SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 30, 1999
Barnes Group Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-04801 06-0247840
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
123 Main Street Bristol, CT 06010
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (860) 583-7070
N/A
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 30, 1999, Barnes Group Inc. purchased substantially all
of the assets of the nitrogen gas springs business of the Teledyne Fluid Systems
Division of Teledyne Industries, Inc. pursuant to an Asset Purchase and Sale
Agreement dated as of July 27, 1999 (the "Agreement") by and between Teledyne
Industries, Inc. (the "Seller") and Barnes Group Inc. (the "Purchaser"). The
aggregate purchase price was $89.7 million. The purchase price will be adjusted
upward or downward following the closing to take into account changes in net
working capital from December 31, 1998 to the closing date, to the extent that
such changes exceed $250,000. The closing net working capital will be determined
by the Purchaser no later than 30 days after the August 30, 1999 closing date,
subject to review and acceptance by the Seller.
The purchase price was determined through negotiations between the
Purchaser and the Seller conducted on an arms' length basis. During such
negotiations, the parties considered, among other things, the present stage of
development of the business and operations of the nitrogen gas springs business,
the condition of its assets, its financial condition, the market for its
services and products and its future business prospects.
The funds used to purchase the assets were borrowed initially under
the Purchaser's $150 million revolving credit agreement with six banks led by
Mellon Bank N.A. The credit agreement has a termination date as of December 6,
2002.
Through its acquisition of the assets, the Purchaser acquired the
machinery, equipment and other physical property owned or leased by Teledyne
Industries, Inc. and used in connection with its business of producing and
distributing nitrogen gas springs for the metal forming industries. The
Purchaser intends to continue the use of such machinery, equipment and other
physical property in connection with the operation of such business. The
acquired assets also include all of the capital stock of Stromsholmen AB, a
Swedish corporation, in Tranas, Sweden that produces and distributes nitrogen
gas springs for the metal forming industries. Such stock was acquired by Barnes
Sweden Holding Company AB, a wholly owned subsidiary of the Purchaser. Of the
aggregate purchase price, $70 million was allocated to the purchase of
Stromsholmen AB. The Purchaser intends for Stromsholmen to continue its present
business.
In accordance with Rule 3-05 of Regulation S-X, the financial
statements of the nitrogen gas springs business of Teledyne's Fluid Systems
Division are required to be filed herewith.
ITEM 7. EXHIBITS.
(a) and (b). The financial statements and pro forma financial
information, required as part of this Report on Form 8-K, will be filed not
later than 75 days from the Date of Report as an amendment to this Report.
(c). The following exhibits are filed as part of this Report:
Exhibit Number Exhibit Name
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Exhibit 2.1 Asset Purchase Sale Agreement dated as of July 27,
1999, by and between Teledyne Industries, Inc. and
Barnes Group Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 13, 1999 BARNES GROUP INC.
By: /s/ Signe Gates
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Name: Signe Gates
Title: Senior Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit Number Exhibit Name Location
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Exhibit 2.1 Asset Purchase and Sale Filed herewith
Agreement dated as of July 27,
1999, by and between Teledyne
Industries,Inc. and Barnes Group Inc.
ASSET PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
TELEDYNE INDUSTRIES, INC.
AND
BARNES GROUP INC.
DATED AS OF JULY 27, 1999
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ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT ("AGREEMENT"), is dated
and entered into as of July 27, 1999, by and among Teledyne Industries, Inc., a
California corporation ("SELLER"), and Barnes Group Inc., a Delaware corporation
on behalf of itself and a Swedish corporation to be formed ("BARNES SWEDEN"),
(Barnes Sweden and Barnes are collectively referred to herein as the
"PURCHASER"), with reference to the following:
RECITALS
A. The Seller, through its Teledyne Fluid Systems division
("FLUID SYSTEMS"), is the owner of certain assets more particularly described in
this Agreement used by Fluid Systems in the production and distribution of
nitrogen gas springs for the metal forming industries (collectively, the
"BUSINESS").
B. The Purchaser wishes to purchase the Business and the
Seller is willing to sell the Business on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual representations, warranties, covenants, agreements, terms and conditions
set forth below, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, covenant and agree as
follows:
Section 1: Definitions. For purposes of this Agreement, the
following terms have the meanings set forth below:
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the United States Securities Exchange Act of 1934,
as amended.
"Agreement" means this Asset Purchase and Sale Agreement, as
the same may be amended from time to time in accordance with the terms hereof.
"Ancillary Agreements" means, collectively, the Assignment
Agreement, the Assumption Agreement and the Bill of Sale and any other Closing
documents necessary to transfer to the Purchaser the Purchased Assets.
"Arbitrator" has the meaning set forth in Section 2.5(b).
"Assignment Agreement" has the meaning set forth in Section
3.3.
"Assumed Contracts" has the meaning set forth in Section
2.3(a).
"Assumed Liabilities" has the meaning set forth in Section
2.3(a).
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"Assumption Agreement" has the meaning set forth in Section
3.3.
"Audited Annual Accounts" has the meaning set forth in Section
4.5.
"Barnes" has the meaning set forth in the preamble to this
Agreement.
"Barnes Sweden" has the meaning set forth in the preamble to
this Agreement.
"Bill of Sale" has the meaning set forth in Section 3.3.
"Business" has the meaning set forth in the Recitals to this
Agreement.
"Cash" means cash on hand or in banks and cash equivalents,
marketable securities and short-term investments.
"CERCLA" means the United States Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.2.
"Closing Inventory" has the meaning set forth in Section
2.5(a).
"Closing Statement" has the meaning set forth in Section
2.5(a).
"Closing Statement Net Working Capital" has the meaning set
forth in Section 2.5(a).
"COBRA Provisions" has the meaning set forth in Section 8(c).
"Code" means the United States Internal Revenue Code of 1986,
as amended.
"Confidentiality Agreement" means the confidentiality letter
agreement dated March 12, 1999, executed by the Purchaser with Lincoln Partners.
"Contracts" has the meaning set forth in Section 2.1(f).
"Deeds" has the meaning set forth in Section 3.3.
"Disclosure Schedules" means, collectively, the various
Schedules referred to in this Agreement.
"Dollars" and "$" means the lawful currency of the United
States of America.
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"Employees" means all of the employees who are employed in
relation to Business immediately prior to the Closing Date, including those
employees who are on temporary leave for purposes of jury duty, vacation, annual
military duty, disability, workers' compensation or sick leave, as set out in
Schedule 8(a) of the Disclosure Schedules.
"Employee Benefit Plan" means an Employee Pension Benefit Plan
or an Employee Welfare Benefit Plan, where no distinction is required by the
context in which the term is used.
"Employee Pension Benefit Plan" has the meaning set forth in
Section 3(2) of ERISA.
"Employee Welfare Benefit Plan" has the meaning set forth in
Section 3(1) of ERISA.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings, relating
in any way to any Environmental Law, or any permit issued under any such
Environmental Law.
"Environmental Law" means any Law relating to the protection
of the air, surface water, groundwater or land, and/or governing the handling,
use, generation, treatment, storage or disposal of Hazardous Materials,
promulgated under any federal, foreign, state, or local statute, law, rule,
regulation, ordinance or code in effect and in each case as amended as of the
Closing Date, including, without limitation, the following: the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 6901 et seq.; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq.; the Federal Water Pollution Control
Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control
Act, as amended, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, as amended,
42 U.S.C. Section 7401 et seq.; the Safe Water Drinking Act, 42 U.S.C. Section
3804 et seq.; and the Swedish Environmental Act; but not including any Law
relating to matters administered by the Occupational Safety and Health
Administration or by any state, provincial, local, domestic or foreign
equivalent thereof.
"Environmental Losses" has the meaning set forth in Section
10.6(a).
"ERISA" means the United States Employee Retirement Income
Security Act of 1974, as amended.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section
2.3(b).
"Fibro Agreement" means the Agency Contract dated October 10,
1983, between Stromsholmen Mek.Verkstad AB (predecessor-in-interest to
Stromsholmen AB) and Fibro GmbH, as amended and supplemented.
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"Fluid Systems" has the meaning set forth in the recitals to
this Agreement.
"Governmental Entity" means any government or any governmental
agency, bureau, board, commission, department or political subdivision, whether
federal, state, provincial or local, domestic or foreign.
"Hart-Scott-Rodino Act" means the United States
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.
"Hazardous Materials" means any chemical, material or
substance defined as or included in the definition of "hazardous substances,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "regulated substances" or words
of similar import, under any applicable Environmental Law.
"Indemnified Party" has the meaning set forth in Section 10.4.
"Indemnifying Party" has the meaning set forth in Section
10.4.
"Intellectual Property" means all of the Seller's rights in
the following intangible rights used by the Seller in connection with the
Business: (i) all of the registered and unregistered copyrights, trade names and
trademarks (with the exception of the Excluded Assets described in Section 2.2),
service marks, patents, and, in each instance, any and all applications
therefor, and licenses with respect to any of the foregoing; (ii) computer
software, manufacturing information, product designs (whether for existing
products or products under development), engineering and manufacturing drawings,
plans, specifications, and cad cam designs (with the exception of the Excluded
Assets described in Section 2.2); and (iii) any know-how with respect to each
intangible right described in i) and ii).
"Inventories" has the meaning set forth in Section 2.1(e).
"Knowledge" as applied to the Seller means the actual
knowledge of the members of the management of Fluid Systems identified on
Schedule 1.1 of the Disclosure Schedules.
"Law" means any federal, state, provincial or local, domestic
or foreign, constitutional provision, statute, law, rule, regulation, Permit,
decree, injunction, judgment, order or legally binding ruling, determination,
finding or writ of any Governmental Entity enacted as of the date hereof.
"Lien" means any lien, mortgage, pledge, security interest,
charge, claim or other encumbrance.
"Losses" has the meaning set forth in Section 10.2(a).
"Leased Real Property" has the meaning set forth in Section
2.1(c)(ii).
"Owned Real Property" has the meaning set forth in Section
2.1(c)(i).
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"Permit" means any license, permit, franchise, certificate of
authority or order, certificate of occupancy, building, safety or fire or health
approval, or any waiver of the foregoing, issued by any Governmental Entity.
"Permitted Lien" means (a) any Lien for Taxes, assessments or
governmental charges or claims that are not yet delinquent, (b) any mechanics',
materialmens' or similar Liens with respect to amounts that are not yet
delinquent, (c) any purchase money Lien or any Lien securing rental payments
under capital lease arrangements, and (d) the Liens set forth on Schedule 1.2 of
the Disclosure Schedules.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a Governmental Entity.
"Purchase Price" has the meaning set forth in Section 2.4.
"Purchased Assets" has the meaning set forth in Section 2.1.
"Purchaser" has the meaning set forth in the Preamble to this
Agreement.
"Purchaser Indemnified Parties" has the meaning set forth in
Section 10.2(a).
"Reference Statement" means the statement as of December 31,
1998, adjusted to reflect the elimination of the assets and liabilities of TFS
(Thailand) Limited, attached hereto as Schedule 2.5(a) of the Disclosure
Schedules.
"Reference Statement Net Working Capital" has the meaning set
forth in Section 2.5(a).
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
discarding, burying, abandoning or disposing into the environment.
"Schedule" means, unless the context otherwise requires, the
referenced Schedule included in the Disclosure Schedules.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning set forth in the Preamble to this
Agreement.
"Seller Defined Benefit Plan" means any Employee Pension
Benefit Plan sponsored by the Seller or any entity required to be aggregated
with the Seller under Section 414(b), (c), (m) or (o) of the Code and which is
subject to Title IV of ERISA.
"Seller Indemnified Parties" has the meaning set forth in
Section 10.3(a).
"Seller Plans" has the meaning set forth in Section 4.13.
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"Shares" has the meaning set forth in Section 2.1(b).
"Stromsholmen AB" means Stromsholmen Aktiebolag, a corporation
organized under the laws of Sweden, company registration number 556463-3930.
"Subsidiary Tax Returns" means any filings with respect to
Taxes on behalf of Stromsholmen AB.
"Swedish Competition Act" means the Swedish Competition Act
(Sw. Konkurrenslag, SFS 1993:20).
"Swedish Environmental Act" means the Swedish Environmental
Code (Sw. Miljobalken, SFS 1998:808).
"Tax" or "Taxes" means any federal, state, provincial, local
or foreign net income, gross income, gross receipts, sales, use, goods and
services or other value-added or ad-valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, windfall profits, customs,
duties or other tax, fee, assessment or charge, including any related interest,
penalty or addition thereto.
"Tax Return or "Tax Returns" means any return, declaration,
report, claim for refund or information return or statement relating to Taxes,
including any schedule or attachment thereto.
"Transfer Taxes" means all taxes, filing fees, registration
costs or similar expenses relating to the transfer of the Purchased Assets to
the Purchaser.
