND TRANCHE CLOSING. With respect to the Second Tranche Closing
only, the First Tranche Closing shall have occurred.
SECTION 6
Conditions to the
Obligation of Seller to Close
The obligations of Seller to consummate the transactions contemplated
hereunder shall be subject to the satisfaction of the applicable conditions
below at or prior to the First Tranche Closing or the Second Tranche Closing, as
applicable, unless waived by Seller in writing.
6.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations and
warranties of each Buyer contained in this Agreement shall be materially true
and correct (other than any such representations which are already qualified by
materiality, which shall be true and correct in all respects) in all respects on
the applicable Closing Date as though such representations and warranties were
made on such date.
6.2 PERFORMANCE. Buyers shall have performed and complied in all material
respects (other than any such covenants which are already qualified by
materiality, which shall be complied with in all respects) with all covenants
and obligations under this Agreement which are required to be performed or
complied with by them on or prior to the applicable Closing Date.
6.3 LEGAL OPINION. Each Buyer shall have furnished Seller with favorable
opinions of the General Counsel of each Buyer, dated the applicable Closing Date
in substantially the form attached as Exhibit G hereto.
6.4 COMPLIANCE WITH REQUIRED ACTIONS.
(a) With respect to the First Tranche Closing, the filing and
waiting period requirements of the HSR Act and all other requirements of the
Antitrust Laws relating to the consummation of the transactions contemplated by
this Agreement, other than requirements applicable to the Second Tranche
Closing, shall have been complied with and there shall be no existing injunction
by any court or governmental authority prohibiting or preventing the
consummation of the transactions contemplated by this Agreement; provided that
this Section 6.4 shall not relieve Buyers or Seller of any of their respective
obligations under Section 4.3. Buyers shall immediately notify Seller (the "HSR
Notice") of the fulfillment of this
- 23 -
29
condition.
(b) With respect to the Second Tranche Closing, the filing and
waiting period requirements of the HSR Act and all other requirements of the
Antitrust Laws relating to the consummation of the Second Tranche Closing shall
have been complied with and there shall be no existing injunction by any court
or governmental authority prohibiting or preventing the consummation of the
transactions contemplated by this Agreement; provided that this Section 6.4
shall not relieve Buyers or Seller of any of their respective obligations under
Section 4.3.
6.5 SECOND TRANCHE CLOSING. With respect to the Second Tranche Closing
only, the First Tranche Closing shall have occurred.
SECTION 7
Termination
7.1 TERMINATION. This Agreement and the transactions contemplated hereby
may be terminated by Seller at any time prior to the First Tranche Closing Date
or, with respect to the Second Tranche Closing, prior to the Second Tranche
Closing Date if the First Tranche Closing and the Second Tranche Closing have
not occurred on or prior to September 30, 1999; provided, however, that the
right to terminate this Agreement pursuant to this Section 7.1 shall not be
available to Seller if its breach of any representation or warranty or failure
to perform or comply with any covenant, condition or obligation under this
Agreement has been the cause of, or resulted in, the failure of the applicable
Closing to occur on or before such date.
7.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement, all obligations of Buyers and of Seller under this Agreement shall
terminate without liability or obligation of Buyers to Seller, or of Seller to
Buyers, except for the obligations of Buyers and Seller under Section 4.2, and
the obligations of each under Sections 9.8 and 9.9.
Notwithstanding anything in this Agreement to the contrary, if any of the
conditions specified in Section 5 or 6 have not been satisfied, either Buyers or
Seller, respectively, in addition to any other rights which may be available to
such parties, shall have the right to (a) waive such condition and proceed with
the closing of the transactions contemplated hereby, (b) extend the time for the
performance of any of the obligations of the parties hereto, or (c) if such
failure is willful, to pursue all remedies available to it at law or equity.
- 24 -
30
SECTION 8
Adjustments and Claims
8.1 CLOSING BALANCE SHEET ADJUSTMENT. The Closing Balance Sheet shall be
subject to adjustment after the First Tranche Closing as specified in this
Section 8.1:
(a) Unaudited Closing Balance Sheet. (i) As promptly as practicable,
but in any event within 45 days, following the First Tranche Closing Date,
Seller shall deliver to Buyers a consolidated income statement, consolidated
statement of cash flow and consolidated balance sheet (the "Closing Balance
Sheet") of the Elevator Business which are unaudited and prepared in accordance
with the following (the "Balance Sheet Preparation Method"): the Closing Balance
Sheet shall be prepared as of immediately prior to the First Tranche Closing,
dated as of the First Tranche Closing Date and prepared in accordance with U.S.
GAAP applied on a basis consistent with Seller's past practices and with the
preparation of the Elevator Balance Sheet with the sole exceptions that (i)
"Stockholders equity" on the Closing Balance Sheet shall be adjusted to equal
$225,971,000, and (ii) the line item "Due to (from) Dover Corporation" on the
Closing Balance Sheet (the "Due to (from) Amount") shall be adjusted by netting
and applying thereto any income tax or deferred tax asset and liability
accounts; and the Due to (from) Amount shall contain all of the net assets and
liabilities between the Elevator Business and Seller and Seller's affiliates
except for those which arose from normal operating activity.
(ii) At the time the unaudited Closing Balance Sheet is delivered to
Buyers, a cash payment adjustment shall be made as follows:
(A) If the Due to (from) Amount on the unaudited Closing
Balance Sheet shows an amount which is due from Seller, then Seller
shall pay such amount to the Elevator Business, by wire transfer of
immediately available funds to account(s) designated by Buyers,
together with interest thereon at LIBOR for the period from the
First Tranche Closing Date to, but not including, the day such
payment is made.
(B) If the Due to (from) Amount on the unaudited Closing
Balance Sheet shows an amount which is due to Seller, then Buyers
shall cause the Elevator Business to pay such amount to Seller, by
wire transfer of immediately available funds to an account
designated by Seller, together with interest thereon at LIBOR for
the period from the First Tranche Closing Date to, but not
including, the day such payment is made.
(b) Audited Closing Balance Sheet. As promptly as practicable, but
in any event within 90 days, following the First Tranche Closing Date, Seller
shall deliver to Buyers the audited Closing Balance Sheet, together with a
report thereon of Seller's Accountants stating that the Closing Balance Sheet
fairly presents the consolidated financial
- 25 -
31
position of the Elevator Business at the First Tranche Closing Date prepared in
conformity with the Balance Sheet Preparation Method.
(c) Disputes. (i) Subject to clause (ii) of this Section 8.1(c), the
audited Closing Balance Sheet delivered by Seller to Buyers shall be deemed to
be and shall be final, binding and conclusive on the parties hereto.
(ii) Buyers may dispute any amounts reflected on the audited Closing
Balance Sheet, but only on the basis that the disputed amounts were not arrived
at in accordance with the Balance Sheet Preparation Method; provided, however,
that Buyers shall have notified Seller and Seller's Accountants in writing of
each disputed item, specifying the amount thereof in dispute and setting forth,
in reasonable detail, the basis for such dispute, within 45 days of Seller's
delivery of the audited Closing Balance Sheet to Buyers. In the event of such a
dispute, Buyers' Accountants and Seller's Accountants shall attempt to reconcile
their differences, and any resolution by them as to any disputed amounts shall
be final, binding and conclusive on the parties hereto. If Buyers' Accountants
and Seller's Accountants are unable to resolve all disputed items within 20 days
after receipt by Seller and Seller's Accountants of Buyers' written notice of
dispute, Buyers' Accountants and Seller's Accountants shall submit the items
remaining in dispute for resolution to Deloitte & Touche LLP (or, if such firm
shall decline to act or is not, at the time of such submission, independent of
Buyers and Seller, to another independent accounting firm of international
reputation mutually acceptable to Buyers and Seller) (either Deloitte & Touche
LLP or such other accounting firm being referred to herein as the "Independent
Accounting Firm"), which shall, within 30 days after such submission, determine
and report to Buyers and Seller upon such remaining disputed items, and such
report shall be final, binding and conclusive on Buyers and Seller. The fees and
disbursements of the Independent Accounting Firm shall be allocated between
Buyers and Seller in the same proportion that the aggregate amount of such
remaining disputed items so submitted to the Independent Accounting Firm is
unsuccessfully disputed by each such party (as finally determined by the
Independent Accounting Firm) bears to the total amount of such remaining
disputed items so submitted.
(iii) In acting under this Agreement, Buyers' Accountants, Seller's
Accountants and the Independent Accounting Firm shall be entitled to the
privileges and immunities of arbitrators.
(d) Audited Closing Balance Sheet Adjustment. The audited Closing
Balance Sheet shall be deemed final for the purposes of this Section 8.1 upon
the earliest of (A) the failure of Buyers to notify Seller of a dispute within
45 days of Seller's delivery of the audited Closing Balance Sheet to Buyers, (B)
the resolution of all disputes, pursuant to Section 8.1(c)(ii), by Buyers' and
Seller's Accountants, and (C) the resolution of all disputes, pursuant to
Section 8.1(c)(ii), by the Independent Accounting Firm. Within three Business
Days of the audited Closing Balance Sheet being deemed final, the net changes in
all asset and liabilities accounts compared to the unaudited Closing Balance
Sheet shall be netted and the resulting amount shall be paid in the manner
described in Section 8.1(a)(ii).
- 26 -
32
(e) Buyers will provide Seller and Seller's Accountants with full
access to the books, records, facilities and employees of the Elevator Business
and to the work papers of Buyers' accountants, and shall cooperate fully with
Seller and Seller's Accountants, to the extent reasonably necessary to permit
them to prepare the Closing Balance Sheet in accordance with the foregoing
provisions and to negotiate and resolve any dispute with respect thereto. Seller
will provide Buyers and Buyers' Accountants with full access to the work papers
of Seller's Accountants and such records of Seller as Seller may have related to
the Elevator Business and the preparation of the Closing Balance Sheet, and
shall cooperate fully with Buyers and Buyers' Accountants, to the extent
reasonably necessary to permit them to negotiate and resolve any dispute with
respect to the audited Closing Balance Sheet.
8.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
(a) None of the representations and warranties of Seller made in
connection with the First Tranche shall survive the First Tranche Closing and
none of the representations and warranties of Seller made in connection with the
Second Tranche shall survive the Second Tranche Closing, except that the
representations and warranties contained in Sections 2.1, 2.2, 2.3, 2.4 and 2.6
hereof shall survive the applicable Closing Date for a period of one year. The
representations and warranties of Buyers contained in Sections 3.1, 3.2 and 3.3
hereof shall survive the applicable Closing Date for a period of one year.
Claims may be commenced under this Section 8 with respect to representations and
warranties only during the period of their survival.
(b) Subject to the provisions of Section 8.3, Buyers hereby agree,
jointly and severally, to indemnify and hold Seller and the Seller Entities
harmless from, and to reimburse Seller and the Seller Entities for, on an
after-Tax basis, any Seller Indemnity Claims arising under the terms and
conditions of this Agreement. For purposes of this Agreement, the term "Seller
Indemnity Claim" shall mean any loss, damage, deficiency, diminution in value,
claim, liability, obligation, suit, proceeding, action, demand, fee, penalty,
fine, interest, surcharge, cost or expense of any nature whatsoever, including,
without limitation, out-of-pocket expenses, investigation costs and fees and
disbursements of counsel but net of any amounts received by Seller under any
insurance (collectively, "Damages") arising out of: (i) any inaccuracy in or any
breach of any representation and warranty of Buyers made in Sections 3.1, 3.2
and 3.3, (ii) any breach or nonfulfillment of, or failure to perform, any of the
covenants, agreements or undertakings of Buyers contained in or made pursuant to
the terms and conditions of this Agreement or any Related Agreement, or (iii)
the Elevator Business, whether arising before, on or after the date hereof,
provided, however, that (x) Buyers shall not have any obligation for the Taxes
(including Damages arising out of such Taxes) of the Elevator Subsidiaries or
with respect to the Elevator Business for which Seller has agreed to indemnify
Buyers pursuant to clauses (iii) and (iv) of Section 8.2(c), (y) Buyers shall
have no obligation for any Damages to the extent that they arise from any breach
by Seller of any of its obligations under Section 4.1(b), and (z) Buyers'
obligations under clause (iii) of this Section 8.2(b) shall not become effective
with respect to any Damages arising out of that portion of the Elevator Business
to be
- 27 -
33
transferred to the Buyer Entities on the First Tranche Closing Date or the
Second Tranche Closing Date, as applicable, until the respective Closing Date
has occurred.
(c) Subject to the provisions of Section 8.3, Seller hereby agrees
to indemnify and hold Buyers, the Buyer Entities and the Elevator Subsidiaries
harmless from, and to reimburse Buyers, the Buyer Entities and the Elevator
Subsidiaries for, on an after-Tax basis, any Buyer Indemnity Claims arising
under the terms and conditions of this Agreement. For purposes of this
Agreement, the term "Buyer Indemnity Claim" shall mean (i) any Damages arising
out of, based upon or resulting from any inaccuracy in or any breach of any
representation and warranty of Seller contained in Sections 2.1, 2.2, 2.3, 2.4
and 2.6 hereof, (ii) any Damages arising out of, based upon or resulting from
any breach of a covenant of Seller contained in Section 4.1(b) or Section 4.5,
in either case, without duplication of any amounts that have been or will be
adjusted under Section 8.1, (iii) any Taxes of the Elevator Subsidiaries or with
respect to the Elevator Business (including Damages arising out of such Taxes)
in excess of current Taxes accrued or contingent Taxes reserved for on the
audited Closing Balance Sheet (but not including, for purposes of clarification,
deferred Taxes for financial accounting purposes) (A) imposed with respect to
taxable periods ending on or before the applicable Closing Date, or (B) imposed
with respect to taxable periods beginning before the applicable Closing Date and
ending after the applicable Closing Date, to the extent such Taxes are allocable
to the portion of such period ending on such Closing Date (in each case
including, for purposes of clarification, but not limited to, income Taxes with
respect to amounts that are accelerated or triggered, including with respect to
deferred intercompany transactions or accounting methods, by reason of the
transactions contemplated herein and income Taxes arising as a result of any
Section 338(h)(10) Elections), or (iv) any income Taxes of any corporation
(other than any Elevator Subsidiary) for which any Elevator Subsidiary may be
jointly and severally liable under U.S. Treasury Regulation Section 1.1502-6 (or
under any similar provision of state, local or foreign law) with respect to any
income Tax return filed on a consolidated or combined basis for a taxable period
ending on or before the applicable Closing Date or beginning before and ending
after the applicable Closing Date. Notwithstanding clause (iii) of the
immediately preceding sentence, a Buyer Indemnity Claim for Taxes other than
income Taxes shall include only claims for Taxes that arise in the context of an
audit, the assertion of a claim, an assessment, or other dispute with respect to
Taxes for which Seller, the Seller Entities, Buyers or the Elevator Subsidiaries
receive oral or written notice from the IRS or other governmental authority of
the commencement or assertion of such audit, claim or other dispute or the
assessment of Taxes no later than three (3) years from the applicable Closing
Date; provided, however, that in the event that Buyers or the Elevator
Subsidiaries are the parties to first receive such notice, Buyers or the
Elevator Subsidiaries must give written notification to Seller of the receipt of
such notice no later than thirty (30) Business Days after the expiration of such
three (3) year period describing in reasonable detail the nature of the claim.
For purposes of Sections 8.2, 8.3 and 9.2 the term "income Taxes" shall include
corporate franchise taxes imposed in whole or in part on net income and
corporate franchise taxes imposed in whole or in part on a basis in lieu of net
income.
- 28 -
34
(d) Except for third party claims with respect to any claims or
demands for amounts relating to Taxes (which shall be governed by clauses (e)
and (f) below), any party that may be entitled to indemnification (an
"Indemnified Party") shall promptly notify the party or parties liable for such
indemnification (the "Indemnifying Party") in writing of any pending or
threatened claim or demand of any third parties for which such Indemnified Party
may request indemnification hereunder (a "Third Party Claim"), stating the
nature, amount and basis of such Third Party Claim to the extent known, along
with copies of relevant documents evidencing the claim and the basis for
indemnification sought. Failure by the Indemnified Party to give such notice
shall not relieve the Indemnifying Party from liability on account of the Third
Party Claim, except if and to the extent the Indemnifying Party is prejudiced
thereby. The Indemnifying Party may elect to assume the defense and control of
any such Third Party Claim but shall allow the Indemnified Party reasonable
opportunity to participate in such defense at its own expense. In the event the
Indemnifying Party elects to assume the defense and control of such Third Party
Claim, it shall notify the Indemnified Party of such fact and the Indemnified
Party shall be precluded from filing any papers, consenting to the entry of any
judgment or entering into any settlement with respect to such Third Party Claim.
