ASSET PURCHASE AGREEMENT
dated as of August 29, 1997
among
IMO INDUSTRIES INC.,
IMO INDUSTRIES (UK) LIMITED,
IMO INDUSTRIES (CANADA) INC. and
IMO INDUSTRIES GMBH
as Sellers,
DH HOLDINGS CORP.,
GEMS SENSORS INC.,
▇▇▇▇▇▇▇▇▇ CANADA, INC.,
▇▇▇▇▇▇ HOLDING COMPANY,
VERWALTUNGSGESELLSCHAFT
REDTENBACHERSTRASSE MBH,
▇▇▇▇▇▇-▇▇▇▇ SARL, and
▇▇▇▇▇▇▇▇▇ ITALIA SRL,
as Buyers
and
▇▇▇▇▇▇▇ CORPORATION,
as the Parent of Buyers
THE GEMS SENSORS SEGMENT OF
IMO INDUSTRIES INC.
TABLE OF CONTENTS
Page
----
ARTICLE I.
Definitions; Interpretation
1.1. Definitions........................................................ 2
1.2. Interpretation..................................................... 8
ARTICLE II.
Purchase and Sale
2.1. Agreements to Purchase and Sell.................................... 8
2.2. Excluded Assets.................................................... 10
2.3. Assumed Liabilities................................................ 11
2.4. Excluded Liabilities............................................... 12
2.5. Allocation of Assets and Liabilities............................... 14
2.6. Subsidiary Shares.................................................. 14
2.7. Intercompany Receivables........................................... 15
2.8. Procedures for Purchased Assets Not Transferable................... 15
2.9. Encumbrances....................................................... 15
ARTICLE III.
Purchase Price
3.1. Purchase and Sale.................................................. 15
ARTICLE IV.
Closing
4.1. Closing Date....................................................... 16
4.2. Transactions at Closing............................................ 16
4.3. Risk of Loss....................................................... 17
4.4. Allocation of Purchase Price....................................... 17
ARTICLE V.
Representations and Warranties of Seller Parent
5.1. Organization and Qualification..................................... 18
5.2. Authority Relative to This Agreement............................... 18
5.3. No Conflict; Required Filings and Consents......................... 19
5.4. Financial Statements............................................... 19
5.5. Purchased Assets................................................... 20
5.6. Confidentiality.................................................... 20
5.7. Brokers, Finders, etc.............................................. 20
5.8. Subsidiary Shares.................................................. 20
5.9. Taxes,............................................................. 20
5.10. Absence of Certain Changes or Events............................... 21
5.11. Personal Property; Real Property................................... 21
5.12. Imo Subsidiaries................................................... 22
ARTICLE VI.
Representations and Warranties of Buyer Parent
6.1. Corporate Organization............................................. 22
6.2. Authority Relative to This Agreement............................... 23
6.3. No Conflict; Required Filings and Consents......................... 23
6.4. Availability of Funds.............................................. 24
6.5. Brokers, Finders, etc.............................................. 24
ARTICLE VII.
Employment Matters
7.1. Employment of Sellers' Employees................................... 24
7.2. Pension Benefit Plans.............................................. 25
7.3. Welfare and Fringe Benefit Plans................................... 26
7.4. Workers Compensation............................................... 27
7.5. Employment Taxes................................................... 27
ii
ARTICLE VIII.
Pre-Closing Covenants of Sellers, Buyer Parent and Buyers
8.1. Covenants of Sellers, Buyer Parent and Buyers...................... 28
8.2. Additional Covenants of Sellers.................................... 28
ARTICLE IX.
Conditions
9.1. Conditions to Each Party's Obligation.............................. 30
9.2. Conditions to Obligation of Buyers................................. 30
9.3. Conditions to Obligation of Sellers................................ 31
ARTICLE X.
Post-Closing Covenants
10.1. Availability of Records............................................ 32
10.2. Tax Matters........................................................ 33
10.3. Further Assurances................................................. 35
10.4. Post-Closing Transactions.......................................... 35
10.5. Seller Parent's Agreement.......................................... 35
10.6. Buyer Parent's Agreement........................................... 35
10.7. Use of Business Names by Buyer..................................... 35
ARTICLE XI.
Indemnification and Survival
11.1. Indemnification.................................................... 36
11.2. Adjustments to Indemnification Payments............................ 37
11.3. Indemnification Procedures......................................... 37
11.4. Survival of Representations and Warranties, etc.................... 39
11.5. Settlement of Insured Liabilities.................................. 39
11.6. Subrogation........................................................ 40
iii
ARTICLE XII.
Termination
12.1. Termination of Agreement........................................... 40
12.2. Effect of Termination.............................................. 40
ARTICLE XIII.
Miscellaneous
13.1. Assignment......................................................... 40
13.2. No Press Release Without Consent................................... 41
13.3. Confidentiality.................................................... 41
13.4. Expenses........................................................... 41
13.5. Severability....................................................... 41
13.6. Entire Agreement................................................... 41
13.7. No Third Party Beneficiaries....................................... 42
13.8. Waiver............................................................. 42
13.9. Governing Law...................................................... 42
13.10. Counterparts...................................................... 42
13.11. Choice of Forum................................................... 42
13.12. Notices........................................................... 42
13.13. Construction...................................................... 44
13.14. Bulk Transfer..................................................... 44
ARTICLE XIV.
Restrictive Covenants
14.1. Non-Competition; Non-Disclosure................................... 44
14.2. ............................................................... 45
iv
Exhibits:
I Transitional Services Agreement
Schedules:
2.3 All leases and other liabilities and obligations related to the
Sellers' sales operations
4.2(b) Allocation of the Purchase Price
5.12 Imo Subsidiary Non-Business Related Liabilities
7.1(a) List of Transitioning Employees
7.1(d) List of Nontransitioning Employees
7.3(b) Disability and post-retirement health and life insurance benefits
payable to Transitioning Employees
Annex:
I Required filings
v
Execution Copy
ASSET PURCHASE AGREEMENT dated as of August 29, 1997, among
IMO INDUSTRIES INC., a Delaware corporation ("Seller Parent"), IMO INDUSTRIES
(UK) LIMITED, a corporation organized under the laws of England and a wholly
owned subsidiary of Seller Parent ("Imo UK"), IMO INDUSTRIES (CANADA) INC., a
corporation organized under the laws of Canada and a wholly owned subsidiary of
Seller Parent ("Imo Canada"), IMO INDUSTRIES GMBH, a corporation organized under
the laws of the Federal Republic of Germany and a wholly owned subsidiary of
Seller Parent ("Imo Germany", and together with Seller Parent, Imo UK and Imo
Canada, the "Sellers"), ▇▇▇▇▇▇▇ CORPORATION, a Delaware corporation ("Buyer
Parent"), DH HOLDINGS CORP., a Delaware corporation and a wholly owned
subsidiary of Buyer Parent ("▇▇▇▇▇▇▇ Delaware I"), GEMS SENSORS INC., a Delaware
corporation and a wholly owned subsidiary of ▇▇▇▇▇▇▇ Delaware I ("▇▇▇▇▇▇▇
Delaware II"), ▇▇▇▇▇▇▇▇▇ CANADA, INC., a corporation organized under the laws of
Canada and an indirect wholly owned subsidiary of Buyer Parent ("▇▇▇▇▇▇▇
Canada"), ▇▇▇▇▇▇ HOLDING COMPANY, a corporation organized under the laws of
England and an indirect wholly owned subsidiary of Buyer Parent ("▇▇▇▇▇▇▇ UK"),
VERWALTUNGSGESELLSCHAFT REDTENBACHERSTRASSE MBH, a corporation organized under
the laws of the Federal Republic of Germany and an indirect wholly owned
subsidiary of Buyer Parent ("▇▇▇▇▇▇▇ Germany"), ▇▇▇▇▇▇-▇▇▇▇ SARL, a corporation
organized under the laws of France and an indirect wholly owned subsidiary of
Buyer Parent ("▇▇▇▇▇▇▇ France"), and ▇▇▇▇▇▇▇▇▇ ITALIA SRL, a corporation
organized under the laws of Italy and an indirect wholly owned subsidiary of
Buyer Parent ("▇▇▇▇▇▇▇ Italy"; and together with ▇▇▇▇▇▇▇ Delaware I, ▇▇▇▇▇▇▇
Delaware II, ▇▇▇▇▇▇▇ Canada, ▇▇▇▇▇▇▇ UK, ▇▇▇▇▇▇▇ Germany and ▇▇▇▇▇▇▇ France, the
"Buyers").
WHEREAS Sellers, through Seller Parent's GEMS Sensors Segment,
Seller Parent's wholly owned subsidiaries Imo Industries SRL ("Imo Italy"), Imo
Industries SARL ("Imo France") and Weka AG ("Imo Switzerland") and Imo UK's
wholly owned subsidiary Imo Industries Limited, company no. 1735937 ("Imo UK
Sub", and together with Imo Italy, Imo France and Imo Switzerland, the "Imo
Subsidiaries"), and the Gems Sensors Segments of Imo Canada and Imo Germany
(collectively, the "GEMS Sensors Segment"), manufacture, sell and market a
variety of products that perform critical liquid sensing, measurement and
control functions, such as level and flow switches, pressure transducers, tank
level indication systems and other visual level indicators (the "Business"); and
WHEREAS Sellers wish to sell all of the assets of the Business
(including all Subsidiary Shares) to Buyers (other than specified Excluded
Assets), and Buyers wish, and Buyer Parent wishes to cause Buyers, to purchase
such assets from Sellers and assume all of Sellers' liabilities in connection
therewith (other than specified Excluded Liabilities);
NOW, THEREFORE, in consideration of the premises and mutual
covenants, agreements and provisions herein contained, the parties hereto agree
as follows:
ARTICLE I.
Definitions; Interpretation
1.1. Definitions. The following terms have the following
meanings when used herein:
"Acquisition" has the meaning set forth in Section 3.1.
"Agreement" means this Asset Purchase Agreement and all
Exhibits and Schedules hereto.
"affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such Person.
"Assumed Liabilities" has the meaning set forth in Section
2.3.
"Balance Sheet" has the meaning set forth in Section 5.4.
"Business" has the meaning set forth in the recitals hereof.
"Buyer Indemnitees" has the meaning set forth in Section
11.1(a).
"Buyer Parent" has the meaning set forth in the recitals
hereof.
"Buyers" has the meaning set forth in the recitals hereof.
"Buyer's Welfare Plans" has the meaning set forth in Section
7.3(a).
2
"Closing" has the meaning set forth in Section 4.1.
"Closing Date" has the meaning set forth in Section 4.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contracts" means all contracts, arrangements, licenses,
leases or other agreements, whether oral or written, primarily relating to, or
used, held for use or intended to be used in connection with, the Business.
"▇▇▇▇▇▇▇ Canada" has the meaning set forth in the recitals
hereof.
"▇▇▇▇▇▇▇ Delaware I" has the meaning set forth in the recitals
hereof.
"▇▇▇▇▇▇▇ Delaware II" has the meaning set forth in the
recitals hereof.
"▇▇▇▇▇▇▇ France" has the meaning set forth in the recitals
hereof.
"▇▇▇▇▇▇▇ Germany" has the meaning set forth in the recitals
hereof.
"▇▇▇▇▇▇▇ Italy" has the meaning set forth in the recitals
hereof.
"▇▇▇▇▇▇▇ UK" has the meaning set forth in the recitals hereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section
2.4.
"FICA" has the meaning set forth in Section 7.5(a).
"Financial Statements" has the meaning set forth in Section
5.4.
"FUTA" has the meaning set forth in Section 7.5(a).
"GAAP" means generally accepted accounting principles
consistently applied in accordance with past practices of Sellers as it relates
to the Business.
3
"GEMS Sensors Segment" has the meaning set forth in the
recitals hereof.