"Transferred Employees" has the meaning set forth in Section
8(b).
"Transition Services Agreement" has the meaning set forth in
Section 3.3.
"TFS (Thailand) Limited" means Teledyne Fluid Systems
(Thailand) Limited, a corporation organized under the laws of Thailand.
"WARN Act" means the United States Federal Worker Adjustment
and Retraining Notification Act, as amended.
Section 2: The Transaction.
2.1. Sale and Purchase of Assets. At the Closing, the Seller
will sell, transfer, assign, convey, set over and deliver to the Purchaser, and
the Purchaser will purchase, acquire and accept from the Seller all right, title
and interest of the Seller in and to all of the assets, rights and properties of
Fluid Systems used in substantial part or with a principal purpose of use or
disposition in connection with the Business, other than the Excluded Assets
(collectively, the "PURCHASED ASSETS") including, without limitation, the
following assets, rights and properties:
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(a) all machinery, equipment, and motor vehicles set
forth on Schedule 2.1(a) of the Disclosure Schedules and all tools, dies, spare
parts, furniture, fixtures and leasehold improvements, used or held for use
solely in connection with the Business as of the Closing Date;
(b) all of the issued and outstanding capital stock
of Stromsholmen AB as set forth on Schedule 2.1(b)(i) of the Disclosure
Schedules (collectively, the "SHARES") to be purchased by Barnes Sweden;
(c) the real property owned by the Seller identified
on Schedule 2.1(c)(i) of the Disclosure Schedules (the "OWNED REAL PROPERTY")
and the Seller's interest in the real property leased by the Seller described on
Schedule 2.1(c)(ii) of the Disclosure Schedules (the "LEASED REAL PROPERTY");
(d) all accounts receivable of the Seller arising
from the operation of the Business;
(e) all inventories of raw materials, work in
process, finished products, goods, goods and products held by third parties
under consignment, spare parts, replacement and component parts, and office,
packaging and other supplies (the "INVENTORIES");
(f) those contracts, agreements, leases, commitments,
instruments, distribution and representative agreements, software licensing
agreements, hardware and software support agreements, PC support agreements,
system support agreements, communication and other services agreements,
consulting and employment agreements, guaranties received, bids, orders and
proposals set forth on Schedule 2.3(a)(ii) of the Disclosure Schedules to the
extent in effect in connection with the Business as of the Closing Date (the
"CONTRACTS"), excluding all corporate-wide purchasing arrangements which relate
generally to the Business and other divisions or business units of the Seller or
any of its Affiliates and any other arrangements with other divisions or
business units of the Seller or any of its Affiliates;
(g) to the extent legally assignable, all Permits
held by the Seller in connection with the Business as of the Closing Date;
(h) all books, records (including personnel records
provided that such personnel records are used by the Purchaser in compliance
with Law), customer lists, ledgers, files, documents, correspondence, lists,
plans, drawings, creative materials, advertising and promotional materials,
studies, reports and other printed or written materials used or held for use by
the Seller primarily in connection with the Business and are material to
continuing the operation of the Business as a going concern; and
(i) all of the Seller's rights to the Intellectual
Property used by Fluid Systems and relating primarily to the Business, including
(i) the Seller's right to use the names "Hyson," and "Kaller," and (ii) the
patents, patent applications and trademarks identified on Schedule 4.11.
2.2. Excluded Assets. Notwithstanding the provisions of
Section 2.1, the Purchased Assets will not include any assets which are not used
in substantial part or with a
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principal purpose of use or disposition in connection with the Business,
including, without limitation, any of the following assets, rights or properties
(collectively, the "EXCLUDED ASSETS"):
(a) any and all assets, rights and properties of TFS
(Thailand) Limited;
(b) any and all assets, rights, and properties of the
Seller or any of its Affiliates other than those used by Fluid Systems in
connection with the operation of the Business;
(c) any assets located at Fluid Systems' facilities
which are not owned or leased or held under right of license or other agreement
by the Seller and are identified on Schedule 2.2(b) of the Disclosure Schedules;
(d) any Cash, including all bank accounts;
(e) any rights or claims of the Seller or any of its
Affiliates with respect to any Tax refund, carryback or carryforward or other
credits to the Seller or such Affiliates for periods ending prior to the Closing
Date;
(f) any property, casualty, workers' compensation or
other insurance policy or related insurance services contract relating to the
Seller or any of its Affiliates, and any rights of the Seller or such Affiliates
under any such insurance policy or contract, including, but not limited to,
rights to any cancellation value;
(g) any rights of the Seller under this Agreement,
the Ancillary Agreements or under any other agreement between the Seller and the
Purchaser;
(h) all "Teledyne" and "Allegheny Teledyne" marks,
including any and all trademarks or service marks, trade names, registered and
unregistered designs, slogans or other like property relating to or including
the names "Teledyne" or "Allegheny Teledyne," the marks Teledyne and Allegheny
Teledyne, and any derivative thereof and the Teledyne and Allegheny Teledyne
logos or any derivatives thereof and any and all related trade dress; the
Seller's proprietary computer programs or other software, including the Seller's
proprietary data bases (including environmental databases), accounting and
reporting formats, systems and procedures which are not used primarily in the
Business, the Comshare financial reporting software and database, the BaaN
operating systems and BaaN-related hardware and software and any documents or
information which are subject to the attorney-client or work product privilege;
(i) such proprietary or confidential non-technical
business information, books, files, papers, records, data and policies of the
Seller or any of its Affiliates as do not relate primarily to the Business,
including proprietary business management software not used by the Seller
primarily in connection with the Business, such as the Teledyne corporate
directories, management procedures and guidelines, proprietary data bases,
accounting and financial reporting formats, systems and procedures, instructions
and organization manuals;
(j) any claim, cause of action, suit, judgment,
demand or right of any nature against third parties to the extent relating to
any Excluded Liability or Excluded Asset and all attorney-client, work product
and other legal privileges of the Seller related thereto;
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(k) any pension assets attributable to Employees or
any former employee of the Seller under any Seller Plans; and
(l) the consideration to be paid to the Seller
pursuant to this Agreement.
2.3. Assumption of Liabilities.
(a) At the Closing the Purchaser will assume and
become responsible for, and will thereafter pay, perform and discharge when due,
the following liabilities of the Business, or arising from the use of the
Purchased Assets or the operation of the Business after the Closing Date whether
accrued, absolute, contingent or otherwise (collectively, the "ASSUMED
LIABILITIES"):
(i) all of the obligations and liabilities
reflected on the Reference Statement (excluding obligations and liabilities of
TFS (Thailand) Limited) which have not been satisfied on or prior to the Closing
Date and all of the obligations and liabilities of the Seller relating to the
Business arising in the ordinary course of business and consistent with past
practice between the date of the Reference Statement and the Closing Date.
(ii) those liabilities and obligations of the
Seller under the Contracts listed on Schedule 2.3(a)(ii) (the "ASSUMED
CONTRACTS").
(iii) those liabilities and obligations of the
Seller with respect to the Employees which the Purchaser has expressly agreed to
assume pursuant to this Agreement; and
(iv) all other debts, liabilities and
obligations arising out of or relating to events or transactions after the
Closing Date in connection with the operation of the Business or use of the
Purchased Assets by the Purchaser.
(b) The Purchaser will not assume, and will not be
deemed to have assumed, any other obligation or liability of the Seller or any
of its Affiliates whatsoever other than as set forth in Section 2.3(a)
(collectively, the "EXCLUDED LIABILITIES"), including, without limitation:
(i) any liabilities or obligations of TFS
(Thailand) Limited;
(ii) any liabilities or obligations of the
Seller under the Seller Plans, except to the extent reflected on the Closing
Statement;
(iii) any liabilities or obligations of the
Seller with respect to Taxes arising from the operation of the Business prior to
the Closing, except to the extent accrued on the Closing Statement;
(iv) any liabilities of the Seller for any
bonus, commission or other incentive compensation payable to the employees of
the Business with respect to periods prior to the Closing;
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(v) subject to Section 10.6 hereof, any
liabilities or obligations of the Seller under Environmental Laws which were
either caused by the Seller's operation of the Business prior to the Closing or
which are attributable to events which occurred or conditions which arose prior
to the Closing; and
(vi) any claims based on products liability
related to products manufactured by the Seller at any time prior to the Closing
and (i) sold by the Seller prior to the Closing or (ii) sold by the Purchaser
subsequent to the Closing to the extent (A) such claims do not arise from
product modifications by the Purchaser, (B) such products are sold by the
Purchaser for use as intended originally by Seller, and (C) such products are
sent out by the Purchaser into the stream of commerce in a commercially
reasonable manner.
2.4. Determination and Payment of Consideration. In
consideration of the sale and transfer of the Purchased Assets to the Purchaser
and the other undertakings of the Seller hereunder, the Purchaser shall (i) pay
the sum of EIGHTY-NINE MILLION SEVEN HUNDRED THOUSAND US Dollars (US$89,700,000)
(the "PURCHASE PRICE"), to the Seller at the Closing in immediately available
funds by wire transfer to a bank account or accounts specified by the Seller and
(ii) assume the Assumed Liabilities. The Purchase Price payable by the Purchaser
at the Closing will be subject to adjustment as provided in Section 2.5.
2.5. Purchase Price Adjustments.
(a) The Purchase Price will be subject to adjustment
upward or downward, as the case may be, following the Closing, in the amount of
the difference, if any, between $8,781,000 (the "REFERENCE STATEMENT NET WORKING
CAPITAL") and the Closing Statement Net Working Capital. For purposes of this
Agreement, "CLOSING STATEMENT NET WORKING CAPITAL" shall mean an amount equal to
the difference between (A) gross accounts receivable (excluding any reserve for
doubtful accounts), gross inventories (excluding intercompany profit in
inventory, any LIFO reserve and any obsolescence reserve) and prepaid expenses
and (B) accounts payable and accrued liabilities (including the net intercompany
account and excluding any accrual for employee incentive compensation, any other
Excluded Liability or vacation obligations with respect to employees of
Stromsholmen AB), in each case as reflected on the Closing Statement. In
connection with the Closing the Seller and the Purchaser shall perform a
physical count of the gross inventories of the Business as of the Closing Date
(the "CLOSING INVENTORY"). The "CLOSING STATEMENT" shall be prepared by the
Purchaser in accordance with generally accepted accounting principles applied on
a basis consistent with the Reference Statement and delivered to the Seller as
soon as practicable, but in any event not later than 30 days after the Closing
Date. There shall be no elimination of intercompany accounts for purposes of the
Closing Statement. The Purchase Price adjustment shall be made on the basis of
the Closing Statement.
(b) Either party will deliver to the other a
statement of any objections relating to the Closing Statement and the related
Purchase Price adjustment, if any, as soon as practicable, but in any event not
later than 60 days after the date of the delivery of the Closing Statement. The
Purchaser and the Seller shall cooperate and negotiate in good faith to
reconcile any disputes. In the event of any dispute or any failure to reach
agreement with respect to any objections relating to the Closing Statement and
any related Purchase Price adjustment within 45
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days after the date of delivery to the other party of any statement of
objections, the items in dispute (and no other items) will be submitted to, and
the amount of such Purchase Price adjustment will be determined by, arbitration
by Arthur Andersen LLP, certified public accountants (the "ARBITRATOR"). The
Arbitrator will deliver its written decision regarding any disputed items to
both parties within 30 days after the submission of such dispute to the
Arbitrator. The determination of the Arbitrator will be in all respects final,
binding and conclusive on the parties hereto.
(c) If the Closing Statement Net Working Capital
exceeds the Reference Statement Net Working Capital by more than $250,000, the
Purchase Price will be increased by the entire amount of such excess and the
Purchaser will pay the Seller the amount of such excess plus interest on such
excess from the Closing Date to the date of payment at a rate of interest equal
to the prime rate announced by PNC Bank as in effect on the Closing Date. If the
Closing Statement Net Working Capital is less than the Reference Statement Net
Working Capital by a deficiency of more than $250,000, the Purchase Price will
be decreased by the entire amount of such deficiency and the Seller will pay the
Purchaser the amount of such deficiency plus interest on such decrease from the
Closing Date to the date of payment at a rate of interest equal to the prime
rate announced by PNC Bank as in effect on the Closing Date.
(d) Any amounts awarded by the Arbitrator or arrived
at by the mutual agreement of the Purchaser and the Seller shall be made in one
payment and paid by the applicable party to the other within five (5) days of
such agreement or the final determination of the Arbitrator, as the case may be.
The provisions of this Section 2.5 will survive the Closing.