The Indemnified Party shall provide the Indemnifying Party with access, during
normal business hours, to its records and personnel relating to such Third Party
Claim and shall otherwise cooperate with the Indemnifying Party in the defense
or settlement thereof and the Indemnifying Party shall reimburse the Indemnified
Party for its reasonable costs and expenses in connection with such cooperation.
The Indemnifying Party shall be authorized to consent to a settlement of, or the
entry of any judgment arising from, such Third Party Claim, without the consent
of the Indemnified Party, provided that the Indemnifying Party shall (i)
promptly upon its effectiveness, pay or cause to be paid all amounts arising out
of such judgment or settlement, (ii) not encumber any of the material assets of
any Indemnified Party or the conduct of the Indemnified Party's business, and
(iii) obtain, as a condition of any settlement or other resolution, a complete
release of any Indemnified Party potentially affected by such Third Party Claim.
(e) (i) If Buyers or any of their subsidiaries (including the
Elevator Subsidiaries) receive oral or written notice from the IRS or any other
governmental authority of the commencement of an audit, the assertion of a
claim, an assessment or other dispute with respect to Taxes for which Seller is
or may be required to indemnify, in whole or in part, under this Section 8.2 (a
"claim"), Buyers shall provide notice to Seller of the same in writing within
ten (10) Business Days, specifying in reasonable detail the basis of such claim
and the facts pertaining thereto, and shall not make payment of the Tax claimed
for at least thirty (30) days after the giving of such notice; provided,
however, that failure to give such notice will not affect Buyers' right to
indemnification hereunder, except if and to the extent Seller is prejudiced
thereby. Seller, at its own cost and expense, shall be entitled to control the
contest of any such claim, including the determination of whether and when to
settle any such contest; provided, however, that Seller will consider in good
faith any reasonable requests by the applicable Buyer regarding the conduct of
such contest and will promptly, and in any event within ten (10) Business Days,
notify the applicable Buyer of any action taken or proposed to be taken from
time to time by Seller with respect to such contest.
- 29 -
35
Buyers may also participate in any such audit or proceeding, and if Seller does
not assume control thereof, Buyers may defend the same in such manner as they
deem appropriate, including, but not limited to, settling such claim or
proceeding after ten (10) Business Days' prior written notice to Seller setting
forth the terms and conditions of settlement, provided, however, that the
maximum amount for which Seller would be obligated to indemnify Buyers in such
case would be the amount of Taxes (and Damages related to such Taxes) that
Seller otherwise would have been obligated to pay Buyers under this Section 8.2,
as determined at the time that Buyers assumed the defense, had Buyers not
assumed the defense. If Seller decides that a claim for Taxes shall be contested
by filing a claim for refund, Seller shall advance (or shall cause to be
advanced) to the applicable Buyer or such Buyer's designee, on an interest-free
basis, the funds sufficient to pay the Taxes necessary to be paid in order to
proceed with such claim for refund, and the applicable Buyer shall cause such
Taxes to be paid. Buyers agree to provide to Seller promptly, and in any event
within ten (10) Business Days, copies of any correspondence or notices received
from time to time from the IRS or any other governmental taxing authority with
respect to such claim. Any audit, claim, assessment or other dispute with
respect to Taxes for which Seller is or may be required to indemnify, in whole
or in part, under this Section 8.2 and which has commenced on or before the
Closing Date shall be deemed to be a "claim" and shall be subject to the
provisions of this Section 8.2(e). Notwithstanding the foregoing, a claim
involving an issue which recurs for any period after the Closing Date and which
does not involve a claim with respect to Taxes set forth on Schedule 2.5 (a
"Recurring Issue") shall be governed by the provisions of Section 8.2(e)(ii).
(ii) With respect to an audit or a proceeding in which there are
proposed adjustments for which both Seller and Buyers, or the Elevator
Subsidiaries, could each have some share of liability under Section 8.2 or
otherwise, or which involves a Recurring Issue: (A) each party may participate
in the claim; and (B) the claim shall be controlled by that party which would
bear the greater portion of the economic burden of the sum of the adjustment and
any corresponding adjustments that may be reasonably anticipated for future Tax
periods, provided, however, that if such latter party elects not to control the
claim, the other party shall have the option to do so. The controlling party
shall give reasonable consideration, in good faith, to the comments of the other
party concerning the conduct of the claim and neither party shall settle the
portion of such a claim for which the other party would be liable without the
consent of that other party, which consent shall not be unreasonably withheld.
(f) Provisions substantially the same as the provisions of Section
8.2(e) shall apply with respect to any Seller Indemnity Claim relating to Taxes
under Section 8.2(b).
(g) Buyers shall be liable for, shall hold Seller and the Seller
Entities harmless against, and agree to pay all sales, transfer, stamp, stock
transfer, value-added, use, real property transfer or gains and similar Taxes
that may be imposed upon, or payable or collectible or incurred in connection
with, this Agreement and the transactions contemplated
- 30 -
36
hereby, except that Seller shall be liable for, shall hold Buyers and the
Elevator Subsidiaries harmless against, and agrees to pay all such Taxes
incurred in connection with the Reorganization.
8.3 LIMITATION ON INDEMNIFICATION.
(a) Except with respect to indemnification obligations (i) relating
to income Taxes, (ii) of Buyers under Section 8.2(b)(iii), and (iii) of Seller
related to breach by Seller of representations, warranties or covenants in
Sections 2.1, 2.2, 2.6 or 4.5 (the "First-Dollar Indemnities"), which shall have
no minimum claim amount, neither party shall be entitled to include in any claim
for indemnification under Section 8.2 any Damages related to a particular claim
or group of related claims unless the aggregate amount of Damages related to
such single claim or a group of related claims exceeds $1,000,000.
(b) Except for claims for indemnification relating to First-Dollar
Indemnities, which shall have no minimum threshold, neither party shall be
entitled to make any claim against the other for indemnification under Section
8.2 unless and until the aggregate amount of claims which may be asserted
exceeds $10,000,000 (the "Threshold Amount").
(c) Except with respect to indemnification obligations relating to
First-Dollar Indemnities and without duplication of Section 8.3(b), the amount
of any indemnity payment under Section 8.2 shall be reduced by the Threshold
Amount.
(d) In calculation of the amounts to be indemnified under Section
8.2 and calculation of the limitations in Sections 8.3(a), (b) and (c), no
effect shall be given to any materiality qualifications included in the
provisions of this Agreement which give rise to such indemnification.
(e) There shall be no duplication in the treatment of amounts or
claims under Sections 8.1 and 8.2.
(f) Section 8.2 shall be the exclusive remedy of the parties with
respect to this Agreement except that, in lieu of Damages under Section 8.2,
Buyers may seek, in accordance with Section 9.1 hereof, a remedy in the nature
of injunction or specific performance for any breach by Seller of any of
Seller's obligations under Section 4.1(b), Section 4.5, Section 4.11 and Section
4.12, the remedy of which is entirely within the control of Seller and requires
no action by any person, entity or governmental agency (except for routine
filings that require no approval) other than Seller or any of its affiliates,
agents or representatives.
- 31 -
37
SECTION 9
Miscellaneous Provisions
9.1 DISPUTE RESOLUTION.
(a) Informal Proceedings. Except as otherwise provided elsewhere in
this Agreement, any controversy or claim between Seller or any affiliate of
Seller, on the one hand, and Buyers or any affiliate of Buyers, on the other
hand, arising from or in connection with this Agreement or the relationship of
the parties under this Agreement whether based on contract, tort, common law,
equity, statute, regulation, order or otherwise (a "Dispute") shall be resolved
only as follows:
(i) Upon written request of Seller or Buyers, each of the parties
will appoint a designated representative whose task it will be to meet for the
purpose of endeavoring to resolve such Dispute.
(ii) The designated representatives shall meet as often as the
parties reasonably deem necessary to discuss the problem in good faith in an
effort to resolve the Dispute without the necessity of any further proceeding.
(iii) If such designated representatives have not resolved such
Dispute within 120 days after their appointment was requested, either party may
require, by written notice to the other, that the Dispute be submitted to the
chief executive officers of Seller and Thyssen.
(iv) Following delivery of such notice, the chief executive officers
of Thyssen and Seller shall meet in person in New York, New York, and discuss
the Dispute in good faith in an effort to resolve the Dispute without the
necessity of any formal proceeding.
(v) Formal proceedings for the resolution of a Dispute may not be
commenced until the earlier of:
(A) the chief executive officers of Thyssen and Seller
concluding in good faith that amicable resolution through continued negotiation
of the matter does not appear likely; or
(B) the expiration of the sixty (60) day period immediately
following the notice requiring submission of the Dispute to the chief executive
officers; provided, however, that this Section 9.1(a) will not be construed to
prevent a party from instituting formal proceedings earlier to avoid the
expiration of any applicable limitations period, or to preserve a superior
position with respect to third parties.
- 32 -
38
(b) Arbitration.
(i) If the parties are unable to resolve any Dispute in accordance
with Section 9.1(a), such Dispute shall be submitted to mandatory and binding
arbitration at the election of either Seller or Buyers (the "Disputing Party").
Except as otherwise provided in this Section 9.1(b), the arbitration shall be
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA").
(ii) To initiate the arbitration, the Disputing Party shall notify
the other party or parties in writing (the "Arbitration Demand"), which shall
(i) describe in reasonable detail the nature of the Dispute, (ii) state the
amount of the claim, (iii) specify the requested relief and (iv) name an
arbitrator who (A) (x) for any issue other than an issue involving proper
accounting or use of accounting principles, has been licensed to practice law in
the U.S. for at least ten years, and (y) for an issue involving proper
accounting or use of accounting principles, has been licensed to practice law in
the U.S. for at least ten years and is a certified public accountant, (B) is not
then an employee of Seller or of Buyers or an employee of an affiliate of either
Seller or Buyers, and (C) is experienced in representing industrial
manufacturing corporations in connection with commercial agreements (the "Basic
Qualifications"). Within fifteen (15) days after the other party's or parties'
receipt of the Arbitration Demand, such other party or parties shall file, and
serve on the Disputing Party, a written statement (i) answering the claims set
forth in the Arbitration Demand and including any affirmative defenses of such
party; (ii) asserting any counterclaim, which shall (A) describe in reasonable
detail the nature of the Dispute relating to the counterclaim, (B) state the
amount of the counterclaim, and (C) specify the requested relief; and (iii)
naming a second arbitrator satisfying the Basic Qualifications. Promptly, but in
any event within fifteen (15) Business Days thereafter, the two arbitrators so
named will select a third neutral arbitrator from a list provided by the AAA of
potential arbitrators who satisfy the Basic Qualifications and who have no past
or present relationships with the parties or their counsel, except as otherwise
disclosed in writing to and approved by the parties. The arbitration will be
heard by the panel of the three arbitrators so chosen (the "Arbitration Panel"),
with the third arbitrator so chosen serving as the chairperson of the
Arbitration Panel. Decisions of a majority of the members of the Arbitration
Panel shall be determinative.
(iii) The arbitration hearing shall be held in New York, New York,
or in such neutral location as the parties may mutually agree. The Arbitration
Panel is specifically authorized to render partial or full summary judgment as
provided for in the Federal Rules of Civil Procedure, and must, as appropriate,
reach such judgment in accordance with the General Corporation Law of Delaware,
the laws of the State of New York and, to the extent that proper accounting
treatment or accounting principles are at issue, applicable generally accepted
accounting principles. The Federal Rules of Evidence shall apply to the
arbitration hearing. The Arbitration Panel will not have power or authority,
under the Commercial Arbitration Rules of the AAA or otherwise, to relieve the
parties from their agreement hereunder to arbitrate or otherwise to amend or
disregard any provision of this Agreement.
- 33 -
39
(iv) Within fifteen (15) days after the closing of the arbitration
hearing, the Arbitration Panel shall prepare and distribute to the parties a
writing setting forth the Arbitration Panel's finding of facts and conclusions
of law relating to the Dispute, including the reasons for the giving or denial
of any award.
(v) The Arbitration Panel is instructed to schedule promptly all
discovery and other procedural steps and otherwise to assume case management
initiative and control to effect an efficient and expeditious resolution of the
Dispute. The Arbitration Panel is authorized to issue monetary sanctions against
either party if, upon a showing of good cause, such party is unreasonably
delaying the proceeding.
(vi) Any award rendered by the Arbitration Panel will be final,
conclusive and binding upon the parties and any judgment thereon may be entered
and enforced in any court of competent jurisdiction. The Arbitration Panel shall
have no authority to award or order any remedy which could not be entered by a
court of appropriate jurisdiction sitting at law or in equity under the laws of
the State of New York or which is in contravention of this Section 9.1.
(vii) Each party will bear one-half of all fees, costs and expenses
of the arbitrators and, notwithstanding any law to the contrary, each party will
bear all the fees, costs and expenses of its own attorneys, experts and
witnesses; provided, however, that (i) to the extent that either party prevails
in its position related to a Dispute, the other party shall pay or reimburse the
prevailing party for all fees, costs and expenses the prevailing party would
otherwise have to pay with respect thereto, and (ii) in connection with any
judicial proceeding to compel arbitration pursuant to this Agreement or to
enforce any award rendered by the Arbitration Panel, the prevailing party in
such a proceeding will be entitled to recover reasonable attorneys' fees and
expenses incurred in connection with such proceeding, in addition to any other
relief to which it may be entitled.
9.2 TAX RETURNS; TAX COOPERATION.
(a) Seller shall prepare, in accordance with the past practices of
the Elevator Subsidiaries, and file all income Tax returns of the Elevator
Subsidiaries for taxable periods ending on or before the applicable Closing
Date. With respect to any Tax returns referred to in this Section 9.2(a), Buyers
shall provide relevant data in the possession of Buyers or their subsidiaries
(including the Elevator Subsidiaries) to Seller at least thirty (30) days prior
to the due date of such Tax returns (determined without taking into account any
applicable extensions). Seller shall provide copies of such Tax returns, or of
the portions of such Tax returns relating to any of the Elevator Subsidiaries,
to Buyers for comments prior to filing such Tax returns. Seller agrees to pay
all Taxes shown as due on such Tax returns (taking into account the amount of
Taxes already paid to the appropriate governmental authorities with respect to
such Tax returns on or before the applicable Closing Date by Seller, the Seller
Entities and the Elevator Subsidiaries) except to the extent the amount of such
Taxes is accrued on the audited Closing Balance Sheet, in which case Buyers will
pay
- 34 -
40
such accrued Taxes.
(b) Buyers agree to file, or cause to be filed, all Tax returns of
the Elevator Subsidiaries for periods that begin before the applicable Closing
Date and that are due after the applicable Closing Date, other than those for
which Seller is responsible under Section 9.2(a) (provided, however, that if the
applicable Closing Date occurs on or before December 31, 1998, Seller shall
prepare and file such returns, in accordance with Section 9.2(a), but the Tax
liability shall still be allocated in accordance with the provisions of Section
9.2(c)). Buyers shall provide copies of such Tax returns, or of the portions of
such Tax returns relating to any of the Elevator Subsidiaries, to Seller for
comments prior to filing such Tax returns. Buyers shall notify Seller of the
amount of the Elevator Subsidiaries' Taxes and the amount of Taxes imposed with
respect to the Elevator Business shown as due on such Tax returns and Seller's
share of such Taxes (taking into account the amount of Taxes already paid to the
appropriate governmental authorities with respect to such Tax returns on or
before the applicable Closing Date by Seller, the Seller Entities and the
Elevator Subsidiaries), and within ten (10) days thereafter (but no earlier than
five (5) days before the date such Taxes become due), Seller shall remit, or
cause to be remitted, the amount of Seller's share of such Taxes to Buyers or
Buyers' designee except to the extent that the amount of such Taxes has been
accrued on the audited Closing Balance Sheet. Buyers agree to file all such Tax
returns in accordance with the past practices of the Elevator Subsidiaries.
Without the prior written consent of Seller, Buyers shall refrain, and shall
cause each of their subsidiaries (including the Elevator Subsidiaries) to
refrain (i) from making, filing or amending any Tax return subject to the
provisions of Section 9.2(a), and (ii) from treating any material item on such
Tax return in a manner that would bind Seller or its subsidiaries, or that would
materially affect the Tax liability of Seller or its subsidiaries, or any Tax
liability for which Seller is, or may be, required to indemnify pursuant to
Section 8.2 hereof.
