Exhibit 2.2
AGREED FORM
===========================================================================
ASSET PURCHASE AGREEMENT
dated
December 15, 1995
between
CINCINNATI MILACRON U.K. LIMITED
and
TRINOVA LIMITED
===========================================================================
TABLE OF CONTENTS
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.1 Purchase and Sale.................................. 1
SECTION 1.2 Acquired Assets and Excluded
Assets........................................... 2
SECTION 1.3 Transfer of Properties............................. 4
SECTION 1.4 Assumption of Certain
Liabilities....................................... 9
SECTION 1.5 Purchase Price...................................... 12
SECTION 1.6 Value Added Tax..................................... 13
SECTION 1.7 Purchase Price Adjustments.......................... 14
SECTION 1.8 Allocation of Purchase Price........................ 16
SECTION 1.9 Power of Attorney, etc.............................. 16
ARTICLE II
The Closing
SECTION 2.1 Closing............................................. 18
SECTION 2.2 Transactions To Be Effected
at the Closing.................................... 18
ARTICLE III
Representations and Warranties
SECTION 3.1 Representations and Warranties of
Seller............................................ 19
SECTION 3.2 Representations and Warranties
of Purchaser...................................... 28
ARTICLE IV
Covenants
SECTION 4.1 Conduct of Transferred
Business.......................................... 29
SECTION 4.2 Access to Information............................... 30
SECTION 4.3 Confidentiality..................................... 30
SECTION 4.4 Legal Requirements.................................. 31
SECTION 4.5 Noncompetition...................................... 32
SECTION 4.6 Agreement Regarding Non-Assignable
Contracts......................................... 32
SECTION 4.7 Stamp Duty.......................................... 33
SECTION 4.8 Use of Names........................................ 33
SECTION 4.9 Insurance........................................... 33
SECTION 4.10 Financial Information............................... 33
SECTION 4.11 Further Assurances; Cooperation
After Closing..................................... 34
SECTION 4.12 Certain Understandings.............................. 35
SECTION 4.13 Supplies............................................ 35
SECTION 4.14 Books and Records................................... 35
SECTION 4.15 Warranty Claims..................................... 36
SECTION 4.16 Environmental ...................................... 36
SECTION 4.17 Nonsolicitation of Employees........................ 36
SECTION 4.18 Patent Claim........................................ 36
SECTION 4.19 Control Application Software........................ 37
SECTION 4.20 Permits............................................. 37
ARTICLE V
Obligations relating to Transferred Employees
SECTION 5.1 Employee Benefits................................... 37
SECTION 5.2 Employees........................................... 37
SECTION 5.3 Seller's Defined Benefit Plan....................... 39
ARTICLE VI
Conditions Precedent
SECTION 6.1 Conditions to Each Party's Obligation............... 39
SECTION 6.2 Conditions to the Obligation
of Purchaser...................................... 39
SECTION 6.3 Conditions to the Obligation of
Seller............................................ 40
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1 Termination......................................... 41
SECTION 7.2 Amendments and Waivers.............................. 42
ARTICLE VIII
Indemnification
SECTION 8.1 Indemnification by Seller........................... 42
SECTION 8.2 Indemnification by Purchaser........................ 43
SECTION 8.3 Environmental Indemnification....................... 44
SECTION 8.4 Losses Net of Insurance, etc........................ 45
SECTION 8.5 Indemnification Procedures.......................... 45
SECTION 8.6 Adjustment to Purchase Price........................ 47
ARTICLE IX
General Provisions
SECTION 9.1 Notices............................................. 47
SECTION 9.2 Interpretation...................................... 49
SECTION 9.3 Survival of Representations and
Warranties........................................ 50
SECTION 9.4 Severability........................................ 50
SECTION 9.5 Counterparts........................................ 50
SECTION 9.6 Entire Agreement; No Third Party
Beneficiaries..................................... 50
SECTION 9.7 Governing Law....................................... 51
SECTION 9.8 Consent to Jurisdiction............................. 51
SECTION 9.9 Schedules........................................... 51
SECTION 9.10 Publicity........................................... 51
SECTION 9.11 Expenses............................................ 51
SECTION 9.12 Assignment.......................................... 51
SECTION 9.13 Restrictive Trade Practices Act
1976.............................................. 52
SECTION 9.14 Transitional Services Agreement.................... 52
APPENDICES, SCHEDULES AND EXHIBITS
Appendix A - Definitions
Schedule 1.2(b)(v) - Other Excluded Assets
Schedule 1.2(b)(viii) - Excluded Books and Records
Schedule 1.4(b)(xiv) - Other Excluded Liabilities
Schedule 1.7 - Balance Sheet Procedures
Schedule 1.7(a) - Projected Balance Sheet
Schedule 3.1(b) - Non-Contravention;
Consents and Approvals
(Seller)
Schedule 3.1(c) - Balance Sheet and
Statement of Earnings
Schedule 3.1(d) - Compliance with Law
Schedule 3.1(e) - Litigation and Claims
Schedule 3.1(f) - Liens
Schedule 3.1(i)(1) - Acquired Intellectual
Property
Schedule 3.1(k) - Material Contracts
Primarily Related to the
Transferred Business
Schedule 3.1(m) - Taxes
Schedule 3.1(n) - Employee Benefits
Schedule 3.1(p) - Terminating Employees
Schedule 3.1(u) - Material Liabilities
Schedule 3.2(b) - Non Contravention;
Consents and Approvals
(Purchaser)
Schedule 5.1 - Transferred Employees
Schedule 5.4 - Actuary's letters
Schedule 6.2(d) - Material Consents
Schedule 9.2 - Officers with Knowledge
Appendix 1.3 - License to Alter
Appendix 1.8 - Allocation of Purchaser
Price
Appendix 2.2(a) - Deeds, assignments etc.
Appendix 5.4 - Seller's Defined Benefit
Plan
This ASSET PURCHASE AGREEMENT is made and entered into on
15th December 1995, between CINCINNATI MILACRON U.K.
LIMITED, a company incorporated in England and Wales
(No. 2306538) and having its registered office at ▇.▇. ▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("Seller"), and
TRINOVA LIMITED ("Purchaser"), a company incorporated in
England and Wales (No. 1771356) whose registered office is
at ▇.▇. ▇▇▇ ▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
WHEREAS Seller is engaged worldwide in the manufacture,
marketing, sale and distribution of Machines and Electronic Controls
for Machines;
WHEREAS the parties hereto desire that Seller sell, transfer and
assign, or cause to be sold, transferred and assigned, to Purchaser,
and that Purchaser purchase and assume, or cause to be purchased and
assumed, from Seller, substantially all the assets and liabilities
related to the Transferred Business, all as more specifically provided
herein;
WHEREAS Milacron and Trinova at the time of or prior to the
Closing hereunder desire to enter into the US Agreement and the
Ancillary Agreements; and
WHEREAS the capitalized terms used herein shall have the meanings
specified in Appendix A hereto (unless the context otherwise
requires).
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows.
ARTICLE I
Purchase and Sale of Acquired Assets
SECTION 1.1. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to sell, assign, transfer,
convey and deliver, to Purchaser at the Closing (except as otherwise
stated herein), and Purchaser agrees to purchase and accept from
Seller, at the Closing, all right, title and interest of Seller in and
to all the Acquired Assets, free and clear of any lien, charge,
security interest or encumbrance, other than Permitted Liens.
2
SECTION 1.2. Acquired Assets and Excluded Assets. (a) The term
"Acquired Assets" means all the business, properties, assets, goodwill
and rights of Seller of whatever kind and nature, real or personal,
tangible or intangible, other than the Excluded Assets, that are owned
by Seller on the Closing Date and that primarily relate to, arise
primarily out of or are used primarily in connection with the
Transferred Business, including, but not limited to, all of Seller's
right, title and interest in and to the following assets (all of which
are deemed to constitute assets primarily related to the Transferred
Business):
(i) the Scheduled Real Property;
(ii) the Acquired Inventory;
(iii) the Equipment;
(iv) the Accounts Receivable other than amounts due or owing to
the Division from MT Division or from any other member of the
Milacron Group (on the basis that Division is treated as a
separate legal entity for these purposes);
(v) the Acquired Intellectual Property;
(vi) the Acquired Know-how;
(vii) the Acquired Permits;
(viii) the Acquired Contracts;
(ix) the Acquired Books and Records;
(x) the Goodwill;
(xi) prepaid items (apportioned on a time basis) and pending
claims of the Transferred Business (other than Tax Claims) that
primarily relate to or arise primarily out of the Transferred
Business;
(xii) all assets of the type reflected on the line items of the
Projected Balance Sheet other than assets that have been disposed
of in the ordinary course of business of the Division from the
date hereof to the Closing Date; and
3
(xiii) all other assets, properties and rights of Seller that
primarily relate to, arise primarily out of or are used primarily
in connection with the Transferred Business (other than the
Excluded Assets).
(b) Notwithstanding anything herein to the contrary, from and
after the Closing, Seller shall retain all of its right, title and
interest in and to, and there shall be excluded from the sale,
conveyance, assignment or transfer to Purchaser hereunder, and the
Acquired Assets shall not include, the following assets (collectively,
the "Excluded Assets")"
(i) all rights of Seller under this Agreement and any other
agreements, instruments and certificates delivered in connection
with this Agreement;
(ii) all rights, claims, demands and judgments relating to the
Excluded Liabilities;
(iii) Tax Claims and prepayments of Taxes;
(iv) all rights to the names and trademarks "Milacron",
"Cincinnati Milacron", "CAMAC" or any variations, abbreviations
or acronyms thereof;
(v) the assets identified in Schedule 1.2(b)(v);
(vi) all Know-how and Intellectual Property of Seller not
primarily related to, arising primarily out of or used primarily
in connection with the Transferred Business;
(vii) all Contracts of Seller that are not Acquired Contracts;
(viii) the Excluded Books and Records listed on Schedule
1.2(b)(viii);
(ix) all cash and cash equivalents of Seller generated or earned
in connection with the Transferred Business;
(x) the Excluded Inventory;
(xi) all Accounts Receivable due to or owing to the Division from
MT Division or from any other members of
4
the Milacron Group on the basis that Division is treated as a
separate legal entity for these purposes.
SECTION 1.3. Transfer of Properties. (a) The Scheduled Real
Property is sold subject to and where appropriate with the benefit of:
(i) all matters capable of registration as Local Land Charges or
resolutions passed by the Local Authority;
(ii) all notices served on Seller and agreements made by (or as
the case may be) with any competent authority;
(iii) all actual orders, directions, notices, charges,
restrictions, conditions and agreements arising under the Public
Health Acts or Town & Country Planning Acts;
(iv) all matters revealed by searches against Seller at the Land
Charges Registry or HM Land Registry as at the date hereof;
(v) all matters contained in the following namely:
(A) underlease dated 6th January, 1994 made between Rusper
(Sheet Metalwork) Limited (1) and Seller (2)("the Underlease");
(B) licence agreement dated 18th August, 1995 made between
Seller (1) and Sumitomo Sitex Europe plc (2);
(C) licence to underlet and alter dated 31st December 1991
made between Industrial Ownership (Southampton) Limited (1)
Rusper (Sheet Metalwork) Limited (2) and Seller (3);
(D) licence to alter dated 31st December, 1991 made between
Rusper (Sheet Metalwork) Limited (1) and Seller (2); and
(E) licence to underlet dated 2nd December, 1993 made
between Industrial Ownership (Southampton) Limited (1) Rusper
(Sheet Metalwork) Limited (2) Seller (3);
There are no matters as set out in Section 1.3(a)(i) to (iv)
to the knowledge of Seller.
5
(b) Purchaser hereby admits and confirms that it has inspected
the Scheduled Real Property and has entered into this Agreement on the
basis of such inspection and with full knowledge and notice in all
respects of the actual condition of such Property including the state
and condition of any building, structure, road, pavement, sewer, drain
or installation of any kind on such Property and takes such Property
in that state and condition on the provided that the provisions
contained in this subclause shall in no way restrict or interfere with
the indemnity afforded to the Purchaser in clause 8.3 hereof or the
provisions of clause 1.4(b)(xvi) hereof;
(c) (i) At Closing or (if later) within five working
days following the grant of the relevant
reversioner's licence, Seller will assign to
Purchaser with full title guarantee (and Purchaser
will accept such assignment) the Underlease in the
agreed form ("the Assignment");
(ii) Seller shall use all reasonable endeavors to
obtain any requisite reversioner's licenses for
the Assignment and permission for the alterations
to the Scheduled Real Property as evidenced by the
draft license attached at Appendix 1.3 and
Purchaser shall co-operate in obtaining such
licences for the Assignment by supplying such
information and references as may lawfully be
required by the reversioners (including but
without limitation a reference from Purchaser's
banker together with a copy of the last three
years audited accounts of Purchaser). Where the
reversioner would otherwise be entitled to
withhold the licence for the Assignment, Purchaser
will offer to covenant direct with the
reversioner, with effect from completion of the
Assignment, to pay the rent and observe and
perform the covenants contained in the Underlease
for the remainder of its term and will if lawfully
required by the reversioner procure a guarantor or
guarantors reasonably acceptable to the
reversioner to enter into a form of guarantee or
surety reasonably acceptable to the reversioner.
