CONFIDENTIAL
ACQUISITION OF
ROLLER BEARING COMPANY
OF AMERICA, INC.
MARCH 31, 1992
EXECUTION COPY
================================================================================
AGREEMENT AND PLAN OF REORGANIZATION
DATED MARCH 31, 1992,
AMONG
ROLLER BEARING COMPANY OF AMERICA, INC.,
ROLLER BEARING ACQUISITION COMPANY, INC.
ROLLER BEARING HOLDING COMPANY, INC.,
AND
THE STOCKHOLDERS OF ROLLER BEARING COMPANY OF AMERICA, INC.
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I GENERAL ................................................ 1
1.1. The Merger ............................................. 1
1.2. The Effective Time of the Merger ....................... 2
1.3. Effect of Merger ....................................... 2
1.4. Charter and By-Laws of Surviving Corporation ........... 2
1.5. Taking of Necessary Action; Further
Assurances ........................................ 3
ARTICLE II PURCHASE OF SHARES; EFFECT OF MERGER ON
CAPITAL STOCK AND OTHER SECURITIES OF
CONSTITUENT CORPORATIONS; ETC ..................... 3
2.1. Purchase of Shares ..................................... 3
2.2. Effect of Merger on Securities ......................... 3
2.3. Exchange of Certificates; Delivery of Funds ............ 4
2.4. Deposit into Escrow .................................... 5
2.5. Exercise of Warrants and Exchange of Options ........... 5
2.6. Authorization of the Merger, this Agreement
and the Agreement of Merger ....................... 6
2.7. After the Effective Time ............................... 6
ARTICLE III REPRESENTATIONS AND WARRANTIES ......................... 6
3.1. Several Representations and Warranties of
Each Stockholder .................................. 6
(a) Title to the Shares .................................... 6
(b) Organization, Good Standing and Power .................. 7
(c) Authority .............................................. 7
(d) Investment Representations ............................. 7
3.2. Representations and Warranties of the
Stockholders and RBC .............................. 8
(a) Organization; Good Standing; Qualification
and Power ......................................... 8
(b) Authority .............................................. 9
(c) Capital Structure ...................................... 9
(d) Equity Investments ..................................... 10
(e) Financial Information .................................. 10
(f) Absence of Undisclosed Liabilities ..................... 11
(g) Absence of Changes ..................................... 11
(h) Title to Assets, Properties and Rights and
Related Matters ................................... 13
(i) Agreements, Etc ........................................ 13
(j) Compliance; Governmental Authorization ................. 15
(k) Litigation, Etc ........................................ 15
(l) Tax .................................................... 16
(m) ERISA .................................................. 18
(n) Environmental Matters .................................. 19
(o) Intellectual Property .................................. 22
(p) Labor Relations; Employees ............................. 23
(q) Insurance .............................................. 23
- i -
Page
----
(r) Brokers ................................................ 23
(s) Material Adverse Effect ................................ 23
(t) Depositions, Powers of Attorney ........................ 23
(u) Government Contracts ................................... 23
(v) Disclosure ............................................. 24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER
AND THE ACQUISITION CORPORATION ................... 24
4.1. Representations and Warranties of the Buyer
and the Acquisition Corporation ................... 24
(a) Organization; Good Standing; and Power ................. 24
(b) Authority .............................................. 24
(c) Authorization of Buyer's Preferred Stock ............... 26
(d) Capital Structure ...................................... 26
(e) No Prior Activities; Pro Forma Balance Sheet ........... 26
(f) Brokers' or Finders' Fees .............................. 26
(g) Nonforeign Status ...................................... 26
ARTICLE V CONDITIONS PRECEDENT ................................... 27
5.1. Conditions to Each Party's Obligations ................. 27
(a) Legal Action ........................................... 27
(b) Legislation ............................................ 27
5.2. Conditions to Obligations of the Buyer and
the Acquisition Corporation ....................... 27
(a) Representations and Warranties ......................... 27
(b) Performance of Obligations ............................. 27
(c) Authorization of Merger ................................ 27
(d) Termination of Management Agreements. .................. 28
(e) Escrow Agreement ....................................... 28
(f) Consents ............................................... 28
(g) Defense Contracts ...................................... 28
(h) Opinion of Counsel ..................................... 28
5.3. Conditions to Obligations of RBC and the
Stockholders ...................................... 28
(a) Representations and Warranties ......................... 28
(b) Performance of Obligations of the Buyer and
the Acquisition Corporation ....................... 28
(c) Authorization of Merger ................................ 29
(d) Issuance of Preferred Stock ............................ 29
(e) Satisfaction of Indebtedness ........................... 29
(f) Escrow Agreement ....................................... 29
(g) Exchange Agreements .................................... 29
(h) Consents ............................................... 29
(i) Defense Contracts ...................................... 29
(j) Opinion of Counsel ..................................... 29
ARTICLE VI CLOSING ................................................ 30
ARTICLE VII ADDITIONAL AGREEMENTS .................................. 30
7.1. Officer and Director Indemnification ................... 30
7.2. Noncompetition ......................................... 30
- ii -
Page
----
7.3. Information Rights ..................................... 30
7.4. Restrictions on Transfer of the Buyer's
Preferred Stock ................................... 31
7.5. Repurchase of Buyer's Preferred Stock .................. 33
7.6. Mandatory Sale ......................................... 34
ARTICLE VIII SURVIVAL AND INDEMNIFICATION ........................... 34
8.1. Survival of Representations and Warranties ............. 34
8.2. Indemnification ........................................ 35
8.2.1. Definitions .................................... 35
8.2.2. Indemnification ................................ 35
8.2.3. Procedure for Claims by Parties ................ 37
8.2.4. Third Party Claims ............................. 37
8.2.5. Limitations on Indemnification ................. 38
8.2.6. Limitation of Remedies ......................... 39
ARTICLE IX MISCELLANEOUS .......................................... 40
9.1. Expenses; Transfer Taxes; Etc. ......................... 40
9.2. Parties in Interest .................................... 40
9.3. Entire Agreement; Amendments ........................... 40
9.4. Headings ............................................... 40
9.5. Notices ................................................ 40
9.6. Publicity .............................................. 41
9.7. Counterparts ........................................... 42
9.8. Governing Law .......................................... 42
9.9. Gender ................................................. 42
9.10. Waivers ................................................ 42
- iii -
ATTACHMENTS
ANNEX I - Stockholders
ANNEX II - Merger Consideration
EXHIBITS
EXHIBIT A - Agreement of Merger
EXHIBIT B - Escrow Agreement
EXHIBIT C - Opinions of Counsel to RBC and certain Stockholders
EXHIBIT D - Exchange Agreements
EXHIBIT E - Opinion of Gibson, Dunn & Crutcher
SCHEDULES
3.1(a) - Title to Shares
3.1(c) - Authority (Stockholders)
3.2(b) - Authority (RBC)
3.2(c) - Capital Structure
3.2(e) - Financial Information
3.2(f) Absence of Undisclosed Liabilities
3.2(g) - Absence of Changes
3.2(h) - Title to Assets, Properties and Rights and Related
Matters
3.2(i) - Agreements
3.2(j) - Compliance; Governmental Authorities
3.2(k) - Litigation
3.2(l) - Tax Matters
3.2(m) - ERISA
3.2(n) - Environmental Reports
3.2(o) - Intellectual Property
3.2(p) - Labor Relations; Employees
3.2(q) - Insurance
4.1(b) - Authority (Buyer)
4.1(d) - Buyer's Capital Structure
4.1(e) - Balance Sheet of Buyer
4.1(f) - Brokers' or Finders' Fees
- iv -
CERTAIN DEFINITIONS
The following terms used in this Agreement are defined in the
following Sections:
Section or
Term Other Location
---- --------------
AC Common Stock 2.2(a)
Acquisition Corporation Caption
Affiliate 3.2(g) (vii)
Agreement First Paragraph
Allotted Shares 7.4
Agreement of Merger First Paragraph
Asserted Liability 8.2.4
Balance Sheet 3.2
Buyer Caption
Buyer Indemnified Persons 8.2.1
Buyer's Common Stock 2.2(a)
Buyer's Preferred Stock 2.1(c) (ii)
Cash Consideration 2.2(a)
Claims Notice 8.2.4
Class A Common Stock First Paragraph
Class B Common Stock First Paragraph
Closing Article VI
Closing Date Article VI
Code 3.2(l)
Company Property 3.2(n)
Company Option Period 7.4
Company Rejected Shares 7.4
Constituent Corporations 1.1
Contracts 3.2(i)
Delaware Statute First Paragraph
Effective Time 1.2
Employee 3.2(m)
Employee Plan 3.2(m)
Encumbrances 3.1(a)
Environmental Damages 3.2(n)
Environmental Reports 3.2(n)
Environmental Requirement 3.2(n)
ERISA 3.2(m)
ERISA Affiliate 3.2(m)
Escrow Account 2.3
Escrow Agreement 5.2(e)
Escrow Deposit Box 2.3
Evaluation Material 5.1(b)
Event of Buyer Indemnification 8.2.1
Event of Stockholder Indemnification 8.2.1
Exchange Agreements 5.3(g)
Financial Statements 3.2(e)
Financing Commitments 5.2(d)
Former Employee 3.2(m)
- v -
GAAP 3.2(e) (ii)
Hazardous Substances 3.2(n)
Indemnifying Party 8.2.4
Indemnitee 8.2.4
Intellectual Property 3.2(o)
Losses 8.2.1
Material Adverse Effect 3.2(s)
Merger 1.1
Multiemployer Plan 3.2(m)
OPI 5.2(d)
Option Notice 7.4
Other Preferred Stockholders 7.4
Other Preferred Stockholders' Option Period 7.4
Per Common Share Cash Consideration 2.2(a)
Per Common Share Preferred
Stock Consideration 2.2(a)
Permitted Transferee 7.4
Per Preferred Share Cash Consideration 2.2(a)
Permitted Liens 3.2(h)
RBC Caption
RBC Common Stock First Paragraph
RBC Preferred Stock First Paragraph
Selling Stockholder 7.4
Stockholder Indemnified Persons 8.2.1
Stockholder(s) Caption
Subsidiary 3.2(d)
Subject Shares 7.4
Survival Date 8.1
Surviving Corporation 1.1
Taxes 3.2(1)
Transfer 7.4
- vi -
AGREEMENT AND PLAN OF REORGANIZATION dated March
31, 1992, among ROLLER BEARING COMPANY OF AMERICA, INC.,
a Delaware corporation ("RBC"), ROLLER BEARING HOLDING
COMPANY, INC., a Delaware corporation (the "Buyer"),
ROLLER BEARING ACQUISITION COMPANY, INC., a Delaware
corporation and a wholly-owned subsidiary of the Buyer
(the "Acquisition Corporation"), and the STOCKHOLDERS of
RBC set forth on Annex I attached hereto (each a
"Stockholder" and collectively the "Stockholders").
The respective Boards of Directors of each of RBC, the Buyer and the
Acquisition Corporation, by resolutions duly adopted, have approved and adopted
this Agreement and Plan of Reorganization (this "Agreement"), the Agreement of
Merger in substantially the form of Exhibit A attached hereto (the "Agreement of
Merger") and the proposed merger of the Acquisition Corporation with and into
RBC in accordance with this Agreement, the Agreement of Merger and the Delaware
General Corporation Law (the "Delaware Statute"), whereby, among other things,
the holders of issued and outstanding shares of the Class A Common Stock, $.01
par value (the "Class A Common Stock"), the Class B Common Stock, $.0i par value
(the "Class B Common Stock"; the Class A Common Stock and the Class B Common
Stock being sometimes collectively referred to herein as the "RBC Common
Stock"), and the Series A Preferred Stock, $.01 par value (the "RBC Preferred
Stock"), of RBC will receive cash and shares of the Buyer's Preferred Stock (as
defined herein) therefor, in the manner set forth in Article II hereof and in
the Agreement of Merger, upon the terms and subject to the conditions set forth
in this Agreement and the Agreement of Merger.
NOW, THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and the Agreement of Merger and of the
representations, warranties, covenants, agreements, conditions and promises
contained herein and in the Agreement of Merger, the parties hereto hereby
approve and adopt this Agreement and the Agreement of Merger whereby, at the
Effective Time, the Acquisition Corporation shall be merged with and into RBC on
the terms and conditions contained herein and therein and, in connection
therewith, agree as follows:
ARTICLE I
GENERAL
1.1. The Merger. In accordance with the provisions of this
Agreement, the Agreement of Merger and the Delaware Statute, the Acquisition
Corporation shall be merged with and into RBC (the "Merger"), which, at and
after the Effective Time, shall be and is hereinafter sometimes referred to as
the "Surviving
Corporation". The Acquisition Corporation and RBC are hereinafter 'sometimes
collectively referred to as the "Constituent Corporations".
1.2. The Effective Time of the Merger. The Merger shall become
effective upon the filing with the Secretary of State of the State of Delaware
of the Agreement of Merger (or a Certificate of Merger relating thereto), which
shall be executed and delivered by each of the Constituent Corporations in the
manner provided under Section 251 of the Delaware Statute. The date and time
when the Merger shall become effective is herein called the "Effective Time".
The Agreement of Merger, as executed and delivered by RBC and the Acquisition
Corporation, is hereby incorporated herein by reference and made a part hereof
as if set forth herein in its entirety.
1.3. Effect of Merger. (a) Except as specifically set forth herein
or in the Agreement of Merger, at the Effective Time, the separate existence of
the Acquisition Corporation shall cease and the Acquisition Corporation shall be
merged with and into the Surviving Corporation, possessing all the rights,
privileges, powers and franchises, as well of a public as of a private nature,
and being subject to all of the restrictions, disabilities and duties of each of
the Constituent Corporations.
(b) At the Effective Time, all and singular, the rights,
privileges, powers and franchises of each of the Constituent Corporations, and
all property, real, personal and mixed, and all debts due to any of the
Constituent Corporations on whatever account, as well for stock subscriptions as
all other things in action or belonging to each of the Constituent Corporations
shall be vested in the Surviving Corporation; and all property, rights,
privileges, powers and franchises, and all and every other interest shall be
thereafter as effectually the property of the Surviving Corporation as they were
of the several and respective Constituent Corporations, and the title to any
real estate vested by deed or otherwise, under the laws of the State of Delaware
in either of the Constituent Corporations, shall not revert or be in any way
impaired by reason of the Delaware Statute; but all rights of creditors and all
liens upon any property of either of the Constituent Corporations shall be
preserved unimpaired, and all debts, liabilities and duties of the respective
Constituent Corporations shall thenceforth attach to the Surviving Corporation,
and may be enforced against it to the same extent as if said debts, liabilities
and duties had been incurred or contracted by it.
1.4. Charter and By-Laws of Surviving Corporation. Immediately
following the Effective Time, (i) the Certificate of Incorporation of RBC shall
be the Certificate of Incorporation of the Surviving Corporation until altered,
amended or repealed as provided in the Delaware Statute, (ii) the By-laws of RBC
shall become the By-laws of the Surviving Corporation until altered,
- 2 -
amended or repealed as provided in the Delaware Statute or in the Certificate of
Incorporation or said By-laws of the Surviving Corporation, (iii) the directors
of the Acquisition Corporation shall be the directors of the Surviving
Corporation and (iv) the officers of the Acquisition Corporation shall become
the officers of the Surviving Corporation.
1.5. Taking of Necessary Action; Further Assurances. Prior to the
Effective Time, and subject to the terms and conditions provided herein, the
parties hereto shall take, or cause to be taken (as the case may be), all such
action as may be necessary or appropriate in order to effectuate the Merger as
provided in this Agreement as expeditiously as reasonably practicable.
ARTICLE II
PURCHASE OF SHARES; EFFECT OF MERGER ON CAPITAL STOCK
AND OTHER SECURITIES
OF CONSTITUENT CORPORATIONS; ETC.
2.1. Purchase of Shares. Immediately prior to the Effective Time,
RBC shall purchase 15 shares of its Class B Common Stock from Bitrix Associates
C.V. ("Bitrix") and 5 shares of its Class B Common Stock from Columbus Holdings
Limited ("Columbus"), and Bitrix and Columbus shall sell such shares to RBC, for
the purchase price of $2,500 per share. Delivery of certificates representing
such shares, together with duly executed stock powers, shall be made against
receipt by Bitrix and Columbus of the purchase price therefor, payable by wire
transfers of immediately available funds to accounts designated by Bitrix and
Columbus or by certified or cashier's check. Immediately prior to the Effective
Time, the Buyer shall provide to RBC the funds necessary to effect the purchases
contemplated by this Section 2.1.
2.2. Effect of Merger on Securities. (a) The following terms shall
have the following respective meanings:
(i) "AC Common Stock" shall mean the Common Stock, $.01 par
value, of the Acquisition Corporation.
(ii) "Buyer's Common Stock" shall mean the Common Stock, $.01
par value, of the Buyer.
(iii) "Buyer's Preferred Stock" shall mean the Series A
Preferred Stock, $.01 par value, of the Buyer.
(iv) "Cash Consideration" means the amount indicated as such
on Annex II hereto.
- 3 -
(v) "Per Common Share Preferred Stock Consideration" means the
number of shares of the Buyer's Preferred Stock indicated as the Per Common
Share Preferred Stock Consideration on Annex II hereto.
(vi) "Per Common Share Cash Consideration" means the amount
indicated as such on Annex II hereto.
(vii) "Per Preferred Share Cash Consideration" means the
amount indicated as such on Annex II hereto.
(b) The manner and basis of converting or exchanging the shares of
capital stock of each of the Constituent Corporations into or for cash or
securities of the Surviving Corporation or the Buyer shall be as follows:
(i) each share of AC Common Stock outstanding at the Effective
Time shall be converted into one share of Class A Common Stock of the
Surviving Corporation;
(ii) each share of RBC Common Stock or RBC Preferred Stock
outstanding at the Effective Time and owned directly or indirectly by RBC
or the Subsidiary or owned by the Buyer or the Acquisition Corporation or
any other subsidiary of the Buyer shall, by virtue of the Merger and
without any action on the part of the holder thereof, be cancelled and no
consideration shall be delivered in exchange therefor;
(iii) each share of RBC Common Stock listed on Annex II hereto
shall, by virtue of the Merger and without any action on the part of the
holder thereof, cease to be outstanding and be converted into the right to
receive the Per Common Share Cash Consideration and the Per Common Share
Preferred Stock Consideration;
(iv) each share of RBC Preferred Stock outstanding at the
Effective Time shall, by virtue of the Merger and without any action on
the part of the holder thereof, cease to be outstanding and be converted
into the right to receive the Per Preferred Share Cash Consideration; and
(v) each authorized but unissued share of capital stock of RBC
at the Effective Time shall be cancelled.
2.3. Exchange of Certificates; Delivery of Funds. At the Effective
Time, the Surviving Corporation shall deliver:
(a) with respect to the RBC Common Stock then held by each
Stockholder, (i) a wire transfer of immediately available funds in an
amount equal to the
- 4 -
Net Cash Amount set forth opposite such Stockholder's name on Annex II and
(ii) duly executed certificates representing that number of shares of the
Buyer's Preferred Stock set forth opposite such Stockholder's name on
Annex II hereto, against receipt by the Surviving Corporation of
certificates representing all shares of RBC Common Stock held by such
Stockholder immediately prior to the Effective Time; and
(b) with respect to the RBC Preferred Stock then held by each
Stockholder, a wire transfer of immediately available funds in an amount
equal to the Preferred Share Cash Consideration set forth opposite such
Stockholder's name on Annex II, against receipt by the Surviving
Corporation of certificates representing all shares of RBC Preferred Stock
held by such Stockholder immediately prior to the Effective Time.
OPI shall receive and distribute the dollar amounts and shares of
the Buyer's Preferred Stock set forth in this Section 2.3 on behalf of the
Stockholders (and shall be held harmless by the Stockholders in connection
therewith).
2.4. Deposit into Escrow. (a) As soon as practicable following the
Closing, the Stockholders (or OPI on behalf of the Stockholders) shall deposit
(i) into the Escrow Account (as defined in the Escrow Agreement) an aggregate of
$100,000, to be held and distributed in accordance with the terms of the Escrow
Agreement, and (ii) into the Escrow Deposit Box (as defined in the Escrow
Agreement) certificates representing in the aggregate 20,000 shares of the
Buyer's Preferred Stock (issued to the Stockholders in the Merger and, with
respect to certain Stockholders, pursuant to the Exchange Agreements or
otherwise), to be held and distributed in accordance with the terms of Section
8.2 hereof and the terms of the Escrow Agreement.
(b) As soon as practicable following the Closing, the Buyer
shall deposit $100,000 into the Escrow Account, to be held and disbursed in
accordance with the terms of the Escrow Agreement.
2.5. Exercise of Warrants and Exchange of Options. (a) Immediately
prior to the Effective Time, each of Bitrix Associates C.V. and Overland Trust
Bank shall exercise all warrants to purchase RBC Common Stock then held by them.
(b) Immediately prior to the Effective Time, options to purchase
41.237, 15 and 5 shares of RBC Common Stock from RBC, Bitrix and Columbus,
respectively, held by Michael Hartnett shall be cancelled in exchange for
purchase shares of the Buyer's Common Stock and/or the Buyer's Preferred Stock.
- 5 -
2.6. Authorization of the Merger, this Agreement and the Agreement
of Merger. The Stockholders, at a meeting duly called and held in accordance
with the Delaware Statute, or pursuant to a written consent in lieu of a meeting
in accordance with the Delaware Statute, have approved, and the Buyer, as the
sole stockholder of the Acquisition Corporation, pursuant to a written consent
in lieu of a meeting in accordance with the Delaware Statute has approved, (a)
the Merger, as required by the Delaware Statute, and (b) the provisions of this
Agreement and the Agreement of Merger.
2.7. After the Effective Time. At and after the Effective Time, the
stock transfer books of the Surviving Corporation shall be closed with respect
to the RBC Common Stock and the RBC Preferred Stock and there shall be no
further registration of transfers of RBC Common Stock or RBC Preferred Stock
thereafter on the records of the Surviving Corporation. If, after the Effective
Time, certificates formerly representing shares of RBC Common Stock or RBC
Preferred Stock are presented to the Surviving Corporation, they shall be
cancelled and exchanged for the consideration set forth in Sections 2.2(b)(iii)
and 2.2(b)(iv), respectively, hereof, as provided in, and subject to, this
Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Several Representations and Warranties of Each Stockholder.
Each Stockholder hereby represents and warrants, severally as to himself or
itself and not jointly, to the Buyer as follows:
(a) Title to the Shares. Such Stockholder is the lawful owner,
of record and beneficially, of the number of shares of RBC Common Stock and/or
RBC Preferred Stock (or options to acquire RBC Common Stock), as the case may
be, set forth opposite such Stockholder's name on Annex I attached hereto and,
except as set forth on Schedule 3.1(a) attached hereto, has good and marketable
title to such shares, free and clear of any Encumbrances (as defined below)
whatsoever and with no restriction on the voting rights and the other incidents
of record and beneficial ownership pertaining thereto. Except as set forth on
Schedule 3.1(a), there are no agreements or understandings between such
Stockholder and any other person with respect to the voting of any of the
capital stock of RBC. As used herein, the term "Encumbrances" shall mean and
include covenants, restrictions, voting arrangements, adverse claims, security
interests, mortgages, liens, pledges, charges, options, rights of first refusal
and all other encumbrances, whether or not relating to the extension of credit
or the borrowing of money.
- 6 -
(b) Organization, Good Standing and Power. In the case of any
Stockholder which is a corporation or a partnership, such Stockholder is duly
organized or formed and validly existing under the laws of the jurisdiction of
its incorporation or formation and has the corporate or other organizational
power and authority under such laws to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
(c) Authority. In the case of any Stockholder which is a
corporation or a partnership, the execution, delivery and performance of this
Agreement and the Escrow Agreement, and the consummation by such Stockholder of
the transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate or partnership action, as the case may be,
on the part of such Stockholder. Such Stockholder has full and absolute power
and authority to enter into this Agreement and the Escrow Agreement and to
perform its or his obligations hereunder and thereunder, and this Agreement and
the Escrow Agreement are valid and binding obligations of such Stockholder,
enforceable against such Stockholder in accordance with their terms. Except as
set forth on Schedule 3.1(c) attached hereto, neither the execution, delivery
and performance of this Agreement or the Escrow Agreement, nor the consummation
by such Stockholder of the transactions contemplated hereby or thereby, nor
compliance by such Stockholder with any of the provisions hereof or thereof,
will (i) violate or conflict with the charter or by-laws of such Stockholder,
(ii) violate, conflict with or constitute (or with notice or lapse of time or
both constitute) a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of, or result in the creation of any Encumbrance upon any shares of RBC Common
Stock or RBC Preferred Stock owned by such Stockholder pursuant to the terms of,
any note, bond, lease, mortgage, indenture, license, agreement or other
instrument or obligation to which such Stockholder is a party, or by which such
Stockholder or any of his or its respective properties or assets may be bound or
affected, or (iii) violate any law, statute, rule or regulation or order,
judgment, award, writ, injunction or decree of any court, administrative agency
or governmental body applicable to such Stockholder or any of his or its
properties or assets. Except as contemplated by this Agreement or as set forth
on Schedule 3.1(c), no permit, authorization, consent or approval of or by, or
any notification of or filing with, any person (governmental or private) is
required in connection with the execution, delivery and performance of this
Agreement by such Stockholder or the consummation by such Stockholder of the
transactions contemplated hereby.
(d) Investment Representations. (i) Such Stockholder is
acquiring the shares of the Buyer's Preferred Stock being issued to such
Stockholder pursuant to the Merger for
- 7 -
such Stockholder's own account and not as a nominee or agent for any other
person and with no present intention of distributing or reselling such shares or
any part thereof in any transactions that would be in violation of the
securities laws of the United States of America or any state thereof.
(ii) Each Stockholder that is a natural person (A) is an
executive officer of the Buyer, (B) has had an opportunity to ask questions of
and to receive answers from the officers and directors of the Buyer or persons
acting on the Buyer's behalf concerning the terms and conditions of an
investment in the Buyer's Preferred Stock, (C) has knowledge and experience in
financial affairs and is capable of evaluating the risks of acquiring and
holding shares of the Buyer's Preferred Stock, (D) can afford to suffer a
complete loss of his investment in shares of the Buyer's Preferred Stock and (E)
understands that there is no public market for the Buyer's Preferred Stock and
that the shares of the Buyer's Preferred Stock held by him may not be sold until
such shares are registered under the Securities Act of 1933, as amended (the
"Securities Act"), and any applicable state securities laws, unless an exemption
from such registration is available.
(iii) Each Stockholder which is a corporation,
partnership or other entity is an "accredited investor" within the meaning of
Rule 501 under the Securities Act.
3.2. Representations and Warranties of the Stockholders and RBC.
Each of the Stockholders and RBC, jointly and severally, hereby represents and
warrants to the Buyer as follows:
(a) Organization; Good Standing; Qualification and Power. Each
of RBC and the Subsidiary (as herein defined) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has all requisite corporate power and authority, and all requisite governmental
authority, to own, lease and operate its assets and properties, to carry on its
business as now being conducted by it and to enter into and consummate the
transactions contemplated by this Agreement and the Agreement of Merger. Each of
RBC and the Subsidiary is duly qualified and in good standing to do business as
a foreign corporation in all jurisdictions in which the failure to be so
qualified and in good standing could reasonably be expected to have a Material
Adverse Effect (as herein defined). RBC has delivered to the Buyer copies of its
Certificate of Incorporation and By-laws, and the Certificate of Incorporation
and By-laws of the Subsidiary, in each case, as in effect on the date hereof.
The stock certificates and stock transfer books of RBC and the Subsidiary have
been heretofore made available to the Buyer and are true and complete.
- 8 -
(b) Authority. The execution, delivery and performance of this
Agreement and the Agreement of Merger by RBC and the consummation by RBC of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of RBC. This Agreement
has been, and the Agreement of Merger when executed and delivered by RBC will
be, duly and validly executed and delivered by RBC, and this Agreement is, and
the Agreement of Merger when executed and delivered by the parties thereto will
be, valid and binding obligations of RBC, enforceable against RBC in accordance
with their respective terms. Except as set forth on Schedule 3.2(b) attached
hereto, neither the execution, delivery and performance of this Agreement or the
Agreement of Merger by RBC, nor the consummation by RBC of the transactions
contemplated hereby or thereby, nor compliance by RBC with any of the provisions
hereof or thereof, will (i) conflict with or violate any provision of the
Certificate of Incorporation or By-laws of RBC or the Subsidiary, (ii) violate,
conflict with or constitute (or with notice or lapse of time or both constitute)
a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of, or result in
the creation of any Encumbrance upon any of the property of RBC or the
Subsidiary pursuant to the terms of, any note, bond, lease, mortgage, indenture,
license, agreement or other instrument or obligation to which RBC or the
Subsidiary is a party or by which any of their respective properties or assets
may be bound or affected, which violation, conflict or default would have a
Material Adverse Effect, or (iii) violate any law, statute, rule or regulation
or order, judgment, award, writ, injunction or decree of any court,
administrative agency or governmental body, applicable to RBC or the Subsidiary
or any of their respective properties or assets in any manner which could
reasonably be expected to have a Material Adverse Effect. Except as contemplated
by this Agreement or the Agreement of Merger and as set forth on Schedule
3.2(b), no permit, authorization, consent or approval of or by, any person
(governmental or private) is required in connection with the execution, delivery
and performance of this Agreement or the Agreement of Merger by RBC or the
consummation by RBC of the transactions contemplated hereby or thereby.
(c) Capital Structure. Immediately prior to the Effective
Time, after taking into effect the repurchase of shares and exercise of warrants
contemplated by Sections 2.1 and 2.4(a) hereof, the authorized capital stock of
RBC shall consist of (i) 3,000 shares of Class A Common Stock, $.O1 par value,
of which (A) 2,047.43 shares shall be validly issued and outstanding and (B)
61.23 shares shall be reserved for issuance upon the exercise of options, (ii)
3,000 shares of Class B Common Stock, $.01 par value, of which 40 shares shall
be validly issued and outstanding, and (iii) 4,000 shares of Preferred Stock,
$.0l par value, of which 1,000 shares are designated as Series A Preferred
Stock, of which 945 shares shall be validly issued and
- 9 -
outstanding. All of such issued and outstanding shares of RBC Common Stock and
RBC Preferred Stock have been duly authorized and are validly issued, fully paid
and nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. Except as set forth on Schedule 3.2(c),
there are no options, warrants, rights, calls, commitments or agreements of any
character to which RBC or the Subsidiary is a party or by which either of them
is bound calling for the issuance of shares of capital stock of RBC or the
Subsidiary or any securities convertible into or exercisable or exchangeable
for, or representing the right to purchase or otherwise receive, any such
capital stock, or other arrangement to acquire, at any time or under any
circumstance, capital stock or such other securities of RBC or the Subsidiary.
Except as set forth on Schedule 3.2(c), there are no voting trusts, voting
agreements, proxies or other agreements or instruments or understandings with
respect to the voting of the capital stock of RBC to which RBC is a party.
(d) Equity Investments. Except for Industrial Tectonics
Bearings Corporation, a Delaware corporation wholly-owned by RBC (the
"Subsidiary"), RBC does not, directly or indirectly, own, have the power to vote
or to exercise a controlling influence with respect to or have the right to
acquire any equity interest in, any corporation, association, trust,
partnership, joint venture or other entity.
(e) Financial Information. (i) Schedule 3.2(e) attached hereto
contains the following financial information:
(A) the consolidated balance sheet of RBC as at November 2, 1991
(the "Balance Sheet"), and the related statements of
operations and accumulated deficit and of cash flows for the
52-week period then ended, audited by Deloitte & Touche,
independent certified public accountants (collectively, the
"1991 Financial Statements"); and
(B) the consolidated balance sheet of RBC as at November 3, 1990
and October 28, 1989 and the related consolidated statements
of operations and accumulated deficit for the 53-week and
52-week, respectively, periods then ended, audited by
Goldstein Golub Kessler & Company, P.C., independent certified
public accountants (together with the 1991 Financial
Statements, the "Financial Statements").
(ii) Except with respect to financial information adjusted by the
prior period adjustments set forth in the 1991 Financial Statements, the
Financial Statements (A) are in accordance with the books and records of RBC,
(B) fairly present
- 10 -
the financial condition of RBC as of the respective dates indicated and the
results of operations of RBC for the respective periods indicated, (C) have been
prepared in accordance with generally accepted accounting principles ("GAAP")
consistently applied and (D) contain and reflect adequate provisions for all
product warranty claims, taxes and anticipated losses on contracts and
commitments for the sale of goods and services.
(f) Absence of Undisclosed Liabilities. Except as disclosed on
Schedule 3.2(f) attached hereto or any other Schedule to this Agreement, at the
date of the Balance Sheet, RBC had no liabilities (matured or unmatured, fixed
or contingent secured or unsecured, direct or indirect, or otherwise) except (i)
as provided for or disclosed on the Balance Sheet or (ii) for purchase contracts
and orders for inventory entered into in the ordinary course of business and
consistent with past practice. Without in any way limiting the generality of the
immediately preceding sentence, except as disclosed in Schedule 3.2(f) or the
Balance Sheet, neither RBC nor the Subsidiary has any liability, known or
unknown, contingent or otherwise, relating to product warranty claims or for
injuries or damage caused by such products.
(g) Absence of Changes. Except as contemplated by this
Agreement or as set forth on Schedule 3.2(g) attached hereto, since the date of
the Balance Sheet:
(i) RBC has been operated in the ordinary course;
(ii) there has been no material adverse change in the
business, prospects, assets or liabilities of RBC or the Subsidiary;
(iii) there has been no damage, destruction or loss which has
materially adversely affected the business, prospects or assets of RBC or
the Subsidiary;
(iv) RBC has not declared any dividend or made any
distributions on its capital stock;
(v) neither RBC nor the Subsidiary has borrowed, or agreed to
borrow, funds (except borrowings under the Senior Loan (as defined in
Section 5.3(e));
(vi) neither RBC nor the Subsidiary has subjected or agreed to
subject any of its assets, tangible or intangible, to any Encumbrance
other than pursuant to the terms of the Senior Loan;
(vii) neither RBC nor the Subsidiary has incurred or become
subject to, or agreed to incur or become subject to, any liability except
current
- 11 -
liabilities incurred in the ordinary course of business;
(viii) except in connection with the transactions contemplated
hereby, neither RBC nor the Subsidiary has entered into any transaction,
contract or commitment involving any Stockholder or Affiliate (as such
term is defined in the Securities Act of 1933, as amended) of any
Stockholder;
(ix) neither RBC nor the Subsidiary has made any accrual for
or any payment of bonuses or special compensation of any kind in excess of
$1,000 to any employee otherwise than under a plan or arrangement in
effect on or accrued at November 2, 1991, or agreed to make any accrual or
arrangement for or payment of bonuses or special compensation of any kind
in excess of $1,000;
(x) neither RBC nor the Subsidiary has directly or indirectly
paid, or agreed to pay, any severance or termination pay to any individual
employee which exceeds $2,000 unless such pay was accrued at November 2,
1991;
(xi) neither RBC nor the Subsidiary has made, or agreed to
make, any changes in its accounting methods or practices;
(xii) neither RBC nor the Subsidiary has made capital
expenditures which for any item exceeds $25,000 or entered into any
commitment to make such expenditures;
(xiii) except with respect to the Senior Loan and/or the
Subordinated Loan, neither RBC nor the Subsidiary has taken any action, or
omitted to take any action, that resulted in or is likely to result in a
default (or would, with the giving of notice or passage of time or both,
be likely to result in such a default) under any note, indenture, lease,
license, agreement or other instrument, or obligation to which RBC or the
Subsidiary is a party, or by which RBC or the Subsidiary is bound, or
resulted in (or would, with the giving of notice or the passage of time or
both, be likely to result in) the creation or imposition of any
Encumbrance upon any property or asset of the Company or the Subsidiary;
(xiv) neither RBC nor the Subsidiary has repaid any
indebtedness (other than with respect to capital leases) other than
scheduled or revolving
- 12 -
payments under the Senior Loan and the Subordinated Loan;
(xv) neither RBC nor the Subsidiary has entered into or
modified any agreement of employment with any individual; and
(xvi) neither RBC nor the Subsidiary has entered into any
other transaction, contract or commitment except in the ordinary course
and except the transactions contemplated by this Agreement.
(h) Title to Assets, Properties and Rights and Related
Matters. RBC or the Subsidiary has good and marketable (and with respect to real
property, good and insurable) title to all the properties, interests in
properties and assets, real, personal or mixed, reflected as being owned on the
Balance Sheet (except for assets acquired or disposed of since the date of the
Balance Sheet in the ordinary course), free and clear of all Encumbrances of any
kind or character, except (i) those set forth on Schedule 3.2(h) attached
hereto, (ii) those set forth on the Balance Sheet, (iii) mechanics, carriers,
repairmen's and other similar liens arising in the ordinary course of business,
(iv) liens for current taxes, assessments and charges or other governmental
levies not yet due and payable, (v) with respect to real property, easements,
covenants, rights of way and other restrictions and conditions, whether or not
of record or referred to in an applicable instrument of title, which do not
materially impair the present value of the property subject thereto and zoning
and similar restrictions (and the state of title to real property is subject to
variations between fences, area walls, retaining walls and the lines of record
title and any facts an accurate survey would show) and (vi) Encumbrances, if
any, which do not materially impair the use of the property subject thereto or
materially affect the value thereof (collectively, the "Permitted Liens"). All
property and assets owned by RBC or the Subsidiary, or in which they have an
interest, or which they have in their possession, which are used by and are
material to RBC or the Subsidiary in their respective businesses, are in good
operating condition and repair, reasonable wear and tear excepted. Schedule
3.2(h) attached hereto sets forth a list of all real property owned or leased by
RBC or the Subsidiary.
(i) Agreements, Etc. Schedule 3.2(i) attached hereto contains
a list of all material contracts, agreements and other instruments made other
than in the ordinary course of business to which RBC and/or the Subsidiary is a
party at the date hereof, or made in the ordinary course of business and
referred to in Sections 3.2(i)(i) through (xv) hereof. Except as set forth on
Schedule 3.2(i), neither RBC nor the Subsidiary is a party to any:
- 13 -
(i) collective bargaining or other agreement with any labor
union or association of employees;
(ii) contract with or commitment for the employment or
retention of any officer, employee or consultant with annual wages,
consulting or similar fees or an annual salary in excess of $50,000;
(iii) profit-sharing, bonus, stock option, pension,
retirement, stock purchase, hospitalization, insurance or similar plan or
agreement, providing benefits to any current officer or employee;
(iv) indenture, mortgage, promissory note, loan agreement or
other agreement or commitment for the borrowing of money or for a line of
credit;
(v) contract or commitment for capital expenditures involving
more than $50,000;
(vi) lease, sublease or other agreement pursuant to which it
is a lessee of or holds or operates any real property owned by any third
party;
(vii) guaranty of the obligations of third parties in excess
of $50,000;
(viii) agreement which materially restricts RBC from doing
business anywhere in the world or materially limits the business in which
it may engage;
(ix) licensing or similar agreement involving payments to
third parties by RBC in excess of $50,000 per annum;
(x) agreement or arrangement for the sale of any of its
assets, property or rights other than in the ordinary course of its
business;
(xi) contract, other than for the compensation of any officer,
employee or consultant, under which the total payments to be made by RBC
and/or the Subsidiary exceed $50,000 per year;
(xii) distributor, dealer, franchisee, sales representative,
sales agency, manufacturer's representative or similar agreement;
(xiii) contract granting any rights to purchase any of its
assets other than inventory in the ordinary course or requiring the
consent or approval of any party to the transfer to or assignment of such
assets
- 14 -
or limiting or restricting in any way the ability to transfer or assign
any of such assets;
(xiv) any contract for the sale of goods or services under
which the anticipated cost of its performance exceeds the revenues
expected to be received under such contract; or
(xv) any contract to supply goods or services, directly or
indirectly, to the government of the United States of America or any
agency thereof or to supply goods or services to any other person known to
RBC or the Subsidiary to incorporate such goods or services into goods or
services provided to the U.S. Government.
Except as set forth on Schedule 3.2(i), neither RBC or the Subsidiary, nor, to
the knowledge of RBC or the Subsidiary, any other party, is in default under any
material provision of any contract, agreement or instrument set forth on
Schedule 3.2(i). Assuming that such contracts, agreements and instruments are
the valid and binding obligations of the other parties thereto and that such
parties have performed the obligations required to be performed by them
thereunder, such contracts, agreements and instruments are in full force and
effect.
(j) Compliance; Governmental Authorization. Except as set
forth on Schedule 3.2(j) attached hereto, and except with respect to any of the
following as they may relate to the environment (which is addressed in Section
3.2(n) hereof), (a) RBC and the Subsidiary have complied with all Federal,
state, local or foreign laws, ordinances, rules or regulations and all
judgments, orders and decrees applicable to their respective assets, properties,
operations or businesses as currently conducted and (b) RBC and the Subsidiary
have obtained, and maintained in full force and effect, all permits, licenses,
franchises, orders or approvals from governmental authorities required to
conduct their respective businesses as currently being conducted.