"Governmental Approval" means any consent, approval,
authorization, waiver, permit, grant, franchise, concession, agreement, license,
exemption or order of, registration, certificate, declaration or filing with, or
report or notice to, any Governmental Authority.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any government authority, agency,
department, board, commission or instrumentality of the United States, any State
of the United States, any foreign jurisdiction or any political subdivision
thereof, and any tribunal or arbitrator(s) of competent jurisdiction, and any
self-regulatory organization.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Imo Canada" has the meaning set forth in the recitals hereof.
"Imo France" has the meaning set forth in the recitals hereof.
"Imo Germany" has the meaning set forth in the recitals
hereof.
"Imo Italy" has the meaning set forth in the recitals hereof.
"Imo Subsidiaries" has the meaning set forth in the recitals
hereof.
"Imo Subsidiary Debt" means all liabilities and obligations
(including principal, interest, prepayment penalties or premiums and other fees
and expenses) of (i) Imo UK Sub to Barclays Bank, (ii) Imo France to Barclays
Bank and Societe Generale, (iii) Imo Italy to Credito Italiano and Comit Bank,
(iv) Imo Switzerland with respect to its mortgage bond indebtedness and (v) all
other indebtedness of any Imo Subsidiary for moneys borrowed.
"Imo Switzerland" has the meaning set forth in the recitals
hereof.
"Imo UK" has the meaning set forth in the recitals hereof.
4
"Imo UK Plan" has the meaning set forth in Section 7.2(d).
"Imo UK Sub" has the meaning set forth in the recitals hereof.
"Indemnified Party" has the meaning set forth in Section 11.3.
"Indemnifying Party" has the meaning set forth in Section
11.3.
"Intellectual Property" means all of Sellers' patents, patent
rights, trademarks, trademark rights, trade names, trade dress, trade name
rights, copyrights, servicemarks, trade secrets, applications for trademarks and
for servicemarks, mask works, know-how and other proprietary rights and
information used, held for use or intended to be used primarily in connection
with the operations and conduct of the Business.
"Intracompany" with respect to any financial relationship
means a relationship that would be eliminated in a consolidated financial
statement of the GEMS Sensors Segment.
"Inventories" has the meaning set forth in Section 2.1(b).
"Leased Real Property" means all interests leased pursuant to
the Leases.
"Leases" means the real property leases, subleases, licenses
and occupancy agreements pursuant to which any Seller or any of its subsidiaries
is the lessee, sublessee, licensee or occupant other than real property leases,
subleases, licenses and occupancy agreements included in Excluded Assets.
"Lien" means any mortgage, pledge, hypothecation, right of
others, claim, security interest, encumbrance, lease, sublease, license,
occupancy agreement, adverse claim or interest, easement, covenant,
encroachment, burden, title defect, title retention agreement, voting trust
agreement, interest, equity, option, lien, right of first refusal, charge or
other restrictions or limitations of any nature whatsoever, including but not
limited to such as may arise under any Contracts.
"Losses" has the meaning set forth in Section 11.1(a).
"Marked Materials" has the meaning set forth in Section 10.7.
"Material Adverse Effect" has the meaning set forth in Section
5.1.
5
"Net Debt" has the meaning set forth in Section 3.1.
"Nontransitioning Employees" has the meaning set forth in
Section 7.1(d).
"Owned Real Property" means the real property owned by Sellers
and located at ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, together with all other
structures, facilities, improvements, fixtures, systems, equipment and items of
property presently or hereafter located thereon attached or appurtenant thereto
and all easements, licenses, rights and appurtenances relating to the foregoing.
"Permitted Liens" means Liens for Taxes not yet due and
payable or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of any Seller in accordance with GAAP.
"Person" means any individual, corporation, partnership, joint
venture, trust or unincorporated organization or government or any agency or
political subdivision thereof.
"Plan" means any bonus, stock option, stock purchase,
restricted stock, incentive, deferred compensation, retiree medical or life
insurance, supplemental retirement or severance plan, program or policy, and any
employment, termination or severance contract.
"Purchased Assets" has the meaning set forth in Section 2.1.
"Purchase Price" has the meaning set forth in Section 3.1.
"Real Property" means the Owned Real Property and the Leased
Real Property.
"Receivables" means the US Receivable and the UK Receivable.
"Seller Indemnitees" has the meaning set forth in Section
11.1(b).
"Seller Parent" has the meaning set forth in the recitals
hereof.
"Seller Parent's 401(k) Plan" has the meaning set forth in
Section 7.2(b).
6
"Seller Parent's Pension Plan" means Imo Industries Inc.
Retirement Plan for U.S. Salaried Employees.
"Sellers" has the meaning set forth in the recitals hereof.
"Separate Covenant" has the meaning set forth in Section 14.2.
"Subordinated Debt" has the meaning set forth in Section
9.2(d).
"Subsidiary Shares" has the meaning set forth in Section 2.6.
"Taxes" means any federal, state, provincial, local, foreign
or other income, alternative, minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits, windfall
profits, gross receipts, value added, sales (including, but not limited to, bulk
sales), use, goods and services, excise, customs duties, transfer, conveyance,
mortgage, registration, stamp, documentary, recording, premium, severance,
environmental (including, without limitation, taxes under section 59A of the
Code), real property, personal property, ad valorem, intangibles, rent,
occupancy, license, occupational, employment, unemployment insurance, social
security, disability, workers' compensation, payroll, health care, withholding,
estimated or other similar tax, duty or other governmental charge or assessment
or deficiencies thereof (including all interest and penalties thereon and
additions thereto whether disputed or not).
"Tax Return" means any return, report, declaration, form,
claim for refund or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof, except
as relates to the Imo Subsidiaries.
"Transactions" has the meaning set forth in Section 5.2.
"Transfer Taxes" has the meaning set forth in Section 10.2.2.
"Transitional Services Agreement" means the Transitional
Services Agreement substantially in the form attached hereto as Exhibit I.
"Transitioning Employees" has the meaning set forth in Section
7.1(a).
"UK Receivables" means the intercompany account receivable of
Imo UK from Imo UK Sub.
7
"US Receivable" means the intercompany account receivable of
Seller Parent from Imo UK Sub.
1.2. Interpretation. The headings contained in this Agreement,
in any exhibit or schedule annexed hereto and in the table of contents to this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever a reference in this
Agreement is made to "each Seller" or "such Seller", such reference shall be a
reference to Seller Parent as well as the other Sellers. When a reference is
made in this Agreement to an Article, Section, Schedule or Exhibit, such
reference shall be to an Article, Section, Schedule or Exhibit of this Agreement
unless otherwise indicated. Whenever the words "included", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". All accounting terms not defined in this
Agreement shall have the meanings determined by GAAP. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms, and references to a
person are also to its permitted successors and assigns. Whenever a reference in
this Agreement is made to the "knowledge of Seller Parent", such reference will
be deemed to refer to the actual knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, president of
Seller Parent, ▇▇▇▇ ▇. ▇▇▇▇▇, Vice President and Assistant Secretary of Seller
Parent, ▇▇▇▇▇▇▇ ▇▇▇▇, Vice President of Seller Parent or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III,
Vice President of Seller Parent.
ARTICLE II.
Purchase and Sale
2.1. Agreements to Purchase and Sell. Upon the terms and
subject to the conditions of this Agreement, at the Closing Sellers shall, and
Seller Parent shall cause Imo Canada, Imo Germany and Imo UK to, sell, transfer,
convey, assign and deliver to Buyers, and Buyers shall, and Buyer Parent shall
cause Buyers to, purchase and accept from Sellers, all right, title, and
interest of Sellers in and to all the properties, assets and rights of any kind
on the Closing Date, whether tangible or intangible, real or personal, of
Sellers primarily relating to, or used, held for use or intended to be used in
connection with, the Business, except for the Excluded Assets (collectively, the
"Purchased Assets"), including the following properties, assets and
8
rights (to the extent primarily relating to, or used, held for use or intended
to be used in connection with, the Business):
(a) all machinery, equipment, furniture, furnishings,
automobiles, trucks, vehicles, tools, dies, molds and parts and similar
property (including, but not limited to, any of the foregoing purchased
subject to any conditional sales or title retention agreement in favor
of any other Person);
(b) all inventories of raw materials, work in process,
finished products, goods, spare parts, replacement and component parts,
and office and other supplies (collectively, the "Inventories"),
including Inventories held at any location controlled by Sellers and
Inventories previously purchased and in transit to any Seller at such
locations;
(c) all rights in and to products sold or leased (including,
but not limited to, products hereafter returned or repossessed and
unpaid sellers' rights of rescission, replevin, reclamation and rights
to stoppage in transit) arising primarily out of the operations or
conduct of the Business;
(d) all rights (including but not limited to any and all
Intellectual Property rights) in and to the products sold or leased and
in and to any products under research or development prior to or on the
Closing Date arising primarily out of the operations or conduct of the
Business;
(e) all of the rights of Sellers under all Contracts,
including, without limitation, purchase and sale orders, any right to
receive payment for products sold or services rendered, and to receive
goods and services, pursuant to such Contracts and to assert claims and
take other rightful actions in respect of breaches, defaults and other
violations of such Contracts and otherwise;
(f) all credits, prepaid expenses, deferred charges, advance
payments, security deposits and prepaid items;
(g) all notes and accounts receivable, including Intracompany
accounts receivable, held by Sellers and all notes, bonds and other
evidences of indebtedness of and rights to receive payments from any
Person held by Sellers;
(h) all Intellectual Property and all rights thereunder or in
respect thereof, including rights to ▇▇▇ for and remedies against past,
present and future infringements thereof, and rights of priority and
protection of interests therein
9
under the laws of any jurisdiction worldwide and all tangible
embodiments thereof;
(i) all books, records, manuals and other materials (in any
form or medium), including all records and materials maintained at the
respective headquarters of Sellers, advertising matter, catalogues,
price lists, correspondence, mailing lists, lists of customers,
distribution lists, photographs, production data, sales and
promotional materials and records, purchasing materials and records,
personnel records, manufacturing and quality control records and
procedures, blueprints, research and development files, records, data
and laboratory books, Intellectual Property disclosures, media
materials and plates, accounting records, sales order files and
litigation files;
(j) to the extent their transfer is permitted by law, all
Governmental Approvals, including all applications therefor;
(k) all Real Property and all licenses, permits, approvals and
qualifications relating to any Real Property issued to any Seller by
any Governmental Authority;
(l) all rights to causes of action, lawsuits, judgments,
claims and demands of any nature available to or being pursued by
Sellers with respect to the Business or the ownership, use, function or
value of any Purchased Asset, whether arising by way of counterclaim or
otherwise;
(m) all guarantees, warranties, indemnities and similar rights
in favor of Sellers with respect to any Purchased Asset;
(n) all partnership interests or any other equity interest in
any corporation, company, limited liability company, partnership, joint
venture, trust or other business association; and
(o) all goodwill generated by or associated with the Business.
2.2. Excluded Assets. Sellers shall not sell, transfer or
assign, and Buyers shall not purchase, the following assets of Sellers (such
assets being collectively referred to as the "Excluded Assets"):
(a) all rights of Sellers arising under this Agreement and the
consummation of the transactions contemplated hereby;
10
(b) all cash, commercial paper, certificates of deposit and
other bank deposits, treasury bills, investments and other cash
equivalents and marketable securities;
(c) all corporate minute books, stock records and Tax Returns
of Sellers and such other similar corporate books and records of
Sellers as may exist on the Closing Date; provided, however, that
Buyers shall be entitled to obtain copies of such other records of
Sellers relating to the Purchased Assets as Buyer Parent may reasonably
require in connection with the operation of the Business or use of the
Purchased Assets subsequent to the Closing;
(d) subject to Section 10.7, all interests in and to the
corporate names and logos of Sellers or any affiliates of any Seller
(except for the names used in the Business), including "Imo", "Imo
Industries Inc.," "Imo Industries (UK) Limited," "Imo Industries
(Canada) Inc.," and "Imo Industries GmbH", the "Swirl" currently used
in connection with the Gems Sensors trademark and all variants thereof
and all rights to the use of such names as trademarks;
(e) Inventories of Imo Canada;
(f) all intercompany receivables from any Seller or an
affiliate of any Seller outside of the Business; and
(g) all rights to refunds of Taxes that are not assumed
pursuant to Section 2.3(c) and that accrued prior to the Closing.