Purchaser and the guarantor(s)(if any) shall
execute the reversioner's licences for the
Assignment and return it to Seller's Solicitors
(or as they shall direct) within 15 working days
6
of the engrossments having been submitted to
Purchaser's Solicitors (details of Sellers and
Purchaser's Solicitors are set out in Article IX);
(iii) Seller will permit Purchaser to occupy the
Scheduled Real property from Closing until
completion of the Assignment or earlier
termination hereunder upon the following
conditions:
(A) Seller hereby licences and authorises Purchaser to
occupy the Scheduled Real Property as licensee only;
(B) Purchaser shall use the Scheduled Real
Property generally for the same purposes as the
Scheduled Real Property has been used by Seller
hitherto and shall act in such a manner that the
covenants contained in the Underlease are fully
observed and performed;
(C) Purchaser shall keep the Scheduled Real
Property together with all fixtures and fittings
in such repair and condition and decorative order
as they are in at the date hereof;
(D) Purchaser shall vacate the Scheduled Real
Property forthwith on termination of the licence
and authority hereby conferred removing all the
property and assets of Purchaser and all rubbish
and scrap and leaving the Scheduled Real Property
in a clean and tidy state and in such repair
condition and decorative order as is provided for
in paragraph (C) above;
(E) Purchaser shall not make any alteration or
addition to the Scheduled Real Property or any
part thereof;
(F) Purchaser shall conform in all respects with
the provisions of and regulations under any Act of
Parliament or Bye-law which may be applicable to
the Scheduled Real Property or to Purchaser's use
or occupation thereof;
(G) Purchaser shall not create any fixed charge
over or assign the licence hereby conferred or
7
sub-licence or permit any other person to use or
occupy the Scheduled Real Property or any part
thereof;
(H) Purchaser shall at all times use all
reasonable endeavours to keep the Scheduled Real
Property secure;
(I) Purchaser shall pay (or reimburse) to Seller
forthwith on demand all proper outgoings of any
kind whatsoever in respect of the Scheduled Real
Property including (without prejudice to the
generality of the foregoing) all rents service
charges rates and water rates taxes gas
electricity sewerage and telephone charges
security and heating expenses and insurance
premiums in respect of the period of occupation
until the date of the Assignment or vacation
pursuant to Section 1.3(d)(vii) whichever is the
earlier; and
(J) Without prejudice to paragraph (I) above the
Purchaser will refund to Seller any rent or
outgoings paid by Seller in respect of the
Scheduled Real Property prior to the date of the
Assignment in respect of the period after the date
of occupation by Purchasers.
(d) It is hereby agreed and declared as follows:
(i) Section 1.3(c)(iii) constitutes a licence and
confers no tenancy upon Purchaser;
(ii) management and control of the Scheduled Real
Property is retained by Seller who shall without
prejudice to Section 1.3(c)(iii)(I) and (J) be the
occupier for all purposes including taxation and
rating;
(iii) Seller shall not be responsible for any
assets goods or chattels of Purchaser in or about
the Scheduled Real Property whether for loss
thereof or damage thereto;
(iv) Seller shall not be responsible for any
injury to or sustained by any person in or about
8
the Scheduled Real Property other than as a result
of Seller's neglect or default;
(v) the licence and authority hereby conferred is
personal to Purchaser and shall not be capable of
assignment or transfer;
(vi) if Purchaser is in material breach of the
obligations on its part contained in
Section 1.3(c)(iii) or if the reversioner
threatens proceedings for possession of the
Scheduled Real Property and/or forfeiture of the
Underlease and/or for breach of covenant against
Seller by reason of the use and occupation of the
Scheduled Real Property by Purchaser or if
Purchaser shall go into liquidation (save for the
purposes of amalgamation or reconstruction while
solvent) or have a receiver or administrator or
supervisor pursuant to any voluntary arrangement
appointed over all or any of its property or
assets or if a petition is presented for the
appointment of an administrator of Purchaser
Seller may by notice in writing to Purchaser
forthwith terminate and revoke the licence and
authority hereby conferred (but without prejudice
to any other right or remedy which may have
accrued to either party hereunder);
(vii) if Seller is unable to obtain a
reversioner's licence for the Assignment after all
reasonable and proper efforts on its part to do so
(including, where necessary or appropriate,
applying to the Court for a declaration that the
licence is being unreasonably withheld) and in any
event by the date 6 months after Closing (or such
other date as Seller and Purchaser shall agree in
writing) the Scheduled Real Property shall be
withdrawn from the sale hereby agreed and the
Purchaser shall vacate the same forthwith without
prejudice to the further assurance provisions of
this Agreement and in the event of Purchaser
vacating as a result of this Section the Scheduled
Real Property shall be severed from this
Agreement;
(viii) if Seller is unable to obtain reversioner's
licence for the alterations referred to in
9
Section 1.3(c)(ii) above after Seller having used
all reasonable efforts to do so by the date 6
months after Closing the Seller shall if required
by Purchaser remove the works detailed in the said
licence for alterations at its own cost making
good all damage caused thereto.
(x) Seller shall indemnify and keep indemnified
Purchaser against all actions, proceeds, costs,
claims, demands and expenses whatsoever arising
directly or indirectly as a result of the Seller
failing to obtain the consent of the reversioners
to the Assignment or in respect of prior to the
completion of the Assignment any action taken by
any superior and/or intermediate landlord against
any superior lease the Underlease and the
Scheduled Real Property.
SECTION 1.4. Assumption of Certain Liabilities. (a) Upon the
terms and subject to the conditions of this Agreement, at the Closing,
Purchaser agrees to assume, pay, perform and discharge when due, all
liabilities or obligations whatsoever, other than Excluded
Liabilities, that are primarily related to, arose primarily out of or
in connection with the Transferred Business, whether arising before or
after the Closing and whether known or unknown, fixed or contingent
(the "Assumed Liabilities"), including all of the liabilities and
obligations listed below (each of which are deemed to relate primarily
to the Transferred Business):
(i) all obligations and liabilities due to be performed
or paid after the Closing Date under Acquired
Contracts;
(ii) [Intentionally omitted]
(iii) all obligations and liabilities of Seller of the
type reflected on the line items of the Projected
Balance Sheet except for obligations and liabilities
which have been satisfied, cancelled or otherwise
transferred in the ordinary course of business of the
Division from the date hereof to the Closing Date;
(iv) all obligations or liabilities with respect to
product liability claims (including claims for death,
personal injury or property damage) with respect to
10
products shipped or services provided by Purchaser
after the Closing in connection with the Transferred
Business, including any liability for incidental or
consequential damages relating thereto;
(v) subject to the provisions of Section 8.3 all
obligations and liabilities arising as a result of
Seller, or any predecessor in interest thereof, being
the owner or occupant of, or the operator of the
activities conducted at, the Scheduled Real Property at
any time, including all obligations and liabilities
relating to personal injury, property damage, the
environment and waste disposal including off-site waste
disposal;
(vi) all obligations and liabilities relating to the
deferred holiday associated with or relating to
Transferred Employees;
(vii) all obligations and liabilities with respect to
all actions, suits, proceedings, disputes, claims or
investigations that are primarily related to or arise
primarily out of or in connection with the Transferred
Business, the Acquired Assets or the Transferred
Employees, at law, in equity or otherwise; and
(viii) the Real Property Tax Liabilities
(b) Notwithstanding anything herein to the contrary, the
following liabilities and obligations of Seller (the "Excluded
Liabilities") shall not be assumed by Purchaser hereunder and shall
not constitute Assumed Liabilities:
(i) any obligation or liability which is primarily
attributable to any of the Excluded Assets, or
primarily associated with the realization of the
benefits of any of the Excluded Assets;
(ii) the Excluded Tax Liabilities;
(iii) all liabilities and obligations for which Seller
has expressly assumed or retained responsibility
pursuant to this Agreement;
(iv) [Intentionally omitted]
11
(v) all pension obligations or liabilities under
Seller's Defined Benefit Plan associated with or
relating to any Transferred Employee except to the
extent provided in Section 5.4;
(vi) all obligations or liabilities with respect to all
warranty claims in connection with products sold and/or
delivered or services provided by Seller before the
Closing in connection with the Transferred Business
including any liability for incidental or consequential
damages relating thereto;
(vii) all obligations or liabilities with respect to
all product liability claims, actions, suits,
proceedings, disputes or investigations (including
claims for death, personal injury or property damage)
with respect to products sold and/or delivered or
services provided by Seller before the Closing in
connection with the Transferred Business including any
liability for incidental or consequential damages
relating thereto;
(viii) all accounts payable from the Division to MT
Division and/or to other members of the Milacron Group,
on the basis the Division is treated as a separate
legal entity for these purposes;
(ix) all obligations and liabilities with respect to
payroll obligations of the Seller to Transferred
Employees that have accrued up to the Closing Date
(including the obligation to pay the Inland Revenue the
PAYE and NIC contributions as deducted) in connection
with the Transferred Business and all associated UK
equivalents of US withholding obligations or
liabilities including any UK equivalents of US
withholding obligations under any of Seller's benefit
plans;
(x) all obligations and liabilities of Seller with
respect to all claims, actions, suits, proceedings,
disputes or investigations based on employment
practices of Seller prior to the Closing Date and all
claims by employees of the Transferred Business
terminated prior to the Closing Date;
(xi) all obligations and liabilities with respect to
any and all claims (whether known or unknown) arising
12
out of any infringement of the intellectual property
rights of third parties in connection with products of
the Business shipped by the Seller prior to the Closing
Date including the claims ("the ▇▇▇▇▇▇▇ and Hurco
Claims") relating to the alleged infringement by
▇▇▇▇▇▇▇ Products and Hurco Products (each as defined in
the Supply Agreement) of existing rights of ▇. ▇▇▇▇▇▇▇
and IMS Technology Inc ("the Existing ▇▇▇▇▇▇▇ and Hurco
Rights");
(xii) all obligations or liabilities relating to
deferred compensation, life insurance, severance
including those equivalent to worker's compensation in
the US, and all costs and expenses incurred in
providing medical and dental and welfare benefits
associated with any Transferred Employee prior to the
Closing Date;
(xiii) any obligation of the Seller to indemnify any
Transferred Employee by reason of the fact that such
Person was a director, officer, employee, or agent of
Seller or was serving at the request of Seller as a
partner, trustee, director, officer, employee, or agent
of another entity (whether such indemnification is for
judgements, damages, penalties, fines, costs, amounts
paid in settlement, losses, expenses or otherwise and
whether such indemnification is pursuant to any
statute, charter document, bylaw, agreement or
otherwise).
(xiv) the Excluded Liabilities listed in
Schedule 1.4(b)(xiv).
(xv) all obligations and liabilities due to be
performed or paid on or before the Closing Date under
the Acquired Contracts.
(xvi) [Intentionally omitted]
(xvii) all obligations and liabilities of Seller for
breach or failure to perform any of Seller's Covenants,
representations and warranties or agreements contained
in or made pursuant to this Agreement; and
(xviii) except as provided in this Agreement, all
obligations and liabilities relating to Sellers Defined
Benefits Plan;
13
SECTION 1.5. Purchase Price. In consideration of the sale,
assignment, transfer, conveyance and delivery to Purchaser of the
Acquired Assets, Purchaser shall pay to Seller on December 28, 1995 in
sterling the sum of [British Pound] 6,850,000 (less two days interest
on such amount at an interest rate of 6.5% per annum but together with
VAT thereon if applicable) subject to adjustment as provided in
Section 1.7 (together, as so adjusted, the "Purchase Price") payable
by wire transfer of immediately available funds to an account or
accounts designated by Seller in a written notice (the "Account
Designation Notice") delivered to Purchaser at least two Business Days
prior to such date. If Seller designates more than one account in the
Account Designation Notice, such notice shall specify the portion of
the Purchase Price to be paid to each such designated account. Seller
agrees to promptly return to Purchaser the amount paid on December 28,
1995 with interest rate of 6.5% per annum from December 30, 1995 if
the Closing does not occur.
SECTION 1.6. Value Added Tax. (a) All payments to be made
pursuant to this Agreement shall (save where otherwise specifically
stated) be taken to be exclusive of VAT (if applicable) and any VAT
charged in respect of the matters giving rise to such payments shall
be added to the amount thereof and paid in addition thereto in which
case Seller shall promptly provide to the Purchaser a tax invoice to
support a claim by the Purchaser for recovery of the tax paid.
(b) The parties acknowledge and agree that it is considered that
section 49(1) Value Added Tax Act 1994 ("VATA 1994") and Article 5 of
the Value Added Tax (Special Provisions) Order 1995 will apply to the
sale and purchase of the Transferred Business, so that the transaction
is treated as a transfer of a going concern. Accordingly:
(i) Purchaser shall give such notice of such transfer
to HM Customs & Excise as required by law;
(ii) Purchaser shall preserve the records for such
period as may be required by law and during that period
shall at al reasonable times permit Seller or its
agents to inspect such records and (at the other
party's expense) to take copies of such records;
14
(iii) Seller and Purchaser shall use all reasonable
endeavours to secure that pursuant to the provisions
referred to above the sale of the Transferred Business
hereunder is treated as neither a supply of goods nor a
supply of services for Value Added Tax purposes;
(iv) if, notwithstanding the provisions referred to
above, any Value Added Tax shall be payable on the sale
hereunder, Purchaser shall pay to Seller such tax and
any penalty if due to delay in payment by Purchaser
following request by Seller or interest likewise
incurred by Seller for late payment thereof, Purchaser
to make such payment on payment by Seller or (if later)
delivery by Seller to Purchaser of tax invoices in
respect thereof; and
(v) no re-allocation of the Vendor's VAT registration
number to Purchaser shall be applied for.
