<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securitites Exchange Act of 1934
Date of Report
(Date of earliest event reported): December 29, 1995
SEQUA CORPORATION
------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware
--------------------------------------------
(State or other jurisdiction of incorporation)
1-804 13-1885030
---------------------- ----------------------------
(Commission File Number) (IRS Employer Identification No.)
200 Park Avenue, New York, New York 10166
- -------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 986-5500
--------------
Exhibit Index appears on Page 8
<PAGE>
Item 2. Acquisitions and Dispositions of Assets.
----------------------------------------
On December 29, 1995, pursuant to a Purchase Agreement
between Sequa Corporation and certain of its subsidiaries
(collectively, "Sequa") and EL-OP U.S., Inc., Sequa sold
substantially all of the business and operating assets, excluding
billed receivables, of its Kollsman Division ("Kollsman
Division") and its subsidiary, Kollsman Manufacturing Company,
Inc. ("KMC")to Kollsman, Inc. and KMC Systems, Inc., both
Delaware corporations, and Kollsman Export Corporation, a foreign
sales corporation organized under the laws of the United States
Virgin Islands, all of the foregoing being assignees of EL-OP
U.S., Inc. (collectively, "Buyer"). Sequa received $49,612,000
in cash subject to final cash settlement adjustments.
$20,000,000 of the proceeds was used to repurchase accounts
receivable sold under Sequa's Receivables Purchase Agreement and
$2,700,000 was used to repay the principal amount outstanding
under Sequa's revolving credit agreement. The remaining proceeds
were invested in short-term interest-bearing securities.
The Kollsman Division and KMC together employed
approximately 620 employees in the United States. The Kollsman
Division designs and manufactures electronic and electro-optical
systems for military use and avionics equipment for commercial,
general aviation and military markets. KMC produces advanced
diagnostic equipment for medical supply companies.
Page 2<PAGE>
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
------------------------------------------------------
and Exhibits.
-------------
(b) Unaudited pro forma financial information of Sequa
Corporation reflecting the sale of the Kollsman Division and
KMC.
The unaudited pro forma consolidated financial information gives
effect to the sale of the Kollsman Division and KMC as if the
disposition had occurred, for balance sheet purposes, on
September 30, 1995 and, for income statement purposes, on
January 1 of the earliest period presented. The Pro Forma
Consolidated Balance Sheet at September 30, 1995 includes a $3.3
million after-tax gain on the sale of the Kollsman Division and
KMC. This pro forma adjustment has not been made to the Pro
Forma Statements of Consolidated Income as it will not have a
continuing impact on Sequa's results of operations.
The pro forma adjustments are based on presently available
information. Sequa's final accounting for the disposition of the
Kollsman Division and KMC is still under review by management and
will be finalized prior to the filing of Sequa's Annual Report on
Form 10-K for the year ended December 31, 1995. The pro forma
gain on the disposition of the Kollsman Division and KMC is based
on the net book value at September 30, 1995 of the assets sold
and a preliminary purchase price which is subject to final cash
settlement adjustments. Accordingly, Sequa's actual recording of
the disposition may differ from the pro forma financial
information. The unaudited pro forma financial information has
been included as required by the rules of the Securities and
Exchange Commission and is not necessarily indicative of the
results that would have been reported had the disposition
actually occurred on the dates specified, nor is it indicative of
the results that may be obtained in the future.
Page 3<PAGE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(Amounts in thousands)
(Unaudited)
<CAPTION>
Pro Forma Adjustments
--------------------- Sequa
Sequa Sale of Other Pro
Historical Kollsman Adjustments Forma
---------- -------- ----------- -----
<S> <C> <C> <C><C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 30,664$ 49,612 (A) $ (25,000)(F)$ 55,276
Trade receivables 213,462 - 25,000 (F) 238,462
Unbilled receivables 35,473 (8,290)(B) - 27,183
Inventories 272,404 (26,617)(B) - 245,787
Other current assets 37,893 (110)(B) - 37,783
---------- -------- --------- --------
Total current assets 589,896 14,595 - 604,491
---------- -------- --------- --------
INVESTMENTS
Net assets of discontinued
operations 145,219 - - 145,219
Other investments 16,428 (152)(B) - 16,276
---------- -------- --------- --------
161,647 (152) - 161,495
---------- -------- --------- --------
PROPERTY, PLANT AND EQUIPMENT 514,698 (12,305)(B) - 502,393
---------- -------- --------- ---------
OTHER ASSETS
Goodwill 324,547 (3,564)(B) - 320,983
Deferred charges 18,578 - - 18,578
---------- -------- --------- ---------
343,125 (3,564) - 339,561
---------- -------- --------- ---------
TOTAL ASSETS $1,609,366$ (1,426) $ - $1,607,940
========== ======== ========= ==========
CURRENT LIABILITIES
Current maturities of debt 16,111 - - 16,111
Accounts payable 109,993 - - 109,993
Taxes on income 24,354 - - 24,354
Accrued expenses 184,303 (9,597)(B) - 175,366
660 (D)
---------- -------- --------- ---------
Total current liabilities 334,761 (8,937) - 325,824
---------- -------- --------- ---------
LONG-TERM DEBT 563,844 - - 563,844
---------- -------- --------- ---------
OTHER LONG-TERM LIABILITIES
Deferred taxes on income 2,479 4,209 (E) - 6,688
Other long-term liabilities 144,700 - - 144,700
---------- -------- --------- ---------
147,179 4,209 - 151,388
---------- -------- --------- ---------
SHAREHOLDERS' EQUITY
Preferred and common stock 11,712 - - 11,712
Capital in excess of par value 287,204 - - 287,204
Cumulative translation adjustment 3,404 - - 3,404
Retained Earnings 346,271 3,302 (C) - 349,573
--------- -------- -------- ---------
648,591 3,302 - 651,893
Less: Cost of treasury stock (85,009) - - (85,009)
--------- -------- -------- ---------
TOTAL SHAREHOLDERS' EQUITY 563,582 3,302 - 566,884
--------- -------- -------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,609,366$ (1,426) $ - $1,607,940
========== ======== ======== ==========
</TABLE>
Page 4
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1995
(Amounts in thousands, except per share data)
(Unaudited)
<CAPTION>
Pro Forma Adjustments
---------------------
Sequa
Sequa Sale of Other Pro
Historical Kollsman Adjustments Forma
---------- -------- ----------- -----
<S> <C> <C> <C> <C> <C><C>
SALES $1,038,085 $ (77,066) $ - $ 961,019
---------- --------- --------- ----------
COSTS AND EXPENSES
Cost of sales 838,555 (53,475) - 785,080
Selling, general and
administrative 168,015 (12,185) - 155,830
---------- -------- --------- ---------
1,006,570 (65,660) - 940,910
---------- -------- --------- ---------
OPERATING INCOME 31,515 (11,406) - 20,109
OTHER INCOME (EXPENSE)
Interest expense (39,870) - 77 (H) (39,793)
Interest income 3,113 - - 3,113
Other, net 3,710 (2,745)(G) 564 (I) 1,529
---------- -------- --------- --------
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES (1,532) (14,151) 641 (15,042)
Income tax (provision)
benefit (4,500) 5,377 (244)(J) 633
---------- -------- --------- --------
NET LOSS FROM CONTINUING
OPERATIONS (6,032) $ (8,774) $ 397 (14,409)
======== =========
Preferred dividend
requirement (2,373) (2,373)
---------- --------
NET LOSS FROM CONTINUING
OPERATIONS APPLICABLE TO
COMMON STOCK $ (8,405) $(16,782)
========== ========
Weighted average common
shares outstanding 9,867 9,867
========== ========
LOSS PER SHARE FROM CONTINUING
OPERATIONS:
Historical $ (.85)
=========
Pro forma $ (1.70)
=======
</TABLE>
Page 5<PAGE>
<PAGE>
<TABLE>
SEQUA CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1994
(Amounts in thousands, except per share data)
(Unaudited)
<CAPTION>
Pro Forma Adjustments
Sequa
Sequa Sale of Other Pro
Historical Kollsman Adjustments Forma
---------- -------- ----------- -----
<S> <C> <C> <C> <C> <C>
SALES $1,419,550 $(109,167) $ - $1,310,383
---------- --------- --------- ----------
COSTS AND EXPENSES
Cost of sales 1,164,739 (81,000) - 1,083,739
Selling, general and
administrative 215,058 (17,943) - 197,115
---------- -------- --------- ---------
1,379,797 (98,943) - 1,280,854
---------- -------- --------- ---------
OPERATING INCOME 39,753 (10,224) - 29,529
OTHER INCOME (EXPENSE)
Interest expense (59,114) - 490 (H) (58,624)
Interest income 2,819 - - 2,819
Other, net (11,353) (15) 1,829 (I) (9,539)
---------- -------- --------- --------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (27,895) (10,239) 2,319 (35,815)
Income tax (provision) benefit 3,200 3,887 (881)(J) 6,206
---------- -------- --------- --------
NET LOSS FROM CONTINUING
OPERATIONS (24,695) $ (6,352) $ 1,438 (29,609)
======== =========
Preferred dividend requirement (3,163) (3,163)
---------- --------
NET LOSS FROM CONTINUING
OPERATIONS APPLICABLE TO
COMMON STOCK $ (27,858) $(32,772)
========== ========
Weighted Average common shares
outstanding 9,722 9,722
========== ========
LOSS PER SHARE FROM CONTINUING
OPERATIONS:
Historical $ (2.87)
==========
Pro forma $ (3.37)
=======
</TABLE>
Page 6<PAGE>
<PAGE>
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Amounts in thousands)
Pro Forma Balance Sheet Adjustments:
(A) Preliminary cash proceeds from the sale of the Kollsman
Division and KMC. The purchase price is subject to final
cash settlement adjustments.
(B) Kollsman Division and KMC net assets sold.
(C) Preliminary after-tax gain on sale of the Kollsman Division
and KMC calculated as follows:
Preliminary cash proceeds $ 49,612
Book value of assets sold (41,441)
Estimated transaction costs (660)
Estimated pre-tax gain on sale 7,511
Tax provision (4,209)
Estimated after-tax gain on sale $ 3,302
(D) Estimated accrued net transaction costs related to the sale
of the Kollsman Division and KMC.
(E) The tax effect of the sale of the Kollsman Division and
KMC.
(F) Cash proceeds used to repurchase all accounts receivable
sold under Sequa's Receivables Purchase Agreement ($25,000
at September 30, 1995) and to repay all principal amounts
outstanding under Sequa's revolving credit agreement (zero
at September 30, 1995)
Pro Forma Income Statement Adjustments
(G) Includes a one time gain of $2,664 on the sale of an
investment.
(H) Elimination of interest expense on principal amounts
outstanding from time to time during the period under
Sequa's revolving credit agreement.
(I) Elimination of discount expense related to the sale of
accounts receivable sold from time to time during the
period under Sequa's Receivables Purchase Agreement.
(J) Tax effect on pro forma adjustments (H) and (I).
Note: In accordance with the SEC's administrative position, no
pro forma adjustments have been made to impute interest
income on cash generated by the disposition in excess of
amounts assumed to have been used to eliminate amounts
outstanding under Sequa's short-term financing
arrangements.
Page 7
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(c) Exhibits
10.1 Purchase Agreement (Including Amendments 1 through
8) pursuant to which Sequa sold substantially all
of the business and operating assets of the
Kollsman Division and KMC.
Page 8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
SEQUA CORPORATION
By:/s/ William P. Ksiazek
William P. Ksiazek
Vice President and Controller
Dated: January 16, 1996
Page 9
<PAGE>
PURCHASE AGREEMENT<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. Sale and Purchase of Assets. . . . . . . . . . . . . . . . . . . . . 21
1.1 Sale of Assets to Buyer. . . . . . . . . . . . . . . . . . . . 21
1.2 Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . 27
2. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.1 Amount and Payment of Purchase Price . . . . . . . . . . . . . 29
2.2 Assumption of Liabilities. . . . . . . . . . . . . . . . . . . 30
2.3 Adjustment of Base Purchase Price. . . . . . . . . . . . . . . 33
2.4 Purchase Price Allocation. . . . . . . . . . . . . . . . . . . 35
3. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.1 Date of Closing. . . . . . . . . . . . . . . . . . . . . . . . 36
3.2 Outside Date for Closing . . . . . . . . . . . . . . . . . . . 36
4. Representations and Warranties by Sellers. . . . . . . . . . . . . . 37
4.1 Organization and Authority . . . . . . . . . . . . . . . . . . 37
4.2 Authorization of Agreement . . . . . . . . . . . . . . . . . . 37
4.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.4 Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . 38
4.5 Condition of Personal Property . . . . . . . . . . . . . . . . 39
4.6 Certain Subsidiaries . . . . . . . . . . . . . . . . . . . . . 39
4.7 Real Property Interests. . . . . . . . . . . . . . . . . . . . 40
4.8 Financial Statements; Other Financial Information. . . . . . . 44
4.9 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 45
4.10 Litigation; Compliance with Laws . . . . . . . . . . . . . . . 46
4.11 List of Agreements, Etc. . . . . . . . . . . . . . . . . . . . 47
i
<PAGE>
4.12 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.13 Status of Agreements . . . . . . . . . . . . . . . . . . . . . 48
4.14 Intangible Assets. . . . . . . . . . . . . . . . . . . . . . . 50
4.15 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.16 Labor Disagreements. . . . . . . . . . . . . . . . . . . . . . 51
4.17 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 52
4.18 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 53
4.19 Permits and Licenses . . . . . . . . . . . . . . . . . . . . . 56
4.20 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.21 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.22 Sufficient Assets. . . . . . . . . . . . . . . . . . . . . . . 57
4.23 Transactions with Affiliates . . . . . . . . . . . . . . . . . 57
4.24 Products; Customers; Suppliers . . . . . . . . . . . . . . . . 57
4.25 Product Warranties . . . . . . . . . . . . . . . . . . . . . . 58
4.26 FCPA Compliance. . . . . . . . . . . . . . . . . . . . . . . . 58
4.27 Certain Affiliates.. . . . . . . . . . . . . . . . . . . . . . 58
4.28 KSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.29 No Misrepresentation . . . . . . . . . . . . . . . . . . . . . 59
5. Representations and Warranties by Buyer. . . . . . . . . . . . . . . 60
5.1 Buyer's Organization . . . . . . . . . . . . . . . . . . . . . 60
5.2 Authorization of Agreement . . . . . . . . . . . . . . . . . . 60
5.3 Consents of Third Parties. . . . . . . . . . . . . . . . . . . 60
5.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.5 Financial Statements.. . . . . . . . . . . . . . . . . . . . . 61
5.6 Adequate Funds.. . . . . . . . . . . . . . . . . . . . . . . . 61
6. Further Agreements of the Parties. . . . . . . . . . . . . . . . . . 61
<PAGE>
6.1 Government Approvals . . . . . . . . . . . . . . . . . . . . . 61
6.2 Hart-Scott-Rodino Act. . . . . . . . . . . . . . . . . . . . . 62
6.3 Back-Ups . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.4 Operations of the Business . . . . . . . . . . . . . . . . . . 63
6.5 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.6 Disclaimer as to Physical Condition. . . . . . . . . . . . . . 65
6.7 Discharge of Liabilities . . . . . . . . . . . . . . . . . . . 66
6.8 Certain Consents and Approvals to Assignment . . . . . . . . . 67
6.9 Sales Taxes and Transfer Taxes and Allocated
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.10 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.11 Access to Information Prior to and After Closing . . . . . . . 68
6.12 Additional Information . . . . . . . . . . . . . . . . . . . . 70
6.13 Business Disclaimer. . . . . . . . . . . . . . . . . . . . . . 70
6.14 Covenant Against Competition, Solicitation and
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.15 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . 73
6.16 Other Action.. . . . . . . . . . . . . . . . . . . . . . . . . 74
6.17 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . 74
6.18 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 76
6.19 Miscellaneous Real Estate Documents. . . . . . . . . . . . . . 76
6.20 Payment of Costs and Expenses. . . . . . . . . . . . . . . . . 77
6.21 Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . 77
6.22 Nashua Lease . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.23 Warranty Costs and Recall Costs Reimbursement. . . . . . . . . 78
7. Conditions Precedent to Closing. . . . . . . . . . . . . . . . . . . 79
7.1 Conditions Precedent to the Obligations of Buyer . . . . . . . 79
<PAGE>
7.2 Conditions Precedent to the Obligations of
Sellers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
8. Transactions at the Closing. . . . . . . . . . . . . . . . . . . . . 83
8.1 Documents to be Delivered by Seller. . . . . . . . . . . . . . 83
8.2 Documents to be Delivered by Buyer . . . . . . . . . . . . . . 87
9. Survival of Representations and Warranties;
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.2 Sellers' Indemnification Obligation. . . . . . . . . . . . . . 90
9.3 Buyer Indemnification Obligation . . . . . . . . . . . . . . . 91
9.4 Conditions of Indemnification for Third Party
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.5 Deductible and Cap.. . . . . . . . . . . . . . . . . . . . . . 93
9.6 Time Limits On Indemnification . . . . . . . . . . . . . . . . 94
9.7 Limits On Indemnification. . . . . . . . . . . . . . . . . . . 94
10. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.2 Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . 96
11. Risk of Loss; Damage to Facilities . . . . . . . . . . . . . . . . . 96
11.1 Major Taking.. . . . . . . . . . . . . . . . . . . . . . . . . 96
11.2 Minor Taking.. . . . . . . . . . . . . . . . . . . . . . . . . 96
11.3 Minor Damage.. . . . . . . . . . . . . . . . . . . . . . . . . 97
11.4 Major Damage.. . . . . . . . . . . . . . . . . . . . . . . . . 99
11.5 Notice of Casualty or Condemnation.. . . . . . . . . . . . . . 100
12. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
12.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
12.2 Finders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
12.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 102
<PAGE>
12.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
12.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 102
12.6 Separability . . . . . . . . . . . . . . . . . . . . . . . . . 102
12.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 102
12.8 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . 103
12.9 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . 103
12.10 Sellers; Joint and Several; Sequa Agency . . . . . . . . 103
12.11 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . 104
<PAGE>
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
Schedules
M Billed Receivables
W Claims Receivables
AB Contract Inventory
AZ Investments
BD Sellers' Knowledge
BJ Letters of Credit
BS Notes Receivable
CR Stock Inventory
CY-1 Certain Customer Agreements
CY-2 Unbilled Receivables
1.1(b) Equipment
1.1(g) Letters of Credit in favor of Sellers
1.1(h) Prepaid expenses and deposits
1.1(L)-1 Land
1.1(L)-2 Real Estate Improvements
1.1(L)-3 Office Leases Premises
1.1(L)-4 Nashua Lease
1.1(m) Additional Assets
1.2(d) Letters of Credit issued on behalf of Sellers
1.2(e) Excluded Rights against Third Parties
1.2(f) Corporate Services
2.3(b)-1 Eligible Military Stock Inventory
2.3(b)-2 Accounting Instructions
2.4 Purchase Price Allocation
4.1 List of Foreign Qualifications
4.3 Conflicts
4.4 Liens
4.5 Condition of Personal Property
4.7(a)-1 Permitted Exceptions
4.7(b) Defaults under Real Property Documents
4.7(i)-1 Real Estate Tax Proceedings
4.7(i)-2 Real Property Tax Bills
4.8 Financial Statements and Related Information
4.9 List of Certain Changes
4.9(e) Claim Receivables or Notes Receivables
4.10 Litigation and Violations of Law
4.11 Assigned Agreements
4.12-1 List of Employees
4.12-2 Notices from Employees
4.12-3 Corporate Instructions
4.12-4 Extraordinary Severance Payments
4.13 List of Prepayments
4.14 Intangible Assets
4.15 Insurance
4.16 Labor Disagreements
4.17 Labor Matters
4.18 Environmental Matters
4.19 Permits and Licenses
<PAGE>
4.23 Transaction with Affiliates
4.24 Important Suppliers and Customers
4.25 List of Material Product and Service Warranties
4.27 List of Affiliates having Certain Names
4.28 KSAL
5.5 Financial Statements of Buyer and Guarantor
6.8 Required Consents
6.9 Allocation of Real Estate Taxes
6.13 Due Diligence Materials
6.17 Severance Plans
6.18 Further Assurances
6.19 Miscellaneous Real Estate Documents
6.21 Insurance Coverage
9.7(b) Buyer's Knowledge
Exhibits
6.14 Non-competition agreement
6.22 Nashua Sub-lease
8.1(a) Bills of Sale
8.1(b) Opinion of counsel to Sellers
8.1(q) Certificate of Non-foreign Status
8.2(c) Opinion of counsel to Buyer
<PAGE>
<PAGE>
PURCHASE AGREEMENT
November 9, 1995
The parties to this Purchase Agreement are Sequa
Corporation, a Delaware corporation ("Sequa"), Kollsman
Manufacturing Company, Inc., a Delaware corporation ("KMC"),
Sequa Export Corporation, a foreign sales corporation organized
under the laws of the United States Virgin Islands ("Sequa
Export", and together, jointly and severally, with Sequa and KMC,
"Sellers"), and EL-OP U.S., Inc., a Delaware corporation
("Buyer") and El-Op Electro-Optics Industries, Ltd., an Israeli
corporation which is the guarantor of Buyer's indemnification
obligations and liabilities under Section 9.3 of this Agreement
("Guarantor").
Sequa's "Kollsman Division" consists of three units
engaged in the following businesses (collectively, "the
Business"): the military systems unit, a government contract
supplier of electro-optical and electric systems for military
weapons; the avionics products unit, a designer and manufacturer
of aircraft instruments and related test equipment; and KMC and
the business thereof, that produces medical diagnostic
instruments. Sellers no longer desire to engage in the Business,
and desire to divest themselves of all of the assets related to
the Business (excluding certain assets relating thereto as
provided in this Agreement). Sequa operates the Business
directly and through KMC and Sequa Export. Sellers desire to
sell to Buyer the Business, as a going concern, and all of the
assets relating to the Business (excluding certain assets
relating thereto as provided in this Agreement), and Buyer shall
assume certain of the liabilities associated with the Business,
and Buyer desires to purchase the Business, as a going concern,
<PAGE>
and those assets and to assume such liabilities, on the terms and
conditions contained in this Agreement.
Accordingly, it is agreed as follows:
Definitions. When used in this Agreement, the
following terms have the following respective meanings:
(a) "Acceptable Contractor" shall have the
meaning given to that term in Section 11 of this Agreement.
(b) "Accountants" shall have the meaning given
to that term in Section 2.3 of this Agreement.
(c) "Accounting Instructions" shall have the
same meaning given to that term in Section 2.3 of this Agreement.
(d) "Actual Knowledge of Buyer" shall have the
meaning given to that term in Section 9.7 of this Agreement.
(e) "Affiliate" shall mean any person or entity
directly or indirectly controlled by, controlling, or under
common control with, any other person or entity. For purposes of
this definition, the term "control" (including "controlling",
"controlled by", and "under common control with") shall mean the
ability through ownership, direct or indirect, of voting stock or
other equity interests, to direct or cause the direction of the
management and policies of a person, partnership, corporation or
other entity.
(f) "Agreement" shall mean this Purchase
Agreement and all Exhibits and Schedules annexed hereto.
<PAGE>
(g) "Assets" shall have the meaning given to
that term in Section 1.1 of this Agreement.
(h) "Assigned Agreements" shall have the meaning
given to that term in Section 1.1 of this Agreement.
(i) "Assumed Liabilities" shall have the meaning
given to that term in Section 2.2(a) of this Agreement.
(j) "Balance Sheet" shall have the meaning given
to that term in Section 4.8 of this Agreement.
(k) "Base Purchase Price" shall have the
meaning given to that term in Section 2.1 of this Agreement.
(l) "Benefit Plans" shall have the same meaning
given to that term in Section 4.17 of this Agreement.
(m) "Billed Receivables" shall mean all accounts
receivable arising from the operation of the Business with
respect to (x) finished products and spare parts that have been
shipped to customers of the Business, and (y) services performed
for customers of the Business, in each case, for which invoices
have been issued or which any Seller invoices in the ordinary
course of the Business after the products or services are shipped
or performed. A list of Billed Receivables as of September 30,
1995 is, to the best of Sellers' knowledge, set forth on Schedule
M.
(n) "Business" shall have the meaning given to
that term in the recitals to this Agreement.
<PAGE>
(o) "Business Day" shall mean (x) for all
purposes other than the payment of money, any day on which
federal and state commercial banks are open for business in the
State of New York; and (y) for the purpose of the payment of
money, any day on which (i) federal and state commercial banks
are open for business in the State of New York, and
(ii) commercial banks are open for business in Israel.
(p) "Business Records" shall have the meaning
given to that term in Section 6.11 of this Agreement.
(q) "Buyer's Claims Liabilities" shall mean any
and all liabilities or obligations arising out of or in
connection with any claim, litigation or proceeding that arises
out of or is in connection with Buyer's actions or omissions in
the operation of the Business and/or the Assets after the close
of business on the Closing Date, including actions or omissions
by Buyer that are a continuation of an action or omission of
Sellers, including continuing breaches or defaults of Sellers
under any leases, contracts, commitments or agreements included
in the Assets, in all such events occurring prior to the close of
business on the Closing Date, but only to the extent that such
continuation, act or omission occurs after the close of business
on the Closing Date.
(r) "Buyer's Environmental Liabilities" shall
mean:
(i) liabilities for Buyer's actions or
omissions after the close of business on the Closing Date
resulting in violations or continuation of violations of
Environmental Laws (whether now or hereafter in existence),
including actions or omissions by Buyer that are a
continuation of an action or omission of Sellers occurring
<PAGE>
prior to the close of business on the Closing Date, but only to
the extent that such continuation, act or omission occurs after
the close of business on the Closing Date;
(ii) liabilities for conditions created by
Buyer after the close of business on the Closing Date;
and/or
(iii) liabilities resulting from the
disposition by Buyer of Materials of Environmental Concern
after the close of business on the Closing Date.
(s) "Buyer Loss" shall have the meaning given to
that term in Section 9.2 of this Agreement.
(t) "Buyer's Other Liabilities" shall mean any
and all liabilities with respect to criminal and civil fines,
penalties and punitive damages arising out of or in connection
with Buyer's actions or omissions after the close of business on
the Closing Date, including actions taken or failed to have been
taken or facts or circumstances existing after the close of
business on the Closing Date, including actions or omissions by
Buyer that are a continuation of an action or omission of Sellers
occurring prior to the close of business on the Closing Date, but
only to the extent that such continuation, act or omission occurs
after the close of business on the Closing Date;
(u) "Cash Equivalents" shall mean all bank
accounts, certificates of deposit, commercial paper, treasury
bills and treasury notes owned by any of Sellers arising from or
in connection with the Business.
<PAGE>
(v) "CERCLA" shall have the meaning given to
that term in Section 4.18 of this Agreement.
(w) "Claims Receivable" shall mean all accounts
receivable disputed by the customers of the Business and all
other receivables accruing before the close of business on the
Closing Date which is not a Billed Receivable or an Unbilled
Receivable and which shall include, without limitation, the
claims set forth on Schedule W.
(x) "Closing" and "Closing Date" shall have the
meanings given to those terms in Section 3.1 of this Agreement.
(y) "COBRA" shall have the meaning given to that
term in Section 4.17 of this Agreement.
(z) "Code" means the Internal Revenue Code of
1986, as the same may be amended from time to time.
(aa) "Common Control Entity" shall have the
meaning given to that term in Section 4.17 of this Agreement.
(ab) "Contract Inventory" shall mean all items of
inventory of the Business, including raw materials, work-in-
process, spare parts, supplies and finished goods, that have been
purchased and/or are being used in or held for use in the
manufacture of products pursuant to specific purchase orders or
agreements, a list of which as of September 30, 1995 is set forth
on Schedule AB.
(ac) "Customer Agreements" shall have the meaning
given to that term in Section 1.1 of this Agreement.
<PAGE>
(ad) "Damage Deductible" shall have the meaning
given to that term in Section 11.3 of this Agreement.
(ae) "Deeds" shall have the meaning given to that
term in Section 8.1(h) of this Agreement.
(af) "Eligible Military Stock Inventory" shall
have the meaning given to that term in Section 2.3 of this
Agreement.
(ag) "Employees" shall have the meaning given to
that term in Section 4.12 of this Agreement.
(ah) "Environmental Laws" shall have the meaning
given to that term in Section 4.18(a) of this Agreement.
(ai) "Environmental Permits" shall have the
meaning given to that term in Section 4.18(e) of this Agreement.
(aj) "Environmental Reports" shall have the
meaning given to that term in Section 1.1(l) of this Agreement.
(ak) "Equipment" shall have the meaning given to
that term in Section 1.1(l) of this Agreement.
(al) "ERISA" shall have the meaning given to that
term in Section 4.17 of this Agreement.
(am) "Estimates at Completion" shall have the
meaning given to that term in Section 7.1(k) of this Agreement.
(an) "Excluded Assets" shall have the meaning
given to that term in Section 1.2 of this Agreement.
