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
CINCINNATI MILACRON INC.
(Exact name of registrant as specified in charter)
Delaware 1-8475 31-1062125
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
4701 Marburg Avenue, Cincinnati, Ohio 45209
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (513) 841-8100
NONE
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On December 30, 1995 (the "Closing Date"), pursuant
to an Asset Purchase Agreement between Cincinnati
Milacron Inc. (the "Registrant") and Trinova
Corporation (the "Purchaser") dated as of December
15, 1995 (the "U.S. Asset Purchase Agreement"), and
an Asset Purchase Agreement between Cincinnati
Milacron U.K. Limited and Trinova Limited dated as of
December 15, 1995 (the "UK Asset Purchase
Agreement"), the Registrant has disposed of and
transferred substantially all the assets and
liabilities of its Electronic Systems Division (the
"Division") to the Purchaser. The Division is engaged
in the business of designing and manufacturing
controls, control components, software, electronics,
motor drives, motor drive components, power panel
assemblies and related products for machine tools and
plastics processing equipment and performing contract
services for outside customers. A copy of the U.S.
Asset Purchase Agreement and a copy of the UK Asset
Purchase Agreement are filed herewith as Exhibits 2.1
and 2.2 and reference is made thereto for the
complete terms and conditions of these Agreements.
The purchase price is $95,225,000 under the U.S. Asset
Purchase Agreement and [British Pound] 6,850,000 under
the UK Asset Purchase Agreement. Thus, the total
purchase price is approximately $105 million (using the
$/[British Pound] exchange rate in effect on the
Closing Date). In both Agreements, the purchase price
is calculated and based on projected balance sheets and
subject to adjustment. The adjustment amounts, if any,
shall be equal to the respective balance between the
net asset value shown in the projected balance sheet
and the net asset value shown in the closing date
balance sheet.
Darryl F. Allen, chairman, president and chief
executive officer of the Purchaser, is a director of
the Registrant. Apart from that, no material
relationship exists between the Registrant and the
Purchaser or any of its affiliates, directors or
officers, or any associate of any such directors or
officers.
<PAGE>
The Division employs approximately 600 employees and
had sales of approximately $90 million in 1995.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
It is impracticable to provide the required financial
statements and pro forma financial information at
this time. The required financial statements and pro
forma financial information will be filed under cover
of Form 8-K/A as soon as practicable, but not later
than March 14, 1996, as required by Item 7(a)(4) of
the General Instructions.
The following Exhibits are included with this Form 8-K:
Exhibit Sequential
Number Description of Exhibit Page Number
2.1 U.S. Asset Purchase Agreement
dated as of December 15, 1995,
between Cincinnati Milacron Inc.,
a Delaware corporation, and
Trinova Corporation, an Ohio
corporation (Schedules and
Exhibits have been omitted
pursuant to Item 6.01(b)(2) of
Regulation S-K. Such Schedules
and Exhibits are listed and
described in the U.S. Asset
Purchase Agreement. The
Registrant hereby agrees to
furnish to the Securities and
Exchange Commission, upon its
request, any or all of such
omitted Schedules and Exhibits).
<PAGE>
Exhibit Sequential
Number Description of Exhibit Page Number
2.2 UK Asset Purchase Agreement dated
as of December 15, 1995, between
Cincinnati Milacron U.K. Limited,
a company incorporated in England
and Wales, and Trinova Limited, a
company incorporated in England
and Wales (Schedules and Exhibits
have been omitted pursuant to Item
6.01(b)(2) of Regulation S-K.
Such Schedules and Exhibits are
listed and described in the UK
Asset Purchase Agreement. The
Registrant hereby agrees to
furnish to the Securities and
Exchange Commission, upon its
request, any or all of such
omitted Schedules and Exhibits).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
CINCINNATI MILACRON INC.
