Final Judgment : The Manitowoc Co., Inc., Et Al.

WHEREAS, Plaintiff, the United States of America, filed its Complaint on October 6, 2008, the United States and defendants, The Manitowoc Company, Inc., Enodis plc, and Enodis Corporation, by their respective attorneys, have consented to the entry of this Final Judgment without trial or adjudication of any issue of fact or law, and without this Final Judgment constituting any evidence against or admission by any party regarding any issue of law or fact;

AND WHEREAS, defendants agree to be bound by the provisions of this Final Judgment pending its approval by the Court;

AND WHEREAS, the essence of this Final Judgment is the prompt and certain divestiture of certain rights and assets by the defendants to assure that competition is not substantially lessened;

AND WHEREAS, the United States requires defendants to make certain divestitures for the purpose of remedying the loss of competition alleged in the Complaint;

AND WHEREAS, defendants have represented to the United States that the divestitures required below can and will be made, and that defendants will later raise no claim of hardship or difficulty as grounds for asking the Court to modify any of the divestiture provisions contained below;

NOW, THEREFORE, before any testimony is taken, without trial or adjudication of any issue of fact or law, and upon consent of the parties, it is hereby ORDERED, ADJUDGED, AND DECREED:

This Court has jurisdiction over the subject matter of and each of the parties to this action. The Complaint states a claim upon which relief may be granted against the defendants under Section 7 of the Clayton Act, as amended (15 U.S.C. § 18).

As used in this Final Judgment:

1. "Acquirer" means the entity to whom defendants divest the Divestiture Business.
2. "Enodis" means defendant Enodis plc, a corporation registered in England and Wales with its headquarters in London, England, and Enodis Corporation, a Delaware corporation with its headquarters in New Port Richey, Florida, and their successors, assigns, parents, subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and all of their directors, officers, managers, agents, and employees.
3. "Manitowoc" means defendant The Manitowoc Company, Inc., a Wisconsin corporation headquartered in Manitowoc, Wisconsin, its successors, assigns, parents, subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and all of their directors, officers, managers, agents, and employees.
4. "Closing Date" means the date on which the transfer of the Divestiture Assets from the defendants to the Acquirer has been completed.
5. "Divestiture Business" means Enodis's entire business engaged in the development, production, distribution, and sale of ice machines, ice machine parts, and related equipment (such as ice bins, ice dispensers, and water filtration systems) in the United States, including, but not limited to:
1. Enodis's facility located in Fairfax, South Carolina, which is owned by Scotsman Group, Inc. (now known as Scotsman Group L.L.C.);
2. Enodis's facility located in Vernon Hills, Illinois, which is leased by Scotsman Group, Inc. (now known as Scotsman Group L.L.C.);
3. Enodis's facility located in Denver, Colorado, which is owned by Welbilt Corporation (now known as Enodis Corporation);
4. Enodis's facility located in Pomona, California, which is leased by Scotsman Group, Inc. (now known as Scotsman Group L.L.C.);
5. All tangible assets used in the Divestiture Business, including, but not limited to, all research and development activities; all manufacturing equipment, tooling and fixed assets, personal property, inventory, office furniture, materials, supplies, and other tangible property (including replacement hardware for the Vernon Hills, Illinois facility that defendants are required to purchase pursuant to Section II, Paragraph E below); all licenses, permits and authorizations issued by any governmental organization relating to the Divestiture Business; all contracts, teaming arrangements, agreements, leases, commitments, certifications, and understandings relating to the Divestiture Business, including, but not limited to, supply and distribution agreements; all customer lists, accounts, and credit records; all repair and performance records and all other records; and
6. All intangible assets used in the development, production, distribution, and sale of ice machines, ice machine parts, and related equipment, including, but not limited to, all contractual rights (to the extent assignable), except for contracts that are not primarily for products or services used by the Divestiture Business; all rights under licenses, permits and authorizations issued by any governmental organization relating to the Divestiture Business; patents, licenses and sublicenses, intellectual property, copyrights, trademarks, trade names (including any use of the name Scotsman or Ice-O-Matic in the United States), service marks, service names, technical information, computer software and related documentation (including replacement software and related documentation that defendants are required to purchase, and applications and data that defendants are required to transfer to hardware, for the Vernon Hills, Illinois facility pursuant to Section II, Paragraph E below), know-how, trade secrets, drawings, blueprints, designs, design protocols, specifications for materials, specifications for parts and devices, safety procedures for the handling of materials and substances, quality assurance and control procedures, design tools and simulation capability, all manuals and technical information defendants provide to their own employees, customers, suppliers, agents or licensees; and all research data concerning historic and current research and development efforts (up to the Closing Date of the divestiture required by Section IV or Section V), including, but not limited to, designs of experiments, and the results of successful and unsuccessful designs and experiments;