<PAGE>
(ao) "Excluded Liabilities" shall mean all
liabilities of any Seller arising from or in connection with the
operation of the Business and/or the Assets on or prior to the
Closing Date, whether accrued, absolute, contingent or otherwise
and whether asserted before or after the date hereof or asserted
on, before or after the Closing Date, except for such liabilities
of Sellers as are specifically assumed by Buyer pursuant to this
Agreement. Without limiting the foregoing, Excluded Liabilities
shall include each and every one of the following liabilities:
(i) any liability for any Taxes accrued
through or applicable to periods on or prior to the Closing
Date other than those Taxes which are being prorated
pursuant to the provisions of Section 6.9 of this Agreement
and as otherwise provided in Section 6.9;
(ii) any liability for any brokerage or
similar charge or commission payable or incurred by any
Seller in connection with this Agreement or the transactions
contemplated hereby;
(iii) any indebtedness, liability or
obligation of, or guaranty of indebtedness made by, any
Seller to or for any Seller or any Affiliate thereof;
(iv) Sellers' Environmental Liabilities;
(v) Sellers' Other Liabilities;
(vi) any and all liabilities for bodily
injury, death and property damage arising out of or in
connection with services performed or products manufactured
that are sold or shipped prior to the close of business on
<PAGE>
the Closing Date only if such bodily injury, death or property
damage occurs on or prior to the Closing Date;
(vii) those Warranty Costs incurred during
the twenty-four month period following the Closing Date for
any Product or Service Warranty for, and any Recall Costs
incurred within the twenty-four month period following the
Closing Date with respect to, any product manufactured or
service performed that is sold and shipped on or before the
close of business on the Closing Date (whether or not the
product was manufactured by the Business), but only to the
extent that such Warranty Costs and Recall Costs exceed, in
the aggregate (i) $1,000,000 for the first twelve months
following the Closing Date or (ii) $800,000 for the next
succeeding twelve months;
(viii) any and all liabilities and
obligations for expenses and fees incurred by any Seller
arising out of or in connection with the negotiation or
execution of this Agreement, or the consummation of the
transactions contemplated hereby or thereby;
(ix) any and all intercompany accounts
payable and other amounts due to any Seller or its
Affiliates, including but not limited to liabilities of any
Seller, arising out of or in connection with the Business
and/or the Assets;
(x) Sellers' Claims Liabilities;
(xi) any and all liabilities for royalty
expense and commissions due pursuant to the provisions of
the Assigned Agreements with respect to shipments of
<PAGE>
products and/or rendering of services prior to the close of
business on the Closing Date;
(xii) any and all liabilities for
government recoupment fees due pursuant to the provisions of
the Assigned Agreements with respect to shipments of
products and/or rendering of services prior to the close of
business on the Closing Date, including but not limited to
any and all liabilities with respect to the Excluded
Recoupment Fees (as such term is defined in the Accounting
Instructions (Schedule 2.3(b)-2)), whether presently or
hereafter due and payable;
(xiii) any liabilities or obligations of any
Seller arising out of or in connection with any Benefit
Plans; and
(xiv) any liabilities or obligations of any
Seller for indebtedness for borrowed money.
(ap) "Final Statement" shall have the meaning
given to that term in Section 2.3 of this Agreement.
(aq) "Guarantor" shall have the meaning given to
that term in the recitals to this Agreement.
(ar) "Hazardous Condition" shall have the meaning
given to that term in Section 11 of this Agreement.
(as) "HSR Act" shall have the meaning given to
that term in Section 6.2 of this Agreement.
(at) "Improvements" shall have the meaning given
to that term in Section 1.1(l) of this Agreement.
<PAGE>
(au) "Indemnified Loss" shall have the meaning
given to that term in Section 9.3 of this Agreement.
(av) "Indemnified Party" shall have the meaning
given to that term in Section 9.4 of this Agreement.
(aw) "Indemnifying Party" shall have the meaning
given to that term in Section 9.4 of this Agreement.
(ax) "Intellectual Property" shall have the
meaning given to that term in Section 1.1(d) of this Agreement.
(ay) "Inventory" shall collectively mean Contract
Inventory and Stock Inventory of the Business.
(az) "Investments" shall mean the minority
ownership interest of Sequa in Kollsman Saudi Arabia Limited, a
business entity organized under the laws of Saudi Arabia
("KSAL"), that is described on Schedule AZ.
(ba) "IRS" shall have the meaning given to that
term in Section 2.4 of this Agreement.
(bb) "KI" shall have the meaning given to that
term in Section 12.7 of this Agreement.
(bc) "KMCI" shall have the meaning given to that
term in Section 12.7 of this Agreement.
(bd) "Knowledge of Sellers", "actual knowledge",
"best knowledge" or words of similar import shall mean the actual
knowledge of those officers, directors and/or employees of
Sellers described on Schedule BD of this Agreement, and shall not
<PAGE>
be deemed to include any knowledge that any of the foregoing
should have known or should be imputed to have known because of
the services of such persons through the Closing.
(be) "Kollsman Division" shall have the meaning
given to that term in the recitals to this Agreement.
(bf) "KSAL" shall have the meaning given to that
term in paragraph (az) of this Agreement.
(bg) "Land" shall have the meaning given to that
term in Section 1.1(l) of this Agreement.
(bh) "Land Appurtenances" shall have the meaning
given to that term in Section 1.1(l) of this Agreement.
(bi) "Legal Requirements" shall have the meaning
given to that term in Section 4.7 of this Agreement.
(bj) "Letters of Credit" shall mean all letters
of credit, bonds or other surety or security posted by or for the
benefit of any Seller in connection with the Business, a true and
complete list of which as of September 30, 1995 is set forth on
Schedule BJ.
(bk) "Licensing Agreements" shall have the
meaning given to that term in Section 1.1 of this Agreement.
(bl) "Lien" shall have the meaning given to that
term in Section 4.3 of this Agreement.
(bm) "Materials of Environmental Concern" shall
have the meaning given to that term in Section 4.18 of this
Agreement.
<PAGE>
(bn) "Minor Taking" shall have the meaning given
to that term in Section 11 of this Agreement.
(bo) "Nashua Lease" shall have the meaning given
to that term in Section 1.1(l) of this Agreement.
(bp) "Nashua Sub-Lease" shall have the meaning
given to that term in Section 6.22 of this Agreement.
(bq) "Net Insurance Proceeds" shall have the
meaning given to that term in Section 11 of this Agreement.
(br) "Non-Competition Agreement" shall have the
meaning given to that term in Section 6.14 of this Agreement.
(bs) "Notes Receivable" shall mean the notes
receivable, if any, set forth on the date hereof on Schedule BS
and as that Schedule is updated through the close of business on
the Closing Date.
(bt) "Office Leases" shall have the meaning given
to that term in Section 1.1(l) of this Agreement.
(bu) "Other Agreements" shall have the same
meaning given to that term in Section 1.1 of this Agreement.
(bv) "Permits" shall have the meaning given to
that term in Section 4.19 of this Agreement.
(bw) "Permitted Exceptions" shall have the
meaning given to that term in Section 4.7 of this Agreement.
<PAGE>
(bx) "Personal Property Leases" shall have the
same meaning given to that term in Section 1.1 of this Agreement.
(by) "Personalty" shall have the meaning given to
that term in Section 1.1(l) of this Agreement.
(bz) "Plans" shall have the meaning given to that
term in Section 1.1(l) of this Agreement.
(ca) "Post-Closing Employees" shall have the
meaning given to that term in Section 6.17 of this Agreement.
(cb) "Product or Service Warranty" shall mean
obligations (provided by contract or law or implied by law) to
repair, replace or accept the return of any product manufactured
or service performed in the operation of the Business.
(cc) "Purchase Contracts" shall have the meaning
given to that term in Section 1.1 of this Agreement.
(cd) "Real Property" shall have the meaning given
to that term in Section 1.1(l) of this Agreement.
(ce) "Real Property Interests" shall have the
meaning given to that term in Section 1.1(l) of this Agreement.
<PAGE>
(cf) "Real Property Documents" shall have the
meaning given to that term in Section 1.1(l) of this Agreement.
(cg) "Real Property Permits" shall have the
meaning given to that term in Section 1.1(l) of this Agreement.
(ch) "Recall Costs" shall mean and include with
respect to any government mandated recall:
(i) direct labor and material costs
incurred in accepting a return and/or making a refund, or
performing a repair or replacement; and
(ii) an overhead charge equal to 149% of
such direct labor costs and a material handling charge equal
to 9.6% of such direct material costs.
(ci) "Representative Agreements" shall have the
meaning given to that term in Section 1.1 of this Agreement.
(cj) "Required Consents" shall have the meaning
given to that term in Section 6.8 of this Agreement.
(ck) "Returns" means all returns, reports,
estimates, information returns and statements (including any
related or supporting information) filed or to be filed with any
<PAGE>
Tax Authority in connection with the determination, assessment,
collection or administration of any Taxes.
(cl) "Sales Contracts" shall have the meaning
given to that term in Section 1.1 of this Agreement.
(cm) "Sellers' Claims Liabilities" shall mean any
and all liabilities or obligations arising out of or in
connection with any claim, litigation or proceeding that arises
out of or is in connection with (i) any government mandated
recall of products manufactured or services performed that are
sold or shipped by any Seller prior to the close of business on
the Closing Date, to the extent that the Recall Costs in
connection therewith are incurred after the twenty-four month
period following the Closing, or (ii) Sellers' actions or
omissions in connection with the operation of the Business and/or
the Assets on or before the close of business on the Closing
Date, provided that if such actions or omissions are continued by
Buyer after the close of business on the Closing Date, Sellers
shall only be liable to the extent that such actions or omissions
occurred on or prior to the close of business on the Closing
Date, provided, however, that Sellers' Claims Liability shall not
in any event mean or include, Product or Service Warranty,
provided, however, that the foregoing shall not relieve Sellers
with respect to any liability or obligation Sellers may have
under Section 9.2(a) of this Agreement to Buyer with respect to
<PAGE>
the representations and warranties made by Sellers in this
Agreement, subject, however, to the limitations on
indemnification and on survival of such representations and
warranties as provided in this Agreement.
(cn) "Sellers' Environmental Liabilities" shall
mean:
(i) liabilities for Sellers' actions or omissions
on or before the close of business on the Closing Date
resulting in violations of Environmental Laws (in existence
on the Closing Date), provided that if such actions or
omissions are continued by Buyer after the close of business
on the Closing Date, Sellers shall only be liable to the
extent that such actions or omissions occurred on or prior
to the close of business on the Closing Date, provided,
however, that the foregoing shall not relieve Sellers with
respect to any liability or obligation Sellers may have
under Section 9.2(a) of this Agreement to Buyer with respect
to the representations and warranties made by Sellers in
this Agreement, subject, however, to the limitations on
indemnification and on survival of such representations and
warranties as provided in this Agreement;
(ii) liabilities for conditions existing on the
Real Property prior to the close of business on the Closing
<PAGE>
Date, except that if such conditions existed prior to Sellers'
or, with respect to the Wichita, Kansas Real Property,
Intercontinental Dynamic Corporation's, use, ownership or
occupancy of the Real Property, or were caused by any party other
than Sellers, such liabilities shall not be "Excluded
Liabilities" or "Assumed Liabilities", and the parties shall
have, with respect to each other and third parties, such rights
and obligations as may be otherwise provided by law; and/or
(iii) liabilities resulting from the disposition
by Sellers of Materials of Environmental Concern on or prior
to the close of business on the Closing Date.
(co) "Seller Loss" shall have the meaning given
to that term in Section 9.3 of the Agreement.
(cp) "Sellers' Other Liabilities" shall mean any
and all liabilities with respect to criminal and civil fines,
penalties and punitive damages arising out of or in connection
with Sellers' actions or omissions on or before the close of
business on the Closing Date, provided that if such actions or
omissions are continued by Buyer after the close of business on
the Closing Date, Sellers shall only be liable to the extent that
such actions or omissions occurred on or prior to the close of
business on the Closing Date, provided, however, that the
foregoing shall not relieve Sellers with respect to any liability
<PAGE>
or obligation Sellers may have under Section 9.2(a) of this
Agreement to Buyer with respect to the representations and
warranties made by Sellers in this Agreement, subject, however,
to the limitations on indemnification and on survival of such
representations and warranties as provided in this Agreement.
(cq) "Service Contracts" shall have the meaning
given to that term in Section 1.1(l) of this Agreement.
(cr) "Stock Inventory" shall mean all items of
inventory of the Business, including raw-materials, work-in-
process, finished goods, spare parts and supplies that do not
constitute Contract Inventory, a list of which as of September
30, 1995 is set forth on Schedule CR.
(cs) "Taxes" shall mean any and all taxes,
charges, fees, levies, penalties or other assessments charged,
accrued or based on net income, capital gain, gross income, gross
receipts, payroll, license, withholding, employment, severance,
occupation or windfall profits, franchise taxes, ad valorem,
excise, property, premium, customs duties, stamp, sales and use
imposed by any Tax Authority, and including, without limitation,
any and all interest, penalties or additional attributable
thereto.
<PAGE>
(ct) "Tax Authority" means any federal, national,
foreign, state, municipal or other local government, any
subdivision, agency, commission or authority thereof, or any
quasi-governmental body or other authority exercising any taxing
or tax regulatory authority.
(cu) "Tax Liabilities" means (i) all liabilities
for Taxes and (ii) all reasonable costs and expenses related
thereto (including, without limitation, reasonable attorneys' and
accountants' fees) without regard to whether Taxes are ultimately
due.
(cv) "Teaming Agreements" shall have the meaning
given to that term in Section 1.1 of this Agreement.
(cw) "Third Party Claim" or "Third Party Claims"
shall have the meaning given to those terms in Section 9.4 of
this Agreement.
(cx) "Title Exceptions" shall have the meaning
given to that term in Section 4.7 of this Agreement.
(cy) "Unbilled Receivables" shall mean all assets
of any Seller which are recorded on the books of any such Seller
in connection with the revenues of the Business, booked on a
percentage of completion method, and with respect to products
<PAGE>
that have not yet been shipped and/or services performed and not
yet billable to customers of the Business pursuant to and in
accordance with the terms and conditions of those of the Customer
Agreements that are listed on Schedule CY-1. A list of Unbilled
Receivables as of September 30, 1995 in respect of each such
Customer Agreement is also set forth on Schedule CY-2.
(cz) "Waived Claims" shall have the meaning given to
that term in Section 9.7 of this Agreement.
(da) "Warranty Costs" shall mean and include the
following costs for Product and Service Warranty:
(i) direct labor and material costs incurred in
accepting a return and/or making a refund, or performing a
repair or replacement; and
(ii) an overhead charge equal to 149% of such
direct labor costs and a material handling charge equal to
9.6% of such direct material costs.
1. Sale and Purchase of Assets.
1.1 Sale of Assets to Buyer. Subject to the terms and
conditions of this Agreement, at the Closing referred to in
Section 3.1 of this Agreement, Sellers shall sell and assign to
<PAGE>
Buyer, and Buyer shall purchase and acquire from Sellers, all of
the Business, as a going concern, and all of Sellers' assets
relating to the Business and used or held for use in the
operation of the Business (excluding only the assets referred to
in Section 1.2 of this Agreement), as those assets exist as of
the close of business on the Closing Date referred to in Section
3.1 of this Agreement, regardless of whether or not such assets
are listed or are required to be listed on any Schedule hereto
(collectively, the "Assets"). The Assets to be sold and assigned
are substantially comprised of the following types of assets
(except as otherwise provided in Section 1.2 of this Agreement):
(a) to the extent transferrable, all of Sellers'
rights under all permits, franchises, licenses and authorizations
that relate to the operation of the Business and/or the Assets,
substantially all of which are those listed on Schedule 4.19;
(b) all equipment (including computers and
office equipment), machinery, tools, supplies, vehicles,
furniture, fixtures, leasehold improvements (subject to any
limitations in the applicable lease for real property) and
improvements on land, and all other tangible personal property
and fixed assets, wherever located, that are owned by any Seller
and used or held for use in the operation of the Business and/or
the Assets, including but not limited to the items listed on
Schedule 1.1(b);
<PAGE>
(c) all rights of Sellers under all leases for
personal property (subject to any limitations contained in the
applicable personal property lease), commitments and other
agreements relating to the operation of the Business, or to which
any of the Assets or the Business is subject, including, without
limitation, those agreements listed on Schedule 4.11
(collectively, the "Assigned Agreements"), (i) to the extent that
those rights relate to the period from and after the close of
business on Closing Date, including, but not limited to (A) all
commitments and other agreements for the purchase of any
materials, supplies or equipment and all purchase orders
(collectively, "Purchase Contracts"); (B) all leases or other
rental agreements for personal property under which any Seller is
either lessor or lessee (collectively, "Personal Property
Leases"), (C) all customer agreements (collectively, "Customer
Agreements"), (D) all sales orders (collectively, "Sales
Contracts"), (E) all representative agreements (collectively,
"Representative Agreements"), and (F) all teaming agreements
(collectively, "Teaming Agreements"), (E) all licensing
agreements (the "Licensing Agreements"), and (ii) any leases for
personal property, commitments and other agreements relating to
the Business and/or the Assets that are entered into in
accordance with the provisions of Section 6.4 of this Agreement
between the date of this Agreement and the close of business on
the Closing Date (collectively, "Other Agreements");
<PAGE>
(d) all patents, copyrights, know-how,
inventions, trade secrets, technology, service marks, service
names, trademarks (including but not limited to Sellers' right,
title and interest in and to the name "Kollsman", but excluding
the name "Sequa"), trade names, logos, brands and privacy,
designs, intellectual, industrial and intangible property rights
of every kind (whether or not copyrightable) and registrations
and applications for registration of any of them and the right to
apply therefor and other intangible personal property used in the
operation of the Business (including, but not limited to, the
intangible personal property listed on Schedule 4.14), together
with the good will of the businesses associated therewith, and
(ii) all books and quality and other control books and computer
software (subject to any additional fees payable with respect to
the transfer of "off-the-shelf" software, none of which are
material and all of which shall be borne by Sellers and Buyer on
a 50/50 basis), programs (whether source code, object code or
other format), and computer documentation and all physical
embodiments thereof, and all printouts, underlying tapes, discs
and other media and computer databases, and all user's testings,
service and operator's and programming manuals, specifications
and diagnostic materials relating to the foregoing ("Intellectual
Property");
(e) except to the extent provided in Section 1.2
of this Agreement, all of Sellers' rights under manufacturers'
<PAGE>
and vendors' warranties relating to the Business and/or the
Assets and items included in the Assets and all similar rights
against third parties relating to the Business and items included
in the Assets and all other claims, choses in action and causes
of action of every kind and description that any Seller may have
against any person or entity relating to the Business and the
Assets;
(f) Unbilled Receivables;
(g) the Letters of Credit in favor of any Seller
listed on Schedule 1.1(g);
(h) the prepaid expenses and deposits, a list of
which, as of September 30, 1995, is set forth on Schedule 1.1(h);
(i) all books and records, including but not
limited to all transaction records, financial records, personnel
and payroll records and a copy of the files, logs and other
records and data relating to the operation of the Business and
the Assets, including, but not limited to, accounting and
budgeting information, technical information and engineering
data, customer lists and supplier lists, but excluding any of the
foregoing relating solely to Excluded Assets and Excluded
Liabilities;
<PAGE>
(j) all items of Stock Inventory and Contract
Inventory;
(k) all Investments;
(l) all real property interests and related
assets relating to the Business, substantially all of which is
comprised of the following real property interests and related
assets (collectively, the "Real Property Interests"):
(i) fee title to the land described in
Schedule 1.1(L)-1 and Schedule 1.1(L)-2 hereto (the "Land") and
any easements, rights-of-way, licenses, interests, rights and
appurtenances of any kind relating or pertaining thereto,
including without limitation, all air, zoning and development
rights appurtenant to the Land, and all right, title and interest
of any Seller in and to any land lying in the bed of any highway,
street, road, avenue, access way or easement, open or proposed,
in front of, at a side or adjoining the Land and to the center
line thereof (collectively, the "Land Appurtenances");
(ii) the buildings, structures and other
improvements situated on the Land (the "Improvements"),
descriptions of which are set forth on Schedules 1.1(L)-1 and
1.1(L)-2;
<PAGE>
(iii) all fixtures and equipment used in
connection with the operation of the Land and/or the Improvements
(the "Equipment");
(iv) all right, title and interest as tenant
under those certain leases (the "Offices Leases") for the use and
occupancy of the land and/or property described in Schedule
1.1(L)-3;
(v) a subleasehold interest in and to the
premises demised to Sellers pursuant to the Nashua lease
described on Schedule 1.1(L)-4 (the "Nashua Lease"), in
accordance with the provisions of Section 6.22 of this Agreement;
(vi) all construction contracts, service
contracts, maintenance contracts, management agreements, utility
agreements, warranties, guaranties, surety and other bonds issued
for the benefit of any Seller, and other agreements relating to
the Land, the Improvements and/or the premises demised under the
Office Leases and the Nashua Lease (collectively, "Service
Contracts");
(vii) all architectural, engineering and other
plans, drawings and studies relating to the Land, the
Improvements and/or the premises demised under the Nashua Lease
(collectively, "Plans");
<PAGE>
(viii) all development, building, alteration,
demolition and other municipal permits, licenses, approvals,
authorizations and certificates relating to the Land, the
Improvements and/or the premises demised under the Nashua Lease
(collectively, "Real Property Permits"), to the extent
transferrable;
(ix) copies of any environmental reports,
studies, soil reports, grading plans, topographical maps and
similar data in the possession of Sellers or under the control of
any one of them with respect to the Land, the Improvements and/or
the premises demised under the Nashua Lease (collectively,
"Environmental Reports");
(x) all goods, chattels and personal
property of any nature whatsoever, if any, used in the operation
of the Land, the Improvements and/or the premises demised under
the Nashua Lease or the Office Leases, in each case owned by
Sellers and now or hereafter affixed or located upon the Land,
the Improvements or the premises demised by the Nashua Lease or
the Office Leases (collectively, the "Personalty"); and
(xi) all other rights and interests of
Sellers relating to the foregoing.
<PAGE>
For purposes of this Agreement, (i) "Real
Property" means, collectively, (A) the Land, (B) the
Improvements, (C) the premises demised under the Office Leases
and Nashua Lease and (D) the Land Appurtenances, and (ii) "Real
Property Documents" mean, collectively, the Nashua Lease, the
Office Leases, the Service Contracts, the Plans, the Real
Property Permits, the Environmental Reports and the Permitted
Exceptions (as hereinafter defined); and
Schedule 1.1(m).
1.2 Excluded Assets. The following assets
(collectively, the "Excluded Assets") used in the operation of
the Business shall be retained by Sellers and shall not be sold
or assigned to Buyer:
(a) all Billed Receivables as of the close of
business on the Closing Date;
(b) all Claims Receivable and Notes Receivable
as of the close of business on the Closing Date;
(c) all cash and Cash Equivalents as of the
close of business on the Closing Date;
<PAGE>
(d) the Letters of Credit issued by or on behalf
of any Seller listed on Schedule 1.2(d) and those Letters of
Credit issued by or on behalf of any Seller between the date
hereof and the close of business on the Closing Date;
(e) Sellers' rights under manufacturers' and
vendors' warranties, and all similar rights against third parties
and all other claims, choses in action and causes of action of
every kind and description that are related only to the Excluded
Assets and the Excluded Liabilities, including such of the
foregoing that are listed on Schedule 1.2(e);
(f) the corporate services provided to the
Business that are listed on Schedule 1.2(f);
(g) the records relating to Sellers' Taxes and
Benefit Plans;
ENU the rights and interests of Sellers under
this Agreement;
(i) any right to use the name "Sequa" or "Sequa
Corporation" or any derivation or adaptation thereof;
(j) all existing rights incident, directly or
indirectly, to insurance policies, proceeds, loss funds (or
<PAGE>
claims or litigation relating thereto) and insurance accounts
relating to Sellers' operation of the Business, except as
otherwise provided in Section 11 of this Agreement only with
respect to property and casualty proceeds and claims therefor;
(k) all business, assets and properties of
Sellers of any kind or nature that are not to be conveyed
pursuant to this Agreement and Schedules hereto;
(l) all refunds of Taxes of every kind and
nature for all periods through and including the Closing Date;
(m) all net operating loss tax carryforwards
attributable to KMC for all periods through and including the
Closing Date;
(n) all assets, whether held in trust or
otherwise, with respect to Benefit Plans;
(o) all claims, debts, liabilities and
obligations owed by any Seller or its Affiliates to the Business
and/or the Kollsman Division; and
(p) all warrants issued by BioTek Solutions,
Inc. entitling Sequa to purchase common stock of BioTek
Solutions, Inc.
<PAGE>
2. Purchase Price.
2.1 Amount and Payment of Purchase Price. At the
Closing, Buyer shall pay to Seller, by wire transfer of
immediately available funds, the total purchase price of Forty
Nine Million Six Hundred Twelve Thousand Dollars ($49,612,000)
(the "Base Purchase Price"), subject to adjustment as provided in
Section 2.3 of this Agreement.
2.2 Assumption of Liabilities. As additional
consideration for the transactions contemplated by this Agreement
and as a material inducement for Sellers to enter into this
Agreement, Buyer further agrees as follows:
(a) On and as of the close of business on the
Closing Date, Buyer shall (i) assume, agree to pay, perform and
discharge all of the obligations and liabilities of Sellers under
the Assigned Agreements that accrue after the close of business
on the Closing Date, and (ii) pay, perform and discharge those
additional obligations and liabilities of Buyer and/or Sellers
set forth below and none other (the "Assumed Liabilities"):
(i) all liability for any Taxes applicable
to periods after the Closing Date arising from the operation
of the Business and as otherwise provided in Section 6.9 of
this Agreement;
<PAGE>
(ii) any liability for any brokerage or
similar charge or commission payable or incurred by Buyer in
connection with this Agreement or the transactions
contemplated hereby;
(iii) Buyer's Environmental Liabilities;
(iv) Buyer's Other Liabilities;
(v) any and all liabilities for bodily
injury, death and property damage occurring after the close
of business on the Closing Date arising out of or in
connection with services performed or products manufactured
that are sold and shipped by the Business (including any and
all items of Inventory) after the close of business on the
Closing Date;
(vi) all Warranty Costs incurred for any
Product or Service Warranty for any product manufactured or
service performed that is sold and shipped (including any
and all items of Inventory) after the close of business on
the Closing Date (whether or not the product was
manufactured by the Business);
(vii) all Warranty Costs incurred after the
close of business on Closing Date for Product or Service
<PAGE>
Warranty and all Recall Costs for all products manufactured
and services performed that are sold and shipped on or
before the close of business on the Closing Date (whether or
not the product was manufactured by the Business), provided
that in no event shall such Warranty Costs and Recall Costs
exceed in the aggregate (i) $1,000,000 for the first twelve
months following the Closing Date, and (ii) $800,000 for the
next succeeding twelve months, provided, further, that Buyer
shall be responsible for all Warranty Costs incurred after
such twenty-four month period without any limitation
whatsoever or contribution from or recourse against any
Seller for such Warranty Costs, provided, however, that the
foregoing shall not relieve Sellers with respect to any
liability or obligation Sellers may have under Section
9.2(a) of this Agreement to Buyer with respect to the
representations and warranties made by Sellers in this
Agreement, subject, however, to the limitations on
indemnification and on survival of such representations and
warranties as provided in this Agreement; and, provided
further, that Buyer shall have no liability or obligation
for Recall Costs after such twenty-four month period;
(viii) any and all liabilities for expenses
and fees incurred by Buyer arising out of in connection with
the negotiation or execution of this Agreement, or the
<PAGE>
consummation of the transactions contemplated hereby or
thereby;
(ix) Buyer's Claims Liabilities;
(x) those employee obligations referred to
in Section 6.17 of this Agreement;
(xi) any and all liabilities for royalty
expense and commissions due pursuant to the provisions of
the Assigned Agreements with respect to shipments of
products and/or rendering of services from and after the
Closing Date; and
(xii) any and all liabilities for
government recoupment fees due pursuant to the provisions of
the Assigned Agreements with respect to shipments of
products and/or rendering of services from and after the
Closing Date.
(b) Except as specifically provided in Sections
2.2(a)(i) through 2.2(a)(xii), 6.3, 6.22 (to the extent provided
in the Nashua Sublease), 6.23 and 9.3, 9.4 and 9.5 of this
Agreement, Buyer shall not assume or be responsible for any lia-
bilities or obligations of Sellers relating to the Business, the
Assets or otherwise, and Sellers shall continue to be responsible
<PAGE>
for and shall pay, perform and discharge all such liabilities and
obligations. Without limiting the generality of the preceding
sentence, Buyer shall not assume or be responsible for, and
Sellers shall continue to be responsible for and shall pay,
perform and discharge all Excluded Liabilities.
(c) Sellers hereby agree to pay, perform and
discharge all of the Excluded Liabilities in accordance with the
respective terms and conditions thereof when the same become due
and payable.
2.3 Adjustment of Base Purchase Price.
(a) Subject to Section 2.3(b) of this Agreement,
if the aggregate amount of Unbilled Receivables and Inventory as
of the close of Business on the Closing Date is greater than
Forty Nine Million One Hundred Sixty Thousand Dollars
($49,160,000), then the Base Purchase Price shall be increased by
an amount equal to that excess. Subject to Section 2.3(b) of
this Agreement, if the aggregate amount of Unbilled Receivables
and Inventory as of the close of business on the Closing Date is
less than Forty Nine Million One Hundred Sixty Thousand Dollars
($49,160,000), then the Base Purchase Price shall be decreased by
an amount equal to that shortfall.
<PAGE>
(b) Set forth on Schedule 2.3(b)-1 is a list
that Buyer and Sellers agree upon as identifying all items of
military Stock Inventory owned by Sellers as of January 31, 1995,
listing all material items separately (the "Eligible Military
Stock Inventory"). The parties agree that the aggregate amount
of the Eligible Military Stock Inventory was, at January 31,
1995, Twenty-Four Million Three Hundred Nineteen Thousand Dollars
($24,319,000). For purposes of computing the aggregate amount of
Unbilled Receivables and Inventory in accordance with Section
2.3(a) of this Agreement: (i) only the aggregate amount
(determined in accordance with the Accounting Instructions) of
the balance of the Eligible Military Stock Inventory owned by
Sellers as of the close of business on the Closing Date shall be
taken into account with respect to any military Stock Inventory;
and (ii) military Stock Inventory, if any, purchased or otherwise
acquired after January 31, 1995, shall not be included in
determining the adjustment to the Base Purchase Price. For
purposes of Section 2.3(a) of this Agreement, Unbilled
Receivables and Inventory shall be determined as of the close of
business on the Closing Date in accordance with the accounting
instructions set forth on Schedule 2.3(b)-2 (the "Accounting
Instructions").