(c) For purposes of Section 8.2 and this Section 9.2, in the case of
any Taxes that are imposed on a periodic basis and are payable for a taxable
period that includes, but does not end on, the applicable Closing Date, the
portion of such Taxes which relates to the portion of such taxable period ending
on the applicable Closing Date shall (x) in the case of any Taxes other than
Taxes based upon or related to income or receipts, be deemed to be the amount of
such Tax for the entire taxable period multiplied by a fraction, the numerator
of which is the number of days in the taxable period ending on the applicable
Closing Date and the denominator of which is the number of days in the entire
taxable period, and (y) in the case of any Tax based upon or related to income
or receipts, be deemed equal to the amount which would be payable if the
relevant taxable period ended on the applicable Closing Date.
(d) Buyers and Seller agree to cooperate in all reasonable respects
with respect to Tax matters contemplated by this Agreement, which cooperation
shall include executing and filing such Tax returns, waivers, consents, forms,
court petitions, refund claims (including filing refund claims as may be
directed by another party hereto),
- 35 -
41
complaints, powers of attorney and other documents needed from time to time in
connection with such Tax matters. Buyers agree to furnish timely, and to cause
each of their subsidiaries (including the Elevator Subsidiaries) to so furnish,
Seller with any and all information reasonably requested by Seller in order to
carry out the provisions of this Agreement. Seller agrees to furnish timely, and
to cause each of its subsidiaries to so furnish, Buyers with any and all
information reasonably requested by Buyers in order to carry out the provisions
of this Agreement.
9.3 AMENDMENT. This Agreement may not be amended except by a written
instrument signed by each of the parties hereto.
9.4 WAIVER OF COMPLIANCE. Except as otherwise provided in this Agreement,
any failure of any of the parties to comply with any obligation, covenant or
agreement contained herein may be waived only by a written notice from the party
entitled to the benefits thereof. No failure by any party hereto to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or future exercise of that right by that party.
9.5 NOTICES. All notices and other communications hereunder shall be
deemed given if given in writing and delivered personally, by courier or by
facsimile transmission, telexed or mailed by registered or certified mail
(return receipt requested), facsimile, telex or postage fees prepaid, to the
party to receive the same at its respective address set forth below (or at such
other address as may from time to time be designated by such party to the others
in accordance with this Section 9.5):
(a) If to Seller:
Dover Corporation
280 Park Avenue
New York, New York 10017-1292
Attention: Corporate Secretary
Telephone: (212) 922-1640
Facsimile: (212) 922-1656
With a copy to:
Coudert Brothers
1114 Avenue of the Americas
New York, New York 10036
Attention: Joseph W. Schmidt, Esq
Telephone: (212) 626-4400
Facsimile: (212) 626-4120
(b) If to Buyers (or either of them):
- 36 -
42
Thyssen Industrie AG
Am Thyssenhaus 1
D-45128 Essen
Germany
Attention: Gary Elliott
Telephone: 011-49-201-106-3060
Facsimile: 011-49-201-106-3065
Thyssen Elevator Holding Corporation
3155 West Big Beaver Rd.
Troy, Michigan 48084
Attention: Nancy Hutcheson
Telephone: (248) 643-3511
Facsimile: (243) 648-3636
With a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Bonnie Greaves, Esq.
Telephone: (212) 848-7670
Facsimile: (212) 848-7179
All such notices and communications hereunder shall be deemed given when
received, as evidenced by the signed acknowledgment of receipt of the person to
whom such notice or communication shall have been personally delivered,
confirmed answer back or other evidence of transmission or the acknowledgment of
receipt returned to the sender by the applicable postal authorities.
9.6 ASSIGNMENT. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any rights, duties
or obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other party and any attempted assignment or transfer
without such prior written consent shall be null and void.
9.7 NO THIRD PARTY BENEFICIARIES. Except as expressly provided in Section
8.2, neither this Agreement or any provision hereof, nor any Schedule,
certificate or other instrument delivered pursuant hereto, nor any agreement to
be entered into pursuant hereto or any provision hereof, is intended to create
any right, claim or remedy in favor of any person or entity, other than the
parties hereto and their respective successors and permitted assigns.
- 37 -
43
9.8 EXPENSES. Except as otherwise expressly provided in this Agreement,
each party shall pay its own expenses in connection with this Agreement, the
agreements to be entered into pursuant hereto and the transactions contemplated
hereby; provided, Buyers shall pay Seller at the First Tranche Closing
$60,000,000 to cover certain of Seller's expenses in accordance with Section
1.2.
9.9 PUBLIC ANNOUNCEMENTS. Buyers and Seller will consult with each other
before issuing, and provide each other with a reasonable opportunity to review
and approve, any press release or other public statement with respect to this
Agreement or the transactions contemplated hereby. Buyers shall not issue, or
permit any of their subsidiaries or controlled affiliates to issue, any such
press release or make any such public statement prior to such consultation and
obtaining Seller's approval (such approval not to be unreasonably withheld),
unless such press release or public statement is required by applicable law, in
which case Buyers will use reasonable efforts to obtain and incorporate Seller's
comments before issuance of such release or statement.
9.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.11 HEADINGS. The section headings contained in this Agreement are solely
for convenience of reference, are not part of the agreement of the parties,
shall not be used in construing this Agreement and shall not in any way affect
the meaning or interpretation of this Agreement.
9.12 FURTHER ACTION. Each Buyer and Seller agrees to execute and deliver,
and to cause its affiliates to execute and deliver, such other documents,
certificates, agreements and other writings and to take such other actions as
may be necessary or desirable and requested by the other in order to consummate
or implement expeditiously the transactions contemplated by this Agreement, to
sell, convey, transfer and assign to Buyers, or to perfect or record Buyers'
interest in or title to, or to enable Buyers to have full ownership, control and
use of, the Elevator Business, the Elevator Subsidiaries and the Elevator
Assets, and to convey, transfer and assign to Seller, or to perfect or record
Seller's interest in or title to, or to enable Seller to have full ownership,
control and use of, the non-Elevator Assets.
9.13 ENTIRE AGREEMENT; SEVERABILITY. This Agreement, and the Schedules,
certificates and other instruments and documents delivered pursuant hereto,
together with the other agreements referred to herein and to be entered into
pursuant hereto, embody the entire agreement of the parties hereto in respect
of, and there are no other agreements or understandings, written or oral, among
the parties relating to, the subject matter hereof. This Agreement supersedes
all prior agreements and understandings, written and oral, between the parties
with respect to the subject matter hereof. The invalidity, illegality or
unenforceability for any reason of any one or more provisions of this Agreement
shall not affect the validity, legality or enforceability of the remainder of
this Agreement.
- 38 -
44
9.14 BUYERS' OBLIGATIONS, ETC. Each Buyer shall be jointly and severally
liable for all obligations of Buyers under this Agreement. Any action by, to or
with respect to any Buyer (such as notice, consent, etc.) will be deemed to have
occurred with respect to both Buyers, provided that Seller shall nevertheless
send notices to both Buyers.
9.15 GOVERNING LAW. This Agreement, and the respective rights, duties and
obligations of the parties hereunder, shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
- 39 -
45
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
THYSSEN INDUSTRIE AG
By: /s/ Eckhard Rohkamm
-----------------------------------------
Name: Prof. Dr. Eckhard Rohkamm
Title: Chairman of the Executive Board
By: /s/ Ulrich Ziolkowski
-----------------------------------------
Name: Ulrich Ziolkowski
Title: Member of the Executive Board
THYSSEN ELEVATOR HOLDING
CORPORATION
By: /s/ Gary Elliott
-----------------------------------------
Name: Gary Elliott
Title: Chairman of the Board
By: /s/ John Brant
-----------------------------------------
Name: John Brant
Title: President
DOVER CORPORATION
By: /s/ Thomas L. Reece
-----------------------------------------
Name: Thomas L. Reece
Title: President and Chief
Executive Officer
- 40 -
46
EXHIBIT I
DEFINED TERMS
"AAA" has the meaning assigned to such term in Section 9.1(b)(i).
"Antitrust Laws" has the meaning assigned to such term in Section
4.3(c).
"Arbitration Demand" has the meaning assigned to such term in Section
9.1(b)(ii).
"Arbitration Panel" has the meaning assigned to such term in Section
9.1(b)(ii).
"Balance Sheet Preparation Method" has the meaning assigned to such
term in Section 8.1(a)(i).
"Basic Qualifications" has the meaning assigned to such term in Section
9.1(b)(ii).
"Benefit Plans" has the meaning assigned to such term in Section
4.7(a).
"Benefits Continuation Period" has the meaning assigned to such term in
Section 4.7(b).
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in the City of
New York or in Germany.
"Buyer" and "Buyers" have the meanings assigned to such terms in the
first paragraph of this Agreement.
"Buyer Entities" means Elevator Holding and NEL.
"Buyer Indemnity Claim" has the meaning assigned to such term in
Section 8.2(c).
"Buyers' Accountants" mean KPMG Peat Marwick LLP.
"Canada Newco" has the meaning assigned to such term in Section 1.1(b).
"Canadian Entities" has the meaning assigned to such term in Section
4.7(d).
"Canadian Pension Plan" has the meaning assigned to such term in
Section 4.7(d).
"claim" has the meaning assigned to such term in Section 8.2(e)(i).
"Closing Balance Sheet" has the meaning assigned to such term in
Section 8.1(a)(i).
"Closing Date" has the meaning assigned to such term in Section 1.3.
EI-1
47
"Code" has the meaning assigned to such term in Section 1.4(a)(i)(D).
"Confidential Information" has the meaning assigned to such term in
Section 4.2.
"Damages" has the meaning assigned to such term in Section 8.2(b).
"DCF" has the meaning assigned to such term in the fourth recital.
"DCH" has the meaning assigned to such term in Section 1.1(a)(i).
"Dispute" has the meaning assigned to such term in Section 9.1(a).
"Disputing Party" has the meaning assigned to such term in Section
9.1(b)(i).
"DOJ" has the meaning assigned to such term in Section 4.3(a).
"Dover Canada" has the meaning assigned to such term in Section 1.1(b).
"Due to (from) Amount" has the meaning assigned to such term in Section
8.1(a)(i).
"Elevator Assets" means all assets, properties, goodwill and business
of every kind and description and wherever located, whether tangible or
intangible, real, personal or mixed, directly or indirectly owned and belonging
to or used or intended to be used in the Elevator Business including, without
limitation, Intellectual Property, maintenance agreements and other contracts,
but not including Licensed IP.
"Elevator Balance Sheet" has the meaning assigned to such term in
Section 2.8.
"Elevator Business" has the meaning assigned to such term in the first
recital.
"Elevator Financial Statements" has the meaning assigned to such term
in Section 2.8.
"Elevator Holding" has the meaning assigned to such term in the first
paragraph of this Agreement.
"Elevator Hourly Pension Plan" has the meaning assigned to such term in
Section 4.7(c).
"Elevator Pension Participants" has the meaning assigned to such term
in Section 4.7(c).
"Elevator Pension Plans" has the meaning assigned to such term in
Section 4.7(c).
"Elevator Salaried Pension Plan" has the meaning assigned to such term
in Section 4.7(c).
EI-2
48
"Elevator Subsidiaries" has the meaning assigned to such term in the
first recital.
"Encumbrance" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement or restriction of any kind,
including, without limitation, any restriction on the use, voting, transfer
(other than as imposed by applicable securities laws), receipt of income or
other exercise of any attributes of ownership.
"Equity Buyers" means (i) Elevator Holding and (ii) NEL.
"Equity Sellers" means the following direct or indirect subsidiaries of
Seller: (i) DCH, (ii) Revod, and (iii) Dover Canada.
"ERISA" has the meaning assigned to such term in Section 4.7(a).
"First-Dollar Indemnities" has the meaning assigned to such term in
Section 8.3(a).
"First Tranche" means the transactions contemplated by Section 1.1(a).
"First Tranche Amount" has the meaning assigned to such term in Section
1.2.
"First Tranche Closing" has the meaning assigned to such term in
Section 1.3.
"First Tranche Closing Date" has the meaning assigned to such term in
Section 1.3.
"Form 10" has the meaning assigned to such term in Section 2.7.
"FTC" has the meaning assigned to such term in Section 4.3(a).
"HSR Act" has the meaning assigned to such term in Section 4.3(a).
"HSR Notice" has the meaning assigned to such term in Section 6.4(a).
"income Taxes" has the meaning assigned to such term in Section 8.2(c).
"Indemnified Party" has the meaning assigned to such term in Section
8.2(d).
"Indemnifying Party" has the meaning assigned to such term in Section
8.2(d).
"Independent Accounting Firm" has the meaning assigned to such term in
Section 8.1(c)(ii).
"Intellectual Property" means (i) United States, international and
foreign patents, patent applications and statutory invention registrations, (ii)
trademarks and service marks, including
EI-3
49
the goodwill associated therewith, (iii) copyrights, (iv) confidential and
proprietary information, including trade secrets and know-how, and (v) licenses
in connection with any of the foregoing.
"IP License Agreement" has the meaning assigned to such term in Section
1.1.
"IP Transfer Agreements" has the meaning assigned to such term in
Section 1.1(a)(ii).
"IRS" has the meaning assigned to such term in Section 4.7(a)
"Liabilities" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including without limitation any liability relating to environmental laws,
product liability or employment benefits.
"LIBOR" means an interest rate per annum equal to the average of the
three month British Bankers Association London Interbank Offered Rate for United
States dollars that appears on page 3750 (or a successor page) of the Dow Jones
Telerate Screen as of 11:00 (London time) on each day during the period for
which interest is owed.
"Licensed IP" means certain Intellectual Property described in and
governed solely by the terms of the IP License Agreement.
"Material Adverse Effect" means any event, occurrence, circumstance,
change or effect or series thereof that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the financial
condition or results of operations of the Elevator Business, taken as a whole;
provided, however, that for purposes of Section 5 only, Material Adverse Effect
shall mean any event, occurrence, circumstance, change or effect, or series
thereof, that could reasonably be expected to give rise to Damages of at least
$10,000,000 individually or at least $55,000,000 in the aggregate.
"NEL" has the meaning assigned to such term in the second recital.
"non-Elevator Assets" means all assets and related Liabilities of the
Elevator Subsidiaries not used in or relating to the Elevator Business.
"Note" has the meaning assigned to such term in Section 1.2.
"Parent" has the meaning assigned to such term in the second recital.
"PBGC" has the meaning assigned to such term in Section 4.7(c).
"Post-Closing Employees" has the meaning assigned to such term in
Section 4.7(b).
"Purchase Price" has the meaning assigned to such term in Section 1.2.
EI-4
50
"Recurring Issue" has the meaning assigned to such term in Section
8.2(e)(i).
"Related Agreements" has the meaning assigned to such term in Section
1.4(a)(i)(B).
"Reorganization" has the meaning assigned to such term in Section
4.5(a).
"Restricted Period" has the meaning assigned to such term in Section
4.12(a).
"Revod" has the meaning assigned to such term in Section 1.1(a)(i).
"Second Tranche" means the transactions contemplated by Section 1.1(b).
"Second Tranche Amount" has the meaning assigned to such term in
Section 1.2.
"Second Tranche Closing" has the meaning assigned to such term in
Section 1.3.
"Second Tranche Closing Date" has the meaning assigned to such term in
Section 1.3.
"Section 338(h)(10) Election" has the meaning assigned to such term in
Section 4.6(a).
"Seller" has the meaning assigned to such term in the first paragraph
of this Agreement.
"Seller Company" means, collectively, Seller, each of the Seller
Entities and the Elevator Subsidiaries.
"Seller Entities" means DCF, DCH Dover Canada and Revod.
"Seller Hourly Pension Plan" has the meaning assigned to such term in
Section 4.7(c).
"Seller Indemnity Claim" has the meaning assigned to such term in
Section 8.2(b).
"Seller Pension Plans" has the meaning assigned to such term in Section
4.7(c).
"Seller Salaried Pension Plan" has the meaning assigned to such term in
Section 4.7(c).
"Seller's Accountants" means PricewaterhouseCoopers LLP.