(c) Purchaser warrants that its ▇▇▇▇▇▇▇ division is duly
registered under the VATA with registration number GB 381053863
(▇▇▇▇▇▇▇ Division).
SECTION 1.7. Purchase Price Adjustments.
(a) A projected schedule of certain types of assets and
liabilities (the "Specified Assets and Liabilities") of the
Transferred Business as of the Closing Date is attached as Schedule
1.7(a) hereto (the "Projected Balance Sheet"). The parties acknowledge
that the Projected Balance Sheet is attached to this Agreement only
for purposes of calculating the purchase price adjustment in
accordance with this Section 1.7, and except for such adjustment,
neither party shall have any liability to the other party for any
variation between the Projected Balance Sheet nd the Closing Date
Balance Sheet.
(b) Within 60 days following the Closing, Seller shall (i)
prepare, or cause to be prepared, and deliver to Purchaser the Closing
Date Balance Sheet, which shall set forth the Specified Assets and
Liabilities of the Transferred Business as of the Closing Date and
shall be accompanied by a certificate from Seller's independent
outside auditors to the effect that the Closing Date Balance Sheet was
prepared in accordance with Schedule 1.7 hereto and (ii) calculate the
Closing Date Net Asset Value, as
15
derived from the Closing Date Balance Sheet, and deliver
such calculation to Purchaser.
(c) Purchaser and Purchaser's independent outside auditors shall,
within 60 days after the delivery by Seller of the Closing Date
Balance Sheet and Seller's calculation of the Closing Date Net Asset
Value, complete their review thereof. In the event that Purchaser and
Purchasers' independent outside auditors determine that the Closing
Date Balance Sheet has not been prepared on this basis set forth in
and in accordance with Schedule 1.7, Purchaser shall, on or before the
last day of such 60-day period, so inform Seller in writing (the
"Purchaser's Objection"), setting forth a specific description of the
basis of Purchaser's Objection and the adjustments to the Closing Date
Net Asset Value and the corresponding adjustments to the Closing Date
Balance Sheet with Purchaser believes should be made accompanied by a
letter from the Purchaser to the effect that the Closing Date Balance
Sheet submitted to Purchaser by Seller was not prepared in accordance
with Schedule 1.7 hereto and that adjusting the Closing Date Balance
Sheet in the manner described in Purchaser's Objection will result in
the Closing Date Balance Sheet having been prepared in accordance with
Schedule 1.7 hereto. If no Purchaser's Objection is received by Seller
on or before that last day of such 60-day period, then the Closing
Date Net Asset Value set forth on the Closing Date Balance Sheet
delivered by Seller shall be final. Seller shall have 30 days from its
receipt of Purchaser's Objection to review and respond to Purchaser's
Objection.
If Seller and Purchaser are unable to resolve all of their
disagreements with respect to the proposed adjustments set forth in
Purchaser's Objection with 20 days following the completion of
Seller's review of Purchaser's Objection, they shall refer any dispute
as to whether the Closing Date Balance Sheet was prepared in
accordance with Schedule 1.7 to the CPA Firm, who shall, acting as
experts and not as arbitrators, determine on the basis set forth in an
in accordance with Schedule 1.7, and only with respect to the
remaining differences so submitted, whether and to what extent, if
any, the Closing Date Balance Sheet and the Closing Date Net Asset
Value require adjustment. Purchaser and Seller shall instruct the CPA
Firm to deliver its written determination to Purchaser and Seller no
later than the thirtieth day after the remaining differences
underlying Purchaser's Objection are referred to the CPA Firm. The CPA
16
Firm's determination shall be conclusive and binding upon
Purchaser and Seller. The fees and disbursements of the CPA
Firm shall be borne equally by Purchaser and Seller.
Purchaser and Seller shall make readily available to the CPA
Firm all relevant books and records and any work papers
(including those of the parties' respective accountants)
relating to the Closing Date Balance Sheet and all other
items reasonably requested by the CPA Firm. The scope of
the disputes to be resolved by the CPA Firm is limited to
whether the Closing Date Balance Sheet was prepared in
accordance with Schedule 1.7.
(d) Purchaser shall, and shall cause its Subsidiaries to, provide
to Seller and its accountants (i) all data and financial statements
reasonably requested by Seller and (ii) full access to the books and
records of the Transferred Business and to any other information,
including work papers of its accountants, and to any employees in each
case to the extent reasonably requested by Seller in connection with
the preparation of the Closing Date Balance Sheet and any adjustments
thereto.
(e) The "Purchase Price Adjustment Amount" shall be equal to (x)
the Base Net Asset Value minus (y) the Closing Date Net Asset Value.
If the Purchase Price adjustment Amount is a negative number, then the
Purchase Price shall be increased by the absolute value of the
Purchase Price Adjustment Amount and Purchaser shall, promptly (and in
any event within five business days) after the final determination of
the Closing Date Net Asset Value, pay to Seller the Purchase Price
Adjustment Amount (together with VAT thereon, if applicable) plus
interest from the Closing Date at the rate of 6.5% per annum in U.S.
dollars by wire transfer of immediately available funds to an account
designated by Seller. If the Purchase Price Adjustment Amount is a
positive number, then the Purchase Price shall be decreased by the
Purchase Price Adjustment Amount and Seller shall, promptly (and in
any event within five business days) after the final determination of
the Closing Date Net Asset Value, pay to Purchaser the Purchase Price
Adjustment Amount plus interest from the Closing Date at the rate of
6.5% per annum in U.S. dollars by wire transfer of immediately
available funds to an account designated by Purchaser.
SECTION 1.8. Allocation of Purchase Price. (a) Purchaser and
Seller agree that the allocations of the
17
Purchase Price shall be as set out in Appendix 1.8 and that
such allocations shall be adjusted in accordance with the
provisions of that Appendix to take account of any Purchase
Price Adjustment Amount agreed or certified pursuant to
Section 1.7.
SECTION 1.9. Power of Attorney, etc. (a) Effective on the Closing
Date, Seller hereby constitutes and appoints Purchaser the true and
lawful attorney of Seller in the name of Seller and/or on its behalf
(and for the benefit of Purchaser), and at the expense of Purchaser:
(i) to demand and receive from time to time any and all the Acquired
Assets and to make endorsements and give receipts and releases for and
in respect of the same and any part thereof; (ii) to institute,
prosecute, compromise and settle any and all proceedings at law, in
equity or otherwise that Purchaser and its successors, legal
representatives or assigns may deem proper in order to collect, assert
or enforce any claim, right or title of any kind in or to the Acquired
Assets; (iii) to defend or compromise any or all actions, suits or
proceedings in respect of any of the Acquired Assets; and (iv) to do
all such acts and things in relation to the matters set forth in the
preceding clauses (i) through (iii) as Purchaser and its successors,
legal representatives or assigns shall deem desirable. Seller hereby
agrees that the appointment hereby made and the powers hereby granted
are as security for the performance of certain obligations of Seller
hereunder and are and shall be irrevocable by it in any manner or for
any reason. Seller shall deliver to Purchaser at Closing an
acknowledged power of attorney to the foregoing effect executed by
Seller and any affiliate selling any of the Acquired Assets.
(b) Effective upon the Closing Date, Purchaser shall have the
right to receive and open all mail, packages and other communications
which relate primarily to the Transferred Business addressed to Seller
or any of its affiliates and Seller agrees promptly to deliver to
Purchaser any such mail, packages or other communications received
directly or indirectly by Seller or any of its affiliates. Purchaser
shall have the right and authority to collect, for its own account,
all receivables and other items which shall be transferred or are
intended to be transferred to Purchaser as provided in this Agreement.
Seller will endorse in favor of Purchaser any cheques or drafts
received on account of any such receivables or other items, and Seller
shall promptly transfer or deliver to
18
Purchaser any cash or other property received directly or
indirectly by Seller or its affiliates in respect of such
receivables and other items. Purchaser shall promptly
deliver to Seller all mail, packages and other
communications received by it which relate to Seller or its
affiliates but do not relate exclusively to the Transferred
Business. Seller and its affiliates shall promptly deliver
to Purchaser all mail, packages and other communications
received by any of them which relate to the Transferred
Business but do not relate to any of them.
ARTICLE II
The Closing
SECTION 2.1. Closing. Subject to the following sentence, the
closing of the sale and transfer of the Acquired Assets and the other
transactions contemplated hereby (herein referred to as the "Closing")
shall take place at the offices of Cravath, Swaine & ▇▇▇▇▇, Worldwide
Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on December 30,
1995 or thereafter as soon as practicable following the satisfaction
or waiver of the conditions set forth in Section 6, or at such other
time, date and place as shall be fixed by agreement between the
parties hereto.
SECTION 2.2. Transactions To Be Effected at the Closing. At the
Closing:
(a) Seller shall deliver to Purchaser (i) the deeds, assignments
and other instruments of transfer described in Appendix 2.2(a)
relating to the Acquired Assets (all of which shall be in the agreed
form) duly executed by or on behalf of Seller and (ii) such other
documents as Purchaser or its counsel may reasonably request to
demonstrate satisfaction or waiver of the conditions and compliance
with the agreement set forth in this Agreement (it being understood
with respect to (i) and (ii) above, that Seller shall not be required
to make any additional representations, warranties or covenants,
express or implied, not contemplated by this Agreement), and (iii) all
of the Acquired Assets the title to which is capable of passing by
delivery (such delivery to take place at the Scheduled Real Property).
19
(b) Purchaser shall deliver to Seller, or shall cause to be
delivered to Seller, (i) payment of the Purchase Price in the manner
provided in Section 1.5, (ii) duly executed counterparts of the deeds,
assignments and other instruments of transfer described in Appendix
2.2(a) and (iii) such other documents as Seller or its counsel may
reasonably request to demonstrate satisfaction or waiver of the
conditions and compliance with the agreements set forth in this
Agreement (it being understood that with respect to (ii) and (iii)
above that Purchaser shall not be required to make any
representations, warranties or covenants, express or implied, not
contemplated by this Agreement).
(c) Seller and Purchaser shall duly execute the know-how election
in the agreed form annexed at Appendix 1.8.
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties of Seller. Seller
hereby represents and warrants to Purchaser as follows:
(a) Organization, Standing and Power. Seller is a company duly
incorporated and existing under the Companies Acts and has the
requisite corporate power and authority to own the Acquired Assets
owned by it and to lease the Acquired Assets leased by it and to carry
on the operations of the Transferred Business as now being conducted
by it. Seller has heretofore delivered to Purchaser true and complete
copies of its certificate of incorporation and memorandum and articles
of association, as amended through the date of this Agreement.
(b) Authority. Seller has all corporate power and authority to
execute this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Seller.
This Agreement has been duly executed and delivered by Seller and
constitutes the legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms except as
enforcement thereof may be limited
20
by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally and except
that the availability of equitable remedies, including
specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought.
The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and the
compliance with the terms hereof will not, to Seller's
knowledge, (i) violate any law, judgment, order, decree,
statute, ordinance, rule and regulation applicable to
Seller, (ii) conflict with any provision of Seller's
Memorandum and Articles of Association, (iii) except as set
forth on Schedule 3.1(b), result in a breach of, constitute
a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or
cancel, any agreement, contract, lease, license, instrument,
or other arrangement to which the Seller is a party or by
which it is bound or to which any of its assets is subject
(or result in the imposition of any lien (other than a
Permitted Lien) upon any of its assets), except where the
violation, conflict breach, default, acceleration,
termination, modification, cancellation, or lien would not
have a material adverse effect on the business, financial
condition or results of operations of the Transferred
Business or on the ability of the parties hereby to
consummate the transactions contemplated by this Agreement
or (iv) require any material consent, approval, order or
authorization of, or the registration, declaration or filing
with, any Governmental Entity or any other Person, except as
otherwise set forth on Schedule 3.1(b).
(c) Financial Statements. The balance sheet, dated as of December
31, 1994 (the "Balance Sheet") and the statement of earnings
(excluding the effect of capitalized software) for the year ended
December 31, 1994 (the "Financial Statements") which are attached as
Schedule 3.1(c) hereto, present the financial condition and results of
operations of the Division as of December 31, 1994 and for the year
then ended in accordance with the policies and procedures employed by
Seller in accounting for the assets and liabilities, earnings from
operations of its divisions. The Financial Statements have been
prepared from the books and records of Seller relating to the
Transferred Business.
(d) Compliance with Applicable Laws. For the last 3 years, Seller
has complied and is currently in compliance in all material respects
with all laws, regulations, rules and
21
orders of all Governmental Entitles, applicable to it which
relate to the Transferred Business. Except as set forth in
Schedule 3.1(d), Seller has not receive any written notice
of any such failure to so comply, and to the knowledge of
Seller, there are no circumstances that may give rise to
such noncompliance. Seller has not received any written
notice that any investigation or review by any Governmental
Entity with respect to the Transferred Business is pending
or that any such investigation or review is contemplated.
This paragraph (d) does not relate to Environmental Laws for
which Section 8.3 is exclusively applicable.
(e) Litigation; Decrees. Schedule 3.1(e) sets forth a list of all
law suits, actions and proceedings pending with respect to the
Transferred Business and all judgements, orders, decrees and
injunctions against the Seller related to the Transferred Business.