(c) Within sixty (60) days after the Closing
Date, Buyer shall determine the Unbilled Receivables and
Inventory as of the close of business on the Closing Date and
<PAGE>
shall deliver to Sellers a statement (the "Final Statement")
setting forth in reasonable detail the amount of Unbilled
Receivables and Inventory as so determined in accordance with the
Accounting Instructions and the resulting adjustments to the Base
Purchase Price pursuant to Sections 2.3(a) and 2.3(b) of this
Agreement. Sellers shall have forty five (45) days after receipt
of the Final Statement to evaluate the Final Statement. If
Sellers accept the Final Statement or do not give Buyer notice
within such forty five (45) day period that it disputes the Final
Statement or any portion thereof, then within seven (7) days
after the expiration of such forty five (45) day period, Buyer
shall pay to Sellers, or Sellers shall pay to Buyer, as the case
may be, the net amount due as a result of any adjustment (or, if
there is any dispute, the undisputed amount). If, however,
within that forty five (45) day period Sellers give notice to
Buyer that they dispute Buyer's determinations as set forth in
the Final Statement, the parties shall confer with regard to the
matter and an appropriate adjustment and payment shall be made as
agreed upon by the parties; if they are unable to resolve the
matter within an additional thirty (30) days after the giving of
such notice by Sellers, a firm of independent certified public
accountants of recognized standing (the "Accountants"), whose
decision on the matter shall be final and binding on the parties,
shall be designated by agreement between Sellers and Buyer to
resolve such dispute (if they fail to agree within such thirty
(30) additional days, the Accountants shall be Price Waterhouse)
<PAGE>
and payment based on the Accountants' decision as to the Final
Statement shall be made promptly after notification of the
decision. The fees and expenses of the Accountants shall be
borne 50% by Buyer and 50% by Sellers.
2.4 Purchase Price Allocation. The purchase price
shall be allocated among the Assets in accordance with Schedule
2.4 as agreed upon by the parties. The parties shall conform to
that allocation for all pertinent tax purposes, and each of the
parties shall file with the Internal Revenue Service ("IRS") a
Form 8594 on a basis consistent with that allocation.
3. Closing.
3.1 Date of Closing. The closing (the "Closing")
under this Agreement shall take place at the offices of Proskauer
Rose Goetz & Mendelsohn LLP, 1585 Broadway, New York, New York
(or at such other place as the parties may agree upon in writing)
upon at least five Business Days prior notice given by Buyer to
Sellers within five Business Days after the last of the
conditions specified in Sections 7.1 and 7.2 of this Agreement
has been fulfilled (or waived), but in no event whatsoever later
than December 10, 1995. The date on which the Closing is held is
referred to in this Agreement as the "Closing Date." At the
Closing, the parties shall execute and deliver the documents
referred to in Section 8 of this Agreement.
<PAGE>
3.2 Outside Date for Closing. If the Closing has not
occurred by December 10, 1995, Sellers or Buyer may terminate
this Agreement by notice to the other. Upon termination pursuant
to this Section 3.2 neither of the parties shall have any
liability of any kind arising out of this Agreement other than
for any liability resulting from its breach of this Agreement
prior to termination. If the Closing is postponed pursuant to
Section 11 of this Agreement, and this Agreement is not otherwise
terminated in accordance with the provisions of Section 11, the
outside date referred to in this Section shall be extended by the
period of the postponement as provided in Section 11.
4. Representations and Warranties by Sellers. Each Seller
represents and warrants to Buyer as follows:
4.1 Organization and Authority. Each Seller is a
corporation duly organized, validly existing and in good standing
under the law of the jurisdiction of its incorporation and has
the full corporate power and authority to enter into and to
perform this Agreement and to own lease and operate its
properties as it now does and to carry on its business as it is
presently being conducted. Each Seller is duly qualified and in
good standing as a foreign corporation in all jurisdictions where
the failure to so qualify or be in good standing would have a
material adverse effect on the Business and/or the Assets. A
<PAGE>
list of such jurisdictions where any Seller is qualified as a
foreign corporation is set forth on Schedule 4.1.
4.2 Authorization of Agreement. The execution,
delivery and performance of this Agreement by each Seller have
been duly authorized by all necessary corporate action of such
Seller (including approval of its board of directors and/or its
shareholders, if required), and this Agreement constitutes a
valid and binding obligation enforceable against such Seller in
accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law). Each Seller shall furnish to Buyer any documents
reasonably requested by Buyer or Buyer's title insurance company
and/or such other title insurer or title insurers (whether on a
co-insurance or reinsurance basis) as may be satisfactory to
Buyer which evidence the capacity and authorization of each of
such Seller (and the signatories acting on behalf of it) to
consummate the transactions contemplated hereby.
4.3 No Conflicts. Subject to receipt of the consents
and approvals referred to on Schedule 4.3, the execution,
delivery and performance of this Agreement by Sellers will not
(i) conflict with their respective certificate of incorporation
<PAGE>
or by-laws and will not conflict with, or result in a breach or
termination of, or constitute a default under, any lease, agree-
ment, commitment or other instrument, or any order, judgment or
decree, by which any Seller is bound, or to which any of the
Assets is subject; (ii) constitute a violation by any Seller of
any law or regulation applicable to it; (iii) result in the
creation of any lien, claim, charge, security interest or
encumbrance ("Lien") upon any of the Assets; or (iv) adversely
affect the operation of the Business in any respect. Except as
set forth on Schedule 4.3 and for the consents referred to in
Sections 6.1 and 6.2 of this Agreement or otherwise provided by
the terms of any of the Assigned Agreements but only insofar as
such consents apply to the assignment of that particular Assigned
Agreement, no consent, approval or authorization of, or desig-
nation, declaration or filing with, any governmental authority or
any person or entity is required on the part of any Seller in
connection with the execution, delivery and performance of this
Agreement.
4.4 Title to Assets. Except as set forth on Schedule
4.4 and except for the lien, if any, of current Taxes not yet due
and payable, each Seller has, and at the Closing Buyer will
receive, valid title, free and clear of any Liens, to all of the
Assets to be conveyed by such Seller pursuant to this Agreement.
Nothing in this Section 4.4 shall be deemed to constitute either
an express or implied representation or warranty with respect to
<PAGE>
any restrictions which the terms and conditions of any of the
Assigned Agreements impose solely on that Assigned Agreement and
no other Assets.
4.5 Condition of Personal Property. Except as set
forth on Schedule 4.5, since May 30, 1995, all material equipment
and other material tangible assets used or held for use in the
Business have, in all material respects, been maintained in the
ordinary course without any deferral of maintenance. Except as
set forth on Schedule 4.5, since May 30, 1995, no material amount
of such equipment or other tangible personal property (other than
Inventory) has been removed from any Seller's premises. To the
best of Sellers' knowledge, Schedule 1.1(b) contains a true and
complete list of all material equipment and such other tangible
personal property (other than Inventory) used or held for use in
the Business as of September 30, 1995.
4.6 Certain Subsidiaries. Sequa is the record and
beneficial owner of all of the outstanding shares of capital
stock of KMC and Sequa Export. The copies of the certificate of
incorporation and by-laws of KMC and Sequa Export that have been
delivered to Buyer are complete and correct and have not been
amended. Sellers conduct the Business directly through Sequa's
Kollsman Division, KMC and Sequa Export and through no other
entity. There are no existing arrangements that require or
<PAGE>
permit any shares of KMC or Sequa Export to be voted by or at the
discretion of anyone other than Sequa.
4.7 Real Property Interests.
(a) Except for the Title Exceptions listed on
Schedule 4.7(a)-1 (the "Permitted Exceptions"), Sequa has good
and marketable fee title to the Land and Improvements and good
and marketable leasehold title to the leasehold estates created
by the Office Leases and the Nashua Lease, subject to the terms
and conditions of those leases. No Seller has made any
assignment, pledge or mortgage of, or granted any security
interest in, any portion of the Real Property, or its leasehold
interests in the Office Leases and the Nashua Lease. For
purposes of this Agreement, the term "Title Exceptions" means any
defects in, exceptions to, or conditions, liens, mortgages,
encumbrances or other matters relating to title to any portion of
the Real Property, whether evidenced by written instrument or
otherwise evidenced; any encroachments upon any portion of the
Real Property by improvements situated on other lands; any
encroachments by the Improvements (including the improvements
demised by the Office Leases and the Nashua Lease) onto any lands
adjoining any portion of the Real Property; any boundary disputes
regarding the boundaries of the Real Property; and the terms,
provisions and conditions contained in any instruments evidencing
or referring to any such defects, exceptions, conditions, liens,
<PAGE>
mortgages, encumbrances, encroachments, boundary disputes or
other matters excepting any of the foregoing that do not
individually or in the aggregate materially detract from or
interfere with the use of the Land, Real Property or Improvements
or the operation of the Business which, for purposes of this
Agreement, shall be deemed to be Permitted Exceptions. The Land,
the Improvements, the Office Leases and the Nashua Lease each
comprise substantially all the real property interests of that
type used in or held for use in connection with the operation of
the Business.
(b) Except as otherwise disclosed in Schedule
4.7(b), no default on the part of any Seller exists, and, to the
best of Sellers' knowledge, no non-monetary default exists, nor
has any written notice thereof been received under the terms of
any of the Real Property Documents which has not been remedied
under the terms of such Real Property Document. To Sellers'
knowledge, no circumstances or state of affairs presently exists
which with notice, lapse of time, or both could reasonably be
anticipated to result in the existence of a default on the part
of any Seller under the terms of any of the Real Property
Documents, or which could reasonably be anticipated to give any
other party to any of the Real Property Documents the right to
terminate such Real Property Document or pursue any other
recourse or remedy against any Seller or the Real Property or the
premises demised under the Office Leases or the Nashua Lease
<PAGE>
provided for at law or in equity or under the terms of such Real
Property Document.
(c) Except as provided under the terms of the
Office Leases or the Nashua Lease, no person, firm or entity has
any possessory interest in, or any other rights with regard to
the use of, any portion of the Real Property (whether pursuant to
lease, sublease, rental, license, concession, management or other
agreement, written or oral, now or hereafter in effect). No
Seller has granted any rights to acquire or to lease any portion
of the Real Property, including, without limitation, any renewals
or extension options, or any part thereof or otherwise obtain any
interest therein. No Seller has granted any rights of first
refusal, rights of reverter or rights of first offer that are
outstanding relating to the Real Property or any interest
therein.
(d) True, complete and correct copies of all the
Real Property Documents and of all written notices of default (if
any) received with respect to the Real Property Documents and
that remain pending have been delivered to Buyer and have been
initialled by the appropriate Seller and Buyer.
(e) Sellers have no interest as a landlord in
any lease or other agreement for the use and occupancy of all or
<PAGE>
any portion of the Land, Improvements or the premises demised
under the Office Leases or the Nashua Lease.
(f) There is no indebtedness or monetary
obligation secured by or in any manner constituting a lien,
security interest or other monetary encumbrance on the Real
Property.
(g) The Real Property, and the construction, use
and operation thereof, are, to Sellers' knowledge, in material
compliance with all applicable local, state or federal laws,
municipal ordinances or regulations, orders, rules or
requirements of any federal, state, municipal department or other
governmental authority having jurisdiction against or affecting
the Real Property or the construction, ownership, maintenance,
operation, use or improvement thereof (including, without
limitation, applicable zoning, building, health and environmental
laws, ordinances, regulations, orders, rules or requirements, and
laws, ordinances, regulations, orders, rules or requirements
applicable to the establishment and maintenance of working
conditions for labor) ("Legal Requirements"), and no Seller has
received written notice (which remains uncured) of, nor has any
Seller any knowledge of, (i) any uncured violation of any
applicable Legal Requirements whether or not officially noted or
issued, or (ii) any condition relating to the Real Property which
could reasonably be expected to constitute a material violation
<PAGE>
of any applicable Legal Requirements. Sellers shall give Buyer
notice of any violation of any Legal Requirement of which any
Seller obtains written notice or acquires knowledge between the
date of this Agreement and the Closing Date.
(h) There is no pending or, to the best of
Sellers' knowledge, threatened annexation or condemnation
proceeding involving all or a portion of the Real Property.
(i) Except as disclosed on Schedule 4.7(i)-1,
there are no, and for the past three years have not been any,
proceedings seeking a reduction in real estate taxes imposed upon
any portion of the Real Property (other than the premises demised
under the Office Leases). There is no pending or, to Sellers'
knowledge, threatened imposition of any special or other
assessments affecting any portion of the Real Property or any
penalties or interest due with respect to the real estate taxes
assessed against all or any portion of the Real Property that are
payable by the owner or, in the case of Real Property leased to
any Seller, the tenant thereof or that could result in a Lien
thereon. True and complete copies of all tax bills with respect
to each portion of the Real Property (other than with respect to
the land and improvements demised under the Office Leases)
payable for the last three years have been initialled by Sellers
and Buyer and have been annexed to this Agreement as Schedule
4.7(i)-2.
<PAGE>
4.8 Financial Statements; Other Financial Information.
(a) Schedule 4.8 contains (x) an unaudited
balance sheet of the Business as of December 31, 1994, together
with the related statements of operations for the twelve month
period then ended, and (y) an unaudited balance sheet of the
Business as of September 30, 1995 (the "Balance Sheet"), together
with the related statement of operations for the nine month
period then ended. Except as described in Schedule 4.8, all of
the financial statements contained in Schedule 4.8 are in
accordance with the books and records of Sellers, fairly present,
in all material respects, the financial position and the results
of operations of the Business as of the dates and for the periods
indicated (subject to normal year end adjustments with respect to
the Balance Sheet and the related statements for the nine months
then ended none of which are material in any respect), which
statements were provided to Sequa in accordance with its
divisional reporting practices, which are subject to Sequa's
further adjustments for the purposes of Sequa's financial
reporting, which adjustments may be material.
(b) All of the accounts receivable of Sellers
arising out of the Business and all of the Unbilled Receivables
reflected in the Balance Sheet and/or Schedule M and Schedule CY-
2 arose from bona fide transactions in the ordinary course of
business. To the best of Sellers' knowledge, Schedule CY-2
<PAGE>
contains a true and correct list of all Unbilled Receivables as
of September 30, 1995. Nothing contained in this Agreement shall
constitute a representation or warranty of collectibility of any
Unbilled Receivable.
4.9 Absence of Certain Changes. Since January 31,
1995, Sellers have operated the Business in the ordinary course
and consistent with past practice, and, except as set forth on
Schedule 4.9:
(a) there has been no material adverse change in
the condition (financial or otherwise) or operations of the
Business or the Assets;
(b) no Seller (as it relates to the Business)
has (i) entered into any transaction that is material to the
Business other than in the ordinary course, (ii) made any
material change in its accounting methods or principles or (iii)
incurred any indebtedness for borrowed money with respect to the
Business or the Assets; or
(c) no Seller has granted or agreed to grant any
general increase in any rate or rates of salaries, compensation
or benefits to the employees of the Business or any specific
increase in the salary, compensation or benefits to (x) any
employee whose total salary and compensation after such increase
<PAGE>
would be at an annual rate in excess of $90,000, other than in
the ordinary course of business, or (y) any other employee
outside of the ordinary course of business;
(d) no Seller has established any new Benefit
Plan, amended or modified any existing Benefit Plan or incurred
any obligation or liability under any Benefit Plan materially
different in nature or amount from obligations or liabilities
incurred during similar periods in prior years;
(e) there presently are no Claims Receivable or
Notes Receivable other than as indicated on Schedule 4.9(e) as
may be updated through the close of business on the Closing Date;
and
(f) there have been no purchases or other
additions of military Stock Inventory.
4.10 Litigation; Compliance with Laws. Except as set
forth on Schedule 4.10, there is no claim, litigation, proceeding
or governmental investigation pending or, to the best of the
knowledge of Sellers, threatened, nor is there any order,
injunction or decree outstanding, against any Seller relating to
the Business and/or the Assets which could reasonably be
determined to have a material adverse effect on the Business
and/or the Assets. To the best of Sellers' knowledge, no Seller
<PAGE>
is in violation of any law, regulation or ordinance or any other
requirement of any governmental body or court with respect to the
operation of the Business and/or the Assets the consequence of
which could be reasonably expected to have a material adverse
effect on the Business and/or the Assets, and no written notice
has been received by any Seller alleging any such violation which
has not since been remedied. Except as set forth on Schedule
4.10, within the past twelve (12) months, no Seller has entered
into any written agreement with (and no such written agreement
exists), had any material dispute with respect to any law,
regulation or ordinance, or, to Sellers' knowledge, been the
subject of any investigation by, any governmental authority or
community group that could reasonably be expected to adversely
affect the operation of the Business and/or the Assets.
4.11 List of Agreements, Etc. Schedule 4.11 contains,
with respect to the Business and the Assets, a complete list of:
(a) all Purchase Contracts, other than those that were entered
into in the ordinary course of business and that involve an
expenditure by Sellers of less than $75,000 for any one
commitment or two or more related commitments; (b) all Personal
Property Leases; (c) all Teaming Agreements; (d) all Customer
Agreements (indicating which Customer Agreements relate to KMC);
(e) all Sales Contracts; (f) all Representative Agreements; (g)
all Licensing Agreements; and (h) all other agreements,
commitments and understandings (written or oral) that require
<PAGE>
payment by or to any Seller of more than $50,000 individually or
that are otherwise material to the Business and/or the Assets.
True and complete copies of all of the leases, commitments and
other agreements referred to on Schedules 4.11 and 4.12-4 have
been delivered to Buyer.
4.12 Employees. Attached hereto as Schedule 4.12-1 is
a complete and correct list of the employees of Sequa and KMC
employed solely in the Business ("Employees"), which list also
includes each such employee's current salary, the date and amount
of the last salary increase and the amount of any other
compensation, including bonus, paid to such employee during the
previous twelve month period or currently due, and such
employee's position (specifying whether such position is with KMC
or Sequa, place of employment, date of birth and date of
employment). None of such compensation reflects settlements of
any claims other than salary negotiations in the ordinary course
of business consistent with past practice. Except as set forth
on Schedule 4.12-2, none of the Employees has, since April 10,
1995, given written notice to Sequa or KMC of either a desire to
terminate his or her employment or of any intention to terminate
his or her employment upon a sale of the Business. Except as set
forth on Schedule 4.12-3, since April 10, 1995, Sequa has not
directed management of the Business to refrain from terminating
any Employee other than in the ordinary course of business. No
Employees are represented by any labor or trade union and, to the
<PAGE>
best of Sellers' knowledge, no movement to designate a collective
bargaining unit to represent any of the Employees exists or, to
Sellers' knowledge, is threatened. Except as set forth on
Schedule 4.12-4, the transactions contemplated by this Agreement
will not trigger any extraordinary payment of any kind to any
Employees other than an obligation to make severance payments
solely pursuant to the Benefit Plans or otherwise as provided by
the Benefit Plans.
4.13 Status of Agreements. All leases, commitments and
other agreements of Sellers to be assumed by Buyer were entered
into in connection with and in the ordinary course of the
Business. Each of the Assigned Agreements is presently in full
force and effect in accordance with its terms and no written
notice has been received by any Seller alleging any default under
any of the Assigned Agreements. To the best of Sellers'
knowledge, no Seller is in material default and, to the knowledge
of Sellers, no other party is in default under any of the
provisions of any of the Assigned Agreements, and, to Sellers'
knowledge, no condition exists that, with notice or the lapse of
time or both, could reasonably be expected to constitute a
material default by any Seller or, to the knowledge of Sellers,
any default by any other party to any of the Assigned Agreements.
No party to any of the Assigned Agreements has, in writing, made
or asserted, or to Seller's knowledge, has, any defense, set off
or counterclaim under any of the Assigned Agreements or has
<PAGE>
exercised any option granted to it to cancel or terminate any
such Assigned Agreement, to shorten the term thereof or to renew
or extend the term thereof, and no Seller has received any
written notice to that effect. No party to any of the Assigned
Agreements has accelerated its time for performance thereunder,
and without limiting the foregoing, no party to any of the
Assigned Agreements has prepaid any of its obligations thereunder
or made any prepayment with respect thereto, and, except as set
forth on Schedule 4.13 and in respect of Product and Service
Warranty, no Seller has received any payment or other
consideration or deposit or collateral with respect to or on
account of obligations to be performed, in whole or in part, by
Buyer (as Sellers' assignee) thereunder after the Closing Date,
and no Billed Receivable is, or shall be, for or on account of
obligations to be performed, in whole or in part, by Buyer (as
Sellers' assignee) thereunder after the Closing Date, other than
with respect to Product and Service Warranty as provided in this
Agreement. As of the date of this Agreement, to Sellers'
knowledge, each Seller has fully and timely performed all of the
material obligations to be performed by it under each of the
Assigned Agreements on or prior to the date of this Agreement.
<PAGE>
4.14 Intangible Assets.
(a) Schedule 4.14 contains a complete list of
all patents, copyrights, service marks, service names,
trademarks, trade names, logos, brands and registrations and
applications for registration of any of them, and all material
computer software programs and material media and other computer
databases used in the Business. Sellers own, free and clear of
any Lien (other than the restrictions contained in any Assigned
Agreement listed on Schedule 4.14 solely with respect to that
Assigned Agreement and no other Asset), all the Intellectual
Property listed on Schedule 4.14.
(b) To Sellers' knowledge, no Seller is
infringing any intellectual property of any third party or
otherwise violating the rights of any third party, and no claim
is pending which has not been remedied or, to Sellers' knowledge,
threatened against any Seller alleging any such violation. To
Sellers' knowledge, there has been no violation by others of any
right of any Seller in any Intellectual Property. Except as set
forth in Schedule 4.14, no Seller is a party to or bound by any
license or other agreement requiring the payment by it of any
royalty or similar payment in connection with the operation of
the Business. Except as set forth in Schedule 4.14, Sellers have
the right to transfer copies of all computer software to Buyer as
set forth in Section 1.1(d) of this Agreement without violating
<PAGE>
any agreement to which any Seller is a party or any rights of any
third party in that software.
4.15 Insurance. Sellers maintain policies of fire and
extended coverage and casualty, liability and other forms of
insurance in connection with the Business and/or Assets in such
amounts and against such risks and losses as are customary in the
industry. Schedule 4.15 contains a complete list of all
insurance policies held by Sellers in connection with the
Business and/or the Assets and specifies the type of coverage,
location and value of the property covered and expiration date of
each of the policies maintained in connection with the Business
and/or the Assets.
4.16 Labor Disagreements. Except as set forth on
Schedule 4.16, with respect to the Business: (a) to the best of
Sellers' knowledge, each Seller is in material compliance with
all applicable laws and regulations regarding employment and
employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor practice;
(b) there is no unfair labor practice charge or complaint against
any Seller pending before the National Labor Relations Board, any
state labor relations board or any court or tribunal and, to the
knowledge of Sellers, none is or has, within the last
eighteen (18) months, been threatened; (c) there is no labor
strike, dispute, request for representation, slowdown or stoppage
<PAGE>
actually pending against or affecting any Sellers and, to the
knowledge of Sellers, none is or has, within the last
eighteen (18) months, been threatened; and (d) no grievance which
might have a material adverse effect on the conduct of the
operations of the Business and no arbitration proceeding arising
out of or under any collective bargaining agreement is pending
and, to the knowledge of Sellers, none is or has, within the last
eighteen (18) months, been threatened.
4.17 Employee Benefit Plans.
(a) Schedule 4.17 sets forth a list of (i) each
employee benefit plan, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and
(ii) to the extent not covered under (i) above, each fringe
benefit, stock option, bonus, incentive compensation, deferred
compensation, excess, supplemental executive compensation,
employee stock purchase, vacation, sickness or disability,
severance or separation, restricted stock or other employee
benefit plan, policy or arrangement, whether written or oral,
maintained or contributed to within the last twelve months by any
Seller or by a Common Control Entity (as defined below) for the
benefit of Employees or former Employees (the "Benefit Plans").
Except as otherwise set forth on Schedule 4.17, no Benefit Plan
provides health, dental, life insurance or other welfare benefits
(whether on an insured or self-insured basis) to Employees or
<PAGE>
former Employees after their retirement or other termination of
employment (other than continuation coverage required under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA") which may be purchased at the sole expense of
the Employee or former Employee).
With respect to each Benefit Plan, each Seller has
heretofore delivered to Buyer true and complete copies of the
following documents, where applicable: (i) the text of the
Benefit Plan and of any trust or insurance contract maintained in
connection therewith, (ii) the most recent annual report (Form
5500 series) together with required schedules filed with the IRS
and any financial statements or opinions required under ERISA,
(iii) the most recent summary plan description and all
modifications, (iv) the most recent determination letter issued
by the IRS and the related submission and communications with the
IRS, and (v) the most recent actuarial report.
(b) With respect to each employee benefit plan
or arrangement (including the Benefit Plans) maintained or
contributed to by Sellers or any corporation or other trade or
business under common control with any Seller (as determined
under Section 414(b) or (c) of the Code, a "Common Control
Entity"), (i) there is no actual or contingent liability under
Title IV of ERISA or the Code to any person or entity, including
the Pension Benefit Guaranty Corporation, IRS, any such plan or
<PAGE>
the participants (or their beneficiaries) in any such plan, (ii)
the Assets have not been subject to a lien under ERISA or the
Code and (iii) there is no basis for such liability or the
assertion of any such lien with respect to the Assets as the
result of or after the consummation of the transactions
contemplated by this Agreement.
4.18 Environmental Matters.
(a) Except as disclosed in Schedule 4.18,
Sellers and all of the property leased or owned by them and used
in the Business is, to the best of Sellers' knowledge, in
material compliance with all federal, state and local laws,
regulations, rules, orders, decrees, ordinances, guidance
documents promulgated by governmental regulatory entities and
common law relating to human health, and the pollution or
protection of human health or the environment, including, but not
limited to, laws relating to emissions, discharges, releases or
threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern ("Environmental Laws").
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum, petroleum
products, petroleum-derived substances, radiation, radioactive
materials, polychlorinated biphenyls, lead based paint, urea
<PAGE>
formaldehyde, asbestos or any materials containing asbestos and
any other substance listed in, regulated by or that could result
in liability under any Environmental Laws.
(b) Except as disclosed in Schedule 4.18: (i) to
the best of Sellers' knowledge, there are no past or present
actions, activities, events or incidents, including, but not
limited to, the release, emission, discharge or disposal of any
Material of Environmental Concern, occurring prior to Seller's
ownership or occupancy of the Real Property, and (ii) to the best
of Sellers' knowledge, there are no past or present actions,
activities, events or incidents, including, but not limited to,
the release, emission, discharge or disposal of any Material of
Environmental Concern, occurring during any Seller's ownership or
occupancy of the Real Property, that, in either case, could
reasonably be expected to form the basis of any claim against or
violation by any Seller, or against any person or entity whose
liability for any claim or violation arises under Environmental
Laws that any Seller has (or may have) retained or assumed either
contractually or by operation of law relating to the Business
and/or the Assets.
(c) Except as set forth on Schedule 4.18, with
respect to the Business (i) to the best of Sellers' knowledge,
there are no on-site or off-site locations where any Seller has
stored, disposed or arranged for the disposal of Materials of
<PAGE>
Environmental Concern, (ii) there are no underground storage
tanks located on property owned or leased by any Seller, (iii)
there is no asbestos or asbestos-containing materials contained
in or forming part of any building, building component, structure
or office space owned or leased by any Seller, (iv) no
polychlorinated biphenyls (PCBs) are used or stored at any
property owned or leased by any Seller, and (v) none of the
electrical equipment located at the real property owned or leased
by any Seller contains any PCBs.
(d) Except as disclosed in Schedule 4.18, to the
best of Sellers' knowledge, Materials of Environmental Concern
have not been transported or disposed of from the property now or
previously used by any Seller in the Business in a manner or to a
location which could reasonably be expected to give rise to
liability under Environmental Laws. Except as disclosed in
Schedule 4.18, none of the real property comprising the Assets is
listed or, to Sellers' knowledge, proposed for listing on the
National Priorities List pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. . 9601 et seq., or any similar inventory of
sites requiring investigation or remediation maintained by any
state. No Seller has received any written notice which remains
uncured from any governmental entity or third party of any actual
or threatened liability arising under the Environmental Laws with
<PAGE>
respect to the real property comprising the Assets or the conduct
of the Business.
(e) To the best of Sellers' knowledge, except as
disclosed on Schedule 4.18, Sellers hold, and are in material
compliance with, all permits, licenses, registrations or other
authorizations required to be held by Sellers under Environmental
Laws in connection with the Business ("Environmental Permits").
4.19 Permits and Licenses. Schedule 4.19 sets forth a
complete list of all permits, licenses, franchises and other
authorizations relating to the Business and/or the Assets held by
any Seller, including without limitation, Real Property Permits
and Environmental Permits (collectively, the "Permits"). To the
best of Sellers' knowledge and except as disclosed on Schedule
4.19, Sellers have all material permits, licenses, franchises and
other authorizations necessary for the conduct of the Business
and the possession, ownership and use of the Assets by Sellers.
All Permits are valid and in full force and effect.
4.20 Taxes. No Seller is a "foreign person" as that
term is defined in Section 1445(f)(3) of the Code.
4.21 Inventory. All items of Inventory are being
purchased on an "AS IS/WHERE IS" and "WITH ALL FAULTS" basis;
except that since May 30, 1995, Sellers have continued to
<PAGE>
maintain the Inventory in the ordinary course of business
consistent with past practice. Schedules AB and CR are, to the
best of Sellers' knowledge, true and complete lists of the
Contract Inventory and the Stock Inventory, respectively, as of
September 30, 1995.