Date: January 5, 1996 By: /s/ Wayne F. Taylor
Wayne F. Taylor
Vice President, General
Counsel and Secretary
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
EXHIBITS
Filed with Form 8-K
Date of report: December 30, 1995
Current Report Under the Securities
Exchange Act of 1934
CINCINNATI MILACRON INC.
Exhibit 2.1
ASSET PURCHASE AGREEMENT
dated as of
December 15, 1995
between
CINCINNATI MILACRON INC.
and
TRINOVA CORPORATION
<PAGE>
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
<PAGE>
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
SECTION 4.12 Further Assurances; Cooperation
After Closing............................. 30
SECTION 4.13 Certain Understandings....................... 31
SECTION 4.14 Supplies..................................... 31
SECTION 4.15 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
<PAGE>
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1 Termination ................................. 40
SECTION 7.2 Amendments and Waivers....................... 41
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
<PAGE>
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
<PAGE>
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.
<PAGE>
Asset Purchase Agreement
2
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):
(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
<PAGE>
Asset Purchase Agreement
3
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;
(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
<PAGE>
Asset Purchase Agreement
4
(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.
(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
<PAGE>
Asset Purchase Agreement
5
(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.;
<PAGE>
Asset Purchase Agreement
6
(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.
(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
<PAGE>
Asset Purchase Agreement
7
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. 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
<PAGE>
Asset Purchase Agreement
8
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
<PAGE>
Asset Purchase Agreement
9
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 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
<PAGE>
Asset Purchase Agreement
10
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 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
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Asset Purchase Agreement
11
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.
<PAGE>
Asset Purchase Agreement
12
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
<PAGE>
Asset Purchase Agreement
13
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 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
<PAGE>
Asset Purchase Agreement 14
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.
(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
<PAGE>
Asset Purchase Agreement
15
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
<PAGE>
Asset Purchase Agreement
16
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 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
<PAGE>
Asset Purchase Agreement
17
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 $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;
<PAGE>
Asset Purchase Agreement
18
(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
<PAGE>
Asset Purchase Agreement
19
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)(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
<PAGE>
Asset Purchase Agreement
20
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.
(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
<PAGE>
Asset Purchase Agreement
21
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:
(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
<PAGE>
Asset Purchase Agreement
22
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
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Asset Purchase Agreement
23
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.
(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
<PAGE>
Asset Purchase Agreement
24
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 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
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Asset Purchase Agreement
25
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
<PAGE>
Asset Purchase Agreement
26
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.
(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
<PAGE>
Asset Purchase Agreement
27
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.
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
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Asset Purchase Agreement
28
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
<PAGE>
Asset Purchase Agreement
29
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 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.
<PAGE>
Asset Purchase Agreement
30
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 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.
<PAGE>
Asset Purchase Agreement
31
(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
<PAGE>
Asset Purchase Agreement
32
Electronic Controls Supply Agreement relating to the supply
of Hilpert and Hurco Products thereunder.
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
<PAGE>
Asset Purchase Agreement
33
purposes of vesting in Purchaser's 401(k) Plan. Notwith-
standing 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 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
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Asset Purchase Agreement
34
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.
<PAGE>
Asset Purchase Agreement
35
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.
<PAGE>
Asset Purchase Agreement
36
(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.
(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
<PAGE>
Asset Purchase Agreement
37
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.
(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.
<PAGE>
Asset Purchase Agreement
38
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.
<PAGE>
Asset Purchase Agreement
39
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.
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
<PAGE>
Asset Purchase Agreement
40
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.
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
<PAGE>
Asset Purchase Agreement
41
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
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
<PAGE>
Asset Purchase Agreement
42
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
<PAGE>
Asset Purchase Agreement
43
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 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
<PAGE>
Asset Purchase Agreement
44
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
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.
<PAGE>
Asset Purchase Agreement
45
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 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
<PAGE>
Asset Purchase Agreement
46
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
<PAGE>
Asset Purchase Agreement
47
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 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
<PAGE>
Asset Purchase Agreement
48
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:
<PAGE>
Asset Purchase Agreement
49
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.