"Spin-off Documents" means (i) those agreements of any Seller Company
contemplated in connection with the Form 10, including, without limitation, the
"Rights Agreement", "Tax Sharing Agreement", "Distribution and Indemnity
Agreement", "Employee Matters Agreement", "Insurance Arrangements Agreement",
"Intellectual Property Agreement", "Dover Elevators, Inc. Salaried Pension
Plan", "1998 Dover Elevators, Inc. Performance Program", "1998 Dover Elevators,
Inc. Incentive Stock Option Plan", "Dover Elevators, Inc. Retirement Savings
Plan, any unfunded supplemental executive retirement plans or similar unfunded
retirement programs
EI-5
51
or any agreements with officers containing change of control provisions
referenced therein; and (ii) any antitakeover or other provisions described in
the Form 10 for inclusion in the Certificate of Incorporation and Bylaws of
Dover Elevators, Inc.
"Tax" or "Taxes" shall mean and include any and all foreign, national,
Federal, provincial, state, local or other income, franchise, sales, gross
receipts, use, value added, goods and services, withholding, employment,
payroll, social security, unemployment, real and personal property taxes or
other taxes, stamp duties, customs duties, deficiencies, fees, assessments, or
other governmental charges, from time to time imposed by or required to be paid
to any governmental authority (including penalties, additions to tax, and
interest on any of the foregoing).
"Territory" has the meaning assigned to such term in Section 4.12(a).
"Third Party Claim" has the meaning assigned to such term in Section
8.2(d).
"Threshold Amount" has the meaning assigned to such term in Section
8.3(b).
"Thyssen" has the meaning assigned to such term in the first paragraph
of this Agreement.
"Transfer Amount" has the meaning assigned to such term in Section
4.7(c).
"Transferred Equity" means all of the outstanding shares of capital
stock of the Elevator Subsidiaries which are corporations and all of the
ownership interests in the Elevator Subsidiaries which are joint ventures.
"U.S. GAAP" has the meaning assigned to such term in Section 2.8.
EI-6
52
Exhibit II: Elevator Subsidiaries
Corporation
(C), Division
Jurisdiction of Ownership (D) or Joint
Elevator Subsidiaries+ Incorporation Percentage Venture (JV)
- ------------------------------------------------------------- ------------------ ---------- -------------
1. Elevator Subsidiaries of Dover Corporation (Canada)
Holdings Limited(1)
a. Dover Corporation (Canada) Limited(2) Canada 100% C
------------------ ---------- -------------
i. Turnbull Elevator Division Division 100% D
------------------ ---------- -------------
ii. Van Isle Elevator (1982) Ltd. Canada (BC) 100% C
------------------ ---------- -------------
iii. Van Isle Elevator Ltd. Canada (BC) 100% C
------------------ ---------- -------------
iv. Elmac Elevator Service & Installation Ltd. Canada (BC) 100% C
------------------ ---------- -------------
v. Ascenseur Modern Maintenance Service Canada 100% C
(Quebec)
------------------ ---------- -------------
vi. Dover Stahl Heiser Canada 100% C
------------------ ---------- -------------
vii. Elevator and Electric Service Ltd. Canada 100% C
(Saskatchewan)
------------------ ---------- -------------
viii. Ascenseur Dover Ltd. Canada 100% C
(Quebec)
------------------ ---------- -------------
ix. Arctic Elevator, Inc. Hong Kong 100% C
------------------ ---------- -------------
x. Dover Elevator Far East (1996) Limited China 80% JV
------------------ ---------- -------------
xi. Dover Elevator Canada Ltd. Canada 100% C
------------------ ---------- -------------
(1) Dover Elevator (Far East) Limited Hong Kong 51% JV
------------------ ---------- -------------
(a) Hainan Dover Elevator (Far East) 100% C
Service Ltd. China
------------------ ---------- -------------
(b) Dover Elevator (Shanghai) Co. Ltd. China 100% C
------------------ ---------- -------------
xii. Rocon Elevator, Inc. Canada 100% C
(Quebec)
------------------ ---------- -------------
xiii. Turnbull Elevator Company Ltd. (HK) Canada 100% C
(Ontario)
------------------ ---------- -------------
- -----------------------
(1) Currently named Dover Corporation (Canada) Limited which name will be
changed before the Second Tranche Closing as part of the
Reorganization.
(2) A new corporation to be formed before the Second Tranche Closing.
Referred to herein as Canada Newco.
+ Indentation connotes direct ownership by the preceding entity one step
less-indented.
EII-1
53
Corporation
(C), Division
Jurisdiction of Ownership (D) or Joint
Elevator Subsidiaries+ Incorporation Percentage Venture (JV)
- ------------------------------------------------------------- ------------------ ---------- -------------
2. Elevator Subsidiaries of Delaware Capital Holdings, Inc.
a. General Elevator Company, Incorporated Maryland 100% C
------------------ ---------- -------------
i. General Elevator Company (Ontario) Inc. Canada 100% C
------------------ ---------- -------------
b. East Coast Elevator Service, Inc. Florida 100% C
------------------ ---------- -------------
c. Dover Elevator International, Inc. Delaware 100% C
------------------ ---------- -------------
i. Dover Elevator Systems, Inc. Delaware 100% C
------------------ ---------- -------------
(1) Hawaiian Pacific Elevator Company Delaware 100% C
------------------ ---------- -------------
(2) Dover Accessibility Products, Inc. Delaware 100% C
------------------ ---------- -------------
(3) Component Sales Group, Inc. Delaware 100% C
------------------ ---------- -------------
ii. Dover Elevator Company Delaware 100% C
------------------ ---------- -------------
(1) Midstate Elevator Company, Inc. Delaware 100% C
------------------ ---------- -------------
iii. Sound Elevator Co. Delaware 100% C
------------------ ---------- -------------
(1) Alaska Pacific Elevator, Inc. Washington 100% C
------------------ ---------- -------------
iv. Dover Elevator Asia Pacific Co., Ltd. 100% C
Thailand Thailand
------------------ ---------- -------------
(1) Dover Elevator (Malaysia) SDN Malaysia 100% C
BHD
------------------ ---------- -------------
(2) Dover Engineering SDN BHD Malaysia 100% C
------------------ ---------- -------------
v. Lagerquist Corporation Delaware 100% C
------------------ ---------- -------------
vi. Arizona Elevator, Inc. Delaware 100% C
------------------ ---------- -------------
vii. Security Elevator Company, Inc. Delaware 100% C
------------------ ---------- -------------
viii. Shanghai Dover Elevator Manufacturing 100% JV
Co., Ltd. China
------------------ ---------- -------------
ix. Miami Elevator Company Delaware 100% C
------------------ ---------- -------------
(1) Eastern Elevator Service Corp. Delaware 100% C
------------------ ---------- -------------
x. Dover Caribbean Inc. Delaware 100% C
------------------ ---------- -------------
(1) Dover Elevator of Puerto Rico, Inc. Puerto Rico 100% C
------------------ ---------- -------------
3. Elevator Subsidiaries of Revod Corporation
a. Empire Elevator Corporation Delaware 100% C
------------------ ---------- -------------
b. Hudson Elevator Corp. Delaware 100% C
------------------ ---------- -------------
+ Indentation connotes direct ownership by the preceding entity one step
less-indented.
EII-2
54
Corporation
(C), Division
Jurisdiction of Ownership (D) or Joint
Elevator Subsidiaries+ Incorporation Percentage Venture (JV)
- ------------------------------------------------------------- ------------------ ---------- -------------
c. Dover Australian Elevator Company Pty. Australia 80% C
Limited
+ Indentation connotes direct ownership by the preceding entity one step
less-indented.
EII-3
55
Exhibit A: IP License Agreement
56
INTELLECTUAL PROPERTY LICENSE AGREEMENT
THIS AGREEMENT is entered into this ___ day of ___________, 1998, by
and among DELAWARE CAPITAL FORMATION, INC., a Delaware corporation ("LICENSOR"),
and Thyssen Elevator Holding Corporation, a Delaware corporation and Thyssen
Industrie AG, a German corporation (each a "Licensee" and collectively,
"LICENSEES").
WITNESSETH:
WHEREAS, pursuant to the Purchase Agreement dated as of ______,__ 1998
(the "PURCHASE AGREEMENT") between Dover Corporation and Licensees, Licensees
have simultaneously herewith purchased and acquired the Elevator Business (as
defined in the Purchase Agreement) from Dover Corporation, the parent company of
Licensor;
WHEREAS, in connection with such transaction, Licensees desire to
acquire from Licensor a license under the Licensed Patents (as defined herein),
to conduct the Elevator Business, and Licensor is willing to grant such a
license under the terms and conditions set forth herein; and
WHEREAS, Licensor is the holder of rights in and to certain trademarks
and logos throughout the world including or comprising the word DOVER and, as
contemplated by the Purchase Agreement, Licensor desires to grant to Licensees,
and Licensees desire to obtain a license to use the trademark and trade name
DOVER solely on Elevator Products during the Transition Period (as such terms
are hereinafter defined), subject to the other limitations provided herein.
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Purchase Agreement.
1.2 "AFFILIATE" shall mean, with respect to each party, any person,
corporation or other legal entity that directly or indirectly controls, is
controlled by, or is under common control with, the party, but only for so long
as said control continues. For purposes of this Agreement, "CONTROL" means the
power to direct the management and affairs of another corporation or legal
entity, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. In the case of a corporation, the direct
or indirect ownership of fifty percent (50%) or more of its outstanding voting
shares shall in any case be
57
deemed to confer control, provided that the direct or indirect ownership of a
lower percentage of such securities shall not necessarily preclude the existence
of control.
1.3 "ELEVATOR PRODUCTS" shall mean the products, services and
activities of the Elevator Business as conducted on the date hereof and any
modifications, improvements or other variations or derivations of such products
or services made during the term of this Agreement in the ordinary course of
conduct of the Elevator Business within the Licensed Field.
1.4 "ENHANCEMENTS" shall mean findings, improvements, discoveries,
inventions, additions, modifications, formulations, derivative works, or changes
(whether or not patented or patentable) with respect to the Licensed Patents
developed after the Closing Date.
1.5 "LICENSED FIELD" shall mean the field in which the Elevator
Business is presently conducted.
1.6 "LICENSED MARKS" shall mean the DOVER trademarks as set forth in
Exhibit B annexed hereto.
1.7 "LICENSED PATENTS" shall mean all patents and patent applications
listed on Exhibit A annexed hereto, and any extension, reissue, continuation,
divisional, reexamination or renewal thereof.
1.8 "PERMITTED PATENT SUBLICENSEE" means any individual, corporation,
partnership, limited liability company, trust, association, joint stock company
or other legal entity providing products or services to or on behalf of
Licensees in connection with the conduct of the Elevator Business within the
Licensed Field.
1.9 "PERMITTED TRADEMARK SUBLICENSEE" means any Elevator Subsidiary and
any Affiliate thereof succeeding to substantially all the assets of such
subsidiary.
1.10 "TRADEMARK TERRITORY" means every country in which the Elevator
Business is conducted on the date hereof, including, but not limited to, the
United States, Canada and any and all countries listed on Exhibit C annexed
hereto.
1.11 "TRANSITION PERIOD" means the period extending from the date
hereof for a period of three years and six months.
-2-
58
ARTICLE II
GRANT OF PATENT LICENSE
2.1 PATENT LICENSE. Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensees, and Licensees accept, an
exclusive, paid-up, irrevocable, world-wide license of any and all rights of
Licensor under the Licensed Patents to make, have made, use, import, offer to
sell and sell products and provide services in the Licensed Field. The patent
license set forth herein supercedes any patent license agreement related to the
Licensed Patents which may already be in effect between Licensor and any
Elevator Subsidiary. Licensor and Licensees (on behalf of any and all Permitted
Patent Sublicensees) acknowledge and agree that any such previously executed
patent license agreements are terminated effective as of the date hereof.
2.2 RIGHT TO SUBLICENSE. Subject to the terms of this Agreement,
Licensees shall be entitled to grant sublicenses of their rights under this
Article II to Permitted Patent Sublicensees, provided that any said sublicensees
agree in writing to be bound by the terms and conditions of this Agreement.
2.3 ENHANCEMENTS. The entire right and title in any and all
Enhancements to the Licensed Patents developed by Licensees or a Permitted
Patent Sublicensee, whether or not patentable, shall be owned solely by
Licensees or said sublicensee.
ARTICLE III
INFRINGEMENT AND MAINTENANCE
3.1 PATENT INFRINGEMENT. Each party will promptly notify the other
party in writing if it knows or has reason to know that the Licensed Patents are
being infringed in the Licensed Field by a third party. If such alleged
infringement has or is occurring outside the Licensed Field then Licensees shall
have no enforcement rights. If such alleged infringement has occurred or is
occurring within the Licensed Field, then within thirty days of such notice
Licensees will either (i) elect to prosecute such alleged infringement, or (ii)
decline to prosecute such alleged infringement. In the event that Licensees
elect to prosecute an infringement, Licensees will have the exclusive right to
prosecute the infringement and to bring action under their direction and
control. Licensor shall reasonably assist Licensees in such action if so
requested at Licensees' expense, and shall lend its name to such action if
requested by Licensees or required by law. Licensees agree to consult with
Licensor in connection with any settlement that could adversely affect the scope
or enforceability of the Licensed Patents, and further agree to cooperate in
good faith with Licensor to avoid or minimize any such effect. All costs and
expenses incurred in an action brought by Licensees shall be borne by Licensees,
and all recoveries in such an action shall be for the benefit of Licensees. In
the event that Licensees elect not to prosecute an infringement in the Licensed
Field, or in the event of an infringement outside the Licensed
-3-
59
Field, Licensor will have the exclusive right to prosecute the infringement, and
Licensees shall expressly consent thereto. Licensor shall bear all costs and
expenses incurred in connection with such prosecution and shall be entitled to
all recoveries in such action.
3.2 MAINTENANCE OF LICENSED PATENTS. Licensor may discontinue
prosecution or maintenance, abandon or dedicate to the public any of the
Licensed Patents in its sole discretion, provided, however, that Licensor shall
provide Licensees with at least 90 days notice prior to abandonment or other
dedication to the public of any Licensed Patents. Upon such notice, Licensees
shall have 60 days to notify Licensor, in their sole discretion, that such
Licensed Patents should not be abandoned or otherwise dedicated to the public.
In such event, Licensees shall be responsible for payment of any costs of
maintaining such Licensed Patents or controlling prosecution at their expense of
any applications in such Licensed Patents, and Licensor agrees fully to
cooperate with Licensees in connection with Licensees' assuming the
responsibility and expense of such maintenance and prosecution activities.
ARTICLE IV
LIMITED TRADEMARK LICENSE
4.1 GRANT. Subject to the terms of this Agreement, Licensor grants to
Licensees a royalty-free, non-transferable, exclusive license, during the
Transition Period, of any and all of Licensor's rights to use the Licensed Marks
on or in connection with Elevator Products advertised, marketed, sold performed,
or otherwise promoted by Licensees and their Permitted Trademark Sublicensees in
the Trademark Territory in the ordinary course of the Elevator Business. The
trademark license rights granted to Licensees by this Agreement do not include
the right to sublicense to any party other than a Permitted Trademark
Sublicensee. All Permitted Trademark Sublicensees shall agree in writing to be
bound by the terms of this Agreement. Licensees agree that, at the end of the
Transition Period, all uses of the Licensed Marks by Licensees and their
Permitted Trademark Sublicensees shall immediately cease, provided that nothing
herein shall require Licensees to novate or modify any contract, filing or other
document existing as of the date hereof and prior to its termination or
expiration in the ordinary course. Nothing herein shall restrict Licensor's and
its Affiliates' and licensees' rights to use the Licensed Marks outside the
Licensed Field. Licensees agree not to sell directly or indirectly or permit the
sale directly or indirectly of Elevator Products bearing the Licensed Marks in
any country outside the Trademark Territory. The trademark license set forth
herein supercedes any trademark license agreement related to Licensed Marks
which may already be in effect between Licensor and any Permitted Trademark
Sublicensees. Licensor and Licensees (on behalf of any and all Permitted
Trademark Sublicensees) hereby acknowledge and agree that any such previously
executed trademark license agreements (including registered user agreements) are
terminated effective as of the date hereof.
4.2 TERMINATION OF TRADEMARK LICENSE. Notwithstanding the provisions of
Section 4.1 and 7.2 hereof, the limited trademark license granted hereunder
shall terminate promptly
-4-
60
upon notice by Licensor to Licensees in the event of a material breach by
Licensees or any of their Permitted Trademark Sublicensees of any material
provision herein relating to the Licensed Marks which is not cured within 30
days after written notice by Licensor to Licensees thereof.
