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): December 30, 1995
TRINOVA CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 1-924 34-4288310
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3000 Strayer, Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 867-2200
This document, including exhibits, contains 109 pages.
The cover page consists of 1 page.
The Exhibit Index is located at page 4.
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TRINOVA CORPORATION
Item 2. Acquisition of Assets
Effective December 30, 1995, TRINOVA Corporation (TRINOVA), and its
wholly-owned subsidiaries Vickers E.S.D., Inc. ("Vickers") and TRINOVA
Limited, acquired substantially all of the assets and certain liabilities of
the Electronic Systems Division ("ESD") of Cincinnati Milacron Inc.
("Cincinnati Milacron") and its wholly-owned subsidiary Cincinnati Milacron
U.K. Limited. ESD has facilities in South Lebanon, Ohio and Biggleswade,
England. The definitive agreements include an Asset Purchase Agreement
between Cincinnati Milacron and TRINOVA (the U.S. Asset Purchase Agreement),
and an Asset Purchase Agreement between Cincinnati Milacron U.K. Limited and
TRINOVA Limited (the U.K. Asset Purchase Agreement), copies of which are filed
herewith as Exhibits (2)-1 and (2)-2, respectively, and reference is made
thereto for complete terms and conditions of such agreements. Cincinnati
Milacron and TRINOVA and Vickers also entered into a supply agreement under
which Vickers will supply electronic controls to Cincinnati Milacron for seven
years.
The total purchase price for the net assets of ESD was approximately $105
million ($95,225,000 under the U.S. Asset Purchase Agreement and [British
Pound] 6,850,000 under the U.K. Asset Purchase Agreement) in cash, subject to
a post-closing adjustment based on the value of the net assets of ESD at
December 30, 1995, as determined by audit. The source of funds used by
TRINOVA for payment of the purchase price was short-term borrowings. The
acquisition will be accounted for as a purchase.
ESD designs and manufactures open architecture computer controls,
software and drives for plastics machinery and machine tools. TRINOVA intends
to continue to conduct the ESD business as formerly conducted by Cincinnati
Milacron, except that it intends to expand such business to serve additional
markets and customers, including Vickers and Vickers' other machine tool,
plastic processing equipment and OEM customers. Darryl F. Allen, Chairman of
the Board, President and Chief Executive Officer of TRINOVA, is a director of
Cincinnati Milacron, Inc.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. It is impracticable to
provide the required financial statements for the acquired business at the
time this report on Form 8-K is filed. The registrant will file an amendment
to this Form 8-K containing the financial statement information as soon as
practicable, but not later than 60 days after the date this Form 8-K must be
filed.
(b) Pro Forma Financial Information. It is impracticable to provide the pro
forma financial statement information at the time this report on Form 8-K is
filed. The registrant will file an amendment to this Form 8-K containing the
pro forma financial statement information as soon as practicable, but not
later than 60 days after the date this Form 8-K must be filed.
(c) Exhibits. The following exhibits are filed as part of this report:
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(2)-1 Asset Purchase Agreement, dated as of December 15, 1995,
between Cincinnati Milacron Inc. and TRINOVA Corporation
(Schedules and exhibits to the Asset Purchase Agreement
have been omitted pursuant to Item 6.01(b)(2) of
Regulation S-K. Such schedules and exhibits are listed
and described in the Asset Purchase Agreement. The
registrant agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Asset Purchase
Agreement to the Commission upon request.)
(2)-2 Asset Purchase Agreement, dated December 15, 1995, between
Cincinnati Milacron U.K. Limited and TRINOVA Limited
(Schedules and exhibits to the Asset Purchase Agreement
have been omitted pursuant to Item 6.01(b)(2) of
Regulation S-K. Such schedules and exhibits are listed
and described in the Asset Purchase Agreement. the
registrant agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Asset Purchase
Agreement to the Commission upon request.)
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.
TRINOVA CORPORATION
By: /S/ DAVID M. RISLEY
David M. Risley
Vice President - Finance and
Chief Financial Officer
Date: January 16, 1996
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EXHIBIT INDEX
Exhibit No. Page No.
(2)-1 Asset Purchase Agreement, dated as of December 15, 5
1995, between Cincinnati Milacron Inc. and TRINOVA
Corporation (Schedules and exhibits to the Asset
Purchase Agreement have been omitted pursuant to
Item 6.01(b)(2) of Regulation S-K. Such schedules
and exhibits are listed and described in the Asset
Purchase Agreement. The registrant agrees to
furnish supplementally a copy of any omitted
schedule or exhibit to the Asset Purchase Agreement
to the Commission upon request.)
(2)-2 Asset Purchase Agreement, dated December 15, 1995, 53
between Cincinnati Milacron U.K. Limited and
TRINOVA Limited (Schedules and exhibits to the
Asset Purchase Agreement have been omitted pursuant
to Item 6.01(b)(2) of Regulation S-K. Such schedules
and exhibits are listed and described in the Asset
Purchase Agreement. The registrant agrees to furnish
supplementally a copy of any omitted schedule or
exhibit to the Asset Purchase Agreement to the
Commission upon request.)
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EXHIBIT (2)-1
ASSET PURCHASE AGREEMENT
dated as of
December 15, 1995
between
CINCINNATI MILACRON INC.
and
TRINOVA CORPORATION
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TABLE OF CONTENTS
Page
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.1 Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Acquired Assets and Excluded Assets. . . . . . . . . . . . . . 2
SECTION 1.3 Assumption of Certain Liabilities. . . . . . . . . . . . . . . 3
SECTION 1.4 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.5 Purchase Price Adjustments . . . . . . . . . . . . . . . . . . 8
SECTION 1.6 Allocation of Purchase Price . . . . . . . . . . . . . . . . .10
SECTION 1.7 Power of Attorney, etc.. . . . . . . . . . . . . . . . . . . .11
ARTICLE II
The Closing
SECTION 2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 2.2 Transactions To Be Effected at the Closing . . . . . . . . . .12
ARTICLE III
Representations and Warranties
SECTION 3.1 Representations and Warranties of Seller . . . . . . . . . . .13
SECTION 3.2 Representations and Warranties of Purchaser. . . . . . . . . .23
ARTICLE IV
Covenants
SECTION 4.1 Conduct of Transferred Business. . . . . . . . . . . . . . . .25
SECTION 4.2 Access to Information. . . . . . . . . . . . . . . . . . . . .26
SECTION 4.3 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 4.4 Legal Requirements . . . . . . . . . . . . . . . . . . . . . .27
SECTION 4.5 Noncompetition . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 4.6 Agreement Regarding Non-Assignable Contracts . . . . . . . . .28
SECTION 4.7 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 4.8 Use of Names . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 4.9 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 4.10 Financial Information. . . . . . . . . . . . . . . . . . . . .29
SECTION 4.11 Bulk Transfer Laws . . . . . . . . . . . . . . . . . . . . . .30
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SECTION 4.12 Further Assurances; Cooperation After Closing. . . . . . . . .30
SECTION 4.13 Certain Understandings . . . . . . . . . . . . . . . . . . . .31
SECTION 4.14 Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 4.15 UK Agreement . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 4.16 Supply Agreement . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 4.17 License Agreements . . . . . . . . . . . . . . . . . . . . . .32
SECTION 4.18 Books and Records. . . . . . . . . . . . . . . . . . . . . . .32
SECTION 4.19 Lockheed Contract. . . . . . . . . . . . . . . . . . . . . . .32
SECTION 4.20 Warranty Claims. . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 4.21 Environmental Matters. . . . . . . . . . . . . . . . . . . . .32
SECTION 4.22 Patent Claim . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 4.23 Nonsolicitation of Employees . . . . . . . . . . . . . . . . .34
SECTION 4.24 Control Application Software . . . . . . . . . . . . . . . . .34
SECTION 4.25 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . .34
ARTICLE V
Post-Closing Obligations to Certain Employees
SECTION 5.1 Offer of Employment. . . . . . . . . . . . . . . . . . . . . .34
SECTION 5.2 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . .34
SECTION 5.3 Defined Benefit Plan . . . . . . . . . . . . . . . . . . . . .35
SECTION 5.4 Post-Retirement Benefits . . . . . . . . . . . . . . . . . . .35
SECTION 5.5 WARN Act . . . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 5.6 401(k) Plan. . . . . . . . . . . . . . . . . . . . . . . . . .36
ARTICLE VI
Conditions Precedent
SECTION 6.1 Conditions to Each Party's Obligation. . . . . . . . . . . . .37
SECTION 6.2 Conditions to the Obligation of Purchaser. . . . . . . . . . .37
SECTION 6.3 Conditions to the Obligation of Seller . . . . . . . . . . . .39
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 7.2 Amendments and Waivers . . . . . . . . . . . . . . . . . . . .41
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ARTICLE VIII
Indemnification
SECTION 8.1 Indemnification by Seller. . . . . . . . . . . . . . . . . . .41
SECTION 8.2 Indemnification by Purchaser . . . . . . . . . . . . . . . . .42
SECTION 8.3. Environmental Indemnification. . . . . . . . . . . . . . . . .43
SECTION 8.4 Losses Net of Insurance, etc.. . . . . . . . . . . . . . . . .44
SECTION 8.5 Indemnification Procedures . . . . . . . . . . . . . . . . . .44
SECTION 8.6 Adjustment to Purchase Price . . . . . . . . . . . . . . . . .46
ARTICLE IX
General Provisions
SECTION 9.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 9.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 9.3 Survival of Representations and Warranties . . . . . . . . . .48
SECTION 9.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.6 Entire Agreement; No Third Party Beneficiaries . . . . . . . .49
SECTION 9.7 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.8 Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.9 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 9.10 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 9.11 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 9.12 Transitional Services Agreement. . . . . . . . . . . . . . . .51
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APPENDICES, SCHEDULES AND EXHIBITS
Appendix A - Definitions
Schedule 1.2(b)(v) - Other Excluded Assets
Schedule 1.5 - Balance Sheet Procedures
Schedule 1.5(a) - Projected Balance Sheet
Schedule 3.1(b) - Non-Contravention; Consents and
Approvals (Seller)
Schedule 3.1(c) - Balance Sheet and Statement
of Earnings
Schedule 3.1(d) - Compliance with Law
Schedule 3.1(e) - Litigation and Claims
Schedule 3.1(f) - Encumbrances
Schedule 3.1(g)(1) - Owned Property
Schedule 3.1(g)(2) - Leased Property
Schedule 3.1(i)(1) - Acquired Intellectual Property
Schedule 3.1(k)(1) - Contracts Primarily Related to the
Transferred Business
Schedule 3.1(k)(2) - Categorical Contracts
Schedule 3.1(m)(1) - Covered Taxes
Schedule 3.1(m)(2) - Contested Covered Taxes
Schedule 3.1(m)(3) - Deficient Covered Taxes
Schedule 3.1(n) - Employee Benefit Plans
Schedule 3.1(p) - Terminating Employees
Schedule 3.1(t) - Other Disclosed Liabilities
Schedule 3.2(b) - Non-Contravention; Consents and
Approvals (Purchaser)
Schedule 5.1 - Transferred Employees
Schedule 6.2(i) - Material Consents
Schedule 9.2 - Employees with Knowledge
Exhibit A - Opinion of Seller
Exhibit B - Opinion of Purchaser
Exhibit C - Electronic Controls Supply
Agreement
Exhibit D - MCL License Agreement
Exhibit E - Controls License Agreement
Exhibit F - Retrofit License Agreement
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ASSET PURCHASE AGREEMENT dated as of December 15,
1995, between CINCINNATI MILACRON INC., a Delaware
corporation ("Seller"), and TRINOVA CORPORATION, an Ohio
corporation ("Purchaser").
WHEREAS Seller is engaged worldwide in the manufacture, marketing,
sale and distribution of Machines and Electronic Controls for Machines;
WHEREAS the parties hereto desire that Seller sell, transfer and
assign, or cause to be sold, transferred and assigned, to Purchaser or
Purchaser Subsidiary, and that Purchaser purchase and assume, or cause to be
purchased and assumed, from Seller, substantially all the assets and
liabilities related to the Transferred Business, all as more specifically
provided herein;
WHEREAS the parties hereto at the time of or prior to the Closing
hereunder desire to enter into the UK Agreement and the Ancillary Agreements;
and
WHEREAS the capitalized terms used herein shall have the meanings
specified in Appendix A hereto.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto hereby agree as follows.
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.1. Purchase and Sale. Upon the terms and subject to
the conditions of this Agreement, Seller agrees to sell, assign, transfer,
convey and deliver, to Purchaser or Purchaser Subsidiary at the Closing
(except as otherwise stated herein), and Purchaser agrees to purchase and
accept from Seller, at the Closing, all right, title and interest of Seller in
and to all the Acquired Assets, free and clear of any lien, charge, security
interest or encumbrance, other than Permitted Liens.
SECTION 1.2. Acquired Assets and Excluded Assets. (a) The term
"Acquired Assets" means all the business, properties, assets, goodwill and
rights of Seller of whatever kind and nature, real or personal, tangible or
intangible, other than the Excluded Assets, that are owned by Seller on the
Closing Date and that primarily relate to, arise primarily out of or are used
primarily in connection with the Transferred Business, including, but not
limited to, all of Seller's right, title and interest in and to the following
assets (all of which are deemed to constitute assets primarily related to the
Transferred Business):
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(i) the Scheduled Real Property;
(ii) the Acquired Inventory;
(iii) the Equipment;
(iv) the Acquired Intellectual Property;
(v) the Acquired Know-how;
(vi) the Acquired Permits;
(vii) the Acquired Contracts;
(viii) the Acquired Books and Records;
(ix) the Acquired Plan Assets;
(x) all goodwill of the Transferred Business;
(xi) prepaid items and pending claims of the Transferred Business
(other than the Tax Claims) that primarily relate to or arise primarily
out of the Transferred Business;
(xii) all assets of the type reflected on the line items of the
Projected Balance Sheet other than assets that have been disposed of in
the ordinary course of business of the Division from the date hereof to
the Closing Date; and
(xiii) all other assets, properties and rights of Seller that
primarily relate to, arise primarily out of or are used primarily in
connection with the Transferred Business (other than the Excluded
Assets).
(b) Notwithstanding anything herein to the contrary, from and
after the Closing, Seller shall retain all of its right, title and interest in
and to, and there shall be excluded from the sale, conveyance, assignment or
transfer to Purchaser or Purchaser Subsidiary hereunder, and the Acquired
Assets shall not include, the following assets (collectively, the "Excluded
Assets"):
(i) all rights of Seller under this Agreement, the Ancillary
Agreements and any other agreements, instruments and certificates
delivered in connection with this Agreement;
(ii) all rights, claims, demands and judgments relating to the
Excluded Liabilities;
(iii) the Tax Claims and prepayments for Taxes;
(iv) all rights to the name and mark "Milacron", "Cincinnati
Milacron", "CAMAC" or any variations, abbreviations or acronyms thereof;
(v) the assets identified in Schedule 1.2(b)(v);
(vi) all Know-how and Intellectual Property of Seller not primarily
related to, arising primarily out of or used primarily in connection
with the Transferred Business;
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(vii) all Contracts of Seller that are not Acquired Contracts;
(viii) the Excluded Plan Assets;
(ix) the Excluded Books and Records;
(x) all cash and cash equivalents of Seller generated or earned in
connection with the Transferred Business;
(xi) the Excluded Inventory; and
(xii) all accounts receivable of the Division.
SECTION 1.3. Assumption of Certain Liabilities. (a) Upon the
terms and subject to the conditions of this Agreement, at the Closing,
Purchaser agrees to assume, pay, perform and discharge when due (or to cause
Purchaser Subsidiary to assume, pay, perform and discharge when due), all
liabilities or obligations whatsoever, other than Excluded Liabilities, that
are primarily related to, arose primarily out of or used primarily in
connection with the Transferred Business, whether arising before or after the
Closing and whether known or unknown, fixed or contingent (the "Assumed
Liabilities"), including all of the liabilities and obligations listed below
(each of which are deemed to relate primarily to the Transferred Business):
(i) all obligations and liabilities due to be performed or paid
after the Closing Date under Acquired Contracts;
(ii) all obligations and liabilities of Seller of the type
reflected on the line items of the Projected Balance Sheet except for
obligations and liabilities which have been satisfied, cancelled or
otherwise transferred in the ordinary course of business of the Division
from the date hereof to the Closing Date;
(iii) all obligations or liabilities with respect to product
liability claims (including claims for death, personal injury or
property damage) with respect to products shipped or services provided
by Purchaser after the Closing in connection with the Transferred
Business, including any liability for incidental or consequential
damages relating thereto.
(iv) subject to the provisions of Section 8.3, all obligations and
liabilities arising as a result of Seller, or any predecessor in
interest thereof, being the owner or occupant of, or the operator of the
activities conducted at, the Owned Property at any time, including all
obligations and liabilities relating to personal injury, property
damage, the environment and waste disposal, including off-site waste
disposal;
(v) all obligations and liabilities relating to deferred vacation
associated with or relating to any Acquired Employee;
(vi) all obligations and liabilities relating to post-retirement
medical benefits associated with or relating to any Acquired Employee
except for any Acquired Employees who on the Closing Date is age 55 or
older and has 10 or more years of service to Seller in accordance with
the terms of Seller's post-retirement medical benefit plan.
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(vii) all obligations and liabilities with respect to all actions,
suits, proceedings, disputes, claims or investigations that are
primarily related to or arise primarily out of or in connection with the
Transferred Business, the Acquired Assets or the Transferred Employees,
at law, in equity or otherwise; and
(viii) the Real Property Tax Liabilities.
(b) Notwithstanding anything herein to the contrary, the
following liabilities and obligations of Seller (the "Excluded Liabilities")
shall not be assumed by Purchaser or Purchaser Subsidiary hereunder, and shall
not constitute "Assumed Liabilities":
(i) any obligation or liability which is primarily attributable to
any of the Excluded Assets, or primarily associated with the realization
of the benefits of any of the Excluded Assets;
(ii) the Excluded Tax Liabilities;
(iii) all liabilities and obligations for which Seller has expressly
assumed or retained responsibility pursuant to this Agreement;
(iv) all obligations or liabilities associated with or relating to
any post-retirement medical and welfare benefits associated with or
relating to any Retiree and for any Transferred Employee who on the
Closing Date is age 55 or older and has 10 or more years of service to
Seller in accordance with the terms of Seller's post-retirement medical
and welfare plans;
(v) all obligations or liabilities under Seller's Defined Benefit
Plan and, except to the extent provided in Section 5.6, Seller's Defined
Contribution Plan;
(vi) all obligations or liabilities with respect to all warranty
claims in connection with products shipped or services provided by
Seller before the Closing in connection with the Transferred Business,
including any liability for incidental or consequential damages relating
thereto;
(vii) all obligations or liabilities with respect to all product
liability claims, actions, suits, proceedings, disputes or
investigations (including claims for death, personal injury or property
damage) with respect to products shipped or services provided by Seller
before the Closing in connection with the Transferred Business,
including any liability for incidental or consequential damages relating
thereto, including any such obligations or liabilities relating to
Earnestine Smith v. Cincinnati Milacron Inc., et. al.;
(viii) all intercompany and intersegment accounts payable and
intercompany and intersegment accruals from the Division as of the
Closing Date;
(ix) all obligations and liabilities with respect to payroll
obligations of the Seller to Transferred Employees that have accrued
prior to the Closing in connection with the Transferred Business and all
associated withholding obligations or liabilities including withholding
obligations under any of Seller's Benefit Plans.
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(x) all obligations and liabilities of Seller with respect to
(i) all claims, actions, suits, proceedings, disputes or investigations
based on employment practices of Seller prior to the Closing (x) which
are brought pursuant to affirmative action laws or (y) with respect to
which Seller's compliance with all affirmative action laws up to the
Closing Date would constitute a defense and (ii) all claims by employees
of the Division who were terminated by Milacron prior to the Closing
Date, including any such obligations or liabilities relating to
Richard A. Seeger v. Cincinnati Milacron Inc.
(xi) all obligations or liabilities with respect to any and all
claims, actions, suits, proceedings, disputes or investigations, whether
known or unknown, with respect to a violation or infringement of the
intellectual property rights of third parties in connection with
products shipped by Seller prior to the Closing Date, including the
claims (the "Hilpert and Hurco Claims") relating to the alleged
infringement by Hilpert Products and Hurco Products (each as defined in
the Electronics Controls Supply Agreement) of existing rights of B.
Hilpert and IMS Technology Inc. (the "Existing Hilpert and Hurco
Rights");
(xii) all obligations or liabilities relating to deferred
compensation, life insurance, severance and worker's compensation and
all costs and expenses incurred in providing medical, dental and welfare
benefits associated with any Transferred Employee prior to the Closing
Date;
(xiii) any obligation of the Seller to indemnify any Transferred
Employee by reason of the fact that such Person was a director, officer,
employee, or agent of Seller or was serving at the request of Seller as
a partner, trustee, director, officer, employee, or agent of another
entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such indemnification is pursuant to any
statute, charter document, bylaw, agreement or otherwise);
(xiv) all obligations and liabilities due to be performed or paid on
or before the Closing Date under the Acquired Contracts;
(xv) all obligations and liabilities arising as a result of Seller,
or any predecessor in interest thereof, being the owner, occupant of, or
operator of the activities conducted at, the Leased U.S. Property at any
time, including all obligations and liabilities relating to personal
injury, property damage, the environment and waste disposal, including
off-site waste disposal;
(xvi) all obligations and liabilities of Seller for breach or
failure to perform any of Seller's covenants, representations and
warranties, or agreements contained in, or made pursuant to, this
Agreement; and
(xvii) except as provided in this Agreement, all obligations and
liabilities relating to Seller's Benefit Plans.
SECTION 1.4. Purchase Price. In consideration of the sale,
assignment, transfer, conveyance and delivery to Purchaser or Purchaser
Subsidiary of the Acquired Assets, Purchaser shall pay to Seller in U.S.
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dollars the sum of $94,225,000 (less two days' interest on such amount at an
interest rate of 6.5%), subject to adjustment as provided in Section 1.5 (as
so adjusted, the "Purchase Price") on December 28, 1995, payable by wire
transfer of immediately available funds to an account or accounts designated
by Seller in a written notice (the "Account Designation Notice") delivered to
Purchaser at least two Business Days prior to such date. If Seller designates
more than one account in the Account Designation Notice, such notice shall
specify the portion of the Purchase Price to be paid to each such designated
account. Seller agrees to promptly return to Purchaser the amount paid on
December 28, 1995, with interest at a rate of 6.5% from December 30, 1995, if
the Closing does not occur.
SECTION 1.5. Purchase Price Adjustments. (a) A projected
schedule of certain types of assets and liabilities (the "Specified Assets and
Liabilities") of the Transferred Business as of the Closing Date is attached
as Schedule 1.5(a) hereto (the "Projected Balance Sheet"). The parties
acknowledge that the Projected Balance Sheet is attached to this Agreement
only for purposes of calculating the purchase price adjustment in accordance
with this Section 1.5, and except for such adjustment, neither party shall
have any liability to the other party for any variation between the Projected
Balance Sheet and the Closing Date Balance Sheet.
(b) Within 60 days following the Closing, Seller shall
(i) prepare, or cause to be prepared, and deliver to Purchaser the Closing
Date Balance Sheet, which shall set forth the Specified Assets and Liabilities
of the Transferred Business as of the Closing Date and shall be accompanied by
a certificate from Seller's independent outside auditors to the effect that
the Closing Date Balance Sheet was prepared in accordance with Schedule 1.5
hereto and (ii) calculate the Closing Date Net Asset Value, as derived from
the Closing Date Balance Sheet, and deliver such calculation to Purchaser.
(c) Purchaser and Purchaser's independent outside auditors shall,
within 60 days after the delivery by Seller of the Closing Date Balance Sheet
and Seller's calculation of the Closing Date Net Asset Value, complete their
review thereof. In the event that Purchaser and Purchaser's independent
outside auditors determine that the Closing Date Balance Sheet has not been
prepared on the basis set forth in and in accordance with Schedule 1.5,
Purchaser shall, on or before the last day of such 60-day period, so inform
Seller in writing (the "Purchaser's Objection"), setting forth a specific
description of the basis of Purchaser's Objection and the adjustments to the
Closing Date Net Asset Value and the corresponding adjustments to the Closing
Date Balance Sheet which Purchaser believes should be made accompanied by a
certificate of Purchaser's accountants to the effect that the Closing Date
Balance Sheet submitted to Purchaser by Seller was not prepared in accordance
with Schedule 1.5 hereto and that adjusting the Closing Date Balance Sheet in
the manner described in Purchaser's Objection will result in the Closing Date
Balance Sheet having been prepared in accordance with Schedule 1.5 hereto. If
no Purchaser's Objection is received by Seller on or before the last day of
such 60-day period, then the Closing Date Net Asset Value set forth on the
Closing Date Balance Sheet delivered by Seller shall be final. Seller shall
have 30 days from its receipt of Purchaser's Objection to review and respond
to Purchaser's Objection.
If Seller and Purchaser are unable to resolve all of their
disagreements with respect to the proposed adjustments set forth in
Purchaser's Objection within 20 days following the completion of Seller's
review of Purchaser's Objection, they shall refer any dispute as to whether
the Closing Date Balance Sheet was prepared in accordance with Schedule 1.5 to
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the CPA Firm, who shall, acting as experts and not as arbitrators, determine
on the basis set forth in and in accordance with Schedule 1.5, and only with
respect to the remaining differences so submitted, whether and to what extent,
if any, the Closing Date Balance Sheet and the Closing Date Net Asset Value
require adjustment. Purchaser and Seller shall instruct the CPA Firm to
deliver its written determination to Purchaser and Seller no later than the
thirtieth day after the remaining differences underlying Purchaser's Objection
are referred to the CPA Firm. The CPA Firm's determination shall be
conclusive and binding upon Purchaser and Seller. The fees and disbursements
of the CPA Firm shall be borne equally by Purchaser and Seller. Purchaser and
Seller shall make readily available to the CPA Firm all relevant books and
records and any work papers (including those of the parties' respective
accountants) relating to the Closing Date Balance Sheet and all other items
reasonably requested by the CPA Firm. The scope of the disputes to be
resolved by the CPA Firm is limited to whether the Closing Date Balance Sheet
was prepared in accordance with Schedule 1.5
(d) Purchaser shall, and shall cause its Subsidiaries to, provide
to Seller and its accountants (i) all data and financial statements reasonably
requested by Seller and (ii) full access to the books and records of the
Transferred Business and to any other information, including work papers of
its accountants, and to any employees in each case to the extent reasonably
requested by Seller in connection with the preparation of the Closing Date
Balance Sheet and any adjustments thereto.
(e) The "Purchase Price Adjustment Amount" shall be equal to
(x) the Base Net Asset Value minus (y) the Closing Date Net Asset Value. If
the Purchase Price Adjustment Amount is a negative number, then the Purchase
Price shall be increased by the absolute value of the Purchase Price
Adjustment Amount and Purchaser shall, promptly (and in any event within five
business days) after the final determination of the Closing Date Net Asset
Value, pay to Seller the Purchase Price Adjustment Amount plus interest from
the Closing Date at a rate of 6.5% in U.S. dollars by wire transfer of
immediately available funds to an account designated by Seller. If the
Purchase Price Adjustment Amount is a positive number, then the Purchase Price
shall be decreased by the Purchase Price Adjustment Amount and Seller shall,
promptly (and in any event within five business days) after the final
determination of the Closing Date Net Asset Value, pay to Purchaser the
Purchase Price Adjustment Amount plus interest from the Closing Date at a rate
of 6.5% in U.S. dollars by wire transfer of immediately available funds to an
account designated by Purchaser.