4.22 Sufficient Assets. The Assets include all of the
assets reflected on the Balance Sheet (except Excluded Assets and
assets sold or otherwise disposed of in the ordinary course of
business since January 31, 1995), and constitute all of the
assets used in or held for use for the conduct of the Business in
the manner in which it has been conducted by Sellers.
4.23 Transactions with Affiliates. Except as set forth
on Schedule 4.23: (a) since January 31, 1995 there has been no
material transaction relating to the Business between any Seller
and any Affiliate thereof, (b) there is no indebtedness,
liability or obligation of, or guaranty of indebtedness made by,
any Seller to any Affiliate thereof relating to the Business, and
(c) there is no indebtedness, liability or obligation of, or
guaranty of indebtedness made by, any Affiliate of a Seller to a
Seller relating to the Business.
4.24 Products; Customers; Suppliers. Schedule 4.24
lists since January 1, 1995, (a) the ten largest suppliers of the
Business measured by purchases and, to the best of Sellers'
<PAGE>
knowledge, all material sole source suppliers; and (b) the ten
largest customers of the Business measured by sales. Except as
set forth on Schedule 4.24, no Seller is engaged in any pending
material dispute with any of those customers or suppliers and no
such customer or supplier has since January 1, 1995 notified any
Seller in writing that it is considering termination, non-renewal
or any adverse modification of its agreement or arrangement with
respect to the Business.
4.25 Product Warranties. Set forth as Schedule 4.25 is
a description of all material written Product and Service
Warranties made by Sellers with respect to each category of
products and services sold and to be sold as of the date hereof
or on or prior to the Closing Date and which remain outstanding
as of the date hereof. Except by operation of law (to the extent
not effectively excluded or disclaimed) and as set forth in
Schedule 4.25, to the best of Sellers' knowledge, no Seller has
given any other written warranty concerning the nature,
merchantability, fitness for a particular purpose or expected
performance in connection with the products and services shipped
and/or sold or contracted to be shipped and/or sold by the
Business on or prior to the Closing Date. Except as disclosed on
Schedule 4.25 and since January 1, 1990, no products or services
shipped and/or sold or contracted to be shipped and/or sold by
the Business on or prior to the Closing Date have at any time
been subject to any voluntary or mandated governmental recall
<PAGE>
(whether federal, state, local or foreign), and, to the best of
Sellers' knowledge, there is no presently existing circumstance
that could reasonably be expected to constitute a valid basis for
any such recall.
4.26 FCPA Compliance. The accounting procedures and
control systems of Sellers relating to the Business are, to
Sellers' knowledge, sufficient to comply in all material respects
with the requirements of the Foreign Corrupt Practices Act, 15
U.S.C. .. 78m, 78dd-1, 78dd-2, 78ff (1986), as amended.
4.27 Certain Affiliates. All Affiliates of Sellers
that have a name containing the word "Kollsman" or the
abbreviations "KMC", "KIC" or "KSM" or that do business under any
such name, are listed on Schedule 4.27. At the Closing, and from
time to time thereafter, Sellers shall take such action, or cause
any such Affiliate to take such action, as Buyer may reasonably
request in order to change the name of any Seller or any such
Affiliate to a name not containing the word "Kollsman" or the
abbreviations "KMC", "KIC" or "KSM".
4.28 KSAL. KSAL is a duly organized and in good
standing under the laws of its country of organization and is
more particularly described in Schedule 4.28. Sequa owns an
interest in KSAL, as more particularly described on Schedule 4.28
subject only to those Liens that are described on Schedule 4.28.
<PAGE>
The sole asset of KSAL consists of cash. KSAL has not entered
into any agreement of any nature whatsoever and has no
liabilities or obligations of any nature whatsoever. The line
item referred to as "Investments" on the Balance Sheet consists
entirely of Sequa's minority ownership interest in KSAL.
nME No Misrepresentation. No representation or
warranty by any Seller in this Agreement (including the Schedules
and Exhibits to this Agreement) and no statement made or
contained in any certificate or instrument delivered or to be
delivered to Buyer pursuant to this Agreement contains or will
contain any untrue statement of a material fact or omits or will
omit to state a material fact necessary to make the statements
contained in this Agreement (including the Schedules and Exhibits
to this Agreement) not misleading at the time given or on the
Closing Date. Sellers make no representation or warranty with
respect to Schedules 2.3(b)-1, 2.3(b)-2, 2.4, 5.5, 6.8, 6.9, 6.18
and 6.21.
5. Representations and Warranties by Buyer. Buyer
represents and warrants to Sellers as follows:
5.1 Buyer's Organization. Buyer is a corporation duly
organized and validly existing under the law of Delaware and has
the full power and authority to enter into and perform this
Agreement in accordance with its terms.
<PAGE>
5.2 Authorization of Agreement. The execution,
delivery and performance of this Agreement by Buyer have been
duly authorized by all necessary action of Buyer (including
approval by the board of directors or executive committee of EL-
OP, U.S., Inc.) and this Agreement constitutes the valid and
binding obligation of Buyer enforceable against it in accordance
with its terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of
equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
5.3 Consents of Third Parties. The execution,
delivery and performance of this Agreement by Buyer will not
(a) conflict with the certificate of incorporation or by laws of
Buyer and will not conflict with or result in the breach or
termination of, or constitute a default under, any lease,
agreement, commitment or other instrument, or any order, judgment
or decree to which Buyer is a party or by which Buyer is bound,
or (b) constitute a violation by Buyer of any law or regulation
applicable to Buyer.
5.4 Litigation. There is no claim, litigation,
proceeding or governmental investigation pending or, to Buyer's
knowledge, threatened, or any order, injunction or decree
<PAGE>
outstanding, against Buyer, that would prevent the consummation
of the transactions contemplated by this Agreement.
5.5 Financial Statements. Schedule 5.5 contains an
audited balance sheet of each of Buyer and Guarantor as of
December 31, 1994. Such balance sheets are in accordance with
the respective books and records of each of Buyer and Guarantor
and fairly present, in all material respects, the financial
position of each of Buyer and Guarantor as of such date and have
been prepared in accordance with generally accepted accounting
principles consistently applied.
5.6 Adequate Funds. Buyer has all funds or absolute
binding commitments to obtain all funds required to consummate
the transactions contemplated by this Agreement.
6. Further Agreements of the Parties.
6.1 Government Approvals. The parties shall, in an
expeditious manner, fully cooperate in obtaining such U.S. and
Israeli Governmental clearances and consents and in making such
Governmental submissions and providing such notices as are
required or which Buyer may require in connection with the
transactions provided for in this Agreement, including, without
limitation, submissions on or before November 10, 1995 to the
Defense Investigative Service and the Committee on Foreign
<PAGE>
Investments in the United States ("CFIUS"), and notice to the
applicable security agency. Each party shall pay its own costs
and expenses in connection with such activities, except that the
fees and expenses of McKenna & Cuneo, counsel which the parties
have retained to assist with such activities, shall be paid 50%
by Buyer and 50% by Sellers. The receipt by Buyer of all such
clearances and consents shall be a condition precedent to Buyer's
and Sellers' obligations to consummate the transactions
hereunder, all as set forth in Sections 7.1 and 7.2 of this
Agreement.
6.2 Hart-Scott-Rodino Act. On or before November 10,
1995, each party shall, in cooperation with the other, file with
each of the Department of Justice and the Federal Trade
Commission any reports or notifications that may be required to
be filed by it under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "HSR Act") in connection with the transactions
contemplated by this Agreement, shall promptly comply with all
requests for further documents and information made by the
Department of Justice or the Federal Trade Commission, and shall
furnish to the other all such information in its possession as
may be necessary for the completion of the reports or
notifications to be filed by the other. The fees due from either
party under the HSR Act in connection with the filing of any of
those reports or notifications shall be borne by Buyer.
<PAGE>
6.3 Back-Ups. Sellers represent and warrant to Buyer
that Schedule BJ sets forth a true and complete list of all
Letters of Credit. At the Closing, Buyer shall deliver to
Sellers: guarantees in form and substance satisfactory to Sellers
in their sole discretion as well as a grant of a security
interest in favor of Sellers in the Assets, subordinated only to
Buyer's bank financing, an acceptable intercreditor agreement and
provisions for tangible net worth of not less than the aggregate
principal amount of the letters of credit set forth on Schedule
1.2(d) to the extent and for so long as they survive and the
maintenance thereof; or substitute or back-up letters of credit,
surety and performance bonds or other similar instruments (or
evidence satisfactory to Sellers and its counsel of the
establishment of the same), each in the aggregate principal
amount and with terms described on Schedule 1.2(d), and from
banks or other appropriate responsible financial institutions
named on Schedule 1.2(d) to replace or collateralize the
corresponding Letters of Credit set forth in Schedule 1.2(d).
6.4 Operations of the Business.
(a) From the date of this Agreement through the
Closing Date, except with the prior written consent of Buyer:
(i) Sellers shall operate the Business in
the ordinary course and consistent with past practice;
<PAGE>
(ii) No Seller shall, except in the
ordinary course of business and consistent with past
practice, (i) enter into any transaction or incur any
liability or obligation, (ii) sell or transfer any of the
assets relating to the Business except that items may be
sold provided such items are replaced with items of equal or
greater value, (iii) grant or agree to grant any general
increases in the rates of salaries or compensation payable
to employees of the Business, except for annual increases at
times and in amounts consistent with past practices,
(iv) grant or agree to grant any specific bonus or increase
to any employee of the Business, (v) hire or terminate the
employment of any employee of the Business, or (vi) provide
for any new pension, retirement or other employment benefits
for employees of the Business or any increase in any
existing benefits;
(iii) No Seller shall enter into any
lease or agreement, modify any existing lease or agreement
or create any Title Exception, with respect to the Real
Property. No Seller shall commence any proceeding, or
settle any pending proceeding, seeking a reduction of real
property taxes with respect to the Real Property; and
<PAGE>
(iv) Each Seller shall maintain all of
its Assets consistent with past practice with no deferral of
maintenance, replace all items of equipment (excluding all
items that are not currently being used) at time intervals
consistent with past practice, and, subject to Section 11 of
this Agreement, repair or replace any asset that may be
damaged or destroyed, if consistent with past practice;
(b) Buyer shall incur no liability or obligation
to Sellers for granting or withholding any consent under this
Section 6.4.
6.5 Notices. Sellers shall (promptly after obtaining
knowledge thereof) notify Buyer in writing of, and furnish any
information which Sellers have or that Buyer may request with
respect to any event or condition of which Sellers have knowledge
that would cause any of Sellers' representations and warranties
contained in this Agreement to be inaccurate in any material
respect, including, without limitation, any material claim,
litigation, proceeding or governmental investigation threatened
or asserted by or against Sellers relating to the Business and/or
the Assets, or any material development with respect to any such
claim, litigation, proceeding or investigation. Any notice
<PAGE>
required to be given pursuant to this Section 6.5 shall specify
that it is being given pursuant this Section 6.5.
6.6 Disclaimer as to Physical Condition. Prior to the
Closing Date, Buyer and Buyer's agents shall have had performed
any and all inspections, reviews, tests, examinations and
investigations of all aspects of the Assets, as Buyer shall deem
necessary or appropriate with respect to the physical condition
of the Assets. Sellers and Buyer acknowledge that Buyer is
acquiring the Assets solely on the basis of Sellers'
representations or warranties in this Agreement or any of the
documents executed by Sellers at the Closing, and Buyer's due
diligence examinations of the Assets. EXCEPT AS SET FORTH IN
THIS AGREEMENT AND SUCH OTHER DOCUMENTS: (I) THIS SALE IS
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTY OF INCOME
POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, AND EACH SELLER DOES HEREBY DISCLAIM
AND RENOUNCE ANY SUCH REPRESENTATION OR WARRANTY EXCEPT FOR THOSE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT AND
THE DOCUMENTS BEING EXECUTED BY SUCH SELLER AT THE CLOSING AND NO
OTHER; AND (II) BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLED, FROM
SELLERS OR ANY AGENTS OR BROKERS AS TO ANY MATTER CONCERNING THE
ASSETS, INCLUDING WITHOUT LIMITATION: (1) THE CONDITION OR SAFETY
OF THE REAL PROPERTY AND THE IMPROVEMENTS THEREON, INCLUDING, BUT
<PAGE>
NOT LIMITED TO, PLUMBING, SEWER, HEATING AND ELECTRICAL SYSTEMS,
ROOFING, AIR CONDITIONING, FOUNDATIONS, SOILS AND GEOLOGY, LOT
SIZE OR SUITABILITY OF THE REAL PROPERTY AND THE IMPROVEMENTS FOR
A PARTICULAR PURPOSE; (2) WHETHER THE APPLIANCES, IF ANY,
PLUMBING OR UTILITIES ARE IN WORKING ORDER; (3) THE HABITABILITY
OR SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF
ITS CONSTRUCTION; (4) THE FITNESS OF ANY PERSONAL PROPERTY OR
FIXTURES; OR (5) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY SOUND
OR IN GOOD CONDITION.
6.7 Discharge of Liabilities. Sellers shall, on the
Closing Date, pay all Excluded Liabilities (including but not
limited to all accounts payable and other liabilities that arose
out of the operations of the Business prior to the close of
business on the Closing Date) only to the extent that they are
then due and payable, and Sellers shall thereafter pay when due
all such Excluded Liabilities, including such accounts payable
and other liabilities that become due and payable thereafter. In
addition, Sellers shall, on the Closing Date, cause to be removed
and discharged any Title Exception affecting the Real Property
which is not a Permitted Exception.
6.8 Certain Consents and Approvals to Assignment. Set
forth on Schedule 6.8 hereto is a list of certain consents,
covenants, approvals or similar acknowledgements that are
required in connection with the consummation of the transactions
<PAGE>
contemplated by this agreement ("Required Consents"). With
respect Required Consents:
(a) the parties will use their reasonable
commercial efforts to obtain all Required Consents on or prior to
the Closing Date;
(b) if the parties are unable to obtain a
Required Consent, then, (i) with respect to the contract, lease,
license, permit, approval or other item with respect to which
such Required Consent is not obtained, this Agreement shall not
constitute or be deemed to be an assignment or an agreement to
assign such item if an attempted assignment without such Required
Consent would constitute a breach of or default under such item
or create in any party thereto the right or power to cancel or
terminate such item, and (ii) Buyer shall be entitled to
terminate this Agreement in accordance with Section 10.1(b) of
this Agreement if all Required Consents have not been obtained at
least five (5) days prior to the Closing Date; and
(c) neither Sellers nor Buyers will be obligated
to incur out-of-pocket expenses (except for reasonable travel
expenses) or commence litigation in order to obtain any Required
Consent pursuant to this Section 6.8.
<PAGE>
6.9 Sales Taxes and Transfer Taxes and Allocated
Expenses. Buyer shall be responsible for (i) any state or local
sales and use taxes payable in connection the sale of the Assets
and (ii) any stamp or transfer taxes, real property taxes or
recording fees assessed in connection with the sale of the
Assets, except for clause (ii) with respect to New Hampshire,
which Buyer and Sellers shall share on a 50/50 basis. At the
Closing, Sellers, on the one hand, and Buyer, on the other hand,
shall allocate all real estate taxes in accordance with Schedule
6.9.
6.10 Expenses. Unless otherwise provided in this
Agreement, each party shall bear its own expenses incurred in
connection with the negotiation and preparation of this Agreement
and in connection with all obligations required to be performed
by it under this Agreement.
6.11 Access to Information Prior to and After Closing.
(a) Prior to the Closing, Buyer and its
representatives may make such reasonable investigation of the
assets and business of the Business as it may desire, and Sellers
shall give to Buyer and to its counsel, accountants and other
representatives reasonable access during normal business hours
throughout the period prior to the Closing to all of the assets,
books, commitments, agreements, records, employees, customers,
<PAGE>
suppliers and files of Sellers relating to the Business and/or
the Assets, and Sellers shall furnish to Buyer during that period
all documents and copies of documents and information concerning
the business and affairs of the Business and/or the Assets as
Buyer reasonably may request. All information furnished to Buyer
by Sellers under this Section 6.11 shall be subject to that
certain Confidentiality Agreement, dated November 30, 1994
between Sequa and Buyer.
(b) For a period of seven (7) years following the
Closing, the parties will retain all business records reflecting
the assets and liabilities of or relating to the Business in
existence as of the Closing, including, without limitation, those
related to the Excluded Assets and the Excluded Liabilities (the
"Business Records"). During such period, the parties will afford
authorized representatives of one another free and full access,
subject to applicable law and governmental clearance, of all of
the Business Records at reasonable times and during normal
business hours at the principal business office of the Business
or of the Sellers or any of them, as appropriate, or at such
other location or locations at which the Business Records may be
stored or maintained from time to time, and will permit such
representatives to make abstracts from, or copies of, any of the
Business Records, or to obtain temporary possession of any
thereof as may be reasonably required by the requesting party at
such party's sole cost and expense. If any party proposes to
<PAGE>
destroy any Business Records after the expiration of seven (7)
years following the Closing, it shall provide written notice of
such intent to the other parties. If within 30 days after
receipt of such notice, the other party notifies the first party
of its desire to retain the Business Records, the responding
party shall be entitled to remove and retain (at its own cost and
expense) the Business Records that the first party proposes to
destroy, within 90 days after the sending of the response.
6.12 Additional Information. Sellers shall promptly
deliver to Buyer copies of all financial statements and reports
which are reasonably requested by Buyer and, in either case,
without representation or warranty as to the truth or accuracy of
the same relating to the Business that may be prepared by it
during the period from the date of this Agreement to the Closing
Date. Sellers shall furnish to Buyer any other information
concerning the financial and operating condition of the Business
and/or the Assets that Buyer from time to time may reasonably
request.
6.13 Business Disclaimer.
(a) Except for representations and warranties
expressly set forth in this Agreement, the Schedules and the
documents and instruments delivered pursuant to this Agreement at
Closing, Buyer UNDERSTANDS AND AGREES THAT NONE OF SELLERS OR
<PAGE>
ANYONE ACTING ON THEIR BEHALF, MAKES ANY EXPRESS OR IMPLIED
REPRESENTATIONS OR WARRANTIES (EXCEPT AS SET FORTH HEREIN) WITH
RESPECT TO THE FINANCIAL CONDITION, ASSETS, PROPERTIES OR
BUSINESS (CURRENT, FIXED, PERSONAL, REAL TANGIBLE AND INTANGIBLE)
REFERRED TO HEREIN, INCLUDING BUT NOT LIMITED TO, CAPACITY,
SUITABILITY, UTILITY, SALABILITY, AVAILABILITY, PROFITABILITY,
COLLECTIBILITY AND OPERATION.
(b) Buyer will purchase the Assets and will
enter into the transactions contemplated by this Agreement with
the understanding, acknowledgement and agreement by Buyer that no
representations or warranties, express or implied, are made with
respect to future prospects (financial or otherwise) of the
Business.
(c) Except as provided in this Agreement and the
Schedules hereto, Sellers expressly disclaim (and Buyer accepts
such disclaimer) any and all obligation or liability for
representations and warranties, express or implied, contained in,
or for omissions from, any written or oral communications,
including, without limitation, due diligence materials heretofore
transmitted to or in any matter obtained by, Buyer in the course
of its investigation of the Business. Buyer represents and
warrants that, in Buyer's determination to buy the Assets and to
consummate the transactions contemplated by this Agreement, Buyer
has not relied on any information previously delivered or
<PAGE>
otherwise acquired, learned or obtained, but rather is entering
this transaction solely upon the basis of the express
representations and warranties contained in this Agreement.
(d) Notwithstanding the foregoing, Sellers
hereby represent and warrant to Buyer that those written
materials that are described on Schedule 6.13, are true, correct
and complete copies of the documents and materials that they
purport to be, provided that, no representation or warranty is
made with regard to the accuracy or completeness of the
statements made therein.
6.14 Covenant Against Competition, Solicitation and
Disclosure. To accord to Buyer the full value of its purchase,
Sellers and Buyer shall enter into an agreement in the form of
Exhibit 6.14 (the "Non-Competition Agreement"), which provides
that none of Sellers or their respective Affiliates shall subject
to certain limitations and exceptions contained in the Non-
Competition Agreement (a) for a period of five (5) years after
the Closing Date, directly or indirectly, engage or become
interested in (as owner, stockholder, partner or otherwise) any
business or entity that engages anywhere in the world in any
business competitive with the Business, (b) at any time disclose
to anyone, or use in competition with the Business, any
information with respect to any confidential or secret aspect of
the operations of the Business and that of the customers of the
<PAGE>
Business, except as required by law or as relates to the Excluded
Assets and/or Excluded Liabilities, or (c) for a period of five
(5) years after the Closing Date, solicit for employment or hire
any employee of the Business on the date of this Agreement or on
the Closing Date. Each Seller acknowledges that the remedy at
law for breach of the provisions of this Section 6.14, or the
Non-Competition Agreement will be inadequate and that, in
addition to any other remedy Buyer may have, it will be entitled,
under the terms of this Agreement and the Non-Competition
Agreement, to an injunction restraining any such breach or
threatened breach, without any bond or other security being
required (subject to money damages in the event Buyer wrongfully
obtains injunctive relief without any such security). If any
court construes the covenant in this Section 6.14 or the
corresponding covenant in the Non-Competition Agreement, or any
part thereof, to be unenforceable because of its duration or the
area covered thereby, the court shall have the power to reduce
the duration or area to the extent necessary so that the
provision is enforceable, and such provision, as reduced, shall
then be enforceable.
6.15 Accounts Receivable.
(a) If any Seller shall at any time after the
Closing receive any payments with respect to any Assets,
including Unbilled Receivables, it shall immediately forward such
<PAGE>
payments to Buyer. If Buyer shall at any time after the Closing
receive any payments with respect to any Excluded Assets,
including Billed Receivables, retained by Sellers pursuant to the
provisions of Section 1.2 of this Agreement, it shall immediately
forward such payments to Sequa. Buyer and Sellers will exchange
reports of daily receipts to assure proper identification and
allocation of receipts in respect of Billed Receivables and
Unbilled Receivables.
(b) For the purpose of complying with paragraph
(a) above, any payment received by Buyer or Sellers with respect
to an account receivable after the Closing that is specifically
identified by a payor as relating to a specified account
receivable shall be applied to that receivable. If no account
receivable is identified by the payor, the recipient shall inform
the other party of its receipt of the payment promptly after its
receipt thereof and, simultaneously therewith, request in writing
of the payor that it specifically identify in writing the account
receivable in respect of which the payment was made. If the
payor does so specify an account receivable, the payment shall be
applied to that receivable. If the payor fails to specify an
account receivable within forty-five (45) days after the making
of such a request, the payment received by Buyer or Sellers shall
first be applied to the earliest account receivable due from that
debtor.
<PAGE>
6.16 Other Action. Each of the parties to this
Agreement shall use its commercially reasonable efforts to cause
the Closing to be held at the earliest practicable date and, in
that connection, to cause the fulfillment at the earliest
practicable date of all of the respective conditions to the
obligations of the parties to consummate the sale and purchase
under this Agreement.
6.17 Employee Matters.
(a) Except as otherwise provided below, Buyer
shall, as of the close of business on the Closing Date, offer
employment to all Employees who are actively at work in the
Business or are on temporary disability, worker's compensation,
leave of absence, vacation or sick leave on the Closing Date.
The terms and conditions to be offered by Buyer to each of such
Employees shall be substantially equivalent to the terms and
conditions being paid to each such Employee by Sellers on the
Closing Date. The employment by Buyer of any Employee who
accepts the terms and conditions of employment offered by Buyer
will commence as of the close of business on the Closing Date.
For purposes of this Agreement, Employees who accept employment
with Buyer as of the close of business on the Closing Date are
hereinafter referred to as "Post-Closing Employees." With
respect to any Post-Closing Employee who, during the period
continuing for four (4) months following the Closing Date, Buyer
<PAGE>
either terminates (other than for cause) or does not continue to
offer terms and conditions of employment that are substantially
equivalent to the terms and conditions of employment being paid
to such Post-Closing Employee by Sellers on the Closing Date,
Buyer shall reimburse Sellers for any severance payments and
related payments required to be made by Sellers in accordance
with the severance plan described on Schedule 6.17 to such Post-
Closing Employee. Sellers agree to cooperate with Buyer by
permitting Buyer throughout the period prior to the Closing Date
to meet with Employees at such reasonable times as shall be
approved by a representative of Sellers and to distribute to such
Employees such forms and other documents relating to employment
by Buyer after the Closing Date as Buyer shall reasonably
request. Although Buyer has no present intention of terminating
the employment of any Post-Closing Employees or reducing the
compensation of any such Post-Closing Employee, other than for
"cause" or by reason of a change in circumstances affecting or
relating to the Business, nothing in this Section 6.17 shall be
deemed to require Buyer to retain any of the Post-Closing
Employees for any fixed period of time or at any particular
compensation rate or in any particular position or prevent Buyer
from being able to continue, modify or establish such benefits
and conditions of employment as it shall determine in its sole
discretion. Nothing herein contained shall grant to any person
any right of employment, nor shall anything herein contained
constitute an agreement to employ any person.
<PAGE>
(b) Buyer will not assume any of the Benefit
Plans, or any rights, duties, obligations or liabilities
thereunder, nor shall it become a successor employer or be
responsible in any way for Sellers' or a Common Control Entity's
participation in or obligations or responsibilities with respect
to any Benefit Plan, nor shall it be obligated by this Agreement
to make any provision with respect to employee benefits after the
Closing Date. Employment of all Employees and coverage of all
such Employees, their dependents and beneficiaries under any
Benefit Plans, shall in all respects terminate as of the close of
business on the Closing Date.
(c) Each Seller shall pay to each Employee, as
applicable, (i) the value of any accrued but unused vacation
entitlements and all other accrued benefits of such employee as
of the Closing Date as soon as practicable after the Closing Date
and in the case of the pension plan, and 401(k) plan, in
accordance with the provisions of such plans, and (ii) a pro rata
portion of the amount which would be payable to such Employee
under any incentive or bonus plan described on Schedule 4.17 for
the period from January 1, 1995 up to and including the Closing
Date, promptly after the adjustments referred to in Section 2.3
of this Agreement have been finally determined and made.
<PAGE>
6.18 Further Assurances. At any time and from time to
time after the Closing, each of the parties shall, without
further consideration, execute and deliver to the other party
such additional instruments of transfer and assumption, and shall
take such other action as the other may request to carry out the
transactions contemplated by this Agreement and effect an orderly
transition including, without limitation, those matters referred
to in Schedule 6.18.
6.19 Miscellaneous Real Estate Documents. Schedule
6.19 contains: (i) to the extent available, a copy of any
Seller's existing title insurance policy for each parcel of the
Real Property, and (ii) true, correct and complete copies of all
of the Real Property Documents.
6.20 Payment of Costs and Expenses. Each Seller shall
pay all fees and expenses of its legal counsel and other
advisors. Buyer shall pay for the cost of the surveys of the
Land and of its due diligence investigation of the Real Property,
the cost of any title insurance which it may elect to obtain and
all fees and expenses of its legal counsel and other advisors.
6.21 Insurance Coverage. With respect to liability for
bodily injury, death and property damage occurring after the
close of business on the Closing Date arising out of or in
connection with products manufactured or services performed and
<PAGE>
sold or shipped prior to close of business on the Closing Date,
Buyer shall obtain and maintain for not less than 10 years after
the Closing Date, to the extent available, the insurance
coverages listed on Schedule 6.21 which insurance will include a
waiver of subrogation. The cost of such coverages shall be borne
as between Sellers and Buyers on a 50/50 basis. Buyer shall
(i) furnish Sellers, from time to time upon request, with copies
of the insurance policies required to be maintained pursuant to
this Section 6.21, together with all amendments thereto,
(ii) require the carriers to furnish to Sellers, copies of any
notice of expiration or termination or modification or similar
notice with respect to any such insurance policy.
Notwithstanding anything to the contrary in this Agreement, Buyer
shall have no obligation with respect to liability for bodily
injury, death and property damage occurring after the close of
business on the Closing Date arising out of or in connection with
products manufactured or services performed and sold or shipped
on or prior to the close of business on the Closing Date, other
than to comply with the provisions of this Section 6.21.
6.22 Nashua Lease. At the Closing, the appropriate
Seller shall sub-lease the premises demised under the Nashua
Lease on the terms and conditions set forth in a sub-lease in
substantially the form annexed hereto as Exhibit 6.22 (the
"Nashua Sub-lease")
<PAGE>
6.23 Warranty Costs and Recall Costs Reimbursement.
(a) Buyer shall maintain a detailed record and
account, including unit serial numbers, of Warranty Costs and
Recall Costs incurred during each of the first two 12 month
periods following the Closing Date with respect to any product
manufactured or service performed that is sold and shipped on or
before the close of business on the Closing Date and prepare a
quarterly report of such Warranty Costs and Recall Costs and send
a copy thereof to Sellers. Sellers or their representatives
shall have reasonable access during normal business hours to
inspect Buyer's records to verify the information contained in
such reports.
(b) If the Warranty Costs and Recall Costs at
any time during either of the 12 month periods immediately
following the Closing Date shall exceed (i) $1,000,000 in the
aggregate for the first twelve months following the Closing Date,
and/or (ii) $800,000 in the aggregate for the next succeeding
twelve months, Buyer shall give notice thereof to Sellers and
within thirty (30) days after receipt of any such notice Sellers
shall pay to Buyer the amount of any such excess in each of such
12 month periods. Buyer shall bill Sellers monthly for such
excess costs. If Sellers shall dispute any such bill, or whether
such matter in fact involves Product or Service Warranty or a
government mandated recall, the parties shall confer with regard
<PAGE>
to the matter and an appropriate adjustment and payment shall be
made if and to the extent agreed upon by the parties. If they
are unable to resolve any such disputed bill within thirty (30)
days after Sellers' receipt thereof the matter shall be resolved
in accordance with the procedures set forth in Section 2.3(c)
with respect to disputes relating to the Final Statement.
