Common use of Employees and Employee Benefit Matters Clause in Contracts

Employees and Employee Benefit Matters. (i) Except as set forth in Section 6(c)(vi) below and except as may be required by collective bargaining agreements in effect on the Closing Date, nothing in this Agreement (whether express or implied) shall in any way restrict the right of the Companies and/or their Subsidiaries to provide salaries, wages and benefits different from those provided to Current Employees (or employees of the non-U.S. Companies and their Subsidiaries) prior to the Closing Date. HarnCo and Sellers shall retain all Liability for post-retirement medical benefits and other benefits payable to Former Employees as of the Closing Date. Nothing in this Agreement shall be deemed to restrict or otherwise prevent or prohibit the Companies or their Subsidiaries from terminating after the Closing Date any employee of the Companies or their Subsidiaries, to the extent permitted by applicable law and any applicable collective bargaining agreement. Investor and MHE shall indemnify HarnCo and its Affiliates against any Adverse Consequences which HarnCo or its Affiliates may incur or suffer under the Worker Adjustment and Retraining Notification Act or any similar state law arising out of, or relating to, any actions taken by Investor, the Companies or their Subsidiaries with respect to Current Employees on or after the Closing Date. (ii) To the extent Current Employees or Former Employees participate in employee health, disability, dental or life insurance benefit plans which are sponsored by HII, HarnCo or one or more of the Sellers, then HII, HarnCo and Sellers shall retain liability for all claims filed thereunder prior to the Closing Date. The Companies and their Subsidiaries shall have liability for all claims filed under such plans by Current Employees on or after the Closing Date. HarnCo and Sellers shall retain Liability for all medical and disability benefits for all Current Employees who are on short-term or long-term disability as of the Closing Date as to such condition or disability. (iii) HarnCo and Sellers shall retain and assume the Liability for all workers' compensation claims filed prior to the Closing Date and the Companies and their Subsidiaries shall have Liability for all workers' compensation claims for all Current Employees filed on or after the Closing Date. (iv) HarnCo and its Affiliates shall retain responsibility for any claims by Former Employees arising out of or relating to the termination of their retiree medical benefits. The Companies and their Subsidiaries shall be responsible for any claims by Current Employees arising out of or relating to the termination of their retiree medical benefits ("Current Employee Claims"). HarnCo and its Affiliates shall control and manage the defense of any litigation brought against the Companies or their Subsidiaries in respect of Current Employee Claims and shall pay the costs and expenses of defending such litigation (but not any settlements or judgments in respect of such litigation); provided that the Companies and their Subsidiaries may retain separate co-counsel at their sole cost and expense to monitor the defense of such litigation; and provided further that the Companies and their Subsidiaries may elect to assume control of the defense (in which case (A) the Companies and their Subsidiaries shall be responsible for the payment of the costs and expenses of defending such litigation and (B) HarnCo and its Affiliates may retain separate co- counsel at their sole cost and expense to monitor such litigation). Neither the Companies or their Subsidiaries, on the one hand, nor HarnCo or its Affiliates, on the other hand, shall enter into any settlement of any litigation against the Companies or their Subsidiaries in respect of Current Employee Claims without the consent of the other, not to be unreasonably withheld. (v) On behalf of itself, MHE and the Companies, Investor agrees and acknowledges that (i) HarnCo does not consider retiree medical insurance to be a vested benefit and (ii) HarnCo has retained, and communicated to Former Employees and Current Employees, its right to change, modify or alter, in whole or in part, or to eliminate retiree medical benefits. With respect to retiree medical insurance, Investor shall permit HarnCo to monitor and consult with MHE concerning its planning for and presentations in collective bargaining negotiations with Local 1114. Until such time as HarnCo and its Affiliates cease to hold any ownership interest (including any interest in preferred shares) in MHE, Investor shall not (and shall not permit MHE or the Companies to) make any statement or admission in its collective bargaining negotiations or otherwise which is inconsistent with the first sentence of this Section 6(c)(v). (A) Effective as of the Closing Date, MHE shall adopt and maintain a defined contribution plan (the "MHE Defined Contribution Plan") intended to be qualified under Section 401(a) of the Code that has features concerning the timing and method of distributions such that a mandatory transfer from the Harnischfeger Industries Employees' Savings Plan (the "Harnischfeger Savings Plan") to the MHE Defined Contribution Plan of account balances attributable to the Current Employees will not cause a violation of Section 411(d)(6) of the Code, and that credits the Current Employees with all of their years of service credited under the Harnischfeger Savings Plan as of the Closing Date for all purposes under the MHE Defined Contribution Plan. As soon as practicable following the Closing Date, MHE shall submit the MHE Defined Contribution Plan to the IRS for a favorable determination that the MHE Defined Contribution Plan is qualified under Section 401(a) of the Code, and MHE shall take all such actions as may be necessary to obtain such favorable determination prior to the end of the remedial amendment period specified therefor in Section 401(b) of the Code. (B) In accordance with the applicable provisions of Section 414(l) of the Code, HarnCo and Sellers shall cause the assets of the Harnischfeger Savings Plan attributable to the accounts (whether or not vested) of each Current Employee (or the beneficiaries or alternate payee(s) of each Current Employee) to be transferred by the trustee of the Harnischfeger Savings Plan to the trustee of the MHE Defined Contribution Plan. The transfer of assets from the Harnischfeger Savings Plan to the MHE Defined Contribution Plan made pursuant to the terms of this Agreement shall be in cash or in kind (including any promissory notes or other evidences of indebtedness with respect to outstanding loans made to Current Employees), as mutually agreed by HarnCo, Sellers and MHE, or in