(e) Within 30 days after the Closing Date, the
parties shall determine the liability of Stromsholmen AB with respect to accrued
vacation for employees of Stromsholmen AB as of the Closing Date and the Seller
shall pay the Purchaser the amount of such liability. Stromsholmen AB shall
remain liable for such accrued vacation from and after the Closing.
Section 3: Closing and Closing Date.
3.1. Closing. Subject to the provisions of Section 11, the
consummation of the transactions contemplated by this Agreement (the "CLOSING")
will take place at the offices of Kirkpatrick & Lockhart LLP, 1500 Oliver
Building, Pittsburgh, PA 15234, at 10:00 a.m. local time, on August 27, 1999 or
at such other place or on such other date as the Purchaser and the Seller may
agree. The Closing will be deemed effective as of 11:59 p.m. Pittsburgh,
Pennsylvania time, on the Closing Date.
3.2. Closing Date. The date on which the Closing actually
takes place is referred to in this Agreement as the "CLOSING DATE."
3.3. Deliveries at the Closing. At the Closing, (i) the Seller
will deliver to the Purchaser the various certificates, instruments and
documents referred to in Section 9.1, (ii) the Purchaser will deliver to the
Seller the various certificates, instruments and documents referred to in
Section 9.2, (iii) the Seller will execute, acknowledge (if appropriate) and
deliver, or cause to be executed, acknowledged (if appropriate) and delivered,
to the Purchaser (1) a Bill of Sale (the
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"BILL OF SALE") in the form attached to this Agreement as Exhibit A, (2) an
Assignment Agreement for the Intellectual Property (the "ASSIGNMENT AGREEMENT")
in the form attached to this Agreement as Exhibit B, (3) the certificates
representing the Shares of Stromsholmen AB, duly endorsed to Barnes Sweden and
the share ledger of Stromsholmen AB, (4) Deed (the "DEED") for the Owned Real
Property in the form attached hereto as Exhibit C, (5) an Assignment and
Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT") in the form
attached hereto as Exhibit D, (6) resolutions of the board of directors of the
Seller authorizing the execution of this Agreement and the conveyance of the
Purchased Assets to the Purchaser, (7) the opinion of counsel to the Seller in
the form attached hereto as Exhibit E and an opinion of counsel to Stromsholmen
AB in form and substance satisfactory to the Purchaser, (8) the Transition
Services Agreement (the "TRANSITION SERVICES AGREEMENT") in the form attached
hereto as Exhibit F, (9) such other instruments of sale, transfer, conveyance,
and assignment, including any certificates of the Seller required for the
Purchaser's title insurance as the Purchaser reasonably may request in form
reasonably satisfactory to the Seller and the Purchaser or as required by
applicable Governmental Entities, (10) consents identified on Schedule 9.1 and
(11) such resignations of the officers and directors of Stromsholmen AB as the
Purchaser may request and any power of attorney reasonably required by the
Purchaser with respect to the authority of the Purchaser to act on behalf of the
board of directors of Stromsholmen AB pending registration of replacement
members of the board of directors, (iv) the Purchaser will execute, acknowledge
and deliver to the Seller (1) the Assignment and Assumption Agreement, (2)
resolutions of the board of directors of Purchaser authorizing the execution of
this Agreement and the consummation of the transactions contemplated hereby, (3)
opinions of counsel to Purchaser in the form attached hereto as Exhibit G, (4)
the Transition Services Agreement and (5) such other instruments of assumption
as the Seller reasonably may request in form reasonably satisfactory to the
Seller and the Purchaser or as required by applicable Governmental Entities, and
(v) the Purchaser will deliver to the Seller the Purchase Price as specified in
Section 2.4, subject to any adjustment following the Closing as provided in
Section 2.5, and the Purchaser's share of any recording and filing fees required
to be paid by the Purchaser pursuant to Section 12.3.
3.4. Allocation of Value. The Purchaser and the Seller hereby
agree to allocate the Purchase Price to the Purchased Assets (including the
portion of the Purchase Price allocated to the shares of Stromsholmen AB) as
follows: the Purchaser shall submit a proposed allocation plan to the Seller for
the Seller's review and consent, which consent shall not be unreasonably
withheld, delayed or conditioned. The allocation when mutually agreed upon shall
be used by the Purchaser and the Seller in preparing their respective Tax
Returns and neither the Purchaser nor the Seller shall dispute such allocation
in connection with any audit or other proceeding. If the Seller and the
Purchaser are unable to agree on an allocation within 180 days after the Closing
Date, each party will prepare its Tax Returns based on its good faith
determination of such allocation.
Section 4: Representations and Warranties of the Seller. The
Seller represents and warrants to the Purchaser, with respect to itself, the
Business and Stromsholmen AB as follows:
4.1. Organization of the Seller. Each of the Seller and
Stromsholmen AB is a corporation duly organized, validly existing and in good
standing under the laws of the
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jurisdiction of its organization and is licensed or qualified to transact
business as a foreign corporation, and is in good standing, under the laws of
all jurisdictions where the Business would require it to be so licensed or
qualified, except where the failure to be so licensed or qualified would not
have a material adverse effect on the Business.
4.2. Authorization of Transaction. The Seller has full
corporate power and authority and has taken all requisite corporate action to
enable it to execute and deliver this Agreement and each of the Ancillary
Agreements to which it is a party and to perform its obligations hereunder and
thereunder. This Agreement constitutes, and each of the Ancillary Agreements
when executed and delivered by the Seller will constitute, the valid and legally
binding obligation of the Seller enforceable against the Seller in accordance
with the respective terms and conditions thereof, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, arrangement, moratorium and
similar Laws now or hereafter in effect relating to creditors' and landlords'
rights and general principles of equity, including commercial reasonableness,
good faith and fair dealing.
4.3. Noncontravention; Consents. Neither the execution and
delivery of this Agreement or any of the Ancillary Agreements by the Seller, nor
the consummation by the Seller of the transactions contemplated hereby or
thereby, will violate any provision of the charter or bylaws of the Seller,
Stromsholmen AB or any Law to which the Seller or Stromsholmen AB is subject,
except violations of Law which would not have a material adverse effect on the
Business. Except (i) as set forth on Schedule 4.3 of the Disclosure Schedules,
and (ii) to the extent that the effect is not materially adverse to the
Business, neither the execution and delivery of this Agreement or any of the
Ancillary Agreements by the Seller, nor the consummation by the Seller of the
transactions contemplated hereby or thereby, will constitute a violation of,
constitute or create a default under or result in the creation or imposition of
any Lien upon any of the Purchased Assets pursuant to any agreement or
commitment to which any of the Seller or Stromsholmen AB is a party or by which
the Seller or Stromsholmen AB or any of the Purchased Assets is bound. As of the
Closing Date, except for any consents and notices identified on Schedule 4.3
which the Seller is unable to obtain prior to the Closing, each of the Seller
and Stromsholmen AB will have given all required notices and obtained all
material licenses, permits, consents, approvals, authorizations, and orders of
Governmental Entities as are required in order to enable the Seller to perform
its obligations under this Agreement and each of the Ancillary Agreements.
4.4. Title to Shares. The persons identified in Schedule 4.4
of the Disclosure Schedules have good and unencumbered title to all of the
issued and outstanding shares of capital stock of Stromsholmen AB to be
transferred hereby, free and clear of all Liens, in the proportion and
percentage set forth next to their respective names. At the Closing, the Seller
will cause the persons listed on Schedule 4.4 of the Disclosure Schedules to
transfer to the Purchaser or its designees good and unencumbered title to the
Shares, free and clear of all Liens. All of the issued and outstanding shares
have been duly authorized and validly issued, and are fully paid and
non-assessable. There are no subscriptions, options, warrants, calls, rights,
agreements or commitments providing for the issuance, sale, delivery or transfer
(including any right of conversion or exchange under any outstanding security or
other instrument) of any capital stock of Stromsholmen AB, other than as
contemplated by this Agreement. No past or current
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employee of Stromsholmen AB has any right or entitlement to any share of the
capital stock of Stromsholmen AB.
4.5. Financial Statements. Set forth as Schedule 4.5 of the
Disclosure Schedules are correct and complete copies of the unaudited balance
sheet of the Business as of December 31, 1996, December 31, 1997, December 31,
1998, and May 31, 1999, together with the related statements of income for the
periods then ended (the "FINANCIAL STATEMENTS"). The Financial Statements are
accurate and complete in all material respects and, except as disclosed on
Schedules 4.5 and 4.22 of the Disclosure Schedules, were prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods indicated and fairly present in all material respects the financial
condition of the Business at the dates thereof and for the respective periods
indicated. The audited annual accounts of Stromsholmen AB and its former group
companies as of December 31, 1996, December 31, 1997 and December 31, 1998 and
for the periods then ended are attached to Schedule 4.5 of the Disclosure
Schedules (the "AUDITED ANNUAL ACCOUNTS"). The Audited Annual Accounts have been
prepared in accordance with law and generally accepted accounting principles in
Sweden (Sw. god redovisningssed) applied on a consistent basis. The Audited
Annual Accounts fairly present in all material respects the financial condition
of Stromsholmen AB and its former group of companies at the dates thereof and
for the respective periods indicated.
4.6. Subsequent Events. Since December 31, 1998 except as set
forth on Schedule 4.6 of the Disclosure Schedules, there has not been any
material adverse change in the business, financial condition, operations or
results of operations, assets or liabilities of the Business. Without limiting
the generality of the foregoing, since such date and in each case in connection
with the Purchased Assets and the Assumed Liabilities, except as contemplated by
the Agreement:
(a) neither the Seller nor Stromsholmen AB has sold,
leased, transferred or assigned any portion of the assets of the Business, other
than in the ordinary course of business;
(b) neither the Seller nor Stromsholmen AB has
experienced any casualty damage, destruction or loss (whether or not covered by
insurance) to its property in excess of $25,000 affecting any of the Purchased
Assets used in the operations of the Business as presently conducted; and
(c) neither the Seller nor Stromsholmen AB has (i)
entered into any employment, deferred compensation or other similar agreement or
arrangement with any of the Employees or (ii) increased the compensation, bonus
or other benefits payable to any of the Employees, other than in the ordinary
course of business and consistent with past practice or as required by Law.
4.7. Tax Matters. There is no dispute or claim concerning any
tax liability of the Seller with respect to the Business which constitutes an
Assumed Liability or concerning any tax liability of Stromsholmen AB. Each of
the Seller and Stromsholmen AB has duly filed on a timely basis all Tax Returns
required to be filed by it and has paid all Taxes that are due and payable, and
all assessments, reassessments, governmental charges, penalties, interest and
fines
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due and payable by it for any period ending on or before the Closing Date. Each
of the Seller and Stromsholmen AB has made adequate provision for Taxes payable
in respect of the Business for the current period and any previous period for
which Tax returns are not yet required to be filed. There are no actions, suits,
proceedings, investigations or claims pending or, to the Knowledge of the
Seller, threatened against the Seller or Stromsholmen AB in respect of Taxes,
governmental charges or assessments, nor are any material matters under
discussion with any governmental authority in respect to taxes, governmental
charges or assessments asserted by any such authority. Each of the Seller and
Stromsholmen AB has withheld from each payment made to any of its past or
present employees, officers or directors, the amount of all Taxes and other
deductions required to be withheld therefrom under applicable law, and has paid
the same to the proper tax or other receiving offices within the time required
under applicable law.
4.8. Contracts.
(a) Except for the Contracts listed on Schedule 4.8
of the Disclosure Schedules and the contracts and agreements constituting
Excluded Assets, neither the Seller with respect to the Business nor
Stromsholmen AB has any liabilities or obligations under, and is not otherwise
bound by, any executory written (i) mortgage, indenture, note, installment
obligation or other instrument relating to the borrowing of money, (ii)
guarantee of any obligation, (iii) letter of credit, bond or other indemnity
(excluding endorsements of instruments for collection in the ordinary course of
the operation of the Business), (iv) agreement requiring the payment by any of
them of more than $25,000 in any 12-month period for the purchase or lease of
any machinery, equipment or other capital assets, (v) collective bargaining
agreement, employment, international sales agent, representative or consulting
agreement or agreement providing for severance payments or other additional
similar rights or benefits (whether or not optional) in the event of the sale of
any of the Business, (vi) joint venture agreement, (vii) agreement requiring the
payment by the Seller with respect to the Business or by Stromsholmen AB to any
Person of more than $25,000 in any 12-month period for the purchase of goods or
services, (viii) agreement requiring the payment to the Seller or Stromsholmen
AB by any Person of more than $25,000 in any 12-month period for the sale of
goods or services provided by the Business, or (ix) any license of the
Intellectual Property which has been granted to third parties.
(b) The Seller has delivered or made available to the
Purchaser correct and complete copies of each written agreement listed on
Schedule 4.8 of the Disclosure Schedules and, to the Knowledge of the Seller,
each such agreement is in full force and effect as of the date of this
Agreement.