7. Conditions Precedent to Closing.
7.1 Conditions Precedent to the Obligations of Buyer.
Buyer's obligation to consummate the purchase under this
Agreement is subject to the fulfillment, at or prior to the
Closing, of each of the following conditions (any of which may be
waived in writing by Buyer):
(a) each representation and warranty of Sellers
under this Agreement shall be true in all material respects at
and as of the time of the Closing with the same effect as though
each representation and warranty had been made again at and as of
that time;
(b) Sellers shall have performed and complied in
all material respects with each obligation, covenant and
condition required by this Agreement to be performed or complied
with by any of them prior to or at the Closing;
<PAGE>
(c) Buyer shall have received all government
approvals required or which Buyer may require in connection with
the transactions contemplated under this Agreement, including but
not limited to approvals from CFIUS;
(d) Buyer shall have received, without any
condition adverse to it, all Required Consents, each in form and
substance reasonably satisfactory to Buyer;
(e) there shall not be in effect an injunction
or restraining order issued by a court of competent jurisdiction
in an action or proceeding against the consummation of the trans-
actions contemplated by this Agreement;
change in the condition (financial or otherwise) or operations
of the Business and/or the Assets, since January 31, 1995;
(g) there shall not be pending or, to the
knowledge of Sellers, threatened any litigation, proceeding or
governmental investigation relating to the transactions contem-
plated by this Agreement;
(h) all applicable waiting periods under the HSR
Act with respect to the transactions contemplated by this
Agreement shall have expired;
<PAGE>
(i) Buyer shall have been furnished with a
certificate of an executive officer of each Seller, dated the
Closing Date, in form and substance satisfactory to Buyer,
certifying to the fulfillment of the conditions set forth in
Sections 7.1(a) through 7.1(h) of this Agreement;
(j) Sellers shall have obtained such estoppel
certificates for the benefit of Buyer and Sellers with respect to
the Real Property as Buyer may reasonably request; and
(k) Sellers and Buyer shall, in their sole and
absolute discretion, have agreed to the Estimates at Completion
and to the methodology of determining a reserve, if any, for the
purposes of the valuation of the Avionics stock inventory and
Avionics excess stock inventory (as such terms are defined in the
Accounting Instructions (Schedule 2.3(b)-2)).
7.2 Conditions Precedent to the Obligations of
Sellers. Each Seller's obligation to consummate the sale under
this Agreement is subject to the fulfillment, at or prior to the
Closing, of each of the following conditions (any of which may be
waived in writing by such Seller):
(a) each representation and warranty of Buyer
under this Agreement shall be true in all material respects at
<PAGE>
and as of the time of the Closing with the same effect as though
each representation and warranty had been made at and as of that
time;
(b) Buyer shall have performed and complied in
all material respects with all obligations, covenants and
conditions required by this Agreement to be performed or complied
with by it prior to or at the Closing;
(c) there shall not be in effect an injunction
or restraining order issued by a court of competent jurisdiction
in an action or proceeding against the consummation of the trans-
actions contemplated by this Agreement;
(d) all applicable waiting periods under the HSR
Act with respect to the transactions contemplated by this
Agreement shall have expired;
(e) Sellers shall have been furnished with a
certificate of an executive officer of Buyer, dated the Closing
Date, in form and substance satisfactory to Sellers, certifying
to the fulfillment of the conditions set forth in Sections 7.2(a)
through 7.2(d) of this Agreement;
(f) Sellers and Buyer shall, in their sole and
absolute discretion, have agreed to the Estimates at Completion
<PAGE>
and to the methodology of determining a reserve, if any, for the
purposes of the valuation of the Avionics stock inventory and
Avionics excess stock inventory (as such terms are defined in the
Accounting Instructions (Schedule 2.3(b)-2)); and
(g) Sellers shall have approved, in their sole
and absolute discretion, the form and substance of the
guarantees, security agreement, intercreditor agreement and net
worth covenants as provided in Section 6.3 of this Agreement.
8. Transactions at the Closing.
8.1 Documents to be Delivered by Seller. At the
Closing, Sellers shall deliver to Buyer the following:
(a) one or more bills of sale in the form of
Exhibit 8.1(a) and such other bills of sale, assignments, deeds
or other instruments of transfer and assignment, termination
letters and UCC-3 termination statements, all in form and
substance reasonably satisfactory to Buyer and its counsel and
consistent with the provisions of this Agreement, as shall be
effective to vest in Buyer valid and marketable title, free and
clear of any Liens (except for the lien, if any, of current taxes
not yet due and payable, and as provided by the terms of any
Assigned Agreement but only with respect to consents for the
assignment of that particular Assigned Agreement), to the Assets,
<PAGE>
and the estoppel certificates referred to in Section 7.1(j) that
have been obtained by Sellers;
(b) an opinion of John J. Dowling III, counsel
to Sellers, dated the Closing Date, in substantially the form of
Exhibit 8.1(b);
(c) a copy of resolutions of the board of
directors and, if legally required, shareholders of each Seller
authorizing the execution, delivery and performance of this
Agreement by it, and a certificate of the secretary or an
assistant secretary of each Seller, dated the Closing Date, that
such resolutions were duly adopted and are in full force and
effect;
(d) the originals (or, to the extent that the
originals are not in the possession or under the control of
Sellers, copies) of all contracts, leases, agreements,
commitments and trademark registrations to be assigned to Buyer
under this Agreement;
(e) the certificate referred to in Section
7.1(i) of this Agreement;
<PAGE>
(f) the originals (or, to the extent that the
originals are not in the possession or under the control of
Sellers, copies) of all Required Consents;
(g) documents required to transfer ownership of
the Investments to Buyer;
(h) bargain and sale deeds with covenants
against grantor's acts (the "Deeds"), duly executed and
acknowledged by the appropriate Sellers, conveying fee simple
title to the Land and Improvements (including fixtures
constituting Equipment), subject only to the Permitted
Exceptions. The Deeds shall include the express contractual
subrogation of Buyer to the rights of the appropriate Seller, if
any, as grantee, to enforce any warranties included in the deed
or deeds conveying the Land and Improvements to such Seller;
(i) an assignment of Sellers' leasehold interest
in the Office Leases;
(j) the Nashua Sub-lease duly executed by Sequa;
(k) an estoppel certificate and consent, if
necessary, from the lessors under the Nashua Lease and the Office
Leases, in form acceptable to Buyer, stating (i) that the Nashua
Lease or appropriate Office Lease, in the form provided by
<PAGE>
Sellers to Buyer, is unmodified and in full force and effect,
(ii) that no default on the part of any Sellers exists under the
Nashua Lease or the appropriate Office Lease, (iii) the date
through which rent and other charges have been paid under the
Nashua Lease or the appropriate Office Lease, and (iv) that the
landlord consents to the Nashua Sub-lease;
(l) an original counterpart of each of the Real
Property Documents, including, without limitation, all
amendments, modifications or renewals of any thereof (and any
other leases and service contracts approved by Buyer); provided,
however, if Sellers do not have in its possession an original
counterpart of any of said documents, Sellers shall deliver to
Buyer a photostatic copy of said document together with a
certification by Sellers to Buyer that said copy is a true and
complete copy of the document and that no Seller has further
modified or amended said document;
(m) an assignment, duly executed by Sellers,
assigning to Buyer all assignable guaranties and warranties,
issued in connection with the construction, improvement,
alteration and repair of the buildings and other improvements
constituting the Improvements and the Personalty owned by
Sellers, together with the original of each such guaranty and
warranty, if available;
<PAGE>
(n) the original, or copy, of each bill for
current real estate taxes and assessments, personal property
taxes, sewer charges, water charges, and other utilities or other
impositions related to the Real Property;
(o) an assignment, duly executed by Sellers,
assigning to Buyer all of Sellers' right, title and interest to,
and possession of, all architectural plans and drawings,
engineering plans, drawings and specifications, site plans,
surveys, soil tests, floor plan, landscape plans and all other
plans and drawings for the Improvements; the original or
certified copies of all the permits required to be delivered by
Sellers pursuant to this Agreement, certificates or reservations,
if any, allocating utility capacity to the property, operating
permits and all other permits or certificates issued by any
governmental authority or subdivision thereof relating to the
use, occupancy or operation of the Real Property;
(p) possession of the Real Property;
(q) a certificate, in the form annexed hereto as
Exhibit 8.1(q), dated the Closing Date and duly executed by
Sellers as required under Treasury Regulation 1.1445-
2(b)(2)(iii);
<PAGE>
(r) such documentation as is necessary, in the
judgment of Buyer and its counsel, in order to transfer and
assign to Buyer the Permits; and
(s) any document required to be delivered
pursuant to Section 4.27 of this Agreement.
8.2 Documents to be Delivered by Buyer. At the
Closing, Buyer shall deliver to Sellers the following:
(a) wire transferred funds in the amount
provided in Section 2.1 of this Agreement;
(b) instruments, in form and substance
reasonably satisfactory to Sellers and their counsel, pursuant to
which Buyer shall assume the obligations and liabilities of
Sellers to be assumed by Buyer pursuant to Section 2.2(a) of this
Agreement;
(c) an opinion of Proskauer Rose Goetz &
Mendelsohn LLP, counsel to Buyer, dated the Closing Date, in sub-
stantially the form of Exhibit 8.2(c);
(d) a copy of resolutions of the board of
directors, and shareholders, if legally required, of Buyer
authorizing the execution, delivery and performance of this
<PAGE>
Agreement by Buyer, and a certificate of the secretary or
assistant secretary of Buyer, dated the Closing Date, that such
resolutions were duly adopted and are in full force and effect;
(e) the certificate referred to in Section
7.2(e) of this Agreement;
(f) the Nashua Sub-Lease, duly executed by
Buyer; and
(g) the guarantees, security agreement (and
related UCC financing statements), intercreditor agreement and
net worth covenants referred to in Section 6.3 of this Agreement.
9. Survival of Representations and Warranties;
Indemnification.
9.1 Survival. All representations, warranties and
agreements by Sellers as set forth in this Agreement and the
Schedules hereto shall survive the Closing Date, notwithstanding
any investigation at any time by or on behalf of Buyer (subject,
however, to the limitations set forth in Section 9.7 of this
Agreement); provided, however, that the representations and
warranties contained in (a) Sections 4.5, 4.7(b), 4.7(d), 4.7(e),
4.7(g), 4.7(h), 4.7(i), 4.8, 4.9, 4.10, 4.11, 4.12, 4.13,
4.14(b), 4.15, 4.16, 4.17, 4.18, 4.19, 4.21, 4.24, 4.26, 4.28,
<PAGE>
4.29 (solely as it relates to the representations and warranties
contained in the other Sections set forth in this Section
9.1(a)), and 6.13(d) of this Agreement shall expire eighteen (18)
months after the Closing Date and thereafter no claim shall be
asserted by Buyer for misrepresentation or breach of warranty
with respect to those Sections and the correspondingly numbered
Schedules, and (b) Section 4.25 shall expire with respect to each
respective Product and Service Warranty described in Schedule
4.25 at such time as each such respective Product and Service
Warranty described therein shall expire by its terms and
conditions. All statements contained in any certificate or other
instrument delivered by or on behalf of Buyer pursuant to this
Agreement or in connection with the transactions contemplated by
this Agreement shall be considered representations and warranties
by Buyer to Sellers with the same force and effect as if
contained in this Agreement. All representations, warranties and
agreements by Buyer shall survive the Closing notwithstanding any
investigation at any time by or on behalf of Sellers, and shall
not be considered waived by Sellers' consummation of the sale
contemplated by this Agreement with knowledge of any breach or
misrepresentation by Buyer; provided, however, that the
representations and warranties contained in Sections 5.4 through
and including 5.6 of this Agreement shall expire eighteen (18)
months after the Closing Date and thereafter no claim shall be
asserted by Sellers for misrepresentation or breach of warranty
with respect to those Sections.
<PAGE>
9.2 Sellers' Indemnification Obligation. Each Seller
shall indemnify and hold harmless Buyer and its Affiliates
against all claims of, and all actual loss, liability, actual
damage or out-of-pocket expense, including reasonable fees and
expenses of counsel, whether involving a third party or between
the parties to this Agreement (a "Buyer Loss"), Buyer may suffer,
sustain or become subject to as a result of (a) any breach of any
warranties, covenants or other agreements contained in this
Agreement, or any misrepresentation by any Seller, or any
warranty or representation not being true as of the Closing or a
claim by a third party which, without regard to the merits of the
claim, would constitute such a breach or misrepresentation if
such third party's allegations were true; (b) any Seller's
failure to fully pay, perform and discharge when the same become
due and payable the Excluded Liabilities; (c) any of Sellers'
other obligations, liabilities, agreements or commitments that do
not arise out of or are not in connection with the operation of
the Business and/or the Assets; (d) any failure to comply with
any "bulk sales" laws applicable to the transactions contemplated
hereby; and (e) any obligation or liability relating to any
Benefit Plan or arrangement (including the Benefit Plans)
sponsored, maintained or contributed to by Sellers or a Common
Control Entity on or prior to the Closing Date to any person or
entity, including the Employees, any such plan or the
participants (or their beneficiaries) in any such plan, whether
<PAGE>
such liability is incurred on, prior to or after the Closing Date
(including, without limitation, any liability relating to
benefits provided under any post-retirement welfare benefit
plan), and any obligation or liability to any Employee or other
present or former employee of any Seller, or to any dependent,
survivor or beneficiary thereof, arising out of or relating to
any such person's employment with any Seller on or prior to the
Closing Date.
9.3 Buyer Indemnification Obligation. Buyer and
Guarantor shall jointly and severally indemnify and hold harmless
Sellers against all claims of, and all actual loss, liability,
actual damage or out-of-pocket expense, including reasonable fees
and expenses of counsel (a "Seller Loss" and, together with a
Buyer Loss, an "Indemnified Loss"), Sellers may suffer, sustain
or become subject to as a result of (a) any breach of any
warranties, covenants or other agreements contained in this
Agreement or any misrepresentation by Buyer, or a claim by a
third party which, without regard to the merits of the claim,
would constitute such a breach or misrepresentation if such third
party's allegations were true; (b) the operations of the Business
and/or the Assets after the close of business on the Closing
Date; (c) Buyer's failure to fully pay, perform and discharge
when the same become due and payable the Assumed Liabilities; (d)
any of Buyer's other obligations, liabilities, agreements or
commitments arising out of or in connection with the operation of
<PAGE>
the Business after the close of business on the Closing Date, in
each case except to the extent Sellers are obligated to indemnify
Buyer for a breach of representation or warranty pursuant to
Section 9.2(a) of this Agreement, subject, however, to the
limitations on indemnification and on survival of such
representations and warranties as provided in this Agreement.
9.4 Conditions of Indemnification for Third Party
Claims. The obligations and liabilities of the parties under
this Agreement with respect to, relating to, caused (in whole or
in part) by or arising out of claims of third parties (individ-
ually, a "Third Party Claim" and collectively "Third Party
Claims") including, without limitation, any Tax Authority, shall
be subject to the following terms and conditions:
(a) The party entitled to be indemnified
hereunder (the "Indemnified Party") shall give the party
obligated to provide the indemnity (the "Indemnifying Party")
prompt notice of any Third Party Claim, and, provided that the
Indemnifying Party acknowledges in writing its obligation to
indemnify in accordance with the terms of this Agreement, the
Indemnifying Party may undertake the defense of that claim by
representatives chosen by it. Any such notice of a Third Party
Claim shall identify with reasonable specificity the basis for
the Third Party Claim, the facts giving rise to the Third Party
Claim, and the amount of the Third Party Claim (or, if such
<PAGE>
amount is not yet known, a reasonable estimate of the amount of
the Third Party Claim). The Indemnified Party shall make
available to the Indemnifying Party copies of all relevant
documents and records in its possession. Failure to give prompt
notice shall not relieve the Indemnifying Party of its obligation
to indemnify except to the extent that the Indemnifying Party is
actually prejudiced by the delay in giving notice.
(b) If the Indemnifying Party, within 15 days
after notice of any such Third Party Claim (or such lesser time
as is reasonable), fails to assume the defense in accordance with
Section 9.4(a) of this Agreement, the Indemnified Party shall
(upon further notice to the Indemnifying Party) have the right to
undertake the defense, compromise or settlement of the Third
Party Claim, subject to the right of the Indemnifying Party to
assume the defense of such Third Party Claim at any time prior to
settlement, compromise or final determination thereof, provided,
however, that at the time of the assumption of defense the
Indemnifying Party shall acknowledge in writing its obligation to
indemnify as provided in Section 9.4(a) of this Agreement and
reimburse the Indemnified Party for its out-of-pocket expenses
incurred prior to the assumption of defense by the Indemnifying
Party.
(c) Anything in this Section 9.4 to the contrary
notwithstanding, (i) the Indemnifying Party shall not, without
<PAGE>
the written consent of the Indemnified Party, settle or compro-
mise any Third Party Claim or consent to the entry of judgment
which does not include as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnified Party
of an unconditional release from all liability in respect of the
Third Party Claim; and (ii) if there is a reasonable probability
that a claim may materially and adversely affect the Indemnified
Party other than as a result of money damages or other money
payments for which the Indemnified Party is indemnified
hereunder, the Indemnified Party shall have the right, at its own
cost and expense, to participate in the defense of the Third
Party Claim (control of the defense to remain with the
Indemnifying Party).
9.5 Deductible and Cap.
(a) Deductible. Except for claims under Section
9.2(a) with respect to representations and warranties, no claim
for indemnification under Section 9.2 may be made by Buyer unless
such claim along with all prior claims, Waived Claims and Damage
Deductibles is, with respect to an Indemnified Loss equal to or
exceeding $200,000 in the aggregate. Except for claims under
Section 9.3(a) with respect to representations and warranties, no
claim for indemnification under Section 9.3 may be made by
Sellers unless such claim along with all prior claims is, with
respect to an Indemnified Loss equal to or exceeding $200,000 in
<PAGE>
the aggregate. In addition, the amount which an Indemnified
Party shall be entitled to receive from an Indemnifying Party
under this Section 9.5 with respect to an Indemnified Loss shall
be net of any recovery actually received from third parties
(including insurance proceeds, counterclaims, subrogation actions
and the like) or actually reimbursed after all costs of
collection on account of such Indemnified Loss.
(b) Cap. In no event whatsoever shall the
liability of Sellers or Buyer with respect to Indemnified Losses
exceed the purchase price hereunder; provided, however, that this
Section 9.5(b) shall not apply with respect to an Indemnified
Loss with respect to an Excluded Liability or an Assumed
Liability.
9.6 Time Limits On Indemnification. No claim on
account of misrepresentation or breach of warranty shall be made
beyond the survival periods referred to in Section 9.1 of this
Agreement. No claim for indemnification may be made by any
Seller against Guarantor after five (5) years from the Closing
Date.
9.7 Limits On Indemnification. If at the Closing,
Buyer has Actual Knowledge that any of Sellers' representations
or warranties contained in this Agreement are untrue, then Buyer
shall be limited to the following options:
<PAGE>
(a) to elect to terminate this Agreement; or
(b) to elect to close the transactions
contemplated by this Agreement, notwithstanding such
misrepresentation or breach of warranty, in which event such
transactions shall be consummated in accordance with the
provisions of this Agreement and Sellers shall have no liability
hereunder by reason of such misrepresentation or breach of
warranty ("Waived Claims"). For purposes hereof: Buyer shall be
deemed to have had "Actual Knowledge" of a matter if any of the
persons listed on Schedule 9.7 had actual knowledge of such
matter, and shall not be deemed to include any knowledge that any
of the foregoing (i) should have had or should be imputed to have
had because of the services of such persons through the Closing
to the Buyer or (ii) had, or should have had or should be imputed
to have had solely by virtue of the fact that such matter was
contained in any of the due diligence materials provided by
Sellers to Buyer.
10. Termination.
10.1 Termination. This Agreement may be terminated:
(a) by written agreement of Buyer and Sellers;
or
<PAGE>
(b) by Buyer, if a Required Consent is not
obtained prior to or at the Closing; or
(c) by Buyer, pursuant to Section 9.7 of this
Agreement; or
(d) by Buyer or Sellers as provided in Section
11 of this Agreement; or
(e) by Buyer or Sellers as provided in Section
3.2 of this Agreement.
10.2 Liability. The termination of this Agreement
hereunder shall not relieve any party of any liability for breach
of this Agreement prior to the termination.
11. Risk of Loss; Damage to Facilities.
11.1 Major Taking. In the event of a condemnation or
taking by eminent domain of all or any portion of the Real
Property, Buyer may elect to terminate this Agreement upon
written notice to Sellers, unless it is a "Minor Taking" (as
hereinafter defined) in which case the provisions of Section 11.2
shall apply.
<PAGE>
11.2 Minor Taking. In the event of a Minor Taking
prior to Closing, Buyer shall nevertheless take title to the Real
Property on the Closing Date, subject to such condemnation or
taking by eminent domain, without any abatement in the Base
Purchase Price provided that the entire condemnation award
applicable to such Real Property shall, on the Closing Date, be
assigned to Buyer or, if received by any Seller prior to the
Closing Date, be paid by such Seller to Buyer at the Closing (net
of the reasonable costs of collection actually paid or incurred
by Sellers), in either such case, free and clear of Liens. For
the purposes of this Agreement, a "Minor Taking" shall mean a
condemnation or taking by eminent domain whereby less than 5% of
any parcel of the Real Property is taken and no interference in
any material respect with the current operation, occupancy or
maintenance of taken Real Property or portion of the Business
conducted thereon or the other Assets could reasonably be
expected to result therefrom. Buyer shall have the right, at its
sole cost and expense, to participate in any proceedings prior to
the Closing with respect to a condemnation or taking, and shall
have the right to approve the settlement of any such proceeding
relating to a Minor Taking, which approval shall not be
unreasonably withheld or delayed.
11.3 Minor Damage.
<PAGE>
(a) In the event of damage or destruction to any
material portion of the Assets first occurring after the date of
this Agreement and prior to the Closing, of which Sellers obtain
actual knowledge and which Sellers reasonably believe would
involve more than $25,000 to repair or replace, Sellers shall
promptly give Buyer notice thereof and retain a contractor or
other professional reasonably acceptable to Buyer (the
"Acceptable Contractor") to estimate the cost of restoration
and/or replacement thereof, and shall instruct such Acceptable
Contractor to deliver its written estimate of such restoration
and/or replacement cost to Sellers and Buyer as soon as
reasonably practicable. If the cost of restoring and/or
replacing such Assets, in the reasonable judgment of such
Acceptable Contractor, is $100,000 or less in the aggregate,
Buyer shall have the option, to be exercised by written notice to
Sellers within thirty (30) days after the restoration and/or
replacement cost has been determined by the Acceptable
Contractor, as provided above, either:
(i) to proceed with the acquisition of all
the Assets at the Closing, in which case at the
Closing, Sellers shall disburse to Buyer the amount of
any insurance proceeds (less deductibles ("Damage
Deductibles")) to the extent at that time actually
collected by Sellers in connection with such damage or
destruction and Sellers shall assign all Sellers'
<PAGE>
rights to receive any such proceeds (less Damage
Deductibles) in the future free and clear of any Liens
thereon and claims thereto, less the reasonable costs of
collection actually paid or incurred by Sellers in
connection therewith (the "Net Insurance Proceeds"); or
(ii) if the damage or destruction (1)
can reasonably be expected to interfere in any material
respect with the operation of the Business as presently
operated and/or the Assets, or (2) shall create in the
Assets an environmentally hazardous condition which
pursuant to applicable law requires remediation
("Hazardous Condition"), to elect to terminate this
Agreement.
(b) Notwithstanding the foregoing, in the event
that a Hazardous Condition is created by any such damage or
destruction which could reasonably be expected to expose Sellers
to liabilities resulting therefrom in excess of $500,000 and/or
such damage or destruction could reasonably be expected to expose
Sellers under the Assigned Agreements to liabilities in excess of
$500,000 by reason of delays or Sellers inability to perform its
obligations under the Assigned Agreements prior to the Closing
Date, then Sellers may elect to terminate this Agreement.
<PAGE>
11.4 Major Damage.
(a) In the event of damage or destruction to the
Assets first occurring after the date hereof and prior to the
Closing and the cost of restoring and/or replacing the Assets, in
the reasonable judgment of the Acceptable Contractor retained by
Sellers, is greater than $100,000 in the aggregate, Buyer shall
have the option, to be exercised by written notice to Sellers
within thirty (30) days after the restoration and/or replacement
cost has been determined by the Acceptable Contractor, as
provided above, either:
(i) to proceed with the acquisition of all
the Assets at the Closing, in which case at the Closing
Sellers shall disburse to Buyer the amount of Net Insurance
Proceeds (less Damage Deductibles) to the extent at that
time collected by Sellers and Sellers shall assign all
Sellers' rights to receive any Net Insurance Proceeds (less
Damage Deductibles) in the future free and clear of any
Liens thereon and claims thereto; or
(ii) to elect to terminate this
Agreement.
(b) Notwithstanding the foregoing, in the event
that a Hazardous Condition is created by any such damage or
<PAGE>
destruction which could reasonably be expected to expose Sellers
to liabilities resulting therefrom in excess of $500,000 and/or
such damage or destruction could reasonably be expected to expose
Sellers under the Assigned Agreements to liabilities in excess of
$500,000 by reason of delays or Sellers inability to perform its
obligations under the Assigned Agreements prior to the Closing
Date, then Sellers may elect to terminate this Agreement.
11.5 Notice of Casualty or Condemnation. In the event
any casualty or condemnation shall affect the Assets after the
date hereof and prior to the Closing, Sellers shall promptly
notify Buyer thereof promptly after Sellers obtain actual
knowledge of any such casualty or notice of condemnation and
provide Buyer with reasonably detailed information with respect
thereto.
12. Miscellaneous.
12.1 Notices. Any notice or other communication under
this Agreement shall be in writing and shall be considered given
when (a) sent by telecopier, with receipt confirmed, (b)
delivered personally, (c) one Business Day after being sent by
recognized overnight courier or (d) four Business Days after
being mailed by registered mail, return receipt requested, to the
parties at the addresses set forth below (or at such other
address as a party may specify by notice to the other):
<PAGE>
If to Buyer:
EL-OP U.S., Inc.
P.O. Box 13233
Hauppauge, New York 11788
Attention: President
Fax: (516) 434-4727
with a copy to:
Firon Karni Sarov & Firon
111, Arlozorov Street
62097 Tel-Aviv
Israel
Attention: Zvi Firon, Adv.
Fax: 011-972-3-695-3802
and
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
Attention: Michael E. Feldman, Esq.
Fax: (212) 969-2900
If to Sellers, to them at:
Sequa Corporation
200 Park Avenue
New York, New York 10166
Attention: Secretary
Fax: (212) 370-1969
with a copy to:
Sequa Corporation
120 South Central Avenue, Suite 1507
St. Louis, Missouri 63105
Attention: John J. Dowling III
Fax: (314) 862-6144
Notwithstanding the foregoing, if, by operation of this section,
any notice or other communication would be deemed to have been
given on a day that is not a Business Day, it shall be deemed to
have been given on the next succeeding day that is a Business
Day.
<PAGE>
12.2 Finders. Buyer and Sellers represent and warrant
to the each other that they have not retained or dealt with any
broker or finder in connection with the transactions contemplated
by this Agreement.
12.3 Entire Agreement. This Agreement, including the
Schedules and Exhibits, contains a complete statement of all the
arrangements between the parties with respect to its subject
matter, supersedes any previous agreements among them relating to
that subject matter, and cannot be changed or terminated orally.
12.4 Headings. The Section headings of this Agreement
are for reference purposes only and are to be given no effect in
the construction or interpretation of this Agreement.
12.5 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of New
York applicable to agreements made and to be performed in New
York.
12.6 Separability. If any provision of this Agreement
is invalid or unenforceable, the balance of this Agreement shall
remain in effect.
12.7 Assignment. No party may assign any of its rights
or delegate any of its duties under this Agreement without the
consent of the other, except that Buyer intends to, and Sellers
hereby agree that it may, assign its rights and delegate its
duties under this Agreement at or prior to the Closing to
Optronic Devices Inc, a wholly owned subsidiary of Buyer, and/or:
(i) with respect to the business of KMC and the portion of the
Assets relating thereto, to KMC, Inc. ("KMCI"), a wholly owned
subsidiary of Kollsman, Inc., a wholly owned subsidiary of EL-OP
<PAGE>
U.S., Inc. ("KI"); (ii) with respect to the portion of the Assets
owned by Sequa Export, to Kollsman Export, Inc., a wholly owned
subsidiary of KI; and (iii) with respect to all of the other
Assets, to KI; provided, however, that in the event of such an
assignment, Buyer and Guarantor shall remain jointly and
severally liable, as a primary obligor, to Sellers for the
performance by its assignees of the Buyer's obligations
hereunder.
12.8 Publicity. No party shall issue any press release
or other public statement regarding the transactions contemplated
by this Agreement without the prior written consent the other,
except that each party may make such disclosures to the public or
to governmental agencies as are required by applicable federal or
state laws.
12.9 No Third Party Beneficiaries. This Agreement
shall enure to the benefit of the parties hereto and their
respective successors and assigns. Nothing in this Agreement is
intended to, nor does it, confer any right or benefit upon any
person or entity other than the parties hereto and their
respective successors and assigns.
12.10 Sellers; Joint and Several; Sequa Agency.
All obligations and liabilities of Sellers under this Agreement
and the documents to be executed and delivered by them at the
Closing pursuant to this Agreement are, and shall be, at all
times, joint and several obligations and liabilities of Sellers.
