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 (Date of earliest event reported): April 1, 1998
OXFORD AUTOMOTIVE, INC.
(Exact name of Registrant as specified in its charter)
Michigan 333-32975 38-3262809
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1250 Stephenson Highway
Troy, Michigan 48083
(Address of principal executive offices)
Registrant's telephone number, including area code: (248) 577-1400
N/A
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 1, 1998 (the "Closing Date") pursuant to an Asset Purchase Agreement,
dated as of March 13, 1998 (the "Purchase Agreement"), between Oxford
Automotive, Inc. ("Registrant") and Eaton Corporation ("Eaton") the Registrant
acquired (the "Acquisition") the Suspension Division of Eaton (the "Suspension
Division"). On the Closing Date, Eaton received approximately $48.6 million
in exchange for the Suspension Division. It is expected that an additional
$5.3 million will be paid to Eaton, within the next 30 days, for Eaton's 49%
interest in Metalurgica Carabobo, S.A., a Venezuelan manufacturer of
conventional leaf springs and coil springs for both light and heavy trucks.
The consideration provided for in the Purchase Agreement for the Suspension
Division was determined by the Registrant after a complete review of the
Suspension Division's operations and negotiations between representatives of
the Registrant and Eaton. The Acquisition was financed from the Registrant's
available cash and the proceeds from the Registrant's offering of its 10-1/8%
Senior Subordinated Notes due 2007, Series B.
The Suspension Division is a leading tier one North American supplier of leaf
spring suspension systems for automotive applications. Products of the
Suspension Division include multiple leaf, parabolic (long taper) multiple
leaf, and single leaf long taper suspension systems.
The Suspension Division is a major supplier to the traditional North American
light truck vehicle manufacturers, and also one Japanese automotive
transplant, one Japanese heavy truck manufacturer, and one European vehicle
program. The Suspension Division designs, manufactures and markets leaf
springs for original equipment vehicle markets with product applications in
light truck rear suspensions. The Suspension Division is focused on the light
truck market, where full-size pick-ups and vans, mini pick-ups and vans, and
sport utility vehicles are the major users of leaf springs, primarily for rear
suspension applications. The Registrant intends to continue and expand the
current operations of the Suspension Division.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
Financial Statements will be filed by amendment pursuant to Item
7(a)(4) on or prior to June 15, 1998
(b) Pro Forma Financial Information.
Pro Forma Financial Information will be filed by amendment pursuant
to Item 7(b)(2) on or prior to June 15, 1998
(c) Exhibits. A list of Exhibits included as part of this report is
set forth in the Exhibit Index which immediately precedes such exhibits and is
incorporated herein by reference.
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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 thereunto duly authorized.
OXFORD AUTOMOTIVE, INC.
/S/ DONALD C. CAMPION
Donald C. Campion
Senior Vice President and
Chief Financial Officer
Dated: April 15, 1998
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EXHIBIT INDEX
Ex. No. Description
2.1 Asset Purchase Agreement, dated as of March 13, 1998,
between Oxford Automotive, Inc. and Eaton Corporation.
The Asset Purchase Agreement does not contain certain
schedules which include routine background information
relating to the Suspension Division. The Registrant
will furnish a copy of the omitted material to the
Commission upon request.
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement"), is made and entered into as of
March 13, 1998, between Oxford Automotive, Inc., a Michigan corporation
("Buyer") and Eaton Corporation, an Ohio corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the design, manufacture and marketing of
steel leaf springs for the original equipment vehicle markets (the "Business")
by and through Seller's Suspension Division (the "Division"); and
WHEREAS, Seller, directly and indirectly though Eaton Yale Ltd., a
corporation organized under the laws of the Province of Ontario, Canada and
indirectly wholly-owned by Eaton ("Eaton Yale"), and Eaton International
Corporation, a Delaware corporation wholly-owned by Seller ("Eaton
International; together with Eaton Yale, the "Seller Subsidiaries"), owns or
leases the assets used in the conduct of the Business of the Division,
including, without limitation, trade accounts receivable, inventory, land,
buildings, fixtures, machinery and equipment, contract rights, customer and
supplier lists, records, and related information, patents, trade secrets and
trademarks; and
WHEREAS, Seller desires to sell, and to cause the Seller Subsidiaries to
sell, and Buyer desires to purchase, and shall cause Oxford Suspension, Inc. a
Michigan corporation ("Oxford U.S."), to purchase all of the assets and assume
certain liabilities of the Division with respect to its U.S. operations and
shall cause Oxford Suspension Ltd., an Ontario corporation ("Oxford Canada"
and together with Oxford U.S., the "Buyer Subsidiaries"), to purchase all of
the assets and assume certain liabilities of the Division with respect to its
Canadian operations in accordance with the terms and conditions of this
Agreement;
NOW, THEREFORE, in consideration of the payments herein provided for and
the covenants herein contained, the parties hereby agree as follows.
1. Sale and Purchase of Assets.
1.1 Transferred Assets. On the terms and subject to the
conditions of this Agreement, and for the consideration set forth in Section
3, Seller shall, and shall cause the Seller Subsidiaries to, on the Closing
Date (as defined in Section 13), sell, transfer and convey to Buyer, free and
clear of all Liens, other than the Real Property Permitted Exceptions (as that
term is defined in Section 4.4(a)) and the Personal Property Permitted
Exceptions (as that term is defined in Section 4.5), all of Seller's and the
Seller Subsidiaries', respective rights, titles and interests in and to the
assets that are used exclusively or primarily to operate the Business or are
generated exclusively or primarily by the Business as currently operated by
the Seller or the Seller Subsidiaries consistent with past practices, wherever
such assets are located and whether real, personal or mixed, tangible or
intangible, and whether or not such assets have any value for accounting
purposes or are carried or reflected on or specifically referred to in the
books or financial statements of the Seller, with such changes, deletions or
additions thereto as may occur from the date hereof to the Closing Date
consistent with the terms and conditions of this Agreement, subject in each
case to Section 1.2, Section 1.3, and Section 1.4 (the "Transferred Assets"),
including, to the extent used exclusively or primarily to operate the Business
or are generated exclusively or primarily by the Business as currently
operated, the following:
(a) Accounts Receivables. All of the Division's trade and
other accounts receivable (the "Accounts Receivable");
(b) Real Property. All of the real property owned by the
Seller or the Seller Subsidiaries, including land, buildings, structures and
improvements thereon or appurtenances thereto, such real property being
located at 100 Mason Street, Wallaceburg, Ontario, Canada (the "Wallaceburg
Facility"), 566 Riverview Drive, Chatham, Ontario, Canada (the "Chatham
Facility"), and 7825 South Homestead Drive, Hamilton, Indiana, U.S.A. (the
"Hamilton Facility", which together with the Wallaceburg Facility and the
Chatham Facility may be referred to hereinafter as the "Manufacturing
Facilities"), as the same shall exist on the Closing Date (the "Owned Real
Property") with a legal description of each parcel of Owned Real Property
included on Schedule 1.1(b);
(c) Machinery and Equipment, Etc. All of the machinery,
equipment, computer hardware, vehicles, tools, repair and replacement parts,
and office furniture, fixtures and equipment (including, to the extent
identified on Schedule 1.1(c), office furniture, testing equipment and
fixtures located at Eaton's Administration & Marketing Building and Innovation
Center, Southfield, Michigan (the "Southfield Facility")), including those
items identified on Schedule 1.1(c), except to the extent disposed of in the
ordinary course of the business prior to the Closing Date, and such additional
items as are acquired in the ordinary course of business prior to the Closing
Date, in each case consistent with the terms and conditions of this Agreement
(the "Machinery and Equipment");
(d) Inventory. All of the Division's inventory of raw
materials, work-in-process, finished goods, supplies and spare parts, as the
same shall exist on the Closing Date, whether in Seller's or a Seller
Subsidiaries' possession, in transit to or from Seller or a Seller Subsidiary
or held on consignment by any third party (the "Inventory");
(e) Contracts. All rights and claims under all contracts,
agreements, and commitments, including outstanding purchase orders and sales
orders of the Division, the Seller, and the Seller Subsidiaries, including
those identified on Schedule 4.9 (the "Contracts");
(f) Lists and Records; Software. All of the Seller's and
the Seller Subsidiaries' books and records, customer and supplier lists,
sales, cost and shipping records and other lists and documents, other than the
corporate minute books, stock books, and stock transfer ledgers of the Seller
and the Seller Subsidiaries (the "Lists and Records") and all computer
software, including source code, disks, documentation, operating manuals,
related systems data, source programs, record layouts, program libraries, and
any other documentation in those application areas that may pertain to any
data processing system or operation (the "Software");
(g) Patents, Trademarks, Intellectual Property, etc. All
of the Intellectual Property, including those items identified on Schedule
1.1(g) (the "Proprietary Rights");
(h) Prepaid Items. All of the Division's prepaid expenses
and deposits, including those prepaid expenses and deposits identified on
Schedule 1.1(h) (the "Prepaid Items");
(i) Governmental Permits and Licenses. All of the
permits, licenses, certifications, approvals, consents, and other governmental
authorizations (the "Permits") issued to the Seller or the Seller
Subsidiaries, subject to Section 1.3;
(j) Metalcar Joint Venture Interest. Subject to Section
1.4, Eaton International's 49% joint venture interest, comprised of 445,258
shares of Class B stock (the "Metalcar Interest") in Metalurgica Carabobo,
S.A., a company organized under the laws of Venezuela (the "Joint Venture")
and all rights and claims under all related contracts among the Seller or the
Seller Subsidiaries and the Joint Venture and its Affiliates, except the
Trademark Agreement dated July 23, 1993 between Seller and the Joint Venture;
(k) Telephone Numbers. All telephone numbers used by the
Seller or the Seller Subsidiaries;
(l) Vendor Payment Identification Numbers, and UPC Codes.
All UPC codes or the similar vendor payment identification numbers used by the
Seller or the Seller Subsidiaries for remittances from customers;
(m) Supplier Rebates. All rebates from suppliers or
similar payments earned by the Seller and the Seller Subsidiaries prior to the
Closing Date;
(o) Claims Against Third Parties. All claims, actions,
suits, proceedings or choses in action, except those relating to Excluded
Assets or Retained Liabilities; and
(p) Other Assets. Those other assets, whether or not used
exclusively or primarily in the Business, identified on Schedule 1.1(p) (the
"Other Assets").
1.2 Excluded Assets. Notwithstanding the foregoing, the
following assets (the "Excluded Assets") shall be retained by Seller or the
Seller Subsidiaries, as the case may be, and shall not be included in the
Transferred Assets:
(a) cash (other than petty cash located at the
Manufacturing Facilities), cash equivalents and marketable securities;
(b) that Intellectual Property owned, licensed or
otherwise used by Seller or any of the Seller Subsidiaries which are not used
exclusively or primarily in the conduct of the Business, including the trade
names and trademarks "Eaton" and "Eaton Corporation" and any other trade
names, trademarks and corporate names incorporating in any way the foregoing
names and trademarks (the "Excluded Proprietary Rights");
(c) any Non-Transferable Assets (as defined in and subject
to Section 1.3) for which consent or approval to transfer has not been
obtained prior to the Closing Date;
(d) all claims and rights of relating to or arising from
any of the Excluded Assets or the Retained Liabilities (as defined in Section
2.1);
(e) all rights, properties and assets of the Division
which shall have been transferred or disposed of by Seller or a Seller
Subsidiary prior to the Closing Date in transactions occurring in the ordinary
course of the Business and consistent with past practice and the terms of this
Agreement;
(f) except as provided in Section 9, all assets held by or
on behalf of Seller or any Seller Subsidiary in trust, reserve or otherwise,
in respect of employee benefit plans or any other obligations pertaining to
employees of the Division;
(g) all rights to the refund of any tax, of any kind, of
the Division that was paid prior to the Closing Date and not reflected on the
Net Assets Statement (as defined in Section 3.3); and
(h) all assets, whether or not used exclusively or
primarily in the conduct of the Business, specifically identified on Schedule
1.2(h) (the "Other Excluded Assets").
1.3 Non-Transferability of Certain Assets.
(a) To the extent that there are certain assets of the
Business, including without limitation the Metalcar Interest and the Permits,
which are not assignable without the consent or approval of Persons other than
Seller ("Non-Transferable Assets"), and such consents or approvals are not
obtained by the Closing Date, the Agreement and the closing of the
transactions contemplated hereby shall not constitute an assignment or
agreement to assign or transfer such assets without such consent or approval.
(b) The Buyer and the Seller agree to use their reasonable
efforts to obtain such consents and approvals. In the meantime, the Buyer and
the Seller shall use their reasonable efforts to obtain for the Buyer the
benefit of such Non-Transferable Assets, including the enforcement for the
benefit and at the expense of Buyer of any rights previously enjoyed by Seller
in connection with any such assets and, at the request of the Buyer, the
Seller shall enforce for the account of the Buyer any right of the Seller
arising from any Permit, approval, or the like and of any contract, license
and other agreement described in Section 1.3(a) against such issuer or the
other party or parties referred to in Section 1.3(a) (including the right to
elect to terminate in accordance with the terms of such asset on the advice of
the Buyer). Except as reimbursed by the Buyer, in no event shall compliance
by Seller with this Section be deemed to require that Seller incur any
obligation or pay any moneys to third parties in connection with such efforts.
(c) To the extent that the Buyer is provided the benefits
pursuant to this Section 1.3 of any Permit or approval or the like or any
contract, license or other agreement, the Buyer shall perform the obligations
of the Seller, except with respect to any Retained Liabilities, under or in
connection with such Permit or approval or the like or any contract, license
or other agreement.
1.4 Metalcar Interest. (a) In accordance with the provisions of
Article 7 of the Certificate of Incorporation and By-Laws of the Joint Venture
(the "Joint Venture Charter") and Section 8.2 of the Share Purchase Agreement
("Share Purchase Agreement") dated July 23, 1993, between Sidergica Venezolana
("Sivensa") S.A.I.C.A.-S.A.C.A., a company organized and existing under the
laws of Venezuela, and Eaton International, Seller shall or shall cause Eaton
International or such other Affiliate of Seller to which the Metalcar Interest
may be transferred prior to Closing or the Metalcar Closing, as applicable, to
provide all required notices to the Joint Venture that Eaton International has
agreed to sell its Metalcar Interest to the Buyer for $5,300,000 (the
"Metalcar Purchase Price") and will comply with all other applicable
provisions of the Joint Venture Charter with respect to the proposed transfer
of its Metalcar Interest. Seller and the Seller Subsidiaries will use their
respective reasonable efforts, together with Buyer, to obtain the consent and
waiver of each of the Other Joint Venture Shareholders (as defined in Section
4.26) with respect to the transfer of the Metalcar Interest and the assignment
of all related contracts and agreements to Buyer.
(b) If on or prior to the Closing Date, (i) the Other
Joint Venture Shareholders holding in excess of 1.0% or more of the
outstanding shares of the Joint Venture elect to exercise their respective
purchase options for 1.0% or more of the Metalcar Interest (ii) the Other
Joint Venture Shareholders do not provide a written waiver of their right to
exercise their purchase option and consent to the transfer of the Metalcar
Interest, (iii) the required notice periods under Section 7.2 of the Joint
Venture Charter and the Share Purchase Agreement have not expired, provided
the Other Joint Venture Shareholders have not provided the written waiver
contemplated by subsection (ii) above, or (iv) Seller is unable to convey the
Metalcar Interest, or portion thereof, free and clear of all Liens (in any
event a "Metalcar Default"), the Buyer may exclude the entire Metalcar
Interest from the Transferred Assets, the Closing Payment (as defined in
Section 3) shall be reduced by the amount of the Metalcar Purchase Price, and
the Metalcar Interest shall be subject to Section 1.4(c). Eaton International
shall sell all or any such portion of the Metalcar Interest to the Other Joint
Venture Shareholders electing to purchase such shares in accordance with
Section 7.2 of the Joint Venture Charter. However, Eaton International shall
not sell all or any part of the Metalcar Interest to any other party, without
first providing the Buyer with the opportunity to purchase the Metalcar
Interest on such terms as may be offered to such other party. This condition
shall apply only to the Seller's obligation under this Agreement to sell the
Metalcar Interest as part of the Transferred Assets, and shall not be a
condition to the Seller's other obligations under this Agreement or a
condition to Buyer's obligations under this Agreement.
(c) If there is a Metalcar Default, Seller and the Seller
Subsidiaries will continue to use their respective reasonable efforts,
together with Buyer, to obtain the consent and waiver of the Other Joint
Venture Shareholders with respect to the transfer of the Metalcar Interest, or
portion thereof, and the assignment of all related contracts and agreements to
Buyer. Seller shall provide any required formal notice as to the proposed
transfer of the Metalcar Interest in accordance with the terms of the Joint
Venture Charter and the Share Purchase Agreement as soon as practicable
following the Closing Date. Subject to the satisfaction of the conditions set
forth in Section 11.12, the transfer of the Metalcar Interest, or portion
thereof reduced by 1% or less, as applicable (the "Metalcar Closing"), shall
take place at such time and place as Buyer and Seller shall mutually agree
following the earlier of the receipt of the required shareholder consents and
waivers or the expiration of any required notice periods with respect to the
transfer, which shall in any event be no later than 65 days after the Closing
Date. At the Metalcar Closing, Buyer shall deliver to Seller the amount of the
Metalcar Purchase Price, adjusted pro rata to the extent the Joint Venture
shares delivered are less than 49%, in the form of Brady Bonds as described in
and subject to Section 3.1. Seller shall deliver to Buyer the shares
representing the Metalcar Interest, or such portion thereof, to be transferred
to Buyer, assignments of the Metalcar Agreements (defined in Section 1.4(d))
and, if the appropriate consents are received, an assignment of the Share
Purchase Agreement. If the required shareholder consents and waivers with
respect to the transfer of the Metalcar Interest have not been received or the
required notice periods have not expired by the 65th day following the Closing
Date, Buyer and Seller shall have the right to extend the Metalcar Closing for
up to an additional 30 days.
(d) In the event that neither the Metalcar Interest nor,
in accordance with Section 1.4(b), any portion thereof is transferred to Buyer
on the Closing Date, then each of the Technical Assistance and License
Agreement dated July 23, 1993 between Eaton Yale and the Joint Venture, the
International Sales Agreement dated July 23, 1993 between Seller and the Joint
Venture, and the Letter Agreement dated July 23, 1993 relating to Export
Control Regulations (collectively the"Metalcar Agreements") shall continue in
effect until the Metalcar Closing. If neither the Metalcar Interest nor
portion thereof is transferred to Buyer pursuant to the Metalcar Closing in
accordance with Section 1.4(c), the Metalcar Agreements may either continue in
effect or be terminated by Seller. In any circumstance, for any period that
the Metalcar Agreements continue in effect after the Closing Date, Seller
shall enter into appropriate agreements with Buyer that allow for the required
technology and related matters to be provided to the Joint Venture pursuant to
the terms of the Metalcar Agreements, upon terms substantially equivalent to
the applicable Metalcar Agreement that provide for the same payments to Buyer
as the Seller receives in the applicable Metalcar Agreement. Regardless of
whether the Metalcar Interest or any portion thereof is transferred to Buyer,
the Trademark Agreement dated July 23, 1993 between Seller and the Joint
Venture shall be terminated by Seller.
2. Assumed, Retained, and Shared Liabilities.
2.1 Assumption of Liabilities. Upon the transfer of the
Transferred Assets on the Closing Date in accordance with this Agreement,
Buyer shall, by an Assumption Agreement, including the Guaranty attached
thereto, in the form attached as Exhibit A (the "Assumption Agreement"),
assume and agree to pay, discharge or perform, as appropriate, the following
liabilities and obligations of the Seller and the Seller Subsidiaries (the
"Assumed Liabilities"):
(a) all liabilities and obligations of the Seller and the
Seller Subsidiaries, including accounts payable and accrued liabilities
arising in the ordinary course of business, in respect of the Business to the
extent reflected on the Net Assets Statement;
(b) all liabilities and obligations of the Seller and the
Seller Subsidiaries in respect of the agreements, contracts, commitments and
leases which are Transferred Assets, including the Collective Bargaining
Agreements (as that term is defined in Section 4.20(b)); provided, however,
that the Buyer shall not assume or agree to pay, discharge or perform any
liabilities or obligations arising out of any breach by the Seller and the
Seller Subsidiaries of any provision of any such agreement, contract,
commitment or lease, including but not limited to liabilities or obligations
arising out of the failure of the Seller or the Seller Subsidiaries to perform
any agreement, contract, commitment or lease in accordance with its terms
prior to the Closing;
(c) subject to Section 2.2(k), all liabilities and
obligations of the Seller and the Seller Subsidiaries in respect of customer
returns and customer warranty claims for products sold by the Seller or the
Seller Subsidiaries on or prior to the Closing Date;
(d) product liability and similar claims for injury to
person or property (including death), regardless of when made or asserted, in
connection with any products included in Inventory as of the Closing; and
(e) liabilities and obligations in respect of (i) Unknown
Environmental Conditions (as defined in the Environmental Agreement attached
as Exhibit E), but, with respect to such matters becoming known within twenty-
four (24) months of the Closing Date, only to the extent that such liabilities
and obligations in respect of Unkown Environmental Conditions are in excess of
$1,500,000, and (ii) Known Environmental Conditions (as defined in the
Environmental Agreement) for which Claims (as defined in the Environmental
Agreement) are made beyond 10 years after the Closing Date.
(f) liabilities and obligations assumed by Buyer pursuant
to Section 9.
2.2 Retained Liabilities. Notwithstanding the foregoing, the
Seller or the Seller Subsidiaries, as the case may be, shall retain and shall
pay and timely discharge, without liability to the Buyer, all of the
liabilities of the Seller or the Seller Subsidiaries other than the Assumed
Liabilities and Buyer's share of the Shared Liabilities (the "Retained
Liabilities"), including, but not limited to:
(a) any liability or obligation under or in connection
with the Excluded Assets and any liability or obligation of the Seller or the
Seller Subsidiaries with respect to any Retained Liability;
(b) any federal, state, provincial, or local income,
capital gain or other tax payable with respect to the Business, the
Transferred Assets or the Assumed Liabilities for any period prior to the
Closing Date;
(c) any liabilities or obligations of the Seller or the
Seller Subsidiaries arising out of or relating to events occurring on or
before the Closing Date;
(d) any amounts owing by the Division to the Seller or the
Seller Subsidiaries or any Affiliate of the Seller;
(e) any indebtedness of the Seller or the Seller
Subsidiaries for borrowed money;
(f) any liability for the failure to comply with the Bulk
Sales laws of any jurisdiction, except any such liability arising out of the
failure of the Buyer to pay any Assumed Liability;
(g) any fees and expenses incurred by the Seller or any
Seller Subsidiary in connection with negotiating, preparing, closing and
carrying out this Agreement and the transactions contemplated by this
Agreement, including, without limitation, the fees, disbursements and expenses
for Seller's attorneys, accountants and consultants;
(h) any product liability or similar claim for injury to
person or property, regardless of when made or asserted, in connection with
any service performed or product sold or leased by or on behalf of the Seller
and the Seller Subsidiaries on or prior to the Closing;
(i) any liability or obligation arising prior to or as a
result of the Closing to any employees, agents or independent contractors of
the Seller or the Seller Subsidiaries or under any benefit arrangement with
respect thereto, except as expressly set forth in Section 9; and
(j) liabilities and obligations in respect of any Unknown
Environmental Conditions which become known within 24 months of the Closing
Date, to the extent such Unknown Environmental Conditions do not exceed
$1,500,000, and Known Environmental Conditions for which Claims are made
within 10 years of the Closing Date.
(k) any liabilities or obligations arising out of or
relating to those matters disclosed in Schedule 4.23 with respect to Ford
Motor Company, to the extent such liabilities or obligations exceed $250,000,
and Buyer agrees to cooperate with Seller and to use reasonable efforts to
contain costs of Seller relating to such matters, subject to reasonable
customer considerations.
2.3 Shared Liabilities The following liabilities and
obligations relating to the Division and the Transferred Assets shall be
shared pro rata between Buyer and the Seller (the "Shared Liabilities"), as
follows:
(a) With respect to utility charges which relate to
billing periods beginning before the Closing Date and ending after the Closing
Date, the responsibility for payment shall be prorated between the parties on
the basis of the proportional number of calendar days in the relevant billing
period that the Buyer or the Seller or the Seller Subsidiaries, as the case
may be, owns the Division;
(b) With respect to ad valorem property, real estate and
similar type taxes for the applicable tax year, the responsibility for payment
will be prorated between the parties on the basis of the proportional number
of calendar days that the Buyer or the Seller or the Seller Subsidiaries, as
the case may be, owns the Division in the relevant tax year;
(c) With respect to all liabilities and obligations
arising out of or related to any occupational condition, cumulative trauma,
hearing loss, illness, disease or sickness suffered by any Division Employee
(as that term is defined in Section 4.20(a)) resulting from, or arising in
connection with, the employment of such Division Employee prior to and after
the Closing Date (an "Occupational Disease"), the responsibility for payment
will be prorated between Buyer and the Seller or the Seller Subsidiaries, on
the basis of the proportional number of calendar days that the Seller or the
Seller Subsidiaries, on the one hand, and the Buyer, on the other, employed
the relevant Division Employees, i.e. each party shall be responsible for such
amount as is the product of (i) the amount of such liabilities and obligations
multiplied by (ii) a fraction (x) the numerator of which is the number of
months (rounded up to the nearest whole month) that such Division Employee was
exposed to the circumstances giving rise to such Occupational Disease while
employed by such party, through the date with respect to which such liability
and obligations are payable, and (y) the denominator of which is the total
number of months (rounded up to the nearest whole month) that such Division
Employee was exposed to the circumstances giving rise to such Occupational
Disease while employed by the parties through the date with respect to which
liabilities and obligations are payable; and
(d) With respect to any liabilities or obligations arising
out of or relating to those matters disclosed in Schedule 4.23 with respect to
Ford Motor Company, any costs up to and including a maximum of $250,000 will
be shared equally by the parties.
If either party pays any of the Shared Liabilities for which the other
party is entirely or partially responsible hereunder, then the responsible
party will promptly reimburse the paying party for that portion of the Shared
Liabilities for which the responsible party is responsible, provided that any
demand for reimbursement shall be accompanied by appropriate evidence of
payment thereof.
3. Purchase Price; Terms of Payment. The aggregate purchase price
(the "Purchase Price") for the Transferred Assets shall be $53.3 million (the
"Closing Payment"), subject to any adjustment as provided for in Section 3.1
and/or Section 3.3, and the assumption by Buyer of the Assumed Liabilities and
Buyer's share of the Shared Liabilities.
3.1 Payment at Closing. (a) At the Closing, Buyer shall pay
the Closing Payment to Seller and/or the Seller Subsidiaries, as may be
designated in writing by Seller to Buyer prior to the Closing, in cash and,
subject to Section 1.4, the delivery of Venezuela Par Bonds in respect of
the Metalcar Interest (the "Brady Bonds"); provided that (i) the cash payments
shall be by wire transfer of immediately available funds to such account(s) as
may be designated in writing by Seller prior to the Closing and (ii) the Brady
Bonds shall only be delivered in lieu of cash for the Metalcar Interest if
Buyer receives, prior to its purchase of such Brady Bonds, an agreement of
indemnification from Seller with respect to the delivery of such bonds in the
form attached hereto as Exhibit B.
(b) The Closing Payment shall be adjusted (i) downward by
(A) the amount of the Metalcar Purchase Price in the event of a Metalcar
Default or (B) a pro rata amount of the Metalcar Purchase Price if the Joint
Venture shares delivered are less than 49% of the outstanding Joint Venture
shares, and (ii) subject to Section 3.4, upward or downward for the difference
in the aggregate value of acquisitions and dispositions (to the extent not
reflected in the Net Assets Statement, as defined in Section 3.3(a)) of (A)
any fixed asset of the Division or (B) property of the Division that is the
subject of a capitalized lease (only with respect to the principal portion
paid with respect to such capitalized lease), that would have been or are
included in the Transferred Assets, to the extent such acquisitions and
dispositions are permitted by this Agreement, between January 1, 1998 and the
Closing Date (the "Fixed Asset Adjustment"). Not later than three days prior
to the Closing Date nor earlier than ten days prior to the Closing Date, the
Seller shall provide the Buyer with Schedule 3.1, which schedule (i) shall
list all acquisitions and dispositions of such fixed assets or leased
property, and (ii) for each acquisition or disposition, shall include (A) a
description of the fixed asset or leased property that was the subject of the
transaction, (B) the dollar value and date of the transaction and evidence
that such dollar value was paid in full, (C) the party from whom the fixed
asset or leased property was acquired or to whom it was transferred, and (D)
the location of the fixed asset or leased property immediately after the
acquisition or immediately prior to the disposition. The Seller shall also
provide the Buyer with copies of all relevant documentation regarding each
such acquisition or disposition within five business days of the transaction,
but in no event later than three days prior to the Closing Date, and such
documents shall be deemed to be Transferred Assets.
3.2 Allocation of the Purchase Price. The Purchase Price shall
be allocated by mutual agreement between the Buyer and the Seller. Such
allocation shall be used for all purposes, including preparation and filing of
Internal Revenue Service Form 8594 and any Canadian income tax returns with
respect to the transactions contemplated hereby and no party hereto shall take
or assert any position inconsistent therewith. The Buyer and the Seller shall
cooperate in connection with the preparation, execution and filing with the
Internal Revenue Service of all necessary information returns required by
Section 1060 of the Internal Revenue Code of 1986, as amended, (the "Code")
and comparable provisions under applicable Canadian law relating to the
allocation of the consideration for the Purchased Assets.
3.3 Adjustment to the Closing Payment. (a) Following the
Closing Date, Seller shall prepare or cause to be prepared, at its sole
expense, an audited statement (the "Net Assets Statement") for the Business as
of the Closing Date which reflects the net book value of those Transferred
Assets and the Assumed Liabilities which are current assets or liabilities as
of the Closing Date (the "Final Net Assets") in accordance with Seller's
Accounting Principles (as defined in Section 3.3(c)) and shall deliver the Net
Assets Statement to Buyer within 60 days after the Closing, together with an
unqualified report of Ernst & Young LLP thereon (subject to non-compliance
with GAAP as set forth on Schedule 3.3).
(b) The Buyer and its representatives shall have the right
to observe the work performed by the Seller or its representatives in
connection with the preparation of the Net Assets Statement, including the
physical inventory, and shall have the right to examine and make copies of the
work papers and such other documents that are generated or reviewed in
connection with the preparation of the Net Assets Statement; provided,
however, that to the extent such work papers and other documents are prepared
by outside independent auditors, the Buyer shall have the right to examine,
but not make copies of, such work papers and other documents, unless otherwise
permitted by applicable accounting standards.