(k) Litigation, Etc. Except as set forth on Schedule 3.2(k),
there are no (a) actions, suits, claims, investigations or legal, administrative
or arbitration proceedings pending or, to the best knowledge of RBC, threatened
against or affecting RBC or the Subsidiary, or any of their respective officers,
directors or employees in their capacities as such, or the assets of RBC or the
Subsidiary, whether at law or in equity, whether civil or criminal in nature or
whether before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, the resolution of which could reasonably be expected to result in
liabilities to RBC or the Subsidiary of $50,000 or more in the aggregate or to
have an adverse effect on
- 15 -
the ability of RBC to consummate the transactions contemplated hereby or to have
a Material Adverse Effect, or (b) judgments, decrees, injunctions or orders of
any court, governmental department, commission, agency, instrumentality or
arbitrator against or affecting the assets of RBC or the Subsidiary.
(1) Tax. (i) RBC and the Subsidiary (and any affiliated group
of which RBC or the Subsidiary is now or has been a member), has duly and timely
filed with the appropriate taxing authorities all returns (including, without
limitation, information returns and reports) in respect of Taxes for all periods
through the date hereof, except for state and Federal returns for the 1991
taxable year for which appropriate requests for extensions have been made;
(ii) All Taxes due prior to the date hereof in respect of
periods beginning before the date hereof have been paid in full, or an adequate
reserve has been established therefor, as set forth in the Balance Sheet, and
neither RBC nor the Subsidiary has any liability for Taxes in excess of the
amounts so paid or reserves so established.
(iii) Except as set forth on Schedule 3.2(1), (A) no
deficiencies for Taxes have been claimed, proposed or assessed by any taxing or
other governmental authority; (B) there are no completed, pending or threatened
audits, investigations or claims for or relating to any liability in respect of
Taxes, and there are no matters under discussion with any governmental
authorities with respect to Taxes that are likely to result in an additional
amount of Taxes; (C) neither RBC nor the Subsidiary has been notified that any
taxing authority intends to audit a return for any other period; and (D) no
extension of a statute of limitations relating to Taxes is in effect, or any
request therefor pending, with respect to RBC or the Subsidiary.
(iv) The only election with respect to Taxes affecting RBC or
any Subsidiary as of the date hereof is the election of 52-53 week taxable year
pursuant to Treas. Reg. S 1.441-2T(c)(2), filed with RBC's federal income tax
return for the taxable year ending October 29, 1988.
(v) Neither RBC nor the Subsidiary: (i) has made or will make
a deemed dividend election under Treas. Reg. S l.1502-32(f)(2) or a consent
dividend election under section 565 of the Internal Revenue Code of 1986, as
amended (the "Code"); (ii) has consented at any time under section 341(f)(1) of
the Code, to have the provisions of section 341(f)(2) of the Code apply to any
disposition of the RBC's or the Subsidiary's assets; (iii) has agreed, or is
required, to make any adjustment under section 481(a) of the Code by reason of a
change in accounting method or otherwise; or (iv) has made any of the foregoing
elections or is required to apply any of the foregoing rules under any
comparable state or local income tax provision.
- 16 -
(vi) Neither RBC nor the Subsidiary has, at any time, been an
includable corporation in an affiliated group of corporations, within the
meaning of section 1504 of the Code, other than in the affiliated group of which
RBC is the common parent corporation.
(vii) Neither RBC nor the Subsidiary is a party to any
tax-sharing agreement or similar arrangement with respect to or involving RBC or
the Subsidiary, including any terminated agreement as to which RBC or the
Subsidiary could have any continuing liability.
(viii) Neither RBC nor the Subsidiary is a "foreign person" as
defined in section 1445(f)(3) of the Code.
(ix) Neither RBC nor the Subsidiary is a party to any joint
venture, partnership, or other arrangement or contract which is treated as a
partnership for federal income tax purposes.
(x) Neither RBC nor the Subsidiary has made or become
obligated to make, or will make, as a result of any event connected with the
acquisition of RBC and the Subsidiary by Buyer or any other transaction
contemplated herein, any "excess parachute payment" as defined in section 280G
of the Code (without regard to subsection (b)(4) thereof).
(xi) There are no outstanding balances of deferred gain or
loss accounts related to deferred intercompany transactions between RBC and the
Subsidiary.
(xii) The amount of consolidated net operating losses, net
capital losses, foreign tax credits, investment, and other tax credits of the
consolidated group of which RBC is the common parent allocable to RBC and the
Subsidiary under Treas. Reg. S 1.1502-79 as of the taxable year ending November
3, 1990 is set forth in the consolidated federal income tax return filed for
that period.
(xiii) RBC has no excess loss account in the Subsidiary.
(xiv) Neither RBC nor the Subsidiary has any (i) investment
tax credit subject to recapture, or (ii) foreign losses of the consolidated
group of which RBC is the common parent allocable to RBC and the Subsidiary
under Treas. Reg. S 1.1502-9 and subject to recapture.
(xv) Neither RBC nor the Subsidiary has participated in, or
cooperated with, any international boycott within the meaning of Section 999 of
the Code nor has any such corporation had operations prior to the Effective Time
which are or may thereafter become reportable thereunder.
- 17 -
(xvi) No power of attorney granted by RBC of the Subsidiary
with respect to the determination of federal income or other material Taxes in
force.
(xvii) There are no material liens for Taxes upon the assets
of RBC or the Subsidiary except for statutory liens for taxes not yet due or
delinquent.
(xviii) As used herein, "Taxes" means any Federal, state,
local, foreign or other tax assessments or other governmental charges,
including, without limitation, any income, estimated income, business,
occupation, franchise, property, sales, employment or withholding tax, including
interest, penalties and additions in connection therewith for which RBC or the
Subsidiary is or may be liable.
(m) ERISA. (i) For the purposes of this Agreement, the term
"Employee Plan" means each employee bonus, retirement, pension, profit sharing,
stock option, stock appreciation, stock purchase or other equity based,
incentive, deferred compensation, hospitalization, medical, dental, vision, life
and other health, accident and disability (whether provided by insurance or
otherwise), severance, termination and other plan, program, arrangement, policy
or payroll practice providing employee benefits including without limitation,
each employee benefit plan as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), other than a multiemployer
plan within the meaning of Section 3(37) of ERISA ("Multiemployer Plan"),
maintained by RBC or any Person that would be aggregated with, or treated as the
same employer as, RBC for any purpose under the Code or ERISA (an "ERISA
Affiliate") or to which RBC or an ERISA Affiliate contributes or has contributed
and under which any person presently employed by RBC or the Subsidiary primarily
in the conduct of their respective businesses (an "Employee") or formerly so
employed by RBC or the Subsidiary (a "Former Employee") participates or had
accrued any rights or under which RBC is liable in respect of an Employee or
Former Employee. The terms "Employee" and "Former Employee" will include, where
applicable, the beneficiaries and dependents of an Employee or Former Employee.
Schedule 3.2(m) attached hereto lists all material Employee Plans. Each Employee
Plan has been maintained in all material respects in accordance with its terms
and with applicable Law. Except as set forth on Schedule 3.2(m), each Employee
Plan which is intended to be qualified within the meaning of Section 401 of the
Code has received a determination letter to that effect from the Internal
Revenue Service and all actions required to be taken as conditions for such
letters have been taken in a timely manner and nothing has occurred since the
date of such letter which would prevent any such Employee Plan from remaining so
qualified or which cannot be cured within the remedial amendment period provided
by Section 401(b) of the Code. Each defined contribution profit sharing plan
maintained for RBC
- 18 -
or the Subsidiary has satisfied the non-discrimination rules for qualified plans
under Section 401(a) of the Code. Up to and including the period ending
immediately prior to the Effective Time, neither RBC nor any Affiliate of RBC
has maintained or had any obligation, primarily or secondarily, to contribute to
any Multiemployer Plan.
(ii) RBC has not engaged in any transaction involving any
Employee Plan in connection with which RBC would be subject to either a material
civil penalty assessed pursuant to Section 502(i) of ERISA or a material tax
imposed pursuant to Section 4975(a) or (b) of the Code and neither RBC nor any
Affiliate of RBC has incurred, or reasonably expects to incur, any liability
under Section 4980B of the Code. There are no material pending, or, to the best
knowledge of RBC, threatened claims by or on behalf of any Employee Plan or by
any Employee or Former Employee involving any Employee Plan (other than routine
claims for benefits). All contributions required to have been made by RBC and
each ERISA Affiliate to each Employee Plan which is subject to the minimum
funding standards of Section 412 of the Code or Section 302 of ERISA have been
made within the time required under such sections and no such Employee Plan has
incurred an "accumulated funding deficiency" within the meaning of such
sections. Neither RBC nor any ERISA Affiliate has incurred any material
liability to the Pension Benefit Guaranty Corporation at any time within the
preceding six years in connection with any Employee Plan other than liability
for premiums due in connection with any such Plan.
(n) Environmental Matters. (i) Except as disclosed in the
reports and documents listed in Schedule 3.2(n) (collectively, the
"Environmental Reports"), since RBC or the Subsidiary has occupied, leased or
owned Company Property, neither RBC or the Subsidiary, nor, to the best
knowledge of RBC or the Subsidiary, any other person or entity, (A) has engaged
in or permitted any operation or activity upon, or any use or occupancy of, any
Company Property, or any portion thereof, for the purpose of or in any way
involving the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of any Hazardous Materials
(whether accidental or intentional) on, under, in or about any such property
other than in compliance with Environmental Requirements or (B) has transported
Hazardous Materials to, from or across Company Property. Except as disclosed in
the Environmental Reports, no Hazardous Materials are currently constructed,
deposited, stored, or otherwise located on, under, in or about Company Property
other than in compliance with Environmental Requirements or, since RBC or the
Subsidiary has occupied, owned or leased Company Property, to the knowledge of
RBC and the Subsidiary, have migrated or threatened to migrate from other
properties upon, about or beneath any Company Property.
- 19 -
(ii) Except as disclosed in the Environmental Reports since
RBC or the Subsidiary has owned, occupied or leased Company Property, no
underground improvements, including but not limited to treatment or storage
tanks, sumps, gas pipelines or oil wells have been placed on any Company
Property.
(iii) Except as disclosed in the Environmental Reports, since
RBC or the Subsidiary has occupied, leased or owned Company Property, RBC and
the Subsidiary's use, maintenance and occupation of Company Property has
complied with all Environmental Requirements.
(iv) Except as disclosed in the Environmental Reports, since
RBC or the Subsidiary has owned, occupied or leased Company Property, neither
RBC nor the Subsidiary has received notice or other communication concerning any
alleged (A) violation of Environmental Requirements with respect to Company
Property, unless corrected to the satisfaction of the appropriate authority, or
(B) liability for Environmental Damages in connection with any Company Property,
and there exists no writ, injunction, decree, order or judgment outstanding, nor
any lawsuit, claim, proceeding, citation, directive, summons or investigation,
pending or threatened, relating to (1) any alleged violation by RBC or the
Subsidiary of Environmental Requirements whether relating to the ownership use,
maintenance or operation of Company Property or otherwise, or (2) the suspected
presence of material quantities of Hazardous Material thereon, nor to the
knowledge of RBC and the Subsidiary does there exist any basis for such lawsuit,
claim, proceeding, citation, directive, summons or investigation being
instituted or filed.
(v) Except as disclosed in the Environmental Reports, since
RBC or the Subsidiary has owned, occupied or leased Company Property, each of
RBC and the Subsidiary has obtained all environmental permits and licenses
required to be issued to it by any governmental authority on account of any of
its activities on any Company Property and is in full compliance with the terms
and conditions of such permits and licenses, each of which remains in full force
and effect.
(vi) Except as disclosed in the Environmental Reports, since
RBC or the Subsidiary has owned, occupied or leased Company Property, no
Encumbrance has attached or threatens to attach to any revenue or any real or
personal property owned by RBC or the Subsidiary as a result of monies being
expended or to be expended by any governmental agency or fund with respect to
environmental matters, including without limitation the New Jersey Spill
Compensation Fund, the New Jersey Sanitary Landfill Contingency Fund and the
United States Hazardous Response Trust Fund, nor is RBC or the Subsidiary aware
of any facts or circumstances that could give rise to such an Encumbrance.
- 20 -
(vii) RBC and the Subsidiary have provided to the Buyer copies
of all environmental studies, reports, audits or analyses in their possession
relating to Company Property and have used their best efforts to obtain from
prior stockholders of RBC and the Subsidiary all such reports in the possession
of such former stockholders.
(viii) As used herein, the following terms shall have the
following meanings:
(A) "Company Property" means any property now or at any time
owned or occupied by RBC or the Subsidiary.
(B) "Environmental Damages" means all claims, judgments,
damages, losses, penalties, fines, liabilities (including strict liability),
encumbrances, liens, costs and expenses of investigation and defense of any
claim, whether or not such claim is ultimately defeated, and of any good faith
settlement or judgment, contingent or otherwise, matured or unmatured,
foreseeable or unforeseeable, including, without limitation, reasonable
attorneys' fees and disbursements and consultants' fees, incurred as a result of
(i) the existence, since RBC or the Subsidiary has owned, occupied or leased
Company Property, of Hazardous Material upon, about or beneath any Company
Property or migrating or threatening to migrate to or from Company Property or
(ii) the violation of any Environmental Requirement pertaining to such property,
including without limitation:
(1) Damages for personal injury, or injury to property
or natural resources occurring upon the Company Property or
elsewhere, including without limitation the cost of demolition and
rebuilding of any improvements on real property, interest and
penalties (including but not limited to claims brought by or on
behalf of former or current employees of RBC or any Subsidiary):
(2) Fees incurred for the services of attorneys,
consultants, contractors, experts, laboratories and all other costs
incurred in connection with the remediation of any Hazardous
Materials found to be present at, or to have originated from, any
Company Property, including, but not limited to, the investigation,
preparation of any feasibility studies or reports or the performance
of any cleanup, remediation, removal, response, abatement,
containment, closure, restoration or monitoring work required by any
federal, state or local governmental agency or political
subdivision; and
(3) Liability to any third person or governmental agency
to indemnify such person or agency for costs expended in connection
with the items referenced in subparagraph (b) herein.
- 21 -
(C) "Environmental Requirement" means any statutes,
regulations, rules, ordinances, codes, licenses, permits, orders, approvals,
plans or authorizations in effect as of the Closing of any governmental
agencies, departments, commissions, boards, bureaus, or instrumentalities of the
Untied States, any states or political subdivisions thereof and any applicable
judicial, administrative, or regulatory decrees, judgments, or orders relating
to the protection of human health or the environment in effect as of the
Closing, including, without limitation, all requirements, including but not
limited to those pertaining to reporting, licensing, permitting, investigation,
and remediation of emissions, discharges, releases or threatened releases of
Hazardous Materials, or relating to the manufacture, processing, distribution,
use treatment, storage, disposal, transport, or handling of Hazardous Materials.
(D) "Hazardous Material" means any substance (1) defined as a
"hazardous waste," "hazardous substance," pollutant or contaminant under any
federal, state or local statute, regulation, rule of ordinance or amendments
thereto including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. section 9601 et seq.) and/or the
Resource Conservation and Recovery Act (42 U.S.C. section 6901 et seq.); or (2)
defined by law as toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by
any governmental authority, agency, department, commission, board, agency or
instrumentality of the United States or of any state or any political
subdivision thereof with jurisdiction over any Environmental Requirement,
including, without limitation, gasoline, diesel fuel or other petroleum
hydrocarbons, polychlorinated biphenyls, asbestos or urea formaldehyde foam
insulation.
(o) Intellectual Property. Schedule 3.2(o) hereto sets forth a
list of all trademarks, service marks, tradenames, registered copyrights and
patents and applications for any of the foregoing owned by or registered in the
name of RBC or. the Subsidiary or used in the business of RBC or the Subsidiary
as presently conducted, in each case which are material to such business
(collectively, the "Intellectual Property"). Except as set forth on Schedule
3.2(o) or on the Balance Sheet, (i) RBC or the Subsidiary owns the Intellectual
Property free and clear of any Encumbrances, (ii) the business conducted by RBC
and the Subsidiary does not infringe any proprietary right of any third party
and (iii) to the knowledge of RBC and the Subsidiary, no third party has
infringed against any of the Intellectual Property. RBC or the Subsidiary owns
or has the right to use all material intellectual property rights, including,
without limitation, the Intellectual Property, currently utilized by RBC in the
conduct of its business without compensation to third parties. Except as set
forth on Schedule 3.2(o), neither RBC nor the Subsidiary has granted any license
to
- 22 -
use Intellectual Property and, to the knowledge of RBC and the Subsidiary, no
person has asserted the invalidity of the Intellectual Property.
(p) Labor Relations; Employees. Except as set forth on
Schedule 3.2(p) attached hereto, (i) neither RBC nor the Subsidiary is
delinquent in any material payments to any of its employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed by them to the date hereof or amounts required to be reimbursed to
such employees, (ii) there is no unfair labor practice complaint against RBC or
the Subsidiary pending before the National Labor Relations Board or any
comparable state, local or foreign agency and (iii) neither any grievance which
might have a Material Adverse Effect nor any arbitration proceeding arising out
of or under any collective bargaining agreement is currently pending. There is
no strike, work stoppage, slowdown or other labor difficulty actually occurring
or, to the knowledge of RBC, threatened against or directly affecting the
operations of RBC or the Subsidiary.
(q) Insurance. Schedule 3.2(q) attached hereto lists all
policies or binders of fire, product liability, workmen's compensation,
vehicular and other insurance held by or on behalf of RBC or the Subsidiary. All
premiums due under such policies and binders are currently paid and no notice of
increased premiums, cancellation or non-renewal of any of such policies or
binders has been received by RBC or the Subsidiary.
(r) Brokers. Neither RBC, any of the officers, directors or
employees of RBC, nor any Stockholder has retained the services of any broker or
finder in connection with the transactions contemplated hereby except Goldman,
Sachs & Co., the fees and expenses of which shall be paid by RBC at the Closing.
(s) Material Adverse Effect. As used in this Agreement, the
term "Material Adverse Effect" shall mean a material adverse effect on the
business, prospects or financial condition of RBC and the Subsidiary, taken as a
whole, other than as a result of general economic conditions.
(t) Depositions, Powers of Attorney. Schedule 3.2(t) sets
forth (i) the name of each bank or similar entity in which RBC or the Subsidiary
has an account, lockbox or safe deposit box and the names of all persons
authorized to draw thereon or to have access to them and (ii) the name of each
person, corporation, firm or other entity holding a general or special power of
attorney from RBC or the Subsidiary and a description of the terms of such
power.
(u) Government Contracts. All information supplied to any
agency of the government of the United States of America in connection with any
contract or proposal, including,
- 23 -
without limitation, information supplied on Department of Defense forms SF1411,
is true, complete and accurate in all material respects.
(v) Disclosure. No representation or warranty by RBC, the
Subsidiary or any of the Stockholders in this Agreement, and no other statement,
document, or certificate furnished or to be furnished by or on behalf of the
Stockholders, RBC or the Subsidiary pursuant to this Agreement or in connection
with the transactions contemplated hereby contains any untrue statement of
material fact or omits or shall omit to state a material fact necessary to make
any statements contained herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
AND THE ACQUISITION CORPORATION
4.1. Representations and Warranties of the Buyer and the Acquisition
Corporation. The Buyer and the Acquisition Corporation hereby jointly and
severally represent and warrant to RBC and each of the Stockholders as follows:
(a) Organization; Good Standing; and Power. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
enter into this Agreement and the Escrow Agreement and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The Acquisition Corporation is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to enter
into this Agreement and the Agreement of Merger, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The Acquisition Corporation has not conducted any business prior to
the date hereof other than its corporate organization, the issuance of shares of
its capital stock, the negotiation of this Agreement and the preparation for the
transactions contemplated hereby. The Buyer and the Acquisition Corporation have
delivered to RBC copies of their respective certificates of incorporation and
by-laws, in each case, as in effect on the date hereof.
(b) Authority. The execution, delivery and performance of this
Agreement and the Escrow Agreement and the consummation by the Buyer of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action on the part of the Buyer. This
Agreement and the Escrow Agreement have been duly and validly executed and
delivered by the Buyer and are the valid and binding
- 24 -
obligations of the Buyer, enforceable against the Buyer in accordance with their
terms. The execution, delivery and performance of this Agreement and the
Agreement of Merger and the consummation by the Acquisition Corporation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of the Acquisition
Corporation. This Agreement has been, and the Agreement of Merger when executed
and delivered by the Acquisition Corporation will be, duly and validly executed
and delivered by the Acquisition Corporation, and this Agreement is, and the
Agreement of Merger when executed and delivered by the parties thereto will be,
valid and binding obligations of the Acquisition Corporation, enforceable
against the Acquisition Corporation in accordance with their respective terms.
Neither the execution, delivery and performance of this Agreement and the Escrow
Agreement by the Buyer or the Acquisition Corporation, as applicable, or the
execution, delivery and performance of the Agreement of Merger by the
Acquisition Corporation, nor the consummation by the Buyer or the Acquisition
Corporation, as the case may be, of the transactions contemplated by this
Agreement and the Escrow Agreement or the Agreement of Merger, nor compliance by
the Buyer or the Acquisition Corporation, as the case may be, with any of the
provisions hereof or thereof, including, without limitation, the issuance by the
Buyer of the Buyer's Preferred Stock pursuant to the Merger, will (i) conflict
with or violate any provision of the Certificate of Incorporation or By-laws of
the Buyer or the Acquisition Corporation, (ii) violate, conflict with or
constitute (or with notice or lapse of time or both constitute) a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of, or result in the creation of any
Encumbrance upon any of the property of the Buyer or the Acquisition Corporation
pursuant to the terms of, any note, bond, lease, mortgage, indenture, license,
agreement, or other instrument or obligation to which the Buyer or the
Acquisition Corporation is a party or by which any of their respective
properties or assets may be bound or affected or (iii) violate any law, statute,
rule or regulation or judgment, order, award, writ, injunction or decree of any
court, administrative agency or governmental body, applicable to the Buyer or
the Acquisition Corporation or any of their respective properties or assets.
Except as contemplated by this Agreement and as set forth on Schedule 4.1(b)
attached hereto, no permit, authorization, consent or approval of or by any
person, governmental or private is required in connection with the execution,
delivery and performance of this Agreement, the Escrow Agreement or the
Agreement of Merger by the Buyer or the Acquisition Corporation or the
consummation by the Buyer or the Acquisition Corporation of the transactions
contemplated hereby or thereby including, without limitation, the issuance by
the Buyer of the Buyer's Preferred Stock pursuant to the Merger.
- 25 -
(c) Authorization of Buyer's Preferred Stock. The
authorization, issuance, sale and delivery of the Buyer's Preferred Stock to the
holders of RBC Common Stock in the Merger has been duly authorized by all
requisite corporate action of the Buyer, and, when issued, sold and delivered in
the Merger, such shares shall be validly issued, fully-paid and nonassessable,
with no personal liability attaching to the ownership thereof. The terms,
designations, powers, preferences and relative, participating, optional and
other special rights and the qualifications, limitations and restrictions, of
the Buyer's Preferred Stock shall be as stated in the Certificate of
Designations relating thereto (the "Certificate of Designations") filed with the
Secretary of State of Delaware prior to the Closing, a true and complete copy of
which has been provided to the Stockholders.
(d) Capital Structure. Schedule 4.1(d) hereto sets forth the
authorized and outstanding capital stock of the Buyer immediately following the
Closing, including all options, warrants and other securities convertible into
or exercisable or exchangeable for capital stock of the Buyer outstanding
immediately following the Closing.
(e) No Prior Activities; Pro Forma Balance Sheet. (i) Neither
the Buyer nor the Acquisition Corporation, since its inception, has (A) engaged
in any business, (B) entered into any agreements, contracts, guarantees,
understandings or other commitments (written or oral) or (C) incurred any
liabilities or become subject to any obligations of any nature (matured or
unmatured, fixed or contingent), other than in connection with its formation or
the transactions contemplated by this Agreement.
(ii) Set forth in Schedule 4.1(e) hereof is the unaudited pro
forma consolidated balance sheet of the Buyer as at the Closing, which has been
prepared in accordance with GAAP and accurately reflects the financial condition
of the Buyer immediately after giving effect to the Merger.
(f) Brokers' or Finders' Fees. Except as set forth on Schedule
4.1(f) attached hereto, neither the Buyer or the Acquisition Corporation nor any
of their respective officers, directors, employees or stockholders has retained
any broker or finder in connection with the transactions contemplated hereby.
(g) Nonforeign Status. The Buyer is not a "foreign person" as
defined in S800.211 of the regulations proposed by the United States Department
of the Treasury under Section 721 of the Defense Production Act of 1950, as
amended.
- 26 -
ARTICLE V
CONDITIONS PRECEDENT
5.1. Conditions to Each Party's Obligations. The obligations of each
party to perform this Agreement are subject to the satisfaction of the following
conditions unless waived in writing (to the extent such conditions can be
waived) by all of the other parties hereto:
(a) Legal Action. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the consummation of
the transactions contemplated hereby or by the Agreement of Merger shall have
been issued by any Federal or state court and remain in effect. Each party
agrees to use its best efforts to have any such injunction lifted.
(b) Legislation. No Federal, state, local or foreign statute,
rule or regulation shall have been enacted which prohibits, restricts or delays
the consummation of the transactions contemplated hereby or by the Agreement of
Merger or any of the conditions to the consummation of such transactions.
5.2. Conditions to Obligations of the Buyer and the Acquisition
Corporation. The obligations of the Buyer to consummate the transactions
contemplated by this Agreement and of the Acquisition Corporation to consummate
the transactions contemplated by this Agreement and the Agreement of Merger are
subject to the satisfaction of the following conditions unless waived in writing
(to the extent such conditions can be waived) by the Buyer and the Acquisition
Corporation:
(a) Representations and Warranties. The representations and
warranties of the Stockholders and RBC set forth in Sections 3.1 and 3.2 hereof
shall in each case be true and correct in all material respects as of
immediately prior to the Effective Time as though made immediately prior to the
Effective Time.
(b) Performance of Obligations. Each of RBC and the
Stockholders shall have performed in all material respects the obligations
required to be performed by them under this Agreement and the Agreement of
Merger, as applicable, immediately prior to the Effective Time.
(c) Authorization of Merger. All action necessary to authorize
the execution, delivery and performance of this Agreement and the Agreement of
Merger and the consummation of the transactions contemplated hereby and thereby
shall have been duly and validly taken by the Board of Directors of RBC and the
Stockholders.
- 27 -
(d) Termination of Management Agreements. The Management
Agreement dated October 29, 1987, between RBC and Overseas Partners, Inc.
("OPI"), and the Management Agreement dated November 1, 1991, between the
Subsidiary and OPI, shall each have been terminated and the Buyer shall have
received evidence thereof reasonably satisfactory to the Buyer.
(e) Escrow Agreement. The Stockholders shall have executed and
delivered an escrow agreement substantially in the form of Exhibit B hereto (the
"Escrow Agreement").
(f) Consents. All permits, authorizations, consents and
approvals of or by any person (governmental or private) required in connection
with the execution, delivery and performance of this Agreement shall have been
obtained.
(g) Defense Contracts. All permits, authorizations and
approvals required under contracts and agreements with the United States
Department of Defense or other United States governmental entity in connection
with the execution, delivery and performance of this Agreement shall have been
obtained by RBC.
(h) Opinion of Counsel. The Buyer and the Acquisition
Corporation shall have received opinions dated the date of the Closing of
O'Sullivan Graev & Karabell, Wormser, Kiely, Galef & Jacobs, I.C. Corbridge
Gough & Co., Smeets Thesseling & Van Bokhorst, De Brauw Blackstone & Westbroek
and Spengler, Carlson, Gubar, Brodsky & Frischling, substantially in the forms
attached as Exhibit C hereto.
5.3. Conditions to Obligations of RBC and the Stockholders. The
obligations of the Stockholders to consummate the transactions contemplated by
this Agreement and of RBC to consummate the transactions contemplated by this
Agreement and the Agreement of Merger are subject to the satisfaction of the
following conditions unless waived in writing (to the extent such conditions can
be waived) by RBC and the Stockholders:
(a) Representations and Warranties. The representations and
warranties of the Buyer and the Acquisition Corporation set forth in Article IV
hereof shall be true and correct in all material respects as of immediately
prior to the Effective Time as though made immediately prior to the Effective
Time.
(b) Performance of Obligations of the Buyer and the
Acquisition Corporation. The Buyer and the Acquisition Corporation shall have
performed in all material respects their respective obligations required to be
performed by them under this Agreement and the Agreement of Merger, as
applicable, immediately prior to the Effective Time.
- 28 -
(c) Authorization of Merger. All action necessary to authorize
the execution, delivery and performance of this Agreement and the Agreement of
Merger and the consummation of the transactions contemplated hereby and thereby
shall have been duly and validly taken by the Buyer and the Acquisition
Corporation and by the Buyer as the sole stockholder of the Acquisition
Corporation.
(d) Issuance of Preferred Stock. The Certificate of
Designations shall have been filed with the Secretary of State of the State of
Delaware (and the Stockholders shall have received satisfactory evidence
thereof), and the Surviving Corporation shall have deposited into the Escrow
Deposit Box, to be held and distributed in accordance with the terms of the
Escrow Agreement, duly executed certificates, registered in the names of the
Stockholders, representing an aggregate of 20,000 shares of the Buyer's
Preferred Stock.
(e) Satisfaction of Indebtedness. Simultaneously with the
Closing, the Buyer shall have paid in full all principal and interest then due
under (i) the Loan and Security Agreement dated October 30, 1987, among RBC, the
Subsidiary and Citicorp North America, Inc., as amended and (ii) the Loan
Agreement dated August 14, 1989, among RBC, Bitrix Associates C.V. and Overland
Trust Bank.
(f) Escrow Agreement. The Buyer shall have executed and
delivered the Escrow Agreement.
(g) Exchange Agreements The Buyer shall have executed and
delivered exchange agreements (the "Exchange Agreements") with each of Gary
Holmes, Harold Macsata and Frederick Morlok, substantially in the forms attached
as Exhibit D hereto.
(h) Consents. All permits, authorizations, consents and
approvals of or by any person (governmental or private) required in connection
with the execution, delivery and performance of this Agreement shall have been
obtained or made.
(i) Defense Contracts. All permits, authorizations and
approvals required under contracts and agreements with the United States
Department of Defense or other United States governmental entity in connection
with the execution, delivery and performance of this Agreement shall have been
obtained by RBC, other than those which if not obtained would not individually
or in the aggregate have a Material Adverse Effect.
(j) Opinion of Counsel. RBC and the Stockholders shall have
received an opinion dated the Closing Date of Gibson, Dunn & Crutcher, counsel
to the Buyer and the Acquisition Corporation, substantially in the form of
Exhibit E hereto.
- 29 -
ARTICLE VI
CLOSING
The closing (the "Closing") for the consummation of the transactions
contemplated by this Agreement shall, unless another date or place is agreed to
in writing by the parties hereto, take place at the offices of O'Melveny &
Meyers, counsel to the senior lender to the Buyer, at 400 South Hope Street, Los
Angeles, California 90071, simultaneously with the execution and delivery
hereof. The date hereof is sometimes referred to herein as the "Closing Date".
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Officer and Director Indemnification. The Surviving Corporation
shall, and the Buyer shall cause the Surviving Corporation to, for a period of
three years after the Effective Time, maintain in full force and effect all
applicable provisions contained in the By-Laws and Certificate of Incorporation
of each of RBC and the Subsidiary with respect to the rights of the present and
former officers and directors of RBC and the Subsidiary to indemnification from
RBC or the Subsidiary, as the case may be.
7.2. Noncompetition. Until the second anniversary of the Closing,
neither Gary Holmes, Michael Hartnett, Bitrix Associates C.V. or Columbus
Holdings Limited, nor any Affiliate thereof, nor any officer, director or holder
of ten percent or more of the voting stock thereof, shall directly or indirectly
take any action to solicit or induce employees of the Surviving Corporation to
terminate their employment with the Surviving Corporation or engage in, invest
in more than ten percent of the voting stock of, assist, act as an advisor to,
or become a director or officer of, any entity that is engaged in any business
which competes with the business of the Surviving Corporation as presently
conducted.
7.3. Information Rights. For so long as Bitrix and Columbus shall
hold shares of the Buyer's Preferred Stock, the Buyer shall furnish to Overseas
Partners, Inc., as their representative, annual financial information in the
form and at the same time as such information is supplied to any creditor to
which the Buyer is obligated to provide such information (or, if the Buyer is
not obligated to deliver annual financial information to any creditor, the Buyer
shall provide to Overseas Partners a balance sheet as of each fiscal year-end of
the Buyer and a statement of operations and cash flows for each such fiscal
- 30 -
year then ended, prepared in accordance with GAAP, within 90 days of the end of
each such fiscal year).
7.4. Restrictions on Transfer of the Buyer's Preferred Stock. (a) No
Stockholder shall Transfer (other than to a Permitted Transferee) any shares of
the Buyer's Preferred Stock (or any interest therein) while such shares are
subject to the terms of the Escrow Agreement.
(b) Unless consented to in writing by all holders of the Buyer's
Preferred Stock then outstanding, following the release to any Stockholder of
the Buyer's Preferred Stock pursuant to the terms of the Escrow Agreement, no
Stockholder shall Transfer (other than to a Permitted Transferee) any of such
released shares of the Buyer's Preferred Stock (or any interest therein) except
as follows:
(i) Such Stockholder (for the purposes of this Section 7.4(b),
a "Selling Stockholder") shall first deliver a written notice (an "Option
Notice"), which shall be irrevocable for a period of 35 days after
delivery thereof, to the Buyer (and the Buyer shall promptly deliver a
copy of such Option Notice to each holder of the Buyer's Preferred Stock
at such holder's address as set forth in the Buyer's stock transfer
ledger) offering all of the Buyer's Preferred Stock proposed to be
Transferred by such Selling Stockholder at the purchase price and on the
terms specified therein. The Buyer (and or its assignee(s) or designee(s))
shall then have the option to purchase all or any portion of the shares of
the Buyer's Preferred Stock specified in the Option Notice (the "Subject
Shares"), said option to be exercised within 15 days after the giving of
such Option Notice (the "Company Option Period") by giving written notice
(a copy of which shall simultaneously be delivered to each Other Preferred
Stockholder (as defined below)) of the Buyer's desire to exercise such
purchase option and specifying the number of Subject Shares that the Buyer
shall acquire. If the Buyer shall not exercise its option or shall elect
to acquire less than all of the Subject Shares (the Subject Shares not
elected to be purchased by the Buyer being referred to herein as the
"Company Rejected Shares"), each holder of the Buyer's Preferred Stock who
or which is not a Stockholder as defined herein (the "Other Preferred
Stockholders"), shall have a non-assignable option to purchase all or any
part of the Company Rejected Shares, said option to be exercised within 25
days after the giving of the Option Notice (the "Other Preferred
Stockholders' Option Period") by giving a written counter-notice to such
Selling Stockholder. Each Other Preferred Stockholder who gives such a
counter-notice is referred to hereinafter as an "Electing Preferred
Stockholder", and the number of shares an Electing Preferred Stockholder
shall elect to purchase is referred to as the "Elected Shares".
- 31 -
(ii) The number of Company Rejected Shares an Electing
Preferred Stockholder shall be entitled to purchase (the "Allotted
Shares") shall be equal to that number of the Company Rejected Shares that
bears the same ratio to the total number of Company Rejected Shares as the
number of shares of the Buyer's Preferred Stock held by such Electing
Preferred Stockholder bears to the number of shares of the Buyer's
Preferred Stock held by all Electing Preferred Stockholders. If the number
of Elected Shares of any Electing Preferred Stockholder shall be less than
the Allotted Shares for such Electing Preferred Stockholder, each Electing
Preferred Stockholder who or which elected to purchase all of his or its
Allotted Shares shall be entitled to purchase any remaining Allotted
Shares of any Electing Preferred Stockholder, to be allocated among the
Electing Preferred Stockholders having the right to purchase such
remaining Allotted Shares in accordance with this paragraph as if such
Allotted Shares were all the Company Rejected Shares and as if such
remaining Electing Preferred Stockholders were all the Electing Preferred
Stockholders, such procedure to be repeated until either (a) all Company
Rejected Shares are allotted to Electing Preferred Stockholders as
aforesaid or (b) there remain Company Rejected Shares to allot but no
Electing Preferred Stockholders to whom to allot them.
(iii) If the Buyer alone, or the Buyer in combination with one
or more Electing Preferred Stockholders elect to purchase all (but not
less than all) the Subject Shares, the Buyer and such Electing Preferred
Stockholder(s) shall be obligated to purchase, and the Selling Stockholder
shall be obligated to sell, the Subject Shares at the price and terms
indicated in the Option Notice, except that the closing of the purchase
shall be held on the twentieth (20th) day after the expiration of the
Company Option Period, in the case where the Company elects to acquire all
Subject Shares, or on the fifteenth (15th) day after the expiration of the
Other Preferred Stockholders' Option Period, in the case where Electing
Preferred Stockholders participate in the acquisition of Subject Shares
(or if such day is not a business day, on the next following business day)
at 10:00 a.m., local time, at the principal executive office of the Buyer,
or at such other time and place as may be agreed in writing by the Selling
Stockholder, the Buyer and the Electing Preferred Stockholder(s).
(iv) If the Company and Electing Preferred Stockholder(s)
collectively elect to purchase less than all the Subject Shares, the
Company and the Electing Preferred Stockholders shall have no right to
purchase any of the Subject Shares, and the Selling Stockholder may, at
any time within a period 90 days after the expiration of the Other
Preferred Stockholders' Option Period, Transfer all (but not
- 32 -
less than all) the Subject Shares at the price and terms contained in the
Option Notice; provided that as a condition to such Transfer, the
purchaser thereof shall have agreed in writing to be subject to and bound
by the terms of this Section 7.4(b). If the Selling Stockholder does not
so transfer the Subject Shares within such 90-day period, the Subject
Shares may not be transferred without repeating the procedures set forth
in this Section 7.4(b).
(c) As used in this Section 7.4, (i) "Transfer" shall mean to sell,
pledge, give, bequeath, transfer, assign or in any other way whatsoever encumber
or dispose of, directly or indirectly, and (ii) "Permitted Transferee" shall
mean (A) with respect to any Stockholder that is an individual, such
Stockholder's spouse or lineal descendants or any trust for the benefit of any
thereof or the personal representative of such Stockholder or his estate and (B)
with respect to any Stockholder which is a corporation, partnership or other
entity, the stockholders or general or limited partners of such corporation or
partnership or any affiliate (as defined in the Securities Act of 1933, as
amended) of such Stockholder or any corporation, partnership or other entity
which acquires substantially all of the assets of such Stockholder or which
shall merge with such Stockholder (if such Stockholder is not the surviving
entity in such merger).
(d) A legend substantially as follows shall be placed on the
certificates representing the Buyer's Preferred Stock owned by each Stockholder:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER COMPLIES WITH THE PROVISIONS OF
SECTION 7.4 OF THE AGREEMENT AND PLAN OF REORGANIZATION DATED AS OF
MARCH 31, 1992, AMONG ROLLER BEARING HOLDING COMPANY, INC. AND THE
OTHER PARTIES THERETO, A COPY OF WHICH IS ON FILE AT THE OFFICES OF
ROLLER BEARING HOLDING COMPANY, INC."
(e) Each person or entity who or which is now or shall become in the
future an Other Preferred Stockholder as defined in this Section 7.4, is and
shall be an intended third-party beneficiary of the provisions of this Section
7.4.
7.5. Repurchase of Buyer's Preferred Stock. Neither the Buyer nor
any subsidiary thereof shall purchase or otherwise acquire any shares of the
Buyer's Preferred Stock (other than from any executive officer of the Buyer in
the event of the termination of such officer's employment with the Buyer) from
any holder thereof other than pursuant to a redemption in accordance with the
terms of the Buyer's Preferred Stock, as set forth in the Buyer's Certificate of
Incorporation, or pursuant to an offer
- 33 -
extended to all holders of the Buyer's Preferred Stock on a pro rata basis.
7.6. Mandatory Sale. If one or more holders of the Buyer's Preferred
Stock shall at any time while the Stockholders hold shares of the Buyer's
Preferred Stock sell shares of the Buyer's Preferred Stock representing 50% or
more of the Buyer's Preferred Stock then outstanding to any party who or which
is not an Affiliate of the Buyer, or if an Affiliate of the Buyer, at a per
share purchase price not less than $100 plus accrued dividends, each Stockholder
shall sell all shares of the Buyer's Preferred Stock then held by such
Stockholder in the same transaction.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1. Survival of Representations and Warranties. Except with respect
to the representations and warranties set forth in Sections 3.1(a), 3.2(1) and
3.2(n) hereof, the representations and warranties set forth in Articles III and
IV hereof shall survive the Closing and remain in effect until the second
anniversary of the Closing Date. The representations and warranties set forth in
Section 3.1(a) shall survive indefinitely. The representations and warranties
set forth in Section 3.2(1) hereof shall survive until all applicable statutes
of limitations have expired. The representations and warranties set forth in
Section 3.2(n) hereof shall survive the Closing until the twelfth anniversary of
the Closing Date or, if earlier, the date upon which the Buyer's Preferred Stock
held by the Stockholders shall be required to be redeemed or repurchased
pursuant to the terms of the Buyer's Preferred Stock or otherwise, or the date
set for any such redemption or repurchase agreed to by the Buyer, whether or not
there shall be legally available funds to effect any such redemption or
repurchase on such date. All covenants of any party hereto shall survive
indefinitely, until by their respective terms they become inoperative. The date
upon which any representation and warranty or covenant expires is referred to
herein as the "Survival Date" of such representation and warranty or covenant
(except that the Survival Date of any representation and warranty or covenant
with respect to any claim made pursuant to Section 8.2.3 or 8.2.4 hereof prior
to the date of expiration of such representation, warranty or covenant shall be,
solely with respect to such claim, the date of final adjudication of such
claim). The Survival Date with respect to the representations and warranties set
forth in Section 3.2(n) hereof is referred to herein as the "Environmental
Survival Date".