4.3 MAINTENANCE OF HIGH QUALITY AND STANDARDS. The parties acknowledge
and agree that great value is placed on the Licensed Marks and the goodwill
associated therewith, that the consuming public and the industry now associate
the Licensed Marks with products of consistently high quality, and that the
terms and conditions of this Agreement are necessary and reasonable to assure
the consuming public and the industry that all Elevator Products bearing the
Licensed Marks are of the same consistently high quality. Accordingly Licensees
agree that the quality and standards of the Elevator Products bearing the
Licensed Marks shall be at least equal to the standards prevailing in the
operation of the Elevator Business immediately prior to the Closing in order to
safeguard the established prestige and goodwill of the Licensed Marks. During
the Transition Period, if any Elevator Products fail substantially to conform to
the aforementioned quality standards, Licensees shall have 60 days from and
after notification by Licensor to Licensees to cure such failure, after which
Licensees shall cause the sale, shipment and distribution of any such
substantially non-conforming Elevator Products to cease.
4.4 INSPECTION AND NOTIFICATION. Throughout the Transition Period,
Licensees shall, at the request of Licensor but no more than once per calendar
year, notify Licensor in writing of the locations of all facilities in which the
Licensees or their Permitted Trademark Sublicensees are manufacturing or
distributing Elevator Products for sale in the Trademark Territory. Licensor and
its representatives may from time to time, during all reasonable business hours
and with prior reasonable notice to Licensees, inspect the operations and
facilities of Licensees and their Permitted Trademark Sublicensees with respect
to performance under this Agreement. Licensees, at the request of Licensor, will
provide to Licensor access for inspection purposes to any advertising,
promotional, display or similar materials or other items bearing or using the
Licensed Marks.
4.5 APPROVAL. Licensees shall submit to Licensor any trademark, service
mark, logo or name which is to be used in combination with the Licensed Marks.
Licensor shall have the right, in its sole reasonable discretion, to refuse to
permit the use of any such trademarks, service marks, logos or names which would
adversely affect the prestige and goodwill associated with the Licensed Marks
and/or Licensor, provided, however, that Licensor consents to the use of the
Licensed Marks in combination with the mark "THYSSEN." Licensor shall approve or
disapprove of the use of a mark in combination with a Licensed Mark within
fifteen (15) days of receiving a written request from a Licensee for the use of
such combination.
4.6 LICENSEES' OBLIGATIONS AS TO THE LICENSED MARKS. Licensees agree
that neither they nor any Permitted Trademark Sublicensee will seek or obtain
any registration of the Licensed Marks without Licensor's prior written
permission. Subject solely to the rights and interest granted herein, Licensees
further agree and acknowledge that if they or any Permitted Trademark
Sublicensees has obtained or obtains in the future, in the Trademark Territory,
any right, title or interest in the Licensed Marks, or in any marks which are
confusingly similar to
-5-
61
the Licensed Marks, that Licensees have acted or will act as an agent and for
the benefit of Licensor for the limited purpose of obtaining such registrations
in the name and on behalf of Licensor. Licensees further agree to execute and
cause their Permitted Trademark Sublicensees to execute any and all instruments
deemed by Licensor and/or its attorneys or representatives to be necessary to
transfer such right, title or interest to Licensor.
4.7 THIRD PARTY CONFLICTS. Notwithstanding Section 4.1 hereof, neither
Licensees nor any Permitted Trademark Sublicensee shall have the right to use
the Licensed Marks in the Trademark Territory in any manner that conflicts with
the rights of any third party. If the use of the Licensed Marks by Licensees or
any Permitted Trademark Sublicensee conflicts with the rights of any third
party, or if a third party makes a bona fide claim alleging such a conflict,
Licensees agree to cooperate in good faith with Licensor in jointly contesting
or, within a reasonable period of time, modifying or withdrawing such use to
avoid or minimize liability.
4.8 CORPORATE NAMES. Licensees shall cause all corporate names of
Elevator Subsidiaries that contain a Licensed Mark to be changed to names not
containing the Licensed Mark within 90 days from and after the date hereof. On
or by such date Licensees shall deliver to Licensor a certificate of a corporate
officer of a Licensee certifying the occurrence of such name changes and
attaching evidence reasonably satisfactory to Licensor of such name changes.
Notwithstanding the foregoing, Permitted Trademark Sublicensees may continue to
use the Licensed Marks in trade names throughout the Transition Period, and
nothing herein shall require Licensees to novate or modify any contract, filing
or other document existing as of the date hereof and prior to its termination or
expiration in the ordinary course.
ARTICLE V
COVENANTS AND OTHER GENERAL PROVISIONS
5.1 NO REPRESENTATIONS AND WARRANTIES. Nothing contained in this
Agreement shall be construed as (a) a representation or warranty by Licensor as
to the scope, validity or enforceability of any Licensed Patents or Licensed
Marks, or (b) as a representation or warranty that anything made, used, sold or
otherwise disposed of under any license granted hereunder is or will be free
from infringement of rights of third parties, or (c) an obligation to bring or
prosecute actions or suits against third parties for infringement.
5.2 NO RIGHT TO CHALLENGE. Licensees agree that neither they nor any
Permitted Patent Sublicensee or Permitted Trademark Sublicensee will take any
action to attack the title to or validity of the Licensed Patents or Licensed
Marks, including without limitation, by challenging or opposing Licensor's
applications or registrations therefor.
5.3 NOTICES AND MARKINGS. Licensees agree to use and cause to be used
the proper trademark notices in connection with the Licensed Marks.
-6-
62
5.4 AUTHORIZATION AND VALIDITY OF THIS AGREEMENT
(a) The execution, delivery and performance by Licensees of
this Agreement are within Licensees' corporate power, require no approval of,
filing with or other action by or in respect of any governmental body, agency or
official and do not and will not contravene, or constitute a default under, any
applicable law, the articles of incorporation or bylaws of Licensees or any
agreement, judgment, injunction, order, decree or instrument binding upon
Licensees. This Agreement constitutes a valid and binding agreement of
Licensees, enforceable against Licensees in accordance with its terms.
(b) The execution, delivery and performance by Licensor of
this Agreement are within Licensor's corporate power, have been duly authorized
by all necessary corporate action, require no approval of, filing with or other
action by or in respected of any governmental body, agency or official and do
not and will not contravene, or constitute a default under, any applicable law,
the articles of incorporation or bylaws of Licensor or any agreement, judgment,
injunction, order, decree or instrument binding upon Licensor. This Agreement
constitutes a valid and binding agreement of Licensor, enforceable against
Licensor in accordance with its terms.
ARTICLE VI
INDEMNIFICATION
6.1 LICENSOR INDEMNIFICATION. Licensor shall indemnify, defend and hold
harmless Licensees, their Permitted Patent Sublicensees and Permitted Trademark
Sublicensees, and their respective directors, stockholders, officers, and
employees from and against any and all claims, demands, actions, suits, losses,
damages, judgments, costs and expenses (including reasonable attorneys' fees)
arising out of any breach of Licensor's representations and warranties or its
covenants contained in this Agreement.
6.2 LICENSEE INDEMNIFICATION. Licensees shall indemnify, defend and
hold harmless Licensor, its Affiliates and their respective directors,
stockholders, officers, and employees from and against any and all claims,
demands, actions, suits, losses, damages, judgments, costs and expenses
(including reasonable attorneys' fees) arising out of (i) any breach of
Licensees' representations and warranties or their covenants contained in this
Agreement and (ii) claims by third parties arising from the manufacture,
distribution or sale after the date hereof of Elevator Products using the
Licensed Marks, other than those claims that, if proven, would constitute a
breach of Licensor's warranties or its covenants set forth in this Agreement.
ARTICLE VII
TERM AND TERMINATION
-7-
63
7.1 TERM. The term of this Agreement shall begin on the date hereof and
shall terminate at such time as each of the Licensed Patents has either expired
or has been finally adjudicated as being invalid or unenforceable.
7.2 TERMINATION.
(a) During the Transition Period, Licensor shall have the
right to terminate this Agreement by giving written notice of termination to
Licensees in the event of any one of the following, such termination being
effective when such notice shall have been duly given in accordance with the
provisions of Section 10.3 of this Agreement; (i) Licensees shall be the subject
of (1) a voluntary or involuntary bankruptcy proceeding, or (2) any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect; (ii) a custodian or receive
shall be appointed for, or take charge of, all or any substantial part of the
property of Licensees; or (iii) Licensees shall make a general assignment for
the benefit of creditors, shall fail to pay, or be unable to pay their debts
generally as they become due, shall call a meeting of their creditors with a
view to arranging a composition or adjustment of their debts, shall by any act
or failure to act indicate their consent to, approval of or acquiescence in any
of the foregoing, or take any corporate action for the purpose of effecting any
of the foregoing.
(b) Licensor may terminate this Agreement at any time by
giving written notice of termination to Licensees if Licensees are in material
default or breach of any material provision of this Agreement and such default
or breach continues unremedied for a period of sixty (60) days after written
notice thereof. In the event that a default or breach is reasonably incapable of
cure within such sixty (60) day period and Licensees are using all reasonable
efforts to cure such default or breach, the cure period therefor shall continue
for an additional 60 days.
(c) Licensees may terminate this Agreement at any time upon
thirty (30) days written notice to Licensor.
(d) The exercise of the right of termination shall not impose
any liability by reason of termination or have the effect of waiving any damages
to which the terminated party might otherwise be entitled.
7.3 EFFECT OF TERMINATION OR EXPIRATION.
The provisions of Article VI, Section 7.2(d), and Article IX
shall survive the termination or expiration of this Agreement, and the
provisions of Articles II and III shall survive termination of this Agreement
other than as provided in Section 7.1. Except as otherwise set forth in the
surviving sections, upon the expiration or termination of this Agreement, the
parties shall have no further rights or obligations under this Agreement.
-8-
64
ARTICLE VIII
FOREIGN TAXES AND GOVERNMENTAL APPROVALS
Licensees agree to obtain all government approvals and registrations
which are required in connection with Licensees' and their Permitted Patent
Sublicensees and Permitted Trademark Sublicensees activities in connection with
this Agreement and to pay any taxes or fees required by any such foreign
government as a result of their activities under this Agreement.
ARTICLE IX
APPLICABLE LAW
9.1 APPLICABLE LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York, United
States of America.
9.2 DISPUTE RESOLUTION. The dispute resolution provisions of Section
9.1 of the Purchase Agreement are incorporated herein by reference in their
entirely.
9.3 INJUNCTION. Notwithstanding the foregoing, Licensees acknowledge
and agree that Licensor would suffer irreparable harm as a result of any breach
by Licensees of the terms of Articles IV and V of this Agreement during the
Transition Period and that damages at law would not be an adequate or proper
remedy and therefore, in addition to any damages and other remedies that the
Licensor may be entitled to at law or in equity as a result of such breach,
Licensor and its successors or assigns, shall be entitled during the Transition
Period to seek in any court of competent jurisdiction and obtain a temporary or
permanent injunction or other order restraining Licensees, their sublicensees
and any of their officers, directors, employees, agents and Affiliates from
breaching or continuing to breach any provision of this Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 ASSIGNMENT. This Agreement shall be binding on the parties, their
parents, subsidiaries, successors and permitted assigns (if any), and each party
warrants that the person signing on its behalf below is duly authorized to
execute this Agreement on its behalf. Neither party to this Agreement may assign
any of its rights or obligations under this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably withheld,
except that either party may assign all or any portion of its rights and
obligations under this Agreement without the consent of the other party: (A) to
one or more of its Affiliates in connection with a reorganization; and/or (B) to
a third party in connection with a merger, consolidation or sale of all or
substantially all of the stock or assets of the Elevator Subsidiaries
-9-
65
or any portion(s) of the business thereof to which the Licensed Patents and
Licensed Marks relate.
10.2 NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (i) on the date of service if served personally on the party to whom
notice is given; (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, provided telephone
confirmation of receipt is obtained promptly after completion of transmission:
(iii) on the business day after delivery, properly addressed, to a nationally
recognized overnight courier service or to the express mail service maintained
by the U.S. Postal Service, provided receipt of delivery is confirmed; or (iv)
on the fifth day after mailing, if mailed to the party to whom notice is to be
given, by first class mail, registered or certified postage prepaid, properly
addressed and return receipt requested and receipt of delivery is confirmed, to
the party as follows:
If to Licensor:
Delaware Capital Formation, Inc
1403 Foulk Road
Suite 102
Wilmington, Delaware 09803-2755
Attention: Amy E. Ward
Telephone: (302) 478-1660
Facsimile: (302) 478-1662
With a copy to:
Dover Corporation
280 Park Avenue
New York, New York 10017-1292
Attention: Corporate Secretary
Telephone: (212) 922-1640
Facsimile: (212) 922-1656
If to Licensees:
Thyssen Industrie AG
Am Thyssenhaus 1
D-45128 Essen
Germany
Attention: Gary Elliott
Telephone: 011-49-201-106-3060
Facsimile: 011-49-201-106-3065
-10-
66
and
Thyssen Elevator Holding Corporation
3155 West Big Beaver Road
Troy, Michigan 48084
Attention: Nancy Hutcheson, Esq.
Telephone: (248) 643-3571
Facsimile: (248) 643-3636
With a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: Bonnie Greaves, Esq.
Telephone: (212) 848-7670
Facsimile: (212) 848-7179
Any party may change its address by giving the other party written notice of its
new address in the manner set forth above.
10.3 WAIVER AND MODIFICATION. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification, or discharge is
agreed to in writing and signed by the party to be charged. No waiver or failure
to insist upon strict compliance with any provisions hereof shall be deemed a
waiver of any other or further breach of or noncompliance with any provision
hereof. A failure of either party hereto to insist upon strict compliance by the
other party with any provision of this Agreement shall not be deemed a waiver of
such provision.
10.4 INDEPENDENT CONTRACTOR. The parties hereby agree that no agency,
joint venture or partnership is created by this Agreement. The legal
relationship of any person or entity performing services for Licensees shall be
one solely between such parties. Neither party shall incur any obligation in the
name of the other party without the prior written consent of that party.
10.5 SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
10.6 ENTIRE AGREEMENT. This Agreement and the Purchase Agreement
contain the
-11-
67
entire agreement between the parties with respect to the subject matter hereof,
and supersede any and all other previous agreements between the parties with
respect to the subject matter hereof.
10.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
10.8 HEADINGS. The paragraph headings used in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any purpose or in any way affect the construction of
this Agreement.
10.9 NO ADVERSE CONSTRUCTION. The parties acknowledge that each
participated in drafting this Agreement, and agree that there shall be no
presumption against any party on the ground that such party was responsible for
preparing this Agreement or any part thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized representatives as of the date
first above written.
DELAWARE CAPITAL FORMATION, INC
BY: _____________________________
NAME:
TITLE:
THYSSEN ELEVATOR HOLDING CORPORATION
BY: _____________________________
NAME:
TITLE:
THYSSEN INDUSTRIE AG
BY: _____________________________
NAME:
-12-
68
Title: EXHIBIT A
LICENSED PATENTS
PATENT NO./ COUNTRY FILING ISSUED DATE
SERIAL NO. DATE
- ----------- ------------------- ---------- -----------
4,923,055 United States 01/24/89 05/08/90
617,077 Australia 01/24/90 01/24/90
2,229,415 Great Britain 01/05/90 11/18/92
2,008,251 Canada 01/22/90 07/14/98
=========== =================== ========== ===========
4,976,338 United States 04/27/89 12/11/90
1,244,783 Canada 04/25/90
2,234,490 Great Britain 04/26/90 09/22/93
=========== =================== ========== ===========
4,798,267 United States 01/20/87 01/17/89
1,270,967 Canada 01/18/88 06/26/90
2,201,656 Great Britain 01/19/88 01/02/91
=========== =================== ========== ===========
4,787,481 United States 01/20/87 11/29/88
2,201,810 Great Britain 01/19/88 10/02/91
1,261,085 Canada N/A 09/26/89
=========== =================== ========== ===========
4,399,685 United States 02/09/81 08/23/83
2,092,762 Great Britain 02/08/82 01/30/85
1,163,114 Canada 12/22/81 03/06/84
=========== =================== ========== ===========
4,599,876 United States 08/19/83 07/15/86
2,127,085 Great Britain 08/19/82 03/26/86
1,230,492 Canada 08/19/83 12/22/87
=========== =================== ========== ===========
5,433,294 United States 05/08/94 07/18/95
=========== =================== ========== ===========
69
PATENT NO./ COUNTRY FILING ISSUED DATE
SERIAL NO. DATE
- ----------- ------------------- ---------- -----------
5,597,987 United States 01/25/95 01/28/97
2,297,309 Great Britain 01/17/96 01/17/96
2,167,998 Canada 01/24/96
=========== =================== ========== ===========
09/047,857 United States 03/25/98
=========== =================== ========== ===========
09/058,709 United States 04/10/98
=========== =================== ========== ===========
-14-
70
EXHIBIT B
LICENSED MARKS
DOVER
DOVER (and Design) as attached
-15-
71
EXHIBIT C
TRADEMARK TERRITORY
Australia
Barbados
Bermuda
China
Costa Rica
Czech Republic
Dominican Republic
Ecuador
Egypt
El Salvador
Guam
Guatemala
Indonesia
Jamaica
Japan
Korea
Malaysia
Mexico
Myanmar
New Zealand
Panama
Philippines
Puerto Rico
Saudi Arabia
Singapore
Taiwan
Thailand
United Emirates Republic
Venezuela
-16-
72
Exhibit B.1: Assignment of Trademarks
73
ASSIGNMENT OF TRADEMARKS
This Assignment of Trademarks is by and between Delaware Capital
Formation, Inc., a Delaware corporation with an office located at 1403 Foulk
Road, Suite 102 Wilmington, Delaware 09803-2755 ("Assignor"), and Thyssen
Elevator Holding Corporation with an office located at 3155 West Big Beaver
Road, Troy, Michigan 48084 ("Assignee").
