Exhibit 2.1
ASSET PURCHASE AGREEMENT
dated as of
December 15, 1995
between
CINCINNATI MILACRON INC.
and
TRINOVA CORPORATION
TABLE OF CONTENTS
Page
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.1 Purchase and Sale............................ 1
SECTION 1.2 Acquired Assets and Excluded
Assets.................................... 2
SECTION 1.3 Assumption of Certain Liabilities............ 3
SECTION 1.4 Purchase Price............................... 7
SECTION 1.5 Purchase Price Adjustments................... 8
SECTION 1.6 Allocation of Purchase Price................. 10
SECTION 1.7 Power of Attorney, etc....................... 11
ARTICLE II
The Closing
SECTION 2.1 Closing...................................... 12
SECTION 2.2 Transactions To Be Effected at
the Closing............................... 12
ARTICLE III
Representations and Warranties
SECTION 3.1 Representations and Warranties of
Seller.................................... 13
SECTION 3.2 Representations and Warranties of
Purchaser................................. 23
ARTICLE IV
Covenants
SECTION 4.1 Conduct of Transferred Business.............. 25
SECTION 4.2 Access to Information........................ 26
SECTION 4.3 Confidentiality.............................. 26
SECTION 4.4 Legal Requirements........................... 27
SECTION 4.5 Noncompetition............................... 27
SECTION 4.6 Agreement Regarding Non-
Assignable Contracts...................... 28
SECTION 4.7 Transfer Taxes............................... 28
SECTION 4.8 Use of Names................................. 29
SECTION 4.9 Insurance.................................... 29
SECTION 4.10 Financial Information........................ 29
SECTION 4.11 Bulk Transfer Laws........................... 30
SECTION 4.12 Further Assurances; Cooperation
After Closing............................. 30
SECTION 4.13 Certain Understandings....................... 31
SECTION 4.14 Supplies..................................... 31
SECTION 4.15 Agreement.................................... 31
SECTION 4.16 Supply Agreement............................. 32
SECTION 4.17 License Agreements........................... 32
SECTION 4.18 Books and Records............................ 32
SECTION 4.19 Lockheed Contract............................ 32
SECTION 4.20 Warranty Claims.............................. 32
SECTION 4.21 Environmental Matters........................ 32
SECTION 4.22 Patent Claim................................. 33
SECTION 4.23 Nonsolicitation of Employees................. 34
SECTION 4.24 Control Application Software................. 34
SECTION 4.25 Permits...................................... 34
ARTICLE V
Post-Closing Obligations to Certain Employees
SECTION 5.1 Offer of Employment.......................... 34
SECTION 5.2 Employee Benefits............................ 34
SECTION 5.3 Defined Benefit Plan......................... 35
SECTION 5.4 Post-Retirement Benefits..................... 35
SECTION 5.5 WARN Act..................................... 35
SECTION 5.6 401(k) Plan.................................. 36
ARTICLE VI
Conditions Precedent
SECTION 6.1 Conditions to Each Party's
Obligation................................ 37
SECTION 6.2 Conditions to the Obligation of
Purchaser................................. 37
SECTION 6.3 Conditions to the Obligation of
Seller.................................... 39
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1 Termination ................................. 40
SECTION 7.2 Amendments and Waivers....................... 41
ARTICLE VIII
Indemnification
SECTION 8.1 Indemnification by Seller.................... 41
SECTION 8.2 Indemnification by Purchaser................. 42
SECTION 8.3. Environmental Indemnification................ 43
SECTION 8.4 Losses Net of Insurance, etc................. 44
SECTION 8.5 Indemnification Procedures................... 44
SECTION 8.6 Adjustment to Purchase Price................. 46
ARTICLE IX
General Provisions
SECTION 9.1 Notices..................................... 46
SECTION 9.2 Interpretation.............................. 48
SECTION 9.3 Survival of Representations and
Warranties............................... 48
SECTION 9.4 Severability................................ 49
SECTION 9.5 Counterparts................................ 49
SECTION 9.6 Entire Agreement; No Third Party
Beneficiaries............................ 49
SECTION 9.7 Governing Law............................... 49
SECTION 9.8 Schedules................................... 49
SECTION 9.9 Publicity................................... 50
SECTION 9.10 Expenses.................................... 50
SECTION 9.11 Assignment.................................. 50
SECTION 9.12 Transitional Services Agreement............. 51
APPENDICES, SCHEDULES AND EXHIBITS
Appendix A - Definitions
Schedule 1.2(b)(v) - Other Excluded Assets
Schedule 1.5 - Balance Sheet Procedures
Schedule 1.5(a) - Projected Balance Sheet
Schedule 3.1(b) - Non-Contravention; Consents
and Approvals (Seller)
Schedule 3.1(c) - Balance Sheet and Statement
of Earnings
Schedule 3.1(d) - Compliance with Law
Schedule 3.1(e) - Litigation and Claims
Schedule 3.1(f) - Encumbrances
Schedule 3.1(g)(1) - Owned Property
Schedule 3.1(g)(2) - Leased Property
Schedule 3.1(i)(1) - Acquired Intellectual
Property
Schedule 3.1(k)(1) - Contracts Primarily Related
to the Transferred Business
Schedule 3.1(k)(2) - Categorical Contracts
Schedule 3.1(m)(1) - Covered Taxes
Schedule 3.1(m)(2) - Contested Covered Taxes
Schedule 3.1(m)(3) - Deficient Covered Taxes
Schedule 3.1(n) - Employee Benefit Plans
Schedule 3.1(p) - Terminating Employees
Schedule 3.1(t) - Other Disclosed Liabilities
Schedule 3.2(b) - Non-Contravention; Consents
and Approvals (Purchaser)
Schedule 5.1 - Transferred Employees
Schedule 6.2(i) - Material Consents
Schedule 9.2 - Employees with Knowledge
Exhibit A - Opinion of Seller
Exhibit B - Opinion of Purchaser
Exhibit C - Electronic Controls Supply
Agreement
Exhibit D - MCL License Agreement
Exhibit E - Controls License Agreement
Exhibit F - Retrofit License Agreement
ASSET PURCHASE AGREEMENT dated as
of December 15, 1995, between CINCINNATI
MILACRON INC., a Delaware corporation
("Seller"), and TRINOVA CORPORATION, an
Ohio corporation ("Purchaser").
WHEREAS Seller is engaged worldwide in the
manufacture, marketing, sale and distribution of Machines
and Electronic Controls for Machines;
WHEREAS the parties hereto desire that Seller
sell, transfer and assign, or cause to be sold, transferred
and assigned, to Purchaser or Purchaser Subsidiary, and that
Purchaser purchase and assume, or cause to be purchased and
assumed, from Seller, substantially all the assets and
liabilities related to the Transferred Business, all as more
specifically provided herein;
WHEREAS the parties hereto at the time of or prior
to the Closing hereunder desire to enter into the UK
Agreement and the Ancillary Agreements; and
WHEREAS the capitalized terms used herein shall
have the meanings specified in Appendix A hereto.
NOW, THEREFORE, in consideration of the mutual
covenants and undertakings contained herein and for other
good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby
agree as follows.
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.1. Purchase and Sale. Upon the terms and
subject to the conditions of this Agreement, Seller agrees
to sell, assign, transfer, convey and deliver, to Purchaser
or Purchaser Subsidiary at the Closing (except as otherwise
stated herein), and Purchaser agrees to purchase and accept
from Seller, at the Closing, all right, title and interest
of Seller in and to all the Acquired Assets, free and clear
of any lien, charge, security interest or encumbrance, other
than Permitted Liens.
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SECTION 1.2. Acquired Assets and Excluded Assets.
(a) The term "Acquired Assets" means all the business,
properties, assets, goodwill and rights of Seller of
whatever kind and nature, real or personal, tangible or
intangible, other than the Excluded Assets, that are owned
by Seller on the Closing Date and that primarily relate to,
arise primarily out of or are used primarily in connection
with the Transferred Business, including, but not limited
to, all of Seller's right, title and interest in and to the
following assets (all of which are deemed to constitute
assets primarily related to the Transferred Business):
(i) the Scheduled Real Property;
(ii) the Acquired Inventory;
(iii) the Equipment;
(iv) the Acquired Intellectual Property;
(v) the Acquired Know-how;
(vi) the Acquired Permits;
(vii) the Acquired Contracts;
(viii) the Acquired Books and Records;
(ix) the Acquired Plan Assets;
(x) all goodwill of the Transferred Business;
(xi) prepaid items and pending claims of the
Transferred Business (other than the Tax Claims) that
primarily relate to or arise primarily out of the
Transferred Business;
(xii) all assets of the type reflected on the line
items of the Projected Balance Sheet other than assets
that have been disposed of in the ordinary course of
business of the Division from the date hereof to the
Closing Date; and
(xiii) all other assets, properties and rights of
Seller that primarily relate to, arise primarily out of
or are used primarily in connection with the
Transferred Business (other than the Excluded Assets).
(b) Notwithstanding anything herein to the
contrary, from and after the Closing, Seller shall retain
all of its right, title and interest in and to, and there
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shall be excluded from the sale, conveyance, assignment or
transfer to Purchaser or Purchaser Subsidiary hereunder, and
the Acquired Assets shall not include, the following assets
(collectively, the "Excluded Assets"):
(i) all rights of Seller under this Agreement, the
Ancillary Agreements and any other agreements,
instruments and certificates delivered in connection
with this Agreement;
(ii) all rights, claims, demands and judgments
relating to the Excluded Liabilities;
(iii) the Tax Claims and prepayments for Taxes;
(iv) all rights to the name and mark "Milacron",
"Cincinnati Milacron", "CAMAC" or any variations,
abbreviations or acronyms thereof;
(v) the assets identified in Schedule 1.2(b)(v);
(vi) all Know-how and Intellectual Property of
Seller not primarily related to, arising primarily out
of or used primarily in connection with the Transferred
Business;
(vii) all Contracts of Seller that are not Acquired
Contracts;
(viii) the Excluded Plan Assets;
(ix) the Excluded Books and Records;
(x) all cash and cash equivalents of Seller
generated or earned in connection with the Transferred
Business;
(xi) the Excluded Inventory; and
(xii) all accounts receivable of the Division.
SECTION 1.3. Assumption of Certain Liabilities.
(a) Upon the terms and subject to the conditions of this
Agreement, at the Closing, Purchaser agrees to assume, pay,
perform and discharge when due (or to cause Purchaser
Subsidiary to assume, pay, perform and discharge when due),
all liabilities or obligations whatsoever, other than
Excluded Liabilities, that are primarily related to, arose
primarily out of or used primarily in connection with the
Transferred Business, whether arising before or after the
Closing and whether known or unknown, fixed or contingent
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(the "Assumed Liabilities"), including all of the
liabilities and obligations listed below (each of which are
deemed to relate primarily to the Transferred Business):
(i) all obligations and liabilities due to be
performed or paid after the Closing Date under Acquired
Contracts;
(ii) all obligations and liabilities of Seller of
the type reflected on the line items of the Projected
Balance Sheet except for obligations and liabilities
which have been satisfied, cancelled or otherwise
transferred in the ordinary course of business of the
Division from the date hereof to the Closing Date;
(iii) all obligations or liabilities with respect to
product liability claims (including claims for death,
personal injury or property damage) with respect to
products shipped or services provided by Purchaser
after the Closing in connection with the Transferred
Business, including any liability for incidental or
consequential damages relating thereto.
(iv) subject to the provisions of Section 8.3, all
obligations and liabilities arising as a result of
Seller, or any predecessor in interest thereof, being
the owner or occupant of, or the operator of the
activities conducted at, the Owned Property at any
time, including all obligations and liabilities
relating to personal injury, property damage, the
environment and waste disposal, including off-site
waste disposal;
(v) all obligations and liabilities relating to
deferred vacation associated with or relating to any
Acquired Employee;
(vi) all obligations and liabilities relating to
post-retirement medical benefits associated with or
relating to any Acquired Employee except for any
Acquired Employees who on the Closing Date is age 55 or
older and has 10 or more years of service to Seller in
accordance with the terms of Seller's post-retirement
medical benefit plan.
(vii) all obligations and liabilities with respect
to all actions, suits, proceedings, disputes, claims or
investigations that are primarily related to or arise
primarily out of or in connection with the Transferred
Business, the Acquired Assets or the Transferred
Employees, at law, in equity or otherwise; and
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(viii) the Real Property Tax Liabilities.
(b) Notwithstanding anything herein to the
contrary, the following liabilities and obligations of
Seller (the "Excluded Liabilities") shall not be assumed by
Purchaser or Purchaser Subsidiary hereunder, and shall not
constitute "Assumed Liabilities":
(i) any obligation or liability which is primarily
attributable to any of the Excluded Assets, or
primarily associated with the realization of the
benefits of any of the Excluded Assets;
(ii) the Excluded Tax Liabilities;
(iii) all liabilities and obligations for which
Seller has expressly assumed or retained responsibility
pursuant to this Agreement;
(iv) all obligations or liabilities associated with
or relating to any post-retirement medical and welfare
benefits associated with or relating to any Retiree and
for any Transferred Employee who on the Closing Date is
age 55 or older and has 10 or more years of service to
Seller in accordance with the terms of Seller's post-
retirement medical and welfare plans;
(v) all obligations or liabilities under Seller's
Defined Benefit Plan and, except to the extent provided
in Section 5.6, Seller's Defined Contribution Plan;
(vi) all obligations or liabilities with respect to
all warranty claims in connection with products shipped
or services provided by Seller before the Closing in
connection with the Transferred Business, including any
liability for incidental or consequential damages
relating thereto;
(vii) all obligations or liabilities with respect to
all product liability claims, actions, suits,
proceedings, disputes or investigations (including
claims for death, personal injury or property damage)
with respect to products shipped or services provided
by Seller before the Closing in connection with the
Transferred Business, including any liability for
incidental or consequential damages relating thereto,
including any such obligations or liabilities relating
to Earnestine Smith v. Cincinnati Milacron Inc., et.
al.;
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(viii) all intercompany and intersegment accounts
payable and intercompany and intersegment accruals from
the Division as of the Closing Date;
(ix) all obligations and liabilities with respect
to payroll obligations of the Seller to Transferred
Employees that have accrued prior to the Closing in
connection with the Transferred Business and all
associated withholding obligations or liabilities
including withholding obligations under any of Seller's
Benefit Plans.