KMC and Sequa Export do hereby appoint Sequa as their agent, to
act in all respects in their stead and on their behalf, with
respect to any and all matters relating to, arising out of or in
connection with this Agreement. In addition, KMC and Sequa
Export hereby acknowledge that (x) such agency is coupled with an
interest and, therefore, irrevocable, and (y) Buyer and its
<PAGE>
successors and assigns shall rely upon this agency in its
dealings with Sellers. Accordingly, all notices or other
communications to be given, and all sums to be paid, to Sellers
shall be delivered to or paid, as the case may be, to Sequa or to
such other person or entity it may designate in writing.
12.11 Jurisdiction. The courts of the State of New
York in New York County and the United States District Court for
the Southern District of New York shall have exclusive
jurisdiction over the parties to this Agreement with respect to
any dispute or controversy among them arising under or in
connection with this Agreement and, by execution and delivery of
this Agreement, each of the parties to this Agreement hereby
submits to the jurisdiction of those courts, including, but not
limited to, the in personam and subject matter jurisdiction of
those courts, waives any objection to such jurisdiction on the
grounds of venue or forum non conveniens, the absence of in
personam or subject matter jurisdiction and any similar grounds,
consents to service of process in the manner permitted by law,
and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement; provided, however,
that any service of process to the Guarantor shall be made upon
EL-OP US, Inc., which is hereby appointed as the agent of the
Guarantor for that limited purpose.
[END OF TEXT]
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed on their behalf as of the date first
above written.
SEQUA CORPORATION
By: __________________________
KOLLSMAN MANUFACTURING
COMPANY, INC.
By: __________________________
SEQUA EXPORT CORPORATION
By: __________________________
EL-OP U.S., INC.
By: __________________________
EL-OP ELECTRO-OPTICS INDUSTRIES,
LTD.
By: __________________________<PAGE>
<PAGE>
ASSIGNMENT AND ASSUMPTION
This ASSIGNMENT AND ASSUMPTION is dated as of
________________ _____, and is between EL-OP U.S., INC., a
Delaware corporation ("Assignor"), and OPTRONIC DEVICES, INC., a
Delaware corporation ("Assignee").
WITNESSETH:
WHEREAS, Assignor owns all the capital stock of
Assignee;
WHEREAS, Assignor has entered into that certain
Purchase Agreement, dated November 9, 1995 (as amended, the
"Purchase Agreement"), by and among Assignor (as buyer) and El-Op
Electro-Optics Industries, Ltd. (as guarantor), on the one hand,
and Sequa Corporation ("Sequa"), Kollsman Manufacturing Company,
Inc. ("KMC") and Sequa Export Corporation ("Export", and together
with Sequa and KMC, "Sellers"), on the other hand, pursuant to
which, among other things, Assignor has agreed to purchase from
Sellers substantially all the assets of the Kollsman Division of
Sequa, subject to certain liabilities;
WHEREAS, Assignor desires to assign to Assignee, and
Assignee desires to assume, all of Assignor's rights, title and
interest in and to, and all Assignor's duties, obligations and
liabilities under, the Purchase Agreement;
NOW, THEREFORE, in recognition of the foregoing and the
mutual promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, Assignor does hereby assign, transfer and convey to
Assignee, and Assignee does hereby accept the assignment of and
otherwise assume, all of Assignor's rights, title and interest in
and to, and its duties, obligations and liabilities under, the
Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption to be executed as of the date first
above written.
EL-OP U.S., INC.
By: _________________________
Reuben Ben-Arie
President
OPTRONIC DEVICES, INC.
By: _________________________
Reuben Ben-Arie
President
<PAGE>
<PAGE>
ASSIGNMENT AND ASSUMPTION
This ASSIGNMENT AND ASSUMPTION is dated as of
_________________ ____, and is between OPTRONIC DEVICES, INC., a
Delaware corporation ("Assignor"), and KOLLSMAN, INC., a Delaware
corporation ("Assignee").
WITNESSETH:
WHEREAS, Assignor owns all the capital stock of
Assignee;
WHEREAS, Assignor's parent corporation, EL-OP U.S.,
Inc. ("ELOP U.S."), has entered into that certain Purchase
Agreement, dated November 9, 1995 (as amended, the "Purchase
Agreement"), by and among ELOP US (as buyer) and El-Op Electro-
Optics Industries, Ltd. (as guarantor), on the one hand, and
Sequa Corporation ("Sequa"), Kollsman Manufacturing Company, Inc.
("KMC") and Sequa Export Corporation ("Export", and together with
Sequa and KMC, "Sellers"), on the other hand, pursuant to which,
among other things, ELOP US has agreed to purchase from Sellers
substantially all the assets of the Kollsman Division of Sequa,
subject to certain liabilities;
WHEREAS, ELOP US has assigned to Assignor, and Assignor
has assumed, all ELOP US's rights, title and interest in and to,
all of ELOP US's duties, obligations and liabilities under, the
Purchase Agreement;
WHEREAS, Assignor desires to assign to Assignee, and
Assignee desires to assume, all of Assignor's rights, title and
interest in and to, and all Assignor's duties, obligations and
liabilities under, the Purchase Agreement;
NOW, THEREFORE, in recognition of the foregoing and the
mutual promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, Assignor does hereby assign, transfer and convey to
Assignee, and Assignee does hereby accept the assignment of and
otherwise assume, all of Assignor's rights, title and interest in
and to, and its duties, obligations and liabilities under, the
Purchase Agreement.
[END OF TEXT]
<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption to be executed as of the date first
above written.
OPTRONIC DEVICES, INC.
By: _________________________
Reuben Ben-Arie
President
KOLLSMAN, INC.
By: _________________________
Reuben Ben-Arie
Executive Vice President
<PAGE>
<PAGE>
ASSIGNMENT AND ASSUMPTION
This ASSIGNMENT AND ASSUMPTION is dated as of
_________________ ____, and is between KOLLSMAN, INC., a Delaware
corporation ("Assignor"), and KMC SYSTEMS, INC., a Delaware
corporation ("Assignee").
WITNESSETH:
WHEREAS, Assignor owns all the capital stock of
Assignee;
WHEREAS, Assignor's parent corporation, EL-OP U.S.,
Inc. ("ELOP U.S."), has entered into that certain Purchase
Agreement, dated November 9, 1995 (as amended, the "Purchase
Agreement"), by and among ELOP US (as buyer) and El-Op Electro-
Optics Industries, Ltd. (as guarantor), on the one hand, and
Sequa Corporation ("Sequa"), Kollsman Manufacturing Company, Inc.
("KMC") and Sequa Export Corporation ("Export", and together with
Sequa and KMC, "Sellers"), on the other hand, pursuant to which,
among other things, ELOP US has agreed to purchase from Sellers
substantially all the assets of the Kollsman Division of Sequa,
subject to certain liabilities;
WHEREAS, all of ELOP US's rights, title, and interest
in and to, and all of ELOP US's duties, obligations and
liabilities under, the Purchase Agreement have been assigned to
and assumed by Assignor;
WHEREAS, Assignor desires to assign to Assignee, and
Assignee desires to assume, all of Assignor's rights, title and
interest in and to, and all of Assignor's duties, obligations and
liabilities under, the Purchase Agreement to the extent that they
relate solely to the business, assets or liabilities of KMC;
NOW, THEREFORE, in recognition of the foregoing and the
mutual promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, Assignor does hereby assign, transfer and convey to
Assignee, and Assignee does hereby accept the assignment of and
otherwise assume, all of Assignor's rights, title and interest in
and to, and its duties, obligations and liabilities under, the
Purchase Agreement to the extent that they relate solely to the
business, assets or liabilities of KMC.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption to be executed as of the date first
above written.
KOLLSMAN, INC.
By: _________________________
Reuben Ben-Arie
Executive Vice President
KMC SYSTEMS, INC.
By: _________________________
Reuben Ben-Arie
Executive Vice President
<PAGE>
<PAGE>
ASSIGNMENT AND ASSUMPTION
This ASSIGNMENT AND ASSUMPTION is dated as of
__________________ ___, and is between KOLLSMAN, INC., a Delaware
corporation ("Assignor"), and KOLLSMAN EXPORT CORPORATION, a
foreign sales corporation organized under the law of the U.S.
Virgin Islands ("Assignee").
WITNESSETH:
WHEREAS, Assignor owns all the capital stock of
Assignee;
WHEREAS, Assignor's parent corporation, EL-OP U.S.,
Inc. ("ELOP U.S."), has entered into that certain Purchase
Agreement, dated November 9, 1995 (as amended, the "Purchase
Agreement"), by and among ELOP US (as buyer) and El-Op Electro-
Optics Industries, Ltd. (as guarantor), on the one hand, and
Sequa Corporation ("Sequa"), Kollsman Manufacturing Company, Inc.
("KMC") and Sequa Export Corporation ("Export", and together with
Sequa and KMC, "Sellers"), on the other hand, pursuant to which,
among other things, ELOP US has agreed to purchase from Sellers
substantially all the assets of the Kollsman Division of Sequa,
subject to certain liabilities;
WHEREAS, all of ELOP US's rights, title, and interest
in and to, and all of ELOP US's duties, obligations and
liabilities under, the Purchase Agreement have been assigned to
and assumed by Assignor;
WHEREAS, Assignor desires to assign to Assignee, and
Assignee desires to assume, all of Assignor's rights, title and
interest in and to, and all of Assignor's duties, obligations and
liabilities under, the Purchase Agreement to the extent that they
relate solely to the business, assets or liabilities of Export.
NOW, THEREFORE, in recognition of the foregoing and the
mutual promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, Assignor does hereby assign, transfer and convey to
Assignee, and Assignee does hereby accept the assignment of and
otherwise assume, all of Assignor's rights, title and interest in
and to, and its duties, obligations and liabilities under, those
sections of the Purchase Agreement to the extent that they relate
solely to the business, assets or liabilities of Export.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption to be executed as of the date first
above written.
KOLLSMAN, INC.
By: _________________________
Reuben Ben-Arie
President
KOLLSMAN EXPORT CORPORATION
By: _________________________
Name:
Title:
<PAGE>
<PAGE>
FIRST AMENDMENT TO PURCHASE AGREEMENT
This amendment (this "First Amendment") to the Purchase
Agreement is dated the 29th day of November, 1995 and is by and
between Sequa Corporation ("Sequa"), Kollsman Manufacturing
Company, Inc. ("KMC") and Sequa Export Corporation ("Export", and
together with Sequa and KMC, "Sellers"), on the one hand, and EL-
OP U.S., Inc. ("Buyer") and El-Op Electro-optics Industries, Ltd.
("Guarantor"), on the other.
A. Sellers, Buyer and Guarantor have entered into
that certain Purchase Agreement, dated as of November 9, 1995
(the "Agreement"), pursuant to which, among other things, Sellers
have agreed to sell to Buyer, and Buyer has agreed to purchase
from Sellers, substantially all of the assets of, and Buyer has
agreed to assume certain specified liabilities of, the Kollsman
Division of Sequa on the terms and subject to the conditions set
forth therein.
B. Sellers, Buyer and Guarantor, simultaneously with
their execution of the Agreement, entered into that certain
Letter Agreement, dated as of November 9, 1995 (the "Letter
Agreement"), relating, among other things, to the preparation,
negotiation and finalization of the Schedules and Exhibits
referred to in the Agreement, as well as certain expenses
incurred by the parties in connection with certain governmental
filings.
C. Sellers and Buyer have agreed upon some of the
Schedules referred to in the Agreement.<PAGE>
<PAGE>
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, and intending to be
legally bound hereby, Sellers, Buyer and Guarantor hereby agree
as follows:
ARTICLE 1
General Provisions
1.1 Definitions. All capitalized terms used, but not
otherwise defined in this First Amendment, shall have the
respective meanings ascribed thereto in the Agreement.
1.2 Other Definitions and Meanings: Interpretations.
For purposes of this First Amendment the term "parties" (except
where the context otherwise requires) means Sellers, Buyer and
Guarantor; the term "person" includes any natural person, firm,
association, partnership, corporation, or entity other than the
parties, and the words "hereof", "hereby" and other words of
similar import refer to this First Amendment as a whole. The
headings of the Articles and Sections of this First Amendment
have been included herein for convenience of reference only and
shall not be deemed to affect the meaning of the operative
provisions of this First Amendment.
1.3 Relationship with the Agreement. This First
Amendment is intended to amend the Agreement as and to the extent
set forth herein. The Agreement, and each and every provision
thereof, will otherwise remain in full force and effect and each
of the parties reserves all of their respective rights contained
therein.
ARTICLE 2
Letter Agreement
<PAGE>
2.1 Termination of Letter Agreement. The Letter
Agreement is hereby terminated effective immediately and,
accordingly shall be of no further force and effect and the
parties shall have no further liability thereunder.
2.2 Governmental Filings. Sellers, on the one hand,
and Buyer, on the other, have filed with each of the Department
of Justice and the Federal Trade Commission the report and
notification required to be filed by them under the Hart-Scott-
Rodino Anti-Trust Improvements Act of 1976 in connection with the
transactions contemplated by the Agreement. The $45,000 filing
fee has been shared equally by Sellers, on the one hand, and
Buyer, on the other. If the transactions contemplated by the
Agreement close in accordance with the Agreement (as amended
herein), Buyer shall reimburse Sellers at the Closing for the
$22,500 paid by Sellers for such filing.
ARTICLE 3
Amendment of Purchase Agreement
3.1 Agreed Upon Schedules. The parties agree and
acknowledge that they have agreed upon the form and substance of
the Schedules to the Agreement that are listed on Schedule A
attached hereto (the "November 29, 1995 Agreed Upon Schedules").
Simultaneously with the execution of this First Amendment, Reuben
Ben-Arie, on behalf of Buyer and Guarantor, and Joseph C.
Allwarden, on behalf of Sellers, have initialled for
identification the November 29, 1995 Agreed Upon Schedules.
Accordingly, the Agreement is hereby amended in order to reflect
the November 29, 1995 Agreed Upon Schedules, with the same effect
as if they had been agreed upon and attached to the Agreement
simultaneously with its execution.
3.2 Other Schedules and Exhibits. All Schedules or
Exhibits that are referred to in the Agreement other than
Schedule 2.3(b)-2 (Accounting
<PAGE>
Instructions) and the November 29, 1995 Agreed Upon Schedules
(the "Open Schedules and/or Exhibits") have not been finalized or
agreed upon as between the parties. Accordingly, on or before
December 8, 1995, Sellers, on the one hand, and Buyer, on the
other, shall finalize the Open Schedules and/or Exhibits. If
agreed upon in each such party's sole and absolute discretion,
Sellers and Buyer, shall initial the agreed upon Open Schedules
and/or Exhibits and the same shall be the subject of a further
amendment to the Agreement in substantially the form of this
First Amendment. If, on or before December 8, 1995, Sellers or
Buyer object in writing to any Open Schedules and/or Exhibits
received by them or otherwise fail to agree upon the form and
substance of the Open Schedules and/or Exhibits, then the
objecting parties may, at their sole and absolute election,
terminate the Agreement (as amended herein) and no party shall
have any further rights or obligations thereunder. For purposes
of delivering Open Schedules and/or Exhibits, delivery shall be
deemed to have been made upon delivery of the same (i) in the
case of Buyer, to Buyer's counsel, Proskauer Rose Goetz &
Mendelsohn LLP, Attention: Michael E. Feldman, Esq., (ii) in the
case of Sellers, to Sellers' counsel, John J. Dowling III, Sequa
Corporation, 120 South Central Avenue, St. Louis, Mo. 63105.
3.3 New Outside Dates. Section 3 of the Agreement is
hereby amended and restated so as to read in its entirety as
follows:
"3 Closing.
3.1 Date of Closing. The closing (the
"Closing") under this Agreement shall take place at the
offices of Proskauer Rose Goetz & Mendelsohn LLP, 1585
Broadway, New York, New York (or at such other place as the
parties may agree upon in writing) upon at least five
Business Days prior notice given by Buyer to Sellers within
five Business Days after the last of the conditions
specified in Sections 7.1 and 7.2 of this Agreement has been
fulfilled (or waived), but in no event whatsoever later than
December 21, 1995. The date on which the Closing is held is
referred to in this Agreement as the "Closing Date." At the
Closing, the parties shall execute and deliver the documents
referred to in Section 8 of this Agreement.
3.2 Outside Date for Closing. If any of the
following events shall not have occurred on or prior to the
following time, Sellers or Buyer may terminate this
Agreement by notice to the other:
<PAGE>
a. the Closing shall not have occurred on
or prior to 12:01 a.m. on December 22, 1995;
b. the condition referred to in Section
7.1(c) shall have been fulfilled or waived prior to
12:01 a.m. on December 21, 1995;
c. the conditions referred to in Sections
7.1(h) and 7.2(d) shall have been fulfilled or waived
prior to 12:01 a.m. on December 16, 1995;
d. the condition referred to in Sections
7.1(d) shall have been fulfilled or waived prior to
12:01 a.m. on December 11, 1995;
e. the conditions referred to in Sections
7.1(k) and 7.2(f) shall have been fulfilled or waived
prior to 12:01 a.m. on December 9, 1995; or
f. the parties shall have, in their sole
and absolute discretion, agreed to the form and
substance of, and intialled for identification (it
being that for purposes of this Section 3.2 facsimile
initials shall be sufficient), Schedule 6.8 to the
Agreement (Required Consents) prior to 12:01 a.m. on
December 2, 1995.
Upon termination pursuant to this Section 3.2 neither of the
parties shall have any liability of any kind arising out of
this Agreement other than for any liability resulting from
its breach of this Agreement prior to termination. If the
Closing is postponed pursuant to Section 11 of this
Agreement, and this Agreement is not otherwise terminated in
accordance with the provisions of Section 11, the outside
date referred to in this Section shall be extended by the
period of the postponement as provided in Section 11."
ARTICLE 4
Miscellaneous
4.1 Severability. If any provision of this First
Amendment shall finally be determined to be unenforceable, then
such provision shall be deemed to be severed from this First
Amendment and every other provision of this First Amendment shall
remain in full force and effect.
4.2 Counterparts. More than one counterpart of this
First Amendment may be executed by the parties hereto, and each
fully-executed counterpart shall be deemed an original without
production of the others.
<PAGE>
4.3 Complete Agreement. The Agreement (as amended
herein) and this First Amendment sets forth the entire
understanding of the parties with respect to the subject matter
thereof and supersedes all prior letters of intent, agreements
(including, without limitation, the Letter Agreement), covenants,
arrangements, communications, representations, or warranties,
whether oral or written, by any officer, employee, or
representative of either party relating thereto.
4.4 Acknowledgement. Sellers and Buyer acknowledge
that each of them has been informed by the other that if either:
(x) they are unable for any reason whatsoever, in their
respective sole and absolute discretion, to timely agree upon the
form and substance of the Open Schedules and/or Exhibits in
accordance with Section 3.2 above, or (y) any of the deadlines
set forth in Section 3 of the Agreement (as amended herein) shall
not have been timely met for any reason whatsoever, then, in
either such event, neither party shall be obligated to grant any
further extensions to this First Amendment or the Agreement (as
amended herein), that they shall not grant such an extension and
that they shall, instead, terminate the Agreement (as amended
herein) and this First Amendment. Sellers have additionally
advised Buyer that they are unwiliing and unable to consummate
any transaction after December 21, 1995.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have each caused
this First Amendment to be executed by its duly authorized
officers or signatory as of the date first above written.
BUYER: EL-OP U.S., INC.
By: ____________________
Name:
Title:
GUARANTOR: EL-OP ELECTRO-OPTICS INDUSTRIES
LTD.
By: ____________________
Name:
Title:
SELLERS: SEQUA CORPORATION
By: ____________________
Name:
Title:
KOLLSMAN MANUFACTURING COMPANY, INC.
By: ____________________
Name:
Title:
SEQUA EXPORT CORPORATION
By: ____________________
Name:
Title: <PAGE>
<PAGE>
SCHEDULE A
to First Amendment to Purchase Agreement
dated November 29, 1995
List of November 29, 1995 Agreed Upon Schedules
M Billed Receivables
W Claims Receivables
AZ Investments
BJ Letters of Credit
BS Notes Receivable
CY-1 Certain Customer Agreements
CY-2 Unbilled Receivables
1.1(b) Equipment
1.1(g) Letters of Credit in favor of Sellers
1.1(h) Prepaid expenses and deposits
1.1(L)-1 Land
1.1(L)-2 Real Estate Improvements
1.1(L)-3 Office Leases Premises
1.1(L)-4 Nashua Lease
1.1(m) Additional Assets
1.2(e) Excluded Rights against Third Parties
1.2(f) Corporate Services
4.3 Conflicts
4.4 Liens
4.5 Condition of Personal Property
4.7(b) Defaults under Real Property Documents
4.7(i)-1 Real Estate Tax Proceedings
4.8 Financial Statements and Related Information
4.9 List of Certain Changes
4.9(e) Claim Receivables or Notes Receivables
4.12-1 List of Employees
4.12-2 Notices from Employees
4.12-3 Corporate Instructions
4.12-4 Extraordinary Severance Payments
4.14 Intangible Assets
4.15 Insurance
4.16 Labor Disagreements
4.17 Labor Matters
4.23 Transaction with Affiliates
4.24 Important Suppliers and Customers
5.5 Financial Statements of Buyer and Guarantor
6.9 Allocation of Real Estate Taxes
6.17 Severance Plans
6.21 Insurance Coverage
<PAGE>
<PAGE>
SECOND AMENDMENT TO PURCHASE AGREEMENT
This amendment (this "Second Amendment") to the
Purchase Agreement is dated the 1st day of December, 1995 and is
by and between Sequa Corporation ("Sequa"), Kollsman
Manufacturing Company, Inc. ("KMC") and Sequa Export Corporation
("Export", and together with Sequa and KMC, "Sellers"), on the
one hand, and EL-OP U.S., Inc. ("Buyer") and El-Op Electro-optics
Industries, Ltd. ("Guarantor"), on the other.
A. Sellers, Buyer and Guarantor have entered into
that certain Purchase Agreement, dated as of November 9, 1995
(the "Agreement"), pursuant to which, among other things, Sellers
have agreed to sell to Buyer, and Buyer has agreed to purchase
from Sellers, substantially all of the assets of, and Buyer has
agreed to assume certain specified liabilities of, the Kollsman
Division of Sequa on the terms and subject to the conditions set
forth therein.
B. Sellers, Buyer and Guarantor have entered into
that certain First Amendment to Purchase Agreement, dated
November 30, 1995 (the "First Amendment"), pursuant to which,
among other things, the Agreement was amended and the parties
agreed to the reimbursement of certain fees incurred by Sellers
in connection with certain governmental filings and to certain
deadlines with respect the finalization of certain Schedules and
Exhibits referred to in the Agreement.
C. Sellers and Buyer have agreed upon one additional
Schedule that is currently referred to in the Agreement and a new
Schedule that is referred to in the Agreement as amended herein.
TERMS AND CONDITIONS
<PAGE>
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, and intending to be
legally bound hereby, Sellers, Buyer and Guarantor hereby agree
as follows:
ARTICLE 1
General Provisions
1.1 Definitions. All capitalized terms used, but not
otherwise defined in this Second Amendment, shall have the
respective meanings ascribed thereto in the Agreement.
1.2 Other Definitions and Meanings: Interpretations.
For purposes of this Second Amendment the term "parties" (except
where the context otherwise requires) means Sellers, Buyer and
Guarantor; the term "person" includes any natural person, firm,
association, partnership, corporation, or entity other than the
parties, and the words "hereof", "hereby" and other words of
similar import refer to this Second Amendment as a whole. For
purposes of this Second Amendment, the term "November 29, 1995
Agreed Upon Schedules" shall have the meaning set forth in the
First Amendment. The headings of the Articles and Sections of
this Second Amendment have been included herein for convenience
of reference only and shall not be deemed to affect the meaning
of the operative provisions of this Second Amendment.
1.3 Relationship with the Agreement and prior
amendment. This Second Amendment is intended to amend the
Agreement as and to the extent set forth herein. The Agreement
and the First Amendment, and each and every provision thereof,
will otherwise remain in full force and effect to the extent not
superseded by this Second Amendment and each of the parties
reserves all of their respective rights contained therein.
<PAGE>
ARTICLE 2
Amendment of Purchase Agreement
2.1 Agreed Upon Schedules. The parties agree and
acknowledge that they have agreed upon the form and substance of
the Schedules to the Agreement that are listed on Schedule A
attached hereto (the "December 1, 1995 Agreed Upon Schedules").
Simultaneously with the execution of this Second Amendment,
Reuben Ben-Arie, on behalf of Buyer and Guarantor, and Joseph C.
Allwarden, on behalf of Sellers, have initialled for
identification the December 1, 1995 Agreed Upon Schedules.
Accordingly, the Agreement is hereby amended in order to reflect
the December 1, 1995 Agreed Upon Schedules, with the same effect
as if they had been agreed upon and attached to the Agreement
simultaneously with its execution.
2.2 Other Schedules and Exhibits. All Schedules or
Exhibits that are referred to in the Agreement other than
Schedule 2.3(b)-2 (Accounting Instructions), the November 29,
1995 Agreed Upon Schedules and the December 1, 1995 Agreed Upon
Schedules (the "Open Schedules and/or Exhibits") have not been
finalized or agreed upon as between the parties. Accordingly, on
or before December 8, 1995, Sellers, on the one hand, and Buyer,
on the other, shall finalize the Open Schedules and/or Exhibits.
If agreed upon in each such party's sole and absolute discretion,
Sellers and Buyer, shall initial the agreed upon Open Schedules
and/or Exhibits and the same shall be the subject of a further
amendment to the Agreement in substantially the form of this
Second Amendment. If, on or before December 8, 1995, Sellers or
Buyer object in writing to any Open Schedules and/or Exhibits
received by them or otherwise fail to agree upon the form and
substance of the Open Schedules and/or Exhibits, then the
objecting parties may, at their sole and absolute election,
terminate the Agreement (as amended) and no party shall have any
further rights or obligations thereunder. For purposes of
delivering Open Schedules and/or Exhibits, delivery shall be
deemed to have been made upon
<PAGE>
delivery of the same (i) in the case of Buyer, to Buyer's
counsel, Proskauer Rose Goetz & Mendelsohn LLP, Attention:
Michael E. Feldman, Esq., and (ii) in the case of Sellers, to
Sellers' counsel, John J. Dowling III, Sequa Corporation, 120
South Central Avenue, St. Louis, Mo. 63105.
2.3 Certain Notifications. A new Section 6.8A shall
be added to the Agreement which shall read in its entirety as
follows:
"6.8A Certain Notices. Sellers shall, on or
prior to December 4, 1995, send to all parties to any Customer
Agreement or Teaming Agreement (x) listed on Schedule 6.8 a
request for its consent to, or (y) listed on Schedule 6.8A a
notice of, the proposed assignment of that agreement to Buyer.
For purposes of this Agreement, a "Required Consent" shall be
deemed not to have been obtained if: (x) any customer or teaming
partner listed on Schedule 6.8A of this Agreement notifies any
Seller or Buyer that it is considering termination, non-renewal
or any adverse modification of the applicable Customer Agreement
or Teaming Agreement or shall indicate that its unwillingness to
continue its business relationship with Sellers and/or Buyer, or
(y) one or more customers shall have notified Sellers or Buyer
that they are considering termination, non-renewal or any adverse
modification of one or more agreements having an aggregate value
of $1,000,000 or more or shall indicate that their unwillingness
to continue their business relationship with Sellers and/or
Buyer."
ARTICLE 3
Miscellaneous
3.1 Severability. If any provision of this Second
Amendment shall finally be determined to be unenforceable, then
such provision shall be deemed to be severed from this Second
Amendment and every other provision of this Second Amendment
shall remain in full force and effect.
3.2 Counterparts. More than one counterpart of this
Second Amendment may be executed by the parties hereto, and each
fully-executed counterpart shall be deemed an original without
production of the others. The parties acknowledge that they are
delivering to each other facsimile counterparts of this Second
Amendment and the December 1, 1995 Agreed Upon Schedules, signed
and initialled on their behalf, and agree that such signature and
initialization shall be binding upon each of them as if the
<PAGE>
counterparts being delivered to the other parties had been
originally signed and initialized.
3.3 Complete Agreement. The Agreement (as amended),
the First Amendment and this Second Amendment set forth the
entire understanding of the parties with respect to the subject
matter thereof and, together, supersede all prior letters of
intent, agreements (including, without limitation, the Letter
Agreement), covenants, arrangements, communications,
representations, or warranties, whether oral or written, by any
officer, employee, or representative of either party relating
thereto.
3.4 Acknowledgement. Sellers and Buyer acknowledge
that each of them has been informed by the other that if either:
(x) they are unable for any reason whatsoever, in their
respective sole and absolute discretion, to timely agree upon the
form and substance of the Open Schedules and/or Exhibits in
accordance with Section 2.2 above, or (y) any of the deadlines
set forth in Section 3 of the Agreement (as amended) shall not
have been timely met for any reason whatsoever, then, in either
such event, neither party shall be obligated to grant any further
extensions to this Second Amendment or the Agreement (as
amended), that they shall not grant such an extension and that
they shall, instead, terminate the Agreement (as amended) and
this Second Amendment. Sellers have additionally advised Buyer
that they are unwilling and unable to consummate any transaction
after December 21, 1995.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have each caused
this Second Amendment to be executed by its duly authorized
officers or signatory as of the date first above written.
BUYER: EL-OP U.S., INC.
By: ____________________
Name:
Title:
GUARANTOR: EL-OP ELECTRO-OPTICS INDUSTRIES LTD.