(c) Each Contract listed on Schedule 4.8 of the
Disclosure Schedules is a valid, binding and enforceable obligation of the
Seller or Stromsholmen AB, as the case may be, and to the Seller's Knowledge, a
valid, binding and enforceable obligation of the other party or parties thereto
(subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar Laws affecting creditors' or landlords'
rights and remedies generally and subject as to enforceability to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing) and is in full force and effect. The Seller and
Stromsholmen AB have performed their respective obligations under the Contracts
listed on Schedule 4.8 of the Disclosure Schedules the failure to perform of
which would reasonably be
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expected to cause the other party to exercise remedies against the defaulting
party, and there exists no default or event of default under any such Contracts
nor has any event occurred which, to the Knowledge of the Seller, with notice,
passage of time or both would constitute a default under any such Contract.
(d) The Fibro Agreement is a valid, binding and
enforceable obligation of Fibro GmbH (subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws
affecting creditors' or landlords' rights and remedies generally and subject as
to enforceability to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing). The Fibro Agreement has
not expired or been terminated and is in full force and effect. To the Knowledge
of the Seller, Fibro GmbH has performed its obligations under the Fibro
Agreement the failure to perform of which would reasonably be expected to cause
the Seller to exercise remedies against the defaulting party.
4.9. Real Property. (a) Schedule 4.9(i) of the Disclosure
Schedules lists and describes in reasonable detail the Owned Real Property. With
respect to each such parcel of Owned Real Property, except as disclosed on
Schedule 4.9(i) of the Disclosure Schedules:
(i) the party identified on Schedule 4.9(i) of
the Disclosure Schedules has good and valid title to such parcel, free and clear
of any Lien (other than Permitted Liens);
(ii) neither the Seller nor Stromsholmen AB has
received written notice of any condemnation proceedings, lawsuits or
administrative actions relating to such property;
(iii) neither the Seller nor Stromsholmen AB has
received written notice that the use or occupancy of such property violates any
covenants, conditions or restrictions that encumber such property or that any
such property is subject to any restriction for which any Permits necessary to
the current use thereof have not been obtained; and
(iv) there are no leases, subleases, licenses,
concessions or other agreements granting to any Person the right of use or
occupancy of any portion of the Real Property.
(b) Schedule 4.9(ii) of the Disclosure Schedules
describes in reasonable detail the Leased Real Property. With respect to the
Leased Real Property, except as set forth on Schedule 4.9(ii) of the Disclosure
Schedules:
(i) the party identified on Schedule 4.9(ii) has
a
valid leasehold interest in the Leased Real Property, free and clear of all
Liens (other than Permitted Liens);
(ii) none of the Seller and Stromsholmen AB has
received written notice of any condemnation proceedings, lawsuits or
administrative actions relating to the Leased Property;
(iii) none of the Seller and Stromsholmen AB has
received written notice that the use or occupancy of the Leased Property
violates any covenants, conditions or restrictions that encumber such property,
or that any such property is subject to any restriction for which any Permits
necessary to the current use thereof have not been obtained; and
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(iv) there are no subleases, licenses,
concessions or other agreements granting to any Person the right of use or
occupancy of any portion of the Leased Real Property.
4.10. Title. The Seller has and will convey to the Purchaser
on the Closing Date good and marketable title to all the Purchased Assets owned
by the Seller (other than the Shares, as to which representations and warranties
are made pursuant to Section 4.4, the Owned Real Property, as to which
representations and warranties are made pursuant to Section 4.9(i), and the
Intellectual Property, as to which representations and warranties are made
pursuant to Section 4.11) free and clear of all Liens (other than Permitted
Liens).
4.11. Intellectual Property. Schedule 4.11 of the Disclosure
Schedules identifies each patent, patent application, trademark application, and
trademark registration owned by the Seller or Stromsholmen AB and the
significant unregistered trademarks and product names used by Seller or
Stromsholmen AB forming a part of the Intellectual Property. To the Seller's
Knowledge, the Seller has the right to use such registered trademarks, and such
registered trademarks and the patents are free of all Liens other than Permitted
Liens, without payment to any party. To the Seller's Knowledge, there are no
limitations on the Seller's right to use the Intellectual Property which would
reasonably be expected to have a material adverse effect on the Business.
Schedule 4.11 indicates the jurisdiction of registration of each registered
trademark and the jurisdiction of filing or grant of each patent. To the
Seller's knowledge, the Seller owns or has the right to use the items of
Intellectual Property identified on Schedule 4.11 other than patents and
trademarks. To the Seller's knowledge, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand is pending or threatened which
challenges the legality, validity, enforceability, use or ownership of the
Intellectual Property or the interest or right of the Seller or Stromsholmen AB
therein. Neither the Seller nor Stromsholmen AB has received any written notice
that it is infringing upon the intellectual property rights of others in
connection with the Seller's operation of the Business. Except as otherwise
noted on Schedule 4.11, as of the date of this Agreement, all necessary
maintenance, renewal and other fees relating to the registrations, issued
patents or applications identified on Schedule 4.11 are current, to the extent
that such fees have or had a deadline during the period from six months prior to
the date of this Agreement.
4.12. Litigation. Except as set forth on Schedule 4.12 of the
Disclosure Schedules, neither the Seller in connection with the Business nor
Stromsholmen AB is (a) subject to any unsatisfied judgment, order, decree,
stipulation, injunction or criminal charge or (b) a party to or, to the Seller's
Knowledge, threatened to be made a party to any complaint, action, suit,
criminal charge, proceeding, hearing or investigation against the Seller or
Stromsholmen AB of or in any court or quasi-judicial or administrative agency of
any Governmental Entity. There are no judicial or administrative actions,
proceedings or investigations pending or, to the Seller's Knowledge, threatened
that question the validity of this Agreement or any of the Ancillary Agreements
or any action taken or to be taken by the Seller in connection with this
Agreement or any of the Ancillary Agreements or that, if adversely determined,
would have a material adverse effect upon the Seller's ability to enter into or
perform their obligations under this Agreement or any of the Ancillary
Agreements to which it is a party.
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4.13. Employee Benefits. Schedule 4.13 of the Disclosure
Schedules sets forth and identifies a complete and correct list of all Employee
Pension Benefit Plans, Employee Welfare Benefit Plans and any other employee
benefit arrangements or payroll practices (including, without limitation,
severance pay, vacation pay, company awards, salary continuation for disability,
sick leave, deferred compensation, bonus or other incentive compensation, stock
purchase arrangements or policies) maintained by the Seller and Stromsholmen AB
or to which the Seller or Stromsholmen AB contributes or has any existing
liability, in each case with respect to any Transferred Employees (collectively,
the "SELLER PLANS"). The Seller is in compliance in all material respects with
the provisions and requirements of the Employee Retirement Income Security Act
of 1974, as amended, and the rulings issued thereunder ("ERISA"). None of the
Seller Plans is a "multiemployer plan" (as such term is defined in Section 3(37)
of ERISA) and the Seller has never contributed (nor been obligated to
contribute) to any multiemployer plan with respect to the Business. There are no
pension benefits payable by Stromsholmen AB to any former employee of
Stromsholmen AB. As of the last day of the most recent prior plan year, the
market value of the assets under each Seller Defined Benefit Plan equaled or
exceeded the present value of benefit liabilities thereunder (determined in
accordance with the actuarial valuation assumptions set forth in such Seller
Defined Benefit Plan).
4.14. Labor Relations. Except as set forth on Schedule 4.14 of
the Disclosure Schedules, there are no disputes, claims or actions pending or,
to the Seller's Knowledge, threatened between the Seller, Stromsholmen AB and
any Employee which would reasonably be expected to have a material adverse
effect on the Business or the relationship of the Employees with management of
the Business. Except as set forth on Schedule 4.14 of the Disclosure Schedules
or as required by applicable Law, neither the Seller with respect to the
Business or Stromsholmen AB is obligated by or subject to any collective
bargaining obligation (and has no obligations or liabilities with respect to any
collective bargaining agreement to which it was a party in the past), selection
of a collective bargaining representative for employees or, formal on-going
labor union organization campaign. Each of the Seller with respect to the
Business and Stromsholmen AB is in substantial compliance with all federal,
state and other applicable Laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and has not and is not
engaged in any unfair labor practices. The Seller with respect to the Business
has not experienced any labor stoppages during the past three years. Schedule
4.14 of the Disclosure Schedules lists the name and current annual compensation
for each employee engaged in the Business on a full time basis by each of the
Seller and Stromsholmen AB. The number of employees of Stromsholmen AB as of the
date of this Agreement is approximately 105 and, to the Knowledge of the Seller,
the employees of Stromsholmen AB do not have salary or pension benefits which,
in the aggregate, are materially more favorable than is customary in the
industry in Sweden. No claim for compensation except as expressly set forth
herein has been made or is expected to be made against Stromsholmen AB by any
person now or previously employed at Stromsholmen AB or by any trade union of
which such person is a member.
4.15. Environmental Matters. Except as set forth on Schedule
4.15 of the Disclosure Schedules, to the Seller's Knowledge, (a) there exists no
material fact, condition or occurrence concerning the Seller's compliance with
or remediation obligations under
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Environmental Laws relating to the Business; (b) no unresolved complaint, notice
of violation, citation, summons or order has been issued or filed alleging any
violation by the Seller of any Environmental Law that is reasonably expected to
have a material adverse effect on the operations or financial condition of the
Business; (c) the operation of the Business by the Seller is in compliance in
all material respects with applicable Environmental Laws; (d) Hazardous
Materials have not at any time been generated, used, treated, released, stored
on, or transported to or from the Real Property or the Leased Real Property by
the Seller, except in compliance in all material respects with Environmental
Laws; and (e) there are no past, pending or threatened Environmental Claims
against the Seller with respect to the Business. The Seller has not conducted
any manufacturing operations at the Leased Real Property.
4.16. Legal Compliance. Except (a) with respect to compliance
with Environmental Laws (as to which representations and warranties are made
pursuant to Section 4.15), and (b) as set forth on Schedule 4.16 of the
Disclosure Schedules, to the Seller's Knowledge, each of the Seller in
connection with the Business and Stromsholmen AB has complied with all
applicable Laws (except where the failure to comply would be "de minimus" and
not have a material adverse affect on the operations or the financial condition
of the Business). To the Knowledge of the Seller, no objections of any
Government Entity "anmarkning" have been made against Stromsholmen AB and the
Seller has no expectation that any such objections will be directed against
Stromsholmen AB after the Closing.
4.17. Permits. Each of the Seller with respect to the Business
and Stromsholmen AB holds all Permits that are required by any Government Entity
to permit the Seller and Stromsholmen AB to operate the Business and the
Purchased Assets as they are presently operated, except any such Permits, the
failure of the Seller or Stromsholmen AB to hold would not have a material
adverse effect on the Business. Each such Permit is listed on Schedule 4.17 of
the Disclosure Schedules. To the Knowledge of the Seller, there are no Permits
required with respect to the Business that have not been obtained.
4.18. Brokers' Fees. Neither the Seller nor any of its
Affiliates has any liability or obligation to pay any fees or commissions to any
broker, finder or agent with respect to the transactions contemplated by this
Agreement for which the Purchaser could become liable or obligated.
4.19 Purchased Assets. Except for the Excluded Assets, the
Purchased Assets include all of the assets owned by the Seller which are
necessary to operate the Business as operated by the Seller and Stromsholmen AB
on the date hereof. The tangible property included in the Purchased Assets are,
taken as a whole, in working order and operational condition, ordinary wear and
tear excepted.
4.20 Year 2000. To the Knowledge of the Seller, except as set
forth on Schedule 4.20 of the Disclosure Schedules, the computer systems used by
the Seller and Stromsholmen in connection with the Business will not be
adversely affected by any date or calendar related malfunction attributable to
the transition to Year 2000.
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4.21 Accounts Receivable. All accounts receivable of each of
the Seller and of Stromsholmen AB reflected on the balance sheet of the Business
dated May 31, 1999 represent, and all accounts receivable of each of the Seller
and of Stromsholmen AB reflected on the balance sheet of the Business as of the
Closing Date will represent, sales actually made in the ordinary course of the
Business.
4.22 Inventory. Except as disclosed on Schedule 4.22, the
inventory reflected on the balance sheet of the Business dated as of May 31,
1999, was, and the inventory reflected on the balance sheet of the Business as
of the Closing Date will be, valued in accordance with generally accepted
accounting principles consistently applied in accordance with previous periods.