- 34 -
8.2. Indemnification.
8.2.1. Definitions. As used in this Section 8.2, the following
terms shall have the following meanings:
(a) "Event of Buyer Indemnification" shall mean the untruth,
inaccuracy or breach of any representation, warranty, agreement or covenant of
the Stockholders contained in this Agreement.
(b) "Event of Stockholder Indemnification" shall mean the
untruth, inaccuracy or breach of any representation, warranty, agreement or
covenant of the Buyer contained in this Agreement.
(c) "Buyer Indemnified Persons" shall mean and include the
Buyer, the Acquisition Corporation, the Surviving Corporation and their
successors and assigns.
(d) "Stockholder Indemnified Persons" shall mean and include
the Stockholders and their respective successors and assigns.
(e) "Losses" shall mean any and all losses, shortages,
damages, including, without limitation, Environmental Damages, expenses
(including reasonable attorneys' and accountants' fees), assessments, tax
deficiencies and taxes (including interest or penalties thereon), liabilities,
settlements, payments, awards, judgments, fines, penalties or interest charges
sustained, suffered or incurred by any Buyer Indemnified Person or Stockholder
Indemnified Person, as the case may be, arising from any Event of Buyer
Indemnification or Event of Stockholder Indemnification, computed net of (i)
actual recoveries pursuant to insurance coverage or otherwise from indemnities
identified prior to the Effective Time, (ii) any specific reserves provided for
the applicable event in the Balance Sheet and (iii) any tax benefits actually
recognized by the Buyer Indemnified Person or the Stockholder Indemnified
Person, as the case may be.
8.2.2. Indemnification. (a) Subject to Sections 8.2.3, 8.2.4
and 8.2.5, the Stockholders shall (i) severally, as to Losses arising out of any
breach of any representation or warranty set forth in Section 3.1 hereof, and
(ii) jointly and severally, with respect to all Losses (other than Losses which
constitute Environmental Damages) arising out of any other Event of Buyer
Indemnification (other than any breach of any representation or warranty set
forth in Section 3.2(n) hereof), indemnify and hold harmless the Buyer
Indemnified Persons, and each of them, from and against any and all Losses
arising from any Event of Buyer Indemnification.
- 35 -
(b) Until the Environmental Survival Date, subject to Sections
8.2.3, 8.2.4 and 8.2.5, the Stockholders, jointly and severally, shall indemnify
and hold harmless the Buyer Indemnified Persons, and each of them, from and
against any and all Environmental Damages if and only to the extent such
Environmental Damages result from any circumstance existing, or any action or
inaction or event or occurrence which occurred, prior to the Closing and (i)
with respect to any such Environmental Damages relating to Company Property
owned, occupied or leased by the Subsidiary, after July 16, 1990 and (ii) with
respect to any such Environmental Damages relating to Company Property owned,
occupied or leased by RBC, after October 30, 1987; provided, however, that the
Stockholders shall have no indemnification obligations under the preceding
clause 8.2.2(b)(ii) unless (and then only to the extent that) the Buyer
Indemnified Persons making such claim shall have failed, after using
commercially reasonable efforts (including, without limitation, the filing and
pursuit of a claim in any Federal or state court of the United States of
competent jurisdiction until such claim is dismissed, or a decision is rendered,
by such court), to have obtained indemnification payments with respect to such
Environmental Damages pursuant to the Inventory Purchase and Indemnification
Agreement (the "General Sullivan Indemnification Agreement") dated the date
hereof, between RBC and General Sullivan Group, Inc., a New Jersey corporation
("General Sullivan"), if such claim is within the scope of the General Sullivan
Indemnification Agreement. Nothing herein shall be interpreted to mean that the
General Sullivan Indemnification Agreement in any way limits the scope of the
indemnity in that portion of clause 8.2.2(b)(ii) preceding the proviso in such
clause. If any Stockholder shall make any payments pursuant to clause
8.2.2(b)(ii) of the preceding sentence, such Stockholder shall be subrogated, to
the extent of such payment, to any rights and remedies available to RBC or any
of its assigns, in respect of the claim on account of which such payment shall
have been made, under the General Sullivan Indemnification Agreement.
(c) Until the Environmental Survival Date, subject to Sections
8.2.3, 8.2.4 and 8.2.5, the Stockholders, jointly and severally, shall indemnify
and hold harmless the Buyer Indemnified Persons, and each of them from and
against any and all Losses (i) relating to or arising out of any excluded
liability set forth in Section 1.04(j) of the Asset Purchase Agreement dated
September 18, 1987, among RBC (formerly RBC Holdings Corp.), General Sullivan
and the other parties thereto or (ii) with respect to which RBC or the
Subsidiary or any of their respective assigns shall have a right of recovery
(but only to extent of such right of recovery) pursuant to Section 10.11 or
10.12 of the Asset Purchase Agreement dated as of June 29, 1990, among RBC, the
Subsidiary (formerly ITI Acquisition, Inc.), Axel Johnson, Inc., a Delaware
corporation, and the other parties thereto; provided, however, that the
Stockholders shall have no indemnification obligations under this Section
8.2.2(c) unless
- 36 -
(and then only to the extent that) the Buyer Indemnified Persons making such
claim shall have failed, after using commercially reasonable efforts (including,
without limitation, the filing and pursuit of a claim in any Federal or state
court of the United States of competent jurisdiction until such claim is
dismissed, or a decision is rendered, by such court), to have obtained
indemnification payments with respect to such Losses pursuant to the provisions
of the agreements specified in the preceding clause (i) or (ii) or of the
General Sullivan Indemnification Agreement, as applicable. If any Stockholder
shall make any payments pursuant to this Section 8.2.2(c), such Stockholder
shall be subrogated, to the extent of such payment, to any rights and remedies
available to RBC and the Subsidiary or any of their respective assigns, in
respect of the claim on account of which such payment shall have been made,
under the RBC Purchase Agreement, the ITB Purchase Agreement or the General
Sullivan Indemnification Agreement, as applicable, with respect to the claim
giving rise to such required payment.
(d) The Buyer shall indemnify and hold harmless the
Stockholder Indemnified Persons, and each of them, from and against all Losses
arising from any Event of Stockholder Indemnification.
8.2.3. Procedure for Claims by Parties. No claim, demand, suit
or cause of action shall be brought under Section 8.2.2 hereof unless the party
or parties seeking indemnification, at any time prior to the applicable Survival
Date, shall give prompt written notice of the existence of any such claim,
stating the nature and basis of such claim and the amount thereof, to the extent
known; provided, however, that the failure to give prompt notice of the
existence of a claim by the party or parties seeking indemnification shall not
obviate the right to indemnity unless the delay in giving such notice shall
adversely affect the ability of the indemnifying party to defend against such
claim or to minimize the subject Loss. Upon the giving of such written notice as
aforesaid, the party or parties seeking indemnification shall have the right to
commence legal proceedings subsequent to the applicable Survival Date for the
enforcement of their rights under Section 8.2.2 hereof.
8.2.4. Third Party Claims. The obligations and liabilities of
any party hereto against which indemnification is sought hereunder with respect
to claims resulting from the assertion of liability by third parties shall be
subject to the following terms and conditions:
(a) Notice of Asserted Liability. Promptly after receipt by
any indemnified person (the "Indemnitee") of notice of any demand, claim or the
commencement (or threatened commencement) of any action, proceeding or
investigation (an "Asserted Liability") that may result in a Loss, the
Indemnitee shall give prompt written notice thereof (the "Claims Notice") to
- 37 -
any other party (or parties) obligated to provide indemnification pursuant to
Section 8.2.2 (the "Indemnifying Party"); provided, however, that the failure to
give the Claims Notice promptly by the Indemnitee shall not obviate the right to
indemnity unless the delay in giving such notice shall adversely affect the
Indemnifying Party. The Claims Notice shall describe the Asserted Liability in
reasonable detail, and shall indicate the amount (estimated, if necessary) of
the Loss that has been or may be suffered by the Indemnitee.
(b) Defense. The Indemnifying Party shall be entitled to
assume the defense of any action, suit or claim brought against the Indemnitee
with respect to which the Indemnifying Party may have any indemnity liability
hereunder, upon delivering written notice to the Indemnitee to such effect. The
Indemnifying Party shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with the defense
thereof other than (i) those relating to investigation or the furnishing of
documents or witnesses and (ii) all reasonable fees and expenses of counsel
retained by such Indemnitee if (A) the Indemnifying Party and the Indemnitee
shall have agreed in writing to the retention of such counsel or (B) the
Indemnitee shall have reasonably concluded that a potential conflict exists or
that a defense is potentially available to it which is not available to the
Indemnifying Party. Each party shall make available to the other party and their
attorneys and accountants all books and records of such party relating to such
proceedings or litigation and the parties hereto agree to render to each other
such assistance as they may reasonably require of each other in order to ensure
the proper and adequate defense of any such action, suit or proceeding.
(c) Settlement. Neither the Indemnifying Party nor the
Indemnitee shall make any settlement of any claims without the written consent
of the other party (which consent shall not be unreasonably withheld).
8.2.5. Limitations on Indemnification. The indemnification provided
for in this Section 8.2 shall be subject to the following limitations:
(a) The Stockholders shall have no liability and no obligation
to indemnify the Buyer for any Losses arising from the untruth, inaccuracy or
breach of any representation, warranty, agreement or covenant of the
Stockholders contained in Article III hereof other than Section 3.2(n) (with
respect to which there shall be no basket amount) unless, until and only to the
extent that such Losses, in the aggregate, shall exceed $500,000 (the "Basket
Amount") and the Buyer shall not be entitled to receive any indemnification
payments from the Stockholders hereunder unless, until and only to the extent
that such Losses exceed the Basket Amount.
- 38 -
(b) Subject to Section 8.2.5(c) and notwithstanding anything
in this Section 8.2 to the contrary, the several liability of each Stockholder,
with respect to any Loss, shall be equal to the product of (A) the percentage
(the "Stockholder's Percentage") set forth opposite such Stockholder's name on
Annex I hereto multiplied by (B) the dollar amount of such Loss; provided,
however, that no Stockholder's liability for indemnification pursuant to this
Section 8.2 shall exceed the product of (x) such Stockholder's Percentage
multiplied by either (y) $4,000,000 if such Loss arises from a claim made
pursuant to Section 8.2.3 or 8.2.4 hereof prior to the first anniversary of the
date hereof, or (z) $2,000,000 (reduced dollar-for-dollar by any claims
described in the preceding clause (y)) if such Loss arises from a claim made
pursuant to Section 8.2.3 or 8.2.4 hereof after the first anniversary of the
date hereof.
(c) If there shall be any indemnification obligation of the
Stockholders (A) under Section 8.2.2(a), such obligation shall be paid, before
any cash payment is made, by the distribution to the applicable Buyer
Indemnified Person of Escrow Shares (as defined in the Escrow Agreement) having
a value equal to the indemnification amount, and such shares shall be deemed to
have been assigned and transferred by the Stockholders to such Buyer Indemnified
Person, free and clear of any claim of any kind by the Stockholders or any of
them, or (B) under Section 8.2.2(b) or 8.2.2(c), such obligation shall be paid
(x) first by the distribution to the applicable Buyer Indemnified Person of cash
from the Stockholders' interest in the Escrow Cash (as defined in the Escrow
Agreement), to the extent amounts of the Escrow Cash shall then be available for
such use in accordance with the terms of the Escrow Agreement set forth in the
preceding paragraph 8.2.5(b)) and (y) second by the distribution to the
applicable Buyer Indemnified Person of Escrow Shares having a value equal to the
indemnification amount, and such shares shall be deemed to have been assigned
and transferred by the Stockholders to such Buyer Indemnified Person free and
clear of any claim of any kind by the Stockholders or any of them, in each case
prior to any other cash payment. For the purposes of this Section 8.2.5(c), the
value of the Escrow Shares shall be their liquidation preference plus any
dividends accrued and unpaid with respect thereto.
8.2.6. Limitation of Remedies. Except as provided in this Agreement,
the remedies provided for in Section 8.2 shall be the sole remedies, contractual
or otherwise, of the indemnified persons and shall preclude assertion by the
indemnified persons of any other rights or the seeking of any other remedies
against the indemnifying persons with respect to this Agreement and the
transactions contemplated hereby.
- 39 -
ARTICLE IX
MISCELLANEOUS
9.1. Expenses; Transfer Taxes; Etc. All fees and expenses incurred
by RBC and the Stockholders in connection with the preparation for, and the
consummation of, the transactions contemplated hereby and the other writings
referenced herein shall be borne by the Stockholders, including, without
limitation, the fees and disbursements of O'Sullivan Graev & Karabell, counsel
to RBC, and Goldman, Sachs & Co., which fees and disbursements shall be paid by
the Stockholders at the Closing; each of the Buyer and the Acquisition
Corporation shall bear its own fees and expenses in connection with the
preparation for, and consummation of, the transactions contemplated hereby and
the other writings referenced herein, which fees and expenses shall be paid by
the Surviving Corporation at the Closing. The Buyer shall pay all sales,
registration, recording or transfer taxes which may be payable in connection
with the transactions contemplated by this Agreement.
9.2. Parties in Interest. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the respective successors and
assigns of the parties hereto; provided, however, that neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
either RBC and the Stockholders, on the one hand, or the Buyer or the
Acquisition Corporation, on the other hand, without the prior written consent of
the other party hereto.
9.3. Entire Agreement; Amendments This Agreement and the other
writings and agreements referred to herein or delivered pursuant hereto contain
the entire understanding of the parties with respect to its subject matter. This
Agreement and such other writings and agreements referred to herein supersede
all prior agreements and understandings between the parties with respect to
their subject matter. This Agreement may be amended only by a written instrument
duly executed by the parties and expressly stating that it is intended to modify
this Agreement, and any condition to a party's obligations hereunder may only be
waived in writing by such party.
9.4. Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.5. Notices. All notices, claims, certificates, requests, demands
and other communications hereunder shall be in writing sent by facsimile
transmission or recognized courier service or delivered personally or mailed (by
registered or certified mail, return receipt requested and postage prepaid),
addressed as follows;
- 40 -
If to RBC, to:
Roller Bearing Company of America, Inc.
140 Terry Drive
P.O. Box 1237
Newtown, Pennsylvania 18940
Attention: President
Telecopy: (215) 579-4318;
If to any Stockholder, to such Stockholder at his or its address set
forth on Annex I;
In each case, with a copy to:
Overseas Partners, Inc.
375 Park Avenue
New York, New York 10152
Attention: Mr. Emanuele Costa
Telecopy: (212) 421-5704; and
O'Sullivan Graev & Karabell
30 Rockefeller Plaza
New York, New York 10112
Attention: Kenneth S. Siegel, Esq.
Telecopy: (212) 408-2420; and
If to the Buyer or the Acquisition Corporation, to:
Roller Bearing Holding Company, Inc.
1800 Century Park East, Suite 1000
Los Angeles, California 90067
Attention: Mr. Richard R. Crowell
Telecopy: (310) 277-5810;
with a copy to:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attention: Terrance L. Carison, Esq.
Telecopy: (213) 229-7520;
or to such other address as the parties may have furnished to the other parties
hereto in writing. Any such notice or communication shall be deemed to have been
given (a) in the case of personal or facsimile delivery, on the date of such
delivery (or, if such day is not a business day, on the first business day
thereafter), (b) in the case of air courier, on the next business day after the
date when sent and (c) in the case of mailing, on the third business day
following the date of posting.
9.6. Publicity. The parties hereto agree that all public
announcements relating to this Agreement or the
- 41 -
transactions contemplated hereby, including announcements to employees, will be
made only as may be agreed upon in writing by both RBC and the Buyer.
9.7. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
9.8. Governing Law. This Agreement shall be governed by and
construed in accordance with (a) the laws of the State of New York applicable to
agreements made and to be wholly performed within such State and (b) with
respect to corporate law governing the Merger, solely by the General Corporation
Law of the State of Delaware. Each of Bitrix and Columbus hereby irrevocably
submits to the jurisdiction of the courts of the State of New York for the
resolution of any dispute arising in connection with this Agreement, the Escrow
Agreement or any of the transactions contemplated hereby or thereby, and hereby
irrevocably appoints Wormser, Kiely, Galef & Jacobs, having the address set
forth on Annex I hereto, as agent for service of process in connection therewith
(provided that the foregoing submission to jurisdiction shall not be construed
to mean that either Bitrix or Columbus conducts any business within the State of
New York).
9.9. Gender. Any reference to the masculine gender shall be deemed
to include the feminine and neuter genders unless the context otherwise
requires.
9.10. Waivers. Any party to this Agreement may, by written notice to
the other parties hereto, waive any provision of this Agreement. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
- 42 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered on the date first above written.
ROLLER BEARING COMPANY OF
AMERICA, INC.
By: /s/ Gary W. Holmes
----------------------------------
Gary W. Holmes
President and CEO
ROLLER BEARING HOLDING
COMPANY, INC.
By: /s/ Michael J. Hartnett
----------------------------------
Name: Michael J. Hartnett
Title: President
ROLLER BEARING ACQUISITION
COMPANY, INC.
By: /s/ Michael J. Hartnett
----------------------------------
Name: Michael J. Hartnett
Title: President
STOCKHOLDERS:
BITRIX ASSOCIATES C.V.
By: BISUB INVESTMENTS N.V.,
Managing General Partner
By: /s/ Todd M. Brinberg
----------------------------------
Attorney-In-Fact
COLUMBUS HOLDINGS LIMITED
By: /s/ Todd M. Brinberg
----------------------------------
Name: Todd M. Brinberg
Title: Assistant Secretary
OVERLAND TRUST BANK
By: /s/ Todd M. Brinberg
----------------------------------
Attorney-In-Fact
BAY STREET CORPORATION
By: /s/ [ILLEGIBLE]
----------------------------------
Name: [ILLEGIBLE]
Title: [ILLEGIBLE]
--------------------------------------
Gary w. Holmes
--------------------------------------
Michael J. Hartnett
--------------------------------------
Frederick L. Morlok
--------------------------------------
Harold J. Macsata
BAY STREET CORPORATION
By:
----------------------------------
Name:
Title:
/s/ Gary w. Holmes
--------------------------------------
Gary w. Holmes
--------------------------------------
Michael J. Hartnett
--------------------------------------
Frederick L. Morlok
--------------------------------------
Harold J. Macsata
BAY STREET CORPORATION
By:
----------------------------------
Name:
Title:
--------------------------------------
Gary w. Holmes
/s/ Michael J. Hartnett
--------------------------------------
Michael J. Hartnett
--------------------------------------
Frederick L. Morlok
/s/ Harold J. Macsata
--------------------------------------
Harold J. Macsata
BAY STREET CORPORATION
By:
----------------------------------
Name:
Title:
--------------------------------------
Gary w. Holmes
--------------------------------------
Michael J. Hartnett
/s/ Frederick L. Morlok
--------------------------------------
Frederick L. Morlok
--------------------------------------
Harold J. Macsata
ANNEX I
CLASS A CLASS B PREFERRED
HOLDER COMMON COMMON SHARES PERCENTAGE
------ ------- ------- --------- ----------
Bitrix Associates C.V 1,057.36(1) 15(2) 648.75 49.2102%
c/o Bisub Investments N.V
P.O. Box 812
De Ruyterkade 62
Curacao, Netherlands Antilles
with a copy to:
Todd M. Brinberg, Esq
Wormser, Kiely, Galef & Jacobs
711 Third Avenue
New York, NY 10017
Columbus Holdings Limited 340.66 5(2) 216.25 15.8545%
36 Finch Road
Douglas, Isle of Man
British Isles
with a copy to:
Todd M. Brinberg, Esq
Worinser, Kiely, Galef & Jacobs
711 Third Avenue
New York, NY 10017
Gary W. Holmes 454.08(3) -- -- 21.1332%
1925 Brickell Avenue
Miaini, Florida 33129
Bay Street Corporation .82 40 20 1.8998%
871 Seaview Avenue
Osterville, MA 02655
- ----------
(1) Includes 35.38 shares which will be acquired upon exercise of
outstanding warrants prior to the closing.
(2) Will be repurchased by RBC immediately prior to the Closing.
(3) 122.2122701 of such shares will be exchanged immediately prior to
the Merger for shares of the Buyer's Common Stock and the Buyer's
Preferred Stock, resulting in 331.8677299 shares being held for the
purposes of receiving consideration in the Merger.
Harold J. Macsata 61.23(4) -- 30 2.8497%
2820 West Fox Chase Circle
Doylestown, PA 18901
Frederick L. Morlok 61.23(4) -- 30 2.8497%
315 Society Place
Newtown, PA 18940
Overland Trust Bank 72.05(5) -- -- 3.3533%
Via Serafino Balestra 5
CH-6900 Lugano
Switzerland
with a copy to:
Todd M. Brinberg, Esq
Wormser, Kiely, Galef & Jacobs
711 Third Avenue
New York, NY 10017
Michael J. Hartnett 61.23(6) -- -- 2.8497%
25871 Prairsetone
Laguna, CA 92523
Totals:
-------- --- --- ------
2,108.66 60 945 100%
- ----------
(4) 54.3164883 of such shares will be exchanged immediately prior to the
Merger for shares of the Buyer's Common Stock and the Buyer's
Preferred Stock, resulting in 6.91351157 shares being held for the
purposes of receiving consideration in the Merger.
(5) Will be acquired upon exercise of outstanding warrants prior to
closing.
(6) Consists of options (which will not be exercised prior to the
closing) to purchase 41.23 shares of Class A Common Stock from RBC
and 15 and 5 shares of Class B Common Stock from Bitrix and Columbus
(which shares of Class B Common Stock will be repurchased by TLBC
immediately prior to the Closing), respectively.
ANNEX II
MERGER CONSIDERATION
Cash Consideration:
Basic Cash $50,000,000.00
PLUS:
50% Holmes Note $535,036.22
D & T Fees $80,300.00
Hartnett Option $310,000.00 $925,336.22
------------------------------
Subtotal $50,925,336.22
MINUS:
Axel Johnson Note $4,138,437.50
Citicorp Cap Ex $1,597,576.15
Citi Term 1 $1,631,404.00
Citi Term 2 $3,964,512.50
Citi Revolver $12,134,295.93
Bitrix $1,676,594.36
OTB Sub Debt $3,414,794.53 $28,557,614.97
--------------------------------
Subtotal $22,367,721.25
MINUS
--------------------------------------------------------
RBC Preferred $754,051.44 $797.94 PER PREFERRED SHARE CASH CONSIDERATION
--------------------------------------------------------
Sellers' Expenses $2,676,472.58 $3,430,524.02
--------------------------------
---------
Per Share
--------------------------------------------------------
Net Cash Consideration $18,937,197.23 $8,813.49 PER COMMON SHARE CASH CONSIDERATION
Preferred Stock Consideration $2,000,000.00 $930.81 PER COMMON SHARE PREFERRED STOCK CONSIDERATION
--------------------------------------------------------
Total Consideration $20,937,197.23 $9,744.30
---------
Environmental Escrow $100,000.00 $46.54
---------
Fully Diluted Common Shares 2148.66
ENTITLEMENTS:
- ------------------------------------------------------------------------------------------------------------
2.3(a)(i) 2.3(a)(ii) 2.3(a)(ii) 2.3(b)
Shares Preferred Shares of Preferred
Available Total Cash Stock Buyer's Share Cash
Stockholder at Closing Entitlement Amount Consideration Preferred Stock Consideration
- ------------------------------------------------------------------------------------------------------------
Bitrix 1057.36 $10,303,237.77 $ 9,319,033.66 $ 984,204.11 $ 9,842.04 $517,662.30
Columbus 340.66 $ 3,319,494.76 $ 3,002,404.11 $ 317,090.65 $ 3,170.91 $172,554.10
Bay Street 40.82 $ 397,762.51 $ 359,766.73 $ 37,995.77 $ 379.96 $ 15,958.76
Overland Trust 72.05 $ 702,077.14 $ 635,012.08 $ 67,065.05 $ 670.65 $ 0.00
Gary Holmes 331.8677299 $ 3,233,820.20 $ 2,924,913.51 $ 308,906.70 $ 3,089.07 $ 0.00
Hal Macsata 6.91351157 $ 67,367.36 $ 60,932.18 $ 6,435.18 $ 64.35 $ 23,938.14
Fred Morlok 6.91351157 $ 67,367.36 $ 60,932.18 $ 6,435.18 $ 64.35 $ 23,938.14
- ------------------------------------------------------------------------------------------------------------
TOTAL 1856.584753 $18,091,127.10 $16,362,994.44 $1,728,132.65 $17,281.33 $754,051.44
- ------------------------------------------------------------------------------------------------------------
EXHIBIT A
EXHIBIT A
AGREEMENT OF MERGER dated as of March 31, 1992,
between ROLLER BEARING ACQUISITION COMPANY, INC., a
Delaware corporation (the "Acquisition Corporation"),
and ROLLER BEARING COMPANY OF AMERICA, INC., a Delaware
corporation (the "Company")
The respective Boards of Directors of each of the Acquisition
Corporation and the Company have, by resolutions duly adopted, approved and
adopted this Agreement, the Agreement and Plan of Reorganization dated the date
hereof (the "Reorganization Agreement"), among the Company, Roller Bearing
Holding Company, Inc., a Delaware corporation (the "Buyer"), the Acquisition
Corporation, which is a wholly-owned subsidiary of the Buyer, and the
Stockholders (as defined in the Reorganization Agreement), and the proposed
merger of the Acquisition Corporation with and into the Company in accordance
with this Agreement, the Reorganization Agreement and the Delaware General
Corporation Law (the "Delaware Statute"), whereby, among other things, the
holders of issued and outstanding shares of the Class A Common Stock, $.01 par
value (the "Class A Common Stock"), the Class B Common Stock, $.0l par value
(the "Class B Common Stock"; and the Class A Common Stock and the Class B Common
Stock being collectively referred to herein as the "Company Common Stock") and
the Series A Preferred Stock, $.01 par value (the "Company Preferred Stock"), of
the Company will receive cash and shares of the Buyer's Preferred Stock (as
defined herein) therefor in the manner set forth in this Agreement and the
Reorganization Agreement, upon the terms and subject to the conditions set forth
in this Agreement and the Reorganization Agreement. All capitalized terms used
but not defined herein shall have the meanings ascribed to them in the
Reorganization Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and the Reorganization Agreement, the parties hereto
agree as follows:
ARTICLE I
GENERAL
1.1. The Merger. In accordance with the provisions of this
Agreement, the Reorganization Agreement and the Delaware Statute, the
Acquisition Corporation shall be merged with and into the Company (the
"Merger"), which, at and after the Effective Time (as hereinafter defined),
shall be and is sometimes referred to herein as the "Surviving Corporation". The
Acquisi-
tion Corporation and the Company are sometimes collectively referred to herein
as the "Constituent Corporations".
1.2. The Effective Time of the Merger. The Merger shall become
effective upon the filing of the Certificate of Merger (as defined in Article IV
hereof) with the Secretary of State of the State of Delaware, in accordance with
Article IV hereof. The date and time when the Merger shall become effective as
aforesaid is herein referred to as the "Effective Time".
1.3. Effect of Merger. (a) At the Effective Time, the separate
existence of the Acquisition Corporation shall cease and the Acquisition
Corporation shall be merged with and into the Surviving Corporation, possessing
all of the rights, privileges, powers and franchises, as well of a public as of
a private nature, and being subject to all of the restrictions, disabilities and
duties of each of the Constituent Corporations.
(b) At the Effective Time, all and singular, the rights,
privileges, powers and franchises of each of the Constituent Corporations, and
all property, real, personal and mixed, and all debts due to any of the
Constituent Corporations on whatever account, as well for stock subscriptions as
all other things in action or belonging to each of the Constituent Corporations
shall be vested in the Surviving Corporation; and all property, rights,
privileges, powers and franchises, and all and every other interest shall be
thereafter as effectually the property of the Surviving Corporation as they were
of the several and respective Constituent Corporations, and the title to any
real estate vested by deed or otherwise, under the laws of the State of Delaware
in either of the Constituent Corporations, shall not revert or be in any way
impaired by reason of the Delaware Statute; but all rights of creditors and all
liens upon any property of either of the Constituent Corporations shall be
preserved unimpaired, and all debts, liabilities and duties of the respective
Constituent Corporations shall thenceforth attach to the Surviving Corporation,
and may be enforced against it to the same extent as if said debts, liabilities
and duties had been incurred or contracted by it.
1.4. Charter and By-Laws of Surviving Corporation. Immediately
following the Effective Time, (a) the Certificate of Incorporation of the
Company shall be the Certificate of Incorporation of the Surviving Corporation
until altered, amended or repealed as provided in the Delaware Statute, (b) the
by-laws of the Company shall become the by-laws of the Surviving Corporation
until altered, amended or repealed as provided in the Delaware Statute, the
Certificate of Incorporation or such by-laws, (c) the directors of the
Acquisition Corporation shall become the directors of the Surviving Corporation
and (d) the officers of the Acquisition Corporation shall become the officers of
the Surviving Corporation.
-2-
1.5. Taking of Necessary Action; Further Assurances. Prior to the
Effective Time, and subject to the terms and conditions provided in the
Reorganization Agreement, the parties hereto shall take, or cause to be taken
(as the case may be), all such action as may be necessary or appropriate in
order to effectuate the Merger as provided in this Agreement as expeditiously as
reasonably practicable.
ARTICLE II
EFFECT OF MERGER ON CAPITAL STOCK AND OTHER SECURITIES
OF CONSTITUENT CORPORATIONS; ETC.
2.1. Effect of Merger on Securities. (a) The following terms shall
have the following respective meanings:
(i) "AC Common Stock" shall mean the Common Stock, $.0l par
value, of the Acquisition Corporation.
(ii) "Buyer's Common Stock" shall mean the Common Stock, $.0l
par value, of the Buyer.
(iii) "Buyer's Preferred Stock" shall mean the Series A
Preferred Stock, $100 par value, of the Buyer.
(iv) "Cash Consideration" means the amount indicated as such
on Annex I hereto.
(v) "Per Common Share Preferred Stock Consideration" means the
number of shares of the Buyer's Preferred Stock indicated as the Per Common
Share Preferred Stock Consideration on Annex I hereto.
(vi) "Per Common Share Cash Consideration" means the amount
indicated as such on Annex I hereto.
(vii) "Per Preferred Share Cash Consideration" means the
amount indicated as such on Annex I hereto.
(b) The manner and basis of converting or exchanging the shares of
capital stock of each of the Constituent Corporations into or for cash or
securities of the Surviving Corporation or the Buyer shall be as follows:
(i) each share of AC Common Stock outstanding at the Effective
Time shall be converted into one share of Class A Common Stock of the
Surviving Corporation;
(ii) each share of Company Common Stock or Company Preferred
Stock outstanding at the Effective Time and owned directly or indirectly
by the Company or the Subsidiary or owned by the Buyer or the Acquisition
-3-
Corporation or any other subsidiary of the Buyer shall, by virtue of the
Merger and without any action on the part of the holder thereof, be
cancelled and no consideration shall be delivered in exchange therefor;
(iii) each share of Company Common Stock listed on Annex I
hereto shall, by virtue of the Merger and without any action on the part
of the holder thereof, cease to be outstanding and be converted into the
right to receive the Per Common Share Cash Consideration and the Per
Common Share Preferred Stock Consideration;
(iv) each share of Company Preferred Stock outstanding at the
Effective Time shall, by virtue of the Merger and without any action on
the part of the holder thereof, cease to be outstanding and be converted
into the right to receive the Per Preferred Share Cash Consideration; and
(v) each authorized but unissued share of capital stock of the
Company at the Effective Time shall be cancelled.
2.2. Exchange of Certificates; Delivery of Funds. At the Effective
Time, the Surviving Corporation shall deliver:
(a) with respect to the Company Common Stock then held by each
Stockholder, (i) a wire transfer of immediately available funds in an
amount equal to the Net Cash Amount set forth opposite such Stockholder's
name on Annex I and (ii) duly executed certificates representing that
number of shares of the Buyer's Preferred Stock set forth opposite such
Stockholder's name on Annex I hereto, against receipt by the Surviving
Corporation of certificates representing all shares of Company Common
Stock held by such Stockholder immediately prior to the Effective Time;
and
(b) with respect to the Company Preferred Stock then held by
each Stockholder, a wire transfer of immediately available funds in an
amount equal to the Preferred Share Cash Consideration set forth opposite
such Stockholder's name on Annex I, against receipt by the Surviving
Corporation of certificates representing all shares of Company Preferred
Stock held by such Stockholder immediately prior to the Effective Time.
OPI shall receive and distribute the dollar amounts and shares of
the Buyer's Preferred Stock set forth in this Section 2.2 on behalf of the
Stockholders (and shall be held harmless by the Stockholders in connection
therewith).
-4-
2.3. Deposit into Escrow. (a) As soon as practicable following the
Closing, the Stockholders (or OPI on behalf of the Stockholders) shall deposit
(i) into the Escrow Account (as defined in the Escrow Agreement) an aggregate of
$100,000, to be held and distributed in accordance with the terms of the Escrow
Agreement, and (ii) into the Escrow Deposit Box (as defined in the Escrow
Agreement) certificates representing in the aggregate 20,000 shares of the
Buyer's Preferred Stock (issued to the Stockholders in the Merger and, with
respect to certain Stockholders, pursuant to the Exchange Agreements or
otherwise), to be held and distributed in accordance with the terms of Section
8.2 of the Reorganization Agreement and the terms of the Escrow Agreement.
(b) As soon as practicable following the Closing, the Buyer
shall deposit $100,000 into the Escrow Account, to be held and disbursed in
accordance with the terms of the Escrow Agreement.
2.4. Exercise of Warrants and Exchange of Options. (a) Immediately
prior to the Effective Time, each of Bitrix Associates C.V. and Overland Trust
Bank shall exercise all warrants to purchase Company Common Stock then held by
them.
(b) Immediately prior to the Effective Time, options to purchase
41.237, 15 and 5 shares of Company Common Stock from the Company, Bitrix and
Columbus, respectively, held by Michael Hartnett shall be cancelled in exchange
for shares of the Buyer's Common Stock and/or the Buyer's Preferred Stock.
2.5. After the Effective Time. At and after the Effective Time, the
stock transfer books of the Surviving Corporation shall be closed with respect
to the Company Common Stock and the Company Preferred Stock and there shall be
no further registration of transfers of Company Common Stock or Company
Preferred Stock thereafter on the records of the Surviving Corporation. If,
after the Effective Time, certificates formerly representing shares of Company
Common Stock or Company Preferred Stock are presented to the Surviving
Corporation, they shall be cancelled and exchanged for the consideration set
forth in Sections 2.1(b)(iii) and 2.1(b)(iv), respectively, hereof, as provided
in, and subject to, this Article II.
-5-
ARTICLE III
TERMINATION
This Agreement may be terminated, and the Merger abandoned, by
resolutions of the Boards of Directors of the Constituent Corporations prior to
the Merger becoming effective, notwithstanding prior approval thereof by their
respective stockholders. In the event of the termination and abandonment of this
Agreement and the Merger, this Agreement shall become void and of no further
effect without any liability on the part of either Constituent Corporation or
the stockholders or the directors or officers in respect thereof.
ARTICLE IV
APPROVAL OF AGREEMENT;
FILING OF CERTIFICATE OF MERGER
The respective Board of Directors of each of the Constituent
Corporations have, by resolutions duly adopted, unanimously approved and adopted
the Merger, this Agreement and the Reorganization Agreement. The respective
stockholders of each of the Constituent Corporations have, by resolutions duly
adopted, approved and adopted the Merger, this Agreement and the Reorganization
Agreement in accordance with Section 251 of the Delaware Statute. Upon
satisfaction of all conditions of the Merger contained in Article V of the
Reorganization Agreement (or appropriate waiver thereof by the party or parties
entitled to satisfaction of such conditions or any of them) and execution and
delivery of this Agreement, the parties hereto shall cause a certificate of
merger (the "Certificate of Merger"), substantially in the form attached as
Exhibit hereto, to be executed and filed with the Secretary of State of the
State of Delaware in accordance with Section 103 of the Delaware Statute and the
Merger shall thereupon become effective.
ARTICLE V
MISCELLANEOUS
5.1. Entire Agreement; Amendments. This Agreement, the Certificate
of Merger and the Reorganization Agreement and the other writings and agreements
referred to herein and therein or delivered pursuant thereto contain the entire
understanding of the parties with respect to the subject matter hereof. This
Agreement, the Certificate of Merger and the Reorganization Agreement and such
other writings and agreements referred to herein and therein supersede all prior
agreements and understandings between the parties with respect to the subject
matter hereof. To the extent permitted by applicable law, this
-6-
Agreement and the Certificate of Merger may be amended by action taken by or on
behalf of the Boards of Directors of the Constituent Corporations at any time
before or after adoption of this Agreement by the stockholders of the
Constituent Corporations. This Agreement may be amended only by a written
instrument duly executed by the parties, and any condition to a party's
obligations hereunder may only be waived in writing by such party.
5.2. Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
5.3. Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by facsimile transmission, air courier or by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
If to the Acquisition Corporation, to:
Roller Bearing Acquisition Company, Inc.
1800 Century Park East, Suite 1000
Los Angeles, California 90067
Attention: Richard R. Crowell
Telecopy: (310) 277-5810
with a copy to:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Telecopy: (213) 229-7520
Attention: Terrance L. Carlson, Esq.; and
If to the Company, to:
Roller Bearing Company
of America, Inc.
140 Terry Drive
P.O. Box 1237
Newtown, Pennsylvania 18490
Telecopy: (215) 579-4318
Attention: President
with a copy to:
O'Sullivan Graev & Karabell
30 Rockefeller Plaza
New York, New York 10112
Telecopy: (212) 408-2420
Attention: Kenneth S. Siegel, Esq.;
-7-
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been received (a) in the case of
personal delivery or facsimile transmission, on the date of such delivery, (b)
in the case of air courier, on the next business day after the date when sent
and (c) in the case of mailing, on the third business day following the date on
which the piece of mail containing such communication was posted.
5.4. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
5.5. Governing Law. This Agreement shall be governed by and
construed in accordance with (a) the laws of the State of New York applicable to
agreements made and to be wholly performed within such State and (b) with
respect to corporate law governing the Merger, solely by the General Corporation
Law of the State of Delaware.
5.6. Gender. Any reference to the masculine gender shall be deemed
to include the feminine and neuter genders unless the context otherwise
requires.
5.7. Parties in Interest. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and assigns. Anything contained herein to the contrary
notwithstanding, this Agreement shall not be assigned by any party hereto
without the consent of the other party hereto.
-8-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the day and year first above
written.
ROLLER BEARING COMPANY
OF AMERICA, INC.
By:
-----------------------------------
Gary W. Holmes
President and CEO
ATTEST:
- ---------------------------------
Emanuele Costa
Secretary
ROLLER BEARING ACQUISITION
COMPANY, INC.
By:
-----------------------------------
Name:
Title
ATTEST:
- ---------------------------------
Name:
Secretary
EXHIBIT A TO THE
AGREEMENT OF MERGER
CERTIFICATE OF MERGER
OF
ROLLER BEARING ACQUISITION COMPANY, INC.
WITH AND INTO
ROLLER BEARING COMPANY OF AMERICA, INC.
We, the undersigned, being respectively the President and Secretary
of Roller Bearing Company of America, Inc., a Delaware corporation ("the
Company"), pursuant to Section 251 of the General Corporation Law of the State
of Delaware, hereby certify as follows:
1. The respective names and states of incorporation of the
constituent corporations (the "Constituent Corporations") are as follows:
Name of Constituent State of
Corporation Incorporation
- ------------------- -------------
Roller Bearing Company of America, Inc. Delaware
Roller Bearing Acquisition Company, Inc. Delaware
2. The Agreement of Merger (the "Agreement of Merger") and the
merger (the "Merger") to which this certificate relates has been approved,
adopted, certified, executed and acknowledged by each of the Constituent
Corporations in accordance with Section 251 of the General Corporation Law of
the State of Delaware.
3. The Company shall be the surviving corporation.
4. The Certificate of Incorporation of the Company shall be the
Certificate of Incorporation of the surviving corporation.
5. The executed Agreement of Merger is on file at the principal
place of business of the surviving corporation, the address of which is:
Roller Bearing Company of America, Inc.
140 Terry Drive
P.O. Box 1237
Newtown, Pennsylvania 18940.