Except as set forth in Schedule 3.1(e), to the knowledge of Seller,
there is no basis for any suit, action or proceeding relating to the
Acquired Assets or the Transferred Business that would in Seller's
reasonable judgment be expected to have (i) as substantial likelihood
of success if brought and (ii) a material adverse effect on the
business, financial condition or results of operations of the
Transferred Business. Except as set forth on Schedule 3.1(e), to the
knowledge of Seller, there is no suit, action, or proceeding
threatened against Seller relating to the Transferred Business or the
transactions contemplated hereby. Seller is not in default under any
material judgement, order, injunction, rule, or decree of any
Governmental Entity or arbitrator relating to the Transferred
Business.
(f) Title to Acquired Assets. Seller has good and marketable
title to all the Acquired Assets free and clear of all Liens, except
for (i) Liens disclosed in Schedule 3.1(f) or on the Balance Sheet or
in the notes thereto and (ii) (A) mechanics', carriers', workmen's,
repairmen's, and other like Liens arising or incurred in the ordinary
course of business, (B) Liens for Taxes, assessments and other
governmental charges that are not yet due and payable or that may
thereafter be paid without penalty, or that are being contested in
good faith by appropriate proceedings (which contested Taxes,
assessments and other governmental charges are set forth in Schedule
3.1(f), (C) assets subject to retention of title in the ordinary
course of business and (D) imperfections of title and other
encumbrances that are not substantial in
22
character or amount and do not detract from, or interfere
with the use of, the Acquired Assets in the Transferred
Business as presently conducted (the Liens described in
clauses (i) and (ii) being herein referred to as "Permitted
Liens"). To the knowledge of Seller, there are no Liens on
the Acquired Assets which would in Seller's reasonable
judgment be expected to have a material adverse effect on
the business, financial condition or result of operations of
the Transferred Business. This paragraph (f) does not
relate to real property, interests in real property or
leasehold interests.
(g) Real Property. Schedule 3.1(g) sets forth a complete list of
all real property and interests in real property directly or
indirectly owned or occupied by Seller that primarily relate to or are
used primarily in connection with the Transferred Business (each, a
"Property"). Seller is the lessee of each Property and is in
possession of the premises purported to be leased thereunder, and each
such lease is valid without any material default thereunder by Seller
or, to Seller's knowledge, by the lessor.
(h) [intentionally omitted]
(i) Intellectual Property and Know-how. To the knowledge of
Seller, the Division has not interfered with, infringed upon,
misappropriated, or violated any material Intellectual Property or
Know-how rights of third parties in any material respect, and, except
as identified on Schedule 3.1(i)(1), Seller has not received any
written charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation or any
claim that the Division must license or refrain from using any such
intellectual property rights of any third party. Schedule 3.1(i)(1)
sets forth a complete list of all Acquired Intellectual Property. To
the extent that registrations, filings and issuances are indicated on
Schedule 3.1(i)(1), such Intellectual Property has been duly
registered in, filed in or issued by the United States Copyright
office or the United States Patent and Trademark Office, the
appropriate offices in the various states of the United States and the
appropriate offices of such other jurisdictions indicated on Schedule
3.1(i)(1). Except as set forth on Schedule 3.1(i)(1), Seller has not
granted any licenses or other rights in, and Seller has no obligation
to grant licenses or other rights in, any of the Acquired Intellectual
Property or in the Know-how owned by Seller
23
that material to the Transferred Business ("Material Know-
how), in each case that is included in the Acquired Assets,
to any other Person. Seller has not made any claim of a
violation or infringement by others of its rights in the
Acquired Intellectual Property or the Material Know-how and,
to the knowledge or Seller, there is not currently any such
violation or infringement. Except as set forth on
Schedule 3.1(i)(1), there are no interferences or other
contested proceedings, either pending or, to the knowledge
of Seller, threatened, in the United States Copyright
Office, the United States Patent and Trademark Office or any
Federal, state or local court or before any other
governmental agency or tribunal, relating to any Acquired
Intellectual Property or any pending application with
respect thereto.
(j) Insurance. All of the material properties and businesses
constituting any part of the Acquired Assets are insured for Seller's
benefit, and will be so insured until the Closing, in amounts and
against risks consistent with recent past practice. All such policies
are in full force and effect.
(k) Contracts. Schedule 3.1(k) sets forth each Contract to which
Seller is a party or by which it is bound that relates primarily to
the Transferred Business except for such Contracts involving amounts
of less than $150,000. Except for the Contracts listed in Schedule
3.1(k) or 3.1(g), Seller is not in the case of Contracts that relate
primarily to the Transferred Business, a party to any:
(i) Contract for or relating to the employment of any officer or
employee or with any labour union;
(ii) Contract which will not be discharged at or prior
to the Closing relating to the borrowing or lending of
money or the guarantee of any obligations for borrowed
money or otherwise, excluding endorsements made for
purposes of collection in the ordinary course of
business;
(iii) Contract granting to any person a preferential
right to purchase any of the Acquired Assets (other
than sales of Inventory in the ordinary course of
business);
24
(iv) Contract with respect to the discharge,
transportation, removal or storage of effluent, wastes,
pollutants or hazardous substances;
(v) Contract for the lease of any land, buildings or
equivalent;
(vi) Contract evidencing any material lien, charge,
security interest or encumbrance on the Acquired
Assets, other than Permitted Liens; or
(vii) Contract relating to joint ventures, distribution
or sales representative arrangements, non-competition
arrangements or confidentiality arrangements.
True, complete and correct copies of all the Contracts
listed on Schedules 3.1(k) have been made available to
Purchaser. Except as disclosed on Schedules 3.1(k) and
3.1(g), each of the Material Contracts is valid, binding,
and enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency, reorganising, moratorium,
fraudulent conveyance or other similar laws affecting
creditors' rights generally from time to time in effect and
to general equitable principles, is in full force and
effect, and neither Seller nor, to the knowledge of Seller,
any other party thereto is in default or breach in any
material respect under the terms of any such Material
Contract, nor, to the knowledge of Seller, has any event or
circumstance occurred that, with notice or lapse of time or
both, would constitute a material event of default
thereunder. Except as disclosed on Schedules 3.1(k) and
3.1(g), Seller has not received any notice of termination or
cancellation of any Material Contract, and to the knowledge
of Seller, there are no material unresolved disputes in
connection with any Material Contract.
(l) Absence of Certain Changes or Events. Except as set forth in
the Schedules hereto, from December 31, 1994 to the date hereof,
Seller has conducted the Transferred Business in the ordinary course
consistent in all material respects with recent past practice, and
there has not been any material adverse change in the business,
assets, liabilities, financial condition or results of operations,
other than changes relating to the economy in general or changes
relating to the Machines industry in general.
25
(m) Taxes. Except as set forth in Schedule 3.1(m), Seller has
timely filed, after giving effect to any applicable extensions, all
Tax Returns relating to any Taxes attributable to the Transferred
Business required to be filed by it. Except for Taxes set forth on
Schedule 3.1(m), which are being contested in good faith and by
appropriate proceedings, and except for Taxes which in the aggregate
are not material, all Taxes attributable to the Transferred Business
shown to be due on such Tax Returns have been timely paid. Except as
set forth in Schedule 3.1(m), no taxing authority is asserting any
deficiency against Seller with respect to material Taxes attributable
to the Transferred Business.
(n) Employee Benefits Plans. Schedule 3.1(n) contains a list of
share or stock option or purchase plans, health insurance arrangements
and economic value added programmes. Seller has delivered to Purchaser
details of the above arrangements.
(o) Books and Records. The Books and Records have been regularly
kept and maintained in accordance with the practices of Seller.
(p) Employees. Except as set forth in Schedule 3.1(p), to
Seller's knowledge, no executive, key employee or significant group of
employees has expressed his, her or their clear intention to terminate
his, her or their employment with the Transferred Business within the
next twelve months. As of the date hereof, except as set forth in
Schedule 3.1(p) hereto, no Transferred Employee has notified the
Seller in writing of his intention to terminate employment with the
Division and no termination notice has been given to any Transferred
Employee. The Division is not a party to or bound by any collective
bargaining agreement, nor has it experienced any strikes, grievances,
claims of unfair labour practices, or other collective bargaining
disputes. To the knowledge of Seller, there is no organizational
effort presently made or threatened by or on behalf of any labour
union with respect to employees of the Division.
(r) Permits. The Acquired Permits include all governmental
licenses, approvals, permits and authorizations currently required for
the ownership or operation of the Acquired Assets or the Transferred
Business as now being conducted, the failure to obtain which would
have a material
26
adverse effect on the Acquired Assets or the Transferred
Business. All such governmental licenses and permits are
valid and in full force and effect; Seller has not received
any written notice that any appropriate authority has
revoked, suspended or terminated, or intends to revoke,
suspend or terminate, any of such governmental licenses and
permits, and all such governmental licenses and permits are
held in the name of Seller or a subsidiary thereof.
(s) Fees. Except for CS First Boston Corporation, whose fees will
be paid by Milacron, there is no investment banker, broker, finder,
financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of Seller who might be entitled to any fee
or commission from Seller in connection with the transactions
contemplated by this Agreement.
(t) Acquired Assets. Except as stated herein, the Acquired Assets
transferred by Seller on the Closing Date to Purchaser (including
without limitation the Acquired Contracts, Acquired Permits, Acquired
Intellectual Property and Acquired Know-How) shall be sufficient to
operate the Transferred Business in all material respects as it is
currently being conducted.
(u) No Undisclosed Material Liabilities. To the knowledge of
Seller, there are no liabilities of the Transferred Business of any
kind other than (i) liabilities provided for in the Balance Sheet,
(ii) liabilities disclosed in the Schedules hereto, including Schedule
3.1(u), (iii) liabilities incurred in the ordinary course of the
Transferred Business since December 31, 1994, and (iv) other
liabilities which, individually or in the aggregate, are not material
to the Transferred Business.
(v) No Other Representations. Except for the representations and
warranties expressly set forth in this Agreement, the US Agreement and
the Ancillary Agreements thereto neither Seller nor any other Person
makes any express or implied representation or warranty on behalf of
Seller.
(w) Seller's Defined Benefit Plan. In relation to the Seller's
Defined Benefit Plan
(i) Full material particulars of Seller's Defined
Benefit Plan have been Disclosed.
27
(ii) In relation to the Active Members (as defined in
Appendix 5.4 and (where appropriate) Transferred
Employees:
(a) so far as the Seller is aware the Seller's Defined
Benefit Plan complies, and has at all times complied with,
all applicable legislation relative to occupational pension
schemes and has been operated in accordance with the
requirements of both the Pension Schemes Office and
Occupational Pensions Board;
(b) the Active Members are Contracted-Out of the State
Earnings Related Pension Scheme in accordance with the
provisions of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
(c) Seller's Defined Benefit Plan is exempt approved under
Chapter I of Part XIV of the Taxes Act for the purposes of
the Pensions Schemes Office of the Inland Revenue and so far
as the Seller is aware there is no reason why such approval
should be withdrawn;
(d) there are no actions, suits or claims pending or
threatened by any of the Active Members of Transferred
Employees and so far as the Seller is aware there is no fact
or circumstances likely to give rise to any such
proceedings;
(e) no undertakings or assurances have been given or implied
to the Transferring Employees or Active Employees as to the
introduction, continuance, increase or improvement of any
retirement, death or disability benefits (whether or not
there is any legal obligation to do so);
(f) no discretion has been exercised under Seller's Defined
Benefit Plan to provide a benefit which would not otherwise
already by provided thereunder and no power to augment or
provide new benefits has been exercised;
(g) all lump sum benefits payable on the death of an Active
Member whilst in employment (other than a return of his own
contributions and contributions paid in respect of him) are
fully
28
insured and each Active Member has been covered for such
insurance at normal rates and on normal terms for persons in
good health;
(h) save for Seller's Defined Benefit Plan, Seller is not a
party to or contributing to any retirement benefits pension
or life assurance scheme or arrangement or fund or personal
pension scheme relating to any of the Transferred Employees
or under any legal or ex-gratia obligation to provide any
retirement, death or disability pension or payment to or in
respect of any such Transferred Employee or person connected
therewith. No proposal has been announced to establish or
contribute to any other such scheme or fund;
(i) there are no pending claims for incapacity or ill-health
pensions and there are no current disputes concerning such
benefits;
(j) all contributions due to the trustees of Seller's
Defined Benefit Plan have been paid;
(k) with the exception of ▇▇▇. ▇. ▇▇▇▇▇▇▇▇▇ (from whom no
application to join Seller's Defined Benefit Plan has been
received) none of the Transferred Employees are part-timers
who have been denied access to Seller's Defined Benefit
Plan;
(l) Seller's Defined Benefit Plan has been registered with
the Registrar of Pension Schemes.
SECTION 3.2. Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to Seller as follows:
(a) Organization, Standing and Power. Purchaser is a Company duly
incorporated and existing under the Companies Acts and has the
requisite corporate power and authority to carry on its business as
now being conducted.
(b) Authority. Purchaser has all corporate power and authority to
execute this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the
29
transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the
Purchaser and do not and will not require the approval of
the stockholders of Purchaser. This Agreement has been duly
executed and delivered by Purchaser and constitutes the
legal, valid and binding obligation of Purchaser enforceable
against it in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of
creditors' rights generally and except that the availability
of equitable remedies, including specific performance, is
subject to the discretion of the court before which any
proceeding therefor may be brought. The execution and
delivery of this Agreement do not, and the consummation of
the transactions contemplated hereby and the compliance with
the terms hereof will not (i) violate any law, judgment,
order, decree, statute, ordinance, rule and regulation
applicable to Purchaser, (ii) conflict with any provision of
its Memorandum and Articles of Association, (iii) except as
set forth on Schedule 3.2(b), conflict with any material
Contract to which it is a party or by which it or any of its
property is bound or (iv) require any material consent,
approval, order or authorization of, or the registration,
declaration or filing with, any Governmental Entity or any
other Person, except as otherwise set forth on
Schedule 3.2(b).