(x) all obligations and liabilities of Seller with
respect to (i) all claims, actions, suits, proceedings,
disputes or investigations based on employment
practices of Seller prior to the Closing (x) which are
brought pursuant to affirmative action laws or (y) with
respect to which Seller's compliance with all
affirmative action laws up to the Closing Date would
constitute a defense and (ii) all claims by employees
of the Division who were terminated by Milacron prior
to the Closing Date, including any such obligations or
liabilities relating to Richard A. Seeger v. Cincinnati
Milacron Inc.
(xi) all obligations or liabilities with respect to
any and all claims, actions, suits, proceedings,
disputes or investigations, whether known or unknown,
with respect to a violation or infringement of the
intellectual property rights of third parties in
connection with products shipped by Seller prior to the
Closing Date, including the claims (the "Hilpert and
Hurco Claims") relating to the alleged infringement by
Hilpert Products and Hurco Products (each as defined in
the Electronics Controls Supply Agreement) of existing
rights of B. Hilpert and IMS Technology Inc. (the
"Existing Hilpert and Hurco Rights");
(xii) all obligations or liabilities relating to
deferred compensation, life insurance, severance and
worker's compensation and all costs and expenses
incurred in providing medical, dental and welfare
benefits associated with any Transferred Employee prior
to the Closing Date;
(xiii) any obligation of the Seller to indemnify any
Transferred Employee by reason of the fact that such
Person was a director, officer, employee, or agent of
Seller or was serving at the request of Seller as a
partner, trustee, director, officer, employee, or agent
of another entity (whether such indemnification is for
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judgments, damages, penalties, fines, costs, amounts
paid in settlement, losses, expenses, or otherwise and
whether such indemnification is pursuant to any
statute, charter document, bylaw, agreement or
otherwise);
(xiv) all obligations and liabilities due to be
performed or paid on or before the Closing Date under
the Acquired Contracts;
(xv) all obligations and liabilities arising as a
result of Seller, or any predecessor in interest
thereof, being the owner, occupant of, or operator of
the activities conducted at, the Leased U.S. Property
at any time, including all obligations and liabilities
relating to personal injury, property damage, the
environment and waste disposal, including off-site
waste disposal;
(xvi) all obligations and liabilities of Seller for
breach or failure to perform any of Seller's covenants,
representations and warranties, or agreements contained
in, or made pursuant to, this Agreement; and
(xvii) except as provided in this Agreement, all
obligations and liabilities relating to Seller's
Benefit Plans.
SECTION 1.4. Purchase Price. In consideration of
the sale, assignment, transfer, conveyance and delivery to
Purchaser or Purchaser Subsidiary of the Acquired Assets,
Purchaser shall pay to Seller in U.S. dollars the sum of
$94,225,000 (less two days' interest on such amount at an
interest rate of 6.5%), subject to adjustment as provided in
Section 1.5 (as so adjusted, the "Purchase Price") on
December 28, 1995, payable by wire transfer of immediately
available funds to an account or accounts designated by
Seller in a written notice (the "Account Designation
Notice") delivered to Purchaser at least two Business Days
prior to such date. If Seller designates more than one
account in the Account Designation Notice, such notice shall
specify the portion of the Purchase Price to be paid to each
such designated account. Seller agrees to promptly return to
Purchaser the amount paid on December 28, 1995, with
interest at a rate of 6.5% from December 30, 1995, if the
Closing does not occur.
SECTION 1.5. Purchase Price Adjustments. (a) A
projected schedule of certain types of assets and
liabilities (the "Specified Assets and Liabilities") of the
Transferred Business as of the Closing Date is attached as
Asset Purchase Agreement
8
Schedule 1.5(a) hereto (the "Projected Balance Sheet"). The
parties acknowledge that the Projected Balance Sheet is
attached to this Agreement only for purposes of calculating
the purchase price adjustment in accordance with this
Section 1.5, and except for such adjustment, neither party
shall have any liability to the other party for any
variation between the Projected Balance Sheet and the
Closing Date Balance Sheet.
(b) Within 60 days following the Closing, Seller
shall (i) prepare, or cause to be prepared, and deliver to
Purchaser the Closing Date Balance Sheet, which shall set
forth the Specified Assets and Liabilities of the
Transferred Business as of the Closing Date and shall be
accompanied by a certificate from Seller's independent
outside auditors to the effect that the Closing Date Balance
Sheet was prepared in accordance with Schedule 1.5 hereto
and (ii) calculate the Closing Date Net Asset Value, as
derived from the Closing Date Balance Sheet, and deliver
such calculation to Purchaser.
(c) Purchaser and Purchaser's independent outside
auditors shall, within 60 days after the delivery by Seller
of the Closing Date Balance Sheet and Seller's calculation
of the Closing Date Net Asset Value, complete their review
thereof. In the event that Purchaser and Purchaser's
independent outside auditors determine that the Closing Date
Balance Sheet has not been prepared on the basis set forth
in and in accordance with Schedule 1.5, Purchaser shall, on
or before the last day of such 60-day period, so inform
Seller in writing (the "Purchaser's Objection"), setting
forth a specific description of the basis of Purchaser's
Objection and the adjustments to the Closing Date Net Asset
Value and the corresponding adjustments to the Closing Date
Balance Sheet which Purchaser believes should be made
accompanied by a certificate of Purchaser's accountants to
the effect that the Closing Date Balance Sheet submitted to
Purchaser by Seller was not prepared in accordance with
Schedule 1.5 hereto and that adjusting the Closing Date
Balance Sheet in the manner described in Purchaser's
Objection will result in the Closing Date Balance Sheet
having been prepared in accordance with Schedule 1.5 hereto.
If no Purchaser's Objection is received by Seller on or
before the last day of such 60-day period, then the Closing
Date Net Asset Value set forth on the Closing Date Balance
Sheet delivered by Seller shall be final. Seller shall have
30 days from its receipt of Purchaser's Objection to review
and respond to Purchaser's Objection.
If Seller and Purchaser are unable to resolve all
of their disagreements with respect to the proposed
Asset Purchase Agreement
9
adjustments set forth in Purchaser's Objection within
20 days following the completion of Seller's review of
Purchaser's Objection, they shall refer any dispute as to
whether the Closing Date Balance Sheet was prepared in
accordance with Schedule 1.5 to the CPA Firm, who shall,
acting as experts and not as arbitrators, determine on the
basis set forth in and in accordance with Schedule 1.5, and
only with respect to the remaining differences so submitted,
whether and to what extent, if any, the Closing Date Balance
Sheet and the Closing Date Net Asset Value require
adjustment. Purchaser and Seller shall instruct the CPA Firm
to deliver its written determination to Purchaser and Seller
no later than the thirtieth day after the remaining
differences underlying Purchaser's Objection are referred to
the CPA Firm. The CPA Firm's determination shall be
conclusive and binding upon Purchaser and Seller. The fees
and disbursements of the CPA Firm shall be borne equally by
Purchaser and Seller. Purchaser and Seller shall make
readily available to the CPA Firm all relevant books and
records and any work papers (including those of the parties'
respective accountants) relating to the Closing Date Balance
Sheet and all other items reasonably requested by the CPA
Firm. The scope of the disputes to be resolved by the CPA
Firm is limited to whether the Closing Date Balance Sheet
was prepared in accordance with Schedule 1.5
(d) Purchaser shall, and shall cause its
Subsidiaries to, provide to Seller and its accountants (i)
all data and financial statements reasonably requested by
Seller and (ii) full access to the books and records of the
Transferred Business and to any other information, including
work papers of its accountants, and to any employees in each
case to the extent reasonably requested by Seller in
connection with the preparation of the Closing Date Balance
Sheet and any adjustments thereto.
(e) The "Purchase Price Adjustment Amount" shall
be equal to (x) the Base Net Asset Value minus (y) the
Closing Date Net Asset Value. If the Purchase Price
Adjustment Amount is a negative number, then the Purchase
Price shall be increased by the absolute value of the
Purchase Price Adjustment Amount and Purchaser shall,
promptly (and in any event within five business days) after
the final determination of the Closing Date Net Asset Value,
pay to Seller the Purchase Price Adjustment Amount plus
interest from the Closing Date at a rate of 6.5% in U.S.
dollars by wire transfer of immediately available funds to
an account designated by Seller. If the Purchase Price
Adjustment Amount is a positive number, then the Purchase
Price shall be decreased by the Purchase Price Adjustment
Amount and Seller shall, promptly (and in any event within
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10
five business days) after the final determination of the
Closing Date Net Asset Value, pay to Purchaser the Purchase
Price Adjustment Amount plus interest from the Closing Date
at a rate of 6.5% in U.S. dollars by wire transfer of
immediately available funds to an account designated by
Purchaser.
SECTION 1.6. Allocation of Purchase Price. (a)
Purchaser and Seller shall agree prior to the Closing Date
on estimated allocations of the Purchase Price to the extent
necessary to permit the making of timely Transfer Tax
filings.
(b) Purchaser shall promptly engage at its expense
an appraiser (the "Appraiser") of national standing that is
reasonably acceptable to Seller. Purchaser shall direct the
Appraiser to appraise the Acquired Assets and to deliver a
report of such appraisal (the "Report") to Purchaser and
Seller no later than 180 days after the Closing Date. Seller
and Purchaser shall jointly determine the allocation of the
Purchase Price to the Acquired Assets for tax purposes in
accordance with the Report (unless the Report is manifestly
incorrect, in which case Purchaser shall engage another
appraiser), which allocation shall be adjusted from time to
time to reflect any adjustment to the Purchase Price for tax
purposes. Purchaser and Seller shall file and cause to be
filed all Returns, and execute such other documents as may
be required by any taxing authority, in a manner consistent
with such allocation as revised from time to time. Seller
and Purchaser shall jointly prepare Form 8594 under Section
1060 of the Code relating to the transactions contemplated
by this Agreement based on such allocation. Purchaser and
Seller shall file, or cause the filing of, such form with
each relevant taxing authority, and refrain, and cause their
Subsidiaries to refrain, from taking any position
inconsistent with such allocation as revised from time to
time with any taxing authority unless required by applicable
law.
SECTION 1.7. Power of Attorney, etc. (a) Effective
on the Closing Date, Seller hereby constitutes and appoints
Purchaser and Purchaser Subsidiary and their successors,
legal representatives and assigns the true and lawful
attorneys of Seller with full power of substitution, in the
name of Seller or Purchaser, but on behalf of and for the
benefit of Purchaser, Purchaser Subsidiary and their
successors, legal representatives and assigns, and at the
expense of Purchaser: (i) to demand and receive from time to
time any and all the Acquired Assets and to make
endorsements and give receipts and releases for and in
respect of the same and any part thereof; (ii) to
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institute, prosecute, compromise and settle any and all
proceedings at law, in equity or otherwise that Purchaser,
Purchaser Subsidiary and their successors, legal
representatives or assigns may deem proper in order to
collect, assert or enforce any claim, right or title of any
kind in or to the Acquired Assets; (iii) to defend or
compromise any or all actions, suits or proceedings in
respect of any of the Acquired Assets; and (iv) to do all
such acts and things in relation to the matters set forth in
the preceding clauses (i) through (iii) as Purchaser,
Purchaser Subsidiary and their successors, legal
representatives or assigns shall deem desirable. Seller
hereby agrees that the appointment hereby made and the
powers hereby granted are coupled with an interest and are
and shall be irrevocable by it in any manner or for any
reason. Seller shall deliver to Purchaser at Closing an
acknowledged power of attorney to the foregoing effect
executed by Seller and any affiliate selling any of the
Acquired Assets.
(b) Effective upon the Closing Date, Purchaser and
Purchaser Subsidiary shall have the right to receive and
open all mail, packages and other communications which
relate primarily to the Transferred Business addressed to
Seller or any of its affiliates and Seller agrees promptly
to deliver to Purchaser any such mail, packages or other
communications received directly or indirectly by Seller or
any of its affiliates. Purchaser and Purchaser Subsidiary
shall have the right and authority to collect, for their own
account, all receivables and other items which shall be
transferred or are intended to be transferred to Purchaser
or Purchaser Subsidiary as provided in this Agreement, and
to endorse with the name of Seller any checks or drafts
received on account of any such receivables or other items,
and Seller shall promptly transfer or deliver to Purchaser
or Purchaser Subsidiary any cash or other property received
directly or indirectly by Seller or its affiliates in
respect of such receivables and other items. Purchaser or
Purchaser Subsidiary shall promptly deliver to Seller all
mail, packages and other communications received by it which
relate to Seller or its affiliates but do not relate
exclusively to the Transferred Business. Seller and its
affiliates shall promptly deliver to Purchaser or Purchaser
Subsidiary all mail, packages and other communications
received by any of them which relate to the Transferred
Business but do not relate to any of them.
Asset Purchase Agreement
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ARTICLE II
The Closing
SECTION 2.1. Closing. Subject to the following
sentence, the closing of the sale and transfer of the
Acquired Assets and the other transactions contemplated
hereby (herein referred to as the "Closing") shall take
place at the offices of Cravath, Swaine & Moore, Worldwide
Plaza, 825 Eighth Avenue, New York, New York 10019, on
December 30, 1995 or thereafter as soon as practicable
following the satisfaction or waiver of the conditions set
forth in Section 6, or at such other time, date and place as
shall be fixed by agreement between the parties hereto.
SECTION 2.2. Transactions To Be Effected at the
Closing. At the Closing:
(a) Seller shall deliver to Purchaser or Purchaser
Subsidiary (i) such appropriately executed limited
recordable warranty deeds, bills of sale, assignments,
affidavits reasonably requested by the title insurer of
the Owned Property (modified as reasonably requested by
Seller) and other instruments of transfer relating to
the Acquired Assets in form and substance reasonably
satisfactory to Seller and Purchaser and their
counsels, (ii) a duly executed assignment and
assumption agreement in appropriate form, (iii) any
construction plans and specifications in the possession
of Seller relating to the construction of any
improvements on the Owned Property or the Leased U.S.