cash and such promissory notes if no such agreement is made, and shall be made as of and as soon as practicable after a valuation date under the Harnischfeger Savings Plan occurring coincident with or immediately following the Closing Date, or as of such later valuation date as may be mutually selected by Sellers, HarnCo and MHE. Such transfer shall account appropriately for earnings and losses during the period from the applicable valuation date to the actual date of transfer (the "Transfer Date"). (C) From the Closing Date until the Transfer Date, MHE shall make continuous payroll deductions each pay period from the pay of each Current Employee who has a loan(s) outstanding from the Harnischfeger Savings Plan of amounts sufficient to pay the installment payments of principal and interest on each such loan as required by the promissory note or other evidence of indebtedness relating to such loan. Such deducted amounts shall be paid by MHE to the trustee of the Harnischfeger Savings Plan who shall accept such payments for a credit against such loans. (vii) HarnCo and Sellers shall retain the Harnischfeger Industries Salaried Employees' Retirement Plan and the Harnischfeger Industries Hourly Employees' Retirement Plan, and all Liabilities with respect to each such plan; provided, that effective as of the Closing Date, Current Employees will no longer accrue service for purposes of benefit accrual, vesting or early retirement subsidies. Neither Investor nor MHE shall assume the Harnischfeger Industries Salaried Employees' Retirement Plan or the Harnischfeger Industries Hourly Employees' Retirement Plan, or any Liabilities with respect to either such plan. (viii) The provisions of Exhibit L shall govern the treatment of the Xxxxxx Pension Scheme. (ix) From the Closing Date until the earlier of MHE's notice of termination to HarnCo or December 31, 1998 (such earlier date shall be the "End Date"), the Current Employees shall continue to participate in the medical, dental, life and long-term disability insurance benefit plans which are sponsored by HarnCo for the benefit of such Current Employees as of the Closing Date; provided that, except as otherwise set forth in this Section 6(c), MHE shall (and Investor and MHE shall cause the other Companies and their Subsidiaries to) pay to HarnCo and Sellers the cost of all benefits provided under such plans with respect to the Current Employees from the Closing Date until the End Date, including, but not limited to, (i) the amount of all claims paid thereunder on or prior to the End Date, (ii) the amount of any claims paid thereunder subsequent to the End Date, provided that any such claim was incurred on or prior to the End Date, and (iii) the cost of any administrative and support services provided with respect to the claims paid pursuant to clauses (i) and (ii). All payments of such costs shall be made not later than 30 days following the submission to the Companies of an invoice therefor by HII or HarnCo.

Employees and Employee Benefit Matters. As soon as practicable, but in no event later than thirty (30) days from the date hereof (the date of such written notice, the "Designated Employee Notice Date"), Mpower shall provide Parent and ICG with written notice (the "Designated Employee Notice") of each Business Employee Mpower intends to offer employment to prior to the Closing Date (the "Designated Employees"), it being understood and agreed that Mpower will offer employment to at least 73% of the Business Employees who have not voluntarily terminated their employment or been terminated for Cause prior to the applicable Designated Employee Notice Date and that Business Employees who are not set forth on the Designated Employee Notice shall not be engaged in the conduct of the Purchased Business after the Designated Employee Notice Date except as otherwise provided in the Management Agreement. Mpower shall, at any time from the Designated Employee Notice Date and prior to the Closing Date, on an individual Designated Employee basis, make an offer of employment (an "Employment Offer") to each Designated Employee on terms to be determined in the sole discretion of Mpower. The Selling Parties and Mpower acknowledge and agree that no Business Employee (including any Business Employee set forth on the Designated Employee Notice) shall be employed by Mpower or deemed to be employed by Mpower for any purposes prior to the date the Designated Employee commences employment with Mpower (each such Business Employee, an "Assumed Employee", and such date, an "Assumed Employee Employment Date"), notwithstanding the fact that each Business Employee shall be managed by Mpower and/or its Affiliates until the Closing Date in accordance with the terms and conditions of the Interim Management Agreement. On the earlier of (i) Except the Closing Date or (ii) the applicable Assumed Employee Employment Date, the Selling Parties shall pay to each Designated Employee the full amount of such Designated Employee's accrued salary and other amounts owed to such Designated Employees as of such date except, with respect to Assumed Employees, for amounts with respect to the liabilities set forth in Section 6(c)(vion Schedule 5.18. On or prior to the earlier of (a) below and except as may the Closing Date or (b) the applicable Assumed Employee Employment Date, the applicable Selling Party shall deliver to each Designated Employee a letter, reasonably satisfactory to Mpower, stating (x) that such Designated Employee's employment with such Selling Party shall be required by collective bargaining agreements in effect terminated on the Closing Date, nothing in this Agreement (whether express or impliedy) shall in that such Selling Party remains responsible for any way restrict the right of the Companies and/or their Subsidiaries to provide salaries, wages and benefits different from those provided to Current Employees (or employees of the non-U.S. Companies and their Subsidiaries) prior to the Closing Date. HarnCo and Sellers shall retain all Liability for post-retirement medical benefits claims and other benefits payable to Former Employees as of the Closing Date. Nothing in this Agreement shall be deemed to restrict or otherwise prevent or prohibit the Companies or their Subsidiaries from terminating after the Closing Date any employee of the Companies or their Subsidiaries, to the extent permitted by applicable law and any applicable collective bargaining agreement. Investor and MHE shall indemnify HarnCo and its Affiliates against any Adverse Consequences which HarnCo or its Affiliates may incur or suffer under the Worker Adjustment and Retraining Notification Act or any similar state law arising out of, or relating to, any actions taken by Investor, the