2.3. Assumed Liabilities. On the Closing Date, upon the terms
and subject to the conditions of this Agreement, Buyers shall, and Buyer Parent
shall cause Buyers to, assume the liabilities of Sellers listed below except for
(i) the Excluded Liabilities and (ii) liabilities to the extent reimbursed by
Sellers' insurance policies (collectively, the "Assumed Liabilities"),
including:
(a) the obligations of Sellers under the Contracts included as
part of the Purchased Assets to the extent that they relate to the
Business;
(b) all warranty claims for defective products whether
manufactured prior to or after the Closing Date;
(c) all Taxes (i) relating to the Purchased Assets or the
operation of the Purchased Assets for periods on or after the Closing
Date; (ii) relating to the
11
Imo Subsidiaries for periods prior to or after the Closing Date; and
(iii) not based on income for periods prior to the Closing Date;
(d) all liabilities in respect of Transitioning Employees as
set forth in Article VII except to the extent expressly retained by
Sellers pursuant to Article VII;
(e) all intercompany payables obligations of the Business
referred to in Section 2.7 and all Intracompany payables obligations of
the Business, the related Intracompany accounts receivable of which are
being purchased pursuant to Section 2.1(g);
(f) the underfunded accrued liability with respect to Seller
Parent's United States Pension Plan, such liability to be discharged
via a lump sum payment of $2,525,000 to Seller Parent on the Closing
Date;
(g) all leases and other liabilities and obligations related
to the operation of Sellers' sales offices listed on Schedule 2.3
hereto;
(h) all Imo Subsidiary Debt;
(i) all liabilities and obligations of Sellers relating to the
pending claim by ERGHY against Imo France and Imo Germany; and
(j) all other liabilities, obligations and commitments, known
or unknown, of Sellers arising out of the ownership, operation or
conduct of the Business or the ownership, use or operation of the
Purchased Assets, on or before the Closing Date if and to the extent
such liabilities, obligations and commitments relate to the Business.
2.4. Excluded Liabilities. Buyers do not assume, and Buyer
Parent does not assume, and will not become responsible for any of the following
liabilities and obligations of Sellers (collectively, the "Excluded
Liabilities"):
(a) all Taxes based on income relating to the Purchased Assets
or the operation of the Purchased Assets for periods prior to the
Closing Date other than Taxes relating to the Imo Subsidiaries;
12
(b) all liabilities and obligations of Sellers or the Business
under notes payable to banks or other indebtedness for moneys borrowed,
except as expressly assumed pursuant to Section 2.3(h);
(c) all liabilities with respect to Seller Parent's Pension
Plan except as expressly assumed pursuant to Section 2.3(f);
(d) all liabilities and obligations relating to the
Subordinated Debt;
(e) all liabilities and obligations relating to any claims,
expenses, losses, costs or indebtedness incurred by II Acquisition
Corp., Seller Parent or their affiliates in connection with the
acquisition of Seller Parent by II Acquisition Corp.;
(f) all liabilities and obligations of the Sellers for any
division of Sellers other than the GEMS Sensors Segment or for any
discontinued operations or former division or subsidiary of the
Sellers, except to the extent such discontinued operation, former
division or subsidiary was owned or operated by the GEMS Sensors
Segment;
(g) all liabilities and obligations of Sellers relating to
Seller Parent's corporate headquarters operations or any other business
segment except as relates to the Transitioning Employees;
(h) all leases and other liabilities and obligations related
to the operation of Sellers' sales offices to the extent not listed on
Schedule 2.3 hereto;
(i) all liabilities and obligations with respect to any
current employee of the Business except as expressly assumed pursuant
to Article VII;
(j) all intercompany payables obligations of the Business
other than those expressly assumed pursuant to Section 2.3(e);
(k) all environmental liabilities, known or unknown,
associated with the facility formerly owned and occupied by the
Business in Hartford, Connecticut;
(l) all liabilities and obligations of any Seller to any
current and former officers and directors of Sellers, other than
Transitioning Employees and former officers and directors of Sellers
who were employees of the GEMS Sensors Segment;
13
(m) all liabilities and obligations of the Sellers' relating
to Sellers' former ▇▇▇▇▇▇▇▇▇ and CEC businesses except for those
arising from the distribution of ▇▇▇▇▇▇▇▇▇ and CEC products by the GEMS
Sensors Segment;
(n) all liabilities and obligations of any Seller to any
current and former shareholders of Sellers;
(o) all liabilities and obligations of Sellers, II Acquisition
Corp. or any of their affiliates to Credit Suisse First Boston
Corporation and ▇▇▇▇▇▇▇▇ & Co. Inc. and their affiliates; and
(p) all other liabilities, obligations and commitments, known
or unknown, of Sellers arising out of the ownership, operation or
conduct of the business of Sellers other than the Business, or the
ownership, use or operation of any assets of the Sellers other than the
Purchased Assets, if and to the extent such liabilities, obligations
and commitments relate to the business of the Sellers other than the
Business.
2.5. Allocation of Assets and Liabilities. The Purchased
Assets held by each individual Seller are being purchased by, and the Assumed
Liabilities of such Seller are being assumed by, the specific Buyer or Buyers
set forth in Schedule 4.2(b) hereto.
2.6. Subsidiary Shares. (a) On the Closing Date, upon the
terms and subject to the conditions of this Agreement, (i) Seller Parent shall
sell, and ▇▇▇▇▇▇▇ Delaware I shall, and Buyer Parent shall cause ▇▇▇▇▇▇▇
Delaware I to, purchase, all of the shares of capital stock of Imo Switzerland,
(ii) Seller Parent shall sell, and ▇▇▇▇▇▇▇ Italy shall, and Buyer Parent shall
cause ▇▇▇▇▇▇▇ Italy to, purchase, all of the shares of capital stock of Imo
Italy, (iii) Seller Parent shall sell, and ▇▇▇▇▇▇▇ France shall, and Buyer
Parent shall cause ▇▇▇▇▇▇▇ France to, purchase, all of the shares of capital
stock of Imo France, and (iv) Imo UK shall, and Seller Parent shall cause Imo UK
to, sell, and ▇▇▇▇▇▇▇ UK shall, and Buyer Parent shall cause ▇▇▇▇▇▇▇ UK to,
purchase, all of the shares of capital stock of Imo UK Sub (the shares of
capital stock referred to in clauses (i), (ii), (iii) and (iv), the "Subsidiary
Shares").
(b) Seller Parent shall, and shall cause each Seller to,
transfer to Buyers on the Closing Date the corporate minute books and stock
ledgers of the Imo Subsidiaries.
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2.7. Intercompany Receivables. On the Closing Date, upon the
terms and subject to the conditions of this Agreement, (a) Seller Parent shall
sell, and ▇▇▇▇▇▇▇ UK shall, and Buyer Parent shall cause ▇▇▇▇▇▇▇ UK to,
purchase, the US Receivable and (b) Imo UK shall, and Seller Parent shall cause
Imo UK to, sell, and ▇▇▇▇▇▇▇ UK shall, and Buyer Parent shall cause ▇▇▇▇▇▇▇ UK
to, purchase, the UK Receivable.
2.8. Procedures for Purchased Assets Not Transferable. If any
consent required to transfer or assign any of the Contracts or any other
property or rights included in the Purchased Assets cannot be obtained prior to
the Closing Date and the Closing occurs, or if an attempted assignment thereof
would be ineffective or would adversely affect the rights of any Seller
thereunder so that Buyers would not in fact receive all such rights, this
Agreement and the related instruments of transfer shall not constitute an
assignment or transfer thereof and Buyers shall not assume Sellers' obligations
with respect thereto. Each Seller, each Buyer and Buyer Parent will cooperate to
achieve a mutually agreeable arrangement under which Buyers would obtain the
benefits and assume the obligations thereunder (but only to the extent such
obligations would have constituted Assumed Liabilities if such assignment
occurred on the Closing Date) from and after the Closing Date in accordance with
this Agreement, including subcontracting, sublicensing or subleasing to Buyers,
or under which Sellers would enforce for the benefit of Buyers, with Buyers
assuming Sellers' obligations to the same extent as if it would have constituted
an Assumed Liability and any and all rights of Sellers against a third Person
thereto. Each Seller will pay promptly to the appropriate Buyer when received
all monies received by such Seller after the Closing Date under any of the
Contracts or any claim or right or any benefit arising thereunder to the extent
that such Buyer would be entitled thereto pursuant hereto.
2.9. Encumbrances. Buyers shall acquire the Purchased Assets,
including the Subsidiary Shares, free and clear of all liabilities, obligations
and commitments of Sellers other than the Assumed Liabilities, and free and
clear of all Liens other than Permitted Liens.
ARTICLE III.
Purchase Price
3.1. Purchase and Sale. On the terms and subject to the
conditions of this Agreement, at the Closing and in addition to Buyers'
assumption of the Assumed Liabilities, Sellers shall, and Seller Parent shall
cause Imo UK, Imo Canada and Imo
15
Germany to, sell, transfer, convey, assign and deliver to Buyers, and Buyers
shall, and Buyer Parent shall cause Buyers to, purchase and accept from Sellers
all the right, title and interest of Sellers to and under the Purchased Assets,
the Subsidiary Shares and the Receivables for an aggregate purchase price (the
"Purchase Price") in an amount equal to:
(i) Eighty Five Million U.S. Dollars ($85,000,000)
less
(ii) the amount of the Net Debt as of the Closing
Date.
As used herein, the term "Net Debt" shall equal (i) the Imo
Subsidiary Debt and less (ii) cash and temporary cash investments held by the
Imo Subsidiaries. For purposes of calculating Net Debt, the Imo Subsidiary Debt
shall be deemed to include the principal balance of, accrued but unpaid interest
thereon, prepayment penalties if any and all other obligations payable or
reimbursable by the applicable Imo Subsidiary on the applicable Imo Subsidiary
Debt whether or not incurred or accrued by the Closing Date. For purposes of
payment on the Closing Date, the Net Debt shall be determined as of two business
prior to the Closing Date. The parties hereto shall act in good faith to adjust
the Purchase Price for any changes in Net Debt as of the Closing Date, and Buyer
Parent (on behalf of the Buyers) and Seller Parent (on behalf of itself and the
other Sellers) shall make any necessary adjusting payments within fifteen (15)
business days of the Closing. The purchase and sale of the Purchased Assets, the
Subsidiary Shares and the Receivables and assumption of the Assumed Liabilities
is referred to in this Agreement as the "Acquisition".
ARTICLE IV.
Closing
4.1. Closing Date. The closing of the purchase and sale of the
Purchased Assets and the other transactions contemplated hereby (the "Closing")
shall take place at the office of Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, at 10:00 a.m., on a date that is no more than two
business days after the satisfaction (or waiver) of all conditions set forth in
Article IX, or at such other place, time or date as Seller Parent and Buyer
Parent may agree. The date on which the Closing actually occurs shall be
referred to as the "Closing Date".