4.23. Returns. Neither the Seller with respect to the Business
nor Stromsholmen AB has during the last three years experienced any material
warranty claims. To the Knowledge of the Seller, except (i) as set forth in the
terms of the Contracts identified on Schedules 2.3(a)(ii) and 4.8 of the
Disclosure Schedules and (ii) Stromsholmen AB's warranty to ABB as disclosed to
the Purchaser, neither the Seller with respect to the Business nor Stromsholmen
AB has provided any express written warranties to its customers. The Seller and
Stromsholmen AB accept returns for customer convenience in the ordinary course
of business and the aggregate number of returns has not been material to the
operations of the Business.
4.24. LIMITED WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS SECTION 4, THE SELLER MAKES NO REPRESENTATION OR WARRANTY
WHATSOEVER TO THE PURCHASER, EXPRESS, IMPLIED OR STATUTORY, CONCERNING THE
PURCHASED ASSETS, THE ASSUMED LIABILITIES OR THE BUSINESS. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, THE SELLER MAKES NO REPRESENTATION OR WARRANTY AS
TO FUTURE PROFITABILITY OF CONTRACTS OR COMMITMENTS, OR ANY PROJECTED FINANCIAL
STATEMENTS OR OTHER PROJECTED FINANCIAL INFORMATION, PROSPECTS OR FUTURE RESULTS
OF OPERATIONS OF THE BUSINESS. ANY WARRANTIES OTHER THAN THOSE EXPRESSLY
PROVIDED FOR IN THIS SECTION 4, WHETHER EXPRESS, IMPLIED OR STATUTORY, WRITTEN
OR ORAL, ARE HEREBY EXPRESSLY DISCLAIMED. THE PURCHASER ACKNOWLEDGES THAT IT HAS
HAD AN OPPORTUNITY TO INSPECT THE PURCHASED ASSETS.
Section 5: Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Seller as follows:
5.1. Organization of the Purchaser. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization and is licensed or qualified to transact
business as a foreign corporation, and is in good standing, under the laws of
all jurisdictions where its business would require it to be so licensed or
qualified except where the failure to be so licensed or qualified would not have
a material adverse effect on the Purchaser.
5.2. Authorization of Transaction. The Purchaser has full
corporate power and authority and has taken all action to enable it to execute
and deliver this Agreement and each of
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the Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder. This Agreement constitutes, and each of the Ancillary
Agreements when executed and delivered by the Purchaser will constitute, the
valid and legally binding obligation of the Purchaser enforceable against the
Purchaser in accordance with their respective terms and conditions, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, arrangement,
moratorium and similar Laws now or hereafter in effect relating to creditors'
and landlords' rights and general principles of equity, including commercial
reasonableness, good faith and fair dealing .
5.3. Noncontravention; Consents. Neither the execution and the
delivery of this Agreement or any of the Ancillary Agreements by the Purchaser,
nor the consummation by the Purchaser of the transactions contemplated hereby or
thereby, will violate any provision of the charter or bylaws of the Purchaser or
any Law to which the Purchaser is subject. As of the Closing Date, neither the
execution and delivery of this Agreement or any of the Ancillary Agreements by
the Purchaser, nor the consummation by the Purchaser of the transactions
contemplated hereby or thereby, will constitute a violation of or constitute or
create a default under, any agreement or commitment to which the Purchaser is a
party or by which the Purchaser or any of its properties are bound or to which
the Purchaser of any of such properties are subject. Except to the extent
contemplated by Section 7.2, as of the Closing Date, the Purchaser will have
given all required notices and shall have obtained, if required, in addition to
those licenses, Permits, consents, approvals, authorizations, certificates, and
orders of Governmental Entities which are to be assigned by the Seller to the
Purchaser pursuant to this Agreement, such licenses, Permits, consents,
approvals, authorizations, certificates, and orders of Governmental Entities
which are required in order to operate the Business or are required in order to
enable the Purchaser to perform its obligations under this Agreement and each of
the Ancillary Agreements.
5.4. Litigation. There are no judicial or administrative
actions, proceedings or investigations pending or, to the Purchaser's knowledge,
threatened that question the validity of this Agreement or any of the Ancillary
Agreements or any action taken or to be taken by the Purchaser in connection
with this Agreement or any of the Ancillary Agreements or that, if adversely
determined, would have a material adverse effect upon the Purchaser's ability to
enter into or perform its obligations under this Agreement or any of the
Ancillary Agreements to which it is a party.
5.5. Brokers' Fees. The Purchaser has no liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which the Seller
could become liable or obligated.
5.6. Financing. The Purchaser has cash resources or available
financing sufficient to consummate the transactions contemplated by this
Agreement.
5.7. Investment Intent. The Purchaser is or shall be acquiring
the Shares for its own account for investment purposes only and not with a view
to the distribution thereof, within the meaning of the Securities Act.
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5.8 Financial Statements. If, in the course of undertaking its
due diligence, Purchaser knew of any inaccuracy in the representation and
warranties of the Seller set forth in Section 4.5 the Purchaser has informed the
Seller of that inaccuracy.
Section 6: Pre-Closing Covenants. Between the date hereof and
the Closing:
6.1. General. Each of the parties will use all commercially
reasonable efforts to take all actions and to do all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement (including satisfying the conditions set forth in Section 9). The
Seller will take or refrain from taking such action as required in Sections 6.2
through 6.7 and will cause Stromsholmen AB to either take or refrain from taking
such actions in the conduct of the Business as is required of the Seller
pursuant to such Sections.
6.2. Notices and Consents. The Seller will prior to the
Closing Date give all notices to third parties and will use reasonable efforts
at its expense to obtain all third party approvals, consents, novations and
waivers that are required to be obtained by the Seller in connection with the
transactions contemplated by this Agreement; provided that the Seller will not
be obligated hereunder to pay any material consideration to the third party from
whom such approval, consent, novation or waiver is requested. At least seven
days prior to the Closing Date, the Seller shall notify the Purchaser of any
such consents which have not been received by the Seller. The Purchaser hereby
agrees to cooperate with the Seller in the Seller's efforts to obtain such third
party consents and where necessary will give or procure the giving of security
to a contracting third party in order to obtain such approval, consent, novation
or waiver. On or before July 28, 1999, the Seller and the Purchaser will have
filed a Notification and Report Form and related material with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the Hart-Scott-Rodino Act and a notification with the Swedish Competition
Authority, in each case, to the extent applicable, and will use their best
efforts to obtain early termination of the applicable waiting period or
otherwise obtain clearance to consummate the transactions contemplated by this
Agreement and will make all further filings pursuant thereto that may be
necessary, proper or advisable.
6.3. Carry on in Regular Course. The Seller will carry on the
operations of the Business substantially in the same manner as heretofore
conducted. Without the prior written consent of the Purchaser, in each case, the
Seller will not make, enter into or incur with respect to the Business (i) any
capital expenditures other than capital expenditures in the ordinary course of
business consistent with historic practices in an amount not to exceed $5,000 or
(ii) any contract of the kind and monetary value described in Section 4.8, other
than such contracts in the ordinary course of business consistent with historic
practices, nor institute any material change in the methods of manufacture,
management, accounting or operation of the Business.
6.4. Contracts and Commitments. The Seller in connection with
the Business will not enter into any material contract or commitment or engage
in any transaction, including any contract, commitment or engagement with any
other division, unit or Affiliate of the Seller, or effect any change to any
program, not in the usual and ordinary course of business and consistent with
the past operation of the Business.
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6.5. Sale of Capital Assets. Other than pursuant to this
Agreement and the sale or disposition of excess or obsolete equipment in the
usual and ordinary course of business consistent with the past operation of the
Business, the Seller will not sell or otherwise dispose of any capital asset
relating to the Business.
6.6. Access. The Seller will permit representatives of the
Purchaser to have access at reasonable times to the Purchased Assets. The
Purchaser agrees that it will use all reasonable efforts to schedule its review
of such items at such times which are not disruptive to the operations of the
Business. Prior to the Closing Date, the Purchaser will be permitted to
complete, at the sole cost and expense of the Purchaser, a Phase I environmental
study of the Owned Real Property; provided, however, that no such Phase I or
other environmental review by the Purchaser will involve sampling, Phase II
testing or invasive investigatory work without prior written consent of the
Seller. The Purchaser will deliver to the Seller a copy of any Phase I or other
third party report generated by any permitted environmental investigation. The
Purchaser will treat any environmental review of the Owned Real Property as
confidential information.
6.7. Notice of Developments; Disclosure Schedules; Updating
Disclosure Schedules.
(a) Each party will give prompt written notice to the
other of any development affecting the ability or obligation of the parties to
consummate the transactions contemplated by this Agreement or any of the
Ancillary Agreements. Except as provided in Section 6.7(c), no such written
notice of a development will be deemed to have amended the Disclosure Schedules,
to have qualified the representations and warranties contained herein or to have
cured any misrepresentation or breach of warranty that otherwise might have
existed hereunder by reason of such material development.
(b) Complete copies of the Disclosure Schedules
referred to herein are being delivered simultaneously with the execution of this
Agreement.
(c) The Seller will deliver to the Purchaser prior to
the Closing Date a written update or supplement to the Disclosure Schedules
reflecting events occurring and contracts and agreements from the date of this
Agreement through the Closing Date. To the extent that such updated or
supplemental Disclosure Schedules reflect matters or events (i) which
constitute, and which are identified specifically as, Excluded Assets or
Excluded Liabilities or (ii) which have occurred after the date of this
Agreement in the ordinary course of business of the Business, which do not
constitute a violation of any of Seller's covenants set forth in Section 6 and
which do not in the reasonable judgment of the Purchaser, represent a material
adverse change in the business, financial condition, operations or results of
operations of the Business, then the Disclosure Schedules shall be deemed to be
amended as of the Closing Date to include the information set forth on such
updated or supplemental Disclosure Schedules. To the extent that such updated or
supplemental Disclosure Schedules reflect matters or events which have occurred
after the date of this Agreement and which in the reasonable judgment of
Purchaser, represent a material adverse change in the business, financial
condition, operations or results of operations of the Business, then (i) the
parties will negotiate in good faith during the seven-day period immediately
after delivery of the updated or supplemental Disclosure Schedules to
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determine the consequences of such disclosures, (ii) the Disclosure Schedules
will be amended only to the extent that the parties mutually agree as a result
of such negotiation and (iii) the Purchaser may elect to terminate this
Agreement after the expiration of such seven-day period, in which event the
Seller and the Purchaser will have no liability to the other as a result of such
termination.
(d) Prior to the Closing, the Purchaser will be
permitted to complete, at the sole cost and expense of the Purchaser, a
survey(s) of the Owned Real Property. In the event that any such survey reveals
any material title defect with respect to the Owned Real Property, the Seller
shall have a reasonable opportunity prior to Closing to cure such material
defect and if the Seller is unable to cure such defect, the Purchaser may elect
to terminate this Agreement in which event the Seller and the Purchaser will
have no liability to the other as a result of such termination.
Section 7: Post-Closing Covenants. The parties agree as
follows with respect to the period following the Closing Date:
7.1. General. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
party reasonably may request, at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
Section 10 of this Agreement). The Seller will cooperate with the Purchaser and
make all commercially reasonable efforts to effectuate the transition of the
Seller's operating systems and enterprise management systems to those employed
by the Purchaser.
7.2. Post-Closing Consents; Nonassignable Contracts.
(a) The Seller will use reasonable efforts after the
Closing Date to obtain all third party approvals, consents, novations and
waivers that are not obtained prior to the Closing Date and that are required in
connection with the transactions contemplated by this Agreement; provided that
the Seller will not be obligated hereunder to pay any material consideration to
the third party from whom such approval, consent, novation or waiver is
required. The Purchaser hereby agrees to cooperate with the Seller in its
efforts to obtain such third party approvals, consents, novations and waivers
and where necessary will give or procure the giving of security to obtain such
third party approval, consent, novation or waiver.
(b) To the extent that any Contract is not capable of
being transferred by the Seller to the Purchaser pursuant to this Agreement
without the consent of a third party and such consent is not obtained prior to
Closing, or if such transfer or attempted transfer would constitute a breach or
a violation of any Law, nothing in this Agreement will constitute a transfer or
an attempted transfer thereof.
(c) In the event that any required consent is not
obtained on or prior to the Closing Date, the Seller will, subject to Section
7.2(b), use its reasonable efforts to (i) provide to the Purchaser the benefits
of the applicable Contract, (ii) cooperate in any reasonable and lawful
arrangement designed to provide such benefits to the Purchaser, and (iii)
enforce at the request
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and expense of the Purchaser and for the account of the Purchaser, any rights of
the Seller arising from any such Contract (including the right to elect to
terminate such Contract in accordance with the terms thereof upon the request of
the Purchaser).
(d) The Purchaser will perform the obligations
arising under all Contracts referred to in Section 7.2(b) for the benefit of the
Seller and the other party or parties thereto.