Property, (iv) originals (or copies, if such originals
are not in Seller's possession) of all building
permits, licenses, certificates of occupancy and
franchises in the possession of Seller relating to the
Owned Property or Leased U.S. Property and (v) such
other documents as Purchaser or its counsel may
reasonably request to demonstrate satisfaction or
waiver of the conditions and compliance with the
agreements set forth in this Agreement (it being
understood with respect to (i), (ii) and (v) above,
that Seller shall not be required to make any
representations, warranties or covenants, express or
implied, not contemplated by this Agreement); and
(b) Purchaser shall deliver to Seller, or shall
cause to be delivered to Seller (i) a duly executed
assignment and assumption agreement in appropriate form
and (ii) such other documents as Seller or its counsel
may reasonably request to demonstrate satisfaction or
waiver of the conditions and compliance with the
Asset Purchase Agreement
13
agreements set forth in this Agreement (it being
understood that with respect to (i) and (ii) above,
that Purchaser shall not be required to make any
representations, warranties or covenants, express or
implied, not contemplated by this Agreement).
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties of
Seller. Seller hereby represents and warrants to Purchaser
as follows:
(a) Organization, Standing and Power. Seller is a
corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and
authority to own the Acquired Assets owned by it and to
lease the Acquired Assets leased by it and to carry on the
operations of the Transferred Business as now being
conducted by it. Seller has heretofore delivered to
Purchaser true and complete copies of its certificate of
incorporation and By-laws, as amended through the date of
this Agreement.
(b) Authority. Seller has all corporate power and
authority to execute each of this Agreement and the
Ancillary Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on
the part of Seller, and the execution and delivery of the
Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated thereby will
be authorized by all necessary corporate action on the part
of Seller prior to the Closing, and do not and will not
require the approval of the stockholders of Seller. This
Agreement has been duly executed and delivered by Seller and
constitutes, and each Ancillary Agreement to which it is a
party when duly executed and delivered by Seller will
constitute, legal, valid and binding obligations of Seller
enforceable against it in accordance with their terms except
as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement
of creditors' rights generally and except that the
availability of equitable remedies, including specific
performance, is subject to the discretion of the court
before which any proceeding therefor may be brought. The
Asset Purchase Agreement 14
execution and delivery of this Agreement do not, and of the
Ancillary Agreements to which it is a party will not, and
the consummation of the transactions contemplated hereby and
thereby and the compliance with the terms hereof and thereof
will not, (i) violate any law, judgment, order, decree,
statute, ordinance, rule and regulation applicable to
Seller, (ii) conflict with any provision of Seller's
certificate of incorporation or By-laws, (iii) except as set
forth on Schedule 3.1(b), conflict with, result in a breach
of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate,
modify, or cancel, any agreement, contract, lease, license,
instrument, or other arrangement to which the Seller is a
party or by which it is bound or to which any of its assets
is subject (or result in the imposition of any lien (other
than a Permitted Lien) upon any of its assets), except where
the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, or lien would not
have a material adverse effect on the business, financial
condition or results of operations of the Transferred
Business or on the ability of the parties hereby to
consummate the transactions contemplated by this Agreement
or (iv) require any material consent, approval, order or
authorization of, or the registration, declaration or filing
with, any Governmental Entity or any other Person, except
(A) for the filing of a premerger notification report by
Seller under the HSR Act, (B) for compliance with and
filings under Section 13(a) of the Exchange Act and (C) as
otherwise set forth on Schedule 3.1(b).
(c) Financial Statements. The balance sheet dated
as of December 31, 1994 (the "Balance Sheet") and the
statements of earnings (excluding the effect of capitalized
software) and cash flows for the year ended December 31,
1994, which are attached as Schedule 3.1(c) hereto, present
the financial condition and results of operations of the
Division as of December 31, 1994, and for the year then
ended, in accordance with the policies and procedures
employed by Seller in accounting for the assets and
liabilities and earnings from operations of its divisions.
Such financial statements have been prepared from the books
and records of Seller relating to the Division.
(d) Compliance with Applicable Laws. For the last
three years, Seller has complied, and is currently in
compliance, in all material respects with all laws,
regulations, rules and orders of all Governmental Entities
applicable to it which relate to the Transferred Business.
Except as set forth in Schedule 3.1(d), Seller has not
received any written notice of any such failure to so
comply, and to the knowledge of Seller, there are no
Asset Purchase Agreement
15
circumstances that may give rise to such noncompliance.
Seller has not received any written notice that any
investigation or review by any Governmental Entity with
respect to the Transferred Business is pending or that any
such investigation or review is contemplated. This paragraph
(d) does not relate to Environmental Laws for which Section
8.3 is exclusively applicable.
(e) Litigation; Decrees. Schedule 3.1(e) sets
forth a list of all law suits, actions and proceedings
pending with respect to the Transferred Business and all
judgments, orders, decrees and injunctions against the
Seller related to the Transferred Business. Except as set
forth in Schedule 3.1(e), to the knowledge of Seller, there
is no basis for any suit, action or proceeding relating to
the Acquired Assets or the Transferred Business that would
in Seller's reasonable judgment be expected to have (i) a
substantial likelihood of success if brought and (ii) a
material adverse effect on the business, financial condition
or results of operations of the Transferred Business. Except
as set forth on Schedule 3.1(e), to the knowledge of Seller,
there is no suit, action, or proceeding threatened against
Seller relating to the Transferred Business or the
transactions contemplated hereby. Seller is not in default
under any material judgment, order, injunction, rule, or
decree of any Governmental Entity or arbitrator relating to
the Transferred Business.
(f) Title to Acquired Assets. Seller has good,
valid and marketable title to all the Acquired Assets free
and clear of all Liens, except for (i) Liens disclosed in
Schedule 3.1(f) or on the Balance Sheet or in the notes
thereto and (ii) (A) mechanics', carriers', workmen's,
repairmen's, and other like Liens arising or incurred in the
ordinary course of business, (B) Liens for Taxes,
assessments and other governmental charges that are not yet
due and payable or that may thereafter be paid without
penalty, or that are being contested in good faith by
appropriate proceedings (which contested Taxes, assessments
and other governmental charges are set forth in
Schedule 3.1(f)), (C) assets subject to lien retention
agreements entered into in the ordinary course of business
and (D) imperfections of title and other encumbrances that
are not substantial in character or amount and do not,
except in immaterial respects, detract from, or interfere
with the use of, the Acquired Assets in the Transferred
Business as presently conducted (the Liens described in
clauses (i) and (ii) being herein referred to as "Permitted
Liens"). To the knowledge of Seller, there are no Liens on
the Acquired Assets which would in Seller's reasonable
judgement be expected to have a material adverse effect on
Asset Purchase Agreement
16
the business, financial condition or results of operations
of the Transferred Business. This paragraph (f) does not
relate to real property, interests in real property or
leasehold interests (except that the defined term "Permitted
Liens" shall be applicable to paragraph (g) of this Section
3.1 to the extent provided therein).
(g) Real Property. Schedule 3.1(g)(1) sets forth a
complete list of all real property and interests in real
property directly or indirectly owned in fee by Seller that
primarily relate to or are used primarily in connection with
the Transferred Business (each, an "Owned Property").
Schedule 3.1(g)(2) sets forth a complete list of all real
property and interests in real property leased by Seller
that primarily relate to or are used primarily in connection
with the Transferred Business (each, a "Leased U.S.
Property"). Seller has good and marketable fee title, to all
Owned Property free and clear of all Liens other than (A)
Permitted Liens, (B) easements, covenants, rights-of- way,
and other encumbrances or restrictions of record, (C)
zoning, building and other similar restrictions and (D)
unrecorded easements, covenants, rights-of-way or other
restrictions, none of which items set forth in clauses (A)
through (D) above, individually or in the aggregate,
materially impair the continued use and operation of the
Owned Property in the Transferred Business as presently
conducted. Seller is the lessee of all the Leased U.S.
Property and is in possession of the premises purported to
be leased thereunder, and each such lease is valid without
any material default thereunder by Seller or, to Seller's
knowledge, by the lessor.
(h) [intentionally omitted]
(i) Intellectual Property and Know-how. To the
knowledge of Seller, the Division has not interfered with,
infringed upon, misappropriated, or violated any material
Intellectual Property or Know How rights of third parties in
any material respect, and, except as identified on Schedule
3.1(i)(1), Seller has not received any written charge,
complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation
or any claim that the Division must license or refrain from
using any such intellectual property rights of any third
party. Schedule 3.1(i)(1) sets forth a complete list of all
Acquired Intellectual Property. To the extent that
registrations, filings, and issuances are indicated on
Schedule 3.1(i)(1), such Intellectual Property has been duly
registered in, filed in or issued by the United States
Copyright office or the United States Patent and Trademark
Office, the appropriate offices in the various states of the
Asset Purchase Agreement
17
United States and the appropriate offices of such
other jurisdictions indicated on Schedule 3.1(i)(1). Except
as set forth on Schedule 3.1(i)(1), Seller is the sole and
exclusive owner of all of the Acquired Intellectual
Property. Except as set forth on Schedule 3.1(i)(1), Seller
has not granted any licenses or other rights in, and Seller
has no obligation to grant licenses or other rights in, any
of the Acquired Intellectual Property or in the Know-how
owned by Seller that is material to the Transferred Business
(the "Material Know-how"), in each case that is included in
the Acquired Assets, to any other Person. Seller has not
made any claim of a violation or infringement by others of
its rights in the Acquired Intellectual Property or the
Material Know-how and, to the knowledge of Seller, there is
not currently any such violation or infringement. Except as
set forth on Schedule 3.1(i)(1), there are no interferences
or other contested proceedings, either pending or, to the
knowledge of Seller, threatened, in the United States
Copyright Office, the United States Patent and Trademark
Office or any Federal, state or local court or before any
other governmental agency or tribunal, relating to any
Acquired Intellectual Property or any pending application
with respect thereto.
(j) Insurance. All of the material properties and
businesses constituting any part of the Acquired Assets are
insured for Seller's benefit, and will be so insured until
the Closing, in amounts and against risks consistent with
recent past practice. All such policies are in full force
and effect.
(k) Contracts. Schedule 3.1(k)(1) sets forth each
Contract to which Seller is a party or by which it is bound
that relates primarily to the Transferred Business except
for such Contracts involving amounts of less than $150,000.
Except for the Contracts listed in Schedule 3.1(k)(1),
3.1(g)(2) or 3.1(k)(2), Seller is not, in the case of
Contracts that relate primarily to the Transferred Business,
a party to any:
(i) Contract for or relating to the employment of
any officer or employee or with any labor union;
(ii) Contract which will not be discharged at or
prior to the Closing relating to the borrowing or
lending of money or the guarantee of any obligations
for borrowed money or otherwise, excluding endorsements
made for purposes of collection in the ordinary course
of business;
Asset Purchase Agreement
18
(iii) Contract granting to any person a preferential
right to purchase any of the Acquired Assets (other
than sales of Inventory in the ordinary course of
business);
(iv) Contract with respect to the discharge,
transportation, removal or storage of effluent, wastes,
pollutants or hazardous substances;
(v) Contract for the lease of any land, buildings
or equipment;
(vi) Contract evidencing any material lien, charge,
security interest or encumbrance on the Acquired
Assets, other than Permitted Liens;
(vii) Contract or subcontract with the United States
government in excess of $500,000; or
(viii) Contract relating to joint ventures,
distribution or sales representative arrangements, non-
competition arrangements or confidentiality
arrangements.
True, complete and correct copies of all the Contracts
listed on Schedules 3.1(k)(1) and 3.1(k)(2) have been made
available to Purchaser. Except as disclosed on Schedules
3.1(k)(1), 3.1(g)(2) and 3.1(k)(2), each of the Material
Contracts is valid, binding and enforceable in accordance
with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other
similar laws affecting creditors' rights generally from time
to time in effect and to general equitable principles, and
is in full force and effect, and neither Seller nor, to the
knowledge of Seller, any other party thereto is in default
or breach in any material respect under the terms of any
such Material Contract, nor, to the knowledge of Seller, has
any event or circumstance occurred that, with notice or
lapse of time or both, would constitute a material event of
default thereunder. Except as disclosed on Schedules
3.1(k)(1), 3.1(g)(2) and 3.1(k)(2), Seller has not received
any notice of termination or cancellation of any Material
Contract and, to the knowledge of Seller, there are no
material unresolved disputes in connection with any Material
Contracts.
(l) Absence of Certain Changes or Events. Except
as set forth in the Schedules hereto, from December 31, 1994
to the date hereof, Seller has conducted the Transferred
Business in the ordinary course consistent in all material
respects with recent past practice, and there has not been
Asset Purchase Agreement
19
any material adverse change in the business, assets,
liabilities, financial condition or results of operations,
other than changes relating to the economy in general or
changes relating to the Machines industry in general.
(m) Taxes. Except as set forth in Schedule
3.1(m)(1), Seller has timely filed, after giving effect to
any applicable extensions, all Returns relating to any Taxes
attributable to the Transferred Business required to be
filed by it. Except for Taxes set forth on Schedule
3.1(m)(2), which are being contested in good faith and by
appropriate proceedings, and except for Taxes which in the
aggregate are not material, all Taxes attributable to the
Transferred Business shown to be due on such Returns have
been timely paid. Except as set forth in Schedule 3.1(m)(3),
no taxing authority is asserting any deficiency against
Seller with respect to material Taxes attributable to the
Transferred Business.
(n) Employee Benefit Plans. Schedule 3.1(n)
contains a list and brief description of each "employee
pension benefit plan" (as defined in Section 3(2) of ERISA),
"employee welfare benefit plan" (as defined in Section 3(1)
of ERISA), stock option, stock purchase, deferred
compensation plan or arrangement, and other employee fringe
benefit plan or arrangement maintained or contributed to by
Seller for the benefit of any Transferred Employees (all the
foregoing being herein called "Benefit Plans"). Seller has
delivered to Purchaser true, complete and correct copies of
(1) each Benefit Plan (and, in the case of any unwritten
Benefit Plans, descriptions thereof) and (2) the most recent
summary plan description for each Benefit Plan (if any such
description was required).
(o) Books and Records. The Books and Records have
been regularly kept and maintained in accordance with the
regular practices of Seller.
(p) Employees. Except as set forth in Schedule
3.1(p), to Seller's knowledge, no executive, key employee or
significant group of employees has expressed his, her or
their clear intention to terminate his, her or their
employment with the Transferred Business within the next
twelve months. As of the date hereof, except as set forth in
Schedule 3.1(p) hereto, no Transferred Employee has notified
the Seller in writing of his intention to terminate
employment with the Division and no termination notice has
been given to any Transferred Employee. The Division is not
a party to or bound by any collective bargaining agreement,
nor has it experienced any strikes, grievances, claims of
unfair labor practices, or other collective bargaining
Asset Purchase Agreement
20
disputes. To the knowledge of Seller, the Division has not
committed any unfair labor practice. To the knowledge of
Seller, there is no organizational effort presently made or
threatened by or on behalf of any labor union with respect
to employees of the Division.