(c) The Net Assets Statement shall be determined on a
consistent basis with the accounting principles currently used by the Seller
in preparing the Financial Statements (as defined in Section 4.3), except that
the warranty reserve in the Net Assets Statement will reflect the warranty
reserve balance included in the November 30, 1997 balance sheet included in
the Financial Statments, which principles are set forth in Schedule 3.3 (the
"Seller's Accounting Principles").
(d) Buyer shall have 30 days after the delivery of the Net
Assets Statement and the work papers and such other documents that are
generated or reviewed by the Seller in connection with the preparation of the
Net Assets Statement to review the Net Assets Statement. If within said
30-day period, Buyer notifies Seller in writing that it is unwilling to accept
any item(s) on the Net Assets Statement, specifically identifying the item(s)
and amount(s) in dispute and the basis for such dispute, the parties shall use
their reasonable efforts to reach agreement within the 30 days following the
delivery of Buyer's notice of dispute, or such longer period as may be agreed
upon by the parties, with respect to such disputed items. Any item(s) on the
Net Assets Statement not identified in writing as a disputed item within the
foregoing 30-day period as provided above shall be deemed to have been
accepted by Buyer and not subject to any further review or change.
(e) If the parties fail to reach a mutually agreeable
determination with respect to the Net Assets Statement within the foregoing
30-day period, or such longer period as may have been agreed upon, the
disputed item(s) shall be submitted to a partner having relevant expertise and
practicing at the Cleveland, Ohio office of Arthur Andersen LLP (the
"Independent Accountant") for resolution. The Independent Accountant's
determination shall be made using the Seller's Accounting Principles, shall be
final and binding on both parties and judgment on such determination may be
entered in any court having jurisdiction, in accordance with Section 21.4.
(f) The resolution of any disputed items shall be combined
with the undisputed items from the Net Assets Statement to re-calculate the
Final Net Assets. The parties shall request that such determination by the
Independent Accountant be resolved as promptly as possible.
(g) Upon the later of the expiration of the 30-day period
referred to above, during which time Buyer may notify Seller of any disputed
item(s) in the Net Assets Statement, or, in the event Buyer provides Seller
with written notice of disputed items in accordance with the foregoing, the
final determination of such disputed item(s), either by agreement of the
parties or a final determination by the Independent Accountant (the
"Settlement Date"), the parties shall make the adjustments to the Closing
Payment, if any, provided for in subsections (h) and (i) below. Between the
Closing Date and the completion of the Net Assets Statement, the Buyer shall,
during regular business hours, afford Seller and its representatives
reasonable access to the facilities of the Business and reasonable access to
all books, records, correspondence, files, financial statements, operating
data, and all other information with respect to the Business, and shall
provide to Seller and its representatives such operating and financial data
and any other information with respect to the Business as it or they may from
time to time reasonably request for the purpose(s) of preparing the Net Assets
Statement and resolving any disputed item(s). Buyer shall cause the personnel
of Buyer to perform those procedures normally performed in connection with a
year-end closing and to provide such other reasonable assistance as is
reasonably necessary to prepare the Net Assets Statement. Seller and its
representatives shall be provided with offices at the Business and telephones,
facilities, office equipment and miscellaneous office supplies, as the Seller
reasonably requests subsequent to the Closing Date until the Settlement Date.
Buyer shall make reasonably available during regular business hours the
appropriate officers and employees of the Business after the Closing for
purposes of Seller or its representatives interviewing the same in connection
with the preparation of the Net Assets Statement and resolving any disputed
items. During the 30-day period following the initial delivery of the Net
Assets Statement to Buyer by Seller, Seller shall make reasonably available
during regular business hours its relevant officers and employees to address
questions regarding the preparation of the Net Assets Statement.
(h) If the Final Net Assets exceeds $15,152,000, the Buyer
shall pay to Seller within three business days following the Settlement Date
the amount of the excess, with interest on such amount calculated at the rate
of interest announced from time to time by Citibank, N.A., New York, New York
as its base rate accruing from the Closing Date through the Settlement Date
(the "Applicable Rate") by wire transfer of immediately available funds to an
account designated in writing to Buyer by Seller.
(i) If the Final Net Assets is less than $15,152,000, the
Seller shall pay to Buyer within three business days following the Settlement
Date the amount of the deficit, with interest on such amount calculated at the
Applicable Rate, by wire transfer of immediately available funds to an account
designated in writing to Seller by Buyer.
(j) The parties agree and acknowledge that the Net Assets
Statement shall be prepared solely for the purpose of determining the value of
certain assets and liabilities of the Business and the final Purchase Price to
be paid to Seller, and that such valuations do not reflect or indicate the
price to be paid for any individual or class or category of the Transferred
Assets.
3.4 Determination of the Fixed Asset Adjustment. (a) The Buyer
shall have 30 days after the Closing Date to review Schedule 3.1 and all
documents delivered pursuant to Section 3.1(b). If within said 30-day period,
Buyer notifies Seller in writing that it disputes the amount of the Fixed
Asset Adjustment, specifically identifying the item(s) and amount(s) in
dispute and the basis for such dispute, the parties shall use their reasonable
efforts to reach agreement within the 30 days following the delivery of
Buyer's notice of dispute, or such longer period as may be agreed upon by the
parties, with respect to such disputed items. Any item(s) on Schedule 3.1 not
identified in writing as a disputed item within the foregoing 30-day period as
provided above shall be deemed to have been accepted by Buyer and not subject
to any further review or change.
(b) If the parties fail to reach a mutually agreeable
determination with respect to Schedule 3.1 within the foregoing 30-day period,
or such longer period as may have been agreed upon, the disputed item(s) shall
be submitted to the Independent Accountant for resolution. The Independent
Accountant's determination shall be made using all documentation relevant to
the acquisitions and dispositions listed on Schedule 3.1 , shall be final and
binding on both parties and judgement on such determination may be entered in
any court having jurisdiction, in accordance with Section 21.4. The parties
shall request that such determination by the Independent Accountant be
resolved as promptly as possible.
(c) In the event Buyer provides Seller with written notice
of disputed items in accordance with this Section 3.4, if the final
determination of such disputed item(s), either by agreement of the parties or
a final determination by the Independent Accountant (the "Fixed Asset
Settlement Date"), is (i) that the increase in the Purchase Price as a result
of the Fixed Asset Adjustment, if any, was in excess of the amount such
adjustment should have been, or (ii) that the amount of the reduction of the
Purchase Price pursuant to such adjustment, if any, was less than such
adjustment should have been, then the Seller shall pay the amount of such
excess or the amount of such additional reduction to the Buyer by payment by
wire transfer of immediately available funds to an account designated in
writing by the Buyer to the Seller within three business days following the
Fixed Asset Settlement Date.
(d) The parties agree and acknowledge that Schedule 3.1
shall be prepared solely for the purpose of determining the value of certain
assets and liabilities of the Business and the final Purchase Price to be paid
to Seller, and that such valuations do not reflect or indicate the price to be
paid for any individual or class or category of the Transferred Assets.
4. Representations and Warranties of Seller. As of the date hereof,
Seller makes the following representations and warranties to Buyer.
4.1 Organization, Existence and Standing of Seller. Each of the
Seller and the Seller Subsidiaries is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation and has full
corporate power and authority to own or lease the Transferred Assets owned by
it, to carry on the Business as it is now conducted by it and to consummate
the transactions contemplated by this Agreement and the related agreements
contemplated by this Agreement (the "Related Agreements"). Each of Seller and
the Seller Subsidiaries is duly qualified to do business in all of the
jurisdictions listed on Schedule 4.1, which include all of the states or other
jurisdictions in which the nature of the Transferred Assets owned or used by
it, or the conduct of the Business conducted by it, requires it to be so
qualified, except where the failure to be so qualified would not have a
Material Adverse Effect.
4.2 Corporate Authority. The entering into and the execution
and delivery of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby (a) have been duly and
validly authorized by requisite corporate action of the Seller and prior to
the Closing Date will have been duly and validly authorized by requisite
corporate action of each of the Seller Subsidiaries, and (b) constitutes the
legal, valid, and binding obligation of each (to the extent a party to this
Agreement and/or any of the Related Agreements) and no additional corporate or
stockholder authorization or consent is or will be required.
4.3 Financial Statements. Copies of pro forma unaudited balance
sheets of the Business as of December 31, 1994, December 31, 1995 and December
31, 1996, and as of November 30, 1997, and related pro forma unaudited
statements of profit and loss for the years and the 11-month period then ended
(collectively, the "Financial Statements"), have been delivered to Buyer and
are attached as Schedule 4.3. The Financial Statements (i) have been prepared
from information contained in the books and records of Seller, (ii) present
fairly, in all material respects, for those items listed therein, the net book
value of the Transferred Assets as of December 31, 1994, December 31, 1995,
December 31, 1996 and November 30, 1997, respectively, and the results of the
Division's operations (as the same are described in Schedule 4.3) for the
years and the 11-month period then ended, and (iii) have been prepared in
accordance with the Seller's Accounting Principles, except as disclosed in
Schedule 4.3.
4.4 Real Property. (a) Except as set forth on Schedule 4.4,
Seller, with respect to the Hamilton Facility, and Eaton Yale, with respect to
the Wallaceburg Facility and the Chatham Facility, each have good and
marketable fee simple title to all of the Owned Real Property owned by it,
free and clear of all Liens, except (i) Liens for real estate taxes and
assessments, both general and special, not yet due and payable, for which
adequate reserves have been established on the Financial Statements or which
are being contested in good faith; (ii) easements for electricity, water, gas,
and telephone lines serving only the real property and the business conducted
thereon, (iii) workmen's or other similar Liens imposed by law and arising or
incurred in the ordinary course of business in respect of obligations which
are not overdue, (iv) other Liens of record, and (v) other matters that do not
materially detract from the value of the Owned Real Property or materially
impair the operation of the Business as presently and ordinarily conducted.
The exceptions set forth in subsection (i) through (v) above shall be referred
to as the "Real Property Permitted Exceptions." Except as described on
Schedule 4.4, the Owned Real Property constitutes all of the real estate used
by Seller or any Seller Subsidiary in connection with the conduct of the
Business. There are no pending or, to the best of Seller's knowledge,
threatened condemnation or eminent domain proceedings involving the Owned Real
Property or any portion thereof, or for a sale in lieu thereof, which if
effected would have a Material Adverse Effect. To the best of the Seller's
knowledge, the Owned Real Property is zoned so as to permit the continued use
of the Owned Real Property by Buyer for the same purposes and uses as same
have been heretofore used by Seller or Eaton Yale, as the case may be.
(b) Neither the Seller nor any Seller Subsidiary leases
any real property in connection with the operation of the Business or the
ownership of the Transferred Assets.
4.5 Title to Personal Property. Except as set forth on Schedule
4.5, Seller has or the Seller Subsidiaries have, as the case may be, good and
marketable title to all of the tangible and intangible personal property
included in the Transferred Assets, free and clear of all Liens, except for
(a) Liens for taxes not yet due and payable or which are being contested in
good faith, and (b) other matters that do not materially impair the operation
of the Business as presently conducted or that would otherwise have a Material
Adverse Effect. The exceptions set forth in subsection (a) and (b) above
shall be referred to as the "Personal Property Permitted Exceptions."
4.6 Condition of Transferred Assets. The Transferred Assets
currently used in the operation of the Business have been maintained and
repaired by the Seller or the Seller Subsidiaries in the ordinary course of
business and are in such condition and repair, reasonable wear and tear
excepted, as is suitable for the purposes for which they are presently used in
the Business.
4.7 Accounts Receivable. The Accounts Receivable included in
the Financial Statements constitute all of the Accounts Receivable of Seller
or the Seller Subsidiaries, as the case may be, that relate to the Business as
of November 30, 1997. Other than those reserved for in the allowance for
doubtful accounts on the Financial Statements, all of such Accounts
Receivable are, and those existing on the Closing Date will be valid and
existing accounts receivable arising out of the sale of products of Seller in
the ordinary course of business. Except as set forth on Schedule 4.7, to the
best of the Seller's knowledge, none of such Accounts Receivable is or will be
at the Closing Date subject to any counterclaim or set-off except to the
extent of any such provision or reserve.
4.8 Inventory. The Inventory included in the Financial
Statements consists only of raw materials, work-in-process, finished goods,
packaging, supplies and spare parts of a quality and quantity usable and
saleable in the ordinary course of business, as determined in accordance with
the Seller's Accounting Principles. Except where the book value of such
Inventory has been written down on or prior to the Closing Date, the Inventory
is valued in the Financial Statements in accordance with the Seller's
Accounting Principles.
4.9 Contracts. (a) Except as set forth in Schedule 4.9,
neither the Seller nor any Seller Subsidiary is a party to or bound by any
agreement or contract, whether written or oral, of the following types that
involve the Business, the Transferred Assets, the Assumed Liabilities, or the
Buyer's share of the Shared Liabilities nor are any such agreements or
contracts presently being negotiated or discussed:
(i) Any contract, lease, agreement, plan or
arrangement involving commitments to others to make capital expenditures or
purchases or sales involving $50,000 or more in any one case or $100,000 in
the aggregate in any period of twelve consecutive months which are not
cancelable by the Seller or the Seller Subsidiaries without penalty on less
than 90-days prior written notice;
(ii) Any contract, lease, agreement, plan or
arrangement relating to any direct or indirect indebtedness for borrowed money
(including loan agreements, lease-purchase arrangements, guarantees,
agreements to purchase goods or services or to supply funds or other
undertakings on which others rely in extending credit), or any conditional
sales contracts, chattel mortgages, equipment lease agreements and other
security arrangements with respect to personal property with an obligation in
excess of $50,000 in any one case or $100,000 in the aggregate in any period
of twelve consecutive months which are not cancelable by the Seller or the
Seller Subsidiaries, without penalty, on less than 90-days prior written
notice;
(iii) Any contract, lease agreement, plan or
arrangement between the Division and the Seller or any Seller Subsidiary or
any Affiliate of the Seller or any Seller Subsidiary or related party in their
respective individual capacities;
(iv) Any employment, consulting or management
services contract or any confidentiality or proprietary rights agreements with
any employee of the Seller or any Seller Subsidiary or any third party;
(v) Any contract containing covenants limiting the
freedom of the Seller or any Seller Subsidiary to compete in any line of
business with any person or in any area or territory;
(vi) Any license agreement, either as licensor or
licensee, or any other agreement or arrangement of any type relating to any
patent, trademark or trade name or other Transferred Asset;
(vii) Any contract, agreement or arrangement of any
kind whatsoever, whether exclusive or otherwise, with any sales agent,
representative, franchisee or distributor;
(viii) Any contract or arrangement of any kind
whatsoever which requires the payment of royalties;
(ix) Any prime contract with any government or any
agency or instrumentality thereof;
(x) Any contract with respect to the discharge or
removal of effluent, wastes or pollutants of any nature;
(xi) Any joint venture, partnership or other
cooperative arrangement or any other such agreement involving a sharing of
profits; or
(xii) Any other legally binding contract, lease,
agreement, plan or arrangement not of the type covered by any of the other
items of this Section 4.9 involving money or property having an obligation in
excess of $50,000 in any one case or $100,000 in the aggregate in any period
of twelve consecutive months which are not cancelable by the Seller or the
Seller Subsidiaries, without penalty, on less than 90-days prior written
notice.
(b) "Material Contracts" shall mean those contracts listed
on Schedule 4.9. The Seller has provided the Buyer with complete copies of
each Material Contract; provided, however, that the Seller has included as
part of Schedule 4.9 a copy of the form of Ethical Business Conduct at Eaton
Commitment and the Agreement Concerning Employee Inventions and Confidential
Information entered into between employees of the Seller or the Seller
Subsidiaries and has not provided the Buyer with executed copies of each such
agreement (the "Form Confidentiality Agreement"). All of the Material
Contracts are in full force and effect and are valid, binding and enforceable
in accordance with their terms as to (i) the Seller or the Seller Subsidiaries
who are parties thereto, as the case may be, and (ii) to the best of the
Seller's knowledge, the other parties to such Material Contracts. Except as
disclosed on Schedule 4.9, each of Seller and the Seller Subsidiaries who are
parties to the Material Contracts has in all material respects performed and
is performing all obligations required to be performed by it under the
Material Contracts, and neither Seller or any of the Seller Subsidiaries who
are parties to the Material Contracts, nor, to the best of the Seller's
knowledge, any other party thereto, is in default of any material obligation
under any of the Material Contracts. Except as disclosed on Schedule 4.9,
none of Seller or any of the Seller Subsidiaries who are parties to the
Material Contracts has received any written notice of default under any of the
Material Contracts, nor has any event occurred which with notice or lapse of
time or both would constitute a default by Seller or any of the Seller
Subsidiaries, as applicable, thereunder.
(c) Except as disclosed on Schedule 4.9, the Seller and
the Seller Subsidiaries have not received, since November 30, 1997, written or
verbal notice of intent to terminate any Material Contract.
4.10 Software. The Software constitutes, in all material
respects, all of the software, including disks, source code (if transferable),
documentation operating manuals and related items necessary for the conduct of
the Business as it is presently conducted by Seller. The Seller has delivered
to the Buyer complete copies of all user and technical documentation related
to the Software.
4.11 Proprietary Rights. Seller and the Seller Subsidiaries are
the sole owners of all of the Proprietary Rights listed as "owned" on Schedule
1.1(g), and Seller or the Seller Subsidiaries have the right, under valid,
binding and subsisting license, technology or similar agreements to employ or
otherwise use the Proprietary Rights listed as "licensed" on Schedule 1.1(g).
Except as disclosed on Schedule 4.11:
(a) Neither Seller or any of the Seller Subsidiaries or,
to the best of the Seller's knowledge, any other party thereto is in default
of any material obligation under any such license, technology or similar
agreement;
(b) None of Seller or the Seller Subsidiaries have granted
any right or interest to any person in connection with any of the Proprietary
Rights;
(c) None of Seller or any of the Seller Subsidiaries are
obligated to pay any amount, whether as a royalty, license fee or other
payment, to any person in order to use any of the Proprietary Rights in the
conduct of the Business or the ownership of the Transferred Assets;
(d) The manufacturing and production processes and product
specifications listed on Schedule 1.1(g), constitute, in all material respects
necessary to the operation of the Business as currently operated, the
information, specifications and formulations necessary for the production of
the Business' products (as the same exist as of the Closing Date) in a manner
consistent with Seller's and the Seller Subsidiaries' past course of business
and past dealings with customers;
(e) The Seller and the Seller Subsidiaries have acquired
sole and exclusive ownership of all Proprietary Rights (except with respect to
the Software for which the Seller and the Seller Subsidiaries have been
granted standard form object code end-user licenses) and applications thereof
(whether or not patentable) and have the right to use or license the use of
the Proprietary Rights on the products or services on, or in respect of which,
they are now being used and all of such patents and registrations and
applications therefor are free and clear of any Liens;
(f) To the best of the Seller's knowledge (except with
respect to the Software for which the Seller and the Seller Subsidiaries have
been granted standard form object code end-user licenses) (i) none of the
Proprietary Rights and none of the applications therefor set forth in Schedule
1.1(g) are subject to any pending or threatened challenge, claim or fight,
(ii) none of the Proprietary Rights and none of the applications therefor set
forth in Schedule 1.1(g) have during the prior five (5) years been the subject
of any challenge, claim or fight, (iii) the operation of the Business and the
ownership of the Transferred Assets does not infringe upon or otherwise
violate any right of any third party, (iv) none of the Proprietary Rights is
being infringed by any third party, (v) there are no impediments to the
ability of the Seller or the Seller Subsidiary, as the case may be, to
maintain and, where lawful, to renew the Proprietary Rights, (vi) none of the
Proprietary Rights is subject to any outstanding order, decree, judgment or
stipulation, and (vii) the Seller has not received any notice of conflict with
asserted rights of others; and
(g) The Proprietary Rights have been duly registered in,
filed in, or issued by, the offices indicated, if any, on Schedule 1.1(g).
4.12 Tax Matters. (a) The Seller and the Seller Subsidiaries
have filed all tax returns and tax reports required to be filed by them with
respect to the Business or the Transferred Assets, including, without
limitation, those returns and reports pertaining to federal, state,
provincial, local, foreign or other income taxes, gross receipt taxes, ad
valorem taxes, transfer taxes, excise taxes, sales and use taxes, payroll
taxes, withholding taxes, occupation taxes, property taxes and franchise
taxes, and all taxes, interest and penalties shown or claimed to be due
thereon have been paid. There are no Liens for taxes (other than for current
real and personal property taxes not yet due and payable) on the Transferred
Assets or with respect to the Business. All taxes and other assessments and
levies (including Canadian Goods and Services Taxes ("GST")) which the Seller
or the Seller Subsidiaries are required by law to withhold or collect have
been duly withheld and collected and have been paid over to the proper
governmental authorities or held by the Seller or the Seller Subsidiary for
such payment.
(b) None of the Transferred Assets directly or indirectly
secures any debt the interest on which is tax-exempt under Section 103(a) of
the Code. None of the Transferred Assets is "tax-exempt use property" within
the meaning of Section 168(h) of the Code.
4.13 Environmental Matters. Except as set forth on Schedules A
and B of the Environmental Agreement as to subsection 4.13(f) and except as
set forth on Schedules A and B of the Environmental Agreement and on Schedule
4.13 as to subsections 4.13 (a)-(e) :
(a) To the best of Seller's knowledge, Seller and the
Seller Subsidiaries hold, and are in substantial compliance with, all Permits
required by Environmental Laws (as defined in the Environmental Agreement) for
Seller and the Seller Subsidiaries to conduct the Business, and, with respect
to the Business, Seller and Seller Subsidiaries are otherwise in compliance
with all applicable Environmental Laws;
(b) None of Seller or any of the Seller Subsidiaries has
received any written request for information, notice of claim, demand or
notification that it is or may be a potentially responsible party, under any
Environmental Laws with respect to any on-site or off-site location;
(c) None of Seller or any of the Seller Subsidiaries is
subject to any judgment, decree or order relating to compliance with, or the
cleanup of regulated substances under, any applicable Environmental Laws;
(d) There are no pending or, to the best of the Seller's
knowledge, threatened suits, proceedings or claims by any third parties for
damages, costs or injunctive relief arising out of the presence of any
Hazardous Substances (as defined in the Environmental Agreement) on or off the
Owned Real Property caused, directly or indirectly, by the Seller or any of
the Seller Subsidiaries or the operation of any facility by the Division
(each, a "Facility");
(e) To the best of Seller's knowledge, no material spill,
discharge, deposit, emission or other release or threat of release of any
Hazardous Substances on, at or from the Owned Real Property has occurred;
(f) To the best of Seller's knowledge, there is no
material violation or alleged violation of any applicable Environmental Laws
with respect to the Owned Real Property or any operation of any Facility, and
no written notice from any governmental agency or other regulatory body
claiming such a violation or requiring any material repair, remedy,
construction, alteration, installation, remediation, removal or cleanup with
respect to the Owned Real Property or requiring any material change in the
means or methods of operation of any Facility has been received.
4.14 No Breach of Contract; No Violations of Law; No Prior
Approval. (a) Neither the execution and delivery of this Agreement nor
compliance with its terms and provisions will conflict with, result in the
breach or violation of, or constitute a default under, any of the terms,
conditions or provisions of (i) Seller's or any Seller Subsidiaries' Articles
of Incorporation or By-laws (or comparable charter documents); (ii) any
agreement or instrument to which Seller or any Seller Subsidiary is a party,
or by which either the Seller or any Seller Subsidiary is bound or to which
any of the Transferred Assets or Assumed Liabilities are subject; or (iii) any
law applicable to the Seller, any Seller Subsidiary or any of the Transferred
Assets, other than, in the case of clauses (ii) and (iii) of this Section
4.14(a), conflicts, breaches, violations or defaults which would not,
individually or in the aggregate have a Material Adverse Effect. Except as
identified on Schedule 4.14, neither the execution and delivery of this
Agreement nor compliance with its terms and provisions will result in the
creation or imposition of any Lien upon any of the Transferred Assets.
(b) Other than the filing of a pre-merger notification
report under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and the filings required under the Competition Act
(Canada) (the "Competition Act") and the notice required under the Investment
Canada Act (the "Investment Act") no filing with, or Permit, authorization,
consent or approval of, any domestic or foreign government authority is
required for the consummation by Seller of the transactions contemplated by
this Agreement.
4.15 Litigation. Except as set forth on Schedule 4.15, there is
no pending or, to the best of Seller's knowledge, threatened claim,
litigation, proceeding or order of any court or governmental agency or
arbitrator or governmental investigation relating to the Business or any of
the Transferred Assets. Except as set forth on Schedule 4.15, no claim,
litigation, proceeding or order listed on Schedule 4.15 would, if adversely
determined, have a Material Adverse Effect. There is no existing or, to the
best of the Seller's knowledge, threatened order, judgment or decree of any
court, governmental agency or arbitrator that specifically applies to the
Business or the Transferred Assets.
4.16 Finders. Other than McDonald & Company Securities, Inc.,
whose fees will be the responsibility of Seller, no finder or broker acting or
who has acted on behalf of Seller or the Seller Subsidiaries in connection
with the transactions contemplated by this Agreement is entitled to receive
any brokerage commission or finder's fee in connection with such transactions,
and, to the best of the Seller's knowledge, no other Person is entitled to
receive any brokerage commission or finder's fee from the Seller or any Seller
Subsidiary in connection with such transactions.
4.17 No Material Adverse Change. Except as disclosed in Schedule
4.17, since
November 30, 1997, the Seller and the Seller Subsidiaries have conducted the
Business in the ordinary course consistent with past practices and there has
not occurred:
(a) any Material Adverse Effect;
(b) any damage to, destruction or loss of any Transferred
Asset (whether or not covered by insurance) that could reasonably be expected
to have a Material Adverse Effect;
(c) any material change by the Seller to the Seller's
Accounting Principles, except changes mandated by United States generally
accepted accounting principles ("US GAAP");
(d) any material revaluation by the Seller or the Seller
Subsidiaries of any of the Transferred Assets, including, without limitation,
writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business;
(e) any other action or event that would have required the
consent of the Buyer pursuant to Section 6.1 had such action or event occurred
after the date of this Agreement; or
(f) any sale or transfer of a material amount of the
Transferred Assets, other than sales of inventory in the ordinary course of
business.
4.18 Governmental Permits and Licenses; Compliance with Laws.
Except for matters which would not have a Material Adverse Effect on the
Business, the Transferred Assets or the Assumed Liabilities (a) Seller and the
Seller Subsidiaries have all of the Permits required to own the Transferred
Assets and to carry on the Business as presently conducted, and, assuming
proper action by the other party thereto or by the issuer thereof, all such
Permits are valid and in effect, and (b) to the best of Seller's knowledge,
neither the ownership of the Transferred Assets by Seller or the Seller
Subsidiaries, nor the operation of the Business by Seller or the Seller
Subsidiaries as it is presently conducted, violates any applicable order, law,
ordinance, code or regulation. Seller has not received any written notice of
any such violation.
4.19 Insurance. Seller is primarily self-insured with respect to
all risks relating to the Business and the Transferred Assets.
4.20 Employees; Labor Relations. (a) Schedule 4.20A sets forth,
as of January 31, 1998 (i) the number of all persons employed (including
persons who are temporarily absent from active employment by reason of
disability, illness, injury, workers' compensation, approved leave of absence
or layoff ("Inactive Employees")) by the Seller or a Seller Subsidiary in the
conduct of the Business (the "Division Employees"), (ii) the name, date of
hire and current annual salary or hourly wage, commission rate, and amount of
most recently paid bonus of each, and (iii) with respect to Division Employees
not covered by Collective Bargaining Agreements, a functional description of
their jobs and locations of employment. The Seller and the Seller
Subsidiaries have paid in full or accrued in the Financial Statements all
wages, salaries, commissions, bonuses, benefits, and other compensation due to
any Division Employee or otherwise arising under any employment related
policy, practice agreement, plan, program, statute or law;
(b) Schedule 4.20B sets forth a correct and complete list
of all collective bargaining agreements (the "Collective Bargaining
Agreements"), complete copies of which have been made available to the Buyer,
covering Division Employees, identifying the job classifications and the
locations of employees covered by each of the Collective Bargaining
Agreements.
(c) With respect to the Business, neither the Seller nor
any Seller Subsidiaries have received any written notice of any unfair labor
practice complaints or any other action, suit, complaint, charge, arbitration,
inquiry, proceeding or investigation pending before the National Labor
Relations Board or the Ontario Labour Relations Board or any other agency
having jurisdiction thereof and, to the best of the Seller's knowledge, no
such complaint has been threatened. Neither the Seller nor any Seller
Subsidiaries have received any written notice of any activities or proceedings
of any labor union (or representatives thereof) to organize any non-union
Division Employees, or of any strikes, slowdowns, work stoppages, lockouts or
threats thereof, by or with respect to any employees of Seller and, to the
best of the Seller's knowledge, within the twelve months prior to the date of
this Agreement, no such activities or proceedings are or were underway nor
have the Seller or the Seller Subsidiaries been the subject of any strikes,
slowdowns, work stoppages, lockouts or threats thereof. With respect to the
Division Employees, there are no material unsatisfied claims, grievances,
arbitration proceedings, workers' compensation proceedings other than standard
employee medical, temporary total, permanent partial and applications for
increase in permanent partial disability benefits currently covered by
Seller's or the Seller Subsidiaries' past and present workers' compensation
insurance. Neither the Seller nor any Seller Subsidiary is a party to or
otherwise bound by, any consent decree with, or citation by, any government
agency relating to any Division Employee or employment practices, wages,
hours, and terms and conditions of employment with respect to the Business.
(d) Except as may be provided for under Seller's Employee
Plans (as defined in Section 4.21) neither the Seller nor any Seller
Subsidiary is liable for any severance pay or other payments to any Division
Employee or former Division Employee arising from the termination of
employment of any person employed by the Seller or any Seller Subsidiary on or
prior to the Closing Date. Except for liabilities arising due to policies,
procedures or practices established or practiced by Buyer after the Closing
Date, the Buyer will not in any event have any liability under any benefit or
severance policy, practice, agreement, plan, or program which exists or
arises, or may be deemed to exist or arise, under any applicable law or
otherwise, as a result of or in connection with the transactions contemplated
by this Agreement or as a result of the termination by the Seller or any
Seller Subsidiary of any persons employed by the Seller or any Seller
Subsidiary on or prior to the Closing Date.
(e) Each Division Employee has executed the Form
Confidentiality Agreement.