6. A copy of the Agreement of Merger will be furnished by the
surviving corporation, on the request and without cost, to any stockholder of
any Constituent Corporation.
-2-
IN WITNESS WHEREOF, the undersigned have caused this Certificate to
be duly executed and delivered as of the ______ day of March, 1992.
ROLLER BEARING COMPANY
OF AMERICA, INC.
By:
-----------------------------------
Name:
Title
ATTEST:
- ---------------------------------
[Name]
Secretary
EXHIBIT B
EXHIBIT B
ESCROW AGREEMENT (the "Agreement") dated March 31,
1992, among ROLLER BEARING HOLDING COMPANY, INC., a
Delaware corporation (the "Buyer"), the STOCKHOLDERS (as
defined herein) and the STOCKHOLDERS' REPRESENTATIVE (as
defined herein).
The parties are entering into this Agreement pursuant to the
Agreement and Plan of Reorganization dated the date hereof (the "Agreement and
Plan of Reorganization"), among Roller Bearing Company of America, Inc., a
Delaware corporation ("RBC"), the Buyer, Roller Bearing Acquisition Company,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Buyer, and the
Stockholders (as defined therein). This Agreement is the Escrow Agreement
referred to in Sections 2.4 and 8.2 of the Agreement and Plan of Reorganization.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Agreement and Plan of Merger.
Accordingly, in consideration of the premises and of the mutual
agreements contained herein and in the Agreement and Plan of Reorganization, the
parties agree as follows:
1. Establishment of Escrow.
1.1. Escrow Shares. As soon as practicable following the date
hereof, as contemplated by Section 2.4 of the Agreement and Plan of
Reorganization, the Buyer and the Stockholders' Representative (on behalf of the
Stockholders) shall deposit or cause to be deposited into a safe deposit box
(the "Escrow Deposit Box") at Citibank, N.A. ("Citibank") located at 640 Fifth
Avenue, New York, New York 10019 (Safe Deposit Box No. C5049) one or more
certificates representing in the aggregate 20,000 shares of the Buyer's
Preferred Stock (which shares were issued to the Stockholders in the Merger and,
with respect to certain Stockholders, pursuant to the Exchange Agreements or a
subscription agreement), such shares to remain in the Escrow Deposit Box until
removed therefrom and distributed in accordance with Section 2 hereof. Such
shares, or a lesser number of such shares as shall result from distributions of
such shares from time to time in accordance with Section 2 hereof, are referred
to herein as the "Escrow Shares".
1.1.1. Ownership Interest in Escrow Shares. At all times
during the term of this Agreement for the purpose of determining the interest of
the respective Stockholders in the Escrow Shares, whether in connection with the
distribution of Escrow Shares or otherwise, each Stockholder shall be deemed to
own that number of Escrow Shares as shall equal the product obtained by
multiplying (A) the percentage set forth opposite such Stockholder's name on
Schedule I hereto (hereinafter
referred to as such Stockholder's "Proportionate Interest") by (B) the number of
Escrow Shares then held in escrow.
1.1.2. Use of Escrow Shares. The Escrow Shares shall be
removed from the Escrow Deposit Box and used for the payment of the indemnity
obligations, if any, of the Stockholders pursuant to and in accordance with
Section 8.2.5(c) of the Agreement and Plan of Reorganization. On the twelfth
anniversary of the date hereof (or, if not a business day, the next business
day), or any earlier date agreed to in writing by the Buyer, all Escrow Shares
remaining in escrow shall promptly be returned to the Stockholders, in
accordance with each Stockholder's Proportionate Interest in such Escrow Shares.
The Buyer shall execute and deliver certificates representing shares of the
Buyer's Preferred Stock in such denominations as shall be necessary to effect
distributions of the Escrow Shares hereunder.
1.1.3. Dividends and Redemptions. Any dividends paid or other
distributions made on the Escrow Shares (other than the proceeds from any
redemption or repurchase of the Escrow Shares) shall be transferred directly to
the Stockholders and shall not be deemed to be a part of the Escrow Shares
hereunder. If during the term of this Agreement the Escrow Shares or any part
thereof shall be required to be redeemed or otherwise repurchased by the
Corporation pursuant to the terms of the Escrow Shares or otherwise, or if the
Corporation shall agree to effect any redemption or repurchase of the Escrow
Shares, the Escrow Shares subject to such redemption or repurchase shall be
released from the Escrow Deposit Box prior to the date set for such redemption
or repurchase so that such shares may be surrendered to the Corporation in
exchange for the redemption or repurchase price therefor, and the proceeds from
any such redemption or repurchase shall be distributed to the Stockholders and
shall not be subject to this Agreement; provided, however, that if a bona-fide
claim, pursuant to Section 8.2 of the Agreement and Plan of Reorganization,
shall be pending at the date set for such redemption or repurchase, an amount of
the proceeds from such redemption or repurchase equal to the dollar amount of
such claim shall be deposited into the Escrow Account (as defined herein), and
shall be deemed to constitute Escrow Cash for the purposes hereof (except that
the Buyer shall have no interest in such proceed. pursuant to Section 1.2.1 or
otherwise), to be held in escrow hereunder until such claim is resolved (in
which case such proceeds shall be distributed to the Stockholders and/or such
claimant in accordance with such resolution). The release from escrow of the
Escrow Shares contemplated by this Section 1.1.3 shall be effected whether or
not there shall be legally available funds for the redemption or repurchase
giving rise to the obligation to release such shares.
1.1.4. Restrictions on Transfer of Escrow Shares. The Escrow
Shares shall be subject to the restrictions on
-2-
transfer set forth in Section 7.4(a) of the Agreement and Plan of
Reorganization.
1.2. Escrow Cash. As contemplated by Section 2.4 of the
Agreement and Plan of Reorganization, on the date hereof the Buyer and the
Stockholders' Representative (on behalf of the Stockholders) have each deposited
$100,000 by wire transfer of immediately available funds into an account (the
"Escrow Account") at Wells Fargo Bank, N.A. ("Wells Fargo") located at 333 South
Grand Avenue, Los Angeles, California 90071 (Account No. 6709-012843), to be
held in the Escrow Account until withdrawn and disbursed in accordance with
Section 2 hereof. Such amount, together with any interest earned thereon or
proceeds derived therefrom, as the same may be reduced from time to time by
distributions therefrom in accordance with Section 2 hereof, is referred to
herein as the "Escrow Cash" (the Escrow Shares and the Escrow Cash being
sometimes collectively referred to herein as the "Escrow Consideration").
1.2.1. Interest in Escrow Cash. At all times during the term
of this Agreement for the purpose of determining the interest of the Buyer and
the respective Stockholders in the Escrow Cash, whether in connection with the
disbursement of Escrow Cash or otherwise, (a) the Buyer shall be deemed to have
a 50% interest (the "Buyer's Proportionate Interest") in the Escrow Cash and (b)
each Stockholder shall be deemed to have that interest in the Escrow Cash as
shall be equal to the product obtained by multiplying (A) such Stockholder's
Proportionate Interest by (B) the remaining 50% of the amount of the Escrow Cash
then held in escrow.
1.2.2. Use of Escrow Cash. (a) Unless otherwise agreed to in
writing by the Buyer and the Stockholders' Representative, the Escrow Cash
(other than any interest earned thereon or proceeds derived therefrom) shall be
used solely for the following purposes:
(i) NJDEP Escrow Account. Within five days following the date
hereof, $100,000 of the Escrow Cash shall be deposited into an
escrow account (the "NJDEP Escrow Account") at the New Jersey
National Bank for the benefit of the New Jersey Department of
Environmental Protection, to be held in the NJDEP Escrow
Account in accordance with the terms of (i) the Administrative
Consent Order dated the date hereof (the "ACO"), among RBC and
the NJDEP and (ii) the Fully Funded Trust Agreement (the
"Trust Agreement") dated the date hereof between RBC and the
New Jersey National Bank. Upon termination of the NJDEP Escrow
Account such $100,000, as the same may be reduced by
distributions made from the NJDEP Escrow Account in accordance
with the terms of the ACO and the Trust Agreement, together
with
-3-
any interest earned thereon, shall be returned to the Escrow
Account, and shall be subject to the uses set forth in
Sections 1.2.2 (ii) and 1.2.2 (iii) hereof. The fees of the
New Jersey National Bank for maintaining such NJDEP Escrow
Account shall also be paid from the Escrow Cash.
(ii) Environmental Testing Costs. Upon approval of invoices by the
Buyer and the Stockholders' Representative, up to $100,000 of
the Escrow Cash shall be used to pay the fees and charges of
H+GCL and Law Environmental incurred in connection with
certain environmental tests performed by them relating to
property located in Rancho Dominguez, California and
Hartsville, South Carolina, owned by the Subsidiary and RBC,
respectively.
(iii) Indemnification Obligations of Stockholders. The Escrow Cash
shall be used to pay any indemnification obligation of the
Stockholders under Section 8.2.2(b) of the Agreement and Plan
of Reorganization.
(iv) Fees of Citibank and Wells Fargo. The Escrow Cash shall be
used to pay the fees of Citibank and Wells Fargo related to
the Escrow Deposit Box and the Escrow Account.
(b) Subject to the proviso set forth in Section 1.1.3 hereof, the
Escrow Cash shall be withdrawn from the Escrow Account and distributed to the
Buyer and the Stockholders, in accordance with their respective Proportionate
Interests, on the first to occur of (i) the twelfth anniversary of the date
hereof and (ii) the date set for any redemption or repurchase by the Buyer of
the Escrow Shares, whether such redemption or repurchase shall be required or
agreed to by the Buyer.
1.2.3. Interest on Escrow Cash. Any part of the Escrow Cash
which constitutes interest earned thereon or proceeds derived therefrom shall be
disbursed to the Buyer and the Stockholders, in accordance with their respective
Proportionate Interests therein, within 30 days following each date upon which
such interest or proceeds exceeds $5,000. Any taxes due with respect to interest
earned on the Escrow Cash shall be paid from the Escrow Cash.
2. Release of Escrow Consideration The Buyer and the Stockholders
agree that no part of the Escrow Consideration shall be distributed unless
agreed to in writing by both the Buyer (or a representative thereof) and the
Stockholders' Representative, and the Buyer and the Stockholders' Representative
agree to execute such withdrawal advices or other instructions to Citibank
-4-
and Wells Fargo, and to take all such other actions, as shall be necessary to
carry out the intent of the provisions of Section 1 hereof.
3. Stockholders' Representative. The Stockholders, by their
execution and delivery of this Agreement, appoint (for themselves, their
successors and assigns and their personal representatives) Overseas Partners,
Inc., a New York corporation (the "Stockholders' Representative"), as their
agent and attorney-in-fact (and, by its execution of this Agreement, the
Stockholders' Representative accepts such appointment), to take all action
required or permitted to be taken by the Stockholders hereunder and under and in
connection with Section 8.2 of the Agreement and Plan of Reorganization,
including, without limitation, the giving and receipt of all notices hereunder
and under Section 8.2 of the Agreement and Plan of Reorganization and the
settlement of any dispute or claim hereunder or under Section 8.2 of the
Agreement and Plan of Reorganization. The Stockholders' Representative shall
incur no liability in connection herewith, except for willful misconduct or
gross negligence. The Stockholders, jointly and severally, shall indemnify and
hold harmless the Stockholders' Representative against any loss, liability,
expense (including reasonable attorney's fees and expenses), claim or demand
arising out of or in connection with its actions hereunder, except with respect
to any loss, liability, expense, claim or demand arising out of the gross
negligence or willful misconduct of the Stockholders' Representative. The
Stockholders' Representative may resign and be discharged from its duties
hereunder at any time upon 10 days' prior written notice to the Stockholders,
whereupon a successor Stockholders' Representative shall be appointed by the
Stockholders representing a majority-in-interest of the Stockholders'
Proportionate Interests.
4. Rights to Escrow Consideration. The Escrow Consideration shall be
for the exclusive benefit of the Buyer and the Stockholders and their respective
permitted successors and assigns, and no other person or entity shall have any
right, title or interest therein. Any claim of any person to the Escrow
Consideration, or any part thereof, shall be subject and subordinate to the
prior right thereto of the Buyer and the Stockholders and their respective
permitted successors and assigns.
5. Settlement of Disputes. Any dispute which may arise under this
Agreement with respect to the rights of the Buyer or any Stockholder to the
Escrow Consideration shall be settled either by mutual agreement of the parties
concerned, by binding arbitration (if agreed to in writing by such parties)
conducted by the American Arbitration Association in the City of New York or by
a final order, decree or judgment of a court of competent jurisdiction in the
United States of America (the time for appeal having expired and no appeal
having been perfected);
-5-
all costs and expenses pertaining thereto shall be borne by the interested
parties in accordance with their respective Proportionate Interests.
6. Termination. This Agreement shall terminate upon the distribution
of the entire Escrow Consideration in accordance with the provisions hereof;
provided, however, that the distribution contemplated by Section 1.2.2(a)(i) of
$100,000 to the NJDEP Escrow Account shall not be deemed to be a distribution
under this Section 6, and, assuming the Escrow Consideration (other than such
amount deposited into the NJDEP Escrow Account) has previously been fully
distributed pursuant to the terms hereof, this Agreement shall remain in full
force and effect, and such $100,000 shall be deemed to constitute a part of the
Escrow Fund hereunder, until the amount deposited in the NJDEP Escrow Account
(as the same may have been reduced pursuant to the terms of the ACO) is returned
to the Escrow Account and subsequently distributed in accordance with the terms
hereof.
7. Miscellaneous.
(a) Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered or if sent by
nationally-recognized overnight courier, by telecopy (if automated receipt of
full transmission is received), or by registered or certified mail, return
receipt requested and postage prepaid, addressed as follows:
(i) If to the Buyer, to:
Roller Bearing Holding Company, Inc.
1800 Century Park East, Suite 1000
Los Angeles, California 90067
Telecopy: (310) 277-5810
Attention: Mr. Richard R. Crowell
with a copy to:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Telecopy: (213) 229-7520
Attention: Terrance L. Carlson, Esq.
(ii) If to the Stockholders' Representative, to:
Overseas Partners, Inc.
375 Park Avenue
New York, New York 10152
Telecopy: (212) 421-5704
Attention: Mr. Emanuele Costa
-6-
with a copy to:
O'Sullivan Graev & Karabell
30 Rockefeller Plaza
New York, New York 10112
Telecopier: (212) 408-2420
Attention: Kenneth S. Siegel, Esq.;
or to such other address as the parties may have furnished to the other parties
hereto in writing. Any such notice or communication shall be deemed to have been
received (i) in the case of personal delivery, on the date of such delivery,
(ii) in the case of nationally recognized overnight courier, on the next
business day after the date when sent, (iii) in the case of telecopy
transmission, when transmitted (if automated receipt of full transmission is
received) and (iv) in the case of mailing, on the third business day following
the post-date of such mailing.
(b) Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed therein.
(d) Benefits of Agreement. All the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Anything contained herein to
the contrary notwithstanding, this Agreement shall not be assignable by any
party hereto without the consent of the other parties hereto.
(e) Modification. This Agreement shall not be altered or
otherwise amended except pursuant to an instrument in writing signed by the
Buyer and the Stockholders' Representative.
(f) Descriptive Headings. The descriptive headings in this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
-7-
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed and delivered on the date first above written.
ROLLER BEARING HOLDING
COMPANY, INC.
By:
----------------------------------
Name:
Title:
ROLLER BEARING ACQUISITION
COMPANY, INC.
BITRIX ASSOCIATES C.V.
By: BISUB INVESTMENTS N.V.,
Managing General Partner
By:
----------------------------------
Attorney-In-Fact
COLUMBUS HOLDINGS LIMITED
By:
----------------------------------
Name: Todd M. Brinberg
Title:
OVERLAND TRUST BANK
By:
----------------------------------
Attorney-In-Fact
BAY STREET CORPORATION
By:
----------------------------------
Name:
Title:
--------------------------------------
Gary W. Holmes
--------------------------------------
Frederick L. Morlok
--------------------------------------
Harold J. Macsata
ACCEPTED AND AGREED TO AS OF
THE DATE FIRST ABOVE WRITTEN:
OVERSEAS PARTNERS, INC.
By:
-------------------------------
Name:
Title:
SCHEDULE I
PREFERRED CASH PROPORTIONATE
STOCKHOLDER DEPOSITED DEPOSITED INTEREST
- ----------- --------- --------- --------
Bitrix Associates CN 9,842.041 49,210.10 49.2101%
c/o Bisub investments N.V
P.O. Box 812
De Ruyterkade 62
Curacao, Netherlands Antilles
with a copy to:
Todd M. Brinberg, Esq
Worinser, Kiely, Galef & Jacobs
711 Third Avenue
New York, NY 10017
Telecopy: (212) 683-0236
Columbus Holdings Limited 3,170.907 15,854.50 15.8545%
36 Finch Road
Douglas, Isle of Man
British Isles
with a copy to:
Todd M. Brinberg, Esq
Worinser, Kiely, Galef & Jacobs
711 Third Avenue
New York, NY 10017
Telecopy: (212) 683-0236
Overland Trust Bank 670.651 3,353.30 3.3533%
Via Serafino Balestra 5
CH-900 Lugano
Switzerland
with a copy to:
Todd M. Brinberg, Esq
Wormser, Kiely, Galef & Jacobs
711 Third Avenue
New York, NY 10017
Telecopy: (212) 683-0236
Bay Street Corporation 379.958 1,899.80 1.8998%
871 Seaview Avenue
Osterville, MA 02655
PREFERRED CASH PROPORTIONATE
STOCKHOLDER DEPOSITED DEPOSITED INTEREST
- ----------- --------- --------- --------
Gary W. Holmes 4,226.634 21,133.20 21.1332%
1925 Brickell Avenue
Miami, FL 33129
Frederick L. Modok 569.937 2,849.70 2.8497%
315 Society Place
Newtawn, PA 18940
Harold J. Macsata 569.937 2,849.70 2.8497%
2820 West Fox Chase Circle
Daylestown, PA 18901
Michael J. Hartnett 569.937 2,849.70 2.8497%
25871 Prairestone
laguna, CA 92523
---------- ----------- -------
TOTAL 20,000 $ 100,000 100%
EXHIBIT C
[Letterhead of O'Sullivan Graev & Karabell]
March 31, 1992
Roller Bearing Holding Company, Inc.
Roller Bearing Acquisition Company, Inc.
1900 Century Park East, Suite 1000
Los Angeles, California 90067
Merger of Roller Bearing Acquisition Company, Inc.
with and into Roller Bearing Company of America Inc.
Dear Sirs:
We have acted as special counsel to Roller Bearing Company of
America, Inc., a Delaware corporation ("RBC"), solely in connection with the
transactions contemplated by (i) the Agreement and Plan of Reorganization dated
the date hereof (the "Reorganization Agreement"), among RBC, Roller Bearing
Holding Company, Inc., a Delaware corporation (the "Buyer"), Roller Bearing
Acquisition Company, Inc., a Delaware corporation and a wholly-owned subsidiary
of the Buyer (the "Acquisition Corporation"), and the Stockholders of RBC (as
defined in the Reorganization Agreement) and (ii) the Agreement of Merger dated
the date hereof (the "Agreement of Merger"), between the Acquisition Corporation
and RBC. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Reorganization Agreement.
In connection with the rendering of the opinions set forth below, we
have examined originals, or copies certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates and other
instruments as we have deemed necessary or appropriate, including, without
limitation, the Reorganization Agreement and the Agreement of Merger. In our
examination, we have assumed the due authorization, execution and delivery by
each person other than RBC of each document heretofore executed and delivered or
hereafter to be executed and delivered by such person, the genuineness of all
signatures, the legal capacity of all natural persons signing such documents,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such latter
documents.
We have also assumed that (a) there is no agreement or understanding
between or among RBC, the Subsidiary, the Buyer,
O'SULLIVAN GRAEV & KARABELL
the Acquisition Corporation or any third party that would expand, modify or
otherwise affect the terms of the Reorganization Agreement or the Agreement of
Merger or the respective rights or obligations of the parties thereunder, and
the Reorganization Agreement, the Agreement of Merger and the Escrow Agreement
correctly and completely set forth the intent of all parties thereto with
respect to the transactions contemplated therein; (b) each of the Buyer and the
Acquisition Corporation is a Delaware corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority to engage in the transactions contemplated by
the Reorganization Agreement and the Agreement of Merger; and (c) at the time
the Buyer seeks to enforce its rights under the Reorganization Agreement, the
Buyer will have taken all actions required to be taken by it in order to enforce
such rights.
Whenever a statement is made in this letter to be "to our knowledge"
(a "Statement of Knowledge"), such statement means that, during the course of
our representation of RBC (as described in the first paragraph of this letter),
and without undertaking any independent investigation with respect thereto
(including, without limitation, undertaking any lien, docket or similar search),
no information has come to the attention of the lawyers of this firm working on
the transactions contemplated by the Reorganization Agreement and the Agreement
of Merger that gives us actual knowledge of the existence or absence of facts
contrary to the Statement of Knowledge, and no inference should be drawn from
any Statement of Knowledge or from our representation of RBC (a) as to the
existence or absence of facts contrary to the Statement of Knowledge or (b) that
we have undertaken any independent investigation to determine the existence or
absence of any facts contrary to such Statement of Knowledge.
In connection with the rendering of the opinions set forth below, as
to matters of fact, we have relied solely and without independent investigation
upon the representations and warranties contained in or made pursuant to the
Reorganization Agreement and certificates of public officials and officers of
RBC and the Subsidiary.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that:
1. RBC and the Subsidiary are corporations validly existing and in
good standing under the laws of the State of Delaware. RBC has all requisite
corporate power and authority to enter into and consummate the transactions
contemplated by, and perform its obligations under, the Reorganization Agreement
and the Agreement of Merger. RBC is qualified to do business and is in good
standing in the states of South Carolina, New Jersey and Pennsylvania. The
Subsidiary is a corporation qualified to do
-2-
O'SULLIVAN GRAEV & KARABELL
business and in good standing under the laws of the State of California.
2. Each of RBC and the Subsidiary has the corporate power and
authority under its Certificate of Incorporation and By-laws and the Delaware
General Corporation Law to own or lease its properties and to conduct its
business as such business is described in the Confidential Memorandum dated July
1991 prepared by Goldman, Sachs & Co. relating to the business operations of
RBC.
3. To our knowledge, except as disclosed in the Reorganization
Agreement, there are no claims, actions, suits or proceedings pending against
RBC or the Subsidiary that could reasonably be expected to have a Material
Adverse Effect.
4. To our knowledge, except as disclosed in the Reorganization
Agreement, neither RBC nor the Subsidiary has received any written notice that
either of them is in material non-compliance with any Federal, state or local
laws, rules or regulations applicable to their respective businesses, the
noncompliance with which could reasonably expected to have a Material Adverse
Effect.
5. To our knowledge, the outstanding capital stock of RBC has been
issued in transactions exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended. Except as disclosed in
the Reorganization Agreement, to our knowledge, all shares of issued and
outstanding capital stock of the Subsidiary are owned of record by RBC, free and
clear of any Encumbrances.
6. The execution, delivery and performance of the Reorganization
Agreement and the Agreement of Merger by RBC and the consummation by REC of the
transactions contemplated thereby have been duly and validly authorized by all
necessary corporate action on the part of RBC. The Reorganization Agreement and
the Agreement of Merger have been duly and validly executed and delivered by
RBC, and the Reorganization Agreement and the Agreement of Merger are valid and
binding obligations of RBC, enforceable against RBC in accordance with their
respective terms, subject, as to the enforcement of remedies, to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting creditors' rights generally and, with respect to the
remedy of specific performance, equitable doctrines applicable thereto.
7. Except as disclosed in the Reorganization Agreement, neither the
execution, delivery and performance of the Reorganization Agreement or the
Agreement of Merger by RBC, nor the consummation by RBC of the transactions
contemplated thereby, nor compliance by RBC with any of the provisions thereof,
will (i) conflict with or violate any provision of the Certificate of
-3-
O'SULLIVAN GRAEV & KARABELL
Incorporation or By-laws of REC or the Subsidiary, (ii) violate, conflict with
or constitute (or with notice or lapse of time or both constitute) a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of, or result in the creation of any
Encumbrance upon any of the property of RBC or the Subsidiary pursuant to the
terms of, any note, bond, lease, mortgage, indenture, license, agreement or
other instrument or obligation set forth on the Disclosure Schedules attached to
the Reorganization Agreement to which RBC or the Subsidiary is a party or by
which any of their respective properties or assets may be bound or affected,
which violation, conflict or default would have a Material Adverse Effect, or
(iii) to our knowledge, violate any New York law, statute, rule or regulation or
order, judgment, award, writ, injunction or decree of any New York court,
administrative agency or governmental body, applicable to RBC or the Subsidiary
or any of their respective properties or assets in any manner which could
reasonably be expected to have a Material Adverse Effect.
The foregoing opinions are subject to the following exceptions,
qualifications and limitations:
A. We are admitted to the Bar of the State of New York and we
express no opinion as to laws of any other jurisdiction other than the Delaware
General Corporation Law and the Federal laws of the United States of America. We
are not admitted to practice in the State of Delaware, but we are generally
familiar with the Delaware General Corporation Law as currently in effect. This
opinion is limited to the effect of the present state of the laws of the State
of New York, the United States of America, the Delaware General Corporation Law
and the facts as they currently exist. We assume no obligation to revise or
supplement this opinion in the event of future changes in such laws or the
interpretations thereof or such facts. We express no opinion as to the
enforceability of any choice of law, choice of forum or severability provisions
in the Reorganization Agreement or the Agreement of Merger. Our opinion in
paragraph 7(iii) is based upon our consideration of only those statutes, rules
and regulations that, in our experience, are normally applicable to transactions
of the type contemplated by the Reorganization Agreement and the Agreement of
Merger.
B. We express no opinion regarding or relating to (i) the ability to
obtain specific performance, injunctive relief or other equitable relief
(whether sought in a proceeding at law or in equity) as a remedy for
noncompliance with the Reorganization Agreement or the Agreement of Merger, and
the use of the term "enforceable" shall not imply any opinion as to the
availability of equitable remedies, (ii) the rights or remedies available to any
party for violations or breaches of any provisions which are immaterial or for
violations or breaches of any provisions the enforcement of which a court
determines would be unreasonable
-4-
O'SULLIVAN GRAEV & KARABELL
under the then existing circumstances, (iii) the rights or remedies available to
any party for any material violation or breach that is the proximate result of
any action taken by any party other than the party against whom enforcement is
sought, which actions such other party is not entitled to take pursuant to the
relevant agreement or instrument or applicable laws or which otherwise violate
applicable laws, (iv) the rights or remedies available to any party insofar as
such party may take discretionary action that is arbitrary, unreasonable or
capricious, or is not taken in good faith or in a commercially reasonable
manner, whether or not such action is permitted under the Reorganization
Agreement or the Agreement of Merger, and (v) the strict enforcement of certain
covenants in contracts absent a showing of damage to the other party.
C. We express no opinion with respect to the legality, validity,
binding nature or enforceability of any provision of the Reorganization
Agreement or the Agreement of Merger to the effect that rights or remedies are
not exclusive, that every right or remedy is cumulative and may be exercised in
addition to any other right or remedy, that the election of some particular
remedy does not preclude recourse to one or more others or that failure to
exercise or delay in exercising rights or remedies will not operate as a waiver
of any such right or remedy.
D. We express no opinion as to the legality, validity, binding
nature or enforceability of any provision in the Reorganization Agreement or the
Agreement of Merger (i) that purports to indemnify a party against liability for
its own wrongful or negligent acts or to the extent such provisions may be held
unenforceable as contrary to public policy, (ii) insofar as it provides for the
payment or reimbursement of costs and expenses or indemnification for claims,
losses or liabilities in excess of a reasonable amount determined by any court
or other' tribunal, (iii) regarding the Buyer's ability to collect attorneys'
fees and costs in an action involving the Reorganization Agreement or the
Agreement of Merger if the Buyer is not the prevailing party in such action or
(iv) purporting to restrict the ability of any person or entity to engage in any
business or activity, directly or indirectly, in any jurisdiction.
E. We express no opinion as to any provision of the Reorganization
Agreement or the Agreement of Merger requiring written amendments or waivers of
such documents insofar as it suggests that oral or other modifications,
amendments or waivers could not be effectively agreed upon by the parties or
that the doctrine of promissory estoppel might not apply.
Our opinion set forth above is being furnished solely to and for the
benefit of Roller Bearing Holding Company, Inc. and Roller Bearing Acquisition
Company, Inc. in connection with
-5-
O'SULLIVAN GRAEV & KARABELL
the transactions contemplated by the Reorganization Agreement. Accordingly, it
may not be relied upon by any other person without our prior written consent.
Very truly yours,
/s/ O'Sullivan Graev & Karabell
-6-
[Letterhead of Wormser, Kiely, Galef & Jacobs]
March 31, 1992
Roller Bearing Holding Company, Inc.
Roller Bearing Acquisition Company, Inc.
c/o WSGP Partners L.P.
1800 Century Park East
Suite 1000
Los Angeles, California 90067
Merger of Roller Bearing Acquisition Company, Inc.
with and into Roller Bearing Company of America, Inc.
Ladies and Gentlemen:
We have acted as counsel in the United States to Bitrix Associates C.V., a
Netherlands limited partnership ("Bitrix"), and Columbus Holdings Limited, an
Isle of Man corporation ("Columbus"), in connection with the transactions
contemplated by (1) the Agreement and Plan of Reorganization (the
"Reorganization Agreement"), dated the date hereof, among Roller Bearing Company
of America, Inc., a Delaware corporation ("RBC"), Roller Bearing Holding
Company, Inc. a Delaware corporation (the "Buyer"), Roller Bearing Acquisition
Company, Inc., a Delaware corporation (the "Acquisition Corporation"), and the
Stockholders of RBC (as that term is defined in the Reorganization Agreement),
and (2) the Escrow Agreement (the "Escrow Agreement"), dated the date hereof,
among the Buyer, the Stockholders, the Stockholders' Representative (as that
term is defined in the Escrow Agreement) and the Escrow Agent identified in the
Escrow Agreement. The Reorganization Agreement and the Escrow Agreement are
collectively referred to here as the "Documents".
We have also acted from time to time as counsel to RBC in connection with
specific matters, including the transfer of shares of stock of RBC prior to the
date of this letter, but we are not representing RBC in connection with the
transactions contemplated by the Documents.
WORMSER, KIELY, GALEF & JACOBS
Roller Bearing Holding Company, Inc.
Roller Bearing Acquisition Company, Inc.
Page 2
In connection with the opinions set forth below, we have examined
originals, or copies certified or otherwise identified to our satisfaction, of
such documents, corporate records, certificates and other instruments as we have
deemed necessary or appropriate. In our examination, we have assumed the due
authorization, execution and delivery of each party to the Documents and the
enforceability of those documents against each of the parties to the Documents.
With respect to matters involving Bitrix and Columbus, we refer you to the legal
opinion letters addressed to you of Smeets, Thesseling & Van Bokhorst and Gough
& Co., respectively. We have also assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified copies or
photocopies, and the authenticity of the originals of such latter documents.
In connection with the opinions set forth below, as to matters of fact we
have relied solely on certificates of public officials and representatives and
officers of RBC, Bitrix and Columbus. We have also assumed the accuracy of the
representations and warranties set forth in the Reorganization Agreement,
including without limitation the various Schedules to the Reorganization
Agreement.
Based on the foregoing and subject to the limitations set forth below, we
are of the opinion that:
1. Immediately prior to the Effective Time (as that term is defined in the
Reorganization Agreement), after taking into effect the repurchase of shares and
the exercise of warrants referred to in Sections 2.1 and 2.4(a) of the
Reorganization Agreement, the authorized stock of RBC consists of (a) 3,000
shares of Class A Common Stock, par value $0.01, of which 2,047.43 shares are
validly issued and outstanding and additional shares may be reserved for
issuance on the exercise of options which may be held by Michael Hartnett, (b)
3,000 shares of Class B Common Stock, par value $0.01, of which 40.00 shares are
validly issued and outstanding and (c) 4,000 shares of Preferred Stock, par
value $0.01, of which 1,000 shares have been designated as Series A Preferred
Stock, 945 of which designated shares are validly issued and outstanding.
2. All such issued and outstanding shares of RBC's Class A Common Stock,
Class B Common Stock and Preferred Stock were duly authorized and validly
issued, and are fully paid and non-assessable and free of preemptive rights,
with no personal liability attaching to the ownership of any of those shares
under the Delaware General Corporation Law.
3. The stock certificates representing all such issued and outstanding
shares of RBC's Class A Common Stock, Class B Common
WORMSER, KIELY, GALEF & JACOBS
Roller Bearing Holding Company, Inc.
Roller Bearing Acquisition Company, Inc.
Page 3
Stock and Preferred Stock have been duly executed by RBC and comply as to form
with the Delaware General Corporation Law.
4. Except as set forth in Schedule 3.2(c) to the Reorganization Agreement,
to our knowledge there are no options, warrants, rights, calls, commitments or
agreements of any character to which RBC is a party or by which it is bound
calling for the issuance of, or any commitment, plan or arrangement to issue,
any shares of stock of RBC or any securities convertible into or exercisable or
exchangeable for, or representing the right to purchase or otherwise receive any
such stock, or other arrangement to acquire, at any time or under any
circumstance, stock or other securities of RBC. Except as set forth in Schedule
3.2(c) to the Reorganization Agreement, to our knowledge there are no voting
trusts, voting agreements, proxies or other agreements or understandings with
respect to the voting of the stock of RBC to which RBC is a party.
5. Immediately prior to the Effective Time, after taking into effect the
repurchase of shares and the exercise of warrants contemplated by Sections 2.1
and 2.4(a) of the Reorganization Agreement, except as set forth on Schedule
3.1(a) to the Reorganization Agreement, Bitrix is the lawful owner of record and
beneficially of 1057.36 shares of the Class A Common Stock of RBC and 648.75
shares of the Preferred Stock of RBC and has good and marketable (subject to
compliance with applicable securities laws) title to such shares, free and clear
of any Encumbrances (as that term is defined in the Reorganization Agreement)
whatsoever and with no restriction on the voting rights or other incidents of
record and beneficial ownership pertaining to such shares. To. our knowledge,
there are no agreements or understandings between Bitrix and any other person
with respect to the voting of any of the shares of stock of RBC.
6. Immediately prior to the Effective Time, after taking into effect the
repurchase of shares and the exercise of warrants contemplated by Sections 2.1
and 2.4(a) of the Reorganization Agreements except as set forth on Schedule
3.1(a) to the Reorganization Agreement, Columbus is the lawful owner of record
and beneficially of 340.66 shares of the Class A Common Stock of RBC and 216.25
shares of the Preferred Stock of RBC and has good and marketable (subject to
compliance with applicable securities laws) title to such shares, free and clear
of any Encumbrances whatsoever and with no restriction on the voting rights or
other incidents of record and beneficial ownership pertaining to such shares. To
our knowledge, there are no agreements or understandings between Columbus and
any other person with respect to the voting of any of the shares of stock of
RBC.
WORMSER, KIELY, GALEF & JACOBS
Roller Bearing Holding Company, Inc.
Roller Bearing Acquisition Company, Inc.
Page 4
7. Assuming that (a) Bitrix is a limited partnership duly organized and
validly existing under the laws of the Netherlands, (b) Columbus is a
corporation, duly incorporated and validly existing under the laws of the Isle
of Man, (c) each of Bitrix and Columbus has the power and authority to enter
into and perform its obligations under the Documents and the transactions
contemplated by the Documents, and (d) all corporate and partnership actions
required to be taken by or on behalf of Bitrix and Columbus to authorize Bitrix
and Columbus to enter into and perform their obligations under the Documents
have been duly and properly taken, then each of the Documents constitutes a
legal, valid and binding obligation of Bitrix and Columbus, enforceable against
Bitrix and Columbus in accordance with its terms, subject to the effect of
applicable bankruptcy, reorganization, insolvency, moratorium and other similar
laws and court decisions of general application, including without limitation
statutory or other laws regarding fraudulent or preferential transfers relating
to, limiting or affecting the enforcement of creditors' rights generally and
general principles of equity.
8. Except as set forth in Schedule 3.1(c) to the Reorganization Agreement,
to our knowledge neither the execution, delivery or performance of the Documents
by Bitrix and Columbus, nor the consummation by Bitrix or Columbus of the
transactions and the performance of their respective obligations contemplated by
the Documents, nor compliance by Bitrix and Columbus with any of the provisions
of the Documents, will (a) violate, conflict with or constitute (or with notice
or lapse of time or both constitute) a default (or give rise to any right of
termination, cancellation or acceleration) or result in the creation of any
encumbrance on any shares of the Class A Common Stock, Class B Common Stock or
Preferred Stock of RBC owned by Bitrix or Columbus, under the terms of, any
note, bond, lease, mortgage, indenture, license, agreement or other instrument
or obligation to which Bitrix or Columbus is a party or by which Bitrix or
Columbus or any of their respective properties or assets are bound or affected,
or (b) violate any order, judgement, award, writ, injunction or decree of any
court, administrative agency or governmental body having jurisdiction over
Bitrix or Columbus or any of their respective properties or assets, or (c)
violate any applicable statute, rule or regulation of the State of New York or
any applicable Federal statute, rule or regulation of the United States of
America.
We are members of the Bar of the State of New York, and our opinions are
limited to matters involving the laws of the State of New York, the Federal laws
of the United States of America and the Delaware General Corporation Law. We do
not express any opinion as to the laws of any other jurisdiction, including
without limitation the laws of the Netherlands or the Isle of Man.
WORMSER, KIELY, GALEF & JACOBS
Roller Bearing Holding Company, Inc.
Roller Bearing Acquisition Company, Inc.
Page 5
Our opinions set forth above are being furnished solely to and for the
benefit of the Buyer and the Acquisition Corporation in connection with the
transactions contemplated by the Documents. Accordingly, it may not be relied on
by any other person without our prior written consent.
Very truly yours,
/s/ WORMSER, KIELY, GALEF & JACOBS
WORMSER, KIELY, GALEF & JACOBS
[Letterhead of Gough & Co.]
Date: March 31, 1992
Messrs. Roller Bearing Acquisition
c/o WSGP Partners,
1800 Century Park East, Suite 1000,
Los Angeles,
California 90067
Dear Sirs,
RE: Columbus Holdings Limited - RBC
We have acted as special Isle of Man Counsel to Columbus Holdings Limited
("Columbus") in connection with (i) the Agreement and Plan of Reorganisation
dated the date hereof; (ii) the Agreement of Merger dated the date hereof; (iii)
the Escrow Agreement dated the date hereof and (iv) the Disclosure Schedules
dated the date hereof. The Agreement and Plan of Reorganisation, the Agreement
of Merger, the Escrow Agreement and the Disclosure Schedules are herein
collectively called the "Documents").
We have not seen the stock powers referred to in the Resolutions hereinafter
mentioned.
We have reviewed the originals or facsimile transmissions of such records and
documents as we have deemed necessary or desirable for our opinions hereinafter
set forth including:-
(1) The Memorandum of Articles of Association of Columbus;
(2) A Certificate of good standing of Columbus dated 6th March 1992 issued by
the Deputy Assistant Chief Registrar of the Isle of Man; and
(3) Resolutions in writing adopted by the Directors of Columbus dated 6th
March 1992;
Gough & Co.
Page 2
In giving the opinions expressed below, we have assumed:-
(a) the authenticity of all documents submitted to us and the conformity with
the originals of all documents submitted to us as copies;
(b) the due authorisation and delivery of the Documents by the parties thereto
other than Columbus;
(c) the legal right and power of all parties under all applicable laws and
regulations of each party to the Documents other than Columbus to enter
into, execute, deliver and perform the obligations under the Documents to
which it is a party;
(d) that all Documents executed by each party to the Documents other than
Columbus are valid, binding and enforceable against the parties thereto in
accordance with their respective terms.
Our opinion is limited to the laws of the Isle of Man and we do not express any
opinion with respect to the laws of any other jurisdiction, including, without
limitation, the laws of the United States or any of them.
Based as of the date hereof upon and subject to the foregoing, and also subject
to the specific assumption, limitations and reliances set forth herein, and on
the basis of our consideration of such facts deemed necessary:
1. Columbus is duly organised and validly existing under the laws of the Isle
of Man and has the corporate power and authority under such laws to enter
into the Reorganisation Agreement and Escrow Agreement, to perform its
obligations thereunder and to consummate the transactions contemplated
thereby.
2. The execution, delivery and performance of the Reorganisation Agreement
and Escrow Agreement and the consummation by Columbus of the transactions
contemplated thereby have been duly and validly authorised by all
necessary corporate action on the part of Columbus. Columbus has full and
absolute power and authority to enter into the Reorganisation Agreement
and Escrow Agreement and to perform its obligations thereunder and the
Reorganisation Agreement and the Escrow Agreement a valid and binding
obligation of Columbus, enforceable against Columbus in accordance with
their terms.
3. Except as set forth on Schedule 3.1(c) attached to the Reorganisation
Agreement, to our knowledge, neither the execution, delivery and
performance of the Reorganisation Agreement or Escrow Agreement, nor the
consummation by Columbus of the transactions contemplated thereby, nor
compliance by Columbus with any of the provisions thereof,
Gough & Co.