(q) Permits. The Acquired Permits include all
governmental licenses, approvals, permits and authorizations
currently required for the ownership or operation of the
Acquired Assets or the Transferred Business as now being
conducted, the failure to obtain which would have a material
adverse effect on the Acquired Assets or the Transferred
Business. All such governmental licenses and permits are
valid and in full force and effect; Seller has not received
any written notice that any appropriate authority has
revoked, suspended or terminated, or intends to revoke,
suspend or terminate, any of such governmental licenses and
permits, and all such governmental licenses and permits are
held in the name of Seller or a subsidiary thereof.
(r) Fees. Except for CS First Boston Corporation,
whose fees will be paid by Seller, there is no investment
banker, broker, finder, financial advisor or other
intermediary who has been retained by or is authorized to
act on behalf of Seller who might be entitled to any fee or
commission from Seller in connection with the transactions
contemplated by this Agreement.
(s) Acquired Assets. Except as stated herein, the
Acquired Assets transferred by Seller on the Closing Date to
Purchaser (including without limitation the Acquired
Contracts, Acquired Permits, Acquired Intellectual Property
and Acquired Know-How) shall be sufficient to operate the
Transferred Business in all material respects as it is
currently being conducted.
(t) No Undisclosed Material Liabilities. To the
knowledge of Seller, there are no liabilities of the
Transferred Business of any kind other than (i) liabilities
provided for in the Balance Sheet, (ii) liabilities
disclosed in the Schedules hereto, including Schedule
3.1(t), (iii) liabilities incurred in the ordinary course of
the Transferred Business since December 31, 1994, and (iv)
other liabilities which, individually or in the aggregate,
are not material to the Transferred Business.
(u) Seller's Defined Contribution Plan. Seller's
Defined Contribution Plan complies in form and in operation
in all material respects with the applicable requirements of
ERISA, the Code, and any other applicable laws. All reports
and descriptions (including Form 5500 Annual Reports and
Asset Purchase Agreement
21
summary plan descriptions) required to be filed or
distributed as of the date hereof, have been filed and
appropriately distributed with respect to Seller's Defined
Contribution Plan. All contributions (including all employer
contributions and employee contributions) which are due
prior to the date hereof have been paid to Seller's Defined
Contribution Plan, and all contributions for any period on
or before the Closing Date will be paid to Seller's Defined
Contribution Plan prior to the date of the transfer of
assets as described in Section 5.6. Seller has received and
provided to Purchaser a favorable determination letter from
the Internal Revenue Service on the qualification of
Seller's Defined Contribution Plan. To Seller's knowledge,
there have been no "prohibited transactions" (as defined in
the Code) with respect to Seller's Defined Contribution Plan
with respect to which Seller could be liable in any material
amount. No action, suit, proceeding, hearing or
investigation with respect to the administration or
investment of the assets of Seller's Defined Contribution
Plan is, to Seller's knowledge, pending or threatened, and
Seller has no knowledge of any basis for such an action,
suit, proceeding, hearing or investigation. If any provision
in Seller's Defined Contribution Plan requires an individual
to be employed on the last day of any period (for example,
but not limited to, the last day of any plan year or the
last day of any quarter) as a condition for receiving any
type of employer contribution to Seller's Defined
Contribution Plan for that period, any Acquired Employee who
was a participant in Seller's Defined Contribution Plan on
the day prior to the Closing Date shall be deemed to be
employed on the last day of such period and shall receive
such employer contribution(s) for the period which includes
the Closing Date. To the extent necessary, Seller shall
amend Seller's Defined Contribution Plan to ensure
compliance with the preceding sentence.
(v) No Other Representations. Except for the
representations and warranties expressly set forth in this
Agreement and the Ancillary Agreements, neither Seller nor
any other Person makes any express or implied representation
or warranty on behalf of Seller.
SECTION 3.2. Representations and Warranties of
Purchaser. Purchaser hereby represents and warrants to
Seller as follows:
(a) Organization, Standing and Power. Each of
Purchaser and Purchaser Subsidiary is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated and has
Asset Purchase Agreement
22
the requisite corporate power and authority to carry on its
business as now being conducted.
(b) Authority. Each of Purchaser and Purchaser
Subsidiary has all corporate power and authority to execute
this Agreement and the Ancillary Agreements to which it is a
party and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action
on the part of Purchaser and Purchaser Subsidiary, and the
execution and delivery of the Ancillary Agreements to which
Purchaser or Purchaser Subsidiary is a party and the
consummation of the transactions contemplated thereby will
be authorized by all necessary corporate action on the part
of Purchaser and Purchaser Subsidiary prior to the Closing,
and do not and will not require the approval of the
stockholders of Purchaser. This Agreement has been duly
executed and delivered by Purchaser and constitutes, and
each Ancillary Agreement to which Purchaser or Purchaser
Subsidiary is a party when duly executed and delivered by
Purchaser or Purchaser Subsidiary will constitute, legal,
valid and binding obligations of each of Purchaser or
Purchaser Subsidiary (as the case may be) enforceable
against it in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of
creditors' rights generally and except that the availability
of equitable remedies, including specific performance, is
subject to the discretion of the court before which any
proceeding therefor may be brought. The execution and
delivery of this Agreement do not, and the consummation of
the transactions contemplated hereby and the compliance with
the terms hereof will not (i) violate any law, judgment,
order, decree, statute, ordinance, rule and regulation
applicable to Purchaser or purchaser Subsidiary, (ii)
conflict with any provision of their respective certificates
of incorporation or By-laws, (iii) except as set forth on
Schedule 3.2(b), conflict with any material Contract to
which any of them is a party or by which it or any of its
property is bound or (iv) require any material consent,
approval, order or authorization of, or the registration,
declaration or filing with, any Governmental Entity or any
other Person, except (A) for the filing of a premerger
notification report by Purchaser under the HSR Act, (B) for
compliance with and filings under Section 13(a) of the
Exchange Act and (C) as otherwise set forth on Schedule
3.2(b).
(c) Fees. There is no investment banker, broker,
finder, financial advisor or other intermediary who has been
Asset Purchase Agreement
23
retained by or is authorized to act on behalf of Purchaser
who might be entitled to any fee or commission from
Purchaser in connection with the transactions contemplated
by this Agreement.
(d) Actions and Proceedings, etc. There are no (i)
outstanding judgement, orders, injunctions or decrees of any
Governmental Entity or arbitration tribunal against or
affecting Purchaser, Purchaser Subsidiary or any of their
affiliates, (ii) lawsuits, actions or proceedings pending
or, to the knowledge of Purchaser, threatened against or
affecting Purchaser, Purchaser Subsidiary or any of their
affiliates, or (iii) investigations by any Governmental
Entity which are, to the knowledge of Purchaser, pending or
threatened against or affecting Purchaser, Purchaser
Subsidiary or any of their affiliates, and which, in the
case of each of clauses (i), (ii) and (iii), have or could
have a material adverse effect on the ability of Purchaser
or Purchaser Subsidiary to consummate the transactions
contemplated hereby.
(e) No Other Representations. Except for the
representations and warranties expressly set forth in this
Agreement and the Ancillary Agreements, neither Purchaser
nor any other Person makes any express or implied
representation or warranty on behalf of Purchaser or
Purchaser Subsidiary.
ARTICLE IV
Covenants
SECTION 4.1. Conduct of Transferred Business. From
and after the date of this Agreement and until the Closing,
except as expressly provided in this Agreement or as
Purchaser shall otherwise reasonably agree, Seller will (i)
conduct the Transferred Business (including the maintenance
of inventory levels) in the ordinary course of business
consistent in all material respects with recent past
practice; (ii) maintain and repair the Acquired Assets in
substantially the same manner as they are currently
maintained and repaired; (iii) not harm the reputation or
goodwill of the Transferred Business or the condition of the
Acquired Assets; (iv) use reasonable efforts to refrain from
taking or omitting to take any action in a manner that would
render Seller's representations and warranties under this
Agreement inaccurate as of the Closing or that would prevent
the consummation of the transactions contemplated hereby;
(v) not grant any increases in direct or indirect
compensation to any Transferred Employee other than changes
Asset Purchase Agreement
24
in compensation in the ordinary course of business; not
enter into any material transaction or incur any material
liability other than in the ordinary course of business;
(vi) not encumber or permit to be encumbered any of the
Acquired Assets other than with Permitted Liens or as set
forth in clauses (B), (C) and (D) of Section 3.1(g); (vii)
not amend, alter or modify any material provision of any of
the Acquired Contracts other than in the ordinary course of
business; (viii) keep all insurance policies with respect to
the Transferred Business in effect, with all premiums paid
to the Closing Date; (ix) use its reasonable efforts to keep
available the services of the Transferred Employees and
preserve the Transferred Business's relationships with
suppliers, customers and others having business dealings
with the Transferred Business; and (x) not sell, lease,
license or otherwise dispose of any Acquired Assets except
(A) pursuant to existing contracts and commitments or (B) in
the ordinary course of business consistent in all material
respects with recent past practice. If at any time during
such period Seller becomes aware of any material adverse
change in the business, assets, financial condition or
results of operations of the Transferred Business, Seller
shall promptly notify Purchaser with respect thereto.
SECTION 4.2. Access to Information. Seller shall
afford to Purchaser and its accountants, counsel and other
representatives reasonable access upon reasonable notice
during normal business hours during the period prior to the
Closing to all the properties, books, contracts,
commitments, Returns and records of the Transferred
Business, and, during such period shall furnish promptly to
Purchaser any information concerning the Transferred
Business as Purchaser may reasonably request.
SECTION 4.3. Confidentiality. (a) Each of
Purchaser and Seller shall hold in confidence and shall not
disclose to any third party (other than to its directors,
officers, those employees who have a need to know and its
outside advisors), without the written consent of the other
party, all information disclosed with respect to the
contemplated transaction relating to the other party and the
Transferred Business, including, without limitation,
information concerning the operation of the Transferred
Business and related commercial, financial and technical
data, whether disclosed orally or in writing, including any
summaries or analyses of such information prepared by or for
Purchaser. Purchaser or Seller's obligations in respect of
confidential information shall not apply to information
which (i) becomes generally available to the public other
than as a result of disclosure by such party, (ii) was known
Asset Purchase Agreement
25
by such party prior to its disclosure hereunder, (iii) is
rightly received by such party from a third party free of
any confidentiality obligations, (iv) is required to be
disclosed in connection with the securing of any
governmental approval necessary for the performance by such
party of its obligations hereunder, (v) is required to be
disclosed for the purpose of complying with governmental
regulations or (vi) is independently developed by such
party's employees who do not have access to such
information.
(b) In the event of any termination of this
Agreement, for a period of seven years from such
termination, each of Purchaser and Seller (i) shall treat as
confidential and shall not disclose or use, directly or
indirectly, for its benefit or otherwise, in any manner
whatsoever, or permit any of its affiliates or officers,
directors, employees, representatives or others under its
control to disclose, or to use, any information concerning
the other party or the Transferred Business (in the case of
the Purchaser) unless such information is acquired or
required to be disclosed as described in (i) through (v) in
clause (a) above and (ii) shall promptly return to the other
party (or destroy with a certificate of destruction) all
written information and documents received from such party,
its accountants or counsel in connection with the
transactions contemplated by this Agreement, including all
copies thereof, and all analyses, memoranda, charts or other
information prepared by such party or any of its affiliates
using any of such written information and documents,
including all copies thereof (including computer disks or
tapes or other storage media if applicable). The provisions
of this Section shall survive any termination of this
Agreement.
SECTION 4.4. Legal Requirements. Each of Purchaser
and Seller will take all reasonable actions necessary to
comply promptly with all legal requirements which may be
imposed on it or any of its Subsidiaries with respect to the
Closing (including the prompt filing of the premerger
notification report under the HSR Act and the furnishing of
all information required under the HSR Act) and will
promptly cooperate with and furnish information to each
other and to other parties in connection with any such legal
requirements.
SECTION 4.5. Noncompetition. (a) Seller agrees
that for a period of five years from the Closing Date,
neither it nor any of its Subsidiaries shall engage, either
directly or indirectly, as a principal or for its own
account or solely or jointly with others, or as stockholders
Asset Purchase Agreement
26
in any corporation or joint stock association, anywhere in
the world, in the business of manufacturing or selling to
third parties any products manufactured or sold by the
Division on or prior to the Closing Date (other than with
respect to Electronic Controls assembled on Machines sold by
Seller); provided that nothing herein shall prohibit (i) the
acquisition by Seller or any of its Subsidiaries of a
diversified company having not more than (x) 10% of its
sales (based on its latest published annual audited
financial statements) attributable to any business that
competes with the Transferred Business, or (y) $5,000,000 in
annual sales to third parties, in such competing business,
(ii) the exercise of Seller's rights under the Electronic
Controls Supply Agreement, (iii) the sale by Seller of
Excluded Inventory to third parties and (iv) the sale by
Seller to third parties of service parts for products
manufactured or sold by the Division.
(b) It is the intention of the parties that if any
of the restrictions or covenants contained herein is held to
cover a geographic area or to be for a length of time which
is not permitted by applicable law, or in any way construed
to be too broad or to any extent invalid, such provision
shall not be construed to be null, void and of no effect,
but to the extent such provision would be valid or
enforceable under applicable law, a court of competent
jurisdiction shall construe and interpret or reform this
Section 4.5 to provide for a covenant having the maximum
enforceable geographic area, time period and other
provisions (not greater than those contained herein) as
shall be valid and enforceable under such applicable law.
Seller acknowledges that Purchaser would be irreparably
harmed by any breach of this Section 4.5 and that there
would be no adequate remedy at law or in damages to
compensate Purchaser for any such breach.