4.2. Transactions at Closing. At the Closing, and on the basis
of the representations, warranties, covenants and agreements made herein and in
the exhibits
16
hereto and in the certificates and other instruments delivered pursuant hereto,
and subject to the terms and conditions hereof:
(a) Seller Parent shall (or shall cause Imo UK, Imo Canada or
Imo Germany to) deliver to the appropriate Buyer (i) such appropriately
executed deeds (in recordable form), bills of sale, assignments and
other instruments of transfer relating to the Purchased Assets in form
and substance reasonably satisfactory to Buyer Parent and its counsel
and (ii) such other documents as Buyer Parent or its counsel may
reasonably request to demonstrate satisfaction of the conditions and
compliance with the covenants set forth in this Agreement;
(b) Buyer Parent shall, as agent for the Buyers, deliver to
Seller Parent, for itself and as agent for the other Sellers, (i)
payment in accordance with the allocation of the Purchase Price among
the various Buyers and the various Sellers as set forth on Schedule
4.2(b), by wire transfer to a bank account or accounts designated in
writing by Sellers (such designation to be made at least two business
days prior to the Closing Date), immediately available funds in an
amount equal to the Purchase Price; (ii) such appropriately executed
assumption agreements and other instruments of assumption providing for
the assumption of the Assumed Liabilities in form and substance
reasonably satisfactory to Seller Parent and its counsel and (iii) such
other documents as Seller Parent and its counsel may reasonably request
to demonstrate satisfaction of the conditions and compliance with the
covenants set forth in this Agreement;
(c) Seller Parent shall (or shall cause Imo UK, Imo Canada or
Imo Germany to) furnish to the appropriate Buyer at Buyer Parent's
expense (i) such UCC and other Lien searches and (ii) such duly
executed UCC-3 Termination or Partial Release Statements and other
releases, in each case as Buyer Parent or its counsel shall reasonably
request for the Purchased Assets; and
(d) The signing Sellers shall, and Seller Parent shall cause
such Sellers to, and the signing Buyers shall, and Buyer Parent shall
cause such Buyers to, execute and deliver the Transitional Services
Agreement.
4.3. Risk of Loss. Until the Closing, any loss of or damage to
the Purchased Assets from fire, casualty or any other occurrence not covered by
insurance payable to Buyer Parent or any Buyer shall be the sole responsibility
of Seller Parent.
4.4. Allocation of Purchase Price. The parties hereto agree to
allocate the aggregate of the Purchase Price and the Assumed Liabilities among
the Purchased
17
Assets in accordance with section 1060 of the Code and based on an allocation
mutually agreed upon by Buyer Parent and Seller Parent, which shall be prepared
by Buyer Parent, at Buyer Parent's expense, and delivered to Seller Parent not
later than the date that is six months after the Closing Date. In connection
with the preparation of the foregoing allocation, the parties hereto shall
cooperate with each other and provide such information as any of them shall
reasonably request. The parties hereto will each report the federal, state and
local and other Tax consequences of the purchase and sale contemplated hereby
(including the filing of IRS Form 8594) in a manner consistent with such
allocation. The preliminary allocation of the Purchase Price among the Purchased
Assets, the Subsidiary Shares and the Receivables is as set forth in Schedule
4.2(b), but remains subject to change based on the above principles.
ARTICLE V.
Representations and Warranties of Seller Parent
Seller Parent represents and warrants to, and agrees with,
Buyer Parent as follows:
5.1. Organization and Qualification. Seller Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, each other Seller is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and each Seller has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect. Each Seller is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not,
individually or in the aggregate, have a Material Adverse Effect. The term
"Material Adverse Effect" means any effect that is or is reasonably likely to be
materially adverse to the business, operations, financial condition, assets or
liabilities (including, without limitation, contingent liabilities) of the
Business.
5.2. Authority Relative to This Agreement. Each Seller that is
executing and delivering this Agreement and the Transitional Services Agreement
has
18
the necessary corporate power and authority to do so and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby (the "Transactions"). The execution and delivery
of this Agreement and the Transitional Services Agreement by each such Seller
and the consummation by each such Seller of the Transactions have been duly and
validly authorized by all necessary corporate action and no other corporate
proceedings on the part of such Seller are necessary to authorize this
Agreement, the Transitional Services Agreement and the and or to consummate the
Transactions. This Agreement and the Transitional Services Agreement have been
duly and validly executed and delivered by each such Seller and, assuming the
due authorization, execution and delivery by Buyer Parent and the applicable
Buyers, constitute the legal, valid and binding obligations of each such Seller
enforceable against such Seller in accordance with their terms.
5.3. No Conflict; Required Filings and Consents. The execution
and delivery of this Agreement and the Transitional Services Agreement by each
applicable Seller do not, and the performance of this Agreement and the
Transitional Services Agreement and the and by each such Seller will not, (i)
conflict with or violate the Certificate of Incorporation or By-laws of Seller
or the comparable organizational document of any other such Seller, (ii)
assuming that required filings under the HSR Act and the filings listed in Annex
I hereto are made by the appropriate parties, conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to any such Seller or by
which any property or asset of any such Seller is bound or affected or (iii)
result in any breach of or constitute a default (or an event with which notice
or lapse of time or both would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance of any nature on any property or
asset of any such Seller pursuant to any Contract to which any such Seller or
any of its subsidiaries is a party or by which any such Seller or any of its
subsidiaries or any property or asset of any such Seller or any of its
subsidiaries is bound or affected, except, in cases of (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, have a Material Adverse Effect.
5.4. Financial Statements. Seller Parent has furnished to
Buyer Parent (i) the unaudited balance sheet (the "Balance Sheet") of the GEMS
Sensors Segment as of July 31, 1997, and (ii) the unaudited balance sheet and
statements of income and cash flows of the GEMS Sensors Segment as of and for
the years ended December 31, 1996, 1995 and 1994 (the statements referred to in
clauses (i) and (ii) above, the "Financial Statements"). Each of the Financial
Statements (i) has been prepared from the books and records of Seller Parent
relating to the GEMS Sensors Segment in accordance with GAAP consistently
applied (except in each case as may be described in
19
any notes included therein and except for the omission of footnotes) throughout
the periods covered thereby and (ii) fairly presents, in all material respects,
the financial condition, results of operations and cash flows of the GEMS
Sensors Segment as of and for the dates and periods indicated.
5.5. Purchased Assets. The Purchased Assets comprise all
assets required for the continued conduct of the Business by Buyers as now being
conducted.
5.6. Confidentiality. Seller Parent has taken all steps
necessary to preserve the confidential nature of all material confidential
information (including, without limitation, any proprietary information) with
respect to the Business, including but not limited to the manufacturing or
marketing of any of the products or services of the Business.
5.7. Brokers, Finders, etc. All negotiations relating to this
Agreement, the Transitional Services Agreement and the Transactions have been
carried on without the participation of any Person acting on behalf of Seller
Parent or its affiliates in such manner as to give rise to any valid claim
against Buyer Parent or any of its subsidiaries for any brokerage or finder's
commission, fee or similar compensation, or for any bonus payable to any
officer, director, employee, agent or sales representative of or consultant to
Seller Parent or its affiliates upon consummation of the Transactions.
5.8. Subsidiary Shares. Seller Parent owns directly or
indirectly through Imo UK all of the Subsidiary Shares, and the Subsidiary
Shares constitute all of the outstanding shares of capital stock (or other
ownership interests having by their terms ordinary voting power to elect
directors or others performing similar functions with respect to each Imo
Subsidiary) of each Imo Subsidiary, and there are no securities of any of the
Imo Subsidiaries convertible or exchangeable for shares of capital stock or
voting securities of such Imo Subsidiary. All of the Subsidiary Shares are duly
authorized, validly issued, fully paid and nonassessable. Each Imo Subsidiary is
a corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization.
5.9. Taxes,
(a) There are no material Liens (other than Permitted Liens)
on the Purchased Assets or on any assets of the Imo Subsidiaries that arose in
connection with any failure or alleged failure to pay any Tax.
20
(b) To Seller Parent's knowledge, (i) Sellers and the Imo
Subsidiaries have filed all consolidated income tax returns that they were
required to file as of the date of this Agreement; (ii) all such consolidated
income tax returns were complete and correct in all material respects and (iii)
Sellers and the Imo Subsidiaries have paid all consolidated income taxes owed by
them.
(c) Sellers have made available to Buyer Parent true and
correct copies of the United States consolidated income tax returns of Seller
Parent.
(d) None of the Imo Subsidiaries is party to any Tax
allocation or sharing agreement. None of the Imo Subsidiaries has any material
liability for Taxes of any person other than the Imo Subsidiary itself, as
transferee or successor, by contract, or otherwise.
5.10. Absence of Certain Changes or Events. Since June 30,
1997, Sellers have conducted the Business only in the ordinary course and in a
manner consistent with past practice and, since June 30, 1997, there has not
been (i) any change in the business, operations, properties, financial
condition, assets or liabilities (including, without limitation, contingent
liabilities) of the Business having, individually or in the aggregate, a
Material Adverse Effect, (ii) any damage, destruction or loss (whether or not
covered by insurance) with respect to any property or asset of the Business
having, individually or in the aggregate, a Material Adverse Effect, (iii) any
material change by Seller Parent in its accounting methods, principles or
practices, (iv) any material revaluation by Seller Parent of any asset used in
the Business (including, without limitation, any writing down of the value of
inventory or writing off of notes or accounts receivable), (v) any failure by
Seller Parent to revalue any material asset used in the Business in accordance
with GAAP, (vi) any entry by any Seller into any commitment or transaction
material to the Business taken as a whole, (vii) except as disclosed to Buyer
Parent, any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any officers or key employees of
any of Sellers employed in the Business, except in the ordinary course of
business consistent with past practice, or (viii) any entering into, renewal,
modification or extension of, any contract, arrangement or agreement with any
other party having, individually or in the aggregate, a Material Adverse Effect.
5.11. Personal Property; Real Property.
21
(a) With respect to the Business, Sellers have sufficient
title to all their tangible properties and assets and sufficient right to use
all their intangible properties and assets to conduct their respective
businesses as currently conducted, with only such exceptions as, individually or
in the aggregate, would not have a Material Adverse Effect.
(b) Seller owns good title to the Owned Real Property in fee
simple, free and clear of all material Liens other than Permitted Liens and
Liens reflected on the draft owner's policy of Lawyers' Title Insurance
Corporation dated August 19, 1997 and the Owned Real Property is not subject to
any governmental decree or order to be sold nor is being condemned, expropriated
or otherwise taken by any public authority with or without payment of
compensation therefor, nor, to the knowledge of Seller Parent, has any such
condemnation, expropriation or taking been proposed.
(c) Seller Parent owns title to the Subsidiary Shares free and
clear of all Liens, except for Permitted Liens.
5.12. Imo Subsidiaries. Except as set forth on Schedule 5.12,
no Imo Subsidiary has any liabilities or obligations of any kind or nature,
whether known or unknown, absolute or contingent, accrued or unaccrued, asserted
or unasserted or otherwise, except for liabilities and obligations relating to
the Business.
ARTICLE VI.
Representations and Warranties of Buyer Parent
Buyer Parent represents and warrants to, and agrees with,
Seller Parent as follows:
6.1. Corporate Organization. Buyer Parent is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, each Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
Buyer Parent and each Buyer has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
material adverse effect on the business,
22
operations, financial condition, assets or liabilities (including, without
limitation, contingent liabilities) of Buyer Parent and its affiliates, taken as
a whole.
6.2. Authority Relative to This Agreement. Buyer Parent and
each Buyer that is executing and delivering this Agreement and the Transitional
Services Agreement has the necessary corporate power and authority to do so and
to perform its obligations hereunder and thereunder and to consummate the
Transactions. The execution and delivery of this Agreement and the Transitional
Services Agreement by Buyer Parent and each such Buyer and the consummation by
Buyer Parent and each such Buyer of the Transactions have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Buyer Parent and any such Buyer are necessary to authorize this
Agreement, the Transitional Services Agreement or to consummate the
Transactions. This Agreement and the Transitional Services Agreement have been
duly and validly executed and delivered by Buyer Parent and each such Buyer and,
assuming the due authorization, execution and delivery by the applicable
Sellers, constitute legal, valid and binding obligations of Buyer Parent and
each such Buyer enforceable against Buyer Parent and such Buyer in accordance
with their terms.