<PAGE>
Asset Purchase Agreement
50
"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;
"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
<PAGE>
Asset Purchase Agreement
51
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.
"Division" shall mean the Electronic Systems
Division of Seller which carries on business at and from the
South Lebanon Plant.
<PAGE>
Asset Purchase Agreement
52
"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.
Sections 9601 et seq. ("CERCLA"), the Federal Water
Pollution Control Act, 33 U.S.C. Sections 1251 et seq., the
Clean Air Act, 42 U.S.C. Sections 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).
<PAGE>
Asset Purchase Agreement
53
"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).
"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.
<PAGE>
Asset Purchase Agreement
54
"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.
"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.
<PAGE>
Asset Purchase Agreement
55
"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).
"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.
<PAGE>
Asset Purchase Agreement
56
"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.
"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
<PAGE>
Asset Purchase Agreement
57
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
<PAGE>
Asset Purchase Agreement
58
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.
"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
<PAGE>
Asset Purchase Agreement
59
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.
Exhibit 2.2
AGREED FORM
===========================================================================
ASSET PURCHASE AGREEMENT
dated
December 15, 1995
between
CINCINNATI MILACRON U.K. LIMITED
and
TRINOVA LIMITED
===========================================================================
<PAGE>
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
<PAGE>
SECTION 4.4 Legal Requirements.................................. 31
SECTION 4.5 Noncompetition...................................... 32
SECTION 4.6 Agreement Regarding Non-Assignable
Contracts......................................... 32
SECTION 4.7 Stamp Duty.......................................... 33
SECTION 4.8 Use of Names........................................ 33
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
<PAGE>
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
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
<PAGE>
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
<PAGE>
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.
<PAGE>
2
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):
(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
<PAGE>
3
(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;
(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
<PAGE>
4
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");
(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.
<PAGE>
5
(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 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
<PAGE>
6
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;
(G) Purchaser shall not create any fixed charge
over or assign the licence hereby conferred or
<PAGE>
7
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 Purchasers.
(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
<PAGE>
8
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;
(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
<PAGE>
9
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.
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
<PAGE>
10
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
(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]
<PAGE>
11
(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;
(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
<PAGE>
12
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;
<PAGE>
13
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 [British Pound] 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;
<PAGE>
14
(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
(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 nd 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
<PAGE>
15
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 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
<PAGE>
16
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, 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
<PAGE>
17
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 promptly transfer or deliver to
<PAGE>
18
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).
<PAGE>
19
(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
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
<PAGE>
20
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 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
<PAGE>
21
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 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
<PAGE>
22
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
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
<PAGE>
23
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);
<PAGE>
24
(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.
<PAGE>
25
(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 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
<PAGE>
26
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
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.
<PAGE>
27
(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;
(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
<PAGE>
28
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:
(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
<PAGE>
29
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.
<PAGE>
30
(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
<PAGE>
31
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 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
<PAGE>
32
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 (iv) 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.
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
<PAGE>
33
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 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
<PAGE>
34
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 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,
<PAGE>
35
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,
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36
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 4.13. 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
<PAGE>
37
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.
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.
<PAGE>
38
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 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
<PAGE>
39
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:
(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;
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40
SECTION 5.3. 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.
(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
<PAGE>
41
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.
<PAGE>
42
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 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
<PAGE>
43
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.
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
<PAGE>
44
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 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
<PAGE>
45
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 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).
<PAGE>
46
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
<PAGE>
47
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 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.
<PAGE>
48
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.
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
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49
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.
(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.
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50
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 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
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51
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
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.
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52
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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53
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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54
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
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55
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.
"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.
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56
"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.
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
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57
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).
"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.
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58
"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.
"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
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59
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).
"Permits" shall mean all permits, licenses, franchises, approvals
and authorizations by governmental or regulatory authorities or
bodies.
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60
"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.
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61
"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.
"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,
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62
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.
"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.