4.21 Employee Benefits. For purposes of this Agreement, the term
"Employee Plan" means each employee bonus, retirement, pension, profit
sharing, stock option, stock appreciation, stock purchase, incentive, deferred
compensation, hospitalization, medical, dental, vision, life and other health
and disability (whether provided by insurance or otherwise), severance,
termination and other plan, program, arrangement, policy or payroll practice
providing any remuneration or benefits (other than current cash compensation),
including without limitation, each employee benefit plan as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (other than a multi-employer plan within the meaning of Section
3(37) or ERISA) or each employee benefit plan within the meaning of the
Pension Benefits Act (Canada), which is both (A) (i) maintained by Seller or
any Seller Subsidiary or any person, corporation, partnership, or other entity
that would be aggregated with, or treated as the same employer as, Seller for
any purpose under the Code or ERISA (an "ERISA Affiliate") or (ii) to which
Seller or an ERISA Affiliate contributes or has contributed and (B) one under
which any Division Employee or former Division Employee participates or had
accrued any rights or under which Seller is liable in respect of a Division
Employee or former Division Employee with respect to his or her employment
with the Division. The terms "Division Employee" and "former Division
Employee" will include, where applicable, the beneficiaries and dependents of
such employees. Schedule 4.21 lists or describes all material Employee Plans.
Each Employee Plan has been maintained in all material respects in accordance
with its terms and with applicable Law. Schedule 4.21 sets forth all Employee
Plans maintained by Seller which are intended to be qualified within the
meaning of Section 401 (a) of the Internal Revenue Code of 1986, as amended.
4.22 Residency of Eaton Yale; GST Registration. Eaton Yale is
not a non-resident of Canada under the Income Tax Act (Canada) and is
registered for the purposes of the Goods and Services Tax Legislation.
4.23 Liabilities. Except as set forth and adequately reserved
for in the Financial Statements or as set forth on Schedule 4.23, to the best
of the Seller's knowledge, the Seller and the Seller Subsidiaries have no
outstanding claims, liabilities or indebtedness, fixed or contingent, or
obligations of any nature, whether accrued, absolute, contingent, threatened
or otherwise, whether due or to become due, with respect to the Business,
other than (a) liabilities incurred in the ordinary course and conduct of the
Business since November 30, 1997, which do not involve borrowings, and (b)
claims, liabilities or indebtedness of the type not required to be disclosed
in the Financial Statements or notes thereto in accordance with US GAAP, but
in no event in excess of $10,000. Except for warranty claims arising in the
ordinary course of business and in which the amount claimed is not more than
$10,000 in the aggregate, to the best of the Seller's knowledge, there are no
outstanding warranty claims.
4.24 Employee Safety. Except as set forth in Schedule 4.24,
neither the Seller nor any Seller Subsidiary (a) is or has been subject to an
investigation by the US and Canadian Department of Labor and similar state or
provincial agencies litigation over compliance with the Occupational Safety
and Health Act of 1970, as amended and any similar Canadian, state, provincial
or local statute and the rules and regulations promulgated thereunder ("Safety
Laws"), or (b) have received or have paid any fine, penalty or citation
relating to or arising out of a violation or alleged violation of any Safety
Laws during the past three years.
4.25 Location of Assets. (a) Except as disclosed on Schedule
4.25, no material personal property owned by a customer of the Business or
owned by any other third party currently is located in a Facility, at Owned
Real Property or at the Southfield Facility.
(b) Except as disclosed on Schedule 4.25, all personal
property owned by the Seller and included in the Transferred Assets is located
in a Facility, at Owned Real Property or at the Southfield Facility, except
for immaterial personal property the aggregate value of which is not in excess
of $10,000.
4.26 Representations and Warranties Regarding Metalcar Matters.
(a) Seller's interest in the Joint Venture consists of 445,258 shares, par
value Bs. 100.00, of Class B capital stock. As of the date hereof, the
Metalcar Interest is held by Eaton International. Prior to the Closing Date
or the Metalcar Closing, as the case may be, Eaton International may transfer
the Metalcar Interest to Seller or on Affiliate of Seller in order to effect
the Brady Bond transaction. The Joint Venture's duly authorized capital stock
consists of the following shares, and such stock represents all of the issued
and outstanding stock of the Joint Venture:
Number
Class of Shares Par Value
Sivensa A 121,192 Bs. 100.00
(90,589 fully paid, 30,653 not paid)
Consolidated Industrial A 341,338 Bs. 100.00
Investment, Ltd. ("CII") (263,361 fully paid, 77,977 not paid)
Eaton International B 445,258 (fully paid) Bs. 100.00
Lilian Cahagan A 42 (fully paid) Bs. 100.00
G. De Garcia A 780 (fully paid) Bs. 100.00
B. De Blohm A 48 (fully paid) Bs. 100.00
J. Jansen A 32 (fully paid) Bs. 100.00
The shareholders identified above (except Eaton International) are sometimes
collectively referred to herein as the "Other Joint Venture Shareholders."
Except as provided in the Share Purchase Agreement dated as of July 23,
1993 between Sivensa and Eaton International (the "Share Purchase Agreement")
and the Joint Venture Charter, there are no outstanding warrants, rights or
options of any kind or nature entitling any party to acquire any shares of the
Joint Venture, nor any preemptive rights, rights of first refusal or other
rights of any kind or nature which would adversely affect the transfer of the
Metalcar Interest contemplated by this Agreement.
(b) The copy of the Joint Venture Charter as presently in
effect, previously delivered by Seller to Buyer, is true and accurate.
(c) Except as disclosed on Schedule 4.26, the representations
and warranties of Sivensa contained in Sections 4.4 (other than the third to
last sentence thereof), 4.11, 4.12, 4.15 and 4.16 of the Share Purchase
Agreement are true and correct in all material respects as of the date hereof.
4.27 Disclaimer; Cross References. (a) EXCEPT FOR
REPRESENTATIONS AND WARRANTIES MADE BY THE SELLER IN SECTION 4 OF THIS
AGREEMENT, THE SELLER HAS MADE AND MAKES NO REPRESENTATIONS OR WARRANTIES,
EITHER EXPRESS OR IMPLIED, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, ALL SUCH WARRANTIES BEING EXPRESSLY DISCLAIMED, AND THE
BUYER HAS NOT RELIED ON ANY SUCH REPRESENTATIONS AND WARRANTIES, EXCEPT FOR
THOSE MADE BY THE SELLER IN SECTION 4 OF THIS AGREEMENT. THIS AGREEMENT SHALL
NOT BE COVERED BY THE WARRANTIES PROVIDED BY ARTICLE 2 OF THE UNIFORM
COMMERCIAL CODE OR ANY SIMILAR LAWS OF ANY JURISDICTION. THIS PROVISION SHALL
NOT IN ANY WAY AFFECT OR DIMINISH ANY AGREEMENT OR COVENANT CONTAINED IN ANY
OTHER SECTION OF THIS AGREEMENT.
(b) Information to be disclosed in any one disclosure schedule
herein referred to may be supplied in any schedule by cross reference to any
other schedule.
5. Representations and Warranties of Buyer. The Buyer makes the
following representations and warranties to the Seller.
5.1 Organization, Existence and Standing of the Buyer. The
Buyer is a corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation and has full corporate power and
authority to own or lease its assets, to carry on its business as it is now
conducted and to consummate the transactions contemplated by this Agreement.
5.2 Corporate Authority. The entering into and the execution
and delivery of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by requisite corporate action of the Buyer and no additional
corporate or stockholder authorization or consent is required.
5.3 No Breach of Contract; No Violations of Law; No Prior
Approval. (a) Neither the execution and delivery of this Agreement nor
compliance with its terms and provisions will conflict with, result in the
breach or violation of, or constitute a default under, any of the terms,
conditions, or provisions of (i) Buyer's Articles of Incorporation or By-laws
(or comparable charter documents); (ii) any agreement or instrument to which
Buyer is a party or by which Buyer is bound; or (iii) any law applicable to
Buyer, other than, in the case of clauses (ii) and (iii), conflicts, breaches,
violations or defaults which would not have a Material Adverse Effect.
(b) Other than the filing of a pre-merger notification
report under the HSR Act and the Competition Act and the Investment Act, no
filing with, or Permit, authorization, consent or approval of, any domestic or
foreign government authority is required for the consummation by Buyer of the
transactions contemplated by this Agreement.
5.4 Finders. Other than The Oxford Investment Group, Inc.,
whose fees, if any, will be the responsibility of Buyer, Buyer knows of no
finder or broker acting or who has acted on behalf of Buyer in connection with
the transactions contemplated by this Agreement, and knows of no other
corporation, firm or person that might be entitled to receive any brokerage
commission or finder's fee in connection with such transactions.
5.5 Financing. Buyer has, and on the Closing Date and on the
date of payment, if any, required by Buyer on the Settlement Date will have,
sufficient funds available to it (without reliance on additional bank or other
additional third party financing) to pay to Seller and/or the Seller
Subsidiaries, as the case may be, the Purchase Price and to otherwise satisfy
all of its obligations under this Agreement and the Related Agreements.
5.6 GST. Buyer or its Affiliate, as required, is registered for
the purposes of the GST Legislation and is acquiring under this Agreement
ownership, possession or use of all or substantially all of the property that
reasonably can be regarded as being necessary for the Buyer to be capable of
carrying on the Business following the Closing.
5.7 Employees. Except for liabilities arising due to policies,
procedures or practices established or practiced by Seller or the Seller
Subsidiaries prior to the Closing Date, neither the Seller nor any Seller
Subsidiary will be liable for any severance pay or other payments to any
Division Employee arising from the termination after the Closing Date of
employment of any Division Employee employed by Buyer after the Closing Date.
6. Covenants of Seller. Seller covenants and agrees with Buyer as
follows.
6.1 Conduct of Business to Closing Date. Except upon the
written consent of the Buyer, which consent shall not be unreasonably
withheld, the Seller shall and shall cause the Seller Subsidiaries to, from
and after the date hereof until the Closing Date, carry on the Business in
substantially the same manner as it has heretofore been conducted, including,
without limitation, doing the following.
(a) Maintain Transferred Assets. Consistent with Seller's
past practice, the Seller shall maintain and keep, and shall cause the Seller
Subsidiaries to maintain and keep, the Transferred Assets in at least as good
condition and repair, reasonable wear and tear excepted, as the condition and
repair the Transferred Assets are in as of date hereof.
(b) Disposition of Assets. The Seller shall not, and
shall not permit the Seller Subsidiaries to, sell, lease, pledge, mortgage or
otherwise dispose of or encumber any of the Transferred Assets except for (i)
the sale, lease, pledge, mortgage or disposal or encumbrance of any of the
Transferred Assets, including Inventory, in a manner consistent with Seller's
past practice and in the ordinary course of business which would not,
individually or in the aggregate, be material to the operation of the
Business, (ii) the disposal of any obsolete, unusable or unsalable Inventory
(as determined in accordance with the Seller's Accounting Principles)
consistent with the Seller's past practice, or (iii) any sale, lease, pledge,
mortgage or disposal or encumbrance of any of the Transferred Assets that
would not have a Material Adverse Effect.
(c) Perform Contracts and Other Obligations. Seller
shall, and shall cause the Seller Subsidiaries to, perform all of its or
their, as the case may be, obligations under the Contracts and any and all
other agreements relating to or affecting the Transferred Assets or the
Business where the failure to so perform may have a Material Adverse Effect.
(d) Other Contracts. Except as set forth on Schedule 6.1,
the Seller shall not, and shall not permit any of the Seller Subsidiaries to,
with respect to the Business: (i) enter into any other material obligation,
agreement, commitment or contract, or make any further additions to its
property or further purchases of machinery or equipment, except agreements,
commitments or contracts for the purchase, sale or lease of goods or services
in the ordinary course of business, consistent with past practice and not in
excess of current requirements or which would not be required to be listed on
Schedule 4.9 were they in effect on the date of this Agreement, (ii) modify or
change any Contract, (iii) cancel any debts or waive any claims or rights
where such cancellation or waiver would have a Material Adverse Effect, (iv)
make any capital expenditure or commitment exceeding $150,000 in any one
instance or $500,000 in the aggregate, other than as identified in the
Division's 1998 Capital Expenditure Budget included as part of Schedule 6.1,
which budget shall not be amended or modified, or (v) make any loan to, or
enter into any business transaction, agreement, arrangement or understanding
of any other nature with, any employee of the Business or any officer or
director of the Seller or any Seller Subsidiary or any Affiliate or associate
of any such officer or director.
(e) Wages or Salary Increases. Seller shall not, and
shall not permit any of the Seller Subsidiaries to (i) grant any increases in
wages, salaries or benefits of any of Seller's or the Seller Subsidiaries', as
the case may be, employees employed exclusively in the conduct of the
Business, except increases in the ordinary course of business in accordance
with Seller's or the applicable Seller Subsidiaries' existing policies and
except for increases in wages and/or benefits as required by a Collective
Bargaining Agreement; provided, however, that the Seller shall give the Buyer
prior notice of each such increase (other than increases mandated by the
Collective Bargaining Agreements), (ii) enter into any employment agreements
with respect to any employees of the Business, (iii) pay or agree to pay any
pension, retirement allowance or other employee benefit not required by any
existing plan, agreement or arrangement to any officer or employee of the
Business, whether past or present, or (iv) with respect to the Division
Employees, commit itself to any additional pension, profit-sharing, bonus,
incentive, deferred compensation, group insurance, severance pay, retirement
or other employee benefit plan, agreement or arrangement, or to any employment
or consulting agreement with or for the benefit of any Division Employee, or
to terminate or amend any of such plans or any of such agreements in existence
on the date of this Agreement.
(f) Maintain Relationships of Customers and Suppliers.
Seller shall, and shall cause the Seller Subsidiaries to, use its reasonable
efforts to maintain satisfactory relationships with all of its existing
customers and suppliers.
(g) Transfer of Transferred Assets. The Seller shall not,
and shall not permit any of the Seller Subsidiaries to take any action that
would prevent the transfer of the Transferred Assets to the Buyer pursuant to
the terms of this Agreement free and clear of all Liens, other than Real
Property Permitted Exceptions and Personal Property Permitted Exceptions.
(h) Books and Records. The Seller shall, and shall cause
the Seller Subsidiaries to, maintain their books, accounts and records with
respect to the Business and the Transferred Assets in the usual, regular and
ordinary manner, on a basis consistent with prior years, and comply with all
laws, the enforcement of which, if the Seller or the Seller Subsidiaries were
not in compliance, would have a Material Adverse Effect.
(i) Permits. The Seller shall, and shall cause the Seller
Subsidiaries to, keep and maintain all Permits in full force and effect,
continue their business pursuant to such Permits and take all steps necessary
to meet requirements on pending applications for Permits, except where the
lapse of any such Permits would not have, either individually or in the
aggregate, a Material Adverse Effect.
6.2 Access by Buyer to Properties and Records; Furnishing
Information. (a) Following the date hereof, authorized representatives of
Buyer shall have reasonable access during normal business hours to all
premises, properties, books, contracts and documents of Seller and the Seller
Subsidiaries relating to the Business, the Transferred Assets, the Assumed
Liabilities, and the Buyer's share of the Shared Liabilities. Such access
shall be arranged through a representative designated by Seller at each
location and shall be coordinated in such a manner as to not materially
interfere with Seller's operations. In order to assist Buyer, Seller's
designated representatives at each location may attend all meetings held
between Buyer or its authorized representatives and any officers and employees
or customers and suppliers of Seller or any representatives thereof. At no
time prior to the Closing shall Buyer contact any of Seller's customers or
suppliers or employees (other than Seller's designated representatives) with
respect to any matters related to the content of this Agreement or the
transaction contemplated hereby, except if accompanied by a representative of
the Seller or upon the written consent of Seller.
(b) From and after the Closing Date, the Seller will make
available to the Buyer, from time to time as the Buyer may reasonably request,
copies of such of the records retained by the Seller or the Seller
Subsidiaries relating to the Business, the Transferred Assets, the Assumed
Liabilities, and the Buyer's share of the Shared Liabilities as may be
reasonably required to enable the Buyer to defend against or assert claims
related to or arising from ownership of the Transferred Assets, the assumption
of the Assumed Liabilities, the Buyer's share of the Shared Liabilities or the
conduct of the Business by the Seller and the Seller Subsidiaries prior to the
Closing Date and to handle tax and financial audits involving the Division or
the Business thereof; provided, however, that the Buyer agrees to hold such
records in confidence, except to the extent required to defend or assert such
claims and to handle such audits, and to return the same to the Seller
promptly upon the conclusion of their use by the Buyer for the purposes herein
specified.
(c) From and after the Closing Date, the Seller shall
cooperate with the Buyer's reasonable requests for assistance, which
assistance shall include the right to examine work papers and such other
documents, including interim financial data, necessary for the Buyer's
preparation of audited financial statements of the Business for the last three
fiscal years and any subsequent interim periods as the Buyer may be required
to prepare pursuant to applicable statutes or regulations or as the Buyer may
reasonably request.
6.3 Compliance with Conditions; ECO-Brazil. Seller shall
deliver the ECO-Brazil Letter (as defined in Section 11.12) to Buyer on the
Closing Date and shall use its reasonable efforts to cause the other
conditions in Section 11 to be satisfied at or prior to the Closing Date.
6.4 Third-Party Consents. Seller shall use its reasonable
efforts to obtain, on or prior to the Closing Date, all consents and approvals
of third parties, including the consent and approval of Eaton International's
partner in the Joint Venture with respect to the Metalcar Interest.
6.5 Notification to Buyer of Damage or Destruction of
Transferred Assets or Material Changes. Seller shall give Buyer written
notice promptly, but no event later than five business days after becoming
aware of any damage or destruction of any material portion of the Transferred
Assets, but in no event not later than two business days prior to the Closing.
6.6 Transfer of Warranties. In the event that any of the
Transferred Assets are under any warranty or vendor's indemnification
agreement from the manufacturer or the original seller thereof, Buyer shall be
entitled to the benefit of the warranty or vendor's indemnification agreement
to the extent that the warranty or vendor's indemnification agreement is
available to the transferee, and Seller shall execute such instruments as may
be required to transfer the warranty to Buyer.
6.7 HSR Filing; Other Governmental Filings. (a) The Seller has
submitted to the United States Department of Justice and the Federal Trade
Commission all of the requisite forms and information applicable to this
transaction under the HSR Act and shall respond promptly to any appropriate
request by either of such agencies for additional information or data.
(b) Seller shall also comply with the laws of any country
and province, including Canada, which are applicable to the transactions
contemplated by this Agreement and pursuant to which governmental notification
and/or approval of such transactions is required. Seller and Buyer shall
cooperate in providing any requisite information and data regarding Seller or
Buyer, as the case may be, and making such filings as may be required in any
such jurisdictions in connection with obtaining any required governmental
approval or providing any required notice.
6.8 Further Assurances by Seller. (a) Seller shall, and shall
cause the Seller Subsidiaries to, from time to time after the Closing, upon
the request of Buyer, do, execute, acknowledge and deliver all such further
acts, deeds, assignments, transfers, conveyances, powers of attorney and
assurances as may be required to transfer to and to vest in Buyer all right,
title and interest of Seller or the Seller Subsidiaries in and to the
Transferred Assets and to protect the right, title and interest of Buyer in
and to all of the Transferred Assets.
(b) Transitional Use of Trade Names and Trademarks. Buyer
and the Seller recognize that certain Inventory and labels and containers
therefor, as well as promotional material relating to the Division, being sold
to the Buyer under this Agreement will bear the trade names "Eaton
Corporation" or "Eaton," which trade names are not being assigned or licensed
to the Buyer. The Seller agrees that the Buyer shall be permitted to sell
such Inventory and use such labels, containers and promotional material for a
period not exceeding six (6) months after the Closing Date. In no event shall
the Buyer be entitled to the use of the trade names and untransferred
trademarks in advertising such inventory. The Buyer shall remove the Seller's
and its Affiliate's trade names and untransferred trademarks from signage no
later than three (3) months from the Closing Date.
6.9 Negotiations with Third Parties. From the date hereof
through the Closing Date, neither Seller nor any of the Seller Subsidiaries or
any of their respective officers, directors, agents or employees will initiate
or solicit proposals or conduct negotiations for the sale, transfer or other
disposition of the Division with any prospective purchasers other than Buyer;
provided, however, that nothing contained in this Section shall prohibit the
Board of Directors of the Seller from furnishing information to or entering
into discussions or negotiations with, any person or entity that makes an
unsolicited bona fide proposal in writing, not subject to any financing
condition, to acquire the assets of the Division, if, and only to the extent
that (a) the Board of Directors determines in good faith and upon written
advice of outside counsel to Seller that such action is required for the Board
of Directors to comply with its fiduciary duties to shareholders imposed by
law, (b) prior to furnishing such information to, or entering into discussions
or negotiations with, such person or entity, Seller provides written notice to
Buyer to the effect that it is furnishing information to, or entering into
discussions or negotiations with, such person or entity, and (c) Seller keeps
Buyer informed of the status (not the terms) of any such discussions or
negotiations.
6.10 Update of Schedules. The Seller shall promptly notify the
Buyer, prior to the Closing Date, of any changes in the information contained
in the Schedules or Exhibits or in any document or information supplied to the
Buyer pursuant to a Schedule. Such information shall be deemed to amend such
Schedules.
6.11 Covenant Not to Compete. The Seller agrees that for a
period of three years after the Closing Date, neither it, the Seller
Subsidiaries, nor any Affiliate shall, directly or indirectly, in any country
in North, South or Central America, own, manage, operate, join, control or
participate in the ownership, management, operation or control of any business
whether in corporate, proprietorship or partnership form or otherwise as more
than a five percent owner in such business where such business is competitive
with the Business as conducted on or prior to the Closing Date.
Notwithstanding the foregoing, Seller and the Seller Subsidiaries may
continue to hold the Metalcar Interest, if the required consents and waivers
are not received to allow a transfer of such interest to Buyer, only in the
event that Seller and Buyer enter into the agreements described in section
1.4(d). The Seller specifically acknowledges and agrees that the remedy at
law for any breach of this Section 6.11 will be inadequate and that the Buyer,
in addition to any other relief available to it, shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
actual damage. In the event that the provisions of this Section 6.11 should
ever be deemed to exceed the limitation provided by applicable law, then the
parties agree that such provisions shall be reformed to set forth the maximum
limitations permitted.
6.12 Acquisition or Disposition of Fixed Assets or Leased
Property. Except upon the written consent of the Buyer, which consent shall
not be unreasonably withheld, after the Seller provides Schedule 3.1 to the
Buyer, the Seller and the Seller Subsidiaries shall use their respective
reasonable efforts not to acquire or dispose of any fixed asset of the
Division or property of the Division that is the subject of a capitalized
lease that would have been or are included in the Transferred Assets.
7. Covenants of Buyer. Buyer covenants and agrees with Seller as
follows.
7.1 Compliance with Conditions. Buyer shall use its reasonable
efforts to cause the conditions in Section 12 to be satisfied at or prior to
the Closing Date.
7.2 Cooperation in Obtaining Consents. Buyer shall take all
steps reasonably requested by Seller to help secure the consents and approvals
referred to in Section 6.4 hereof.
7.3 HSR Filing; Other Governmental Filings. (a) The Buyer has
submitted to the United States Department of Justice and the Federal Trade
Commission all of the requisite forms and information applicable to this
transaction under the HSR Act and shall respond promptly to any appropriate
request by either of such agencies for additional information or data.
(b) Buyer shall also comply with the laws of any country
and province, including Canada, which are applicable to the transactions
contemplated by this Agreement and pursuant to which governmental notification
and/or approval of such transactions is required. Seller and Buyer shall
cooperate in providing any requisite information and data regarding Seller or
Buyer, as the case may be, and making such filings as may be required in any
such jurisdictions in connection with obtaining any required governmental
approval or providing any required notice.
7.4 Make Records Available. From and after the Closing Date,
Buyer shall make available to Seller, from time to time as Seller may
reasonably request, copies of such of the records transferred to Buyer by
Seller pursuant to this Agreement as may be reasonably required to enable
Seller to defend against or assert claims related to or arising from ownership
of the Transferred Assets or the conduct of the Business by Seller and the
Seller Subsidiaries prior to the Closing Date and to handle tax and financial
audits involving the Division or the Business thereof; provided, however, that
the Seller agrees to hold such records in confidence, except to the extent
required to defend or assert such claims and to handle such audits, and to
return the same to Buyer promptly upon the conclusion of their use by Seller
for the purposes herein specified.
8. Mutual Covenants.
8.1 GST Election. Eaton Yale and Buyer agree to jointly elect
under Section 167 of the GST Legislation to have Subsection 167(l.1) of the
GST Legislation apply to the sale under this Agreement. The Buyer shall file
the election in the manner and within the time prescribed by the GST
Legislation. In the event that an election under Section 167 of the GST
Legislation cannot be validly made by the parties, or Revenue Canada does not
accept in whole or in part such an election by the parties, the Buyer (i)
shall pay to Eaton Yale, in addition to any amounts payable by the Buyer under
this Agreement, all goods and services tax payable pursuant to the GST
Legislation on or in respect of the property and services supplied hereunder
including, without limitation, such tax calculated on or in respect of the
value of the consideration paid or payable by the Buyer under this Agreement,
and (ii) shall indemnify and save harmless Eaton Yale from any penalties and
interest which may be payable by or assessed against the Seller under the GST
Legislation due to the supplies made under this Agreement not being eligible
for the Section 167 election.
8.2 Election Regarding Accounts Receivable.. Eaton Yale and
Buyer shall, as soon as possible after the Closing Date, jointly execute an
election under Section 22 of the Income Tax Act (Canada) as to the sale of the
Accounts Receivable sold by Eaton Yale, shall designate therein the face value
of the Accounts Receivable sold by Eaton Yale and the applicable portion of
the Purchase Price, consistent with the provisions of Section 3.2, as the
consideration paid by the Buyer therefor and shall each file such election
with Revenue Canada forthwith after execution thereof (and, in any event, with
their respective Canadian income tax returns for the year of sale) to make
such election.
8.3 Transition Services Agreements. At Closing, the Seller and
the Buyer shall enter into Transitional Services Agreements in the forms
attached as Exhibit C and Exhibit D (the "Services Agreements") relating to
the provision of certain services by the Seller for the Buyer and the
provision of certain services by the Buyer for the Seller on an interim basis
following the Closing Date.
8.4 Payments Received. The Seller and the Buyer agree that,
after the Closing Date, they shall hold and shall promptly transfer and
deliver to the other, from time to time as and when received by them and in
the currency received by them, any cash, checks with appropriate endorsements
(using their best efforts not to convert such checks into cash), or other
property that they may receive on or after the Closing Date which properly
belongs to the other party, including without limitation any payments of
accounts receivable and insurance proceeds, and shall account to the other for
all such receipts. From and after the Closing Date, the Buyer shall have the
right and authority to endorse without recourse the name of the Seller or any
Seller Subsidiary on any check or any other evidences of indebtedness received
by the Buyer on account of the Business and the Transferred Assets transferred
to the Buyer under this Agreement. In the event of a dispute between the
parties regarding their respective obligations hereunder, the parties shall
cooperate and act in good faith to promptly resolve such dispute and, in
connection with such cooperation, allow each other reasonable access to the
records of the other relating to such disputed item.
8.5 Further Assurances. From time to time after the Closing
Date, the Buyer and the Seller shall, and the Seller shall cause the Seller
Subsidiaries to, at their own expense, execute and deliver, or cause to be
executed and delivered, all such other instruments, including instruments of
conveyance, assignment and transfer and to make all filing with and to obtain
all consents, approvals or authorizations of any governmental or regulatory
authority or any other Person under any Permit and take all such other actions
as such party may reasonably be requested to take by the other party to this
Agreement, consistent with the terms of this Agreement, in order to effectuate
better the provisions and purposes of this Agreement and the transactions
contemplated by this Agreement.
8.6 Certain Tax Payments and Returns. Each of the Seller and
Buyer shall be responsible for the preparation and filing of any tax returns
which it is required by law to file. In the case of any personal or real
property tax return required to be filed by the Seller or the Seller
Subsidiaries after the Closing Date that relate to pre-Closing activities and
with respect to which all or any portion of such taxes constitutes an Assumed
Liability or the Buyer's share of the Shared Liabilities: (i) such return
shall be prepared by the Seller in a manner that is consistent, so far as is
permitted by applicable law, with such other tax returns filed for prior
taxable periods, (ii) such tax return shall be submitted to Buyer at least 15
days prior to the intended day of filing along with a calculation that
identifies the amount of taxes that is an Assumed Liability or the Buyer's
share of the Shared Liabilities, (iii) the Buyer shall have 10 days after
receipt of such return to approve or state all objections to such return and
the calculation of such taxes that is an Assumed Liability or the Buyer's
share of the Shared Liabilities, and (iv) the Buyer shall pay to the Seller
the undisputed amount of such taxes that is an Assumed Liability or the
Buyer's share of the Shared Liabilities no later than the due date for such
return. If the parties cannot thereafter resolve any disputed amount within
30 days, such dispute shall be resolved by the Independent Accountant whose
fee shall be paid in equal shares by the Buyer and the Seller. The Buyer
shall, within two business days after the decision of the Independent
Accountant, pay the balance of taxes due, if any, to the Seller, together with
interest (computed from the due date of the return) based on the statutory
interest rate applicable to deficiencies of such taxes. If the Seller or the
Seller Subsidiaries receive a refund of taxes that is a Transferred Asset,
such Person shall pay such refund to the Buyer within two business days after
receipt (reduced by the amount of Income Taxes, if any, imposed on such Person
on account of the refund).
8.7 Tax Clearance Certificates, Filings and Notices. The Seller
shall cooperate with the Buyer and take all actions required to obtain all
conditional tax clearances, tax clearance certificates and similar documents
in connection with the consummation of the transactions contemplated by this
Agreement. The Seller shall make all filings and deliver all notices required
by any employment security, taxing or other governmental authority in
connection with the consummation of the transactions contemplated by this
Agreement.
8.8 Covenant Regarding Personnel. (a) Except as contemplated
by Section 9.1 of this Agreement, the Seller agrees that, for a period of
eighteen months after the Closing Date, it shall not, and shall cause its
subsidiaries and Affiliates not to, without first obtaining the written
consent of the Buyer, which consent may be withheld for any reason, directly
or indirectly solicit or attempt to solicit any person who is employed by the
Buyer or its subsidiaries or Affiliates in the Business to leave his or her
employer or to become an employee of the Seller or any of its subsidiaries or
Affiliates. The foregoing shall not prohibit (a) the Seller or its
subsidiaries or Affiliates from soliciting or employing any individual who has
received notice of termination from, or ceases to be employed by, the Buyer or
its subsidiaries or Affiliates prior to the first time such individual
discussed with any representative of the Seller or its subsidiaries or
Affiliates employment by such party, and (b) the Seller or its subsidiaries or
Affiliates from employing an individual who responds to a general solicitation
of employment by such party.
(b) Except as contemplated by this Agreement, the Buyer
agrees that, for a period of eighteen months after the Closing Date, it shall
not, and shall cause its subsidiaries and Affiliates not to, without first
obtaining the written consent of the Seller, which consent may be withheld for
any reason, directly or indirectly solicit or attempt to solicit any person
who is or was employed by the Seller or its subsidiaries or Affiliates in the
Business to leave his or her employer or to become an employee of the Buyer or
any of its subsidiaries or Affiliates. The foregoing shall not prohibit (a)
the Buyer or its subsidiaries or Affiliates from soliciting or employing any
individual who has received notice of termination from, or ceases to be
employed by, the Seller or its subsidiaries or Affiliates prior to the first
time such individual discussed with any representative of the Buyer or its
subsidiaries or Affiliates employment by such party, and (b) the Buyer or its
subsidiaries or Affiliates from employing an individual who responds to a
general solicitation of employment by such party.