(e) After the Closing, the Seller, at the reasonable
request of the Purchaser, shall promptly execute and deliver to the Purchaser
all such further assignments, bills of sale, endorsements and other documents in
form and substance satisfactory to the Purchaser and its counsel as the
Purchaser may reasonably request in order to (i) vest in the Purchaser title to
and possession of the Purchased Assets and (ii) otherwise carry out or evidence
the terms of this Agreement.
7.3. Litigation Support; Tax Return Preparation; Records
Retention; Transitional Services.
(a) In the event and for so long as any party is
actively investigating, contesting, defending against or prosecuting any charge,
complaint, action, suit, proceeding, hearing, investigation, claim, demand or
audit (including routine audits and contract close-outs) in connection with (i)
any transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
involving the Business, the parties will cooperate with each other and with
legal counsel in the contest or defense, make available its personnel and
provide such testimony and access to its books and records as may be reasonably
necessary in connection with the contest or defense. The consent of the
Purchaser shall be required to any settlement if such settlement could
reasonably be expected to have a material adverse effect on the Business and
such consent shall not be unreasonably withheld, delayed or conditioned.
(b) The Seller shall prepare and file any Subsidiary
Tax Returns which relate to tax periods ending on or before the Closing Date and
the Seller shall pay all Taxes shown as due on such Subsidiary Tax Returns. The
Purchaser shall remit, within 15 days of receipt, to the Seller an amount equal
to any refund, offset, or credit (including any interest paid or credited with
respect thereto) received by the Purchaser and Stromsholmen AB, or any successor
thereof of Taxes relating to tax periods ending on or before the Closing Date.
The Purchaser shall prepare and file or cause to be prepared and filed any
Subsidiary Tax Returns required to be filed after the Closing Date, other than
Subsidiary Tax Returns which relate to tax periods ending on or before the
Closing Date, and the Purchaser shall pay or cause to be paid all Taxes shown as
due on any such Subsidiary Tax Returns. Such Subsidiary Tax Returns shall be
prepared on a basis consistent with those prepared for prior tax years unless a
different treatment is required by an intervening change in law. The Seller
shall have the right to exercise control over the contest and/or settlement, in
any official inquiry, examination, or proceeding of any issue with respect to
Subsidiary Tax Returns which relate to tax periods ending on or before the
Closing Date. The Purchaser shall promptly notify the Seller in writing of the
commencement of any tax audit or administrative or judicial proceeding related
to tax periods ending on or prior to the Closing Date.
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The Purchaser shall have the right to exercise control over the contest and/or
settlement in any official inquiry, examination, or proceeding, of any issue
with respect to Subsidiary Tax Returns required to be filed after the Closing
Date, other than Subsidiary Tax Returns which relate to tax periods ending on or
before the Closing Date.
(c) The Seller and the Purchaser will each provide
the other party with such assistance as may reasonably be requested in
connection with the preparation of any Tax Return, audit or other examination by
any taxing authority or judicial or administrative proceeding relating to
liability for Taxes and will provide to the other party all records and other
information which may be relevant to any such Tax Return, audit or examination,
proceeding or determination and with any final determination of any such audit
or examination, proceeding or determination that affects any amount required to
be shown on any Tax Return of the other party for any period.
(d) The Purchaser will cause appropriate Employees of
the Purchaser to prepare usual and customary tax return packages with respect to
the tax periods beginning January 1, 1999 and ending as of the Closing Date.
Such tax return packages will be delivered to the Seller not later than ninety
days following the Closing Date.
(e) The Purchaser will provide reasonable assistance
to the Seller in connection with any Tax audits or other administrative or
judicial proceedings involving the Business and affecting such income Tax
Returns or declarations for any period all or any portion of which is prior to
the Closing Date, including the participation of the then current personnel of
the Purchaser in such audits and proceedings. The Purchaser will not, without
the prior written consent of the Seller, or except as required by Law, initiate
any contract or voluntarily enter into any agreements with, or volunteer any
information to, any taxing authorities with regard to specific items on such Tax
Returns or declarations.
(f) The Purchaser will maintain all original books,
records, files, documents, papers and agreements pertaining to the Purchased
Assets, the Assumed Liabilities or otherwise relating to the Business as
conducted before the Closing Date for at least seven years following the Closing
Date or such longer period as may be required by Law. The Seller agrees that it
will maintain all original books, records, files, documents, papers and
agreements relating to any of the Purchased Assets or Assumed Liabilities which
are not included in the Purchased Assets for at least seven years following the
Closing Date or such longer period as may be required by Law. The Seller and the
Purchaser agree that before destroying or discarding any materials required to
be retained pursuant to this Section 7.3(f), it will notify the other in writing
(which notice will include a description of the materials to be destroyed or
discarded) and such other party may, at its expense, remove or make copies of
such materials within 90 days following the date of such written notice. In the
event the other party has not removed such materials within such 90-day period,
the party desiring to destroy or discard such materials may proceed with such
action without any liability to the other.
(g) The Seller hereby covenants and agrees to pay,
perform and discharge the Excluded Liabilities. After the Closing Date the
Purchaser will provide services, assistance and reasonable cooperation to the
Seller in connection with:
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(i) the completion and delivery of the financial
statements and the general ledger of the Business as of the Closing Date to the
Seller, including such information for the preparation of quarterly, semi-annual
and annual reports required to be prepared by the Seller (either by Law or in
accordance with the Seller's internal reporting systems and procedures) in
connection with the operation of the Business prior to the Closing Date and with
the transactions provided for herein;
(ii) the Seller's administration of the Excluded
Liabilities; and
(iii) such other services as the Seller may
reasonably request incidental to the orderly transfer of the Business and the
Purchased Assets to the Purchaser.
7.4. Signage and Labels. The Purchaser will remove the
Seller's names from all exterior signs located at the Owned Real Property and
the Leased Real Property as soon as practicable but in any event within two
months after the Closing Date. The Purchaser may use the Seller's name on
finished goods inventory which constitutes part of the Purchased Assets but will
change or otherwise replace the stamps and dies bearing the Seller's name as
soon as reasonably practicable after the Closing Date, but in any event within
six months of the Closing Date. As soon as practicable and in any event within
two months after the Closing Date, the Purchaser shall discontinue public use of
any business records described in Section 2.1(h) without first removing
therefrom, or obliterating all portrayals or references to, any of the Seller's
trade names, trademarks or service marks or other intangible property contained
in such records, unless the Seller consents in writing to such usage.
7.5 Non-Competition and Non-Disclosure. The Seller
acknowledges that a material consideration of the acquisition by the Purchaser
of the Purchased Assets is the covenant of the Seller that it will not engage in
any business, conduct or act which is competitive with the Business.
Accordingly, the Seller covenants and agrees with the Purchaser as follows:
(a) neither the Seller nor any of its Affiliates
shall, for a period of five years from the Closing Date, directly or indirectly,
(i) engage in any business which is competitive or in competition with the
Business, or (ii) knowingly request, induce or attempt to influence any
customer, client or supplier of or to the Business to curtail or cancel any
business with the Purchaser in connection with the Business, or (iii) solicit
any Employee of the Business to leave employment with the Purchaser or
Stromsholmen AB; provided however, that nothing contained in this Section 7.5
shall prevent the Seller or any of its Affiliates from A) acquiring or holding
an interest of less than 10% of the outstanding equity securities of any
competing business whose equity securities are publicly traded, B) making or
thereafter maintaining an investment in any competing business if the assets
used by such competing business in the activity competitive with the Business
constitute less than 20% in value of the assets of such competing business, or
C) making an acquisition of assets (and following such acquisition carrying on
the business and activities with the assets acquired, for purposes herein, such
activities constituting a competing business) if the portion of assets used in
carrying on the activity competitive with the business constitutes less than 20%
in value of the assets acquired and the Seller shall use commercially
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reasonable efforts to divest such competing business within a reasonable time
after such acquisition of assets;
(b) any breach of this Section 7.5 cannot be remedied
solely by the recovery of damages and that the Purchaser, in addition to any
other remedy available to it, shall be entitled to an injunction against such
breach. If any court of competent jurisdiction finds any provision of this
Section 7.5 to be unenforceable for the reason that it is unreasonable in scope,
area or duration, the parties hereto agree to amend such provision nunc pro tunc
to reduce the scope, area or duration to a level which the court finds to be
reasonable, and such provision shall be enforceable in said amended area and/or
for said amended duration; and
(c) except as may be required by law, the Seller
shall not, without the prior written consent of the Purchaser, use, directly or
indirectly, for its own account or for the account of any Person, or disclose to
any Person, any data, written material, records or other documents relating to
the Business which are of a confidential nature, including, without limitation,
any confidential information concerning the business or affairs of any customer,
client, supplier or Employee of the Business.
Section 8: Employee Benefits.
(a) On or prior to the Closing Date, the Purchaser
shall offer employment, effective as of the Closing Date and conditional on the
Closing, to those Employees who are identified by the Purchaser within three
weeks of the date of this Agreement on terms and conditions which are in the
aggregate no less favorable than the terms and conditions on which the Employees
are employed immediately prior to the Closing Date; provided that the number of
Employees of the Seller's Brecksville, Ohio facility identified on Schedule 4.14
of the Disclosure Schedules to which Purchaser will not extend employment offers
will not exceed twenty (20). Such offer shall include wages and benefits
substantially comparable, in the aggregate, to the wages and benefits provided
by the Seller to the Employees immediately prior to the Closing Date. Purchaser
acknowledges and agrees that the Seller makes no representation or warranty that
any of the Employees will accept employment with Purchaser and the acceptance by
Employees of offers of employment with Purchaser shall not constitute a
condition to Purchaser's obligation to complete the purchase under this
Agreement. If an Employee does not accept an offer of employment by the
Purchaser on the terms set forth herein and such Employee makes a claim for
severance payment or other compensation, it shall be the Seller's responsibility
to handle such claim, at the Seller's expense, including any legal proceedings
resulting therefrom, and to make any payment in consequence thereof.
(b) Any Employees who accept offers of employment by
Purchaser (the "TRANSFERRED EMPLOYEES"), effective as of the Closing Date, shall
cease to participate in all Seller Plans and shall be entitled to participate in
Purchaser's benefit plans, programs, policies and arrangements in accordance
with such offers (the "PURCHASER PLANS"). Periods of employment with the Seller
(including periods of employment with any other employer, to the extent
recognized under the Seller Plans) immediately prior to the Closing Date, shall
be taken into account for purposes of determining, as applicable, eligibility
and vesting under the Purchaser
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Plans. Without limiting the generality of the foregoing, Purchaser shall,
subject to the terms and conditions of its plans, cause Purchaser's medical and
prescription drug, dental, life insurance, disability and other health plans to
immediately, and without any waiting period, be available to cover each
Transferred Employee (and his or her eligible dependents) as of the Closing
Date, and cause such plans to waive any limitation of coverage of Transferred
Employees (and their eligible dependents) due to pre-existing conditions. Any
claims incurred with regard to any Transferred Employees through the Closing
Date and which are covered under the Seller Plans shall be payable under the
terms of the applicable plan of the Seller. All other claims incurred with
regard to any Transferred Employees and which are covered under the Purchaser's
Plans shall be payable under the terms of the applicable plan of the Purchaser.
(c) For purposes of the COBRA health continuation of
coverage provisions (hereafter referred to as the "COBRA PROVISIONS") contained
in Section 4980 (f) of the Code and in Section 601 through 608 of ERISA, the
Transferred Employees shall be considered to have undergone a termination of
employment with the Seller. It is the understanding and intention of the Seller
and the Purchaser that no group health plan maintained by the Purchaser shall
constitute a successor plan to any of the Seller's group health plans and the
Purchaser is not a successor employer with respect to any of the Seller's group
health plans and the Seller is not a predecessor employer with respect to the
Purchaser's group health plans, within the meaning of the COBRA Provisions. It
is the further understanding and intention of the Seller and the Purchaser,
however, that the health plan coverage to be afforded to the Transferred
Employees pursuant to Section 8(b)(i) shall be coverage that, pursuant to
Section 602(2)(D)(i) of ERISA, terminates any continuation coverage rights the
transferred Employees might otherwise have under the COBRA Provisions as a
result of termination of employment with the Seller.
Section 9: Closing Conditions.