Companies or their Subsidiaries liabilities with respect to Current Employees such Designated Employee's employment on or after the Closing Date. (ii) To the extent Current Employees or Former Employees participate in employee health, disability, dental or life insurance benefit plans which are sponsored by HII, HarnCo or one or more of the Sellers, then HII, HarnCo and Sellers shall retain liability for all claims filed thereunder prior to the Closing Date. The Companies and their Subsidiaries shall have liability for all claims filed under such plans by Current Employees on or after the Closing Date. HarnCo and Sellers shall retain Liability for all medical and disability benefits for all Current Employees who are on short-term or long-term disability as of the Closing Date as to such condition or disability. (iii) HarnCo and Sellers shall retain and assume the Liability for all workers' compensation claims filed prior to the Closing Date and the Companies and their Subsidiaries shall have Liability for all workers' compensation claims for all Current Employees filed on or after the Closing Date. (iv) HarnCo and its Affiliates shall retain responsibility for any claims by Former Employees arising out of or relating to the termination of their retiree medical benefits. The Companies and their Subsidiaries shall be responsible for any claims by Current Employees arising out of or relating to the termination of their retiree medical benefits ("Current Employee Claims"). HarnCo and its Affiliates shall control and manage the defense of any litigation brought against the Companies or their Subsidiaries in respect of Current Employee Claims and shall pay the costs and expenses of defending such litigation (but not any settlements or judgments in respect of such litigation); provided that the Companies and their Subsidiaries may retain separate co-counsel at their sole cost and expense to monitor the defense of such litigation; and provided further that the Companies and their Subsidiaries may elect to assume control of the defense (in which case (A) the Companies and their Subsidiaries shall be responsible for the payment of the costs and expenses of defending such litigation and (B) HarnCo and its Affiliates may retain separate co- counsel at their sole cost and expense to monitor such litigation). Neither the Companies or their Subsidiaries, on the one hand, nor HarnCo or its Affiliates, on the other hand, shall enter into any settlement of any litigation against the Companies or their Subsidiaries in respect of Current Employee Claims without the consent of the other, not to be unreasonably withheld. (v) On behalf of itself, MHE and the Companies, Investor agrees and acknowledges that (i) HarnCo does not consider retiree medical insurance to be a vested benefit and (ii) HarnCo has retained, and communicated to Former Employees and Current Employees, its right to change, modify or alterthan, in whole or in partthe event such Designated Employee accepts an offer of employment from Mpower, or to eliminate retiree medical benefits. With respect to retiree medical insurance, Investor shall permit HarnCo to monitor and consult with MHE concerning its planning for and presentations in collective bargaining negotiations with Local 1114. Until such time as HarnCo and its Affiliates cease to hold any ownership interest (including any interest in preferred shares) in MHE, Investor shall not (and shall not permit MHE or the Companies to) make any statement or admission in its collective bargaining negotiations or otherwise which is inconsistent with the first sentence of this Section 6(c)(v). (A) Effective as of the Closing Date, MHE shall adopt and maintain a defined contribution plan (the "MHE Defined Contribution Plan") intended to be qualified under Section 401(a) of the Code that has features concerning the timing and method of distributions such that a mandatory transfer from the Harnischfeger Industries Employees' Savings Plan (the "Harnischfeger Savings Plan") to the MHE Defined Contribution Plan of account balances attributable to the Current Employees will not cause a violation of Section 411(d)(6) of the Code, and that credits the Current Employees with all of their years of service credited under the Harnischfeger Savings Plan as of the Closing Date for all purposes under the MHE Defined Contribution Plan. As soon as practicable following the Closing Date, MHE shall submit the MHE Defined Contribution Plan to the IRS for a favorable determination that the MHE Defined Contribution Plan is qualified under Section 401(a) of the Code, and MHE shall take all such actions as may be necessary to obtain such favorable determination prior to the end of the remedial amendment period specified therefor in Section 401(b) of the Code. (B) In accordance with the applicable provisions of Section 414(l) of the Code, HarnCo and Sellers shall cause the assets of the Harnischfeger Savings Plan attributable to the accounts (whether or not vested) of each Current Employee (or the beneficiaries or alternate payee(s) of each Current Employee) to be transferred by the trustee of the Harnischfeger Savings Plan to the trustee of the MHE Defined Contribution Plan. The transfer of assets from the Harnischfeger Savings Plan to the MHE Defined Contribution Plan made pursuant to the terms of this Agreement shall be in cash or in kind (including any promissory notes or other evidences of indebtedness with respect to outstanding loans made to Current Employees), as mutually agreed by HarnCo, Sellers and MHE, or in cash and such promissory notes if no such agreement is made, and shall be made as of and as soon as practicable after a valuation date under the Harnischfeger Savings Plan occurring coincident with or immediately following the Closing Date, or as of such later valuation date as may be mutually selected by Sellers, HarnCo and MHE. Such transfer shall account appropriately for earnings and losses during the period from the applicable valuation date to the actual date of transfer (the "Transfer Date"). (C) From the Closing Date until the Transfer Date, MHE shall make continuous payroll deductions each pay period from the pay of each Current Employee who has a loan(s) outstanding from the Harnischfeger Savings Plan of amounts sufficient to pay the installment payments of principal and interest on each such loan as required by the promissory note or other evidence of indebtedness relating to such loan. Such deducted amounts shall be paid by MHE to the trustee of the Harnischfeger Savings Plan who shall accept such payments for a credit against such loans. (vii) HarnCo and Sellers shall retain the Harnischfeger Industries Salaried Employees' Retirement Plan and the Harnischfeger Industries