9. Employees, Employee Benefits.
9.1 Offer of Employment. (a) Buyer agrees to cause the Buyer
Subsidiaries to offer employment, beginning on the Closing Date, to, and the
Seller shall use its reasonable efforts to assist the Buyer Subsidiaries in
employing, all of the Division Employees and Gerry Glinski and Jim Oliver (the
"Technical Support Personnel"), other than those identified on Schedule 9.1A
(i) in comparable positions, and (ii) with compensation substantially
equivalent to their compensation, including incentive and bonus compensation,
prior to the Closing Date and with a package of employee benefits that is
substantially equivalent in the aggregate (except as otherwise provided in
this Section 9), to the employee benefit package available to those employees
prior to the Closing Date; provided, however, that nothing in this Section 9.1
shall (i) require the Buyer or the Buyer Subsidiaries to provide any form of
equity or equity-based compensation or incentive or bonus plan, or (ii)
preclude the Buyer or the Buyer Subsidiaries from implementing a uniform
compensation or benefit program(s) for all of the Buyer's or the Buyer
Subsidiaries' employees, including the former Division Employees and Technical
Support Personnel. If for whatever reason, either or both of the Technical
Support Personnel do not agree to become employees of the Buyer Subsidiaries,
such persons shall be used by Seller, as long as they are employees of Seller,
to provide the services provided to the Division prior to the Closing Date to
the Buyer Subsidiaries in accordance with the terms of the Services Agreement
relating to the services to be provided by the Seller for the Buyer
Subsidiaries following the Closing Date. Nothing in the foregoing sentence is
intended to limit the ability of Seller to terminate any such employment or to
reduce the levels of employment at the Southfield Innovation Center, relocate
any of such employees, reduce or shift production at the Southfield Innovation
Center or close the Southfield Innovation Center for reasonable business
purposes or as a result of changing business conditions; provided, that except
for terminations of employment occassioned by violation of Seller's employment
rules and practices by such employees, Seller shall continue to use the
Technical Support Personnel to provide the required services for at least six
months after the Closing Date, unless Buyer consents to a change thereto.
(b) The Buyer shall also cause the Buyer Subsidiaries to
provide, for a period of at least two years following the Closing Date, to
Division Employees or Technical Support Personnel who accept such offers of
employment with the Buyer Subsidiaries ("Hired Employees") with group health
benefits on substantially the same terms as current employees of the Buyer or
its affiliates in similar positions. The Buyer shall cause the Buyer
Subsidiaries to recognize service with Seller or any Seller Affiliate,
including a Seller Subsidiary, by Hired Employees for purposes of eligibility,
vesting and benefits under all such benefit programs.
(c) Except for Assumed Liabilities (including those
liabilities and obligations assumed by Buyer under this Section 9), the
Buyer's share of the Shared Liabilities related to Occupational Diseases, or
as described on Schedule 9.lC, the Buyer and the Buyer Subsidiaries do not
assume and accept no liability or obligation of the Seller or the Seller
Subsidiaries resulting from any collective bargaining agreement, contract of
employment, employee handbook, precedent, past practice and/or other method
which in the past established terms and conditions of employment between the
Seller, the Seller Subsidiaries, and their employees. The Buyer shall cause
Oxford Canada to assume and accept the liabilities and obligations of the
Seller or the Seller Subsidiaries resulting from the collective bargaining
agreements listed on Schedule 9.1C.
(d) The Buyer and the Buyer Subsidiaries do not assume and
accept no liability or obligation of the Seller or the Seller Subsidiaries for
any severence obligations to the employees of the Seller or the Seller
Subsidiaries in connection with the consummation of the transactions
contemplated by this Agreement. The Seller and the Seller Subsidiaries shall
be liable for any severence payments and obligations to employees of the
Seller Subsidiaries arising out of or related to any Division Employee or
Technical Support Personnel not accepting the offers of employment with the
Buyer Subsidiaries pursuant to Section 9.l(a).
(e) Nothing in this Agreement shall be intended to limit
the ability of the Buyer or the Buyer Subsidiaries (i) to terminate any such
employment, reduce the levels of employment, relocate any Hired Employee,
reduce or shift production at any Facility or close any Facility, or (ii) to
amend or terminate any employee benefit or welfare plan (except as otherwise
provided in this Section 9) for, in the case of the foregoing clauses (i) and
(ii), reasonable business purposes or as a result of changing business
conditions. Hired Employees initially shall be employed at the Facility at
which each is presently employed (except for research and development,
technical service, marketing and customer service employees presently employed
at the Southfield Facility or any of Seller's other facilities not included in
the Transferred Assets).
9.2 Allocation Of Salaried Pension Plan Liabilities. (a)
Effective as of the date (the "Effective Date") next following the Closing
Date, and as soon as is reasonably practicable thereafter,
(i) Buyer shall cause Oxford U.S. to establish a new
defined benefit pension plan or arrange for the amendment of the Lobdell Emery
Corporation Salaried Employees' Retirement Income Plan (referred to
hereinafter as "Oxford's U.S. Pension Plan") for the purpose of covering those
Hired Employees (the "Transferred U.S. Participants") who, as of the Closing
Date, are, or are eligible to become, participants in Appendix A of the
Pension Plan For Eaton Corporation Employees ("Seller's U.S. Pension Plan").
Oxford's U.S. Pension Plan shall provide benefits to the Transferred U.S.
Participants pursuant to Plan provisions and under a benefit formula which
are, at a minimum, equal in all material respects to those contained in
Seller's U.S. Pension Plan, as in effect on the Closing Date; and
(ii) Buyer shall cause Oxford Canada to establish a
new defined benefit pension plan (referred to hereinafter as "Oxford's
Canadian Pension Plan") covering those Hired Employees (the "Transferred
Canadian Participants") who, as of the Closing Date, are, or are eligible to
become, participants in the Eaton Corporation Pension Plan For Salaried
Employees Of Certain Divisions And Plants Of Eaton Yale Ltd. ("Seller's
Canadian Pension Plan"). Oxford's Canadian Pension Plan shall provide
benefits to the Transferred Canadian Participants pursuant to Plan provisions
and under a benefit formula which are, at a minimum, equal in all material
respects to those contained in Seller's Canadian Pension Plan, as in effect on
the Closing Date.
For the purposes of this Agreement, the Transferred U.S. Participants and
Transferred Canadian Participants are hereinafter referred to in the aggregate
as the "Transferred Pension Participants." Seller's U.S. Pension Plan and
Seller's Canadian Pension Plan shall be referred to jointly as "Seller's
Pension Plans", and Oxford's U.S. Pension Plan and Oxford's Canadian Pension
Plan shall be referred to jointly as "Oxford's Pension Plans". A Transferred
Pension Participant's Credited Service, Service, and Compensation under
Seller's Pension Plans (as defined in such Plans) shall be recognized and
provided for such Transferred Pension Participant for purposes of determining
his eligibility for, and amount of, benefits under Oxford's Pension Plans, to
the same extent that such factors are recognized under Seller's Pension Plans.
As of the Effective Date, Seller shall amend Seller's Pension Plans, if and to
the extent necessary, to exclude the Transferred Pension Participants.
(b) As of the Effective Date, but subject to the actual
transfers of assets contemplated by Section 9.2(g), Buyer shall cause the
Buyer Subsidiaries to assume under the applicable Oxford Pension Plan all the
liabilities and obligations of Seller and the Seller Subsidiaries for and on
behalf of the Transferred Pension Participants, which have been the
liabilities and obligations of Seller and the Seller Subsidiaries under
Seller's Pension Plans. Seller and the Seller Subsidiaries shall retain all
liability and responsibility under Seller's Pension Plans for those
participants and former participants under Seller's Pension Plans, who are not
Transferred Pension Participants, and for the spouses and beneficiaries of
such participants and former participants.
(c) In conjunction with the establishment by the Buyer
Subsidiaries of Oxford's Pension Plans, the Buyer Subsidiaries shall either
utilize previously existing funding arrangements, or establish as of the
Effective Date new separate funding arrangements for such Plans through either
a qualified trust or contract of insurance, in either case as acceptable for
such purpose pursuant to applicable laws and regulations. Such separate
funding arrangements shall be referred to hereinafter as "Oxford's Canadian
Pension Fund" and "Oxford's U.S. Pension Fund" respectively, and referred to
jointly as "Oxford's Pension Funds". The separate trust accounts for Seller's
U.S. Pension Plan and Seller's Canadian Pension Plan which exist under
Seller's U.S. master pension trust and Canadian master pension trust
respectively, as established through Bankers Trust Company in the U.S. and
Royal Trust Company in Canada, shall be referred to hereinafter as "Seller's
U.S. Pension Trust" and "Seller's Canadian Pension Trust" respectively, and
jointly as "Seller's Pension Trusts".
(d) As soon as is reasonably practicable after the
Closing Date, Seller shall arrange for the transfer to Oxford's U.S. Pension
Fund and Oxford's Canadian Pension Fund of that portion of the assets held as
of the Closing Date under Seller's U.S. Pension Trust and Seller's Canadian
Pension Trust respectively, which is allocable to the Transferred U.S.
Participants and the Transferred Canadian Participants respectively. Such
allocable portions of assets (including any employer contributions to
Seller's Pension Plans which are accrued for any period prior to the Effective
Date, but unpaid as of such date) shall be determined by Seller's actuarial
consulting firms, with the determination subject to Section 9.2(e), and shall
be equal to,
(i) with respect to Seller's U.S. Pension Trust, the
portion of the assets of such Trust (the "U.S. Transfer Amount") held
thereunder as of the Closing Date equal to the greater of : (a) the amount
required to be transferred with respect to the Transferred U.S. Participants
as of the Closing Date pursuant to Section 208 of the Employee Retirement
Income Security Act of 1974, as amended from time to time thereafter
("ERISA"), and Section 414(l) of the Code, and the applicable regulations and
rulings thereunder; and (b) that portion of the Projected Benefit Obligation
(the "PBO") of Seller's U.S. Pension Plan attributable to the Transferred U.S.
Participants, determined as of the Closing Date. For purposes of determining
the minimum required asset transfer under clause (a) above, the assumptions
used shall be those used by the U.S. Pension Benefit Guaranty Corporation
("PBGC") with respect to plan terminations occurring on the Closing Date, such
assumptions being deemed reasonable under Code Regulation 1.414(l)-1(b)(9);
and
(ii) with respect to Seller's Canadian Pension Trust,
the portion of the assets of such trust (the "Canadian Transfer Amount") equal
to the greater of (a) the going concern liabilities in respect of the
Transferred Canadian Participants accrued as of the Closing Date, determined
using the actuarial basis established by Seller's actuary in the most recent
report prepared in accordance with Section 14 of the Regulation to the Pension
Benefits Act of Ontario (the "Ontario Act") and pursuant to the applicable
provisions of Seller's Canadian Pension Plan as of the Closing Date; and (b)
the minimum amount of assets necessary in order to provide for the transfer to
Buyer's Canadian Pension Trust of the accrued liabilities for the Transferred
Canadian Participants, determined as of the Closing Date based on the
provisions of Policy Statement 2 of the Pension Commission of Ontario (the
"PCO") dated as at July 28, 1988. For the purposes of applying Policy
Statement 2, the determination required under paragraph (3)(b)(iii) shall be
made by Seller, and paragraph 8(a) or 9, as determined by Seller shall be
deemed to apply. Notwithstanding the foregoing, if the amount approved (as
provided in Section 9.2(f)) by the Ontario Superintendent of Pensions (the
"Superintendent") for transfer from the Seller's Canadian Pension Trust to
Oxford's Canadian Pension Fund pursuant to this Agreement is different from
the Canadian Transfer Amount as determined above, the Canadian Transfer Amount
shall be deemed for all purposes of this Agreement to be the amount so
approved by the Superintendent.
(e) Within ninety days after the Closing Date, Seller
shall notify Buyer of the proposed U.S. and Canadian Transfer Amounts, and
shall provide Buyer with a copy of the actuarial computations of such amounts,
along with all data, documents, calculations, workpapers and other materials
or information utilized in preparing such computation, and including such
information as may be required (the "Canadian Transfer Report") to obtain the
consent of the Superintendent to the transfer of assets and liabilities from
Seller's Canadian Pension Trust to Oxford's Canadian Pension Fund as
contemplated by this Section. Buyer shall notify Seller in writing of Buyer's
agreement with such determinations, or shall submit to Seller a written list
of points of disagreement, within the period of sixty days following Buyer's
receipt of Seller's notification and all of the supporting data, documents,
calculations, workpapers and other materials and information. If Buyer
submits to Seller any such list of points of disagreement with respect to
either of such actuarial computations, and if such disagreement cannot be
resolved to the satisfaction of both Buyer and Seller within the period of
thirty days following the date of receipt of any such list by Seller, then the
disagreement shall be resolved by an independent third party actuarial
consulting firm, to be mutually selected by Buyer and Seller no later than
thirty days after the end of the first thirty day period. The opinion of such
actuarial consulting firm as to such actuarial computations, and its
conclusion as to what the form and content of the Canadian Transfer Report
should be, shall be final (subject to Section 9.2(f)) and binding on both
Seller and Buyer and shall not be subject to appeal by either of them. Each
of Seller and Buyer shall be responsible for one-half of the fees and expenses
of such final determination by such actuarial consulting firm.
(f) Within thirty days next following the earlier of (i)
Buyer's acceptance of the Canadian Transfer Report, and (ii) the report of the
third party actuarial consulting firm as to what the form and content of the
Canadian Transfer Report should be, Seller shall submit the final Canadian
Transfer Report to the Superintendent to obtain the regulatory consent
required by law to the transfer of assets as set out in the Canadian Transfer
Report.
(g) The transfer of the U.S. and Canadian Transfer Amounts
from each of Seller's Pension Trusts to the applicable Oxford Pension Fund
shall be completed as soon as practicable after such asset amounts are finally
determined pursuant to this Section 9.2 and, with respect to the Canadian
Transfer Amount, after Seller's receipt of the required consent from the
Superintendent. Each such Transfer Amount,
(i) shall be increased or decreased to take account
of the investment gains and/ or losses experienced by the applicable Seller's
Pension Trust for the period commencing on the Effective Date and ending on
the date (the "Asset Transfer Date", as determined separately for each of
Seller's Pension Trusts) on which the assets of each such Trust are
transferred (provided that during such period, Seller shall not permit the
trustees of Seller's Pension Trusts to make any material changes in the
investment policies utilized by such trustees prior to the Closing Date), such
gains and/or losses to be calculated on a pro rated basis in respect of all
assets of the applicable Seller's Pension Trust, and
(ii) shall be decreased by the amount of any benefit
payments due and made to or on behalf of any of the applicable group of
Transferred Pension Participants from the applicable Seller's Pension Trust
during such period, and any other disbursements, including any applicable fees
and expenses, which have been charged to Seller's Pension Trusts, calculated
on a pro rated basis in respect of all assets of the applicable Seller's
Pension Trust.
The resultant net amount of assets to be so transferred from each of Seller's
Pension Trusts shall consist of cash.
(h) As of and after the Effective Date, but prior to the
Asset Transfer Date related to each of Seller's Pension Trusts, Seller shall
direct the trustee of each such Trust to pay benefits therefrom to, or on
behalf of, any Transferred Pension Participant who becomes entitled thereto
under the applicable Oxford Pension Plan during such period, with such
payments to be made in accordance with instructions furnished by the Buyer
Subsidiaries to Seller from time to time; subject, however, to Seller's
reasonable audit and approval of the proper computation of such benefits.
(i) As soon as is reasonably practicable after the Closing
Date, Buyer shall provide the Seller with copies of the governing documents
for Oxford's Pension Plans and Oxford's Pension Funds, for review and comment
by (but not subject to the approval of) Seller, and Buyer shall then cause the
Buyer Subsidiaries to apply
(i) for a determination by the Internal Revenue
Service of the United States ("IRS") that Oxford's U.S. Pension Plan (as
established or amended pursuant to Section 9.2(a)(i)) and Oxford's U.S.
Pension Fund qualify under Sections 401(a) and 501(a), respectively, of the
Code, and under the applicable provisions of ERISA, and any regulations
issued under or pursuant to either the Code or ERISA; and
(ii) for registration of Oxford's Canadian Pension
Plan with the Canadian Department of National Revenue ("Revenue Canada") and
the PCO to establish registration thereof under the Canada Income Tax Act (the
"Canada Act") and the Ontario Act and the applicable regulations under both
such Acts.
Buyer further agrees to cause the Buyer Subsidiaries to revise and/or amend
either or both of Oxford's Pension Plans as may be required by IRS, Revenue
Canada and/or the PCO in accordance with applicable governmental requirements
for the purpose of obtaining any such qualification or registration. Copies
of such filings by the Buyer Subsidiaries shall be furnished by the Buyer
Subsidiaries to Seller when first made, and a copy of the U.S. determination
letter and the Canadian acceptances of registration shall be furnished by the
Buyer Subsidiaries to Seller within a reasonable period of time following the
receipt of each such letter by the Buyer Subsidiaries.
(j) Seller shall be responsible for satisfying any and all
governmental reporting and/or disclosure requirements applicable to Seller's
Pension Plans and/or Seller's Pension Trusts. The Buyer Subsidiaries shall be
responsible for satisfying any and all governmental reporting and/or
disclosure requirements applicable to Oxford's Pension Plans and/or Oxford's
Pension Funds. Seller shall furnish to Buyer any information relating to the
transfers of assets and liabilities from Seller's Pension Trusts and Seller's
Pension Plans to Oxford's Pension Funds and Oxford's Pension Plans,
respectively, which may be necessary for the Buyer Subsidiaries to satisfy
such requirements, to the extent that such information is not already in the
possession of Buyer or any of Buyer's representatives.
(k) Upon the completion of the transfers of assets and
liabilities contemplated by this Section 9.2, Seller, the Seller Subsidiaries,
Seller's Pension Plans, and Seller's Pension Trusts, and their respective
agents, shall be completely discharged of any and all obligations and
liabilities with respect to the pension benefits accrued at any time by the
Transferred Pension Participants under Seller's Pension Plans. Buyer further
agrees to indemnify Seller for any liabilities Seller may incur as a result of
the transfer of assets and/or liabilities from Seller's U.S. Pension Trust and
Seller's U.S. Pension Plan to Oxford's U.S. Pension Fund and Oxford's U.S.
Pension Plan, respectively, prior to the review by the IRS of Oxford's U.S.
Pension Fund and Oxford's U.S. Pension Plan, in the event Oxford U.S. is
unable to obtain the issuance by the IRS of a favorable determination letter
with respect to such Fund and Plan. Notwithstanding the foregoing, and
without limiting any other indemnity obligation of Seller under or in
connection with this Agreement, Seller shall indemnify, defend, and hold
harmless Buyer and the Buyer Subsidiaries from and against any and all suits,
demands, and/or claims of any kind which may arise under, or on account of or
in connection with either or both of Seller's Pension Plans and/or either or
both of Seller's Pension Trusts, and which relate to the period prior to the
Effective Date (regardless of when any such suit, demand, and/or claim is
made), including without limitation any suits, demands, and/or claims by any
person or party in relation to any provisions of ERISA, the Canada Act or the
Ontario Act, as amended from time to time, and any regulations issued under or
pursuant to any of such statutes, the proper administration, investment, and
funding of such Plans and Trusts, and any withdrawal of assets or application
of surplus assets with respect thereto.
(l) Notwithstanding any other provisions of this
Agreement, and except as otherwise contemplated by Section 9(a), the Buyer and
the Buyer Subsidiaries reserve the right to modify or amend the terms of, or
to terminate, either or both of Oxford's Pension Plans, and/or either or both
of Oxford's Pension Funds at any time after the Effective Date, subject to all
applicable laws and regulations; provided that, except as may be required
under any such applicable laws or regulations, no such change shall, prior to
the expiration of five years following the Closing Date, result in the
complete termination of coverage of the Transferred Pension Participants under
either or both of Oxford's Pension Plans, or otherwise decrease the rate at
which new benefits accrue, or the total value of benefits accrued thereunder,
for the Transferred Pension Participants.
9.3 Assignment And Assumption Of Hourly Pension Plans. (a)
As of the Effective Date, but subject to the actual assignment and assumption
of assets contemplated by Section 9.3(d), Eaton Yale shall assign to Oxford
Canada, and Buyer shall cause Oxford Canada to assume from Eaton Yale the
Eaton Yale Ltd. Pension Plan PP For Hourly-Rate Employees Of The Suspension
Division Wallaceburg Plant ("Plan PP") and the Eaton Yale Ltd. Pension Plan
SP For Hourly-Rate Employees Of The Suspension Division Chatham Plant ("Plan
SP"), including all rights, obligations, and liabilities thereunder, so that
Oxford Canada on and after the Effective Date shall be the successor employer
and administrator thereunder. For the purposes of this Agreement, Plan PP and
Plan SP shall be referred to jointly as the "Hourly Pension Plans".
(b) For the purposes of this Agreement, "Plan PP
Participants" and "Plan SP Participants" shall mean all members and former
members (within the meaning of the Ontario Act), and all other persons
entitled to payments from Plan PP and Plan SP, respectively, as of the Effec-
tive Date. The Plan PP Participants and the Plan SP Participants shall be
referred to jointly as the "Transferred Hourly Participants".
(c) As soon as is reasonably practicable after the Closing
Date, Buyer shall cause Oxford Canada to amend the Hourly Pension Plans, and
shall make all regulatory filings, as are necessary to demonstrate that such
Plans have been assumed and adopted by Oxford Canada, and that Oxford Canada
has been substituted in place of Eaton Yale as the "Company" thereunder,
effective as of the Effective Date, and shall provide Seller with a copy of
such amended Plans and regulatory filings.
(d) The separate participating trust accounts for Plan PP
and Plan SP which exist under Seller's Canadian master pension trust, as
established through Royal Trust Company, shall be referred to herein as the
"Plan PP Trust" and the "Plan SP Trust" respectively, and jointly as the "-
Hourly Pension Trusts". Effective as of the Closing Date, Seller shall cause
the Hourly Pension Trusts to cease to participate in Seller's Canadian master
pension trust, and to be converted so that cash shall be the sole asset of the
Hourly Pension Trusts. Buyer and Oxford Canada shall have no obligation or
entitlement with respect to such conversion procedure. Subject to Section
9.3(e), the Seller shall then assign to Oxford Canada and the Buyer shall
cause Oxford Canada to assume the rights and obligations of the Seller under
the Hourly Pension Trusts.
(e) It is understood and agreed that, prior to the
assignment and assumption contemplated by Section 9.3(d), Seller shall cause
to be paid into the Hourly Pension Trusts any employer contributions which
have been accrued by Eaton Yale, but not yet paid, with respect to all periods
of operation of the Hourly Pension Plans occurring prior to the Effective
Date, as such contributions are determined by Seller in accordance with the
current Plan PP and Plan SP actuarial reports filed and accepted by the PCO
and the applicable provisions of the Ontario Act. As soon as is reasonably
practicable after the Closing Date, Seller's actuarial consulting firm shall
calculate the fair market value of assets and the solvency liabilities (as
such term is defined in the regulations under the Ontario Act) as of the
Closing Date for each of the Hourly Pension Plans (using those actuarial
assumptions and methods disclosed by Seller to Buyer and Buyer's actuary and
used in determining the "funded ratios" (as hereafter defined) for such Plans
as of January 1, 1998). To the extent that Seller's actuary determines that
the "funded ratio" (defined as the ratio of the fair market value of assets to
solvency liabilities) of either or both of the Hourly Pension Plans as of the
Closing Date, is lower than their respective funded ratios as of January 1,
1998 (as estimated by Seller and represented to Buyer to be the following:
Plan PP - 84.2%; Plan SP - 92.4%), Seller shall pay to the applicable Hourly
Pension Trusts for such Plans (or directly to Oxford Canada, to the extent
payment to the Hourly Pension Trusts is prohibited by applicable laws and
regulations) such additional amounts in cash which, when added to the fair
market value of the assets of the applicable Hourly Pension Trusts as of the
Closing Date, will make each of the funded ratios of the Hourly Pension Plans
equal to their respective funded ratios as of January 1, 1998 (as set forth
above); provided, that such payment shall only be required to the extent that
the total amount otherwise determined to be payable to the applicable Hourly
Pension Trusts (or Oxford Canada) is in excess of $50,000. Notwithstanding the
foregoing provisions of this Section 9.3(e), within ninety days after the
Closing Date, Seller shall notify Buyer of any such required payment as
determined by Seller's actuary, and shall provide Buyer with a copy of the
actuarial computations of any such amount, along with all data, documents,
calculations, workpapers and other materials or information utilized in
preparing such computation. Buyer shall notify Seller in writing of Buyer's
agreement with such determinations, or shall submit to Seller a written list
of points of disagreement, within the period of sixty days following Buyer's
receipt of Seller's notification and all of the supporting data, documents,
calculations, workpapers and other materials and information. If Buyer
submits to Seller any such list of points of disagreement with respect to such
actuarial computations, and if such disagreement cannot be resolved to the
satisfaction of both Buyer and Seller within the period of thirty days
following the date of receipt of any such list by Seller, then the dis-
agreement shall be resolved by an independent third party actuarial consulting
firm, to be mutually selected by Buyer and Seller no later than thirty days
after the end of the first thirty day period. The opinion of such actuarial
consulting firm as to such actuarial computations, shall be final and binding
on both Seller and Buyer and shall not be subject to appeal by either of them.
Each of Seller and Buyer shall be responsible for one-half of the fees and
expenses of such final determination by such actuarial consulting firm.
(f) As of and after the Effective Date, but prior to the
assignment and assumption of assets contemplated by Section 9.3(d), Seller
shall direct the trustee of the Hourly Pension Trusts to pay benefits
therefrom to, or on behalf of, any Transferred Hourly Participant who is, or
becomes, entitled thereto under either of the Hourly Pension Plans during such
period, with such payments to be made in accordance with instructions
furnished by Oxford Canada to Seller from time to time; subject, however to
Seller's reasonable audit and approval of the proper computation of such
benefits.
(g) Seller shall be responsible for satisfying any and all
governmental reporting and/or disclosure requirements applicable to either of
the Hourly Pension Plans and/or either of the Hourly Pension Trusts with
respect to plan years ending prior to the Effective Date, and Oxford Canada
shall be responsible for satisfying such requirements with respect to plan
years ending on or after the Effective Date.
(h) As of and after the Effective Date, but subject to the
actual assignment and assumption of assets contemplated by Section 9.3(d), and
without limiting any other indemnity obligation of Buyer under or in
connection with this Agreement, Buyer shall indemnify, defend, and hold
harmless Seller and the Seller Subsidiaries from and against any and all
suits, demands, and/ or claims of any kind (collectively the "Claims") which
may arise under, or on account of or in connection with, either or both of the
Hourly Pension Plans and/or either or both of the Hourly Pension Trusts, and
which relate to the period after the Closing Date, including without
limitation any Claims by any person or party in relation to any provisions of
ERISA, the Canada Act or the Ontario Act, as amended from time to time, and
any regulations issued under or pursuant to any of such statutes, except to
the extent that the same shall arise from any breach of any representation or
warranty on the part of Seller or the Seller Subsidiaries under this
Agreement, or as otherwise provided in Section 9.3(i).
(i) As of and after the Effective Date, and without
limiting any other indemnity obligation of Seller under or in connection with
this Agreement, Seller shall indemnify, defend, and hold harmless Buyer and
the Buyer Subsidiaries from and against any and all Claims of any kind which
may arise under, or on account of or in connection with of either or both of
the Hourly Pension Plans and/or either or both of the Hourly Pension Trusts,
and which relate to the period prior to the Effective Date (regardless of when
any such Claim is made), including without limitation any Claims by any person
or party in relation to any provisions of ERISA, the Canada Act or the Ontario
Act, as amended from time to time, and any regulations issued under or
pursuant to any of such statutes, the proper administration, investment, and
funding of such Plans and Trusts, and any withdrawal of assets or application
of surplus assets with respect thereto.
(j) Notwithstanding any other provisions of this
Agreement, Buyer and the Buyer Subsidiaries reserve the right to modify or
amend the terms of, or to terminate, either or both of the Hourly Pension
Plans, and/or either or both of the Hourly Pension Trusts at any time after
the Effective Date, subject to all applicable laws and regulations, and the
provisions of any applicable collective bargaining agreements.
9.4 Allocation Of U.S. Investment/Savings Plan Responsibilities.
(a) Seller shall retain all liability and responsibility for making
contributions to and the disposition of accounts of each Hired Employee who is
eligible to be a participant on the Closing Date ("Investment Plan
Participant") in the Eaton Corporation Share Purchase And Investment Plan
("Seller's Investment Plan"). Each Investment Plan Participant shall have his
full interest in his account, including without limitation all employer
matching contributions made by Seller and any earnings thereon for the
partial year 1998, allocated and/or distributed on his behalf as soon as
practicable after the Closing Date,
(i) pursuant to the provisions of Seller's
Investment Plan which are applicable to cessation of employment with Seller on
the Closing Date for reasons other than retirement, disability, or death and
in connection with the divestiture of a facility, including without limitation
such provisions with respect to the direct transfer of all or a portion of an
Investment Plan Participant's account to another qualified investment plan or
arrangement; and
(ii) in accordance with the administrative procedures
and practices which have been established by Seller with respect to such
allocation and/or distribution.
(b) With respect to any Investment Plan Participant who
has an outstanding loan under Seller's Investment Plan as of the Closing Date
pursuant to Article IX thereof, the transfer of his employment from Seller to
Oxford U.S. as of the Effective Date shall be deemed to be a termination of
employment with Seller only for the purposes of effecting the repayment of
such loan pursuant to the applicable provisions of Seller's Investment Plan
and the administrative procedures which have been established by Seller with
respect to such repayments. Buyer shall cause Oxford U.S. to assist Seller in
obtaining from any Investment Plan Participants all information, election
forms, and other materials which are necessary and required by Seller to
effectuate any such allocation, distribution and/or loan repayment.
(c) As soon as is reasonably practicable after the Closing
Date, Buyer shall cause Oxford U.S. to establish a new defined contribution
plan or arrange for the amendment of the Lobdell Emery Salaried Employees'
Retirement Savings Plan ("Oxford's Savings Plan") for the purpose of covering
Investment Plan Participants. Oxford's Savings Plan shall require that Oxford
U.S. make matching contributions of at least fifty percent (50%) of the salary
reduction contributions elected to be made thereunder by any Investment Plan
Participant, subject to a maximum matching contribution for any such
Investment Plan Participant of three percent (3%) of such Investment Plan
Participant's Compensation (as defined in such Plan). Investment Plan
Participants participating under Oxford's Savings Plan shall also be eligible
for such additional matching contributions, to the extent provided under such
Plan to other similarly situated employees of Oxford U.S., to the extent
warranted by overall business performance criteria determined by Oxford U.S.