(c) Fees. There is no investment banker, broker, finder,
financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of Purchaser who might be entitled to any
fee or commission from Purchaser in connection with the transactions
contemplated by this Agreement.
(d) Actions and Proceedings, etc. There are no (i) outstanding
judgements, orders, injunctions or decrees or any court or
Governmental Entity or arbitration tribunal against or affecting
Purchaser or any of its affiliates, (ii) lawsuits, actions or
proceedings pending or, to the knowledge of Purchaser, threatened
against or affecting Purchaser or any of its affiliates, or (iii)
investigations by any Governmental Entity which are, to the knowledge
of Purchaser, pending or threatened against or affecting Purchaser or
any of its affiliates, and which, in the case of each of clauses (i),
(ii) and (iii), have or could have a material adverse effect on the
ability of Purchaser to consummate the transactions contemplated
hereby.
30
(e) No Other Representations. Except for the representations and
warranties expressly set forth in this Agreement, the US Agreement and
the Ancillary Agreement thereto neither Purchaser nor any other Person
makes any express or implied representation or warranty on behalf of
Purchaser.
ARTICLE IV
Covenants
SECTION 4.1. Conduct of Transferred Business. From and after the
date of this Agreement and until the Closing, except as expressly
provided in this Agreement or as Purchaser shall otherwise reasonably
agree, Seller will (i) conduct the Transferred Business (including the
maintenance of inventory levels) in the ordinary course of business
consistent in all material respects with recent past practice; (ii)
maintain and repair the Acquired Assets in substantially the same
manner as they are currently maintained and repaired; (iii) not
knowingly harm the reputation or goodwill of the Transferred Business
or the condition of the Acquired Assets; (iv) use reasonable efforts
to refrain from taking or omitting to take any action in a manner that
would render Seller's representations and warranties under this
Agreement inaccurate as of the Closing or that would prevent the
consummation of the transactions contemplated hereby; (v) not grant
any increases in direct or indirect termination to any Transferred
Employee other than changes in termination in the ordinary course of
business; not enter into any material transaction or incur any
material liability other than in the ordinary course of business; (vi)
not encumber or permit to be encumbered any of the Acquired Assets
other than with Permitted Liens; (vii) not amend, alter or modify any
material provision of any of the Acquired Contracts other than in the
ordinary course of business; (viii) keep all insurance policies with
respect to the Transferred Business in effect, with all premiums paid
to the Closing Date; (ix) use its reasonable efforts to keep available
the services of the Transferred Employees and preserve the Transferred
Business's relationships with suppliers, customers and others having
business dealings with the Transferred Business; and (x) not sell,
lease, license or otherwise dispose of any Acquired Assets except (A)
pursuant to existing contracts and commitments or (B) in
31
the ordinary course of business consistent in all material
respect with recent past practice. If at any time during
such period Seller becomes aware of any material adverse
change in the business, assets, financial condition or
results of operations of the Transferred Business, Seller
shall promptly notify Purchaser with respect thereto.
SECTION 4.2. Access to Information. Seller shall afford to
Purchaser and its accountants, counsel and other representatives
reasonable access upon reasonable written notice during normal
business hours during the period prior to the Closing to all the
properties, books, contracts, commitments, Tax Returns and records of
the Transferred Business, and, during such period shall furnish
promptly to Purchaser any information concerning the Transferred
Business as Purchaser may reasonably request.
SECTION 4.3. Confidentiality. (a) Each of Purchaser and Seller
shall hold in confidence and shall not disclose to any third party
(other than to its directors, officers, those employees who have a
need to know and its outside advisors), without the written consent of
the other party, all information disclosed with respect to the
contemplated transaction relating to the other party and the
Transferred Business, including, without limitation, information
concerning the operation of the Transferred Business and related
commercial, financial and technical data, whether disclosed orally or
in writing, including any summaries or analyses of such information
prepared by or for Purchaser. Purchaser's or Seller's obligations in
respect of confidential information shall not apply to information (i)
which becomes generally available to the public other than as a result
of disclosure by such party, (ii) was known to by such party prior to
its disclosure hereunder (iii) is rightly received by such party from
a third party free of any confidentiality obligations (iv) is required
to be disclosed in connection with the securing of any governmental
approval necessary for the performance by such party of its
obligations hereunder or (v) is required to be disclosed for the
purpose of complying with governmental regulations or (vi) is
independently developed by such party's employees who do not have
access to such information.
(b) In the event of any termination of this Agreement, for a
period of seven years from such termination, each of Purchaser and
Seller (i) shall treat as confidential and
32
shall not disclose or use, directly or indirectly, for its
benefit or otherwise, in any manner whatsoever, or permit
any of its affiliates or officers, directors, employees,
representatives or others under its control to disclose, or
to use, any information concerning the other party or the
Transferred Business (in the case of the Purchaser) unless
such information is acquired or required to be disclosed as
described in clause (i) through (iv) in clause (a) above and
shall promptly return to the other party (or destroy with a
certificate of destruction) all written information and
documents received from such party, its accountants or
counsel in connection with the transactions contemplated by
this Agreement, including all copies thereof, and all
analyses, memoranda, charts or other information prepared by
such party or any of its affiliates using any of such
written information and documents, including all copies
thereof (including computer disks or tapes or other storage
media if applicable). The provisions of this Section shall
survive any termination of this Agreement.
SECTION 4.4. Legal Requirements. Each of Purchaser and Seller
will take all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on it or any of its
Subsidiaries with respect to the Closing and will promptly cooperate
with and furnish information to each other and to other parties in
connection with any such legal requirements.
SECTION 4.5. Noncompetition. (a) Seller agrees that for a period
of five years from the Closing Date, neither it nor any of its
Subsidiaries shall engage, either directly or indirectly, as a
principal or for its own account or solely or jointly with others, or
as shareholders in any company or partnership anywhere in the world,
in the business of manufacturing or selling to third parties any
products manufactured or sold by the Division on or prior to the
Closing Date (other than with respect to Electronic Controls assembled
on Machines sold by Seller); provided that nothing herein shall
prohibit (i) the acquisition by Seller or any of its Subsidiaries of a
diversified company having not more than (x) 10% of its sales (based
on its latest published annual audited financial statements)
attributable to any business that competes with the Transferred
Business or (y) $5,000,000 in annual sales to third parties in such
competing business, (ii) the exercise of Seller's rights (if any)
under the Electronic Controls Supply Agreement, (iii) the sale by
Seller of Excluded Inventory to third
33
parties and (iv) the sale by Seller to third parties of
service parts for products manufactured or sold by the
Division.
(b) It is the intention of the parties that if any of the
restrictions or covenants contained herein held to cover a geographic
area or to be for a length of time which is not permitted by
applicable law, or in any way construed to be too broad or to any
extent invalid, such provision shall not be construed to be null, void
and of no effect, but to the extent such provision would be valid or
enforceable under applicable law, a court of competent jurisdiction
shall construe and interpret or reform this Section 4.5 to provide for
a covenant having the maximum enforceable geographic area, time period
and other provisions (not greater than those contained herein) as
shall be valid and enforceable under such applicable law. Seller
acknowledges that Purchaser would be irreparably harmed by any breach
of this Section 4.5 and that there would be no adequate remedy at law
or in damages to compensate Purchaser for any such breach.
SECTION 4.6. Agreement Regarding Non-Assignable Contracts. If any
Acquired Contract (i) is not assignable without the consent of any
party thereto, (ii) may by its terms be terminated or cancelled upon
assignment or (iii) is not by its terms assignable, Seller and
Purchaser agree to use their reasonable efforts to obtain the consent
of any required parties thereto to effect such assignment. If such
assignment may not be so effected, each of the parties agrees to
cooperate with the other in any reasonable arrangement designed to
enable Seller to perform for the account of Purchaser its obligations
under, and to provide Purchaser the benefits of, and to cause
Purchaser to bear all the burdens and liabilities under, any such
agreements, including enforcement at the cost, and for the account of,
Purchaser, of any and all rights of Seller against the other party
arising out of the breach or cancellation thereof by such other party
or otherwise.
SECTION 4.7. Stamp Duty. Seller shall bear and pay all stamp duty
of and in respect of the transfer of the Acquired Assets pursuant to
this Agreement.
SECTION 4.8. Use of Names. Except as set forth in Section 4.14,
Purchaser agrees that neither it nor any of its affiliates nor any of
their respective successors and
34
assigns shall at any time use the names "Milacron",
"Cincinnati Milacron" or "CAMAC", or any variation thereof
or combination that includes either such name, or any Trade
Names or Trademarks relating thereto, or any acronym or
abbreviation thereof (collectively, the "Seller's Names").
Within 60 days of the Closing Date, with respect to all
Acquired Inventory constituting Acquired Assets on which
Seller's Names are marked, affixed or otherwise used,
Purchaser shall rename or obliterate or permanently sticker
over Seller's Names on Acquired Inventory or appropriately
make or otherwise alter or modify Acquired Inventory in
accordance with the first sentence of this Section 4.8.
SECTION 4.9. Insurance. From and after the Closing, Purchaser
shall secure insurance with respect to the Transferred Business
covering general liability and product liability in amounts consistent
with its normal and customary practice.
SECTION 4.10. Financial Information. After the Closing, upon
reasonable written notice, Purchaser and Seller shall furnish or cause
to be furnished to each other and their respective accountants,
counsel and other representatives access, during normal business
hours, to such information (including records pertinent to the
Transferred Business) and assistance relating to the Transferred
Business as is reasonably necessary for financial reporting and
accounting matters, the preparation and filing of any Tax Return or
other returns, reports or forms or the defense of any Tax claim or
assessment and will provide the other party with such audited
financial statement and other financial information for past periods
as such other party reasonably deems necessary for compliance with
disclosure requirements of the relevant legislation or under GAAP;
provided, however, that the party requesting such financial statements
shall pay for the auditing of such financial statements if such
auditing is necessary solely by reason of such party's request. In the
case of Purchaser, such assistance shall include cooperation in
responding to audit reports made by taxing authorities to Seller
regarding the Transferred Business and, at Seller's request,
participation in audits of Seller relating to the Transferred
Business. Purchaser shall retain the books and records included in the
Acquired Assets for a period of seven years after the Closing. After
the end of such seven- year period, before disposing of such books or
records, Seller may within 60 days prior to the end of such period,
35
request upon written notice to Purchaser to recover such
books and records at Seller's cost and expense, whereupon
Purchaser shall allow Seller the opportunity to remove and
retain all or any part of such books or records as Seller
may select at such time that such books and records would
otherwise be disposed of by Purchaser.
SECTION 4.11. Further Assurances; Cooperation After Closing. (a)
Seller will use its reasonable efforts to facilitate and effect the
implementation of the transfer of such Acquired Assets to Purchaser
and, for such purpose but without limitation, Seller promptly will at
and after the Closing execute and deliver to Purchaser such
assignments, deeds, bills of sale, consents and other instruments as
Purchaser or its counsel may reasonably request as necessary for such
purpose.
(b) In the event that after the Closing, Seller becomes aware
that any Acquired Assets were not transferred to Purchaser by Seller
at the Closing, Seller shall promptly notify Purchaser to that effect
and shall reasonably cooperate with Purchaser to transfer such
Acquired Assets to Purchaser. In the event that after the Closing,
Purchaser becomes aware that any assets that are not Acquired Assets
were transferred to Purchaser at the Closing, Purchaser shall promptly
notify Seller to that effect and shall reasonably cooperate with
Seller to transfer such assets to Seller.
(c) In the event and for so long as any party hereto is
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice,
law, occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving the Division,
the other party will reasonably cooperate with contesting or defending
party and its counsel in the contest or defense, all at the sole cost
and expenses of the contesting or defending party (unless the
contesting or defending Party is entitled to indemnification therefor
under Article VIII below).
SECTION 4.12. Certain Understandings. Purchaser acknowledges that
neither Seller, its Subsidiaries nor any other Person has made any
representation or warranty,
36
express or implied, as to the accuracy or completeness of
any information regarding the Transferred Business not
included in this Agreement or the Schedules hereto, and
neither Seller, its Subsidiaries nor any other Person will
be subject to any liability to Purchaser or any other person
resulting from the distribution to Purchaser, or Purchaser's
use of, any such information. Purchaser acknowledges that,
should the Closing occur, Purchaser will acquire the
Acquired Assets without any representation or warranty as to
merchantability or fitness for any particular purpose, in an
"as is" condition and on a "where is" basis, except as
otherwise expressly represented or warranted herein.
SECTION 4.13. Supplies. Purchaser shall not use stationery,
purchase order forms, signage, invoices, receipts, or advertising and
promotional materials, training and service literature and materials
that state or otherwise indicate thereon that the Transferred Business
or any part thereof is a division or unit of Seller, except that
Purchaser may use such materials in the ordinary course of the
Transferred Business for a period of 90 days after the Closing,
provided that such materials clearly indicate that the Transferred
Business has been sold to Purchaser and is independent of Seller.
SECTION 4.14. Books and Records. Seller shall, upon written
notice and during normal business hours, furnish to Purchaser and its
representatives, access to the Excluded Books and Records and
Purchaser may, with Seller's consent (which consent shall not be
unreasonably withheld), make photocopies thereof.