Hourly Employees' Retirement Plan, and all Liabilities with respect to each such plan; provided, that effective as of the Closing Date, Current Employees will no longer accrue service for purposes of benefit accrual, vesting or early retirement subsidies. Neither Investor nor MHE shall assume the Harnischfeger Industries Salaried Employees' Retirement Plan or the Harnischfeger Industries Hourly Employees' Retirement Plan, or any Liabilities with respect to either such plan. (viii) The provisions of Exhibit L shall govern the treatment of the Xxxxxx Pension Scheme. (ix) From the Closing Date until the earlier of MHE's notice of termination to HarnCo or December 31, 1998 (such earlier date shall be the "End Date"), the Current Employees shall continue to participate in the medical, dental, life and long-term disability insurance benefit plans which are sponsored by HarnCo for the benefit of such Current Employees as of the Closing Date; provided that, except as otherwise set forth in this Section 6(c), MHE shall (and Investor and MHE shall cause the other Companies and their Subsidiaries to) pay to HarnCo and Sellers the cost of all benefits provided under such plans with respect to the Current Employees benefits set forth on Schedule 5.18 and (z) that Mpower has agreed to provide the Designated Employee, in the event such Designated Employee accepts an offer of employment from Mpower, with the Closing Date until benefits set forth in the End DateEmployment Offer. To the extent that service is relevant for the purposes of eligibility to receive any benefits provided by Mpower to their employees, including, but not limited to, Mpower shall recognize (i) the amount of all claims paid thereunder on or prior to the End Date, (ii) the amount of any claims paid thereunder subsequent to the End Date, provided that any such claim was incurred on or prior to the End Date, and (iii) the cost of any administrative and support services provided same extent recognized by Mpower with respect to their other employees) all service of the claims paid pursuant to clauses (i) and (ii). All payments Designated Employees with the Selling Parties or any Affiliate or predecessor thereof, except as would cause duplication of benefits; provided, however, that any specific terms set forth in such Assumed Employee's Employment Offer shall supersede any benefits that would otherwise be recognized as a result of the service of such costs Assumed Employee with the Selling Parties. Notwithstanding anything else in this Agreement, no Business Employee who does not receive and accept an Employment Offer from Mpower and commence employment with Mpower shall be made not later than 30 days following the submission to the Companies of become an invoice therefor by HII or HarnCoAssumed Employee.

Employees and Employee Benefit Matters. (a) Effective as of the Closing, each employee of the Business who is actively employed in the Business on the Closing and not on layoff, leave of absence, xxxxxxx'x compensation leave or any other leave other than normal vacation will cease to be an employee of Seller and will become an employee of Buyer ("Transferred Employee"). Seller will neither employ nor offer employment to any Transferred Employee during the eighteen (18) month period following the Closing without the prior written consent of Buyer. Any employee of the Business at the Closing who is not a Transferred Employee at such time by reason of not being actively employed in the Business will cease to be an employee of Seller and will become an employee of Buyer effective as of the date he or she returns to the Business from layoff or leave, as the case may be, and such employee shall become a Transferred Employee effective as of such date. (b) Seller currently maintains the following pension plans covering employees of the Business: the Pension Plan for Salaried Employees of SKF USA Inc. (the "Salaried Plan") covering designated salaried and other employees of Seller, including salaried employees of the Business, and the Pension Plan for Hourly Employees of SKF USA Inc. ("Seller's Union Plan") covering hourly employees of the Business who are represented by the Union. (i) Except With respect to the Salaried Plan: (1) Within thirty (30) days after, and effective as set forth in Section 6(c)(viof, the Closing, Seller shall execute such amendments to the Salaried Plan as are necessary to provide that: (i) below and except as may be required by collective bargaining agreements in effect on the Closing Dateany individual, nothing in this Agreement (whether express or implied) shall in any way restrict the right including a Transferred Employee, who is an employee of the Companies and/or their Subsidiaries to provide salaries, wages and benefits different from those provided to Current Employees (or employees of the non-U.S. Companies and their Subsidiaries) Business immediately prior to the Closing Dateand who is covered by the Salaried Plan (a "Salaried Plan Employee") shall cease to be covered by the Salaried Plan as of the Closing except as to benefits accrued prior to the Closing; and (ii) the accrued benefit under the Salaried Plan of any Salaried Plan Employee shall become fully vested as of the Closing. HarnCo To the extent permitted by law, each Salaried Plan Employee shall be deemed to have terminated employment with the Seller as of the Closing for purposes of the Salaried Plan, and Sellers the vested accrued benefit of each such Employee shall retain all Liability thereafter be distributable in accordance with the terms of the Salaried Plan. (2) There shall be no transfer of assets or liabilities of the Salaried Plan to any retirement plan maintained by Buyer; neither Buyer nor any of its affiliates shall become a sponsor of, or otherwise maintain, the Salaried Plan; and Buyer acknowledges that neither Buyer nor any of its affiliates shall have any right, title, or interest in any of the assets of the Salaried Plan. (ii) With respect to Seller's Union Plan: (1) Within thirty (30) days after, and effective as of, the Closing, Seller shall execute such amendments to Seller's Union Plan as are necessary to provide that any Transferred Employee who is covered by Seller's Union Plan (a "Union Plan Employee") and any other individual who is an employee of the Business immediately prior to the Closing and who is covered by Seller's Union Plan shall cease to be covered by Seller's Union Plan as of the Closing, except (to the extent required by Section 7.07(b)(ii)(5) or not inconsistent with Section 7.07(b)(ii)(3)) as to benefits accrued prior to the Closing. (2) As soon as practicable after (and no later than 30 days after), and effective as of, the Closing, Buyer shall establish a defined benefit pension