SECTION 1.6. Allocation of Purchase Price. (a) Purchaser and
Seller shall agree prior to the Closing Date on estimated allocations of the
Purchase Price to the extent necessary to permit the making of timely Transfer
Tax filings.
(b) Purchaser shall promptly engage at its expense an appraiser
(the "Appraiser") of national standing that is reasonably acceptable to
Seller. Purchaser shall direct the Appraiser to appraise the Acquired Assets
and to deliver a report of such appraisal (the "Report") to Purchaser and
Seller no later than 180 days after the Closing Date. Seller and Purchaser
shall jointly determine the allocation of the Purchase Price to the Acquired
Assets for tax purposes in accordance with the Report (unless the Report is
manifestly incorrect, in which case Purchaser shall engage another appraiser),
which allocation shall be adjusted from time to time to reflect any adjustment
to the Purchase Price for tax purposes. Purchaser and Seller shall file and
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cause to be filed all Returns, and execute such other documents as may be
required by any taxing authority, in a manner consistent with such allocation
as revised from time to time. Seller and Purchaser shall jointly prepare
Form 8594 under Section 1060 of the Code relating to the transactions
contemplated by this Agreement based on such allocation. Purchaser and Seller
shall file, or cause the filing of, such form with each relevant taxing
authority, and refrain, and cause their Subsidiaries to refrain, from taking
any position inconsistent with such allocation as revised from time to time
with any taxing authority unless required by applicable law.
SECTION 1.7. Power of Attorney, etc. (a) Effective on the
Closing Date, Seller hereby constitutes and appoints Purchaser and Purchaser
Subsidiary and their successors, legal representatives and assigns the true
and lawful attorneys of Seller with full power of substitution, in the name of
Seller or Purchaser, but on behalf of and for the benefit of Purchaser,
Purchaser Subsidiary and their successors, legal representatives and assigns,
and at the expense of Purchaser: (i) to demand and receive from time to time
any and all the Acquired Assets and to make endorsements and give receipts and
releases for and in respect of the same and any part thereof; (ii) to
institute, prosecute, compromise and settle any and all proceedings at law, in
equity or otherwise that Purchaser, Purchaser Subsidiary and their successors,
legal representatives or assigns may deem proper in order to collect, assert
or enforce any claim, right or title of any kind in or to the Acquired Assets;
(iii) to defend or compromise any or all actions, suits or proceedings in
respect of any of the Acquired Assets; and (iv) to do all such acts and things
in relation to the matters set forth in the preceding clauses (i) through
(iii) as Purchaser, Purchaser Subsidiary and their successors, legal
representatives or assigns shall deem desirable. Seller hereby agrees that
the appointment hereby made and the powers hereby granted are coupled with an
interest and are and shall be irrevocable by it in any manner or for any
reason. Seller shall deliver to Purchaser at Closing an acknowledged power of
attorney to the foregoing effect executed by Seller and any affiliate selling
any of the Acquired Assets.
(b) Effective upon the Closing Date, Purchaser and Purchaser
Subsidiary shall have the right to receive and open all mail, packages and
other communications which relate primarily to the Transferred Business
addressed to Seller or any of its affiliates and Seller agrees promptly to
deliver to Purchaser any such mail, packages or other communications received
directly or indirectly by Seller or any of its affiliates. Purchaser and
Purchaser Subsidiary shall have the right and authority to collect, for their
own account, all receivables and other items which shall be transferred or are
intended to be transferred to Purchaser or Purchaser Subsidiary as provided in
this Agreement, and to endorse with the name of Seller any checks or drafts
received on account of any such receivables or other items, and Seller shall
promptly transfer or deliver to Purchaser or Purchaser Subsidiary any cash or
other property received directly or indirectly by Seller or its affiliates in
respect of such receivables and other items. Purchaser or Purchaser
Subsidiary shall promptly deliver to Seller all mail, packages and other
communications received by it which relate to Seller or its affiliates but do
not relate exclusively to the Transferred Business. Seller and its affiliates
shall promptly deliver to Purchaser or Purchaser Subsidiary all mail, packages
and other communications received by any of them which relate to the
Transferred Business but do not relate to any of them.
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ARTICLE II
The Closing
SECTION 2.1. Closing. Subject to the following sentence, the
closing of the sale and transfer of the Acquired Assets and the other
transactions contemplated hereby (herein referred to as the "Closing") shall
take place at the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825
Eighth Avenue, New York, New York 10019, on December 30, 1995 or thereafter as
soon as practicable following the satisfaction or waiver of the conditions set
forth in Section 6, or at such other time, date and place as shall be fixed by
agreement between the parties hereto.
SECTION 2.2. Transactions To Be Effected at the Closing. At the
Closing:
(a) Seller shall deliver to Purchaser or Purchaser Subsidiary
(i) such appropriately executed limited recordable warranty deeds, bills
of sale, assignments, affidavits reasonably requested by the title
insurer of the Owned Property (modified as reasonably requested by
Seller) and other instruments of transfer relating to the Acquired
Assets in form and substance reasonably satisfactory to Seller and
Purchaser and their counsels, (ii) a duly executed assignment and
assumption agreement in appropriate form, (iii) any construction plans
and specifications in the possession of Seller relating to the
construction of any improvements on the Owned Property or the Leased
U.S. Property, (iv) originals (or copies, if such originals are not in
Seller's possession) of all building permits, licenses, certificates of
occupancy and franchises in the possession of Seller relating to the
Owned Property or Leased U.S. Property and (v) such other documents as
Purchaser or its counsel may reasonably request to demonstrate
satisfaction or waiver of the conditions and compliance with the
agreements set forth in this Agreement (it being understood with respect
to (i), (ii) and (v) above, that Seller shall not be required to make
any representations, warranties or covenants, express or implied, not
contemplated by this Agreement); and
(b) Purchaser shall deliver to Seller, or shall cause to be
delivered to Seller (i) a duly executed assignment and assumption
agreement in appropriate form and (ii) such other documents as Seller or
its counsel may reasonably request to demonstrate satisfaction or waiver
of the conditions and compliance with the agreements set forth in this
Agreement (it being understood that with respect to (i) and (ii) above,
that Purchaser shall not be required to make any representations,
warranties or covenants, express or implied, not contemplated by this
Agreement).
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties of Seller. Seller
hereby represents and warrants to Purchaser as follows:
(a) Organization, Standing and Power. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
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jurisdiction in which it is incorporated and has the requisite corporate power
and authority to own the Acquired Assets owned by it and to lease the Acquired
Assets leased by it and to carry on the operations of the Transferred Business
as now being conducted by it. Seller has heretofore delivered to Purchaser
true and complete copies of its certificate of incorporation and By-laws, as
amended through the date of this Agreement.
(b) Authority. Seller has all corporate power and authority to
execute each of this Agreement and the Ancillary Agreements to which it is a
party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Seller, and the execution and delivery of the
Ancillary Agreements to which it is a party and the consummation of the
transactions contemplated thereby will be authorized by all necessary
corporate action on the part of Seller prior to the Closing, and do not and
will not require the approval of the stockholders of Seller. This Agreement
has been duly executed and delivered by Seller and constitutes, and each
Ancillary Agreement to which it is a party when duly executed and delivered by
Seller will constitute, legal, valid and binding obligations of Seller
enforceable against it in accordance with their terms except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and except that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding therefor may be
brought. The execution and delivery of this Agreement do not, and of the
Ancillary Agreements to which it is a party will not, and the consummation of
the transactions contemplated hereby and thereby and the compliance with the
terms hereof and thereof will not, (i) violate any law, judgment, order,
decree, statute, ordinance, rule and regulation applicable to Seller,
(ii) conflict with any provision of Seller's certificate of incorporation or
By-laws, (iii) except as set forth on Schedule 3.1(b), conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, any
agreement, contract, lease, license, instrument, or other arrangement to which
the Seller is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any lien (other than a Permitted Lien)
upon any of its assets), except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation, or lien would
not have a material adverse effect on the business, financial condition or
results of operations of the Transferred Business or on the ability of the
parties hereby to consummate the transactions contemplated by this Agreement
or (iv) require any material consent, approval, order or authorization of, or
the registration, declaration or filing with, any Governmental Entity or any
other Person, except (A) for the filing of a premerger notification report by
Seller under the HSR Act, (B) for compliance with and filings under
Section 13(a) of the Exchange Act and (C) as otherwise set forth on
Schedule 3.1(b).
(c) Financial Statements. The balance sheet dated as of
December 31, 1994 (the "Balance Sheet") and the statements of earnings
(excluding the effect of capitalized software) and cash flows for the year
ended December 31, 1994, which are attached as Schedule 3.1(c) hereto, present
the financial condition and results of operations of the Division as of
December 31, 1994, and for the year then ended, in accordance with the
policies and procedures employed by Seller in accounting for the assets and
liabilities and earnings from operations of its divisions. Such financial
statements have been prepared from the books and records of Seller relating to
the Division.
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(d) Compliance with Applicable Laws. For the last three years,
Seller has complied, and is currently in compliance, in all material respects
with all laws, regulations, rules and orders of all Governmental Entities
applicable to it which relate to the Transferred Business. Except as set
forth in Schedule 3.1(d), Seller has not received any written notice of any
such failure to so comply, and to the knowledge of Seller, there are no
circumstances that may give rise to such noncompliance. Seller has not
received any written notice that any investigation or review by any
Governmental Entity with respect to the Transferred Business is pending or
that any such investigation or review is contemplated. This paragraph (d)
does not relate to Environmental Laws for which Section 8.3 is exclusively
applicable.
(e) Litigation; Decrees. Schedule 3.1(e) sets forth a list of
all law suits, actions and proceedings pending with respect to the Transferred
Business and all judgments, orders, decrees and injunctions against the Seller
related to the Transferred Business. Except as set forth in Schedule 3.1(e),
to the knowledge of Seller, there is no basis for any suit, action or
proceeding relating to the Acquired Assets or the Transferred Business that
would in Seller's reasonable judgment be expected to have (i) a substantial
likelihood of success if brought and (ii) a material adverse effect on the
business, financial condition or results of operations of the Transferred
Business. Except as set forth on Schedule 3.1(e), to the knowledge of Seller,
there is no suit, action, or proceeding threatened against Seller relating to
the Transferred Business or the transactions contemplated hereby. Seller is
not in default under any material judgment, order, injunction, rule, or decree
of any Governmental Entity or arbitrator relating to the Transferred Business.
(f) Title to Acquired Assets. Seller has good, valid and
marketable title to all the Acquired Assets free and clear of all Liens,
except for (i) Liens disclosed in Schedule 3.1(f) or on the Balance Sheet or
in the notes thereto and (ii) (A) mechanics', carriers', workmen's,
repairmen's, and other like Liens arising or incurred in the ordinary course
of business, (B) Liens for Taxes, assessments and other governmental charges
that are not yet due and payable or that may thereafter be paid without
penalty, or that are being contested in good faith by appropriate proceedings
(which contested Taxes, assessments and other governmental charges are set
forth in Schedule 3.1(f)), (C) assets subject to lien retention agreements
entered into in the ordinary course of business and (D) imperfections of title
and other encumbrances that are not substantial in character or amount and do
not, except in immaterial respects, detract from, or interfere with the use
of, the Acquired Assets in the Transferred Business as presently conducted
(the Liens described in clauses (i) and (ii) being herein referred to as
"Permitted Liens"). To the knowledge of Seller, there are no Liens on the
Acquired Assets which would in Seller's reasonable judgement be expected to
have a material adverse effect on the business, financial condition or results
of operations of the Transferred Business. This paragraph (f) does not relate
to real property, interests in real property or leasehold interests (except
that the defined term "Permitted Liens" shall be applicable to paragraph (g)
of this Section 3.1 to the extent provided therein).
(g) Real Property. Schedule 3.1(g)(1) sets forth a complete list
of all real property and interests in real property directly or indirectly
owned in fee by Seller that primarily relate to or are used primarily in
connection with the Transferred Business (each, an "Owned Property").
Schedule 3.1(g)(2) sets forth a complete list of all real property and
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interests in real property leased by Seller that primarily relate to or are
used primarily in connection with the Transferred Business (each, a "Leased
U.S. Property"). Seller has good and marketable fee title, to all Owned
Property free and clear of all Liens other than (A) Permitted Liens,
(B) easements, covenants, rights-of-way, and other encumbrances or
restrictions of record, (C) zoning, building and other similar restrictions
and (D) unrecorded easements, covenants, rights-of-way or other restrictions,
none of which items set forth in clauses (A) through (D) above, individually
or in the aggregate, materially impair the continued use and operation of the
Owned Property in the Transferred Business as presently conducted. Seller is
the lessee of all the Leased U.S. Property and is in possession of the
premises purported to be leased thereunder, and each such lease is valid
without any material default thereunder by Seller or, to Seller's knowledge,
by the lessor.
(h) [intentionally omitted]
(i) Intellectual Property and Know-how. To the knowledge of
Seller, the Division has not interfered with, infringed upon, misappropriated,
or violated any material Intellectual Property or Know How rights of third
parties in any material respect, and, except as identified on
Schedule 3.1(i)(1), Seller has not received any written charge, complaint,
claim, demand, or notice alleging any such interference, infringement,
misappropriation, or violation or any claim that the Division must license or
refrain from using any such intellectual property rights of any third party.
Schedule 3.1(i)(1) sets forth a complete list of all Acquired Intellectual
Property. To the extent that registrations, filings, and issuances are
indicated on Schedule 3.1(i)(1), such Intellectual Property has been duly
registered in, filed in or issued by the United States Copyright office or the
United States Patent and Trademark Office, the appropriate offices in the
various states of the United States and the appropriate offices of such other
jurisdictions indicated on Schedule 3.1(i)(1). Except as set forth on
Schedule 3.1(i)(1), Seller is the sole and exclusive owner of all of the
Acquired Intellectual Property. Except as set forth on Schedule 3.1(i)(1),
Seller has not granted any licenses or other rights in, and Seller has no
obligation to grant licenses or other rights in, any of the Acquired
Intellectual Property or in the Know-how owned by Seller that is material to
the Transferred Business (the "Material Know-how"), in each case that is
included in the Acquired Assets, to any other Person. Seller has not made any
claim of a violation or infringement by others of its rights in the Acquired
Intellectual Property or the Material Know-how and, to the knowledge of
Seller, there is not currently any such violation or infringement. Except as
set forth on Schedule 3.1(i)(1), there are no interferences or other contested
proceedings, either pending or, to the knowledge of Seller, threatened, in the
United States Copyright Office, the United States Patent and Trademark Office
or any Federal, state or local court or before any other governmental agency
or tribunal, relating to any Acquired Intellectual Property or any pending
application with respect thereto.
(j) Insurance. All of the material properties and businesses
constituting any part of the Acquired Assets are insured for Seller's benefit,
and will be so insured until the Closing, in amounts and against risks
consistent with recent past practice. All such policies are in full force and
effect.
(k) Contracts. Schedule 3.1(k)(1) sets forth each Contract to
which Seller is a party or by which it is bound that relates primarily to the
Transferred Business except for such Contracts involving amounts of less than
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$150,000. Except for the Contracts listed in Schedule 3.1(k)(1), 3.1(g)(2) or
3.1(k)(2), Seller is not, in the case of Contracts that relate primarily to
the Transferred Business, a party to any:
(i) Contract for or relating to the employment of any officer or
employee or with any labor union;
(ii) Contract which will not be discharged at or prior to the
Closing relating to the borrowing or lending of money or the guarantee
of any obligations for borrowed money or otherwise, excluding
endorsements made for purposes of collection in the ordinary course of
business;
(iii) Contract granting to any person a preferential right to
purchase any of the Acquired Assets (other than sales of Inventory in
the ordinary course of business);
(iv) Contract with respect to the discharge, transportation,
removal or storage of effluent, wastes, pollutants or hazardous
substances;
(v) Contract for the lease of any land, buildings or equipment;
(vi) Contract evidencing any material lien, charge, security
interest or encumbrance on the Acquired Assets, other than Permitted
Liens;
(vii) Contract or subcontract with the United States government in
excess of $500,000; or
(viii) Contract relating to joint ventures, distribution or sales
representative arrangements, non-competition arrangements or
confidentiality arrangements.
True, complete and correct copies of all the Contracts listed on
Schedules 3.1(k)(1) and 3.1(k)(2) have been made available to Purchaser.
Except as disclosed on Schedules 3.1(k)(1), 3.1(g)(2) and 3.1(k)(2), each of
the Material Contracts is valid, binding and enforceable in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting creditors'
rights generally from time to time in effect and to general equitable
principles, and is in full force and effect, and neither Seller nor, to the
knowledge of Seller, any other party thereto is in default or breach in any
material respect under the terms of any such Material Contract, nor, to the
knowledge of Seller, has any event or circumstance occurred that, with notice
or lapse of time or both, would constitute a material event of default
thereunder. Except as disclosed on Schedules 3.1(k)(1), 3.1(g)(2) and
3.1(k)(2), Seller has not received any notice of termination or cancellation
of any Material Contract and, to the knowledge of Seller, there are no
material unresolved disputes in connection with any Material Contracts.
(l) Absence of Certain Changes or Events. Except as set forth in
the Schedules hereto, from December 31, 1994 to the date hereof, Seller has
conducted the Transferred Business in the ordinary course consistent in all
material respects with recent past practice, and there has not been any
material adverse change in the business, assets, liabilities, financial
condition or results of operations, other than changes relating to the economy
in general or changes relating to the Machines industry in general.
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(m) Taxes. Except as set forth in Schedule 3.1(m)(1), Seller has
timely filed, after giving effect to any applicable extensions, all Returns
relating to any Taxes attributable to the Transferred Business required to be
filed by it. Except for Taxes set forth on Schedule 3.1(m)(2), which are
being contested in good faith and by appropriate proceedings, and except for
Taxes which in the aggregate are not material, all Taxes attributable to the
Transferred Business shown to be due on such Returns have been timely paid.
Except as set forth in Schedule 3.1(m)(3), no taxing authority is asserting
any deficiency against Seller with respect to material Taxes attributable to
the Transferred Business.
(n) Employee Benefit Plans. Schedule 3.1(n) contains a list and
brief description of each "employee pension benefit plan" (as defined in
Section 3(2) of ERISA), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA), stock option, stock purchase, deferred compensation
plan or arrangement, and other employee fringe benefit plan or arrangement
maintained or contributed to by Seller for the benefit of any Transferred
Employees (all the foregoing being herein called "Benefit Plans"). Seller has
delivered to Purchaser true, complete and correct copies of (1) each Benefit
Plan (and, in the case of any unwritten Benefit Plans, descriptions thereof)
and (2) the most recent summary plan description for each Benefit Plan (if any
such description was required).
(o) Books and Records. The Books and Records have been regularly
kept and maintained in accordance with the regular practices of Seller.
(p) Employees. Except as set forth in Schedule 3.1(p), to
Seller's knowledge, no executive, key employee or significant group of
employees has expressed his, her or their clear intention to terminate his,
her or their employment with the Transferred Business within the next twelve
months. As of the date hereof, except as set forth in Schedule 3.1(p) hereto,
no Transferred Employee has notified the Seller in writing of his intention to
terminate employment with the Division and no termination notice has been
given to any Transferred Employee. The Division is not a party to or bound by
any collective bargaining agreement, nor has it experienced any strikes,
grievances, claims of unfair labor practices, or other collective bargaining
disputes. To the knowledge of Seller, the Division has not committed any
unfair labor practice. To the knowledge of Seller, there is no organizational
effort presently made or threatened by or on behalf of any labor union with
respect to employees of the Division.
(q) Permits. The Acquired Permits include all governmental
licenses, approvals, permits and authorizations currently required for the
ownership or operation of the Acquired Assets or the Transferred Business as
now being conducted, the failure to obtain which would have a material adverse
effect on the Acquired Assets or the Transferred Business. All such
governmental licenses and permits are valid and in full force and effect;
Seller has not received any written notice that any appropriate authority has
revoked, suspended or terminated, or intends to revoke, suspend or terminate,
any of such governmental licenses and permits, and all such governmental
licenses and permits are held in the name of Seller or a subsidiary thereof.
(r) Fees. Except for CS First Boston Corporation, whose fees
will be paid by Seller, there is no investment banker, broker, finder,
financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of Seller who might be entitled to any fee or
commission from Seller in connection with the transactions contemplated by
this Agreement.
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(s) Acquired Assets. Except as stated herein, the Acquired
Assets transferred by Seller on the Closing Date to Purchaser (including
without limitation the Acquired Contracts, Acquired Permits, Acquired
Intellectual Property and Acquired Know-How) shall be sufficient to operate
the Transferred Business in all material respects as it is currently being
conducted.
(t) No Undisclosed Material Liabilities. To the knowledge of
Seller, there are no liabilities of the Transferred Business of any kind other
than (i) liabilities provided for in the Balance Sheet, (ii) liabilities
disclosed in the Schedules hereto, including Schedule 3.1(t),
(iii) liabilities incurred in the ordinary course of the Transferred Business
since December 31, 1994, and (iv) other liabilities which, individually or in
the aggregate, are not material to the Transferred Business.
(u) Seller's Defined Contribution Plan. Seller's Defined
Contribution Plan complies in form and in operation in all material respects
with the applicable requirements of ERISA, the Code, and any other applicable
laws. All reports and descriptions (including Form 5500 Annual Reports and
summary plan descriptions) required to be filed or distributed as of the date
hereof, have been filed and appropriately distributed with respect to Seller's
Defined Contribution Plan. All contributions (including all employer
contributions and employee contributions) which are due prior to the date
hereof have been paid to Seller's Defined Contribution Plan, and all
contributions for any period on or before the Closing Date will be paid to
Seller's Defined Contribution Plan prior to the date of the transfer of assets
as described in Section 5.6. Seller has received and provided to Purchaser a
favorable determination letter from the Internal Revenue Service on the
qualification of Seller's Defined Contribution Plan. To Seller's knowledge,
there have been no "prohibited transactions" (as defined in the Code) with
respect to Seller's Defined Contribution Plan with respect to which Seller
could be liable in any material amount. No action, suit, proceeding, hearing
or investigation with respect to the administration or investment of the
assets of Seller's Defined Contribution Plan is, to Seller's knowledge,
pending or threatened, and Seller has no knowledge of any basis for such an
action, suit, proceeding, hearing or investigation. If any provision in
Seller's Defined Contribution Plan requires an individual to be employed on
the last day of any period (for example, but not limited to, the last day of
any plan year or the last day of any quarter) as a condition for receiving any
type of employer contribution to Seller's Defined Contribution Plan for that
period, any Acquired Employee who was a participant in Seller's Defined
Contribution Plan on the day prior to the Closing Date shall be deemed to be
employed on the last day of such period and shall receive such employer
contribution(s) for the period which includes the Closing Date. To the extent
necessary, Seller shall amend Seller's Defined Contribution Plan to ensure
compliance with the preceding sentence.
(v) No Other Representations. Except for the representations and
warranties expressly set forth in this Agreement and the Ancillary Agreements,
neither Seller nor any other Person makes any express or implied
representation or warranty on behalf of Seller.
SECTION 3.2. Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to Seller as follows:
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(a) Organization, Standing and Power. Each of Purchaser and
Purchaser Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated
and has the requisite corporate power and authority to carry on its business
as now being conducted.
(b) Authority. Each of Purchaser and Purchaser Subsidiary has
all corporate power and authority to execute this Agreement and the Ancillary
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Purchaser and
Purchaser Subsidiary, and the execution and delivery of the Ancillary
Agreements to which Purchaser or Purchaser Subsidiary is a party and the
consummation of the transactions contemplated thereby will be authorized by
all necessary corporate action on the part of Purchaser and Purchaser
Subsidiary prior to the Closing, and do not and will not require the approval
of the stockholders of Purchaser. This Agreement has been duly executed and
delivered by Purchaser and constitutes, and each Ancillary Agreement to which
Purchaser or Purchaser Subsidiary is a party when duly executed and delivered
by Purchaser or Purchaser Subsidiary will constitute, legal, valid and binding
obligations of each of Purchaser or Purchaser Subsidiary (as the case may be)
enforceable against it in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and except that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding therefor may be
brought. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and the compliance with
the terms hereof will not (i) violate any law, judgment, order, decree,
statute, ordinance, rule and regulation applicable to Purchaser or purchaser
Subsidiary, (ii) conflict with any provision of their respective certificates
of incorporation or By-laws, (iii) except as set forth on Schedule 3.2(b),
conflict with any material Contract to which any of them is a party or by
which it or any of its property is bound or (iv) require any material consent,
approval, order or authorization of, or the registration, declaration or
filing with, any Governmental Entity or any other Person, except (A) for the
filing of a premerger notification report by Purchaser under the HSR Act,
(B) for compliance with and filings under Section 13(a) of the Exchange Act
and (C) as otherwise set forth on Schedule 3.2(b).
(c) Fees. There is no investment banker, broker, finder,
financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of Purchaser who might be entitled to any fee or
commission from Purchaser in connection with the transactions contemplated by
this Agreement.
(d) Actions and Proceedings, etc. There are no (i) outstanding
judgement, orders, injunctions or decrees of any Governmental Entity or
arbitration tribunal against or affecting Purchaser, Purchaser Subsidiary or
any of their affiliates, (ii) lawsuits, actions or proceedings pending or, to
the knowledge of Purchaser, threatened against or affecting Purchaser,
Purchaser Subsidiary or any of their affiliates, or (iii) investigations by
any Governmental Entity which are, to the knowledge of Purchaser, pending or
threatened against or affecting Purchaser, Purchaser Subsidiary or any of
their affiliates, and which, in the case of each of clauses (i), (ii) and
(iii), have or could have a material adverse effect on the ability of
Purchaser or Purchaser Subsidiary to consummate the transactions contemplated
hereby.
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(e) No Other Representations. Except for the representations and
warranties expressly set forth in this Agreement and the Ancillary Agreements,
neither Purchaser nor any other Person makes any express or implied
representation or warranty on behalf of Purchaser or Purchaser Subsidiary.
ARTICLE IV
Covenants
SECTION 4.1. Conduct of Transferred Business. From and after the
date of this Agreement and until the Closing, except as expressly provided in
this Agreement or as Purchaser shall otherwise reasonably agree, Seller will
(i) conduct the Transferred Business (including the maintenance of inventory
levels) in the ordinary course of business consistent in all material respects
with recent past practice; (ii) maintain and repair the Acquired Assets in
substantially the same manner as they are currently maintained and repaired;
(iii) not harm the reputation or goodwill of the Transferred Business or the
condition of the Acquired Assets; (iv) use reasonable efforts to refrain from
taking or omitting to take any action in a manner that would render Seller's
representations and warranties under this Agreement inaccurate as of the
Closing or that would prevent the consummation of the transactions
contemplated hereby; (v) not grant any increases in direct or indirect
compensation to any Transferred Employee other than changes in compensation in
the ordinary course of business; not enter into any material transaction or
incur any material liability other than in the ordinary course of business;
(vi) not encumber or permit to be encumbered any of the Acquired Assets other
than with Permitted Liens or as set forth in clauses (B), (C) and (D) of
Section 3.1(g); (vii) not amend, alter or modify any material provision of any
of the Acquired Contracts other than in the ordinary course of business;
(viii) keep all insurance policies with respect to the Transferred Business in
effect, with all premiums paid to the Closing Date; (ix) use its reasonable
efforts to keep available the services of the Transferred Employees and
preserve the Transferred Business's relationships with suppliers, customers
and others having business dealings with the Transferred Business; and (x) not
sell, lease, license or otherwise dispose of any Acquired Assets except
(A) pursuant to existing contracts and commitments or (B) in the ordinary
course of business consistent in all material respects with recent past
practice. If at any time during such period Seller becomes aware of any
material adverse change in the business, assets, financial condition or
results of operations of the Transferred Business, Seller shall promptly
notify Purchaser with respect thereto.