except that the Divestiture Business shall not include the servers, applications, and related documentation located at the Vernon Hills, Illinois facility that are not used primarily in the operation of the Divestiture Business, provided that within 45 days after the filing of the Complaint in this matter, defendants take all steps necessary (including the purchase of replacement hardware, the purchase, licensing, or provision of software and related documentation, and the transfer of applications and data) to ensure that all information technology operations used by the Divestiture Business are maintained at levels of functionality equivalent or superior to the levels of functionality that exist as of the filing of the Complaint in this matter. Defendants shall also take all steps necessary to purge any data related to the Divestiture Business from hardware and backup media at Vernon Hills that will not be divested under this provision. The Divestiture Business shall not include the tangible or intangible assets comprising the Enodis facility in New Port Richey, Florida, with the exception of the following: (1) any software, electronically stored information, or documents arising from research and development activities related to the ice machine business; (2) any assets used primarily in the operation of the ice machine business, or (3) any assets necessary for operation of the ice machine business.

6. "Frimont Business" means Enodis plc's Frimont S.p.A. business, which produces commercial ice machines for the European market and which the European Commission has required to be divested.

III. Applicability

1. This Final Judgment applies to Manitowoc and Enodis, as defined above, and all other persons in active concert or participation with any of them who receive actual notice of this Final Judgment by personal service or otherwise.
2. If, prior to complying with Section IV and V of this Final Judgment, defendants sell or otherwise dispose of all or substantially all of their assets or of lesser business units that include the Divestiture Business, they shall require the purchaser to be bound by the provisions of this Final Judgment. Defendants need not obtain such an agreement from the Acquirer of the assets divested pursuant to this Final Judgment.