SECTION 4.6. Agreement Regarding Non-Assignable
Contracts. If any Acquired Contract (i) is not assignable
without the consent of any party thereto, (ii) may by its
terms be terminated or cancelled upon assignment or (iii) is
not by its terms assignable, Seller and Purchaser agree to
use their reasonable efforts to obtain the consent of any
required parties thereto to effect such assignment. If such
assignment may not be so effected, each of the parties
agrees to cooperate with the other in any reasonable
arrangement designed to enable Seller to perform for the
account of Purchaser its obligations under, and to provide
Purchaser the benefits of, and to cause Purchaser to bear
all the burdens and liabilities under, any such agreements,
including enforcement at the cost, and for the account of,
Purchaser, of any and all rights of Seller against the other
Asset Purchase Agreement
27
party arising out of the breach or cancellation thereof by
such other party or otherwise.
SECTION 4.7. Transfer Taxes. Seller shall be
responsible for the payment of all Transfer Taxes, except
that Purchaser shall be responsible to the extent such
Transfer Taxes are payable as a result of Purchaser's
failure to comply with this Section 4.7. Seller and
Purchaser shall, and shall cause their respective
Subsidiaries to, cooperate in timely making and filing all
Returns as may be required to comply with the provisions of
any Transfer Tax laws. To the extent legally able to do so,
Purchaser shall deliver to Seller exemption certificates
satisfactory in form and substance to Seller with respect to
Transfer Taxes if such delivery would reduce the amount of
Transfer Taxes that would otherwise be imposed.
SECTION 4.8. Use of Names. Except as set forth in
Section 4.14, Purchaser agrees that neither it nor any of
its affiliates nor any of their respective successors and
assigns shall at any time use the names "Milacron",
"Cincinnati Milacron" or "CAMAC", or any variation thereof
or combination that includes either such name, or any Trade
Names or Trademarks relating thereto, or any acronym or
abbreviation thereof (collectively, the "Seller's Names").
Within 60 days of the Closing Date, with respect to all
Acquired Inventory constituting Acquired Assets on which
Seller's Names are marked, affixed or otherwise used,
Purchaser shall rename, obliterate or permanently sticker
over Seller's Names on Acquired Inventory or appropriately
make or otherwise alter or modify Acquired Inventory in
accordance with the first sentence of this Section 4.8.
SECTION 4.9. Insurance. From and after the
Closing, Purchaser shall secure insurance with respect to
the Transferred Business covering general liability and
product liability in amounts consistent with its normal and
customary practice.
SECTION 4.10. Financial Information. After the
Closing, upon reasonable written notice, Purchaser and
Seller shall furnish or cause to be furnished to each other
and their respective accountants, counsel and other
representatives access, during normal business hours, to
such information (including records pertinent to the
Transferred Business) and assistance relating to the
Transferred Business as is reasonably necessary for
financial reporting and accounting matters, the preparation
and filing of any Returns or other returns, reports or
forms, or the defense of any Tax claim or assessment and
will provide the other party with such audited financial
Asset Purchase Agreement
28
statements and other financial information for past periods
as such other party reasonably deems necessary for
compliance with disclosure requirements of the Securities
and Exchange Commission or under GAAP; provided, however,
that the party requesting such financial statements shall
pay for the auditing of such financial statements if such
auditing is necessary solely by reason of such party's
request. In the case of Purchaser, such assistance shall
include cooperation in responding to audit reports made by
taxing authorities to Seller regarding the Transferred
Business and, at Seller's request, participation in audits
of Seller relating to the Transferred Business. Purchaser
shall retain the books and records included in the Acquired
Assets for a period of seven years after the Closing. After
the end of such seven-year period, before disposing of such
books or records, Seller may within 60 days prior to the end
of such period, request upon written notice to Purchaser to
recover such books and records at Seller's cost and expense,
whereupon Purchaser shall allow Seller the opportunity to
remove and retain all or any part of such books or records
as Seller may select at such time that such books and
records would otherwise be disposed of by Purchaser.
SECTION 4.11. Bulk Transfer Laws. Purchaser hereby
waives compliance by Seller with the provisions of any
so-called "bulk transfer law" of any jurisdiction in
connection with the sale of the Acquired Assets to
Purchaser. Seller shall indemnify and hold harmless
Purchaser against any and all liabilities that may be
asserted by third parties against Purchaser as a result of
noncompliance with any such bulk transfer law; provided,
however, that nothing herein shall prevent Seller from
contesting any such liabilities in good faith.
SECTION 4.12. Further Assurances; Cooperation
after Closing. (a) Seller will use its reasonable efforts to
facilitate and effect the implementation of the transfer of
the Acquired Assets to Purchaser or Purchaser Subsidiary
and, for such purpose but without limitation, Seller
promptly will at and after the Closing execute and deliver
to Purchaser such assignments, deeds, bills of sale,
consents and other instruments as Purchaser or its counsel
may reasonably request as necessary for such purpose.
(b) In the event that after the Closing, Seller
becomes aware that any Acquired Assets were not transferred
to Purchaser or Purchaser Subsidiary by Seller at the
Closing, Seller shall promptly notify Purchaser to that
effect and shall reasonably cooperate with Purchaser to
transfer such Acquired Assets to Purchaser or Purchaser
Subsidiary. In the event that after the Closing, Purchaser
Asset Purchase Agreement
29
becomes aware that any assets that are not Acquired Assets
were transferred to Purchaser or Purchaser Subsidiary at the
Closing, Purchaser shall promptly notify Seller to that
effect and shall reasonably cooperate with Seller to
transfer such assets to Seller.
(c) In the event and for so long as any party
hereto is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim
or demand in connection with (i) any transaction
contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure
to act, or transaction on or prior to the Closing Date
involving the Division, the other party will reasonably
cooperate with the contesting or defending party and its
counsel in the contest or defense as shall be necessary in
connection with the contest or defense, all at the sole cost
and expense of the contesting or defending party (unless the
contesting or defending Party is entitled to indemnification
therefor under Article VIII below).
SECTION 4.13. Certain Understandings. Purchaser
acknowledges that neither Seller, its Subsidiaries nor any
other Person has made any representation or warranty,
express or implied, as to the accuracy or completeness of
any information regarding the Transferred Business not
included in this Agreement or the Schedules hereto, and
neither Seller, its Subsidiaries nor any other Person will
be subject to any liability to Purchaser or any other person
resulting from the distribution to Purchaser, or Purchaser's
use of, any such information. Purchaser acknowledges that,
should the Closing occur, Purchaser will acquire the
Acquired Assets without any representation or warranty as to
merchantability or fitness for any particular purpose, in an
"as is" condition and on a "where is" basis, except as
otherwise expressly represented or warranted herein.
SECTION 4.14. Supplies. Purchaser shall not use
stationery, purchase order forms, signage, invoices,
receipts, or advertising and promotional materials, training
and service literature and materials or other similar
materials that state or otherwise indicate thereon that the
Transferred Business or any part thereof is a division or
unit of Seller, except that Purchaser may use such materials
in the ordinary course of the Transferred Business for a
period of 90 days after the Closing, provided that such
materials clearly indicate that the Transferred Business has
been sold to Purchaser and is independent of Seller.
Asset Purchase Agreement
30
SECTION 4.15. UK Agreement. Purchaser and Seller
hereby unconditionally and irrevocably guarantee the full
performance of all the obligations of Purchaser UK
Subsidiary and Selling Subsidiary, respectively, created
under the UK Agreement.
SECTION 4.16. Supply Agreement. At the Closing,
Purchaser and Seller shall deliver the executed Electronic
Controls Supply Agreement in the form of Exhibit C hereto.
SECTION 4.17. License Agreements. At or prior to
the Closing, Purchaser and Seller shall execute and deliver
the MCL License Agreement, Controls License Agreement and
Retrofit License Agreement in the forms of Exhibits D, E and
F hereto, respectively.
SECTION 4.18. Books and Records. Seller shall,
upon written notice and during normal business hours,
furnish to Purchaser and its representatives, access to the
Excluded Books and Records, and Purchaser may, with Seller's
consent (which consent shall not be unreasonably withheld),
make photocopies thereof.
SECTION 4.19. Lockheed Contract. Seller shall
reimburse Purchaser for any settlement amount agreed to in
connection with a contractual dispute between Purchaser and
Lockheed Corp. on the Lockheed Contract but only to the
extent such settlement amount exceeds $83,000, and then only
to the extent of such excess; provided, however, that if the
settlement amount is greater than $100,000, Purchaser shall
gain the consent of Seller, which consent shall not be
unreasonably withheld, in order to be reimbursed for any
settlement amount in excess of $100,000.
SECTION 4.20. Warranty Claims. Purchaser shall
provide to Seller, upon Seller's request, service for all
products shipped by Seller prior to the Closing which is
required based on a warranty claim for such product, and
Seller shall pay Purchaser at Purchaser's direct cost
(materials and labor) for such services rendered.
SECTION 4.21. Environmental Matters. (a) Within
one year from the Closing Date, Seller shall at its expense
remove the Storage Tank and perform any remediation to
obtain a no further action letter from the appropriate
Governmental Entity. Purchaser shall provide all necessary
access to the site during business hours to allow Seller
and/or its subcontractors to perform the removal of the
Storage Tank.
Asset Purchase Agreement
31
(b) Seller shall take all necessary action to
achieve the renewal of the NPDES discharge permit of the
Division and Purchaser and Seller shall cooperate to effect
a timely transfer of this permit.
(c) Purchaser shall not, and shall cause Purchaser
UK Subsidiary to not, undertake any investigation of
environmental conditions or conduct any testing of soil or
subsurface conditions, including groundwater, at the Owned
Property or Scheduled Real Property (as "Scheduled Real
Property" is defined in the UK Agreement and the Owned
Property and the Scheduled Real Property hereinafter called
the "Indemnified Property"), except (i) as required to do so
by a Governmental Entity, (ii) as part of a response to a
spill or release of a Hazardous Substance caused by
Purchaser or Purchaser UK Subsidiary after the Closing Date,
(iii) in the ordinary course of Purchaser's or Purchaser UK
Subsidiary's environmental and industrial hygiene audits and
reviews consistent with Purchaser's or Purchaser UK
Subsidiary's audit and review programs, (iv) as requested by
a bona-fide potential purchaser of the Indemnified Property,
or a portion thereof, from the Purchaser after the Closing
Date and (v) as based on Purchaser's or Purchaser UK
Subsidiary's reasonable good faith belief that there exists
a violation of Environmental Laws on such Indemnified
Property; provided that, in the case of Section 4.21(c)(v),
any such investigation or testing shall be conducted in a
manner commensurate with such good faith reasonable belief.
(d) With respect to the excess levels of lead
found in certain sinks on the Owned Property which has been
identified by Seller to the Ohio Environmental Protection
Agency (the "Sinks Issue"), Seller shall conduct the
appropriate study and remediate in a manner approved by the
Ohio Environmental Protection Agency. The costs of such
study and the costs of such remediation in excess of
$20,000, shall be borne by Seller. Purchaser shall reimburse
Seller up to the first $20,000 of such remediation.
SECTION 4.22. Patent Claim. Seller shall use its
reasonable efforts to resolve the Hilpert and Hurco Claims
expeditiously. Any settlement of the Hilpert and Hurco
Claims by Seller which has an effect on the operation by
Purchaser of the Transferred Business shall be in accordance
with the provisions of the Electronic Controls Supply
Agreement. As long as such settlement is in accordance with
the provisions of the Electronic Controls Supply Agreement,
Purchaser shall not bear any liability with respect to
royalties payable under a license of the Existing Hilpert
and Hurco Rights except to the extent set forth in the
Asset Purchase Agreement
32
Electronic Controls Supply Agreement relating to the supply
of Hilpert and Hurco Products thereunder.
SECTION 4.23. Nonsolicitation of Employees.
Purchaser and Seller agree that they will not, without the
consent of the other party, during the five year period
following the Closing Date solicit the employment of any of
the other party's employees while they are employed by such
other party.
SECTION 4.24. Control Application Software. Seller
agrees that for a period of one year following the Closing
Seller shall provide Purchaser with reasonable access to
Seller's control application software for its machines as
required to conduct the Transferred Business, subject to the
execution by the parties hereto of a confidentiality
agreement relating thereto that is reasonably acceptable to
the parties hereto and subject to Purchaser agreeing to use
such software solely in the manufacture of Electronic
Controls for Seller.
SECTION 4.25. Permits. Seller shall take all
reasonable efforts to ensure that the Acquired Permits are
promptly transferred to Purchaser subject to applicable law.
ARTICLE V
Post-Closing Obligations to Certain Employees
SECTION 5.1. Offer of Employment. Purchaser shall
offer employment in comparable positions to all Transferred
Employees on the Closing Date or upon the return of any such
Transferred Employee to active employment. If and to the
extent Purchaser does not offer to employ any Transferred
Employee, Purchaser shall indemnify and hold harmless Seller
for any required severance payments to such Transferred
Employee. All Transferred Employees who accept Purchaser's
employment offer shall be referred to herein as "Acquired
Employees".
SECTION 5.2. Employee Benefits. As of the Closing
Date, Acquired Employees shall be eligible to participate in
Purchaser's employee benefit plans in the same manner and to
the same extent as other similarly situated employees of
Purchaser; provided, however, Acquired Employees shall be
given credit for service earned as of the Closing Date with
Seller or any of its Subsidiaries (or service credited by
Seller or any of its Subsidiaries) under Seller's employee
benefit plans for purposes of eligibility to participate in
Purchaser's employee benefit plans and for
Asset Purchase Agreement
33
purposes of vesting in Purchaser's 401(k) Plan. Notwith-
standing the foregoing, for a period of two years after the
Closing Date, Purchaser will provide (or cause its
Subsidiaries to provide) to each Acquired Employee severance
pay and severance benefits which are no less favorable than
under the severance plan and current practice of Seller as
in effect on the date of this Agreement and shall credit
such Acquired Employees with their service with Seller or
its Subsidiaries (or service credited by Seller or any of
its Subsidiaries) earned as of the Closing Date for purposes
of computation of severance benefits. Purchaser shall cause
to be waived any pre-existing condition limitations under
its welfare plans that might otherwise apply to an Acquired
Employee. Purchaser agrees to recognize (or cause its
Subsidiaries to recognize) the dollar amount of all expenses
incurred by Acquired Employees during the calendar year 1995
for purposes of satisfying the 1995 calendar year
deductibles and copayment limitations under the relevant
Benefit Plans.
SECTION 5.3. Defined Benefit Plan. (a) It is
understood and agreed that (i) Acquired Employees shall
cease accruing benefits under Seller's Defined Benefit Plan
as of the Closing Date and (ii) Seller shall not transfer or
cause to be transferred to any plan of Purchaser any assets
or liabilities under Seller's Defined Benefit Plan.