SECTION 4.2. Access to Information. Seller shall afford to
Purchaser and its accountants, counsel and other representatives reasonable
access upon reasonable notice during normal business hours during the period
prior to the Closing to all the properties, books, contracts, commitments,
Returns and records of the Transferred Business, and, during such period shall
furnish promptly to Purchaser any information concerning the Transferred
Business as Purchaser may reasonably request.
SECTION 4.3. Confidentiality. (a) Each of Purchaser and Seller
shall hold in confidence and shall not disclose to any third party (other than
to its directors, officers, those employees who have a need to know and its
outside advisors), without the written consent of the other party, all
information disclosed with respect to the contemplated transaction relating to
the other party and the Transferred Business, including, without limitation,
information concerning the operation of the Transferred Business and related
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commercial, financial and technical data, whether disclosed orally or in
writing, including any summaries or analyses of such information prepared by
or for Purchaser. Purchaser or Seller's obligations in respect of
confidential information shall not apply to information which (i) becomes
generally available to the public other than as a result of disclosure by such
party, (ii) was known by such party prior to its disclosure hereunder,
(iii) is rightly received by such party from a third party free of any
confidentiality obligations, (iv) is required to be disclosed in connection
with the securing of any governmental approval necessary for the performance
by such party of its obligations hereunder, (v) is required to be disclosed
for the purpose of complying with governmental regulations or (vi) is
independently developed by such party's employees who do not have access to
such information.
(b) In the event of any termination of this Agreement, for a
period of seven years from such termination, each of Purchaser and Seller
(i) shall treat as confidential and shall not disclose or use, directly or
indirectly, for its benefit or otherwise, in any manner whatsoever, or permit
any of its affiliates or officers, directors, employees, representatives or
others under its control to disclose, or to use, any information concerning
the other party or the Transferred Business (in the case of the Purchaser)
unless such information is acquired or required to be disclosed as described
in (i) through (v) in clause (a) above and (ii) shall promptly return to the
other party (or destroy with a certificate of destruction) all written
information and documents received from such party, its accountants or counsel
in connection with the transactions contemplated by this Agreement, including
all copies thereof, and all analyses, memoranda, charts or other information
prepared by such party or any of its affiliates using any of such written
information and documents, including all copies thereof (including computer
disks or tapes or other storage media if applicable). The provisions of this
Section shall survive any termination of this Agreement.
SECTION 4.4. Legal Requirements. Each of Purchaser and Seller
will take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it or any of its Subsidiaries with
respect to the Closing (including the prompt filing of the premerger
notification report under the HSR Act and the furnishing of all information
required under the HSR Act) and will promptly cooperate with and furnish
information to each other and to other parties in connection with any such
legal requirements.
SECTION 4.5. Noncompetition. (a) Seller agrees that for a
period of five years from the Closing Date, neither it nor any of its
Subsidiaries shall engage, either directly or indirectly, as a principal or
for its own account or solely or jointly with others, or as stockholders in
any corporation or joint stock association, anywhere in the world, in the
business of manufacturing or selling to third parties any products
manufactured or sold by the Division on or prior to the Closing Date (other
than with respect to Electronic Controls assembled on Machines sold by
Seller); provided that nothing herein shall prohibit (i) the acquisition by
Seller or any of its Subsidiaries of a diversified company having not more
than (x) 10% of its sales (based on its latest published annual audited
financial statements) attributable to any business that competes with the
Transferred Business, or (y) $5,000,000 in annual sales to third parties, in
such competing business, (ii) the exercise of Seller's rights under the
Electronic Controls Supply Agreement, (iii) the sale by Seller of Excluded
Inventory to third parties and (iv) the sale by Seller to third parties of
service parts for products manufactured or sold by the Division.
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(b) It is the intention of the parties that if any of the
restrictions or covenants contained herein is held to cover a geographic area
or to be for a length of time which is not permitted by applicable law, or in
any way construed to be too broad or to any extent invalid, such provision
shall not be construed to be null, void and of no effect, but to the extent
such provision would be valid or enforceable under applicable law, a court of
competent jurisdiction shall construe and interpret or reform this Section 4.5
to provide for a covenant having the maximum enforceable geographic area, time
period and other provisions (not greater than those contained herein) as shall
be valid and enforceable under such applicable law. Seller acknowledges that
Purchaser would be irreparably harmed by any breach of this Section 4.5 and
that there would be no adequate remedy at law or in damages to compensate
Purchaser for any such breach.
SECTION 4.6. Agreement Regarding Non-Assignable Contracts. If
any Acquired Contract (i) is not assignable without the consent of any party
thereto, (ii) may by its terms be terminated or cancelled upon assignment or
(iii) is not by its terms assignable, Seller and Purchaser agree to use their
reasonable efforts to obtain the consent of any required parties thereto to
effect such assignment. If such assignment may not be so effected, each of
the parties agrees to cooperate with the other in any reasonable arrangement
designed to enable Seller to perform for the account of Purchaser its
obligations under, and to provide Purchaser the benefits of, and to cause
Purchaser to bear all the burdens and liabilities under, any such agreements,
including enforcement at the cost, and for the account of, Purchaser, of any
and all rights of Seller against the other party arising out of the breach or
cancellation thereof by such other party or otherwise.
SECTION 4.7. Transfer Taxes. Seller shall be responsible for the
payment of all Transfer Taxes, except that Purchaser shall be responsible to
the extent such Transfer Taxes are payable as a result of Purchaser's failure
to comply with this Section 4.7. Seller and Purchaser shall, and shall cause
their respective Subsidiaries to, cooperate in timely making and filing all
Returns as may be required to comply with the provisions of any Transfer Tax
laws. To the extent legally able to do so, Purchaser shall deliver to Seller
exemption certificates satisfactory in form and substance to Seller with
respect to Transfer Taxes if such delivery would reduce the amount of Transfer
Taxes that would otherwise be imposed.
SECTION 4.8. Use of Names. Except as set forth in Section 4.14,
Purchaser agrees that neither it nor any of its affiliates nor any of their
respective successors and assigns shall at any time use the names "Milacron",
"Cincinnati Milacron" or "CAMAC", or any variation thereof or combination that
includes either such name, or any Trade Names or Trademarks relating thereto,
or any acronym or abbreviation thereof (collectively, the "Seller's Names").
Within 60 days of the Closing Date, with respect to all Acquired Inventory
constituting Acquired Assets on which Seller's Names are marked, affixed or
otherwise used, Purchaser shall rename, obliterate or permanently sticker over
Seller's Names on Acquired Inventory or appropriately make or otherwise alter
or modify Acquired Inventory in accordance with the first sentence of this
Section 4.8.
SECTION 4.9. Insurance. From and after the Closing, Purchaser
shall secure insurance with respect to the Transferred Business covering
general liability and product liability in amounts consistent with its normal
and customary practice.
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SECTION 4.10. Financial Information. After the Closing, upon
reasonable written notice, Purchaser and Seller shall furnish or cause to be
furnished to each other and their respective accountants, counsel and other
representatives access, during normal business hours, to such information
(including records pertinent to the Transferred Business) and assistance
relating to the Transferred Business as is reasonably necessary for financial
reporting and accounting matters, the preparation and filing of any Returns or
other returns, reports or forms, or the defense of any Tax claim or assessment
and will provide the other party with such audited financial statements and
other financial information for past periods as such other party reasonably
deems necessary for compliance with disclosure requirements of the Securities
and Exchange Commission or under GAAP; provided, however, that the party
requesting such financial statements shall pay for the auditing of such
financial statements if such auditing is necessary solely by reason of such
party's request. In the case of Purchaser, such assistance shall include
cooperation in responding to audit reports made by taxing authorities to
Seller regarding the Transferred Business and, at Seller's request,
participation in audits of Seller relating to the Transferred Business.
Purchaser shall retain the books and records included in the Acquired Assets
for a period of seven years after the Closing. After the end of such seven-
year period, before disposing of such books or records, Seller may within 60
days prior to the end of such period, request upon written notice to Purchaser
to recover such books and records at Seller's cost and expense, whereupon
Purchaser shall allow Seller the opportunity to remove and retain all or any
part of such books or records as Seller may select at such time that such
books and records would otherwise be disposed of by Purchaser.
SECTION 4.11. Bulk Transfer Laws. Purchaser hereby waives
compliance by Seller with the provisions of any so-called "bulk transfer law"
of any jurisdiction in connection with the sale of the Acquired Assets to
Purchaser. Seller shall indemnify and hold harmless Purchaser against any and
all liabilities that may be asserted by third parties against Purchaser as a
result of noncompliance with any such bulk transfer law; provided, however,
that nothing herein shall prevent Seller from contesting any such liabilities
in good faith.
SECTION 4.12. Further Assurances; Cooperation after Closing.
(a) Seller will use its reasonable efforts to facilitate and effect the
implementation of the transfer of the Acquired Assets to Purchaser or
Purchaser Subsidiary and, for such purpose but without limitation, Seller
promptly will at and after the Closing execute and deliver to Purchaser such
assignments, deeds, bills of sale, consents and other instruments as Purchaser
or its counsel may reasonably request as necessary for such purpose.
(b) In the event that after the Closing, Seller becomes aware
that any Acquired Assets were not transferred to Purchaser or Purchaser
Subsidiary by Seller at the Closing, Seller shall promptly notify Purchaser to
that effect and shall reasonably cooperate with Purchaser to transfer such
Acquired Assets to Purchaser or Purchaser Subsidiary. In the event that after
the Closing, Purchaser becomes aware that any assets that are not Acquired
Assets were transferred to Purchaser or Purchaser Subsidiary at the Closing,
Purchaser shall promptly notify Seller to that effect and shall reasonably
cooperate with Seller to transfer such assets to Seller.
(c) In the event and for so long as any party hereto is
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with (i) any
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transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing
Date involving the Division, the other party will reasonably cooperate with
the contesting or defending party and its counsel in the contest or defense as
shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending party (unless the contesting
or defending Party is entitled to indemnification therefor under Article VIII
below).
SECTION 4.13. Certain Understandings. Purchaser acknowledges
that neither Seller, its Subsidiaries nor any other Person has made any
representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Transferred Business not
included in this Agreement or the Schedules hereto, and neither Seller, its
Subsidiaries nor any other Person will be subject to any liability to
Purchaser or any other person resulting from the distribution to Purchaser, or
Purchaser's use of, any such information. Purchaser acknowledges that, should
the Closing occur, Purchaser will acquire the Acquired Assets without any
representation or warranty as to merchantability or fitness for any particular
purpose, in an "as is" condition and on a "where is" basis, except as
otherwise expressly represented or warranted herein.
SECTION 4.14. Supplies. Purchaser shall not use stationery,
purchase order forms, signage, invoices, receipts, or advertising and
promotional materials, training and service literature and materials or other
similar materials that state or otherwise indicate thereon that the
Transferred Business or any part thereof is a division or unit of Seller,
except that Purchaser may use such materials in the ordinary course of the
Transferred Business for a period of 90 days after the Closing, provided that
such materials clearly indicate that the Transferred Business has been sold to
Purchaser and is independent of Seller.
SECTION 4.15. UK Agreement. Purchaser and Seller hereby
unconditionally and irrevocably guarantee the full performance of all the
obligations of Purchaser UK Subsidiary and Selling Subsidiary, respectively,
created under the UK Agreement.
SECTION 4.16. Supply Agreement. At the Closing, Purchaser and
Seller shall deliver the executed Electronic Controls Supply Agreement in the
form of Exhibit C hereto.
SECTION 4.17. License Agreements. At or prior to the Closing,
Purchaser and Seller shall execute and deliver the MCL License Agreement,
Controls License Agreement and Retrofit License Agreement in the forms of
Exhibits D, E and F hereto, respectively.
SECTION 4.18. Books and Records. Seller shall, upon written
notice and during normal business hours, furnish to Purchaser and its
representatives, access to the Excluded Books and Records, and Purchaser may,
with Seller's consent (which consent shall not be unreasonably withheld), make
photocopies thereof.
SECTION 4.19. Lockheed Contract. Seller shall reimburse
Purchaser for any settlement amount agreed to in connection with a contractual
dispute between Purchaser and Lockheed Corp. on the Lockheed Contract but only
to the extent such settlement amount exceeds $83,000, and then only to the
extent of such excess; provided, however, that if the settlement amount is
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greater than $100,000, Purchaser shall gain the consent of Seller, which
consent shall not be unreasonably withheld, in order to be reimbursed for any
settlement amount in excess of $100,000.
SECTION 4.20. Warranty Claims. Purchaser shall provide to
Seller, upon Seller's request, service for all products shipped by Seller
prior to the Closing which is required based on a warranty claim for such
product, and Seller shall pay Purchaser at Purchaser's direct cost (materials
and labor) for such services rendered.
SECTION 4.21. Environmental Matters. (a) Within one year from
the Closing Date, Seller shall at its expense remove the Storage Tank and
perform any remediation to obtain a no further action letter from the
appropriate Governmental Entity. Purchaser shall provide all necessary access
to the site during business hours to allow Seller and/or its subcontractors to
perform the removal of the Storage Tank.
(b) Seller shall take all necessary action to achieve the renewal
of the NPDES discharge permit of the Division and Purchaser and Seller shall
cooperate to effect a timely transfer of this permit.
(c) Purchaser shall not, and shall cause Purchaser UK Subsidiary
to not, undertake any investigation of environmental conditions or conduct any
testing of soil or subsurface conditions, including groundwater, at the Owned
Property or Scheduled Real Property (as "Scheduled Real Property" is defined
in the UK Agreement and the Owned Property and the Scheduled Real Property
hereinafter called the "Indemnified Property"), except (i) as required to do
so by a Governmental Entity, (ii) as part of a response to a spill or release
of a Hazardous Substance caused by Purchaser or Purchaser UK Subsidiary after
the Closing Date, (iii) in the ordinary course of Purchaser's or Purchaser UK
Subsidiary's environmental and industrial hygiene audits and reviews
consistent with Purchaser's or Purchaser UK Subsidiary's audit and review
programs, (iv) as requested by a bona-fide potential purchaser of the
Indemnified Property, or a portion thereof, from the Purchaser after the
Closing Date and (v) as based on Purchaser's or Purchaser UK Subsidiary's
reasonable good faith belief that there exists a violation of Environmental
Laws on such Indemnified Property; provided that, in the case of
Section 4.21(c)(v), any such investigation or testing shall be conducted in a
manner commensurate with such good faith reasonable belief.
(d) With respect to the excess levels of lead found in certain
sinks on the Owned Property which has been identified by Seller to the Ohio
Environmental Protection Agency (the "Sinks Issue"), Seller shall conduct the
appropriate study and remediate in a manner approved by the Ohio Environmental
Protection Agency. The costs of such study and the costs of such remediation
in excess of $20,000, shall be borne by Seller. Purchaser shall reimburse
Seller up to the first $20,000 of such remediation.
SECTION 4.22. Patent Claim. Seller shall use its reasonable
efforts to resolve the Hilpert and Hurco Claims expeditiously. Any settlement
of the Hilpert and Hurco Claims by Seller which has an effect on the operation
by Purchaser of the Transferred Business shall be in accordance with the
provisions of the Electronic Controls Supply Agreement. As long as such
settlement is in accordance with the provisions of the Electronic Controls
Supply Agreement, Purchaser shall not bear any liability with respect to
royalties payable under a license of the Existing Hilpert and Hurco Rights
except to the extent set forth in the Electronic Controls Supply Agreement
relating to the supply of Hilpert and Hurco Products thereunder.
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SECTION 4.23. Nonsolicitation of Employees. Purchaser and Seller
agree that they will not, without the consent of the other party, during the
five year period following the Closing Date solicit the employment of any of
the other party's employees while they are employed by such other party.
SECTION 4.24. Control Application Software. Seller agrees that
for a period of one year following the Closing Seller shall provide Purchaser
with reasonable access to Seller's control application software for its
machines as required to conduct the Transferred Business, subject to the
execution by the parties hereto of a confidentiality agreement relating
thereto that is reasonably acceptable to the parties hereto and subject to
Purchaser agreeing to use such software solely in the manufacture of
Electronic Controls for Seller.
SECTION 4.25. Permits. Seller shall take all reasonable efforts
to ensure that the Acquired Permits are promptly transferred to Purchaser
subject to applicable law.
ARTICLE V
Post-Closing Obligations to Certain Employees
SECTION 5.1. Offer of Employment. Purchaser shall offer
employment in comparable positions to all Transferred Employees on the Closing
Date or upon the return of any such Transferred Employee to active employment.
If and to the extent Purchaser does not offer to employ any Transferred
Employee, Purchaser shall indemnify and hold harmless Seller for any required
severance payments to such Transferred Employee. All Transferred Employees
who accept Purchaser's employment offer shall be referred to herein as
"Acquired Employees".
SECTION 5.2. Employee Benefits. As of the Closing Date, Acquired
Employees shall be eligible to participate in Purchaser's employee benefit
plans in the same manner and to the same extent as other similarly situated
employees of Purchaser; provided, however, Acquired Employees shall be given
credit for service earned as of the Closing Date with Seller or any of its
Subsidiaries (or service credited by Seller or any of its Subsidiaries) under
Seller's employee benefit plans for purposes of eligibility to participate in
Purchaser's employee benefit plans and for purposes of vesting in Purchaser's
401(k) Plan. Notwithstanding the foregoing, for a period of two years after
the Closing Date, Purchaser will provide (or cause its Subsidiaries to
provide) to each Acquired Employee severance pay and severance benefits which
are no less favorable than under the severance plan and current practice of
Seller as in effect on the date of this Agreement and shall credit such
Acquired Employees with their service with Seller or its Subsidiaries (or
service credited by Seller or any of its Subsidiaries) earned as of the
Closing Date for purposes of computation of severance benefits. Purchaser
shall cause to be waived any pre-existing condition limitations under its
welfare plans that might otherwise apply to an Acquired Employee. Purchaser
agrees to recognize (or cause its Subsidiaries to recognize) the dollar amount
of all expenses incurred by Acquired Employees during the calendar year 1995
for purposes of satisfying the 1995 calendar year deductibles and copayment
limitations under the relevant Benefit Plans.
SECTION 5.3. Defined Benefit Plan. (a) It is understood and
agreed that (i) Acquired Employees shall cease accruing benefits under
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Seller's Defined Benefit Plan as of the Closing Date and (ii) Seller shall not
transfer or cause to be transferred to any plan of Purchaser any assets or
liabilities under Seller's Defined Benefit Plan.
(b) As of the Closing Date, Seller shall fully vest (to the
extent not already vested) all Acquired Employees who have at least one year
of service in Seller's Defined Benefit Plan in their accrued benefit in
Seller's Defined Benefit Plan.
SECTION 5.4. Post-Retirement Benefits. Purchaser and its
Subsidiaries shall indemnify and hold harmless Seller against, any and all
liability for post-retirement medical benefits with respect to Acquired
Employees other than Acquired Employees who on the Closing Date are age 55 or
older and have 10 or more years of service to Seller.
SECTION 5.5. WARN Act. Purchaser agrees to provide any required
notice under the WARN Act, and any similar statute and otherwise comply with
any such statute with respect to any "plant closing" or "mass layoff", as
defined under the WARN Act, or similar event, affecting Transferred Employees
and occurring after the Closing Date. Purchaser shall indemnify and hold
harmless Seller with respect to any liability under the WARN Act or any
similar statute arising out of the actions of Purchaser or its Subsidiaries
after the Closing, and Seller shall indemnify and hold harmless Purchaser with
respect to any liability under the WARN Act or any similar statute arising out
of the actions of Seller or its Subsidiaries before the Closing.
SECTION 5.6. 401(k) Plan. (a) Effective as of the Closing Date,
each Acquired Employee who was a participant in Seller's Defined Contribution
Plan as of the Closing Date shall become a participant in Purchaser's
401(k) Plan ("Purchaser's 401(k) Plan") on the day following the Closing.
(b) Upon forwarding by Purchaser to Seller of (i) a favorable
determination letter issued by the Internal Revenue Service to the Purchaser
to the effect that Purchaser's 401(k) Plan meets the requirements for
qualification under section 401(a) of the Code, (ii) copies of signed plan
amendments, if necessary in order for such plan to accept a transfer of
account balances from Seller's Defined Contribution Plan, and after timely
provision of any required notice; Seller shall as soon as practicable cause
the following to be transferred from Seller's Defined Contribution Plan to
Purchaser's 401(k) Plan.
(i) Any promissory notes and related documents for any Acquired
Employee's loans outstanding (as of the transfer date) in Seller's
Defined Contribution Plan.
(ii) Shares in the Cincinnati Milacron Stock Fund in Seller's
Defined Contribution Plan having a fair market value equal to the
aggregate value of the Acquired Employee's account balances in such fund
in Seller's Defined Contribution Plan as of the transfer date.
Along with the foregoing, Seller shall cause a cash transfer to be made from
Seller's Defined Contribution Plan to Purchaser's 401(k) Plan equal to the
remaining aggregate value of Acquired Employees' account balances in Seller's
Defined Contribution Plan as of the transfer date, it being understood that
with respect to Acquired Employees' account balances in Subfund B of the
Seller's Defined Contribution Plan, such amounts shall be transferred as soon
as practicable and may be transferred as soon as practicable and may be
transferred at a later time than the cash and stock transfers contemplated in
this Section 5.6.
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ARTICLE VI
Conditions Precedent
SECTION 6.1. Conditions to Each Party's Obligation. The
obligation of Purchaser and Seller to consummate the transactions contemplated
to occur at the Closing shall be subject to the satisfaction or waiver thereby
as of the Closing Date of each of the following conditions:
(a) HSR and Other Approvals. Any applicable waiting period under
the HSR Act relating to the transactions contemplated hereby shall have
expired or been terminated, and all other material authorizations, consents,
orders or approvals of, or regulations, declarations or filings with, or
expirations of applicable waiting periods imposed by, any Governmental Entity
necessary for the consummation of the transactions contemplated hereby shall
have been obtained or filed or shall have occurred.
(b) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by
this Agreement shall be in effect or threatened by a governmental agency with
a substantial likelihood of success.
SECTION 6.2. Conditions to the Obligation of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated to occur
at the Closing shall be subject to the satisfaction or waiver thereby as of
the Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and as of the time of
the Closing as though made at and as of such time, except as otherwise
contemplated by this Agreement, and Purchaser shall have received a
certificate signed by an authorized officer of Seller to such effect.
(b) Performance of Obligations of Seller. Seller shall have
performed or complied in all material respects with all obligations and
covenants required to be performed or complied with by Seller under this
Agreement prior to the Closing, and Purchaser shall have received a
certificate signed by an authorized officer of Seller to such effect.
(c) Opinion of Seller's Counsel. Purchaser shall have received
an opinion dated the Closing Date of Cravath, Swaine & Moore, or Wayne Taylor,
General Counsel to Seller, reasonably satisfactory to Purchaser and its
counsel, substantially in the form of Exhibit A hereto.
(d) Bills of Sale; Deeds. Seller shall have delivered to
Purchaser bills of sale conveying the personal property included in the
Acquired Assets, in each case in form and substance reasonably satisfactory to
Purchaser and its counsel and a duly executed and acknowledged limited
warranty deed conveying good and marketable fee title to the Owned Property
subject only to Permitted Liens and those matters referred to in items (B),
(C) and (D) of Section 3.1(g) which do not violate the representation with
respect thereto therein contained, and Purchaser shall have obtained title
insurance with respect thereto; provided Purchaser shall have used reasonable
efforts to obtain such title insurance by December 30, 1995.
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(e) UK Agreement. The actions contemplated under the
UK Agreement to occur at the closing under that agreement shall occur
simultaneously with or prior to the Closing.
(f) Supply Agreement. Seller shall have delivered to Purchaser a
duly executed Electronic Controls Supply Agreement in the form of Exhibit C
hereto.
(g) Withholding Certificate. Seller shall have delivered to
Purchaser a duly executed certificate certifying that the sale of the Acquired
Assets is exempt from withholding under Section 1445 of the Code.
(h) License Agreements. Seller shall have delivered to Purchaser
a duly executed Retrofit License Agreement in the form of Exhibit F hereto.
(i) Material Consents. Seller shall have delivered to Purchaser
the consents described in Schedule 6.2(i) hereto.
(j) Other Documents. Seller shall have furnished to Purchaser
such other documents relating to Seller's corporate existence and authority
(including, without limitation, copies of resolutions of the board of
directors of Seller), absence of Liens, and such other matters as Purchaser or
its counsel may reasonably request.
(k) Acceptance by Purchaser's Counsel. The form and substance of
all legal matters contemplated hereby and of all documents delivered hereunder
shall be acceptable to Shumaker, Loop & Kendrick, counsel to Purchaser.
SECTION 6.3. Conditions to the Obligation of Seller. The
obligation of Seller to consummate the transactions contemplated to occur at
the Closing shall be subject to the satisfaction or waiver thereby as of the
Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Purchaser set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and as of the time
of the Closing as though made at and as of such time, except as otherwise
contemplated by this Agreement, and Seller shall have received a certificate
signed by an authorized officer of Purchaser to such effect.
(b) Performance of Obligations of Purchaser. Purchaser shall have
performed or complied in all material respects with all obligations and
covenants required to be performed or complied with by it under this Agreement
prior to the Closing, and Seller shall have received a certificate signed by
an authorized officer of Purchaser to such effect.
(c) Opinion of Purchaser's Counsel. Seller shall have received
an opinion dated the Closing Date of James E. Kline, Esq., General Counsel to
Purchaser, reasonably satisfactory to Seller and its counsel, substantially in
the form of Exhibit B hereto.
(d) License Agreements. Purchaser shall have delivered to Seller
a duly executed MCL License Agreement and Controls License Agreement in the
form of Exhibits D and E, respectively, hereto.
(e) UK Agreement. The actions contemplated under the
UK Agreement to occur at the closing under that agreement shall occur
simultaneously with or prior to the Closing.
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(f) Supply Agreement. Purchaser shall have delivered to Seller a
duly executed Electronic Controls Supply Agreement in the form of Exhibit C
hereto.
(g) Acceptance by Seller's Counsel. The form and substance of
all legal matters contemplated hereby and of all papers delivered hereunder
shall be acceptable to Cravath, Swaine & Moore, counsel to Seller.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1. Termination. (a) Notwithstanding anything to the
contrary in this Agreement, this Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing,
(i) by mutual written consent of Seller and Purchaser, (ii) by Seller or
Purchaser if the UK Agreement is terminated or (iii) by Seller or Purchaser,
if the Closing does not occur on or prior to January 15, 1996; provided,
however, that the party seeking termination pursuant to clause (ii) or (iii)
above is not in breach of any of its representations, warranties, covenants or
agreements contained in this Agreement.
(b) In the event of termination by Seller or Purchaser pursuant
to this Section 7.1, written notice thereof shall forthwith be given to the
other party and the transactions contemplated by this Agreement shall be
terminated, without further action by any party. If the transactions
contemplated by this Agreement are terminated as provided herein:
(i) Each of Purchaser and Seller shall promptly return (or destroy
with a certificate of destruction) to the other party all documents and
other material received from the other party relating to the
transactions contemplated hereby, whether so obtained before or after
the execution hereof; and
(ii) all confidential information received by Purchaser or Seller
with respect to the businesses of the other party shall be treated in
accordance with Section 4.3 hereto, which shall remain in full force and
effect notwithstanding the termination of this Agreement.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 7.1, this
Agreement shall become null and void and of no further force and effect,
except for the provisions of (i) Section 4.3 relating to the obligation of
Purchaser and Seller to keep confidential certain information and data
obtained by it, (ii) this Section 7.1, (iii) Section 9.09 relating to
publicity and (iv) Section 9.10 regarding certain expenses. Nothing in this
Section 7.1 shall be deemed to release any party from any liability for any
breach by such party of the terms and provisions of this Agreement.