6.3. No Conflict; Required Filings and Consents. The execution
and delivery of this Agreement and the Transitional Services by Buyer Parent and
by each applicable Buyer do not, and the performance of this Agreement and the
Transitional Services Agreement by Buyer Parent and such Buyer will not, (i)
conflict with or violate the Certificate of Incorporation or Bylaws of Buyer
Parent or the comparable organizational documents of any other such Buyer, (ii)
assuming that required filings under the HSR Act and the filings listed in Annex
I hereto are made or have been made by the appropriate parties, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to any
such Buyer or by which any property or asset of Buyer Parent or any such Buyer
is bound or affected, or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Buyer Parent or any such Buyer pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Buyer Parent or any such Buyer is a
party or by which Buyer Parent or any such Buyer or any property or asset of
Buyer Parent or any such Buyer is bound or affected, except, in cases of (ii)
and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, have a material
adverse effect on the business,
23
operations, financial condition, assets or liabilities (including, without
limitation, contingent liabilities) of Buyer Parent or any such Buyer.
6.4. Availability of Funds. Buyer Parent has, or will have at
the Closing, cash available sufficient to enable it to consummate the
Transactions.
6.5. Brokers, Finders, etc. All negotiations relating to this
Agreement and the Transactions have been carried on without the participation of
any Person acting on behalf of Buyer Parent and its affiliates in such manner as
to give rise to any valid claim against Seller Parent or its affiliates for any
brokerage or finder's commission, fee or similar compensation.
ARTICLE VII.
Employment Matters
7.1. Employment of Sellers' Employees. (a) Seller Parent will,
and will cause each of its subsidiaries to, use all reasonable efforts to cause
the employees listed on Schedule 7.1(a) who are currently employed by Sellers in
the operation of the Business ("Transitioning Employees") to make available
their employment services to Buyers.
(b) For a period of one year following the Closing Date,
Buyers shall, and Buyer Parent shall cause Buyers to, offer employment to all
such Transitioning Employees at wage or salary levels, as applicable, and with
employee benefits that are in the aggregate substantially equivalent to, and no
less favorable than, those provided to such Transitioning Employees by Sellers.
(c) Effective from and after the Closing, Buyers shall, and
Buyer Parent shall cause Buyers to, assume and become solely responsible for (x)
any and all liabilities in respect of the Transitioning Employees relating to or
arising in connection with any actual or constructive termination of any such
Transitioning Employee's employment with Sellers, Buyers or any of their
affiliates, including any and all such liabilities relating to the claims of any
such Transitioning Employee for any severance compensation or benefits (whether
from Buyer Parent, Seller Parent or any of their respective affiliates), and (y)
any and all liabilities for accrued but unpaid vacation, sick pay, salaries,
wages, deferred compensation and similar payroll items for services rendered by
the Transitioning Employees to Sellers prior to the Closing.
24
(d) From and after the Closing, each Seller shall remain
solely responsible for any and all liabilities in respect of the employees
listed on Schedule 7.1(d) who are currently employed in Sellers' field sales
organization ("Nontransitioning Employees") including, but not limited to, such
liabilities (i) for claims for severance compensation or benefits arising in
connection with or related to any actual or constructive termination of
employment with such Seller of any such Nontransitioning Employee before, on or
after the Closing Date, including in connection with the consummation of the
transactions contemplated by this Agreement and the Share Purchase Agreement
dated as of July 25, 1997 between Seller Parent and II Acquisition Corp., and
(ii) for benefits accrued or, in the case of claims for medical or other welfare
benefits, for claims incurred, under any Plan by the Nontransitioning Employee.
7.2. Pension Benefit Plans. (a) Effective as of January 1,
1998, Buyer Parent shall, or shall cause Buyers to, to the extent necessary,
amend any existing defined contribution plan to provide for (i) the eligibility
of the United States Transitioning Employees to participate in each such plan on
the same basis as the Buyer Parent's similarly situated employees are then
eligible to participate and (ii) the recognition under each such plan of all
service of the United States Transitioning Employees with Sellers completed
prior to the Closing for purposes of eligibility to participate and vesting
under each such plan.
(b) Effective from and after the Closing, Seller Parent shall
permit all United States Transitioning Employees who were eligible to
participate in Seller Parent's 401(k) cash or deferred savings plan
("Seller Parent's 401(k) Plan") prior to Closing to continue to
actively participate in such plan through December 31, 1997. In
connection therewith, (i) Buyer Parent shall, or shall cause Buyers to,
permit such United States Transitioning Employees to defer salary
accrued on or after the Closing Date and through December 31, 1997
pursuant to the terms of Seller Parent's 401(k) Plan and shall
contribute the amount of such deferrals plus any matching
contributions, if applicable under Seller Parent's 401(k) Plan, to the
trustee of Seller Parent's 401(k) Plan to be credited to such United
States Transitioning Employees' respective accounts and (ii) with
respect to United States Transitioning Employees with outstanding loan
balances payable to their personal accounts under Seller Parent's
401(k) Plan, Buyer Parent shall, or shall cause Buyers to, to the
extent permitted by law and authorized by such United States
Transitioning Employee, deduct from each such United States
Transitioning Employee's monthly salary and pay to the trustee of
Seller Parent's 401(k) Plan the amount necessary to timely repay such
25
loan pursuant to such United States Transitioning Employee's loan
agreement under Seller Parent's 401(k) Plan.
(c) Seller Parent shall cause all United States Transitioning
Employees who participated in Seller Parent's Pension Plan prior to
Closing to continue to accrue benefits under such plan through December
31, 1997, such benefits to be at Buyers' expense.
(d) As soon as reasonably practicable following the Closing
Date, the parties agree to use their commercially reasonable efforts to
agree upon the principles pursuant to which assets and liabilities of
the Imo Industries Pension and Life Assurance Plan (the "Imo UK Plan")
related to the employees and pensioners of the GEMS Sensors Segment
will be transferred from the Imo UK Plan to a qualified pension scheme
to be designated by ▇▇▇▇▇▇▇ U.K. If the parties are unable to agree
they will appoint a mutually acceptable arbiter to resolve such
principles.
7.3. Welfare and Fringe Benefit Plans. (a) Effective as of
January 1, 1998, Buyer Parent shall, or shall cause Buyers to, cause each
Transitioning Employee and his eligible dependents to be eligible to participate
in each employee welfare benefit plan (as such term is defined in Section 3(1)
of ERISA) maintained by Buyer Parent (or Buyers) and each other benefit
arrangement maintained by Buyer Parent for the benefit of similarly situated
employees of Buyer Parent ("Buyer's Welfare Plans"). Notwithstanding the
preceding sentence, from and after the Closing, Buyer Parent shall become solely
responsible for all liabilities for claims of the Transitioning Employees and
their eligible dependents incurred under those Plans that are basic accident or
life insurance plans, whether incurred prior to, on or after the Closing Date.
Subject to the preceding sentence and Section 7.3(b) hereunder, Sellers shall
continue to cover all Transitioning Employees who were covered under any health,
welfare and contributory benefit plans maintained by Sellers prior to Closing
until December 31, 1997. In connection therewith, Buyer Parent shall reimburse
Seller Parent for all costs related to such continuation of coverage as soon as
practicable following Buyer Parent's receipt from Seller Parent of a detailed
invoice describing such costs. Buyer Parent, Buyers and Sellers shall cooperate
in ensuring that welfare benefit coverage for Transitioning Employees and their
eligible dependents prior to the Closing is coordinated with such coverage
provided after the Closing.
(b) From and after the Closing, Buyer Parent shall become
solely responsible for (i) disability benefits payable under any Plan that is a
disability benefit plan in respect of Transitioning Employees who, on the
Closing Date, are on long term
26
disability status and entitled to benefits under such Plans and (ii)
post-retirement health and life insurance benefits payable under the terms of
any Plan that provides such post-retirement benefits in respect of those former
employees of Sellers formerly employed in the same operation of the Business as
the Transitioning Employees, including those employees set forth in the
memorandum attached hereto as Schedule 7.3(b), who on the Closing Date, are
receiving such post-retirement benefits under such Seller Parent Plan.
7.4. Workers Compensation. From and after the Closing Date,
Buyer Parent and Buyers shall become solely responsible for any and all worker's
compensation to or in respect of any Transitioning Employee relating to or
arising in connection with any and all claims for workers' compensation benefits
arising in connection with any occupational injury or disease.
7.5. Employment Taxes. (a) Sellers, Buyers and Buyer Parent
will (i) treat each Buyer as a "successor employer" and each Seller as a
"predecessor," within the meaning of sections 3121(a)(1) and 3306(b)(1) of the
Code, with respect to Transitioning Employees who are employed by Buyers for
purposes of Taxes imposed under the United States Federal Unemployment Tax Act
("FUTA") or the United States Federal Insurance Contributions Act ("FICA") and
(ii) cooperate with each other to avoid, to the extent possible, the filing of
more than one IRS Form W-2 with respect to each such Transitioning Employee for
the calendar year within which the Closing Date occurs.
(b) At the request of Buyer Parent with respect to any
particular applicable Tax law relating to employment, unemployment insurance,
social security, disability, workers' compensation, payroll, health care or
other similar Tax other than Taxes imposed under FICA and FUTA, Sellers, Buyers
and Buyer Parent will (i) treat each Buyer as a successor employer and each
Seller as a predecessor employer, within the meaning of the relevant provisions
of such Tax law, with respect to Transitioning Employees who are employed by
Buyers and (ii) cooperate with each other to avoid, to the extent possible, the
filing of more than one individual information reporting form pursuant to each
such Tax law with respect to each such Transitioning Employee for the calendar
year within which the Closing Date occurs.
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ARTICLE VIII.
Pre-Closing Covenants of Sellers, Buyer Parent and Buyers
8.1. Covenants of Sellers, Buyer Parent and Buyers.
8.1.1 Corporate and Other Actions. Each Seller, each Buyer and
Buyer Parent shall take all necessary corporate action required to fulfill its
obligations under this Agreement and to consummate the Transactions.
8.1.2 Approvals. Each Seller, each Buyer and Buyer Parent
shall promptly make all filings, applications, statements and reports to all
Governmental Authorities which are required to be made prior to the Closing Date
by or on behalf of Buyer Parent or such Seller or Buyer pursuant to any
applicable statute, rule or regulation in connection with this Agreement and the
Transactions including, without limitation, the filings listed in Annex I
hereto.
8.1.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Each of Buyer Parent and Seller
Parent shall promptly (and, in any event, within 2 days after the date hereof)
prepare and file with the Federal Trade Commission and the Department of Justice
the notification and report form required under the HSR Act and the regulations
promulgated thereunder (unless such form has already been so filed prior to the
date hereof) and any further filings pursuant thereto as may be required.
8.1.4 Further Actions. Each Seller, each Buyer and Buyer
Parent agree to use all reasonable good faith efforts to take all actions and to
do all things necessary, proper or advisable to consummate the Transactions.
8.2. Additional Covenants of Sellers.
8.2.1 Conduct of Business. From the date hereof to the Closing
Date, except as expressly permitted or required by this Agreement or as
otherwise consented to by Buyer Parent in writing, Seller Parent will, and will
cause Imo Canada, Imo UK and Imo Germany to:
(a) carry on the Business in, and only in, the ordinary
course, in substantially the same manner as heretofore conducted, and
use all reasonable efforts to preserve intact its present business
organization, maintain its properties in good operating condition and
repair, keep available the services of its present officers and
significant employees, and preserve its relationship with
28
customers, suppliers and others having business dealings with it, to
the end that its goodwill and going business shall be in all material
respects unimpaired following the Closing;
(b) pay accounts payable and other obligations of the Business
when they become due and payable in the ordinary course of business
consistent with prior practice;
(c) perform in all material respects all of its obligations
under all Contracts and other agreements and instruments relating to or
affecting the Business or the Purchased Assets, and comply in all
material respects with all applicable laws applicable to it, the
Purchased Assets or the Business;
(d) not enter into or assume any material agreement, contract
or instrument relating to the Business, or enter into or permit any
material amendment, supplement, waiver or other modification in respect
thereof;
(e) not grant (or commit to grant) any increase in the
compensation (including incentive or bonus compensation) of any
employee of the GEMS Sensors Segment or institute, adopt or amend (or
commit to institute, adopt or amend) any compensation or benefit plan,
policy, program or arrangement or collective bargaining agreement
applicable to any such employee;
(f) not issue, sell, pledge or otherwise dispose of any
Subsidiary Shares or any securities convertible into or exchangeable
for any such Subsidiary Shares, or any rights, warrants or options to
acquire or with respect to any such Subsidiary Shares or convertible or
exchangeable securities; and
(g) not effect any stock split, reverse stock split,
reclassification with respect to any Imo Subsidiary or otherwise change
the capitalization of any Imo Subsidiary as it exists on the date
hereof.