IV. Divestitures

1. Defendants are ordered and directed, within 150 calendar days after the filing of the Complaint in this matter, or five (5) calendar days after notice of the entry of this Final Judgment by the Court, whichever is later, to divest the Divestiture Business in a manner consistent with this Final Judgment to a single Acquirer acceptable to the United States, in its sole discretion after consultation with the European Commission. The United States, in its sole discretion, may agree to one or more extensions of this time period not to exceed sixty (60) calendar days in total, and shall notify the Court in such circumstances. Defendants agree to use their best efforts to divest the Divestiture Business as expeditiously as possible.
2. In accomplishing the divestiture ordered by this Final Judgment, defendants promptly shall make known, by usual and customary means, the availability of the Divestiture Business. Defendants shall inform any person making inquiry regarding a possible purchase of the Divestiture Business that they are being divested pursuant to this Final Judgment and provide that person with a copy of this Final Judgment. Defendants shall offer to furnish to all prospective Acquirers, subject to customary confidentiality assurances, all information and documents relating to the Divestiture Business customarily provided in a due diligence process except such information or documents subject to the attorney-client privilege or work-product doctrine. Defendants shall make available such information to the United States at the same time that such information is made available to any other person.
3. Defendants shall provide the Acquirer and the United States information relating to all personnel involved in development, production, distribution, and sales related to the Divestiture Business to enable the Acquirer to make offers of employment. Defendants will not interfere with any negotiations by the Acquirer to employ any employee whose primary responsibility is development, production, distribution, and sales related to the Divestiture Business, and will not interfere with negotiations by the Acquirer to employ the following three Enodis employees who work at the Vernon Hills, Illinois facility: (1) the Senior Business Analyst and Developer; (2) the Unix Administrator and Network Manager; and (3) the Computer Operator and Systems Specialist.
4. Defendants shall permit prospective Acquirers of the Divestiture Business to have reasonable access to personnel and to make inspections of the physical facilities of the Divestiture Business; access to any and all environmental, zoning, and other permit documents and information; and access to any and all financial, operational, or other documents and information customarily provided as part of a due diligence process.
5. Defendants shall warrant to the Acquirer that each asset will be operational on the date of sale.
6. Defendants shall not take any action that will impede in any way the permitting, operation, or divestiture of the Divestiture Business. Defendants shall not exercise any contractual right to prevent, or otherwise attempt in any way to impede, sales or service representatives that represent Enodis in connection with the Divestiture Business from representing the Acquirer in the sale or servicing of products sold by the Divestiture Business.
7. Enodis shall warrant to the Acquirer that there are no material defects, and Manitowoc shall warrant that it is not aware of any material defects, in the environmental, zoning or other permits pertaining to the operation of each asset, and that following the sale of the Divestiture Business, defendants will not undertake, directly or indirectly, any challenges to the environmental, zoning, or other permits relating to the operation of the Divestiture Business.
8. Notwithstanding anything to the contrary in this Final Judgment, at the option of the Acquirer, defendants shall enter into a transition services agreement for a limited period, with respect to information technology and other support services that are reasonably necessary to operate the Divestiture Business, with the scope, terms and conditions of such agreement being subject to the approval of the United States in its sole discretion.
9. At the option of the Acquirer, defendants shall use their best efforts to procure the assignment of contractual rights referenced in Section II, Paragraph E(6) before the Closing Date of the divestiture required by Section IV or Section V.
10. Defendants shall not interfere with any effort by the Acquirer to negotiate a contract with any supplier of any product purchased by the Divestiture Business as of the filing of the Complaint in this matter. If requested by the Acquirer:
    1. Defendants shall provide information or documentation relating to controllers, compressors, condensers, valves, and copper strips, or any other product customized for the Divestiture Business by any supplier, that are purchased by the Divestiture Business under contracts as to which the defendants are unable to secure effective assignment to the Acquirer or under contracts that are not primarily for products or services used by the Divestiture Business; and
    2. If the Acquirer is unable, prior to the Closing Date of the divestiture required by Section IV or Section V, to negotiate and enter into a contract, on commercially reasonable terms with a qualified and reliable supplier, providing for the Acquirer's supply of copper strips, or any other product for which an alternative supplier is not available as of the Closing Date, that have the same characteristics (or, so long as the product allows continuation of the Divestiture Business without disruption, having substantially the same characteristics) and are of the same, or superior, quality as those purchased by the Divestiture Business as of the filing of the Complaint in this matter, defendants shall purchase any such product on behalf of the Acquirer and resell it to the Acquirer at the price specified in defendants' supply contract as of the date of the purchase of the product for the Divestiture Business. This obligation shall expire upon the earlier of (1) the Acquirer or Divestiture Business having negotiated a contract of purchase of any such product meeting the criteria set forth above, (2) the Acquirer notifying defendants in writing that the Divestiture Business no longer intends to purchase any such product under this provision, (3) the expiration of the supply contract in accordance with the terms of that contract as they existed as of the date of the filing of the Complaint in this matter, or (4) one year after the date of the divestiture required under Section IV or Section V. Defendants shall not discuss, provide, disclose, or otherwise make available, directly or indirectly, any information related to such purchases and resales to any defendant personnel involved in production, marketing, distribution, or sales of ice machines.
11. Unless the United States otherwise consents in writing, the divestiture pursuant to Section IV, or by trustee appointed pursuant to Section V, of this Final Judgment, shall include the entire Divestiture Business, and shall be accomplished in such a way as to satisfy the United States, in its sole discretion, that the Divestiture Business can and will be used by the Acquirer as part of a viable, ongoing business engaged in the development, production, distribution, and sale of commercial cube ice machines, ice machine parts, and related equipment in the United States. The divestitures, whether pursuant to Section IV or Section V of this Final Judgment,
    1. shall be made to the acquirer of the Frimont Business;
    2. shall be made to an Acquirer that, in the United States's sole judgment, has the intent and capability (including the necessary managerial, operational, technical and financial capability) of competing effectively in the development, production, distribution, and sale of commercial cube ice machines, ice machine parts, and related equipment in the United States; and
    3. shall be accomplished so as to satisfy the United States, in its sole discretion, that none of the terms of any agreement between the Acquirer and defendants give defendants the ability unreasonably to raise the Acquirer's costs, to lower the Acquirer's efficiency, or otherwise to interfere in the ability of the Acquirer to compete effectively in the development, production, distribution, and sale of commercial cube ice machines, ice machine parts, and related equipment in the United States.