SECTION 4.15. Warranty Claims. Purchaser shall provide to Seller,
upon Seller's request, service for all products shipped by Seller
prior to the Closing which is required based on a warranty claim for
such product, and Seller shall pay Purchaser at Purchaser's direct
cost (materials and labour) for such services rendered.
SECTION 4.16. Environmental. Purchaser shall not undertake any
investigation of environmental conditions or conduct any testing of
soil or subsurface conditions, including groundwater, at the Scheduled
Real Property except: (i) as required to do so by a Governmental
Entity (ii) as part of a response to a spill or release of a hazardous
Substance caused by Purchaser after the Closing Date (iii) in the
ordinary course of Purchaser's
37
environmental and industrial hygiene audits and reviews
consistent with Purchaser's audit and review programs,
(iv) as requested by a bona-fide potential purchaser of the
Scheduled Real Property, or a portion thereof, from the
Purchaser after the Closing Date and (v) as based on
Purchaser's reasonable good faith belief that there exists a
violation of Environmental Laws on such Scheduled Real
Property; provided that in the case of Section 4.16(c)(iv)
any such investigation or testing shall be conducted in a
manner commensurate with such good faith reasonable belief.
SECTION 4.17. Nonsolicitation of Employees.
Purchaser and Seller agree that they will not without the consent
of the other party during the five year period following the Closing
Date solicit the employment of any of the other party's employees
while they are employed by such other party.
SECTION 4.18. Patent Claim. Seller shall use its reasonable
efforts to resolve the ▇▇▇▇▇▇▇ and Hurco Claims expeditiously. Any
settlement of the ▇▇▇▇▇▇▇ and Hurco Claims by Seller which has an
effect on the operation by Purchaser of the Transferred Business shall
be in accordance with the provisions of the Supply Agreement. As long
as such settlement is in accordance with the provisions of the Supply
Agreement, Purchaser shall not bear any liability with respect to
royalties payable under a license of the Existing ▇▇▇▇▇▇▇ and Hurco
Rights except to the extent set forth in the Supply Agreement relating
to the supply of ▇▇▇▇▇▇▇ and Hurco Products thereunder.
SECTION 4.19. Control Application Software. Seller agrees that
for a period of one year following the Closing Purchaser shall provide
Seller with reasonable access to control application software of
Purchaser as required to conduct the Transferred Business, subject to
the execution by the parties hereto of a confidentiality agreement
relating thereto that is reasonably acceptable to the parties hereof
and subject to Purchaser agreeing to use such software solely in the
manufacture of electronic controls for Seller.
SECTION 4.20. Permits. Seller shall take all reasonable efforts
to ensure that the Acquired Permits are promptly transferred to
Purchaser subject to applicable law.
38
ARTICLE V
Obligations relating to Transferred Employees
SECTION 5.1. Employee Benefits. In accordance with the Employment
Regulations Purchaser will, save in respect of provisions relating to
occupational pension schemes, stock option plans and economic value
added programmes maintain for a period of at least two years after the
Closing Date without interruption, benefit plans and contractual
benefits that are overall no less favourable than those provided to
Transferred Employees by Seller on the Closing Date. Notwithstanding
the foregoing, for a period of two years after the Closing Date,
Purchaser will provide (or cause its Subsidiaries to provide) to each
transferred Employee severance pay and severance benefits which are no
less favourable than under the severance plans and current practice of
Seller prior to the date hereof and notified in writing to the
Purchaser as being in effect on the date of this Agreement and
summarised in Schedule 3.1(k) under the heading "Redundancy Payments".
SECTION 5.2. Employees. (a) The parties hereby acknowledge and
agree that the Transfer of Undertakings (Protection of Employment)
Regulations 1981 as amended (the "Employment Regulations") apply to
the sale and purchase of the Transferred Business effected by this
Agreement and accordingly the contract of employment (excluding
provisions relating to occupational pension schemes) of each of the
Transferred Employees with Seller shall transfer to Purchaser in
accordance with the Employment Regulations with effect from the
Closing Date. Seller represents to Purchaser and indemnifies Purchaser
accordingly that Seller has up to and including the Closing Date fully
discharged all wages, salaries and other benefits of the Transferred
Employees and all PAYE tax deductions and National Insurance
Contributions relating thereto.
(b) Purchaser shall be liable for and shall indemnify Seller
against all or any claim for redundancy payments, unfair dismissal or
other compensation (whether statutory or contractual), salaries,
wages, and other benefits, National Insurance Contributions, PAYE tax
deductions, damages, costs
39
or expenses which may be made against Seller (or for which
Seller may become liable) as a result of:
(i) anything done by or in relation to Seller on or prior to the
Closing Date in respect of the Transferred Employees or any of
their contracts of employment at the prior written request of
Purchaser; or
(ii) anything done in respect of the Transferred Employees by or
in relation to the Purchaser on or after the Closing Date.
(c) Seller and Purchaser shall forthwith comply with the
information and consultation requirements laid down in Regulation 10
of the Employment Regulations and Purchaser shall forthwith give
Seller such information as it requires in order to comply with
Regulation 10(2)(d) of the Employment Regulations.
(d) Seller shall be liable for and shall indemnify Purchaser
against all costs, claims, demands and liabilities of any kind which
may be made by or incurred to any Transferred Employee and/or by or to
any trade union arising on or prior to the Closing Date including
without limitation compensation for failure to inform or consult a
representative of a trade union in accordance with Regulation 10(3) of
the Employment Regulations or a protective award under Section 189 of
the Trade Union and Labour Relations (Consolidation) ▇▇▇ ▇▇▇▇ and
against all legal costs and expenses reasonably incurred by Purchaser
in settling, contesting or dealing with any such claim.
(e) Seller shall indemnify Purchaser in respect of all costs
claims, liabilities, charges, expenses and awards incurred as a result
of any claim and against all legal costs and expenses reasonably
incurred by Purchaser in settling, contesting or dealing with any such
claim:
(i) by or in respect of any or all of the Transferred Employees
that they are a member of a recognised trade union or that any
collective agreement has been transferred to Purchaser; and
(ii) by any person other than a Transferred Employee that his
employment has been transferred to Purchaser including without
limitation in relation to the termination of that person's
employment;
40
SECTION 5.3. Seller's Defined Benefit Plan. The provisions of
Appendix 5.4 shall apply in respect of the Seller's Defined Benefit
Plan.
ARTICLE VI
Conditions Precedent
SECTION 6.1. Conditions to Each Party's Obligation. The
obligation of Purchaser and Seller to consummate the transactions
contemplated to occur at the Closing shall be subject to the
satisfaction or waiver thereby as of the Closing Date of each of the
following conditions:
(a) Approvals. All material authorizations, consents, orders or
approvals of, or regulations, declarations or filings with, or
expirations of applicable waiting periods imposed by, any Governmental
Entity necessary for the consummation of the transactions contemplated
hereby shall have been obtained or filed or shall have occurred.
(b) No Injunctions or Restraints. No injunction or other legal
restraint or prohibition preventing the consummation of the
transactions contemplated by this Agreement shall be in effect or
threatened by a governmental agency with a substantial likelihood of
success.
SECTION 6.2. Conditions to the Obligation of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated to
occur at the Closing shall be subject to the satisfaction or waiver
thereby as of the Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
as of the time of the Closing as though made at and as of such time,
except as otherwise contemplated by this Agreement, and Purchaser
shall have received a certificate signed by an authorized officer of
Seller to such effect.
(b) Performance of Obligations of Seller. Seller shall have
performed or complied in all material respects with all obligations
and covenants required to be performed or complied with by Seller
under this Agreement prior to the
41
Closing, and Purchaser shall have received a certificate
signed by an authorized officer of Seller to such effect.
(c) US Agreement. The actions contemplated under the US Agreement
to occur at the closing under that agreement shall occur
simultaneously with or prior to the Closing.
(d) Material Consents. Seller shall have delivered to Purchaser
the consents described in Schedule 6.2(d) hereto.
(e) Other Documents. Seller shall have furnished to Purchaser
such other documents relating to Seller's corporate existence and
authority (including, without limitation, copies of resolutions of the
board of directors of Seller), absence of Liens, and such other
matters as Purchaser or its counsel may reasonably request.
SECTION 6.3. Conditions to the Obligation of Seller. The
obligation of Seller to consummate the transactions contemplated to
occur at the Closing shall be subject to the satisfaction or waiver
thereby as of the Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Purchaser set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
as of the time of the Closing as though made at and as of such time,
except as otherwise contemplated by this Agreement, and Seller shall
have received a certificate signed by an authorized officer of
Purchaser to such effect.
(b) Performance of Obligations of Purchaser. Purchaser shall have
performed or complied in all material respects with all obligations
and covenants required to be performed or complied with by it under
this Agreement prior to the Closing, and Seller shall have received a
certificate signed by an authorized officer of Purchaser of such
effect.
(c) US Agreement. The actions contemplated under the US Agreement
to occur at the closing under that agreement shall occur
simultaneously with or prior to the Closing.
42
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.1. Termination. (a) Notwithstanding anything to the
contrary in this Agreement, this Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the
Closing, (i) by mutual written consent of Seller and Purchaser, (ii)
by Seller or Purchaser if the US Agreement is terminated, or (iii) by
Seller or Purchaser, if the Closing does not occur on or prior to
January 15, 1996; provided, however, that the party seeking
termination pursuant to clause (ii) or (iii) above is not in breach of
any of its representations, warranties, covenants or agreements
contained in this Agreement.
(b) In the event of termination by Seller or Purchaser pursuant
to this Section 7.1, written notice thereof shall forthwith be given
to the other party and the transactions contemplated by this Agreement
shall be terminated, without further action by any party. If the
transactions contemplated by this Agreement are terminated as provided
herein:
(i) Each of Purchaser and Seller shall promptly return (or
destroy with a certificate of destruction) to the other party all
documents and other material received from the other party
relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof; and
(ii) all confidential information received by Purchaser or Seller
with respect to the businesses of the other party shall be
treated in accordance with Section 4.3 hereto, which shall remain
in full force and effect notwithstanding the termination of this
Agreement.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 7.1,
this Agreement shall become null and void and of no further force and
effect, except for the provisions of (i) Section 4.3 relating to the
obligation of Purchaser and Seller to keep confidential certain
information and data obtained by it from Seller, (ii) this Section
7.1, (iii) Section 9.10 relating to publicity and (iv) Section 9.11
regarding certain expenses. Nothing in this Section 7.1 shall be
deemed to release any party from
43
any liability for any breach by such party of the terms and
provisions of this Agreement.
SECTION 7.2. Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of
the parties hereto. Purchaser or Seller may, by an instrument in
writing signed on behalf of such party, waive compliance by the other
party with any term or provision of this Agreement that such other
party was or is obligated to comply with or perform.
ARTICLE VIII
Indemnification
SECTION 8.1. Indemnification by Seller. Seller hereby agrees to
indemnify Purchaser and its affiliates and their respective officers,
directors, employees, stockholders, agents and representatives
against, and agrees to hold them harmless from, any loss, liability,
claim, damage or expense, and including reasonable legal fees and
expenses; (individually a "Loss" and collectively "Losses"), as
incurred (Payable quarterly upon written request), for or on account
of or arising from or in connection with or otherwise with respect to
any Excluded Liabilities or any breach of any covenant, obligation,
agreement or representation or warranty of Seller contained in this
Agreement; provided, however, that Seller shall not have any liability
under this Section 8.1 with respect to any breach of a representation
or warranty under Article III hereof, other than representations and
warranties contained in Sections 3.1(a) and 3.1(b) except to the
extent that the aggregate of all such Losses (outside of Losses
payable under Section 8.3) exceeds $250,000, and then only to the
extent of such excess; and provided further, however, that the total
indemnification to be paid by Seller (outside of Losses payable under
Section 8.3) under or in respect of any breach of a representation or
warranty contained in this Agreement under Article III hereof, other
than representations and warranties contained in Section 3.1(a) and
3.1(b), shall not in any event exceed $5,000,000.
Purchaser acknowledges and agrees that its sole and exclusive
remedy with respect to any and all claims relating to the subject
matter of this Agreement shall be pursuant to the indemnification
provisions set forth in this
44
Article VIII. In furtherance of the foregoing, Purchaser
hereby waives, to the fullest extent permitted under
applicable law, any and all rights, claims and causes of
action it may have against Seller arising at common law or
under any statute, law, ordinance, rule or regulation.
SECTION 8.2. Indemnification by Purchaser. Purchaser hereby
agrees to indemnify Seller and its affiliates and their respective
officers, directors, employees, stockholders, agents and
representatives against, and agrees to hold them harmless from any
Loss, as incurred (payable quarterly upon written request), for or on
account of or arising from or in connection with or otherwise with
respect to any Assumed Liabilities or any breach of any covenant,
obligation, agreement or representation or warranty of Purchaser
contained in this Agreement provided, however, that Purchaser shall
not have any liability under this Section 8.2 with respect to any
breach of a representation or warranty under Article III hereof, other
than representations and warranties contained in Sections 3.2(a) and
3.2(b), except to the extent that the aggregate of all such Losses
exceeds $250,000 and then only to the extent of such excess; and
provided further however, that the total indemnification to be paid by
Purchaser under or in respect of any breach of a representation or
warranty contained in this Agreement under Article III hereof, other
than representations and warranties contained in Section 3.2(a) and
3.2(b), shall not in any event exceed $5,000,000.