WHEREAS, Assignor is the record owner of all right, title and interest
in and to the trademarks set forth in Schedule A and the goodwill associated
therewith (the "Marks").
WHEREAS, Assignee is desirous of acquiring all right, title and
interest in and to the Marks together with the goodwill of the business
symbolized by the Marks.
NOW THEREFORE, for good and valuable consideration, receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound
hereby, Assignor hereby assigns to Assignee any and all of Assignor's right,
title and interest in and to the Marks together with the goodwill of the
business symbolized by the Marks.
IN WITNESS WHEREOF, Assignor has caused this Assignment of Trademarks
to be duly executed in a manner appropriate thereto effective as of __________
___, 1998.
DELAWARE CAPITAL FORMATION, INC.
By:______________________________
Name: Amy Ward
Title: President
74
SCHEDULE A
U.S. TRADEMARK APPLICATIONS
MARK CLASS SERIAL NO. FILING DATE
- ---- ----- ---------- -----------
DMC-II 9 75/263138 03/25/97
DUALIFT 75/337062 08/07/97
PERFORMANCE 75/337059 08/07/97
MONITORING
SIERRA 75/424022 01/27/98
SMART LINK 75/337061 08/07/97
U.S. TRADEMARKS
MARK CLASS REGISTRATION NO. REGISTRATION DATE
- ---- ----- ---------------- -----------------
ARTIFAX (Stylized) 42 1565171 11/07/89
CELLLINK 9 2121254 12/16/97
COMPONENT SALES 42 1858976 10/18/94
GROUP & DESIGN
COMPUTAMATIC 7 752898 07/16/63
DMC-I 9 1429943 02/24/87
DMC-I/M 9 1652957 08/06/91
ENTRY PLUS 1513387 11/22/88
U.S. TRADEMARKS
MARK CLASS REGISTRATION NO. REGISTRATION DATE
- ---- ----- --------------- -----------------
HELPLINK 9 1908281 08/01/95
I-2 9 1138278 07/29/80
IMPULSE 9 1387397 03/25/86
INDEPENDENCE 2115841 11/25/97
-1-
75
MARK CLASS REGISTRATION NO. REGISTRATION DATE
- ---- ----- ---------------- -----------------
IVO 6, 7, 9 1148666 03/24/81
LEVELATOR 7 368428 06/20/39
LMH 9 1671628 01/14/92
LMT-AC 9 1824275 03/01/94
MICRO MODERNIZER 9 1298492 10/02/84
MICROLIGHT 9 B1838486 05/31/94
OILDRAULIC & Design 7 398983 12/08/42
QUANTUM 9 1993559 08/13/96
SGT 9 1971097 04/30/96
T II 9 1303526 11/06/84
T-IV 9 1824277 03/01/94
T-IV/M 9 1824276 03/01/94
TRAFLOMATIC 9 1154705 05/19/81
TRAFLOMATIC II 9 1290844 08/21/84
VISI-FLO 9 587536 03/30/54
FOREIGN TRADEMARKS
MARK CLASS REGISTRATION NO. REGISTRATION DATE COUNTRY
- ---- ----- ---------------- ----------------- -------
COMPUTAMATIC 7 44,389 06/25/71 Benelux
COMPUTAMATIC 7 7332/91 10/25/91 Denmark
COMPUTAMATIC 1,617,811 09/27/90 France
COMPUTAMATIC 7 1,181,708 10/18/91 Germany
COMPUTAMATIC 37, 39 239538 05/29/92 Panama
COMPUTAMATIC 82 497295 10/01/90 Taiwan
DMC-I 355,958 05/19/89 Canada
-2-
76
MARK CLASS REGISTRATION NO. REGISTRATION DATE COUNTRY
- ---- ----- ---------------- ----------------- -------
DMC-I 9 2,445,848 08/31/92 Japan
IMPULSE 355,957 05/19/89 Canada
FOREIGN TRADEMARKS
MARK CLASS REGISTRATION NO. REGISTRATION DATE COUNTRY
- ---- ----- ---------------- ----------------- -------
OILDRAULIC 7 A192,279 01/15/65 Australia
OILDRAULIC 101,214 08/19/55 Canada
OILDRAULIC 7 1,617,813 09/27/90 France
OILDRAULIC 7 739,868 10/01/59 Germany
OILDRAULIC 7 153,110 09/29/59 Italy
OILDRAULIC 9 2287877 12/26/90 Japan
OILDRAULIC 82 427,800 Taiwan
OILDRAULIC & Design 310,983 08/25/81 Panama
ROTA-FLOW 101,213 08/19/55 Canada
SHORTSTUB 120942 01/27/61 Canada
SPIRAL DESIGN 263,168 10/16/81 Canada
T II 87 493864 09/01/90 Taiwan
T III 373,941 10/05/90 Canada
T III 37, 39 221038 09/09/91 Panama
THE ELEVATOR 264,014 11/06/81 Canada
INNOVATORS
TRAFLOMATIC 100,102 01/14/55 Canada
TRAFLOMATIC 37, 39 221039 09/09/91 Panama
TRAFLOMATIC II 87 513779 03/01/91 Taiwan
TRAFLOMATIC III 374,139 10/12/90 Canada
TRAFLOMATIC III 9 2287876 12/26/90 Japan
-3-
77
MARK CLASS REGISTRATION NO. REGISTRATION DATE COUNTRY
- ---- ----- ---------------- ----------------- -------
TRAFLOMATIC III 11 2418360 05/29/92 Japan
TRAFLOMATIC III 39 222714 10/02/91 Panama
TRAFLOMATIC III 87 416,896 Taiwan
-4-
78
Exhibit B.2: Patent Assignment
79
PATENT ASSIGNMENT
This Assignment of Patents is by and between Delaware Capital
Formation, Inc., a Delaware corporation with an office located at 1403 Foulk
Road, Suite 102, Wilmington, Delaware 09803-2755 ("Assignor"), and Thyssen
Elevator Holding Corporation with an office located at 3155 West Big Beaver
Road, Troy, Michigan 48084 ("Assignee").
WHEREAS, Assignor is the owner of all right, title and interest in and
to the Letters Patents and Patent Applications listed in Schedule A attached
hereto (the "Patents").
WHEREAS, Assignee is desirous of acquiring all right, title and
interest in and to the Patents.
NOW THEREFORE, for good and valuable consideration, receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound
hereby, Assignor hereby assigns to Assignee any and all of Assignor's right,
title and interest in and to the Patents, including any divisions and
continuations thereof, and Assignor hereby authorizes the Commissioner of
Patents to issue the said United States Letters Patent to said Assignee, as the
assignee of the whole right, title and interest thereto.
IN WITNESS WHEREOF, Assignor has cause this Patent Assignment to be
duly executed in a manner appropriate thereto effective as of ___________ ___,
1998.
DELAWARE CAPITAL FORMATION, INC.
By:_________________________________
Name: Amy Ward
Title: President
80
SCHEDULE A
U.S. PATENTS
Patent Number Filing Date Issue Date
- ------------- ----------- ----------
4781270 03/02/87 11/10/88
4832158 12/03/87 05/23/89
4637496 04/25/85 01/20/87
4658935 08/05/85 04/21/87
5561277 03/15/94 10/01/96
5637841 10/17/94 06/10/97
5654531 08/07/95 08/05/97
4368501 09/26/80 01/11/83
U.S. PATENT APPLICATIONS
Serial Number Filing Date
- ------------- -----------
09/047972 03/25/98
FOREIGN PATENTS
Patent Number Filing Date Issue Date Country
- ------------- ----------- ---------- -------
2174976 04/24/86 04/19/89 United Kingdom
2201811 01/19/88 10/02/91 United Kingdom
2104477 08/19/82 06/26/85 United Kingdom
1295060 01/18/88 01/28/92 Canada
1177530 01/26/82 11/06/84 Canada
1250533 02/10/86 02/28/89 Canada
1176185 06/07/82 10/16/84 Canada
1115865 11/21/80 01/05/82 Canada
1115866 11/21/80 01/05/82 Canada
81
Exhibit B.3: Copyright Assignment
82
COPYRIGHT ASSIGNMENT
This Assignment of Copyright is by and between Delaware Capital
Formation, Inc., a Delaware corporation with an office located at 1403 Foulk
Road, Suite 102, Wilmington, Delaware 09803-2755 ("Assignor"), and Thyssen
Elevator Holding Corporation with an office located at 3155 West Big Beaver
Road, Troy, Michigan 48084 ("Assignee").
WHEREAS, Assignor is the owner of all right, title and interest in and
to Copyright Registration No. TX 4-017-523 for Entry Plus Software issued on
February 21, l995 (the "Copyright").
WHEREAS, Assignee is desirous of acquiring all right, title and
interest in and to said Copyright.
NOW THEREFORE, for good and valuable consideration, receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound
hereby, Assignor hereby assigns to Assignee any and all of Assignor's right,
title and interest in and to said Copyright.
IN WITNESS WHEREOF, Assignor has cause this Copyright Assignment to be
duly executed in a manner appropriate thereto effective as of ___________ ___,
1998.
DELAWARE CAPITAL FORMATION, INC.
By:_________________________________
Name: Amy Ward
Title: President
83
Exhibit C: Insurance Arrangements Agreement
84
INSURANCE ARRANGEMENTS AGREEMENT
INSURANCE ARRANGEMENTS AGREEMENT, dated as of _____________ by and
among Thyssen Industrie AG, a corporation organized and existing under the laws
of the Federal Republic of Germany ("Thyssen"), Thyssen Elevator Holding
Corporation, a corporation organized and existing under the laws of the State of
Delaware (together with Thyssen, the "Buyers"), and Dover Corporation, a
corporation organized and existing under the laws of the State of Delaware,
U.S.A. ("Seller").
W I T N E S S E T H :
WHEREAS, Seller, through certain of its direct and indirect
subsidiaries, divisions and joint ventures listed on Schedule 1 hereto (the
"Elevator Subsidiaries"), conducts a business of manufacturing, installing,
servicing, repairing and modernizing elevators and installing, servicing and
repairing escalators manufactured by others (the "Elevator Business");
WHEREAS, Buyers and Seller have entered into a Purchase Agreement dated
as of November 23, 1998 (the "Purchase Agreement"), pursuant to which Seller has
agreed to sell and transfer the Elevator Business to Buyers, and Buyers have
agreed to purchase and acquire the Elevator Business from Seller, upon the terms
and subject to the conditions set forth therein (the "Sale");
WHEREAS, the Elevator Business is and will remain wholly-owned by
Seller until the closing of the first tranche of the Sale (the "First Tranche
Closing");
WHEREAS, pursuant to agreements with Liberty Mutual Insurance Company
("Liberty"), covering periods through December 31, 1998, Liberty provides
insurance coverage for the Elevator Business (as well as other operations of
Seller), including general, product, automobile and worker's compensation
liabilities, and Seller coordinates the administration of Claims (as hereinafter
defined) against the Elevator Business covered by Liberty and by Seller's
self-insurance program (the "Existing Arrangement");
WHEREAS, the Elevator Business (as well as other operations of Seller)
is also covered through December 31, 1998 by property, foreign (property and
casualty insurance outside of North America), theft, business travel accident,
surety bonds, aviation and directors and officers insurance (collectively, "Aon
Coverage"), all placed on Seller's behalf by Aon Risk Services ("Aon") and
insured by various insurance companies with various deductibles and retentions;
85
WHEREAS, Seller allocates to the appropriate Elevator Subsidiaries all
the costs of insuring, administering and paying any Claims relating to the
Elevator Business (the "Elevator Obligations") payable under the Existing
Arrangement or Aon Coverage;
WHEREAS, although Elevator Obligations are the responsibility of the
appropriate Elevator Subsidiary, in the past these amounts have been advanced by
Seller and the appropriate Elevator Subsidiary has reimbursed Seller for such
payments;
WHEREAS, Seller has committed to replace the Existing Arrangement and
the Aon Coverage (with the exception of theft and director and officer liability
insurance) with a similar arrangement with Liberty and similar coverage placed
by Aon, which will relate only to, and become a direct obligation of, the
Elevator Business (each element of such replacement arrangement and coverage
being a "New Arrangement");
WHEREAS, the Existing Arrangement and Aon Coverage will, nevertheless,
continue to apply for an indefinite period into the future with respect to any
covered event which occurred prior to the effective time of the New Arrangement
and prior to the First Tranche Closing;
WHEREAS, pursuant to the Purchase Agreement, the parties have agreed to
enter into this Agreement in order to provide for the future arrangements
between the parties with respect to all such insurance.
NOW, THEREFORE, in consideration of the covenants herein contained, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1
TERMINATION OF COVERAGE; ADMINISTRATION OF PAST OBLIGATIONS
1.1 TERMINATION OF SELLER'S COVERAGE. Upon the earlier of: (i) the
effective time of the applicable New Arrangement or (ii) the First Tranche
Closing, Seller will:
(a) cause the insurance coverage under the Existing
Arrangement and Aon Coverage for occurrences after the effective time of the
applicable New Arrangement or the First Tranche Closing, as the case may be, to
cease to apply to the Elevator Business for Claims on or after such date; and
(b) cease to administer any Claims with respect to the
Elevator Business, except as provided in Section 1.3,
provided, that if the effective time of the applicable New Arrangement occurs
before the First Tranche Closing, Seller will cause the applicable Elevator
Subsidiary to continuously maintain insurance coverage under the applicable New
Arrangement until the First Tranche Closing.
- 2 -
86
For purposes of this Agreement, "Claim" shall mean the occurrence of an
event which results in any judgment, loss, damages, punitive or exemplary
damages, fine or penalty, liability, costs or expenses (including reasonable
attorneys' fees, charges and disbursements or fees, premiums and expenses of
Liberty) whether required to be paid to a third party or otherwise incurred in
connection with or arising from any claim, suit, action or proceeding.
1.2 NEW COVERAGE. From and after the First Tranche Closing, Buyers and
the Elevator Subsidiaries shall be solely responsible for maintaining, and all
costs of, each New Arrangement, or otherwise providing insurance coverage with
respect to the Elevator Business, in such amounts and upon such terms as they
deem fit.
1.3 HISTORICAL COVERAGE.
(a) Subject to Section 2.2, Seller will maintain the Existing
Arrangement and the Aon Coverage for the performance of the Elevator Obligations
for any Claim with respect to periods prior to the earlier of (i) the effective
time of the applicable New Arrangement or (ii) the First Tranche Closing which
is covered by policies which were in effect through such date. It is understood
that the Existing Arrangement and the Aon Coverage may not cover all Claims
relating to the Elevator Business.
(b) Effective as of the First Tranche Closing, Buyers and the
Elevator Business shall be solely responsible for the control and defense of any
Claims under the Aon Coverage or the Existing Arrangement relating to the
Elevator Business, as though Buyers were the policy holder under the Aon
Coverage or the Existing Arrangement, as applicable; provided, that Buyers shall
not permit the entry of any settlement or any voluntary payment exceeding
$1,000,000 without providing as much advance notice to Seller as reasonably
practicable.