Page 3
will (i) violate or conflict with the Memorandum or Articles of
Association of Columbus or (ii) violate any law, statute, rule or
regulation under Isle of Man law. Except as contemplated by the
Reorganisation Agreement, or as set forth on Schedule 3.1(c) attached to
the Reorganisation Agreement, to our knowledge, no permit, authorisation,
consent or approval of or by, or any notification of or filing with, any
person (governmental or private) is required under Isle of Man law in
connection with the execution, delivery and performance of the
Reorganisation Agreement by Columbus or the consummation by Columbus of
the transactions contemplated thereby.
4. No Isle of Man governmental approval is required in connection with the
execution and delivery of each of the Agreement of Reorganisation or the
Escrow Agreement by Columbus or the performance by Columbus of its
obligations thereunder.
5. A final and conclusive judgement of a Court of the United States of
America or the State of New York against Columbus in respect of the
Agreement of Reorganisation and the Escrow Agreement would be enforced
against Columbus by an action in the courts of the Isle of Man without
re-examination of the merits of the case under the common law doctrine of
obligation, provided that such judgement was not obtained by fraud or that
its enforcement would not be contrary to public policy in the Isle of Man
that the proceedings in which the same was obtained were not contrary to
natural justice.
Yours faithfully,
/s/ I. C. Corbridge,
I. C. Corbridge,
Gough & Co.
[Letterhead of Smeets, Thesseling & Van Bokhorst]
March 31, 1992
Roller Bearing Holding Company Inc.
Roller Bearing Acquisition Company, Inc.
1800 Century Park East, Suite 1000
Los Angeles, CA 90007
Re: Bitrix Associates C.V.
Dear Sirs,
We have acted as counsel as to the laws of the Netherlands and the
Netherlands Antilles to Bitrix Associates C.V. (the "Partnership") in connection
with the Agreement and Plan of Reorganization (the "Agreement and Plan"), dated
March 31, 1992, among Roller Bearing Company of America, Inc., Roller Bearing
Acquisition Company, Inc., Roller Bearing Holding Company, Inc. and the
Shareholders of Roller Bearing Company of America, Inc., including, without
limitation, the Partnership and the Escrow Agreement (the "Escrow Agreement"),
dated March 31, 1992, among Roller Bearing Holding Company, Inc. and the
shareholders of Roller Bearing Company of America, Inc., including, without
limitation, the Partnership. The Agreement and Plan and the Escrow Agreement are
hereinafter together referred to as the "Documents".
As such counsel we have reviewed copies of the Documents.
We have considered such questions of Netherlands and Netherlands Antilles
law as we have deemed relevant or necessary for the purposes of this opinion and
we have reviewed originals or copies, certified or otherwise identified to our
satisfaction, of such records of the Partnership and of the managing general
partner of the Partnership, certificates of public officials and such other
documents as we have deemed relevant or necessary as a basis for the opinion
hereinafter expressed.
In giving this opinion we have assumed:
i) the genuineness of all signatures on the documents we have reviewed;
ii) the authenticity of all such documents submitted to us as originals:
SMEETS, THESSELING & VAN BOKHORST
Bitrix Associates C.V.
Page Two
iii) the conformity with originals of all documents submitted to us as
certified or photostatic copies;
iv) the due power and authority of the parties to the Documents, other
than the Partnership, to execute, deliver and perform their
obligations under the Documents and that the Documents constitute
the legal, valid, binding and enforceable obligations of said
parties; and
v) that the Documents are legal, valid, binding and enforceable under
the laws under which they have been construed and by which they have
been chosen to be governed.
In rendering the following opinion we are opining on the matters
hereinafter referred to, only insofar as they are governed by the laws of the
Netherlands and the Netherlands Antilles as currently in effect. We have made no
investigation of and express no opinion in relation to the laws of any
jurisdiction other than the Netherlands and the Netherlands Antilles.
As to certain matters of fact of which we have no or insufficient
independent knowledge, we have relied upon representations and certificates of
the general partner of the Partnership as well as upon the accuracy of the
recitals made in the Resolutions.
Based upon and subject to the foregoing and having regard to such legal
considerations as we deem relevant, we are of the opinion that:
1. Based solely on the legal opinion of De Brauw Blackstone Westbroek,
dated on the date hereof, a copy which is attached hereto ("the BBW
Opinion"), the Partnership was duly entered into and is validly
existing as a limited Partnership ("Commanditaire Vennootschap")
under the laws of the Netherlands. In the following paragraphs of
this opinion, we have assumed and based ourselves on the correctness
of the BBW Opinion.
2. Bisub Investments N.V. ("Bisub") is a corporation duly organized and
validly existing under the laws of the Netherlands Antilles, with
full corporate power and authority to conduct its business in
accordance with Article 2 of its Articles of Incorporation, which
includes the corporate power and authority to execute and deliver
the Partnership Agreement and to act as Managing General Partner of
the Partnership. Bisub is duly registered with the Commercial
Register of the Chamber of Commerce and Industry at Curacao.
SMEETS, THESSELING & VAN BOKHORST
Bitrix Associates c.v.
Page Three
3. The Partnership has all requisite partnership power and authority to
enter into, execute, deliver, and to perform its obligations under
the Documents.
4. The management of the Partnership, including but not limited to, the
day to day management of the Partnership will, pursuant to the
Partnership Agreement, be conducted by Bisub in its capacity of
Managing General Partner. Bisub has taken all requisite corporate
action to execute and deliver the Documents for and on behalf of the
Partnership in its capacity of Managing General Partner of the
Partnership. No other partnership action has to be taken in
connection with the execution and delivery of the Documents for and
on behalf of the Partnership.
5. The Documents have been duly signed for and on behalf of Bisub, in
its capacity of Managing General Partner of the Partnership, and
constitute legal, valid and binding obligations of the Partnership,
enforceable against the Partnership in accordance with their
respective terms, except as such enforcement may be limited by
applicable bankruptcy, moratorium, insolvency and other similar laws
affecting the enforcement of creditors' rights generally.
6. Bisub in its capacity of Managing General Partner of the
Partnership, has been granted a foreign exchange control exemption
by the Bank of the Netherlands Antilles as well as a Business
License, which exemption and license are in full force and effect.
No other authorization, approval or other action by, or notices to
or filing with any Netherlands Antilles governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Partnership of any of its obligations pursuant to
the Documents.
7. Except as set forth on Schedule 3.1 (c) attached to the Agreement
and Plan, to the best of our knowledge, neither the execution,
delivery and performance of the Documents, nor the consummation by
the Partnership of the transactions and the performance by the
Partnership of its obligations contemplated thereby, nor compliance
by the Partnership with any of the provisions thereof, will: (i)
violate or conflict with the Partnership Agreement; or (ii) violate
any law, statute, rule or regulation of the Netherlands Antilles.
Except as contemplated by the Agreement and Plan, or as set forth on
Schedule 3.1 (c) attached to the Agreement and Plan, to the best of
our knowledge, no permit, authorization, consent or approval of or
by, or any notification of or filing with, any person (governmental
or private) is required under the
SMEETS, THESSELING & VAN BOKHORST
Bitrix Associates C.V.
Page Four
laws of the Netherlands or the Netherlands Antilles in connection
with the execution, delivery and performance of the Documents by the
Partnership or the consummation by the Partnership of the
transactions contemplated thereby.
8. Since there is no treaty regarding the enforcement of judgments in
existence between the Netherlands and the United States of America,
enforcement of a judgment obtained in a court located in the City
and State of New York cannot be obtained directly in the Netherlands
courts. However, since the Partnership has chosen the laws of the
State of New York to govern the Documents, a final and conclusive
judgment of a Court of the United States of America or the State of
New York against the Company in respect of the Documents would be
considered by the Netherlands courts to be a part of the Documents
and, as such, should be enforceable in accordance with its terms,
provided, however, that enforcement of the Documents, including a
judgment of the aforesaid courts, would not lead to a result which
would be in conflict with the public order of the Netherlands.
However, a Netherlands court has discretionary power not to
recognize any such judgment.
The opinions set forth above are subject to the qualification that any
specific performance or injunctive relief may be subject to the discretion of
the competent courts before which any proceedings are brought, and we express no
opinion as to the availability of such remedies.
This opinion is delivered to you and your counsel, solely in connection
with the transaction described in the Documents, and may not be relied upon or
used by you, your counsel, for any other purpose or any other person, firm or
company without our written consent.
Sincerely yours,
SMEETS, THESSELING & VAN BOKHORST
/s/ Frank P.C. Zeven
Frank P.C. Zeven
[Letterhead of De Brauw Blackstone Westbroek]
March 31, 1992
02023MSS. 001
Roller Bearing Holding Company, Inc.
Roller Bearing Acquisition Company, Inc.
c/o WSGP Partners L.P.
1800 Century Park East
Suite 1000
Los Angeles, California 90067
Dear Sirs:
Re: BITRIX ABSOCIATES C.V.
I have acted as counsel as to matters of Netherlands law for BITRIX ASSOCIATES
C.V. (the "Limited Partnership"), a commanditaire vennootschap (limited
partnership) organized under the laws of the Netherlands with its registered
office in Curacao, Netherlands Antilles.
In connection therewith, I have examined the following documents:
a. a copy of the limited partnership agreement (the "Agreement"), dated as of
February 15, 1988, among BITRIX N.V., a company incorporated under the
laws of the Netherlands Antilles, as beherend vennoot (general partner,
hereinafter the "General Partner"), BISUB INVESTMENTS N.V., a company
incorporated under the laws of the Netherlands Antilles, as beherend
vennoot (general partner, hereinafter the "Managing General
2
Partner" and collectively with the General Partner the "General
Partners"), and BLP INVESTMENTS B.V., a company incorporated under the
laws of the Netherlands, as commanditaire vennoot (limited partner,
hereinafter the "Limited Partner" and collectively with the General
Partners the "Partners");
b. a telecopy of an extract from the Commercial Register of the Chamber of
Commerce and Industry at Curacao, Netherlands Antilles with respect to the
Limited Partnership, dated March 20, 1992, confirmed to me to be correct
as at the date hereof;
c. a telecopy of a confirmation letter, dated March 23, 1992, with respect to
the Limited Partnership from Curacao Corporation Company N.V., in its
capacity as Managing Director of the Managing General Partner, confirmed
to me to be correct as at the date hereof;
d. a telecopy of a confirmation letter, dated March 23, 1992, with respect to
the General Partner from Curacao Corporation Company N.V., in its capacity
as Managing Director of the General Partner, confirmed to me to be correct
as at the date hereof;
e. a telecopy of a confirmation letter, dated March 23, 1992, with respect to
the Managing General Partner from Curacao Corporation Company N.V., in its
capacity as Managing Director of the Managing General Partner, confirmed
to me to be correct as at the date hereof;
f. a telecopy of a confirmation letter, dated March 24, 1992, with respect to
the Limited Partner from Trust International Management (T.I.M.) B.V., in
its capacity as Managing Director of the Limited Partner, confirmed to me
to be correct as at the date hereof;
- --------------------------------------------------------------------------------
DE BRAUW BLACKSTONE WESTBROEK
3
and such other documents as I have deemed necessary to enable me to render this
opinion.
I have not investigated the laws of any jurisdiction but the Netherlands and do
not express an opinion on the laws of any jurisdiction but the Netherlands.
In rendering the following opinion, I have made the following assumptions:
(i) that all documents submitted to me as photocopies, specimen documents,
drafts, forms, final versions or telecopies conform or conform in all
material respects to the respective originals thereof and that such
documents, where applicable, will be executed in a form substantially
similar to the documents reviewed by me;
(ii) that the signatures on the originals of all documents are the genuine
signatures of the persons purported to have executed the same;
(iii) that the confirmation letters referred to above under c. through f. are
true and correct.
Based upon and subject to the foregoing and subject to the qualifications set
forth below and subject to any matters, documents, and events not disclosed to
me, I am at the date hereof of the following opinion:
1. The Limited Partnership was duly entered into in accordance with the laws
of the Netherlands and is validly existing as a commanditaire vennootschap
(limited partnership) under the laws of the Netherlands.
- --------------------------------------------------------------------------------
DE BRAUW BLACKSTONE WESTBROEK
4
2. The Limited Partnership has full power and authority under the Agreement
and under the laws of the Netherlands to carry out its business as such
business is described in the objects clause (Article 1.2) of the
Agreement.
The opinions expressed above are subject to the following qualifications:
(aa) I do not express an opinion with respect to any Netherlands tax law;
(bb) The opinions expressed herein are limited by any bankruptcy, surseance van
betaling (temporary suspension of payments), moratorium or similar laws
generally affecting. the enforceability of rights of creditors,. as well
as by principles of redelijkheid (reasonableness) and billijkheid
(fairness) as applicable under Netherlands law;
(cc) The courts of the Netherlands will observe and give effect to the choice
of law provisions. contained in the Agreement save that in all events the
courts of the Netherlands may give effect to mandatory rules of the law of
any jurisdiction with which the matter has a close connection, if and to
the extent under the laws of such jurisdiction, those rules must be
applied whatever the chosen law.
This opinion is addressed to you and for your sole benefit and the benefit of
your counsel. Except as stated in the preceding sentence, this opinion may not
be relied upon by, transmitted to or filed with any person, firm, company or
institution without my prior written consent.
Very truly yours
/s/ Cees N. Peijster
Cees N. Peijster
- --------------------------------------------------------------------------------
DE BRAUW BLACKSTONE WESTBROEK
[Letterhead of Spengler Carlson Gubar Brodsky & Frischling]
March 31, 1992
RBC Holding Company, Inc.
RBC Acquisition Company, Inc.
c/o WSGP Partners, L.P.
1800 Century Park East, Suite 1000
Los Angeles, California 90067
Re: Merger of RBC Acquisition Company, Inc. With and Into Roller Bearing
Company of America, Inc.
Gentlemen:
We have acted as special counsel to Bay Street Corporation, a
Delaware corporation (the "Company"), in connection with the proposed
disposition of its shareholdings in Roller Bearing Company of America, Inc., a
Delaware corporation ("RBC"), as contemplated by (i) the Agreement and Plan of
Reorganization dated March __, 1992 (the "Reorganization Agreement"), among RBC,
RBC Holding Company, Inc., a Delaware corporation (the "Buyer"), RBC Acquisition
Company, Inc., a Delaware corporation, the Company and the other stockholders of
RBC and (ii) the Escrow Agreement dated March ___, 1992 (the "Escrow
Agreement"), among Buyer, the Stockholders and the Escrow Agent (as defined
therein). Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Reorganization Agreement.
In connection with the rendering of the opinions set forth below, we
have examined originals, or copies certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates and other
instruments as we have deemed necessary or appropriate, including, without
Spengler Carlson Gubar Brodsky & Frischling
RBC Holding Company, Inc.
RBC Acquisition Company, Inc.
c/o WSGP Partners, L.P.
March , 1992
Page -2-
limitation, (a) the Reorganization Agreement and (b) the Escrow Agreement. In
our examination, we have assumed the due authorization, execution and delivery
by each person other than the Company of each document heretofore executed and
delivered or hereafter to be executed and delivered by such person, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals of
such latter documents.
In connection with the rendering of the opinions set forth below, as
to matters of fact, we have relied solely upon (without independent
investigation) the representations and warranties contained in or made pursuant
to the Reorganization Agreement and certificates of public officials and
officers of the Company.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that:
1. The Company is a corporation, duly incorporated, validly existing
and in good standing under the laws of Delaware.
2. All corporate actions required to be taken by or on behalf of the
Company to authorize the Company to enter into and perform its obligations under
each of the Reorganization Agreement and the Escrow Agreement have been duly and
properly taken.
3. The Company has the corporate power and authority to enter into
and perform its obligations under each of the Reorganization Agreement and the
Escrow Agreement and the transactions contemplated therein.
4. The execution and delivery of each of the Reorganization
Agreement and the Escrow Agreement and the consummation of the transactions
contemplated therein (i) will not conflict with, or result in a material breach
of, any of the terms, conditions or provisions of, or constitute a material
default under, the certificate of incorporation or by-laws of the Company, (ii)
will not conflict with, or result in a material breach of any of the terms,
conditions or provisions of, or constitute a material default under, any
material agreement of which we have knowledge to which the Company is a party or
by which it may be bound, (iii) to our knowledge, will not result in the
violation by the Company of
Spengler Carlson Gubar Brodsky & Frischling
RBC Holding Company, Inc.
RBC Acquisition Company, Inc.
c/o WSGP Partners, L.P.
March , 1992
Page -3-
any order, rule, regulation, judgment or decree of any federal or state
government, governmental instrumentality or court having jurisdiction over the
Company or any of its properties, and (iv) will not result in the violation by
the Company of any applicable federal or State of Delaware statute, rule or
regulation (except that we express no opinion as to compliance with federal or
state securities laws).
5. Each of the Reorganization Agreement and the Escrow Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to the effect of
applicable bankruptcy, reorganization, insolvency, moratorium and other similar
laws and court decisions of general application, including without limitation,
statutory or other laws regarding fraudulent or preferential transfers relating
to, limiting or affecting the enforcement of creditors' rights generally.
7. Based solely upon a review of stock certificates and the
representations of officers of the Company, and no independent investigation:
prior to the transactions contemplated by the Reorganization Agreement, the
Company is the lawful owner, of record and beneficially, of 0.82 shares of RBC
Class A common stock, par value $.0l, and 40 shares of RBC Class B common stock,
par value $.01 (collectively with the common stock, the "Shares"); upon the
effectiveness of the transactions contemplated by the Reorganization Agreement,
assuming that the Buyer is a bona fide purchaser (as such term is defined in
Section 8-302 of the Uniform Commercial Code), it will acquire the Shares free
of any claims of third parties and with no restriction on the voting rights and
the other incidents of ownership pertaining thereto (other than those which may
be imposed by applicable securities laws); and there are no agreements or
understandings of which we have knowledge between the Company and any other
person with respect to the voting of the Shares subject to which Buyer would be
acquiring title to the Shares.
We are admitted to the Bar of the State of New York and we express
no opinion as to laws of any other jurisdiction other than the Delaware General
Corporation Law and laws of the United States of America.
Our opinion set forth above is being furnished solely to and for the
benefit of RBC Holding Company, Inc. and subsidiaries in connection with the
transactions contemplated
Spengler Carlson Gubar Brodsky & Frischling
RBC Holding Company, Inc.
RBC Acquisition Company, Inc.
c/o WSGP Partners, L.P.
March , 1992
Page -4-
by the Reorganization Agreement. Accordingly, it may not be relied upon by any
other person without our prior written consent.
Very truly yours,
/s/ [ILLEGIBLE]
7844c
EXHIBIT D
ROLLER BEARING HOLDING COMPANY, INC.
EXCHANGE AGREEMENT
by and between
ROLLER BEARING HOLDING COMPANY, INC.
and
GARY W. HOLMES
Dated: March 30, 1992
ROLLER BEARING HOLDING COMPANY, INC.
EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement") is entered into as of
March 30, 1992, by and among Roller Bearing Holding Company, Inc., a Delaware
corporation ("Holding Company") and Gary W. Holmes ("Exchanging Shareholder").
ARTICLE 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"Holding Common Stock" means Holding Company's Class A Voting Common
Stock, par value $0.01.
"Holding Preferred Stock" means Holding Company's Redeemable
Exchangeable Cumulative Preferred Stock, par value $0.01.
"RBC Common Stock" means, the Class A Common Stock, $0.01 par value
of Roller Bearing Company of America, Inc., a Delaware corporation ("RBC").
"Holding Common Shares" means the shares of Holding Common Stock
listed on Exhibit A.
"Holding Preferred Shares" means the shares of Holding Preferred
Stock listed on Exhibit A.
"RBC Common Shares" means the shares of RBC Common Stock listed on
Exhibit A.
ARTICLE 2
EXCHANGE OF STOCK
Holding Company shall issue and deliver to the Exchanging
Stockholder, concurrently with the execution and delivery of this Agreement, the
Holding Common Shares and the Holding Preferred Shares in exchange for the RBC
Common Shares, the certificates for which shall be delivered to Holding Company
by Exchanging Stockholder concurrently herewith.
ARTICLE 3
REPRESENTATIONS OF EXCHANGING SHAREHOLDER
Exchanging Shareholder hereby represents and warrants to Holding
Company that:
(a) This Agreement has been duly executed and delivered by
Exchanging Shareholder and, assuming the due execution and delivery hereof by
Holding Company, constitutes a valid and binding obligation of Exchanging
Shareholder, enforceable against Exchanging Shareholder in accordance with its
terms.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate, conflict
with or result in a default or breach under (i) any term or provision of any
contract, agreement, indebtedness, lease, commitment, license, franchise, permit
authorization or concession to which Exchanging Shareholder is a party, which
breach or default would have a material adverse effect on the ability of
Exchanging Shareholder to consummate the transactions contemplated hereby, or
(ii) any statute, law, rule, regulation, ordinance, code, order, judgment, writ,
injunction, decree or award, applicable to Exchanging Shareholder, which
violation would have a material adverse effect on the ability of Exchanging
Shareholder to consummate the transactions contemplated hereby.
(c) Exchanging Shareholder is acquiring the Holding Common
Shares and the Holding Preferred Shares for his own account and not as a nominee
or agent for any other person and with no intention of distributing or reselling
such securities or any part thereof in any transactions that would be in
violation of the securities laws of the United States of America or any state
thereof.
(d) Exchanging Shareholder has had an opportunity to ask
questions of and to receive answers from the officers of Holding Company and his
affiliates, or a person or persons acting on Holding Company's or its
affiliates' behalf, concerning the terms and conditions of this investment.
(e) Exchanging Shareholder has such knowledge and experience
in financial affairs that Exchanging Shareholder is capable of evaluating the
merits and risks of acquiring and holding the Holding Common Shares and the
Holding Preferred Shares.
(f) Exchanging Shareholder has not relied, in connection with
the decision to accept or to provide consideration for the Holding Common Shares
and the Holding Preferred Shares, upon the identity or advice of any other
person or upon any representations, warranties or agreements other than those in
this Agreement.
(g) Exchanging Shareholder's financial situation is such that
Exchanging Shareholder can afford to suffer the complete loss of the
consideration given in exchange for the Holding Common Shares and the Holding
Preferred Shares.
(h) Exchanging Shareholder's net worth or joint net worth with
Exchanging Shareholder's spouse, exceeds $1,000,000; or Exchanging Shareholder's
individual income was in excess of $200,000 in each of the two most recent years
or my joint income with Exchanging Shareholder's spouse was in excess of
2
$300,000 in each of the two most recent years, and Exchanging Shareholder
reasonably expects to reach the same income level in the current year.
(i) Exchanging Shareholder is an "accredited investor" within
the meaning of Rule 501 under the Securities Act of 1933, as amended (the "1933
Act"); has made his own investigation regarding a determination to purchase the
Holding Common Stock and the Holding Preferred Stock and has received all
information it considers necessary or appropriate for deciding whether to
purchase the Holding Common Stock and the Holding Preferred Stock; and, in
making its decision to so purchase, is not in any way relying on the fact that
any other person has decided to participate in the purchase.
(j) Exchanging Shareholder understands that there is no public
market for the Holding Common Stock or the Holding Preferred Stock, that the
Holding Common Stock and the Holding Preferred Stock have not been registered
under the 1933 Act or registered or qualified under any state securities ("Blue
Sky") laws, and that the Holding Common Stock and the Holding Preferred Stock
cannot be resold by Exchanging Shareholder unless registered and qualified under
the 1933 Act and all applicable Blue Sky laws or unless an exemption from
registration and qualification is available.
(k) No consent, approval or authorization of, or declaration,
filing or registration with, any United States federal, state or local
governmental or regulatory authority is required to be made or obtained by
Exchanging Shareholder in connection with the execution and delivery of this
Agreement by Exchanging Shareholder, the purchase of the Holding Common Stock or
the Holding Preferred Stock by Exchanging Shareholder, and the performance by
Exchanging Shareholder of the other specific obligations of Exchanging
Shareholder contained herein, other than any consents or approvals obtained by
Exchanging Shareholder prior to the Closing Date, notices and filings required
pursuant to the 1933 Act or Blue Sky laws, or any consents or approvals which,
if not obtained, would not have a material adverse effect on Holding Company or
the interest of Exchanging Shareholder in the Holding Common Stock or the
Holding Preferred Stock.
(l) Exchanging Shareholder represents that he is a resident of
the State of Florida.
ARTICLE 4
RESTRICTIONS ON TRANSFER
Exchanging Shareholder agrees as follows:
(a) Exchanging Shareholder agrees that he shall not sell,
assign, convey, hypothecate or in any other manner transfer any of the shares of
Holding Common Stock or shares of Holding Preferred Stock except in compliance
with the 1933 Act and any applicable state securities laws.
(b) Exchanging Shareholder agrees that prior to making any
disposition of any Holding Common Stock or Holding Preferred Stock (other than a
disposition to Holding Company) Exchanging Shareholder will give written notice
to Holding Company describing the manner of such proposed disposition.
Exchanging
3
Shareholder further agrees not to effect such proposed disposition until either
(i) Holding Company has notified Exchanging Shareholder that, in the opinion of
Holding Company's counsel, no registration of such Holding Common Stock or
Holding Preferred Stock under the 1933 Act or registration or qualification
under the securities or Blue Sky laws of any state is required in connection
with such proposed disposition, or (ii) a registration statement under the 1933
Act covering such proposed disposition has been filed by Holding Company under
the Act and has become effective and compliance with applicable state securities
or Blue Sky laws has been effected. Holding Company shall respond as promptly as
reasonably practicable to any notice of sale given hereunder.
(c) Each certificate representing the shares of Holding Common
Stock and Holding Preferred Stock issued pursuant to this Agreement shall bear
legends in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES ACT OF ANY JURISDICTION. SUCH SECURITIES MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED PLEDGED OR HYPOTHECATED
EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR APPLICABLE STATE
SECURITIES LAW, OR (ii) ANY EXEMPTION FROM REGISTRATION UNDER SUCH
ACT OR APPLICABLE STATE SECURITIES LAW RELATING TO THE DISPOSITION
OF SECURITIES, INCLUDING RULE 144, PROVIDED AN OPINION OF COUNSEL IS
FURNISHED, REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO ROLLER
BEARING HOLDING COMPANY, INC. (THE "COMPANY") THAT AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND/OR APPLICABLE STATE
SECURITIES LAW IS AVAILABLE.
ARTICLE 5
5.1 Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the others shall be in writing and delivered
in person or by courier, or by facsimile transmission or by mail, postage
prepaid, as follows:
4
If to Holding Company, to:
Roller Bearing Holding Company, Inc.
1800 Century Park East, Suite 1000
Los Angeles, California 90067
Attention: Mr. Richard R. Crowell
Telecopy: (310) 277-5810
with a copy to:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attention: Terrance L. Carison, Esq.
Telecopy: (213) 229-7520
If to Exchanging Shareholder, to:
Gary W. Holmes
1925 Brickell Avenue, PH 3 &4
Miami, Florida 33129
Notices delivered in person shall be effective when so delivered
Notices delivered by courier shall be effective three (3) business days after
delivery b; the sender to an air courier of national reputation who guarantees
delivery within such three (3) business day period. Faxed notices shall be
effective when receipt is acknowledged telephonically by the addressee or its
agent or employee. Notices sent by mail shall be effective five (5) business
days after the sender's deposit of such notice in the United States mails, first
class postage prepaid.
5.2 Governing Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the internal laws of
the State of New York governing contracts executed and to be performed wholly
within such state, without regard to the principles of conflicts of laws.
5.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.4 Specific Performance. The parties will be irreparably damaged in
the event that this Agreement is not specifically enforced. In the event of a
breach or threatened breach of the terms, covenants and/or conditions of this
Agreement by any of the parties hereto, the other parties shall, in addition to
all other remedies, be entitled (without any bond or other security being
required) to a temporary and/or permanent injunction, without showing any actual
damage or that monetary damages would not provide an adequate remedy, and/or a
decree for specific performance, in accordance with the provisions hereof.
5.5 Severability. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision
5
and shall not in any manner affect or render invalid or unenforceable any other
severable provision of this Agreement, and this Agreement shall be carried out
as if any such invalid or unenforceable provision were not contained herein.
5.6 Additional Action. Each party hereto shall cooperate and shall
take such further action and shall execute and deliver such further documents as
may be reasonably requested by any other party in order to carry out the
provisions and purposes of this Agreement.
5.7 Headings. The headings of the Articles and Sections herein are
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
or have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
first above written.
ROLLER BEARING HOLDING COMPANY, INC.,
a Delaware corporation
By: /s/ M. J. Hartnett
------------------------------------
Its: President
EXCHANGING SHAREHOLDER
/s/ Gary W. Holmes
- ----------------------------------------
Gary W. Holmes
EXHIBIT A
Holding Common Shares: 5,625 shares of Holding Common Stock.
Holding Preferred Shares: 6,226.857 shares of Holding Redeemable Exchangeable
Cumulative Preferred Stock.
RBC Common Shares: 122.2122701 shares of RBC Class A Common Stock.
7
ROLLER BEARING HOLDING COMPANY, INC.
EXCHANGE AGREEMENT
by and between
ROLLER BEARING HOLDING COMPANY, INC.
and
FREDERICK MORLOK
Dated: March 30, 1992
ROLLER BEARING HOLDING COMPANY, INC.
EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement") is entered into as of
March 30, 1992, by and among Roller Bearing Holding Company, Inc., a Delaware
corporation ("Holding Company") and Frederick Morlock ("Exchanging
Shareholder").
ARTICLE 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"Holding Common Stock" means Holding Company's Class A Voting Common
Stock, par value $0.01.
"Holding Preferred Stock" means Holding Company's Redeemable
Exchangeable Cumulative Preferred Stock, par value $0.01.
"RBC Common Stock" means, collectively, the Class A Common Stock,
$0.01 par value, and the Class B Common Stock, $0.01 par value, of Roller
Bearing Company of America, Inc., a Delaware corporation ("RBC").
"Holding Common Shares" means the shares of Holding Common Stock
listed on Exhibit A.
"Holding Preferred Shares" means the. shares of Holding Preferred
Stock listed on Exhibit A.
"REC Common Shares" means the shares of RBC Common Stock listed on
Exhibit A.
ARTICLE 2
EXCHANGE OF STOCK
Holding Company shall issue and deliver to the Exchanging
Stockholder, concurrently with the execution and delivery of this Agreement, the
Holding Common Shares and the Holding Preferred Shares in exchange for the RBC
Common Shares, the certificates for which shall be delivered to Holding Company
by Exchanging Stockholder concurrently herewith.
ARTICLE 3
REPRESENTATIONS OF EXCHANGING SHAREHOLDER
Exchanging Shareholder hereby represents and warrants to Holding
Company that:
(a) This Agreement has been duly executed and delivered by
Exchanging Shareholder and, assuming the due execution and delivery hereof by
Holding Company, constitutes a valid and binding obligation of Exchanging
Shareholder, enforceable against Exchanging Shareholder in accordance with its
terms.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate, conflict
with or result in a default or breach under (i) any term or provision of any
contract, agreement, indebtedness, lease, commitment, license, franchise, permit
authorization or concession to which Exchanging Shareholder is a party, which
breach or default would have a material adverse effect on the ability of
Exchanging Shareholder to consummate the transactions contemplated hereby, or
(ii) any statute, law, rule, regulation, ordinance, code, order, judgment, writ,
injunction, decree or award, applicable to Exchanging Shareholder, which
violation would have a material adverse effect on the ability of Exchanging
Shareholder to consummate the transactions contemplated hereby.
(c) Exchanging Shareholder is acquiring the Holding Common
Shares and the Holding Preferred Shares for his own account and not as a nominee
or agent for any other person and with no intention of distributing or reselling
such securities or any part thereof in any transactions that would be in
violation of the securities laws of the United States of America or any state
thereof.
(d) Exchanging Shareholder has had an opportunity to ask
questions of and to receive answers from the officers of Holding Company and his
affiliates, or a person or persons acting on Holding Company's or its
affiliates' behalf, concerning the terms and conditions of this investment.
(e) Exchanging Shareholder has such knowledge and experience
in financial affairs that Exchanging Shareholder is capable of evaluating the
merits and risks of acquiring and holding the Holding Common Shares and the
Holding Preferred Shares.
(f) Exchanging Shareholder has not relied, in connection with
the decision to accept or to provide consideration for the Holding Common Shares
and the Holding Preferred Shares, upon the identity or advice of any other
person or upon any representations, warranties or agreements other than those in
this Agreement.
(g) Exchanging Shareholder's financial situation is such that
Exchanging Shareholder can afford to suffer the complete loss of the
consideration given in exchange for the Holding Common Shares and the Holding
Preferred Shares.
(h) Exchanging Shareholder's net worth or joint net worth with
Exchanging Shareholder's spouse, exceeds $1,000,000; or Exchanging Shareholder's
individual income was in excess of $200,000 in each of the two most recent years
or my joint income with Exchanging Shareholder's spouse was in excess of
2
$300,000 in each of the two most recent years, and Exchanging Shareholder
reasonably expects to reach the same income level in the current year.
(i) Exchanging Shareholder is an executive officer of Holding
Company.
(j) Exchanging Shareholder is an "accredited investor" within
the meaning of Rule 501 under the Securities Act of 1933, as amended (the "1933
Act"); has made his own investigation regarding a determination to purchase the
Holding Common Stock and the Holding Preferred Stock and has received all
information it considers necessary or appropriate for deciding whether to
purchase the Holding Common Stock and the Holding Preferred Stock; and, in
making its decision to so purchase, is not in any way relying on the fact that
any other person has decided to participate in the purchase.
(k) Exchanging Shareholder understands that there is no public
market for the Holding Common Stock or the Holding Preferred Stock, that the
Holding Common Stock and the Preferred Stock have not been registered under the
1933 Act or registered or qualified under any state securities ("Blue Sky")
laws, and that the Holding Common Stock and the Holding Preferred Stock cannot
be resold by Exchanging Shareholder unless registered and qualified under the
1933 Act and all applicable Blue Sky laws or unless an exemption from
registration and qualification is available.
(l) No consent, approval or authorization of, or declaration,
filing or registration with, any United States federal, state or local
governmental or regulatory authority is required to be made or obtained by
Exchanging Shareholder in connection with the execution and delivery of this
Agreement by Exchanging Shareholder, the purchase of the Holding Common Stock or
the Holding Preferred Stock by Exchanging Shareholder, and the performance by
Exchanging Shareholder of the other specific obligations of Exchanging
Shareholder contained herein, other than any consents or approvals obtained by
Exchanging Shareholder prior to the Closing Date, notices and filings required
pursuant to the 1933 Act or Blue Sky laws, or any consents or approvals which,
if not obtained, would not have a material adverse effect on Holding Company or
the interest of Exchanging Shareholder in the Holding Common Stock or the
Holding Preferred Stock.
(m) Exchanging Shareholder represents that he is a resident of
the State of Pennsylvania.
ARTICLE 4
RESTRICTIONS ON TRANSFER
Exchanging Shareholder agrees as follows:
(a) Exchanging Shareholder agrees that he shall not sell,
assign, convey, hypothecate or in any other manner transfer any of the shares of
Holding Common Stock or shares of Holding Preferred Stock except in compliance
with the 1933 Act and any applicable state securities laws.
(b) Exchanging Shareholder agrees that prior to making any
disposition of any Holding Common Stock or Holding Preferred Stock (other than a
3
disposition to Holding Company) Exchanging Shareholder will give written notice
to Holding company describing the manner of such proposed disposition.
Exchanging Shareholder further agrees not to effect such proposed disposition
until either (i) Holding Company has notified Exchanging Shareholder that, in
the opinion of Holding Company's counsel, no registration of such Holding Common
Stock or Holding Preferred Stock under the 1933 Act or registration or
qualification under the securities or Blue Sky laws of any state is required in
connection with such proposed disposition, or (ii) a registration statement
under the 1933 Act covering such proposed disposition has been filed by Holding
Company under the Act and has become effective and compliance with applicable
state securities or Blue Sky laws has been effected. Holding Company shall
respond as promptly as reasonably practicable to any notice of sale given
hereunder.
(c) Each certificate representing the shares of Holding Common
Stock and Holding Preferred Stock issued pursuant to this Agreement shall bear
legends in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES ACT OF ANY JURISDICTION. SUCH SECURITIES MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED PLEDGED OR HYPOTHECATED
EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR APPLICABLE STATE
SECURITIES LAW, OR (ii) ANY EXEMPTION FROM REGISTRATION UNDER SUCH
ACT OR APPLICABLE STATE SECURITIES LAW RELATING TO THE DISPOSITION
OF SECURITIES, INCLUDING RULE 144, PROVIDED AN OPINION OF COUNSEL IS
FURNISHED, REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO ROLLER
BEARING HOLDING COMPANY, INC. (THE "COMPANY") THAT AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND/OR APPLICABLE STATE
SECURITIES LAW IS AVAILABLE.
THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED WITHIN ONE
YEAR FROM THE DATE OF PURCHASE EXCEPT IN ACCORDANCE WITH THE
REQUIREMENTS OF SECTION 204.011 OF THE PENNSYLVANIA BLUE SKY
REGULATIONS.
(d) Pennsylvania law also requires the following legend to
appear in this Agreement.
EACH PENNSYLVANIA RESIDENT WHO ACCEPTS AN OFFER TO PURCHASE
THE SECURITIES HAS THE RIGHT TO CANCEL AND WITHDRAW HIS OR HER
ACCEPTANCE, WITHOUT INCURRING ANY
4
LIABILITY TO THE SELLER, UNDERWRITER (IF ANY) OR ANY OTHER PERSON,
WITHIN TWO BUSINESS DAYS FOLLOWING THE RECEIPT BY THE ISSUER OF HIS
OR HER WRITTEN BINDING CONTRACT OF PURCHASE, OR IN THE CASE OF A
TRANSACTION IN WHICH THERE IS NO BINDING CONTRACT OF PURCHASE WITHIN
TWO BUSINESS DAYS AFTER MAKING THE INITIAL PAYMENT FOR THE
SECURITIES BEING OFFERED.
ARTICLE 5
MISCELLANEOUS
5.1 Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the others shall be in writing and delivered
in person or by courier, or by facsimile transmission or by mail, postage
prepaid, as follows:
If to Holding Company, to:
Roller Bearing Holding Company, Inc.
1800 Century Park East, Suite 1000
Los Angeles, California 90067
Attention: Mr. Richard R. Crowell
Telecopy: (310) 277-5810
with a copy to:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attention: Terrance L. Carlson, Esq.
Telecopy: (213) 229-7520
If to Exchanging Shareholder, to:
Frederick Morlok
315 Society Place
Newtown, Pennsylvania 18940
Notices delivered in person shall be effective when so delivered.
Notices delivered by courier shall be effective three (3) business days after
delivery by the sender to an air courier of national reputation who guarantees
delivery within such three (3) business day period. Faxed notices shall be
effective when receipt is acknowledged telephonically by the addressee or its
agent or employee. Notices sent by mail shall be effective five (5) business
days after the sender's deposit of such notice in the United States mails, first
class postage prepaid.
5.2 Governing Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the internal laws of
the State of New York governing contracts executed and to be performed wholly
within such state, without regard to the principles of conflicts of laws.
5
5.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.4 Specific Performance. The parties will be irreparably damaged in
the event that this Agreement is not specifically enforced. In the event of a
breach or threatened breach of the terms, covenants and/or conditions of this
Agreement by any of the parties hereto, the other parties shall, in addition to
all other remedies, be entitled (without any bond or other security being
required) to a temporary and/or permanent injunction, without showing any actual
damage or that monetary damages would not provide an adequate remedy, and/or a
decree for specific performance, in accordance with the provisions hereof.
5.5 Severability. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
5.6 Additional Action. Each party hereto shall cooperate and shall
take such further action and shall execute and deliver such further documents as
may be reasonably requested by any other party in order to carry out the
provisions and purposes of this Agreement.
5.7 Headings. The headings of the Articles and Sections herein are
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
or have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
first above written.
ROLLER BEARING HOLDING COMPANY, INC.,
a Delaware corporation
By: /s/ M. J. Hartnett
------------------------------------
Its: President
EXCHANGING SHAREHOLDER
/s/ Frederick Morlok
- ----------------------------------------
Frederick Morlok
7
EXHIBIT A
Holding Common Shares: 2,500 shares of Holding Common Stock.
Holding Preferred Shares: 2,767.485 shares of Holding Redeemable Exchangeable
Cumulative Preferred Stock.
RBC Common Shares: 54.31648843 shares of RBC Class A Common Stock.
8
ROLLER BEARING HOLDING COMPANY, INC.
EXCHANGE AGREEMENT
by and between
ROLLER BEARING HOLDING COMPANY, INC.
and
HAROLD J. MACSATA
Dated: March 30, 1992
ROLLER BEARING HOLDING COMPANY, INC.
EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement") is entered into as of
March 30, 1992, by and among Roller Bearing Holding Company, Inc., a Delaware
corporation ("Holding Company") and Harold J. Macsata ("Exchanging
Shareholder").
ARTICLE 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"Holding Common Stock" means Holding Company's Class A Voting Common
Stock, par value $0.01.