(b) As of the Closing Date, Seller shall fully
vest (to the extent not already vested) all Acquired
Employees who have at least one year of service in Seller's
Defined Benefit Plan in their accrued benefit in Seller's
Defined Benefit Plan.
SECTION 5.4. Post-Retirement Benefits. Purchaser
and its Subsidiaries shall indemnify and hold harmless
Seller against, any and all liability for post-retirement
medical benefits with respect to Acquired Employees other
than Acquired Employees who on the Closing Date are age 55
or older and have 10 or more years of service to Seller.
SECTION 5.5. WARN Act. Purchaser agrees to
provide any required notice under the WARN Act, and any
similar statute and otherwise comply with any such statute
with respect to any "plant closing" or "mass layoff", as
defined under the WARN Act, or similar event, affecting
Transferred Employees and occurring after the Closing Date.
Purchaser shall indemnify and hold harmless Seller with
respect to any liability under the WARN Act or any similar
statute arising out of the actions of Purchaser or its
Subsidiaries after the Closing, and Seller shall indemnify
and hold harmless Purchaser with respect to any liability
Asset Purchase Agreement
34
under the WARN Act or any similar statute arising out of the
actions of Seller or its Subsidiaries before the Closing.
SECTION 5.6. 401(k) Plan. (a) Effective as of the
Closing Date, each Acquired Employee who was a participant
in Seller's Defined Contribution Plan as of the Closing Date
shall become a participant in Purchaser's 401(k) Plan
("Purchaser's 401(k) Plan") on the day following the
Closing.
(b) Upon forwarding by Purchaser to Seller of (i)
a favorable determination letter issued by the Internal
Revenue Service to the Purchaser to the effect that
Purchaser's 401(k) Plan meets the requirements for
qualification under section 401(a) of the Code, (ii) copies
of signed plan amendments, if necessary in order for such
plan to accept a transfer of account balances from Seller's
Defined Contribution Plan, and after timely provision of any
required notice; Seller shall as soon as practicable cause
the following to be transferred from Seller's Defined
Contribution Plan to Purchaser's 401(k) Plan.
(i) Any promissory notes and related documents for
any Acquired Employee's loans outstanding (as of the
transfer date) in Seller's Defined Contribution Plan.
(ii) Shares in the Cincinnati Milacron Stock Fund
in Seller's Defined Contribution Plan having a fair
market value equal to the aggregate value of the
Acquired Employee's account balances in such fund in
Seller's Defined Contribution Plan as of the transfer
date.
Along with the foregoing, Seller shall cause a cash transfer
to be made from Seller's Defined Contribution Plan to
Purchaser's 401(k) Plan equal to the remaining aggregate
value of Acquired Employees' account balances in Seller's
Defined Contribution Plan as of the transfer date, it being
understood that with respect to Acquired Employees' account
balances in Subfund B of the Seller's Defined Contribution
Plan, such amounts shall be transferred as soon as
practicable and may be transferred as soon as practicable
and may be transferred at a later time than the cash and
stock transfers contemplated in this Section 5.6.
Asset Purchase Agreement
35
ARTICLE VI
Conditions Precedent
SECTION 6.1. Conditions to Each Party's
Obligation. The obligation of Purchaser and Seller to
consummate the transactions contemplated to occur at the
Closing shall be subject to the satisfaction or waiver
thereby as of the Closing Date of each of the following
conditions:
(a) HSR and Other Approvals. Any applicable
waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or been
terminated, and all other material authorizations, consents,
orders or approvals of, or regulations, declarations or
filings with, or expirations of applicable waiting periods
imposed by, any Governmental Entity necessary for the
consummation of the transactions contemplated hereby shall
have been obtained or filed or shall have occurred.
(b) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction or
other legal restraint or prohibition preventing the
consummation of the transactions contemplated by this
Agreement shall be in effect or threatened by a governmental
agency with a substantial likelihood of success.
SECTION 6.2. Conditions to the Obligation of
Purchaser. The obligation of Purchaser to consummate the
transactions contemplated to occur at the Closing shall be
subject to the satisfaction or waiver thereby as of the
Closing Date of each of the following conditions:
(a) Representations and Warranties. The
representations and warranties of Seller set forth in this
Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the time of the
Closing as though made at and as of such time, except as
otherwise contemplated by this Agreement, and Purchaser
shall have received a certificate signed by an authorized
officer of Seller to such effect.
(b) Performance of Obligations of Seller. Seller
shall have performed or complied in all material respects
with all obligations and covenants required to be performed
or complied with by Seller under this Agreement prior to the
Closing, and Purchaser shall have received a certificate
signed by an authorized officer of Seller to such effect.
Asset Purchase Agreement
36
(c) Opinion of Seller's Counsel. Purchaser shall
have received an opinion dated the Closing Date of Cravath,
Swaine & Moore, or Wayne Taylor, General Counsel to Seller,
reasonably satisfactory to Purchaser and its counsel,
substantially in the form of Exhibit A hereto.
(d) Bills of Sale; Deeds. Seller shall have
delivered to Purchaser bills of sale conveying the personal
property included in the Acquired Assets, in each case in
form and substance reasonably satisfactory to Purchaser and
its counsel and a duly executed and acknowledged limited
warranty deed conveying good and marketable fee title to the
Owned Property subject only to Permitted Liens and those
matters referred to in items (B), (C) and (D) of Section
3.1(g) which do not violate the representation with respect
thereto therein contained, and Purchaser shall have obtained
title insurance with respect thereto; provided Purchaser
shall have used reasonable efforts to obtain such title
insurance by December 30, 1995.
(e) UK Agreement. The actions contemplated under
the UK Agreement to occur at the closing under that
agreement shall occur simultaneously with or prior to the
Closing.
(f) Supply Agreement. Seller shall have delivered
to Purchaser a duly executed Electronic Controls Supply
Agreement in the form of Exhibit C hereto.
(g) Withholding Certificate. Seller shall have
delivered to Purchaser a duly executed certificate
certifying that the sale of the Acquired Assets is exempt
from withholding under Section 1445 of the Code.
(h) License Agreements. Seller shall have
delivered to Purchaser a duly executed Retrofit License
Agreement in the form of Exhibit F hereto.
(i) Material Consents. Seller shall have delivered
to Purchaser the consents described in Schedule 6.2(i)
hereto.
(j) Other Documents. Seller shall have furnished
to Purchaser such other documents relating to Seller's
corporate existence and authority (including, without
limitation, copies of resolutions of the board of directors
of Seller), absence of Liens, and such other matters as
Purchaser or its counsel may reasonably request.
(k) Acceptance by Purchaser's Counsel. The form
and substance of all legal matters contemplated hereby and
Asset Purchase Agreement
37
of all documents delivered hereunder shall be acceptable to
Shumaker, Loop & Kendrick, counsel to Purchaser.
SECTION 6.3. Conditions to the Obligation of
Seller. The obligation of Seller to consummate the
transactions contemplated to occur at the Closing shall be
subject to the satisfaction or waiver thereby as of the
Closing Date of each of the following conditions:
(a) Representations and Warranties. The
representations and warranties of Purchaser set forth in
this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the time
of the Closing as though made at and as of such time, except
as otherwise contemplated by this Agreement, and Seller
shall have received a certificate signed by an authorized
officer of Purchaser to such effect.
(b) Performance of Obligations of Purchaser.
Purchaser shall have performed or complied in all material
respects with all obligations and covenants required to be
performed or complied with by it under this Agreement prior
to the Closing, and Seller shall have received a certificate
signed by an authorized officer of Purchaser to such effect.
(c) Opinion of Purchaser's Counsel. Seller shall
have received an opinion dated the Closing Date of James E.
Kline, Esq., General Counsel to Purchaser, reasonably
satisfactory to Seller and its counsel, substantially in the
form of Exhibit B hereto.
(d) License Agreements. Purchaser shall have
delivered to Seller a duly executed MCL License Agreement
and Controls License Agreement in the form of Exhibits D and
E, respectively, hereto.
(e) UK Agreement. The actions contemplated under
the UK Agreement to occur at the closing under that
agreement shall occur simultaneously with or prior to the
Closing.
(f) Supply Agreement. Purchaser shall have
delivered to Seller a duly executed Electronic Controls
Supply Agreement in the form of Exhibit C hereto.
(g) Acceptance by Seller's Counsel. The form and
substance of all legal matters contemplated hereby and of
all papers delivered hereunder shall be acceptable to
Cravath, Swaine & Moore, counsel to Seller.
Asset Purchase Agreement
38
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1. Termination. (a) Notwithstanding
anything to the contrary in this Agreement, this Agreement
may be terminated and the transactions contemplated hereby
abandoned at any time prior to the Closing, (i) by mutual
written consent of Seller and Purchaser, (ii) by Seller or
Purchaser if the UK Agreement is terminated or (iii) by
Seller or Purchaser, if the Closing does not occur on or
prior to January 15, 1996; provided, however, that the party
seeking termination pursuant to clause (ii) or (iii) above
is not in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
(b) In the event of termination by Seller or
Purchaser pursuant to this Section 7.1, written notice
thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be
terminated, without further action by any party. If the
transactions contemplated by this Agreement are terminated
as provided herein:
(i) Each of Purchaser and Seller shall promptly
return (or destroy with a certificate of destruction)
to the other party all documents and other material
received from the other party relating to the
transactions contemplated hereby, whether so obtained
before or after the execution hereof; and
(ii) all confidential information received by
Purchaser or Seller with respect to the businesses of
the other party shall be treated in accordance with
Section 4.3 hereto, which shall remain in full force
and effect notwithstanding the termination of this
Agreement.
(c) If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described
in this Section 7.1, this Agreement shall become null and
void and of no further force and effect, except for the
provisions of (i) Section 4.3 relating to the obligation of
Purchaser and Seller to keep confidential certain
information and data obtained by it, (ii) this Section 7.1,
(iii) Section 9.09 relating to publicity and (iv) Section
9.10 regarding certain expenses. Nothing in this Section 7.1
shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this
Agreement.
Asset Purchase Agreement
39
SECTION 7.2. Amendments and Waivers. This
Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Purchaser or Seller may, by an instrument in writing signed
on behalf of such party, waive compliance by the other party
with any term or provision of this Agreement that such other
party was or is obligated to comply with or perform.
ARTICLE VIII
Indemnification
SECTION 8.1. Indemnification by Seller. Seller
hereby agrees to indemnify Purchaser and its affiliates and
their respective officers, directors, employees,
stockholders, agents and representatives against, and agrees
to hold them harmless from, any loss, liability, claim,
damage or expense (and including reasonable legal fees and
expenses; individually a "Loss" and collectively "Losses"),
as incurred (payable quarterly upon written request), for or
on account of or arising from or in connection with or
otherwise with respect to any Excluded Liabilities or any
breach of any covenant, obligation, agreement or
representation or warranty of Seller contained in this
Agreement or in any Ancillary Agreement (other than the
Electronic Controls Supply Agreement); provided, however,
that Seller shall not have any liability under this Section
8.1 with respect to any breach of a representation or
warranty under Article III hereof, other than
representations and warranties contained in Sections 3.1(a)
and 3.1(b), except to the extent that the aggregate of all
such Losses (outside of Losses payable under Section 8.3)
exceeds $1,000,000, and then only to the extent of such
excess; and provided further, however, that the total
indemnification to be paid by Seller (outside of Losses
payable under Section 8.3) under or in respect of any breach
of a representation or warranty contained in this Agreement
under Article III hereof, other than representations and
warranties contained in Section 3.1(a) and 3.1(b), shall not
in any event exceed $50,000,000.
Purchaser acknowledges and agrees that its sole
and exclusive remedy with respect to any and all claims
relating to the subject matter of this Agreement and the
Ancillary Agreements (other than the Electronic Controls
Supply Agreement) shall be pursuant to the indemnification
provisions set forth in this Article VIII. In furtherance of
the foregoing, Purchaser hereby waives, to the fullest
extent permitted under applicable law, any and all rights,
claims and causes of action it may have against Seller
Asset Purchase Agreement
40
arising under or based upon any Federal, state or local
statute, law, ordinance, rule or regulation.
SECTION 8.2. Indemnification by Purchaser.
Purchaser hereby agrees to indemnify Seller and its
affiliates and their respective officers, directors,
employees, stockholders, agents and representatives against,
and agrees to hold them harmless from any Loss, as incurred
(payable quarterly upon written request), for or on account
of or arising from or in connection with or otherwise with
respect to any Assumed Liabilities or any breach of any
covenant, obligation, agreement or representation or
warranty of Purchaser or Purchaser Subsidiary contained in
this Agreement or in any Ancillary Agreement (other than the
Electronic Controls Supply Agreement); provided, however,
that Purchaser shall not have any liability under this
Section 8.2 with respect to any breach of a representation
or warranty under Article III hereof, other than
representations and warranties contained in Sections 3.2(a)
and 3.2(b), except to the extent that the aggregate of all
such Losses exceeds $1,000,000, and then only to the extent
of such excess; and provided further, however, that the
total indemnification to be paid by Purchaser under or in
respect of any breach of a representation or warranty
contained in this Agreement under Article III hereof, other
than representations and warranties contained in Section
3.2(a) and 3.2(b), shall not in any event exceed
$50,000,000.
Seller acknowledges and agrees that its sole and
exclusive remedy with respect to any and all claims relating
to the subject matter of this Agreement and the Ancillary
Agreements (other than the Electronic Controls Supply
Agreement) shall be pursuant to the indemnification
provisions set forth in this Article VIII. In furtherance of
the foregoing, Seller hereby waives, to the fullest extent
permitted under applicable law, any and all rights, claims
and causes of action it may have against Purchaser or its
Subsidiaries arising under or based upon any Federal, state
or local statute, law, ordinance, rule or regulation.
SECTION 8.3. Environmental Indemnification. (a)
Subject to the provisions of Section 4.21 and the further
provisions of this Section 8.3, Seller agrees to indemnify
and hold harmless Purchaser and its affiliates and their
respective officers, directors, employees, stockholders,
agents and representatives, from any and all Environmental
Liabilities, whenever asserted or incurred, arising out of
or relating to (i) any condition existing on the Indemnified
Property as of or prior to the Closing Date and (ii)
Hazardous Substances generated at the Indemnified
Asset Purchase Agreement
41
Property but disposed of outside the Indemnified Property
prior to the Closing Date (collectively, "Environmental
Claims"). "Environmental Liabilities" means all liabilities,
obligations (including obligations to respond to,
investigate and remediate conditions caused by any Hazardous
Substances), responsibilities, losses, damages,
deficiencies, punitive damages, treble damages, fines,
penalties, costs, expenses (including reasonable attorneys'
fees), interest, bonds, security or other financial
assurance, resulting from any claim or demand under the
authority of or based upon any Environmental Law.