Seller acknowledges and agrees that its sole and exclusive remedy
with respect to any and all claims relating to the subject matter of
this Agreement shall be pursuant to the indemnification provisions set
forth in this Article VIII. In furtherance of the foregoing, Seller
hereby waives, to the fullest extent permitted under applicable law,
any and all rights, claims and causes of action it may have against
Purchaser arising at common law or under any statute, law, ordinance,
rule or regulation.
SECTION 8.3. Environmental Indemnification. (a) Subject to the
provisions of Section 4.16 and the further provisions of this Section
8.3, Seller agrees to indemnify and hold harmless Purchaser and its
affiliates and their respective officers, directors, employees,
shareholders, agents and representatives, from any and all
Environmental Liabilities, whenever asserted or incurred, arising out
of or relating to (i) any condition existing on
45
the Scheduled Real Property as of or prior to the Closing Date
and (ii) Hazardous Substances generated at the Scheduled Real Property
but disposed of outside the Scheduled Real Property prior to the
Closing Date (collectively, "Environmental Claims"). "Environmental
Liabilities" means all liabilities, obligations (including obligations
to respond to, investigate and remediate conditions caused by any
Hazardous Substances) responsibilities, losses, damages, deficiencies,
punitive damages, and other damages, fines, penalties, costs, expenses
(including reasonable attorney's fees) interest, bonds, security or
other financial assurance, resulting from any claim or demand under
the authority of or based upon any Environmental Law.
(b) Seller shall not be required to indemnify Purchaser or any
other Person under Section 8.3(a) until the aggregate of all amounts
paid by Purchaser or Trinova for which indemnity would otherwise be
due under such Section or the corresponding Section of the US
Agreement exceeds $1,000,000 and then only to the extent of such
excess; provided, however, that Seller shall not be required to
indemnify Purchaser under Section 8.3(a) for any Environmental
Liabilities incurred in connection with a breach by Purchaser of the
covenant in Section 4.16 or the corresponding Section of the US
Agreement.
(c) Neither Purchaser nor any other Person shall be entitled to
make any claim for indemnification under Section 8.3(a) after the
fifth anniversary of the Closing Date; provided, however, that any
such matter as to which a claim has been asserted by notice to Seller
that is pending or unresolved on the last date for which a claim for
indemnification may be made shall continue to be covered by this
Section until such matter is finally terminated or otherwise resolved
by the parties under this Agreement or by a court of competent
jurisdiction and any amounts payable hereunder are finally determined
and paid.
(d) Purchaser shall indemnify and hold harmless Seller and its
affiliates and their respective officers, directors, employees,
shareholders, agents and representatives from any Environmental Claim
with respect to which Seller is not obligated to indemnify Purchaser
as a result of the operation of Section 8.3(b).
46
SECTION 8.3. Losses Net of Insurance, etc. The amount of any Loss
for which indemnification is provided under this Article VIII shall be
net of any amounts recovered by the Person indemnified pursuant to
this Article VIII (the "Indemnified Party") under insurance policies
with respect to such Loss and shall be (i) increased to take account
of any net Tax cost incurred by the Indemnified Party arising from the
receipt or accrual of indemnity payments hereunder (grossed up for
such increase) and (ii) reduced to take account of any net Tax benefit
realized by the Indemnified Party arising from the payment of any such
Loss. Any indemnification payment hereunder shall initially be made
(i) in the case of net Tax costs or benefits, without regard to this
paragraph and shall be increased or reduced to reflect any such net
Tax cost (including gross-up) or net Tax benefit only after the
Indemnified Party has actually realized such cost or benefit, and (ii)
in the case of insurance amounts not yet recovered, without taking
into account such unrecovered insurance amounts, with a future payment
to be made by the Indemnified Party to the Indemnifying Party upon the
recovery of, and in the amount of, any such insurance amounts. For
purposes of this Agreement, an Indemnified Party shall be deemed to
have "actually realized" a net Tax cost or net Tax benefit to the
extent that, and at such time as, the amount of Taxes payable by such
Indemnified Party is increased above or reduced below, as the case may
be, the amount of Taxes that such Indemnified Party would be required
to pay but for the receipt of the indemnity payment or the payment of
such Loss.
SECTION 8.4. Indemnification Procedures. With respect to third
party claims, all claims for indemnification by any Indemnified Party
hereunder shall be asserted and resolved as set forth in this Section
8.4. In the event that any written claim or demand for which Seller or
Purchaser as the case may be (an "Indemnifying Party"), would be
liable to any Indemnified Party hereunder is asserted against or
sought to be collected from any Indemnified Party by a third party,
such Indemnified Party shall promptly, but in no event more than 15
days following such Indemnified Party's receipt of such claim or
demand, notify the Indemnifying Party of such claim or demand and the
amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such
claim and demand) (the "Claim Notice"); provided, however, that
failure to give such notification shall not affect the
47
indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of
such failure (except that the Indemnifying Party shall not be liable
for any expenses incurred during the period in which the Indemnified
Party failed to give such notice). The Indemnifying Party shall have
45 days from the personal delivery or mailing of the Claim Notice (the
"Notice Period") to notify the Indemnified Party (a) whether or not
the Indemnifying Party disputes the liability of the Indemnifying
Party to the Indemnified Party hereunder with respect to such claim or
demand and (b) whether or not it desires to defend the Indemnified
Party against such claim or demand. All costs and expenses incurred by
the Indemnifying Party in defending such claim or demand shall be a
liability of, and shall be paid by, the Indemnifying Party. Except as
hereinafter provided, in the event that the Indemnifying Party
notifies the Indemnified Party within the Notice Period that it
desires to defend the Indemnified Party against such claim or demand,
the Indemnifying Party shall have the right to defend the Indemnified
Party by appropriate proceedings and shall have the sole power to
direct and control such defense; provided, however, that the
Indemnifying Party shall not cease to defend, settle or otherwise
dispose of any Claim without the prior written consent of the
Indemnified Party if as a result thereof the Indemnified Party could
become subject to injunctive or other equitable relief or the business
of the Indemnified Party could be materially adversely affected in any
nonmonetary manner. If any Indemnified Party desires to participate in
any such defense it may do so at its sole cost and expense. The
Indemnified Party shall not settle a claim or demand for which it is
indemnified by the Indemnifying Party without the written consent of
the Indemnifying Party. The assumption of the defense or the
settlement or other disposal of any claim by the Indemnifying Party
shall not prejudice in any way the right of such Indemnifying Party to
challenge and defend against the Indemnified Party's assertion of a
right to indemnification under this Agreement. If the Indemnifying
Party elects not be defend the Indemnified Party against such claim or
demand, whether by not giving the Indemnified Party timely notice as
provided above or otherwise, then the amount of any such claim or
demand, or, if the same be contested by the Indemnified Party, then
that portion thereof as to which such defense is unsuccessful (and the
reasonable costs and expenses pertaining to such defense) shall be the
liability of the Indemnifying Party hereunder.
48
To the extent the Indemnifying Party shall direct, control or
participate in the defense or settlement on any third party claim or
demand, the Indemnified Party will give the Indemnifying Party and its
counsel access to, during normal business hours, the relevant business
records and other documents, and shall permit them to consult with the
employees and counsel of the Indemnified Party. The Indemnified Party
shall use its reasonable efforts in the defense of all such claims.
SECTION 8.6. Adjustment to Purchase Price. Seller and Purchaser
shall treat any indemnity payment under this Agreement as an
adjustment to the Purchase Price for Tax purposes unless a final
determination with respect to the Indemnified Party causes any such
payment not to be treated as an adjustment to the Purchase Price for
tax purposes.
ARTICLE IX
General Provisions
SECTION 9.1. Notices. All notices and other communications
hereunder shall be in writing (including wire, telefax or similar
writing) and shall be sent, delivered or mailed, addressed, or
telefaxed:
(a) if to Purchaser, to:
Trinova Limited
▇.▇. ▇▇▇ ▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention of ▇▇▇▇▇ ▇▇▇▇
with copies to:
Nabarro ▇▇▇▇▇▇▇▇▇ ("Purchaser's Solicitors")
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇
49
Trinova Corporation
3000 ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇, Loop & ▇▇▇▇▇▇▇▇
North Courthouse Square
1000 ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(b) if to Seller, to:
Cincinnati Milacron U.K. Limited
▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ OQU England
Phone: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention of ▇▇▇ ▇▇▇▇▇
with copies to:
Cincinnati Milacron Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
50
Wragge & Co ("Seller's Solicitors")
▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Phone: (▇)▇▇▇ ▇▇▇ ▇▇▇▇
Fax: (▇)▇▇▇ ▇▇▇ ▇▇▇▇
Attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Esq.
Each of notice, request or other communication shall be given (i)
by hand delivery, (ii) by nationally recognized courier service or
(iii) by telefax, receipt confirmed. Each such notice, request or
communication shall be effective (i) if delivered by hand or by
nationally recognized courier service, when delivered at the address
specified in this Section 9.1 (or in accordance with the latest
unrevoked written direction from such party) and (ii) if given by
telefax, when such telefax is transmitted to the telefax number
specified in this Section 9.1 (or in accordance with the latest
unrevoked written direction from such party), and the appropriate
confirmation is received.
SECTION 9.2. Interpretation. (a) When a reference is made in this
Agreement to a Section, Appendix, Schedule or Exhibit, such reference
shall be to a Section, Appendix, Schedule or Exhibit of this Agreement
unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "included", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words
"without limitation". All accounting terms not defined in this
Agreement or in the notes to the Financial Statements shall have their
meanings under GAAP.
(b) When a reference is made in this Agreement "to the knowledge
of Seller" or "to Seller's Knowledge" or "to the knowledge of
Purchaser" or "to Purchaser's Knowledge" such reference shall mean to
the knowledge of certain employees of Seller or Purchaser, as the case
may be, listed on Schedule 9.2 after reasonable inquiry of persons
under their supervision whom they believe will have relevant
knowledge.
SECTION 9.3. Survival of Representations and Warranties. The
representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall pursuant to Section 8.1
survive for a period
51
of 24 months from the Closing Date provided however, that the
representations and warranties under Sections 3.1(a), 3.1(b), 3.1(f)
and 3.1(g) (but Sections 3.1(f) and 3.1(g) only with respect to title)
shall survive the Closing with no expiration date. This Section 9.3
shall not limit any covenant or agreement of the parties which by its
terms contemplates performance after the Closing Date.
SECTION 9.4. Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the
application thereof to any person or entity or any circumstance, is
found to be invalid or unenforceable in any jurisdiction, (a) a
suitable and equitable provision shall be substituted therefor in
order to carry out, so far as may be valid and enforceable, the intent
and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to
other persons, entities or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
SECTION 9.5. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and
all of which shall, taken together, be considered one and the same
agreement, it being understood that both parties need not sign the
same counterpart.
SECTION 9.6. Entire Agreement; No Third Party Beneficiaries. This
Agreement (a) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and (b) is not
intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
SECTION 9.7. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of England, regardless of
the laws that might otherwise govern under applicable principles of
conflicts of law.
52
SECTION 9.8. Consent to Jurisdiction. Each of Purchaser and
Seller irrevocably submits to the non- exclusive jurisdiction of the
High Court of Justice in England, for the purposes of any suit, action
or other proceeding arising out of this Agreement or any transaction
contemplated hereby.
SECTION 9.9. Schedules. The disclosure of any matter in any
Schedule to this Agreement shall be deemed to be a disclosure for all
purposes of this Agreement to which such matter could reasonably be
expected to be pertinent, but shall expressly not be deemed to
constitute an admission by Seller or Purchaser, or to otherwise imply,
that any such matter is material for purposes of this Agreement.
SECTION 9.10. Publicity. So long as this Agreement is in effect,
neither Seller nor Purchaser shall issue or cause the publication of
any press release or other public announcement with respect to the
transactions contemplated by this Agreement without the consent of the
other party, which consent shall not be unreasonably withheld or
withdrawn, except as may be required by law or the regulations of any
securities exchange. Any party hereto that is required to make a
public announcement shall promptly notify the other party hereto and
shall allow the other party hereto to comment on the text of such
announcement.
SECTION 9.11. Expenses. Whether or not the Closing takes place,
all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be borne by the party
incurring such expense.
SECTION 9.12. Assignment. Neither this Agreement nor any of the
rights or obligations hereunder shall be assigned by either of the
parties hereto without the prior written consent of the other party,
except that any party may assign all its rights and obligations to the
assignee of all or substantially all of the assets of such party or of
a division or business unit of such party, provided that such party
shall in no event be released from its obligations hereunder without
the prior written consent of the other party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of
and enforceable by the parties and their respective successors and
assigns.
53
SECTION 9.13. Restrictive Trade Practices ▇▇▇ ▇▇▇▇ ("RTPA"). This
Agreement and any arrangement of which it forms part and all the
rights and obligations of the parties under it will become effective
on the date of this Agreement except that should this Agreement or any
such arrangement be subject to registration under the RTPA then the
provisions which render it registrable will not come into effect until
the day after the date on which a copy and particulars of this
Agreement or any arrangement of which it forms part are furnished to
the Director General of Fair Trading for registration under the RTPA.
SECTION 9.14. Transitional Services Agreement. The parties agree
that as soon as practicable following the date hereof, the parties
hereto shall enter into a transitional services agreement for
transitional services that are reasonable and customary for this type
of transaction, which services shall be provided by Seller to
Purchaser.
AS WITNESS, this Agreement has been signed by the duly authorised
representatives of SELLER and PURCHASER the date first written above.
CINCINNATI MILACRON U.K.