"Holding Preferred Stock" means Holding Company's Redeemable
Exchangeable Cumulative Preferred Stock, par value $0.01.
"RBC Common Stock" means, collectively, the Class A Common Stock,
$0.01 par value, and the Class B Common Stock, $0.01 par value, of Roller
Bearing Company of America, Inc., a Delaware corporation ("RBC").
"Holding Common Shares" means the shares of Holding Common Stock
listed on Exhibit A.
"Holding Preferred Shares" means the shares of Holding Preferred
Stock listed on Exhibit A.
"RBC Common Shares" means the shares of RBC Common Stock listed on
Exhibit A.
ARTICLE 2
EXCHANGE OF STOCK
Holding Company shall issue and deliver to the Exchanging
Stockholder, concurrently with the execution and delivery of this Agreement, the
Holding Common Shares and the Holding Preferred Shares in exchange for the RBC
Common Shares, the certificates for which shall be delivered to Holding Company
by Exchanging Stockholder concurrently herewith.
ARTICLE 3
REPRESENTATIONS OF EXCHANGING SHAREHOLDER
Exchanging Shareholder hereby represents and warrants to Holding
Company that:
(a) This Agreement has been duly executed and delivered by
Exchanging Shareholder and, assuming the due execution and delivery hereof by
Holding Company, constitutes a valid and binding obligation of Exchanging
Shareholder, enforceable against Exchanging Shareholder in accordance with its
terms.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate, conflict
with or result in a default or breach under (i) any term or provision of any
contract, agreement, indebtedness, lease, commitment, license, franchise, permit
authorization or concession to which Exchanging Shareholder is a party, which
breach or default would have a material adverse effect on the ability of
Exchanging Shareholder to consummate the transactions contemplated hereby, or
(ii) any statute, law, rule, regulation, ordinance, code, order, judgment, writ,
injunction, decree or award, applicable to Exchanging Shareholder, which
violation would have a material adverse effect on the ability of Exchanging
Shareholder to consummate the transactions contemplated hereby.
(c) Exchanging Shareholder is acquiring the Holding Common
Shares and the Holding Preferred Shares for his own account and not as a nominee
or agent for any other person and with no intention of distributing or reselling
such securities or any part thereof in any transactions that would be in
violation of the securities laws of the United States of America or any state
thereof.
(d) Exchanging Shareholder has had an opportunity to ask
questions of and to receive answers from the officers of Holding Company and his
affiliates, or a person or persons acting on Holding Company's or its
affiliates' behalf, concerning the terms and conditions of this investment.
(e) Exchanging Shareholder has such knowledge and experience
in financial affairs that Exchanging Shareholder is capable of evaluating the
merits and risks of acquiring and holding the Holding Common Shares and the
Holding Preferred Shares.
(f) Exchanging Shareholder has not relied, in connection with
the decision to accept or to provide consideration for the Holding Common Shares
and the Holding Preferred Shares, upon the identity or advice of any other
person or upon any representations, warranties or agreements other than those in
this Agreement.
(g) Exchanging Shareholder's financial situation is such that
Exchanging Shareholder can afford to suffer the complete loss of the
consideration given in exchange for the Holding Common Shares and the Holding
Preferred Shares.
(h) Exchanging Shareholder's net worth or joint net worth with
Exchanging Shareholder's spouse, exceeds $1,000,000; or Exchanging Shareholder's
individual income was in excess of $200,000 in each of the two most recent years
or my joint income with Exchanging Shareholder's spouse was in excess of
2
$300,000 in each of the two most recent years, and Exchanging Shareholder
reasonably expects to reach the same income level in the current year.
(i) Exchanging Shareholder is an executive officer of Holding
Company.
(j) Exchanging Shareholder is an "accredited investor" within
the meaning of Rule 501 under the Securities Act of 1933, as amended (the "1933
Act"); has made his own investigation regarding a determination to purchase the
Holding Common Stock and the Holding Preferred Stock and has received all
information it considers necessary or appropriate for deciding whether to
purchase the Holding Common Stock and the Holding Preferred Stock; and, in
making its decision to so purchase, is not in any way relying on the fact that
any other person has decided to participate in the purchase.
(k) Exchanging Shareholder understands that there is no public
market for the Holding Common Stock or the Holding Preferred Stock, that the
Holding Common Stock and the Holding Preferred Stock have not been registered
under the 1933 Act or registered or qualified under any state securities ("Blue
Sky") laws, and that the Holding Common Stock and the Holding Preferred Stock
cannot be resold by Exchanging Shareholder unless registered and qualified under
the 1933 Act and all applicable Blue Sky laws or unless an exemption from
registration and qualification is available.
(l) No consent, approval or authorization of, or declaration,
filing or registration with, any United States federal, state or local
governmental or regulatory authority is required to be made or obtained by
Exchanging Shareholder in connection with the execution and delivery of this
Agreement by Exchanging Shareholder, the purchase of the Holding Common Stock or
the Holding Preferred Stock by Exchanging Shareholder, and the performance by
Exchanging Shareholder of the other specific obligations of Exchanging
Shareholder contained herein, other than any consents or approvals obtained by
Exchanging Shareholder prior to the Closing Date, polices and filings required
pursuant to the 1933 Act or Blue Sky laws, or any consents or approvals which,
if not obtained, would not have a material adverse effect on Holding Company or
the interest of Exchanging Shareholder in the Holding Common Stock or the
Holding Preferred Stock.
(m) Exchanging Shareholder represents that he is a resident of
the State of Pennsylvania.
ARTICLE 4
RESTRICTIONS ON TRANSFER
Exchanging Shareholder agrees as follows:
(a) Exchanging Shareholder agrees that he shall not sell,
assign, convey, hypothecate or in any other manner transfer any of the shares of
Holding Common Stock or shares of Holding Preferred Stock except in compliance
with the 1933 Act and any applicable state securities laws.
(B) Exchanging Shareholder agrees that prior to making any
disposition of any Holding Common Stock or Holding Preferred Stock (other than a
3
disposition to Holding Company) Exchanging Shareholder will give written notice
to Holding Company describing the manner of such proposed disposition.
Exchanging Shareholder further agrees not to effect such proposed disposition
until either (i) Holding Company has notified Exchanging Shareholder that, in
the opinion of Holding Company's counsel, no registration of such Holding Common
Stock or Holding Preferred Stock under the 1933 Act or registration or
qualification under the securities or Blue Sky laws of any state is required in
connection with such proposed disposition, or (ii) a registration statement
under the 1933 Act covering such proposed disposition has been filed by Holding
Company under the Act and has become effective and compliance with applicable
state securities or Blue Sky laws has been effected. Holding Company shall
respond as promptly as reasonably practicable to any notice of sale given
hereunder.
(c) Each certificate representing the shares of Holding Common
Stock and Holding Preferred Stock issued pursuant to this Agreement shall bear
legends in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES ACT OF ANY JURISDICTION. SUCH SECURITIES
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH
RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR
APPLICABLE STATE SECURITIES LAW, OR (ii) ANY EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAW
RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING RULE 144,
PROVIDED AN OPINION OF COUNSEL IS FURNISHED, REASONABLY SATISFACTORY
IN FORM AND SUBSTANCE TO ROLLER BEARING HOLDING COMPANY, INC. (THE
"COMPANY") THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND/OR APPLICABLE STATE SECURITIES LAW IS AVAILABLE.
THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED WITHIN ONE
YEAR FROM THE DATE OF PURCHASE EXCEPT IN ACCORDANCE WITH THE
REQUIREMENTS OF SECTION 204.011 OF THE PENNSYLVANIA BLUE SKY
REGULATIONS.
(d) Pennsylvania law also requires the following legend to
appear in this Agreement.
EACH PENNSYLVANIA RESIDENT WHO ACCEPTS AN OFFER TO PURCHASE
THE SECURITIES HAS THE RIGHT TO CANCEL AND WITHDRAW HIS OR HER
ACCEPTANCE, WITHOUT INCURRING ANY
4
LIABILITY TO THE SELLER, UNDERWRITER (IF ANY) OR ANY OTHER PERSON,
WITHIN TWO BUSINESS DAYS FOLLOWING THE RECEIPT BY THE ISSUER OF HIS
OR HER WRITTEN BINDING CONTRACT OF PURCHASE, OR IN THE CASE OF A
TRANSACTION IN WHICH THERE IS NO BINDING CONTRACT OF PURCHASE WITHIN
TWO BUSINESS DAYS AFTER MAKING THE INITIAL PAYMENT FOR THE
SECURITIES BEING OFFERED.
ARTICLE 5
MISCELLANEOUS
5.1 Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the others shall be in writing and delivered
in person or by courier, or by facsimile transmission or by mail, postage
prepaid, as follows:
If to Holding Company, to:
Roller Bearing Holding Company, Inc.
1800 Century Park East, Suite 1000
Los Angeles, California 90067
Attention: Mr. Richard R. Crowell
Telecopy: (310) 277-5810
with a copy to:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attention: Terrance L. Carlson, Esq.
Telecopy: (213) 229-7520
If to Exchanging Shareholder, to:
Harold J. Macsata
2820 West Fox Chase Circle
Doylestown, Pennsylvania 18901
Notices delivered in person shall be effective when so delivered.
Notices delivered by courier shall be effective three (3) business days after
delivery by the sender to an air courier of national reputation who guarantees
delivery within such three (3) business day period. Faxed notices shall be
effective when receipt is acknowledged telephonically by the addressee or its
agent or employee. Notices sent by mail shall be effective five (5) business
days after the sender's deposit of such notice in the United States mails, first
class postage prepaid.
5.2 Governing Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the internal laws of
the State
5
of New York governing contracts executed and to be performed wholly within such
state, without regard to the principles of conflicts of laws.
5.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.4 Specific Performance. The parties will be irreparably damaged in
the event that this Agreement is not specifically enforced. In the event of a
breach or threatened breach of the terms, covenants and/or conditions of this
Agreement by any of the parties hereto, the other parties shall, in addition to
all other remedies, be entitled (without any bond or other security being
required) to a temporary and/or permanent injunction, without showing any actual
damage or that monetary damages would not provide an adequate remedy, and/or a
decree for specific performance, in accordance with the provisions hereof.
5.5 Severability. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
5.6 Additional Action. Each party hereto shall cooperate and shall
take such further action and shall execute and deliver such further documents as
may be reasonably requested by any other party in order to carry out the
provisions and purposes of this Agreement.
5.7 Headings. The headings of the Articles and Sections herein are
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
or have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
first above written.
ROLLER BEARING HOLDING COMPANY, INC.,
a Delaware, corporation
By: /s/ M. J. Hartnett
------------------------------------
Its: President
EXCHANGING SHAREHOLDER
/s/ Harold J. Macsata
- ----------------------------------------
Harold J. Macsata
7
EXHIBIT A
Holding Common Shares: 2,500 shares of Holding Common Stock.
Holding Preferred Shares: 2,767.485 shares of Holding Redeemable Exchangeable
Cumulative Preferred Stock.
RBC Common Shares: 54.31648843 shares of RBC Class A Common Stock.
8
EXHIBIT E
[Letterhead of Gibson, Dunn & Crutcher]
March 31, 1992
Roller Bearing Company of America, Inc.
140 Terry Drive
Newtown, Pennsylvania 18940
Re: Agreement and Plan of Reorganization dated March 31,1992 among
Roller Bearing Company of America, Inc., Roller Bearing Holding
Company, Inc., Roller Bearing Acquisition Company, Inc., and the
stockholders of Roller Bearing Company of America Inc.
Ladies and Gentlemen:
We have acted as special counsel to Roller Bearing Holding Company,
Inc., a Delaware corporation ("Holding Company") and Roller Bearing Acquisition
Company, Inc., a Delaware corporation ("Acquisition Company") in connection
with (i) that certain Agreement and Plan of Reorganization dated the date hereof
(the "Agreement of Reorganization") among Roller Bearing Company of America,
Inc. ("RBC"), Holding Company, Acquisition Company, and the Stockholders (as
defined in the Agreement of Reorganization), (ii) the Agreement of Merger dated
the date hereof between Acquisition Company and RBC (the "Agreement of Merger")
and (iii) the Escrow Agreement among Holding Company, the Stockholders and the
Stockholders' Representative (as defined in the Escrow Agreement).
GIBSON, DUNN & CRUTCHER
March 31, 1992
Page 2
This letter is delivered to you pursuant to Section 5.3(i) of the
Agreement of Reorganization. Capitalized terms used in this letter shall have
the meanings ascribed to them in the Agreement of Reorganization unless
otherwise defined in this letter. Each of Holding Company and Acquisition
Company is referred to herein as a "Purchasing Transaction Party." The Agreement
of Reorganization, the Agreement of Merger, and the Escrow Agreement are
referred to herein collectively as the "Transaction Documents."
In rendering this opinion, we have made such inquiries and reviewed
such documents as we considered necessary. As to factual matters, we have, with
your consent, relied exclusively upon oral and written statements and
certificates of public officials and of stockholders, directors, officers and
other representatives of Holding Company, Acquisition Company, RBC, and
Industrial Tectonics Bearings Corporation, a Delaware corporation ("ITB"), and
we have made no effort to establish or verify the accuracy or completeness of
such factual matters.
In our capacity as special counsel to Holding Company and
Acquisition Company, we have reviewed the Transaction Documents and the
Certificate of Designations of the Redeemable Exchangeable Cumulative Preferred
Stock, par value $0.01, of Holding Company (the "Buyer's Preferred Stock").
Among other things, we have assumed with your permission that:
(a) the signatures on all documents examined by us are
genuine, all natural persons whose signatures appear on documents have the
legal capacity to sign such documents, all individuals (other than those
who have signed on behalf of a Purchasing Transaction Party) whose
signatures appear on such documents were duly authorized to execute such
documents on behalf of the party for whom they purport to have signed, the
documents submitted to us as originals are authentic, the documents
submitted to us as certified or reproduction copies conform to the
originals and the originals of such copies are authentic;
GIBSON, DUNN & CRUTCHER
March 31, 1992
Page 3
(b) each of RBC and each Stockholder (each, a "Selling
Transaction Party") has the power and authority to execute, deliver and
perform its respective obligations under each Transaction Document to
which such Selling Transaction Party is a party, the execution and
delivery of each such Transaction Document and performance of such
obligations have been duly authorized by all necessary action on the part
of each such Selling Transaction Party and each such Transaction Document
is the legal, valid and binding obligation of such Selling Transaction
Party, enforceable against such Selling Transaction Party in accordance
with its terms;
(c) no Selling Transaction Party or Purchasing Transaction
Party is party to any agreement or understanding that would expand, modify
or otherwise affect the terms of the Transaction Documents or the
respective rights or obligations of the parties thereunder, and the
Transaction Documents correctly and completely set forth the intent of all
parties thereto;
(d) each of RBC and ITB is a Delaware corporation, duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority to engage in
the transactions contemplated by the Transaction Documents;
(e) each Stockholder not a natural person is duly organized,
validly existing and in good standing under the laws of its jurisdiction
of incorporation or organization, as the case may be; and
(f) at the time any Selling Transaction Party seeks to enforce
its rights under the Transaction Documents, such Selling Transaction Party
will have taken all actions required to be taken by it in order to enforce
such rights.
Whenever a statement is made in this letter to be "to our knowledge"
a ("Statement of Knowledge"), such statement means that, during the course of
our representation of Holding Company and Acquisition Company (as described in
the first paragraph of this letter), and without undertaking any independent
investigation with respect thereto, no information has come to the attention of
the lawyers of this firm working on the transactions contemplated by the
Transaction Documents that would
GIBSON, DUNN & CRUTCHER
March 31, 1992
Page 4
give us actual knowledge of the existence or absence of facts contrary to the
Statement of Knowledge, and no inference should be drawn from any Statement of
Knowledge or from our representation of Holding Company or Acquisition Company,
(a) as to the existence or absence of facts contrary to such Statement of
Knowledge or (b) that we have undertaken any independent investigation to
determine the existence or absence of any facts contrary to such Statement of
Knowledge.
Based on the foregoing and in reliance thereon, and subject to the
assumptions, exceptions, qualifications and limitations set forth herein, we are
of the opinion that:
1. Each Purchasing Transaction Party is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.
2. Each Purchasing Transaction Party has the corporate power and
authority to execute and deliver the Transaction Documents and to consummate the
transactions contemplated thereby. Each Purchasing Transaction Party has taken
all necessary corporate action to authorize the execution and delivery of the
Transaction Documents and the performance by it of its obligations thereunder.
Each Transaction Document has been duly and validly executed and delivered by
each Purchasing Transaction Party that is a party to such document, and
constitutes the legal, valid and binding obligation of each such Purchasing
Transaction Party, enforceable against each such Purchasing Transaction Party in
accordance with its terms.
3. Except for matters that in the aggregate would not have a
material adverse effect on the ability of either Purchasing Transaction Party to
consummate the transactions contemplated by the Transaction Documents, neither
the execution, delivery and performance of the Transaction Documents by Holding
Company or Acquisition Company nor the consummation by Holding Company or
Acquisition Company of the transactions contemplated thereby, nor compliance by
Holding Company or Acquisition Company with any of the provisions thereof,
including the issuance by Holding Company of the Buyer's Preferred Stock
pursuant to the Merger, will (A) conflict with or violate the certificate of
incorporation or bylaws of either Purchasing Transaction Party, (B) violate any
law, statute,
GIBSON, DUNN & CRUTCHER
March 31, 1992
Page 5
rule or regulation binding on either Purchasing Transaction Party, or (C) to our
knowledge, violate, conflict with, result in a breach of or constitute (or with
notice or lapse of time or both constitute) a default (or give rise to any right
of termination, cancellation or acceleration) under any contract to which either
Purchasing Transaction Party is a party, or (D) to our knowledge, based solely
upon a review of any orders, writs, judgments or decrees identified to us by
officers of Holding Company and Acquisition Company as applicable to any of them
or binding or affecting any of their respective assets (the "Judicial Orders"),
violate any Judicial Orders.
4. The authorization, issuance, sale and delivery of the Buyer's
Preferred Stock to the holders of RBC Common Stock in the Merger in accordance
with Section 2.2(b)(iii) of the Agreement of Reorganization have been duly
authorized by all requisite corporate action of Holding Company and when issued
in the Merger (A) such shares of the Buyer's Preferred Stock will be validly
issued, fully-paid and nonassessable, (B) the terms, rights, privileges and
preferences of such shares of the Buyer's Preferred Stock are as set forth in
the Certificate of Incorporation of Holding Company filed with the Secretary of
State of the State of Delaware, as amended (the "Buyer's Certificate"), (C)
there are no preemptive rights to purchase or otherwise acquire any shares of
the Buyer's Preferred Stock pursuant to the Buyer's Certificate, By-laws or, to
our knowledge, any agreement to which Holding Company is a party, and (D) such
shares will be, to our knowledge, issued in compliance with the Securities Act
of 1933.
5. The authorized capital stock of Holding Company consists of the
following: (i) three hundred thousand (300,000) shares of Class A Voting Common
Stock, par value one cent ($0.01) per share; (ii) one hundred thousand (100,000)
shares of Class B Non-Voting Common Stock, par value one cent ($0.01) per share;
and (iii) two hundred thousand (200,000) shares of Redeemable Exchangeable
Cumulative Preferred Stock, par value one cent ($0.01) per share, of which
123,319.534 shares will be validly issued and outstanding as of the Effective
Time of the Merger.
The foregoing opinions are subject to the following exceptions,
qualifications and limitations:
A. We are not admitted to practice in the State of Delaware;
however, we are generally familiar with the General Corporation Law of the
GIBSON, DUNN & CRUTCHER
March 31, 1992
Page 6
State of Delaware as currently in effect. This opinion is limited to the effect
of the current state of the laws of the State of New York, the United States of
America, the General Corporation Law of the State of Delaware and the facts as
they currently exist. We assume no obligation to revise or supplement this
opinion in the event of future changes in such laws or the interpretations
thereof or such facts. We express no opinion as to the enforceability of any
choice of law, choice of forum or severability provision in any Transaction
Document. Our opinion in paragraph 3(B) is based upon our consideration of only
those New York, Delaware and United States statutes, rules and regulations that,
in our experience, are normally applicable to transactions of the type
contemplated by the Transaction Documents, and we express no opinion as to
whether the consummation of the transactions contemplated by the Transaction
Documents violate: (i) the federal Assignment of Contracts Act, 41 U.S.C. ss.15,
or the Assignment of Claims Act, 31 U.S.C. ss.3727, which generally prohibit the
transfer of federal government contracts without government consent; (ii) any
regulation implementing those two statutes; and (iii) contracts to which RBC or
ITB is a party and that are being transferred pursuant to any Transaction
Document implementing either of those two statutes.
B. Our opinion set forth in paragraph 2 is subject to (i) the effect
of any bankruptcy, insolvency, reorganization, moratorium, arrangement or
similar laws affecting the enforcement of creditors' rights (including, without
limitation, the effect of statutory or other laws regarding fraudulent transfers
or preferential transfers) and (ii) general principles of equity, regardless of
whether enforceability is considered in a proceeding in equity or at law.
C. Without limitation in respect of clause B(ii) above, we express
no opinion regarding or relating to (i) the ability to obtain specific
performance, injunctive relief or other equitable relief (whether sought in a
proceeding at law or in equity) as a remedy for noncompliance with any
Transaction Document, and the use of the term "enforceable" shall not imply any
opinion as to the availability of equitable remedies, (ii) the rights or
remedies available to any party for any violation or breach of any provision
that is immaterial or for any violation or breach of any provision the
enforcement of which a court determines would be unreasonable under the then
existing circumstances, (iii) the rights or remedies available to any
GIBSON, DUNN & CRUTCHER
March 31, 1992
Page 7
party for any material violation or breach that is the proximate result of any
action taken by any party other than the party against whom enforcement is
sought, which actions (A) such other party is not entitled to take pursuant to
the relevant agreement or instrument or applicable laws or (B) violate
applicable laws, (iv) the rights or remedies available to any party insofar as
such party may take discretionary action that is arbitrary, unreasonable or
capricious, or is not taken in good faith or in a commercially reasonable
manner, whether or not such action is permitted under the Transaction Documents,
and (v) the strict enforcement of certain covenants in contracts absent a
showing of damage to the other party.
D. We express no opinion with respect to the legality, validity,
binding nature or enforceability of any provision in any Transaction Document to
the effect that rights or remedies are not exclusive, that every right or remedy
is cumulative and may be exercised in addition to any other right or remedy,
that the election of some particular remedy does not preclude recourse to one or
more others or that failure to exercise or delay in exercising rights or
remedies will not operate as a waiver of any such right or remedy.
E. We express no opinion as to the legality, validity, binding
nature or enforceability of any provision in any Transaction Document (i) that
purports to indemnify a party against liability for its own wrongful or
negligent acts or to the extent such provisions may be held unenforceable as
contrary to public policy, or (ii) insofar as it provides for the payment or
reimbursement of costs and expenses or indemnification for claims, losses or
liabilities in excess of a reasonable amount determined by any court or other
tribunal. We express no opinion regarding RBC's or any Stockholder's ability to
collect attorneys' fees and costs in an action involving any Transaction
Document if RBC or such Stockholder, as the case may be, is not the prevailing
party in such action.
F. We express no opinion as to any provision in any Transaction
Document requiring written amendments or waivers of such documents insofar as it
suggests that oral or other modifications, amendments or waivers could not be
effectively agreed upon by the parties or that the doctrine of promissory
estoppel might not apply.
GIBSON, DUNN & CRUTCHER
March 31, 1992
Page 8
This opinion is rendered as of the date set forth above solely for
the benefit of RBC in connection with the Transaction Documents and is not to be
relied upon, used, circulated, referred to or quoted to any other party or for
any other purpose without our prior written consent, except that the
Stockholders, with the exception of the Stockholder identified on Annex I to the
Agreement of Reorganization as Overland Trust Bank, may rely hereon.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER
GIBSON, DUNN & CRUTCHER
TLC/GNN
EXECUTION COPY
- --------------------------------------------------------------------------------
DISCLOSURE SCHEDULES
TO THE
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF MARCH 31, 1992,
AMONG
ROLLER BEARING COMPANY OF AMERICA, INC.,
ROLLER BEARING ACQUISITION, INC.,
ROLLER BEARING HOLDING COMPANY, INC.
AND
THE STOCKHOLDERS OF ROLLER BEARING COMPANY OF AMERICA, INC.
- --------------------------------------------------------------------------------
All capitalized terms not defined herein shall have the meanings ascribed to
them in the Agreement and Plan of Reorganization.
TABLE OF CONTENTS
Page
----
Schedule 3.1(a) - Title to Shares ........................................... 1
Schedule 3.1(c) - Authority (Stockholders) .................................. 3
Schedule 3.2(b) - Authority (RBC) ........................................... 4
Schedule 3.2(c) - Capital Structure ......................................... 5
Schedule 3.2(e) - Financial Information ..................................... 6
Schedule 3.2(f) - Absence of Undisclosed Liabilities ........................ 7
Schedule 3.2(g) - Absence of Changes ........................................ 8
Schedule 3.2(h) - Title to Assets, Properties and Rights and
Related Matters ......................................... 12
Schedule 3.2(i) - Agreements ................................................ 14
Schedule 3.2(j) - Compliance; Governmental Authorization .................... 24
Schedule 3.2(k) - Litigation, Etc............................................ 25
Schedule 3.2(1) - Tax ....................................................... 27
Schedule 3.2(m) - ERISA ..................................................... 28
Schedule 3.2(n) - Environmental Reports ..................................... 29
Schedule 3.2(0) - Intellectual Property ..................................... 31
Schedule 3.2(p) - Labor Relations; Employees ................................ 33
Schedule 3.2(q) - Insurance ................................................. 34
Schedule 3.2(t) - Depositions, Powers of Attorney ........................... 37
Schedule 4.1(b) - Authority (Buyer) ......................................... 39
Schedule 4.1(e) - Balance Sheet of Buyer .................................... 40
Schedule 4.1(f) - Brokers' or Finders' Fees ................................. 41
-i-
Schedule 3.l(a) - Title to Shares
A. All shares of capital stock of Roller Bearing Company of America, Inc.
("RBC"), Industrial Tectonics Bearings Corporation, a wholly-owned
subsidiary of RBC ("ITB"), and RBC Fineblanking, Inc., a wholly-owned
subsidiary of RBC ("RBCF"), are currently pledged to Citicorp North
America, Inc. (formerly known as Citicorp Industrial Credit, Inc.)
("Citicorp") (the "Citicorp Pledge") pursuant to a Loan and Security
Agreement dated as of October 30, 1987, as amended (the "Citicorp Loan
Agreement" or "Citicorp Loan"), among RBC, ITB, RBCF and Citicorp, which
loan will be paid in full at Closing.
B. In addition to the Citicorp Pledge, all shares of capital stock of RBC
held by Gary Holmes have been pledged to (1) RBC (which pledge is
subordinated to the Citicorp Pledge) pursuant to a stock pledge agreement
between Mr. Holmes and RBC as security for a loan made by RBC to Mr.
Holmes and (2) Bitrix Associates C.V. (which pledge is subordinated to the
Citicorp Pledge and the pledge to RBC), pursuant to certain stock pledge
agreements between Gary Holmes and Bitrix Associates C.V. as security for
loans made by Bitrix Associates C.V. to Mr. Holmes, all of which loans
will be paid in full at Closing.
C. There are no voting agreements or understandings between any stockholders
of RBC, or, to the knowledge of RBC, between any of them and any other
person, with respect to the voting of any of the shares of capital stock
of RBC.
D. Item (B) on Schedule 3.2(c) is incorporated herein by reference in its
entirety.
E. All of the shares of Class A Common Stock and Series A Preferred Stock
held by Harold Macsata and Fred Morlok, in addition to the Citicorp
Pledge, are subject to (1) a right of first refusal in favor of Bitrix
Associates C.V. and Columbus Holdings Limited in the event such employees
are not employed by RBC at any time after October 30, 1992, (2) a purchase
option or obligation, as the case may be, in favor of Bitrix Associates
C.V. and Columbus Holdings Limited in the event such employees are
terminated voluntarily or for cause prior to October 30, 1992, as the case
may be, (3) a "bring-along right" in favor of Bitrix Associates C.V. and
Columbus Holdings Limited in the event that they propose to transfer a
majority of the shares of RBC then held by them to any person and (4)
certain other transfer restrictions in favor of Bitrix Associates C.V. and
Columbus Holdings Limited, all as delineated in the Stock
Purchase Agreements dated as of November 30, 1991, and January 31, 1992, as
amended, between each of Mr. Macsata and Mr. Morlok, respectively, and RBC,
Bitrix Associates C.V. and Columbus Holdings Limited.
-2-
Schedule 3.1(c) - Authority (Stockholders)
A. Items (A), (B) and (D) on Schedule 3.1(a) are incorporated herein by
reference in their entirety.
-3-
Schedule 3.2(b) - Authority (RBC)
A. The transaction would constitute a default under the Citicorp Loan
Agreement and the related Citicorp Pledge; however, the Citicorp Loan will
be will be paid in full at Closing.
B. The transaction will require a filing pursuant to the New Jersey
Environmental Cleanup and Responsibility Act with, and the approval of or
negative declaration from, the New Jersey Department of Environmental
Protection prior to Closing.
C. Consents to the transaction may be required pursuant to the following
leases and contracts:
1. Consents may be required to transfer the U.S. Government contracts
of RBC and ITB pursuant to the Anti-Assignment Act, 41 U.S.C. ss.15
and 48 C.F.R. 42.1204.
2. Lease dated as of March 27, 1991, between Walnut Realty, Ltd. and
RBC with respect to an office and warehouse located at 2974
Congressman Lane, Dallas, Texas.
3. Lease Agreement dated August 31, 1997, between RBC and U.S. Fleet
Leasing, Inc. for the lease of certain automobiles.
4. Master Lease Agreement dated April 29, 1990, between Sun Financial
Group, Inc. and RBC for certain computer software equipment.
5. Lease Agreement dated October 9, 1990, between MDC Newtown
Partnership and RBC with respect to 13,700 square feet at 140 Terry
Drive, Newtown, Pennsylvania (only prior notice required).
D. The transaction would constitute a default under the Loan Agreement dated
as of August 14, 1989 (the "Subordinated Loan Agreement"), among RBC,
Bitrix Associates C.V., and Overland Trust Bank; however, all amounts
outstanding under the Subordinated Loan Agreement will be paid in full at
the Closing.
-4-
Schedule 3.2(c) - Capital Structure
A. Each of the items on Schedule 3.1(a) are incorporated herein by reference
in their entirety.
B. Mike Hartnett ("Hartnett") holds options to purchase an aggregate of
61.237 shares of REC's Class A Common Stock, $.0l par value (the "Class A
Common Stock"), as follows:
(a) Options to purchase an aggregate of 41.237 shares of Class A Common
Stock from RBC for an aggregate purchase price of $310,000
($7,517.52 per share); and
(b) Options to purchase 15 shares of RBC Class B Common Stock, $.01 par
value (the "Class B Common Stock"), from Bitrix Associates C.V., and
5 shares of RBC Class B Common Stock from Columbus Holdings Limited,
in each case for $2,500 per share, which Hartnett must then
immediately sell to RBC in exchange for 20 shares of Class A Common
Stock (this option is available only after August 15, 1992, and only
if the options described in the preceding clause (a) are exercised
in full).
C. Bitrix Associates C.V. and Overland Trust Bank ("OTB") hold warrants (the
"Warrants") to purchase 35.38 and 72.05 shares of Class A Common Stock,
respectively, at an exercise price of $.0l per share, pursuant to the
Subordinated Loan Agreement dated August 14, 1989, among RBC, Bitrix
Associates C.V. and OTB. In the event of a merger or consolidation of RBC
with another entity, the right to purchase each share of Class A Common
Stock pursuant to the Warrants will be automatically converted into the
right to receive the securities or property issuable or distributable in
respect of one share of Class A Common Stock of RBC, or its successors,
upon such merger or consolidation.
-5-
Schedule 3.2(e) - Financial Information
A. See attached consolidated balance sheet of RBC as at November 2, 1991, and
the related statements of operations and accumulated deficit and of cash
flows for the 52-week period then ended, audited by Deloitte & Touche,
independent certified public accountants.
B. See attached consolidated balance sheet of RBC as at November 3, 1990 and
October 26, 1989 and the related consolidated statements of operations and
accumulated deficit for the 53-week and 52-week, respectively, periods
then ended, audited by Goldstein Golub Kessler & Company, P.C.,
independent certified public accountants.
-6-
ROLLER BEARING COMPANY OF AMERICA, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
(with supplementary Information)
NOVEMBER 3, 1990
[LOGO]
GOLDSTEIN
GOLUB
KESSLER
& COMPANY PC
CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF GMN INTERNATIONAL
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOVEMBER 3, 1990
CONTENTS
Page
----
Independent Auditor's Report 1
Consolidated Financial Statement:
Balance Sheet 2
Statement of Operations and Accumulated Deficit 3
Statement of Cash Flows 4
Notes to Consolidated Financial Statements 5 - 16
Supplementary Information:
Independent Auditor's Report on Consolidated
Supplementary Information 17
Consolidated Statement of Operations Using the
First-In, First-Out Method of Inventory Valuation 18
Consolidated Cost of Goods Sold 19
Consolidated Packing, Shipping and Selling Expenses 20
Consolidated General and Administrative Expenses 20
Consolidating Balance Sheet 21 - 22
Consolidating Statement of Operations and Retained
Earnings (Accumulated Deficit) 23
Consolidating Cost of Goods Sold 24
Consolidating Packing, Shipping and Selling Expenses 25
Consolidating General and Administrative Expenses 25
[Letterhead of GOLDSTEIN
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Roller Bearing Company of America, Inc.
We have audited the accompanying consolidated balance sheets of Roller Bearing
Company of America, Inc. and Subsidiaries as of November 3, 1990 and October 28,
1989, and the related consolidated statements of operations and accumulated
deficit and cash flows for the fifty-three and fifty-two-week periods then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Roller Bearing
Company of America, Inc. and Subsidiaries as of November 3, 1990 and October 28,
1989, and the results of their operations and their cash flows for the
fifty-three and fifty-two-week periods then ended in conformity with generally
accepted accounting principles.
/s/ GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
December 21, 1990,
except for Note 11, as to
which the date is May 3, 1991
ROLLER BEARING COMPANY OF AMERICA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
November 3, October 28,
1990 1989
------------ ------------
ASSETS (Note 5)
Current Assets:
Cash (Note 1) $ 105,000
Accounts receivable, less allowance for doubtful
accounts of $41,000 and $31,000, respectively 7,987,000 $ 5,320,000
Inventories (Notes 2 and 3) 12,389,000 8,417,000
Prepaid Expenses and other current assets (Note 11) 1,133,000 104,000
------------ ------------
Total current assets 21,614,000 13,841,000
Property, Plant and Equipment, less accumulated
depreciation of $4,020,000 and $2,214,000,
respectively (Notes 2 and 4) 19,190,000 10,576,000
Other Assets (Note 11) 787,000 484,000
------------ ------------
Total Assets $ 41,591,000 $ 24,901,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 5,294,000 $ 3,781,000
Loan payable (Note 5) 10,982,000 8,192,000
Current portion of long-term debt (Note 5) 2,271,000 679,000
Accrued expenses and other current liabilities 1,698,000 1,178,000
Due to seller (Notes 1 and 5) 562,000
Obligation for postretirement benefits,
current portion (Note 9) 27,000 23,000
------------ ------------
Total current liabilities 20,834,000 13,853,000
Long-term Debt, net of current portion (Note 5) 12,955,000 3,979,000
Subordinated Long-term Debt (Note 6) 4,929,000 3,934,000
Obligation for Postretirement Benefits, net of current portion (Note 9) 1,311,000 1,338,000
Deferred Income Taxes Payable (Note 12) 246,000 246,000
------------ ------------
Total liabilities 40,275,000 23,350,000
------------ ------------
Commitments and Contingency (Notes 5, 7, 8, 10 and 13)
Stockholders' Equity (Note 6):
Series A, nonvoting preferred stock - par value $.01; authorized 4,000
shares, issued and outstanding 945 shares with a redemption value of
$472,500 (Note 10) 10 10
Class A, voting common stock - par value $.01;
authorized 3,000 shares, issued and outstanding
1,835 shares 18 18
Class B, nonvoting Common stock - par value $.01;
authorized 3,000 shares, issued and outstanding
220 shares 2 2
Additional paid-in capital, including $90,000 and
$70,000 attributable to warrants, respectively 1,589,970 1,569,970
Accumulated deficit (274,000) (19,000)
------------ ------------
Stockholders' equity 1,316,000 1,551,000
------------ ------------
Total Liabilities and Stockholders' Equity $ 41,591,000 $ 24,901,000
============ ============
See Notes to Consolidated Financial Statements
- 2 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
For the For the
Fifty-three- Fifty-two
Week Period Week Period
Ended Ended
November 3, October 28,
1990 1989
------------ ------------
Net sales $ 43,031,000 $ 37,160,000
Cost of goods sold 32,274,000 25,416,000
------------ ------------
Gross profit 10,757,000 11,744,000
------------ ------------
Operating expenses:
Packing, shipping and selling 2,391,000 2,293,000
General and administrative 5,620,000 4,925,000
Management fee (Note 11) 271,000 150,000
------------ ------------
8,282,000 7,368,000
------------ ------------
Income from operations 2,475,000 4,376,000
------------ ------------
Interest expense, net of interest
income of $59,000 in 1990 (Note 11) 2,643,000 2,264,000
------------ ------------
Income (loss) before provision for income
taxes and extraordinary item (168,000) 2,112,000
Provision for income taxes (Note 12) 87,000 854,000
------------ ------------
Income (loss) before extraordinary item (255,000) 1,258,000
Extraordinary item - income tax benefits
arising from utilization of net
operating loss carryforwards 265,000
------------ ------------
Net income (loss) (255,000) 1,523,000
Accumulated deficit at beginning
of period (19,000) (1,542,000)
------------ ------------
Accumulated deficit at end of period $ (274,000) $ (19,000)
============ ============
See Notes to Consolidated Financial Statements
- 3 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the For the
Fifty-three- Fifty-two
Week Period Week Period
Ended Ended
November 3, October 28,
1990 1989
------------ -----------
Cash flows from operating activities:
Net income (loss) $ (255,000) $ 1,523,000
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation 1,806,000 1,217,000
Gain on sale of property and equipment (38,000)
Amortization of subordinated debt discount 15,000 4,000
Provision for losses on accounts receivable 10,000
Provision for deferred income taxes 246,000
Changes in operating assets and liabilities
net of acquisition:
Increase in accounts receivable (1,341,000) (744,000)
Increase in inventories (808,000) (1,488,000)
Increase in prepaid expenses and other
current assets (1,029,000) (8,000)
Increase in other assets (303,000) (484,000)
Increase in accounts payable 818,000 1,362,000
Increase (decrease) in accrued expenses and
other current liabilities (280,000) 399,000
------------ -----------
Net cash provided by (used in)
operating activities (1,367,000) 1,989,000
------------ -----------
Cash flows from investing activities:
Purchases of property and equipment (3,164,000) (3,198,000)
Acquisition of business (5,599,000)
------------ -----------
Cash used in investing activities (8,763,000) (3,198,000)
------------ -----------
Cash flows from financing activities:
Net proceeds of loan payable 2,790,000 519,000
Proceeds from issuance of subordinated
long-term debt 1,000,000 4,200,000
Retirement of subordinated long-term debt (1,740,000)
Proceeds from long-term debt 7,545,000 1,277,000
Principal payments on obligation for
postretirement benefits (23,000) (21,000)
Principal payments of long-term debt (1,077,000) (3,026,000)
------------ -----------
Net cash provided by financing activities 10,235,000 1,209,000
------------ -----------
Net increase in cash and cash at end of period $ 105,000 $ -0-
============ ===========
See Notes to Consolidated Financial Statements
- 4 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 1 - Acquisitions:
On June 29, 1990, ITI Acquisition, Inc. (the "Purchaser"), a newly formed
and inactive corporation whose name has been changed to Industrial Tectonics
Bearings Corporation ("ITB") and a wholly owned subsidiary of Roller Bearing
Company of America, Inc. ("RBC"), entered into an asset purchase agreement (the
"Agreement") to acquire certain assets and assume certain liabilities of the
Bearing Division of Industrial Tectonics, Inc. (the "Seller"). The cost of the
acquisition under the Agreement amounted to approximately $10,361,000 (including
$100,000 held in escrow to cover ITB's liability for environmental matters, as
defined in the Agreement) plus approximately $800,000 of acquisition costs. The
transaction has been accounted for as a purchase using the acquisition date of
July 16, 1990 (date of closing). The excess of the purchase price over the book
value of net assets acquired amounted to approximately $1,023,000, which amount
has been allocated to property, plant and equipment.
This transaction was financed with a $5,000,000 term loan from a bank and
a $4,100,000 promissory note to the Seller (see Note 5).
On October 27, 1989, RBC Fineblanking, Inc. ("RBCF"), a newly formed
Connecticut corporation (incorporated on October 25, 1989), acquired certain
property and equipment of Mitral Corporation. The cost of the acquired assets
amounted to approximately $675,000. The transaction was accounted for as a
purchase.