Oxford's Savings Plan shall also contain provisions pursuant to which
Investment Plan Participants may make rollovers of their account balances from
Seller's Investment Plan to Oxford's Savings Plan, subject to all current
restrictions contained in Oxford's Savings Plan, and all applicable laws and
regulations. Oxford's Savings Plan will recognize service with Seller and the
Seller Subsidiaries for all purposes for which service is a criterion in
Oxford's Savings Plan. Notwithstanding any other provisions of this
Agreement, the Buyer and Oxford U.S. reserve the right to modify or amend the
terms of, or to terminate, Oxford's Savings Plan at any time after the
Effective Date, subject to all applicable laws and regulations; provided that
(except as may be required under any such applicable laws or regulations) no
such change shall, prior to the expiration of two years following the Closing
Date, result in the complete termination of Oxford's Savings Plan, or reduce
the rate at which new matching contributions are made thereunder for any
Investment Plan Participant.
9.5 Allocation of Canadian Savings Plan Responsibilities. (a)
Effective as of the Closing Date, Seller shall cause each Hired Employee who
is eligible to have an account as of such date ("RRSP Participant") under the
Eaton Yale Ltd. Group Registered Retirement Savings Plan ("Seller's RRSP") to
have a fully nonforfeitable right to such account.
(b) As soon as is reasonably practicable after the Closing
Date, Buyer shall cause Oxford Canada to establish a new group registered
retirement savings plan ("Oxford's RRSP"), covering RRSP Participants.
Oxford's RRSP shall require that Oxford Canada adjust the compensation of RRSP
Participants (to the extent permissible under the Canada Act and regulations
thereunder) to effectively permit Oxford Canada to make matching contributions
of at least fifty percent (50%) of the contributions elected to be made
thereunder by any RRSP Participant, subject to a maximum matching contribution
for any RRSP Participant of three percent (3%) of such RRSP Participant's
compensation and subject to the Canada Act and regulations thereunder. RRSP
Participants participating under Oxford's RRSP shall also be eligible for such
additional matching contributions, to the extent provided under such Plan to
other similarly situated employees of Oxford Canada, to the extent warranted
by overall business performance criteria determined by Oxford Canada. The
Seller and Oxford Canada shall make reasonable efforts to cause the RRSP
Participants, at their option, to transfer their individual account balances
to the new accounts that Oxford Canada shall cause to be established on their
behalf under Oxford's RRSP. Oxford's RRSP will recognize service with Seller
and the Seller Subsidiaries for all purposes for which service is a criterion
in Oxford's RRSP, and will contain provisions which are substantially
comparable to those provided under Seller's RRSP with respect to participant
contribution levels, investment options and distribution methods.
Notwithstanding any other provisions of this Agreement, the Buyer and Oxford
Canada reserve the right to modify or amend the terms of, or to terminate,
Oxford's RRSP at any time after the Effective Date, subject to all applicable
laws and regulations; provided that (except as may be required under any such
applicable laws or regulations) no such change shall, prior to the expiration
of two years following the Closing Date, restrict the key Plan provisions
referred to in the preceding sentence, result in the complete termination of
Oxford's RRSP, or reduce the rate at which new matching contributions are made
thereunder for any RRSP Participant.
9.6 Assignment and Assumption Of Hourly Supplemental
Unemployment Benefit Plans and Trust Funds. At the Closing, and effective as
of the Effective Date, Eaton Yale shall assign to Oxford Canada, and Buyer
shall cause Oxford Canada to assume from Eaton Yale, all liability and
responsibility under and pursuant to the Eaton Yale Ltd. Supplemental
Unemployment Benefit Plan For Hourly-Rate Employees Of The Suspension Division
Chatham Plant and the Eaton Yale Ltd. Supplemental Unemployment Benefit Plan
For Hourly-Rate Employees Of The Suspension Division Wallaceburg Plant
(collectively the "SUB Plans"), so that Oxford Canada at all times on and
after the Effective Date shall be the successor employer, sponsor and
administrator thereunder. On or as soon as is reasonably practicable after
the Closing Date, Seller shall amend the governing documents of Seller's SUB
Plans and related agreements to confirm that Oxford Canada has been
substituted in place of Eaton Yale as the "Company" under the SUB Plans, and
that Oxford Canada has become the successor settlor to Eaton Yale under, and
with control over, the trust funds for the SUB Plans.
9.7 Allocation Of Welfare Benefit Responsibilities. (a) As
provided in Sections 9.1(a) and (b), the Buyer shall cause the Buyer
Subsidiaries to provide welfare benefits (medical, dental and life insurance)
for the Hired Employees, under the Buyer Subsidiaries' applicable welfare
benefit plans, programs, practices, and/or arrangements (hereinafter
collectively referred to as "Oxford's Benefit Plans") commencing on the
Effective Date, without requiring evidence of insurability and without the
application of any pre-existing physical or mental condition restrictions.
Any Hired Employee's periods of employment with Seller and/or the Seller
Subsidiaries, or any predecessor thereof, and any and all periods of a Hired
Employee's coverage under, or participation in, any of Seller's or the Seller
Subsidiaries' welfare benefit (medical, dental and life insurance) plans,
programs, practices, and/or arrangements covering Hired Employees prior to the
Effective Date (hereinafter collectively referred to as "Seller's Benefit
Plans"), shall be deemed to be employment with the Buyer Subsidiaries, and
coverage under and/or participation in Oxford's Benefit Plans respectively,
for all purposes of establishing such Hired Employee's eligibility for
participation and benefit entitlement under Oxford's Benefit Plans. The
extent to which any Hired Employee (and his dependents and/or other
beneficiaries) has satisfied in whole or in part any Seller's Benefit Plan
annual deductible, or has paid any out-of-pocket expenses pursuant to any
Seller's Benefit Plan co-insurance provision, shall be counted toward the
satisfaction of any applicable deductible or out-of-pocket expense maximum
respectively under the comparable Oxford's Benefit Plans.
(b) Subject to Section 2.3, the Buyer Subsidiaries shall
be responsible only for (i) claims made by the Hired Employees (and their
dependents and/or other beneficiaries) arising under Oxford's Benefit Plans
with respect to events occurring, charges incurred or services rendered to
Hired Employees (and their dependents and/or other beneficiaries) after the
Closing Date; (ii) salary continuation or other short term disability benefits
with respect to any Hired Employee which may become payable for any period of
disability occurring after the Closing Date, whether or not the disability
commenced prior to the Effective Date; and (iii) long term disability payments
with respect to any Hired Employee which may become payable with respect to
any qualified disability which commenced prior to the Effective Date, if a
claim for such benefits was not filed and approved under the applicable
Seller's Benefit Plan prior to the Effective Date, subject to Seller's
obligation to share liabilities related to Occupational Diseases pursuant to
Section 2.3(c). Seller shall retain all liability, responsibility, and
obligation for the provision of benefits under Seller's Benefit Plans, with
respect to events occurring, charges incurred or services rendered to the
Hired Employees (and their dependents and/or other beneficiaries ) on or prior
to the Closing Date, except as otherwise provided in the preceding sentence;
provided, that Seller shall also retain liability for continuing payment of
non-professional charges associated with a hospital confinement commencing on
or prior to the Closing Date. Welfare benefit coverage of the Hired Employees
and their eligible dependents and other beneficiaries, under Oxford's Benefit
Plans pursuant to this Section 9.7, shall for all purposes, including without
limitation provision by the Buyer Subsidiaries of welfare benefit continuation
coverage as required under Part 6 of Title I of ERISA and Section 4980B of the
Code (collectively "COBRA"), commence as of the Effective Date, and coverage
and eligibility of such persons for welfare benefit coverage or payments under
any applicable Seller's Benefit Plan shall cease as of the Closing Date,
except as otherwise specifically provided pursuant to this Section 9.7.
(c) As of the Effective Date, Buyer shall cause Oxford
Canada to provide non-collectively bargained Hired Employees employed by
Oxford Canada in Canada, with retiree medical and life insurance coverage
benefits, that are at least equal in all material respects to those similar
benefits as would have been provided to such Hired Employees in the event of
their retirement from the Seller or any of the Seller Subsidiaries, under the
applicable Seller's Benefit Plans, as in effect on the Closing Date; provided,
that the retiree life insurance coverage provided by Oxford Canada shall be
limited to a maximum of C$5,000. Except as provided in the foregoing
sentence, the Buyer and/or the Buyer Subsidiaries shall at no time be
obligated to provide retiree medical or life insurance coverage to or with
respect to any Hired Employee, including any other Hired Employees who were or
would have become eligible on or after the Effective Date for any such
benefits under Seller's Benefits Plans, nor shall Buyer and/or the Buyer
Subsidiaries be required to provide any other types of benefits to or with
respect to any Hired Employee following retirement or other termination of
employment (except to the extent required by Code Section 4980B with respect
to Hired Employees employed in the U.S., for events occurring after the
Effective Date).
(d) Notwithstanding any other provisions of this
Agreement, Seller agrees to provide, and shall retain all liability and
responsibility for providing the following benefits to certain Hired
Employees: (i) retiree medical insurance coverage for those non-collectively
bargained Hired Employees employed by Buyer or the Buyer Subsidiaries in the
U.S.; and (ii) retiree life insurance coverage for those non-collectively
bargained Hired Employees employed by Buyer or the Buyer Subsidiaries in
Canada, to the extent such coverage would have exceeded C$5,000 under the
applicable Seller's Benefit Plans. Such Hired Employees shall be eligible to
apply to Seller for such retiree medical and life insurance coverage,
commencing upon the later retirement from Buyer or the Buyer Subsidiaries of
any Hired Employee to which such benefit is applicable, provided that: (i)
such Hired Employee retires at age 50 or later, having completed at least ten
years of service (all service with Seller, the Seller Subsidiaries, Buyer, the
Buyer Subsidiaries and Buyer's affiliates shall be included for this purpose);
and (ii) such coverage shall be subject to such terms and conditions as Seller
shall have in place from time to time with respect to the providing of such
benefits under Seller's applicable welfare benefit plans.
(e) Notwithstanding any other provisions of this
Agreement, Buyer and the Buyer Subsidiaries reserve the right to modify or
amend the terms of, or to terminate, any or all of Oxford's Benefit Plans at
any time after the Effective Date, subject to all applicable laws and
regulations; provided that, except as may be required under any such
applicable laws or regulations, no such change shall, prior to the expiration
of five years following the Closing Date, result in the material reduction of
retiree medical coverage of the non-collectively bargained Hired Employees
employed by Oxford Canada in Canada, as set forth in Section 9.7(c).
9.8 Accrued Vacation Pay. Seller and Eaton Yale and Buyer agree
that the Net Assets Statement shall include an amount as a current liability
which accurately represents all liabilities and obligations for the payment of
vacation pay, leave or similar benefits which either are vested in, or have
been accrued on behalf of, the hourly Hired Employees, but which have not yet
been paid by Seller or Eaton Yale, as of the Closing Date. On and after the
Effective Date, Buyer shall cause the Buyer Subsidiaries to be liable and
responsible for the payment of all such vested and accrued vacation benefits,
in accordance with the applicable administrative procedures and practices of
Seller and Eaton Yale which are in effect on the Closing Date for Division
Employees, to the eligible Hired Employees.
9.9 Reimbursement For Other Party's Liabilities.
Notwithstanding any other provisions of this Agreement, in the event that
either Seller (or Eaton Yale) or Buyer (or the Buyer Subsidiaries) shall be
required, by operation of law or regulation or by judicial or quasi-judicial
determination or by the operation of any contract or other agreement of any
kind with any insurance company or other entity, to pay or discharge directly,
or indirectly through any representative or benefit trust or other fund or
otherwise, any liability, responsibility, or obligation for the provision of
any benefit or other payment (including any benefit premium payment or other
direct or indirect cost with respect to any benefit coverage) which is the
liability, responsibility, and/or obligation of the other party pursuant to
this Section 9, the party responsible for such payment agrees to reimburse
promptly the other party, or any appropriate representative or benefit trust
or other fund of such party as may be determined thereby, in full for any and
all such payments or discharges upon the presentation of written evidence
thereof.
9.10 Wage Reporting. (a) U.S. Emloyees. Wages paid by Seller
to Hired Employees during the year in which the Closing Date occurs shall be
considered attributable to Oxford U.S. for purposes of Code Section 3121(a)(1)
and Income Tax Regulations promulgated thereunder. Seller shall furnish each
Hired Employee one Wage and Tax Statement (IRS Form W-2) for wages paid by
Seller. Buyer shall cause Oxford U.S. to furnish IRS Forms W-2 covering the
period from the Closing Date through the end of the year in which the Closing
Date occurs. Both parties shall comply with the provisions of Section 4 of
Rev. Proc. 84-77.
(b) Foreign Employees. Wages paid by Eaton Yale to Hired
Employees during the year in which the Closing Date occurs shall be reported
by Eaton Yale under the provisions of Income Tax Act (Canada).
9.11 No Third Party Beneficiaries. Neither Buyer nor Seller
intend that this Section 9 create any rights or interests, except as between
Buyer, the Buyer Subsidiaries, Seller and the Seller Subsidiaries, and no
present or future employees (or any dependents or beneficiaries of such
employees) of either party, or any of their affiliates (including the Buyer
Subsidiaries and the Seller Subsidiaries) will be treated or deemed as third
party beneficiaries in or under this Agreement.
10. Certain Real Estate Matters.
10.1 Title Commitment; Title Policy; Survey. (a) As soon as
practicable following the date of this Agreement, the Seller shall cause, (i)
with respect to the Owned Real Property located in the United States, Chicago
Title Insurance Company or such other title insurance company as may be
reasonably acceptable to the Buyer (the "Title Company") to issue and deliver
its commitment for an ALTA extended form owner's policy of title insurance
(the "US Title Policy"), together with two copies of all recorded documents
referred to therein committing the Title Company to issue such policy at
Closing, insuring Buyer as the holder of a fee simple title to such Owned Real
Property and with the deletion of the so-called standard permitted exceptions
covering the Owned Real Property, subject only to the Real Property Permitted
Exceptions in an amount equal to the portion of the Purchase Price allocated
to such Owned Real Property, and (ii) with respect to the Owned Real Property
located in Canada, the opinion of Seller's counsel (the "Canadian Title
Opinion") as to title to such Owned Properties to be delivered to the Buyer,
which opinion shall be addressed to Buyer, its counsel and such other parties
as may reasonably be requested by Buyer and shall provide that the Seller or
the Seller Subsidiaries have good title in fee simple to each such Owned
Property, subject only to the Real Property Permitted Exceptions, which shall
also address matters of survey and zoning compliance, and confirm the results
of all usual off-title searches for properties of this nature, and which shall
be reasonably satisfactory to Buyer. The Seller shall deliver or cause to be
delivered to the Buyer a draft of the Canadian Title Opinion for review by
Buyer's counsel at least ten business days prior to the Closing Date. The US
Title Policy shall include the following endorsements: (i) ALTA 3.1 Zoning
with parking, (ii) Contiguity, (iii) Access, (iv) ALTA 9 comprehensive, and
(v) survey, and the Canadian Title Opinion shall contain provisions to the
same effect.
(b) Prior to the Closing Date, the Seller shall engage a
registered surveyor or professional engineer approved by the Buyer to prepare
a current ALTA as-built land title survey of the Owned Real Property (the
"Survey") in form sufficient to enable the Title Company to delete from the US
Title Policy and the Canadian Title Opinion the so-called standard exceptions
for matters disclosed by an accurate survey.
(c) The cost and expense of the US Title Policy, the
Canadian Title Opinion, the Surveys, and any transfer or recording fees or
taxes shall be shared equally by the Seller and the Buyer.
10.2 Objections. The Buyer shall have ten days after receipt of
all of the documents referred to in Section 10.1 to give the Seller written
notice of any objections to the conditions or exceptions shown thereon;
provided, however, that such objections are limited to those that relate to
conditions or exceptions that would have a material adverse effect on the
value of the property or a material adverse effect on the ability of the Buyer
to operate the Business. Failure to object to any additional condition or
exception within said period shall constitute an approval of such condition or
exception. If the Buyer gives such notice, the Seller shall have the
obligation, prior to the Closing, to use their reasonable efforts to remedy or
remove the objectionable condition or exception, or to provide the Buyer with
evidence reasonably satisfactory to the Buyer that such condition or exception
shall be removed or remedied prior to or concurrently with the Closing. If
the Seller cannot so remedy or remove such condition or exception prior to or
concurrently with the Closing, the Buyer shall have the right to either waive
its objection to such condition or exception and proceed towards the Closing
or terminate this Agreement without liability.
11. Conditions to Obligations of Buyer. The obligations of Buyer
under this Agreement are subject to the satisfaction at or prior to the
Closing Date of the following conditions, any of which may be waived in whole
or in part by the Buyer in its sole discretion by delivery of a written notice
to that effect to the Seller.
11.1 HSR/Competition Act Compliance. All applicable governmental
pre-merger filing requirements under the HSR Act shall have been satisfied and
the applicable waiting period requirements under the HSR Act shall have
terminated or expired. All filings required to be made under the Competition
Act (Canada) in connection with the completion of the transactions herein
contemplated shall have been made and the waiting periods thereunder shall
have been terminated or shall have expired without any action or proceeding
thereunder having been commenced or threatened by the Director under such Act.
11.2 No Litigation. At the Closing Date, no litigation,
proceeding, investigation, or inquiry shall be pending or threatened to enjoin
or prevent the consummation of the transactions contemplated by this
Agreement, or involving any of the Transferred Assets which, if sustained,
would have a Material Adverse Effect on Buyer's right to retain the
Transferred Assets or to conduct the Business as it is currently conducted.
11.3 No Casualty. Prior to the Closing Date, there shall not
have occurred any single uninsured casualty in or to any of the Transferred
Assets as a result of which the monetary amount of damage or destruction
totals $500,000 or a lesser amount if such damage or destruction has a
Material Adverse Effect, unless Seller agrees to replace the damaged or
destroyed Transferred Assets or unless the parties mutually agree to an
adjustment in the Purchase Price.
11.4 Retail Sales Tax Certificate. On or prior to the Closing,
Seller shall deliver to Buyer a certificate issued by the Minister of Finance
pursuant to Section 6 of the Retail Sales Tax Act (Ontario) to the effect that
Eaton Yale has paid all taxes collectable or payable under such Act or has
otherwise entered into arrangements satisfactory to such Minister to pay any
such taxes.
11.5 Truth of Representations and Warranties. The
representations and warranties of Seller contained herein shall, if qualified
by materiality, be true and correct and, if not so qualified, be true and
correct in all material respects at and as of the Closing as if made as of the
Closing; provided that representations and warranties that are made as of a
specific date need be true in all material respects only as of such date. The
Seller shall furnish the Buyer with an appropriate closing certificate, dated
the Closing Date, to that effect.
11.6 Performance by the Seller. All of the covenants and
agreements required by this Agreement to have been performed and complied with
by the Seller, if qualified by materiality, shall have been performed and
complied with and, if not so qualified, shall have been performed and complied
with by the Seller in all material respects prior to or on the Closing Date.
The Seller shall have delivered to the Buyer an appropriate certificate to
that effect dated the Closing Date.
11.7 Statutory Prohibition. No written or published statute,
rule, regulation or order shall have been enacted, entered or deemed
applicable by any domestic or foreign government or governmental or
administrative agency or court which would make the transaction contemplated
by this Agreement illegal.
11.8 Releases. The Seller shall have obtained all appropriate
releases and termination statements, if any, for any and all financing
statements and Liens which do not relate to lease transactions entered into in
the ordinary course of business of the Business with respect to the
Transferred Assets.
11.9 No Material Adverse Change. There shall have not been a
material adverse change in the financial condition, property, prospects or
business of the Division as such is currently conducted.
11.10 Real Estate Matters. The provisions in Section 10.2 shall
have been satisfied by Seller or waived by Buyer.
11.11 Environmental Agreement. On or prior to the Closing, Seller
shall have executed and delivered the Environmental Agreement with Buyer in
the form attached to this Agreement as Exhibit E.
11.12 Metalcar. On or prior to the Closing Date or the date of
the Metalcar Closing, as applicable, Seller shall deliver to Buyer the
indemnification agreement referred to in Section 3.1. In addition, on the
Closing Date or the date of the Metalcar Closing, as applicable, Seller's
representatives on the Joint Venture Board of Directors shall resign and
Seller shall deliver the letter attached as Exhibit F (the "ECO-Brazil
Letter") to Buyer and the Joint Venture.
12. Conditions to Obligations of Seller. The obligations of Seller
under this Agreement are subject to the satisfaction at or prior to the
Closing Date of the following conditions, any of which may be waived in whole
or in part by the Seller in its sole discretion by delivery of a written
notice to that effect to the Buyer.
12.1 HSR/Competition Act Compliance. All applicable governmental
pre-merger filing requirements under the HSR Act shall have been satisfied and
the applicable waiting period requirements under the HSR Act shall have
expired. All filings required to be made under the Competition Act (Canada)
in connection with the completion of the transactions herein contemplated
shall have been made and the waiting periods thereunder shall have been
terminated or shall have expired without any action or proceeding thereunder
having been commenced or threatened by the Director under such Act.
12.2 No Litigation. At the Closing Date, no litigation,
proceeding, investigation, or inquiry shall be pending or threatened to enjoin
or prevent the consummation of the transactions contemplated by this
Agreement.
12.3 Truth of Representation and Warranties. The representations
and warranties of Buyer contained herein shall, if qualified by materiality,
be true and correct and, if not so qualified, be true and correct in all
material respects at and as of the Closing as if made as of the Closing;
provided that representations and warranties that are made as of a specific
date need be true in all material respects only as of such date. The Buyer
shall furnish the Seller with an appropriate closing certificate, dated the
Closing Date, to that effect.
12.4 Performance by the Buyer. All of the covenants and
agreements required by this Agreement to have been performed and complied with
by the Buyer, if qualified by materiality, shall have been performed and
complied with and, if not so qualified, shall have been performed and complied
with by the Buyer in all material respects prior to or on the Closing Date.
The Buyer shall have delivered to the Seller an appropriate certificate to
that effect dated the Closing Date.
12.5 Statutory Prohibition. No written or published statute,
rule, regulation or order shall have been enacted, entered or deemed
applicable by any domestic or foreign government or governmental or
administrative agency or court which would make the transaction contemplated
by this Agreement illegal.
12.6 Environmental Agreement. On or prior to the Closing, Buyer
shall have executed and delivered the Environmental Agreement with Seller in
the form attached to this Agreement as Exhibit E.
13. The Closing Date; Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of the Seller, at Eaton Center, Cleveland, Ohio, at 10:00 A.M. on April 1,
1998, or, if the conditions specified in Section 11 and 12 have not been
fulfilled or waived by such date, no later than the fifth business day
following the fulfillment or waiver of such conditions or at such other place
or on such other day as Buyer and Seller shall agree upon in writing. Such
date is herein called the "Closing Date." If all of the conditions specified
in Sections 11 and 12 shall have been fulfilled or waived in writing by Buyer
or by Seller, as the case may be, on or by the Closing Date, then, on the
Closing Date, the Buyer and the Seller shall make the following deliveries.
13.1 Deliveries by the Buyer. Subject to the terms and
conditions of this Agreement, at the Closing, the Buyer shall deliver or cause
to be delivered to the Seller:
(a) the Closing Payment required by Section 3.1 of this
Agreement;
(b) the Assumption Agreement;
(c) each of the Services Agreements;
(d) the Environmental Agreement; and
(e) the certificates referred to in Section 12.3 and
Section 12.4.
13.2 Deliveries by the Seller. Subject to the terms and
conditions of this Agreement, at the Closing, the Seller shall deliver or
cause to be delivered to the Buyer and/or its assignees as the Buyer may
designate to the Seller prior to the Closing:
(a) a general assignment and bill of sale in the form
attached as Exhibit G;
(b) assignments of Seller's ownership rights to each of
the Proprietary Rights in form mutually satisfactory to counsel for Buyer and
Seller hereunder and in recordable form to the extent necessary to assign such
rights;
(c) an assignment of the Metalcar Interest or a portion
thereof in the Joint Venture;
(d) a warranty deed of transfer for each of the parcels of
real estate included in the Owned Real Property, each in form acceptable for
filing with and recording in the records of the appropriate office or land
registry office of the township, county, state or province where such real
estate is located, and such other documents required to be delivered by Seller
under Section 10;
(e) each of the Services Agreements;
(f) the Environmental Agreement;
(g) subject to Section 1.4, the Brady Bond Indemnity
Letter and the ECO-Brazil Letter;
(h) the disclosure document required under Section 20;
(i) the certificates referred to in Section 11.5 and
Section 11.6; and
(j) separate assignments or other appropriate instruments
of transfer to Buyer of any of the Transferred Assets not appropriately
transferred by the documents referred to in clauses (a) through (i) above.
13.3 Right to Possession. Buyer's right to possession of the
Transferred Assets shall commence at the close of business on the Closing
Date, and Buyer or its assigns shall take possession of the Transferred Assets
at the places they are located on the Closing Date.
14. Taxes. The Seller and the Buyer shall share equally all sales,
use, transfer and documentary taxes and recording and filing fees, if any,
including, without limitation, all provincial land transfer taxes, provincial
sales taxes, other than GST under Part IX of the Excise Tax Act (Canada), and
any other charges applicable to the transfer of the Transferred Assets and the
assumption of the Assumed Liabilities provided for by this Agreement. Buyer
and Seller's respective obligations with respect to GST are set forth in
Section 8.1.
15. Bulk Sales. The Buyer hereby waives compliance by Seller with any
applicable bulk sales or bulk transfer law applicable in any jurisdiction
where the Transferred Assets are located and Seller hereby agrees that the
provisions of Section 17.1 shall apply to any losses, damages, costs, charges
or expenses which Buyer may sustain as a consequence of Seller not complying
with such bulk sales or bulk transfer laws.
16. Survival of Representations, Warranties, and Covenants. (a) The
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing only for the applicable period set forth
in this Section 16. All of the representations, warranties, covenants and
agreements of Seller and Buyer contained in this Agreement and all unasserted
claims and causes of action with respect thereto shall terminate upon
expiration of the fifteen (15) month following the Closing Date, except that:
(i) the representations and warranties in Section
4.12 (Tax Matters), shall terminate upon the expiration of the applicable
statute of limitations;
(ii) the representations and warranties in Section
4.13 (Environmental Matters) shall terminate upon the expiration of twenty-
four (24) months following the Closing Date;
(iii) the representations and warranties in Section
4.1 (Organization, Existence and Standing of Seller), Section 4.2 (Corporate
Authority), Section 5.1 (Organization, Existence and Standing of Buyer), and
Section 5.2 (Corporate Authority) shall survive indefinitely;
(iv) the representations and warranties in the first
sentence of Section 4.4(a) (Real Property) shall terminate on the third
anniversary of the Closing Date;
(v) the representations and warranties in Section
4.5 (Title to Personal Property) shall terminate on the seventh anniversary of
the Closing Date;
(vi) the covenants and agreements contained in this
Agreement having specific time periods of applicability shall survive the
Closing Date for the periods set forth therein; and
(vii) covenants and agreements of the Buyer to assume
the Assumed Liabilities, the Buyer's share of the Shared Liabilities, and the
liabilities assumed by Buyer under Section 9 and to indemnify Seller and the
Seller Subsidiaries with respect to the Assumed Liabilities, the Buyer's
share of the Shared Liabilities, and the liabilities assumed by Buyer under
Section 9 as provided for in clause (b) of Section 17.2 and the covenants and
agreements of the Seller to retain the Retained Liabilities, the Seller's
share of the Shared Liabilities, and the liabilities retained by Seller under
Section 9 and to indemnify the Buyer with respect to the Retained Liabilities,
the Seller's share of the Shared Liabilities, and the liabilities retained by
Seller under Section 9 as provided for in clause (c) of Section 17.1 shall
(except as otherwise set forth in Section 9) survive indefinitely.
(b) In the event notice of any claim for indemnification
is given (as provided for in Section 17) within the applicable survival
period, the representations, warranties, covenants and agreements that are the
subject of such indemnification claim shall survive until such time as such
claim is finally resolved.
17. Indemnification.
17.1 Indemnification of Buyer. Subject to Section 16 and to
compliance with Sections 17.3 and 17.4 of this Agreement, Seller agrees to
indemnify Buyer against any loss, cost, liability or expense (including,
without limitation, costs and expenses of investigation and litigation and, to
the extent permitted by law, actual attorney's fees) (collectively,
"Indemnified Losses") incurred by Buyer by reason of (a) any breach of any
representation, warranty, covenant or agreement of Seller, or in any
certificate or other closing document furnished by the Seller, pursuant to
this Agreement (disregarding any materiality, knowledge or Material Adverse
Effect qualifications contained herein), (b) the indemnification obligation
contained in Section 15, or (c) the assertion against Buyer of any of the
Retained Liabilities, the Seller's share of the Shared Liabilities or
liabilities retained or assumed by Seller under Section 9.
17.2 Indemnification of Seller. Subject to Section 16 and to
compliance with Sections 17.3 and 17.4 of this Agreement, Buyer agrees to
indemnify Seller and the Seller Subsidiaries against any Indemnified Losses
incurred by the Seller by reason of (a) any breach of any representation,
warranty, covenant or agreement of Buyer, or in any certificate or other
closing document furnished by the Buyer, pursuant to this Agreement
(disregarding any materiality, knowledge or Material Adverse Effect
qualifications contained herein), or (b) the assertion against Seller of any
of the Assumed Liabilities, the Buyer's share of the Shared Liabilities or
liabilities assumed by Buyer under Section 9.