SECTION 7.2. Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. Purchaser or Seller may, by an instrument in writing signed
on behalf of such party, waive compliance by the other party with any term or
provision of this Agreement that such other party was or is obligated to
comply with or perform.
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ARTICLE VIII
Indemnification
SECTION 8.1. Indemnification by Seller. Seller hereby agrees to
indemnify Purchaser and its affiliates and their respective officers,
directors, employees, stockholders, agents and representatives against, and
agrees to hold them harmless from, any loss, liability, claim, damage or
expense (and including reasonable legal fees and expenses; individually a
"Loss" and collectively "Losses"), as incurred (payable quarterly upon written
request), for or on account of or arising from or in connection with or
otherwise with respect to any Excluded Liabilities or any breach of any
covenant, obligation, agreement or representation or warranty of Seller
contained in this Agreement or in any Ancillary Agreement (other than the
Electronic Controls Supply Agreement); provided, however, that Seller shall
not have any liability under this Section 8.1 with respect to any breach of a
representation or warranty under Article III hereof, other than
representations and warranties contained in Sections 3.1(a) and 3.1(b), except
to the extent that the aggregate of all such Losses (outside of Losses payable
under Section 8.3) exceeds $1,000,000, and then only to the extent of such
excess; and provided further, however, that the total indemnification to be
paid by Seller (outside of Losses payable under Section 8.3) under or in
respect of any breach of a representation or warranty contained in this
Agreement under Article III hereof, other than representations and warranties
contained in Section 3.1(a) and 3.1(b), shall not in any event exceed
$50,000,000.
Purchaser acknowledges and agrees that its sole and exclusive
remedy with respect to any and all claims relating to the subject matter of
this Agreement and the Ancillary Agreements (other than the Electronic
Controls Supply Agreement) shall be pursuant to the indemnification provisions
set forth in this Article VIII. In furtherance of the foregoing, Purchaser
hereby waives, to the fullest extent permitted under applicable law, any and
all rights, claims and causes of action it may have against Seller arising
under or based upon any Federal, state or local statute, law, ordinance, rule
or regulation.
SECTION 8.2. Indemnification by Purchaser. Purchaser hereby
agrees to indemnify Seller and its affiliates and their respective officers,
directors, employees, stockholders, agents and representatives against, and
agrees to hold them harmless from any Loss, as incurred (payable quarterly
upon written request), for or on account of or arising from or in connection
with or otherwise with respect to any Assumed Liabilities or any breach of any
covenant, obligation, agreement or representation or warranty of Purchaser or
Purchaser Subsidiary contained in this Agreement or in any Ancillary Agreement
(other than the Electronic Controls Supply Agreement); provided, however, that
Purchaser shall not have any liability under this Section 8.2 with respect to
any breach of a representation or warranty under Article III hereof, other
than representations and warranties contained in Sections 3.2(a) and 3.2(b),
except to the extent that the aggregate of all such Losses exceeds $1,000,000,
and then only to the extent of such excess; and provided further, however,
that the total indemnification to be paid by Purchaser under or in respect of
any breach of a representation or warranty contained in this Agreement under
Article III hereof, other than representations and warranties contained in
Section 3.2(a) and 3.2(b), shall not in any event exceed $50,000,000.
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Seller acknowledges and agrees that its sole and exclusive remedy
with respect to any and all claims relating to the subject matter of this
Agreement and the Ancillary Agreements (other than the Electronic Controls
Supply Agreement) shall be pursuant to the indemnification provisions set
forth in this Article VIII. In furtherance of the foregoing, Seller hereby
waives, to the fullest extent permitted under applicable law, any and all
rights, claims and causes of action it may have against Purchaser or its
Subsidiaries arising under or based upon any Federal, state or local statute,
law, ordinance, rule or regulation.
SECTION 8.3. Environmental Indemnification. (a) Subject to the
provisions of Section 4.21 and the further provisions of this Section 8.3,
Seller agrees to indemnify and hold harmless Purchaser and its affiliates and
their respective officers, directors, employees, stockholders, agents and
representatives, from any and all Environmental Liabilities, whenever asserted
or incurred, arising out of or relating to (i) any condition existing on the
Indemnified Property as of or prior to the Closing Date and (ii) Hazardous
Substances generated at the Indemnified Property but disposed of outside the
Indemnified Property prior to the Closing Date (collectively, "Environmental
Claims"). "Environmental Liabilities" means all liabilities, obligations
(including obligations to respond to, investigate and remediate conditions
caused by any Hazardous Substances), responsibilities, losses, damages,
deficiencies, punitive damages, treble damages, fines, penalties, costs,
expenses (including reasonable attorneys' fees), interest, bonds, security or
other financial assurance, resulting from any claim or demand under the
authority of or based upon any Environmental Law.
(b) Seller shall not be required to indemnify Purchaser or any
other Person under Section 8.3(a) until the aggregate of all amounts paid by
Purchaser or Purchaser UK Subsidiary for which indemnity would otherwise be
due under such Section or the corresponding Section of the UK Agreement
exceeds $1,000,000, and then only to the extent of such excess; provided,
however, that Seller shall not be required to indemnify Purchaser under
Section 8.3(a) for any Environmental Liabilities incurred in connection with a
breach by Purchaser of the covenant in Section 4.21 or the corresponding
Section of the UK Agreement.
(c) Neither Purchaser nor any other Person shall be entitled to
make any claim for indemnification under Section 8.3(a) after the fifth
anniversary of the Closing Date; provided, however, that any such matter as to
which a claim has been asserted by notice to Seller that is pending or
unresolved on the last date for which a claim for indemnification may be made
shall continue to be covered by this Section until such matter is finally
terminated or otherwise resolved by the parties under this Agreement or by a
court of competent jurisdiction and any amounts payable hereunder are finally
determined and paid.
(d) Purchaser shall indemnify and hold harmless Seller and its
affiliates and their respective officers, directors, employees, stockholders,
agents and representatives from any Environmental Claim with respect to which
Seller is not obligated to indemnify Purchaser as a result of the operation of
Section 8.3(b).
SECTION 8.4. Losses Net of Insurance, etc. The amount of any
Loss for which indemnification is provided under this Article VIII shall be
net of any amounts recovered by the Person indemnified pursuant to this
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Article VIII (the "Indemnified Party") under insurance policies with respect
to such Loss and shall be (i) increased to take account of any net Tax cost
incurred by the Indemnified Party arising from the receipt or accrual of
indemnity payments hereunder (grossed up for such increase) and (ii) reduced
to take account of any net Tax benefit realized by the Indemnified Party
arising from the payment of any such Loss. Any indemnification payment
hereunder shall initially be made (i) in the case of net Tax costs or
benefits, without regard to this paragraph and shall be increased or reduced
to reflect any such net Tax cost (including gross-up) or net Tax benefit only
after the Indemnified Party has actually realized such cost or benefit, and
(ii) in the case of insurance amounts not yet recovered, without taking into
account such unrecovered insurance amounts, with a future payment to be made
by the Indemnified Party to the Indemnifying Party upon the recovery of, and
in the amount of, any such insurance amounts. For purposes of this Agreement,
an Indemnified Party shall be deemed to have "actually realized" a net Tax
cost or net Tax benefit to the extent that, and at such time as, the amount of
Taxes payable by such Indemnified Party is increased above or reduced below,
as the case may be, the amount of Taxes that such Indemnified Party would be
required to pay but for the receipt of the indemnity payment or the payment of
such Loss.
SECTION 8.5. Indemnification Procedures. With respect to third
party claims, all claims for indemnification by any Indemnified Party
hereunder shall be asserted and resolved as set forth in this Section 8.5. In
the event that any written claim or demand for which an Indemnifying Party,
Seller or Purchaser as the case may be (an "Indemnifying Party"), would be
liable to any Indemnified Party hereunder is asserted against or sought to be
collected from any Indemnified Party by a third party, such Indemnified Party
shall promptly, but in no event more than 15 days following such Indemnified
Party's receipt of such claim or demand, notify the Indemnifying Party of such
claim or demand and the amount or the estimated amount thereof to the extent
then feasible (which estimate shall not be conclusive of the final amount of
such claim and demand) (the "Claim Notice"); provided, however, that failure
to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure (except that the Indemnifying Party
shall not be liable for any expenses incurred during the period in which the
Indemnified Party failed to give such notice). The Indemnifying Party shall
have 45 days from the personal delivery or mailing of the Claim Notice (the
"Notice Period") to notify the Indemnified Party (a) whether or not the
Indemnifying Party disputes the liability of the Indemnifying Party to the
Indemnified Party hereunder with respect to such claim or demand and
(b) whether or not it desires to defend the Indemnified Party against such
claim or demand. All costs and expenses incurred by the Indemnifying Party in
defending such claim or demand shall be a liability of, and shall be paid by,
the Indemnifying Party. Except as hereinafter provided, in the event that the
Indemnifying Party notifies the Indemnified Party within the Notice Period
that it desires to defend the Indemnified Party against such claim or demand,
the Indemnifying Party shall have the right to defend the Indemnified Party by
appropriate proceedings and shall have the sole power to direct and control
such defense; provided, however, that the Indemnifying Party shall not cease
to defend, settle or otherwise dispose of any Claim without the prior written
consent of the Indemnified Party if as a result thereof the Indemnified Party
could become subject to injunctive or other equitable relief or the business
of the Indemnified Party could be materially adversely affected in any
nonmonetary manner. If any Indemnified Party desires to participate in any
such defense it may do so at its sole cost and expense. The Indemnified Party
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shall not settle a claim or demand for which it is indemnified by the
Indemnifying Party without the written consent of the Indemnifying Party. The
assumption of the defense or the settlement or other disposal of any claim by
the Indemnifying Party shall not prejudice in any way the right of such
Indemnifying Party to challenge and defend against the Indemnified Party's
assertion of a right to indemnification under this Agreement. If the
Indemnifying Party elects not to defend the Indemnified Party against such
claim or demand, whether by not giving the Indemnified Party timely notice as
provided above or otherwise, then the amount of any such claim or demand, or,
if the same be contested by the Indemnified Party, then that portion thereof
as to which such defense is unsuccessful (and the reasonable costs and
expenses pertaining to such defense) shall be the liability of the
Indemnifying Party hereunder. To the extent the Indemnifying Party shall
direct, control or participate in the defense or settlement of any third party
claim or demand, the Indemnified Party will give the Indemnifying Party and
its counsel access to, during normal business hours, the relevant business
records and other documents, and shall permit them to consult with the
employees and counsel of the Indemnified Party. The Indemnified Party shall
use its reasonable efforts in the defense of all such claims.
SECTION 8.6. Adjustment to Purchase Price. Seller and Purchaser
shall treat any indemnity payment under this agreement as an adjustment to the
Purchase Price for Tax purposes, unless a final determination with respect to
the Indemnified Party causes any such payment not to be treated as an
adjustment to the Purchase Price for United States Federal income Tax
purposes.
ARTICLE IX
General Provisions
SECTION 9.1. Notices. All notices and other communications
hereunder shall be in writing (including wire, telefax or similar writing) and
shall be sent, delivered or mailed, addressed, or telefaxed:
(a) if to Purchaser, to:
Vickers E.S.D., Inc.
3000 Strayer
Maumee, Ohio 43537-0050
Phone: (419) 867-2200
Fax: (419) 867-2649
Attention of John Weber
with a copy to:
Trinova Corporation
3000 Strayer
Maumee, Ohio 43537-0050
Attention of: James E. Kline, Esq.
Phone: (419) 867-2340
Fax: (419) 867-2209
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with a copy to:
Shumaker, Loop & Kendrick
North Courthouse Square
1000 Jackson
Toledo, Ohio 43624
Phone: (419) 241-9000
Fax: (419) 241-6894
Attention of Lyman F. Spitzer, Esq.
(b) if to Seller, to:
Cincinnati Milacron Inc.
4701 Marburg Avenue
Cincinnati, Ohio 45209
Phone: (513) 841-8287
Fax: (513) 841-7166
Attention of Wayne F. Taylor, Esq.
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Phone: (212) 474-1000
Fax: (212) 474-3700
Attention of James M. Edwards, Esq.
Each such notice, request or other communication shall be given (i) by
hand delivery, (ii) by nationally recognized courier service or (iii) by
telefax, receipt confirmed. Each such notice, request or communication
shall be effective (i) if delivered by hand or by nationally recognized
courier service, when delivered at the address specified in this
Section 9.1 (or in accordance with the latest unrevoked written
direction from such party) and (ii) if given by telefax, when such
telefax is transmitted to the telefax number specified in this
Section 9.1 (or in accordance with the latest unrevoked written
direction from such party), and the appropriate confirmation is
received.
SECTION 9.2. Interpretation. (a) When a reference is made
in this Agreement to a Section, Appendix, Schedule or Exhibit, such
reference shall be to a Section, Appendix, Schedule or Exhibit of this
Agreement unless otherwise indicated. The table of contents and
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 words "included", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation". All accounting terms not defined in this
Agreement or in the notes to the Financial Statements shall have their
meanings under GAAP.
(b) When a reference is made in this Agreement "to the
knowledge of Seller" or "to Seller's knowledge" or "to the knowledge of
Purchaser" or "to Purchaser's knowledge", such reference shall mean to
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the knowledge of certain employees of Seller or Purchaser as the case
may be, listed on Schedule 9.2, after reasonable inquiry of persons
under their supervision whom they believe will have relevant knowledge.
SECTION 9.3. Survival of Representations and Warranties.
The representations and warranties in this Agreement, the Ancillary
Agreements (other than the Electronic Controls Supply Agreement) or on
any instrument delivered pursuant to this Agreement shall survive for a
period of 24 months from the Closing Date; provided, however, that the
representations and warranties under Sections 3.1(a), 3.1(b), 3.1(f) and
3.1(g) (but Sections 3.1(f) and 3.1(g) only with respect to title) shall
survive the Closing with no expiration date. This Section 9.3 shall not
limit any covenant or agreement of the parties which by its terms
contemplates performance after the Closing.
SECTION 9.4. Severability. The provisions of this
Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any person or entity or any
circumstance, is found to be invalid or unenforceable in any
jurisdiction, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of
such provision to other persons, entities or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of
such provision, or the application thereof, in any other jurisdiction.
SECTION 9.5. Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original
and all of which shall, taken together, be considered one and the same
agreement, it being understood that both parties need not sign the same
counterpart.
SECTION 9.6. Entire Agreement; No Third Party
Beneficiaries. This Agreement (a) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof and
(b) is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
SECTION 9.7. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Ohio, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law.
SECTION 9.8. Schedules. The disclosure of any matter in
any schedule to this Agreement shall be deemed to be a disclosure for
all purposes of this Agreement to which such matter could reasonably be
expected to be pertinent, but shall expressly not be deemed to
constitute an admission by Seller or Purchaser, or to otherwise imply,
that any such matter is material for purposes of this Agreement.
SECTION 9.9. Publicity. So long as this Agreement is in
effect, neither Seller nor Purchaser shall issue or cause the
publication of any press release or other public announcement with
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respect to the transactions contemplated by this Agreement without the
consent of the other party, which consent shall not be unreasonably
withheld or withdrawn, except as may be required by law or the
regulations of any securities exchange. Any party hereto that is
required to make a public announcement shall promptly notify the other
party hereto and shall allow the other party hereto to comment on the
text of such announcement.
SECTION 9.10. Expenses. Whether or not the Closing takes
place, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by the party
incurring such expense.
SECTION 9.11. Assignment. Neither this Agreement nor any
of the rights or obligations hereunder shall be assigned by either of
the parties hereto without the prior written consent of the other party,
except that any party may assign all its rights and obligations to the
assignee of all or substantially all of the assets of such party or of a
division or business unit of such party, provided that such party shall
in no event be released from its obligations hereunder without the prior
written consent of the other party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be
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enforceable by the parties and their respective successors and assigns.
SECTION 9.12. Transitional Services Agreement. The parties
agree that as soon as practicable following the date hereof, the parties
hereto shall enter into a transitional services agreement for
transitional services that are reasonable and customary for this type of
transaction, which services shall be provided by Seller to Purchaser.
IN WITNESS WHEREOF, SELLER and PURCHASER have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
CINCINNATI MILACRON INC.
by
Name:
Title:
TRINOVA CORPORATION
by
Name:
Title:
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Appendix A
As used in the Agreement, the following terms shall have the
following meanings:
"Account Designation Notice" shall have the meaning set
forth in Section 1.4.
"Acquired Assets" shall have the meaning set forth in
Section 1.2(a).
"Acquired Books and Records" shall mean all Books and
Records located at the South Lebanon Plant.
"Acquired Contracts" shall mean all Contracts to which
Seller is a party or by which Seller is bound that primarily relate to,
arise primarily out of or are used primarily in connection with the
Transferred Business.
"Acquired Employees" shall mean all Transferred Employees
who accept Purchaser's offer of employment.
"Acquired Intellectual Property" shall mean all Intellectual
Property owned by Seller that primarily relates to, arises primarily out
of or is used primarily in connection with the operations of the
Transferred Business.
"Acquired Inventory" shall mean all Inventory on the Closing
Date other than Excluded Inventory.
"Acquired Know-how" shall mean all Know-how owned by Seller
that primarily relates to, arises primarily out of or is used primarily
in connection with the operations of the Transferred Business.
"Acquired Permits" shall mean all Permits owned by Seller
that primarily related to, arise primarily out of or are used primarily
in connection with the operations of the Transferred Business.
"Acquired Plan Assets" shall mean all account balances and
other assets (including stock accounts) of Acquired Employees in
Seller's Defined Contribution Plan.
An "affiliate" of any Person shall mean any other Person
that directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such first
Person. "Control" shall have the meaning specified in Rule 12b-2 under
the Exchange Act.
"Agreement" shall mean this Asset Purchase Agreement dated
as of December 15, 1995, between Seller and Purchaser, including the
Schedules, Exhibits and the Appendices hereto, as it may be amended from
time to time.
"Ancillary Agreements" shall mean the Electronic Controls
Supply Agreement, the MCL License Agreement, the Retrofit License
Agreement and the Controls License Agreement;
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"Appraiser" shall have the meaning set forth in Section 1.6.
"Assumed Liabilities" shall have the meaning set forth in
Section 1.3(a).
"Balance Sheet" shall have the meaning set forth in
Section 3.1(c).
"Base Net Asset Value" shall mean the difference between
(x) the total assets shown on the Projected Balance Sheet and (y) the
total liabilities shown on the Projected Balance Sheet, excluding any
deferred tax assets and deferred tax liabilities.
"Benefit Plans" shall have the meaning set forth in
Section 3.1(n).
"Books and Records" shall mean all books, ledgers, files,
invoices, customers' and suppliers' lists and operating records related
to or used in connection with the Transferred Business (other than any
Federal or state income or franchise Tax Return of Seller).
"Claim Notice" shall have the meaning set forth in
Section 8.5.
"Closing" shall have the meaning set forth in Section 2.1.
"Closing Date" shall have the meaning set forth in
Section 2.1.
"Closing Date Balance Sheet" shall mean the asset and
liability statement prepared, or caused to be prepared, by Seller in
accordance with Section 1.5(b) hereof.
"Closing Date Net Asset Value" shall mean the difference
between (x) the total assets shown on the Closing Date Balance Sheet
properly prepared in accordance with Section 1.5 and (y) the total
liabilities shown on such Closing Date Balance Sheet, excluding any
deferred tax assets and deferred tax liabilities.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Contracts" shall mean all contracts, leases, indentures,
agreements, commitments and all other legally binding arrangements,
whether oral or written.
"Controls License Agreement" shall mean a license agreement
between Seller and Purchaser granting Seller a royalty-free license to
use Acquired Intellectual Property and Acquired Know-how in machine
control products, other than those purchased by Seller under the
Electronic Controls Supply Agreement, and which are applied to Machines
used or distributed by Seller.
The "CPA Firm" shall mean Arthur Andersen LLP or such other
firm of independent public accountants as to which Seller and Purchaser
shall mutually agree.
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"Division" shall mean the Electronic Systems Division of
Seller which carries on business at and from the South Lebanon Plant.
"Electronic Controls" shall mean electronic computer
controls and associated Division developed software for such electronic
computer controls.
"Electronic Controls Supply Agreement" shall mean the supply
and services agreement between Seller and Purchaser granting Seller a
supply arrangement for Electronic Controls.
"Environmental Claims" shall have the meaning set forth in
Section 8.3.
"Environmental Laws" means any applicable laws, regulations,
orders or decrees issued, promulgated or entered into by any
Governmental Entity, relating to the environment, preservation or
reclamation of natural resources, or to the production, use, storage,
labeling, transportation, management or disposal of Hazardous
Substances, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.
("CERCLA"), the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq. and any similar or implementing state or local law, and all
amendments or regulations promulgated thereunder.
"Environmental Liabilities" shall have the meaning set forth
in Section 8.3.
"Environmental Permits" means all permits, licenses or
authorizations from any Governmental Entity required under Environmental
Laws for the operation of the Transferred Business.
"Equipment" shall mean all equipment of Seller, other than
Excluded Assets, that primarily relate to, arise primarily out of or is
used primarily in connection with the Transferred Business.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Excluded Assets" shall have the meaning set forth in
Section 1.2(b).
"Excluded Books and Records" shall mean all Books and
Records not primarily related to the Transferred Business.
"Excluded Inventory" shall mean all Inventory recorded in a
manner consistent with past practice on the face of a balance sheet of a
division or subsidiary of Seller other than the Division on the Closing
Date.
"Excluded Liabilities" shall have the meaning set forth in
Section 1.3(b).
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"Excluded Plan Assets" shall mean all Plan Assets and all
assets held in trust under Seller's Defined Contribution Plan other than
for Acquired Employees.
"Excluded Tax Liabilities" shall mean all obligations or
liabilities of Seller for (A) Taxes attributable to the Transferred
Business for taxable periods ending on or before the Closing Date or
related to any income or gain from the transactions contemplated by this
Agreement or any deferred gain on any intercompany transactions and
(B) Taxes attributable to the Transferred Business for the portion
ending on the Closing Date of any taxable period that includes but does
not end on the Closing Date (in each case, other than the Real Property
Tax Liabilities). For purposes of calculating the amount of Taxes
described in clause (B) of the preceding sentence, the Tax liabilities
attributable to any such portion shall be (i) in the case of any
personal and intangible property Tax, the amount of any such Tax for the
entire taxable period multiplied by a fraction, the denominator of which
is the number of days during such taxable period and the numerator of
which is the number of days in such portion and (ii) in the case of any
other Tax (other than a Real Property Tax Liability), the amount of any
such Tax attributable to the activities of the Transferred Business
occurring on or before the Closing Date.
"GAAP" shall mean United States generally accepted
accounting principles.
"Governmental Entity" shall mean any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign.
"Hazardous Substances" means all hazardous or toxic
substances, wastes or chemicals, petroleum (including petroleum, crude
oil or any fraction or by-product thereof) regulated pursuant to any
Environmental Law.
"Hilpert and Herco Claims" shall have the meaning set forth
in Section 1.3(b)(xi).
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Indemnified Party" shall have the meaning set forth in
Section 8.4.
"Indemnifying Party" shall have the meaning set forth in
Section 8.5.
"Indemnified Property" shall have the meaning set forth in
Section 4.21.
"Intellectual Property" shall mean the (i) Patents,
(ii) Trademarks, (iii) Trade Names, (iv) copyrights, (v) service marks,
(vi) shop rights and (vii) license rights.
"Inventory" means all raw materials, work in process,
finished goods, supplies, parts and other inventories held by Seller or
any of its affiliates at any location primarily related to the
Transferred Business.
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"Know-how" shall mean all trade secrets, know-how (including
product know-how and use and application know-how), formulas, processes,
product designs, specifications, quality control procedures,
manufacturing, engineering and other drawings, technology, technical
information, safety information, lab journals, engineering data and
design and engineering specifications, research records, market surveys
and all promotional literature, customer and supplier lists and similar
data.
"Leased U.S. Property" shall have the meaning set forth in
Section 3.1(g).
"Lien" shall mean any mortgage, claim, charge, lien,
security interest, easements, rights-of-way, pledges or other
encumbrance.
"Lockheed Contract" shall mean the purchase orders issued by
Lockheed Aeronautical Systems Company Nos. ADV3H2330 and ADV2T7150, both
dated August 1, 1990.
"Loss" shall have the meaning set forth in Section 8.1.
"Machine" shall mean plastics machinery and machine tools.
"Material Contract" shall mean (A) the Contracts listed on
Schedule 3.1(k)(1) and (B) the Contracts listed on Schedule 3.1(k)(2)
that involve an amount in excess of $150,000.
"Material Know-how" shall have the meaning set forth in
Section 3.1(i).
"MCL License Agreement" shall mean the license agreement
between Purchaser and Seller granting Seller a royalty-free license to
use Purchaser's technology primarily related to Mechanism Control
Language.
"Mechanism Control Language" shall mean the programmable
logic controller programming language and related interpreter software
supplied by the Division for Electronic Controls.
"Notice Period" shall have the meaning set forth in
Section 8.5.
"Owned Property" shall have the meaning set forth in
Section 3.1(g).
"Patents" shall mean patents (including all reissues,
reexaminations, divisions, continuations, continuations in part and
extensions thereof), patent applications and patent disclosures docketed
and all other patent rights.
"Permits" shall mean all permits, licenses, franchises,
approvals and authorizations by governmental or regulatory authorities
or bodies.
"Permitted Liens" shall have the meaning set forth in
Section 3.1(f).
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"Person" shall mean any individual, corporation,
partnership, joint venture, trust, business association, organization,
Governmental Entity or other entity.
"Plan Assets" shall mean all assets held in trust under
Seller's Defined Benefit Plan.
"Projected Balance Sheet" shall have the meaning set forth
in Section 1.5(a) hereto.
"Purchase Price" shall have the meaning set forth in
Section 1.4.
"Purchase Price Adjustment Amount" shall have the meaning
set forth in Section 1.5(e).
"Purchaser" shall have the meaning set forth in the heading
of the Agreement.
"Purchaser's Objection" shall have the meaning set forth in
Section 1.5(c).
"Purchaser's 401(k) Plan" shall have the meaning set forth
in Section 5.6.
"Purchaser Subsidiary" shall mean Vickers E.S.D., Inc., a
Delaware corporation and a wholly owned subsidiary of Purchaser.
"Purchaser UK Subsidiary" shall mean Trinova Limited.
"Real Property Tax Liabilities" shall mean all obligations
or liabilities for real property Taxes attributable to the Transferred
Business for all taxable periods.
"Report" shall have the meaning set forth in Section 1.6.
"Retiree" shall mean any person who at the time of his or
her retirement was employed by Seller principally in connection with the
Transferred Business.
"Retrofit License Agreement" shall mean the license
agreement between Seller and Purchaser granting Purchaser a royalty-free
license to use Seller's Retrofit Technology.
"Retrofit Technology" shall mean the know-how and
proprietary and/or confidential information of Seller set forth in the
Machine Application Documentation (as that term is defined in the
Retrofit License Agreement).
"Return" shall mean any return (including information
returns), report, declaration or statement relating to Taxes and filed
with a taxing authority, including any schedule or attachment thereto or
amendment thereof.