9.1. Conditions to Obligation of the Purchaser. The obligation
of the Purchaser to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(a) the representations and warranties set forth in
Section 4 will be true and correct in all material respects (except to the
extent that any such representation or warranty is qualified by materiality in
Section 4) at and as of the Closing Date:
(b) the Seller will have performed and complied with
all of its covenants hereunder in all material respects (except to the extent
any such covenant is qualified by materiality) through the Closing;
(c) there will not be any action, suit or proceeding
pending or threatened before any Governmental Entity or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling or charge
would (i) prevent consummation of any of the transactions contemplated by this
Agreement or any Ancillary Agreement, or (ii) cause any of the transactions
contemplated by this Agreement or Ancillary Agreement to be rescinded following
consummation;
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(d) all applicable waiting periods (and any extension
thereof) under the Hart-Scott-Rodino Act and the Swedish Competition Act, in
each case, to the extent applicable, will have expired or otherwise been
terminated without the objection of any relevant Governmental Authority;
(e) the Seller will have delivered to the Purchaser a
certificate to the effect that each of the conditions specified above is
satisfied in all respects;
(f) the consents, approvals and authorizations
identified on Schedule 4.3 shall have been obtained by the Seller; and
(g) the Seller will have executed and delivered to
the Purchaser the documents identified in Section 3.3; and
(h) the Seller and/or its successor will have
executed and delivered to the Purchaser the Transition Services Agreement
(including the related side letter by and between the Purchaser and the Seller).
The Purchaser may waive any condition specified in this
Section 9.1, other than Section 9.1(d), if it executes a writing so stating at
or prior to the Closing.
9.2. Conditions to Obligation of the Seller. The obligation of
the Seller to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in
Section 5 will be true and correct in all material respects (except to the
extent any such representation or warranty is qualified by materiality in
Section 5)at and as of the Closing Date;
(b) the Purchaser will have performed and complied
with all of its covenants hereunder in all material respects (except to the
extent that any such covenant is qualified by materiality) through the Closing;
(c) there will not be any action, suit or proceeding
pending or threatened before any Governmental Entity or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling or charge
would (i) prevent the consummation of any of the transactions contemplated by
this Agreement or any Ancillary Agreement or (ii) cause any of the transactions
contemplated by this Agreement or any Ancillary Agreement to be rescinded
following consummation;
(d) the Purchaser will have delivered to the Seller a
certificate to the effect that each of the conditions specified above is
satisfied in all respects;
(e) all applicable waiting periods (and any
extensions thereof) under the Hart-Scott-Rodino Act and the Swedish Competition
Act, in each case, to the extent applicable, will have expired or otherwise been
terminated without the objection of any relevant Governmental Authority;
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(f) the Purchaser will have executed and delivered to
the Seller the documents identified in Section 3.3;
(g) all consents, approvals and authorizations
identified on Schedule 4.3 shall have been obtained by the Seller;
(h) the Purchaser will have delivered to the Seller
the Purchase Price; and
(i) the Purchaser will have executed and delivered to
the Seller and/or its successor the Transition Services Agreement (including the
related side letter by and between the Purchaser and the Seller).
The Seller may waive any conditions specified in this Section
9.2, other than Section 9.2(e), if it executes a writing so stating at or prior
to the Closing.
Section 10: Remedies for Breaches of this Agreement.
10.1. Survival. Except as otherwise provided herein, all of
the representations and warranties contained in this Agreement or in any
certificate delivered pursuant to this Agreement relating to the representations
and warranties contained in this Agreement will survive the Closing and continue
in full force and effect for a period of thirty (30) months after the Closing
Date, except that the representations and warranties of the Seller contained in
Sections 4.1, 4.2, 4.4, and 4.10 shall survive without time limit.
10.2. Indemnification Provisions for Benefit of the Purchaser.
(a) In the event the Seller breaches any of its
representations, warranties or covenants contained in this Agreement and
provided that the Purchaser within the applicable survival period makes a
written claim for indemnification against the Seller setting forth in reasonable
detail the circumstances regarding the claim and, if ascertainable, an estimate
of the amount thereof, then the Seller agrees to indemnify, defend and hold the
Purchaser harmless from and against the entirety of any losses, expenses, costs,
damages, fines, penalties and other liabilities (collectively, "LOSSES") the
Purchaser or any of its Affiliates, or any of their respective directors,
officers, employees, agents or representatives (collectively, the "PURCHASER
INDEMNIFIED PARTIES"), suffer to the extent such Losses result from, arise out
of or are caused by such breach.
(b) The Seller further agrees to indemnify, defend
and hold the Purchaser Indemnified Parties harmless from and against any Losses
the Purchaser Indemnified Parties suffer to the extent such Losses result from,
arise out of, or are caused by any Excluded Liability or any Excluded Assets
(which, in the context of Losses arising under Environmental Law shall include,
subject to Section 10.6, the necessary and reasonable costs of remediation and
compliance under any Environmental Law or in connection with any Hazardous
Materials).
(c) The Seller will not have any obligation to
indemnify the Purchaser Indemnified Parties from and against any Losses (i)
until the Purchaser Indemnified Parties have suffered Losses by reason of all
such breaches which exceed, in the aggregate, $500,000, after
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which point the Seller will be obligated to indemnify the Purchaser from and
against only those additional Losses suffered by the Purchaser Indemnified
Parties in excess of such amount; provided, however, that with respect to Losses
which result from, arise out of, or are caused by any Excluded Liability, the
Seller will be obligated to indemnify the Purchaser for such Losses in excess of
$200,000, or (ii) to the extent the Losses the Purchaser Indemnified Parties
have suffered exceed, in the aggregate, an amount equal to 20% of the Purchase
Price after which point the Seller will have no obligation to indemnify the
Purchaser Indemnified Parties from and against further Losses in excess of such
amount. The limitations contained in this Section 10.2(c) shall not limit the
Seller's obligation to indemnify Purchaser Indemnified Parties with respect to
Losses attributable to the Seller's breach of Sections 4.1, 4.2, 4.4 and 4.10,
Environmental Losses attributable to Stromsholmen AB's prior ownership of the
foundry, the septic system formerly at the Seller's Brecksville, Ohio facility.
(d) Notwithstanding anything to the contrary
contained in this Agreement, the Seller's obligation to indemnify Purchaser
Indemnified Parties with respect to Losses, other than Environmental Losses and
Losses attributable to Seller's breach of Sections 2.3(b)(ii), 2.3(b)(iii) and
2.3(b)(v) shall automatically terminate on the third anniversary of the Closing
Date except to the extent of and with respect to claims for indemnification
properly made in accordance with this Section 10 prior to such third
anniversary, and the Seller's obligation to indemnify Purchaser Indemnified
Parties with respect to Environmental Losses and Losses attributable to Seller's
breach of Sections 2.3(b)(ii), 2.3(b)(iii) and 2.3(b)(v) shall automatically
terminate on the seventh anniversary of the Closing Date except to the extent of
and with respect to claims for indemnification properly made in accordance with
this Section 10 prior to such seventh anniversary. The limitations contained in
this Section 10.2(d) shall not limit the Seller's obligation to indemnify
Purchaser Indemnified Parties with respect to Losses attributable to the
Seller's breach of Sections 4.1, 4.2, 4.4 and 4.10 or Environmental Losses
attributable to Stromsholmen AB's prior ownership of the foundry or the septic
system formerly at the Seller's Brecksville, Ohio facility.
10.3. Indemnification Provisions for Benefit of the Seller.
(a) In the event the Purchaser breaches any of its
representations, warranties or covenants contained in this Agreement or in any
certificate delivered by the Purchaser pursuant to this Agreement and provided
that the Seller makes a written claim for indemnification against the Purchaser
setting forth in reasonable detail the circumstances regarding the claim and, if
ascertainable, an estimate of the amount thereof, then the Purchaser agrees to
indemnify, defend and hold the Seller harmless from and against the entirety of
any Losses the Seller or any of its Affiliates, or any of their respective
directors, officers, employees, agents or representatives (collectively, the
"SELLER INDEMNIFIED PARTIES"), suffer to the extent such Losses result from,
arise out of or are caused by such breach.
(b) The Purchaser further agrees to indemnify, defend
and hold the Seller harmless from and against the entirety of any Losses the
Seller Indemnified Parties suffer to the extent such Losses result from, arise
out of or are caused by any Assumed Liabilities or the Purchased Assets.
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(c) The Purchaser further agrees to indemnify, defend
and hold the Seller harmless from and against the entirety of any Losses the
Seller Indemnified Parties suffer to the extent such Losses result from, arise
out of or are caused by the operation of the Business or use of the Purchased
Assets or any Assumed Liabilities after the Closing Date.
10.4. Matters Involving Third Parties. If any third party
notifies any party hereto (the "INDEMNIFIED PARTY") with respect to any matter
which may give rise to a claim for indemnification against the other party
hereto (the "INDEMNIFYING PARTY") under this Section 10, then the Indemnified
Party will notify the Indemnifying Party thereof promptly and in any event
within 10 days after receiving any written notice from a third party; provided
that no delay on the part of the Indemnified Party in notifying the Indemnifying
Party will relieve the Indemnifying Party from any obligation hereunder unless,
and then solely to the extent that, the Indemnifying Party is prejudiced
thereby. Once the Indemnified Party has given notice of the matter to the
Indemnifying Party, the Indemnified Party may defend against the matter in any
manner it reasonably may deem appropriate. In the event the Indemnifying Party
notifies the Indemnified Party within 10 days after the date the Indemnified
Party has given notice of the matter that the Indemnifying Party is assuming the
defense of such matter (a) the Indemnifying Party will defend the Indemnified
Party against the matter with counsel of its choice reasonably satisfactory to
the Indemnified Party, (b) the Indemnified Party may retain separate counsel at
its sole cost and expense (except that the Indemnifying Party will be
responsible for the fees and expenses of such separate co-counsel to the extent
the Indemnified Party reasonably concludes in good faith that the Indemnified
Party has defenses available to it that may conflict with those of the
Indemnifying Party), (c) the Indemnified Party will not consent to the entry of
a judgment or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party (not to be withheld or delayed
unreasonably) and (d) the Indemnifying Party will not consent to the entry of a
judgment with respect to the matter or enter into any settlement which does not
include a provision whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all liability with respect thereto, without the written
consent of the Indemnified Party (not to be withheld or delayed unreasonably).
10.5. Indemnification Limitations. Neither party hereto will
be liable to the other hereunder for any punitive, consequential or incidental
damages (including loss of revenue or income, business interruption, cost of
capital or loss of business reputation or opportunity) relating to any claim for
which either such party may be entitled to recover under this Agreement (other
than indemnification of amounts paid or payable to third parties in respect of
any third party claim for which indemnification hereunder is required). Neither
the Purchaser nor the Seller will file or otherwise commence any other action,
suit or proceeding against the other in respect of this Agreement or the
transactions contemplated hereby unless (a) such party notifies the other of its
intent to do so and (b) a period commencing with such notice and expiring on the
earlier of the date on which a meeting between officers of the Purchaser and the
Seller has been completed without a mutually satisfactory resolution and 30 days
after the date of such notice. Such officers will meet at a mutually convenient
time and location during such 30-day period for the purpose of attempting to
resolve in good faith the claims described in such notice.
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10.6. Indemnification for Environmental Matters.
(a) With respect to any Losses relating to or arising
from any Environmental Law for which the Purchaser seeks indemnity in connection
with the operation of the Business ("ENVIRONMENTAL LOSSES"), the Purchaser shall
provide notice to the Seller pursuant to Section 12.8 hereof specifying in
reasonable detail, to the extent known, the nature of the Environmental Losses
and the estimated amount to remediate the condition giving rise to the
Environmental Losses, to the extent it is then quantifiable (which estimate
shall not be conclusive of the final amount of any Environmental Losses).
(b) The Seller shall have the right to control and
investigate and/or remediate any condition giving rise to a claim or demand for
indemnification by the Purchaser under this Agreement with respect to any
Environmental Losses; provided, however, that if after written notice and a
reasonable opportunity to cure the Seller does not exercise such right, the
Purchaser may exercise such right. The Seller and its employees, contractors,
representatives and agents shall have reasonable access at reasonable times to
the Owned Real Property and the Leased Real Property for the purpose of
conducting any investigation and/or remediation, including any sampling or
monitoring required to be performed by the Seller, which may include intrusive
investigations or remedial action, after the Closing Date or at any time
thereafter. The Seller shall use all reasonable efforts to minimize disruption
to the Business as a result of conducting any such investigation or remediation.
(c) The Purchaser shall use reasonable efforts to
cooperate with the Seller to minimize costs with respect to Environmental
Losses. Nothing in this Agreement shall require the Seller to perform any
environmental remediation activities or other environmental testing, sampling or
monitoring activities beyond the minimum required by applicable Environmental
Laws to permit the use of the Owned Real Property consistent with its current
use, which may include leaving Hazardous Materials in place or the use of deed
restrictions.