17.3 Eligible Claim, Threshold Amount, Maximum Amount; Payment.
A party may bring a claim seeking indemnification (the "Indemnified Party")
under the terms and provisions of this Section 17 only if such claim exceeds
$25,000 (an "Eligible Claim"). Further, a party may bring an Eligible Claim
seeking indemnification under the terms and provisions of this Section 17 only
if such Eligible Claim, either alone or when aggregated with other Eligible
Claims for indemnification by such party, exceeds $400,000 (the "Threshold
Amount"). Until such time as a party can bring an Eligible Claim or Eligible
Claims in the aggregate amount in excess of the Threshold Amount, no right to
indemnification under this Section 17 shall arise. In the event that a party
brings an Eligible Claim or Eligible Claims for an amount in excess of the
Threshold Amount, such party shall be entitled to indemnification for the
amount of such excess up to the maximum amount referred to in the following
sentence. No party hereunder shall be required to indemnify the other for
Claims with respect to which indemnification (on a cumulative basis) hereunder
would otherwise be available under this Section in excess of an amount equal
to 15% of the Purchase Price, as adjusted pursuant to Section 3.1 or Section
3.3; provided, however, that Seller's obligations to indemnify the Buyer for
breaches of the representations and warranties in Section 4.13 (Environmental
Matters) for matters existing but unknown to the Seller as of the Closing
shall not exceed $1,500,000. NOTWITHSTANDING ANYTHING IN THE FOREGOING TO THE
CONTRARY, HOWEVER, CLAIMS BY BUYER AGAINST SELLER OR ANY OF THE SELLER
SUBSIDIARIES IN RESPECT OF THE RETAINED LIABILITIES, SELLER'S SHARE OF THE
SHARED LIABILITIES, SELLER'S LIABILITIES UNDER SECTION 9, OR THE
INDEMNIFICATION CONTAINED IN SECTION 15, WHETHER ANY OF THE FOREGOING
LIABILITIES ARE DIRECTLY OR INDIRECTLY RELATED TO ANY REPRESENTATION OR
WARRANTY HEREIN, AND CLAIMS BY SELLER OR ANY OF THE SELLER SUBSIDIARIES IN
RESPECT OF THE ASSUMED LIABILITIES, BUYER'S SHARE OF THE SHARED LIABILITIES,
OR BUYER'S LIABILITIES UNDER SECTION 9 SHALL NOT BE SUBJECT TO ANY OF THE
LIMITATIONS ON INDEMNIFICATION SET FORTH IN THIS SECTION 17.3, INCLUDING
WITHOUT LIMITATION, THOSE LIMITATIONS RELATING TO ELIGIBLE CLAIMS AND THE
MAXIMUM AMOUNT OF AVAILABLE INDEMNIFICATION.
17.4 Procedures for Claims. Subject to Section 17.3, any
Indemnified Party shall provide written notice of any Eligible Claim to the
party from which it seeks indemnification (the "Indemnifying Party") within
thirty (30) days of such party becoming aware of the existence of such
Eligible Claim stating the amount claimed to be due and payable or an estimate
of the claim if contingent or unliquidated, the basis of the claim and the
provision or provisions of this Agreement under which such claim is asserted.
Within 30 calendar days after receipt of such notice, the Indemnifying Party
shall by written notice to the Indemnified Party either (a) concede liability
in whole as to the amount claimed in such notice, (b) deny liability in whole
as to such amount, or (c) concede liability in part and deny liability in
part. If the parties are not able to resolve any dispute over a claim brought
under this Section 17 within thirty (30) days after the Indemnified Party
receives written notice from the Indemnifying Party denying liability in whole
or in part, the parties shall submit dispute to the dispute resolution
procedure set forth in the Section 21.10.
17.5 Third-Party Claims. (a) An Indemnifying Party shall have
the right, exercisable by written notice to the Indemnified Party within 30
days of receipt of written notice from the Indemnified Party of the
commencement of or assertion of any lawsuit filed or instituted against the
Indemnified Party asserting any claim for which the Indemnifying Party may be
responsible under this Agreement (each, a "Third Party Claim"), to assume and
conduct the defense of each Third Party Claim with counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnified Party;
provided, however, that such Third Party Claim involves (and continues to
involve) solely monetary damages (the "Litigation Condition").
(b) If the Indemnifying Party does not assume the defense
of such Third Party Claim in accordance with this Section, the Indemnified
Party may continue to defend the Third Party Claim. If the Indemnifying Party
has assumed the defense of a Third Party Claim as provided in this Section
17.5, the Indemnifying Party shall not be liable for any legal expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof; provided, however, that if (i) the Litigation Condition ceases to be
met, or (ii) the Indemnifying Party fails to take reasonable steps necessary
to defend diligently such Third Party Claim within thirty (30) calendar days
(or such shorter period as may be required to defend diligently such Third
Party Claim) after receiving written notice from the Indemnified Party that
the Indemnified Party believes the Indemnifying Party has failed to take such
steps, the Indemnified Party may assume its own defense, and the Indemnifying
Party shall be liable for all reasonable costs or expenses paid or incurred in
connection therewith.
(c) Without the Indemnified Party's prior written consent
or authorization, the Indemnifying Party shall not consent to a settlement of,
or the entry of any judgment arising from, any Third Party Claim. If the
Indemnifying Party does not assume the defense of any such Third Party Claim
or litigation resulting from such claim in accordance with the terms of this
Section 17.5, the Indemnified Party may defend against such claim or
litigation in such manner as it may deem appropriate, including settling such
claim or litigation, after giving notice of the same to the Indemnifying
Party, on such terms as the Indemnified Party may deem appropriate. If the
Indemnifying Party seeks to question the manner in which the Indemnified Party
defended such Third Party Claim or litigation resulting from such claim or the
amount of or nature of any such settlement, the Indemnifying Party shall have
the burden to prove by a preponderance of the evidence that the Indemnified
Party did not defend such claim in a reasonably prudent manner.
17.6 Exclusive Remedy. Except as otherwise expressly provided
for in this Agreement, following the Closing, the indemnification provided by
this Section 17 shall be the exclusive remedy for the Buyer or the Seller, as
the case may be, with respect to this Agreement and the transactions
contemplated by this Agreement, except claims for fraud or intentional
misrepresentation shall not be limited by the provisions in this Section 17.
17.7 Payment of Amounts. If any amount is determined to be due
and owing to a party as a result of any occurrence which gives rise to
indemnification obligations under this Section 17, such amount shall be paid
by the Indemnifying Party to the Indemnified Party in immediately available
funds.
18. Termination.
18.1 Grounds. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned only under one of the following circumstances:
(a) By the Buyer, if Buyer is not satisfied, in good faith
and the exercise of its reasonable judgment, that the representations and
warranties of Seller set forth in Section 4 of this Agreement, the written
material provided to Buyer by Seller regarding the Division, which are listed
on Schedule 18.1, and the written management presentation made to Buyer by the
Seller, are materially untrue or inaccurate and, as a result of such untruths
or inaccuracies, the conduct of the Business after the Closing would be
materially and adversely affected, without regard to any general changes in
the economy or in the industries served by the Business. As of the date
hereof, Buyer does not have any actual knowledge that such representations and
warranties and other materials described in this Section 18.1(a) are
materially untrue or inaccurate. Nothing in this Section 18.1(a) is meant to
imply that Seller has made any representations or warranties with regard to
forecast information contained in either the written information provided to
Buyer or the oral presentation made to Buyer by Seller; or
(b) At any time prior to the Closing Date:
(i) By Buyer (upon action by its Board of Directors)
if the conditions set forth in Section 11 of this Agreement have become
incapable of fulfillment on or before the Closing Date;
(ii) By Seller (upon action by its Board of
Directors) if the conditions set forth in Section 12 of this Agreement have
become incapable of fulfillment on or before the Closing Date;
(iii) By the Seller or the Buyer if the Closing has
not occurred on or prior to the 180th day after the date of this Agreement,
unless the absence of such occurrence shall be due to the failure of the party
seeking to terminate this Agreement (or its subsidiaries or affiliates) to
perform in all material respects each of its obligations under this Agreement
required to be performed by it at or prior to the Closing Date;
(iv) By either the Buyer or the Seller, if a court of
competent jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued an order, decree or ruling or taken any other
action, in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and nonappealable; or
(v) by the Buyer at any time if the Seller amends
the Schedules pursuant to Section 6.10 and such amendment reflects information
that would have or have had a Material Adverse Effect; or
(c) At any time by the mutual written consent of both
Buyer and Seller.
18.2 Effect. (a) In the event that this Agreement is terminated
pursuant to Section 18.1 without fault or breach of this Agreement by either
party, all obligations of Seller and Buyer hereunder shall terminate without
liability.
(b) Unless this Agreement is terminated pursuant to
Section 18.1, if any of the conditions to the obligations of Buyer in Section
11 or of Seller in Section 12 have not been satisfied prior to the Closing,
Buyer or Seller, as the case may be, in addition to any other rights that may
be available to them, shall have the right to waive their respective
conditions and to proceed with the Closing and the consummation of the
transactions contemplated by this Agreement. Unless this Agreement is
terminated pursuant to Section 18.1, if either party fails to perform any of
its obligations under this Agreement, the party having the benefit of the
obligation shall have, in addition to any other rights and remedies available
to it, the right to compel specific performance of the obligations, including,
as the case may be, Buyer's obligation to pay to Seller the Closing Payment.
19. Expenses. Subject to Section 18, Section 10.1(c), and Section 14,
whether or not the transactions contemplated hereby are consummated, each of
the parties hereto will, except in the case of any breach of the terms and
provisions of this Agreement for which either Buyer or Seller, as the case may
be, may be entitled to indemnification under Section 17 hereof, pay its
respective expenses, income and other taxes and costs (including, without
limitation, the fees, disbursements and expenses of its attorneys, accountants
and consultants) incurred by it in negotiating, preparing, closing and
carrying out this Agreement and the transactions contemplated by this
Agreement, except that the Seller shall also be responsible for 50% or
$25,000, which ever is less, of the aggregate costs and expenses of Phase I
and Phase II environmental assessments performed by or on behalf of the Buyer
for the Manufacturing Facilities.
20. Indiana Responsible Property Transfer Law. Buyer and Seller
hereby waive compliance with the 30 day advance notice requirements under the
Indiana Responsible Property Transfer Law ("IRPTL") with respect to the
Hamilton Facility. On or prior to the Closing Date, Seller shall provide the
disclosure document required under the IRPTL to Buyer with respect to the
Hamilton Facility.
21. Miscellaneous.
21.1 Certain Definitions. When used in this Agreement, the
following phrases shall have the meanings set forth below:
(a) "to the best of Seller's knowledge" means the actual
knowledge of Hayden Cotterill, Philip Peterson, Alan Sunshine, John Stemen,
Phil Dietrich, Steve Earley, Steve Horrocks, Glenn Stack, Christine Palimaka,
Ron Egan, Todd Mayse, Larry Oman, Ruby Mack and any other Division management
personnel with compliance responsibility.
(b) "Intellectual Property" shall mean
(i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions, divisions, and reexaminations thereof;
(ii) all trademarks, service marks, trade dress,
logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, which relate solely to the Division;
(iii) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith;
(iv) all trade secrets and confidential business
information (including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals);
(v) all computer software (including data and
related documentation); and
(vi) all copies and tangible embodiments thereof (in
whatever form or medium).
(c) "Material Adverse Effect" means (i) any effect that is
materially adverse to the value of the Transferred Assets taken as a whole or
materially adverse to the Business, the condition (financial or otherwise),
results of operations or prospects of the Business taken as a whole, or (ii)
any effect that would, individually or in the aggregate, materially impair,
hinder or otherwise materially and adversely affect the ability of Seller or
Buyer, as the case may be, to effect the Closing, to perform any of their
material obligations under this Agreement or any of the Related Agreements, or
to receive all material benefits of the transactions contemplated by this
Agreement.
(d) "Affiliates" shall mean, with respect to any person,
at the time in question, any other person controlling, controlled by or under
common control with such Person. For purposes of this definition, "control"
(including the terms "controlling", "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
(e) "$" shall mean United States Dollars, except as
otherwise provided in Section 21.14 of this Agreement.
(f) "Lien" means any lien, mortgage, charge, pledge,
security interest, restriction on transferability, easement, defect of title
or other claim, charge or encumbrance of any nature whatsoever on any real or
personal property or property interest.
(g) "Person" means an individual, corporation, limited
liability company, partnership or other entity or organization.
21.2 Notices. Notices hereunder will be sent by telecopy or
facsimile transmission or by certified mail, return receipt requested, postage
prepaid, and addressed:
(a) In the case of Buyer, to:
Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Attention: President
Facsimile No.: (248) 577-3465
With a copy to:
The Oxford Investment Group, Inc.
2000 North Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
Attention: Rex E. Schlaybaugh, Jr.
Facsimile No.: (248) 540-7280
(b) In the case of Seller to:
Eaton Corporation
1111 Superior Street
Eaton Center
Cleveland, Ohio 44114
Attention: Corporate Secretary
Facsimile No.: 216-479-7103
All notices delivered hereunder shall be marked "PERSONAL AND CONFIDENTIAL."
Any party may change the address to which notices are to be addressed by
giving the other party notice in the manner herein set forth.
21.3 No Disclosure of Agreement; Press Releases. Except as
required by law or the rules and regulations of the Securities Exchange
Commission or any securities exchange, neither Buyer nor Seller shall disclose
the Purchase Price or other terms and conditions of this Agreement to anyone
other than their employees and agents involved in the negotiation and
preparation of this Agreement, without obtaining the prior written consent of
the other parties to this Agreement. The parties shall mutually agree upon
the language of any press releases issued in connection with this Agreement or
the transactions contemplated hereby.
21.4 Governing Law. The validity, enforceability,
interpretation, and performance of this Agreement will be determined in
accordance with the laws of the state of Ohio applicable to contracts made and
to be performed wholly within that state.
EACH PARTY HERETO (I) IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURTS FOR THE NORTHERN DISTRICT OF OHIO AND THE
STATE COURTS OF THE STATE OF OHIO, (II) WAIVES ANY OBJECTION TO LAYING VENUE
IN ANY SUCH ACTION OR PROCEEDING IN SUCH COURTS, (III) WAIVES ANY OBJECTION
THAT SUCH COURTS ARE AN INCONVENIENT FORUM OR DO NOT HAVE JURISDICTION OVER
ANY PARTY HERETO AND (IV) AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN
ANY SUCH ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN
ACCORDANCE WITH SECTION 21.2 OF THIS AGREEMENT.
21.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute but one and the same instrument. A signature to
this Agreement delivered by telecopy or other artificial means shall be deemed
valid.
21.6 Headings. The headings, subheadings, and captions in this
Agreement and in any exhibit hereto are for reference purposes only and are
not intended to affect the meaning or interpretation of this Agreement.
21.7 Schedules. The disclosure of any matter in any Schedule to
this Agreement shall expressly not be deemed to constitute an admission by the
Buyer or the Seller or to otherwise imply that any such matter is material for
the purposes of this Agreement.
21.8 Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to its subject matter and
supersedes all negotiations, prior discussions, agreements, arrangements and
understandings, written or oral, relating to the subject matter of this
Agreement, except that the terms and conditions of the Confidentiality
Agreement dated September 24, 1997 between Buyer and Seller shall remain in
full force and effect as provided for in that Confidentiality Agreement. All
discussions and negotiations by the Buyer, or any person on behalf of the
Buyer, with any person pertaining to the subject matter of this Agreement
shall not be deemed to be on behalf of any such person in his or her
individual capacity or as a representative or agent for The Oxford Investment
Group, Inc., but rather shall be deemed to be solely on behalf of the Buyer.
21.9 Assignment; Successors and Assigns. No party may assign any
of its rights or obligations under this Agreement without the prior written
consent of the other parties, except that, without such consent, (i) Buyer may
(A) assign any or all of its rights and obligations hereunder to one or more
of its Affiliates, and (B) designate one or more of its Affiliates to perform
its obligations under this Agreement and to take title to such of the
Transferred Assets as the Buyer may designate, and (ii) Seller may assign any
or all of its rights and obligations hereunder to one or more of its
Affiliates provided that such assignee assumes such obligations in writing
and, further provided that Buyer or Seller, as the case may be, guarantees
performance of such obligations by such assignee. This Agreement shall be
binding upon, and inure to the benefit of, Seller and Buyer and their
respective successors and permitted assigns.
21.10 Dispute Resolution. (a) Any dispute arising under this
Agreement (not subject to a dispute resolution procedure otherwise specified
herein) may be submitted by either party for resolution to non-binding
mediation pursuant to the procedures of the CPR Institute for Dispute
Resolution, 366 Madison Avenue, New York, New York 10017-3122. Failing such a
resolution, the parties will consider entering into binding arbitration;
provided, however, the parties will not be bound to enter into binding
arbitration. If the parties choose not to enter into binding arbitration,
then the parties can seek redress in a court of law as provided in Section
21.4.
(b) All performance required by either party under this
Agreement shall continue during any such dispute resolution proceedings,
except for the matters that are the subject of such dispute.
21.11 No Waiver. No failure of any party to exercise any power
given it under this Agreement, or to insist upon strict compliance with any
provision of this Agreement, and no custom or practice of the parties at
variance with the terms of this Agreement shall constitute a waiver of any
party's right to demand exact compliance with the terms of this Agreement.
21.12 Discharge, Amendment. This Agreement may not be released,
discharged, abandoned, amended, changed or modified in any manner, except by
an instrument in writing signed on behalf of each of the Parties by a duly
authorized representative of each party.
21.13 No Third Party Beneficiaries. It is hereby agreed that the
named parties and their permitted successors and assigns shall have the sole
right to enforce the performance of the provisions of this Agreement and the
sole right to receive any and all amounts payable by the parties pursuant to
this Agreement, and that no other person or entity shall be entitled to, or
shall have any claim, right, title or interest to or in any such amounts by
virtue of this Agreement. This Agreement is personal to the named parties,
and is not intended for the benefit of, and is not intended to be relied upon
by, any other person or entity and no such person or entity (or any other
person or entity acting on its behalf) shall be entitled to the benefit of or
to enforce this Agreement.
21.14 Applicable Exchange Rates. (a) Except as otherwise set
forth in this Section 21.14, for purposes of determining compliance by the
Buyer or the Seller or the Seller Subsidiaries with their respective
representations, warranties, covenants, and agreements under this Agreement
with respect to amounts denominated in Canadian Dollars ("C$") or US Dollars
("US$), the applicable exchange rate shall be C$1.4329 = US$1.
(b) For purposes of determining whether or not a claim for
indemnification under this Agreement would be an Eligible Claim and whether
the Eligible Claims exceed the Threshold Amount with respect to Indemnified
Losses denominated in C$, the applicable exchange rate shall be (i) with
respect to a Third Party Claim, the exchange rate as published in the Wall
Street Journal as of the last business day preceding the date the Indemnified
Party receives notice of the claim, or (ii) with respect to such other claims
for indemnification, the exchange rate as published in the Wall Street Journal
as of the last business day preceding the date the Indemnified Party receives
notice of the facts giving rise to the claim.
(c) For purposes of payments of any amounts determined to
be due and owing to a party as a result of any occurrence which gives rise to
indemnification obligations under Section 17, and for purposes of determining
whether or not the maximum indemnification obligation of a party under Section
17.3 has been met, the applicable exchange rate shall be that rate as
published in the Wall Street Journal as of the last business day preceding the
date payment to the Indemnified Party is made, so long as such exchange rate
does not result in a payment which would be less than a payment made using the
exchange rate as determined pursuant to Section 21.14(b), in which case, the
exchange rate determined pursuant to Section 21.14(b) shall be used. All
payments made pursuant to Section 17 shall be in US$.
[This space intentionally left blank.]
<PAGE>
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered by its duly authorized representatives as of the
date first written above.
EATON CORPORATION
BY: /s/ DAVID S. BARIE
Name: David S. Barie
Title: Associate Director - Corporate Development
BY: /s/ GREGORY A. SMITH
Name: Gregory A. Smith
Title: Attorney-In-Fact
OXFORD AUTOMOTIVE, INC.
BY: /s/ DONALD C. CAMPION
Name: Donald C. Campion
Title: Sr. Vice President and Chief Financial Officer
<PAGE>
<PAGE>
EXHIBITS
Exhibit A Assumption Agreement
Exhibit B Brady Bond Indemnity Letter
Exhibit C Transitional Services Agreement - Seller to Buyer
Exhibit D Transitional Services Agreement - Buyer to Seller
Exhibit E Environmental Agreement
Exhibit F ECO-Brazil Letter
Exhibit G General Assignment and Bill of Sale
SCHEDULES
Schedule 1.1(b) Real Property
Schedule 1.1(c) Machinery and Equipment
Schedule 1.1(g) Proprietary Rights
Schedule 1.1(h) Prepaid Items
Schedule 1.1(p) Other Assets
Schedule 1.2(h) Other Excluded Assets
Schedule 3.1 Fixed Assets (to be provided prior to Closing)
Schedule 3.3 Seller's Accounting Principles
Schedule 4.1 Jurisdictions of Qualification to do Business
Schedule 4.3 Financial Statements; Exceptions to Seller's Accounting
Principles
Schedule 4.4 Real Property Exceptions
Schedule 4.5 Personal Property Exceptions
Schedule 4.9 Material Contracts
Schedule 4.7 Accounts Receivable Exceptions
Schedule 4.11 Proprietary Rights Exceptions
Schedule 4.13 Environmental Exceptions
Schedule 4.14 Creation of Lien on Transferred Assets
Schedule 4.15 Litigation
Schedule 4.17 Material Adverse Changes
Schedule 4.20A Employee Matters
Schedule 4.20B Collective Bargaining Agreements
Schedule 4.21 Employee Plans
Schedule 4.23 Liabilities
Schedule 4.24 Employee Safety
Schedule 4.25 Asset Location Exceptions
Schedule 4.26 Metalcar Exceptions
Schedule 6.1 Other Permitted Conduct
Schedule 9.1A Retained Employees
Schedule 9.1C Certain Assumed Liabilities
Schedule 18.1 Materials Provided
<PAGE>
<PAGE>
EXHIBIT A
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of , 1998 (the "Effective Date)
by [Oxford Suspension, Inc., a Michigan corporation] [Oxford Suspension Ltd.,
an Ontario corporation] ("Buyer Sub") and Oxford Automotive, Inc., a Michigan
corporation ("Buyer"), in favor of Eaton Corporation, an Ohio corporation
("Seller"), Eaton Yale Ltd., an Ontario corporation and Eaton International
Corporation, a Delaware corporation ("Seller Subsidiaries").
Buyer and Seller have entered into an Asset Purchase Agreement, dated as
of _______, 1998 (the "Purchase Agreement"), whereby Buyer has agreed to
assume the Assumed Liabilities and the Buyer's share of the Shared Liabilities
(as those terms are defined in the Purchase Agreement). Pursuant to the
provisions of Section 21.9 of the Purchase Agreement, Buyer has assigned
certain of its obligations under the Purchase Agreement to Buyer Sub. The
execution and delivery of this Assumption Agreement by Buyer is required under
Section 13.1 of the Purchase Agreement.
In consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Capitalized terms not otherwise defined in this Assumption
Agreement, shall have the meanings assigned to them in the Purchase Agreement.
2. Pursuant to the terms of the Purchase Agreement, Buyer Sub hereby
assumes and agrees to pay, perform, and discharge the Assumed Liabilities and
the Buyer's share of the Shared Liabilities, as they relate to the Transferred
Assets transferred to Buyer Sub, and to the extent any Assumed Liabilities or
any of Buyer's share of the Shared Liabilities are not assumed by the Buyer
Sub or any other subsidiary of the Buyer, Buyer hereby assumes and agrees to
pay, perform, and discharge such Assumed Liabilities and Buyer's share of the
Shared Liabilities.
3. Except pursuant to the terms of the Purchase Agreement or as set
forth in paragraph 2 of this Assumption Agreement, neither Buyer nor Buyer Sub
assumes or agrees to pay, perform or discharge any obligations, liabilities,
contracts or commitments of Seller and the Seller Subsidiaries of any kind or
nature whatsoever.
4. Nothing in this Assumption Agreement, express or implied, is
intended or shall be construed to expand or defeat, impair or limit in any way
the rights, claims or remedies of the parties as set forth in the Purchase
Agreement.
5. Nothing in this Assumption Agreement, express or implied, is
intended or shall be construed to confer upon, or give to, any person,
corporation or other entity, other than the parties hereto, any rights,
remedies, obligations or liabilities.
6. This Assumption Agreement shall inure to the benefit of and be
binding upon Buyer Sub, Buyer, Seller, the Seller Subsidiaries and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed and delivered this
Assumption Agreement as of the Effective Date.
[BUYER SUB]
By:
Title:
OXFORD AUTOMOTIVE, INC.
By:
Title:
EATON CORPORATION
By:
Title:
EATON YALE LTD.
By:
Title:
EATON INTERNATIONAL CORPORATION
By:
Title:
<PAGE>
<PAGE>
GUARANTY
1. Guaranty. Oxford Automotive, Inc. ("Buyer") unconditionally
guarantees and promises, to and for the benefit of Eaton Corporation
("Seller"), the complete and timely payment, performance and observance by
("Buyer Sub") (including its
successors and assigns) of its obligations, agreements and covenants under,
and in accordance with the terms and conditions of the Assumption Agreement by
Buyer Sub and Buyer in favor of Eaton Corporation, Eaton Yale Ltd., and Eaton
International Corporation dated as of the same date as this Guaranty (the
"Assumption Agreement"). This Guaranty is a guaranty of payment and not of
collection. Seller may proceed to enforce this Guaranty directly against
Buyer without any obligation to proceed first or simultaneously against the
Buyer Sub to enforce performance by the Buyer Sub of its obligations and
covenants under the foregoing Assumption Agreement. Buyer agrees that this
Guaranty shall be construed as an absolute, unconditional and continuing
obligation of Buyer without regard to and unaffected by the regularity,
validity or enforceability of any liability or obligation hereby guaranteed
and without regard to any subsequent course of conduct by Seller, Buyer or the
Buyer Sub or any combination of them. Without limiting the generality of the
foregoing, the obligations of Buyer hereunder shall in no way be released,
diminished or otherwise affected by reason of the solvency or insolvency of
Buyer Sub, any voluntary or involuntary proceedings by or against Buyer Sub in
bankruptcy or for an arrangement or reorganization, or for any other relief
under any provision of the Bankruptcy Reform Act of 1994, as amended, or any
other insolvency or debtor's relief law from time to time in effect.
2. Assignment. This Guaranty shall not be affected, nor shall Buyer
in any way be exonerated or released from its obligations under this Guaranty,
by the assignment by Buyer Sub of its rights and/or the delegation by Buyer
Sub of its duties under the Assumption Agreement, with or without notice to or
the consent of Seller.
3. Waiver. The failure of Seller to enforce at any time any
provision of this Guaranty shall in no way be construed to be a waiver of any
such provision, nor in any way to affect the validity of this Guaranty or any
part thereof or the right of Seller thereafter to enforce each and every such
provision. No waiver of any breach of this Guaranty shall be held to be a
waiver of any other or subsequent breach.
4. General Provisions. Buyer agrees to pay reasonable outside
attorney's fees and other reasonable costs and expenses which may be incurred
by Seller in the enforcement of this Guaranty. All remedies of Seller
hereunder shall be cumulative, and no delay or omission by Seller in the
exercise of its rights or remedies under the Assignment Agreement or under
this Guaranty shall impair or otherwise affect the right of Seller to later
pursue any remedy available to it in connection with the enforcement of the
Assignment Agreement or this Guaranty except to the extent that Buyer's
obligations shall have otherwise terminated. If any provision hereof and/or
any of Buyer's obligations hereunder shall be, or are adjudged to be,
unenforceable, the remainder of this Guaranty and all of Buyer's other
obligations hereunder shall remain in full force and effect and not be
affected thereby. Buyer acknowledges that its undertakings hereunder are
given in consideration of Seller's entering into of the Purchase Agreement and
execution thereof, and that Seller will not consummate the Purchase Agreement
without the execution and delivery of this Guaranty by Buyer.
5. Successors. This Guaranty shall be binding upon and shall inure
to the benefit of Seller and Buyer and their respective heirs, successors,
assigns, executors and administrators.
6. Modification. This Guaranty may not be changed, waived,
discharged or terminated orally or by course of conduct, but rather only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
Dated: , 1998
OXFORD AUTOMOTIVE, INC.
By:
Title:
<PAGE>
<PAGE>
EXHIBIT B
DRAFT #3 - CONFIDENTIAL
February 13, 1998
Mr. Rex Schlaybaugh, Jr.
Oxford Automotive, Inc.
Bloomfield Hills, Michigan
Fax: (248) 540-7501
Dear Mr. Schlaybaugh:
We have previously agreed that your wholly owned subsidiary company, Oxford
Suspension, Inc. ("Oxford") will purchase Venezuela Par Bonds Series A
(6-3/4%) maturing on March 31, 2020 (the "Bonds") from Citibank Nassau
("Citibank"), on or around _________________, 1998, valued at United States
dollars $_____________, inclusive of accrued interest. Oxford further intends
to pass title of the Bonds to Eaton Corporation ("Eaton") on ______________,
1998 in consideration for Eaton's equity position in Metalurgica Carabobo,
S.A., a Venezuela company ("Metalcar").
In consideration for using the Bonds as described above, please be advised
that Eaton agrees, at Oxford's direction, to purchase the Bonds from Oxford at
Oxford's original purchase price within seven days of the date of Oxford's
payment to Citibank Nassau should the transfer of ownership to Oxford of
Eaton's interest in Metalcar not be executed on ________________, 1998. Eaton
further agrees to indemnify Oxford and its affiliates against any loss, cost,
tax, commission, liability or expense (including, without limitation, costs
and expenses of investigation and litigation and, to the extent permitted by
law, reasonable attorneys' fees) incurred by Oxford or its affiliates arising
out of or relating, directly or indirectly, to the transactions described in
this letter.
To the extent that Oxford (as the "Indemnified Party") seeks any
indemnification hereunder from Eaton (as the "Indemnifying Party"), the
procedures for handling claims which are set forth in the Asset Purchase
Agreement between Oxford Automotive, Inc. and Eaton in Sections 17.4
(Procedures for Claims) (including those procedures related to dispute
resolution, but excluding the proviso "Subject to Section 17.3" therein
contained, and without imposing any minimum for what constitutes an "Eligible
Claim"), 17.5 (Third Party Claims) and 17.7 (Payment) shall apply. The
obligations of Eaton under this letter shall be without limitation and shall
not be subject to any of the limitations on indemnification set forth in
Section 17.3 of the Asset Purchase Agreement, including, without limitation,
those limitations relating to eligible claims, timing and the maximum amount
of indemnification.
Yours sincerely,
Robert A. Elliott
Director - Global Corporate Finance
ACCEPTED AND AGREED
Oxford Automotive, Inc.
By:
Its:
<PAGE>
<PAGE>
EXHIBIT C
TRANSITION SERVICES AGREEMENT
(SELLER SERVICES TO BUYER)
This Transition Services Agreement ("Services Agreement") is entered
into as of , 1998 between Oxford Automotive, Inc. a Michigan
corporation ("Buyer"), and Eaton Corporation, an Ohio corporation ("Seller"),
on behalf of the parties themselves and their respective direct and indirect
subsidiaries. In each case where Buyer or Seller is required to perform,
Buyer or Seller shall perform or cause their respective direct or indirect
subsidiary to perform under the terms of this Services Agreement. Buyer and
Seller are sometimes hereinafter collectively referred to as the "Parties".
R E C I T A L S:
A. Seller and Buyer have entered into an Asset Purchase Agreement
dated as of March __, 1998 (the "Purchase Agreement") relating to the purchase
by Buyer of substantially all of the assets and the assumption of certain
liabilities of Seller's Suspension Division (the "Acquired Business").
B. The Purchase Agreement provides that, upon the consummation of the
transactions described therein, the Parties shall enter into this Services
Agreement providing for the purchase by Buyer of certain services relating to
the Acquired Business from Seller during a transition period from the date
hereof.