(b) Seller shall not be required to indemnify
Purchaser or any other Person under Section 8.3(a) until the
aggregate of all amounts paid by Purchaser or Purchaser UK
Subsidiary for which indemnity would otherwise be due under
such Section or the corresponding Section of the UK
Agreement exceeds $1,000,000, and then only to the extent of
such excess; provided, however, that Seller shall not be
required to indemnify Purchaser under Section 8.3(a) for any
Environmental Liabilities incurred in connection with a
breach by Purchaser of the covenant in Section 4.21 or the
corresponding Section of the UK Agreement.
(c) Neither Purchaser nor any other Person shall
be entitled to make any claim for indemnification under
Section 8.3(a) after the fifth anniversary of the Closing
Date; provided, however, that any such matter as to which a
claim has been asserted by notice to Seller that is pending
or unresolved on the last date for which a claim for
indemnification may be made shall continue to be covered by
this Section until such matter is finally terminated or
otherwise resolved by the parties under this Agreement or by
a court of competent jurisdiction and any amounts payable
hereunder are finally determined and paid.
(d) Purchaser shall indemnify and hold harmless
Seller and its affiliates and their respective officers,
directors, employees, stockholders, agents and
representatives from any Environmental Claim with respect to
which Seller is not obligated to indemnify Purchaser as a
result of the operation of Section 8.3(b).
SECTION 8.4. Losses Net of Insurance, etc. The
amount of any Loss for which indemnification is provided
under this Article VIII shall be net of any amounts
recovered by the Person indemnified pursuant to this
Article VIII (the "Indemnified Party") under insurance
policies with respect to such Loss and shall be (i)
increased to take account of any net Tax cost incurred by
the Indemnified Party arising from the receipt or accrual
Asset Purchase Agreement
42
of indemnity payments hereunder (grossed up for such
increase) and (ii) reduced to take account of any net Tax
benefit realized by the Indemnified Party arising from the
payment of any such Loss. Any indemnification payment
hereunder shall initially be made (i) in the case of net
Tax costs or benefits, without regard to this paragraph
and shall be increased or reduced to reflect any such net
Tax cost (including gross-up) or net Tax benefit only
after the Indemnified Party has actually realized such
cost or benefit, and (ii) in the case of insurance amounts
not yet recovered, without taking into account such
unrecovered insurance amounts, with a future payment to be
made by the Indemnified Party to the Indemnifying Party
upon the recovery of, and in the amount of, any such
insurance amounts. For purposes of this Agreement, an
Indemnified Party shall be deemed to have "actually
realized" a net Tax cost or net Tax benefit to the extent
that, and at such time as, the amount of Taxes payable by
such Indemnified Party is increased above or reduced
below, as the case may be, the amount of Taxes that such
Indemnified Party would be required to pay but for the
receipt of the indemnity payment or the payment of such
Loss.
SECTION 8.5. Indemnification Procedures. With
respect to third party claims, all claims for
indemnification by any Indemnified Party hereunder shall
be asserted and resolved as set forth in this Section 8.5.
In the event that any written claim or demand for which an
Indemnifying Party, Seller or Purchaser as the case may be
(an "Indemnifying Party"), would be liable to any
Indemnified Party hereunder is asserted against or sought
to be collected from any Indemnified Party by a third
party, such Indemnified Party shall promptly, but in no
event more than 15 days following such Indemnified Party's
receipt of such claim or demand, notify the Indemnifying
Party of such claim or demand and the amount or the
estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final
amount of such claim and demand) (the "Claim Notice");
provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder
except to the extent the Indemnifying Party shall have
been actually prejudiced as a result of such failure
(except that the Indemnifying Party shall not be liable
for any expenses incurred during the period in which the
Indemnified Party failed to give such notice). The
Indemnifying Party shall have 45 days from the personal
delivery or mailing of the Claim Notice (the "Notice
Period") to notify the Indemnified Party (a) whether or
not the Indemnifying Party disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with
respect to such claim or demand and (b) whether or not it
Asset Purchase Agreement
43
desires to defend the Indemnified Party against such claim
or demand. All costs and expenses incurred by the
Indemnifying Party in defending such claim or demand shall
be a liability of, and shall be paid by, the Indemnifying
Party. Except as hereinafter provided, in the event that
the Indemnifying Party notifies the Indemnified Party
within the Notice Period that it desires to defend the
Indemnified Party against such claim or demand, the
Indemnifying Party shall have the right to defend the
Indemnified Party by appropriate proceedings and shall
have the sole power to direct and control such defense;
provided, however, that the Indemnifying Party shall not
cease to defend, settle or otherwise dispose of any Claim
without the prior written consent of the Indemnified Party
if as a result thereof the Indemnified Party could become
subject to injunctive or other equitable relief or the
business of the Indemnified Party could be materially
adversely affected in any nonmonetary manner. If any
Indemnified Party desires to participate in any such
defense it may do so at its sole cost and expense. The
Indemnified Party shall not settle a claim or demand for
which it is indemnified by the Indemnifying Party without
the written consent of the Indemnifying Party. The
assumption of the defense or the settlement or other
disposal of any claim by the Indemnifying Party shall not
prejudice in any way the right of such Indemnifying Party
to challenge and defend against the Indemnified Party's
assertion of a right to indemnification under this
Agreement. If the Indemnifying Party elects not to defend
the Indemnified Party against such claim or demand,
whether by not giving the Indemnified Party timely notice
as provided above or otherwise, then the amount of any
such claim or demand, or, if the same be contested by the
Indemnified Party, then that portion thereof as to which
such defense is unsuccessful (and the reasonable costs and
expenses pertaining to such defense) shall be the
liability of the Indemnifying Party hereunder. To the
extent the Indemnifying Party shall direct, control or
participate in the defense or settlement of any third
party claim or demand, the Indemnified Party will give the
Indemnifying Party and its counsel access to, during
normal business hours, the relevant business records and
other documents, and shall permit them to consult with the
employees and counsel of the Indemnified Party. The
Indemnified Party shall use its reasonable efforts in the
defense of all such claims.
SECTION 8.6. Adjustment to Purchase Price. Seller
and Purchaser shall treat any indemnity payment under this
agreement as an adjustment to the Purchase Price for Tax
purposes, unless a final determination with respect to the
Indemnified Party causes any such payment not to be
Asset Purchase Agreement
44
treated as an adjustment to the Purchase Price for United
States Federal income Tax purposes.
ARTICLE IX
General Provisions
SECTION 9.1. Notices. All notices and other
communications hereunder shall be in writing (including
wire, telefax or similar writing) and shall be sent,
delivered or mailed, addressed, or telefaxed:
(a) if to Purchaser, to:
Vickers E.S.D., Inc.
3000 Strayer
Maumee, Ohio 43537-0050
Phone: (419) 867-2200
Fax: (419) 867-2649
Attention of John Weber
with a copy to:
Trinova Corporation
3000 Strayer
Maumee, Ohio 43537-0050
Attention of: James E. Kline, Esq.
Phone: (419) 867-2340
Fax: (419) 867-2209
with a copy to:
Shumaker, Loop & Kendrick
North Courthouse Square
1000 Jackson
Toledo, Ohio 43624
Phone: (419) 241-9000
Fax: (419) 241-6894
Attention of Lyman F. Spitzer, Esq.
(b) if to Seller, to:
Cincinnati Milacron Inc.
4701 Marburg Avenue
Cincinnati, Ohio 45209
Phone: (513) 841-8287
Fax: (513) 841-7166
Attention of Wayne F. Taylor, Esq.
Asset Purchase Agreement
45
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Phone: (212) 474-1000
Fax: (212) 474-3700
Attention of James M. Edwards, Esq.
Each such notice, request or other communication shall be
given (i) by hand delivery, (ii) by nationally recognized
courier service or (iii) by telefax, receipt confirmed. Each
such notice, request or communication shall be effective (i)
if delivered by hand or by nationally recognized courier
service, when delivered at the address specified in this
Section 9.1 (or in accordance with the latest unrevoked
written direction from such party) and (ii) if given by
telefax, when such telefax is transmitted to the telefax
number specified in this Section 9.1 (or in accordance with
the latest unrevoked written direction from such party), and
the appropriate confirmation is received.
SECTION 9.2. Interpretation. (a) When a reference
is made in this Agreement to a Section, Appendix, Schedule
or Exhibit, such reference shall be to a Section, Appendix,
Schedule or Exhibit of this Agreement unless otherwise
indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement. Whenever the words "included", "includes" or
"including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation". All
accounting terms not defined in this Agreement or in the
notes to the Financial Statements shall have their meanings
under GAAP.
(b) When a reference is made in this Agreement "to
the knowledge of Seller" or "to Seller's knowledge" or "to
the knowledge of Purchaser" or "to Purchaser's knowledge",
such reference shall mean to the knowledge of certain
employees of Seller or Purchaser as the case may be, listed
on Schedule 9.2, after reasonable inquiry of persons under
their supervision whom they believe will have relevant
knowledge.
SECTION 9.3. Survival of Representations and
Warranties. The representations and warranties in this
Agreement, the Ancillary Agreements (other than the
Electronic Controls Supply Agreement) or on any instrument
Asset Purchase Agreement
46
delivered pursuant to this Agreement shall survive for a
period of 24 months from the Closing Date; provided,
however, that the representations and warranties under
Sections 3.1(a), 3.1(b), 3.1(f) and 3.1(g) (but Sections
3.1(f) and 3.1(g) only with respect to title) shall survive
the Closing with no expiration date. This Section 9.3 shall
not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Closing.
SECTION 9.4. Severability. The provisions of this
Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
If any provision of this Agreement, or the application
thereof to any person or entity or any circumstance, is
found to be invalid or unenforceable in any jurisdiction,
(a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or
enforceability of such provision, or the application
thereof, in any other jurisdiction.
SECTION 9.5. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original and all of which shall, taken together,
be considered one and the same agreement, it being
understood that both parties need not sign the same
counterpart.
SECTION 9.6. Entire Agreement; No Third Party
Beneficiaries. This Agreement (a) constitutes the entire
agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties
with respect to the subject matter hereof and (b) is not
intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
SECTION 9.7. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of Ohio, regardless of the laws that might
otherwise govern under applicable principles of conflicts of
law.
SECTION 9.8. Schedules. The disclosure of any
matter in any schedule to this Agreement shall be deemed to
Asset Purchase Agreement
47
be a disclosure for all purposes of this Agreement to which
such matter could reasonably be expected to be pertinent,
but shall expressly not be deemed to constitute an admission
by Seller or Purchaser, or to otherwise imply, that any such
matter is material for purposes of this Agreement.
SECTION 9.9. Publicity. So long as this Agreement
is in effect, neither Seller nor Purchaser shall issue or
cause the publication of any press release or other public
announcement with respect to the transactions contemplated
by this Agreement without the consent of the other party,
which consent shall not be unreasonably withheld or
withdrawn, except as may be required by law or the
regulations of any securities exchange. Any party hereto
that is required to make a public announcement shall
promptly notify the other party hereto and shall allow the
other party hereto to comment on the text of such
announcement.
SECTION 9.10. Expenses. Whether or not the Closing
takes place, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby
shall be borne by the party incurring such expense.
SECTION 9.11. Assignment. Neither this Agreement
nor any of the rights or obligations hereunder shall be
assigned by either of the parties hereto without the prior
written consent of the other party, except that any party
may assign all its rights and obligations to the assignee of
all or substantially all of the assets of such party or of a
division or business unit of such party, provided that such
party shall in no event be released from its obligations
hereunder without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be
Asset Purchase Agreement
48
enforceable by the parties and their respective successors
and assigns.
SECTION 9.12. Transitional Services Agreement. The
parties agree that as soon as practicable following the date
hereof, the parties hereto shall enter into a transitional
services agreement for transitional services that are
reasonable and customary for this type of transaction, which
services shall be provided by Seller to Purchaser.
IN WITNESS WHEREOF, SELLER and PURCHASER have
caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first
written above.
CINCINNATI MILACRON INC.
by
-------------------------
Name:
Title:
TRINOVA CORPORATION
by
-------------------------
Name:
Title:
Asset Purchase Agreement
49
Appendix A
As used in the Agreement, the following terms
shall have the following meanings:
"Account Designation Notice" shall have the
meaning set forth in Section 1.4.
"Acquired Assets" shall have the meaning set forth
in Section 1.2(a).
"Acquired Books and Records" shall mean all Books
and Records located at the South Lebanon Plant.
"Acquired Contracts" shall mean all Contracts to
which Seller is a party or by which Seller is bound that
primarily relate to, arise primarily out of or are used
primarily in connection with the Transferred Business.
"Acquired Employees" shall mean all Transferred
Employees who accept Purchaser's offer of employment.
"Acquired Intellectual Property" shall mean all
Intellectual Property owned by Seller that primarily relates
to, arises primarily out of or is used primarily in
connection with the operations of the Transferred Business.
"Acquired Inventory" shall mean all Inventory on
the Closing Date other than Excluded Inventory.
"Acquired Know-how" shall mean all Know-how owned
by Seller that primarily relates to, arises primarily out of
or is used primarily in connection with the operations of
the Transferred Business.
"Acquired Permits" shall mean all Permits owned by
Seller that primarily related to, arise primarily out of or
are used primarily in connection with the operations of the
Transferred Business.
"Acquired Plan Assets" shall mean all account
balances and other assets (including stock accounts) of
Acquired Employees in Seller's Defined Contribution Plan.
An "affiliate" of any Person shall mean any other
Person that directly or indirectly, through one or more
intermediaries, Controls, is Controlled by, or is under
common Control with, such first Person. "Control" shall
have the meaning specified in Rule 12b-2 under the Exchange
Act.
Asset Purchase Agreement
50
"Agreement" shall mean this Asset Purchase
Agreement dated as of December 15, 1995, between Seller and
Purchaser, including the Schedules, Exhibits and the
Appendices hereto, as it may be amended from time to time.