8.2.2 Access to Information. Sellers will permit
representatives of Buyer Parent and Buyers from and after the date hereof up to
the Closing Date, to have access at all reasonable times to the books, accounts,
records, properties, operations and facilities of every kind pertaining to the
Business, and will furnish Buyer Parent and Buyers with such financial and
operating data concerning Sellers as Buyer Parent shall from time to time
reasonably request, subject to any confidentiality agreements to which any
Seller may be a party.
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ARTICLE IX.
Conditions
9.1. Conditions to Each Party's Obligation. The obligation of
each Buyer to purchase the Purchased Assets, and the obligation of each Seller
to sell, assign, transfer, convey and deliver the Purchased Assets to Buyers,
shall be subject to the satisfaction on or prior to the Closing of the following
conditions:
(a) Approvals. The waiting period under the HSR Act shall have
expired or been terminated. All authorizations, consents, orders or approvals
of, or declarations or filings with, or other expirations of waiting periods
imposed by, any Governmental Authority necessary for the consummation of the
Transactions shall have been obtained or filed or shall have occurred.
(b) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other legal restraint or
prohibition preventing the consummation of the Transactions shall be in effect.
9.2. Conditions to Obligation of Buyers. The obligation of
each Buyer to purchase and pay for the Purchased Assets is subject to the
satisfaction (or waiver by such Buyer) at and as of the Closing of each of the
following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Seller Parent contained in this Agreement and
in any certificate, document or instrument delivered in connection herewith
shall be true and correct in all material respects on and as of the date of this
Agreement and at and as of the Closing with the same effect as though such
representations and warranties had been made at and as of the Closing, except
for representations and warranties that speak as of a specific date or time
other than the Closing (which need only be true and correct in all material
respects as of such date or time); provided, however, that if any such
representation or warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied, such representation or
warranty as so qualified shall be true and correct in all respects.
(b) Performance of Obligations of Sellers. Each Seller shall
have performed or complied in all material respects with all obligations,
conditions and covenants required to be performed or complied with by it under
this Agreement at or prior to the Closing.
30
(c) Fairness Opinion. Buyer Parent shall have received an
opinion from Alex. ▇▇▇▇▇ & Sons, Inc. or another nationally recognized
investment bank to the effect that the Acquisition is fair to Buyer Parent's
stockholders from a financial point of view.
(d) Legal Opinion. Buyer Parent shall have received an opinion
from Debevoise & ▇▇▇▇▇▇▇▇, stating that, in the opinion of such counsel, the
transactions contemplated by this Agreement will not violate any of the
covenants contained in the Indenture, dated as of April 15, 1996, between Seller
Parent and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee relating to Seller
Parent's 11-3/4% Senior Subordinated Notes due 2006 (the "Subordinated Debt").
(e) Regulatory Approvals. Buyers shall have received all
necessary permits and approvals required under the Swiss law known as ▇▇▇
▇▇▇▇▇▇▇▇▇ in connection with the acquisition of the share capital of Imo
Switzerland; provided, however, that this condition shall apply only to the
obligations of Buyers at the closing to acquire the share capital of Imo
Switzerland.
9.3. Conditions to Obligation of Sellers. The obligation of
each Seller to sell, assign, transfer, convey, and deliver the Purchased Assets
is subject to the satisfaction (or waiver by such Seller) at and as of the
Closing of each of the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Buyer Parent contained in this Agreement and
in any certificate, document or instrument delivered in connection herewith
shall be true and correct in all material respects on and as of the date of this
Agreement and at and as of the Closing with the same effect as though such
representations and warranties had been made at and as of the Closing, except
for representations and warranties that speak as of a specific date or time
other than the Closing (which need only be true and correct in all material
respects as of such date or time); provided, however, that if any such
representation or warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied, such representation or
warranty as so qualified shall be true and correct in all respect.
(b) Performance of Obligations of Buyer Parent and Buyers.
Buyer Parent and each Buyer shall have performed or complied in all material
respects with all obligations, conditions and covenants required to be performed
or complied with by it under this Agreement at or prior to the Closing.
31
(c) Fairness Opinion. Seller Parent shall have received an
opinion from ▇▇▇▇▇▇▇▇ & Co. Inc. or another nationally recognized investment
banking firm to the effect that the Acquisition is fair, from a financial
standpoint, to Seller Parent, its Restricted Subsidiaries (as defined in the
Subordinated Debt indenture) and its stockholders.
(d) Buyer Parent shall have paid to Seller Parent in same day
funds an amount equal to $850,000 in respect of reimbursement of a portion of
the fee incurred by Seller Parent payable to Credit Suisse First Boston
Corporation in connection with the tender offer by II Acquisition Corp. for
shares of Seller Parent. It is understood and agreed by Buyer Parent and Seller
Parent that Buyer Parent was not and is not a participant in or in any way
involved in the acquisition of Seller Parent by II Acquisition Corp.
ARTICLE X.
Post-Closing Covenants
10.1. Availability of Records. (a) After the Closing, Buyer
Parent shall make available to Seller Parent as reasonably requested by Seller
Parent, its agents and representatives, any taxing authority and any
Governmental Authority all information, records or documents relating to the
Business or the employees of Sellers and the Imo Subsidiaries for all periods
prior to Closing and shall, subject to the second succeeding sentence, preserve
all such information, records and documents until the later of (i) seven years
after the Closing, (ii) the expiration of all statutes of limitations for Taxes
for periods prior to the Closing or extensions thereof applicable to any Seller
for Tax information, records or documents or (iii) the required retention period
for all government contract information, records or documents. Buyer Parent
shall also make available to Seller Parent, as reasonably requested by Seller
Parent, personnel responsible for preparing or maintaining information, records
and documents, in connection with Tax matters, environmental matters,
governmental contracts, litigation or potential litigation, including claims for
workers' compensation, product liability, general insurance liability and
automobile insurance liability. Prior to destroying, during the record retention
period described in the second preceding sentence, any records related to any
Seller or any Imo Subsidiary for the period prior to the Closing Date, Buyer
Parent shall notify Seller Parent 30 days in advance of any such proposed
destruction of its intent to destroy such records, and Buyer Parent will permit
Seller Parent to retain any such records which Seller Parent requests be saved
within this 30 day period, but Buyer Parent shall have the right to destroy any
records not so identified at the end of such 30 day period.
32
(b) After the Closing, Seller Parent shall make available to
Buyer Parent as reasonably requested by Buyer Parent, its agents and
representatives, any taxing authority and any Governmental Authority all
information, records or documents relating to the Business or the employees
related to the Business for all periods prior to Closing and shall, subject to
the second succeeding sentence, preserve all such information, records and
documents until the later of (i) seven years after the Closing, (ii) the
expiration of all statutes of limitations for Taxes for periods prior to the
Closing or extensions thereof applicable to Buyer Parent for Tax information,
records or documents or (iii) the required retention period for all government
contract information, records or documents. Seller Parent shall also make
available to Buyer Parent, as reasonably requested by Buyer Parent, personnel
responsible for preparing or maintaining information, records and documents, in
connection with Tax matters, environmental matters, governmental contracts,
litigation or potential litigation, including claims for workers' compensation,
product liability, general insurance liability and automobile insurance
liability. Prior to destroying, during the record retention period described in
the second preceding sentence, any records related to for the period prior to
the Closing Date, Seller Parent shall notify Buyer Parent 30 days in advance of
any such proposed destruction of its intent to destroy such records, and Seller
Parent will permit Buyer Parent to retain any such records which Buyer Parent
requests be saved within this 30 day period, but Seller Parent shall have the
right to destroy any records not so identified at the end of such 30 day period.
10.2. Tax Matters.
10.2.1 Tax Returns and Payments. Sellers shall, and Seller
Parent shall cause Imo UK, Imo Canada and Imo Germany to, timely file all
consolidated income Tax Returns, and pay when due and owing all income taxes,
relating to the Purchased Assets for periods through and including the time of
Closing. Buyers shall, and Buyer Parent shall cause Buyers to, cause the Imo
Subsidiaries to file timely their respective tax returns, and to pay when due
and owing all Taxes, to the extent such tax returns or taxes are required to be
filed or paid. All such tax returns shall be complete and correct in all
material respects.
10.2.2 Transfer Taxes. Buyer Parent shall be responsible for
the timely payment of all sales (including, without limitation, bulk sales),
use, value added, documentary, stamp, gross receipts, registration, transfer,
conveyance, excise, recording, firearm, ammunition, license and other similar
Taxes and fees ("Transfer Taxes"), arising out of or in connection with or
attributable to the transactions effected pursuant to this Agreement, except
that Seller Parent shall be responsible for the timely payment of all stamp duty
payable in connection with the transfer of the shares of Imo
33
UK Sub to Buyers. Seller Parent and Buyer Parent shall jointly be responsible
for the preparation and timely filing of all Tax Returns required to be filed in
respect of Transfer Taxes (including, without limitation, all notices required
to be given with respect to bulk sales taxes), provided that Buyer Parent or
Seller Parent shall be permitted to prepare any such Tax Returns that are the
primary responsibility of Buyer Parent or Seller Parent, as the case may be,
under applicable law. Buyer Parent's or Seller Parent's preparation of any such
Tax Returns shall be subject to Seller Parent's or Buyer Parent's approval, as
the case may be, which approval shall not be withheld unreasonably.
10.2.3 Property Tax Bills. Subject to the provisions of
Section 10.2.4, Buyer Parent shall pay property tax bills relating to the
Purchased Assets which are due after the Closing Date. If Seller Parent receives
any property tax ▇▇▇▇ applicable to the Purchased Assets, Seller Parent shall
promptly send such property tax ▇▇▇▇ to Buyer Parent for payment by Buyer Parent
as set forth above.
10.2.4 Cooperation. Without limiting the generality of Section
10.2.5, Buyer Parent shall fully cooperate with Seller Parent with respect to
the preparation of each return or other document required to be filed or
delivered to taxing authorities after the Closing Date in respect of any Taxes
which are payable with respect to any period beginning before the Closing Date.
10.2.5 Assistance. Without limiting the generality of Section
10.2.1 or 10.2.4, after the Closing, Buyer Parent, on the one hand, and Seller
Parent, on the other hand, shall provide each other with such assistance as may
reasonably be requested by any of them in connection with the preparation of any
Tax Return, any audit or other examination by any taxing authority, or any
judicial or administrative proceedings relating to liability for Taxes, and each
will retain and, upon the request of the other, provide the other with, any
records or information which may be relevant to such return, audit, examination
or proceedings. Such assistance shall include making employees available on a
mutually convenient basis to provide additional information and explanation of
any material to be provided hereunder and shall include furnishing to or
permitting the copying by the requesting party of any records, returns,
schedules, documents, work papers or other relevant materials which might
reasonably be expected to be of use in connection with such return, audit,
examination or proceedings. The party requesting assistance hereunder shall
reimburse the party whose assistance is requested for the reasonable
out-of-pocket expenses incurred by it in providing such assistance, but shall
not be required to reimburse the party providing such assistance with respect to
time of employees made available pursuant to this Section 10.2.
34
10.3. Further Assurances. Seller Parent and Buyer Parent shall
each, and Seller Parent shall cause each of Imo Canada, Imo UK and Imo Germany
to, and Buyer Parent shall cause the other Buyers to, execute any further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that Buyer Parent or Seller Parent,
respectively, may reasonably request, in order to effectuate the Transactions
and in order to grant, preserve, protect and perfect the validity of any
security interests included in the Purchased Assets.