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"Scheduled Real Property" shall mean all real property,
leaseholds and other interests in real property of Seller listed in
Schedule 3.1(g)(1) or 3.1(g)(2), in each case together with its right,
title and interest in all buildings, improvements, fixtures and all
other appurtenances thereto.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Seller" shall have the meaning set forth in the heading of
the Agreement.
"Seller's Defined Benefit Plan" shall mean the Cincinnati
Milacron Retirement Plan.
"Seller's Defined Contribution Plan" shall mean the
Cincinnati Milacron Performance Dividend and Savings Plan.
"Seller's Names" shall have the meaning set forth in
Section 4.8.
"Selling Subsidiary" shall mean Cincinnati Milacron U.K.
Limited, a company organized under the laws of England and Wales and a
wholly-owned subsidiary of Seller.
"South Lebanon Plant" shall mean the Seller's plant located
in South Lebanon, Ohio.
"Storage Tank" shall mean the underground storage tank and
any related piping systems formerly used for the storage of #2 fuel oil
at the South Lebanon Plant.
"Subsidiary" shall mean, with respect to any Person, as of
any date of determination, any other Person as to which such Person
owns, directly or indirectly, or otherwise controls, more than 50% of
the voting shares or other similar interests.
"Tax" or "Taxes" shall mean all Federal, state, local,
foreign or other governmental taxes, assessments, duties, fees, levies
or similar charges of any kind, including all income, profit, franchise,
environmental, excise, property, occupation, use, intangibles, sales,
payroll, employment, withholding and other taxes, and including all
interest, penalties and additions imposed with respect to such amounts.
"Tax Claims" shall mean all rights to claims available to,
or being pursued by, Seller for (A) refunds of Taxes attributable to the
Transferred Business for taxable periods ending on or before the Closing
Date and (B) refunds of Taxes attributable to the Transferred Business
for the portion ending on the Closing Date of any taxable period that
includes but does not end on the Closing Date. For purposes of
calculating the amount of refunds of Taxes described in clause (B) of
the preceding sentence, the refunds of Taxes attributable to any such
portion shall be (i) in the case of any refund of any real, personal and
intangible property Tax, the amount of any such refund for the entire
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taxable period multiplied by a fraction, the denominator of which is the
number of days during such taxable period and the numerator of which is
the number of days in such portion and (ii) in the case of any refund of
any other Tax, the amount of any refund of Taxes attributable to the
activities of the Transferred Business occurring on or before the
Closing Date.
"Trademarks" shall mean trademarks, registrations thereof,
pending applications therefor and such unregistered rights as may exist
through use.
"Trade Names" shall mean trade names, brand marks, trade
dress, brand names, logos and all other names and slogans embodying
business or product goodwill for which no trademark registration has
been obtained and for which no application is pending.
"Transfer Taxes" shall mean all transfer, documentary,
sales, use, registration and other similar Taxes (including all
applicable real estate transfer Taxes) and related amounts (including
any penalties, interest and additions to Tax) incurred in connection
with the Agreement and the Ancillary Agreements and the transactions
contemplated hereby and thereby, including the transfer of the Acquired
Assets to Purchaser or Purchaser Subsidiary (or any permitted assignee
of the foregoing).
"Transferred Business" shall mean all the business conducted
by the Division at the South Lebanon Plant inclusive of the Acquired
Assets and Assumed Liabilities and excluding the Excluded Liabilities
and Excluded Assets.
"Transferred Employee" shall mean each person who on the
Closing Date is employed by Seller principally in connection with the
Transferred Business, including any such person receiving disability
benefits, on leave under the Family and Medical Leave Act of 1993 or
otherwise on leave from actual employment, but not including any person
on long term disability leave, each of which is listed on Schedule 5.1.
For purposes of this definition, an employee that devotes 80% or more of
his or her work time in connection with the Transferred Business shall
be deemed to be employed principally in connection with the Transferred
Business.
"UK Agreement" shall mean the Asset Purchase Agreement dated
as of December 15, 1995, between Selling Subsidiary and Purchaser UK
Subsidiary whereby the selling Subsidiary will sell certain assets and
transfer certain liabilities to the Purchaser UK Subsidiary.
"WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act of 1988, as the same may be amended from time to time.
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EXHIBIT (2)-2
ASSET PURCHASE AGREEMENT
dated
December 15, 1995
between
CINCINNATI MILACRON U.K. LIMITED
and
TRINOVA LIMITED
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TABLE OF CONTENTS
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.1 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Acquired Assets and Excluded Assets . . . . . . . . . . . . . 2
SECTION 1.3 Transfer of Properties. . . . . . . . . . . . . . . . . . . . 4
SECTION 1.4 Assumption of Certain Liabilities . . . . . . . . . . . . . . 9
SECTION 1.5 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 1.6 Value Added Tax . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 1.7 Purchase Price Adjustments. . . . . . . . . . . . . . . . . .14
SECTION 1.8 Allocation of Purchase Price. . . . . . . . . . . . . . . . .16
SECTION 1.9 Power of Attorney, etc. . . . . . . . . . . . . . . . . . . .16
ARTICLE II
The Closing
SECTION 2.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 2.2 Transactions To Be Effected at the Closing. . . . . . . . . .18
ARTICLE III
Representations and Warranties
SECTION 3.1 Representations and Warranties of Seller. . . . . . . . . . .19
SECTION 3.2 Representations and Warranties of Purchaser . . . . . . . . .28
ARTICLE IV
Covenants
SECTION 4.1 Conduct of Transferred Business . . . . . . . . . . . . . . .29
SECTION 4.2 Access to Information . . . . . . . . . . . . . . . . . . . .30
SECTION 4.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 4.4 Legal Requirements. . . . . . . . . . . . . . . . . . . . . .31
SECTION 4.5 Noncompetition. . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 4.6 Agreement Regarding Non-Assignable Contracts. . . . . . . . .32
SECTION 4.7 Stamp Duty. . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 4.8 Use of Names. . . . . . . . . . . . . . . . . . . . . . . . .33
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SECTION 4.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 4.10 Financial Information . . . . . . . . . . . . . . . . . . . .33
SECTION 4.11 Further Assurances; Cooperation After Closing . . . . . . . .34
SECTION 4.12 Certain Understandings. . . . . . . . . . . . . . . . . . . .35
SECTION 4.13 Supplies. . . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 4.14 Books and Records . . . . . . . . . . . . . . . . . . . . . .35
SECTION 4.15 Warranty Claims . . . . . . . . . . . . . . . . . . . . . . .36
SECTION 4.16 Environmental . . . . . . . . . . . . . . . . . . . . . . . .36
SECTION 4.17 Nonsolicitation of Employees. . . . . . . . . . . . . . . . .36
SECTION 4.18 Patent Claim. . . . . . . . . . . . . . . . . . . . . . . . .36
SECTION 4.19 Control Application Software. . . . . . . . . . . . . . . . .37
SECTION 4.20 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . .37
ARTICLE V
Obligations relating to Transferred Employees
SECTION 5.1 Employee Benefits . . . . . . . . . . . . . . . . . . . . . .37
SECTION 5.2 Employees . . . . . . . . . . . . . . . . . . . . . . . . . .37
SECTION 5.3 Seller's Defined Benefit Plan . . . . . . . . . . . . . . . .39
ARTICLE VI
Conditions Precedent
SECTION 6.1 Conditions to Each Party's Obligation . . . . . . . . . . . .39
SECTION 6.2 Conditions to the Obligation of Purchaser . . . . . . . . . .39
SECTION 6.3 Conditions to the Obligation of Seller. . . . . . . . . . . .40
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 7.2 Amendments and Waivers. . . . . . . . . . . . . . . . . . . .42
ARTICLE VIII
Indemnification
SECTION 8.1 Indemnification by Seller . . . . . . . . . . . . . . . . . .42
SECTION 8.2 Indemnification by Purchaser. . . . . . . . . . . . . . . . .43
SECTION 8.3 Environmental Indemnification . . . . . . . . . . . . . . . .44
SECTION 8.4 Losses Net of Insurance, etc. . . . . . . . . . . . . . . . .45
SECTION 8.5 Indemnification Procedures. . . . . . . . . . . . . . . . . .45
SECTION 8.6 Adjustment to Purchase Price. . . . . . . . . . . . . . . . .47
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ARTICLE IX
General Provisions
SECTION 9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 9.2 Interpretation. . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.3 Survival of Representations and Warranties. . . . . . . . . .50
SECTION 9.4 Severability. . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 9.5 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 9.6 Entire Agreement; No Third Party Beneficiaries. . . . . . . .50
SECTION 9.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 9.8 Consent to Jurisdiction . . . . . . . . . . . . . . . . . . .51
SECTION 9.9 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 9.10 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 9.11 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 9.12 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 9.13 Restrictive Trade Practices Act 1976. . . . . . . . . . . . .52
SECTION 9.14 Transitional Services Agreement. . . . . . . . . . . . . . .52
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APPENDICES, SCHEDULES AND EXHIBITS
Appendix A - Definitions
Schedule 1.2(b)(v) - Other Excluded Assets
Schedule 1.2(b)(viii) - Excluded Books and Records
Schedule 1.4(b)(xiv) - Other Excluded Liabilities
Schedule 1.7 - Balance Sheet Procedures
Schedule 1.7(a) - Projected Balance Sheet
Schedule 3.1(b) - Non-Contravention; Consents and
Approvals (Seller)
Schedule 3.1(c) - Balance Sheet and Statement of
Earnings
Schedule 3.1(d) - Compliance with Law
Schedule 3.1(e) - Litigation and Claims
Schedule 3.1(f) - Liens
Schedule 3.1(i)(1) - Acquired Intellectual
Property
Schedule 3.1(k) - Material Contracts Primarily
Related to the Transferred
Business
Schedule 3.1(m) - Taxes
Schedule 3.1(n) - Employee Benefits
Schedule 3.1(p) - Terminating Employees
Schedule 3.1(u) - Material Liabilities
Schedule 3.2(b) - Non Contravention; Consents and
Approvals (Purchaser)
Schedule 5.1 - Transferred Employees
Schedule 5.4 - Actuary's letters
Schedule 6.2(d) - Material Consents
Schedule 9.2 - Officers with Knowledge
Appendix 1.3 - License to Alter
Appendix 1.8 - Allocation of Purchaser Price
Appendix 2.2(a) - Deeds, assignments etc.
Appendix 5.4 - Seller's Defined Benefit Plan
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This ASSET PURCHASE AGREEMENT is made and entered into on 15th December 1995,
between CINCINNATI MILACRON U.K. LIMITED, a company incorporated in England
and Wales (No. 2306538) and having its registered office at P.O. Box 505,
Kingsbury Road, Birmingham B24 0QU ("Seller"), and TRINOVA LIMITED
("Purchaser"), a company incorporated in England and Wales (No. 1771356) whose
registered office is at P.O. Box 4, New Lane, Havant, Hampshire PO9 2WB.
WHEREAS Seller is engaged worldwide in the manufacture, marketing, sale
and distribution of Machines and Electronic Controls for Machines;
WHEREAS the parties hereto desire that Seller sell, transfer and assign,
or cause to be sold, transferred and assigned, to Purchaser, and that
Purchaser purchase and assume, or cause to be purchased and assumed, from
Seller, substantially all the assets and liabilities related to the
Transferred Business, all as more specifically provided herein;
WHEREAS Milacron and Trinova at the time of or prior to the Closing
hereunder desire to enter into the US Agreement and the Ancillary Agreements;
and
WHEREAS the capitalized terms used herein shall have the meanings
specified in Appendix A hereto (unless the context otherwise requires).
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereby agree as follows.
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.1. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to sell, assign, transfer, convey
and deliver, to Purchaser at the Closing (except as otherwise stated herein),
and Purchaser agrees to purchase and accept from Seller, at the Closing, all
right, title and interest of Seller in and to all the Acquired Assets, free
and clear of any lien, charge, security interest or encumbrance, other than
Permitted Liens.
SECTION 1.2. Acquired Assets and Excluded Assets. (a) The term
"Acquired Assets" means all the business, properties, assets, goodwill and
rights of Seller of whatever kind and nature, real or personal, tangible or
intangible, other than the Excluded Assets, that are owned by Seller on the
Closing Date and that primarily relate to, arise primarily out of or are used
primarily in connection with the Transferred Business, including, but not
limited to, all of Seller's right, title and interest in and to the following
assets (all of which are deemed to constitute assets primarily related to the
Transferred Business):
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(i) the Scheduled Real Property;
(ii) the Acquired Inventory;
(iii) the Equipment;
(iv) the Accounts Receivable other than amounts due or owing to the
Division from MT Division or from any other member of the Milacron Group
(on the basis that Division is treated as a separate legal entity for
these purposes);
(v) the Acquired Intellectual Property;
(vi) the Acquired Know-how;
(vii) the Acquired Permits;
(viii) the Acquired Contracts;
(ix) the Acquired Books and Records;
(x) the Goodwill;
(xi) prepaid items (apportioned on a time basis) and pending claims of
the Transferred Business (other than Tax Claims) that primarily relate
to or arise primarily out of the Transferred Business;
(xii) all assets of the type reflected on the line items of the
Projected Balance Sheet other than assets that have been disposed of in
the ordinary course of business of the Division from the date hereof to
the Closing Date; and
(xiii) all other assets, properties and rights of Seller that primarily
relate to, arise primarily out of or are used primarily in connection
with the Transferred Business (other than the Excluded Assets).
(b) Notwithstanding anything herein to the contrary, from and after the
Closing, Seller shall retain all of its right, title and interest in and to,
and there shall be excluded from the sale, conveyance, assignment or transfer
to Purchaser hereunder, and the Acquired Assets shall not include, the
following assets (collectively, the "Excluded Assets")"
(i) all rights of Seller under this Agreement and any other agreements,
instruments and certificates delivered in connection with this
Agreement;
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(ii) all rights, claims, demands and judgments relating to the Excluded
Liabilities;
(iii) Tax Claims and prepayments of Taxes;
(iv) all rights to the names and trademarks "Milacron", "Cincinnati
Milacron", "CAMAC" or any variations, abbreviations or acronyms thereof;
(v) the assets identified in Schedule 1.2(b)(v);
(vi) all Know-how and Intellectual Property of Seller not primarily
related to, arising primarily out of or used primarily in connection
with the Transferred Business;
(vii) all Contracts of Seller that are not Acquired Contracts;
(viii) the Excluded Books and Records listed on Schedule 1.2(b)(viii);
(ix) all cash and cash equivalents of Seller generated or earned in
connection with the Transferred Business;
(x) the Excluded Inventory;
(xi) all Accounts Receivable due to or owing to the Division from MT
Division or from any other members of the Milacron Group on the basis
that Division is treated as a separate legal entity for these purposes.
SECTION 1.3. Transfer of Properties. (a) The Scheduled Real Property
is sold subject to and where appropriate with the benefit of:
(i) all matters capable of registration as Local Land Charges or
resolutions passed by the Local Authority;
(ii) all notices served on Seller and agreements made by (or as the case
may be) with any competent authority;
(iii) all actual orders, directions, notices, charges, restrictions,
conditions and agreements arising under the Public Health Acts or Town &
Country Planning Acts;
(iv) all matters revealed by searches against Seller at the Land Charges
Registry or HM Land Registry as at the date hereof;
(v) all matters contained in the following namely:
(A) underlease dated 6th January, 1994 made between Rusper (Sheet
Metalwork) Limited (1) and Seller (2)("the Underlease");
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(B) licence agreement dated 18th August, 1995 made between Seller
(1) and Sumitomo Sitex Europe plc (2);
(C) licence to underlet and alter dated 31st December 1991 made
between Industrial Ownership (Southampton) Limited (1) Rusper (Sheet
Metalwork) Limited (2) and Seller (3);
(D) licence to alter dated 31st December, 1991 made between Rusper
(Sheet Metalwork) Limited (1) and Seller (2); and
(E) licence to underlet dated 2nd December, 1993 made between
Industrial Ownership (Southampton) Limited (1) Rusper (Sheet Metalwork)
Limited (2) Seller (3);
There are no matters as set out in Section 1.3(a)(i) to (iv) to the knowledge
of Seller.
(b) Purchaser hereby admits and confirms that it has inspected the
Scheduled Real Property and has entered into this Agreement on the basis of
such inspection and with full knowledge and notice in all respects of the
actual condition of such Property including the state and condition of any
building, structure, road, pavement, sewer, drain or installation of any kind
on such Property and takes such Property in that state and condition on the
provided that the provisions contained in this subclause shall in no way
restrict or interfere with the indemnity afforded to the Purchaser in clause
8.3 hereof or the provisions of clause 1.4(b)(xvi) hereof;
(c) (i) At Closing or (if later) within five working days following
the grant of the relevant reversioner's licence, Seller will
assign to Purchaser with full title guarantee (and Purchaser will
accept such assignment) the Underlease in the agreed form ("the
Assignment");
(ii) Seller shall use all reasonable endeavors to obtain any
requisite reversioner's licenses for the Assignment and permission
for the alterations to the Scheduled Real Property as evidenced by
the draft license attached at Appendix 1.3 and Purchaser shall co-
operate in obtaining such licences for the Assignment by supplying
such information and references as may lawfully be required by the
reversioners (including but without limitation a reference from
Purchaser's banker together with a copy of the last three years
audited accounts of Purchaser). Where the reversioner would
otherwise be entitled to withhold the licence for the Assignment,
Purchaser will offer to covenant direct with the reversioner, with
effect from completion of
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the Assignment, to pay the rent and observe and perform the
covenants contained in the Underlease for the remainder of its
term and will if lawfully required by the reversioner procure a
guarantor or guarantors reasonably acceptable to the reversioner
to enter into a form of guarantee or surety reasonably acceptable
to the reversioner. Purchaser and the guarantor(s)(if any) shall
execute the reversioner's licences for the Assignment and return
it to Seller's Solicitors (or as they shall direct) within 15
working days of the engrossments having been submitted to
Purchaser's Solicitors (details of Sellers and Purchaser's
Solicitors are set out in Article IX);
(iii) Seller will permit Purchaser to occupy the Scheduled Real
property from Closing until completion of the Assignment or
earlier termination hereunder upon the following conditions:
(A) Seller hereby licences and authorises Purchaser to occupy the
Scheduled Real Property as licensee only;
(B) Purchaser shall use the Scheduled Real Property generally for
the same purposes as the Scheduled Real Property has been used by
Seller hitherto and shall act in such a manner that the covenants
contained in the Underlease are fully observed and performed;
(C) Purchaser shall keep the Scheduled Real Property together with
all fixtures and fittings in such repair and condition and
decorative order as they are in at the date hereof;
(D) Purchaser shall vacate the Scheduled Real Property forthwith
on termination of the licence and authority hereby conferred
removing all the property and assets of Purchaser and all rubbish
and scrap and leaving the Scheduled Real Property in a clean and
tidy state and in such repair condition and decorative order as is
provided for in paragraph (C) above;
(E) Purchaser shall not make any alteration or addition to the
Scheduled Real Property or any part thereof;
(F) Purchaser shall conform in all respects with the provisions of
and regulations under any Act of Parliament or Bye-law which may
be applicable to the Scheduled Real Property or to Purchaser's use
or occupation thereof;
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(G) Purchaser shall not create any fixed charge over or assign the
licence hereby conferred or sub-licence or permit any other person
to use or occupy the Scheduled Real Property or any part thereof;
(H) Purchaser shall at all times use all reasonable endeavours to
keep the Scheduled Real Property secure;
(I) Purchaser shall pay (or reimburse) to Seller forthwith on
demand all proper outgoings of any kind whatsoever in respect of
the Scheduled Real Property including (without prejudice to the
generality of the foregoing) all rents service charges rates and
water rates taxes gas electricity sewerage and telephone charges
security and heating expenses and insurance premiums in respect of
the period of occupation until the date of the Assignment or
vacation pursuant to Section 1.3(d)(vii) whichever is the earlier;
and
(J) Without prejudice to paragraph (I) above the Purchaser will
refund to Seller any rent or outgoings paid by Seller in respect
of the Scheduled Real Property prior to the date of the Assignment
in respect of the period after the date of occupation by
Purchaser.
(d) It is hereby agreed and declared as follows:
(i) Section 1.3(c)(iii) constitutes a licence and confers no
tenancy upon Purchaser;
(ii) management and control of the Scheduled Real Property is
retained by Seller who shall without prejudice to
Section 1.3(c)(iii)(I) and (J) be the occupier for all purposes
including taxation and rating;
(iii) Seller shall not be responsible for any assets goods or
chattels of Purchaser in or about the Scheduled Real Property
whether for loss thereof or damage thereto;
(iv) Seller shall not be responsible for any injury to or
sustained by any person in or about the Scheduled Real Property
other than as a result of Seller's neglect or default;
(v) the licence and authority hereby conferred is personal to
Purchaser and shall not be capable of assignment or transfer;
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(vi) if Purchaser is in material breach of the obligations on its
part contained in Section 1.3(c)(iii) or if the reversioner
threatens proceedings for possession of the Scheduled Real
Property and/or forfeiture of the Underlease and/or for breach of
covenant against Seller by reason of the use and occupation of the
Scheduled Real Property by Purchaser or if Purchaser shall go into
liquidation (save for the purposes of amalgamation or
reconstruction while solvent) or have a receiver or administrator
or supervisor pursuant to any voluntary arrangement appointed over
all or any of its property or assets or if a petition is presented
for the appointment of an administrator of Purchaser Seller may by
notice in writing to Purchaser forthwith terminate and revoke the
licence and authority hereby conferred (but without prejudice to
any other right or remedy which may have accrued to either party
hereunder);
(vii) if Seller is unable to obtain a reversioner's licence for
the Assignment after all reasonable and proper efforts on its part
to do so (including, where necessary or appropriate, applying to
the Court for a declaration that the licence is being unreasonably
withheld) and in any event by the date 6 months after Closing (or
such other date as Seller and Purchaser shall agree in writing)
the Scheduled Real Property shall be withdrawn from the sale
hereby agreed and the Purchaser shall vacate the same forthwith
without prejudice to the further assurance provisions of this
Agreement and in the event of Purchaser vacating as a result of
this Section the Scheduled Real Property shall be severed from
this Agreement;
(viii) if Seller is unable to obtain reversioner's licence for the
alterations referred to in Section 1.3(c)(ii) above after Seller
having used all reasonable efforts to do so by the date 6 months
after Closing the Seller shall if required by Purchaser remove the
works detailed in the said licence for alterations at its own cost
making good all damage caused thereto.
(x) Seller shall indemnify and keep indemnified Purchaser against
all actions, proceeds, costs, claims, demands and expenses
whatsoever arising directly or indirectly as a result of the
Seller failing to obtain the consent of the reversioners to the
Assignment or in respect of prior to the completion of the
Assignment any action taken by any superior and/or intermediate
landlord against any superior lease the Underlease and the
Scheduled Real Property.
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SECTION 1.4. Assumption of Certain Liabilities. (a) Upon the terms
and subject to the conditions of this Agreement, at the Closing, Purchaser
agrees to assume, pay, perform and discharge when due, all liabilities or
obligations whatsoever, other than Excluded Liabilities, that are primarily
related to, arose primarily out of or in connection with the Transferred
Business, whether arising before or after the Closing and whether known or
unknown, fixed or contingent (the "Assumed Liabilities"), including all of the
liabilities and obligations listed below (each of which are deemed to relate
primarily to the Transferred Business):
(i) all obligations and liabilities due to be performed or paid after
the Closing Date under Acquired Contracts;
(ii) [Intentionally omitted]
(iii) all obligations and liabilities of Seller of the type reflected on
the line items of the Projected Balance Sheet except for obligations and
liabilities which have been satisfied, cancelled or otherwise
transferred in the ordinary course of business of the Division from the
date hereof to the Closing Date;
(iv) all obligations or liabilities with respect to product liability
claims (including claims for death, personal injury or property damage)
with respect to products shipped or services provided by Purchaser after
the Closing in connection with the Transferred Business, including any
liability for incidental or consequential damages relating thereto;
(v) subject to the provisions of Section 8.3 all obligations and
liabilities arising as a result of Seller, or any predecessor in
interest thereof, being the owner or occupant of, or the operator of the
activities conducted at, the Scheduled Real Property at any time,
including all obligations and liabilities relating to personal injury,
property damage, the environment and waste disposal including off-site
waste disposal;
(vi) all obligations and liabilities relating to the deferred holiday
associated with or relating to Transferred Employees;
(vii) all obligations and liabilities with respect to all actions,
suits, proceedings, disputes, claims or investigations that are
primarily related to or arise primarily out of or in connection with the
Transferred Business, the Acquired Assets or the Transferred Employees,
at law, in equity or otherwise; and
(viii) the Real Property Tax Liabilities
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(b) Notwithstanding anything herein to the contrary, the following
liabilities and obligations of Seller (the "Excluded Liabilities") shall not
be assumed by Purchaser hereunder and shall not constitute Assumed
Liabilities:
(i) any obligation or liability which is primarily attributable to any
of the Excluded Assets, or primarily associated with the realization of
the benefits of any of the Excluded Assets;
(ii) the Excluded Tax Liabilities;
(iii) all liabilities and obligations for which Seller has expressly
assumed or retained responsibility pursuant to this Agreement;
(iv) [Intentionally omitted]
(v) all pension obligations or liabilities under Seller's Defined
Benefit Plan associated with or relating to any Transferred Employee
except to the extent provided in Section 5.4;
(vi) all obligations or liabilities with respect to all warranty claims
in connection with products sold and/or delivered or services provided
by Seller before the Closing in connection with the Transferred Business
including any liability for incidental or consequential damages relating
thereto;
(vii) all obligations or liabilities with respect to all product
liability claims, actions, suits, proceedings, disputes or
investigations (including claims for death, personal injury or property
damage) with respect to products sold and/or delivered or services
provided by Seller before the Closing in connection with the Transferred
Business including any liability for incidental or consequential damages
relating thereto;
(viii) all accounts payable from the Division to MT Division and/or to
other members of the Milacron Group, on the basis the Division is
treated as a separate legal entity for these purposes;
(ix) all obligations and liabilities with respect to payroll obligations
of the Seller to Transferred Employees that have accrued up to the
Closing Date (including the obligation to pay the Inland Revenue the
PAYE and NIC contributions as deducted) in connection with the
Transferred Business and all associated UK equivalents of US withholding
obligations or liabilities including any UK equivalents of US
withholding obligations under any of Seller's benefit plans;
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(x) all obligations and liabilities of Seller with respect to all
claims, actions, suits, proceedings, disputes or investigations based on
employment practices of Seller prior to the Closing Date and all claims
by employees of the Transferred Business terminated prior to the Closing
Date;
(xi) all obligations and liabilities with respect to any and all claims
(whether known or unknown) arising out of any infringement of the
intellectual property rights of third parties in connection with
products of the Business shipped by the Seller prior to the Closing Date
including the claims ("the Hilpert and Hurco Claims") relating to the
alleged infringement by Hilpert Products and Hurco Products (each as
defined in the Supply Agreement) of existing rights of B. Hilpert and
IMS Technology Inc ("the Existing Hilpert and Hurco Rights");
(xii) all obligations or liabilities relating to deferred compensation,
life insurance, severance including those equivalent to worker's
compensation in the US, and all costs and expenses incurred in providing
medical and dental and welfare benefits associated with any Transferred
Employee prior to the Closing Date;
(xiii) any obligation of the Seller to indemnify any Transferred
Employee by reason of the fact that such Person was a director, officer,
employee, or agent of Seller or was serving at the request of Seller as
a partner, trustee, director, officer, employee, or agent of another
entity (whether such indemnification is for judgements, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses or
otherwise and whether such indemnification is pursuant to any statute,
charter document, bylaw, agreement or otherwise).