NOW, THEREFORE, the Parties, intending to be legally bound, hereby agree
as follows:
SECTION 1
DEFINITIONS
For the purposes of this Services Agreement, the following terms shall
have the definitions hereinafter specified:
1.1 "Service'' or '' Services" shall mean those services described on
Schedule A attached hereto to be provided for the terms and in the manner
describer herein.
Except as otherwise defined in this Section 1, all terms, the first
letters of which are capitalized, shall have the meanings assigned to them in
the Purchase Agreement.
SECTION 2
AGREEMENT TO SELL AND BUY
2.1 Provision of Services. Seller shall sell to Buyer and shall make
adequate Seller personnel and facilities available for the purpose of
providing, and Buyer shall purchase from Seller, the Services listed and
described on Schedule A, for a reasonable transition period of time not to
exceed six months, unless a shorter or longer time period is set forth on
Schedule A as to any particular service, or unless otherwise mutually agreed
upon by the Parties. In every case, all of the aforesaid Services shall be
provided in accordance with the terms, limitations and conditions set forth
herein and on Schedule A. Unless otherwise specified on Schedule A, the cost
to Buyer for the Services shall be on a cost basis, which shall include the
cost of labor, labor fringe benefits, materials, health care and other welfare
benefits claim costs, an allocable portion of the costs associated with
upgrades of the Systems described in Schedule A, only to the extent such
upgrades are required to provide the Services hereunder, and other costs and
expenses associated with the performance of such Services, including a portion
of the relevant Seller overhead expenses calculated on the same basis and in
the same manner as is used in calculating the overhead expense assessments to
other Seller organizational units and as shall be consistent in form and
method of allocation with such assessment imposed on Seller units conducting
the Acquired Business prior to the Closing Date (the "Actual Costs"). Such
Actual Costs shall not include a profit for Seller.
SECTION 3
SERVICES; PAYMENT; INDEPENDENT CONTRACTOR
3.1 Services to be Provided. The categories of Services shall include
the services as described on Schedule A and such other services as are
reasonably requested by Buyer that are required or advisable to maintain the
continuity of the Acquired Business, its customers, its products or material
supply arrangements and operations. The Parties agree that the details of the
specific Services to be provided hereunder, and certain terms related thereto
shall be as set forth on Schedules A-l to attached hereto and shall
cooperate with each other to ensure appropriate coordination of such Services.
Unless otherwise agreed by the Parties, the Services shall be performed
by Seller for Buyer at a quality level and in a manner that are substantially
the same as the quality level and manner in which such Services were generally
performed by Seller for the Acquired Business prior to the date of this
Services Agreement, and Buyer shall use such Services for substantially the
same purposes and in substantially the same manner as the Acquired Business
had used such Services prior to the date hereof; provided, however, that
Seller shall be entitled to obtain such Services from a third party or to
discontinue such Services if it does so for its other businesses during the
term of this Services Agreement. No modifications to the Services by Seller
however, will result in a material change in the level and type of Services
provided. Seller will provide Buyer with sixty (60) days' prior written
notice of its intention to do so. Seller shall use reasonable efforts to
obtain such licenses or other authority as shall be necessary for Seller to
grant Buyer access to or use of any restricted software used in the
performance of Services by Seller hereunder. Buyer shall bear all of Seller's
costs and expenses associated with obtaining such licenses or other authority.
Seller shall act under this Services Agreement solely as an independent
contractor and not as an agent of Buyer. Buyer shall be entitled to utilize
those Services, and the levels thereof that it needs. There is no obligation
of Buyer to utilize any or all of the Services provided by Seller in
accordance with this Services Agreement; provided, however, that in the event
Buyer elects not to use a particular Service, it shall notify Seller prior to
the Closing Date and Seller shall have no further obligations hereunder with
respect to such Service.
3.2 Payment. (a) Except as otherwise provided herein, statements will
be rendered each month by Seller to Buyer for Services delivered during the
preceding month, and each such statement shall be payable net thirty (30) days
after the date thereof. Such statements shall be substantiated by supporting
information and shall itemize in reasonable detail the basis for such
statement. Statements not contested in good faith by Buyer or not paid within
such 30-day period shall be subject to late charges for each month the
statement is overdue, calculated as the greater of the following:
(i) in the event Seller is subject to a late charge by virtue of
its provision to Buyer of such Service, such late charge, or
(ii) the then current prime rate as published in the "Money
Rates" column of the Wall Street Journal plus one percentage point.
In either event, the late charge shall be calculated to a rate no higher than
that allowed by applicable law.
3.3 Priorities. Notwithstanding any other provision hereof, Seller
shall have the right to establish priorities, as between Seller and Buyer, as
to the provision of the Services, subject to the following: the priority of
Buyer shall be no lower than that enjoyed by the Acquired Business vis a vis
other Seller entities prior to the date of this Services Agreement.
3.4 Disclaimer of Warranty. THE SERVICES AND GOODS TO BE PURCHASED
UNDER THIS SERVICES AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS
AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
SECTION 4
TERM
(a) The term of each Service is as set forth on Schedule A; provided,
however, that: (i) Buyer may cancel any Service upon sixty (60) days' written
notice subject to the requirement that Buyer pay to Seller the costs
associated with such cancellation; and (ii) Seller may cancel any Service upon
sixty (60) days' written notice if Seller decides to discontinue providing
such Service for its other businesses. During the term of the Services
Agreement, Seller shall use all reasonable efforts to advise Buyer promptly of
any plans to discontinue or replace any of the support services which are to
be provided to Buyer under the Services Agreement.
(b) Upon the termination of a Service or Services with respect to
which Seller holds books, records, files or any other documents owned by
Buyer, Seller will return all of such books, records, files and any other
documents to Buyer as soon as reasonably practicable. Buyer shall bear
Seller's costs and expenses associated with the return of such documents. In
addition, upon the termination of any of the Services which involved the
compilation of data on Seller's computer systems, Seller shall as soon as
reasonably practicable deliver to Buyer on magnetic media in readable format
mutually acceptable to the Parties, which format shall be capable of being
read by a computer mutually acceptable to Seller and Buyer, all data files
maintained by Seller to the extent that they contain information which is the
property of Buyer, together with printed file descriptions sufficient to
identify such data files and their contents and structure. Buyer shall bear
all of Seller's costs and expenses associated with the provision and delivery
of such material.
(c) To avoid disruption of Services and to minimize problems of the
eventual transfer of applicable automated systems, Seller will provide Buyer,
if requested, with a reasonable amount of assistance, at Buyer's sole cost and
expense, in reviewing the current processing environment and all systems and
operational documentation to be used by Buyer to operate and maintain
automated systems for the Acquired Business upon termination of this Services
Agreement.
SECTION 5
FORCE MAJEURE
(a) Seller shall not be liable for any interruption of Service, delay
or failure to perform under this Services Agreement when such interruption,
delay or failure results from causes beyond its reasonable control or from any
act or failure to act of Buyer, or as the result of strikes, lock-outs or
other labor difficulties; acts of any government, riot, insurrection or other
hostilities; embargo, fuel or energy shortage, fire, flood, acts of God,
wrecks or transportation delays; or inability to obtain necessary labor,
materials or utilities from usual sources. In such event, Seller's
obligations hereunder shall be postponed for such time as its performance is
suspended or delayed on account thereof. Seller will promptly notify Buyer,
either orally or in writing, upon learning of the occurrence of such event of
force majeure. Upon the cessation of the force majeure event, Seller will use
reasonable efforts to resume its performance with the least possible delay.
(b) If Seller's performance under this Services Agreement is suspended
in whole or in part for more than fourteen (14) calendar days due to an event
of force majeure, Buyer shall be entitled at its sole cost and expense to
arrange alternative sources of supply for a period of time equal to the
greater of: (i) the time that Seller advises it will be unable to perform; or
(ii) the time reasonably necessary for Buyer to induce another supplier of
Services to supply such Services to Buyer.
(c) In the event of any failure, interruption or delay in performance
of the Services, whether excused or unexcused, Seller shall use its reasonable
efforts to restore the Services as soon as may be reasonably possible in
accordance with its existing contingency plans for such Services.
(d) Seller shall have the right to shut down temporarily for
maintenance purposes the operation of the facilities providing any Service
whenever in its judgment, reasonably exercised, such action is necessary. In
the event maintenance is non-scheduled, Buyer shall be notified that
maintenance is required. Seller shall cooperate with Buyer to try to arrange
alternative facilities, at Buyer's request and sole cost and expense, if the
facilities normally used for such Services are shut down for preventive or
non-scheduled maintenance. Seller shall give Buyer as much advance notice of
any such shutdown as is practicable. Where feasible, this notice shall be
given in writing. Where written notice is not feasible, oral notice shall be
given and promptly confirmed in writing. Except for the obligation to
cooperate to try to arrange for alternative facilities referred to above,
Seller shall be relieved of its obligations to provide Services during the
period that its facilities are so shut down but shall use reasonable efforts
to minimize each period of shutdown for such purpose and to schedule such
shutdown so as not to inconvenience or disrupt the operations of Buyer.
SECTION 6
LIABILITIES
6.1 Consequential and Other Damages. Seller shall not be liable,
whether in contract, in tort (including negligence and strict liability), or
otherwise, for any special, indirect, incidental or consequential damages
whatsoever, which in any way arise out of, relate to, or are a consequence of,
its performance or nonperformance hereunder, or the provision of or failure to
provide any Service hereunder.
6.2 Limitation of Liability. In any event, the liability of Seller
with respect to this Services Agreement or anything done in connection
herewith, including but not limited to the performance or breach hereof, or
from the sale, delivery, provision or use of any Service or documentation or
data provided under or covered by this Services Agreement, whether in
contract, tort (including negligence or strict liability) or otherwise, shall
not exceed $100,000, except in the event of gross negligence or willful
misconduct. In addition, Seller shall not be liable for any penalties or
interest imposed by the Internal Revenue Service on Buyer in connection with
any failure by Seller to pay over any payroll withholding taxes pursuant to
its obligations under this Services Agreement unless such failure arises out
of, results from or is attributable to Seller's actions or omissions.
SECTION 7
TERMINATION
7.1 Breach of Services Agreement. If either party shall cause or
suffer to exist any breach of any of its obligations under this Services
Agreement, including but not limited to any failure to make payments (other
than those contested in good faith) when due, and such party does not cure
such default within thirty (30) days after receiving written notice thereof
from the non-breaching party, the non-breaching party may terminate this
Services Agreement, including the provision of Services pursuant hereto,
immediately by providing written notice of termination.
7.2 Sums Due. In the event of a termination of this Services
Agreement, Seller shall be entitled to all outstanding amounts due from Buyer
up to the date of termination under Sections 3 and 4 hereof.
7.3 Effect of Termination. Termination or expiration of this Services
Agreement shall not act as a waiver of any breach of this Services Agreement
and shall not act as a release of either Party for any liability or obligation
incurred under this Services Agreement through the effective date of such
termination or expiration.
SECTION 8
MISCELLANEOUS
8.1 Ingress and Egress. Seller shall at all times during the
continuance of this Services Agreement have the right of reasonable ingress to
and egress from Buyer's premises, during Buyer's regular business hours and
upon reasonable prior notice, for any purposes connected with the delivery of
Services hereunder or the exercise of any right under this Services Agreement
or the performance of any obligations required by this Services Agreement.
8.2 Amendments. No amendment, modification, alteration or enlargement
of this Services Agreement shall be valid or binding unless in writing and
signed by the Parties hereto.
8.3 Notices. All notices or other written communications required or
permitted hereunder shall be written in English and shall be delivered in
person or by mail, express delivery service, telex or cable, with postage or
delivery charges prepaid, to the following addresses:
If to Buyer: Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Attn: Donald Campion
Fax Number: (248) 577-3465
If to Seller: Office of the Secretary
Eaton Corporation
Eaton Center
1111 Superior Avenue
Cleveland, OH 44114
Fax Number: (216) 479-7103
Or to such other persons or addresses as the Parties may designate by
notice from time to time. All such notices shall be effective when delivered.
8.4 Assignment. This Services Agreement may not be assigned by either
party without the prior written consent of the other party. Any purported
assignment without such consent shall be void and of no effect; provided,
however, that Seller shall have the right to contract with a third party to
provide any of the Services hereunder without the prior written consent of
Buyer if it does so for its other businesses. Seller will provide Buyer with
sixty days prior written notice of its intention to do so. Seller and Buyer
acknowledge that Seller may delegate the performance of any Services to be
provided under the Services Agreement to one or more of its Affiliates that
normally performs such Services and that Buyer may designate one or more of
its Affiliates that is engaged in the conduct of the Acquired Business to
receive any or all of the Services, provided however that notwithstanding the
foregoing Seller and Buyer shall each remain fully responsible for compliance
with the terms of this Agreement the same as if such delegation or designation
were not effected.
8.5 Governing Law. This Services Agreement shall be governed by and
interpreted in accordance with the laws of the State of Ohio, United States of
America, without regard to any provisions thereof relating to choice of law.
8.6 Integration. This Services Agreement embodies the entire
understanding of the Parties with respect to the subject matter hereof and,
with the exception of the Purchase Agreement (and the transactions and
documents contemplated thereby), there are no further agreements or
understandings, written or oral, between the Parties with respect thereto.
This Services Agreement supersedes all previous negotiations, discussions and
commitments with respect to the subject matter hereof. The Parties agree that
the terms of this Services Agreement shall have priority and control over the
terms of any order form, invoice or other document which relates to this
Services Agreement or the Services unless such document is signed by both
Parties, refers to paragraph 8.2 of this Services Agreement and unambiguously
indicates that it is an amendment of this Services Agreement.
8.7 Execution in Counterparts. This Services Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become a binding agreement when one or more
counterparts have been signed by each of the Parties hereto.
8.8 Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Services Agreement.
8.9 Waiver. Neither Party shall be deemed to have waived any right,
power, privilege or remedy unless such waiver is in writing and duly executed
by it. The failure of any party hereto to enforce at any time any of the
provisions of this Services Agreement shall in no way be construed as a waiver
of any such provision, nor in any way affect the validity of this Services
Agreement or any part hereof or the right of any party thereafter to enforce
each and every such provision. No waiver of any breach of this Services
Agreement shall be held to be a waiver of any other or subsequent breach of
this Services Agreement.
8.10 Damage, Destruction and Condemnation. In the event that any
Service facilities or any part thereof are damaged or destroyed by fire, flood
or other casualty, or in the event that title to, or the temporary use of, the
Service facilities or any part thereof shall be taken under the exercise of
power of eminent domain by any governmental body or by any person, firm or
corporation acting under governmental authority, Seller shall be relieved of
any obligations under this Services Agreement with respect to the affected
Services and Buyer shall have the right to make alternate arrangements for the
provision of the affected Services.
8.11 Price Calculations and Mediation.
(a) Discussions. During the entire term of this Services Agreement:
(i) Buyer shall have the right to meet with Seller, upon the reasonable
request of Buyer, to discuss any and all questions which Buyer may have
concerning various information and any of the calculations of the prices being
charged under this Services Agreement; and (ii) upon the reasonable request of
Buyer, Seller shall provide to Buyer information in written and oral form
concerning: (A) any of the calculations of the prices under this Services
Agreement; and (B) any of the information and the source documents which
support and underlie any changes in price under this Services Agreement.
(b) Mediation. All disputes, controversies or claims connected with,
arising out of or relating to this Services Agreement or any modification
thereof shall initially be subject to the remedy of mediation described
herein, including the interpretation, performance or nonperformance of this
Services Agreement, any claim for damages, a breach or default of this
Services Agreement, the termination of this Services Agreement, whether such
controversies or claims are in law or equity or include claims based upon
contract, statute, tort or otherwise.
If a controversy arises, a Party shall provide the other Party written
notice of the dispute, asking for mediation in accordance herewith. Within
twenty (20) days after receipt of such notice, the notified Party shall submit
to the other Party a written response. The notice and response shall each
include a statement of the other Party's position and a summary of the
evidence and arguments supporting its position. Each Party shall be
represented by an executive authorized to settle the controversy. The
representatives shall meet at a mutually acceptable time and place within
thirty (30) days of the date of the notified Party's response and thereafter
as often as they reasonably deem necessary to exchange relevant information
and to attempt to resolve the dispute.
If the controversy has not been resolved within sixty (60) days after
the first meeting, or if the Party receiving such notice will not meet within
such thirty (30) days (the failure of which shall not be deemed a breach of
this Services Agreement), either Party may initiate non-binding mediation of
the controversy or claim pursuant to the procedures of the CPR Institute for
Dispute Resolution, 366 Madison Avenue, New York, New York 10017-3122.
Failing resolution, the parties will consider entering into binding
arbitration; provided, however, the parties will not be bound to enter into
binding arbitration.
8.12 Title to Data; Security; Confidentiality. (a) Seller agrees that
all records, data, files, input materials, reports, forms and other data
received, computed, developed, used and/or stored pursuant to this Services
Agreement which are related to the Acquired Business are the exclusive
property of Buyer and that all such records and other data shall be furnished,
at Buyer's sole cost and expense, to Buyer in available machine readable form
as soon as reasonably practicable upon termination of this Services Agreement
for any reason whatsoever, unless there are outstanding amounts due from Buyer
pursuant to this Services Agreement.
Moreover, upon Buyer's request, at any time or times while this Services
Agreement is in effect, Seller shall as soon as reasonably practicable deliver
to Buyer, at Buyer's sole cost and expense, any or all of the data and records
held by Seller pursuant to this Services Agreement, in the form routinely
available to Seller. Seller shall not possess any interest, title, lien or
right to any such data or records.
In addition, Seller agrees, upon Buyer's reasonable request, to permit
Buyer and its auditors to have access, at all times while this Services
Agreement is in effect, to any of Buyer's records or data which are in the
possession of Seller during Seller's regular business hours and upon
reasonable prior notice. Such access shall be provided in a way so as not to
interfere with Seller's normal business operations.
(b) Seller shall deliver to Buyer upon the reasonable request of Buyer
a backup tape of Buyer's data in the form and with the content routinely
available to Seller. Buyer shall bear all of Seller's costs and expenses
associated with the providing of such tape.
(c) Seller agrees to treat confidentially all records and other
information with respect to Buyer. Seller, on behalf of itself and its
employees, agrees to keep confidential all records and other information with
respect to Buyer. Specifically, Seller agrees that it will, during the term
of this Services Agreement and thereafter (except where required by law or
court order or administrative agency order or subpoena): (i) retain all such
information of Buyer in confidence; (ii) not disclose any such information to
any third party without Buyer's permission; (iii) not use any such information
of Buyer for any purposes other than performing its obligations under this
Services Agreement; (iv) use its reasonable efforts to limit access to Buyer's
information to those employees who have a need to know the information for the
business purposes of this Services Agreement, and maintain reasonable
arrangements to protect confidentiality satisfactory to Buyer with Seller's
employees having access to such information, and with third parties having any
access to such information; and (v) insure that all tangible objects and
copies thereof in Seller's possession or under its control containing or
imparting any such information of Buyer shall be returned to Buyer at any time
upon Buyer's request or upon termination of this Services Agreement. Buyer
shall bear all costs and expenses associated with the return of such tangible
objects and copies thereof.
IN WITNESS WHEREOF, the Parties have executed this Services Agreement as
of the date first written above.
OXFORD AUTOMOTIVE, INC.
By:
Name:
Title:
EATON CORPORATION
By:
Name:
Title:
<PAGE>
<PAGE>
EXHIBIT D
TRANSITION SERVICES AGREEMENT
(BUYER SERVICES TO SELLER)
This Transition Services Agreement ("Services Agreement") is entered
into as of , 1998 between Oxford Automotive, Inc., a Michigan
corporation ("Buyer"), and Eaton Corporation, an Ohio corporation ("Seller"),
on behalf of the parties themselves and their respective direct and indirect
subsidiaries. In each case where Seller or Buyer is required to perform,
Seller or Buyer shall perform or cause their respective direct or indirect
subsidiary to perform under the terms of this Services Agreement. Seller and
Buyer are sometimes hereinafter collectively referred to as the "Parties".
R E C I T A L S:
A. Buyer and Seller have entered into an Asset Purchase Agreement
dated as of March __, 1998 (the "Purchase Agreement") relating to the purchase
by Buyer of substantially all of the assets and the assumption of certain
liabilities of Seller's Suspension Division (the "Acquired Business").
B. The Purchase Agreement provides that, upon the consummation of the
transactions described therein, the Parties shall enter into this Services
Agreement providing for the purchase by Seller of certain services relating to
the Acquired Business from Buyer during a transition period from the date
hereof.
NOW, THEREFORE, the Parties, intending to be legally bound, hereby agree
as follows:
SECTION 1
DEFINITIONS
For the purposes of this Services Agreement, the following terms shall
have the definitions hereinafter specified:
1.1 "Service" or "Services" shall mean those services described on
Schedule A attached hereto to be provided for the terms and in the manner
describer herein.
Except as otherwise defined in this Section 1, all terms, the first
letters of which are capitalized, shall have the meanings assigned to them in
the Purchase Agreement.
SECTION 2
AGREEMENT TO SELL AND BUY
2.1 Provision of Services. Buyer shall sell to Seller and shall make
adequate Buyer personnel and facilities available for the purpose of
providing, and Seller shall purchase from Buyer, the Services listed and
described on Schedule A, for a reasonable transition period of time not to
exceed six months, unless a shorter or longer time period is set forth on
Schedule A as to any particular service, or unless otherwise mutually agreed
upon by the Parties. In every case, all of the aforesaid Services shall be
provided in accordance with the terms, limitations and conditions set forth
herein and on Schedule A. Unless otherwise specified on Schedule A, the cost
to Seller for the Services shall be on a cost basis, which shall include the
cost of labor, labor fringe benefits, materials, health care and other welfare
benefits claim costs, an allocable portion of the costs associated with
upgrades of the Systems described in Schedule A, only to the extent such
upgrades are required to provided the Services hereunder, and other costs and
expenses associated with the performance of such Services, including a portion
of the relevant Buyer overhead expenses calculated in a manner consistent in
form and method of allocation with such assessment imposed on other Buyer
units after the Closing Date (the "Actual Costs"). Such Actual Costs shall
not include a profit for Buyer.
SECTION 3
SERVICES; PAYMENT; INDEPENDENT CONTRACTOR
3.1 Services to be Provided. The categories of Services shall include
the services as described on Schedule A. The Parties agree that the details
of the specific Services to be provided hereunder, and certain terms related
thereto shall be as set forth on Schedules A-l to A- attached hereto and
shall cooperate with each other to ensure appropriate coordination of such
Services.
Unless otherwise agreed by the Parties, the Services shall be performed
by Buyer for Seller at a quality level and in a manner that are substantially
the same as the quality level and manner in which such Services were generally
performed by Seller prior to the date of this Services Agreement, and Seller
shall use such Services for substantially the same purposes and in
substantially the same manner as the Acquired Business had provided such
Services prior to the date hereof; provided, however, that Buyer shall be
entitled to obtain such Services from a third party during the term of this
Services Agreement. No modifications to the Services by Buyer however, will
result in a material change in the level and type of Services provided.
Buyer will provide Seller with sixty (60) days' prior written notice of its
intention to do so. Buyer shall use reasonable efforts to obtain such
licenses or other authority as shall be necessary for Buyer to grant Seller
access to or use of any restricted software used in the performance of
Services by Buyer hereunder. Seller shall bear all of Buyer's costs and
expenses associated with obtaining such licenses or other authority. Buyer
shall act under this Services Agreement solely as an independent contractor
and not as an agent of Seller. Seller shall be entitled to utilize those
Services, and the levels thereof that it needs. There is no obligation of
Seller to utilize any or all of the Services provided by Buyer in accordance
with this Services Agreement; provided, however, that in the event Seller
elects not to use a particular Service, it shall notify Buyer prior to the
Closing Date and Buyer shall have no further obligations hereunder with
respect to such Service.
3.2 Payment. (a) Except as otherwise provided herein, statements will
be rendered each month by Buyer to Seller for Services delivered during the
preceding month, and each such statement shall be payable net thirty (30) days
after the date thereof. Such statements shall be substantiated by supporting
information and shall itemize in reasonable detail the basis for such
statement. Statements not contested in good faith by Seller or not paid
within such 30-day period shall be subject to late charges for each month the
statement is overdue, calculated as the greater of the following:
(i) in the event Buyer is subject to a late charge by virtue of
its provision to Seller of such Service, such late charge, or
(ii) the then current prime rate as published in the "Money
Rates" column of the Wall Street Journal plus one percentage point.
In either event, the late charge shall be calculated to a rate no higher than
that allowed by applicable law.
3.3 Priorities. Notwithstanding any other provision hereof, Buyer
shall have the right to establish priorities, as between Buyer and Seller, as
to the provision of the Services, subject to the following: the priority of
Seller shall be no lower than that provided to the Acquired Business vis a vis
other Buyer entities after the date of this Services Agreement.
3.4 Disclaimer of Warranty. THE SERVICES AND GOODS TO BE PURCHASED
UNDER THIS SERVICES AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS
AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
SECTION 4
TERM
(a) The term of each Service is as set forth on Schedule A; provided,
however, that: (i) Seller may cancel any Service upon sixty (60) days'
written notice subject to the requirement that Seller pay to Buyer the costs
associated with such cancellation; and (ii) Buyer may cancel any Service upon
sixty (60) days' written notice if Buyer decides to discontinue providing such
Service for its other businesses. During the term of the Services Agreement,
Buyer shall use all reasonable efforts to advise Seller promptly of any plans
to discontinue or replace any of the support services which are to be provided
to Seller under the Services Agreement.
(b) Upon the termination of a Service or Services with respect to
which Buyer holds books, records, files or any other documents owned by
Seller, Buyer will return all of such books, records, files and any other
documents to Seller as soon as reasonably practicable. Seller shall bear
Buyer's costs and expenses associated with the return of such documents. In
addition, upon the termination of any of the Services which involved the
compilation of data on Buyer's computer systems, Buyer shall as soon as
reasonably practicable deliver to Seller on magnetic media in readable format
mutually acceptable to the Parties, which format shall be capable of being
read by a computer mutually acceptable to Buyer and Seller, all data files
maintained by Buyer to the extent that they contain information which is the
property of Seller, together with printed file descriptions sufficient to
identify such data files and their contents and structure. Seller shall bear
all of Buyer's costs and expenses associated with the provision and delivery
of such material.
SECTION 5
FORCE MAJEURE
(a) Buyer shall not be liable for any interruption of Service, delay
or failure to perform under this Services Agreement when such interruption,
delay or failure results from causes beyond its reasonable control or from any
act or failure to act of Seller, or as the result of strikes, lock-outs or
other labor difficulties; acts of any government, riot, insurrection or other
hostilities; embargo, fuel or energy shortage, fire, flood, acts of God,
wrecks or transportation delays; or inability to obtain necessary labor,
materials or utilities from usual sources. In such event, Buyer's obligations
hereunder shall be postponed for such time as its performance is suspended or
delayed on account thereof. Buyer will promptly notify Seller, either orally
or in writing, upon learning of the occurrence of such event of force majeure.
Upon the cessation of the force majeure event, Buyer will use reasonable
efforts to resume its performance with the least possible delay.
(b) If Buyer's performance under this Services Agreement is suspended
in whole or in part for more than fourteen (14) calendar days due to an event
of force majeure, Seller shall be entitled at its sole cost and expense to
arrange alternative sources of supply for a period of time equal to the
greater of: (i) the time that Buyer advises it will be unable to perform; or
(ii) the time reasonably necessary for Seller to induce another supplier of
Services to supply such Services to Seller.
(c) In the event of any failure, interruption or delay in performance
of the Services, whether excused or unexcused, Buyer shall use its reasonable
efforts to restore the Services as soon as may be reasonably possible in
accordance with its existing contingency plans for such Services.
(d) Buyer shall have the right to shut down temporarily for
maintenance purposes the operation of the facilities providing any Service
whenever in its judgment, reasonably exercised, such action is necessary. In
the event maintenance is non-scheduled, Seller shall be notified that
maintenance is required. Buyer shall cooperate with Seller to try to arrange
alternative facilities, at Seller's request and sole cost and expense, if the
facilities normally used for such Services are shut down for preventive or
non-scheduled maintenance. Buyer shall give Seller as much advance notice of
any such shutdown as is practicable. Where feasible, this notice shall be
given in writing. Where written notice is not feasible, oral notice shall be
given and promptly confirmed in writing. Except for the obligation to
cooperate to try to arrange for alternative facilities referred to above,
Buyer shall be relieved of its obligations to provide Services during the
period that its facilities are so shut down but shall use reasonable efforts
to minimize each period of shutdown for such purpose and to schedule such
shutdown so as not to inconvenience or disrupt the operations of Seller.
SECTION 6
LIABILITIES
6.1 Consequential and Other Damages. Buyer shall not be liable,
whether in contract, in tort (including negligence and strict liability), or
otherwise, for any special, indirect, incidental or consequential damages
whatsoever, which in any way arise out of, relate to, or are a consequence of,
its performance or nonperformance hereunder, or the provision of or failure to
provide any Service hereunder.
6.2 Limitation of Liability. In any event, the liability of Buyer
with respect to this Services Agreement or anything done in connection
herewith, including but not limited to the performance or breach hereof, or
from the sale, delivery, provision or use of any Service or documentation or
data provided under or covered by this Services Agreement, whether in
contract, tort (including negligence or strict liability) or otherwise, shall
not exceed $100,000, except in the event of gross negligence or willful
misconduct. In addition, Buyer shall not be liable for any penalties or
interest imposed by the Internal Revenue Service on Seller in connection with
any failure by Buyer to pay over any payroll withholding taxes pursuant to its
obligations under this Services Agreement unless such failure arises out of,
results from or is attributable to Buyer's actions or omissions.
SECTION 7
TERMINATION
7.1 Breach of Services Agreement. If either party shall cause or
suffer to exist any breach of any of its obligations under this Services
Agreement, including but not limited to any failure to make payments (other
than those contested in good faith) when due, and such party does not cure
such default within thirty (30) days after receiving written notice thereof
from the non-breaching party, the non-breaching party may terminate this
Services Agreement, including the provision of Services pursuant hereto,
immediately by providing written notice of termination.
7.2 Sums Due. In the event of a termination of this Services
Agreement, Buyer shall be entitled to all outstanding amounts due from Seller
up to the date of termination under Sections 3 and 4 hereof.
7.3 Effect of Termination. Termination or expiration of this Services
Agreement shall not act as a waiver of any breach of this Services Agreement
and shall not act as a release of either Party for any liability or obligation
incurred under this Services Agreement through the effective date of such
termination or expiration.
SECTION 8
MISCELLANEOUS
8.1 Ingress and Egress. Buyer shall at all times during the
continuance of this Services Agreement have the right of reasonable ingress to
and egress from Seller's premises, during Seller's regular business hours and
upon reasonable prior notice, for any purposes connected with the delivery of
Services hereunder or the exercise of any right under this Services Agreement
or the performance of any obligations required by this Services Agreement.