The consolidated statement of operations and accumulated deficit includes
the operating results of RBCF for the fifty-three-week period ended November 3,
1990 and of ITB from the date of closing.
Note 2 - Principal Business Activity and Significant Accounting Policies:
Principles of Consolidation:
The accompanying consolidated financial statements include the accounts of
RBC and its wholly owned subsidiaries ITB and RBCF (collectively referred to as
the "Company"). All material intercompany accounts and transactions have been
eliminated in consolidation.
- 5 -
ROLLER BEARING COMPANY OF AMERICA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 2 - Principal Business Activity and Significant Accounting Policies
(continued):
Principal Business Activity:
The Company is engaged in the manufacture and sale of roller bearing
components and assembled parts, and in the design, manufacture and sale of
high-precision roller and ball bearings.
Fiscal Year:
The Company reports its operations based on a fifty-two or
fifty-three-week period ending on the Saturday closest to October 31.
Inventories:
Inventories are stated at the lower of cost, determined by the last-in,
first-out ("LIFO") method, or market. (See Note 3 for the effect on the
financial statements.)
Revenue Recognition:
Sales are recorded when products are shipped. For sales under fixed-price
contracts a provision for anticipated losses is made in the period in which they
first become determinable.
Depreciation:
Depreciation of property, plant and equipment is being provided for by the
straight-line method over the estimated useful lives of the respective assets.
Income Taxes:
The Company files a consolidated federal income tax return.
Deferred income taxes represent the tax effect of timing differences for
financial reporting and income tax purposes. The principal timing differences
relate to the use of accelerated depreciation methods in connection with the
preparation of the Company's income tax returns and depreciation provided for in
accordance with the Company's depreciation policy for financial statement
purposes (see Note 12).
- 6 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 3 - Inventories:
The components of inventories on a first-in, first-out basis ("FIFO") are
as follows:
November 3, October 28,
1990 1989
----------- ----------
Raw materials $ 1,786,000 $1,780,000
Work-in-process 5,628,000 1,548,000
Finished goods 8,128,000 5,966,000
----------- ----------
15,542,000 9,294,000
Less adjustment to reduce
inventories to LIFO 2,178,000 877,000
----------- ----------
13,364,000 8,417,000
Less progress billings 975,000
----------- ----------
$12,389,000 $8,417,000
=========== ==========
For inventory which will eventually be resold to the United States
government, on which the Company has received progress payments, the United
States has a security interest in certain assets, as defined in each purchase
order, relating to this inventory.
The Company uses the LIFO method of determining the cost of its
inventories. The Company believes the LIFO method will reduce the effect of
future inflationary cost increases in inventories and thus match current costs
with current revenue.
If inventories were valued using the FIFO method, inventories would have
been $2,178,000 and $877,000 higher at November 3, 1990 and October 28, 1989,
respectively, and net income would have been $989,000 and $71,000 higher for the
periods then ended, respectively.
At November 3, 1990 and October 28, 1989, the accounting basis of LIFO
inventories was higher than the tax basis by approximately $862,000 and
$560,000, respectively, as a result of applying the provisions of Accounting
Principles Board Opinion No. 16.
- 7 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 4 - Property, Plant and Equipment:
Property, plant and equipment, which is stated at cost, consists of the
following:
November 3, October 26, Depreciation
1990 1989 Period
----------- ----------- ------------
Land $ 2,772,000 $ 408,000
Building and
improvements 4,268,000 1,987,000 30 years
Machinery and
equipment 15,741,000 10,080,000 7 years
Computer and office
equipment 429,000 315,000 7 years
----------- -----------
$23,210,000 $12,790,000
=========== ===========
Machinery and equipment includes assets acquired under capital leases in
the aggregate amount of $1,201,000 net of accumulated depreciation of $191,000
at November 3, 1990.
Note 5 - Loan Payable and Long-term Debt:
The Company has a credit facility agreement, which was amended on July 16,
1990, which provides for borrowings under term loans, capital expenditure
advances and a revolving credit agreement, not to exceed $24,000,000 with
interest on all borrowings calculated at 1-1/2% - 2-1/2% per annum above the
lender's base rate. Under the revolving credit agreement, the Company borrowed
$10,982,000 and $8,192,000 at November 3, 1990 and October 28, 1989,
respectively, which is reflected as loan payable on the accompanying
consolidated balance sheet.
- 8 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 5 - Loans Payable and Long-term Debt (continued):
Long-term debt consists of the following:
November 3, October 28,
1990 1989
----------- ----------
Term loan (i) $ 2,721,000 $3,435,000
Term loan (ii) 4,923,000
Capital expenditure advances (iii) 2,341,000 506,000
Obligations under capital leases (iv) 999,000 690,000
Note payable - seller (v) 4,100,000
Due to related party (see Note 11) 242,000
Other 27,000
----------- ----------
15,226,000 4,658,000
Less current portion 2,271,000 679,000
----------- ----------
$12,955,000 $3,979,000
=========== ==========
(i) This term loan is payable in quarterly installments of $195,000, and
commencing January 31, 1992, $320,000, with a final payment due in October 1992
of $1,020,000. This loan bears interest at 1-1/2% above the bank's base rate.
(ii) This term loan is payable in quarterly installments of $177,500 with
a final payment due in October 1992 of $3,580,000. This loan bears interest at
2-1/2% above the bank's base rate.
(iii) The amended credit facility provides for capital expenditure
advances not to exceed $3,400,000. The agreement provides that the aggregate
principal amount advanced through April 30, 1991 will be payable in 23 monthly
installments, as defined, with a final installment for the remaining principal
balance due on October 31, 1992. This loan bears interest at 1-1/2% above the
bank's base rate.
(iv) The Company has acquired certain equipment under leases which have
been accounted for as capital leases. These items are included in property,
plant and equipment in the accompanying balance sheet. The minimum lease
payments have been capitalized using interest rates ranging from 12-1/2% to
15-1/2%. The balance is shown net of deferred interest of $274,000 and $163,000,
respectively.
(v) The note payable - seller is payable on July 16, 1995, with interest
payable semiannually commencing January 16, 1991. This subordinated loan bears
interest at the rate of 6% per annum for the period from July 16, 1990 to July
15, 1991, 9% per annum for the period from July 16, 1991 to July 15, 1992 and
12% per annum thereafter.
- 9 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 5 - Loans Payable and Long-term Debt (continued):
Aggregate maturities of long-term debt are as follows:
Fiscal year ending in
1991 $ 2,271,000
1992 8,313,000
1993 251,000
1994 268,000
1995 4,123,000
-----------
$15,226,000
===========
Borrowings under the credit facility are collateralized by substantially
all of the assets and the capital stock of the Company.
The credit facility, as amended, contains covenants that require
maintenance of certain amounts of working capital, tangible net worth and
earnings. It also restricts capital expenditures and requires maintenance of
certain ratios.
In addition, the Company is required to pay a contingency fee to the
lender. The fee is 1/2% of net sales for each year through 1990 in which net
sales do not exceed $30,000,000 and gross profit, adjusted for certain
depreciation and fringe benefits, does not exceed $11,700,000. At November 3,
1990 and October 28, 1989, no fee was recorded as the Company exceeded the above
requirements.
Interest paid amounted to approximately $2,600,000 and $2,343,000 for the
periods ended November 3, 1990 and October 28, 1989, respectively.
Note 6 - Subordinated Long-term Debt:
On August 14, 1989, the Company borrowed $4,000,000 through the issuance
of subordinated long-term debt from two entities, one of which is a related
party. On July 16, 1990, the Company borrowed an additional $1,000,000 from
these entities under the same terms. This debt bears interest at the rate of 14%
per annum. Interest is payable semiannually, with the principal payable on
August 14, 1994. At November 3, 1990, $1,645,000 was owed to the related party.
For the fifty-three-week period ended November 3, 1990, interest on the loan
from the related party amounted to approximately $199,000.
- 10 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 6 -.Subordinated Long-term Debt (continued):
The Company issued common stock purchase warrants in connection with the
subordinated long-term debt. The warrants entitle the holders to purchase, in
the aggregate, 107.2 shares of Class A common stock at an exercise price of $.01
per share. Such shares have been reserved for issuance. The warrants expire on
August 14, 1994 and contain antidilutive provisions. As of November 3, 1990,
these warrants have not been exercised.
Note 7 - Commitments:
The Company leases factory facilities under a noncancelable operating
lease, which expires in October 1991, for $250,000 per annum. The lease is
renewable thereafter, at the option of the Company, for up to two successive
one-year terms at a maximum rental of $250,000 per annum. The Company is
responsible for the payment of real estate taxes and certain operating costs in
connection with this lease.
The Company entered into a noncancelable operating lease on November 1,
1990 for office facilities, which expires in October 1995, for approximately
$175,000 per annum. The lease is renewable thereafter, at the option of the
Company, for an additional five-year term. The lease is subject to escalation
based upon increases in the Consumer Price Index.
The Company also has noncancelable operating leases for warehouse
facilities, transportation equipment and computer and office equipment, which
expire at various dates through October 30, 1993.
The aggregate future minimum rental commitments under these leases are as
follows:
Fiscal year ending in
1991 $ 619,000
1992 258,000
1993 198,000
1994 175,000
1995 175,000
----------
$1,425,000
==========
- 11 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 7 - Commitments (continued):
Rent expense charged to operations amounted to approximately $641,000 and
$543,000 for the periods ended November 3, 1990 and October 28, 1989,
respectively.
Note 8 - Pension Plans:
In 1987, the Company assumed two noncontributory defined benefit pension
plans covering union employees in its West Trenton, New Jersey, division ("Union
Plan") and all employees in its Hartsville, South Carolina, division
("Hartsville Plan"). During the period ended October 28, 1989, the Company
authorized the termination and the distribution of all the assets of the
Hartsville Plan. The termination amount was approximately $70,000 and is
recorded in the accompanying consolidated statement of operations and
accumulated deficit. The Company was obligated to make termination payments to
the plan and participants may be eligible for continuation of benefits under
insurance provided by the Pension Benefit Guaranty Corporation (a U.S.
government agency).
The Company annually contributed to the Union Plan an amount that is
actuarially determined to provide the plan with sufficient assets to meet future
benefit payment requirements. Plan assets are comprised primarily of U.S.
government securities and corporate bonds. The plan provides benefits of stated
amounts based on an employee's years of service.
Pension expense for this plan is comprised of the following:
For the Period Ended
November 3, October 28,
1990 1989
--------- ---------
Service cost benefits earned
during the period $ 78,000 $ 82,000
Interest cost 309,000 317,000
Actual return on plan assets (342,000) (364,000)
Net amortization and deferrals (6,000) (9,000)
--------- ---------
Total pension expense $ 39,000 $ 26,000
========= =========
- 12 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 8 - Pension Plans (continued):
The funded status of the Union Plan is as follows:
November 3, October 28,
1990 1989
----------- -----------
Plan assets $ 3,968,000 $ 3,993,000
Actuarial present value of projected
benefit obligation 4,191,000 4,001,000
----------- -----------
Plan assets less than projected
benefit obligation (223,000) (8,000)
Unrecognized net loss 38,000 35,000
Unrecognized prior service cost 325,000 228,000
Unrecognized net asset at transition -
amortized over a minimum of 15 years (230,000) (249,000)
----------- -----------
Prepaid (accrued) pension expense $ (90,000) $ 6,000
=========== ===========
The assumptions used in determining pension expense and funded status
information were as follows:
Discount rate 8%
Expected long-term rate of
return on assets 9%
Certain officers of the Company are the trustees of the plans.
Additionally, the Company has established salary reduction plans under
Section 401(k) of the Internal Revenue Code for all of its employees not covered
by a collective bargaining agreement. The plans are funded by participants
through employee contributions and by Company contributions equal to a
percentage of eligible employees' compensation. The Company contributions
charged to operations amounted to approximately $235,000 and $181,000 for the
periods ended November 3, 1990 and October 28, 1989, respectively.
Note 9 - Postretirement Health Care and Life Insurance Benefits:
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits for substantially all former employees
who retired after attaining specified age and service requirements. At October
30, 1987, the
- 13 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 9 - Postretirement Health Care and Life Insurance Benefits (continued):
Company recorded the actuarially computed present value of the future benefits
payable to present retirees, which was estimated at June 30, 1987 (the latest
valuation date) to be $1,400,000. Accrued costs are funded annually and were
$23,000 and $21,000 for the periods ended November, 3, 1990 and October 28,
1989, respectively. Any liability for future retirees cannot presently be
determined.
Note 10 - Series A Preferred Stock:
There are 4,000 shares of $.01 par value Series A preferred stock
authorized, with 945 shares issued for $500 per share. These shares have no
voting privileges and, with respect to dividends, are cumulative at the rate of
$67.50 per share per annum. No dividends were paid during the periods ended
November 3, 1990 and October 28, 1989. Dividends in the amount of $191,363 are
in arrears at November 3, 1990. In the event of liquidation, the holders of each
share of Series A preferred stock shall be entitled to receive $500 per share,
plus any unpaid dividends. Additionally, the Company may, at any time, redeem
the whole or any part of the preferred stock in the amount of $500 per share
together with any unpaid dividends on such shares subject to restrictions
contained in the credit facility agreement.
Note 11 - Related Party Transactions:
In connection with the acquisition of ITB described in Note 1, the Company
paid approximately $160,000 of acquisition costs to certain stockholders and a
company affiliated with certain other stockholders.
Additionally, the Company entered into an arrangement whereby a company
affiliated with certain stockholders will provide management services to the
Company for a fee of $325,000 per annum. At November 3, 1990, $242,000 is owed
to this affiliated company, which amount is payable on November 1, 1991.
Accordingly, this amount is included in long-term debt (see Note 5).
Prepaid expenses and other current assets and other assets include
approximately $300,000 and $572,000, respectively, including accrued interest of
$59,000 due from an officer/
- 14 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 11 - Related Party Transactions (continued):
stockholder of the Company. Repayment terms are $50,000 per annum with a final
payment of principal and accrued interest on December 26, 1994. Interest is
calculated at a bank's prime rate, and is payable annually. For the period ended
November 3, 1990, the Company recorded interest income of approximately $59,000.
During April and May 1991, the officer/stockholder repaid the accrued interest
and a portion of the principal due.
Note 12 - Provision for Income Taxes:
The provision for income taxes consists of the following:
For the Period Ended
---------------------------
November 3, October 28,
1990 1989
----------- -----------
Federal:
Current - alternative
minimum tax $ 87,000 $272,000
Deferred 246,000
Charge in lieu of
income taxes 200,000
-------- --------
87,000 718,000
State 136,000
-------- --------
$ 87,000 $854,000
======== ========
The Tax Reform Act of 1986 enacted an alternative minimum tax system for
corporations, generally effective for taxable years beginning after December 31,
1986. The alternative minimum tax is imposed at a 20% rate on the corporation's
alternative minimum taxable income, which is determined by making statutory
adjustments to the corporation's regular taxable income. For the periods ended
November 3, 1990 and October 28, 1989, $87,000 and $272,000, respectively, of
income taxes currently payable are calculated pursuant to the alternative
minimum tax. This amount will be carried forward and allowed as a credit against
regular income tax in the event the regular income tax exceeds the alternative
minimum tax in future years.
For financial reporting purposes for the period ended October 28, 1989,
the income tax benefits attributable to the utilization of net operating losses
has been reflected as an extraordinary item.
- 15 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 3, 1990
Note 12 - Provision for Income Taxes (continued):
The Company paid income taxes in the amount of $186,000 and $512,300
during the periods ended November 3, 1990 and October 28, 1989, respectively.
At November 3, 1990, the Company has approximately $1,250,000 of net
operating loss carryforwards available for regular income tax purposes to offset
future taxable income through 2005.
Note 13 - Litigation:
The Company is a defendant in litigation incidental to its operations.
Based on the opinion of management, resolution of this litigation will not have
a material impact on the financial position of the Company.
- 16 -
[LOGO]
INDEPENDENT AUDITOR'S REPORT ON
CONSOLIDATED SUPPLEMENTARY INFORMATION
To the Board of Directors
Roller Bearing Company of America, Inc.
We have audited the basic consolidated financial statements of Roller Bearing
Company of America, Inc. and Subsidiaries for the fifty-three and fifty-two-week
periods ended November 3, 1990 and October 28, 1989, respectively, and those
statements, together with our opinion thereon, are presented in the preceding
section of this report. Our audits were made primarily for the purpose of
formulating an opinion on those financial statements. The consolidated
supplementary information, as listed in the table of contents, is the
responsibility of management and, although not considered necessary for a fair
presentation of financial position, results of operations and cash flows, is
presented for additional analysis and has been subjected to the auditing
procedures applied in the audits of the basic financial statements. In our
opinion, the consolidated supplementary information is fairly stated, in all
material respects, in relation to the basic consolidated financial statements
taken as a whole.
/s/ GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
December 21, 1990,
except for Note 11, as to
which the date is May 3, 1991
ROLLER BEARING COMPANY OF AMERICA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS USING THE
FIRST-IN, FIRST-OUT METHOD OF INVENTORY VALUATION
For the For the
Fifty-three- Fifty-two-
Week Period Week Period
Ended Ended
November 3, October 28,
1990(1) 1989
----------- -----------
Net sales $43,031,000 $37,160,000
Cost of goods sold 30,973,000 25,313,000
----------- -----------
Gross profit 12,058,000 11,847,000
Operating expenses:
Packing, shipping and selling 2,391,000 2,293,000
General and administrative 5,620,000 4,925,000
Management fee 271,000 150,000
----------- -----------
8,282,000 7,368,000
----------- -----------
Income from operations 3,776,000 4,479,000
----------- -----------
Interest expense, net of interest
income of $59,000 2,643,000 2,264,000
----------- -----------
Income before provision for income
taxes $ 1,133,000 $ 2,215,000
=========== ===========
(1) Includes the operating results of RBCF for the fifty-three weeks ended
November 3, 1990 and the operating results of ITB for the period from July 16,
1990 to November 3, 1990.
See Notes to Consolidated Financial Statements
- 18 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED SUPPLEMENTARY INFORMATION
For the For the
Fifty-three- Fifty-two-
Week Period Week Period
Ended Ended
November 3, October 28,
1990(1) 1989
----------- -----------
Cost of goods sold:
Beginning inventory $ 8,417,000 $ 6,929,000
Raw material purchases 6,899,000 6,062,000
Inventory acquired 4,557,000
Labor 10,123,000 8,063,000
Fringe benefits 2,856,000 2,039,000
Parts purchased 1,939,000 2,525,000
Supplies 2,623,000 1,845,000
Subcontracting 2,103,000 2,324,000
Repairs 991,000 560,000
Freight-in 337,000 176,000
Miscellaneous 238,000 116,000
Property taxes 172,000 174,000
Fixed expenses:
Depreciation 1,806,000 1,217,000
Utilities 1,233,000 978,000
Salaries 913,000 493,000
Rent 431,000 332,000
----------- -----------
45,638,000 33,833,000
Less ending inventory 13,364,000 8,417,000
----------- -----------
Cost of goods sold $32,274,000 $25,416,000
=========== ===========
(1) Includes the operating results of RBCF for the fifty-three weeks ended
November 3, 1990 and the operating results of ITB for the period from July 16,
1990 to November 3, 1990.
See Notes to Consolidated Financial Statements
- 19 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED SUPPLEMENTARY INFORMATION
For the For the
Fifty-three- Fifty-two-
Week Period Week Period
Ended Ended
November 3, October 28,
1990(1) 1989
----------- -----------
Packing, shipping and selling expenses:
Salaries $1,176,000 $1,023,000
Fringe benefits 120,000 100,000
Office and packing supplies 278,000 411,000
Freight on sales 222,000 226,000
Commissions 97,000 176,000
Telephone 44,000 86,000
Travel and entertainment 251,000 127,000
Advertising 110,000 61,000
Rent 34,000 62,000
Miscellaneous 59,000 21,000
---------- ----------
$2,391,000 $2,293,000
========== ==========
General and administrative expenses:
Salaries $2,447,000 $2,114,000
Fringe benefits 918,000 770,000
Insurance 460,000 572,000
Professional fees 521,000 325,000
Temporary help and hiring 7,000 18,000
Travel and entertainment 311,000 285,000
Miscellaneous 235,000 259,000
Rentals 176,000 149,000
Supplies 150,000 184,000
Directors' fees 22,000 15,000
Relocation costs 136,000 71,000
Telephone 165,000 109,000
Repairs and maintenance 61,000 33,000
Dues and subscriptions 1,000 21,000
Bad debt expense 10,000
---------- ----------
$5,620,000 $4,925,000
========== ==========
(1) Includes the operating results of RBCF for the fifty-three weeks ended
November 3, 1990 and the operating results of ITB for the period from July 16,
1990 to November 3, 1990.
See Notes to Consolidated Financial Statements
- 20 -
ROLLER BEARING COMPANY OF AMERICA INC. AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
CONSOLIDATING BALANCE SHEET
NOVEMBER 3, 1990
Roller
Bearing
Company of Roller RBC Industrial
America, Bearing Fine- Tectonics
Inc. and Company of blanking, Bearings
Subsidiaries Eliminations America. Inc. Inc. Corporation
------------ ------------ ------------ ------------ ------------
ASSETS
Current Assets:
Cash $ 105,000 $ 1,000 $ 104,000
Accounts receivable - net 7,987,000 $ (70,000) $ 5,648,000 123,000 2,286,000
Inventories 12,389,000 9,062,000 113,000 3,214,000
Prepaid expenses and other current
assets 1,133,000 1,071,000 62,000
Due from subsidiaries (1,837,000) 1,837,000
------------ ------------ ------------ ------------ ------------
Total current assets 21,614,000 (1,907,000) 17,618,000 237,000 5,666,000
Property, Plant and Equipment - net 19,190,000 11,185,000 858,000 7,147,000
Investment in Subsidiaries (1,001,000) 1,001,000
Other Assets 787,000 773,000 14,000
------------ ------------ ------------ ------------ ------------
Total Assets $ 41,591,000 $ 2,908,000) $ 30,577,000 $ 1,109,000 $ 12,813,000
============ ============ ============ ============ ============
See Notes to Consolidated Financial Statements
- 21 -
ROLLER BEARING COMPANY OF AMERICA INC. AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
CONSOLIDATING BALANCE SHEET
(continued)
NOVEMBER 3, 1990
Roller
Bearing
Company of Roller RBC Industrial
America, Bearing Fine- Tectonics
Inc. and Company of blanking, Bearings
Subsidiaries Eliminations America. Inc. Inc. Corporation
------------ ------------ ------------ ------------ ------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,294,000 $ (70,000) $ 4,577,000 $ 24,000 $ 763,000
Loan payable 10,982,000 10,982,000
Current portion of long-term debt 2,271,000 1,561,000 710,000
Accrued expenses and other current
liabilities 1,698,000 1,065,000 25,000 608,000
Due to seller 562,000 562,000
Obligation for postretirement
benefits - current portion 27,000 27,000
Due to parent (1,837,000) 1,060,000 777,000
------------ ------------ ------------ ------------ ------------
Total current liabilities 20,834,000 (1,907,000) 18,212,000 1,109,000 3,420,000
Long-term Debt - net 12,955,000 4,742,000 8,213,000
Subordinated Long-term Debt 4,929,000 4,929,000
Obligation for Postretirement
Benefits - net 1,311,000 1,311,000
Deferred Income Taxes Payable 246,000 246,000
------------ ------------ ------------ ------------ ------------
Total liabilities 40,275,000 (1,907,000) 29,440,000 1,109,000 11,633,000
------------ ------------ ------------ ------------ ------------
Stockholders' Equity:
Preferred stock 10 10
Common stock 20 (1,001) 20 1,000 1
Additional paid-in capital 1,589,970 (999,999) 1,589,970 999,999
Retained earnings (accumilated deficit) (274,000) (453,000) (1,000) 180,000
------------ ------------ ------------ ------------ ------------
Stockholders' equity 1,316,000 (1,001,000) 1,137,000 - 0 - 1,180,000
------------ ------------ ------------ ------------ ------------
Total Liabilities and
Stockholders' Equity $ 41,591,000 $ (2,908,000) $ 30,577,000 $ 1,109,000 $ 12,813,000
============ ============ ============ ============ ============
See Notes to Consolidated Financial Statements
- 22 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
CONSOLIDATING STATEMENT OF OPERATIONS AND RETAINED
EARNINGS (ACCUMULATED DEFICIT)
FOR THE FIFTY-THREE-WEEK PERIOD ENDED NOVEMBER 3, 1990
Roller
Bearing
Company of Roller RBC Industrial
America, Bearing Fine- Tectonics
Inc. and Company of blanking, Bearings
Subsidiaries Eliminations America. Inc. Inc. Corporation
------------ ------------ ------------ ------------ ------------
Net sales $ 43,031,000 $ (350,000) $ 38,358,000 $ 1,215,000 $ 3,808,000
Cost of goods sold 32,274,000 (350,000) 28,751,000 1,115,000 2,758,000
------------ ------------ ------------ ------------ ------------
Gross profit 10,757,000 9,607,000 100,000 1,050,000
------------ ------------ ------------ ------------
Operating expenses:
Packing, shipping and selling 2,391,000 2,308,000 11,000 72,000
General and administrative 5,620,000 5,182,000 438,000
Management fee 271,000 271,000
------------ ------------ ------------ ------------
8,282,000 7,761,000 11,000 510,000
------------ ------------ ------------ ------------
Income from operations 2,475,000 1,846,000 89,000 540,000
Interest expense, net 2,643,000 2,299,000 81,000 263,000
------------ ------------ ------------ ------------
Income (loss) before provision for
income taxes (168,000) (453,000) 8,000 277,000
Provision (benefit) for income taxes 87,000 (19,000) 9,000 97,000
------------ ------------ ------------ ------------
Net income (loss) (255,000) (434,000) (1,000) 180,000
Accumulated deficit at beginning
of period (19,000) (19,000)
------------ ------------ ------------ ------------ ------------
Retained earnings (accumulated deficit)
at end of period $ (274,000) $-0- $ (453,000) $ (1,000) $ 180,000
============ ============ ============ ============ ============
See Notes to Consolidated Financial Statements
- 23 -
ROLLER BEARING COMPANY OF AMERICA, INC. AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
CONSOLIDATING COST OF GOODS SOLD
FOR THE FIFTY-THREE-WEEK PERIOD ENDED NOVEMBER 3, 1990
Roller
Bearing
Company of Roller RBC Industrial
America, Bearing Fine- Tectonics
Inc. and Company of blanking, Bearings
Subsidiaries Eliminations America. Inc. Inc. Corporation
------------ ------------ ------------ ------------ ------------
Beginning inventory $ 8,417,000 $ 8,417,000
Raw material purchases 6,899,000 5,996,000 $ 268,000 $ 635,000
Inventory acquired 4,557,000 4,557,000
Labor 10,123,000 8,869,000 396,000 858,000
Fringe benefits 2,856,000 2,494,000 59,000 303,000
Parts purchased 1,939,000 1,939,000
Supplies 2,623,000 2,471,000 79,000 73,000
Subcontracting 2,103,000 $ (350,000) 2,371,000 82,000
Repairs 991,000 867,000 46,000 78,000
Freight-in 337,000 337,000
Miscellaneous 238,000 87,000 53,000 98,000
Property taxes 172,000 172,000
Fixed expenses:
Depreciation 1,806,000
1,502,000 136,000 168,000
Utilities 1,233,000 1,053,000 37,000 143,000
Salaries 913,000 913,000
Rent 431,000 325,000 72,000 34,000
------------ ------------ ------------ ------------ ------------
45,638,000 (350,000) 37,813,000 1,228,000 6,947,000
Less ending inventory 13,364,000 9,062,000 113,000 4,189,000
------------ ------------ ------------ ------------ ------------
Cost of goods sold $ 32,274,000 $ (350,000) $ 28,751,000 $ 1,115,000 $ 2,758,000
============ ============ ============ ============ ============
See Notes to Consolidated Financial Statements
- 24 -
ROLLER BEARING COMPANY OF AMERICA INC, AND SUBSIDIARIES
CONSOLIDATING SUPPLEMENTARY INFORMATION
FOR THE FIFTY-THREE-WEEK PERIOD ENDED NOVEMBER 3, 1990
Roller
Bearing
Company of Roller RBC Industrial
America, Bearing Fine- Tectonics
Inc. and Company of blanking, Bearings
Subsidiaries Eliminations America. Inc. Inc. Corporation
------------ ------------ ------------ ------------ ------------
Packing, shipping and selling expenses:
Salaries $ 1,176,000 $ 1,136,000 $ 40,000
Fringe benefits 120,000 107,000 13,000
Office and packing supplies 278,000 274,000 4,000
Freight on sales 222,000 222,000
Commissions 97,000 88,000 $ 9,000
Telephone 44,000 44,000
Travel and entertainment 251,000 243,000 8,000
Advertising 110,000 108,000 2,000
Rent 34,000 34,000
Miscellaneous 59,000 52,000 7,000
------------ ------------ ------------ ------------
$ 2,391,000 $ 2,308,000 $ 11,000 $ 72,000
============ ============ ============ ============
General and administrative expenses:
Salaries $ 2,447,000 $ 2,359,000 $ 88,000
Fringe benefits 918,000 950,000 (32,000)
Insurance 460,000 460,000
Professional fees 521,000 434,000 87,000
Temporary help and hiring 7,000 7,000
Travel and entertainment 311,000 300,000 11,000
Miscellaneous 235,000 229,000 6,000
Rentals 176,000 176,000
Supplies 150,000 128,000 22,000
Directors' fees 22,000 22,000
Relocation costs 136,000 136,000
Telephone 165,000 154,000 11,000
Repairs and maintenance 61,000 60,000 1,000
Dues and subscriptions 1,000 1,000
Bad debt expense 10,000 10,000
Allocated expenses (226,000) 226,000
------------ ------------ ------------
$ 5,620,000 $ 5,182,000 $ 438,000
============ ============ ============
See Notes to Consolidated Financial Statements
- 25 -
Schedule 3.2(f) - Absence of Undisclosed Liabilities
A. Aetna Insurance and RBC are currently in discussions regarding the
year-end premium due under RBC's medical insurance split-funded plan with
Aetna for the year ended June 30, 1991.
-7-
Schedule 3.2(g) - Absence of Changes
(i) Operations in Ordinary Course
1. Immediately prior to the Closing of the transaction, RBCF will be
merged with and into RBC and following such merger, RBCF will cease
to exist as a separate legal entity. In connection therewith,
certain equipment will be moved from RBCF in Connecticut to RBC's
plant in New Jersey. Charges associated with such move are expected
to total approximately $45,000.
2. A routine audit relating to payment by RBC of state sales tax was
recently completed by the State of New Jersey. As a result, RBC
agreed to pay approximately $15,000 in additional sales tax.
(ii) Material Changes, etc.
1. RBC is aware that modifications to U.S. Government defense
appropriations and related programs, including, without limitation,
the Seawolf Submarine Program (Program #SSN2l), are under review by
the Department of Defense and the U.S. Congress. Such modifications
may decrease the aggregate amount of U.S. Government spending on
defense related programs, including the Seawolf Program; however, it
is impossible to predict which programs will be affected and
therefore, what effect, if any, such modifications will have on RBC.
(iii) Damages, etc.
None.
(iv) Dividends, etc.
None.
(v) Borrowed Funds, etc.
None.
(vi) Encumbrances
None.
-8-
(vii) Liabilities, etc.
1. RBC has entered into an agreement with J&H Machine Tools, Inc. for
the purchase of two Mori Seiki Turning Centers. The aggregate amount
due under such agreement is $341,766.40.
2. RBC has entered into an agreement with Carolina Handling, Inc., for
the purchase of a Side Loading Fork Lift Truck. The aggregate amount
due under such agreement is $29,600.
3. RBC has authorized BCM Engineers ("BCM") to perform certain
environmental services to ensure that RBC will successfully meet the
compliance deadline schedules submitted to the Ewing-Lawrence
Sewerage Authority for compliance with the effluent discharge
regulations at the West Trenton plant. The aggregate amount accrued
under such authorization to date is approximately $35,000, of which
$32,000 has already been paid. An additional $10,000 may have to be
spent in the future to complete such project.
4. RBC leased additional office equipment totalling $3,179.94 per month
pursuant to the Master Lease Agreement dated as of August 26, 1982,
between RBC and Comdisco, Inc. The aggregate amount due under such
agreement is $9,735.20 per month.
5. Item (i)(l) and (2) on this Schedule are incorporated herein in
their entirety by reference.
6. RBC has determined that it will incur certain costs associated with
closing a lagoon on its South Carolina property.
7. Since November 2, 1991, RBC has incurred approximately $4,700 in
legal fees it agreed to pay on behalf of Fred Roman in connection
with the matter disclosed in item A of Schedule 3.2(k) pursuant to
the agreement referenced in item C of Schedule 3.2.
8. On March 31, 1992, the Stockholders of RBC authorized a bonus pool
for officers of RBC in the aggregate amount of $1,000,000, with
respect to services rendererd prior to such date, and approved the
payment of bonuses from such pool pursuant to Section 280G(b)(5) of
the Internal Revenue Code of 1996, as amended.
-9-
(viii) Transactions with Stockholders and Affiliates
1. Items (B) and (C) on Schedule 3.2(c) are incorporated herein by
reference in their entirety.
2. On November 30, 1991, RBC entered into a Stock Purchase Agreement
with Hal Macsata, Bitrix Associates C.V., and Columbus Holdings
Limited pursuant to which RBC agreed to exchange 60 shares of Class
A Common Stock for 60 shares of Class B Common Stock held by Mr.
Macsata, of which 45 and 15 shares of Class B Common Stock were
purchased by Mr. Macsata from Bitrix Associates C.V. and Columbus
Holdings Limited, respectively.
3. On January 31, 1992, RBC entered into a Stock Purchase Agreement
with Fred Morlok, Bitrix Associates C.V. and Columbus Holdings
Limited pursuant to which RBC agreed to exchange 60 shares of Class
A Common Stock for 60 shares of Class B Common Stock held by Mr.
Morlok, of which 45 and 15 shares of Class B Common Stock were
purchased by Mr. Morlok from Bitrix Associates C.V. and Columbus
Holdings Limited, respectively.
4. On February 7, 1992, RBC entered into the First Amendment to Stock
Purchase Agreement with Mr. Morlok, Bitrix Associates C.V. and
Columbus Holdings Limited.
5. On February 11, 1992, Gary Holmes and RBC entered into a Correction
Agreement pursuant to which Mr. Holmes delivered 55 shares of Class
A Common Stock to RBC, without consideration therefor, to correct a
mistake in the number of shares of Class A Common Stock issued to
Mr. Holmes made at the time Mr. Holmes was originally issued shares
of Class A Common Stock by RBC.
(ix) Bonuses, etc.
1. Item 8 of Schedule 3.2(g)(vii) is hereby incorporated herein in its
entirety by reference.
(x) Severance, etc.
1. Fred Roman, a salesman, has been terminated effective as of February
24, 1992, and will receive severance payments totalling
approximately $13,000 through May, 1992.
-10-
2. RBC has agreed to pay the employees of RBCF who are being terminated
as a result of the cessation of RBCF's operations in Connecticut one
month's severance pay. The total cost of such payments is expected
to total approximately $7,500 in severance payments and $4,000 in
accrued vacation payments, all of which has been accrued on the
books of RBC.
(xi) Accounting Changes
None.
(xii) Capital Expenditures Greater than $25,000
1. All of the items on (vii) on this Schedule are incorporated hereby
in their entirety by reference.
(xiii) Defaults, etc.
None.
(xiv) Repayment of Indebtedness
None.
(xv) Employment Agreement
1. RBC entered into a consulting agreement with Ray Holtman pursuant to
which RBC will pay Mr. Holtman $6,667 a month. Mr. Holtman will
perform master scheduling services for RBC's plants in New Jersey
and South Carolina. RBC has extended an offer of employment to Mr.
Holtman at an annual salary of $80,000 to perform such services.
(xvi) Contracts, etc. Other than Ordinary Course
None.
-11-
Schedule 3.2(h) - Title to Assets, Properties
and Rights and Related Matters
A. Encumbrances
1. All of RBC's real property is subject to a mortgage pursuant to the
Citicorp Loan Agreement. The Citicorp Loan will be paid in full at
Closing.
2. See attached list of Encumbrances from the title insurance policies
for the real property listed below.
B. Real Property Owned
1. All that certain piece, parcel or tract of land, together with the
buildings and improvements thereon, situate, lying and being South
of Hartsville, Darlington County, State of Carolina, containing
73.58 acres, more or less, designated as Tract B, as reflected on a
plat prepared by Jack B. Epperly, dated October 13, 1987, and
recorded in the Office of the Clerk of Court for Darlington County
in Plat Book 115 at page 17; said tract of land has the metes,
bounds and measurements as are reflected on said plat and said plat
is incorporated herein and made a part hereof.
2. Those portions of the 348 Acre Tract of Land in the County of Los
Angeles, State of California, allotted to Maria De Los Reyes
Dominguez, by Decree of Partition of a part of Rancho San Pedro, as
shown on the map filed in Los Angeles County Superior Court Case No.
3284, also shown on Licensed Surveyor's Map filed in Book 71 page 31
of record of surveys, in the office of the County Recorder of said
County described on Schedule 1 attached to the deed.
C. Real Property Leased
1. Lease dated as of March 27, 1991, between Walnut Realty, Ltd. and
RBC with respect to an office and warehouse located at 2974
Congressman Lane, Dallas, Texas.
2. Lease dated as of June 12, 1990, between David Henderson and RBC of
South Carolina with respect to an office located at 113 Pinehurst
East, Hartsville, S.C.
3. Leased dated as of August 25, 1989, between Rick Mantz and RBC with
respect to property located at Route 5, Box 381, Hartsville, S.C.
-12-
4. Lease dated as of June 5, 1989, between Pedigreed Properties and RBC
with respect to a warehouse located at Fourth Street and Laurens
Avenue, Building 9, Hartsville, S.C.
5. Lease dated as of October 8, 1990, between MDC Newtown Partnership
and RBC with respect to office space located at 140 Terry Drive,
Suite 100, Renaissance Place, Newtown, PA.
6. Lease dated as of March 6, 1990, between J.T. MacDermid and RBCF
with respect to factory space located at the J.T. MacDermid Group
Building, 31 Harwinton Avenue, Plymouth, CT. RBC has given notice to
terminate this lease and vacate the property effective as of March
31, 1992.
7. Lease dated as of October 30, 1987, between General Sullivan Group,
Inc. and RBC Holdings Corp. with respect to a manufacturing plant
comprising 135,000 square feet located in Ewing, NJ.
8. Lease dated June 10, 1985, between Elmhurst Countryside Associates
("Elmhurst") and RBC, which lease had been assigned pursuant to the
Assignment and Assumption dated October 30, 1987 between General
Sullivan Group, Inc. and RBC Holdings Corp. (now known as RBC), and
consented to by Elmhurst pursuant to a Consent Letter dated October
15, 1987. The Elmhurst lease has expired but RBC continues to make
payments and abide by the terms of such expired lease.
-13-
South Carolina Property
Schedule B
- --------------------------------------------------------------------------------
Policy No. 0 025647 (N23-87968-42) (L 489590)
- --------------------------------------------------------------------------------
This policy does not insure, against loss or damage by reason of the following:
Standard Exceptions:
(b) Easements, or claims of easements, not shown by the public records.
Special Exceptions:
1. Taxes for 1987 real estate owed to Darlington County covering 44.64 acres
(according to their records), with amount due in the sum of $97.80 and due
and payable by 1/15/88.
Taxes for 1987 real estate owed to South Carolina Tax Commission covering
30 acres and one building, in the sum of $13,907.71, and due and payable
by 1/15/88.
2. Easement given in favor of Carolina Power and Light company recorded in
Book 526 at page 611.
3. Possible Easement to Carolina Power and Light company given by S. M.
Woodham, recorded in Book 105 at page 565. (This easement does not
specifically state the acreage, but this easement is in the area where the
property is located.)
4. Exact acreage is not insured.
- --------------------------------------------------------------------------------
California Property
ORDER NO. 4084370-39
ALTA OWNER'S POLICY (10-21-87)
OWNERS POLICY
SCHEDULE B
EXCEPTIONS FROM COVERAGE
THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE (AND THE COMPANY WILL
NOT PAY COSTS, ATTORNEYS' FEES OR EXPENSES) WHICH ARISE BY REASON OF:
A. PROPERTY TAXES, INCLUDING ANY ASSESSMENTS COLLECTED WITH TAXES, TO BE
LEVIED FOR THE FISCAL YEAR 1990 - 1991 WHICH ARE A LIEN NOT YET PAYABLE
B. SUPPLEMENTAL ASSESSMENTS OF PROPERTY TAXES, IF ANY, MADE PURSUANT TO THE
PROVISIONS OF PART 0.5, CHAPTER 3.5 (COMMENCING WITH SECTION 75) OF THE
CALIFORNIA REVENUE AND TAXATION CODE. AS A RESULT OF THE TRANSFER OF TITLE
TO THE VESTEE NAMED IN SCHEDULE A.