10.4. Post-Closing Transactions. In the event the parties
hereto do not at the Closing effect the transfer and sale of the share capital
of Imo Switzerland pursuant to Section 9.2(e), such transfer and sale shall be
effected promptly upon the receipt by Buyers of the permits and approvals
referred to in such Section 9.2(e). In the event that such permits or approvals
have been denied by the relevant Governmental Authority or have not been
obtained by December 31, 1997, Seller Parent shall pay to ▇▇▇▇▇▇▇ Delaware I an
amount equal to the portion of the Purchase Price allocated to the share capital
of Imo Switzerland as set forth in Schedule 4.2(b) (as may be subsequently
adjusted).
10.5. Seller Parent's Agreement. Seller Parent agrees to cause
Imo Canada, Imo UK and Imo Germany to duly and timely perform their respective
obligations hereunder and under the Transitional Services Agreement.
10.6. Buyer Parent's Agreement. Buyer Parent agrees to cause
Buyers to duly and timely perform their respective obligations hereunder and
under the Transitional Services Agreement.
10.7. Use of Business Names by Buyer. To the extent the
trademarks, service marks, brand names or trade, corporate or business names of
any Seller are used by the GEMS Sensors Segment or the Business on stationery,
signage, invoices, receipts, forms, packaging, advertising and promotional
materials, product, training and service literature and materials, computer
programs or like materials ("Marked Materials") or appear on Inventory at the
Closing, Buyers may use such Marked Materials or sell such Inventory after the
Closing for a period of one year without altering or modifying such Marked
Materials or Inventory, or removing such trademarks, service marks, brand names,
or trade, corporate or business names, but Buyers shall not thereafter use such
trademarks, service marks, brand names or trade, corporate or business names in
any other manner without the prior written consent of any Seller. Buyers may use
the Imo "Swirl" in connection with the Gems Sensors Trademark for a period of
two years following the closing date, but Buyer shall not
35
thereafter use such "Swirl" after such period without the prior written consent
of the Seller Parent.
ARTICLE XI.
Indemnification and Survival
11.1. Indemnification. (a) By Seller Parent. Seller Parent
covenants and agrees to defend, indemnify and hold harmless, on an after-tax
basis, Buyers and their officers, directors, employees, agents, advisers,
representatives and affiliates (collectively, the "Buyer Indemnitees") from and
against, and pay or reimburse the Buyer Indemnitees for, any and all claims,
liabilities, obligations, losses, fines, costs, royalties, proceedings,
deficiencies or damages (whether absolute, accrued, conditional or otherwise and
whether or not resulting from third party claims), including out-of-pocket
expenses and reasonable attorneys' and accountants' fees incurred in the
investigation or defense of any of the same or in asserting any of their
respective rights hereunder (collectively, "Losses"), resulting from or arising
out of
(i) any Excluded Liabilities (other than the
liabilities referred to in Section 2.4(l)) or Excluded Assets;
(ii) any inaccuracy of any of the representations or
warranties contained in Sections 5.9, 5.11 and 5.12;
(iii) any failure of any Seller to perform any
covenant or agreement hereunder; and
(iv) the matters disclosed on Schedule 5.12.
Notwithstanding anything to the contrary contained in this
Agreement, the maximum aggregate liability of Sellers under this Section 11.1(a)
shall not exceed the Purchase Price.
(b) By Buyer Parent. (i) Buyer Parent covenants and agrees to
defend, indemnify and hold harmless, on an after-tax basis, Sellers and their
officers, directors, employees, agents, advisers, representatives and affiliates
(collectively, the "Seller Indemnitees") from and against any and all Losses
resulting from or arising out of the Assumed Liabilities and the operation of
the Business by Buyers or Sellers or Buyers' or Sellers' ownership, operation or
use of the Purchased Assets whether prior to or
36
after the Closing Date, except to the extent such Losses result from or arise
out of the Excluded Liabilities or constitute Losses for which Seller Parent is
required to indemnify the Buyer Indemnitees under Section 11.1(a).
Notwithstanding anything to the contrary contained in this
Agreement, the maximum aggregate liability of Buyer Parent under this Section
11.1(b)(i) shall not exceed the Purchase Price.
(ii) Buyer Parent covenants and agrees to defend, indemnify
and hold harmless, on an after-tax basis, the Seller Indemnitees from and
against any and all Losses resulting from or arising out of the environmental
liabilities referred to in Section 2.4(l). Buyer Parent shall, promptly upon the
request of Seller Parent, pay to Seller Parent any amount required to be paid by
Seller Parent or any of its affiliates or subsidiaries, in respect of any Losses
described in this Section 11.1(b)(ii) and any fees and expenses incurred by
Seller Parent or any of its affiliates or subsidiaries in connection with
defending against any claim that could result in such Loss or pursuing a claim
against any third party (including insurance companies) for reimbursement,
contribution or indemnification with respect to such Loss. Buyer Parent and
Seller Parent agree that the intent of the preceding sentence is that Seller
Parent shall not be required to make any "out of pocket" payments with respect
to any such Loss.
11.2. Adjustments to Indemnification Payments. Any payment
made by Seller Parent to the Buyer Indemnitees, on the one hand, or by Buyer
Parent to the Seller Indemnitees, on the other hand, pursuant to Section 11.1 in
respect of any claim shall be net of any insurance proceeds realized by and paid
to the indemnified party in respect of such claim. The indemnified party shall
use its reasonable efforts to make insurance claims relating to any claim for
which it is seeking indemnification pursuant to Section 11.1; provided that the
indemnified party shall not be obligated to make such an insurance claim if the
indemnified party in its reasonable judgment believes that the cost of pursuing
such an insurance claim together with any corresponding increase in insurance
premiums or other chargebacks to the indemnified party, as the case may be,
would exceed the value of the claim for which the indemnified party is seeking
indemnification; provided further, that Seller Parent shall make any and all
insurance claims and to pursue such claims in good faith and in a commercially
reasonable manner as requested by Buyer Parent in connection with its
indemnification obligations under Section 11.1(b)(ii), with all costs of making
such claims to be borne by Buyer Parent pursuant to Section 11.1(b)(ii).
11.3. Indemnification Procedures. (a) In the case of any claim
asserted by a third party against a party entitled to indemnification under this
Agreement (the
37
"Indemnified Party") other than indemnification pursuant to Section 11.1(b)(ii),
notice shall be given by the Indemnified Party to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and the
Indemnified Party shall permit the Indemnifying Party (at the expense of such
Indemnifying Party) to assume the defense of any claim or any litigation
resulting therefrom, provided that (i) the counsel for the Indemnifying Party
who shall conduct the defense of such claim or litigation shall be reasonably
satisfactory to the Indemnified Party, (ii) the Indemnified Party may
participate in such defense at such Indemnified Party's expense, and (iii) the
omission by any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its indemnification obligation under this
Agreement except to the extent that such omission results in a failure of actual
notice to the Indemnifying Party and such Indemnifying Party is materially
damaged as a result of such failure to give notice. Except with the prior
written consent of the Indemnified Party, no Indemnifying Party, in the defense
of any such claim or litigation, shall consent to entry of any judgment or enter
into any settlement that provides for injunctive or other nonmonetary relief
affecting the Indemnified Party or that does not include as an unconditional
term thereof the giving by each claimant or plaintiff to such Indemnified Party
of a release from all liability with respect to such claim or litigation. In the
event that the Indemnified Party shall in good faith determine that the conduct
of the defense of any claim subject to indemnification hereunder or any proposed
settlement of any such claim by the Indemnifying Party might be expected to
affect adversely the Indemnified Party's Tax liability or the ability of Buyer
to conduct the Business, or that the Indemnified Party may have available to it
one or more defenses or counterclaims that are inconsistent with one or more of
those that may be available to the Indemnifying Party in respect of such claim
or any litigation relating thereto, the Indemnified Party shall have the right
at all times to take over and assume control over the defense, settlement,
negotiations or litigation relating to any such claim at the sole cost of the
Indemnifying Party, provided that if the Indemnified Party does so take over and
assume control, the Indemnified Party shall not settle such claim or litigation
without the written consent of the Indemnifying Party, such consent not to be
unreasonably withheld. In the event that the Indemnifying Party does not accept
the defense of any matter as above provided, the Indemnified Party shall have
the full right to defend against any such claim or demand and shall be entitled
to settle or agree to pay in full such claim or demand. In any event, the
Indemnifying Party and the Indemnified Party shall cooperate in the defense of
any claim or litigation subject to this Section 11.3 and the records of each
shall be available to the other with respect to such defense.
38
(b) In the event any Indemnified Party should have a claim
against any Indemnifying Party under Section 11.1(a) or (b)(i) that does not
involve a third party claim being asserted against or sought to be collected
from such Indemnified Party, the Indemnified Party shall promptly deliver notice
of such claim to the Indemnifying Party. If the Indemnifying Party does not
notify the Indemnified Party within 10 business days following its receipt of
such notice that the Indemnifying Party disputes its liability to the
Indemnified Party under Section 11.1(a) or (b)(i), then such claim specified by
the Indemnified Party in such notice shall be conclusively deemed a liability of
the Indemnifying Party under Section 11.1(a) or (b)(i) and the Indemnifying
Party shall pay the amount of such liability to the Indemnified Party on demand
or, in the case of any notice in which the amount of the claim (or any portion
thereof) is estimated, on such later date when the amount of such claim (or such
portion thereof) becomes finally determined. If the Indemnifying Party has
timely disputed its liability with respect to such claim, as provided above, the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved by litigation.
(c) In the event the Buyer Parent is required to indemnify the
Seller Indemnitees pursuant to Section 11.1(b)(ii), the Indemnifying Party shall
promptly pay the Indemnified Party upon demand the amount demanded, and the
Indemnified Party shall have no obligation to the Indemnifying Party with
respect to such indemnification except pursuant to this Article XI.
11.4. Survival of Representations and Warranties, etc. The
representations and warranties contained in Sections 5.9, 5.11 and 5.12 shall
survive the Closing for a period equal to (i) the applicable statutory period
for tax matters with respect to Section 5.9, and (ii) two years from and after
the Closing Date with respect to Sections 5.11 and 5.12. Except as set forth in
the preceding sentence, the representations and warranties contained in this
Agreement shall not survive the Closing. The covenants of the parties including
the covenants in Article XI shall survive the Closing and expire in accordance
with their terms.
11.5. Settlement of Insured Liabilities. Buyer Parent
covenants and agrees that it will promptly notify Seller Parent of any insured
loss or claim that relates to the GEMS Sensors Segment. Seller Parent will to
the extent permitted by law and Sellers' insurance policies and agreements, and
without diminishing any applicable insurance coverage for such loss, permit
Buyer Parent, at its cost and expense, to assume control of the handling of such
claim and the defense and settlement of such claim, including claims made in
respect of Losses referred to in Section 11.1(b)(ii).
39
Seller Parent and Buyer Parent hereto agree that they will not settle any such
insured Losses without the other party's consent, which consent will not be
unreasonably withheld, except that Buyer Parent may settle any insured Loss
referred to in Section 11.1(b)(ii) without consent.
11.6. Subrogation. Seller Parent shall use its reasonable
efforts to cause Buyer Parent to become subrogated to Seller Parent's rights
with respect to any insurance coverage of Losses referred to in Section
11.1(b)(ii), provided the terms of Sections 11.1(b)(ii) and 11.3(c) have been
complied with, with respect to such Losses.
ARTICLE XII.
Termination
12.1. Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing Date with the mutual consent of
Buyer Parent and Seller Parent.
12.2. Effect of Termination. In the event of the termination
of this Agreement pursuant to the provisions of Section 12.1, this Agreement
shall become void and have no effect, without any liability to any Person in
respect hereof or of the transactions contemplated hereby on the part of any
party hereto, or any of its directors, officers, employees, agents,
consultants, representatives, advisers, stockholders or affiliates, except as
specified in Sections 13.3 and 13.4 and except for any liability resulting from
such party's breach of this Agreement.