(xiv) the Excluded Liabilities listed in Schedule 1.4(b)(xiv).
(xv) all obligations and liabilities due to be performed or paid on or
before the Closing Date under the Acquired Contracts.
(xvi) [Intentionally omitted]
(xvii) all obligations and liabilities of Seller for breach or failure
to perform any of Seller's Covenants, representations and warranties or
agreements contained in or made pursuant to this Agreement; and
(xviii) except as provided in this Agreement, all obligations and
liabilities relating to Sellers Defined Benefits Plan;
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SECTION 1.5. Purchase Price. In consideration of the sale, assignment,
transfer, conveyance and delivery to Purchaser of the Acquired Assets,
Purchaser shall pay to Seller on December 28, 1995 in sterling the sum of
Pounds Sterling 6,850,000 (less two days interest on such amount at an
interest rate of 6.5% per annum but together with VAT thereon if applicable)
subject to adjustment as provided in Section 1.7 (together, as so adjusted,
the "Purchase Price") payable by wire transfer of immediately available funds
to an account or accounts designated by Seller in a written notice (the
"Account Designation Notice") delivered to Purchaser at least two Business
Days prior to such date. If Seller designates more than one account in the
Account Designation Notice, such notice shall specify the portion of the
Purchase Price to be paid to each such designated account. Seller agrees to
promptly return to Purchaser the amount paid on December 28, 1995 with
interest rate of 6.5% per annum from December 30, 1995 if the Closing does not
occur.
SECTION 1.6. Value Added Tax. (a) All payments to be made pursuant to
this Agreement shall (save where otherwise specifically stated) be taken to be
exclusive of VAT (if applicable) and any VAT charged in respect of the matters
giving rise to such payments shall be added to the amount thereof and paid in
addition thereto in which case Seller shall promptly provide to the Purchaser
a tax invoice to support a claim by the Purchaser for recovery of the tax
paid.
(b) The parties acknowledge and agree that it is considered that
section 49(1) Value Added Tax Act 1994 ("VATA 1994") and Article 5 of the
Value Added Tax (Special Provisions) Order 1995 will apply to the sale and
purchase of the Transferred Business, so that the transaction is treated as a
transfer of a going concern. Accordingly:
(i) Purchaser shall give such notice of such transfer to HM Customs &
Excise as required by law;
(ii) Purchaser shall preserve the records for such period as may be
required by law and during that period shall at al reasonable times
permit Seller or its agents to inspect such records and (at the other
party's expense) to take copies of such records;
(iii) Seller and Purchaser shall use all reasonable endeavours to secure
that pursuant to the provisions referred to above the sale of the
Transferred Business hereunder is treated as neither a supply of goods
nor a supply of services for Value Added Tax purposes;
(iv) if, notwithstanding the provisions referred to above, any Value
Added Tax shall be payable on the sale hereunder, Purchaser shall pay to
Seller such tax and any penalty if due to delay in payment by Purchaser
following request by Seller or interest likewise incurred by Seller for
late payment thereof, Purchaser to make such payment on payment by
Seller or (if later) delivery by Seller to Purchaser of tax invoices in
respect thereof; and
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(v) no re-allocation of the Vendor's VAT registration number to
Purchaser shall be applied for.
(c) Purchaser warrants that its Vickers division is duly registered
under the VATA with registration number GB 381053863 (Vickers Division).
SECTION 1.7. Purchase Price Adjustments.
(a) A projected schedule of certain types of assets and liabilities
(the "Specified Assets and Liabilities") of the Transferred Business as of the
Closing Date is attached as Schedule 1.7(a) hereto (the "Projected Balance
Sheet"). The parties acknowledge that the Projected Balance Sheet is attached
to this Agreement only for purposes of calculating the purchase price
adjustment in accordance with this Section 1.7, and except for such
adjustment, neither party shall have any liability to the other party for any
variation between the Projected Balance Sheet and the Closing Date Balance
Sheet.
(b) Within 60 days following the Closing, Seller shall (i) prepare, or
cause to be prepared, and deliver to Purchaser the Closing Date Balance Sheet,
which shall set forth the Specified Assets and Liabilities of the Transferred
Business as of the Closing Date and shall be accompanied by a certificate from
Seller's independent outside auditors to the effect that the Closing Date
Balance Sheet was prepared in accordance with Schedule 1.7 hereto and
(ii) calculate the Closing Date Net Asset Value, as derived from the Closing
Date Balance Sheet, and deliver such calculation to Purchaser.
(c) Purchaser and Purchaser's independent outside auditors shall,
within 60 days after the delivery by Seller of the Closing Date Balance Sheet
and Seller's calculation of the Closing Date Net Asset Value, complete their
review thereof. In the event that Purchaser and Purchasers' independent
outside auditors determine that the Closing Date Balance Sheet has not been
prepared on this basis set forth in and in accordance with Schedule 1.7,
Purchaser shall, on or before the last day of such 60-day period, so inform
Seller in writing (the "Purchaser's Objection"), setting forth a specific
description of the basis of Purchaser's Objection and the adjustments to the
Closing Date Net Asset Value and the corresponding adjustments to the Closing
Date Balance Sheet with Purchaser believes should be made accompanied by a
letter from the Purchaser to the effect that the Closing Date Balance Sheet
submitted to Purchaser by Seller was not prepared in accordance with
Schedule 1.7 hereto and that adjusting the Closing Date Balance Sheet in the
manner described in Purchaser's Objection will result in the Closing Date
Balance Sheet having been prepared in accordance with Schedule 1.7 hereto. If
no Purchaser's Objection is received by Seller on or before
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that last day of such 60-day period, then the Closing Date Net Asset Value set
forth on the Closing Date Balance Sheet delivered by Seller shall be final.
Seller shall have 30 days from its receipt of Purchaser's Objection to review
and respond to Purchaser's Objection.
If Seller and Purchaser are unable to resolve all of their disagreements
with respect to the proposed adjustments set forth in Purchaser's Objection
with 20 days following the completion of Seller's review of Purchaser's
Objection, they shall refer any dispute as to whether the Closing Date Balance
Sheet was prepared in accordance with Schedule 1.7 to the CPA Firm, who shall,
acting as experts and not as arbitrators, determine on the basis set forth in
an in accordance with Schedule 1.7, and only with respect to the remaining
differences so submitted, whether and to what extent, if any, the Closing Date
Balance Sheet and the Closing Date Net Asset Value require adjustment.
Purchaser and Seller shall instruct the CPA Firm to deliver its written
determination to Purchaser and Seller no later than the thirtieth day after
the remaining differences underlying Purchaser's Objection are referred to the
CPA Firm. The CPA Firm's determination shall be conclusive and binding upon
Purchaser and Seller. The fees and disbursements of the CPA Firm shall be
borne equally by Purchaser and Seller. Purchaser and Seller shall make
readily available to the CPA Firm all relevant books and records and any work
papers (including those of the parties' respective accountants) relating to
the Closing Date Balance Sheet and all other items reasonably requested by the
CPA Firm. The scope of the disputes to be resolved by the CPA Firm is limited
to whether the Closing Date Balance Sheet was prepared in accordance with
Schedule 1.7.
(d) Purchaser shall, and shall cause its Subsidiaries to, provide to
Seller and its accountants (i) all data and financial statements reasonably
requested by Seller and (ii) full access to the books and records of the
Transferred Business and to any other information, including work papers of
its accountants, and to any employees in each case to the extent reasonably
requested by Seller in connection with the preparation of the Closing Date
Balance Sheet and any adjustments thereto.
(e) The "Purchase Price Adjustment Amount" shall be equal to (x) the
Base Net Asset Value minus (y) the Closing Date Net Asset Value. If the
Purchase Price adjustment Amount is a negative number, then the Purchase Price
shall be increased by the absolute value of the Purchase Price Adjustment
Amount and Purchaser shall, promptly (and in any event within five business
days) after the final determination of the Closing Date Net Asset Value, pay
to Seller the Purchase Price Adjustment Amount (together with VAT thereon, if
applicable) plus interest from the Closing Date at the rate of 6.5% per annum
in U.S. dollars by wire transfer of immediately available funds to an account
designated by Seller. If the Purchase Price Adjustment Amount is a positive
number,
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then the Purchase Price shall be decreased by the Purchase Price Adjustment
Amount and Seller shall, promptly (and in any event within five business days)
after the final determination of the Closing Date Net Asset Value, pay to
Purchaser the Purchase Price Adjustment Amount plus interest from the Closing
Date at the rate of 6.5% per annum in U.S. dollars by wire transfer of
immediately available funds to an account designated by Purchaser.
SECTION 1.8. Allocation of Purchase Price. (a) Purchaser and Seller
agree that the allocations of the Purchase Price shall be as set out in
Appendix 1.8 and that such allocations shall be adjusted in accordance with
the provisions of that Appendix to take account of any Purchase Price
Adjustment Amount agreed or certified pursuant to Section 1.7.
SECTION 1.9. Power of Attorney, etc. (a) Effective on the Closing
Date, Seller hereby constitutes and appoints Purchaser the true and lawful
attorney of Seller in the name of Seller and/or on its behalf (and for the
benefit of Purchaser), and at the expense of Purchaser: (i) to demand and
receive from time to time any and all the Acquired Assets and to make
endorsements and give receipts and releases for and in respect of the same and
any part thereof; (ii) to institute, prosecute, compromise and settle any and
all proceedings at law, in equity or otherwise that Purchaser and its
successors, legal representatives or assigns may deem proper in order to
collect, assert or enforce any claim, right or title of any kind in or to the
Acquired Assets; (iii) to defend or compromise any or all actions, suits or
proceedings in respect of any of the Acquired Assets; and (iv) to do all such
acts and things in relation to the matters set forth in the preceding clauses
(i) through (iii) as Purchaser and its successors, legal representatives or
assigns shall deem desirable. Seller hereby agrees that the appointment
hereby made and the powers hereby granted are as security for the performance
of certain obligations of Seller hereunder and are and shall be irrevocable by
it in any manner or for any reason. Seller shall deliver to Purchaser at
Closing an acknowledged power of attorney to the foregoing effect executed by
Seller and any affiliate selling any of the Acquired Assets.
(b) Effective upon the Closing Date, Purchaser shall have the right to
receive and open all mail, packages and other communications which relate
primarily to the Transferred Business addressed to Seller or any of its
affiliates and Seller agrees promptly to deliver to Purchaser any such mail,
packages or other communications received directly or indirectly by Seller or
any of its affiliates. Purchaser shall have the right and authority to
collect, for its own account, all receivables and other items which shall be
transferred or are intended to be transferred to Purchaser as provided in this
Agreement. Seller will endorse in favor of Purchaser any cheques or drafts
received on account of any such receivables or other items, and Seller shall
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promptly transfer or deliver to Purchaser any cash or other property received
directly or indirectly by Seller or its affiliates in respect of such
receivables and other items. Purchaser shall promptly deliver to Seller all
mail, packages and other communications received by it which relate to Seller
or its affiliates but do not relate exclusively to the Transferred Business.
Seller and its affiliates shall promptly deliver to Purchaser all mail,
packages and other communications received by any of them which relate to the
Transferred Business but do not relate to any of them.
ARTICLE II
The Closing
SECTION 2.1. Closing. Subject to the following sentence, the closing
of the sale and transfer of the Acquired Assets and the other transactions
contemplated hereby (herein referred to as the "Closing") shall take place at
the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue,
New York, New York 10019, on December 30, 1995 or thereafter as soon as
practicable following the satisfaction or waiver of the conditions set forth
in Section 6, or at such other time, date and place as shall be fixed by
agreement between the parties hereto.
SECTION 2.2. Transactions To Be Effected at the Closing. At the
Closing:
(a) Seller shall deliver to Purchaser (i) the deeds, assignments and
other instruments of transfer described in Appendix 2.2(a) relating to the
Acquired Assets (all of which shall be in the agreed form) duly executed by or
on behalf of Seller and (ii) such other documents as Purchaser or its counsel
may reasonably request to demonstrate satisfaction or waiver of the conditions
and compliance with the agreement set forth in this Agreement (it being
understood with respect to (i) and (ii) above, that Seller shall not be
required to make any additional representations, warranties or covenants,
express or implied, not contemplated by this Agreement), and (iii) all of the
Acquired Assets the title to which is capable of passing by delivery (such
delivery to take place at the Scheduled Real Property).
(b) Purchaser shall deliver to Seller, or shall cause to be delivered
to Seller, (i) payment of the Purchase Price in the manner provided in
Section 1.5, (ii) duly executed counterparts of the deeds, assignments and
other instruments of transfer described in Appendix 2.2(a) and (iii) such
other documents as Seller or its counsel may reasonably request to demonstrate
satisfaction or waiver of the conditions and compliance with the agreements
set forth in this
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Agreement (it being understood that with respect to (ii) and (iii) above that
Purchaser shall not be required to make any representations, warranties or
covenants, express or implied, not contemplated by this Agreement).
(c) Seller and Purchaser shall duly execute the know-how election in
the agreed form annexed at Appendix 1.8.
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties of Seller. Seller hereby
represents and warrants to Purchaser as follows:
(a) Organization, Standing and Power. Seller is a company duly
incorporated and existing under the Companies Acts and has the requisite
corporate power and authority to own the Acquired Assets owned by it and to
lease the Acquired Assets leased by it and to carry on the operations of the
Transferred Business as now being conducted by it. Seller has heretofore
delivered to Purchaser true and complete copies of its certificate of
incorporation and memorandum and articles of association, as amended through
the date of this Agreement.
(b) Authority. Seller has all corporate power and authority to execute
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Seller. This Agreement has been duly executed
and delivered by Seller and constitutes the legal, valid and binding
obligation of Seller enforceable against it in accordance with its terms
except as enforcement thereof may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally
and except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
and the compliance with the terms hereof will not, to Seller's knowledge, (i)
violate any law, judgment, order, decree, statute, ordinance, rule and
regulation applicable to Seller, (ii) conflict with any provision of Seller's
Memorandum and Articles of Association, (iii) except as set forth on
Schedule 3.1(b), result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, any agreement, contract, lease, license, instrument, or
other arrangement to which the Seller is a party or by which it is
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bound or to which any of its assets is subject (or result in the imposition of
any lien (other than a Permitted Lien) upon any of its assets), except where
the violation, conflict breach, default, acceleration, termination,
modification, cancellation, or lien would not have a material adverse effect
on the business, financial condition or results of operations of the
Transferred Business or on the ability of the parties hereby to consummate the
transactions contemplated by this Agreement or (iv) require any material
consent, approval, order or authorization of, or the registration, declaration
or filing with, any Governmental Entity or any other Person, except as
otherwise set forth on Schedule 3.1(b).
(c) Financial Statements. The balance sheet, dated as of December 31,
1994 (the "Balance Sheet") and the statement of earnings (excluding the effect
of capitalized software) for the year ended December 31, 1994 (the "Financial
Statements") which are attached as Schedule 3.1(c) hereto, present the
financial condition and results of operations of the Division as of
December 31, 1994 and for the year then ended in accordance with the policies
and procedures employed by Seller in accounting for the assets and
liabilities, earnings from operations of its divisions. The Financial
Statements have been prepared from the books and records of Seller relating to
the Transferred Business.
(d) Compliance with Applicable Laws. For the last 3 years, Seller has
complied and is currently in compliance in all material respects with all
laws, regulations, rules and orders of all Governmental Entitles, applicable
to it which relate to the Transferred Business. Except as set forth in
Schedule 3.1(d), Seller has not receive any written notice of any such failure
to so comply, and to the knowledge of Seller, there are no circumstances that
may give rise to such noncompliance. Seller has not received any written
notice that any investigation or review by any Governmental Entity with
respect to the Transferred Business is pending or that any such investigation
or review is contemplated. This paragraph (d) does not relate to
Environmental Laws for which Section 8.3 is exclusively applicable.
(e) Litigation; Decrees. Schedule 3.1(e) sets forth a list of all law
suits, actions and proceedings pending with respect to the Transferred
Business and all judgements, orders, decrees and injunctions against the
Seller related to the Transferred Business. Except as set forth in Schedule
3.1(e), to the knowledge of Seller, there is no basis for any suit, action or
proceeding relating to the Acquired Assets or the Transferred Business that
would in Seller's reasonable judgment be expected to have (i) as substantial
likelihood of success if brought and (ii) a material adverse effect on the
business, financial condition or results of operations of the Transferred
Business. Except as set forth on Schedule 3.1(e), to the knowledge of Seller,
there is no suit, action, or proceeding threatened against Seller relating to
the
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Transferred Business or the transactions contemplated hereby. Seller is not
in default under any material judgement, order, injunction, rule, or decree of
any Governmental Entity or arbitrator relating to the Transferred Business.
(f) Title to Acquired Assets. Seller has good and marketable title to
all the Acquired Assets free and clear of all Liens, except for (i) Liens
disclosed in Schedule 3.1(f) or on the Balance Sheet or in the notes thereto
and (ii) (A) mechanics', carriers', workmen's, repairmen's, and other like
Liens arising or incurred in the ordinary course of business, (B) Liens for
Taxes, assessments and other governmental charges that are not yet due and
payable or that may thereafter be paid without penalty, or that are being
contested in good faith by appropriate proceedings (which contested Taxes,
assessments and other governmental charges are set forth in Schedule 3.1(f),
(C) assets subject to retention of title in the ordinary course of business
and (D) imperfections of title and other encumbrances that are not substantial
in character or amount and do not detract from, or interfere with the use of,
the Acquired Assets in the Transferred Business as presently conducted (the
Liens described in clauses (i) and (ii) being herein referred to as "Permitted
Liens"). To the knowledge of Seller, there are no Liens on the Acquired
Assets which would in Seller's reasonable judgment be expected to have a
material adverse effect on the business, financial condition or result of
operations of the Transferred Business. This paragraph (f) does not relate to
real property, interests in real property or leasehold interests.
(g) Real Property. Schedule 3.1(g) sets forth a complete list of all
real property and interests in real property directly or indirectly owned or
occupied by Seller that primarily relate to or are used primarily in
connection with the Transferred Business (each, a "Property"). Seller is the
lessee of each Property and is in possession of the premises purported to be
leased thereunder, and each such lease is valid without any material default
thereunder by Seller or, to Seller's knowledge, by the lessor.
(h) [intentionally omitted]
(i) Intellectual Property and Know-how. To the knowledge of Seller,
the Division has not interfered with, infringed upon, misappropriated, or
violated any material Intellectual Property or Know-how rights of third
parties in any material respect, and, except as identified on
Schedule 3.1(i)(1), Seller has not received any written charge, complaint,
claim, demand, or notice alleging any such interference, infringement,
misappropriation, or violation or any claim that the Division must license or
refrain from using any such intellectual property rights of any third party.
Schedule 3.1(i)(1) sets forth a complete list of all Acquired Intellectual
Property. To
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the extent that registrations, filings and issuances are indicated on
Schedule 3.1(i)(1), such Intellectual Property has been duly registered in,
filed in or issued by the United States Copyright office or the United States
Patent and Trademark Office, the appropriate offices in the various states of
the United States and the appropriate offices of such other jurisdictions
indicated on Schedule 3.1(i)(1). Except as set forth on Schedule 3.1(i)(1),
Seller has not granted any licenses or other rights in, and Seller has no
obligation to grant licenses or other rights in, any of the Acquired
Intellectual Property or in the Know-how owned by Seller that material to the
Transferred Business ("Material Know-how), in each case that is included in
the Acquired Assets, to any other Person. Seller has not made any claim of a
violation or infringement by others of its rights in the Acquired Intellectual
Property or the Material Know-how and, to the knowledge or Seller, there is
not currently any such violation or infringement. Except as set forth on
Schedule 3.1(i)(1), there are no interferences or other contested proceedings,
either pending or, to the knowledge of Seller, threatened, in the United
States Copyright Office, the United States Patent and Trademark Office or any
Federal, state or local court or before any other governmental agency or
tribunal, relating to any Acquired Intellectual Property or any pending
application with respect thereto.
(j) Insurance. All of the material properties and businesses
constituting any part of the Acquired Assets are insured for Seller's benefit,
and will be so insured until the Closing, in amounts and against risks
consistent with recent past practice. All such policies are in full force and
effect.
(k) Contracts. Schedule 3.1(k) sets forth each Contract to which
Seller is a party or by which it is bound that relates primarily to the
Transferred Business except for such Contracts involving amounts of less than
$150,000. Except for the Contracts listed in Schedule 3.1(k) or 3.1(g),
Seller is not in the case of Contracts that relate primarily to the
Transferred Business, a party to any:
(i) Contract for or relating to the employment of any officer or
employee or with any labour union;
(ii) Contract which will not be discharged at or prior to the Closing
relating to the borrowing or lending of money or the guarantee of any
obligations for borrowed money or otherwise, excluding endorsements made
for purposes of collection in the ordinary course of business;
(iii) Contract granting to any person a preferential right to purchase
any of the Acquired Assets (other than sales of Inventory in the
ordinary course of business);
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(iv) Contract with respect to the discharge, transportation, removal or
storage of effluent, wastes, pollutants or hazardous substances;
(v) Contract for the lease of any land, buildings or equivalent;
(vi) Contract evidencing any material lien, charge, security interest or
encumbrance on the Acquired Assets, other than Permitted Liens; or
(vii) Contract relating to joint ventures, distribution or sales
representative arrangements, non-competition arrangements or
confidentiality arrangements.
True, complete and correct copies of all the Contracts listed on
Schedules 3.1(k) have been made available to Purchaser. Except as disclosed
on Schedules 3.1(k) and 3.1(g), each of the Material Contracts is valid,
binding, and enforceable in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganising, moratorium, fraudulent conveyance or
other similar laws affecting creditors' rights generally from time to time in
effect and to general equitable principles, is in full force and effect, and
neither Seller nor, to the knowledge of Seller, any other party thereto is in
default or breach in any material respect under the terms of any such Material
Contract, nor, to the knowledge of Seller, has any event or circumstance
occurred that, with notice or lapse of time or both, would constitute a
material event of default thereunder. Except as disclosed on Schedules 3.1(k)
and 3.1(g), Seller has not received any notice of termination or cancellation
of any Material Contract, and to the knowledge of Seller, there are no
material unresolved disputes in connection with any Material Contract.
(l) Absence of Certain Changes or Events. Except as set forth in the
Schedules hereto, from December 31, 1994 to the date hereof, Seller has
conducted the Transferred Business in the ordinary course consistent in all
material respects with recent past practice, and there has not been any
material adverse change in the business, assets, liabilities, financial
condition or results of operations, other than changes relating to the economy
in general or changes relating to the Machines industry in general.
(m) Taxes. Except as set forth in Schedule 3.1(m), Seller has timely
filed, after giving effect to any applicable extensions, all Tax Returns
relating to any Taxes attributable to the Transferred Business required to be
filed by it. Except for Taxes set forth on Schedule 3.1(m), which are being
contested in good faith and by appropriate proceedings, and except for Taxes
which in the aggregate are not material, all Taxes attributable to the
Transferred Business shown
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to be due on such Tax Returns have been timely paid. Except as set forth in
Schedule 3.1(m), no taxing authority is asserting any deficiency against
Seller with respect to material Taxes attributable to the Transferred
Business.
(n) Employee Benefits Plans. Schedule 3.1(n) contains a list of share
or stock option or purchase plans, health insurance arrangements and economic
value added programmes. Seller has delivered to Purchaser details of the
above arrangements.
(o) Books and Records. The Books and Records have been regularly kept
and maintained in accordance with the practices of Seller.
(p) Employees. Except as set forth in Schedule 3.1(p), to Seller's
knowledge, no executive, key employee or significant group of employees has
expressed his, her or their clear intention to terminate his, her or their
employment with the Transferred Business within the next twelve months. As of
the date hereof, except as set forth in Schedule 3.1(p) hereto, no Transferred
Employee has notified the Seller in writing of his intention to terminate
employment with the Division and no termination notice has been given to any
Transferred Employee. The Division is not a party to or bound by any
collective bargaining agreement, nor has it experienced any strikes,
grievances, claims of unfair labour practices, or other collective bargaining
disputes. To the knowledge of Seller, there is no organizational effort
presently made or threatened by or on behalf of any labour union with respect
to employees of the Division.
(r) Permits. The Acquired Permits include all governmental licenses,
approvals, permits and authorizations currently required for the ownership or
operation of the Acquired Assets or the Transferred Business as now being
conducted, the failure to obtain which would have a material adverse effect on
the Acquired Assets or the Transferred Business. All such governmental
licenses and permits are valid and in full force and effect; Seller has not
received any written notice that any appropriate authority has revoked,
suspended or terminated, or intends to revoke, suspend or terminate, any of
such governmental licenses and permits, and all such governmental licenses and
permits are held in the name of Seller or a subsidiary thereof.
(s) Fees. Except for CS First Boston Corporation, whose fees will be
paid by Milacron, there is no investment banker, broker, finder, financial
advisor or other intermediary who has been retained by or is authorized to act
on behalf of Seller who might be entitled to any fee or commission from Seller
in connection with the transactions contemplated by this Agreement.
(t) Acquired Assets. Except as stated herein, the Acquired Assets
transferred by Seller on the Closing Date to Purchaser (including
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without limitation the Acquired Contracts, Acquired Permits, Acquired
Intellectual Property and Acquired Know-How) shall be sufficient to operate
the Transferred Business in all material respects as it is currently being
conducted.
(u) No Undisclosed Material Liabilities. To the knowledge of Seller,
there are no liabilities of the Transferred Business of any kind other than
(i) liabilities provided for in the Balance Sheet, (ii) liabilities disclosed
in the Schedules hereto, including Schedule 3.1(u), (iii) liabilities incurred
in the ordinary course of the Transferred Business since December 31, 1994,
and (iv) other liabilities which, individually or in the aggregate, are not
material to the Transferred Business.
(v) No Other Representations. Except for the representations and
warranties expressly set forth in this Agreement, the US Agreement and the
Ancillary Agreements thereto neither Seller nor any other Person makes any
express or implied representation or warranty on behalf of Seller.
(w) Seller's Defined Benefit Plan. In relation to the Seller's Defined
Benefit Plan
(i) Full material particulars of Seller's Defined Benefit Plan have
been Disclosed.
(ii) In relation to the Active Members (as defined in Appendix 5.4 and
(where appropriate) Transferred Employees:
(a) so far as the Seller is aware the Seller's Defined Benefit
Plan complies, and has at all times complied with, all applicable
legislation relative to occupational pension schemes and has been
operated in accordance with the requirements of both the Pension
Schemes Office and Occupational Pensions Board;
(b) the Active Members are Contracted-Out of the State Earnings
Related Pension Scheme in accordance with the provisions of the
Pension Schemes Act 1993;
(c) Seller's Defined Benefit Plan is exempt approved under
Chapter I of Part XIV of the Taxes Act for the purposes of the
Pensions Schemes Office of the Inland Revenue and so far as the
Seller is aware there is no reason why such approval should be
withdrawn;
(d) there are no actions, suits or claims pending or threatened by
any of the Active Members of Transferred Employees and so far as
the Seller is aware there is no fact or circumstances likely to
give rise to any such proceedings;
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(e) no undertakings or assurances have been given or implied to
the Transferring Employees or Active Employees as to the
introduction, continuance, increase or improvement of any
retirement, death or disability benefits (whether or not there is
any legal obligation to do so);
(f) no discretion has been exercised under Seller's Defined
Benefit Plan to provide a benefit which would not otherwise
already by provided thereunder and no power to augment or provide
new benefits has been exercised;
(g) all lump sum benefits payable on the death of an Active Member
whilst in employment (other than a return of his own contributions
and contributions paid in respect of him) are fully insured and
each Active Member has been covered for such insurance at normal
rates and on normal terms for persons in good health;
(h) save for Seller's Defined Benefit Plan, Seller is not a party
to or contributing to any retirement benefits pension or life
assurance scheme or arrangement or fund or personal pension scheme
relating to any of the Transferred Employees or under any legal or
ex-gratia obligation to provide any retirement, death or
disability pension or payment to or in respect of any such
Transferred Employee or person connected therewith. No proposal
has been announced to establish or contribute to any other such
scheme or fund;
(i) there are no pending claims for incapacity or ill-health
pensions and there are no current disputes concerning such
benefits;
(j) all contributions due to the trustees of Seller's Defined
Benefit Plan have been paid;
(k) with the exception of Mrs. C. Carstairs (from whom no
application to join Seller's Defined Benefit Plan has been
received) none of the Transferred Employees are part-timers who
have been denied access to Seller's Defined Benefit Plan;
(l) Seller's Defined Benefit Plan has been registered with the
Registrar of Pension Schemes.