8.2 Amendments. No amendment, modification, alteration or enlargement
of this Services Agreement shall be valid or binding unless in writing and
signed by the Parties hereto.
8.3 Notices. All notices or other written communications required or
permitted hereunder shall be written in English and shall be delivered in
person or by mail, express delivery service, telex or cable, with postage or
delivery charges prepaid, to the following addresses:
If to Buyer: Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Attn: Donald Campion
Fax Number: (248) 577-3465
If to Seller: Office of the Secretary
Eaton Corporation
Eaton Center
1111 Superior Avenue
Cleveland, OH 44114
Fax Number: (216) 479-7103
Or to such other persons or addresses as the Parties may designate by
notice from time to time. All such notices shall be effective when delivered.
8.4 Assignment. This Services Agreement may not be assigned by either
party without the prior written consent of the other party. Any purported
assignment without such consent shall be void and of no effect; provided,
however, that Buyer shall have the right to contract with a third party to
provide any of the Services hereunder without the prior written consent of
Seller if it does so for its other businesses. Buyer will provide Seller with
sixty days prior written notice of its intention to do so. Buyer and Seller
acknowledge that Buyer may delegate the performance of any Services to be
provided under the Services Agreement to one or more of its Affiliates that
normally performs such Services and that Seller may designate one or more of
its Affiliates to receive any or all of the Services, provided however that
notwithstanding the foregoing Buyer and Seller shall each remain fully
responsible for compliance with the terms of this Agreement the same as if
such delegation or designation were not effected.
8.5 Governing Law. This Services Agreement shall be governed by and
interpreted in accordance with the laws of the State of Ohio, United States of
America, without regard to any provisions thereof relating to choice of law.
8.6 Integration. This Services Agreement embodies the entire
understanding of the Parties with respect to the subject matter hereof and,
with the exception of the Purchase Agreement (and the transactions and
documents contemplated thereby), there are no further agreements or
understandings, written or oral, between the Parties with respect thereto.
This Services Agreement supersedes all previous negotiations, discussions and
commitments with respect to the subject matter hereof. The Parties agree that
the terms of this Services Agreement shall have priority and control over the
terms of any order form, invoice or other document which relates to this
Services Agreement or the Services unless such document is signed by both
Parties, refers to paragraph 8.2 of this Services Agreement and unambiguously
indicates that it is an amendment of this Services Agreement.
8.7 Execution in Counterparts. This Services Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become a binding agreement when one or more
counterparts have been signed by each of the Parties hereto.
8.8 Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Services Agreement.
8.9 Waiver. Neither Party shall be deemed to have waived any right,
power, privilege or remedy unless such waiver is in writing and duly executed
by it. The failure of any party hereto to enforce at any time any of the
provisions of this Services Agreement shall in no way be construed as a waiver
of any such provision, nor in any way affect the validity of this Services
Agreement or any part hereof or the right of any party thereafter to enforce
each and every such provision. No waiver of any breach of this Services
Agreement shall be held to be a waiver of any other or subsequent breach of
this Services Agreement.
8.10 Damage, Destruction and Condemnation. In the event that any
Service facilities or any part thereof are damaged or destroyed by fire, flood
or other casualty, or in the event that title to, or the temporary use of, the
Service facilities or any part thereof shall be taken under the exercise of
power of eminent domain by any governmental body or by any person, firm or
corporation acting under governmental authority, Buyer shall be relieved of
any obligations under this Services Agreement with respect to the affected
Services and Seller shall have the right to make alternate arrangements for
the provision of the affected Services.
8.11 Price Calculations and Mediation.
(a) Discussions. During the entire term of this Services Agreement:
(i) Seller shall have the right to meet with Buyer, upon the reasonable
request of Seller, to discuss any and all questions which Seller may have
concerning various information and any of the calculations of the prices being
charged under this Services Agreement; and (ii) upon the reasonable request of
Seller, Buyer shall provide to Seller information in written and oral form
concerning: (A) any of the calculations of the prices under this Services
Agreement; and (B) any of the information and the source documents which
support and underlie any changes in price under this Services Agreement.
(b) Mediation. All disputes, controversies or claims connected with,
arising out of or relating to this Services Agreement or any modification
thereof shall initially be subject to the remedy of mediation described
herein, including the interpretation, performance or nonperformance of this
Services Agreement, any claim for damages, a breach or default of this
Services Agreement, the termination of this Services Agreement, whether such
controversies or claims are in law or equity or include claims based upon
contract, statute, tort or otherwise.
If a controversy arises, a Party shall provide the other Party written
notice of the dispute, asking for mediation in accordance herewith. Within
twenty (20) days after receipt of such notice, the notified Party shall submit
to the other Party a written response. The notice and response shall each
include a statement of the other Party's position and a summary of the
evidence and arguments supporting its position. Each Party shall be
represented by an executive authorized to settle the controversy. The
representatives shall meet at a mutually acceptable time and place within
thirty (30) days of the date of the notified Party's response and thereafter
as often as they reasonably deem necessary to exchange relevant information
and to attempt to resolve the dispute.
If the controversy has not been resolved within sixty (60) days after
the first meeting, or if the Party receiving such notice will not meet within
such thirty (30) days (the failure of which shall not be deemed a breach of
this Services Agreement), either Party may initiate non-binding mediation of
the controversy or claim pursuant to the procedures of the CPR Institute for
Dispute Resolution, 366 Madison Avenue, New York, New York 10017-3122.
Failing resolution, the parties will consider entering into binding
arbitration; provided, however, the parties will not be bound to enter into
binding arbitration.
8.12 Title to Data; Security; Confidentiality. (a) Buyer agrees that
all records, data, files, input materials, reports, forms and other data
received, computed, developed, used and/or stored pursuant to this Services
Agreement are the exclusive property of Seller and that all such records and
other data shall be furnished, at Seller's sole cost and expense, to Seller in
available machine readable form as soon as reasonably practicable upon
termination of this Services Agreement for any reason whatsoever, unless there
are outstanding amounts due from Seller pursuant to this Services Agreement.
Moreover, upon Seller's request, at any time or times while this
Services Agreement is in effect, Buyer shall as soon as reasonably practicable
deliver to Seller, at Seller's sole cost and expense, any or all of the data
and records held by Buyer pursuant to this Services Agreement, in the form
routinely available to Buyer. Buyer shall not possess any interest, title,
lien or right to any such data or records.
In addition, Buyer agrees, upon Seller's reasonable request, to permit
Seller and its auditors to have access, at all times while this Services
Agreement is in effect, to any of Seller's records or data which are in the
possession of Buyer during Buyer's regular business hours and upon reasonable
prior notice. Such access shall be provided in a way so as not to interfere
with Buyer's normal business operations.
(b) Buyer shall deliver to Seller upon the reasonable request of
Seller a backup tape of Seller's data in the form and with the content
routinely available to Buyer. Seller shall bear all of Buyer's costs and
expenses associated with the providing of such tape.
(c) Buyer agrees to treat confidentially all records and other
information with respect to Seller. Buyer, on behalf of itself and its
employees, agrees to keep confidential all records and other information with
respect to Seller. Specifically, Buyer agrees that it will, during the term
of this Services Agreement and thereafter (except where required by law or
court order or administrative agency order or subpoena): (i) retain all such
information of Seller in confidence; (ii) not disclose any such information to
any third party without Seller's permission; (iii) not use any such
information of Seller for any purposes other than performing its obligations
under this Services Agreement; (iv) use its reasonable efforts to limit access
to Seller's information to those employees who have a need to know the
information for the business purposes of this Services Agreement, and maintain
reasonable arrangements to protect confidentiality satisfactory to Seller with
Buyer's employees having access to such information, and with third parties
having any access to such information; and (v) insure that all tangible
objects and copies thereof in Buyer's possession or under its control
containing or imparting any such information of Seller shall be returned to
Seller at any time upon Seller's request or upon termination of this Services
Agreement. Seller shall bear all costs and expenses associated with the
return of such tangible objects and copies thereof.
IN WITNESS WHEREOF, the Parties have executed this Services Agreement as
of the date first written above.
OXFORD AUTOMOTIVE, INC.
By:
Name:
Title:
EATON CORPORATION
By:
Name:
Title:
<PAGE>
<PAGE>
EXHIBIT E
ENVIRONMENTAL AGREEMENT
This Environmental Agreement ("Agreement") made and entered into as of
April , 1998, by, between and among Oxford Automotive, Inc.
("Buyer") and Eaton Corporation ("Seller").
WHEREAS, Buyer and Seller are entering into an Asset Purchase Agreement
of even date herewith ("the Asset Purchase Agreement"), and Buyer and Seller
desire to set forth the respective obligations with respect to environmental
matters in connection therewith.
Now, therefore, in consideration of the mutual covenants, the parties
hereto agree as follows:
1. Definitions.
Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Asset Purchase Agreement. For the purposes of this
Environmental Agreement, the following terms shall have the meanings assigned
below.
(a) "Claims" shall mean: any and all actions, proceedings,
obligations, causes of action, fines, penalties, or expenses imposed
upon or asserted against Buyer by any third party or governmental
authority; or non-compliance with Environmental Laws which is likely to
result in prosecution.
(b) "Environmental Laws" shall mean: any applicable statute,
code, enactment, ordinance, rule, regulation, permit, municipal bylaw,
consent, approval, authorization, judgment, order, common law rule
(including without limitation the common law respecting nuisance and
tortious liability), decree, injunction, or other requirement having the
force and effect of law, whether local, municipal, state, provincial,
territorial or national (whether in the United States or Canada)
relating to: (i) emissions, discharges, spills, releases or threatened
releases of Hazardous Substances; (ii) the use, treatment, storage,
disposal, handling, manufacturing, transportation, generation,
production, processing or shipment of Hazardous Substances; (iii) the
regulation of storage tanks; or (iv) otherwise relating to pollution or
the protection of human health and the environment.
(c) "Hazardous Substances" shall mean: all substances, wastes,
pollutants, contaminants and materials regulated or defined or
designated as hazardous, extremely, or imminently hazardous, dangerous,
or toxic pursuant to any Environmental Laws by any local, state,
territorial or governmental authority, or with respect to which such
government authority otherwise requires environmental investigation,
monitoring, reporting, or remediation, including but not limited to (i)
petroleum and petroleum products including crude oil and any fractions
thereof, (ii) natural gas, synthetic gas and any mixtures thereof, and
(iii) radioactive substances, asbestos, urea formaldehyde, and
polychlorinated biphenyls.
(d) "Known Environmental Conditions" shall mean: those items
listed on Schedule A, attached hereto, which items violate Environmental
Laws; and those items known to Seller but not disclosed to or known by
Buyer prior to the Closing Date, which items violate Environmental Laws.
(e) "Risk-based Action Levels" shall mean: those risk-based
standards in effect as of the Closing Date applicable to a Remedial
Action based, in Seller's discretion, on (i) generic standards for
industrial properties promulgated by the governmental authority with
jurisdiction over the Remedial Action or (ii) only where use of generic
standards is deemed technically or economically impracticable by Seller
and where prior agreement of Buyer has been obtained (which agreement
shall not be unreasonably withheld), site-specific standards developed
by Seller and approved by the governmental authority with jurisdiction
over the Remedial Action, including notices on title and deed
restrictions.
(f) "Unknown Environmental Conditions" shall mean: the presence
at Closing of Hazardous Substances on the Owned Real Property (except as
caused by off-site sources) at levels in excess of Risk-based Action
Levels of which Seller had no Knowledge prior to the Closing Date and
which resulted from the disposal, discharge or release of Hazardous
Substances at, on or from the Owned Real Property.
(g) "Remedial Action" shall mean: any and all measures
necessary to resolve a Claim or to reduce the level of Hazardous
Substances at, on or from the Owned Real Properties to levels which
comply with Risk-based Action Levels.
2. Environmental Assessments.
(a) Phase I Environmental Site Assessments of the Owned Real
Property have been conducted by Buyer through its consultants,
Conestoga-Rovers & Associates ("CRA") prior to the Closing Date.
(b) Phase II Environmental Site Assessments of the Owned Real
Property have been initiated and follow-up activities related thereto
will be completed prior to the Closing Date by Buyer through its
consultants, CRA.
(c) The cost of conducting the Phase I Environmental Site
Assessments and Phase II Environmental Site Assessments shall be borne
by Buyer, except that Seller agrees to pay $25,000.00 of the first
$50,000.00 expended by Buyer for such assessments. Seller has the right
to review scopes of work for the Environmental Site Assessment conducted
prior to the Closing Date and Buyer shall promptly provide to Seller
copies of the assessments and all associated sampling data, notices,
test results, draft reports, and correspondence with any governmental
authority. Buyer shall provide Seller with a letter expressly stating
that Seller and Seller subsidiaries may rely on the Assessments.
3. Remedial Action.
(a) Seller shall, as promptly as is required, undertake Remedial
Action for those items listed in the attached Schedule B.
(b) Seller shall conduct Remedial Action in the event a Claim is
submitted to Buyer regarding Known Environmental Conditions or Unknown
Environmental Conditions, subject to Section 2.1(e) of the Asset
Purchase Agreement provided that (x) the Claim must be submitted to
Buyer before the expiration of ten (10) years following the date of
Closing; and (y) the Claim cannot arise as a result of Buyer's
notification to or communication with the third party or governmental
authority submitting the Claim, except where such notification is
required by Environmental Law.
(c) A Remedial Action shall be deemed adequate for the purposes
of satisfying Seller's obligations hereunder to the extent such Remedial
Action: (i) attains compliance in the most reasonable cost-effective
manner with Risk-based Action Levels; and (ii) complies with
Environmental Laws including any applicable order or directive issued by
a governmental authority having jurisdiction over the Remedial Action.
(d) With respect to any claim requiring Remedial Action, Seller
shall have sixty (60) days after receipt of written notice thereof from
Buyer (with such notice being provided within a reasonable time after
receipt so as not to prejudice Seller and stating with reasonable
specificity the nature of the environmental condition, the basis of the
assertion, that Buyer has not responded to the Claim, and the amount
thereof to the extent known), to either (i) acknowledge in writing that
Seller will conduct the Remedial Action, in which case Seller shall
undertake, conduct and control, through counsel, consultants and
contractors of Seller's choosing subject to the approval of Buyer, which
approval shall not be unreasonably withheld the defense, investigation,
remediation, and settlement thereof or (ii) fail to acknowledge in
writing that it will or acknowledge in writing that it will not conduct
the Remedial Action with respect to such matter, in which case Seller
shall permit Buyer to assume the conduct and control of the defense,
investigation, remediation, and settlement thereof through counsel,
consultants and contractors of Buyer's own choosing (and reasonably
satisfactory to Seller); provided that if it is ultimately determined
that Seller should have conducted, in whole or part, the Remedial
Action, the reasonable fees and expenses of Buyer's counsel, consultants
and contractors shall be indemnified hereunder subject to Section 2.1(e)
of the Asset Purchase Agreement.
(e) Upon acknowledging its Remedial Action obligations
hereunder, Seller shall have the right to conduct all Remedial Actions
and other activities necessary to comply with its obligations hereunder
and Seller shall have sole decision-making authority and control as to
such matters; provided that in exercising its rights and obligations,
(i) Seller shall provide the Buyer with the scope of work for the
Remedial Actions prior to conducting such Remedial Actions. Buyer may
provide any comments to the scope of work within five (5) business days
of receipt thereof. Seller shall use best efforts to address Buyer's
reasonable comments in the scope of work. Where agency approval is not
required or obtained and Buyer seeks to add to or revise the scope of
work which addition or revision Seller disputes, the terms of paragraph
7 (Dispute Resolution) shall apply and (ii) neither Party shall take
actions that would prevent or hinder the other party from complying in
all material respects with Environmental Laws. Seller will not, without
the written consent of Buyer (which consent shall not unreasonably be
withheld), compromise the current industrial use or existing operations
of the Property.
(f) Seller's obligations under this Agreement in respect to Known
Environmental Conditions or Unknown Environmental Conditions shall be
reduced to the extent that any act, failures to act, or negligence by,
or gross negligence of, Buyer or its affiliates, successors or assigns
after the Closing Date adversely affect such obligations in any way.
4. Seller's Access After Closing. For purposes of this Agreement, Seller's
access to the Owned Real Property after Closing shall be subject to the
following terms and conditions. For the purposes of this Section,
"Owner" shall refer to Buyer and/or its designated representative and
"Licensee" shall refer to Seller and/or its designated representative.
(a) Owner will permit access to and entry upon Owned Real
Property to Licensee as necessary to conduct and complete Remedial
Actions pursuant to this Environmental Agreement.
(b) Except in the event of an emergency, Licensee shall provide
Owner with a least ten (10) business days notice prior to beginning any
drilling, construction, and equipment installation, as well as other
activity that may disrupt normal business operations on the Owned Real
Property.
(c) Owner shall use its best efforts not to unreasonably
interfere with the Licensee while Licensee exercises its rights of
ingress and egress to perform the Remedial Actions. Licensee shall use
its best efforts to perform the Remedial Action in a manner which
minimizes disruption to Owner's business activities and to the Owned
Real Property.
(d) Promptly upon completion of an Remedial Action, Licensee
shall at its expense restore the Owned Real Property to substantially
the condition which existed immediately prior to the commencement of the
Remedial Action, and said restoration is to be completed to Owner's
reasonable satisfaction.
(e) Licensee shall within ten (10) days of receipt by the
Licensee provide to Owner copies of all scopes of work, final reports,
correspondence with any governmental authority, and sampling data
related to, or which result from, any Remedial Actions on the Owned Real
Property. Any communications with or notifications to the third party
or governmental authority submitting the Claim or with the governmental
authority with jurisdiction over the Remedial Action, relating to the
Remedial Action shall be made solely by Licensee.
(f) Prior to and during a Remedial Action, Licensee shall take
all steps which are reasonably necessary to prevent injury to persons or
damage to property resulting from or in any way connected with the
Remedial Action.
(g) Licensee shall indemnify and hold harmless the Owner against
any liens, damages, losses, expenses and encumbrances (excluding any
incidental or consequential damages, lost revenue or lost profits) that
may be filed or attach against the Owned Real Property in connection
with Remedial Actions that Licensee performs on the Owned Real Property.
No contractor, subcontractor, material man, agent, officer, director or
employee of the Licensee shall have any right to a lien against Owned
Real Property or any part thereof for any work, labor or materials
furnished to Licensee for the Remedial Actions performed on Owned Real
Property, unless otherwise mandated by applicable law.
(h) Buyer will pay any and all costs, claims, rents or charges
which Seller may incur if access to Owned Real Property is not granted
in accordance with this Environmental Agreement.
(i) Owner agrees to be responsible and reimburse Licensee for
any damage or loss that Owner, its employees, agents, invitees, lessees,
occupants of Owned Real Property, contractors, successors or assigns
cause, whether sole, joint or concurrent, to any test or monitoring
well, remediation equipment and/or associated piping, or any other
property or equipment installed or otherwise used by Licensee, except
where such equipment was installed without Buyer's approval.
5. Exclusive Remedies. Buyer agrees that any claim or demand against
Seller arising out of or relating to environmental liabilities must be
brought only under this Environmental Agreement and subject to the
procedures and limitations herein.
6. Cooperation, Access, Reasonableness.
(a) Buyer and Seller shall cooperate with respect to the
undertaking of their mutual obligations pursuant to this Environmental
Agreement, including providing one another reasonable access to relevant
records and officers and employees with knowledge of the matters at
issue, and shall inform one another in reasonably prompt fashion of all
significant developments concerning conditions or actions giving rise to
claims for indemnification hereunder.
(b) All activities relating to the parties' obligations pursuant
to this Environmental Agreement must be undertaken in a manner in which
a prudent business person acting in a commercially reasonable manner
would undertake such work, minimizing interruptions of operations at the
Owned Real Property.
(c) Nothing in this Environmental Agreement shall prevent Buyer
from (i) taking any reasonable and prudent interim measures in the event
of an imminent and substantial endangerment to human health, welfare or
the environment, (ii) taking any reasonable action for which Buyer does
not elect to seek redress, in whole or in part, under this Agreement and
(iii) taking any action lawfully required or directed by and
governmental authority of competent jurisdiction, without prejudice to
Buyer's right to seek redress therefore under this Environmental
Agreement.
7. Dispute Resolution. If a dispute arises between the parties hereto and
that dispute cannot be resolved within a reasonable period of time,
either party hereto may notify the other party that the dispute is to be
submitted to arbitration. In the event that notice of submission of the
dispute to arbitration is provided by either party, the parties jointly
shall select an environmental consultant or engineer reasonably
qualified to arbitrate such dispute (the "Independent Consultant"). The
Independent Consultant shall have the right to obtain the assistance of
legal counsel mutually acceptable to Buyer and Seller in arbitrating the
dispute, if the Independent Consultant determines that such assistance
is necessary. Notwithstanding any other provision hereof, the parties
hereto shall each bear one-half of the cost of the Independent
Consultant and its legal counsel, if any. If the parties hereto cannot
agree on an Independent Consultant, they shall apply to the American
Arbitration Association for the appointment of an Independent
Consultant. The Independent Consultant shall establish an expedited
procedure for hearings and resolving the dispute. Unless the parties
hereto agree otherwise, the Independent Consultant shall be required to
render a decision resolving the dispute, with a written opinion stating
the reasons therefor, no more than 60 days after the Independent
Consultant is retained. The decision of the Independent Consultant
shall be final and binding and a court of competent jurisdiction may
enter judgment thereon. The dispute resolution procedures of this
Section 9 shall constitute the exclusive remedy of the parties hereto
with respect to any disputes arising out of this Environmental
Agreement.
8. Conflict with Purchase Agreement. This Environmental Agreement is
intended to modify and supplement certain of the terms of the Purchase
Agreement with respect to the matters described herein. In the event of
any conflict or ambiguity between the Purchase Agreement and this
Environmental Agreement with respect to Assumed, Retained or Shared
Liabilities, the provisions of the Purchase Agreement shall control, and
in all other cases the provisions of this Environmental Agreement shall
control.
9. Other Rights. All rights and remedies of any party hereunder shall be
cumulative and are expressly in addition to those now or hereafter
existing under the Purchase Agreement, or at law or in equity, any of
which alone or together may be fully exercised by either party.
10. Further Assurances. Each party agrees to execute additional instruments
and documents and do all such further things as may reasonably be
requested by the other in order to carry out the intent of this
Environmental Agreement.
11. Waivers and Amendments.
(a) Any provision of this Environmental Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Buyer and Seller, or in the case
of a waiver, by the party against whom the waiver is to be effective.
(b) No waiver by either party of any default, misrepresentation
or breach of warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default,
misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights existing by virtue of any prior or subsequent
occurrence. No single or partial exercise by either party of any right,
power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
12. Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request,
demand, claim or other communication hereunder shall be deemed duly
given (i) if personally delivered, when so delivered, (ii) if mailed,
two Business Days after having been sent by registered or certified
mail, return receipt requested, postage prepaid and addressed to the
intended recipient as set forth below, (iii) if given by telecopier,
once such notice or other communication is transmitted to the telecopier
number specific below and the appropriate answer back or telephonic
confirmation is received, provided that such notice or other
communication is promptly thereafter mailed in accordance with the
provisions of clause (ii) above or (iv) if sent through a reputable
overnight delivery service in circumstances in which such service
guarantees next day delivery, the day following being so sent.
(a) If to Seller, to:
Eaton Corporation
Eaton Center
1111 Superior Avenue
Cleveland, Ohio 44114
Attention: Corporate Secretary
and by telecopy to: (216) 479-7103
(b) If to Buyer, to:
Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Attention: President
and by telecopy to: (248) 577-3465
With a copy to:
The Oxford Investment Group, Inc.
2000 North Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
Attention: Rex E. Schlaybaugh, Jr.
and by telecopy to: (248) 540-7280
13. Miscellaneous. This Environmental Agreement may be signed in any number
of counterparts, each of which shall be deemed an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Environmental Agreement shall become effective when
each party hereto shall have received a counterpart hereof signed by the
other party hereto. This Environmental Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors in interest and assigns by operation of law or otherwise.
This Environmental Agreement shall be construed and interpreted in
accordance with the laws of the jurisdiction within which the facility
at issue is located.
14. Severability. If any provision of this Environmental Agreement, or the
application thereof to any person, place or circumstances, shall be held
by the court of competent jurisdiction to be invalid, unenforceable or
void, the remainder of the Agreement and such provisions as applied to
other persons, places and circumstances shall remain in full force and
effect.
15. Power and Authority. Each party to the Environmental Agreement hereby
certifies that it: (i) is a corporation duly formed, validly existing
and in good standing under the laws of the state of its incorporation;
(ii) has full power and authority to execute this Environmental
Agreement and any and all documents which may be related thereto; and
(iii) has, to the extent necessary, obtained authorization from its
Board of Directors to execute this Environmental Agreement. The
undersigned representative(s) of each party certifies that he or she is
fully authorized by the party whom he or she represents to enter into
the terms and conditions of this Environmental Agreement and to bind
legally such party to this Environmental Agreement.
16. Construction. The language used in this Environmental Agreement will be
deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied
against either party. Whenever required by the context, any gender
shall include any other gender, the singular shall include the plural
and the plural shall include the singular. The headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Whenever the
word "including" is used in this Agreement, it shall be deemed to mean
"including, without limitations," "including, but not limited to" or
other words of similar import such that the items following the word
"including" shall be deemed to be a list by way of illustration only and
shall not be deemed to be an exhaustive list of applicable items in the
context thereof.
EATON CORPORATION OXFORD AUTOMOTIVE, INC.
By: By:
Name: Name:
Title: Title:
<PAGE>
<PAGE>
EXHIBIT F
[Date of Closing]
Oxford Automotive, Inc.
1250 Stephenson Highway
Troy, Michigan 48083
Gentlemen:
This letter sets forth our understandings and agreements with respect to the
matters set forth herein following the closing of the transactions
contemplated by the Asset Purchase Agreement (the "Agreement") dated as of
March 13, 1998, between Eaton Corporation ("Seller") and Oxford Automotive,
Inc. ("Buyer"). Defined terms used herein but not otherwise defined shall
have the meanings given to them in the Agreement.
Prior to the Closing Date, to the extent that orders for finished springs were
placed with Eaton Corporation in Brazil ("ECO-Brazil") for Chrysler through
Dana Corporation in Brazil (the "Chrysler/Dana Business"), ECO-Brazil
purchased its requirements of springs and bushings from Metalurgica Carabobo,
S.A. (the "Company") pursuant to purchase orders issued to Metalcarat a price
to ECO-Brazil, including freight, import duties and insurance, of US
$32.36/spring and US$2.38/bushing.
In the event Buyer acquires Seller's 49% joint venture interest in the Company
as contemplated by the Agreement, for the two-year period following the
Closing Date, Seller agrees to cause ECO-Brazil to continue to purchase its
requirements of springs and bushings for the Chrysler/Dana-Brazil business on
the same terms and conditions upon which ECO-Brazil currently purchases such
requirements, provided that the following conditions are, and continue during
such period to be, met:
1. ECO-Brazil continues to receive orders for finished springs from Dana-
Brazil or its successor for the Chrysler business which currently gives rise
to the Dana-Brazil business;
2. The quality, delivery and other performance measures provided by
Metalcar following the Closing Date are at least as good as was being provided
by Metalcar prior to the Closing Date and remain satisfactory to Dana-Brazil;
and
3. Applicable law, including tax, customs, duty and tariffs, and inflation
in Brazil do not change so as to adversely effect the cost of such purchases
to ECO-Brazil or to make the continued transactions illegal.
Please execute this letter in the space indicated below to indicate your
agreements with the terms and conditions of this Letter Agreement.
EATON CORPORATION
By:_____________________
Accepted and agreed to as of _______, 1998.
OXFORD AUTOMOTIVE, INC.
By:
<PAGE>
<PAGE>
EXHIBIT G
GENERAL ASSIGNMENT AND BILL OF SALE
GENERAL ASSIGNMENT AND BILL OF SALE, dated as of _____________ (the
"Effective Date") by Eaton Corporation, an Ohio corporation ("Seller"), Eaton
Yale Ltd., an Ontario corporation and Eaton International Corporation, a
Delaware corporation, ("Seller Subsidiaries") in favor of [Oxford Suspension,
Inc., a Michigan corporation] [Oxford Suspension Ltd., an Ontario corporation]
("Buyer Sub").
Oxford Automotive, Inc., a Michigan corporation ("Buyer") and Seller
have entered into an Asset Purchase Agreement, dated _______, 1998, (the
"Purchase Agreement"), whereby Buyer has agreed to purchase and Seller has
agreed to sell, the Transferred Assets (as defined in the Purchase
Agreement). Pursuant to the provisions of Section 21.9 of the Purchase
Agreement, Buyer has assigned certain of its rights under the Purchase
Agreement to Buyer Sub. Seller, the Seller Subsidiaries, and Buyer Sub wish
to execute and deliver this General Assignment and Bill of Sale ("Bill of
Sale") for the purposes of transferring to and vesting in Buyer Sub all of
Seller's right, title and interest in and to the Transferred Assets located in
[the United States] [Canada]. The execution and delivery of this Bill of Sale
by Seller and the Seller Subsidiaries is required under Section 13.2 of the
Purchase Agreement.
In consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Capitalized terms not otherwise defined in this Bill of Sale,
shall have the meanings assigned to them in the Purchase Agreement.
2. Pursuant to the terms of the Purchase Agreement, Seller and the
Seller Subsidiaries hereby convey, transfer, assign, set over to and vest in
Buyer Sub, its successors and assigns, forever all of Seller's and the Seller
Subsidiaries' right, title and interest, legal or equitable, in and to all of
the Transferred Assets located in [the United States][Canada].
3. Seller hereby warrants, covenants and agrees that, from time to
time after the delivery of this instrument, at Buyer's request and without
further consideration, it will do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all and every such
further acts, deeds, conveyances, transfers, assignments, powers of attorney
and assurances as reasonably may be required more effectively to convey,
transfer to and vest in Buyer Sub, and to put Buyer Sub in possession of, any
of such Transferred Assets.
4. Nothing in this Bill of Sale, express or implied, is intended or
shall be construed to expand or defeat, impair or limit in any way the rights,
obligations, claims or remedies of the parties as set forth in the Purchase
Agreement.
5. Nothing in this Bill of Sale, express or implied, is intended or
shall be construed to confer upon, or give to, any person, corporation or
other entity, other than the parties hereto, any rights, remedies, obligations
or liabilities.
6. This Bill of Sale shall issue to the benefit of and be binding
upon Buyer Sub, Seller, and the Seller Subsidiaries and their respective
successors and assigns.
IN WITNESS WHEREOF, Seller and the Seller Subsidiaries have executed and
delivered this Bill of Sale to Buyer Sub on the Effective Date.
EATON CORPORATION
By:
Title:
EATON YALE LTD.
By:
Title:
EATON INTERNATIONAL CORPORATION
By:
Title:
[BUYER SUB]
By:
Title:
