CONFIDENTIAL
ASSET SALE AGREEMENT
BY AND BETWEEN
IMO INDUSTRIES INC.
AND
ROLLER BEARING COMPANY OF AMERICA, INC.
Dated as of May 10, 1993
Table of Contents
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ARTICLE I. ASSETS TO BE ACQUIRED .................................. 1
1.1. Acquisition and Transfer of Assets ..................... 1
1.2. Excluded Assets ........................................ 4
1.3. Assumed Liabilities .................................... 5
1.4. Excluded Liabilities ................................... 6
1.5. Cancellation of Permits, Bonds
and Guarantees ....................................... 8
ARTICLE II. PURCHASE PRICE ......................................... 9
2.1. Purchase Price and Payment ............................. 9
2.2. Purchase Price Adjustment .............................. 9
2.3. Allocation of Purchase Price ........................... 11
ARTICLE III. THE CLOSING ............................................ 12
3.1. Closing Date ........................................... 12
3.2. Proceedings at Closing ................................. 12
3.3. Deliveries by the Seller to the Purchaser .............. 12
3.4. Deliveries by the Purchaser to the Seller .............. 13
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
OF THE SELLER .......................................... 14
4.1. Organization and Good Standing ......................... 14
4.2. Authorization of Agreement ............................. 14
4.3. Properties; Leases; Asset .............................. 15
4.4. Consents ............................................... 15
4.5. Financial Statement .................................... 15
4.6. Absence of Certain Developments ........................ 16
4.7. Intangible Property .................................... 17
4.8. Taxes .................................................. 17
4.9. Employees and Employee and Benefits .................... 17
4.10. Litigation ............................................. 19
4.11. Compliance with Law .................................... 20
4.12 Receivables ............................................ 20
4.13. Inventory .............................................. 20
4.14. Environmental Matters .................................. 20
4.15. Brokers ................................................ 21
4.16. Material Contracts and Bids ............................ 21
4.17. No Undisclosed Liabilities ............................. 22
(i)
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ARTICLE V. REPRESENTATIONS AND WARRANTIES OF
THE PURCHASER .......................................... 22
5.1. Organization and Good Standing ......................... 22
5.2. Authorization of Agreement ............................. 22
5.3. Consents ............................................... 23
5.4. Availability of Funds .................................. 23
5.5. Litigation ............................................. 24
5.6. Brokers ................................................ 24
ARTICLE VI. COVENANTS OF THE SELLER ................................ 24
6.1. Cooperation ............................................ 24
6.2. Access to Documents; Opportunity
to Ask Questions ..................................... 24
6.3. Conduct of Business .................................... 25
6.4. Consents and Conditions; Assignment
of Assets ............................................ 27
6.5. Compliance with Connecticut Transfer Act
6.6 No Solicitation ........................................ 27
ARTICLE VII. COVENANTS OF THE PURCHASER ............................. 28
7.1. Cooperation ............................................ 28
7.2. Confidentiality ........................................ 28
7.3. Consents and Conditions ................................ 28
7.4. Permits, Bonds and Guarantees .......................... 29
ARTICLE VIII. COVENANTS RELATING TO EMPLOYMENT
AND EMPLOYEE MATTERS ................................... 29
8.1. Employees .............................................. 29
8.2. COBRA .................................................. 29
8.3. Union Plans ............................................ 30
8.4. Termination Obligations ................................ 31
8.5. Indemnification ........................................ 31
ARTICLE IX. CONDITIONS PRECEDENT TO THE PURCHASER'S
OBLIGATIONS ............................................ 31
9.1. Representations, Warranties and Covenants .............. 31
9.2. No Prohibition ......................................... 32
9.3. Opinion of the Seller's Counsel ........................ 32
9.4. Delivery of Documents .................................. 32
9.5. Lease. ................................................. 32
9.6. Absence of Material Adverse Effect ..................... 32
9.7. Approvals and Consents ................................. 32
(ii)
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ARTICLE X. CONDITIONS PRECEDENT TO THE SELLER'S
OBLIGATIONS ............................................ 33
10.1. Representations, Warranties and Covenants .............. 33
10.2. No Prohibition ......................................... 33
10.3. Opinion of the Purchaser's Counsel ..................... 33
10.4. Delivery of Documents .................................. 34
10.5. Lease .................................................. 34
ARTICLE XI. ADDITIONAL POST-CLOSING COVENANTS ...................... 34
11.1. Further Assurances ..................................... 34
11.2. Public Announcements ................................... 36
11.3. Joint Post-Closing Covenant of the
Seller and the Purchaser ............................. 36
11.4. Books and Records; Personnel ........................... 37
ARTICLE XII. INDEMNIFICATION AND RELATED MATTERS .................... 38
12.1. Indemnification by the Seller .......................... 38
12.2. Indemnification by the Purchaser ....................... 39
12.3. Determination of Damages and
Related Matters ...................................... 39
12.4. Limitation on Indemnification
Liabilities Under Section 12.1(a) .................... 40
12.5. Survival of Representations,
Warranties and Covenants ............................. 40
12.6. Notice of Indemnification .............................. 40
12.7. Indemnification Procedure for
Third-Party Claims ................................... 41
12.8. Arbitration of Disputes Relating
to Indemnification ................................... 42
12.9. Exclusive Remedy ....................................... 44
ARTICLE XIII. TERMINATION ............................................ 44
13.1. Termination ............................................ 45
13.2. Liabilities After Termination. ......................... 45
ARTICLE XIV. MISCELLANEOUS .......................................... 45
14.1. Certain Definitions .................................... 45
14.2. Prorations ............................................. 51
14.3. Waiver of Compliance with Bulk
Transfer Laws ........................................ 52
14.4. Entire Agreement ....................................... 52
14.5. Governing Law .......................................... 52
14.6. Transfer Taxes ......................................... 52
(iii)
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14.7. Expenses ............................................... 53
14.8. Table of Contents and Headings ......................... 53
14.9. Notices ................................................ 53
14.10. Severability ........................................... 54
14.11. Binding Effect; No Assignment .......................... 54
14.12. Amendments ............................................. 55
14.13. Counterparts ........................................... 55
(iv)
Exhibits and Schedules
Schedule 1.1(a) - - Equipment
Schedule 1.1(d) - - Patents and Patent Applications
Schedule 1.1(e) - - Trademarks and Copyrights
Schedule 1.1(h) - - Permits
Schedule 1.1(i) - - Included Contracts
Schedule 1.2(e) - - Excluded Contracts
Schedule 1.4(1) - - Excluded Obligations, Liabilities and
Indebtedness
Schedule 1.5(b) - - Bonds
Schedule 4.4 - - Consents
Schedule 4.5 - - Initial Balance Sheet
Schedule 4.6 - - Certain Business Developments
Schedule 4.7 - - Intangible Assets
Schedule 4.9(a) - - Employees and Employee Benefits
Schedule 4.9(b) (i) - - CB Employee Benefit Plans
Schedule 4.9(b) (ii) - - CB Benefit Arrangements
Schedule 4.9(b) (iii) - - Severance Arrangements
Schedule 4.9(c) - - CB Employee Benefit Plan Exceptions
Schedule 4.10 - - Litigations
Schedule 4.11 - - Compliance With Law
Schedule 4.13 - - Inventory
Schedule 4.14(a) - - Environmental Permits
Schedule 4.14(b) - - Non-Compliance with Environmental Laws
Schedule 4.14(c) - - Environmental Legal Proceedings
Schedule 4.16 - - Material Contracts
Schedule 14.1 - - Retirees
Schedule 14.2 - - Certain Employees
Exhibit A - - Intentionally Omitted
Exhibit B - - Lease Term Sheet
(v)
ASSET SALE AGREEMENT
ASSET SALE AGREEMENT (the "Agreement"), dated as of May 10, 1993, by
and between Imo Industries Inc., a Delaware corporation (the "Seller"), and
Roller Bearing Company of America, Inc., a Delaware corporation (the
"Purchaser").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Seller, through its Heim Bearings division, is engaged
in the business of manufacturing, selling and distributing ball, spherical and
rod end bearings and related products (the "Business"); and
WHEREAS, the Purchaser desires to purchase, and the Seller desires
to sell, all of the assets and properties of the Seller employed in connection
with the Business (other than any real property and buildings), and, as part of
such purchase and sale, the Seller desires to assign, and the Purchaser desires
to assume, certain obligations and liabilities of the Business, subject, in each
case, to the exceptions, terms and conditions set forth herein; and
WHEREAS, certain capitalized terms used herein are defined in
Section 14.1 hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements hereinafter set forth, and
upon the terms and subject to the conditions hereinafter set forth, the
Purchaser and the Seller hereby agree as follows:
ARTICLE I.
ASSETS TO BE ACQUIRED
1.1. Acquisition and Transfer of Assets. Upon the terms and subject
to the conditions hereinafter set forth, the Seller shall sell, assign,
transfer, convey and deliver to the Purchaser, and the Purchaser shall purchase,
acquire and accept from the Seller, all of the Seller's right, title and
interest in and to the Business, including, without limitation, in and to all of
the assets, properties, rights, contracts and claims, primarily related to or
used primarily in connection with the Business (except as otherwise set forth in
Section 1.2 hereof), wherever located, whether tangible or intangible, as the
same shall
exist as of the Closing (such rights, title and interest in and to all such
assets, properties, rights, contracts and claims, being collectively referred to
herein as, the "Assets"). The Assets shall include, without limitation, all of
the Seller's rights, title and interest in and to the assets, properties,
rights, contracts and claims described in the following paragraphs (a) through
(n) but in each case, only to the extent primarily related to or used primarily
in connection with the Business; provided, however, that the Assets shall in any
event include all of the foregoing listed on the schedules referred to in
clauses (a) through (n) below:
(a) all furnishings, furniture, office and other supplies,
vehicles, spare parts, tools, dies, fuel, machinery, equipment and
other tangible personal property of any kind (collectively, the
"Equipment"), including, without limitation, all of the Equipment
listed on Schedule 1.1(a) hereto;
(b) all items of inventory notwithstanding how classified in
the financial records of the Seller, including, without limitation,
raw materials, work-in-process, finished goods, supplies, spare parts,
samples and stores (collectively the "Inventory");
(c) all accounts, accounts receivable and notes receivable
(whether short-term or long-term) from third parties or affiliated
entities and all deposits with third parties or affiliated entities,
together with any unpaid interest and fees accrued thereon from the
respective obligors and any security or collateral therefor,
including recoverable deposits and advances (collectively, the
"Accounts Receivable");
(d) (i) all patents and patent applications owned by the
Seller, all licenses to patents and patent applications to and from
third parties and all patents and patent applications in which the
Seller otherwise has rights, including, without limitation, those
listed in Schedule 1.1(d) hereto, (ii) research and development data
and results, manufacturing and other processes, trade secrets, know
how, inventions, mask work, designs, technology, proprietary data or
information, formulae, and manufacturing, engineering and other
technical information, whether owned by the Seller or licensed to the
Seller by third parties or affiliated entities, (iii) all notebooks,
records,
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reports and data relating thereto and (iv) all applications and
registrations for any of the foregoing (collectively, the assets
referred to in clauses (i) through (iv) are referred to herein as the
"Patent-Related Assets");
(e) all trademarks, trade names, service marks and
copyrights, any applications and registrations for any of the
foregoing listed on Schedule 1.1(e) hereto, and all computer programs,
software and data bases owned by the Seller, all licenses to and from
third parties or affiliated entities in respect of any of the
foregoing and each of the foregoing in which the Seller otherwise has
rights (collectively all of the foregoing assets, whether or not
listed on Schedule 1.1(e), together with the Patent-Related Assets,
are referred to herein as the "Intangible Assets");
(f) all marketing brochures and materials and other printed
and written materials relating to the Sellers' ownership of or
operation of the Business that the Seller is not required by law to
retain (of which the Seller may retain duplicates so long as the
confidentiality thereof is maintained by the Seller), and duplicates
of any such materials that the Seller is required by law to retain;
(g) all rights under or pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers,
contractors and other third parties or affiliated entities in
connection with the operation of the Business or affecting any of the
Assets;
(h) all Permits related to or used in connection with the
Business or the Assets, including, without limitation, the Permits
listed on Schedule 1.1(h) hereto held by the Seller (to the extent
permitted by applicable Law to be transferred);
(i) all Contracts including, without limitation, those
listed on Schedule 1.1(i) hereto;
(j) all deferred and prepaid charges, sums and fees, other
than in respect of taxes and insurance premiums;
(k) all Bids;
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(l) all of the Seller's rights, claims, credits, causes of
action or rights of set-off against third parties relating to the
Business or the Assets, whether liquidated or unliquidated, fixed or
contingent, including all claims under the Contracts;
(m) all books, records, files and papers related to the
Assets or the conduct of the Business; and
(n) all goodwill relating to the foregoing Assets.
1.2. Excluded Assets. Notwithstanding anything to the contrary
contained in Section 1.1 hereof, the Seller and the Purchaser expressly
understand and agree that the Seller is not hereunder selling, assigning,
transferring, conveying or delivering to the Purchaser the following assets,
properties, rights, contracts and claims (collectively, the "Excluded Assets"):
(a) cash, bank accounts, certificates of deposits, treasury
bills, treasury notes and marketable securities;
(b) except as otherwise specifically provided in Section 8.3
hereof with respect to the CB Employee Benefit Plans and CB Benefit
Arrangements assumed by the Purchaser, pension or other funded
employee benefit plan assets;
(c) any policy of insurance;
(d) except as set forth in Schedule 1.1(e) hereto, any of
the Seller's right, title or interest in or to any name, mark, trade
name or trademark, including, without limitation, any incorporating
"Imo" or "Imo Delaval" and all corporate symbols or logos
incorporating "Imo" or "Imo Delaval", either alone or in combination,
and any and all goodwill represented thereby and pertaining thereto;
(e) all Contracts that relate solely to the Excluded Assets
or the Excluded Liabilities;
(f) all prepaid insurance premiums and prepaid taxes
pertaining to the Business and all
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prepaid charges, sums and fees pertaining to any of the Excluded
Assets or the Excluded Liabilities;
(g) any of the Seller's right, title or interest in real
property and buildings located thereon, including, without limitation,
the office of the Business in Fairfield, Connecticut and any of the
fixtures attached thereto (including all environmental systems) and
any Permits relating to the ownership of the real property or the
buildings located thereon, including, without limitation, those
Permits relating to the occupancy of such buildings, but excluding
those Permits necessary for the operation of Business;
(h) any books, records or other data relating to the
Seller's ownership or operation of the Business not located on the
premises of the Business and which are part of the Seller's general
corporate books and records or required by applicable Law to be
retained by the Seller, provided, however, that copies of such books,
records or other data relating to the Business shall be furnished to
the Purchaser promptly upon reasonable written request;
(i) except as otherwise set forth in the last sentence of
Section 11.1 hereof, any of Seller's right, title and interest under
any Contracts, agreements, licenses, Permits, exemptions, franchises,
variances, waivers, consents, approvals or other authorizations or
arrangements that are not transferrable without consent (unless such
consent has been obtained); and
(j) any claims for refunds or rebates of any previously paid
taxes, levies or duties including, without limitation, the Customs
Receivable.
1.3. Assumed Liabilities. Effective as of the Closing, the Purchaser
shall assume and pay, perform and discharge all debts, claims, liabilities,
obligations, damages and expenses (collectively, the "Liabilities") of the
Seller of every kind and nature, whether known, unknown, contingent, absolute,
determined, indeterminable or otherwise on the Closing Date and whether incurred
or accruing prior to, on or after the Closing Date, to the extent primarily
relating to or arising primarily from the operation of the Business including,
without limitation, all claims against, and liabilities and obligations of, the
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Seller with respect to the Contracts being transferred to the Purchaser
hereunder (to the extent that such liabilities and obligations remain
unsatisfied or are required to be performed on or after the Closing Date) and
all such liabilities and obligations with respect to Employees and CB Retirees
as are specifically set forth in Article VIII hereof (collectively, the "Assumed
Liabilities").
1.4. Excluded Liabilites. Notwithstanding anything in Section 1.3
hereof to the contrary, the Seller and the Purchaser expressly understand and
agree that the Purchaser shall not assume or become liable for any of the
following Liabilities of the Seller (the "Excluded Liabilities"):
(a) any liability or obligation (whether presently in
existence or arising hereafter) of the Seller for any Taxes;
(b) except as provided in the Lease, any liability or
obligation arising out of any violation of any Environmental Law by
the Seller (including, without limitation, the items set forth in
Schedule 4.11) or arising out of the presence, transportation, storage
or disposal of Hazardous Substances, in each case to the extent such
violation existed, or such Hazardous Substances were present,
transported, stored or disposed of, on or prior to the Closing Date;
(c} any liability or obligation, whether presently in
existence or arising hereafter, that is not primarily attributable to,
or does not arise primarily out of the conduct of, the Business;
(d) any liability or obligation, whether presently in
existence or arising hereafter, relating to any of the Excluded
Assets;
(e) any liability or obligation, whether presently in
existence or arising hereafter, arising in connection with the
operation of the Business or the ownership of the Assets prior to the
Closing Date (whether based on occurrences prior to the Closing or
after the Closing), but only to the extent that the Seller or any of
its Affiliates is reimbursed for such liability or obligation under
any insurance policy or such liability or obligation is paid directly
to the Seller or any of its Affiliates pursuant to any
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insurance policy; provided, however, that the Seller shall use all
reasonable efforts to obtain reimbursement of or payment for such
liability or obligation under any insurance policy pursuant to which
the Seller may be entitled to reimbursement or payment (which shall
not be interpreted as requiring the Seller to commence legal action
against any insurance carrier);
(f) any liability or obligation of the Seller to Employees,
former Employees (including the spouses and beneficiaries of such
individuals), and CB Retirees arising from the employment of any such
individual with the Seller or in connection with compensation or
benefits under any Employee Benefit Plan or Benefit Arrangement
provided by Seller, except as specifically provided in Article VIII
hereof;
(g) any liability or obligation of the Seller arising out of
(i) any threatened or pending litigation that is pending or threatened
as of the Closing Date, whether or not listed on any schedule hereto
or (ii) any negligent, reckless, tortious or unlawful action or
inaction of the Seller prior to the Closing Date, including, without
limitation, any of the foregoing in clause (i) or (ii) relating to the
Business or the Assets (it being understood that to the extent any
liability of the Purchaser results from the combined effect or
duration of actions or inactions on the part of each of the Seller and
the Purchaser, the apportionment of such liability shall be determined
pursuant to equitable principles of contribution);
(h) any liability or obligation arising out of defects in,
or damages to persons or property arising out of defects in, products
manufactured and sold by, or services rendered by, the Seller prior to
the Closing Date;
(i) (i) any current liability or obligation of the Seller
existing on the Closing Date that should have been accrued on the
Closing Balance Sheet or reflected in the notes thereto in accordance
with GAAP but that was not so accrued or reflected and (ii) any
non-current liability or obligation of the Seller existing on the
Closing Date that should have been accrued on the Initial Balance
Sheet or reflected in
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the notes thereto in accordance with GAAP but that was not so accrued
or reflected;
(j) any liability or obligation relating to workers'
compensation claims made by any employee of the Seller (whether filed
or presented before or after the Closing Date) in connection with any
claim arising as a result of any incidents or circumstances occurring
or in existence on or before the Closing Date, provided that with
respect to any claim that is solely stress related, any claim that is
solely other than a physical injury and any stress related or
non-physical component of a claim, such claim shall have been made or
presented to the Seller prior to the Closing Date and if not so made
or presented shall constitute an Assumed Liability;
(k) all of the obligations of the Seller under (i) the
letter agreement, dated November 16, 1992, between the Seller and
Larry Raffone (the "Raffone Agreement") and (ii) the letter
agreement, dated November 16, 1992, between the Seller and Mario di
Domenico (collectively with the Raffone Agreement, the "Letter
Agreements"); and
(l) any other obligation, liability or indebtedness of the
Seller described in Schedule 1.4(1) hereto.
1.5. Cancellation of Permits, Bonds and Guarantees.
(a) Subsequent to the Closing, to the extent permitted by
Law, the Seller shall have the right to cancel any Permit and any bond,
guarantee or undertaking by the Seller now applicable to the Business or the
Assets to the extent such is not assigned or transferred to the Purchaser
pursuant to Section 1.1 hereof. The failure of the Seller to cancel any Permit,
bond, guarantee or undertaking shall not affect the respective rights,
obligations, liabilities and indemnifications of the Seller by the Purchaser
under this Agreement. Notwithstanding the foregoing, the Seller shall provide
written notice to the Purchaser of the Seller's intention to cancel any such
Permit, bond, guaranty or undertaking and shall provide the Purchaser with the
reasonable opportunity to obtain a new Permit or replace any such bond, guaranty
or undertaking, prior to any cancellation thereof by the Seller.
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(b) The Purchaser shall assume, or promptly reimburse the Seller
for all costs associated with the assignment or transfer of all Permits related
to the Business and the costs of all bonds related to the Business, which are
set forth on Schedule 1.5(b) hereto and, in either case, cannot be cancelled for
as long as they remain outstanding.
ARTICLE II.
PURCHASE PRICE
2.1. Purchase Price and Payment. The consideration for the transfer
of the Assets and the Business to the Purchaser by the Seller shall be the
Purchaser's assumption of the Assumed Liabilities as provided in Section 1.3
hereof, plus the payment to the Seller of $6,000,000 (the "Purchase Price"),
subject to adjustment as provided in Section 2.2 hereof. Payment of the
$6,000,000 portion of the Purchase Price shall be in U.S. dollars, and shall be
made on the Closing Date by wire transfer of immediately available funds to the
account or accounts designated by the Seller.
2.2. Purchase Price Adjustment.
(a) As soon as practicable (but in no event later than 60
days) following the Closing Date, the Seller shall prepare and deliver
to the Purchaser a balance sheet for the Business as of the Closing
Date (the "Closing Balance Sheet"), which shall include a computation
of the Preliminary Working Capital Adjustment (as defined below). The
Closing Balance Sheet shall be prepared by the Seller on a basis
consistent with the Initial Balance Sheet in accordance with GAAP,
except as set forth in the notes thereto (which notes shall be
prepared on a basis consistent with the notes to the Initial Balance
Sheet) and that the Customs Receivable shall not be reflected as an
asset on the Initial Balance Sheet or the Closing Balance Sheet.
(b) The "Preliminary Working Capital Adjustment" shall equal
the amount of Working Capital reflected on the Initial Balance Sheet
minus the amount of Working Capital reflected on the Closing Balance
Sheet. As used herein, "Working Capital" for purposes of both the
Initial Balance Sheet and the Closing
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Balance Sheet shall mean the difference between the total current
assets (excluding any current assets that are Excluded Assets
including, without limitation, the Customs Receivable) of the Business
and the total current liabilities (excluding short-term borrowings and
any other current liabilities that are Excluded Liabilities) of the
Business, as reflected on the Initial Balance Sheet or the Closing
Balance Sheet, as the case may be.
(c) Following the Closing Date, the Purchaser shall afford
the Seller access to all books and records relating to the Business
and make available the assistance of any employees of the Purchaser
related to the Business, in each case as is necessary to enable the
Seller to prepare the Closing Balance Sheet and to calculate the
Preliminary Working Capital Adjustment, both of which shall be
certified by the Seller's Chief Financial Officer as having been
prepared and calculated in accordance with the terms of this
Agreement.
(d) The Purchaser shall have a period of 20 Business Days to
review the Closing Balance Sheet and the calculation of the
Preliminary Working Capital Adjustment following delivery of the
Closing Balance Sheet by the Seller. During such period, the Seller
shall afford the Purchaser access to any of its books, records and
work papers necessary to enable the Purchaser to review the Closing
Balance Sheet and the calculation of the Preliminary Working Capital
Adjustment. The Purchaser may dispute any amounts reflected in the
Preliminary Working Capital Adjustment by giving notice in writing to
the Seller specifying each of the disputed items and setting forth in
reasonable detail the basis for such dispute. Failure by the Purchaser
to dispute the amounts reflected in the Preliminary Working Capital
Adjustment within 20 Business Days of delivery of the Closing Balance
Sheet by the Seller shall be deemed an acquiescence therein by the
Purchaser. If within 30 days after delivery by the Purchaser to the
Seller of any notice of dispute, the Purchaser and the Seller are
unable to resolve all of such disputed items, then any remaining items
in dispute shall be submitted to Arthur Andersen & Co. (the
"Arbitrator"). The Arbitrator shall determine the remaining disputed
items and report to the Seller and the Purchaser upon such items. The
Arbitrator's
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decision shall be final, conclusive and binding on all parties. The
Purchaser and the Seller agree that judgment may be entered upon the
determination of the Arbitrator in any court having jurisdiction over
the party against whom such determination is to be enforced. The fees
and disbursements of the Arbitrator shall be borne equally by the
Purchaser and the Seller. The Preliminary Working Capital Adjustment
if undisputed or deemed undisputed or as revised in accordance with
the procedure outlined above shall be the "Final Working Capital
Adjustment."
(e) If the amount of the Final Working Capital Adjustment is
positive then the Purchase Price shall be decreased by such amount and
the Seller shall pay to the Purchaser, within five (5) Business Days
of the final determination thereof pursuant to the foregoing
provisions of this Section 2.2, an amount equal to the Final Working
Capital Adjustment in cash, with interest from the Closing Date until
paid, computed at the prime rate announced from time to time by
Bankers Trust Company, as in effect on the Closing Date.
(f) If the amount of the Final Working Capital Adjustment is
negative then the Purchase Price shall be increased by such amount and
the Purchaser shall pay to the Seller, within five (5) Business Days
of the final determination thereof pursuant to the foregoing
provisions of this Section 2.2, an amount equal to the Final Working
Capital Adjustment in cash, with interest from the Closing Date until
paid, computed at the prime rate announced from time to time by
Bankers Trust Company, as in effect on the Closing Date.
(g) The Purchaser and the Seller agree that the procedures
established by this Section 2.2 shall constitute the exclusive
procedures for determining the Preliminary Working Capital Adjustment
and the Final Working Capital Adjustment.
2.3. Allocation of Purchase Price. The Purchaser and the Seller
hereby agree that the Purchase Price of the Assets will be allocated in a
mutually acceptable manner within sixty (60) Business Days after the Closing
Date. Subject to the requirements of any applicable tax law, all tax returns and
reports filed by the Purchaser and the Seller shall be prepared consistently
with such allocation.
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In the event of any purchase price adjustment hereunder, the Purchaser and the
Seller agree to adjust such allocation to reflect such purchase price adjustment
and to file consistently any tax returns and reports required as a result of
such purchase price adjustment.
ARTICLE III.
THE CLOSING
3.1. Closing Date. The Closing shall take place at the offices of
Weil, Gotshal & Manges, 767 Fifth Avenue, York, New York at 10:00 A.M., not
later than the fifth Business Day following satisfaction of all of the
conditions precedent thereto set forth in this Agreement, or at such other place
and at such other time and date as may be mutually agreed upon by the Purchaser
and the Seller. In the event that by the date of the Closing the Seller is
unable to obtain the consents, waivers, approvals and authorizations required by
Section 10.6 hereof, the Closing shall be adjourned until the Seller obtains
such consents, waivers, approvals and authorizations. The date of the Closing is
referred to in this Agreement as the "Closing Date."
3.2. Proceedings at Closing. All proceedings to be taken and all
documents to be executed and delivered by the Seller in connection with the
consummation of the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Purchaser and its counsel. All
proceedings to be taken and all documents to be executed and delivered by the
Purchaser in connection with the consummation of the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to the Seller and
its counsel. All proceedings to be taken and all documents to be executed and
delivered by all parties at the Closing shall be deemed to have been taken,
executed and delivered simultaneously, and no proceedings shall be deemed taken
nor any documents executed or delivered until all have been taken, executed and
delivered.
3.3. Deliveries by the Seller to the Purchaser. At the Closing, the
Seller shall deliver, or shall cause to be delivered, to the Purchaser the
following:
(a) executed assignments, patent assignments, trademark
assignments, bills of sale and/or
12
certificates of title, in forms to be mutually agreed upon by
Purchaser and Seller, dated the Closing Date, transferring to the
Purchaser all of the Assets;
(b) the certificate referred to in Section 9.1(c) hereof
signed by the Chief Financial Officer and another duly authorized
senior executive officer of the Seller referred to in Section 9.1(c)
hereof;
(c) the opinions of counsel for the Seller referred to in
Section 9.3 hereof;
(d) a lease with respect to the office of the Business in
Fairfield, Connecticut having the terms set forth on Exhibit B hereto
(the "Lease"), signed by a duly authorized officer of the Seller;
(e) a receipt for the Purchase Price; and
(f) such other documents, certificates and agreements as the
Purchaser reasonably requests.
3.4. Deliveries by the Purchaser to the Seller. At the Closing, the
Purchaser shall deliver to the Seller the following:
(a) immediately available funds in the amount of the
Purchase Price, by wire transfer as provided in Section 2.1 hereof;
(b) the certificate referred to in Section 10.1(c) hereof
signed by the Chief Financial Officer and another duly authorized
senior executive officer of the Purchaser;
(c) the opinion of counsel for the Purchaser referred to in
Section 10.3 hereof;
(d) an executed assumption agreement, in a form to be
mutually agreed upon by Purchaser and Seller, dated the Closing Date,
pursuant to which the Purchaser assumes all of the Assumed
Liabilities;
(e) the Lease, signed by a duly authorized officer of the
Purchaser; and
(f) such other documents, certificates and agreements as the
Seller reasonably requests.
13
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as
follows:
4.1. Organization and Good Standing. The Seller 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 carry
on its business (including, without limitation, the Business) as it is now being
conducted, and to execute, deliver and perform this Agreement and to consummate
the transactions contemplated hereby.
4.2. Authorization of Agreement. The Seller has full corporate power
and authority to execute and deliver this Agreement and each other agreement,
document, instrument or certificate contemplated by this Agreement or to be
executed by the Seller in connection with the consummation of the transactions
contemplated by this Agreement (all such other agreements, documents,
instruments and certificates required to be executed by the Seller being
hereinafter referred to, collectively, as the "Seller Documents"), and to
perform fully its obligations hereunder and thereunder. The execution, delivery
and performance by the Seller of this Agreement and each of the Seller Documents
has been duly authorized by all necessary corporate action on the part of the
Seller. This Agreement has been, and each of the Seller Documents will be at or
prior to the Closing, duly executed and delivered by the Seller, and (assuming
the due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and the Seller Documents when so executed
and delivered will constitute, legal, valid and binding obligations of the
Seller, enforceable against the Seller in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). None of the
execution and delivery by the Seller of this Agreement and the Seller Documents,
or the consummation of the transactions contemplated hereby or thereby, or
compliance by the Seller with any of the provisions hereof or thereof will (i)
14
conflict with, or result in the breach of, any provision of the certificate of
incorporation or by-laws of the Seller, (ii) conflict with, violate, result in
the breach or termination of, or constitute a default under any Contract, Order
or Permit to which the Seller is a party or by which it or any of the Assets is
bound or subject, (iii) constitute a violation of any Law applicable to the
Seller, or (iv) result in the creation of any Lien (other than any Lien in favor
of the Purchaser) upon any of the Assets, except, in each case, for violations,
conflicts, breaches or defaults which in the aggregate would not materially
hinder or impair the transactions contemplated hereby or have a Material Adverse
Effect.
4.3. Properties; Leases; Assets.
(a) The Seller owns and has good and valid title to or, in the case
of leased properties, a good and valid leasehold interest in, all of the Assets,
including all such Assets reflected in the Financial Statement, except Assets
disposed of in the ordinary course of business after December 31, 1992. The
Seller holds title to each such Asset free and clear of all Liens other than
Permitted Exceptions.
(b) Except with respect to the real property of the Seller utilized
in the Business, the Assets to be transferred to the Purchaser on the Closing
Date comprise all of the assets necessary to operate the Business as presently
being conducted in all material respects.
4.4. Consents. No consent, waiver, approval, or authorization of, or
declaration, registration or filing with, or notification to, any Person or
Governmental Body is required on the part of the Seller in connection with the
execution and delivery by the Seller of this Agreement or the Seller Documents,
or the compliance by the Seller with any of the provisions hereof or thereof, or
the consummation of the transactions contemplated hereby or thereby, except (i)
as set forth on Schedule 4.4 hereto and (ii) consents, waivers, approvals,
Orders or Permits, if any, which the Purchaser is required to obtain.
4.5. Financial Statement. The Initial Balance Sheet of the Business
as of the month ended April 30, 1993, a copy of which is attached hereto as
Schedule 4.5 (the "Financial Statement"), has been prepared based on information
in the books and records of the Seller in accordance
15
with GAAP except as set forth in the notes thereto and presents fairly the
financial position of the Business as at the date indicated.
4.6. Absence of Certain Developments. Except as set forth on
Schedule 4.6 hereto, since December 31, 1992 the Seller has operated the
Business in the ordinary course consistent with past practice and there has
arisen no event, condition or circumstance, or group of events, conditions or
circumstances that have resulted in, or could be reasonably expected to result
in, a Material Adverse Effect. Without limiting the generality of the foregoing,
except as set forth on Schedule 4.6 hereto, since December 31, 1992, there has
not been:
(a) other than in the ordinary course of business and in accordance
with past practice, any (i) increase in benefits payable or potentially payable
under any severance, continuation or termination pay policies or employment
agreements with any officer or employee of the Seller who is employed in
connection with the Business or who may otherwise become an employee of the
Purchaser following the Closing, (ii) increase in compensation, bonus or other
benefits payable or potentially payable to officers or employees of the Seller
who are employed in connection with the Business or who may otherwise become
employees of the Purchaser following the Closing, or (iii) change in the terms
of any bonus, pension, insurance, health or other employee benefit plan or
arrangement of the Seller with respect to any officer or employee who is
employed in connection with the Business or who may otherwise become an employee
of the Purchaser following the Closing;
(b) any loan to or guarantee or assumption of any loan or obligation
on behalf of any officer or employee of the Seller involved in the Business;
(c) any change by the Seller in its accounting principles, methods
or practices or in the manner it keeps its books and records; or
(d) any labor dispute (other than routine individual grievances) or
activity or proceeding by a labor union or representative thereof to organize
any employees of the Seller involved in the Business who were not subject to a
collective bargaining agreement at December 31, 1992, or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect to any such
employee.
16
4.7. Intangible Property. The Intangible Assets set forth on
Schedules 1.1(d) and 1.1(e) constitute all of the registered patents,
trademarks, trade names, service marks and copyrights, and all applications
therefor relating to any of the foregoing, used in connection with, or necessary
for the operation of, the Business, except for any name, mark, trade name or
trade mark incorporating "IMO" or "IMO Delaval." Except as set forth on Schedule
4.7 hereto, each of the Intangible Assets listed on Schedule 1.1(d) or 1.1(e) as
being owned by the Seller is owned by the Seller free and clear of any and all
Liens (other than Permitted Exceptions) and, to the knowledge of the Seller, no
other Person has any claim of ownership with respect thereto. The Seller has
adequate licenses or other valid rights to use all of the Intangible Assets
which it does not own and which are material to the conduct of the Business as
presently conducted, and such licenses and rights are included in the Assets. To
the Seller's knowledge, the Seller's use of the foregoing Intangible Assets does
not conflict with, infringe upon, violate or interfere with any intellectual
property rights of any other Person. Except as set forth on Schedule 4.7, there
are not and have not been any legal Proceedings involving any of the Intangible
Assets nor, to the Seller's knowledge, is any such action or proceeding
threatened.
4.8. Taxes. None of the Assets is tax-exempt use property within the
meaning of Section 168(h) of the Code. None of the Assets is property that is or
will be required to be treated as being owned by another person pursuant to the
provisions of Section 168(f) (8) of the Internal Revenue Code of 1954, as
amended and in effect immediately prior to the enactment of the Tax Reform Act
of 1986.
4.9. Employees and Employee Benefits.
(a) Except as set forth on Schedule 4.9(a) hereto, (i) the Seller is
not 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 through Closing Date or amounts required to be reimbursed to
such Employees; (ii) the Seller is not a party to any collective bargaining
agreement applicable to the Employees; (iii) none of the Employees is
represented by any labor organization; (iv) there is no unfair labor practice
complaint against the Seller pending before the National Labor Relations Board
or any comparable state, local or foreign agency and neither any grievance which
might have a Material Adverse Effect nor any
17
arbitration proceeding arising out of or under any collective
bargaining agreement is currently pending; (v) there is no labor strike, work
stoppage or slowdown actually occurring or, to the knowledge of the Seller,
threatened against or directly affecting the operations of the Business which
would have a Material Adverse Effect.
(b) Schedule 4.9(b) (i) hereto lists each CB Employee Benefit Plan.
Schedule 4.9(b) (ii) hereto lists each CB Benefit Arrangement. Schedule 4.9(b)
(iii) hereto lists each Severance Arrangement.
(c) Except as set forth on Schedule 4.9(c) hereto:
(i) all CB Employee Benefit Plans intended to be qualified under
Section 401 of the Code have received favorable determinations from the Internal
Revenue Service, and to the best knowledge of the Seller, nothing has occurred
since such determinations to affect adversely such determinations, and true and
correct copies of such plans and determination letters have been delivered to
the Purchaser;
(ii) no CB Employee Benefit Plans which constitute "employee
welfare benefit plans," as defined in Section 3(1) of ERISA, are funded through
trusts under Section 501(c) of the Code;
(iii) no CB Employee Benefit Plan has participated in, engaged
in or been a party to any "prohibited transaction" (as defined in ERISA or the
Code), and neither the Seller nor any of its ERISA Affiliates has incurred, or
is reasonably expected to incur, any liability for taxes under Code Section
4975, with respect to any CB Employee Benefit Plan;
(iv) other than normal claims for benefits, there is no material
claim, pending or threatened, involving any CB Employee Benefit Plan or CB
Benefit Arrangement by any person against such plan or arrangement, or the
Seller or any ERISA Affiliate, nor to the knowledge of the Seller is there any
reasonable basis to anticipate any such claim; there is no material violation of
any reporting or disclosure requirement imposed by ERISA or the Code with
respect to any CB Employee Benefit Plan. True and correct copies of the most
recent annual report on IRS Form 5500 (including attachments, exhibits,
schedules, actuarial
18
report and audited financial statement) for each CB Employee
Benefit Plan have been delivered to the Purchaser. These reports and related
exhibits and attachments accurately described the assets and liabilities of each
such plan as of the date thereof and since the date of such annual reports there
has been no material adverse change in the funding status of any funded CB
Employee Benefit Plan; and
(v) no CB Employee Benefit Plan which is an employee pension
benefit plan, as defined in Section 3(2) of ERISA, has incurred an "accumulated
funding deficiency" (within the meaning of Section 412(a) of the Code) whether
or not waived. Except as disclosed in Schedule 4.9(c) hereto, no "reportable
event" within the meaning of Section 4043(b) of ERISA (to the extent that the
reporting of such events to the Pension Benefit Guaranty Corporation ("PBGC")
within 30 days of the occurrence has not been waived) with respect to any such
pension plan has occurred and is continuing or is reasonably expected to occur.
No termination liability to the PBGC has been or is expected to be incurred with
respect to any such pension plan, and no conditions or events have occurred that
present significant risk of termination by the PBGC.
(d) Neither the Seller nor any of its ERISA Affiliates have at any
time during the six (6) years immediately prior to the Closing Date sponsored,
maintained or contributed to or incurred an obligation to contribute to any
"multiemployer plan", as defined in Sections 3(37) and 4001(a)(3) of ERISA.
(e) With respect to each CB Employee Benefit Plan and CB Benefit
Arrangement, all contributions to or payments under any such plan which were
required to be paid as of the Closing Date have been paid by the Seller and all
amounts accrued to date under such plans as liabilities of the Seller which have
not been paid because they are not yet due under applicable law have been
properly recorded on the books of the Seller, as reflected on the Closing
Balance Sheet.
4.10. Litigation. Except as set forth on Schedule 4.10 hereto, there
is no Legal Proceeding pending or, to the knowledge of the Seller, threatened
(i) against or initiated by the Seller in connection with the operation of the
Business or ownership of the Assets; (ii) that seeks to enjoin or obtain damages
in respect of the consummation of the transactions contemplated by this
Agreement or the
19
Seller Documents; or (iii) that questions the validity of this Agreement, any
of the Seller Documents or any action taken or to be taken by the Seller in
connection with the consummation of the transactions contemplated hereby or
thereby.
4.11. Compliance with Law. Except as set forth on Schedule 4.11
hereto or on another Schedule hereto, the Business has been and is being
conducted, and the uses to which the Assets have been and are being put, have
been and are in compliance in all material respects with all applicable Laws,
Orders and Permits. Except as set forth on Schedule 4.11 hereto, the Seller has
neither received, nor knows of the issuance of, any notice of any such violation
or alleged violation.
4.12. Receivables. All of the accounts and accounts receivable
reflected on the Initial Balance Sheet, and all accounts and accounts receivable
arising subsequent to the date thereof, have arisen from bona fide transactions
in the ordinary course of business consistent with past practice.
4.13. Inventory. Subject to any reserve therefor that may be set
forth in the Financial Statement or set forth in Schedule 4.13 hereto, all of
the Inventory: (a) has been acquired or manufactured in the ordinary course of
business, consistent with past practice; (b) is of a quality useable in the
ordinary course of business (including processing into merchantable finished
inventories for sale in the ordinary course of business) free of any material
defect or deficiency; (c) is in merchantable and undamaged condition in all
material respects; and (d) is not obsolete.
4.14. Environmental Matters. (a) The Seller has obtained all
approvals, authorizations, certificates, consents, licenses, orders and permits
or other similar authorizations of all Governmental Bodies, or from any other
person, that are required under any Environmental Law and relate to the Business
or the Assets. Schedule 4.14(a) sets forth all permits, licenses and other
authorizations issued under any Environmental Law to the Seller relating to the
Business or the Assets.
(b) Except as set forth on Schedule 4.14(b), the Seller is in
compliance in all material respects with all terms and conditions of all
approvals, authorizations,
20
certificates, consents, licenses, orders and permits or other similar
authorizations of all Governmental Bodies and all other persons required under
all Environmental Laws and used in the Business or that relate to the Assets,
and is also in compliance in all material respects with all other limitations,
restrictions, conditions, standards, requirements, schedules and timetables
required or imposed under all Environmental Laws.
(c) Except as set forth in Schedule 4.14(c), there is no pending
or, to the Seller's knowledge, threatened, Legal Proceeding, citation or notice
of violation under any Environmental Law relating to the Business or any of the
Assets.
4.15. Brokers. Other than Morgan Stanley & Co. Incorporated ("Morgan
Stanley"), no person has acted directly or indirectly as a broker, finder or
financial advisor for the Seller in connection with the negotiations relating to
or the transactions contemplated by this Agreement and no Person other than
Morgan Stanley is entitled to any fee, commission or like payment in respect
thereof based in any way on any agreement, arrangement or understanding made by
or on behalf of the Seller. The Seller acknowledges that it is responsible for
the payment of the fees of Morgan Stanley in connection with the transactions
contemplated by this Agreement.
4.16. Material Contracts and Bids.
(a) Schedule 4.16 hereto contains a true and correct list of each
oral or written contract, agreement, commitment or obligation with respect to
the Assets or the Business to which the Seller is a party, other than all
purchase orders entered into in the ordinary course of business, which is being
assigned to the Purchaser hereunder and which involves the payment to or from
the Seller of amounts in excess of $25,000 per year or the loss of which could
result in a Material Adverse Effect (collectively, the "Material Contracts").
(b) Except as disclosed in Schedule 4.16, each Contract constitutes
the legal, valid and binding obligation of the Seller and, to the Seller's
knowledge, each other party thereto, enforceable against the Seller in
accordance with each Contract's terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors'
21
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except to the extent that rights to
indemnification and contribution under any Contract may be limited by federal or
state securities laws or public policy relating thereto. The Seller has no
knowledge of any other party to any Contract being in default or having failed
to perform any material obligation thereunder.
4.17. No Undisclosed Liabilities. Except as set forth on any
schedule hereto and for liabilities incurred in the ordinary course of business
and consistent with past practices, since the date of the Financial Statement,
the Seller has not incurred any material liability or obligation (whether
accrued, absolute, contingent or otherwise), and whether due or to become due,
of a nature required by GAAP to be reflected on a corporate balance sheet or
disclosed in the notes thereto.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller that:
5.1. Organization and Good Standing. The Purchaser 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 carry
on its business as it is now being conducted, and to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
5.2. Authorization of Agreement. The Purchaser has full corporate
power and authority to execute and deliver this Agreement and each other
agreement, document, instrument or certificate contemplated by this Agreement or
to be executed by it in connection with the consummation of the transactions
contemplated by this Agreement (all such other agreements, documents,
instruments and certificates required to be executed by the Purchaser being
hereinafter referred to, collectively, as the "Purchaser Documents") and
22
to perform fully its respective obligations hereunder and thereunder. The
execution, delivery and performance by the Purchaser of this Agreement and each
Purchaser Document has been duly authorized by all necessary corporate action on
the part of the Purchaser. This Agreement has been, and the Purchaser Documents
will be at or prior to the Closing, duly executed and delivered by the Purchaser
and (assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement constitutes, and the Purchaser Documents when
so executed and delivered will constitute, legal, valid and binding obligations
of the Purchaser, enforceable against it in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). None of the
execution and delivery by the Purchaser of this Agreement and the Purchaser
Documents, or the consummation of the transactions contemplated hereby or
thereby, or compliance by the Purchaser with any of the provisions hereof or
thereof, will (i) conflict with, or result in the breach of, any provision of
the certificate of incorporation or by-laws of the Purchaser, (ii) conflict
with, violate, result in the breach termination of, or constitute a default
under any contract or Order to which the Purchaser is a party or by which it or
any of its respective properties or assets is bound or subject, or (iii)
constitute a violation of any Law applicable to the Purchaser, except, in each
case, for violations, conflicts, breaches or defaults which individually or in
the aggregate would not materially hinder or impair the transactions
contemplated hereby.
5.3. Consents. No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to, any Person
or Governmental Body is required on the part of the Purchaser in connection with
the execution and delivery of this Agreement or the Purchaser Documents or the
compliance by the Purchaser with any of the provisions hereof or thereof, except
consents, waivers, approvals, Orders or Permits, if any, which the Seller is
required to obtain pursuant to Section 4.4 hereof.
5.4. Availability of Funds. The Purchaser has available sufficient
funds or commitments from lending institutions for such funds to enable it to
consummate the transactions contemplated by this Agreement.
23
5.5. Litigation. There is no Legal Proceeding pending or, to the
knowledge of the Purchaser, threatened, that seeks to enjoin or obtain damages
in respect of the consummation of the transactions contemplated by this
Agreement or that questions the validity of this Agreement, the Purchaser
Documents or any action taken or to be taken by the Purchaser in connection with
the consummation of the transactions contemplated hereby or thereby.
5.6. Brokers. Other than Aurora Capital Partners L.P. ("Aurora"), no
Person has acted directly or indirectly as a broker, finder or financial advisor
for the Purchaser in connection with the negotiations relating to or the
transactions contemplated by this Agreement and no Person is entitled to any fee
or commission or like payment in respect thereof based in any way on
agreements, arrangements or understandings made by or on behalf of the
Purchaser. The Purchaser acknowledges that it is responsible for the payment of
the fees of Aurora in connection with the transactions contemplated by this
Agreement.
ARTICLE VI.
COVENANTS OF THE SELLER
From and after the date hereof and until the Closing, the Seller
hereby covenants and agrees with the Purchaser that:
6.1. Cooperation. The Seller shall use its best efforts to cause the
consummation of the transactions contemplated hereby in accordance with the
terms and conditions hereof, including, without limitation, cooperating with the
Purchaser to obtain novations for all government contracts to be transferred
hereunder.
6.2. Access to Documents; Opportunity to Ask questions. The Seller
shall provide the Purchaser with such information as the Purchaser from time to
time reasonably may request with respect to the Business, and shall permit the
Purchaser and any of its directors, officers, employees, counsel,
representatives, accountants and auditors (collectively, the "Purchaser
Representatives") reasonable access, during normal business hours and upon
reasonable prior notice, to the properties, corporate records and books of
accounts of the Business, as the Purchaser from time to time reasonably may
request;
24
provided, however, that the Seller shall not be obligated to provide the
Purchaser with any information the provision of which may be prohibited by law
or contractual obligation. No disclosure by the Seller whatsoever during any
investigation by the Purchaser shall constitute an enlargement of or additional
warranty or representation of the Seller beyond those expressly set forth in
this Agreement. All information and access obtained by the Purchaser in
connection with the transactions contemplated by this Agreement shall be subject
to the terms and conditions of the letter agreement relating to confidentiality,
dated as of December 7, 1992, between the Seller and the Purchaser (the
"Confidentiality Agreement").
6.3. Conduct of Business.
(a) Except as otherwise may be contemplated by this Agreement,
required by any of the documents listed in the Schedules hereto or as the
Purchaser otherwise may consent to in writing (which consent shall not be
unreasonably withheld), the Seller shall cause the Business to be operated, and
the Assets to be used and maintained, in the ordinary course consistent with
past practice and use all reasonable efforts consistent with past practice to
(i) preserve present business operations, organization and goodwill of the
Business, (ii) keep available the services of present employees of the Business,
(iii) preserve present relationships with persons having business dealing(s)
with the Business, (iv) maintain all of the assets and properties of the
Business in their current condition, normal wear and tear excepted, (v) maintain
insurance in such amounts and of such kinds as is comparable to that in effect
on the date hereof (with insurers of substantially the same or better financial
condition), (vi) comply with all Laws; (vii) file all foreign, federal, state
and local tax returns applicable to the Business or the Assets required to be
filed and make timely payment of all applicable Taxes when due, (viii) notify
the Purchaser in writing of any action, event, condition or circumstance, or
group of actions, events, conditions or circumstances, relating to the Business
or the Assets, or to the Seller's knowledge, any other person, that results in,
or could reasonably be expected to result in, a Material Adverse Effect, other
than changes in general economic conditions or in the bearings business in
general, such notification to be provided to the Purchaser by the Seller
promptly after the occurrence of any such action, event, condition or
circumstance, or group thereof, and (ix) if related in any way to the Business
or the Assets, notify
25
the Purchaser in writing of the commencement of any Legal Proceedings by or
against the Seller, or upon the Seller's becoming aware of any threat, claim,
action, suit, inquiry, proceeding, notice of violation, demand letter, subpoena,
government audit or disallowance that could reasonably be expected to result in
a Legal Proceeding, such notification to be provided to the Purchaser by the
Seller promptly after such commencement or after the Seller's becoming aware
thereof.
(b) Except as otherwise may be contemplated by this Agreement,
required by any of the documents listed in the Schedules hereto or as the
Purchaser otherwise may consent to in writing (which consent shall not be
unreasonably withheld), the Seller shall not do any of the following:
(i) (A) increase the rate of compensation payable or to
become payable to any of the employees or agents of the Business other
than in the ordinary course of business, (B) amend in any material
respect any bonus, stock option, stock purchase, profit-sharing,
deferred compensation, pension, retirement or other similar plan or
arrangement to or in respect of any such employee or agent, other than
as may be required to maintain compliance with ERISA and/or the Code
or (C) enter into any new, or amend in any material respect any
existing, employment, severance or consulting agreement, sales agency,
or other Contract with respect to the performance of personal services
for the Business, other than as may be required to maintain compliance
with ERISA and/or the Code;
(ii) (A) incur or become subject to, or agree to incur or
become subject to, any material obligation or liability (contingent or
otherwise) relating to the Business, except (x) normal trade or
business obligations (including Contracts) incurred in the ordinary
course of business and consistent with past practice and (y) existing
obligations under Contracts listed on any Schedule to this Agreement,
(B) sell, assign, transfer, convey, lease or otherwise dispose of any
of the Assets (other than inventory of the Business in the ordinary
course of business consistent with past practice), (C) cancel or
compromise any material debt or claim or waive or release any material
right relating to the Business or
26
the Assets, except for adjustments or settlements made in the ordinary
course of business consistent with past practice, (D) acquire any
material assets relating to the Business other than in the ordinary
course of business, (E) mortgage, pledge or encumber (or permit to be
encumbered) any of the Assets or permit the Assets to become subject
to any Lien, except for (1) liens on certain Assets of the Business in
connection with the restructuring of the Seller's senior indebtedness
(which the Seller covenants and agrees to have removed on or prior to
the Closing Date), (2) liens for Taxes not due and (3) mechanics'
liens being disputed by the Seller in good faith and by appropriate
proceedings, (F) amend, modify or terminate any Contract, except for
amendments or modifications to (or scheduled expirations of) sales or
supply contracts that do not materially and adversely affect the
benefits available to the Business thereunder, or (G) alter the manner
of keeping its books, accounts or records or the accounting practices
therein reflected.
6.4. Consents and Conditions; Assignment of Assets. The Seller shall
use its best efforts to obtain all approvals, consents or waivers from Persons
other than Governmental Bodies (provided that the Seller and the Purchaser shall
use their best efforts to obtain the consent of all Governmental Bodies to the
assignment to the Purchaser of the Permits set forth on Schedule 4.4 hereof)
necessary to assign to the Purchaser all of the Seller's interest in the Assets
or any claim, right or benefit arising thereunder or resulting therefrom (each,
an "Interest") as soon as practicable; provided, however, that in no event
shall the Seller be obligated to pay any consideration therefor to the third
party from whom such approval, consent or waiver is requested or release any
right, benefit or claim in order to obtain such approval, consent or waiver.
6.5. Compliance with Connecticut Transfer Act. The Seller shall
comply with the Connecticut Transfer Act, Connecticut General Statutes Section
22a-134 et seq and file a Form III with the Commissioner of Environmental
Protection prior to the Closing. In accordance with Connecticut General Statutes
Section 22a-134e, the Purchaser shall pay all applicable fees at the time of the
filing of the Form III.
6.6. No Solicitation. Between the date hereof and the earlier to
occur of the Closing Date or the termination
27
of this Agreement, neither the Seller nor any of its Affiliates, directors,
officers, employees, representatives or agents shall solicit, encourage or
consider any other acquisition proposal (including by way of furnishing any
information concerning all or a portion of the Business or the Assets);
provided, however, that the Seller may consider another acquisition proposal
(including by way of furnishing any information concerning all or a portion of
the Business or the Assets) if the failure to do so would cause the Seller, its
officers or directors to breach their fiduciary duties under applicable Law. As
used in this Section 6.6, the phrase "acquisition proposal" means a proposal for
the acquisition of all or a portion of the Business or the Assets.
ARTICLE VII.
COVENANTS OF THE PURCHASER
From and after the date hereof, and until the Closing Date, the
Purchaser hereby covenants and agrees with the Seller that:
7.1. Cooperation. The Purchaser shall use its best efforts to cause
the consummation of the transactions contemplated hereby in accordance with the
terms and conditions hereof, including, without limitation, cooperating with the
Seller to obtain novations for all government contracts to be transferred
hereunder.
7.2. Confidentiality. The Purchaser and Aurora shall comply with
the terms of the Confidentiality Agreement.
7.3. Consents and Conditions. The Purchaser shall use its best
efforts to obtain all approvals, consents or waivers from Persons other than
Governmental Bodies necessary to assign to the Purchaser all of the Seller's
interest in the Assets or any claim, right or benefit arising thereunder or
resulting therefrom as soon as practicable; provided, however, that in no event
shall the Purchaser be obligated to pay any consideration therefor to the third
party from whom such approval, consent or waiver is requested or release any
right, benefit or claim in order to obtain such approval, consent or waiver.
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7.4. Permits, Bonds and Guarantees. The Purchaser shall use its best
efforts to obtain as of the Closing all Permits required by any Governmental
Body with respect to the Purchaser's operation of the Business or the
Purchaser's ownership or operation of the Assets (including all such Permits
required under Environmental Laws) without any guaranty or liability of the
Seller with respect thereto; provided, however, that, as provided in Section 1.1
hereof, the Seller shall assign, transfer or convey to the Purchaser at the
Closing those Permits described in one or more Schedules hereto that are held by
the Seller in connection with the Business and that can be assigned without
having to obtain the consent of any Governmental Body with respect thereto or
for which such consent is obtained.
ARTICLE VIII.
COVENANTS RELATING TO EMPLOYMENT AND EMPLOYEE MATTERS
8.1. Employees.
(a) The Purchaser shall offer employment as of the Closing Date
to each Employee who is not a CB Employee on terms and conditions of employment
substantially similar to those the Purchaser provides to similarly situated
employees on the Business Day immediately preceding the Closing Date; provided,
however, that such Employees shall not be third party beneficiaries of this
Agreement. The Purchaser shall offer each CB Employee employment under terms and
conditions provided in the collective bargaining agreement applicable to each
such CB Employee. The Purchaser agrees to assume all of the rights and
obligations of the Seller under all collective bargaining agreements applicable
to the CB Employees and the CB Retirees and which are in effect on the Business
Day immediately preceding the Closing Date.
(b) Upon the reasonable request of the Purchaser, the Seller
shall provide to the Purchaser a statement of all accrued compensation and
benefits of Employees under the Seller's Employee Benefit Plans, Benefit
Arrangements and Severance Arrangements as of the Closing Date.
8.2. COBRA. Except as provided in the following sentence, the Seller
agrees that, with respect to group
29
health plans sponsored by it prior to the Closing Date, it shall be liable for
compliance with the continuation coverage provisions of Sections 601 through 608
of ERISA imposed as the result of a "qualifying event" (as that term is defined
in ERISA Section 603 and Code Section 4980B(f) (3)) that occurs prior to the
Closing Date with respect to any CB Employee or CB Retiree and that occurs prior
to or on the Closing Date with respect to any other Employee or former Employee,
(including the spouse and beneficiaries of any such individual) provided that
the Purchaser shall reimburse the Seller for the administrative costs of
providing such coverage with respect to a qualifying event occurring on the
Closing Date that are not paid by the Employee. The Purchaser agrees that it
shall be liable for compliance with the continuation coverage provisions of
Sections 601 through 608 of ERISA (i) imposed as the result of a qualifying
event that occurs on or after the Closing Date with respect to any CB Employee
or CB Retiree or (ii) imposed for any period extending beyond the Closing Date
with respect to a qualifying event which occurred prior to the Closing Date with
respect to any CB Employee or CB Retiree, provided that with respect to (ii)
hereof the Seller (or the plan administrator appointed by it) has met all
relevant notice requirements under Section 606 of ERISA or Section 4980B(f) (6)
of the Code pertaining to any "covered employee" or "qualified beneficiary" (as
such terms are defined in Section 607 of ERISA and Sections 4980B(f) and (g) of
the Code) affected by such qualifying event.
8.3. Union Plans. Effective on and after the Closing, the Purchaser
shall assume the sponsorship of each CB Employee Benefit Plan and CB Benefit
Arrangement provided for under the collective bargaining agreements applicable
to the Business, but shall be permitted to amend or terminate any of such plans
at any time after the Closing in accordance with the terms of such plans with
respect to amendment or termination thereof and in accordance with any
applicable duty to bargain with its employees' bargaining representatives. The
Seller agrees that it will adopt such resolutions and undertake such other
actions as may be necessary or appropriate to transfer sponsorship of such plans
to the Purchaser, including, but not limited to the orderly transfer of assets
of all funded CB Employee Benefit Plans and CB Benefit Arrangements to the
successor fiduciaries of such plans as soon as practicable after the Closing
Date, and Purchaser shall adopt appropriate resolutions assuming sponsorship of
such plans.
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8.4. Termination Obligations. From and after the Closing Date, the
Purchaser shall be liable for all payments that may be required to be made under
any Severance Arrangement, other than any payments made under the Letter
Agreements.
8.5. Indemnification. The Purchaser shall indemnify the Seller from
any liability, loss, damage or expense the Seller may incur (including
reasonable attorneys' fees) with respect to any claims of Employees (i) arising
out of their employment with the Purchaser, (ii) under any Law relating to the
termination, whether constructive or actual, of such Employee's employment
arising on or after the Closing Date, except as provided in Section 8.2 hereof
concerning COBRA obligations, (iii) arising out of or in connection with
post-retirement welfare benefits for CB Retirees or (iv) in connection with
Liabilities assumed by the Purchaser under this Article VIII.
ARTICLE IX.
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to consummate the purchase of the
Assets and the assumption of the Assumed Liabilities on the Closing Date is, at
the option of the Purchaser, subject to the satisfaction of the following
conditions:
9.1. Representations, Warranties and Covenants.
(a) Each of the representations and warranties of the Seller
contained herein shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as though the same had been made
on and as of the Closing Date, it being understood that to the extent that such
representations and warranties were made as of a specified date the same shall
continue on the Closing Date to be true and correct in all material respects as
of the specified date.
(b) The Seller shall have performed and complied, in all
material respects, with the covenants and provisions of this Agreement required
to be performed or complied with by it at or prior to the Closing Date.
31
(c) The Purchaser shall have received a certificate of the
Seller, dated as of the Closing Date and signed by the Chief Financial Officer
and another duly authorized senior executive officer of the Seller, certifying
as to the fulfillment of the conditions set forth in this Section 9.1.
9.2. No Prohibition. No Law or Order of any Governmental Body shall
be in effect which prohibits the Purchaser or the Seller from consummating the
transactions contemplated hereby or would be violated as a result of such
consummation.
9.3. Opinion of the Seller's Counsel. The Purchaser shall have
received an opinion or opinions of counsel for the Seller, dated the Closing
Date, in a form reasonably acceptable to the Purchaser.
9.4. Delivery of Documents. The Seller shall have executed and
delivered to the Purchaser at the Closing a bill of sale, certificates of title,
an assignment and assumption agreement, a patent, application, trademark
information and assignment agreement and such other documents as shall
reasonably be requested by the Purchaser to transfer the Assets and otherwise
consummate the transactions contemplated by this Agreement.
9.5. Lease. The Seller shall have executed and delivered to the
Purchaser the Lease.
9.6. Absence of Material Adverse Effect. There shall not have
occurred between the date hereof and the Closing Date any Material Adverse
Effect, regardless whether such Material Adverse Effect is the result of a
single occurrence, condition or circumstance, or group of occurrences,
conditions and circumstances.
9.7 Approvals and Consents. All Permits of all Governmental Bodies
and all consents of all other Persons shall have been obtained (a) as are
necessary to consummate the transactions contemplated hereby and for the
Purchaser to receive the benefits contemplated by this Agreement and (b) where
the failure to obtain any of the foregoing, whether alone or in the aggregate,
could result in a Material Adverse Effect.
32
ARTICLE X.
CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS
The obligation of the Seller to consummate the sale, transfer and
assignment to the Purchaser of the Assets and the assignment of the Assumed
Liabilities on the Closing Date is, at the option of the Seller, subject to the
satisfaction of the following conditions.
10.1. Representations, Warranties and Covenants.
(a) Each of the representations and warranties of the
Purchaser contained herein shall be true and correct in all material
respects as of the Closing Date with the same force and effect as
though the same had been made on and as of the Closing Date, it being
understood that to the extent that such representations and warranties
were made as of a specified date the same shall continue on the
Closing Date to be true and correct in all material respects as of the
specified date.
(b) The Purchaser shall have performed and complied in all
material respects with the covenants and provisions in this Agreement
required herein to be performed or complied with by them at or prior
to the Closing Date.
(c) The Seller shall have received a certificate of the
Purchaser, dated as of the Closing Date and signed by the Chief
Financial Officer and another duly authorized senior executive officer
of the Purchaser, certifying as to the fulfillment of the conditions
set forth in this Section 10.1.
10.2. No Prohibition. No Law or Order of any Governmental Body shall
be in effect which prohibits the Seller or the Purchaser from consummating the
transactions contemplated hereby or would be violated as a result of such
consummation.
10.3. Opinion of the Purchaser's Counsel. The Seller shall have
received an opinion or opinions of counsel for the Purchaser, dated the Closing
Date, in a form reasonably acceptable to the Seller.
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10.4. Delivery of Documents. The Purchaser shall have executed and
delivered to the Seller at the Closing an assignment and assumption agreement.
10.5. Lease. The Purchaser shall have executed and delivered to the
Seller the Lease.
ARTICLE XI.
ADDITIONAL POST-CLOSING COVENANTS
11.1. Further Assurances.
(a) From time to time after the Closing Date, each of the
Seller and the Purchaser shall, at its sole cost and expense, at the
reasonable request of the Purchaser, execute and deliver such other
and further instruments of sale, assignment, assumption, transfer and
conveyance and take such other and further actions as the Purchaser
may reasonably request in order to vest in the Purchaser and put the
Purchaser in possession of the Assets and to transfer to the Purchaser
any Contracts and rights of the Seller relating to the Assets and
assure to the Purchaser the benefits thereof, and, at the reasonable
request of the Seller, to give effect to the Purchaser's assumption of
the Assumed Liabilities.
(b) Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to
assign any Asset, Permit or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof,
without the consent of a Governmental Body or other third party
thereto, would constitute a breach or other contravention thereof, be
ineffective with respect to any party thereto or in any way adversely
affect the rights of the Purchaser.
(c) With respect to any Contract or any claim, right or
benefit arising thereunder or resulting therefrom, promptly after the
date hereof, to the extent reasonably requested by the Purchaser, the
Purchaser and the Seller will use their respective best efforts to
obtain the written consent of the other parties to any such Contract
for the assignment thereof to the Purchaser, or written confirmation
from such
34
parties reasonably satisfactory in form and substance to the Purchaser
confirming that such consent is not required; provided, however, that the Seller
shall not be obligated to pay any consideration for obtaining any such consent
unless the Purchaser in writing requests the Seller to pay such consideration
and agrees to reimburse the Seller for any such payment. If such consent, waiver
or confirmation is not obtained, the Seller and the Purchaser will cooperate in
an arrangement reasonably satisfactory to the Purchaser under which the
Purchaser would obtain, to the extent practicable, the claims, rights and
benefits and assume the corresponding obligations thereunder in accordance with
this Agreement, including subcontracting, sub-licensing or sub-leasing to the
Purchaser, or under which the Seller would enforce for the benefit of the
Purchaser, with the Purchaser assuming the Seller's obligations thereunder, any
and all claims, rights and benefits of the Seller against the third party
thereto. The Seller will promptly pay to the Purchaser when received all monies
received by the Seller under any such Contract or claim, right or benefit. The
Purchaser shall indemnify the Seller with respect to any of the obligations
assumed by the Purchaser under any such Contract, claim, right or benefit.
(d) To the extent any of the approvals, consents or waivers
of any Governmental Body referred to in Section 9.7 hereof has not
been obtained by the Seller as of the Closing and the Purchaser
nevertheless elects to close the transactions contemplated hereby, the
Seller's only obligation with respect thereto shall be to use its
reasonable efforts to do the following:
(i) cooperate with the Purchaser in any reasonable
and lawful arrangements designed to provide the benefits of
such Interest to the Purchaser as long as the Purchaser
cooperates in all material respects with the Seller in such
arrangements and promptly reimburses the Seller for all
payments, charges or other liabilities made or suffered by
the Seller in connection therewith; and
(ii) enforce, at the request of the Purchaser and
at the expense and for the account of the Purchaser, any and
all rights of the Seller arising from such Interest against
such issuer or
35
grantor thereof or the other party or parties thereto
(including the right to elect to terminate such Interest in
accordance with the terms thereof upon the written request
of the Purchaser).
To the extent that the Seller enters into lawful arrangements designed
to provide the benefits of any Interest as set forth above, such
Interest shall be deemed an Asset.
11.2. Public Announcements. Neither the Seller (nor any of its
Affiliates) nor the Purchaser (nor any of its Affiliates) shall make any public
statement, including, without limitation, any press release, with respect to
this Agreement and the transactions contemplated hereby, without the prior
written consent of the other party (which consent may not be unreasonably
withheld), except as may be required by Law.
11.3. Joint Post-Closing Covenant of the Seller and the Purchaser.
The Seller and the Purchaser jointly covenant and agree that, from and after the
Closing Date, the Seller and the Purchaser will cooperate with each other in
defending or prosecuting any action, suit, proceeding, investigation or audit of
the other relating to (a) the preparation and audit of the Seller's and the
Purchaser's tax returns for all periods up to and including the Closing Date,
and (b) any audit of the Purchaser and/or the Seller with respect to the sales,
transfer and similar taxes imposed by the laws of any state, relating to the
transactions contemplated by this Agreement. In furtherance hereof, the
Purchaser and the Seller further covenant and agree to respond to all reasonable
inquiries related to such matters and to provide, to the extent possible,
substantiation of transactions and to make available and furnish appropriate
documents and personnel in connection therewith.
11.4. Books and Records; Personnel. For a period of six (6) years
after the Closing Date (or such longer period as may be required by any
Governmental Body or ongoing Legal Proceeding):
(a) Neither party hereto shall dispose of or destroy any of
the business records and files relating to the Business. If either
party wishes to dispose of or destroy such records and files after
that time, it shall first give thirty (30) days' prior written notice
to the other party and such other party shall have the
36
right, at its option and expense, upon prior written notice to the
first party within such thirty (30) day period, to take possession of
the records and files within sixty (60) days after the date of such
other party's notice to the first party.
(b) Each party hereto shall allow the other party and its
Representatives access to all business records and files relating to
the Business, during regular business hours and upon reasonable notice
at the Purchaser's or the Seller's, as the case may be, principal
place of business or at any location where such records are stored,
and each party shall have the right, at its own expense, to make
copies of any such records and files; provided, however, that any such
access or copying shall be had or done in such a manner so as not to
interfere with the normal conduct of the Purchaser's or the Seller's,
as the case may be, business or operations.
(c) Each party hereto shall make available to the other
party, upon written request and at such other party's expense (i)
personnel to assist the other party in locating and obtaining records
and files maintained by such first party and (ii) as regards the
Purchaser, any of the Purchaser's personnel previously in the Seller's
employ whose assistance or participation is reasonably required by the
Seller in anticipation of, or preparation for, existing or future
litigation, arbitration, administrative proceeding, tax return
preparation or other matters in which the Seller or any of its
affiliates is involved and which is related to the Business.
(d) Each party hereto hereby agrees to keep the information
given to it by the other party pursuant to this Section 11.4
confidential and will not (except as required by applicable law,
regulation or legal process, and only after compliance with this
Section 11.4(d)), without the other party's prior written consent,
disclose any such information to any third party other than such first
party's attorneys, accountants, other representatives or agents
(collectively, the "Representatives") who need to know such
information for reasonable business purposes of such first party;
provided, however, that such first party shall be responsible for any
such person's maintaining the confidentiality of such information.
37
In the event that such first party or any of the Representatives are
requested pursuant to, or required by, applicable law, regulation or
legal process to disclose any of such information, such first party
will notify the other party promptly thereof so that the other party
may seek a protective order or other appropriate remedy or, in the
other party's sole discretion, waive compliance with the terms of this
Section 11.4(d); provided, however, that in the event that no such
protective order or other remedy is obtained, or that the other party
waives compliance with the terms of this Section 11.4(d), the first
party will furnish only the portion of such information which the
first party is advised by counsel is legally required and will
exercise all reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such information.
ARTICLE XII.
INDEMNIFICATION AND RELATED MATTERS
12.1. Indemnification by the Seller. From and after the Closing
Date, the Seller and its successors and assigns (such entities being
collectively hereinafter referred to for purposes of this Article XII as the
"Seller") shall indemnify and hold the Purchaser and its successors, assigns and
Affiliates harmless to the extent provided in this Article XII from and against
any and all Damages resulting from or arising out of the following:
(a) the failure of any of the Seller's representations and
warranties contained in this Agreement to have been true when made and
as of the Closing Date, it being understood that to the extent that
any of such representations and warranties were made as of a specified
date the same shall apply only to the failure of such representation
or warranty to be true as of such specified date;
(b) the failure of the Seller to comply in all material
respects with any of the covenants contained in this Agreement which
are required to be performed by the Seller;
(c) the Excluded Liabilities; and
38
(d) the failure to comply with any bulk sales or bulk
transfer laws in connection with the transactions contemplated hereby;
provided, however, that nothing herein shall relieve the Purchaser of
any obligation with respect to the Assumed Liabilities.
12.2. Indemnification by the Purchaser. From and after the Closing
Date, the Purchaser and its successors and assigns (such entities being
collectively hereinafter referred to for purposes of this Article XII as the
"Purchaser") shall indemnify and hold the Seller and its successors, assigns and
Affiliates harmless to the extent provided in this Article XII from and against
any and all Damages resulting from or arising out of the following:
(a) the failure of any of the Purchaser's representations
and warranties contained in this Agreement to have been true when made
and as of the Closing Date, it being understood that to the extent
that any of such representations and warranties were made as of a
specified date the same shall apply only to the failure of such
representation or warranty to be true as of such specified date;
(b) the failure of the Purchaser to comply in all material
respects with any of the covenants contained in this Agreement which
are required to be performed by the Purchaser;
(c) the Assumed Liabilities;
(d) the Purchaser's operation of the Business or ownership
of the Assets on or after the Closing Date; and
(e) any workers' compensation claims made by any employee of
Seller in connection with any claim arising as a result of any
incidents or circumstances occurring or in existence on or before the
Closing Date to the extent the aggregate amount of all such claims
does not exceed $100,000.
12.3. Determination of Damages and Related Matters. In calculating any
amount payable to the Purchaser pursuant to Section 12.1 or payable to the
Seller pursuant to Section 12.2, the Seller or the Purchaser, as the case may
be, shall receive credit for (i) any tax benefit allowable as a result of the
facts giving rise to the claim for
39
indemnification, and (ii) any insurance recoveries, and no amount shall be
included for the Purchaser's or the Seller's, as the case may be, special,
consequential or punitive damages. The Seller and the Purchaser agree that,
except as specifically set forth in this Agreement, neither party (including its
representatives) has made or shall have liability for any representation or
warranty, express or implied, in connection with the transactions contemplated
by this Agreement, including in the case of the Seller and its representatives
any representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Business.
12.4. Limitation on Indemnification Liabilities Under Section 12.1(a).
The indemnifications in favor of the Purchaser contained in Section 12.1(a)
hereof (a) shall not be effective until the aggregate dollar amount of all
Damages exceeds $100,000 (the "Threshold Amount"), and then only to the extent
such aggregate amount exceeds the Threshold Amount, and (b) shall terminate once
the dollar amount of all Damages indemnified against under such Section
aggregates 67 percent of the Purchase Price. Neither the requirement that
Damages exceed the Threshold Amount nor the aggregate limit on indemnification
obligations of the Seller referred to in this Section 12.4 shall apply with
respect to the indemnification obligations of the Seller under Section 12.1(b),
(c) or (d).
12.5. Survival of Representations, Warranties and Covenants. The
parties hereto agree that the indemnification obligations of the Seller under
Section 12.1(a) hereof and the Purchaser under Section 12.2(a) hereof with
respect to the representations and warranties made in this Agreement shall
survive for one year after the Closing Date; provided, however, that the
representations and warranties set forth in Sections 4.1, 4.2, 4.8, 4.9 and 4.14
hereof shall survive until expiration of the applicable statutes of limitation.
All other indemnification obligations of the parties shall survive until
expiration of all applicable statutes of limitation.
12.6. Notice of Indemnification. In the event any legal proceeding
shall be threatened or instituted or any claim or demand shall be asserted by
any person in respect of which payment may be sought by one party hereto from
the other party under the provisions of this Article XII or for breach of any of
the representations and warranties set forth herein, the party seeking
indemnification
40
(the "Indemnitee") shall promptly cause written notice of the assertion of
any such claim of which it has knowledge which is covered by this indemnity to
be forwarded to the other party (the "Indemnitor"), which notice must be
received by the Indemnitor no later than thirty (30) days after the expiration
of the one year period described above in Section 12.5 (except for
indemnification pertaining to representations, covenants and agreements referred
to in Section 12.5 hereof as to which such one year limitation is not
applicable). Any notice of a claim by reason of any of the representations,
warranties or covenants contained in this Agreement shall state specifically the
representation, warranty or covenant with respect to which the claim is made,
the facts giving rise to an alleged basis for the claim, and the amount of the
liability asserted against the Indemnitor by reason of the claim.
Notwithstanding the foregoing, the failure of either the Purchaser or the Seller
to give notice of any claim for indemnification in accordance with the foregoing
provision shall not adversely affect such party's right to indemnity hereunder
except to the extent that such failure adversely affects the right of the
Indemnitor to assert any reasonable defense to such claim. The Indemnitor shall
have thirty (30) Business Days following its receipt of such notice either (y)
to acquiesce in such claim by giving the Indemnitee written notice of such
acquiescence or (z) to object to the claim by giving Indemnitee written notice
of the objection. If the Indemnitor does not object within such thirty (30)
Business Days, the Indemnitee shall be entitled to be indemnified for all
Damages reasonably and proximately incurred by Indemnitee in respect of such
claim. If the Indemnitor objects to such claim in a timely manner, and the
Indemnitee and the Indemnitor are unable to resolve their dispute within ten
(10) Business Days following such objection (or such additional period of time
as may be mutually agreed to by such parties), the claim shall be submitted
immediately to arbitration pursuant to Section 12.8.
12.7. Indemnification Procedure for Third-Party Claims. In connection
with any claim that may give rise to indemnity under this Article XII resulting
from or arising out of any claim or proceeding by a person that is not a party
hereto, the Indemnitor (unless the Indemnitee elects not to seek indemnity
hereunder for such claim) may, upon written notice to the Indemnitee, assume the
defense of any such claim or proceeding if the Indemnitor acknowledges to the
Indemnitee its right to indemnity pursuant hereto in respect of such claim (as
such claim may have been modified
41
through written agreement of the parties or arbitration hereunder). If the
Indemnitor assumes the defense of any such claim or proceeding, the Indemnitor
shall select counsel reasonably acceptable to the Indemnitee to conduct the
defense of such claim or proceeding, shall take all steps necessary in the
defense or settlement thereof and shall at all times diligently and promptly
pursue the resolution thereof. If the Indemnitor shall have assumed the defense
of any claim or proceeding in accordance with this Section 12.7, the Indemnitor
shall be authorized to consent to a settlement of, or the entry of any judgment
arising from, any such claim or proceeding, without the prior written consent of
the Indemnitee; provided, however, that the Indemnitor shall pay or cause to be
paid all amounts arising out of such settlement or judgment concurrently with
the effectiveness thereof; provided further, that the Indemnitor shall not be
authorized to encumber any of the assets of the Indemnitee or to agree to any
restriction that would apply to the Indemnitee or to its conduct of business;
and provided further, that a condition to any such settlement shall be a
complete release of the Indemnitee with respect to such claim. The Indemnitee
shall be entitled to participate in (but not control) the defense of any such
action with its own counsel at its own expense. Each Indemnitee shall, and shall
cause each of each Affiliates, officers, employees, consultants and agents to,
cooperate fully with the Indemnitor in the defense of any claim or proceeding
being defended by the Indemnitor pursuant to this Section 12.7. If the
Indemnitor does not assume the defense of any claim or proceeding resulting
therefrom in accordance with the terms of this Section 12.7, the Indemnitee may
defend against such claim or proceeding in such manner as it may deem
appropriate including settling such claim or proceeding after giving notice of
the same to the Indemnitor, on such terms as the Indemnitee may deem
appropriate. If the Indemnitor seeks to question the manner in which the
Indemnitee defended such claim or proceeding or the amount of or nature of any
such settlement, the Indemnitor shall have the burden of proof by a
preponderance of the evidence that such Indemnitee did not defend such claim or
proceeding in a reasonably prudent manner.
12.8. Arbitration of Disputes Relating to Indemnification.
(a) Any dispute with respect to any claim for indemnification under
this Article XII shall be resolved by one arbitrator in accordance with the
procedures set forth
42
in this Section 12.8. Within ten (10) Business Days after expiration of the ten
(10) Business Day period referred to in Section 12.6, the Seller and the
Purchaser shall designate a mutually acceptable arbitrator who is a retired or
former judge of any appellate court of the State of New York, any United States
appellate court or the United States District Court for any New York district
who is, in any such case, not affiliated with any party in interest to such
arbitration and who has substantial professional experience with regard to
corporate legal matters. If the parties hereto are unable to agree upon such
arbitrator within such ten (10) Business Day period, the arbitrator shall be
appointed by the American Arbitration Association as soon as practicable and
shall be a retired or former judge of any appellate court of the State of New
York, any United States appellate court or the United States district court for
any New York district who is, in any such case, not affiliated with any party in
interest in such arbitration and who has substantial professional experience
with regard to corporate legal matters.
(b) The arbitrator shall consider the dispute at issue in New York
City, New York, at a mutually agreed upon time within thirty (30) days (or such
longer period as may be acceptable in writing to the parties to such
arbitration) of the designation of the arbitrator. The arbitration proceeding
shall be held in accordance with the rules for the arbitration of commercial
disputes promulgated by the American Arbitration Association in effect on the
date of the initial request by the party seeking indemnification and shall
include an opportunity for the parties to conduct discovery in advance of the
proceeding. Notwithstanding the foregoing, the Purchaser and the Seller agree
that they will attempt, and they intend that they and the arbitrator should use
their best efforts in that attempt, to conclude the arbitration proceeding and
have a final decision from the arbitrator within ninety (90) days from the date
of selection of the arbitrator; provided, however, that the arbitrator shall be
entitled to extend such 90-day period one or more times to the extent necessary
for such arbitrator to place a dollar value on any claim that may be
unliquidated. The arbitrator shall immediately deliver his or her written
decision with respect to the dispute to each of the parties, who shall promptly
act in accordance therewith. The Purchaser and the Seller each agrees that any
decision of the arbitrator shall be final, conclusive and binding, and that it
will not contest any action by any other party thereto in accordance with the
decision of the
43
arbitrator. It is specifically understood and agreed that any party may enforce
any award rendered pursuant to the arbitration provisions of this Section 12.8
by bringing suit in any court of competent jurisdiction.
(c) All fees, costs and expenses (including reasonable attorneys'
fees and expenses) incurred by the party that prevails in any such arbitration
commenced pursuant to this Section 12.8 or any judicial action or proceeding
seeking to enforce the agreement to arbitrate disputes as set forth in this
Section 12.8 or seeking to enforce any order or award of any arbitration
commenced pursuant to this Section 12.8 in such manner as the arbitrator or the
court in such judicial action, as the case may be, may determine to be
appropriate under the circumstances. All costs and expenses attributable to the
arbitrator shall be allocated among the parties to the arbitration in such
manner as the arbitrator shall determine to be appropriate under the
circumstances.
12.9. Exclusive Remedy. The exclusive remedy available to a party
hereto in respect of the matters covered by Section 12.1 or Section 12.2 hereof
shall be to proceed in the manner and subject to the limitations contained in
this Article XII.
ARTICLE XIII.
TERMINATION
13.1. Termination. This Agreement may be terminated:
(a) by the written agreement of the Purchaser and the
Seller;
(b) by either the Purchaser or the Seller if there shall be
in effect a non-appealable order of a court of competent jurisdiction
permanently prohibiting the consummation of the transactions
contemplated hereby; and
(c) by either the Purchaser or the Seller if the Closing
shall not have occurred on or before June 30, 1993 provided that such
date shall be extended to July 31, 1993 to the extent necessary to
obtain approval of the Connecticut Department of Environmental
44
Protection of the transfer of Permit No. SPOOll7O relating to the
treatment and discharge of waste water as specified on Schedule 4.4.
13.2. Liabilities After Termination. Upon any termination of this
Agreement pursuant to Section 13.1 above, no party hereto shall thereafter have
any further liability or obligation hereunder other than the Purchaser's
obligations pursuant to Section 7.2 hereof, but no such termination shall
relieve either party hereto of any liability to the other party hereto for any
breach of this Agreement prior to the date of such termination.
ARTICLE XIV.
MISCELLANEOUS
14.1. Certain Definitions. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Accounts Receivable" has the meaning set forth in Section 1.1(c)
hereof.
"Affiliate" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with such other Person.
"Assets" has the meaning set forth in Section 1.1 hereof.
"Assumed Liabilities" has the meaning set forth in Section 1.3.
"Benefit Arrangement" means each employment or severance contract or
arrangement providing for insurance coverage, severance, termination, vacation
pay or similar coverage and all written compensation policies and practices
maintained by the Seller or any ERISA Affiliate covering any Employee or former
Employee of the Business that is not an Employee Benefit Plan.
"Bid" means any quotation, bid or proposal made by the Seller that
if accepted or awarded would lead to a Contract with any Person for the design,
manufacture and
45
sale of products or the provision of services by or to the Business or with
respect to any Asset.
"Business" has the meaning set forth in the recitals hereof.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required
by law to close.
"CB Benefit Arrangement" means each Benefit Arrangement covering any
CB Employee or CB Retiree.
"CB Employee Benefit Plan" means each Employee Benefit Plan covering
any CB Employee or CB Retiree.
"CB Employees" means Employees who are covered by a collective
bargaining agreement.
"CB Retirees" means former Employees of the Business who were
employed pursuant to a collective bargaining agreement and their spouses and
beneficiaries with a right to receive post-retirement welfare benefits from the
Seller and listed on Schedule 14.1 hereto.
"Closing" means the consummation of the transactions contemplated by
this Agreement.
"Closing Balance Sheet" has the meaning set forth in Section 2.2(a)
hereof.
"Closing Date" has the meaning set forth in Section 3.1 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" has the meaning set forth in Section 6.2
hereof.
"Contract" means any contract, agreement, indenture, note, bond,
loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, insurance policy, commitment or other arrangement or agreement,
whether written or oral, relating to the Business or any of the other Assets.
46
"Customs Receivable" means that certain receivable in the amount of
$509,394 in respect of a refund of customs duties related to the Business.
"Damages" means all demands, claims, actions or causes of action,
assessments, losses, damages, costs, expenses, liabilities, judgments, awards,
fines, sanctions, penalties, charges and amounts paid in settlement, including
(y) interest on cash disbursements at a rate per annum equal to the prime rate
of Bankers Trust Company plus two percent (2%) from the date each such cash
disbursement is made until the Person incurring the same shall have been
indemnified in respect thereof and (z) reasonable costs, fees and expenses of
attorneys, experts, accountants, appraisers, consultants, witnesses,
investigators and any other agents of such person.
"Employee Benefit Plan" means each employee benefit plan, as defined
in Section 3(3) of ERISA, that is sponsored or contributed to by Seller or any
ERISA Affiliate and which covers any Employee or former Employee of the
Business.
"Employees" means all persons employed in the Business on the day
immediately prior to the Closing Date, including any persons on layoff,
disability, sick leave or leave of absence from the Business.
"Environmental Laws" means all Laws which exist on the Closing Date
relating to the protection of human health, safety or the environment including:
(i) all requirements pertaining to reporting, licensing, permitting,
controlling, investigating or remediating emissions, discharges, releases or
threatened releases of Hazardous Substances, chemical substances, pollutants,
contaminants or toxic substances, materials or wastes, whether solid, liquid or
gaseous in nature, into the air, surface water, ground water or land, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances, chemical substances,
pollutants, contaminants or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature; and (ii) all requirements pertaining to the
protection of the health and safety of employees or the public.
"Equipment" has the meaning set forth in Section 1.1(a) hereof.
47
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means any entity that, as of the relevant
measuring date under ERISA, is a member of a controlled group of corporations or
under common control with Seller within the meaning of Section 414 of the Code.
"Excluded Assets" has the meaning set forth in Section 1.2 hereof.
"Excluded Liabilities" has the meaning set forth in Section 1.4
hereof.
"Final Working Capital Adjustment" has the meaning set forth in
Section 2.2(d) hereof.
"Financial Statement" has the meaning set forth in Section 4.5
hereof.
"GAAP" means generally accepted accounting principles in the United
States consistently applied. Unless otherwise specified in this Agreement, all
accounting terms shall have the meanings ascribed to such terms by GAAP.
"Governmental Body" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether federal,
state, local or foreign, or any agency or instrumentality thereof, or any court
or arbitrator (public or private).
"Hazardous Substance" means any chemical substance: (i) the presence
of which requires investigation or remediation under any Law; (ii) that is
defined as a "hazardous waste" or "hazardous substance" under any Law; (iii)
that is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic or mutagenic or otherwise hazardous and is regulated by any
Governmental Body having or asserting jurisdiction over the Business or any of
the Assets; (iv) the presence of which causes a nuisance to adjacent properties
or poses a hazard to the health or safety or any Person; (v) the presence of
which on adjacent properties constitutes a trespass by the Seller; or (vi)
without limitation, that contains gasoline, diesel fuel or other petroleum
hydrocarbons, polychlorinated biphenyls ("PCBs") or asbestos.
48
"Indemnitee" has the meaning set forth in Section 12.6 hereof.
"Indemnitor" has the meaning set forth in Section 12.6 hereof.
"Initial Balance Sheet" means the balance sheet of the Business at
April 30, 1993 attached hereto as Schedule 4.5.
"Intangible Assets" has the meaning set forth in Section 1.1(e)
hereof.
"Interest" has the meaning set forth in Section 6.4 hereof.
"Inventory" has the meaning set forth in Section 1.1(c) hereof.
"Knowledge" or "knowledge" means, with respect to the Seller, the
actual knowledge (after due inquiry) of the officers and directors of the Seller
and its Affiliates, and the employees of the Seller set forth on Schedule 14.2,
and with respect to the Purchaser, the actual knowledge of the officers and
directors of the Purchaser and its Affiliates.
"Law" means any federal, state, local or foreign law (including
common law), statute, code, ordinance, rule, regulation or other requirement or
guideline.
"Lease" has the meaning set forth in Section 3.3(d) hereof.
"Legal Proceeding" means any judicial, administrative or arbitral
action, suit, proceeding (public or private), claim or governmental proceeding.
"Liabilities" has the meaning set forth in Section 1.3 hereof.
"Lien" means any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement, or
other real estate declaration, covenant, condition, restriction or servitude,
transfer restriction under any shareholder or similar agreement, encumbrance or
any other restriction or limitation whatsoever.
49
"Material Adverse Effect" means any material adverse change in, or
effect on, or any effect that results in a material adverse change in, the
operations, affairs, financial condition, results of operations, Assets,
Liabilities or any other aspect of the Business.
"Material Contracts" has the meaning set forth in Section 4.16(a)
hereof.
"Order" means any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award.
"Parent" has the meaning set forth in the recitals hereof.
"Patent-Related Assets" has the meaning set forth in Section 1.1(d)
hereof.
"Permit" means any written approval, waiver, authorization, consent,
franchise, license, permit or certificate by, or any filing with, any
Governmental Body.
"Permitted Exceptions" means (i) statutory Liens for current taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being contested in good faith by appropriate proceedings;
(ii) mechanics', carriers', workers', repairers' and similar Liens arising or
incurred in the ordinary course of business that are not in the aggregate
material to the Business or the Assets; (iii) zoning, entitlement and other land
use and environmental regulations by Governmental Bodies, provided that such
regulations have not been violated; (iv) Liens arising out of a failure to
comply with the provisions of any bulk transfer laws of any jurisdiction; and
(v) such other imperfections in title, charges, easements, restrictions and
encumbrances which do not in the aggregate have a Material Adverse Effect.
"Person" or "person" means any individual, corporation, partnership,
firm, joint venture, association, joint-stock company, trust, unincorporated
organization or Governmental Body.
"Preliminary Working Capital Adjustment" has the meaning set forth
in Section 2.2(b) hereof.
"Purchase Price" has the meaning set forth in Section 2.1 hereof.
50
"Purchaser" has the meaning set forth in the recitals hereof.
"Purchaser Documents" has the meaning set forth in Section 5.2
hereof.
"Representatives" has the meaning set forth in Section 11.4(d)
hereof.
"Purchaser Representatives" has the meaning set forth in Section 6.2
hereof.
"Seller" has the meaning set forth in the recitals hereof.
"Seller Documents" has the meaning set forth in Section 4.2 hereof.
"Severance Arrangement" means each termination, severance or similar
plan, policy or arrangement of the Seller concerning Employees.
"Taxes" means all federal, state, municipal, local or foreign taxes,
assessments, additions to tax, interest, penalties, deficiencies, duties, fines,
fees, withholding tax obligations, trust fund taxes and other governmental
charges or impositions of any kind or description, whether measured by
properties, assets, wages, payroll, purchases, value added, payments, sales,
use, business, capital stock, surplus or income, arising out of or in connection
with the operation and ownership of the Business and the Assets by the Seller or
otherwise.
"Threshold Amount" has the meaning set forth in Section 12.4 hereof.
"Working Capital" has the meaning set forth in Section 2.2(b)
hereof.
14.2. Prorations. The Purchaser and the Seller hereby agree as
follows with regard to prorations applicable to the consummation of the
transactions contemplated hereby. The parties agree that all operational
expenses incurred directly in the operation of the Business, including, without
limitation, utility bills, the expense of supplies, the expense of fuel, and the
like, shall be prorated between the parties as of the Closing Date, and as of
such date
51
shall become the obligation and responsibility of the Purchaser. Prorations
which are to be effected on the Closing Date shall be made on the Closing Date
or, if such prorations cannot reasonably be made as of the Closing Date, as soon
thereafter as possible and "as of" the Closing Date. In addition, all pre-paid
expenses shall be prorated between the parties as of the Closing Date. The
Purchaser, as of the Closing Date, shall pay such amounts as may be required to
replace all deposits held with the suppliers of utilities to the Business, and
to assist the Seller as may be reasonably required in obtaining a return of such
deposits put in place by the Seller as of the Closing Date.
All personal property taxes and special and general assessments
relating to the Assets shall be prorated by the parties as of the Closing Date,
and all such taxes applicable to periods of time prior to the Closing Date shall
be the sole obligation, responsibility and expense of the Seller, and shall be
paid by the Seller. All such assessments and taxes applicable to periods
following the Closing Date shall be the sole obligation, responsibility and
expense of the Purchaser.
14.3. Waiver of Compliance with Bulk Transfer Laws. The Purchaser
hereby waives compliance by the Seller with the provisions of the bulk transfer
laws of any jurisdiction in connection with the transactions contemplated by
this Agreement.
14.4. Entire Agreement. This Agreement (with its Schedules and
Exhibits) contains, and is intended as, a complete statement of all of the terms
and the arrangements between the parties hereto with respect to the matters
provided for herein, and supersedes any and all previous agreements and
understandings between the parties hereto with respect to those matters.
14.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York without reference
to choice or conflict of law principles.
14.6. Transfer Taxes. The Purchaser and the Seller shall equally
share in the cost of (A) all transfer and documentary taxes and fees imposed
with respect to instruments of conveyance in the transaction contemplated hereby
and (B) all sales, use, gains, excise and other transfer or similar taxes on the
transfer of the Assets
52
contemplated hereunder (not including any tax determined by the overall net
income of the Seller). The Purchaser or the Seller, as the case may be, shall
execute and deliver to the other at the Closing any certificates or other
documents as the other may reasonably request to perfect any exemption from any
such transfer, documentary, sales, gains, excise or use tax.
14.7. Expenses. Each of the parties hereto shall bear its own
expenses (including, without limitation, fees and disbursements of its counsel,
accountants and other experts), incurred by it in connection with the
preparation, negotiation, execution, delivery and performance of this Agreement,
each of the other documents and instruments executed in connection with or
contemplated by this Agreement and the consummation of the transactions
contemplated hereby and thereby.
14.8. Table of Contents and Headings. The table of contents and
section headings of this Agreement are for reference purposes only and are to be
given no effect in the construction or interpretation of this Agreement.
14.9. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally or four days after being mailed by registered mail, return receipt
requested, to a party at the following address (or to such other address as such
party may have specified by notice given to the other party pursuant to this
provision):
If to the Seller, to:
Imo Industries Inc.
3450 Princeton Pike
Lawrenceville, New Jersey 08648
Telephone: (609) 896-7600
Facsimile: (609) 896-7688
Attention: Thomas J. Bird; Senior Vice President
and General Counsel
with a copy to:
Weil, Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
53
Attention: Stephen M. Besen, Esq.
If to the Purchaser, to:
Roller Bearing Company of America, Inc.
P.O. Box 1237
140 Terry Drive, Suite 100
Newtown, Pennsylvania 18940-0870
Telephone: 215-579-4300
Facsimile: 215-579-4381
Attention: Michael Hartnett, President
with a copy to:
Aurora Capital Partners L.P.
1800 Century Park East
10th Floor
Los Angeles, California 90067
Telephone: 310-551-0101
Facsimile: 310-277-5591
Attention: Richard Roeder
and a copy to:
Gibson, Dunn & Crutcher
2029 Century Park East
Los Angeles, California 90067
Telephone: 310-552-8500
Facsimile: 310-277-5827
Attention: Kenneth R. Lamb, Esq.
14.10. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validly or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
14.11. Binding Effect; No Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns. Nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any person or entity not party to
this Agreement. No assignment of this Agreement or of any rights or obligations
hereunder may be made by any party (by operation of law or otherwise) without
the prior written consent of each of the other parties hereto and any attempted
assignment without such required
54
consents shall be void; provided, however, that the Purchaser shall, without the
Seller's consent, be entitled to assign this Agreement to any Person that shall
merge with the Purchaser and be the survivor of such merger, or shall acquire
all or substantially all of the assets of the Purchaser.
14.12. Amendments. This Agreement may be amended, supplemented or
modified, and any provision hereof may be waived, only pursuant to a written
instrument making specific reference to this Agreement signed by each of the
parties hereto.
14.13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Asset Sale
Agreement as of the date and year first above written.
IMO INDUSTRIES INC.
By: /s/ Thomas J. Bird
----------------------------------------
Name: Thomas J. Bird
Title: Senior Vice President and
General Counsel
ROLLER BEARING COMPANY OF AMERICA, INC.
By: /s/ Richard K. Roeder
---------------------------------------
Name: Richard K. Roeder
Title: An Authorized Officer
55
EXHIBIT B
---------
TERMS OF REAL PROPERTY LEASE
1. The annual rental payment for the Fairfield, Connecticut property shall be
not less than $5.00 per square foot and not greater than $6.00 per square foot
with the exact amount to be agreed by Purchaser and Seller.
2. The lease shall be on a "triple net" basis.
3. The lease shall provide that Purchaser shall indemnify Seller for violations
by the Purchaser of Environmental Laws arising or occurring after the Closing
Date and during the lease period.
4. All other terms of the lease shall be as agreed by Purchaser and Seller;
provided that Purchaser and Seller agree that such terms shall be in accordance
with current market practice in the area.
Schedule 1.1(a)
---------------
Equipment
See Attached List
<PAGES 707 TO 730 ILLEGIBLE>
SCHEDULE 1.1(d)
PATENTS AND PATENT APPLICATIONS
I. PATENTS AND PATENT APPLICATIONS
See Attached List
HEIM U.S. PATENTS AND APPLICATIONS
Patent/ Title Patent Date
Application #
- --------------------------------------------------------------------------------
4,894,897 Linear Bearing Assembly 1-23-90
5,087,131 Three Piece Rod End 2-11-92
3,915,518 Self-Adjusting Spherical Bearing 10-28-75
Assembly
3,932,008 Bearing Having a Self-Lubricating 1-13-76
Liner and Method for Making
3,932,771 Control for Three-Phase A.C. Motor 1-13-76
3,934,954 Spherical Bearing with Slotted Key 1-27-76
3,940,836 Method of Manufacturing a Spherical 3-2-65
Bearing
3,960,416 Spherical Bearing Having Adjustable 6-1-76
Key
3,969,803 Method of Manufacturing Spherical 7-20-76
Bearings
3,989,321 Spherical Bearing Assembly with Spring 11-2-76
Biased Segmented Inner Race Member
3,989,320 Self-Aligning Bearing with 11-2-76
Preloading Braking Member
3,989,322 Spherical Bearing Assembly 11-2-76
3,992,066 Spherical Bearing and Parts Therefor 11-16-76
3,993,369 Bearing Assembly with Deformable 11-23-76
Inner Member
3,998,504 Keyed Bearing with Inserts 12-21-76
4,005,514 Spherical Bearing Assembly 2-1-77
4,024,616 Self-Aligning Bearing with a 5-24-77
Split Inner Member
4,030,783 Self-Adjusting Spherical Bearing 6-21-77
Heim U. S. Patents, page 2
4,038,733 Method of Manufacturing a Self- 8-2-77
Aligning Bearing with a Deformable
Inner Member
4,053,190 Self-Aligning Bearing with a Split 10-11-77
Inner Member
4,059,317 Spherical Bearing with Slotted Key 11-22-77
4,076,343 Spherical Bearing Assembly with 2-28-77
Insert Member
4,077,681 Self-Adjusting Bearing 3-7-78
4,079,490 Method of Manufacturing Bearing 3-21-78
4,080,233 Method of Making a Self-Lubricating 3-21-78
Bearing
4,111,499 Bearing Assembly and Liner 9-5-78
4,139,245 Vibration Damping in Machine 2-13-79
Element Bearings
4,196,503 Self-Aligning Bearing with 4-8-80
Preloading Braking Member
4,202,052 Method of Manufacturing Spherical 5-13-80
Bearings and Parts Therefor
4,242,784 Method of Manufacturing a Spherical 1-6-81
Bearing
4,251,122 Self-Adjusting Bearing Assembly 2-17-81
4,277,118 Bearings with Felted Telfon Liners 7-7-81
4,335,924 Wear Resistant Bearing 6-22-82
4,584,748 Leading Balls through Resilient 4-29-86
Gages in Linear Bearings
and Material Handling Chain
4,674,164 Bearings with Felted Teflon Liners 6-23-87
and Method for Making Same
HEIM FOREIGN PATENTS AND APPLICATIONS
Patent/
Application # Name Effective
- --------------------------------------------------------------------------------
CANADA
- ------
981,734 Ball Bearing Assembly 1-13-76/93
994,401 Anti-Friction Ball Bearing 8-3-76/93
Assembly
996,985 Anti-Friction Ball Bearing Assembly 9-14-76/93
999,908 Preloaded Anti-Friction 11-16-76/93
Bearing Assembly
1,010,097 Anti-Friction Ball Bearing 5-10-77/94
Assembly
1,010,098 Anti-Friction Ball Bearing 5-10-77/94
Assembly
1,010,099 Anti-Friction Ball Bearing 5-10-77/94
Assembly
1,014,339 Method for Manufacturing 7-26-77/94
Spherical Bearing Assemblies
1,015,388 Linear Bearing 8-9-77/94
1,018,227 Ball Bearing Assembly 9-27-77/94
1,025,919 Bearing Having a Self-Lubricating 2-7-78/95
Liner & Method of Making Same
1,038,434 Anti-Friction Ball Bearing 9-12-78/95
Assembly
1,154,744 Bearings with Felted Teflon 10-4-83/00
Liners & Method for Making Same
1,162,394 Method of Manufacturing a 2-21-04/01
Spherical Bearing
Heim Foreign Patents & Applications, page 2
FRANCE
- ------
71.28300 Self-Aligning Bearing 8-2-71/91
72.32009 Ball Bearing Assembly 9-8-72/92
72.25769 Ball Bearing Assembly 7-13-73/93
GREAT BRITAIN
- -------------
1,349,008 Self-Aligning Bearing 6-2-71/91
1,370,730 Ball Bearing Assembly 8-30-72/92
1,421,249 Ball Bearing Assembly 6-6-73/93
1,426,950 Spherical Bearing Assembly 12-31-72/93
1,477,010 Anti-Friction Ball Bearing 8-19-74/94
Assembly
1,485,019 Self-Adjusting Bearing 11-12-74/94
ITALY
- -----
986,169 Rod End Bearing Assembly 6-14-73/93
989,741 Ball Bearing Assembly 7-4-73/93
Heim Foreign Patents & Applications, page 3
SWITZERLAND
- -----------
546,898 Self-Aligning Bearing 7-12-71/91
567,669 Ball Bearing Assembly 7-13-73/93
586,357 Self-Adjusting Bearing 1-15-75/95
639,731 Bearings with Felted Teflon 3-6-79/99
Liners
Schedule 1.1(e)
Trademarks and Copyrights
I. TRADEMARKS
----------
Title Renewal Date
----- ------------
See Attached List
II. COPYRIGHTS
----------
NONE
III. LICENSE AGREEMENTS
------------------
1. Schaublin, S.A.
Delemont, Switzerland
Licensed to manufacture metric bearings using Heim manufacturing
techniques
2. Boeing Airplance Company
Seattle, WA
Grantor of license to Heim for use of patented method of sealing
spherical bearings.
HEIM U.S. TRADEMARK REGISTRATIONS
---------------------------------
RENEWAL
MARK REGISTRATION NO. REGISTERED DUE
- --------------------------------------------------------------------------------
SPHERCO 587,687 1954 1994
UNIFLON 782,796 1965 2005
UNILINK 783,990 1965 2005
UNILIN 985,883 1974 1994
UNIFLON 1,061,529 1977 1997
UNIBAL 1,131,200 1980 2000
HEIM INCOM INTER-
NATIONAL INC. 1,264,009 1984 2004
HEIM 1,291,853 1984 2004
HEIM FOREIGN TRADEMARK REGISTRATIONS
------------------------------------
COUNTRY REGISTRATION # RENEWAL DATE
- --------------------------------------------------------------------------------
SPHERCO
- --------
Australia A250.518 1992
Austria 72.009 1992
Bangledesh 2003 1995
Benelux 104,468 1990
Brazil 612,538 1995
Canada 129,756 1993
Chili 182,333 1991
Denmark 755/1973 1993
Denmark 1566/1973 1993
Finland 64392 renewal pending
France 839,626 renewal pending
Germany 905,035 1991
Great Britain 978,034 1992
Italy 270,213 1991
Japan 1089787 1995
Japan 1089788 1995
Mexico 170,121 renewal pending
Norway 85;644 1992
Philippines 20553 1993
Portugal 175,411 1997
Spain 550,951 1996
Switzerland 156,885 1991
Heim Foreign Trademark Registrations, page 2
UNIBAL
- ------
Australia 113,767 1995
Austria 37,648 1992
Brazil 1232/0650051 renewal pending
Canada 163,677 1999
Denmark 1230/1954 1994
France 1,045,766 1998
Germany 1,087,709 1994
Great Britain 716,965 1988
Ireland 55758 1995
Italy 311,894 1993
Japan 452,189 1994
New Zealand 53,218 1988
Norway 49560 1997
Portugal 143,163 1997
Spain 315,641 1998
Sweden 77908 2001
So. Africa 1157/53/1 1997
Switzerland 147,328 1993
Heim Foreign Trademark Registrations, page 3
UNIFLON
- -------
Australia A213,126 1988
Canada 163,796 1999
France 1062364 1988
Germany 852,506 renewal pending
Great Britain 916,703 1988
Ireland 72,402 1988
Italy 226,101 renewal pending
New Zealand 84,865 1988
New Zealand 87,308 1989
So. Africa 68.1283 1988
Switzerland 231,295 renewal pending
UNILINK
- -------
Australia A226,209 1990
Canada 167,399 2000
Ireland 75.923 1990
Switzerland 237,403 1989
SCHEDULE 1.1(h)
PERMITS
1. State Discharge Permit Number SP0001170
Issued October 2, 1989
Expires October 2, 1994
2. Air Compliance Permit No. 0014
No expiration date
3. Air Compliance Permit No. 0015
No expiration date
4. General Permit for the Discharge of
Stormwater Associated with Industrial Activity
Issued October 1, 1992
(Registration November 19, 1992)
5. Registration of underground storage tanks A1R1 and F6R1
in accordance with the Underground Storage Facilities
Program of the Department of Environmental Protection
of the State of Connecticut (Registration form dated
December 18, 1992)
6. Hazardous Waste Number -- EPA ID# CTD 001162122
7. NPDES Permit No. CT0022560 (Expired)
8. General Permit for the Discharge of Minor Tumbling and
Cleaning of Parts Wastewater
Issued June 11, 1992
Expires June 11, 2002
Registration to be filed (coverage commences upon
approval of registration)
9. General Permit for the Discharge of Minor Boiler
Blowdown Wastewaters
Issued June 11, 1992
Expires June 11, 2002
Automatic coverage
10. General Permit for the Discharge of Minor Non-Contact
Cooling Water
Issued June 11, 1992
Expires June 11, 2002
Automatic coverage
11. General Permit for the Discharge of Domestic Sewage
Issued June 11, 1992
Expires June 11, 2002
Automatic Coverage
2
SCHEDULE 1.1(i)
INCLUDED CONTRACTS
For a description of certain contracts with Governmental agencies see Schedule
4.4. Although such contracts constitute ordinary course purchase orders they
will require novation agreements.
Purchase Order No. 62089
Bird Environmental Technologies Inc.
126 Monroe Turnpike
Trumbull, CT 06611 $22,186.00/yr.
SCHEDULE 1.2(e)
EXCLUDED CONTRACTS
NONE
SCHEDULE 1.4(l)
---------------
EXCLUDED OBLIGATIONS, LIABILITIES AND INDEBTEDNESS
1. CT DEP Order No. HM-715
2. Stipulated judgment of $45,000.00 in settlement of certain environmental
claims pending pursuant to Timothy R.E. Keeney, Commissioner of Department
of Environmental Protection v. IMO Corporation d/b/a Heim Bearings,
CV91-0505295S, Judicial District of Hartford-New Britain at Hartford.
3. See item 3 on Schedule 4.14(c).
Schedule 1.5(b)
---------------
Bonds
None
SCHEDULE 4.4
CONSENTS
1. GOVERNMENT CONTRACTS REQUIRING NOVATION AGREEMENTS:
Contract No. Buying Activity Contract Value Remaining Value
------------ --------------- -------------- ---------------
DLA460-93-M-J974 DISC $3,163.09 $3,163.09
DLA500-92-M-DC45 DISC 1,763.65 201.56
DLA500-92-M-RA44 DISC 2,342.00 2,342.00
DLA500-92-M-UD65 DISC 13,877.60 13,877.60
DLA500-92-M-UF63 DISC 3,029.40 3,029.40
DLA500-92-M-UJ67 DISC 2,203.50 2,203.50
DLA500-92-M-UM79 DISC 7,442.75 7,442.75
DLA500-92-M-UUS2 DISC 17,050.65 17,050.65
DLA500-92-M-UW34 DISC 2,771.00 2,771.05
DLA500-92-M-VC21 DISC 1,280.50 1,280.60
DLA500-92-M-VM22 DISC 1,055.75 1,055.75
DLA500-92-M-WB74 DISC 1,688.00 742.72
DLA500-92-M-A946 DISC 2,249.25 2,249.25
DLA500-93-M-B058 C0MPLETE (1 PIECE 0PEN, WAS ERR0R)
DLA500-93-M-D144 DISC 2,173.80 2,173.80
DLA500-93-M-E672 DISC 799.00 799.00
DLA500-93-M-F573 DISC 4,264.00 4,264.00
DLA500-93-M-H656 DISC 2,032.00 2,032.00
DLA500-93-M-J403 DISC 24,843.00 24,843.00
DLA500-93-M-R757 DISC 903.84 903.84
Contract No. Buying Activity Contract Value Remaining Value
------------ --------------- -------------- ---------------
DLA500-93-M-T903 DISC 4,759.20 4,759.20
DLA500-93-M-U802 DISC 7,750.00 7,750.00
DLA500-93-M-0341 DISC 1,809.20 1,809.20
DLA500-93-M-5720 DISC 3,532.30 3,532.30
DLA500-93-M-5888 DISC 1,488.06 1,322.72
DLA500-93-M-7978 DISC 4,342.50 4,342.50
DLA500-93-W-3121 DISC 6,200.75 6,200.75
F046069-93-M-0723 McCLELLAN AFB 3,086.75 3,086.75
F41608-92-M-3711 KELLY AFB 23,347.35 23,347.35
F41608-92-M-0293 KELLY AFB 3,150.84 3,150.84
F42610-93-M-0070 KELLY AFB 9,544.00 9,544.50
F4608-93-M-0692 A.S.0. 6,405.00 6,405.00
N00383-92-C-V311 A.S.0. 2,805.81 2,805.81
N00383-93-P-R634 A.S.0. 2,040.35 2,040.35
N00383-93-P-R649 A.S.0. 13,803.00 13,803.00
N00163-91-M-2251 DISC 6,456.00 193.68
DLA500-92-M-WG69 DISC 2,781.03 2,781.03
DLA500-93-M-F471 DISC 920.50 920.50
N00181-93-M-N707 SHIPPED
N00421-93-M-2825 NAVAL AIR WARFARE 567.00 567.00
2
DISC, 700 Robbins Ave., Philadelphia, PA 19111-5096
McClellan AFB, CA 95652-1060 (Dept. of the Air Force, SALC/PKXO)
Kelly AFB, TX 78241-500 (Dept. of the Air Force, Dir. Of Contracting, San
Antonio Air Logistics Center, Buyer: Tarin M./LAFKA, 512-925-6961)
Kelly AFB, Buyer: Maclane, G./LPKD
Hill AFB, Utah 84056-5000 Dept. of the Air Force, Dir. Of Contracting, Bldg.
1258, Ogden Air Logistics Cnter, Buyer: Kathy Stahler/LMKR
Kelly AFB, Buyer: C/Cuellar/LPKD
A.S.O., 700 Robbins Ave., Philadelphia, PA 19111-5098
Procurement Naval Air Warfare Center, Patuxent River, MD 20670-5304 Buyer:
D. Leishear, PR. 12.10.
2. Approval by the Connecticut Department of Environmental Protection of the
transfer by IMO Industries Inc. to Roller Bearing Company of America, Inc.
of State Discharge Permit, Permit No. SP0001170 for the treatment and
discharge of groundwater contamination wastewater.
3
Schedule 4.5
------------
Initial Balance Sheet
See attached
Schedule 4.5
Page 1 of 2
INITIAL BALANCE SHEET
Heim Bearings
April 30, l993
(Dollars in Thousands)
ASSETS
CURRENT ASSETS
Cash $0
Trade accounts and notes receivable - Net (1) 2,421
Inventories - Net 6,209
Prepaid expenses and other current assets 6
Inter-company accounts 69
-------
TOTAL CURRENT ASSETS 8,705
PROPERTY, PLANT AND EQUIPMENT - NET 2,301
-------
TOTAL ASSETS $11,006
=======
LIABILITIES & DIVISION INVESTMENT
CURRENT LIABILITIES
Trade accounts payable $762
Payroll and other related items 271
Other accrued expenses 476
Customer advance payments 74
-------
TOTAL CURRENT LIABILITIES 1,583
DIVISION INVESTMENT (1) 9,423
TOTAL LIABILITIES - DIVISION INVESTMENT -------
$11,006
=======
- ----------------------
See Accompanying Note
(1) Trade Receivables and Division Investment have been reduced to reflect the
exclusion of duty related receivables.
Schedule 4.5
Page 2 of 2
NOTE TO INITIAL BALANCE SHEET
Heim Bearings
April 30, 1993
Liabilities required for a GAAP presentation not included in the accompanying
balance sheet:
FAS 106 Liabilities
Non-Union Active $209
Non-Union Retirees 137
------
Total Salaried 346
Union Active 526
Union Retirees 457
------
Total Union 983
TOTAL FAS 106 LIABILITY (1) 1,329
Union Pension
Assets 4,240
Accrued Liability 4,056
------
Net Pension Assets (2) 184
Medical Run Out Costs
Active Salaried 19
Active Union 0
Non-Union Retirees & Disabled 5
Retired Union 25
------
TOTAL 49
Workers Compensation Unfunded Reserves 378
------
TOTAL NET LIABILITIES $1,572
======
(1) Based on actuarial Report as of 1/1/92,
prepared November 1992.
(2) Based on recent actuarial estimates as of 12/31/92.
SCHEDULE 4.6
------------
Certain Business Developments
A. Employment Agreements
---------------------
1. Letter Agreement, dated November 16, 1992, between IMO Industries Inc.
and Lawrence A. Raffone, regarding ongoing employment with IMO Industries Inc.
2. Letter Agreement, dated November 16, 1992, between IMO Industries Inc.
and Mario Di Domenico, regarding ongoing employment with IMO Industries Inc.
B. Severance Arrangements
----------------------
For a description of severance arrangements see Schedule 4.9(b) (iii).
C. From January 1, 1993 through and including April 30, 1993, the Business
has incurred aggregate net losses (before interest and taxes) of approximately
$424,000.
D. From January 1, 1993 through and including April 30, 1993, the Business
had net bookings of approximately $3,836,000 as compared to net bookings of
approximately $5,586,000 for the same period in 1992.
Schedule 4.7
------------
Intangible Assets
None
Schedule 4.9(a)
---------------
Employees and Employee Benefits
Collective Bargaining Agreement
- -------------------------------
1. BY AND BETWEEN THE HEIM BEARINGS DIVISION OF IMO INDUSTRIES INC. and
International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America, U.A.W. and Amalgamated Local 376 U.A.W.
Effective February 1, 1992 - January 31, 1995
2. See Schedule 4.10
Schedule 4.9(b)(i)
------------------
CB Employment Benefit Plan
1. See terms of Collective Bargaining Agreement, set forth in Schedule
4.9(a).
2. Plan 047 Hourly Payroll Retirement Plan, Imo Industries Inc., Heim
Division
3. Plan 543 Imo Industries Inc., Business Travel Accident Insurance Plan
4. Plan 816* Imo Industries Inc. Premium Conversion Plan; Program of
Insurance Benefits for Hourly employees - Heim Division
5. Plan 576 Imo Industries Inc., Severance Plan - Imo Union
6. Plan 582 Imo Industries Inc., HMO Plan for hourly employees
* Plan 816 covers; Life Insurance, ADED, SIBI, short term,
disability and vision care
Schedule 4.9 (b)(ii)
--------------------
CB Benefit Arrangements
1. See terms of the Collective Bargaining Agreement, set forth in Schedule
4.9(a).
The following list corresponds to the Blue Section of the Collective
Bargaining Agreement.
2. Paid sick and/or leave allowance (Article 20, Section 1)
3. Educational Assistance (Article 22, Section 9)
4. Bereavement Pay (Article 14, Section 1 and 2)
5. Jury Duty (Article 15, Section 1 and 2)
6. Apprenticeship Program (Article 22)
7. Retiree Medical Medicare Part B Reimbursement (Article 23, Section 8)
SCHEDULE 4.9(b) (iii)
SEVERANCE ARRANGEMENTS
1 See terms of Collective Bargaining Agreement, set forth in Schedule 4.9(a)
2. See IMO Corporate Standard Practice No. 328 "Separations of Employment --
Salaried and Non-Union Hourly Employees"
3. Letter Agreement, dated November 16, 1992, between IMO Industries Inc. and
Lawrence A. Raffone, regarding termination of employment with IMO
Industries Inc.
4. Letter Agreement, dated November 16, 1992, between IMO Industries Inc. and
Mario Di Domenico, regarding termination of employment with IMO Industries
Inc.
Schedule 4.9(c)
---------------
CB Employee Benefit Plan Exceptions
None
Schedule 4.10
-------------
Litigations
Whitley V. Heim, Case No. 9320283 Discrimination claim filed with the
Connecticut Commission of Human Rights and Opportunities.
See Schedule 4.14(c)
SCHEDULE 4.11
COMPLIANCE WITH LAW
1. See Schedule 1.4(1).
2. Seller and/or Seller's predecessor in title, Incom International
Inc. may have been required to comply with the Connecticut Transfer Act,
Connecticut General Statutes Section 22a-134 et seq. and to have filed an
appropriate form with the Commissioner of Environmental Protection in
connection (a) with Seller's stock purchase of Incom International Inc.
and of the purchase of the Business and premises relating thereto on
December 31, 1987 and (b) with Seller's merger with Incom International
Inc. in December, 1986. The Connecticut Department of Environmental
Protection ("DEP") is aware that no form was filed at the time of Seller's
purchase of the Business. On November 13, 1992, Seller indicated to DEP
that a Form III would be filed in the near future.
On a no names basis, Seller's environmental counsel contacted DEP,
and DEP expressed the view that a filing at the time of Seller's sale of
the Assets may be acceptable in lieu of filing a Form III for the earlier
transaction(s) and that no further filings would be required. However,
there can be no assurance that the DEP will not take any action regarding
this matter.
3. On June 11, 1992, the Connecticut Department of Environmental
Protection issued a number of General Permits applicable to the Business.
See, Schedule 1.1(h). Prior to that date, Seller had applied for, but not
received, permits pursuant to Connecticut General Statutes Section 22a-430
for various wastewater discharges relating to the Business. Upon issuance
of the General Permits, Seller was required to file a registration for the
General Permit for the Discharge of Minor Tumbling and Cleaning of Parts
Wastewater. No registration for the other permits were required and Seller
was provided with automatic coverage under these other General Permits.
The registration for the Minor Tumbling and Cleaning of Parts Wastewater
General Permit is expected to be filed in the near future.
Said General Permits also contain a number of terms and conditions
concerning treatment and control, effluent limitations, monitoring,
reporting and recordkeeping. Seller is currently taking the necessary
actions to come within full compliance with the terms and conditions of
such General Permits.
4. According to Bird Environmental Technologies, Inc., the Business'
environmental consultant, MW-24 (a well located on the Business' premises)
was recently tested and the laboratory analysis indicated the presence of
elevated levels of volatile organic compounds ("VOCS") in the well. The
Business is contemplating ways to remediate this condition, including
conducting an additional investigation to confirm the source of the
contamination and installing a pumping system for the removal and
treatment of the VOC-containing groundwater.
5. On or about November 19, 1992, IMO Industries Inc. filed a
registration form with the Connecticut Department of Environmental
Protection for a Stormwater General Permit (see item 4 of Schedule
1.4(h)), and such permit required the preparation and certification of a
Stormwater Pollution Plan by April 1, 1993. IMO completed such plan on May
6, 1993. Pursuant to the permit, the plan was not required to be filed
with the Connecticut DEP but was required to retained on site at the
Business' premises.
2
Schedule 4.13
-------------
Inventory
None
Schedule 4.14(a)
----------------
Environmental Permits
See Schedule 1.1(h) for a list of environmental permits, licenses and
authorizations relating to the Business and the Assets.
Schedule 4.l4 (b)
-----------------
Non-Compliance with Environmental Laws
1. See items 2, 3, 4 and 5 of Schedule 4.11.
2. See item 2 of Schedule 4.4.
3. See Schedule 1.4(1).
Schedule 4.14(c)
----------------
Environmental Legal Proceedings
1. See Schedule 1.4(1).
2. See items 2, 3, 4 and 5 of Schedule 4.11.
3. In June 1992, IMO Industries Inc. was notified by the U.S. EPA that it
was a potentially responsible party ("PRP") at the Solvents Recovery Services of
New England Superfund Site in Southington, Connecticut. According to the U.S.
EPA, as of June 1992, IMO's generator ranking was 738 with its percentage of its
waste volume total at 0.00196%.
Schedule 4.16
-------------
Material Contracts
For a discussion of certain contracts with Government agencies see Schedule 4.4.
Although these contracts constitute ordinary course purchase orders they will
require novation agreements.
Schedule 14.1
-------------
CB Retirees
See attached listings
Division Name: HEIM BEARINGS
RETIRIED EMPLOYEE ENROLLMENT - UNION EMPLOYEES
AS OF: APRIL 1, 1993
Date of
ZIP SOC SEC Birth DATE
Name CODE Sex Number MO/DY/ YR AGE RETIRED
- ---------------------------------------------------------------------------------------------------------------------
Lavoie, herve 02777 M ###-##-#### 5/11/07 7 85 9/10/71
Grauer, Albert 06770 M ###-##-#### 2/11/08 8 84 4/1/73
Halpern, Irving 06854 M ###-##-#### 10/21/08 8 84 11/1/73
Doeorad, Adas 33135 M ###-##-#### 12/24/09 9 83 1/1/75
Recklet, Edward 06430 M ###-##-#### 6/20/10 10 82 7/1/80
Renkavinsky, John 06605 M ###-##-#### 2/3/10 10 82 2/4/76
Tines, Joseph 12157 M ###-##-#### 8/23/10 10 82 8/1/73
Mitov, Constantia BELGM M ###-##-#### 1/13/11 11 81 8/1/74
Kent, Robert P. 06612 M ###-##-#### 1/18/12 12 80 2/1/77
Arroyo, Luciano v. PR M ###-##-#### 11/2/14 14 78 2/1/78
Vlasic Sr., Louis v. 06606 M ###-##-#### 6/2/14 14 78 7/31/80
Roda, Jaciato D. 33682 M ###-##-#### 6/12/15 15 77 4/30/83
Shields, James 06430 M ###-##-#### 7/2/15 15 77 7/30/78
Borrago, Manauel F. 33068 M ###-##-#### 12/8/16 16 76 8/1/83
Corallo, John 06611 M ###-##-#### 4/8/16 16 76 7/30/78
Kovacs, Michael 06430 M ###-##-#### 8/15/17 17 75 2/4/84
Rios, Ramon 33068 M ###-##-#### 7/31/17 17 75 6/30/83
Nagy, William J. 06430 M ###-##-#### 4/20/18 18 74 7/17/83
Miller, George S. 06430 M ###-##-#### 2/22/19 19 73 6/1/73
Butryacwicz, Stanislaw 06610 M ###-##-#### 5/11/20 20 72 7/31/87
Morvat, Ivan 06430 M ###-##-#### 6/14/20 20 72 6/17/85
Reyes, Luis 32606 M ###-##-#### 11/6/20 20 72 5/30/86
Baglia, Samuel C. 18407 M ###-##-#### 8/15/21 21 71 8/15/86
Castro, Venancio 33013 M ###-##-#### 4/17/21 21 71 4/30/82
Goncalves, Manuel PRTGL M ###-##-#### 8/31/21 21 71 6/30/82
Bahr, Jose 06606 M ###-##-#### 5/15/22 22 70 12/31/88
Kurbus, Armin 06430 M ###-##-#### 2/17/22 22 70 7/1/90
ORZSULAK, HENRY 06606 M ###-##-#### 3/25/22 22 70 3/31/89
Juhasz, Istvan 06460 M ###-##-#### 10/2/23 23 69 4/30/86
Kristie, Edward 06611 M ###-##-#### 2/15/23 23 69 3/1/89
Fraioli, Mariano 06497 M ###-##-#### 1/12/24 24 68 1/1/86
Giuseppe, Ismolo 06611 M ###-##-#### 3/6/24 24 68 3/31/89
Roseto, Idalberto 06611 M ###-##-#### 9/28/24 24 68 10/1/90
Bodaar, Frank L. 06605 M ###-##-#### 1/11/25 25 67 12/15/77
MARTI, ROLANDO 06606 M ###-##-#### 4/04/25 25 67 12/15/77
Suarez, Leosides 06608 M ###-##-#### 4/22/25 25 67 8/1/90
Young, John 06460 M ###-##-#### 3/7/25 25 67 3/1/90
LADRA, FRANK M ###-##-#### 2/27/26 26 66 3/1/91
Veranes, Mariano 06608 M ###-##-#### 12/05/26 26 66 1/1/92
PINTO, HERMINIO 06605 M ###-##-#### 1/20/27 27 65 6/30/92
Division Name: HEIM BEARINGS
Novak, Ivan 06418 M ###-##-#### 2/10/28 28 64 10/1/91
SOVA, EUGENE 06460 M ###-##-#### 7/16/28 28 64 12/1/92
Thibault, Paul 06610 M ###-##-#### 2/11/28 28 64 8/1/90
GAAL, LASZLO 06430 M ###-##-#### 12/23/29 29 63 10/22/64
Magliocco, Quirino 06611 M ###-##-#### 6/7/29 29 63 9/21/83
ROSA, ANICETO 06605 M ###-##-#### 4/30/29 29 63 05/1/92
ZADRAVECZ, JAMES 06430 M ###-##-#### 7/4/30 30 62 09/1/92
Risac, Drago 06497 M ###-##-#### 3/5/34 34 58 2/1/84
Ferguson, Nanine 05465 F ###-##-#### 12/31/05 5 87 9/1/70
MIDALGO, L. 33135 F ###-##-#### 10/10/05 5 87 3/1/77
Roberts, Laura 06497 F ###-##-#### 2/28/08 8 84 8/1/73
Gomez, Juana 06604 F ###-##-#### 5/21/11 11 81 8/1/73
Suaila, Elena 06611 F ###-##-#### 9/4/11 11 81 3/12/70
Murkette, Helen R. 06484 F ###-##-#### 9/1/12 12 80 6/1/81
Gaitter, Anna M. 06430 F ###-##-#### 6/1/14 14 78 7/1/79
Liepertz, Vera S. 06018 F ###-##-#### 9/4/14 14 78 9/28/79
Rios, Petra 33068 F ###-##-#### 4/10/14 14 78 6/30/83
Corallo, Jeanie 06611 F ###-##-#### 6/28/16 16 76 8/1/78
Delvalle, Emma 33135 F ###-##-#### 12/16/17 17 75 3/1/83
Augustyn, Maria 06605 F ###-##-#### 10/16/18 18 74 5/1/85
Gesualdi, Amelia 06606 F ###-##-#### 3/22/18 18 74 4/1/83
Milious, Dorothy 06605 F ###-##-#### 12/14/19 18 74 2/29/84
Subic, Helen 06604 F ###-##-#### 10/30/18 18 74 10/28/76
Brown, Rosanna 06607 F ###-##-#### 9/2/19 19 73 2/16/83
Juhasz, Anna 06460 F ###-##-#### 8/29/20 20 72 2/7/85
Walter, Elisabeth 06430 F ###-##-#### 4/30/20 20 72 4/30/83
Borrego, Consuelo 33068 F ###-##-#### 1/2/21 21 71 5/31/83
Mzynski, Theresa M. 06405 F ###-##-#### 9/28/21 21 71 1/31/85
Notar, Loida 06606 F ###-##-#### 5/29/21 21 71 6/1/87
Pedrayes, Misa 06611 F ###-##-#### 1/1/21 21 71 4/30/86
Belovich, Leopoldine 06430 F ###-##-#### 8/18/22 22 70 3/31/89
Pucko, Ana 06430 F ###-##-#### 7/9/22 22 70 12/1/87
Delaney, Thora M. 06430 F ###-##-#### 6/23/23 23 69 7/22/88
Nagy, Elizabeth 06430 F ###-##-#### 3/25/23 23 69 8/1/83
Olivera, Maria 06605 F ###-##-#### 8/3/23 23 69 1/1/92
Krattamaker, Ana 06606 F ###-##-#### 2/20/24 24 68 4/1/88
Skoczylas, Antoni 34287 F ###-##-#### 6/13/24 24 68 7/1/89
Castro, Edisia 33013 F ###-##-#### 3/6/25 25 67 4/30/88
Rodriguez, Marina 06610 F ###-##-#### 3/3/25 25 67 8/1/90
Weglenski, Jadwiga 06497 F ###-##-#### 5/27/25 25 67 2/1/92
ROUDI, JUSTINA 06604 F ###-##-#### 10/27/27 27 65 11/1/92
GERENCIR, MARGOT 06605 F ###-##-#### 3/23/28 28 64 4/1/91
Skoczylas, Brenislawa 33596 F ###-##-#### 9/27/28 28 64 12/18/86
Bot, Irene 34287 F ###-##-#### 11/20/31 31 61 8/31/87
Baglia, Micholena 06430 F ###-##-#### 2/14/88 88 4 3/29/80
Terminated Vested
ANNUAL SERVICE DATA
FOR THE HEIM UNIVERSAL CORPORATION HOURLY EMPLOYEES PENSION PLAN OF
IMO INDUSTRIES INC. AS OF JANUARY 1, 1993
INACTIVES
- ------------------------------------------------------------------------------------------------------------------------------------
SOCIAL DATE MONTHLY BENEFIT FORM ----SPOUSE'S INFORMATION--- STATUS
SECURITY OF BENEFIT START OF DATE OF MONTHLY THIS
NUMBER NAME SEX BIRTH AMOUNT DATE BENEFIT BIRTH SEX BENEFIT YEAR COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### AUGUSTYN, E M 07/02/45 84.75 07/01/10 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### BATISTA, E F 07/06/38 144.30 07/01/03 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### CAJIGAS, F M 05/09/52 64.13 05/01/17 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### DEALMEIDA, J M 12/10/35 244.50 12/01/00 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### DESOUSA, C F 04/23/50 142.10 04/01/15 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### FOMBELLIDA, J M 09/11/38 279.00 09/01/03 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### GONZALEZ, R M 10/19/53 111.80 10/01/16 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### GROTTI, A M 08/16/20 114.75 08/01/93 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### GUSAITES, A M 02/24/48 47.25 02/01/13 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### HIDALGO, J M 11/23/48 82.50 11/01/13 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### KARADIMOS, B M 10/01/39 138.75 10/01/96 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### KUCZO, M F 09/13/34 309.35 09/01/99 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### MATKO, J M 04/23/44 49.58 04/01/09 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### MIRANDA, J B M 07/15/51 213.75 07/01/16 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### HAVAS, V M 07/19/30 113.75 07/01/03 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### NEWBERRY, A F 07/24/52 149.35 07/01/17 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### PEET, E M 04/21/58 115.70 04/01/23 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### PIERCE, R M 03/03/57 135.45 03/01/22 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### UGALDE, M F 10/11/46 127.50 10/01/11 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### VAZQUEZ, A F 02/01/36 62.40 02/01/01 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### VUKOVIC, M M 11/23/42 94.00 11/01/07 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### WARD, N M 11/30/34 126.50 11/01/99 LIFE 11
- ------------------------------------------------------------------------------------------------------------------------------------
2,953.16 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
COUNT= 22
- ------------------------------------------------------------------------------------------------------------------------------------
Disability
ANNUAL SERVICE DATA
FOR THE HEIM UNIVERSAL CORPORATION HOURLY EMPLOYEES PENSION PLAN OF
IMO INDUSTRIES INC. AS OF JANUARY 1, 1992
INACTIVES
- ------------------------------------------------------------------------------------------------------------------------------------
SOCIAL DATE MONTHLY BENEFIT FORM ----SPOUSE'S INFORMATION--- STATUS
SECURITY OF BENEFIT START OF DATE OF MONTHLY THIS
NUMBER NAME SEX BIRTH AMOUNT DATE BENEFIT BIRTH SEX BENEFIT YEAR COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### HERNANDEZ, S F 11/28/29 100.00 10/01/06 LIFE 13
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### KARADIMOS, G F 07/01/35 118.75 09/01/87 LIFE 13
- ------------------------------------------------------------------------------------------------------------------------------------
218.75 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
COUNT= 2
- ------------------------------------------------------------------------------------------------------------------------------------
Survivors
ANNUAL SERVICE DATA
FOR THE HEIM UNIVERSAL CORPORATION HOURLY EMPLOYEES PENSION PLAN OF
IMO INDUSTRIES INC. AS OF JANUARY 1, 1992
INACTIVES
- ------------------------------------------------------------------------------------------------------------------------------------
SOCIAL DATE MONTHLY BENEFIT FORM ----SPOUSE'S INFORMATION--- STATUS
SECURITY OF BENEFIT START OF DATE OF MONTHLY THIS
NUMBER NAME SEX BIRTH AMOUNT DATE BENEFIT BIRTH SEX BENEFIT YEAR COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### ARMENGOL, E M 03/07/24 70.69 03/01/81 55JS 04/19/30 F 38.88 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### BENNICI, C F 09/08/24 137.75 05/01/85 55JS 09/08/21 M 75.76 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### BLAIS, F A M 07/18/11 64.78 09/01/75 55JS 10/19/14 F 35.63 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### BODIE, I M 05/07/18 328.75 11/01/78 55JS 10/16/13 F 180.81 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### DELANEY, J M 05/01/21 222.85 01/01/85 55JS 05/01/24 F 122.57 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### DELORME, R M 08/01/21 108.33 08/01/81 55JS 12/30/25 F 59.58 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### FERRANTE, LOUIS M 09/08/21 141.11 10/01/83 55JS 10/31/33 F 77.61 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### HIDALGO, A M 04/27/11 169.17 03/01/77 55JS 10/10/05 F 93.04 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### HOVANEC, J M 01/14/26 175.57 10/01/89 55JS 06/13/30 F 96.56 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### LIBERAIDRE, A M 04/15/20 100.30 05/01/85 55JS 09/16/21 F 55.17 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### ORAZULAK, W M 03/24/22 138.65 04/01/89 55JS 03/25/25 F 76.26 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### PECK, M F 07/26/08 57.16 08/01/73 55JS 05/06/11 F 31.44 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### POMEROY, R M 08/25/94 77.91 09/01/51 55JS 03/03/96 F 42.85 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### POMPA, D M 10/01/21 69.64 06/01/80 55JS 05/26/23 F 38.30 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### RODRIGUEZ, G M 04/16/17 77.58 01/01/80 55JS 11/21/22 F 42.67 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### SCIPPA, A F 01/05/07 183.75 04/01/74 55JS 07/21/10 F 101.06 18
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### VERDOCK, J M 04/05/18 258.36 10/01/79 55JS 07/01/12 F 142.10 18
- ------------------------------------------------------------------------------------------------------------------------------------
2,382.35 1,310.29
- ------------------------------------------------------------------------------------------------------------------------------------
COUNT= 17
- ------------------------------------------------------------------------------------------------------------------------------------
Vested Transfers
ANNUAL SERVICE DATA
FOR THE HEIM UNIVERSAL CORPORATION HOURLY EMPLOYEES PENSION PLAN OF
IMO INDUSTRIES INC. AS OF JANUARY 1, 1992
INACTIVES
- ------------------------------------------------------------------------------------------------------------------------------------
SOCIAL DATE MONTHLY BENEFIT FORM ----SPOUSE'S INFORMATION--- STATUS
SECURITY OF BENEFIT START OF DATE OF MONTHLY THIS
NUMBER NAME SEX BIRTH AMOUNT DATE BENEFIT BIRTH SEX BENEFIT YEAR COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### COPPOLA, P M 10/20/28 1.00 10/01/93 LIFE 15
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### DARLING, J F 11/25/50 59.38 11/01/15 LIFE 15
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### DECARVALHO, N M M 12/01/43 51.85 12/01/08 LIFE 15
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### DUPONT, V M 11/22/29 94.05 11/01/94 LIFE 15
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### GARCES, M F 11/09/57 72.45 11/01/22 LIFE 15
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### GONCALVES, J M 02/15/55 44.33 02/01/20 LIFE 15
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### HERNANDEZ, F M 07/25/53 5.54 07/01/18 LIFE 15
- ------------------------------------------------------------------------------------------------------------------------------------
###-##-#### NASTAGIA, M M 05/02/47 21.38 05/01/12 LIFE 15
- ------------------------------------------------------------------------------------------------------------------------------------
349.98 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
COUNT= 8
- ------------------------------------------------------------------------------------------------------------------------------------
Schedule 14.2
Certain Employees
1. Larry A. Raffone
2. Mario DiDomenico
3. Manuel deCarvalho