(c) Seller will cooperate with Buyers, Liberty and Aon, to the
extent reasonably necessary, in connection with the administration of any such
Claims.
(d) Subject to Section 2.2, consistent with past practice,
Seller shall maintain books and records sufficient to allocate to the Elevator
Subsidiaries all of the Elevator Obligations. At least quarterly, Seller shall
notify the Elevator Subsidiaries and Buyers of the current amount of Elevator
Obligations due and, upon receipt of notice, Buyers agree to cause the Elevator
Subsidiaries to immediately pay, or reimburse Seller for, any and all such
amounts due Seller after the First Tranche Closing (including, without
limitation, all deductibles, retentions and premiums) in connection with the
Elevator Obligations insured through the Existing Arrangement and the Aon
Coverage.
(e) Seller and its agents shall not be liable to Buyers or to
the Elevator Subsidiaries for any judgment, loss, damages, liability, costs or
expenses ("Losses") which arise in any manner from the operation or
administration of the Existing Arrangement or the Aon Coverage (including but
not limited to the handling of insurance claims or any failure to obtain
insurance) after the First Tranche Closing, except to the extent that same
arises from the gross negligence or willful misconduct of Seller (or its
agents). Buyers hereby waive all claims against Seller and its agents for such
Losses and the cost and expense of defending against
- 3 -
87
claims relating to such Losses, except to the extent that same arises from the
gross negligence or willful misconduct of Seller (or its agents).
SECTION 2
INDEMNIFICATION; BEST EFFORTS
2.1 INDEMNIFICATION. Buyers agree, effective as of the First Tranche
Closing, to assume and be liable for and to indemnify Seller against all Losses
incurred by Seller at any time after the First Tranche Closing under the Aon
Coverage or under the Existing Arrangement, to the extent they arise out of
Elevator Obligations (except to the extent that the same arise from the gross
negligence or willful misconduct of Seller or its agents), including, without
limitation, any Claim, the basis of which is that: (i) Buyers or the Elevator
Business have failed to pay any amounts owed which constitute Elevator
Obligations, (ii) a third party has been or may be injured or damaged in any way
by any breach by Buyers or the Elevator Subsidiaries of any of their duties,
representations or warranties under this Agreement, or (iii) Buyers, the
Elevator Subsidiaries or any of their employees, agents, or servants acted
improperly in connection with the notification, investigation, adjustment, and
settlement of Claims and Losses arising under the Aon Coverage or Existing
Arrangement.
2.2 BEST EFFORTS. Effective as of the First Tranche Closing, Buyers and
Seller agree to use their reasonable best efforts to cause Liberty to look
solely to the Elevator Subsidiaries, Buyers or an affiliate of Buyers, and to
release Seller from all obligation, with respect to any and all amounts payable
under the Existing Arrangement (including, without limitation, deductibles and
amounts that are self-insured) to the extent such amounts relate to the Elevator
Business, in which event the provisions of Section 1.3(a) and (d) shall become
inoperative.
SECTION 3
MISCELLANEOUS PROVISIONS
3.1 DISPUTE RESOLUTION.
(a) Informal Proceedings. Except as otherwise provided
elsewhere in this Agreement, any controversy or claim between Seller or any
affiliate of Seller, on the one hand, and Buyers or any affiliate of Buyers, on
the other hand, arising from or in connection with this Agreement or the
relationship of the parties under this Agreement whether based on contract,
tort, common law, equity, statute, regulation, order or otherwise (a "Dispute")
shall be resolved only as follows:
(i) Upon written request of Seller or Buyers, each of the
parties will appoint a designated representative whose task it will be to meet
for the purpose of endeavoring to resolve such Dispute.
- 4 -
88
(ii) The designated representatives shall meet as often as the
parties reasonably deem necessary to discuss the problem in good faith in an
effort to resolve the Dispute without the necessity of any further proceeding.
(iii) If such designated representatives have not resolved
such Dispute within 120 days after their appointment was requested, either party
may require, by written notice to the other, that the Dispute be submitted to
the chief executive officers of Seller and Thyssen.
(iv) Following delivery of such notice, the chief executive
officers of Thyssen and Seller shall meet in person in New York, New York, and
discuss the Dispute in good faith in an effort to resolve the Dispute without
the necessity of any formal proceeding.
(v) Formal proceedings for the resolution of a Dispute may not
be commenced until the earlier of:
(A) the chief executive officers of Thyssen and
Seller concluding in good faith that amicable resolution through continued
negotiation of the matter does not appear likely; or
(B) the expiration of the sixty (60) day period
immediately following the notice requiring submission of the Dispute to the
chief executive officers; provided, however, that this Section 3.1(a) will not
be construed to prevent a party from instituting formal proceedings earlier to
avoid the expiration of any applicable limitations period, or to preserve a
superior position with respect to third parties.
(b) Arbitration.
(i) If the parties are unable to resolve any Dispute in
accordance with Section 3.1(a), such Dispute shall be submitted to mandatory and
binding arbitration at the election of either Seller or Buyers (the "Disputing
Party"). Except as otherwise provided in this Section 3.1(b), the arbitration
shall be pursuant to the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA").
(ii) To initiate the arbitration, the Disputing Party shall
notify the other party or parties in writing (the "Arbitration Demand"), which
shall (i) describe in reasonable detail the nature of the Dispute, (ii) state
the amount of the claim, (iii) specify the requested relief and (iv) name an
arbitrator who (A) (x) for any issue other than an issue involving proper
accounting or use of accounting principles, has been licensed to practice law in
the U.S. for at least ten years, and (y) for an issue involving proper
accounting or use of accounting principles, has been licensed to practice law in
the U.S. for at least ten years and is a certified public accountant, (B) is not
then an employee of Seller or of Buyers or an employee of an affiliate of either
Seller or Buyers, and (C) is experienced in representing industrial
manufacturing corporations in connection with commercial agreements (the "Basic
Qualifications"). Within fifteen (15) days after the other party's or parties'
receipt of the Arbitration Demand, such other party or parties shall file, and
serve on the Disputing Party, a written statement (i) answering the claims set
forth in the Arbitration Demand and including any affirmative defenses of such
party; (ii) asserting any counterclaim, which shall (A) describe in reasonable
detail the nature of the Dispute
- 5 -
89
relating to the counterclaim, (B) state the amount of the counterclaim, and (C)
specify the requested relief; and (iii) naming a second arbitrator satisfying
the Basic Qualifications. Promptly, but in any event within fifteen (15)
Business Days thereafter, the two arbitrators so named will select a third
neutral arbitrator from a list provided by the AAA of potential arbitrators who
satisfy the Basic Qualifications and who have no past or present relationships
with the parties or their counsel, except as otherwise disclosed in writing to
and approved by the parties. The arbitration will be heard by the panel of the
three arbitrators so chosen (the "Arbitration Panel"), with the third arbitrator
so chosen serving as the chairperson of the Arbitration Panel. Decisions of a
majority of the members of the Arbitration Panel shall be determinative.
(iii) The arbitration hearing shall be held in New York, New
York, or in such neutral location as the parties may mutually agree. The
Arbitration Panel is specifically authorized to render partial or full summary
judgment as provided for in the Federal Rules of Civil Procedure, and must, as
appropriate, reach such judgment in accordance with the General Corporation Law
of Delaware, the laws of the State of New York and, to the extent that proper
accounting treatment or accounting principles are at issue, applicable generally
accepted accounting principles. The Federal Rules of Evidence shall apply to the
arbitration hearing. The Arbitration Panel will not have power or authority,
under the Commercial Arbitration Rules of the AAA or otherwise, to relieve the
parties from their agreement hereunder to arbitrate or otherwise to amend or
disregard any provision of this Agreement.
(iv) Within fifteen (15) days after the closing of the
arbitration hearing, the Arbitration Panel shall prepare and distribute to the
parties a writing setting forth the Arbitration Panel's finding of facts and
conclusions of law relating to the Dispute, including the reasons for the giving
or denial of any award.
(v) The Arbitration Panel is instructed to schedule promptly
all discovery and other procedural steps and otherwise to assume case management
initiative and control to effect an efficient and expeditious resolution of the
Dispute. The Arbitration Panel is authorized to issue monetary sanctions against
either party if, upon a showing of good cause, such party is unreasonably
delaying the proceeding.
(vi) Any award rendered by the Arbitration Panel will be
final, conclusive and binding upon the parties and any judgment thereon may be
entered and enforced in any court of competent jurisdiction. The Arbitration
Panel shall have no authority to award or order any remedy which could not be
entered by a court of appropriate jurisdiction sitting at law or in equity under
the laws of the State of New York or which is in contravention of this Section
9.1.
(vii) Each party will bear one-half of all fees, costs and
expenses of the arbitrators and, notwithstanding any law to the contrary, each
party will bear all the fees, costs and expenses of its own attorneys, experts
and witnesses; provided, however, that (i) to the extent that either party
prevails in its position related to a Dispute, the other party shall pay or
reimburse the prevailing party for all fees, costs and expenses the prevailing
party would otherwise have to pay with respect thereto, and (ii) in connection
with any judicial proceeding to compel arbitration pursuant to this Agreement or
to enforce any award rendered by the Arbitration Panel, the prevailing party in
such a proceeding will be entitled to recover reasonable
- 6 -
90
attorneys' fees and expenses incurred in connection with such proceeding, in
addition to any other relief to which it may be entitled.
3.2 AMENDMENT. This Agreement may not be amended except by a written
instrument signed by each of the parties hereto.
3.3 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant or agreement contained herein may be waived only by a written notice
from the party entitled to the benefits thereof. No failure by any party hereto
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or future exercise of that right by that party.
3.4 NOTICES. All notices and other communications hereunder shall be
deemed given if given in writing and delivered personally, by courier or by
facsimile transmission, telexed or mailed by registered or certified mail
(return receipt requested), facsimile, telex or postage fees prepaid, to the
party to receive the same at its respective address set forth below (or at such
other address as may from time to time be designated by such party to the others
in accordance with this Section 3.4):
(a) If to Seller:
Dover Corporation
280 Park Avenue
New York, New York 10017-1292
Attention: Corporate Secretary
Telephone: (212) 922-1640
Facsimile: (212) 922-1656
With a copy to:
Coudert Brothers
1114 Avenue of the Americas
New York, New York 10036
Attention: Joseph W. Schmidt, Esq
Telephone: (212) 626-4400
Facsimile: (212) 626-4120
(b) If to Buyers (or either of them):
Thyssen Industrie AG
Am Thyssenhaus 1
D-45128 Essen
Germany
Attention: Gary Elliott
Telephone: 011-49-201-106-3060
Facsimile: 011-49-201-106-3065
- 7 -
91
Thyssen Elevator Holding Corporation
3155 West Big Beaver Rd.
Troy, MI 48084
Attention: Nancy Hutcheson
Telephone: (248) 643-3511
Facsimile: (243) 648-3636
With a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: Bonnie Greaves, Esq.
Telephone: (212) 848-7670
Facsimile: (212) 848-7179
All such notices and communications hereunder shall be deemed given
when received, as evidenced by the signed acknowledgment of receipt of the
person to whom such notice or communication shall have been personally
delivered, confirmed answer back or other evidence of transmission or the
acknowledgment of receipt returned to the sender by the applicable postal
authorities.
3.5 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
rights, duties or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other party and any attempted
assignment or transfer without such prior written consent shall be null and
void.
3.6 EXPENSES. Except as otherwise expressly provided in this Agreement,
each party shall pay its own expenses in connection with this Agreement, the
agreements to be entered into pursuant hereto and the transactions contemplated
hereby.
3.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.8 HEADINGS. The section headings contained in this Agreement are
solely for convenience of reference, are not part of the agreement of the
parties, shall not be used in construing this Agreement and shall not in any way
affect the meaning or interpretation of this Agreement.
3.9 FURTHER ACTION. Each Buyer and Seller agree to execute and deliver,
and to cause their affiliates to execute and deliver, such other documents,
certificates, agreements and other writings and to take such other actions as
may be necessary or desirable and requested by the other in order to consummate
or implement expeditiously the transactions contemplated by this Agreement.
- 8 -
92
3.10 SEVERABILITY. The invalidity, illegality or unenforceability for
any reason of any one or more provisions of this Agreement shall not affect the
validity, legality or enforceability of the remainder of this Agreement.
3.11 BUYERS' OBLIGATIONS, ETC. Each Buyer shall be jointly and
severally liable for all obligations of Buyers under this Agreement. Any action
by, to or with respect to any Buyer (such as notice, consent, etc.) will be
deemed to have occurred with respect to both Buyers, provided that Seller shall
nevertheless send notices to both Buyers.
3.12 GOVERNING LAW. This Agreement, and the respective rights, duties
and obligations of the parties hereunder, shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York.
- 9 -
93
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
THYSSEN INDUSTRIE AG
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
THYSSEN ELEVATOR HOLDING
CORPORATION
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
DOVER CORPORATION
By: ______________________________
Name:
Title:
-10-
94
Schedule 1: Elevator Subsidiaries
CORPORATION
(C), DIVISION
JURISDICTION OF OWNERSHIP (D) OR JOINT
ELEVATOR SUBSIDIARIES+ INCORPORATION PERCENTAGE VENTURE (JV)
- -------------------------------------------------------------------------------------------------------------------------
1. Elevator Subsidiaries of Dover Corporation (Canada)
Holdings Limited(1)
- -------------------------------------------------------------------------------------------------------------------------
a. Dover Corporation (Canada) Limited(2) Canada 100% C
- -------------------------------------------------------------------------------------------------------------------------
i. Turnbull Elevator Division Division 100% D
- -------------------------------------------------------------------------------------------------------------------------
ii. Van Isle Elevator (1982) Ltd. Canada (BC) 100% C
- -------------------------------------------------------------------------------------------------------------------------
iii. Van Isle Elevator Ltd. Canada (BC) 100% C
- -------------------------------------------------------------------------------------------------------------------------
iv. Elmac Elevator Service & Installation Ltd. Canada (BC) 100% C
- -------------------------------------------------------------------------------------------------------------------------
v. Ascenseur Modern Maintenance Service Canada 100% C
(Quebec)
- -------------------------------------------------------------------------------------------------------------------------
vi. Dover Stahl Heiser Canada 100% C
- -------------------------------------------------------------------------------------------------------------------------
vii. Elevator and Electric Service Ltd. Canada 100% C
(Saskatchewan)
- -------------------------------------------------------------------------------------------------------------------------
viii. Ascenseur Dover Ltd. Canada 100% C
(Quebec)
- -------------------------------------------------------------------------------------------------------------------------
ix. Arctic Elevator, Inc. Hong Kong 100% C
- -------------------------------------------------------------------------------------------------------------------------
x. Dover Elevator Far East (1996) Limited China 80% JV
- -------------------------------------------------------------------------------------------------------------------------
xi. Dover Elevator Canada Ltd. Canada 100% C
- -------------------------------------------------------------------------------------------------------------------------
(1) Dover Elevator (Far East) Limited Hong Kong 51% JV
- -------------------------------------------------------------------------------------------------------------------------
(a) Hainan Dover Elevator (Far East) 100% C
Service Ltd. China
- -------------------------------------------------------------------------------------------------------------------------
(b) Dover Elevator (Shanghai) Co. Ltd. China 100% C
- -------------------------------------------------------------------------------------------------------------------------
xii. Rocon Elevator, Inc. Canada 100% C
(Quebec)
- -------------------------------------------------------------------------------------------------------------------------
xiii. Turnbull Elevator Company Ltd. (HK) Canada 100% C
(Ontario)
- -------------------------------------------------------------------------------------------------------------------------
2. Elevator Subsidiaries of Delaware Capital Holdings, Inc.
- -------------------------------------------------------------------------------------------------------------------------
a. General Elevator Company, Incorporated Maryland 100% C
- -------------------------------------------------------------------------------------------------------------------------
- --------
(1) Currently named Dover Corporation (Canada) Limited which name will be
changed before the Second Tranche Closing as part of the Reorganization.
(2) A new corporation to be formed before the Second Tranche Closing.
+ Indentation connotes direct ownership by the preceding entity one step
less-indented.