plan and trust ("Buyer's Union Plan") for post-retirement medical benefits the benefit of the Union Plan Employees, which shall be intended to qualify and other benefits payable to Former be exempt from tax under sections 401(a) and 501(a) of the Code, and Buyer shall apply to the Internal Revenue Service for a determination letter with respect thereto. Buyer's Union Plan shall cover the Union Plan Employees as of the Closing Dateor, in the case of any Union Plan Employee who becomes a Transferred Employee after the Closing by reason of the last sentence of Section 7.07(a), as of the date such employee becomes a Transferred Employee, and shall provide such participants with benefits substantially similar to those provided by Seller's Union Plan. Nothing Buyer's Union Plan shall provide the Union Plan Employees full credit for eligibility, vesting, and (except with respect to any of such employees who make the election described in Section 7.07(b)(ii)(5)) benefit accrual purposes with respect to all service with Seller to the extent such service was credited under the terms of Seller's Union Plan. (3) As soon as practicable following Seller's receipt of written evidence of the adoption of Buyer's Union Plan and of a copy of a favorable determination letter issued by the Internal Revenue Service with respect to Buyer's Union Plan, and except as otherwise provided in Section 7.07(b)(ii)(5), Seller shall direct the trustees of Seller's Union Plan to transfer from the trust under Seller's Union Plan to the trust under Buyer's Union Plan an amount which shall be determined by a certified actuary designated by the Seller ("Seller's Actuary") and reasonably acceptable to an actuary designated by the Buyer ("Buyer's Actuary") equal to: (i) the present value of all accrued benefits, including ancillary benefits, under Seller's Union Plan as of the Closing with respect to the Union Plan Employees (other than those making the election described in Section 7.07(b)(ii)(5)); plus (ii) interest accrued from the Closing to the date of transfer on the amount described in clause (i), at a rate equal to 7 1/2 percent per annum, from the Closing to the date of transfer; less (iii) the amount of any benefit payments made to the Union Plan Employees (other than those making the election described in Section 7.07(b)(ii)(5)) from Seller's Union Plan after the Closing and prior to the date of the transfer to Buyer's Union Plan, adjusted (as the interest rate described in clause (ii) above) to reflect the time of such payments, and reasonable administrative costs and expenses incurred during such period. The calculation of the present value of the benefits described in clause (i) above shall be determined using assumptions described on Schedule 7.07(b). Notwithstanding any other provision in this Agreement Section 7.07(b)(ii)(3), the amount of assets to be transferred pursuant to this Section 7.07(b)(ii)(3), shall satisfy the requirements of section 414(1) of the Code and section 208 of the Employee Retirement Income Security Act of 1974. (4) At the time of transfer of the amount set forth in Section 7.07(b)(ii)(3) and except as otherwise provided in Section 7.07(b)(ii)(5), Buyer and Buyer's Union Plan shall assume all liabilities for all accrued benefits, including all ancillary benefits, under Seller's Union Plan in respect of the Union Plan Employees, and Seller and Seller's Union Plan shall be relieved of all liabilities for such benefits, including any liability under any collective bargaining agreement to provide such benefits. Upon the transfer of assets in accordance with Section 7.07(b)(ii)(3), Buyer agrees to indemnify and hold harmless Seller, its officers, directors, employees, agents, and affiliates from and against any and all costs, damages, losses, expenses, or other liabilities arising out of or related to Buyer's obligations under this Section 7.07(b)(ii) or Buyer's Union Plan, including benefits accrued by the Union Plan Employees prior to the Closing which are to be provided by Buyer's Union Plan; provided, however, that Buyer shall not indemnify or hold harmless such parties with respect to any costs, damages, losses, expenses, or other liabilities that result, directly or indirectly, from violations of law by such parties which occurred prior to the Closing. (5) Notwithstanding any other provision of this Section 7.07(b)(ii) to the contrary, there shall be no transfer under this Section 7.07(b)(ii) of any assets or liabilities with respect to the vested accrued benefit of any of the Union Plan Employees who are eligible for retirement benefits as of the Closing Date under Seller's Union Plan and who so elect by notifying Seller in writing within 30 days after the Closing. To the extent permitted by Applicable Law, each such employee shall be deemed to restrict or otherwise prevent or prohibit have terminated employment with the Companies or their Subsidiaries from terminating after Seller as of the Closing Date for purposes of Seller's Union Plan, and his vested accrued benefit shall thereafter be distributable in accordance with the terms of Seller's Union Plan. (6) Seller and Buyer shall provide each other with such records and information as may be necessary or appropriate to carry out their obligations under this Section 7.07(b)(ii) or for the purposes of administering Buyer's Union Plan (including, without limitation, schedules of the Union Plan Employees and their service credits and accrued benefits under the Seller's Union Plan), and they shall cooperate in the filing of documents required in connection with the transfer of assets and liabilities described herein. Notwithstanding anything contained herein to the contrary, no such transfer shall take place until the 31st day following the filing of any Form 5310-A required in connection therewith. (c) Seller currently maintains the Pre-Tax Accumulation of Capital for Employees Plan ("Seller's 401(k) Plan") for its eligible employees, including eligible employees of the Business. With respect to Seller's 401(k) Plan: (i) Within thirty (30) days after, and effective as of, the Closing, Seller shall execute such amendments to Seller's 401(k) Plan as are necessary to provide that: (1) any individual, including a Transferred Employee, who is an employee of the Companies or their SubsidiariesBusiness immediately prior to the Closing and who is covered by Seller's 401(k) Plan (a "401(k) Plan Employee") shall cease to be covered by Seller's 401(k) Plan as of the Closing except as to benefits accrued with respect to periods prior to the Closing; and (2) the accrued benefit under Seller's 401(k) Plan of any 401(k) Plan Employee shall, to the extent permitted by applicable law and any applicable collective bargaining