V. Appointment of Trustee

1. If defendants have not divested the Divestiture Business within the time period specified in Section IV, Paragraph A, defendants shall notify the United States of that fact in writing. Upon application of the United States, the Court shall appoint a trustee selected by the United States, in consultation with the European Commission to enable selection of a trustee acceptable to both the United States and the European Commission, and approved by the Court to effect the divestiture of the Divestiture Business.
2. After the appointment of a trustee becomes effective, only the trustee shall have the right to sell the Divestiture Business. The trustee shall have the power and authority to accomplish the divestiture to an Acquirer acceptable to the United States at such price and on such terms as are then obtainable upon reasonable effort by the trustee, subject to the provisions of Sections IV, V, and VI of this Final Judgment, and shall have such other powers as this Court deems appropriate. Subject to Section V, Paragraph D of this Final Judgment, the trustee may hire at the cost and expense of defendants any investment bankers, attorneys, or other agents, who shall be solely accountable to the trustee, reasonably necessary in the trustee's judgment to assist in the divestiture.
3. Defendants shall not object to a sale by the trustee on any ground other than the trustee's malfeasance or that the Acquirer has not been approved by the European Commission. Any objection by defendants on the ground of the trustee's malfeasance must be conveyed in writing to the United States and the trustee within ten (10) calendar days after the trustee has provided the notice required under Section VI; any objection by defendants based on lack of approval from the European Commission must be conveyed in writing to the United States and the trustee within two (2) business days after the European Commission notifies defendants that it does not approve of the proposed Acquirer.
4. The trustee shall serve at the cost and expense of defendants, on such terms and conditions as the United States approves, and shall account for all monies derived from the sale of the assets sold by the trustee and all costs and expenses so incurred. After approval by the Court of the trustee's accounting, including fees for its services and those of any professionals and agents retained by the trustee, all remaining money shall be paid to defendants and the trust shall then be terminated. The compensation of the trustee and any professionals and agents retained by the trustee shall be reasonable in light of the value of the Divestiture Business and based on a fee arrangement providing the trustee with an incentive based on the price and terms of the divestiture and the speed with which it is accomplished, but timeliness is paramount.
5. Defendants shall use their best efforts to assist the trustee in accomplishing the required divestiture. The trustee and any consultants, accountants, attorneys, and other persons retained by the trustee shall have full and complete access to the personnel, books, records, and facilities of the business to be divested, and defendants shall develop financial and other information relevant to such business as the trustee may reasonably request, subject to reasonable protection for trade secret or other confidential research, development, or commercial information. Defendants shall take no action to interfere with or to impede the trustee's accomplishment of the divestiture.
6. After its appointment, the trustee shall file monthly reports with the United States and the Court setting forth the trustee's efforts to accomplish the divestiture ordered under this Final Judgment. To the extent such reports contain information that the trustee deems confidential, such reports shall not be filed in the public docket of the Court. Such reports shall include the name, address, and telephone number of each person who, during the preceding month, made an offer to acquire, expressed an interest in acquiring, entered into negotiations to acquire, or was contacted or made an inquiry about acquiring, any interest in the Divestiture Business, and shall describe in detail each contact with any such person. The trustee shall maintain full records of all efforts made to divest the Divestiture Business.
7. If the trustee has not accomplished the divestiture ordered under this Final Judgment within six (6) months after its appointment, the trustee shall promptly file with the Court a report setting forth (1) the trustee's efforts to accomplish the required divestiture, (2) the reasons, in the trustee's judgment, why the required divestiture has not been accomplished, and (3) the trustee's recommendations. To the extent such reports contain information that the trustee deems confidential, such reports shall not be filed in the public docket of the Court. The trustee shall at the same time furnish such report to the United States which shall have the right to make additional recommendations consistent with the purpose of the trust. The Court thereafter shall enter such orders as it shall deem appropriate to carry out the purpose of the Final Judgment, which may, if necessary, include extending the trust and the term of the trustee's appointment by a period requested by the United States.

VI. Notice of Proposed Divestiture

1. Within two (2) business days following execution of a definitive divestiture agreement, defendants or the trustee, whichever is then responsible for effecting the divestiture required herein, shall notify the United States of any proposed divestiture required by Section IV or V of this Final Judgment. If the trustee is responsible, it shall similarly notify defendants. The notice shall set forth the details of the proposed divestiture and list the name, address, and telephone number of each person not previously identified who offered or expressed an interest in or desire to acquire any ownership interest in the Divestiture Business, together with full details of the same.
2. Within fifteen (15) calendar days of receipt by the United States of such notice, the United States may request from defendants, the proposed Acquirer, any other third party, or the trustee, if applicable, additional information concerning the proposed divestiture, the proposed Acquirer, and any other potential Acquirer. Defendants and the trustee shall furnish any additional information requested within fifteen (15) calendar days of the receipt of the request, unless the parties shall otherwise agree.
3. Within thirty (30) calendar days after receipt of the notice or within twenty (20) calendar days after the United States has been provided the additional information requested from defendants, the proposed Acquirer, any third party, and the trustee, whichever is later, the United States shall provide written notice to defendants and the trustee, if there is one, stating whether or not it objects to the proposed divestiture. If the United States provides written notice that it does not object, the divestiture may be consummated, subject only to defendants' limited right to object to the sale under Section V, Paragraph C of this Final Judgment. Absent written notice that the United States does not object to the proposed Acquirer or upon objection by the United States, a divestiture proposed under Section IV or Section V shall not be consummated. Upon objection by defendants under Section V, Paragraph C, a divestiture proposed under Section V shall not be consummated unless approved by the Court.