S1-1
95
CORPORATION
(C), DIVISION
JURISDICTION OF OWNERSHIP (D) OR JOINT
ELEVATOR SUBSIDIARIES+ INCORPORATION PERCENTAGE VENTURE (JV)
- -------------------------------------------------------------------------------------------------------------------------
i. General Elevator Company (Ontario) Inc. Canada 100% C
- -------------------------------------------------------------------------------------------------------------------------
b. East Coast Elevator Service, Inc. Florida 100% C
- -------------------------------------------------------------------------------------------------------------------------
c. Dover Elevator International, Inc. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
i. Dover Elevator Systems, Inc. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
(1) Hawaiian Pacific Elevator Company Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
(2) Dover Accessibility Products, Inc. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
(3) Component Sales Group, Inc. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
ii. Dover Elevator Company Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
(1) Midstate Elevator Company, Inc. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
iii. Sound Elevator Co. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
(1) Alaska Pacific Elevator, Inc. Washington 100% C
- -------------------------------------------------------------------------------------------------------------------------
iv. Dover Elevator Asia Pacific Co., Ltd. 100% C
Thailand Thailand
- -------------------------------------------------------------------------------------------------------------------------
(1) Dover Elevator (Malaysia) SDN Malaysia 100% C
BHD
- -------------------------------------------------------------------------------------------------------------------------
(2) Dover Engineering SDN BHD Malaysia 100% C
- -------------------------------------------------------------------------------------------------------------------------
v. Lagerquist Corporation Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
vi. Arizona Elevator, Inc. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
vii. Security Elevator Company, Inc. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
viii. Shanghai Dover Elevator Manufacturing 100% JV
Co., Ltd. China
- -------------------------------------------------------------------------------------------------------------------------
ix. Miami Elevator Company Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
(1) Eastern Elevator Service Corp. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
x. Dover Caribbean Inc. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
(1) Dover Elevator of Puerto Rico, Inc. Puerto Rico 100% C
- -------------------------------------------------------------------------------------------------------------------------
3. Elevator Subsidiaries of Revod Corporation
- -------------------------------------------------------------------------------------------------------------------------
a. Empire Elevator Corporation Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
b. Hudson Elevator Corp. Delaware 100% C
- -------------------------------------------------------------------------------------------------------------------------
c. Dover Australian Elevator Company Pty. Australia 80% C
Limited
=========================================================================================================================
+ Indentation connotes direct ownership by the preceding entity one step
less-indented.
S1-2
96
Exhibit D: Form of FIRPTA Certificate
CERTIFICATE
Section 1445 of the Internal Revenue Code provides that a transferee
(buyer) of a U.S. real property interest must withhold tax if the transferor
(seller) is a foreign person. To inform the transferee (buyer) that withholding
of tax is not required upon the disposition of a U.S. real property interest by
Delaware Capital Holdings, Inc., a Delaware corporation ("DCH"), the undersigned
hereby certifies the following on behalf of DCH:
1. DCH is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);
2. DCH's U.S. employer identification number is 13-3351268; and
3. DCH's office address is 1403 Foulk Road, Suite 102, Wilmington,
Delaware 19803.
DCH understands that this certification may be disclosed to the
Internal Revenue Service by the transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct,
and complete, and I further declare that I have authority to sign this document
on behalf of DCH.
DELAWARE CAPITAL HOLDINGS, INC.
- ------------------------ ---------------------------
Date Name:
Title:
97
Exhibit E: Form of Note
98
Exhibit E
Form of Note
U.S.$[1,160,000,000][1,140,000,000][20,000,000] [applicable Closing Date]
New York, New York
FOR VALUE RECEIVED, THYSSEN AG, an Aktiengesellschaft organized and
existing under the laws of the Federal Republic of Germany ("Thyssen"), hereby
promises to pay (or cause to be paid) to the order of Dover Corporation, a
corporation organized and existing under the laws of the State of Delaware
("Dover"), on or before [insert date five Business Days following the
applicable Closing Date] (the date of such payment being the "Payment Date"),
the principal sum of U.S.$[1,160,000,000][1,140,000,000][20,000,000], together
with interest on such amount accruing from the date hereof until paid at a rate
per annum equal to the overnight British Bankers Associates London Interbank
Offered Rate for United States dollars that appears on page 3750 (or a
successor page) of the Dow Jones Telerate Screen as of 11:00 a.m. (London time)
on the earlier to occur of (i) two London banking days prior to the Payment
Date and (ii) the date of this promissory note.
Both principal and interest are payable in lawful money of the United
States of America in immediately available funds to Dover at [insert account
information specified by Dover in accordance with Section 1.2 of the Purchase
Agreement] in same day funds.
THYSSEN AG
By _______________________
Name:
Title:
By _______________________
Name:
Title:
99
Exhibit F
Form of Opinion of General Counsel to Seller
[applicable Closing Date]
Thyssen Industrie AG
Am Thyssenhaus 1
D-45128 Essen
Germany
Thyssen Elevator Holding Corporation
3155 West Big Beaver Rd.
Troy, MI 48084
Ladies and Gentlemen:
I am General Counsel of Dover Corporation, a Delaware corporation (the
"Company") and have acted as counsel to the Company in connection with the
execution and delivery by the Company of the Purchase Agreement, dated as of
November 23, 1998 (the "Purchase Agreement") among the Company, as Seller, and
yourselves, as Buyers. This opinion is being rendered to you pursuant to Section
5.3 of the Purchase Agreement. Capitalized terms used but not defined herein
have the meanings attributed to them in the Purchase Agreement.
The Company conducts substantially all of its business through its
Subsidiaries. I am not the General Counsel of any of the Subsidiaries, but the
Subsidiaries report to me regularly on material litigation and/or contingencies
and review other legal matters with me from time to time.
I have examined the Purchase Agreement and the forms of the Related
Agreements attached as exhibits to the Purchase Agreement and originals or
copies, certified or otherwise identified to my satisfaction, of such documents,
corporate records, certificates of public officials and other instruments as I
have deemed relevant and necessary as the basis for the
F1-1
100
opinions set forth below.
In such examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified, photostatic or facsimile copies and the
authenticity of the originals of such copies.
As to various questions of fact material to the opinions rendered
herein, I have relied upon the statements and representations in the documents
which I have examined. I have assumed the due execution and delivery, pursuant
to due authorization, of the documents that I have examined by each party
thereto other than the Company and the Seller Entities, that each such party has
the full power, authority and legal right to enter into and perform its
obligations under each such document to which it is a party, that each such
document constitutes the valid and legally binding obligations of each such
other party, enforceable against such party in accordance with its terms, and
that each such party has satisfied those legal requirements that are applicable
to it to the extent necessary to make such documents enforceable against it.
Based upon my examination, as described above, and subject to the
assumptions and qualifications stated, I am of the opinion that:
(1) Each of Seller and each Seller Entity other than Dover
Canada is a corporation duly organized and validly existing under the laws of
the jurisdiction of its organization.
(2) Each of this Agreement and the Related Agreements
constitutes the legal, valid and binding agreement of each of the Seller
Companies party thereto, enforceable against such party in accordance with its
terms, subject to applicable bankruptcy, insolvency and other laws affecting
creditors' rights generally and to general principles of equity.
(3) The execution and the delivery of this Agreement and the
Related Agreements, and the consummation of the transactions contemplated hereby
and thereby, have been duly authorized by all requisite corporate or other
action on the part of each Seller Company party thereto.
(4) Each of the Elevator Subsidiaries organized or formed
under the laws of Delaware or New York is a corporation or other entity duly
organized or formed, as the case may be, validly existing and in good standing
under the laws of its jurisdiction of incorporation or formation and has all
necessary power under its organizational documents and the law pursuant to which
it was organized or formed to own, operate or lease the properties and assets
now owned, operated or leased by it and to carry on the Elevator Business as it
is currently conducted by such Elevator Subsidiary.
(5) All of the Transferred Equity that constitutes capital
stock of
F1-2
101
corporations organized under the laws of Delaware or New York has been validly
issued and is fully paid and nonassessable. Each of the Seller Entities directly
or indirectly owns the Transferred Equity in the amounts and percentages set
forth on Exhibit II to the Purchase Agreement, in each case free and clear of
any material Encumbrances known to me. Except as indicated on such Exhibit II,
the Transferred Equity of Elevator Subsidiaries organized under the laws of
Delaware or New York constitutes all of the issued and outstanding capital stock
and other equity interests of each such Elevator Subsidiary. To my knowledge,
(a) there are no outstanding options, warrants or other rights to subscribe for
or purchase from any Seller Company, or any plans, contracts or commitments
providing for the issuance of, or the granting of rights to acquire, (i) any
capital stock or other similar ownership interests in any Elevator Subsidiary or
(ii) any securities convertible into or exchangeable for any capital stock or
other ownership interests in any Elevator Subsidiary, and (b) there are no
outstanding contractual obligations of any Seller Company to repurchase, redeem
or otherwise acquire any outstanding shares of capital stock or other similar
ownership interests in any of the Elevator Subsidiaries.
I am a member of the Bar of the State of New York and the foregoing
opinions are limited to the laws of the State of New York, the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware.
The opinions set forth above are rendered solely to you in connection
with the above matter and may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without my prior written
consent.
Very truly yours,
F1-3
102
Exhibit G: Form of Opinion of General Counsel to each Buyer
103
Exhibit G-1
Form of Opinion of Buyer's General Counsel
[applicable Closing Date]
Dover Corporation
280 Park Avenue
New York, NY 10017-1292
Ladies and Gentlemen:
I am the General Counsel of Thyssen Industrie AG, an Aktiengesellschaft
organized and existing under the laws of the Federal Republic of Germany (the
"Company"), and am delivering this opinion pursuant to Section 6.3 of the
Purchase Agreement, dated as of November 23, 1998 (the "Purchase Agreement"),
among the Company, Thyssen Elevator Holding Corporation, a corporation organized
under the laws of the State of Delaware, and Dover Corporation, a Delaware
corporation. Unless otherwise defined herein, capitalized terms used herein are
defined as set forth in the Purchase Agreement.
In connection with the foregoing, I have reviewed executed copies of
the Purchase Agreement and each of the Related Agreements to which the Company
is a party and have examined originals or copies certified or otherwise
identified to my satisfaction of such corporate records of the Company,
certificates of public officials and of officers of the Company and such other
documents as I have deemed necessary as a basis for the opinions hereinafter
expressed. As to questions of fact material to such opinions, I have, when
relevant facts were not independently established by me, examined and relied
upon representations made by the Company in the Purchase Agreement and
certificates of officers of the Company or of public officials.
Based upon the foregoing and upon such other investigations as I have
deemed necessary, I am of the opinion that;
1. The Company is an Aktiengesellschaft validly existing and in good
standing under the laws of the Federal Republic of Germany.
2. The Purchase Agreement and each Related Agreement to which the
Company is a party constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency and other laws affecting creditors' rights
generally and to general principles of equity.
3. The execution and the delivery of the Purchase Agreement and each
Related Agreement to which the Company is a party, and the consummation of the
transactions contemplated thereby, will not violate any provision of the
Articles of Incorporation or other
G1-1
104
similar constituent documents of the Company and have been duly authorized by
all necessary corporate action on the part of the Company.
4. To my knowledge, there are no suits, actions, proceedings
(including, without limitation, arbitral or administrative proceedings), claims
or governmental investigations pending or threatened against the Company that
could reasonably be expected to prevent or require the recision of the
transactions contemplated by the Purchase Agreement or any Related Agreement to
which the Company is a party, or which could reasonably be expected to challenge
the validity or propriety of, or have a material adverse effect on the ability
of the Company to consummate the transactions contemplated by, the Purchase
Agreement or any Related Agreement to which it is a party.
5. To my knowledge, the Company is not in violation of any law, rules,
regulations, judgments, orders or injunctions of any German court or
governmental body or agency thereof that are applicable to the Company and that
could reasonably be expected to prevent the Company from consummating the
transactions contemplated by the Purchase Agreement or the Related Agreements to
which it is a party.
My opinions expressed above are limited to the law of the Federal
Republic of Germany, and I do not express any opinion herein concerning any
other law. I note that the Purchase Agreement and the Related Agreements to
which the Company is a party are governed by the laws of the State of New York
and in rendering the opinion set forth in Section 2 above have assumed, with
your permission and without investigation, that the laws of the State of New
York are identical in all relevant respects to the laws of Germany.
The opinions set forth herein are rendered only to you and are solely
for your benefit in connection with the transactions contemplated by the
Purchase Agreement and the Related Agreements. The opinions set forth herein may
not be relied upon by you for any other purpose or relied upon by any other
person for any purpose without my prior written consent.
Very truly yours,
G1-2
105
Exhibit G-2
Form of Opinion of Buyer's General Counsel
[applicable Closing Date]
Dover Corporation
280 Park Avenue
New York, NY 10017-1292
Ladies and Gentlemen:
I am the General Counsel of Thyssen Elevator Holding Corporation, a
corporation organized under the laws of the State of Delaware (the "Company"),
and am delivering this opinion pursuant to Section 6.3 of the Purchase
Agreement, dated as of November 23, 1998 (the "Purchase Agreement"), among
Thyssen Industrie AG, an Aktiengesellschaft organized and existing under the
laws of the Federal Republic of Germany, the Company and Dover Corporation, a
Delaware corporation. Unless otherwise defined herein, capitalized terms used
herein are defined as set forth in the Purchase Agreement.
In connection with the foregoing, I have reviewed executed copies of
the Purchase Agreement and each of the Related Agreements to which the Company
is a party and have examined originals or copies certified or otherwise
identified to my satisfaction of such corporate records of the Company,
certificates of public officials and of officers of the Company and such other
documents as I have deemed necessary as a basis for the opinions hereinafter
expressed. As to questions of fact material to such opinions, I have, when
relevant facts were not independently established by me, examined and relied
upon representations made by the Company in the Purchase Agreement and
certificates of officers of the Company or of public officials.
Based upon the foregoing and upon such other investigations as I have
deemed necessary, I am of the opinion that;
1. The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware.
2. The Purchase Agreement and each Related Agreement to which the
Company is a party constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency and other laws affecting creditors' rights
generally and to general principles of equity.
3. The execution and the delivery of the Purchase Agreement and each
Related Agreement to which the Company is a party, and the consummation of the
transactions contemplated thereby, will not violate any provision of the
Certificate of Incorporation or bylaws
G2-1
106
of the Company and have been duly authorized by all necessary corporate action
on the part of the Company.
4. To my knowledge, there are no suits, actions, proceedings
(including, without limitation, arbitral or administrative proceedings), claims
or governmental investigations pending or threatened against the Company that
could reasonably be expected to prevent or require the recision of the
transactions contemplated by the Purchase Agreement or any Related Agreement to
which the Company is a party, or which could reasonably be expected to challenge
the validity or propriety of, or have a material adverse effect on the ability
of the Company to consummate the transactions contemplated by, the Purchase
Agreement or any Related Agreement to which it is a party.
My opinions expressed above are limited to the laws of the State of
Michigan and the General Corporation Law of the State of Delaware, and I do not
express any opinion herein concerning any other law. I note that the Purchase
Agreement and the Related Agreements to which the Company is a party are
governed by the laws of the State of New York and in rendering the opinion set
forth in Section 2 above have assumed, with your permission and without
investigation, that the laws of the State of New York are identical in all
relevant respects to the laws of the State of Michigan.
The opinions set forth herein are rendered only to you and are solely
for your benefit in connection with the transactions contemplated by the
Purchase Agreement and the Related Agreements. The opinions set forth herein may
not be relied upon by you for any other purpose or relied upon by any other
person for any purpose without my prior written consent.
Very truly yours,
G2-2
1
EXHIBIT 20
DOVER TO SELL
ELEVATOR BUSINESS
NEW YORK, NY (November 23, 1998)... Dover Corporation (DOV-NYSE) has signed a
definitive Agreement to sell all of its elevator business operations to Thyssen.
The transaction will close as soon as regulatory approvals have been given,
which Thyssen and Dover are highly confident of receiving.
Thyssen Elevator, a unit of Thyssen Industrie AG (Germany), is a global
elevator company with sales of more than $2 billion, primarily from areas
outside North America. Dover Elevator reported sales of $880 million for the
year 1997 and $658 million for the first 9 months of 1998.
Dover Corporation had 1997 sales of $4,548 million and operational pretax
profits (as defined on page 5 of its 1997 Annual Report) of $746 million (of
which $880 million and $105 million, respectively, were from its elevator
business).
The Agreement provides for a payment to Dover at closing of $1.1 billion and for
a sharing of certain expenses arising out of the transaction. Dover had
previously announced a plan to spin-off its elevator business to its
shareholders in early 1999. The Agreement signed today terminates that plan. At
closing, which could occur prior to the end of the year, Dover will report a
non-recurring gain on the sale, currently estimated at approximately $2.30 per
Dover share.