agreement. Investor and MHE shall indemnify HarnCo and its Affiliates against any Adverse Consequences which HarnCo or its Affiliates may incur or suffer under the Worker Adjustment and Retraining Notification Act or any similar state law arising out ofApplicable Law, or relating to, any actions taken by Investor, the Companies or their Subsidiaries with respect be distributable to Current Employees on or such employee after the Closing Date. (ii) To the extent Current Employees or Former Employees participate in employee health, disability, dental or life insurance benefit plans which are sponsored by HII, HarnCo or one or more of the Sellers, then HII, HarnCo and Sellers shall retain liability for all claims filed thereunder prior to the Closing Date. The Companies and their Subsidiaries shall have liability for all claims filed under such plans by Current Employees on or after the Closing Date. HarnCo and Sellers shall retain Liability for all medical and disability benefits for all Current Employees who are on short-term or long-term disability as of the Closing Date as to such condition or disability. (iii) HarnCo and Sellers shall retain and assume the Liability for all workers' compensation claims filed prior to the Closing Date and the Companies and their Subsidiaries shall have Liability for all workers' compensation claims for all Current Employees filed on or after the Closing Date. (iv) HarnCo and its Affiliates shall retain responsibility for any claims by Former Employees arising out of or relating to the termination of their retiree medical benefits. The Companies and their Subsidiaries shall be responsible for any claims by Current Employees arising out of or relating to the termination of their retiree medical benefits ("Current Employee Claims"). HarnCo and its Affiliates shall control and manage the defense of any litigation brought against the Companies or their Subsidiaries in respect of Current Employee Claims and shall pay the costs and expenses of defending such litigation (but not any settlements or judgments in respect of such litigation); provided that the Companies and their Subsidiaries may retain separate co-counsel at their sole cost and expense to monitor the defense of such litigation; and provided further that the Companies and their Subsidiaries may elect to assume control of the defense (in which case (A) the Companies and their Subsidiaries shall be responsible for the payment of the costs and expenses of defending such litigation and (B) HarnCo and its Affiliates may retain separate co- counsel at their sole cost and expense to monitor such litigation). Neither the Companies or their Subsidiaries, on the one hand, nor HarnCo or its Affiliates, on the other hand, shall enter into any settlement of any litigation against the Companies or their Subsidiaries in respect of Current Employee Claims without the consent of the other, not to be unreasonably withheld. (v) On behalf of itself, MHE and the Companies, Investor agrees and acknowledges that (i) HarnCo does not consider retiree medical insurance to be a vested benefit and (ii) HarnCo has retained, and communicated to Former Employees and Current Employees, its right to change, modify or alter, in whole or in part, or to eliminate retiree medical benefits. With respect to retiree medical insurance, Investor shall permit HarnCo to monitor and consult with MHE concerning its planning for and presentations in collective bargaining negotiations with Local 1114. Until such time as HarnCo and its Affiliates cease to hold any ownership interest (including any interest in preferred shares) in MHE, Investor shall not (and shall not permit MHE or the Companies to) make any statement or admission in its collective bargaining negotiations or otherwise which is inconsistent with the first sentence of this Section 6(c)(v). (A) Effective as of the Closing Date, MHE shall adopt and maintain a defined contribution plan (the "MHE Defined Contribution Plan") intended to be qualified under Section 401(a) of the Code that has features concerning the timing and method of distributions such that a mandatory transfer from the Harnischfeger Industries Employees' Savings Plan (the "Harnischfeger Savings Plan") to the MHE Defined Contribution Plan of account balances attributable to the Current Employees will not cause a violation of Section 411(d)(6) of the Code, and that credits the Current Employees with all of their years of service credited under the Harnischfeger Savings Plan as of the Closing Date for all purposes under the MHE Defined Contribution Plan. As soon as practicable following the Closing Date, MHE shall submit the MHE Defined Contribution Plan to the IRS for a favorable determination that the MHE Defined Contribution Plan is qualified under Section 401(a) of the Code, and MHE shall take all such actions as may be necessary to obtain such favorable determination prior to the end of the remedial amendment period specified therefor in Section 401(b) of the Code. (B) In accordance with the applicable provisions of Section 414(l) of the Code, HarnCo and Sellers shall cause the assets of the Harnischfeger Savings Plan attributable to the accounts (whether or not vested) of each Current Employee (or the beneficiaries or alternate payee(s) of each Current Employee) to be transferred by the trustee of the Harnischfeger Savings Plan to the trustee of the MHE Defined Contribution Plan. The transfer of assets from the Harnischfeger Savings Plan to the MHE Defined Contribution Plan made pursuant to the terms of this Agreement shall be in cash or in kind (including any promissory notes or other evidences of indebtedness with respect to outstanding loans made to Current EmployeesCode section 401(k)(10), as mutually agreed by HarnCo, Sellers and MHE, or in cash and such promissory notes if no such agreement is made, and shall be made as of and as soon as practicable after a valuation date under the Harnischfeger Savings Plan occurring coincident with or immediately following the Closing Date, or as of such later valuation date as may be mutually selected by Sellers, HarnCo and MHE. Such transfer shall account appropriately for earnings and losses during the period from the applicable valuation date to the actual date of transfer (the "Transfer Date"). (C) From the Closing Date until the Transfer Date, MHE shall make continuous payroll deductions each pay period from the pay of each Current Employee who has a loan(s) outstanding from the Harnischfeger Savings Plan of amounts sufficient to pay the installment payments of principal and interest on each such loan as required by the promissory note or other evidence of indebtedness relating to such loan. Such deducted amounts shall be paid by MHE to the