C. SUPPLEMENTAL OR ESCAPED ASSESSMENTS OF PROPERTY TAXES, IF ANY, MADE
PURSUANT TO PART 0.5, CHAPTER 3.5 OR PART 2, CHAPTER 3, ARTICLES 3 AND 4,
RESPECTIVELY, OF THE CALIFORNIA REVENUE AND TAXATION CODE AS A RESULT OF
CHANGES IN OWNERSHIP OR NEW CONSTRUCTION OCCURRING PRIOR TO DATE OF
POLICY.
1. AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL THERETO AS
SET FORTH IN A DOCUMENT
GRANTED TO: SOUTHERN CALIFORNIA EDISON COMPANY, A CORPORATION
PURPOSE: POLES
RECORDED: JANUARY 31, 1957 AS INSTRUMENT NO. 3402 IN BOOK 53526
PAGE 182, OFFICIAL RECORDS
AFFECTS: OVER 2 STRIPS OF LAND EACH 10 FEET IN WIDTH, THE CENTER
LINES OF SAID STRIPS ARE DESCRIBED AS FOLLOWS:
STRIP NO. 1: BEGINNING AT THE NORTHWESTERLY CORNER OF PARCEL NO. 1 AS
SHOWN UPON A RECORD OF SURVEY FILED IN BOOK 71 PAGE 31 OF RECORD OF
SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, THENCE SOUTH
87 DEGREES 58 MINUTES 07 SECONDS WEST 100.15 FEET TO THE WESTERLY LINE OF
SANTA FE AVENUE, AS NOW ESTABLISHED; THENCE SOUTHERLY ALONG SAID WESTERLY
STREET LINE, A DISTANCE OF 880.49 FEET; THENCE NORTH 81 DEGREES 51 MINUTES
O8 SECONDS WEST 203 FEET TO THE TRUE POINT OF BEGINNING OF THIS
DESCRIPTION; SAID POINT SHALL HEREINAFTER BE REFERRED TO AS POINT "A";
THENCE FROM SAID POINT OF BEGINNING, NORTH 81 DEGREES 51 MINUTES 08
SECONDS WEST, A DISTANCE OF 340 FEET TO A POINT WHICH IS DISTANT SOUTH 81
DEGREES 51 MINUTES EAST 16 FEET FROM THE EASTERLY LINE OF THAT CERTAIN
LAND CONVEYED TO THE LOS ANGELES COUNTY FLOOD CONTROL DISTRICT BY DEED
RECORDED IN BOOK 18477 PAGE 151
PAGE 4
ORDER NO. 4084370-39
OF OFFICIAL RECORDS OF SAID COUNTY; THENCE NORTH 08 DEGREES 08 MINUTES 52
SECONDS EAST, PARALLEL WITH SAID EASTERLY LINE, A DISTANCE OF 184 FEET.
STRIP NO. 2: BEGINNING AT HEREINBEFORE MENTIONED POINT A', THENCE NORTH 08
DEGREES 08 MINUTES 52 SECONDS EAST 40 FEET; THENCE SOUTH 81 DEGREES 51
MINUTES 08 SECONDS EAST 14 FEET.
ALSO A STRIP OF LAND 2 FEET IN WIDTH LYING WITHIN SAID LAND THE CENTER
LINE OF WHICH IS DESCRIBED AS FOLLOWS:
BEGINNING AT HEREINBEFORE MENTIONED POINT "A"; THENCE SOUTH 81 DEGREES 51
MINUTES 08 SECONDS EAST 32 FEET.
2. AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL THERETO AS
SET FORTH IN A DOCUMENT
GRANTED TO: COUNTY SANITATION DISTRICT NO. 2 OF LOS ANGELES COUNTY
PURPOSE: SEWER PIPE LINE
RECORDED: MARCH 16, 1951, IN BOOK 35822 PAGE 387, OFFICIAL RECORDS
AFFECTS: THAT PORTION OF SAID LAND WITHIN A STRIP OF LAND 15 FEET
IN WIDTH, LYING EASTERLY AND NORTHERLY OF AND ADJOINING
THE FOLLOWING DESCRIBED LINE:
BEGINNING AT THE INTERSECTION OF THE NORTHERLY LINE OF SAID MARIA DE LOS
REYES DOMINGUEZ 348 ACRE ALLOTMENT WITH THE EASTERLY LINE OF THAT CERTAIN
EASEMENT CONVEYED TO LOS ANGELES COUNTY FLOOD CONTROL DISTRICT, RECORDED
IN BOOK 18477 PAGE 151 OF OFFICIAL RECORDS; THENCE SOUTHERLY AND EASTERLY
ALONG THE SAID LAST MENTIONED LINE TO THE CENTER LINE OF AN EASEMENT (25
FEET WIDE).
3. ANY LOSS OR DAMAGE ON ACCOUNT OF THE FACT THAT UNDER EITHER THE FEDERAL
BANKRUPTCY CODE OR SIMILAR STATE INSOLVENCY OR CREDITORS RIGHTS LAWS,
TITLE TO THE INSURED REAL ESTATE IS ATTACKED ON THE GROUND THAT THE
TRANSFER OF THE INSURED REAL ESTATE TO THE INSURED WAS A FRAUDULENT
CONVEYANCE.
4. WATER RIGHTS, CLAIMS OR TITLE TO WATER.
5. ANY RIGHTS, INTERESTS, OR CLAIMS WHICH MAY EXIST OR ARISE BY REASON OF THE
FOLLOWING FACTS SHOWN ON A SURVEY PLAT ENTITLED "PRELIMINARY SURVEY FOR
L.I.T.I. ASSOCIATES, INC., "DATED * PREPARED BY: GRIMES SURVEYING &
MAPPING, DAVID F. GRIMES L. S. 3774. May 19, 1990, as revised July 3, 1990
and July 10, 1990
A. FOOTINGS OF A CONCRETE BUILDING LOCATED ON THE LAND ADJACENT TO THE
SOUTH MAY EXTEND ONTO SAID LAND.
B. EDGE OF PAVEMENT LOCATED ON SAID LAND EXTENDS ONTO LAND ADJACENT TO THE
SOUTH BY 0.2 FEET.
C. A METAL STRUCTURE SITUATED ON THE LAND ADJACENT ON THE SOUTH EXTENDS
ONTO SAID LAND A MAXIMUM OF 0.3 FEET.
PAGE 5
ORDER NO. 4084370-39
D. A BLOCK. WALL AND CHAIN LINK FENCE ARE LOCATED NORTH OF THE SOUTHERLY LINE.
E. A FIRE HYDRANT WITH GUARD POSTS IS LOCATED SOUTH OF THE BUILDING LOCATED ON
SAID LAND.
F. THE WEST FACE OF A BLOCK WALL ALONG THE WESTERLY PROPERTY LINE IS LOCATED A
MAXIMUM OF 0.55 FEET EASTERLY OF SAID LINE.
G. AN AUXILIARY POLE AND ANCHOR CABLE IS LOCATED OUTSIDE OF THE EASEMENT
RECORDED.
H. A FIRE HYDRANT WITH GUARD POSTS EXISTS NEAR THE WEST PROPERTY LINE.
I. OVERHEAD TENSOR CABLES EXTEND FROM A POWER POLE LOCATED ALONG THE WESTERLY
PROPERTY LINE OVER THE BUILDING LOCATED ON SAID LAND IN A NORTHEASTERLY
DIRECTION TO A POWER POLE LOCATED ON THE NORTHWESTERLY PROPERTY LINE.
J. A DRAIN GRATE WITH AN UNDERGROUND PIPE THAT EXTEND ONTO THE LAND ADJACENT TO
THE WEST IS LOCATED NEAR THE WESTERLY PROPERTY LINE.
K. A SEWER MANHOLE IS LOCATED IN THE NORTHWEST PORTION OF SAID LAND.
L. THE NORTH FACE OF A BLOCK WALL IN THE NORTHWEST CORNER OF SAID LAND IS
LOCATED A MAXIMUM OF 0.47 FEET SOUTHERLY OF THE NORTHWEST PROPERTY LINE.
M. A CHAIN LINK FENCE ALONG THE NORTHWEST PROPERTY LINE IS LOCATED PARTLY ON
SAID LAND AND PARTLY ON THE LAND ADJACENT TO THE NORTHWEST.
N. POLES AND POLELINES ARE LOCATED ALONG THE NORTHWEST PROPERTY LINE.
O. A CONCRETE SLAB WITH VAULT IS LOCATED ON THE NORTHEAST CORNER OF SAID LAND.
P. A GAS METER AND SPRINKLER BOX ARE LOCATED ON THE NORTH FACE OF THE BUILDING
LOCATED ON SAID LAND NEAR A CONCRETE SLAB.
Q. A FIRE DEPARTMENT CONNECTOR AND CONCRETE SLAB AND VAULT ARE LOCATED NEAR THE
SOUTHEAST CORNER.
R. A CONCRETE GUTTER DRAINS RUNOFF WATER INTO THE SANTA FE AVENUE RIGHT OF WAY.
S. A ONE STORY METAL BUILDING EXTENDS ONTO THE EASEMENT RECORDED JANUARY 31,
1957 AS INSTRUMENT NO. 3402 BOOK 53526 PAGE 182, OFFICIAL RECORDS AND A
TRANSFORMER AND CONCRETE PAD ARE LOCATED NORTH AND EAST AND OUT OF THE LIMITS
OF SAID EASEMENT.
T. A CONCRETE SLAB WITH METAL ROOF LOCATED IN THE SOUTHWEST CORNER OF SAID
LAND EXTENDS ONTO THE EASEMENT RECORDED MARCH 16, 1951 IN BOOK 35822 PAGE 367
OFFICIAL RECORDS.
PAGE 6
ORDER NO. 4084370-39
6. A DEED OF TRUST TO SECURE AN INDEBTEDNESS IN THE AMOUNT SHOWN BELOW, AND
ANY OTHER OBLIGATIONS SECURED THEREBY:
AMOUNT: $5,000,000.00
DATED: JULY 16, 1990
TRUSTOR: ITI ACQUISITION, INC.
TRUSTEE: CONTINENTAL LAWYERS TITLE COMPANY
BENEFICIARY: CITICORP NORTH AMERICA, INC.
RECORDED: JULY 25, 1990 AS INSTRUMENT NO.
90-1292474, OFFICIAL RECORDS
7. A FINANCING STATEMENT FILED IN THE OFFICE OF THE COUNTY RECORDER, SHOWING
DEBTOR: INDUSTRIAL TECTONICS BEARINGS CORPORATION
SECURED PARTY: CITICORP NORTH AMERICA, INC.
RECORDED: JULY 25, 1990, AS INSTRUMENT NO.
90-1292475, OFFICIAL RECORDS
PROPERTY COVERED: SAID LAND
8. A FINANCING STATEMENT FILED IN THE OFFICE OF THE COUNTY RECORDER, SHOWING
DEBTOR: INDUSTRIAL TECTONICS BEARINGS CORPORATION
SECURED PARTY: CITICORP NORTH AMERICA, INC.
RECORDED: JULY 25, 1990, AS INSTRUMENT NO.
90-1292476, OFFICIAL RECORDS
PROPERTY COVERED: SAID LAND
9. A FINANCING STATEMENT FILED IN THE OFFICE OF THE COUNTY RECORDER, SHOWING
DEBTOR: ITI ACQUISITION, INC.
SECURED PARTY: CITICORP NORTH AMERICA, INC.
RECORDED: JULY 25, 1990, AS INSTRUMENT NO.
90-1292477, OFFICIAL RECORDS
PROPERTY COVERED: SAID LAND
10. A FINANCING STATEMENT FILED IN THE OFFICE OF THE COUNTY RECORDER, SHOWING
DEBTOR: ITI ACQUISITION, INC.
SECURED PARTY: CITICORP NORTH AMERICA, INC.
RECORDED: JULY 25, 1990, AS INSTRUMENT NO.
90-1292478, OFFICIAL RECORDS
PROPERTY COVERED: SAID LAND
ENDORSEMENTS:
THE FOLLOWING ENDORSEMENTS ARE ATTACHED TO AND MADE A PART OF THIS POLICY:
103.7
103.3
116.1
116.4
103.5
100.29
PAGE 7
[Map Omitted]
Schedule 3.2(i) - Agreements
A. Agreements
(i) Collective Bargaining Agreements
1. Agreement dated September 1, 1988, between RBC and
International Union, United Auto Workers, Local #502 ("Local
502"), extended from September 1, 1991, through August 31,
1992.
2. Retirement Plan Agreement dated September 1, 1988, between RBC
and Local 502, extended from September 1, 1991, through August
31, 1992.
(ii) Contract with or Commitment
1. Management Agreement dated as of October 29, 1987, between RBC
and Overseas Partners, Inc. ("OPI") pursuant to which RBC pays
OPI $250,000 annually.
2. Management Agreement dated as of November 1, 1991, between ITB
and OPI pursuant to which ITB pays OPI $75,000 annually.
3. Agreement dated September 1, 1988, between RBC and George
Kilborne providing for the payment of an annual aggregate
directors fee of $24,000 to Mr. Kilborne.
4. Consulting Agreement between RBC and Noble Lowndes Johnson
("NLJ") providing for NLJ to perform ongoing consulting
services regarding medical insurance and related matters.
5. Item (xiii)(1) on Schedule 3.2(g) is incorporated herein in
its entirety by reference.
(iii) Benefits to any Officer or Employee
(Active) Employee Insurance Schedule
Type Carrier Monthly Costs
---- ------- -------------
1. Dental (Shop) Unity (Trenton) $ 2,940.38
(Office) Delta (Excluding $ 2,736.l5
S.C.)
2. Prescription Drug Travellers $26,490.58
3. Executive Life Federal Kemper 1,500.00
4. Executive Great West 2,416.67
Disability
-14-
Type Carrier Monthly Costs
---- ------- -------------
5. Life Insurance Great West 6,803.63 (premium
to be
reduced approx.
50%)
6. Medical U.S. Healthcare 26,205.90
(HMO PA/NJ)
Medigroup 15,876.51
Aetna 116,335.00
7. Medical (ITB) FHP 30,100.00
8. Pension Shop (Trenton 4,082.75
active portion)
9. 401K -Salaried & S.C. 23,400.00
-ITB 7,700.00
10. Short Term Liberty Mutual 850.00
Disability (S.C. only)
11. Performance Bonus
- RBC has occasionally paid a discretionary year-end performance
bonus based on operating income, individual contributions and other
factors to approximately twenty key employees.
12. Productivity Bonus
- RBC and ITB pay productivity bonuses to certain of their
respective employees.
-productivity bonuses at the West Trenton plant are paid per
contract and are based on sales output per hour.
- productivity bonuses at the Hartsville, S.C. plant are based
on sales output per hour.
- productivity bonuses at ITB are based on shipments and a
gross margin goal.
13. Gainsharing
- RBC implemented a gainsharing plan three years ago whereby
quarterly distributions were made to all employees if certain budget
cash flow targets were met. However, only two payments were ever
made.
14. Additional Medical Coverage for senior management
15. Retiree Medical Benefits
o Medicare (Part B) Reimbursement - $ 5,063.07
o prescription Drug ($2.00 Co-pay) - 12,109.18
o Medical (365 Day Basic Hospital - 30,272.68
Surgical plus Major Medical to $250M
for retirees under age 65)
-15-
o SC medical retirees (70 Day Basic 1,066.89
Major Medical to $50M for retirees
under age 65)
16. Other obligations
o Retirees (Trenton & SC)
Life Insurance 723.62
Pension (Trenton) 5,500.42
(iv) Material indentures, loans, etc.
1. Loans
a. The following loans are outstanding pursuant to the Citicorp
Loan Agreement, as amended by the First Amendment dated June
13, 1988, Second Amendment dated August 14, 1989, Third
Amendment dated April 16, 1990, and the Fourth Amendment dated
July 16, 1990:
Lender Type Principal Amount
------ ---- ----------------
(i) Citicorp Revolver $12,445,000.00
(ii) Citicorp Capital 1,776,000.00
Expenditure
Term Loan
(iii) Citicorp Term Loan A 1,941,000.00
(iv) Citicorp Term Loan C 4,113,000.00
b. The following loans are outstanding pursuant to the
Subordinated Loan Agreement dated August 14, 1989, among RBC,
Bitrix Associates C.V. and Overland Trust Bank:
Lender Type Principal Amount
------ ---- ----------------
(i) Overland Mezzanine Loan $3,353,500.00
Trust
(ii) Bitrix Mezzanine Loan 1,646,500.00
c. The following loan is outstanding pursuant to the Asset
Purchase Agreement dated as of June 29, 1990, among Industrial
Tectonics, Inc., Axel Johnson, Inc. ("Axel Johnson"), ITI
Acquisition, Inc. and RBC:
Lender Type Principal Amount
------ ---- ----------------
(1) Axel Johnson Term Loan $4,100,000.00
-16-
2. Equipment Financing Agreements
Agreement Principal Amount
--------- ----------------
a. Master Lease Agreement between Comdisco, $478,946.54
Inc. and RBC dated August 26, 1982, for
the lease of an IBM computer, other office
equipment and software business systems.
b. Agreement between Software 2000, Sun Financial $ 70,000.00
Group, Inc. ("SFGI") and RBC dated June 25, 1990,
pursuant to Master Lease Agreement dated April 28,
1990 (the "Master Lease Agreement") between RBC and
SFGI, for the license of computer software from
Software 2000.
c. Agreement between SFGI and RBC for the $149,112.11
lease of a Mayano turning center.
d. Agreement between Concord Commercial $701,151.30
Corporation ("CCC") and RBC dated March
14, 1989, for the lease of operating
machinery from Mazak Corporation ("MC").
e. Agreement between CIT Group/Equipment $593,577.00
Financing and RBC dated June 18, 1991, for
the lease of operating machinery from MC.
f. Agreement between Advante Leasing and RBC $ 22,500.00
for the lease of scales and an air
compressor.
-17-
g. Purchase Agreement dated April 18, 1989, $ 9,750.00
between Modern Handling Equipment Co. and
RBC for the purchase of a Hyster fork lift
truck.
(v) Contract or Commitment for Capital Expenditures
1. The items listed on Schedule 3.2(f) are incorporated herein by
reference in their entirety.
(vi) Material Leases, Subleases or Other Agreements Regarding Real
Property
1. The items listed on Schedule 3.2(h)(C) are incorporated herein
by reference in their entirety.
(vii) Guaranty of Obligations
1. RBC has guaranteed the obligations of RBCF and ITB under the
Citicorp Loan Agreement, which guarantees will be terminated
when the Citicorp Loan is paid in full at the Closing.
(viii) Agreement Which Materially Restricts
None.
(ix) Licensing Agreement
None.
(x) Agreement or Arrangement for Sale
None
(xi) Vendors Receiving Total Payments Greater Than $50,000 Per Year
Vendor Name Dollar Value Subject Matter
----------- ------------ --------------
A. RBC
1. Specialty Rigs $1,700,000 Raw materials for helicopter
bearings
2. Timken Co. 1,000,000 Raw materials for commercial
products
-18-
Vendor Name Dollar Value Subject Matter
----------- ------------ --------------
3. Sullivan Steel Services 500,000 Raw materials for commercial
products
4. Public Service Electric & Gas Co. 324,000 Power for Trenton Plant
5. Universal Bearings 240,000 Component parts purchases-
rollers
6. Norton Co. 182,000 Grinding wheels
7. Ovako Steel 180,000 Raw materials for commercial
products
8. Carolina Power & Lght 152,000 Power for Hartsvlle plant
9. Rock Industrial Services, Inc. 138,000 Sub-contractors, machine shop
service
10. Brenner Tool & Die 135,000 Tools for Trenton plant
11. Carpenter Technology Corp. 109,000 Tool steel
12. Miller Bearing Co., Inc. 105,000 Component parts purchases
13. Superior Plating Co. 95,000 Sub-contractor for plating
14. Kennametal Inc. 89,000 Tooling for Hartsville and
Trenton Plants
15. Summit Corporation of America 85,000 Silver plating
16. International Seal & Packaging 59,000 Component parts purchases
17. Edgewater Steel 58,000 Tool steel
18. Spartan Filtering Systems 54,000 Sub-contractor, machine shop
service
19. ETEO Mfg. Co. 53,000 Sub-contractor, machine shop
service
B. ITB
20. Advanced Precision Industries Inc. 213,429.03 Subcontractor, machine shop
service
21. Beacon Tool Co., Inc. 52,813.00 Sub-contractor, machine shop
service
22. Coulter Steel & Forge Co. 57,844.95 Raw materials
23. Crucible Specialty Metals 117,365.72 Raw materials
24. Earle M. Jorgensen Co. 108,874.48 Raw materials
25. FHP, inc. 438,659.53 Medical insurance
26. Golden State Engineering, Inc. 224,220.84 Sub-contractor, machine shop
service
-19-
Vendor Name Dollar Value Subject Matter
----------- ------------ --------------
27. Industrial Tectonic Inc. 75,805.60 Purchased parts
28. JK Engineering Co. 114,650.20 Sub-contractor, machine shop
service
29. JPM Company, Inc. 108,944.72 Purchased parts
30. Ladish Co., Inc. 101,898.00 Sub-contracting press
31. Los Angeles County 132,281.30 Taxes
32. MRC Bearings 60,596.80 Purchased parts
33. Peak Technical Services, Inc. 60,764.66 Temporary employees
34. Pye & Hogan 95,500.00 Sub-contractor grinding
35. Salem Tech Service, Inc. 74,608.80 Temporary employees
36. Southern California Edison Co. 387,037.69 Electricity
37. Stoody Company 105,400.00 Purchased parts
38. Storm Forge 78,424.70 Purchased parts
39. Teledyne Powder Alloys 280,918.95 Purchased parts
40. The Timken Company 50,921.58 Raw materials
41. Vermont Rebuild Incorporated 58,342.10 Outside service maintenance
42. Werner Precision Machine Corp. 76,457.34 Sub-contractor, machine shop
service
43. Wetmore Cutting Tools 85,437.89 Supplies
44. Winstead Precision Ball Company 53,622.47 Purchased parts
45. Items (5), (6) and (7) on Schedule
3.2(h)(C) are incorporated herein in
their entirety by reference.
46. Certain of the business insurance
policies have premiums in excess of
$50,000 a year. See Schedule 3.2(q).
47. Items (iv)(2)(a), (c), (d) and (e)
on this Schedule are incorporated
herein in their entirety by
reference.
48. Item (vii)(1) on Schedule 3.2(g)
is incorporated herein in its
entirety by reference.
(xii) Distributor, etc. Agreements
1. Agreement between Sommerfeldt and Co. and RBC dated October 9,
1989 (exclusive sales agent for lower peninsula of Michigan).
-20-
2. Agreement between Rotoprecision Inc. and Industrial Tectonics,
Inc. dated November 12, 1986 (exclusive sales agent and
representative in Canada).
(xiii) Contracts Requiring Consent to Purchase or Transfer
1. All of the items listed on Schedules 3.2(h)(C) and 3.2(i)(iv)
are incorporated herein by reference in their entirety.
2. All of the contracts listed on Schedule 3.2(i)(xv) may require
the consent of the U.S. Government to transfer such contracts
pursuant to the Anti-Assignment Act, 41 U.S.C. ss.15 and 48
C.F.R. 42.1204.
3. Lease Agreement dated July 20, 1989, between Advante Leasing
Corp. and RBC for the lease of an AT&T printer.
4. Lease Agreements dated July 6, 1989 and April 6, 1989,
respectively, between Bell Atlantic Tricon Leasing and RBC for
lease of a Canon fax machine and UPS Shipping System,
respectively.
5. Lease Agreement dated April 25, 1989, between Vanguard
Financial Service Corp. and RBC for lease of a postal parcel
shipping system.
6. Lease Agreements dated August 31, 1987 and January 15, 1988,
between US Fleet Leasing and RBC for the lease of certain
automobiles.
7. Lease Agreement dated April 28, 1990, between Bell Atlanticom
and RBC for the lease of a voice mail system.
8. Lease Agreement dated July 18, 1988, between IBM and ITI for
the lease of certain software and hardware.
9. Item (C)(4) on Schedule 3.2(b) is incorporated herein in its
entirety by reference.
(xiv) Loss Contracts
None.
(xv) U.S. Governmental Contracts
-21-
1. Agreement dated August 31, 1990, between RBC and U.S. Army
Aviation Systems Command (No. DAAJ09-90-C-1058).
2. Agreement dated April 27, 1990, between RBC and U.S. Army
Aviation Systems Command (No. DAAJ09-90-C-0507).
3. Agreement dated April 30, 1990, between RBC and U.S. Army
Aviation Systems Command (No. DAAJ09-90-C-05l0).
4. Agreement dated October 22, 1991, between RBC and Defense
Industrial Supply Center (No. DLA500-92-C-1208).
5. Agreement dated December 11, 1991, between RBC and Naval Air
Station Point Magy. Ca. (No. N0429A-92-M-1407).
6. Agreement dated January 23, 1992, between RBC and Defense
Industrial Supply Center (DLA500-92-M-9195).
7. Agreement dated December 19, 1991, between RBC and Aviation
Supply Office (N00383-92-C-N022).
8. Agreement dated February 14, 1992, between RBC and Defense
Industrial Supply Center (DLA500-92-C-1246).
9. Agreement dated February 27, 1992, between RBC and Defense
Industrial Supply Center (DLA500-92-C-0339).
10 See attached Addendum I listing purchase orders relating to
Boeing Vertol Orders as of February 27, 1992.
11. Agreement dated October 28, 1991, between ITB and Department
of the Navy (N00383-92-C-H005).
12. Agreement dated January 31, 1999, between ITB and Department
of the Navy (N00383-89-C-3628).
13. Agreement dated March 25, 1991, between ITB and Department of
the Navy (N00383-91-C-5335).
14. Agreement dated August 6, 1991, between ITB and Department of
the Air Force (F41608-91-C-1587).
-22-
15. Agreement dated February 18, 1992, between ITB and Defense
Industrial Supply Center (DLA500-92-MCB23).
B. Defaults
1. Novations were not obtained at the time RBC acquired ITB
pursuant to the Anti-Assignment Act, 41 U.S.C. ss.15 and 48
C.F.R. 42.1204, with respect to certain contracts between ITB
and certain agencies of the U.S. Government, although ITB
submitted novation agreements to such agencies for signature.
Such contracts have continued to be performed by ITB and the
parties thereto.
C. Non-Ordinary Course Agreements
1. RBC executed a letter agreement dated June 27, 1991, agreeing
to pay the legal fees of Fred Roman in connection with the
matter described in item A of Schedule 3.2(k), for so long as
Mr. Roman remained employed with RBC. Mr. Roman's employment
was terminated on February 24, 1992; however, RBC has orally
agreed to continue to pay such fees and expects that the
matter will soon be settled.
-23-
Addendum I
BOEING VERTOL ORDERS AS OF 2/27/92
F/N P.O. NC. P.O. QUA. P.O. VALUE
107R2580-1 AAZ125 17 17119.34
A02RS253-1 AAZ196 1 1906.44
ABU218 25 47661.00
A02RS253-2 ABN176 60 82631.40
114R2131-1 AAZ139 40 42295.20
AAZ181 120 56684.40
AAZ182 3 1417.11
ABN199 24 25377.12
ABU227 30 74007.00
ABY356 48 50754.24
ABY372 160 85026.60
ABY374 18 8502.66
ABY375 120 56684.40
114R2130-2 AAZ139 50 41996.00
AAZ149 120 74301.60
AAZ150 114 70586.52
AAZ151 3 1857.34
AAZ152 20 12383.60
AAZ158 60 37150.80
ABN196 24 51769.92
ABY357 30 40157.70
ABY372 180 120258.00
114R5214-6 AAZ153 150 297432.00
AAZ154 24 47589.12
AAZ155 6 11897.28
AAZ156 114 226048.32
AAZ157 4 7931.52
AAZ163 120 237945.60
AAZ191 1 1999.63
AAZ199 5 32462.90
MAA300 100 211970.00
ABU230 96 181237.44
ABU231 10 37430.60
ABY356 140 259263.20
ABY372 180 331390.80
114RS214-5 ABU209 90 180236.70
ABU224 105 198030.00
ABU265 60 116720.40
ABY356 160 291868.80
ABY372 174 316697.40
AAZ114 114 207491.40
AAZ115 24 43682.40
AAZ116 40 72804.00
AAZ141 2 3640.20
114RS225-1 AAZ122 348 270980.64
AAZ123 12 9344.16
AAZ124 12 9344.16
AAZ138 114 105626.70
AAZ149 54 42048.72
ABU295 300 233604.00
ABY372 180 166779.00
114RS226-1 AAZ138 114 103654.50
ABY372 180 163665.00
R.A. RODRIGUEZ
A0ZRS251-1 1652501 71 108176.31
Schedule 3.2(j) - Compliance: Governmental Authorization
A. None
-24-
Schedule 3.2(k) - Litigation, Etc.
A. McGill v. Fred Roman - Fred Roman, a former salesman for McGill, a
division of Emerson Electric, hired by RBC, was sued by McGill alleging a
violation of the non-compete clause in Roman's employment contract. RBC is
not a party to the litigation. Mr. Roman was terminated by RBC on February
24, 1992.
B. Wells Fargo - Guard at Trenton plant injured 12/89. Subrogation claim,
totalling $1,275.
C. Wanda Foreman V. RBC - Former employee asserted a civil rights claim
against RBC. Pre-trial hearing was held in 1988 and since that time no
further action has taken place. RBC believes that for all practical
purposes the suit has been dropped.
D. Jose J. Rubiano - ITB Workman compensation claim - no reserve established.
E. Douglas Large - Trenton shop workman compensation claim - reserve in the
amount of $6,500 has been set aside by RBC's workmen's compensation
insurance carrier, New Jersey Manufacturers Insurance Company ("NJMIC").
F. Robert Talec - Trenton shop workman compensation claim - reserve in the
amount of $5,400 has been set aside by NJMIC.
G. Andrezej Staniec - Trenton shop workman compensation claim - reserve to be
obtained by RBC from NJMIC.
H. Zbigniew Pietranik - Trenton shop workman compensation claim - reserve to
be obtained by RBC from NJMIC.
I. Kwang Everett - Trenton shop workman compensation claim - reserve in the
amount of $7,946 has been set aside by NJMIC.
J. Dong Choi - Trenton shop workman compensation claim - reserve in the
amount of $4,155 has been set aside by NJMIC.
K. Michael Kovacs - Trenton Shop workman compensation claim - reserve in the
amount of $6,800 has been set aside by NJMIC.
L. George Bergner - Trenton shop workman compensation claim - reserve in the
amount of $18,381 has been set aside by NJMIC.
-25-
M. Forklifts, Inc. v. RBC - Forklifts, Inc. has made certain claims against
RBC. Total claims plus legal fees are expected to total $3,500.
-26-
Schedule 3.2(1) - Tax
A. Item (i)(2) on Schedule 3.2(g) is incorporated herein in its entirety by
reference.
-27-
Schedule 3.2(m) - ERISA
A. Material Employee Plans
1. The items listed on Schedule See 3.2(i)(A)(iii) are hereby
incorporated herein by reference in their entirety.
B. Section 401 Plans
1. Fidelity Management and Research Co., has received a Letter of
Determination from the Internal Revenue Service ("IRS") for the
Prototype Master Plan for RBC's 401(k) Plan.
2. ITB's 401(k) plan does not presently have a Letter of Determination
from the IRS.
3. RBC and ITB plan to file applications with the IRS in 1992 for new
Letters of Determination for their respective 401(k) plans.
C. RBC and ITB are not parties to any Multiemployer Plan.
D. Item B of Schedule 3.2(g)(vii) is hereby incorporated herein in its
entirety by reference.
-28-
Schedule 3.2(n) - Environmental Reports
A. Environmental Site Assessment Report for West Trenton, New Jersey,
dated December 1991 prepared by The Earth Technology Corporation;
B. Letter and drawings from The Earth Technology Corporation, dated
January 29, 1992;
C. Draft letter from John Emling of Roller Bearing Company of America to
Sharon Sorokin (undated);
D. Letter from The Earth Technology Corporation to Sharon Sorokin dated
December 10, 1991;
K. Letter from The Earth Technology Corporation to Sharon Sorokin, dated
December 20, 1991;
F. All documents in New Jersey ECRA Case No. 85396;
G. Updated Environmental Audit at the Industrial Tectonics Facility,
Rancho Dominguez, California, dated March 19, 1992 prepared by Metcalf & Eddy;
H. Industrial Tectonics Site Visit Notes of Metcalf & Eddy (undated);
I. Work Plan for Site Investigation, Former Industrial Tectonics Facility,
18301 South Santa Fe Avenue, Rancho Dominguez, California, dated August, 1990
prepared by ENSR Consulting and Engineering;
J. Environmental Audit at Industrial Tectonics Site, Rancho Dominguez,
California, dated June, 1990 prepared by Metcalf & Eddy;
K. Site Assessment Report, Industrial Tectonics Facility, 18301 South
Santa Fe Avenue, Rancho Dominguez, California dated November, 1990, prepared by
ENSR Consulting and Engineering;
L. Preliminary General Discussion of Potential Remedial Actions and
Associated Costs, Industrial Tectonics Facility, Rancho Dominguez, California,
prepared by Metcalf & Eddy;
M. Letter from Thomas King at Industrial Tectonics Bearings Corporation to
Sharon Sorokin, dated January 7, 1992;
N. Letter from Hygienetics/GCL to Peter Askey (Roller Bearing Company of
America) and William Reynolds (Axel Johnson, Inc.) dated March 6, 1992 with
attachments;
-29-
O. Letter from Hygienetics/GSL to Peter Askey (Roller Bearing Company of
America) and William Reynolds (Axel Johnson, Inc.) dated March 12, 1992 with
attachments;
P. Letter from South Carolina Department of Health and Environmental
Control ("SCDHEC") dated August 13, 1987;
Q. Letter from ERT to Gary Holmes dated October 23, 1987;
R. Letter from Robert Zavatkay of Roller Bearing Company of America, dated
January 3, 1992;
S. Preliminary Environmental Site Assessment of the Roller Bearing Company
of South Carolina Facility at Hartsville, South Carolina, dated September 30,
1987 prepared by ERT;
T. Site Screening Investigation, Roller Bearing Corporation of South
Carolina, dated June 22, 1990 prepared by Bureau of Solid Waste and Hazardous
Waste Management of SCDHEC and transmittal letter dated July 19, 1991;
U. Letter from L.E. Stegner of Roller Bearing Company of America to Harvey
Daniels at SCDHEC, dated July 31, 1991;
V. Due Diligence Update for Roller Bearing Company of America Site in
Hartsville, South Carolina, dated December 6, 1991 prepared by ENSR Consulting
and Engineering;
W. Draft Letter from ENSR Consulting and Engineering to Sharon Sorokin,
dated January 16, 1992;
X. Letter from Chuck Holmes of Roller Bearing Company of America to Sharon
Sorokin, dated January 7, 1992;
y. Phase I Environmental Site Assessment, a Leased Portion of 31 Harwinton
Avenue, Plymouth, Connecticut, dated December, 1991 prepared by Environmental
Risk Limited;
Z. All documents of public record relating to any of the Company Property
other than those documents for which a court order or Freedom of Information Act
request or similar request under a state or local statute or ordinance is
required for release;
AA. All documents, studies, reports, audits and analyses commissioned,
obtained or reviewed by Buyer relating to the Company Property.
-30-
Schedule 3.2(o) - Intellectual Property
A. Patents Number Issued
------- ------ ------
Combination Seal and 4,113,327 9/21/78
Thrust Washer for
Anti-Friction
Bearings
Method of Making 4,161,055 7/17/79
Self-Aligning
Spherical Bushing
Sealed Self-Aligning 4,080,013 3/21/78
Spherical Bushing
Locking Device for 4,185,539 1/29/80
Hydraulic Actuator
Self-Aligning Bushing 4,109,976 8/29/78
Self-Aligning Spherical 4,765,757 8/23/88
Bushing Means
Cam Follower Assembly Investigating
Lined Split Plastic Investigating
Cage
Split-Inner-Ring 4,334,720 6/15/82
Ball Bearing with
Lubrication Structure
Ball Bearing Retention 4,019,791 4/26/77
Construction
B. Trademarks:
Trademark Owner Country Number Certificate
--------- ----- ------- ------ -----------
Pitchlign RBC Germany 678,170 On Hand
Pitchlign RBC Canada 100,105 On Hand
Pitchlign RBC Australia A119101 On Hand
Pitchlign RBC Italy 313498
Pitchlign RBC Japan 1445060 On Hand
Pitchlign RBC France 1097578 On Hand
Pitchlign RBC USA Investigating
Wicklube RBC USA Investigating
Glide-A-Seal RBC USA 1,107,055 On Hand
Planelign RBC USA 786,377 On Hand
RBC RBC Canada 154,239 On Hand
RBC RBC Japan 797,349
RBC RBC USA 586,678 On Hand
Roller Block RBC USA Investigating
Orange RBC USA Investigating
Quadlube RBC USA Investigating
RBC Roller RBC USA Investigating
Helisphere ITB USA 741,578 On Hand
Kylosphere ITB USA 873,754
Rolltact ITB USA 838,763
Cam-Centric RBC USA 1,562,046
-31-
C. Encumbrances
1. RBC and ITB have each granted a security interest in all of their
intellectual property to Citicorp pursuant to the Citicorp Loan
Agreement, which will be paid in full at the closing.
-32-
Schedule 3.2(p) - Labor Relations; Employees
A. None
-33-
Schedule 3.2(a) - Insurance
A. See Business Insurance Schedule attached hereto.
-34-
BUSINESS INSURANCE SCHEDULE
Type Coverage Carrier Policy # Period Premium
- ---- -------- ------- -------- ------ -------
GCL/Products $1,000,000 Liberty Mutual LG1-13-060188-151 1/1/92-1/1/93 $131,187
Umbrella/Products 15,000,000 Liberty Mutual LE1-060188-181 1/1/92-1/1/93 47,200
Umbrella/Liability 5,000,000 Fireman's Fund XXK-000-3150-3089 1/1/92-1/1/93 5,000
Aviation Products 50,000,000 National Union AP479-6179 2/8/92-2/8/93 101,500
Property/BI Fire Arkwright 250-376 2/1/90-2/1/93 89,031
Company Plane 10,000,000 U.S. Fire 650-AP-II-148927-2 7/22/91-7/22/92 2,166
(Liability)
Comprehensive Crime Bond 200,000 INA JO1790067 6/30/91-6/30/92 1,793
Business Travel Accident Policy 100,000 INA ABL-65-33-72 3/21/91-3/21/92 1,538
Welfare and Pension Plan Bond 1,600,000 INA J01822317 6/30/91-6/30/92 226
Flood Policy (ITB) Hobbs Group FL2032435659 8/14/91-8/14/92 660
Workman's Comp NJM W15388-2-91 10/31/91-10/31/92 197,516*
Liberty Mutual WC2-131-060188-141 1/1/92-1/1/93 156,254
Liberty Mutual WC2-131-060188-201 1/1/92-1/1/93 181,115
Automobiles Liberty Mutual ASI-131-060188-161 1/1/92-1/1/93 7,741
Liberty Mutual ASI-131-060188-091 1/1/92-1/1/93 21,326
Liberty Mutual ASI-131-060188-171 1/1/92-1/1/93 984
Liberty Mutual ASI-131-060188-111 1/1/92-1/1/93 12,050
Above coverages include all locations as applicable.
- ----------
* Net of dividend.
-35-
Schedule 3.2(t) - Depositions, Powers of Attorney
(i) Bank Names, etc.
A. RBC
NEW JERSEY NATIONAL
Type of Account Account Number Signatories
--------------- -------------- -----------
Operating 320-7868 Gary Holmes, Hal
Macsata, John Wnuk
Executive 606-1609 Gary Holmes, Hal
Macsata, John Wnuk
Payroll 320-7879 Gary Holmes, Hal
Macsata, John Wnuk
Petty Cash 322-1937 John Emling, George
Sobochek, Nancy
Hamcherick
NORTH CAROLINA
NATIONAL BANK
Payroll 758-429-716 Gary Holmes, Hal
Macsata, Chuck
Holmes, Emanuele
Costa
Petty Cash 758-432-423 Gary Holmes, Bobby
MacFarland, Hal
Macsata
CONNECTICUT NATIONAL BANK
Payroll 6612-6397 Gary Holmes, Hal
Macsata, Bob
Zavatkay
Petty Cash 6515-1896 Bob Zavatkay, Hal
Macsata
CITICORP
Revolving Hal Macsata, John
Credit Account Wnuk, Gillian
Persaud, George
Dowbnia, Sandy
Taylor
-36-
Blocked 01926-04512 J. Gallagher, S.
Goetschius, C.
Torello, Garvin, S.
Fisher
B. ITB
BANK OF AMERICA
Type of Account Account Number Signatories
--------------- -------------- -----------
General 01928-04511 Mike Hartnett, Ed
Trainer, M.L.
Jarosh, Hal Macsata,
S.L. Wang
Payroll 01923-04509 Mike Hartnett, Ed
Trainer, M.L.
Jarosh, Hal Macsata,
S.L. Wang
(ii) Powers of Attorney
None.
-37-
Schedule 4.1(b) - Authority (Buyer)
None.
-38-
Schedule 4.1(e) - Balance Sheet of Buyer
See Exhibit A attached hereto.
-39-
Schedule 4.1(f) - Brokers' or Finders' Fees
1. William E. Myers.
-40-