By: ____________________
Name:
Title:
SELLERS: SEQUA CORPORATION
By: ____________________
Name:
Title:
KOLLSMAN MANUFACTURING COMPANY, INC.
By: ____________________
Name:
Title:
SEQUA EXPORT CORPORATION
By: ____________________
Name:
Title: <PAGE>
<PAGE>
SCHEDULE A
to Second Amendment to Purchase Agreement
dated December 1, 1995
List of December 1, 1995 Agreed Upon Schedules
6.8 Required Consents
6.8A Other Customer Agreement and Teaming Agreements
<PAGE>
THIRD AMENDMENT TO PURCHASE AGREEMENT
This amendment (this "Third Amendment") to the Purchase
Agreement is dated the 8th day of December, 1995 and is by and
between Sequa Corporation ("Sequa"), Kollsman Manufacturing
Company, Inc. ("KMC") and Sequa Export Corporation ("Export", and
together with Sequa and KMC, "Sellers"), on the one hand, and EL-
OP U.S., Inc. ("Buyer") and El-Op Electro-optics Industries, Ltd.
("Guarantor"), on the other.
A. Sellers, Buyer and Guarantor have entered into
that certain Purchase Agreement, dated as of November 9, 1995
(the "Agreement"), pursuant to which, among other things, Sellers
have agreed to sell to Buyer, and Buyer has agreed to purchase
from Sellers, substantially all of the assets of, and Buyer has
agreed to assume certain specified liabilities of, the Kollsman
Division of Sequa on the terms and subject to the conditions set
forth therein.
B. Sellers, Buyer and Guarantor have entered into
that certain First Amendment to Purchase Agreement, dated
November 29, 1995 (the "First Amendment") and that certain Second
Amendment to Purchase Agreement, dated December 1, 1995 (the
"Second Amendment"), pursuant to which, among other things, the
Agreement was amended and the parties agreed to the reimbursement
of certain fees incurred by Sellers in connection with certain
governmental filings and to certain deadlines with respect the
finalization of certain Schedules and Exhibits referred to in the
Agreement.
C. Sellers and Buyer have agreed upon additional
Schedules that are currently referred to in the Agreement, and to
amend the Agreement as set forth herein.
<PAGE>
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, and intending to be
legally bound hereby, Sellers, Buyer and Guarantor hereby agree
as follows:
ARTICLE 1
General Provisions
1.1 Definitions. All capitalized terms used, but not
otherwise defined in this Third Amendment, shall have the
respective meanings ascribed thereto in the Agreement.
1.2 Other Definitions and Meanings: Interpretations.
For purposes of this Third Amendment the term "parties" (except
where the context otherwise requires) means Sellers, Buyer and
Guarantor; the term "person" includes any natural person, firm,
association, partnership, corporation, or entity other than the
parties, and the words "hereof", "hereby" and other words of
similar import refer to this Third Amendment as a whole. For
purposes of this Third Amendment, the term "November 29, 1995
Agreed Upon Schedules" shall have the meaning set forth in the
First Amendment, and the term "December 1, 1995 Agreed Upon
Schedules" shall have the meaning set forth in the Second
Amendment. The headings of the Articles and Sections of this
Third Amendment have been included herein for convenience of
reference only and shall not be deemed to affect the meaning of
the operative provisions of this Third Amendment.
1.3 Relationship with the Agreement and prior
amendments. This Third Amendment is intended to amend the
Agreement as and to the extent set forth herein. The Agreement,
the First Amendment and the Second Amendment, and each and every
provision thereof, will otherwise remain in full force and
<PAGE>
effect to the extent not superseded by this Third Amendment and
each of the parties reserves all of their respective rights
contained therein.
ARTICLE 2
Amendment of Purchase Agreement
2.1 Agreed Upon Schedules. The parties agree and
acknowledge that they have agreed upon the form and substance of
the Schedules to the Agreement that are listed on Schedule A
attached hereto (the "December 8, 1995 Agreed Upon Schedules").
Simultaneously with the execution of this Third Amendment, either
Reuben Ben-Arie or Michael E. Feldman (as attorney-in-fact) on
behalf of Buyer and Guarantor, and John J. Dowling III, on behalf
of Sellers, have initialled for identification the December 8,
1995 Agreed Upon Schedules. Accordingly, the Agreement is hereby
amended in order to reflect the December 8, 1995 Agreed Upon
Schedules, with the same effect as if they had been agreed upon
and attached to the Agreement simultaneously with its execution.
2.2 Other Schedules and Exhibits. All Schedules or
Exhibits that are referred to in the Agreement other than
Schedule 2.3(b)-2 (Accounting Instructions), the November 29,
1995 Agreed Upon Schedules, the December 1, 1995 Agreed Upon
Schedules and the December 8, 1995 Agreed Upon Schedules (the
"Open Schedules and/or Exhibits") have not been finalized or
agreed upon as between the parties. Accordingly, on or before
December 13, 1995, Sellers, on the one hand, and Buyer, on the
other, shall finalize the Open Schedules and/or Exhibits. If
agreed upon in each such party's sole and absolute discretion,
Sellers and Buyer, shall initial the agreed upon Open Schedules
and/or Exhibits and the same shall be the subject of a further
amendment to the Agreement in substantially the form of this
Third Amendment. If, on or before December 13, 1995, Sellers or
Buyer object in writing to any Open Schedules and/or Exhibits
received by them or otherwise fail to agree upon the
<PAGE>
form and substance of the Open Schedules and/or Exhibits, then
the objecting parties may, at their sole and absolute election,
terminate the Agreement (as amended) and no party shall have any
further rights or obligations thereunder. For purposes of
delivering Open Schedules and/or Exhibits, delivery shall be
deemed to have been made upon delivery of the same (i) in the
case of Buyer, to Buyer's counsel, Proskauer Rose Goetz &
Mendelsohn LLP, Attention: Michael E. Feldman, Esq., and (ii) in
the case of Sellers, to Sellers' counsel, John J. Dowling III,
Sequa Corporation, 120 South Central Avenue, St. Louis, Mo.
63105.
2.3 New Outside Dates. Section 3 of the Agreement is
hereby amended and restated so as to read in its entirety as
follows:
"3 Closing.
3.1 Date of Closing. The closing (the
"Closing") under this Agreement shall take place at the
offices of Proskauer Rose Goetz & Mendelsohn LLP, 1585
Broadway, New York, New York (or at such other place as the
parties may agree upon in writing) upon at least twenty-four
hours' notice given by Buyer to Sellers after the last of
the conditions specified in Sections 7.1 and 7.2 of this
Agreement has been fulfilled (or waived), but in no event
whatsoever later than December 21, 1995. The date on which
the Closing is held is referred to in this Agreement as the
"Closing Date." At the Closing, the parties shall execute
and deliver the documents referred to in Section 8 of this
Agreement.
3.2 Outside Date for Closing. If any of the
following events shall not have occurred on or prior to the
following time, Sellers or Buyer may terminate this
Agreement by notice to the other:
a. the Closing shall not have occurred on
or prior to 12:01 a.m. on December 22, 1995;
b. the condition referred to in Section
7.1(c) shall have been fulfilled or waived prior to
12:01 a.m. on December 21, 1995;
c. the conditions referred to in Sections
7.1(h) and 7.2(d) shall have been fulfilled or waived
prior to 12:01 a.m. on December 16, 1995;
d. the condition referred to in Sections
7.1(d) shall have been fulfilled or waived prior to
12:01 a.m. on December 16, 1995; or
<PAGE>
e. the conditions referred to in Sections
7.1(k) and 7.2(f) shall have been fulfilled or waived
prior to 12:01 a.m. on December 16, 1995.
Upon termination pursuant to this Section 3.2 neither of the
parties shall have any liability of any kind arising out of
this Agreement other than for any liability resulting from
its breach of this Agreement prior to termination. If the
Closing is postponed pursuant to Section 11 of this
Agreement, and this Agreement is not otherwise terminated in
accordance with the provisions of Section 11, the outside
date referred to in this Section shall be extended by the
period of the postponement as provided in Section 11."
ARTICLE 3
Miscellaneous
3.1 Severability. If any provision of this Third
Amendment shall finally be determined to be unenforceable, then
such provision shall be deemed to be severed from this Third
Amendment and every other provision of this Third Amendment shall
remain in full force and effect.
3.2 Counterparts. More than one counterpart of this
Third Amendment may be executed by the parties hereto, and each
fully-executed counterpart shall be deemed an original without
production of the others. The parties acknowledge that they are
delivering to each other facsimile counterparts of this Third
Amendment and the December 8, 1995 Agreed Upon Schedules, signed
and initialled on their behalf, and agree that such signature and
initialization shall be binding upon each of them as if the
counterparts being delivered to the other parties had been
originally signed and initialized.
3.3 Complete Agreement. The Agreement (as amended),
the First Amendment, the Second Amendment and this Third
Amendment set forth the entire understanding of the parties with
respect to the subject matter thereof and, together, supersede
all prior letters of intent, agreements (including, without
limitation, the Letter Agreement), covenants, arrangements,
<PAGE>
communications, representations, or warranties, whether oral or
written, by any officer, employee, or representative of either
party relating thereto.
3.4 Acknowledgement. Sellers and Buyer acknowledge
that each of them has been informed by the other that if either:
(x) they are unable for any reason whatsoever, in their
respective sole and absolute discretion, to timely agree upon the
form and substance of the Open Schedules and/or Exhibits in
accordance with Section 2.2 above, or (y) any of the deadlines
set forth in Section 3 of the Agreement (as amended) shall not
have been timely met for any reason whatsoever, then, in either
such event, neither party shall be obligated to grant any further
extensions to this Third Amendment or the Agreement (as amended),
that they shall not grant such an extension and that they shall,
instead, terminate the Agreement (as amended) and this Third
Amendment. Sellers have additionally advised Buyer that they are
unwilling and unable to consummate any transaction after December
21, 1995.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have each caused
this Third Amendment to be executed by its duly authorized
officers or signatory as of the date first above written.
BUYER: EL-OP U.S., INC.
By: ____________________
Name:
Title:
GUARANTOR: EL-OP ELECTRO-OPTICS INDUSTRIES
LTD.
By: ____________________
Name:
Title:
SELLERS: SEQUA CORPORATION
By: ____________________
Name:
Title:
KOLLSMAN MANUFACTURING COMPANY, INC.
By: ____________________
Name:
Title:
SEQUA EXPORT CORPORATION
By: ____________________
Name:
Title: <PAGE>
<PAGE>
SCHEDULE A
to Third Amendment to Purchase Agreement
dated December 8, 1995
List of December 8, 1995 Agreed Upon Schedules
BD Sellers' Knowledge
CR Stock Inventory
1.2(d) Letters of Credit issued on behalf of Sellers
2.3(b)-1 Eligible Military Stock Inventory
2.4 Purchase Price Allocation
4.1 List of Foreign Qualifications
4.7(a)-1 Permitted Exceptions
4.7(i)-2 Real Property Tax Bills
4.19 Permits and Licenses
4.27 List of Affiliates having Certain Names
<PAGE>
<PAGE>
FOURTH AMENDMENT TO PURCHASE AGREEMENT
This amendment (this "Fourth Amendment") to the
Purchase Agreement is dated the 13th day of December, 1995 and is
by and between Sequa Corporation ("Sequa"), Kollsman
Manufacturing Company, Inc. ("KMC") and Sequa Export Corporation
("Export", and together with Sequa and KMC, "Sellers"), on the
one hand, and EL-OP U.S., Inc. ("Buyer") and El-Op Electro-optics
Industries, Ltd. ("Guarantor"), on the other.
A. Sellers, Buyer and Guarantor have entered into
that certain Purchase Agreement, dated as of November 9, 1995
(the "Agreement"), pursuant to which, among other things, Sellers
have agreed to sell to Buyer, and Buyer has agreed to purchase
from Sellers, substantially all of the assets of, and Buyer has
agreed to assume certain specified liabilities of, the Kollsman
Division of Sequa on the terms and subject to the conditions set
forth therein.
B. Sellers, Buyer and Guarantor have entered into
that certain First Amendment to Purchase Agreement, dated
November 29, 1995 (the "First Amendment"), that certain Second
Amendment to Purchase Agreement, dated December 1, 1995 (the
"Second Amendment"), and that certain Third Amendment to Purchase
Agreement, dated December 13, 1995 (the "Third Amendment"),
pursuant to which, among other things, the Agreement was amended
and the parties agreed to the reimbursement of certain fees
<PAGE>
incurred by Sellers in connection with certain governmental
filings and to certain deadlines with respect the finalization of
certain Schedules and Exhibits referred to in the Agreement.
C. Sellers and Buyer have agreed upon additional
Schedules and Exhibits that are currently referred to in the
Agreement, and to amend the Agreement as set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, and intending to be
legally bound hereby, Sellers, Buyer and Guarantor hereby agree
as follows:
ARTICLE 1
General Provisions
1.1 Definitions. All capitalized terms used, but not
otherwise defined in this Fourth Amendment, shall have the
respective meanings ascribed thereto in the Agreement.
1.2 Other Definitions and Meanings: Interpretations.
For purposes of this Fourth Amendment the term "parties" (except
<PAGE>
where the context otherwise requires) means Sellers, Buyer and
Guarantor; the term "person" includes any natural person, firm,
association, partnership, corporation, or entity other than the
parties, and the words "hereof", "hereby" and other words of
similar import refer to this Fourth Amendment as a whole. For
purposes of this Fourth Amendment, the term "November 29, 1995
Agreed Upon Schedules" shall have the meaning set forth in the
First Amendment, the term "December 1, 1995 Agreed Upon
Schedules" shall have the meaning set forth in the Second
Amendment, and the term "December 8, 1995 Agreed Upon Schedules"
shall have the meaning set forth in the Third Amendment. The
headings of the Articles and Sections of this Fourth Amendment
have been included herein for convenience of reference only and
shall not be deemed to affect the meaning of the operative
provisions of this Fourth Amendment.
1.3 Relationship with the Agreement and prior
amendments. This Fourth Amendment is intended to amend the
Agreement as and to the extent set forth herein. The Agreement,
the First Amendment, the Second Amendment and the Third
Amendment, and each and every provision thereof, will otherwise
remain in full force and effect to the extent not superseded by
this Fourth Amendment and each of the parties reserves all of
their respective rights contained therein.
<PAGE>
ARTICLE 2
Amendment of Purchase Agreement
2.1 Agreed Upon Schedules. The parties agree and
acknowledge that they have agreed upon the form and substance of
the Schedules and Exhibits to the Agreement that are listed on
Schedule A attached hereto (the "December 13, 1995 Agreed Upon
Schedules and Exhibits"). Simultaneously with the execution of
this Fourth Amendment, either Reuben Ben-Arie or Michael E.
Feldman (as attorney-in-fact) on behalf of Buyer and Guarantor,
and John J. Dowling III, on behalf of Sellers, have initialled
for identification the December 13, 1995 Agreed Upon Schedules
and Exhibits. Accordingly, the Agreement is hereby amended in
order to reflect the December 13, 1995 Agreed Upon Schedules and
Exhibits, with the same effect as if they had been agreed upon
and attached to the Agreement simultaneously with its execution.
2.2 Other Schedules and Exhibits. All Schedules or
Exhibits that are referred to in the Agreement other than
Schedule 2.3(b)-2 (Accounting Instructions), the November 29,
1995 Agreed Upon Schedules, the December 1, 1995 Agreed Upon
Schedules, the December 8, 1995 Agreed Upon Schedules and the
December 13, 1995 Schedules and Exhibits (the "Open Schedules
and/or Exhibits") have not been finalized or agreed upon as
between the parties. Accordingly, on or before December 18,
1995, Sellers, on the one hand, and Buyer, on the other, shall
<PAGE>
finalize the Open Schedules and/or Exhibits. If agreed upon in
each such party's sole and absolute discretion, Sellers and
Buyer, shall initial the agreed upon Open Schedules and/or
Exhibits and the same shall be the subject of a further amendment
to the Agreement in substantially the form of this Fourth
Amendment. If, on or before December 18, 1995, Sellers or Buyer
object in writing to any Open Schedules and/or Exhibits received
by them or otherwise fail to agree upon the form and substance of
the Open Schedules and/or Exhibits, then the objecting parties
may, at their sole and absolute election, terminate the Agreement
(as amended) and no party shall have any further rights or
obligations thereunder. For purposes of delivering Open
Schedules and/or Exhibits, delivery shall be deemed to have been
made upon delivery of the same (i) in the case of Buyer, to
Buyer's counsel, Proskauer Rose Goetz & Mendelsohn LLP,
Attention: Michael E. Feldman, Esq. (Fax: 212/969-2900), and (ii)
in the case of Sellers, to Sellers' counsel, John J. Dowling III,
Sequa Corporation, 120 South Central Avenue, St. Louis, Mo. 63105
(Fax: 314/862-6144).
ARTICLE 3
Miscellaneous
3.1 Severability. If any provision of this Fourth
Amendment shall finally be determined to be unenforceable, then
such provision shall be deemed to be severed from this Fourth
<PAGE>
Amendment and every other provision of this Fourth Amendment
shall remain in full force and effect.
3.2 Counterparts. More than one counterpart of this
Fourth Amendment may be executed by the parties hereto, and each
fully-executed counterpart shall be deemed an original without
production of the others. The parties acknowledge that they are
delivering to each other facsimile counterparts of this Fourth
Amendment and the December 13, 1995 Agreed Upon Schedules and
Exhibits, signed and initialled on their behalf, and agree that
such signature and initialization shall be binding upon each of
them as if the counterparts being delivered to the other parties
had been originally signed and initialized.
3.3 Complete Agreement. The Agreement (as amended),
the First Amendment, the Second Amendment, the Third Amendment
and this Fourth Amendment set forth the entire understanding of
the parties with respect to the subject matter thereof and,
together, supersede all prior letters of intent, agreements
(including, without limitation, the Letter Agreement), covenants,
arrangements, communications, representations, or warranties,
whether oral or written, by any officer, employee, or
representative of either party relating thereto.
3.4 Acknowledgement. Sellers and Buyer acknowledge
that each of them has been informed by the other that if either:
<PAGE>
(x) they are unable for any reason whatsoever, in their
respective sole and absolute discretion, to timely agree upon the
form and substance of the Open Schedules and/or Exhibits in
accordance with Section 2.2 above, or (y) any of the deadlines
set forth in Section 3 of the Agreement (as amended) shall not
have been timely met for any reason whatsoever, then, in either
such event, neither party shall be obligated to grant any further
extensions to this Fourth Amendment or the Agreement (as
amended), that they shall not grant such an extension and that
they shall, instead, terminate the Agreement (as amended) and
this Fourth Amendment. Sellers have additionally advised Buyer
that they are unwilling and unable to consummate any transaction
after December 21, 1995.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have each caused
this Fourth Amendment to be executed by its duly authorized
officers or signatory as of the date first above written.
BUYER: EL-OP U.S., INC.
By: ____________________
Name:
Title:
GUARANTOR: EL-OP ELECTRO-OPTICS INDUSTRIES LTD.
By: ____________________
Name:
Title:
SELLERS: SEQUA CORPORATION
By: ____________________
Name:
Title:
KOLLSMAN MANUFACTURING COMPANY, INC.
By: ____________________
Name:
Title:
SEQUA EXPORT CORPORATION
By: ____________________
Name:
Title: <PAGE>
<PAGE>
SCHEDULE A
to Fourth Amendment to Purchase Agreement
dated December 13, 1995
List of December 13, 1995 Agreed Upon Schedules and Exhibits
Schedules
AB Contract Inventory
4.25 List of Material Product and Service Warranties
Exhibits
8.1(a) Bills of Sale
8.1(q) Certificate of Non-foreign Status
<PAGE>
<PAGE>
FIFTH AMENDMENT TO PURCHASE AGREEMENT
This amendment (this "Fifth Amendment") to the Purchase
Agreement is dated the 15th day of December, 1995 and is by and
between Sequa Corporation ("Sequa"), Kollsman Manufacturing
Company, Inc. ("KMC") and Sequa Export Corporation ("Export", and
together with Sequa and KMC, "Sellers"), on the one hand, and EL-
OP U.S., Inc. ("Buyer") and El-Op Electro-optics Industries, Ltd.
("Guarantor"), on the other.
A. Sellers, Buyer and Guarantor have entered into
that certain Purchase Agreement, dated as of November 9, 1995
(the "Agreement"), pursuant to which, among other things, Sellers
have agreed to sell to Buyer, and Buyer has agreed to purchase
from Sellers, substantially all of the assets of, and Buyer has
agreed to assume certain specified liabilities of, the Kollsman
Division of Sequa on the terms and subject to the conditions set
forth therein.
B. Sellers, Buyer and Guarantor have entered into
that certain First Amendment to Purchase Agreement, dated
November 29, 1995 (the "First Amendment"), that certain Second
Amendment to Purchase Agreement, dated December 1, 1995 (the
"Second Amendment"), that certain Third Amendment to Purchase
Agreement, dated December 8, 1995 (the "Third Amendment"), and
that certain Fourth Amendment to Purchase Agreement, dated
December 13, 1995 (the "Fourth Amendment"), pursuant to which,
among other things, the Agreement was amended and the parties
agreed to the reimbursement of certain fees incurred by Sellers
in connection with certain governmental filings and to certain
deadlines with respect the finalization of certain Schedules and
Exhibits referred to in the Agreement.
C. Sellers and Buyer have agreed to amend the
Agreement as set forth herein.
<PAGE>
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, and intending to be
legally bound hereby, Sellers, Buyer and Guarantor hereby agree
as follows:
ARTICLE 1
General Provisions
1.1 Definitions. All capitalized terms used, but not
otherwise defined in this Fifth Amendment, shall have the
respective meanings ascribed thereto in the Agreement.
1.2 Other Definitions and Meanings: Interpretations.
For purposes of this Fifth Amendment the term "parties" (except
where the context otherwise requires) means Sellers, Buyer and
Guarantor; the term "person" includes any natural person, firm,
association, partnership, corporation, or entity other than the
parties, and the words "hereof", "hereby" and other words of
similar import refer to this Fifth Amendment as a whole. For
purposes of this Fifth Amendment, the term "November 29, 1995
Agreed Upon Schedules" shall have the meaning set forth in the
First Amendment, the term "December 1, 1995 Agreed Upon
Schedules" shall have the meaning set forth in the Second
Amendment, the term "December 8, 1995 Agreed Upon Schedules"
shall have the meaning set forth in the Third Amendment, and the
term "December 13, 1995 Agreed Upon Schedules and Exhibits" shall
have the meaning set forth in the Fourth Amendment. The headings
of the Articles and Sections of this Fifth Amendment have been
included herein for convenience of reference only and shall not
be deemed to affect the meaning of the operative provisions of
this Fifth Amendment.
<PAGE>
1.3 Relationship with the Agreement and prior
amendments. This Fifth Amendment is intended to amend the
Agreement as and to the extent set forth herein. The Agreement,
the First Amendment, the Second Amendment, the Third Amendment
and the Fourth Amendment, and each and every provision thereof,
will otherwise remain in full force and effect to the extent not
superseded by this Fifth Amendment and each of the parties
reserves all of their respective rights contained therein.
ARTICLE 2
Amendment of Purchase Agreement
2.1 New Outside Dates. Section 3 of the Agreement is
hereby amended and restated so as to read in its entirety as
follows:
"3 Closing.
3.1 Date of Closing. The closing (the
"Closing") under this Agreement shall take place at the
offices of Proskauer Rose Goetz & Mendelsohn LLP, 1585
Broadway, New York, New York (or at such other place as the
parties may agree upon in writing) upon at least twenty-four
hours' notice given by Buyer to Sellers after the last of
the conditions specified in Sections 7.1 and 7.2 of this
Agreement has been fulfilled (or waived), but in no event
whatsoever later than December 21, 1995. The date on which
the Closing is held is referred to in this Agreement as the
"Closing Date." At the Closing, the parties shall execute
and deliver the documents referred to in Section 8 of this
Agreement.
3.2 Outside Date for Closing. If any of the
following events shall not have occurred on or prior to the
following time, Sellers or Buyer may terminate this
Agreement by notice to the other:
a. the Closing shall not have occurred on
or prior to 12:01 a.m. on December 22, 1995;
b. the condition referred to in Section
7.1(c) shall have been fulfilled or waived prior to
12:01 a.m. on December 21, 1995;
c. the conditions referred to in Sections
7.1(h) and 7.2(d) shall have been fulfilled or waived
prior to 12:01 a.m. on December 16, 1995;
d. the condition referred to in Section
7.1(d) shall have been fulfilled or waived prior to
12:01 a.m. on December 21, 1995; or
<PAGE>
e. the conditions referred to in Sections
7.1(k) and 7.2(f) shall have been fulfilled or waived
prior to 12:01 a.m. on December 19, 1995.
Upon termination pursuant to this Section 3.2 neither of the
parties shall have any liability of any kind arising out of
this Agreement other than for any liability resulting from
its breach of this Agreement prior to termination. If the
Closing is postponed pursuant to Section 11 of this
Agreement, and this Agreement is not otherwise terminated in
accordance with the provisions of Section 11, the outside
date referred to in this Section shall be extended by the
period of the postponement as provided in Section 11."
ARTICLE 3
Miscellaneous
3.1 Severability. If any provision of this Fifth
Amendment shall finally be determined to be unenforceable, then
such provision shall be deemed to be severed from this Fifth
Amendment and every other provision of this Fifth Amendment shall
remain in full force and effect.
3.2 Counterparts. More than one counterpart of this
Fifth Amendment may be executed by the parties hereto, and each
fully-executed counterpart shall be deemed an original without
production of the others. The parties acknowledge that they are
delivering to each other facsimile counterparts of this Fifth
Amendment, signed and initialled on their behalf, and agree that
such signature and initialization shall be binding upon each of
them as if the counterparts being delivered to the other parties
had been originally signed and initialized. Notwithstanding
anything herein contained to the contrary, this Fifth Amendment
shall not be binding on any of the parties unless and until
signed counterparts are received by facsimile by each party prior
to 12:01 a.m. on December 16, 1995.
3.3 Complete Agreement. The Agreement (as amended),
the First Amendment, the Second Amendment, the Third Amendment,
the Fourth Amendment and this Fifth Amendment set forth the
entire understanding of the parties with respect to the subject
matter thereof and, together, supersede all prior
<PAGE>
letters of intent, agreements (including, without limitation, the
Letter Agreement referred to in the First Amendment), covenants,
arrangements, communications, representations, or warranties,
whether oral or written, by any officer, employee, or
representative of either party relating thereto.
3.4 Acknowledgement. Sellers and Buyer acknowledge
that each of them has been informed by the other that if either:
(x) they are unable for any reason whatsoever, in their
respective sole and absolute discretion, to timely agree upon the
form and substance of the Open Schedules and/or Exhibits in
accordance with Section 2.2 of the Fourth Amendment, or (y) any
of the deadlines set forth in Section 3 of the Agreement (as
amended) shall not have been timely met for any reason
whatsoever, then, in either such event, neither party shall be
obligated to grant any further extensions to this Fourth
Amendment or the Agreement (as amended), that they shall not
grant such an extension and that they shall, instead, terminate
the Agreement (as amended) and this Fifth Amendment. Sellers
have additionally advised Buyer that they are unwilling and
unable to consummate any transaction after December 21, 1995.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have each caused
this Fifth Amendment to be executed by its duly authorized
officers or signatory as of the date first above written.
BUYER: EL-OP U.S., INC.
By: ____________________
Name:
Title:
GUARANTOR: EL-OP ELECTRO-OPTICS INDUSTRIES
LTD.
By: ____________________
Name:
Title:
SELLERS: SEQUA CORPORATION
By: ____________________
Name:
Title:
KOLLSMAN MANUFACTURING COMPANY, INC.
By: ____________________
Name:
Title:
SEQUA EXPORT CORPORATION
By: ____________________
Name:
Title:
<PAGE>
<PAGE>
SIXTH AMENDMENT TO PURCHASE AGREEMENT
This amendment (this "Sixth Amendment") to the Purchase
Agreement is dated the 18th day of December, 1995 and is by and
between Sequa Corporation ("Sequa"), Kollsman Manufacturing
Company, Inc. ("KMC") and Sequa Export Corporation ("Export", and
together with Sequa and KMC, "Sellers"), on the one hand, and EL-
OP U.S., Inc. ("Buyer") and El-Op Electro-optics Industries, Ltd.
("Guarantor"), on the other.
A. Sellers, Buyer and Guarantor have entered into
that certain Purchase Agreement, dated as of November 9, 1995
(the "Agreement"), pursuant to which, among other things, Sellers
have agreed to sell to Buyer, and Buyer has agreed to purchase
from Sellers substantially all of the assets of, and Buyer has
agreed to assume certain specified liabilities of, the Kollsman
Division of Sequa on the terms and subject to the conditions set
forth therein.
B. Sellers, Buyer and Guarantor have entered into
that certain First Amendment to Purchase Agreement, dated
November 29, 1995 (the "First Amendment"), that certain Second
Amendment to Purchase Agreement, dated December 1, 1995 (the
"Second Amendment"), that certain Third Amendment to Purchase
Agreement, dated December 8, 1995 (the "Third Amendment"), and
that certain Fourth Amendment, dated December 13, 1995 (the
"Fourth Amendment"), and that certain Fifth Amendment, dated
December 15, 1995 (the "Fifth Amendment", and collectively, the
"Amendments"), pursuant to which, among other things, the
Agreement was amended and the parties agreed to the reimbursement
of certain fees incurred by Sellers in connection with certain
governmental filings and to certain deadlines with respect the
finalization of certain Schedules and Exhibits referred to in the
Agreement.