trustee of the Harnischfeger Savings Plan who shall accept such payments for a credit against such loans. (vii) HarnCo and Sellers shall retain the Harnischfeger Industries Salaried Employees' Retirement Plan and the Harnischfeger Industries Hourly Employees' Retirement Plan, and all Liabilities with respect to each such plan; provided, that effective as of the Closing Date, Current Employees will no longer accrue service for purposes of benefit accrual, vesting or early retirement subsidies. Neither Investor nor MHE shall assume the Harnischfeger Industries Salaried Employees' Retirement Plan or the Harnischfeger Industries Hourly Employees' Retirement Plan, or any Liabilities with respect to either such plan. (viii) The provisions of Exhibit L shall govern the treatment of the Xxxxxx Pension Scheme. (ix) From the Closing Date until the earlier of MHE's notice of termination to HarnCo or December 31, 1998 (such earlier date shall be the "End Date"), the Current Employees shall continue to participate in the medical, dental, life and long-term disability insurance benefit plans which are sponsored by HarnCo for the benefit of such Current Employees as of the Closing Date; provided that, except as otherwise set forth in this Section 6(c), MHE shall (and Investor and MHE shall cause the other Companies and their Subsidiaries to) pay to HarnCo and Sellers the cost of all benefits provided under such plans with respect to the Current Employees from the Closing Date until the End Date, including, but not limited to, (i) the amount of all claims paid thereunder on or prior to the End Date, (ii) the amount of any claims paid thereunder subsequent to the End Date, provided that any such claim was incurred on or prior to the End Date, and (iii) the cost of any administrative and support services provided with respect to the claims paid pursuant to clauses (i) and (ii). All payments of such costs shall be made not later than 30 days following the submission to the Companies of an invoice therefor by HII or HarnCo.

Employees and Employee Benefit Matters. (i) Except as Set forth on Schedule 6.7 hereto is a list of each Business Employee which, assuming the truth and accuracy of the information set forth in Section 6(c)(vi) below and except on Schedule 4.9(a), the Purchasers intend to hire as may be required by collective bargaining agreements in effect on of the First Closing Date, nothing it being understood and agreed that Business Employees who are not set forth on Schedule 6.7 shall not be engaged in this Agreement the conduct of the Business after the date hereof except as otherwise provided in the Management Agreement. The Seller Companies and the Purchasers acknowledge and agree that no Business Employee (whether express or impliedincluding any Business Employee set forth on Schedule 6.7) shall in be employed by the Purchasers or deemed to be employed by the Purchasers for any way restrict the right of the Companies and/or their Subsidiaries to provide salaries, wages and benefits different from those provided to Current Employees (or employees of the non-U.S. Companies and their Subsidiaries) purposes prior to the First Closing Date, notwithstanding the fact that each Business Employee set forth on Schedule 6.7 shall be managed by FDN and/or its Affiliates until the First Closing Date in accordance with the terms and conditions of the Management Agreement. HarnCo and Sellers On the First Closing Date, the Seller Companies shall retain all Liability for post-retirement medical benefits pay to each Business Employees listed on Schedule 6.7 that the Purchasers hire as of the First Closing Date the full amount of such Business Employee's accrued salary, vacation pay and other benefits payable amounts owed to Former such Business Employees as of the First Closing Date. Nothing To the extent that service is relevant for the purposes of eligibility in this Agreement any benefits provided by the Purchasers to their employees, the Purchasers shall be deemed to restrict or otherwise prevent or prohibit the Companies or their Subsidiaries from terminating after the Closing Date any employee of the Companies or their Subsidiaries, recognize (to the same extent permitted recognized by applicable law and any applicable collective bargaining agreement. Investor and MHE shall indemnify HarnCo and its Affiliates against any Adverse Consequences which HarnCo or its Affiliates may incur or suffer under the Worker Adjustment and Retraining Notification Act or any similar state law arising out of, or relating to, any actions taken by Investor, the Companies or their Subsidiaries Purchasers with respect to Current their other employees) all service of the Business Employees listed on Schedule 6.7 with the Seller Companies or any Affiliate or predecessor thereof. The Purchasers will not hire any Business Employees not listed on Schedule 6.7 for a period of 90 Days after the Closing Date. (ii) To the extent Current Employees or Former Employees participate in employee health, disability, dental or life insurance benefit plans which are sponsored by HII, HarnCo or one or more of the Sellers, then HII, HarnCo and Sellers shall retain liability for all claims filed thereunder prior to the Closing Date. The Companies and their Subsidiaries shall have liability for all claims filed under such plans by Current Employees on or after the Closing Date. HarnCo and Sellers shall retain Liability for all medical and disability benefits for all Current Employees who are on short-term or long-term disability as of the First Closing Date as unless the Purchasers reimburse, or cause such Business Employee to reimburse, the Seller Companies for the full value of all severance or other benefits paid to such condition or disability. (iii) HarnCo and Sellers shall retain and assume the Liability for all workers' compensation claims filed prior to the Closing Date and the Companies and their Subsidiaries shall have Liability for all workers' compensation claims for all Current Employees filed on or after the Closing Date. (iv) HarnCo and its Affiliates shall retain responsibility for any claims by Former Employees arising out of or relating to the termination of their retiree medical benefits. The Companies and their Subsidiaries shall be responsible for any claims by Current Employees arising out of or relating to the termination of their retiree medical benefits ("Current Business Employee Claims"). HarnCo and its Affiliates shall control and manage the defense of any litigation brought against the Companies or their Subsidiaries in respect of Current Employee Claims and shall pay the costs and expenses of defending such litigation (but not any settlements or judgments in respect of such litigation); provided