"Ancillary Agreements" shall mean the Electronic
Controls Supply Agreement, the MCL License Agreement, the
Retrofit License Agreement and the Controls License
Agreement;
"Appraiser" shall have the meaning set forth in
Section 1.6.
"Assumed Liabilities" shall have the meaning set
forth in Section 1.3(a).
"Balance Sheet" shall have the meaning set forth
in Section 3.1(c).
"Base Net Asset Value" shall mean the difference
between (x) the total assets shown on the Projected Balance
Sheet and (y) the total liabilities shown on the Projected
Balance Sheet, excluding any deferred tax assets and
deferred tax liabilities.
"Benefit Plans" shall have the meaning set forth
in Section 3.1(n).
"Books and Records" shall mean all books, ledgers,
files, invoices, customers' and suppliers' lists and
operating records related to or used in connection with the
Transferred Business (other than any Federal or state income
or franchise Tax Return of Seller).
"Claim Notice" shall have the meaning set forth in
Section 8.5.
"Closing" shall have the meaning set forth in
Section 2.1.
"Closing Date" shall have the meaning set forth in
Section 2.1.
"Closing Date Balance Sheet" shall mean the asset
and liability statement prepared, or caused to be prepared,
by Seller in accordance with Section 1.5(b) hereof.
"Closing Date Net Asset Value" shall mean the
difference between (x) the total assets shown on the Closing
Date Balance Sheet properly prepared in accordance with
Section 1.5 and (y) the total liabilities shown on such
Asset Purchase Agreement
51
Closing Date Balance Sheet, excluding any deferred tax
assets and deferred tax liabilities.
"Code" shall mean the Internal Revenue Code of
1986, as amended.
"Contracts" shall mean all contracts, leases,
indentures, agreements, commitments and all other legally
binding arrangements, whether oral or written.
"Controls License Agreement" shall mean a license
agreement between Seller and Purchaser granting Seller a
royalty-free license to use Acquired Intellectual Property
and Acquired Know-how in machine control products, other
than those purchased by Seller under the Electronic Controls
Supply Agreement, and which are applied to Machines used or
distributed by Seller.
The "CPA Firm" shall mean Arthur Andersen LLP or
such other firm of independent public accountants as to
which Seller and Purchaser shall mutually agree.
"Division" shall mean the Electronic Systems
Division of Seller which carries on business at and from the
South Lebanon Plant.
Asset Purchase Agreement
52
"Electronic Controls" shall mean electronic
computer controls and associated Division developed software
for such electronic computer controls.
"Electronic Controls Supply Agreement" shall mean
the supply and services agreement between Seller and
Purchaser granting Seller a supply arrangement for
Electronic Controls.
"Environmental Claims" shall have the meaning set
forth in Section 8.3.
"Environmental Laws" means any applicable laws,
regulations, orders or decrees issued, promulgated or
entered into by any Governmental Entity, relating to the
environment, preservation or reclamation of natural
resources, or to the production, use, storage, labeling,
transportation, management or disposal of Hazardous
Substances, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C.
Sections 9601 et seq. ("CERCLA"), the Federal Water
Pollution Control Act, 33 U.S.C. Sections 1251 et seq., the
Clean Air Act, 42 U.S.C. Sections 7401 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq. and any similar or implementing state or local law, and
all amendments or regulations promulgated thereunder.
"Environmental Liabilities" shall have the meaning
set forth in Section 8.3.
"Environmental Permits" means all permits,
licenses or authorizations from any Governmental Entity
required under Environmental Laws for the operation of the
Transferred Business.
"Equipment" shall mean all equipment of Seller,
other than Excluded Assets, that primarily relate to, arise
primarily out of or is used primarily in connection with the
Transferred Business.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
"Excluded Assets" shall have the meaning set forth
in Section 1.2(b).
Asset Purchase Agreement
53
"Excluded Books and Records" shall mean all Books
and Records not primarily related to the Transferred
Business.
"Excluded Inventory" shall mean all Inventory
recorded in a manner consistent with past practice on the
face of a balance sheet of a division or subsidiary of
Seller other than the Division on the Closing Date.
"Excluded Liabilities" shall have the meaning set
forth in Section 1.3(b).
"Excluded Plan Assets" shall mean all Plan Assets
and all assets held in trust under Seller's Defined
Contribution Plan other than for Acquired Employees.
"Excluded Tax Liabilities" shall mean all
obligations or liabilities of Seller for (A) Taxes
attributable to the Transferred Business for taxable periods
ending on or before the Closing Date or related to any
income or gain from the transactions contemplated by this
Agreement or any deferred gain on any intercompany
transactions and (B) Taxes attributable to the Transferred
Business for the portion ending on the Closing Date of any
taxable period that includes but does not end on the Closing
Date (in each case, other than the Real Property Tax
Liabilities). For purposes of calculating the amount of
Taxes described in clause (B) of the preceding sentence, the
Tax liabilities attributable to any such portion shall be
(i) in the case of any personal and intangible property Tax,
the amount of any such Tax for the entire taxable period
multiplied by a fraction, the denominator of which is the
number of days during such taxable period and the numerator
of which is the number of days in such portion and (ii) in
the case of any other Tax (other than a Real Property Tax
Liability), the amount of any such Tax attributable to the
activities of the Transferred Business occurring on or
before the Closing Date.
"GAAP" shall mean United States generally accepted
accounting principles.
"Governmental Entity" shall mean any court,
administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign.
"Hazardous Substances" means all hazardous or
toxic substances, wastes or chemicals, petroleum (including
petroleum, crude oil or any fraction or by-product thereof)
regulated pursuant to any Environmental Law.
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54
"Hilpert and Herco Claims" shall have the meaning
set forth in Section 1.3(b)(xi).
"HSR Act" shall mean the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
"Indemnified Party" shall have the meaning set
forth in Section 8.4.
"Indemnifying Party" shall have the meaning set
forth in Section 8.5.
"Indemnified Property" shall have the meaning set
forth in Section 4.21.
"Intellectual Property" shall mean the (i)
Patents, (ii) Trademarks, (iii) Trade Names, (iv)
copyrights, (v) service marks, (vi) shop rights and (vii)
license rights.
"Inventory" means all raw materials, work in
process, finished goods, supplies, parts and other
inventories held by Seller or any of its affiliates at any
location primarily related to the Transferred Business.
"Know-how" shall mean all trade secrets, know-how
(including product know-how and use and application
know-how), formulas, processes, product designs,
specifications, quality control procedures, manufacturing,
engineering and other drawings, technology, technical
information, safety information, lab journals, engineering
data and design and engineering specifications, research
records, market surveys and all promotional literature,
customer and supplier lists and similar data.
"Leased U.S. Property" shall have the meaning set
forth in Section 3.1(g).
"Lien" shall mean any mortgage, claim, charge,
lien, security interest, easements, rights-of-way, pledges
or other encumbrance.
"Lockheed Contract" shall mean the purchase orders
issued by Lockheed Aeronautical Systems Company Nos.
ADV3H2330 and ADV2T7150, both dated August 1, 1990.
"Loss" shall have the meaning set forth in
Section 8.1.
"Machine" shall mean plastics machinery and
machine tools.
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55
"Material Contract" shall mean (A) the Contracts
listed on Schedule 3.1(k)(1) and (B) the Contracts listed on
Schedule 3.1(k)(2) that involve an amount in excess of
$150,000.
"Material Know-how" shall have the meaning set
forth in Section 3.1(i).
"MCL License Agreement" shall mean the license
agreement between Purchaser and Seller granting Seller a
royalty-free license to use Purchaser's technology primarily
related to Mechanism Control Language.
"Mechanism Control Language" shall mean the
programmable logic controller programming language and
related interpreter software supplied by the Division for
Electronic Controls.
"Notice Period" shall have the meaning set forth
in Section 8.5.
"Owned Property" shall have the meaning set forth
in Section 3.1(g).
"Patents" shall mean patents (including all
reissues, reexaminations, divisions, continuations,
continuations in part and extensions thereof), patent
applications and patent disclosures docketed and all other
patent rights.
"Permits" shall mean all permits, licenses,
franchises, approvals and authorizations by governmental or
regulatory authorities or bodies.
"Permitted Liens" shall have the meaning set forth
in Section 3.1(f).
"Person" shall mean any individual, corporation,
partnership, joint venture, trust, business association,
organization, Governmental Entity or other entity.
"Plan Assets" shall mean all assets held in trust
under Seller's Defined Benefit Plan.
"Projected Balance Sheet" shall have the meaning
set forth in Section 1.5(a) hereto.
"Purchase Price" shall have the meaning set forth
in Section 1.4.
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56
"Purchase Price Adjustment Amount" shall have the
meaning set forth in Section 1.5(e).
"Purchaser" shall have the meaning set forth in
the heading of the Agreement.
"Purchaser's Objection" shall have the meaning set
forth in Section 1.5(c).
"Purchaser's 401(k) Plan" shall have the meaning
set forth in Section 5.6.
"Purchaser Subsidiary" shall mean Vickers E.S.D.,
Inc., a Delaware corporation and a wholly owned subsidiary
of Purchaser.
"Purchaser UK Subsidiary" shall mean Trinova
Limited.
"Real Property Tax Liabilities" shall mean all
obligations or liabilities for real property Taxes
attributable to the Transferred Business for all taxable
periods.
"Report" shall have the meaning set forth in
Section 1.6.
"Retiree" shall mean any person who at the time of
his or her retirement was employed by Seller principally in
connection with the Transferred Business.
"Retrofit License Agreement" shall mean the
license agreement between Seller and Purchaser granting
Purchaser a royalty-free license to use Seller's Retrofit
Technology.
"Retrofit Technology" shall mean the know-how and
proprietary and/or confidential information of Seller set
forth in the Machine Application Documentation (as that term
is defined in the Retrofit License Agreement).
"Return" shall mean any return (including
information returns), report, declaration or statement
relating to Taxes and filed with a taxing authority,
including any schedule or attachment thereto or amendment
thereof.
"Scheduled Real Property" shall mean all real
property, leaseholds and other interests in real property of
Seller listed in Schedule 3.1(g)(1) or 3.1(g)(2), in each
case together with its right, title and interest in all
Asset Purchase Agreement
57
buildings, improvements, fixtures and all other
appurtenances thereto.
"SEC" shall mean the Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of
1933, as amended.
"Seller" shall have the meaning set forth in the
heading of the Agreement.
"Seller's Defined Benefit Plan" shall mean the
Cincinnati Milacron Retirement Plan.
"Seller's Defined Contribution Plan" shall mean
the Cincinnati Milacron Performance Dividend and Savings
Plan.
"Seller's Names" shall have the meaning set forth
in Section 4.8.
"Selling Subsidiary" shall mean Cincinnati
Milacron U.K. Limited, a company organized under the laws of
England and Wales and a wholly-owned subsidiary of Seller.
"South Lebanon Plant" shall mean the Seller's
plant located in South Lebanon, Ohio.
"Storage Tank" shall mean the underground storage
tank and any related piping systems formerly used for the
storage of #2 fuel oil at the South Lebanon Plant.
"Subsidiary" shall mean, with respect to any
Person, as of any date of determination, any other Person as
to which such Person owns, directly or indirectly, or
otherwise controls, more than 50% of the voting shares or
other similar interests.
"Tax" or "Taxes" shall mean all Federal, state,
local, foreign or other governmental taxes, assessments,
duties, fees, levies or similar charges of any kind,
including all income, profit, franchise, environmental,
excise, property, occupation, use, intangibles, sales,
payroll, employment, withholding and other taxes, and
including all interest, penalties and additions imposed with
respect to such amounts.
"Tax Claims" shall mean all rights to claims
available to, or being pursued by, Seller for (A) refunds of
Taxes attributable to the Transferred Business for taxable
Asset Purchase Agreement
58
periods ending on or before the Closing Date and (B) refunds
of Taxes attributable to the Transferred Business for the
portion ending on the Closing Date of any taxable period
that includes but does not end on the Closing Date. For
purposes of calculating the amount of refunds of Taxes
described in clause (B) of the preceding sentence, the
refunds of Taxes attributable to any such portion shall be
(i) in the case of any refund of any real, personal and
intangible property Tax, the amount of any such refund for
the entire taxable period multiplied by a fraction, the
denominator of which is the number of days during such
taxable period and the numerator of which is the number of
days in such portion and (ii) in the case of any refund of
any other Tax, the amount of any refund of Taxes
attributable to the activities of the Transferred Business
occurring on or before the Closing Date.
"Trademarks" shall mean trademarks, registrations
thereof, pending applications therefor and such unregistered
rights as may exist through use.
"Trade Names" shall mean trade names, brand marks,
trade dress, brand names, logos and all other names and
slogans embodying business or product goodwill for which no
trademark registration has been obtained and for which no
application is pending.
"Transfer Taxes" shall mean all transfer,
documentary, sales, use, registration and other similar
Taxes (including all applicable real estate transfer Taxes)
and related amounts (including any penalties, interest and
additions to Tax) incurred in connection with the Agreement
and the Ancillary Agreements and the transactions
contemplated hereby and thereby, including the transfer of
the Acquired Assets to Purchaser or Purchaser Subsidiary (or
any permitted assignee of the foregoing).
"Transferred Business" shall mean all the business
conducted by the Division at the South Lebanon Plant
inclusive of the Acquired Assets and Assumed Liabilities and
excluding the Excluded Liabilities and Excluded Assets.
"Transferred Employee" shall mean each person who
on the Closing Date is employed by Seller principally in
connection with the Transferred Business, including any such
person receiving disability benefits, on leave under the
Family and Medical Leave Act of 1993 or otherwise on leave
from actual employment, but not including any person on long
term disability leave, each of which is listed on Schedule
5.1. For purposes of this definition, an employee that
devotes 80% or more of his or her work time in
Asset Purchase Agreement
59
connection with the Transferred Business shall be deemed to
be employed principally in connection with the Transferred
Business.
"UK Agreement" shall mean the Asset Purchase
Agreement dated as of December 15, 1995, between Selling
Subsidiary and Purchaser UK Subsidiary whereby the selling
Subsidiary will sell certain assets and transfer certain
liabilities to the Purchaser UK Subsidiary.
"WARN Act" shall mean the Worker Adjustment and
Retraining Notification Act of 1988, as the same may be
amended from time to time.