(d) The Purchaser shall give prompt written notice to
the Seller of any report or other document submitted, whether voluntarily or by
requirement of a Government Entity, to a Governmental Entity which describes any
environmental condition existing prior to the Closing Date. To the extent
reasonably possible in the circumstances, the Seller shall have the right to
review and comment upon any submission to a Governmental Entity which describes
or addresses any environmental condition for which the Purchaser is claiming
indemnification from the Seller hereunder (and the Seller will cooperate with
the Purchaser in responding to such requests, including making available all
relevant records in its possession or under its control), and the Purchaser
shall revise such submission in accordance with the Seller's reasonable comments
thereon. To the extent reasonably possible in the circumstances, the Purchaser
shall give the Seller prompt written notice of, and the Seller and/or its
representatives shall have the right to participate in, any phone call or
meeting with any Governmental Entity at which any environmental condition for
which the Purchaser is claiming indemnification from the Seller hereunder is to
be discussed or addressed in any manner.
(e) The Seller shall not have any obligation to
indemnify any Purchaser Indemnified Party from and against (i) any Environmental
Losses arising from or related to a use
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of the Owned Real Property and the Leased Real Property after the Closing Date
that is not substantially a continuation of the operation of the Business as
conducted on the Closing Date, or (ii) any Environmental Losses arising from or
related to any change in the use of the Owned Real Property after the Closing
Date from industrial use, or by the installation or construction of new
buildings, pavement or other structures or improvements on, or alteration of the
topography of, the Owned Real Property after the Closing Date other than
described in subparagraph (i) above, or (iii) any Environmental Losses arising
from or related to any amendment to or change in any Environmental Law from that
which is in effect on the date hereof. Notwithstanding anything to the contrary
contained herein, the Seller will not have any obligation to indemnify the
Purchaser Indemnified Parties from and against any Environmental Losses (i)
which are not asserted by a third party or do not relate to an environmental
condition arising from the operation of the Business and in existence prior to
the Closing, (ii) arising with respect to any release of a Hazardous Material by
the Purchaser, (iii) resulting from the Purchaser, its agents and
representatives, conducting invasive investigations, sampling or monitoring of
the Owned Real Property or the Leased Real Property unless (A) required to do so
by Environmental Law or a Governmental Entity, or (B) conducted in response to a
material claim asserted by a third party, or (iv) resulting from any act or
knowing failure to act of the Purchaser, its employees, contractors,
representatives or agents to further cause or exacerbate the leaking, migration
or release of any Hazardous Materials at the Owned Real Property or the Leased
Real Property. The Purchaser acknowledges that nothing contained herein absolves
it of any obligation under any Environmental Law for Environmental Losses with
respect to violations of Environmental Laws by the Purchaser, its employees,
contractors, representatives or agents.
(f) If the Purchaser undertakes environmental
remediation activities or other environmental testing, sampling or monitoring
activities in connection with Environmental Losses which are not required by
Environmental Law, a Governmental Entity or in response to a third party claim
asserting liability for an environmental condition at the Owned Real Property or
the Leased Real Property, subject to the limitations contained in Section 10.2,
the Seller shall only be obligated to indemnify the Purchaser in respect of 50
cents out of each dollar of such Environmental Losses, to the extent such
Environmental Losses do not exceed $1,000,000.
10.7. EXCLUSIVE REMEDY. THE INDEMNIFICATION PROVISIONS
CONTAINED IN THIS SECTION 10 WILL CONSTITUTE THE SOLE AND EXCLUSIVE RECOURSE AND
REMEDY OF THE PARTIES FOR MONETARY DAMAGES WITH RESPECT TO ANY BREACH OF ANY OF
THE REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED IN THIS AGREEMENT OR ANY
OF THE ANCILLARY AGREEMENTS OR WITH RESPECT TO ANY LOSSES RESULTING FROM,
ARISING OUT OF, OR CAUSED BY EXCLUDED LIABILITIES. THE PROVISIONS OF THIS
SECTION 10 WILL NOT RESTRICT THE RIGHT OF ANY PARTY TO SEEK SPECIFIC PERFORMANCE
OR OTHER EQUITABLE REMEDIES IN CONNECTION WITH ANY BREACH OF ANY OF THE
COVENANTS CONTAINED IN THIS AGREEMENT OR ANY OF THE ANCILLARY AGREEMENTS. THE
PURCHASER ACKNOWLEDGES THAT IT HAS NO RIGHT TO RESCIND THIS AGREEMENT EITHER FOR
A BREACH OF CONTRACT OR FOR NEGLIGENT OR INNOCENT MISREPRESENTATION.
NOTWITHSTANDING ANY OTHER PROVISIONS OF THE AGREEMENT, THE PROVISIONS OF THIS
SECTION 10.7 SHALL NOT APPLY TO EXCLUDE OR LIMIT
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THE LIABILITY OF THE SELLER TO THE EXTENT THAT ANY CLAIM ARISES BY REASON OF ANY
FRAUD OR FRAUDULENT MISREPRESENTATION OF ANY SUCH PARTY.
10.8. Minimizing Losses. Nothing contained in this Agreement
shall limit either party's obligation to use commercially reasonable efforts
consistent with applicable law to minimize all Losses for which it may seek
indemnification from the other party pursuant to this Section 10.
Section 11: Termination.
11.1. Termination of Agreement. The parties may terminate this
Agreement as provided below:
(a) the parties may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(b) the Purchaser may terminate this Agreement by
giving written notice to the Seller at any time prior to the Closing if the
Closing has not occurred on or before the later of (i) September 10, 1999 and
(ii) the fifth full business day after expiration or termination of the waiting
period under the Hart-Scott-Rodino Act and the Swedish Competition Act (without
notice of further inquiry or investigation), unless failure results primarily
from the Purchaser itself breaching any representation, warranty or covenant
contained in this Agreement, or unless an extension is mutually agreeable to the
Seller and the Purchaser;
(c) the Seller may terminate this Agreement by giving
written notice to the Purchaser at any time prior to the Closing if the Closing
has not occurred on or before the later of (i) September 10 and (ii) the fifth
full business day after expiration or termination of the waiting period under
the Hart-Scott-Rodino Act and the Swedish Competition Act (without notice of
further inquiry or investigation), unless the failure results primarily from the
Seller breaching any representation, warranty or covenant contained in this
Agreement, or unless an extension is mutually agreeable to the Seller and the
Purchaser; and
(d) either the Seller or the Purchaser may terminate
this Agreement by giving written notice to the other party if the Closing has
not occurred on or before September 30, 1999, unless the failure results from a
breach of any representation, warranty or covenant contained in this Agreement
by the party seeking termination, or unless an extension is mutually agreeable
to the Seller and the Purchaser.
11.2. Effect of Termination. If any party terminates this
Agreement pursuant to Section 11.1, all obligations of the parties hereunder
will terminate without liability of any party to the other party (except for any
liability of any party then in breach); provided that the provisions of Sections
12.1 and 12.3 of this Agreement and the Confidentiality Agreement will survive
termination and remain in full force and effect thereafter.
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Section 12: Miscellaneous.
12.1. Press Releases and Announcements. With the exception of
announcements to employees, no party will issue any press release or
announcement relating to the subject matter of this Agreement prior to the
Closing Date without the prior approval of the other party; provided that any
party may make any public disclosure it believes in good faith is required by
Law or the rules of any national securities exchange or any automated
inter-dealer quotation system on which the securities of either party (or any
Affiliate thereof) are listed or admitted for trading (in which case the
disclosing party will advise the other party at least one business day prior to
making such disclosure).
12.2. Expenses; Transfer Taxes. Each of the parties hereto
will bear all legal, accounting, investment banking and other expenses incurred
by it or on its behalf in connection with the transactions contemplated by this
Agreement, whether or not such transactions are consummated. The Purchaser and
the Seller shall pay the sales, use, transfer and documentary taxes applicable
to the transfer of the Purchased Assets to the Purchaser by allocation and
pro-ration between them in accordance with the custom of that jurisdiction in
which each such payment obligation arises with respect to the Purchased Assets.
12.3. Consent to Amendments. The provisions of this Agreement
may be amended or waived only by a written agreement executed and delivered by
the Seller and the Purchaser. No other course of dealing between the parties to
this Agreement or any delay in exercising any rights hereunder will operate as a
waiver of any rights of such parties.
12.4. Successors and Assigns. No party hereto may assign or
delegate any of such party's rights or obligations under or in connection with
this Agreement without the written consent of the other party hereto. Except as
otherwise expressly provided herein, all covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto will be binding upon
and enforceable against the respective successors and assigns of such party and
will be enforceable by and will inure to the benefit of the respective
successors and permitted assigns of such party.
12.5. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable Law, such provision will be ineffective only to
the extent of such prohibition of invalidity, without invalidating the remainder
of this Agreement.
12.6. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Agreement.
12.7. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
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12.8. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered
personally to the recipient or when sent to the recipient by telecopy (receipt
confirmed), one business day after the date when sent to the recipient by
reputable express courier service (charges prepaid) or two business days after
the date when mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications will be sent to the Purchaser and the Seller at the respective
address indicated below:
If to the Purchaser:
Barnes Group Inc.
c/o Associated Spring
80 Scott Swamp Road
Farmington, CT 06032
Attention: Leonard Carlucci, President
Telephone: 860-409-4668
Facsimile: 860-409-4698
with a copy to:
Signe Gates, Esq.
Senior Vice President, General Counsel
and Secretary
Barnes Group Inc.
123 Main Street
Bristol, CT 06011-049
Telephone: 860-583-7070
Facsimile: 860-585-5396
If to the Seller:
Teledyne Industries, Inc.
c/o Allegheny Teledyne Incorporated
1000 Six PPG Place
Pittsburgh, Pennsylvania 15222
Attention: Jon D. Walton
Senior Vice President, General Counsel and Secretary
Telephone: (412) 394-2836
Facsimile: (412) 394-3010
12.9. No Third-Party Beneficiaries. This Agreement will not
confer any rights or remedies upon any Person, including, without limitation,
the Employees other than the parties hereto and their respective successors and
permitted assigns.
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12.10. Entire Agreement. This Agreement, and the documents
referred to in it, constitute the entire Agreement and understanding of the
parties and supersede any previous agreement between the parties relating to the
subject matter of this Agreement.
12.11. Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent and no rule of strict construction will be applied against any party. The
use of the word "including" in this Agreement means "including without
limitation" and is intended by the parties to be by way of example rather than
limitation.
12.12. Incorporation of Exhibits and Schedules. The Exhibits
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
12.13. Bulk Transfer Laws. The Purchaser acknowledges that the
Seller will not comply with the provisions of any bulk transfer laws of any
jurisdiction, local or foreign, in connection with the transactions contemplated
by this Agreement. The Seller hereby covenants and agrees to indemnify and hold
the Purchaser harmless from and against any and all liabilities other than
Assumed Liabilities which the Purchaser may incur as a result of any failure to
comply with any applicable bulk transfer laws in connection with this Agreement.
12.14. WARN Act. The Purchaser represents and warrants to the
Seller that the Purchaser will continue to operate the Business for the period
immediately following the Closing Date and the Purchaser will be solely liable
for any and all obligations and liabilities arising under the WARN Act with
respect to consummation of the transactions contemplated by this Agreement. The
Purchaser shall comply with all requirements of the WARN Act in connection with
any discharge or lay off of Employees employed in the Business effected after
the Closing Date.
12.15. GOVERNING LAW. WITH RESPECT TO THE SELLER AND THE
PURCHASER, ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO WILL BE
GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE COMMONWEALTH
OF PENNSYLVANIA.
12.16. TIME IS OF THE ESSENCE. With regard to all dates and
time periods set forth in this Agreement, time is of the essence.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF the parties hereto have executed and
delivered this Agreement on the date first written above.
TELEDYNE INDUSTRIES, INC.
By:/s/James L. Murdy
----------------------
Name: James L. Murdy
Title:Executive Vice President-
Finance and Administration
and Chief Financial Officer
BARNES GROUP INC.
By:___________________________
Name:_________________________
Title:__________________________
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed and
delivered this Agreement on the date first written above.
TELEDYNE INDUSTRIES, INC.
By:___________________________
Name:_________________________
Title:__________________________
BARNES GROUP INC.
By:/s/Leonard M. Carlucci
----------------------
Name: Leonard M. Carlucci
Title: Vice President
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed and
delivered this Agreement on the date first written above.
TELEDYNE INDUSTRIES, INC.
By:___________________________
Name:_________________________
Title:__________________________
BARNES GROUP INC.
By:/s/Edmund M. Carpenter
----------------------
Name: Edmund M. Carpenter
Title: President & Chief Exeuctive
Officer
<PAGE>
LIST OF EXHIBITS
Exhibit A - Form of Bill of Sale
Exhibit B - Form of Assignment Agreement
Exhibit C - Form of Deed
Exhibit D - Form of Assumption Agreement
Exhibit E - Opinion of Counsel to Seller
Exhibit F - Transition Services Agreement
Exhibit G - Opinion of Counsel to Purchaser