LIMITED,
by
----------------------------
Name:
Title:
TRINOVA LIMITED,
by
----------------------------
Name:
Title:
54
Appendix A
As used in the Agreement, the following terms shall have the
following meanings:
"Account Designation Notice" shall have the meaning set forth in
Section 1.5.
"Accounts Receivable" shall mean all book debts, prepayments and
other accounts receivable of Seller on the Closing Date that primarily
relate to or arise primarily out of operations of the Transferred
Business other than accounts receivable from Seller or its affiliates.
"Acquired Assets" shall have the meaning set forth in Section
1.2(a).
"Acquired Books and Records" shall mean all books and records of
the Transferred Business located at the Scheduled Real Property.
"Acquired Contracts" shall mean all Contracts to which Seller is
a party or by which Seller is bound that primarily relate to, arise
primarily out of or are used primarily in connection with the
Transferred Business.
"Acquired Intellectual Property" shall mean all Intellectual
Property owned by Seller that primarily relates, arises primarily out
of or is used primarily in connection with the operations of the
Transferred Business.
"Acquired Inventory" shall mean Inventory on the Closing Date
other than Excluded Inventory.
"Acquired Know-how" shall mean all Know-how owned by Seller that
primarily relates to, arises primarily out of or is used primarily in
connection with the operations of the Transferred Business.
"Acquired Permits" shall mean all Permits owned by Seller that
primarily relate to, arise primarily out of or are used primarily in
connection with the operations of the Transferred Business.
An "affiliate" of any Person shall mean any other Person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under
55
common control with, such first Person. "Control" shall have the
meaning given to it by Section 840 of the Taxes Act.
"agreed form" shall mean in respect of any document, the form of
that document agreed by (and for the purpose of identification signed
by or on behalf of) the parties.
"Agreement" shall mean this Asset Purchase Agreement dated as of
December 15, 1995, between Seller and Purchaser, including the
Schedules, Exhibits and the Appendices hereto, as it may be amended
from time to time.
"Assumed Liabilities" shall have the meaning set forth in Section
1.4(a).
"Balance Sheet" shall have the meaning set forth in Section
3.1(c) hereto.
"Base Net Asset Value" shall mean the difference between (x) the
total assets shown on the Projected Balance Sheet and (y) the total
liabilities shown on the Projected Balance Sheet, excluding any
deferred tax assets and deferred tax liabilities.
"Biggleswade Plant" shall mean Seller's plant situated in ▇▇▇▇▇ ▇
▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, utilized for the sale
and repair of Electronic Controls and the manufacture of electrical
assemblies and electrical subassemblies.
"Books and Records" shall mean all books, ledgers, files,
invoices, customers' and suppliers' lists and operating records
related to or used in connection with the Transferred Business (other
than VAT records and other books and records which the Seller is
required by law to retain).
"Claim Notice" shall have the meaning set forth in Section 8.5.
"Closing" shall have the meaning set forth in Section 2.1.
"Closing Date" shall mean the date of the Closing.
56
"Closing Date Balance Sheet" shall mean the asset and liability
statement prepared, or caused to be prepared, by Seller in accordance
with Section 1.7(b) hereof.
"Closing Date Net Asset Value" shall mean the difference between
(x) the total assets shown on the Closing Date Balance Sheet properly
prepared in accordance with Section 1.7 and (y) the total liabilities
shown on such Closing Date Balance Sheet, excluding any deferred tax
assets and deferred tax liabilities.
"Companies Acts" shall mean the Companies Acts 1948 to 1989.
"Contracts" shall mean all contracts, leases, indentures,
agreements, commitments and all other legally binding arrangements,
whether oral or written.
The "CPA Firm" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP. or such other
firm of independent chartered accountants as to which Seller and
Purchaser shall mutually agree.
"Division" shall mean the Electronic Systems Division of Seller
which carries on business at and from the Biggleswade Plant.
"Electronic Controls" shall mean electronic computer controls and
associated Division developed software for such electronic computer
controls.
"Employment Regulations" shall have the meaning set forth in
Section 5.3.
"Environmental Laws" means any applicable laws, statutes,
regulations, orders or decrees issued, promulgated or entered into by
any Governmental Entity, relating to the environment, preservation or
reclamation of natural resources, or to the production, use, storage,
labelling, transportation management or disposal of Hazardous
Substances or the risks to employees arising therefrom.
"Environmental Liabilities" shall have the meaning set forth in
Section 8.3.
"Environmental Permits" means all permits, licenses or
authorizations from any Governmental Entity required under
57
Environmental Laws for the operation of the Transferred Business.
"Equipment" shall mean all machinery, plant, equipment, vehicles,
loose tools, patterns, jigs, furniture, fixtures, and fittings (other
than landlord's fixtures and fittings) of Seller, other than Excluded
Assets, that primarily relate to, arise primarily out of or are used
primarily in connection with the Transferred Business.
"Excluded Assets" shall have the meaning set forth in Section
1.2(b).
"Excluded Books and Records" shall mean all Books and Records not
primarily related to the Transferred Business.
"Excluded Inventory" shall mean (a) all Inventory not reflected
on the books and records of the Division on the Closing Date, (b) the
Free Issue Inventory and (c) Service Parts.
"Excluded Liabilities" shall have the meaning set forth in
Section 1.4(b).
"Excluded Tax Liabilities" shall mean all obligations or
liabilities of Seller for (A) Taxes attributable to the Transferred
Business for taxable periods ending on or before the Closing Date or
related to any income or gain from the transactions contemplated by
this Agreement or any deferred gain on any intercompany transactions
and (B) Taxes attributable to the Transferred Business for the portion
ending on the Closing Date of any taxable period that includes but
does not end on the Closing Date (in each case, other than the Real
Property Tax Liabilities). For the purposes of calculating the amount
of Taxes described in clause (B) of the preceding sentence, the Tax
Liabilities attributable to any such portion shall be (i) in the case
of any personal and intangible property Tax, the amount of any such
Tax for the entire taxable period multiplied by a fraction, the
denominator of which is the number of days during such taxable period
and the numerator of which is the number of days in such portion and
(ii) in the case of any other Tax (other than a Real Property Tax
Liability), the amount of such Tax attributable to the activities of
the Transferred Business occurring on or before the Closing Date.
58
"Free Issue Inventory" shall mean the parts, components and other
material and the copyright in drawings provided by MT Division to
Division and all other free issue materials of a similar nature
provided to Division by its customers.
"GAAP" shall mean United Kingdom generally accepted accounting
principles.
"Goodwill" shall mean the goodwill and connection of the
Transferred Business including the exclusive right of Purchaser to
carry on the Transferred Business in succession to Seller.
"Governmental Entity" shall mean any court, administrative agency
or commission or other governmental authority or instrumentality,
domestic or foreign.
"Hazardous Substances" means all hazardous or toxic substances,
wastes or chemicals, petroleum (including petroleum crude oil or any
fraction or by-product thereof) regulated pursuant to any
Environmental Law.
"▇▇▇▇▇▇▇ and Hurco Claims" shall have the meaning set forth in
Section 1.4(b)(xi).
"Indemnified Party" shall have the meaning set forth in Section 8.4.
"Indemnifying Party" shall have the meaning set forth in Section 8.5.
"Intellectual Property" shall mean the (i) Patents, (ii)
Trademarks, (iii) Trade Names, (iv) copyrights (other than the
copyright in the drawings referred to in the definition of "Free Issue
Inventory"), (v) service marks, (vi) shop rights, and (vii) license
rights.
"Inventory" means all raw materials, work in process, finished
goods, supplies, parts and other inventories held by Seller or any of
its affiliates at any location primarily related to the Transferred
Business.
"Know-how" shall mean all trade secrets, know-how (including
product know-how and use and application know- how), formulas,
processes, product designs, specifications, quality control
procedures, manufacturing, engineering and other drawings, technology,
technical information, safety
59
information, lab journals, engineering data and design and
engineering specifications, research records, market surveys and all
promotional literature, customer and supplier lists and similar data.
"Lien" shall mean any mortgage, claim, charge, lien, security
interest, easements, rights-of-way, pledges or other encumbrance.
"Loss" shall have the meaning set forth in Section 8.1.
"Machines" shall mean plastics machinery and machine tools.
"Material Contract" shall mean (A) the Contracts listed on
Schedule 3.1(k)(1) and (B) the Contracts listed on Schedule 3.1(k)(2)
that involve an amount in excess of $150,000.
"Material Know-how" shall have the meaning set forth in Section 3.1(i).
"Milacron" shall mean Cincinnati Milacron Inc., a Delaware
corporation and the parent corporation of Seller.
"Milacron Group" shall mean Milacron and its subsidiaries and
subsidiary undertakings whether direct or indirect.
"MT Division" shall mean the Machine Tools Division of Seller
which carries on business at and from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇.
"Notice Period" shall have the meaning set forth in Section 8.5.
"Patents" shall mean patents (including all reissues,
reexaminations, divisions, continuations, continuations in part and
extensions thereof), patent applications and patent disclosures
docketed and all other patent rights described in Schedule 3.1(i)(I).
"Permits" shall mean all permits, licenses, franchises, approvals
and authorizations by governmental or regulatory authorities or
bodies.
60
"Permitted Liens" shall have the meaning set forth in
Section 3.1(f).
"Person" shall mean any individual, corporation, partnership,
joint venture, trust, business association, organization, Governmental
Entity or other entity.
"Projected Balance Sheet" shall have the meaning set forth in
Section 1.7(a) hereof.
"Property" shall have the meaning set forth in Section 3.1(g).
"Purchase Price" shall have the meaning set forth in Section 1.5.
"Purchase Price Adjustment Amount" shall have the meaning set
forth in Section 1.7(e).
"Purchaser" shall have the meaning set forth in the heading of
the Agreement.
"Purchaser's Objection" shall have the meaning set forth in
Section 1.7(c).
"Real Property Tax Liabilities" shall mean the UK equivalent of
all US obligations or liabilities for real property taxes attributable
to the Scheduled Real Property for all taxable periods.
"Scheduled Real Property" shall mean the leasehold interest in
real property of Seller listed in Schedule 3.1(g), together with its
right, title and interest in all buildings, improvements, fixtures and
all other appurtenances thereto.
"Seller" shall have the meaning set forth in the heading of the
Agreement.
"Seller's Defined Benefit Plan" shall mean the Cincinnati
Milacron Pension Plan currently governed by a Definitive Deed and
Rules dated 14th February 1994 (as amended).
"Seller's Names" shall have the meaning set forth in Section 4.8.
61
"Service Parts" shall have the meaning set forth in Section 4.5.
"Subsidiary" shall have the meaning given to it by Section 736 of
the Companies ▇▇▇ ▇▇▇▇.
"Supply Agreement" shall mean the Electronic Control Supply
Agreement dated as of 15th December 1995 between Milacron and Trinova
whereby Trinova will supply products and services to Milacron.
"Tax" or "Taxes" shall mean all forms of taxation, charges,
duties, imposts, rates, levies and governmental charges (whether
national or local) in the nature of taxation whatsoever and whensoever
created, enacted or imposed and whether of the United Kingdom or
elsewhere (including VAT, Income Tax payable under the PAYE system and
National Insurance Contributions) together with all fines, penalties,
interest charges and surcharges connected therewith.
"Tax Claims" shall mean all rights to claims available to, or
being pursued by, Seller for (A) refunds of Taxes attributable to the
Transferred Business for taxable periods ending on or before the
Closing Date and (B) refunds of Taxes attributable to the Transferred
Business for the portion ending on the Closing Date of any taxable
period that includes but does not end on the Closing Date. For
purposes of calculating the amount of refunds of Taxes described in
clause (B) of the preceding sentence, the refunds of Taxes
attributable to any such portion shall be (i) in the case of any
refund of any real, personal and intangible property Tax, the amount
of any such refund for the entire taxable period multiplied by a
fraction, the denominator of which is the number of days during such
taxable period and the numerator of which is the number of days in
such portion and (ii) in the case of any refund of any other Tax, the
amount of any refund of Taxes attributable to the activities of the
Transferred Business occurring on or before the Closing Date.
"Taxes Act" shall mean the Income and Corporation Taxes ▇▇▇ ▇▇▇▇.
"Tax Return" shall mean any return (including information
returns), report, declaration or statement relating to Taxes and filed
with a taxing authority,
62
including any schedule or attachment thereto or amendment
thereof.
"Trademarks" shall mean trademarks, registrations thereof,
pending applications therefor and such unregistered rights as may
exist through use.
"Trade Names" shall mean trade names, brand marks, trade dress,
brand names, logos and all other names and slogans embodying business
or product goodwill for which no trademark registration has been
obtained and for which no application is pending.
"Transferred Business" shall mean all the business conducted by
the Division at the Biggleswade Plant inclusive of the Acquired Assets
and Assumed Liabilities and excluding the Excluded Liabilities and the
Excluded Assets.
"Transferred Employees" shall mean all employees of Seller who
shall become employees of Purchaser upon the transfer of the
Transferred Business as listed in Schedule 5.1 by virtue of the
application of the Employment Regulations.
"Trinova" shall mean Trinova Corporation, an Ohio corporation and
the parent corporation of Purchaser.
"US Agreement" shall mean the Asset Purchase Agreement dated as
of December 15, 1995, between Milacron and Trinova whereby Milacron
will sell certain assets and transfer certain liabilities to Trinova.
"VAT" shall mean Value Added Tax.
"VATA 1994" shall have the meaning set forth in Section 1.6.