that the Companies and their Subsidiaries may retain separate co-counsel at their sole cost and expense to monitor the defense of such litigation; and provided further that the Companies and their Subsidiaries may elect to assume control of the defense (in which case (A) the Companies and their Subsidiaries shall be responsible for the payment of the costs and expenses of defending such litigation and (B) HarnCo and its Affiliates may retain separate co- counsel at their sole cost and expense to monitor such litigation). Neither the Companies or their Subsidiaries, on the one hand, nor HarnCo or its Affiliates, on the other hand, shall enter into any settlement of any litigation against the Companies or their Subsidiaries in respect of Current Employee Claims without the consent of the other, not to be unreasonably withheld. (v) On behalf of itself, MHE and the Companies, Investor agrees and acknowledges that (i) HarnCo does not consider retiree medical insurance to be a vested benefit and (ii) HarnCo has retained, and communicated to Former Employees and Current Employees, its right to change, modify or alter, in whole or in part, or to eliminate retiree medical benefits. With respect to retiree medical insurance, Investor shall permit HarnCo to monitor and consult with MHE concerning its planning for and presentations in collective bargaining negotiations with Local 1114. Until such time as HarnCo and its Affiliates cease to hold any ownership interest (including any interest in preferred shares) in MHE, Investor shall not (and shall not permit MHE or the Companies to) make any statement or admission in its collective bargaining negotiations or otherwise which is inconsistent with the first sentence of this Section 6(c)(v). (A) Effective as of the Closing Date, MHE shall adopt and maintain a defined contribution plan (the "MHE Defined Contribution Plan") intended to be qualified under Section 401(a) of the Code that has features concerning the timing and method of distributions such that a mandatory transfer from the Harnischfeger Industries Employees' Savings Plan (the "Harnischfeger Savings Plan") to the MHE Defined Contribution Plan of account balances attributable to the Current Employees will not cause a violation of Section 411(d)(6) of the Code, and that credits the Current Employees with all of their years of service credited under the Harnischfeger Savings Plan as of the Closing Date for all purposes under the MHE Defined Contribution Plan. As soon as practicable following the Closing Date, MHE shall submit the MHE Defined Contribution Plan to the IRS for a favorable determination that the MHE Defined Contribution Plan is qualified under Section 401(a) of the Code, and MHE shall take all such actions as may be necessary to obtain such favorable determination prior to the end of the remedial amendment period specified therefor in Section 401(b) of the Code. (B) In accordance with the applicable provisions of Section 414(l) of the Code, HarnCo and Sellers shall cause the assets of the Harnischfeger Savings Plan attributable to the accounts (whether or not vested) of each Current Employee (or the beneficiaries or alternate payee(s) of each Current Employee) to be transferred by the trustee of the Harnischfeger Savings Plan to the trustee of the MHE Defined Contribution Plan. The transfer of assets from the Harnischfeger Savings Plan to the MHE Defined Contribution Plan made pursuant to the terms of this Agreement shall be in cash or in kind (including any promissory notes or other evidences of indebtedness with respect to outstanding loans made to Current Employees), as mutually agreed by HarnCo, Sellers and MHE, or in cash and such promissory notes if no such agreement is made, and shall be made as any change of and as soon as practicable after a valuation date under the Harnischfeger Savings Plan occurring coincident with or immediately following the Closing Date, or as of such later valuation date as may be mutually selected by Sellers, HarnCo and MHE. Such transfer shall account appropriately for earnings and losses during the period employment resulting from the applicable valuation date to the actual date of transfer (the "Transfer Date"). (C) From the Closing Date until the Transfer Date, MHE shall make continuous payroll deductions each pay period from the pay of each Current Employee who has a loan(s) outstanding from the Harnischfeger Savings Plan of amounts sufficient to pay the installment payments of principal and interest on each such loan as required Transactions contemplated by the promissory note or other evidence of indebtedness relating to such loan. Such deducted amounts shall be paid by MHE to the trustee of the Harnischfeger Savings Plan who shall accept such payments for a credit against such loans. (vii) HarnCo and Sellers shall retain the Harnischfeger Industries Salaried Employees' Retirement Plan this Agreement and the Harnischfeger Industries Hourly Employees' Retirement Plan, and all Liabilities with respect to each such plan; provided, that effective as of the Closing Date, Current Employees will no longer accrue service for purposes of benefit accrual, vesting or early retirement subsidies. Neither Investor nor MHE shall assume the Harnischfeger Industries Salaried Employees' Retirement Plan or the Harnischfeger Industries Hourly Employees' Retirement Plan, or any Liabilities with respect to either such planOperative Agreements. (viii) The provisions of Exhibit L shall govern the treatment of the Xxxxxx Pension Scheme. (ix) From the Closing Date until the earlier of MHE's notice of termination to HarnCo or December 31, 1998 (such earlier date shall be the "End Date"), the Current Employees shall continue to participate in the medical, dental, life and long-term disability insurance benefit plans which are sponsored by HarnCo for the benefit of such Current Employees as of the Closing Date; provided that, except as otherwise set forth in this Section 6(c), MHE shall (and Investor and MHE shall cause the other Companies and their Subsidiaries to) pay to HarnCo and Sellers the cost of all benefits provided under such plans with respect to the Current Employees from the Closing Date until the End Date, including, but not limited to, (i) the amount of all claims paid thereunder on or prior to the End Date, (ii) the amount of any claims paid thereunder subsequent to the End Date, provided that any such claim was incurred on or prior to the End Date, and (iii) the cost of any administrative and support services provided with respect to the claims paid pursuant to clauses (i) and (ii). All payments of such costs shall be made not later than 30 days following the submission to the Companies of an invoice therefor by HII or HarnCo.