ARTICLE XIII.
Miscellaneous
13.1. Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that no assignment shall be made on or prior to the
Closing Date without the prior written consent of the other parties hereto.
Notwithstanding the foregoing, at any time prior to the Closing Date, Buyer
Parent may, without the consent of any Seller Parent, nominate one or more
wholly owned subsidiaries of itself to which Sellers shall transfer some of the
Purchased Assets, all as set forth in writing by Buyer Parent to Seller Parent;
provided, however, that Buyer Parent shall at all times remain liable for
40
all its obligations hereunder. The obligations of any Seller set forth in this
Agreement shall be binding upon the buyer or successor in interest to all or
substantially all of the assets or business of such Seller.
13.2. No Press Release Without Consent. No press release
related to this Agreement or the transactions contemplated herein, or other
announcement to the employees, customers or suppliers of any Seller will be
issued without the joint approval of Seller Parent and Buyer Parent, except any
public disclosure which Seller Parent or Buyer Parent in its good faith judgment
believes is required by law or by any stock exchange on which its securities or
those of its affiliates are listed (in which case the party making the
disclosure will use all commercially reasonable efforts to consult with the
other party prior to making any such disclosure). Buyer Parent and Seller Parent
will cooperate to prepare a joint press release to be issued at the time of the
signing of this Agreement and on the Closing Date.
13.3. Confidentiality. Except as required by applicable law,
all information related to the Business supplied to Buyer Parent and Buyers by
Sellers shall be maintained in strict confidence by Buyer Parent and each Buyer
and its employees, advisors and agents in accordance with the terms of Section 7
of the Letter of Intent between Buyer Parent and II Acquisition Corp. dated July
30, 1997, and in the event that this Agreement is terminated, all written
materials relating thereto shall be returned to Seller Parent or destroyed as
provided in such confidentiality agreement and Buyer Parent shall deliver an
officer's certificate to Seller Parent certifying as to such return or
destruction. In such event, Buyers and their employees, advisors and agent shall
make no further use of such information whatsoever.
13.4. Expenses. Except as set forth in 9.3(d), each party
shall bear its own expenses with respect to the Transactions.
13.5. Severability. Each of the provisions contained in this
Agreement shall be severable, and the unenforceability of one shall not affect
the enforceability of any others or of the remainder of this Agreement.
13.6. Entire Agreement. This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in writing signed by
all the parties hereto. This Agreement and the other agreements expressly
contemplated hereby or attached hereto contain the entire agreement of the
parties hereto with respect to the transactions covered hereby, superseding all
negotiations, prior discussions and preliminary agreements made prior to the
date hereof.
41
13.7. No Third Party Beneficiaries. This Agreement is solely
for the benefit of the parties hereto and their respective affiliates and no
provision of this Agreement shall be deemed to confer upon third parties any
remedy, claim, liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement.
13.8. Waiver. The failure of any party to enforce any
condition or part of this Agreement at any time shall not be construed as a
waiver of that condition or part, nor shall it forfeit any rights to future
enforcement thereof.
13.9. Governing Law. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Delaware
without regard to the conflicts of laws provisions thereof.
13.10. Counterparts. More than one counterpart of this
Agreement may be executed by the parties hereto, and each fully executed
counterpart shall be deemed an original.
13.11. Choice of Forum. Buyer Parent, Buyers and Sellers agree
that any suit, action or proceeding brought by either party against the other
party to this Agreement in connection with or arising out of this Agreement
shall be brought solely in the Federal Courts of the State of Delaware or, if
such court lacks jurisdiction, in the State Courts of the State of Delaware.
13.12. Notices. All communications, notices and consents
provided for herein shall be in writing and be given in person or by means of
telex, facsimile or other means of wire transmission (with request for assurance
of receipt in a manner typical with respect to communications of that type) or
by mail, and shall become effective (a) on delivery if given in person, (b) on
the date of transmission if sent by telex, facsimile or other means of wire
transmission, or (c) four business days after being deposited in the United
States mails, with proper postage and documentation, for first-class registered
or certified mail, prepaid.
Notices shall be addressed as follows:
(i) If to Buyer Parent or any Buyer, to:
▇▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to any Seller, to:
Imo Industries Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
and
Constellation Capital Partners LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
provided, however, that if any party shall have designated a different address
by notice to the others, then to the last address so designated.
43
13.13. Construction. The language in all parts of this
Agreement shall be construed, in all cases, according to its fair meaning. The
parties acknowledge that each party and its counsel have reviewed and revised
this Agreement and that any rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement.
13.14. Bulk Transfer. The parties hereto hereby waive
compliance with the provisions of any applicable bulk sales law of any
jurisdiction in connection with the transactions contemplated hereby and no
representation, warranty or covenant contained in this Agreement shall be deemed
to have been breached as a result of such non-compliance. Seller Parent hereby
agrees to indemnify, defend and hold Buyer Parent harmless from and against any
and all Losses arising out of or relating to claims which may be asserted by
third parties, including Governmental Authorities, against the Purchased Assets
or any Buyer Indemnitees as a result of non-compliance with any applicable bulk
sales law.
ARTICLE XIV.
Restrictive Covenants
In consideration of the consummation of the transactions
contemplated hereby, provided the Closing occurs:
14.1. Non-Competition; Non-Disclosure. Each Seller covenants
and agrees not to, and Seller Parent covenants and agrees to cause Imo UK, Imo
Canada and Imo Germany not to:
(a) For a period of five (5) consecutive years from
the Closing Date, directly or indirectly through any affiliate or other entity,
as a principal, employee, partner, agent or otherwise, compete, assist in or
provide financial resources to any activity which competes with the Business,
including the designing, manufacturing, selling and servicing of products that
perform critical liquid sensing, measurement and control functions, including
level and flow switches, pressure transducers, tank level indication systems and
other visual level indicators, as such Business is conducted, or to Seller
Parent's knowledge, contemplated to be conducted, on the Closing Date anywhere
in North America, any nation that is a member of the European Union,
Switzerland, Norway, Japan, China, and Australia. The foregoing shall not
restrict any Seller from owning ten (10%) or less of the securities of any
competitor of the Business if such securities are listed on any national
securities
44
exchange or authorized for quotation on the Automated Quotations System of the
National Association of Securities Dealers, Inc., if such Seller has no other
connection or relationship, direct or indirect, with the issuer of such
securities.
(b) Use or disclose to anyone except authorized
personnel of Buyer Parent and its subsidiaries and affiliates, whether or not
for its benefit or otherwise, any confidential matters concerning the Business,
including, without limitation, trade secrets, customer lists and credit records,
employee data, sales representatives and their territories, mailing lists,
consultancy arrangements, pricing policies, operational methods, marketing plans
or strategies, product development and techniques or plans, research and
development programs and plans, business acquisition plans, personnel plans,
designs and design projects and any other research or business information
concerning the Business which the Sellers currently deem to be confidential or
proprietary (whether or not a trade secret under applicable law) provided,
however, that, this covenant shall not apply to (i) information that is or
becomes available to the general public other than as a result of a violation of
the provisions of this Section 14.1(b) by such Seller, or (ii) becomes available
to such Seller on a non-confidential basis from a source other than such Seller
or its advisors, provided such source is not known by such persons to be subject
to a confidentiality obligation to the Sellers or another party, (iii)
information that is required to be disclosed under applicable law (provided that
the disclosing party agrees to notify Buyer Parent in advance of such
disclosure) or (iv) is independently invented, developed, discovered or
investigated by any of them.
(c) For a period of two (2) consecutive years from
the Closing Date, directly or indirectly solicit, encourage to leave employment,
or hire any employee of the Business.
14.2. Each Seller acknowledges that the foregoing restrictions
are reasonable and necessary to protect the value to Buyer, of its acquisition
of the Purchased Assets, and agrees that in the event of any breach thereof the
harm to any Buyer will be irreparable and without adequate remedy at law, and
therefore that injunctive relief with respect thereto will be appropriate. Such
injunctive relief shall not be such Buyer's exclusive remedy, and shall be in
addition to any other remedies to which such Buyer may be entitled, whether in
law or in equity. Sellers waive any requirement for the posting of any bond or
security as a condition to the granting of any injunction or other equitable
relief. The covenants contained in Section 14.1(a) shall be deemed to be a
series of separate covenants, one for each product line in each county and each
city of every state or jurisdiction in which the GEMS Sensors Segment has
heretofore conducted or now conducts the Business. Each such separate covenant
is
45
referred to herein as a "Separate Covenant." If any court or tribunal of
competent jurisdiction shall refuse to enforce one or more of the Separate
Covenants because the time limit applicable thereto is deemed unreasonable, it
is expressly understood and agreed that such Separate Covenant or Separate
Covenants shall not be void but that for the purpose of such proceedings such
time limitation shall be deemed to be reduced to the extent necessary to permit
the enforcement of such Separate Covenant or Separate Covenants. If any court or
tribunal of competent jurisdiction shall refuse to enforce any or all of the
Separate Covenants because, taken together, they are more extensive (whether as
to geographic area, scope of business or otherwise) than is deemed to be
reasonable, it is expressly understood and agreed between the parties hereto
that such Separate Covenant or Separate Covenants shall not be void but that for
the purpose of such proceedings the restrictions contained therein (whether as
to geographic area, scope of business or otherwise) shall be deemed to be
reduced to the extent necessary to permit the enforcement of such Separate
Covenant or Separate Covenants. In the event that a court or tribunal of
competent jurisdiction otherwise determines that any of the foregoing provisions
are unenforceable as stated, the parties intend that such restrictions be
modified to permit the maximum enforceable restriction on competition with the
Business by any Seller.
46
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized officers as of the
date first above written.
▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
DH HOLDINGS CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
GEMS SENSORS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇▇ CANADA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ HOLDING COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
VERWALTUNGSGESELLSCHAFT
REDTENBACHERSTRASSE MBH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Attorney-in-fact
▇▇▇▇▇▇-▇▇▇▇ SARL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Attorney-in-fact
▇▇▇▇▇▇▇▇▇ ITALIA SRL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Attorney-in-fact
IMO INDUSTRIES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
IMO INDUSTRIES (UK) LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
IMO INDUSTRIES (CANADA) INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
IMO INDUSTRIES GmbH
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Annex I
1. DH Holdings Corp. must obtain a permit in Switzerland under ▇▇▇ ▇▇▇▇▇▇▇▇▇
prior to completion of its acquisition of WEKA AG.
Schedule 4.2(b)
Buyer Asset Seller Consideration
----- ----- ------ -------------
GEMS Sensors, Inc. GEMS US Imo Industries Inc. US $71,750,000(1)
Division (Delaware)
▇▇▇▇▇▇ Holding A/R Imo UK Imo Industries Inc. US $ 5,000,000
Company Sub(2)
(England)
▇▇▇▇▇▇▇▇▇ Canada GEMS Canada Imo Industries US $ 0
Inc. division (Canada), Inc.
▇▇▇▇▇▇ Holding Imo Industries Imo Industries US $ 6,900,000
Company (England) Limited (UK) Limited
▇▇▇▇▇▇ Holding A/R Imo UK Imo Industries US $ 1,000,000
Company (England) Sub (UK) Limited
▇▇▇▇▇▇▇▇▇ GmbH GEMS German Imo Industries US $(1,000,000)
(Germany) Division GmbH
▇▇▇▇▇▇-▇▇▇▇ SARL Imo Industries Imo Industries Inc. US $ 450,000
(France) SARL (Delaware)
▇▇▇▇▇▇▇▇▇ Italia SRL Imo Industries Imo Industries Inc. US $ 100,000
(Italy) SRL (Delaware)
DH Holdings Corp. WEKA AG Imo Industries Inc. US $ 800,000
(Delaware) (Delaware)
--------
(1) This amount shall be reduced by the Net Debt as defined in Section 3.1.
(2) See Section 2.7 of the Agreement.