SECTION 3.2. Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to Seller as follows:
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(a) Organization, Standing and Power. Purchaser is a Company duly
incorporated and existing under the Companies Acts and has the requisite
corporate power and authority to carry on its business as now being conducted.
(b) Authority. Purchaser has all corporate power and authority to
execute this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Purchaser and do not and will not require
the approval of the stockholders of Purchaser. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of Purchaser enforceable against it in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditors' rights generally
and except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
and the compliance with the terms hereof will not (i) violate any law,
judgment, order, decree, statute, ordinance, rule and regulation applicable to
Purchaser, (ii) conflict with any provision of its Memorandum and Articles of
Association, (iii) except as set forth on Schedule 3.2(b), conflict with any
material Contract to which it is a party or by which it or any of its property
is bound or (iv) require any material consent, approval, order or
authorization of, or the registration, declaration or filing with, any
Governmental Entity or any other Person, except as otherwise set forth on
Schedule 3.2(b).
(c) Fees. There is no investment banker, broker, finder, financial
advisor or other intermediary who has been retained by or is authorized to act
on behalf of Purchaser who might be entitled to any fee or commission from
Purchaser in connection with the transactions contemplated by this Agreement.
(d) Actions and Proceedings, etc. There are no (i) outstanding
judgements, orders, injunctions or decrees or any court or Governmental Entity
or arbitration tribunal against or affecting Purchaser or any of its
affiliates, (ii) lawsuits, actions or proceedings pending or, to the knowledge
of Purchaser, threatened against or affecting Purchaser or any of its
affiliates, or (iii) investigations by any Governmental Entity which are, to
the knowledge of Purchaser, pending or threatened against or affecting
Purchaser or any of its affiliates, and which, in the case of each of clauses
(i), (ii) and (iii), have or could have a material adverse effect on the
ability of Purchaser to consummate the transactions contemplated hereby.
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(e) No Other Representations. Except for the representations and
warranties expressly set forth in this Agreement, the US Agreement and the
Ancillary Agreement thereto neither Purchaser nor any other Person makes any
express or implied representation or warranty on behalf of Purchaser.
ARTICLE IV
Covenants
SECTION 4.1. Conduct of Transferred Business. From and after the date
of this Agreement and until the Closing, except as expressly provided in this
Agreement or as Purchaser shall otherwise reasonably agree, Seller will
(i) conduct the Transferred Business (including the maintenance of inventory
levels) in the ordinary course of business consistent in all material respects
with recent past practice; (ii) maintain and repair the Acquired Assets in
substantially the same manner as they are currently maintained and repaired;
(iii) not knowingly harm the reputation or goodwill of the Transferred
Business or the condition of the Acquired Assets; (iv) use reasonable efforts
to refrain from taking or omitting to take any action in a manner that would
render Seller's representations and warranties under this Agreement inaccurate
as of the Closing or that would prevent the consummation of the transactions
contemplated hereby; (v) not grant any increases in direct or indirect
termination to any Transferred Employee other than changes in termination in
the ordinary course of business; not enter into any material transaction or
incur any material liability other than in the ordinary course of business;
(vi) not encumber or permit to be encumbered any of the Acquired Assets other
than with Permitted Liens; (vii) not amend, alter or modify any material
provision of any of the Acquired Contracts other than in the ordinary course
of business; (viii) keep all insurance policies with respect to the
Transferred Business in effect, with all premiums paid to the Closing Date;
(ix) use its reasonable efforts to keep available the services of the
Transferred Employees and preserve the Transferred Business's relationships
with suppliers, customers and others having business dealings with the
Transferred Business; and (x) not sell, lease, license or otherwise dispose of
any Acquired Assets except (A) pursuant to existing contracts and commitments
or (B) in the ordinary course of business consistent in all material respect
with recent past practice. If at any time during such period Seller becomes
aware of any material adverse change in the business, assets, financial
condition or results of operations of the Transferred Business, Seller shall
promptly notify Purchaser with respect thereto.
SECTION 4.2. Access to Information. Seller shall afford to Purchaser
and its accountants, counsel and other representatives reasonable access upon
reasonable written notice during normal business
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hours during the period prior to the Closing to all the properties, books,
contracts, commitments, Tax Returns and records of the Transferred Business,
and, during such period shall furnish promptly to Purchaser any information
concerning the Transferred Business as Purchaser may reasonably request.
SECTION 4.3. Confidentiality. (a) Each of Purchaser and Seller shall
hold in confidence and shall not disclose to any third party (other than to
its directors, officers, those employees who have a need to know and its
outside advisors), without the written consent of the other party, all
information disclosed with respect to the contemplated transaction relating to
the other party and the Transferred Business, including, without limitation,
information concerning the operation of the Transferred Business and related
commercial, financial and technical data, whether disclosed orally or in
writing, including any summaries or analyses of such information prepared by
or for Purchaser. Purchaser's or Seller's obligations in respect of
confidential information shall not apply to information (i) which becomes
generally available to the public other than as a result of disclosure by such
party, (ii) was known to by such party prior to its disclosure hereunder
(iii) is rightly received by such party from a third party free of any
confidentiality obligations (iv) is required to be disclosed in connection
with the securing of any governmental approval necessary for the performance
by such party of its obligations hereunder or (v) is required to be disclosed
for the purpose of complying with governmental regulations or (vi) is
independently developed by such party's employees who do not have access to
such information.
(b) In the event of any termination of this Agreement, for a period of
seven years from such termination, each of Purchaser and Seller (i) shall
treat as confidential and shall not disclose or use, directly or indirectly,
for its benefit or otherwise, in any manner whatsoever, or permit any of its
affiliates or officers, directors, employees, representatives or others under
its control to disclose, or to use, any information concerning the other party
or the Transferred Business (in the case of the Purchaser) unless such
information is acquired or required to be disclosed as described in clause (i)
through (vi) in clause (a) above and shall promptly return to the other party
(or destroy with a certificate of destruction) all written information and
documents received from such party, its accountants or counsel in connection
with the transactions contemplated by this Agreement, including all copies
thereof, and all analyses, memoranda, charts or other information prepared by
such party or any of its affiliates using any of such written information and
documents, including all copies thereof (including computer disks or tapes or
other storage media if applicable). The provisions of this Section shall
survive any termination of this Agreement.
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SECTION 4.4. Legal Requirements. Each of Purchaser and Seller will
take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it or any of its Subsidiaries with
respect to the Closing and will promptly cooperate with and furnish
information to each other and to other parties in connection with any such
legal requirements.
SECTION 4.5. Noncompetition. (a) Seller agrees that for a period of
five years from the Closing Date, neither it nor any of its Subsidiaries shall
engage, either directly or indirectly, as a principal or for its own account
or solely or jointly with others, or as shareholders in any company or
partnership anywhere in the world, in the business of manufacturing or selling
to third parties any products manufactured or sold by the Division on or prior
to the Closing Date (other than with respect to Electronic Controls assembled
on Machines sold by Seller); provided that nothing herein shall prohibit
(i) the acquisition by Seller or any of its Subsidiaries of a diversified
company having not more than (x) 10% of its sales (based on its latest
published annual audited financial statements) attributable to any business
that competes with the Transferred Business or (y) $5,000,000 in annual sales
to third parties in such competing business, (ii) the exercise of Seller's
rights (if any) under the Electronic Controls Supply Agreement, (iii) the sale
by Seller of Excluded Inventory to third parties and (iv) the sale by Seller
to third parties of service parts for products manufactured or sold by the
Division.
(b) It is the intention of the parties that if any of the restrictions
or covenants contained herein held to cover a geographic area or to be for a
length of time which is not permitted by applicable law, or in any way
construed to be too broad or to any extent invalid, such provision shall not
be construed to be null, void and of no effect, but to the extent such
provision would be valid or enforceable under applicable law, a court of
competent jurisdiction shall construe and interpret or reform this Section 4.5
to provide for a covenant having the maximum enforceable geographic area, time
period and other provisions (not greater than those contained herein) as shall
be valid and enforceable under such applicable law. Seller acknowledges that
Purchaser would be irreparably harmed by any breach of this Section 4.5 and
that there would be no adequate remedy at law or in damages to compensate
Purchaser for any such breach.
SECTION 4.6. Agreement Regarding Non-Assignable Contracts. If any
Acquired Contract (i) is not assignable without the consent of any party
thereto, (ii) may by its terms be terminated or cancelled upon assignment or
(iii) is not by its terms assignable, Seller and Purchaser agree to use their
reasonable efforts to obtain the consent of any required parties thereto to
effect such assignment. If such assignment
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may not be so effected, each of the parties agrees to cooperate with the other
in any reasonable arrangement designed to enable Seller to perform for the
account of Purchaser its obligations under, and to provide Purchaser the
benefits of, and to cause Purchaser to bear all the burdens and liabilities
under, any such agreements, including enforcement at the cost, and for the
account of, Purchaser, of any and all rights of Seller against the other party
arising out of the breach or cancellation thereof by such other party or
otherwise.
SECTION 4.7. Stamp Duty. Seller shall bear and pay all stamp duty of
and in respect of the transfer of the Acquired Assets pursuant to this
Agreement.
SECTION 4.8. Use of Names. Except as set forth in Section 4.14,
Purchaser agrees that neither it nor any of its affiliates nor any of their
respective successors and assigns shall at any time use the names "Milacron",
"Cincinnati Milacron" or "CAMAC", or any variation thereof or combination that
includes either such name, or any Trade Names or Trademarks relating thereto,
or any acronym or abbreviation thereof (collectively, the "Seller's Names").
Within 60 days of the Closing Date, with respect to all Acquired Inventory
constituting Acquired Assets on which Seller's Names are marked, affixed or
otherwise used, Purchaser shall rename or obliterate or permanently sticker
over Seller's Names on Acquired Inventory or appropriately make or otherwise
alter or modify Acquired Inventory in accordance with the first sentence of
this Section 4.8.
SECTION 4.9. Insurance. From and after the Closing, Purchaser shall
secure insurance with respect to the Transferred Business covering general
liability and product liability in amounts consistent with its normal and
customary practice.
SECTION 4.10. Financial Information. After the Closing, upon
reasonable written notice, Purchaser and Seller shall furnish or cause to be
furnished to each other and their respective accountants, counsel and other
representatives access, during normal business hours, to such information
(including records pertinent to the Transferred Business) and assistance
relating to the Transferred Business as is reasonably necessary for financial
reporting and accounting matters, the preparation and filing of any Tax Return
or other returns, reports or forms or the defense of any Tax claim or
assessment and will provide the other party with such audited financial
statement and other financial information for past periods as such other party
reasonably deems necessary for compliance with disclosure requirements of the
relevant legislation or under GAAP; provided, however, that the party
requesting such financial statements shall pay for the auditing of such
financial statements if such auditing is necessary solely by reason of such
party's request. In the case of Purchaser, such assistance shall include
cooperation in responding to audit reports made by taxing
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authorities to Seller regarding the Transferred Business and, at Seller's
request, participation in audits of Seller relating to the Transferred
Business. Purchaser shall retain the books and records included in the
Acquired Assets for a period of seven years after the Closing. After the end
of such seven-year period, before disposing of such books or records, Seller
may within 60 days prior to the end of such period, request upon written
notice to Purchaser to recover such books and records at Seller's cost and
expense, whereupon Purchaser shall allow Seller the opportunity to remove and
retain all or any part of such books or records as Seller may select at such
time that such books and records would otherwise be disposed of by Purchaser.
SECTION 4.11. Further Assurances; Cooperation After Closing.
(a) Seller will use its reasonable efforts to facilitate and effect the
implementation of the transfer of such Acquired Assets to Purchaser and, for
such purpose but without limitation, Seller promptly will at and after the
Closing execute and deliver to Purchaser such assignments, deeds, bills of
sale, consents and other instruments as Purchaser or its counsel may
reasonably request as necessary for such purpose.
(b) In the event that after the Closing, Seller becomes aware that any
Acquired Assets were not transferred to Purchaser by Seller at the Closing,
Seller shall promptly notify Purchaser to that effect and shall reasonably
cooperate with Purchaser to transfer such Acquired Assets to Purchaser. In
the event that after the Closing, Purchaser becomes aware that any assets that
are not Acquired Assets were transferred to Purchaser at the Closing,
Purchaser shall promptly notify Seller to that effect and shall reasonably
cooperate with Seller to transfer such assets to Seller.
(c) In the event and for so long as any party hereto is contesting or
defending against any action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand in connection with (i) any transaction
contemplated under this Agreement or (ii) any fact, situation, circumstance,
status, condition, activity, practice, law, occurrence, event, incident,
action, failure to act, or transaction on or prior to the Closing Date
involving the Division, the other party will reasonably cooperate with
contesting or defending party and its counsel in the contest or defense, all
at the sole cost and expenses of the contesting or defending party (unless the
contesting or defending Party is entitled to indemnification therefor under
Article VIII below).
SECTION 4.12. Certain Understandings. Purchaser acknowledges that
neither Seller, its Subsidiaries nor any other Person has made any
representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Transferred Business not
included in this Agreement or the Schedules hereto, and neither Seller, its
Subsidiaries nor any other Person will be subject to any liability to
Purchaser or any other person resulting from the distribution to
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Purchaser, or Purchaser's use of, any such information. Purchaser
acknowledges that, should the Closing occur, Purchaser will acquire the
Acquired Assets without any representation or warranty as to merchantability
or fitness for any particular purpose, in an "as is" condition and on a "where
is" basis, except as otherwise expressly represented or warranted herein.
SECTION 4.13. Supplies. Purchaser shall not use stationery, purchase
order forms, signage, invoices, receipts, or advertising and promotional
materials, training and service literature and materials that state or
otherwise indicate thereon that the Transferred Business or any part thereof
is a division or unit of Seller, except that Purchaser may use such materials
in the ordinary course of the Transferred Business for a period of 90 days
after the Closing, provided that such materials clearly indicate that the
Transferred Business has been sold to Purchaser and is independent of Seller.
SECTION 4.14. Books and Records. Seller shall, upon written notice and
during normal business hours, furnish to Purchaser and its representatives,
access to the Excluded Books and Records and Purchaser may, with Seller's
consent (which consent shall not be unreasonably withheld), make photocopies
thereof.
SECTION 4.15. Warranty Claims. Purchaser shall provide to Seller, upon
Seller's request, service for all products shipped by Seller prior to the
Closing which is required based on a warranty claim for such product, and
Seller shall pay Purchaser at Purchaser's direct cost (materials and labour)
for such services rendered.
SECTION 4.16. Environmental. Purchaser shall not undertake any
investigation of environmental conditions or conduct any testing of soil or
subsurface conditions, including groundwater, at the Scheduled Real Property
except: (i) as required to do so by a Governmental Entity (ii) as part of a
response to a spill or release of a hazardous Substance caused by Purchaser
after the Closing Date (iii) in the ordinary course of Purchaser's
environmental and industrial hygiene audits and reviews consistent with
Purchaser's audit and review programs, (iv) as requested by a bona-fide
potential purchaser of the Scheduled Real Property, or a portion thereof, from
the Purchaser after the Closing Date and (v) as based on Purchaser's
reasonable good faith belief that there exists a violation of Environmental
Laws on such Scheduled Real Property; provided that in the case of
Section 4.16(c)(iv) any such investigation or testing shall be conducted in a
manner commensurate with such good faith reasonable belief.
SECTION 4.17. Nonsolicitation of Employees.
Purchaser and Seller agree that they will not without the consent of the
other party during the five year period following the Closing Date solicit the
employment of any of the other party's employees while they are employed by
such other party.
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SECTION 4.18. Patent Claim. Seller shall use its reasonable efforts to
resolve the Hilpert and Hurco Claims expeditiously. Any settlement of the
Hilpert and Hurco Claims by Seller which has an effect on the operation by
Purchaser of the Transferred Business shall be in accordance with the
provisions of the Supply Agreement. As long as such settlement is in
accordance with the provisions of the Supply Agreement, Purchaser shall not
bear any liability with respect to royalties payable under a license of the
Existing Hilpert and Hurco Rights except to the extent set forth in the Supply
Agreement relating to the supply of Hilpert and Hurco Products thereunder.
SECTION 4.19. Control Application Software. Seller agrees that for a
period of one year following the Closing Purchaser shall provide Seller with
reasonable access to control application software of Purchaser as required to
conduct the Transferred Business, subject to the execution by the parties
hereto of a confidentiality agreement relating thereto that is reasonably
acceptable to the parties hereof and subject to Purchaser agreeing to use such
software solely in the manufacture of electronic controls for Seller.
SECTION 4.20. Permits. Seller shall take all reasonable efforts to
ensure that the Acquired Permits are promptly transferred to Purchaser subject
to applicable law.
ARTICLE V
Obligations relating to Transferred Employees
SECTION 5.1. Employee Benefits. In accordance with the Employment
Regulations Purchaser will, save in respect of provisions relating to
occupational pension schemes, stock option plans and economic value added
programmes maintain for a period of at least two years after the Closing Date
without interruption, benefit plans and contractual benefits that are overall
no less favourable than those provided to Transferred Employees by Seller on
the Closing Date. Notwithstanding the foregoing, for a period of two years
after the Closing Date, Purchaser will provide (or cause its Subsidiaries to
provide) to each transferred Employee severance pay and severance benefits
which are no less favourable than under the severance plans and current
practice of Seller prior to the date hereof and notified in writing to the
Purchaser as being in effect on the date of this Agreement and summarised in
Schedule 3.1(k) under the heading "Redundancy Payments".
SECTION 5.2. Employees. (a) The parties hereby acknowledge and agree
that the Transfer of Undertakings (Protection of Employment) Regulations 1981
as amended (the "Employment Regulations") apply to the
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sale and purchase of the Transferred Business effected by this Agreement and
accordingly the contract of employment (excluding provisions relating to
occupational pension schemes) of each of the Transferred Employees with Seller
shall transfer to Purchaser in accordance with the Employment Regulations with
effect from the Closing Date. Seller represents to Purchaser and indemnifies
Purchaser accordingly that Seller has up to and including the Closing Date
fully discharged all wages, salaries and other benefits of the Transferred
Employees and all PAYE tax deductions and National Insurance Contributions
relating thereto.
(b) Purchaser shall be liable for and shall indemnify Seller against all
or any claim for redundancy payments, unfair dismissal or other compensation
(whether statutory or contractual), salaries, wages, and other benefits,
National Insurance Contributions, PAYE tax deductions, damages, costs or
expenses which may be made against Seller (or for which Seller may become
liable) as a result of:
(i) anything done by or in relation to Seller on or prior to the Closing
Date in respect of the Transferred Employees or any of their contracts
of employment at the prior written request of Purchaser; or
(ii) anything done in respect of the Transferred Employees by or in
relation to the Purchaser on or after the Closing Date.
(c) Seller and Purchaser shall forthwith comply with the information
and consultation requirements laid down in Regulation 10 of the Employment
Regulations and Purchaser shall forthwith give Seller such information as it
requires in order to comply with Regulation 10(2)(d) of the Employment
Regulations.
(d) Seller shall be liable for and shall indemnify Purchaser against
all costs, claims, demands and liabilities of any kind which may be made by or
incurred to any Transferred Employee and/or by or to any trade union arising
on or prior to the Closing Date including without limitation compensation for
failure to inform or consult a representative of a trade union in accordance
with Regulation 10(3) of the Employment Regulations or a protective award
under Section 189 of the Trade Union and Labour Relations (Consolidation) Act
1992 and against all legal costs and expenses reasonably incurred by Purchaser
in settling, contesting or dealing with any such claim.
(e) Seller shall indemnify Purchaser in respect of all costs claims,
liabilities, charges, expenses and awards incurred as a result of any claim
and against all legal costs and expenses reasonably incurred by Purchaser in
settling, contesting or dealing with any such claim:
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(i) by or in respect of any or all of the Transferred Employees that
they are a member of a recognised trade union or that any collective
agreement has been transferred to Purchaser; and
(ii) by any person other than a Transferred Employee that his employment
has been transferred to Purchaser including without limitation in
relation to the termination of that person's employment;
SECTION 5.4. Seller's Defined Benefit Plan. The provisions of
Appendix 5.4 shall apply in respect of the Seller's Defined Benefit Plan.
ARTICLE VI
Conditions Precedent
SECTION 6.1. Conditions to Each Party's Obligation. The obligation of
Purchaser and Seller to consummate the transactions contemplated to occur at
the Closing shall be subject to the satisfaction or waiver thereby as of the
Closing Date of each of the following conditions:
(a) Approvals. All material authorizations, consents, orders or
approvals of, or regulations, declarations or filings with, or expirations of
applicable waiting periods imposed by, any Governmental Entity necessary for
the consummation of the transactions contemplated hereby shall have been
obtained or filed or shall have occurred.
(b) No Injunctions or Restraints. No injunction or other legal
restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect or threatened by a
governmental agency with a substantial likelihood of success.
SECTION 6.2. Conditions to the Obligation of Purchaser. The obligation
of Purchaser to consummate the transactions contemplated to occur at the
Closing shall be subject to the satisfaction or waiver thereby as of the
Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Seller set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the time of the
Closing as though made at and as of such time, except as otherwise
contemplated by this Agreement, and Purchaser shall have received a
certificate signed by an authorized officer of Seller to such effect.
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(b) Performance of Obligations of Seller. Seller shall have performed
or complied in all material respects with all obligations and covenants
required to be performed or complied with by Seller under this Agreement prior
to the Closing, and Purchaser shall have received a certificate signed by an
authorized officer of Seller to such effect.
(c) US Agreement. The actions contemplated under the US Agreement to
occur at the closing under that agreement shall occur simultaneously with or
prior to the Closing.
(d) Material Consents. Seller shall have delivered to Purchaser the
consents described in Schedule 6.2(d) hereto.
(e) Other Documents. Seller shall have furnished to Purchaser such
other documents relating to Seller's corporate existence and authority
(including, without limitation, copies of resolutions of the board of
directors of Seller), absence of Liens, and such other matters as Purchaser or
its counsel may reasonably request.
SECTION 6.3. Conditions to the Obligation of Seller. The obligation of
Seller to consummate the transactions contemplated to occur at the Closing
shall be subject to the satisfaction or waiver thereby as of the Closing Date
of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Purchaser set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the time of the
Closing as though made at and as of such time, except as otherwise
contemplated by this Agreement, and Seller shall have received a certificate
signed by an authorized officer of Purchaser to such effect.
(b) Performance of Obligations of Purchaser. Purchaser shall have
performed or complied in all material respects with all obligations and
covenants required to be performed or complied with by it under this Agreement
prior to the Closing, and Seller shall have received a certificate signed by
an authorized officer of Purchaser of such effect.
(c) US Agreement. The actions contemplated under the US Agreement to
occur at the closing under that agreement shall occur simultaneously with or
prior to the Closing.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1. Termination. (a) Notwithstanding anything to the
contrary in this Agreement, this Agreement may be terminated and the
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transactions contemplated hereby abandoned at any time prior to the Closing,
(i) by mutual written consent of Seller and Purchaser, (ii) by Seller or
Purchaser if the US Agreement is terminated, or (iii) by Seller or Purchaser,
if the Closing does not occur on or prior to January 15, 1996; provided,
however, that the party seeking termination pursuant to clause (ii) or (iii)
above is not in breach of any of its representations, warranties, covenants or
agreements contained in this Agreement.
(b) In the event of termination by Seller or Purchaser pursuant to this
Section 7.1, written notice thereof shall forthwith be given to the other
party and the transactions contemplated by this Agreement shall be terminated,
without further action by any party. If the transactions contemplated by this
Agreement are terminated as provided herein:
(i) Each of Purchaser and Seller shall promptly return (or destroy with
a certificate of destruction) to the other party all documents and other
material received from the other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution
hereof; and
(ii) all confidential information received by Purchaser or Seller with
respect to the businesses of the other party shall be treated in
accordance with Section 4.3 hereto, which shall remain in full force and
effect notwithstanding the termination of this Agreement.
(c) If this Agreement is terminated and the transactions contemplated
hereby are abandoned as described in this Section 7.1, this Agreement shall
become null and void and of no further force and effect, except for the
provisions of (i) Section 4.3 relating to the obligation of Purchaser and
Seller to keep confidential certain information and data obtained by it from
Seller, (ii) this Section 7.1, (iii) Section 9.10 relating to publicity and
(iv) Section 9.11 regarding certain expenses. Nothing in this Section 7.1
shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement.
SECTION 7.2. Amendments and Waivers. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. Purchaser or Seller may, by an instrument in writing signed on behalf
of such party, waive compliance by the other party with any term or provision
of this Agreement that such other party was or is obligated to comply with or
perform.
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ARTICLE VIII
Indemnification
SECTION 8.1. Indemnification by Seller. Seller hereby agrees to
indemnify Purchaser and its affiliates and their respective officers,
directors, employees, stockholders, agents and representatives against, and
agrees to hold them harmless from, any loss, liability, claim, damage or
expense, and including reasonable legal fees and expenses; (individually a
"Loss" and collectively "Losses"), as incurred (Payable quarterly upon written
request), for or on account of or arising from or in connection with or
otherwise with respect to any Excluded Liabilities or any breach of any
covenant, obligation, agreement or representation or warranty of Seller
contained in this Agreement; provided, however, that Seller shall not have any
liability under this Section 8.1 with respect to any breach of a
representation or warranty under Article III hereof, other than
representations and warranties contained in Sections 3.1(a) and 3.1(b) except
to the extent that the aggregate of all such Losses (outside of Losses payable
under Section 8.3) exceeds $250,000, and then only to the extent of such
excess; and provided further, however, that the total indemnification to be
paid by Seller (outside of Losses payable under Section 8.3) under or in
respect of any breach of a representation or warranty contained in this
Agreement under Article III hereof, other than representations and warranties
contained in Section 3.1(a) and 3.1(b), shall not in any event exceed
$5,000,000.
Purchaser acknowledges and agrees that its sole and exclusive remedy
with respect to any and all claims relating to the subject matter of this
Agreement shall be pursuant to the indemnification provisions set forth in
this Article VIII. In furtherance of the foregoing, Purchaser hereby waives,
to the fullest extent permitted under applicable law, any and all rights,
claims and causes of action it may have against Seller arising at common law
or under any statute, law, ordinance, rule or regulation.