<PAGE>
C. Sellers and Buyer have agreed upon additional
Schedules and Exhibits that are currently referred to in the
Agreement, and to amend the Agreement as set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, and intending to be
legally bound hereby, Sellers, Buyer and Guarantor hereby agree
as follows:
ARTICLE 1
General Provisions
1.1 Definitions. All capitalized terms used, but not
otherwise defined in this Sixth Amendment, shall have the
respective meanings ascribed thereto in the Agreement.
1.2 Other Definitions and Meanings: Interpretations.
For purposes of this Sixth Amendment the term "parties" (except
where the context otherwise requires) means Sellers, Buyer and
Guarantor; the term "person" includes any natural person, firm,
association, partnership, corporation, or entity other than the
parties, and the words "hereof", "hereby" and other words of
similar import refer to this Sixth Amendment as a whole. For
purposes of this Sixth Amendment, the term "November 29, 1995
Agreed Upon Schedules" shall have the meaning set forth in the
First Amendment, the term "December 1, 1995 Agreed Upon
Schedules" shall have the meaning set forth in the Second
Amendment, the term "December 8, 1995 Agreed Upon Schedules"
shall have the meaning set forth in the Third Amendment, the term
"December 13 Agreed Upon Schedules and Exhibits" shall have the
meaning set forth in the Fourth Amendment. The headings of the
Articles and Sections of this Sixth Amendment have been included
herein for convenience of reference only and
<PAGE>
shall not be deemed to affect the meaning of the operative
provisions of this Sixth Amendment.
1.3 Relationship with the Agreement and prior
amendments. This Sixth Amendment is intended to amend the
Agreement as and to the extent set forth herein. The Agreement
and the Amendments, and each and every provision thereof, will
otherwise remain in full force and effect to the extent not
superseded by this Sixth Amendment and each of the parties
reserves all of their respective rights contained therein.
ARTICLE 2
Amendment of Purchase Agreement
2.1 Agreed Upon Schedules. The parties agree and
acknowledge that they have agreed upon the form and substance of
the Schedules and Exhibits to the Agreement that are listed on
Schedule A attached hereto (the "December 18, 1995 Agreed Upon
Schedules"). Simultaneously with the execution of this Sixth
Amendment, Reuben Ben-Arie on behalf of Buyer and Guarantor, and
John J. Dowling III, on behalf of Sellers, have initialled for
identification the December 18, 1995 Agreed Upon Schedules.
Accordingly, the Agreement is hereby amended in order to reflect
the December 18, 1995 Agreed Upon Schedules, with the same effect
as if they had been agreed upon and attached to the Agreement
simultaneously with its execution.
2.2 Other Schedules and Exhibits. All Schedules or
Exhibits that are referred to in the Agreement other than
Schedule 2.3(b)-2 (Accounting Instructions), the November 29,
1995 Agreed Upon Schedules, the December 1, 1995 Agreed Upon
Schedules, the December 8, 1995 Agreed Upon Schedules, the
December 13, 1995 Schedules and Exhibits, and the December 18,
1995 Agreed Upon Schedules (the "Open Schedules and/or Exhibits")
have not been finalized or agreed upon as between the parties.
Accordingly, on or before December 20, 1995, Sellers, on the one
hand, and Buyer, on the other, shall finalize the
<PAGE>
Open Schedules and/or Exhibits. If agreed upon in each such
party's sole and absolute discretion, Sellers and Buyer, shall
initial the agreed upon Open Schedules and/or Exhibits and the
same shall be the subject of a further amendment to the Agreement
in substantially the form of this Sixth Amendment. If, on or
before December 20, 1995, Sellers or Buyer either object in
writing to any Open Schedules and/or Exhibits received by them or
otherwise fail to agree upon the form and substance of the Open
Schedules and/or Exhibits and initial the same, then the
objecting parties may, at their sole and absolute election,
terminate the Agreement (as amended) and no party shall have any
further rights or obligations thereunder. For purposes of
delivering Open Schedules and/or Exhibits, delivery shall be
deemed to have been made upon delivery of the same (i) in the
case of Buyer, to Buyer's counsel, Proskauer Rose Goetz &
Mendelsohn LLP, Attention: Michael E. Feldman, Esq. either by
personal delivery of by fax at 212/969-2900, and (ii) in the case
of Sellers, to Sellers' counsel, John J. Dowling III, Sequa
Corporation, 120 South Central Avenue, St. Louis, Mo. 63105
either by personal delivery or by fax at 314/862-6144.
2.3 New Outside Dates. Section 3 of the Agreement is
hereby amended and restated so as to read in its entirety as
follows:
"3 Closing.
3.1 Date of Closing. The closing (the
"Closing") under this Agreement shall take place at the
offices of Proskauer Rose Goetz & Mendelsohn LLP, 1585
Broadway, New York, New York (or at such other place as the
parties may agree upon in writing) upon at least twenty-four
hours' notice given by Buyer to Sellers after the last of
the conditions specified in Sections 7.1 and 7.2 of this
Agreement has been fulfilled (or waived), but in no event
whatsoever later than 5:00 p.m. on December 21, 1995. The
date on which the Closing is held is referred to in this
Agreement as the "Closing Date." At the Closing, the
parties shall execute and deliver the documents referred to
in Section 8 of this Agreement.
3.2 Outside Date for Closing. If any of the
following events shall not have occurred on or prior to the
following time, Sellers or Buyer may terminate this
Agreement by means of a delivery notice to the other in the
manner provided in Section 2.2(i) and (ii) above:
<PAGE>
a. the Closing shall not have occurred on
or prior to 5:00 p.m. on December 21, 1995;
b. the condition referred to in Section
7.1(c) shall have been fulfilled or waived prior to
12:01 a.m. on December 21, 1995;
c. the condition referred to in Section
7.1(d) shall have been fulfilled or waived prior to
12:01 a.m. on December 21, 1995; or
d. the conditions referred to in Sections
7.1(k) and 7.2(f) shall have been fulfilled or waived
prior to 12:01 a.m. on December 21, 1995.
Upon termination pursuant to this Section 3.2 neither of the
parties shall have any liability of any kind arising out of
this Agreement other than for any liability resulting from
its breach of this Agreement prior to termination. If the
Closing is postponed pursuant to Section 11 of this
Agreement, and this Agreement is not otherwise terminated in
accordance with the provisions of Section 11, the outside
date referred to in this Section shall be extended by the
period of the postponement as provided in Section 11."
ARTICLE 3
Miscellaneous
3.1 Severability. If any provision of this Sixth
Amendment shall finally be determined to be unenforceable, then
such provision shall be deemed to be severed from this Sixth
Amendment and every other provision of this Sixth Amendment shall
remain in full force and effect.
3.2 Counterparts. More than one counterpart of this
Sixth Amendment may be executed by the parties hereto, and each
fully-executed counterpart shall be deemed an original without
production of the others.
3.3 Complete Agreement. The Agreement (as amended),
the Amendments and this Sixth Amendment set forth the entire
understanding of the parties with respect to the subject matter
thereof and, together, supersede all prior letters of intent,
agreements (including, without limitation, the Letter Agreement
referred to in the First Amendment), covenants, arrangements,
<PAGE>
communications, representations, or warranties, whether oral or
written, by any officer, employee, or representative of either
party relating thereto.
3.4 Acknowledgement. Sellers and Buyer acknowledge
that each of them has been informed by the other that if either:
(x) they are unable for any reason whatsoever, in their
respective sole and absolute discretion, to timely agree upon the
form and substance of the Open Schedules and/or Exhibits in
accordance with Section 2.2 above, or (y) any of the deadlines
set forth in Section 3 of the Agreement (as amended) shall not
have been timely met for any reason whatsoever, then, in either
such event, neither party shall be obligated to grant any further
extensions to this Sixth Amendment or the Agreement (as amended),
that they shall not grant such an extension and that they shall,
instead, terminate the Agreement (as amended) and this Sixth
Amendment. Sellers have additionally advised Buyer that they are
unwilling and unable to consummate any transaction after 5:00
p.m. December 21, 1995.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have each caused
this Sixth Amendment to be executed by its duly authorized
officers or signatory as of the date first above written.
BUYER: EL-OP U.S., INC.
By: ____________________
Name:
Title:
GUARANTOR: EL-OP ELECTRO-OPTICS INDUSTRIES
LTD.
By: ____________________
Name:
Title:
SELLERS: SEQUA CORPORATION
By: ____________________
Name:
Title:
KOLLSMAN MANUFACTURING COMPANY, INC.
By: ____________________
Name:
Title:
SEQUA EXPORT CORPORATION
By: ____________________
Name:
Title: <PAGE>
<PAGE>
SCHEDULE A
to Sixth Amendment to Purchase Agreement
dated December 18, 1995
List of December 18, 1995 Agreed Upon Schedules
4.11 Assigned Agreements
4.18 Environmental Matters
4.28 KSAL
<PAGE>
<PAGE>
SEVENTH AMENDMENT TO PURCHASE AGREEMENT
This amendment (this "Seventh Amendment") to the
Purchase Agreement is dated the 19th day of December, 1995 and is
by and between Sequa Corporation ("Sequa"), Kollsman
Manufacturing Company, Inc. ("KMC") and Sequa Export Corporation
("Export", and together with Sequa and KMC, "Sellers"), on the
one hand, and EL-OP U.S., Inc. ("Buyer") and El-Op Electro-optics
Industries, Ltd. ("Guarantor"), on the other.
A. Sellers, Buyer and Guarantor have entered into
that certain Purchase Agreement, dated as of November 9, 1995
(the "Agreement"), pursuant to which, among other things, Sellers
have agreed to sell to Buyer, and Buyer has agreed to purchase
from Sellers substantially all of the assets of, and Buyer has
agreed to assume certain specified liabilities of, the Kollsman
Division of Sequa on the terms and subject to the conditions set
forth therein.
B. Sellers, Buyer and Guarantor have entered into
that certain First Amendment to Purchase Agreement, dated
November 29, 1995 (the "First Amendment"), that certain Second
Amendment to Purchase Agreement, dated December 1, 1995 (the
"Second Amendment"), that certain Third Amendment to Purchase
Agreement, dated December 8, 1995 (the "Third Amendment"), and
that certain Fourth Amendment, dated December 13, 1995 (the
"Fourth Amendment"), and that certain Fifth Amendment, dated
December 15, 1995 (the "Fifth Amendment"), and that certain Sixth
Amendment, dated December 18, 1995 (the "Sixth Amendment", and
collectively, the "Amendments"), pursuant to which, among other
things, the Agreement was amended and the parties agreed to the
reimbursement of certain fees incurred by Sellers in connection
with certain governmental filings and to certain deadlines with
respect the finalization of certain Schedules and Exhibits
referred to in the Agreement.
<PAGE>
C. Sellers and Buyer have agreed upon additional
Schedules and Exhibits that are currently referred to in the
Agreement, and to amend the Agreement as set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, and intending to be
legally bound hereby, Sellers, Buyer and Guarantor hereby agree
as follows:
ARTICLE 1
General Provisions
1.1 Definitions. All capitalized terms used, but not
otherwise defined in this Seventh Amendment, shall have the
respective meanings ascribed thereto in the Agreement.
1.2 Other Definitions and Meanings: Interpretations.
For purposes of this Seventh Amendment the term "parties" (except
where the context otherwise requires) means Sellers, Buyer and
Guarantor; the term "person" includes any natural person, firm,
association, partnership, corporation, or entity other than the
parties, and the words "hereof", "hereby" and other words of
similar import refer to this Seventh Amendment as a whole. The
headings of the Articles and Sections of this Seventh Amendment
have been included herein for convenience of reference only and
shall not be deemed to affect the meaning of the operative
provisions of this Seventh Amendment.
1.3 Relationship with the Agreement and prior
amendments. This Seventh Amendment is intended to amend the
Agreement as and to the extent set forth herein. The Agreement
and the Amendments, and each and every provision
<PAGE>
thereof, will otherwise remain in full force and effect to the
extent not superseded by this Seventh Amendment and each of the
parties reserves all of their respective rights contained
therein.
ARTICLE 2
Amendment of Purchase Agreement
2.1 Agreed Upon Schedules. The parties agree and
acknowledge that they have agreed upon the form and substance of
the Schedules and Exhibits to the Agreement that are listed on
Schedule A attached hereto (the "December 19, 1995 Agreed Upon
Schedules and Exhibits"). Simultaneously with the execution of
this Seventh Amendment, Reuben Ben-Arie on behalf of Buyer and
Guarantor, and John J. Dowling III, on behalf of Sellers, have
initialled for identification the December 19, 1995 Agreed Upon
Schedules and Exhibits. Accordingly, the Agreement is hereby
amended in order to reflect the December 19, 1995 Agreed Upon
Schedules, with the same effect as if they had been agreed upon
and attached to the Agreement simultaneously with its execution.
[END OF TEXT]<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have each caused
this Seventh Amendment to be executed by its duly authorized
officers or signatory as of the date first above written.
BUYER: EL-OP U.S., INC.
By: ____________________
Name:
Title:
GUARANTOR: EL-OP ELECTRO-OPTICS INDUSTRIES LTD.
By: ____________________
Name:
Title:
SELLERS: SEQUA CORPORATION
By: ____________________
Name:
Title:
KOLLSMAN MANUFACTURING COMPANY, INC.
By: ____________________
Name:
Title:
SEQUA EXPORT CORPORATION
By: ____________________
Name:
Title: <PAGE>
<PAGE>
SCHEDULE A
to Seventh Amendment to Purchase Agreement
dated December 19, 1995
List of December 19, 1995 Agreed Upon Schedules
SCHEDULES
6.19 Miscellaneous Real Estate Documents
9.7(b) Buyer's Knowledge
EXHIBITS
6.14 Non-competition agreement
6.22 Nashua Sub-lease
<PAGE>
<PAGE>
EIGHTH AMENDMENT TO PURCHASE AGREEMENT
This amendment (this "Eighth Amendment") to the
Purchase Agreement executed this 28th day of December, 1995 is
dated as of the 22nd day of December, 1995 and is by and between
Sequa Corporation ("Sequa"), Kollsman Manufacturing Company, Inc.
("KMC") and Sequa Export Corporation ("Export", and together with
Sequa and KMC, "Sellers"), on the one hand, and EL-OP U.S., Inc.
("Buyer") and EL-OP Electro-Optics Industries, Ltd.
("Guarantor"), on the other.
A. Sellers, Buyer and Guarantor have entered into
that certain Purchase Agreement, dated as of November 9, 1995
(the "Agreement"), pursuant to which, among other things, Sellers
have agreed to sell to Buyer, and Buyer has agreed to purchase
from Sellers substantially all of the assets of, and Buyer has
agreed to assume certain specified liabilities of, the Kollsman
Division of Sequa on the terms and subject to the conditions set
forth therein.
B. Sellers, Buyer and Guarantor have entered into
that certain First Amendment to Purchase Agreement, dated
November 29, 1995 (the "First Amendment"), that certain Second
Amendment to Purchase Agreement, dated December 1, 1995 (the
"Second Amendment"), that certain Third Amendment to Purchase
Agreement, dated December 8, 1995 (the "Third Amendment"), that
certain Fourth Amendment, dated December 13, 1995 (the "Fourth
Amendment"), that certain Fifth Amendment, dated December 15,
1995 (the "Fifth Amendment"), that certain Sixth Amendment, dated
December 18, 1995 (the "Sixth Amendment"), and that certain
Seventh Amendment, dated December 19, 1995 (the "Seventh
Amendment", and collectively, the "Amendments"), pursuant to
which, among other things, the Agreement was amended and the
parties agreed to the reimbursement of certain fees incurred by
Sellers in connection with certain governmental filings and to
certain deadlines with respect the finalization of certain
Schedules and Exhibits referred to in the Agreement.
C. Sellers and Buyer have agreed upon the balance of
the Schedules and Exhibits that are currently referred to in the
Agreement to be agreed upon by them in accordance with the
Amendments, and to amend the Agreement as set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, and intending to be
legally bound hereby, Sellers, Buyer and Guarantor hereby agree
as follows:
<PAGE>
ARTICLE 1
General Provisions
1.1 Definitions. All capitalized terms used, but not
otherwise defined in this Eighth Amendment, shall have the
respective meanings ascribed thereto in the Agreement.
1.2 Other Definitions and Meanings; Interpretations.
For purposes of this Eighth Amendment the term "parties" (except
where the context otherwise requires) means Sellers, Buyer and
Guarantor; the term "person" includes any natural person, firm,
association, partnership, corporation, or entity other than the
parties, and the words "hereof", "hereby" and other words of
similar import refer to this Eighth Amendment as a whole. The
headings of the Articles and Sections of this Eighth Amendment
have been included herein for convenience of reference only and
shall not be deemed to affect the meaning of the operative
provisions of this Eighth Amendment.
1.3 Relationship with the Agreement and prior
amendments. This Eighth Amendment is intended to amend the
Agreement and the Amendments as and to the extent set forth
herein. The Agreement and the Amendments, and each and every
provision thereof, will otherwise remain in full force and effect
to the extent not superseded by this Eighth Amendment and each of
the parties reserves all of their respective rights contained
therein.
<PAGE>
<PAGE>
ARTICLE 2
Amendment of Purchase Agreement
2.1 Agreed Upon Schedules and Exhibits. The parties
agree and acknowledge that they have agreed upon the form and
substance of the Schedules and Exhibits to the Agreement that are
listed on Schedule A attached hereto (the "December 21, 1995
Agreed Upon Schedules") as well as the First Supplement to
Disclosure Schedules and, accordingly, have agreed upon the form
and substance of all Schedules and Exhibits that are referred to
in the Agreement (as amended). Simultaneously with the execution
of this Eighth Amendment, Reuben Ben-Arie, Michael E. Feldman
and/or and Eric Rubenfeld (as attorneys-in-fact) on behalf of
Buyer and Guarantor, and Joseph Allwarden and/or John J. Dowling
III, on behalf of Sellers, have initialed for identification the
December 21, 1995 Agreed Upon Schedules and First Supplement to
Disclosure Schedules. Accordingly, the Agreement is hereby
amended in order to reflect the December 21, 1995 Agreed Upon
Schedules and First Supplement to Disclosure Schedules, with the
same effect as if they had been agreed upon and attached to the
Agreement simultaneously with its execution.
2.2 New Outside Dates. Section 3 of the Agreement is
hereby amended and restated so as to read in its entirety as
follows:
"3 Closing.
3.1 Date of Closing. The closing (the
"Closing") under this Agreement shall take place at the
offices of Proskauer Rose Goetz & Mendelsohn LLP, 1585
Broadway, New York, New York after the last conditions
specified in Sections 7.1(a), (b), (e), (f) and (i) and
7.2(a), (b), (c) and (e) of this Agreement has been
fulfilled (or waived), but in no event whatsoever later than
5:00 p.m. on December 29, 1995. The date on which the
Closing is held is referred to in this Agreement as the
"Closing Date," and the effective time of closing shall be
the close of business (5:00 p.m. EST) on the Closing Date.
At the Closing, the parties shall execute and deliver the
documents referred to in Section 8 of this Agreement.
3.2 Outside Date for Closing. If any of the
following events shall not have occurred on or prior to the
following times, this Agreement shall automatically
terminate and neither Sellers nor Buyer will be required to
give notice of such termination to the other:
a. the Closing shall not, for any reason
whatsoever, have occurred on or prior to 5:00 p.m. on
December 29, 1995;
b. Buyer shall have wire transferred to
Sequa
<PAGE>
Corporation, The Bank of New York, New York, NY ABA
#021000018 Account #8090605950 on or before 12:00 p.m.
EST on December 28, 1995, immediately available funds,
in the amount of $22,500 representing reimbursement to
Sequa of one-half (1/2) of the Hart-Scott-Rodino fee
previously paid and advanced by Sequa Corporation on
behalf of Buyer; or
c. Sequa shall have agreed in writing prior
to 8:00 p.m. EST December 28 1995, in its sole and
absolute discretion (which may be subjective), to the
terms, conditions and provisions of a proposed
intercreditor and subordination agreement with Buyer's
lender, which is referred to in Section 6.3 of the
Agreement, which agreements will provide, among other
things, for the right of Sequa to foreclose on the
security interests and mortgages granted to Sequa, with
no more than fifteen (15) days prior written notice to
Buyer and Buyer's lenders, unless such lenders pay
Sequa the full amount of such letters of credit which
have been drawn. In the event that Sequa is unable for
any reason to agree in writing with Buyer upon the loan
documentation, covenants and guaranties referred to in
Section 6.3 of the Agreement to be executed by Buyer in
favor of Sequa on or before 8:00 p.m. EST on December
28, 1995, then the substitute or back-up letters of
credit as required by Section 6.3 of the Agreement must
be delivered at and as a condition to Closing.
Upon termination pursuant to this Section 3.2 none of the
parties hereto shall have any liability of any kind arising out
of this Agreement other than for any liability resulting from its
breach of this Agreement prior to termination. If the Closing is
postponed pursuant to Section 11 of this Agreement, and this
Agreement is not otherwise terminated in accordance with the
provisions of Section 11, the outside date referred to in this
shall be extended by the period of the postponement as provided
in Section 11, but in no event whatsoever beyond December 31,
1995."
2.3 Certain Conditions.
2.3.1 EACs and Certain Reserves. The
parties acknowledge
and agree that they have agreed to the Estimates at
Completion and to the methodology of determining a reserve,
if any, for the purposes of the valuation of the Avionics
stock inventory and Avionics excess stock inventory. Such
Estimates at Completion have been initialed by the parties,
are attached to this Eighth Amendment as Schedule B (the
"EACs") and a description of such methodology has been
initialed for identification by the parties and is attached
to this Eighth Amendment as
<PAGE>
Schedule C (the "Methodology"). Accordingly:
(a) Sections 7.1(k) and 7.2(f) of the
Agreement are each hereby agreed to have been satisfied as
conditions to Closing; and
(b) Schedule 2.3(b)-2 (Accounting
Instructions) is hereby amended to annex
thereto the EACs and the Methodology as
Annex 1 and Annex 2 thereto, respectively,
with the same effect as if they had been
agreed upon and annexed to such Schedule at
the time of its initialing by the parties.
2.3.2 Other Conditions. Section 7.1(c),
Section 7.1(d),
Section 7.1(h), Section 7.1(j) and Section 7.2(d) are each
hereby agreed to have been satisfied as conditions to
Closing. Estoppel certificates, if any, and Required
Consents will only be delivered to the extent received by
Sellers on or prior to the Closing Date.
2.3.3 Certain Litigation Matters. A new
Section 7.1(l) is hereby added to the Agreement which reads
in its entirety as follows:
"(l) All matters shall be satisfactory in all
respects in Buyer's sole and absolute discretion (which may
be subjective) with respect to the "governmental settlement"
referred to in Item 1 of Schedule 4.10 to the Agreement and
described in the March 3, 1995, November 22, 1995 and
December 13, 1995 letters from McKenna & Cuneo that are
attached thereto, and if Buyer has not advised Sellers that
Buyer is not satisfied with all such matters in writing
personally delivered to either Joseph C. Allwarden or John
J. Dowling III and receipted in writing by either Joseph C.
Allwarden or John J. Dowling III at the offices of
Proskauer Rose Goetz & Mendelsohn LLP, 1585 Broadway, New
York, New York 10036 by 8:00 p.m. EST, December 27, 1995 to
the contrary, then such shall be deemed satisfied."
2.4 Certain Covenants.
2.4.1 Certain Payroll Adjustments
A new Section 6.17(d) shall be added to the Agreement
and shall read in its entirety as follows:
"(d) From and after the Closing, Buyer
shall not use that portion of Sellers'
computer program for processing payroll
checks using Sellers' bank bar codes."
2.4.2 Legal Opinions.
(a) Section 8.1(b) is hereby amended by
replacing the
words "substantially the form of Exhibit 8.1(b)" by the
words "a form reasonably satisfactory to Buyer and its
counsel".
<PAGE>
(b) Section 8.1(b) is hereby amended by
replacing the
words "substantially the form of Exhibit 8.2(c) by the words
"a form reasonably satisfactory to Sellers and their
counsel".
2.4.3 Suspension and Debarment. A new
Section 6.24 is
hereby added to the Agreement and shall read as follows:
"6.24 Suspension and Debarment.
(a) Except as set forth in Section 6.24 (b), (c) and
(d) of this
Agreement, Buyer hereby assumes and accepts all risk of any
suspension and/or debarment proceedings asserted against
Buyer, including risk of loss, termination or cessation of
business and the like with the Government to the extent
arising out of or in connection with any of Sellers' actions
or omissions, whether known or unknown, on or before the
close of business on the Closing Date, including but not
limited to matters disclosed in Schedules 4.9, 4.10 and 4.24
to this Agreement, and except as provided in (b) and (c)
below whether or not involving a misrepresentation or breach
of warranty by Sellers.
(b) Sellers hereby retain all liabilities and
obligations as the
result of (i) any suspension and/or debarment proceedings
pending or threatened in writing against Sellers relating to
the Business on or before the close of business on the
Closing Date other than with respect to the matters
disclosed in Schedules 4.9, 4.10 and 4.24 to this Agreement,
the risk of which shall be with Buyer; and (ii) any
suspension and/or debarment proceedings: (A) solely to the
extent arising out of or in connection with those matters
involving a misrepresentation or breach of warranty by
Sellers of this Agreement but then if and only if such
misrepresentation or breach of warranty is actually known on
or before the close of business on the Closing Date by any
of Joseph C. Allwarden, John J. Quicke, John J. Dowling III,
Stuart Z. Krinsly, Ira A. Schreger and Jesse Battino; or (B)
arising out of or in connection with those matters involving
a misrepresentation or breach of warranty of the
representation and warranty provided in (c) below.
(c) Sellers represent and warrant that, except for the
matters
disclosed as Item 2 of Schedule 4.10, there are no pending
suspension and/or debarment proceedings nor are there any
such suspensions and/or debarment proceedings presently
threatened in writing.
(d) Notwithstanding anything contained in this Section
6.24, (i)
all liabilities and obligations with respect to criminal
monetary fines, civil monetary fines, administrative
monetary fines, monetary penalties and punitive damages of a
monetary nature, solely to the extent arising
<PAGE>
out of or in connection with Sellers' actions or omissions on or
before the close of business on the Closing Date shall be deemed
to be included within the meaning of the term "Sellers' Other
Liabilities", including but not limited to such monetary amounts
assessed with respect to the matters disclosed in Schedule 4.10
and all such monetary amounts assessed with respect to actions or
omissions of Sellers resulting in a suspension or debarment
proceeding described in either Section 6.24 (a) or (b); and (ii)
each Seller shall indemnify Buyer for all out-of-pocket expenses,
including reasonable fees and expenses of counsel, incurred by
Buyer in connection with any suspension or debarment proceeding
described in Section 6.24 (a) or (b) subject, however, to the
limitations on indemnification and on survival of representations
and warranties as provided in this Agreement and further provided
that the Two Hundred Thousand Dollar ($200,000) deductible may be
applied to all such fees and expenses of counsel."
ARTICLE 3
Miscellaneous
3.1 Severability. If any provision of this Eighth
Amendment shall finally be determined to be unenforceable, then
such provision shall be deemed to be severed from this Eighth
Amendment and every other provision of this Eighth Amendment
shall remain in full force and effect.
3.2 Counterparts. More than one counterpart of this
Eighth Amendment may be executed by the parties hereto, and each
fully-executed counterpart shall be deemed an original without
production of the others.
3.3. Complete Agreement The Agreement (as amended),
the Amendments and this Eighth Amendment set forth the entire
understanding of the parties with respect to the subject matter
thereof and, together, supersede all prior letters of intent,
agreements (including, without limitation, the Letter Agreement
referred to in the First Amendment), covenants, arrangements,
communications, representations, or warranties, whether oral or
written, by an officer, employee, or representative of either
party relating thereto.
3.4 Acknowledgment. Sellers and Buyer acknowledge and
agree that each of them has been informed by the other that if
any of the deadlines set forth in Section 3 of the Agreement (as
amended) shall not have been timely met for any reason
whatsoever, then, in such vent, neither party shall be obligated
to grant any further extensions to this Eighth Amendment or the
Agreement (as amended) and such decision shall be in such party's
sole and absolute discretion (which may be subjective) and the
Agreement (as amended) shall automatically terminate without
necessity of notice or discussion. Sellers have additionally
advised Buyer that they are unwilling and unable and do not have
the corporate
<PAGE>
power or authority, including Board of Director approval, to
consummate any transaction after December 29, 1995 and that from
and after December 30, 1995, Sellers may in their sole and
absolute discretion (which may be subjective) solicit and/or
accept offers for the Business from third parties.
3.5 Wire Transfer. Sellers acknowledge that Buyer
informed Sellers that the wire transfer referred to in Section
3.2 b was made at approximately 4:15 p.m. EST. Sellers will
confirm whether such amounts were received on or before 12:00
p.m. on December 28, 1995 and so advise Buyer.
[END OF TEXT]
<PAGE>
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have each caused
this Eighth Amendment to be executed by its duly authorized
officers or signatory as of the date first above written.
BUYER: EL-OP U.S., INC.
By:
_____________________________
Name:
Title:
GUARANTOR: EL-OP ELECTRO-OPTICS
INDUSTRIES LTD.
By:
_____________________________
Name:
Title:
SELLERS: SEQUA CORPORATION
By:
_____________________________
Name:
Title:
KOLLSMAN MANUFACTURING
COMPANY, INC.
By:
______________________________
Name:
Title:
SEQUA EXPORT CORPORATION
By: _______________________________
Name:
Title:
<PAGE>
SCHEDULE A
to Eighth Amendment to Purchase Agreement
dated as of December 22, 1995
List of December 21, 1995 Agreed Upon Schedules and Exhibits
4.10 Litigation
4.13 List of Prepayments (Superseded and replaced in its entirety
by Schedule 4.13 dated December 28, 1995 and included in the
First Supplement to Disclosure
Schedules)
6.13 Due Diligence Materials
6.18 Further Assurances