SECTION 8.2. Indemnification by Purchaser. Purchaser hereby agrees to
indemnify Seller and its affiliates and their respective officers, directors,
employees, stockholders, agents and representatives against, and agrees to
hold them harmless from any Loss, as incurred (payable quarterly upon written
request), for or on account of or arising from or in connection with or
otherwise with respect to any Assumed Liabilities or any breach of any
covenant, obligation, agreement or representation or warranty of Purchaser
contained in this Agreement provided, however, that Purchaser shall not have
any liability under this Section 8.2 with respect to any breach of a
representation or warranty under Article III hereof, other than
representations and warranties contained in Sections 3.2(a) and 3.2(b), except
to the extent that the aggregate of all such Losses exceeds $250,000 and then
only to
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the extent of such excess; and provided further however, that the total
indemnification to be paid by Purchaser under or in respect of any breach of a
representation or warranty contained in this Agreement under Article III
hereof, other than representations and warranties contained in Section 3.2(a)
and 3.2(b), shall not in any event exceed $5,000,000.
Seller acknowledges and agrees that its sole and exclusive remedy with
respect to any and all claims relating to the subject matter of this Agreement
shall be pursuant to the indemnification provisions set forth in this
Article VIII. In furtherance of the foregoing, Seller hereby waives, to the
fullest extent permitted under applicable law, any and all rights, claims and
causes of action it may have against Purchaser arising at common law or under
any statute, law, ordinance, rule or regulation.
SECTION 8.3. Environmental Indemnification. (a) Subject to the
provisions of Section 4.16 and the further provisions of this Section 8.3,
Seller agrees to indemnify and hold harmless Purchaser and its affiliates and
their respective officers, directors, employees, shareholders, agents and
representatives, from any and all Environmental Liabilities, whenever asserted
or incurred, arising out of or relating to (i) any condition existing on the
Scheduled Real Property as of or prior to the Closing Date and (ii) Hazardous
Substances generated at the Scheduled Real Property but disposed of outside
the Scheduled Real Property prior to the Closing Date (collectively,
"Environmental Claims"). "Environmental Liabilities" means all liabilities,
obligations (including obligations to respond to, investigate and remediate
conditions caused by any Hazardous Substances) responsibilities, losses,
damages, deficiencies, punitive damages, and other damages, fines, penalties,
costs, expenses (including reasonable attorney's fees) interest, bonds,
security or other financial assurance, resulting from any claim or demand
under the authority of or based upon any Environmental Law.
(b) Seller shall not be required to indemnify Purchaser or any other
Person under Section 8.3(a) until the aggregate of all amounts paid by
Purchaser or Trinova for which indemnity would otherwise be due under such
Section or the corresponding Section of the US Agreement exceeds $1,000,000
and then only to the extent of such excess; provided, however, that Seller
shall not be required to indemnify Purchaser under Section 8.3(a) for any
Environmental Liabilities incurred in connection with a breach by Purchaser of
the covenant in Section 4.16 or the corresponding Section of the US Agreement.
(c) Neither Purchaser nor any other Person shall be entitled to make
any claim for indemnification under Section 8.3(a) after the fifth anniversary
of the Closing Date; provided, however, that any such matter as to which a
claim has been asserted by notice to Seller that is pending or unresolved on
the last date for which a claim for indemnification may be made shall continue
to be covered by this Section
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until such matter is finally terminated or otherwise resolved by the parties
under this Agreement or by a court of competent jurisdiction and any amounts
payable hereunder are finally determined and paid.
(d) Purchaser shall indemnify and hold harmless Seller and its
affiliates and their respective officers, directors, employees, shareholders,
agents and representatives from any Environmental Claim with respect to which
Seller is not obligated to indemnify Purchaser as a result of the operation of
Section 8.3(b).
SECTION 8.3. Losses Net of Insurance, etc. The amount of any Loss for
which indemnification is provided under this Article VIII shall be net of any
amounts recovered by the Person indemnified pursuant to this Article VIII (the
"Indemnified Party") under insurance policies with respect to such Loss and
shall be (i) increased to take account of any net Tax cost incurred by the
Indemnified Party arising from the receipt or accrual of indemnity payments
hereunder (grossed up for such increase) and (ii) reduced to take account of
any net Tax benefit realized by the Indemnified Party arising from the payment
of any such Loss. Any indemnification payment hereunder shall initially be
made (i) in the case of net Tax costs or benefits, without regard to this
paragraph and shall be increased or reduced to reflect any such net Tax cost
(including gross-up) or net Tax benefit only after the Indemnified Party has
actually realized such cost or benefit, and (ii) in the case of insurance
amounts not yet recovered, without taking into account such unrecovered
insurance amounts, with a future payment to be made by the Indemnified Party
to the Indemnifying Party upon the recovery of, and in the amount of, any such
insurance amounts. For purposes of this Agreement, an Indemnified Party shall
be deemed to have "actually realized" a net Tax cost or net Tax benefit to the
extent that, and at such time as, the amount of Taxes payable by such
Indemnified Party is increased above or reduced below, as the case may be, the
amount of Taxes that such Indemnified Party would be required to pay but for
the receipt of the indemnity payment or the payment of such Loss.
SECTION 8.4. Indemnification Procedures. With respect to third party
claims, all claims for indemnification by any Indemnified Party hereunder
shall be asserted and resolved as set forth in this Section 8.4. In the event
that any written claim or demand for which Seller or Purchaser as the case may
be (an "Indemnifying Party"), would be liable to any Indemnified Party
hereunder is asserted against or sought to be collected from any Indemnified
Party by a third party, such Indemnified Party shall promptly, but in no event
more than 15 days following such Indemnified Party's receipt of such claim or
demand, notify the Indemnifying Party of such claim or demand and the amount
or the estimated amount thereof to the extent then feasible (which estimate
shall not be conclusive of the final amount of such claim and demand) (the
"Claim Notice"); provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent
the Indemnifying Party shall have been actually
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prejudiced as a result of such failure (except that the Indemnifying Party
shall not be liable for any expenses incurred during the period in which the
Indemnified Party failed to give such notice). The Indemnifying Party shall
have 45 days from the personal delivery or mailing of the Claim Notice (the
"Notice Period") to notify the Indemnified Party (a) whether or not the
Indemnifying Party disputes the liability of the Indemnifying Party to the
Indemnified Party hereunder with respect to such claim or demand and
(b) whether or not it desires to defend the Indemnified Party against such
claim or demand. All costs and expenses incurred by the Indemnifying Party in
defending such claim or demand shall be a liability of, and shall be paid by,
the Indemnifying Party. Except as hereinafter provided, in the event that the
Indemnifying Party notifies the Indemnified Party within the Notice Period
that it desires to defend the Indemnified Party against such claim or demand,
the Indemnifying Party shall have the right to defend the Indemnified Party by
appropriate proceedings and shall have the sole power to direct and control
such defense; provided, however, that the Indemnifying Party shall not cease
to defend, settle or otherwise dispose of any Claim without the prior written
consent of the Indemnified Party if as a result thereof the Indemnified Party
could become subject to injunctive or other equitable relief or the business
of the Indemnified Party could be materially adversely affected in any
nonmonetary manner. If any Indemnified Party desires to participate in any
such defense it may do so at its sole cost and expense. The Indemnified Party
shall not settle a claim or demand for which it is indemnified by the
Indemnifying Party without the written consent of the Indemnifying Party. The
assumption of the defense or the settlement or other disposal of any claim by
the Indemnifying Party shall not prejudice in any way the right of such
Indemnifying Party to challenge and defend against the Indemnified Party's
assertion of a right to indemnification under this Agreement. If the
Indemnifying Party elects not be defend the Indemnified Party against such
claim or demand, whether by not giving the Indemnified Party timely notice as
provided above or otherwise, then the amount of any such claim or demand, or,
if the same be contested by the Indemnified Party, then that portion thereof
as to which such defense is unsuccessful (and the reasonable costs and
expenses pertaining to such defense) shall be the liability of the
Indemnifying Party hereunder. To the extent the Indemnifying Party shall
direct, control or participate in the defense or settlement on any third party
claim or demand, the Indemnified Party will give the Indemnifying Party and
its counsel access to, during normal business hours, the relevant business
records and other documents, and shall permit them to consult with the
employees and counsel of the Indemnified Party. The Indemnified Party shall
use its reasonable efforts in the defense of all such claims.
SECTION 8.6. Adjustment to Purchase Price. Seller and Purchaser shall
treat any indemnity payment under this Agreement as an adjustment to the
Purchase Price for Tax purposes unless a final determination with respect to
the Indemnified Party causes any such payment not to be treated as an
adjustment to the Purchase Price for tax purposes.
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ARTICLE IX
General Provisions
SECTION 9.1. Notices. All notices and other communications hereunder
shall be in writing (including wire, telefax or similar writing) and shall be
sent, delivered or mailed, addressed, or telefaxed:
(a) if to Purchaser, to:
Trinova Limited
P.O. Box 4
New Lane
Havant
Hampshire
PO9 2WB
Attention of Peter Hine
with copies to:
Nabarro Nathanson ("Purchaser's Solicitors")
50 Stratton Street
London W1X 6NX
Tel: 0171 493 9933
Fax: 0171 629 7900
Attention of Mark Saunders
Trinova Corporation
3000 Strayer
Maumee, Ohio 43537-0050
Phone: (419) 867-2340
Fax: (419) 867-2209
Attention of James E. Kline, Esq.
Shumaker, Loop & Kendrick
North Courthouse Square
1000 Jackson
Toledo, Ohio 43624
Phone: (419) 241-9000
Fax: (419) 241-6894
Attention of Lyman F. Spitzer, Esq.
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(b) if to Seller, to:
Cincinnati Milacron U.K. Limited
P.O. Box 505, Kingsbury Road,
Birmingham B24 OQU England
Phone: 0121 351 3821
Fax: 0121 351 7891
Attention of Roy Smith
with copies to:
Cincinnati Milacron Inc.
4701 Marburg Avenue
Cincinnati, Ohio 45209
Phone: (513) 841-8287
Fax: (513) 841-7166
Attention of Wayne F. Taylor, Esq.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Phone: (212) 474-1000
Fax: (212) 474-3700
Attention of James M. Edwards, Esq.
Wragge & Co ("Seller's Solicitors")
55 Colmore Row,
Birmingham
B3 2AS England
Phone: (0)121 233 1000
Fax: (0)121 214 1099
Attention of Stephen J. Braithwaite Esq.
Each of notice, request or other communication shall be given (i) by hand
delivery, (ii) by nationally recognized courier service or (iii) by telefax,
receipt confirmed. Each such notice, request or communication shall be
effective (i) if delivered by hand or by nationally recognized courier
service, when delivered at the address specified in this Section 9.1 (or in
accordance with the latest unrevoked written direction from such party) and
(ii) if given by telefax, when such telefax is transmitted to the telefax
number specified in this Section 9.1 (or in accordance with the latest
unrevoked written direction from such party), and the appropriate confirmation
is received.
SECTION 9.2. Interpretation. (a) When a reference is made in this
Agreement to a Section, Appendix, Schedule or Exhibit, such reference shall be
to a Section, Appendix, Schedule or Exhibit of this Agreement unless otherwise
indicated. The table of contents and
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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 words "included", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation". All accounting terms not defined in this Agreement or in the
notes to the Financial Statements shall have their meanings under GAAP.
(b) When a reference is made in this Agreement "to the knowledge of
Seller" or "to Seller's Knowledge" or "to the knowledge of Purchaser" or "to
Purchaser's Knowledge" such reference shall mean to the knowledge of certain
employees of Seller or Purchaser, as the case may be, listed on Schedule 9.2
after reasonable inquiry of persons under their supervision whom they believe
will have relevant knowledge.
SECTION 9.3. Survival of Representations and Warranties. The
representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall pursuant to Section 8.1 survive for
a period of 24 months from the Closing Date provided however, that the
representations and warranties under Sections 3.1(a), 3.1(b), 3.1(f) and
3.1(g) (but Sections 3.1(f) and 3.1(g) only with respect to title) shall
survive the Closing with no expiration date. This Section 9.3 shall not limit
any covenant or agreement of the parties which by its terms contemplates
performance after the Closing Date.
SECTION 9.4. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If
any provision of this Agreement, or the application thereof to any person or
entity or any circumstance, is found to be invalid or unenforceable in any
jurisdiction, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in
any other jurisdiction.
SECTION 9.5. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall, taken together, be considered one and the same agreement, it being
understood that both parties need not sign the same counterpart.
SECTION 9.6. Entire Agreement; No Third Party Beneficiaries. This
Agreement (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the
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parties with respect to the subject matter hereof and (b) is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
SECTION 9.7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of England, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law.
SECTION 9.8. Consent to Jurisdiction. Each of Purchaser and Seller
irrevocably submits to the non-exclusive jurisdiction of the High Court of
Justice in England, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby.
SECTION 9.9. Schedules. The disclosure of any matter in any Schedule
to this Agreement shall be deemed to be a disclosure for all purposes of this
Agreement to which such matter could reasonably be expected to be pertinent,
but shall expressly not be deemed to constitute an admission by Seller or
Purchaser, or to otherwise imply, that any such matter is material for
purposes of this Agreement.
SECTION 9.10. Publicity. So long as this Agreement is in effect,
neither Seller nor Purchaser shall issue or cause the publication of any press
release or other public announcement with respect to the transactions
contemplated by this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld or withdrawn, except as may be
required by law or the regulations of any securities exchange. Any party
hereto that is required to make a public announcement shall promptly notify
the other party hereto and shall allow the other party hereto to comment on
the text of such announcement.
SECTION 9.11. Expenses. Whether or not the Closing takes place, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the party incurring such
expense.
SECTION 9.12. Assignment. Neither this Agreement nor any of the rights
or obligations hereunder shall be assigned by either of the parties hereto
without the prior written consent of the other party, except that any party
may assign all its rights and obligations to the assignee of all or
substantially all of the assets of such party or of a division or business
unit of such party, provided that such party shall in no event be released
from its obligations hereunder without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and enforceable by the parties and their
respective successors and assigns.
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SECTION 9.13. Restrictive Trade Practices Act 1976 ("RTPA"). This
Agreement and any arrangement of which it forms part and all the rights and
obligations of the parties under it will become effective on the date of this
Agreement except that should this Agreement or any such arrangement be subject
to registration under the RTPA then the provisions which render it registrable
will not come into effect until the day after the date on which a copy and
particulars of this Agreement or any arrangement of which it forms part are
furnished to the Director General of Fair Trading for registration under the
RTPA.
SECTION 9.14. Transitional Services Agreement. The parties agree that
as soon as practicable following the date hereof, the parties hereto shall
enter into a transitional services agreement for transitional services that
are reasonable and customary for this type of transaction, which services
shall be provided by Seller to Purchaser.
AS WITNESS, this Agreement has been signed by the duly authorised
representatives of SELLER and PURCHASER the date first written above.
CINCINNATI MILACRON U.K. LIMITED,
by
____________________________
Name:
Title:
TRINOVA LIMITED,
by
____________________________
Name:
Title:
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Appendix A
As used in the Agreement, the following terms shall have the
following meanings:
"Account Designation Notice" shall have the meaning set forth in
Section 1.5.
"Accounts Receivable" shall mean all book debts, prepayments and
other accounts receivable of Seller on the Closing Date that primarily
relate to or arise primarily out of operations of the Transferred
Business other than accounts receivable from Seller or its affiliates.
"Acquired Assets" shall have the meaning set forth in
Section 1.2(a).
"Acquired Books and Records" shall mean all books and records of
the Transferred Business located at the Scheduled Real Property.
"Acquired Contracts" shall mean all Contracts to which Seller is a
party or by which Seller is bound that primarily relate to, arise
primarily out of or are used primarily in connection with the
Transferred Business.
"Acquired Intellectual Property" shall mean all Intellectual
Property owned by Seller that primarily relates, arises primarily out of
or is used primarily in connection with the operations of the
Transferred Business.
"Acquired Inventory" shall mean Inventory on the Closing Date
other than Excluded Inventory.
"Acquired Know-how" shall mean all Know-how owned by Seller that
primarily relates to, arises primarily out of or is used primarily in
connection with the operations of the Transferred Business.
"Acquired Permits" shall mean all Permits owned by Seller that
primarily relate to, arise primarily out of or are used primarily in
connection with the operations of the Transferred Business.
An "affiliate" of any Person shall mean any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first Person.
"Control" shall have the meaning given to it by Section 840 of the Taxes
Act.
"agreed form" shall mean in respect of any document, the form of
that document agreed by (and for the purpose of identification signed by
or on behalf of) the parties.
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"Agreement" shall mean this Asset Purchase Agreement dated as of
December 15, 1995, between Seller and Purchaser, including the
Schedules, Exhibits and the Appendices hereto, as it may be amended from
time to time.
"Assumed Liabilities" shall have the meaning set forth in
Section 1.4(a).
"Balance Sheet" shall have the meaning set forth in Section 3.1(c)
hereto.
"Base Net Asset Value" shall mean the difference between (x) the
total assets shown on the Projected Balance Sheet and (y) the total
liabilities shown on the Projected Balance Sheet, excluding any deferred
tax assets and deferred tax liabilities.
"Biggleswade Plant" shall mean Seller's plant situated in Units 1
and 2, Eldon Way, Biggleswade SG18 8NH, England, utilized for the sale
and repair of Electronic Controls and the manufacture of electrical
assemblies and electrical subassemblies.
"Books and Records" shall mean all books, ledgers, files,
invoices, customers' and suppliers' lists and operating records related
to or used in connection with the Transferred Business (other than VAT
records and other books and records which the Seller is required by law
to retain).
"Claim Notice" shall have the meaning set forth in Section 8.5.
"Closing" shall have the meaning set forth in Section 2.1.
"Closing Date" shall mean the date of the Closing.
"Closing Date Balance Sheet" shall mean the asset and liability
statement prepared, or caused to be prepared, by Seller in accordance
with Section 1.7(b) hereof.
"Closing Date Net Asset Value" shall mean the difference between
(x) the total assets shown on the Closing Date Balance Sheet properly
prepared in accordance with Section 1.7 and (y) the total liabilities
shown on such Closing Date Balance Sheet, excluding any deferred tax
assets and deferred tax liabilities.
"Companies Acts" shall mean the Companies Acts 1948 to 1989.
"Contracts" shall mean all contracts, leases, indentures,
agreements, commitments and all other legally binding arrangements,
whether oral or written.
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The "CPA Firm" shall mean Arthur Andersen, LLP. or such other firm
of independent chartered accountants as to which Seller and Purchaser
shall mutually agree.
"Division" shall mean the Electronic Systems Division of Seller
which carries on business at and from the Biggleswade Plant.
"Electronic Controls" shall mean electronic computer controls and
associated Division developed software for such electronic computer
controls.
"Employment Regulations" shall have the meaning set forth in
Section 5.3.
"Environmental Laws" means any applicable laws, statutes,
regulations, orders or decrees issued, promulgated or entered into by
any Governmental Entity, relating to the environment, preservation or
reclamation of natural resources, or to the production, use, storage,
labelling, transportation management or disposal of Hazardous Substances
or the risks to employees arising therefrom.
"Environmental Liabilities" shall have the meaning set forth in
Section 8.3.
"Environmental Permits" means all permits, licenses or
authorizations from any Governmental Entity required under Environmental
Laws for the operation of the Transferred Business.
"Equipment" shall mean all machinery, plant, equipment, vehicles,
loose tools, patterns, jigs, furniture, fixtures, and fittings (other
than landlord's fixtures and fittings) of Seller, other than Excluded
Assets, that primarily relate to, arise primarily out of or are used
primarily in connection with the Transferred Business.
"Excluded Assets" shall have the meaning set forth in
Section 1.2(b).
"Excluded Books and Records" shall mean all Books and Records not
primarily related to the Transferred Business.
"Excluded Inventory" shall mean (a) all Inventory not reflected on
the books and records of the Division on the Closing Date, (b) the Free
Issue Inventory and (c) Service Parts.
"Excluded Liabilities" shall have the meaning set forth in
Section 1.4(b).
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"Excluded Tax Liabilities" shall mean all obligations or
liabilities of Seller for (A) Taxes attributable to the Transferred
Business for taxable periods ending on or before the Closing Date or
related to any income or gain from the transactions contemplated by this
Agreement or any deferred gain on any intercompany transactions and
(B) Taxes attributable to the Transferred Business for the portion
ending on the Closing Date of any taxable period that includes but does
not end on the Closing Date (in each case, other than the Real Property
Tax Liabilities). For the purposes of calculating the amount of Taxes
described in clause (B) of the preceding sentence, the Tax Liabilities
attributable to any such portion shall be (i) in the case of any
personal and intangible property Tax, the amount of any such Tax for the
entire taxable period multiplied by a fraction, the denominator of which
is the number of days during such taxable period and the numerator of
which is the number of days in such portion and (ii) in the case of any
other Tax (other than a Real Property Tax Liability), the amount of such
Tax attributable to the activities of the Transferred Business occurring
on or before the Closing Date.
"Free Issue Inventory" shall mean the parts, components and other
material and the copyright in drawings provided by MT Division to
Division and all other free issue materials of a similar nature provided
to Division by its customers.
"GAAP" shall mean United Kingdom generally accepted accounting
principles.
"Goodwill" shall mean the goodwill and connection of the
Transferred Business including the exclusive right of Purchaser to carry
on the Transferred Business in succession to Seller.
"Governmental Entity" shall mean any court, administrative agency
or commission or other governmental authority or instrumentality,
domestic or foreign.
"Hazardous Substances" means all hazardous or toxic substances,
wastes or chemicals, petroleum (including petroleum crude oil or any
fraction or by-product thereof) regulated pursuant to any Environmental
Law.
"Hilpert and Hurco Claims" shall have the meaning set forth in
Section 1.4(b)(xi).
"Indemnified Party" shall have the meaning set forth in Section
8.4.
"Indemnifying Party" shall have the meaning set forth in
Section 8.5.
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"Intellectual Property" shall mean the (i) Patents,
(ii) Trademarks, (iii) Trade Names, (iv) copyrights (other than the
copyright in the drawings referred to in the definition of "Free Issue
Inventory"), (v) service marks, (vi) shop rights, and (vii) license
rights.
"Inventory" means all raw materials, work in process, finished
goods, supplies, parts and other inventories held by Seller or any of
its affiliates at any location primarily related to the Transferred
Business.
"Know-how" shall mean all trade secrets, know-how (including
product know-how and use and application know-how), formulas, processes,
product designs, specifications, quality control procedures,
manufacturing, engineering and other drawings, technology, technical
information, safety information, lab journals, engineering data and
design and engineering specifications, research records, market surveys
and all promotional literature, customer and supplier lists and similar
data.
"Lien" shall mean any mortgage, claim, charge, lien, security
interest, easements, rights-of-way, pledges or other encumbrance.
"Loss" shall have the meaning set forth in Section 8.1.
"Machines" shall mean plastics machinery and machine tools.
"Material Contract" shall mean (A) the Contracts listed on
Schedule 3.1(k)(1) and (B) the Contracts listed on Schedule 3.1(k)(2)
that involve an amount in excess of $150,000.
"Material Know-how" shall have the meaning set forth in
Section 3.1(i).
"Milacron" shall mean Cincinnati Milacron Inc., a Delaware
corporation and the parent corporation of Seller.
"Milacron Group" shall mean Milacron and its subsidiaries and
subsidiary undertakings whether direct or indirect.
"MT Division" shall mean the Machine Tools Division of Seller
which carries on business at and from Kingsbury Road, Birmingham,
England.
"Notice Period" shall have the meaning set forth in Section 8.5.
"Patents" shall mean patents (including all reissues,
reexaminations, divisions, continuations, continuations in part and
extensions thereof), patent applications and patent disclosures docketed
and all other patent rights described in Schedule 3.1(i)(I).
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"Permits" shall mean all permits, licenses, franchises, approvals
and authorizations by governmental or regulatory authorities or bodies.
"Permitted Liens" shall have the meaning set forth in
Section 3.1(f).
"Person" shall mean any individual, corporation, partnership,
joint venture, trust, business association, organization, Governmental
Entity or other entity.
"Projected Balance Sheet" shall have the meaning set forth in
Section 1.7(a) hereof.
"Property" shall have the meaning set forth in Section 3.1(g).
"Purchase Price" shall have the meaning set forth in Section 1.5.
"Purchase Price Adjustment Amount" shall have the meaning set
forth in Section 1.7(e).
"Purchaser" shall have the meaning set forth in the heading of the
Agreement.
"Purchaser's Objection" shall have the meaning set forth in
Section 1.7(c).
"Real Property Tax Liabilities" shall mean the UK equivalent of
all US obligations or liabilities for real property taxes attributable
to the Scheduled Real Property for all taxable periods.
"Scheduled Real Property" shall mean the leasehold interest in
real property of Seller listed in Schedule 3.1(g), together with its
right, title and interest in all buildings, improvements, fixtures and
all other appurtenances thereto.
"Seller" shall have the meaning set forth in the heading of the
Agreement.
"Seller's Defined Benefit Plan" shall mean the Cincinnati Milacron
Pension Plan currently governed by a Definitive Deed and Rules dated
14th February 1994 (as amended).
"Seller's Names" shall have the meaning set forth in Section 4.8.
"Service Parts" shall have the meaning set forth in Section 4.5.
"Subsidiary" shall have the meaning given to it by Section 736 of
the Companies Act 1985.
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"Supply Agreement" shall mean the Electronic Control Supply
Agreement dated as of 15th December 1995 between Milacron and Trinova
whereby Trinova will supply products and services to Milacron.
"Tax" or "Taxes" shall mean all forms of taxation, charges,
duties, imposts, rates, levies and governmental charges (whether
national or local) in the nature of taxation whatsoever and whensoever
created, enacted or imposed and whether of the United Kingdom or
elsewhere (including VAT, Income Tax payable under the PAYE system and
National Insurance Contributions) together with all fines, penalties,
interest charges and surcharges connected therewith.
"Tax Claims" shall mean all rights to claims available to, or
being pursued by, Seller for (A) refunds of Taxes attributable to the
Transferred Business for taxable periods ending on or before the Closing
Date and (B) refunds of Taxes attributable to the Transferred Business
for the portion ending on the Closing Date of any taxable period that
includes but does not end on the Closing Date. For purposes of
calculating the amount of refunds of Taxes described in clause (B) of
the preceding sentence, the refunds of Taxes attributable to any such
portion shall be (i) in the case of any refund of any real, personal and
intangible property Tax, the amount of any such refund for the entire
taxable period multiplied by a fraction, the denominator of which is the
number of days during such taxable period and the numerator of which is
the number of days in such portion and (ii) in the case of any refund of
any other Tax, the amount of any refund of Taxes attributable to the
activities of the Transferred Business occurring on or before the
Closing Date.
"Taxes Act" shall mean the Income and Corporation Taxes Act 1988.
"Tax Return" shall mean any return (including information
returns), report, declaration or statement relating to Taxes and filed
with a taxing authority, including any schedule or attachment thereto or
amendment thereof.
"Trademarks" shall mean trademarks, registrations thereof, pending
applications therefor and such unregistered rights as may exist through
use.
"Trade Names" shall mean trade names, brand marks, trade dress,
brand names, logos and all other names and slogans embodying business or
product goodwill for which no trademark registration has been obtained
and for which no application is pending.
"Transferred Business" shall mean all the business conducted by
the Division at the Biggleswade Plant inclusive of the Acquired Assets
and Assumed Liabilities and excluding the Excluded Liabilities and the
Excluded Assets.
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"Transferred Employees" shall mean all employees of Seller who
shall become employees of Purchaser upon the transfer of the Transferred
Business as listed in Schedule 5.1 by virtue of the application of the
Employment Regulations.
"Trinova" shall mean Trinova Corporation, an Ohio corporation and
the parent corporation of Purchaser.
"US Agreement" shall mean the Asset Purchase Agreement dated as of
December 15, 1995, between Milacron and Trinova whereby Milacron will
sell certain assets and transfer certain liabilities to Trinova.
"VAT" shall mean Value Added Tax.
"VATA 1994" shall have the meaning set forth in Section 1.6.
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