EXHIBIT 2.1
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STOCK PURCHASE AGREEMENT
BETWEEN
THE SELLERS IDENTIFIED HEREIN
AND
TECUMSEH PRODUCTS COMPANY
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Dated as of November 27, 2002
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TABLE OF CONTENTS
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ARTICLE 1 SALE AND PURCHASE OF SHARES.......................................................1
1.1 Sale and Purchase of Shares...........................................................1
ARTICLE 2 PURCHASE PRICE AND PAYMENT........................................................2
2.1 Purchase Price........................................................................2
2.2 Adjustment of Initial Purchase Price..................................................2
2.3 Payment of Initial and Final Purchase Price...........................................6
2.4 Allocation of Final Purchase Price....................................................6
2.5 Elkhorn and Ozark Adjustment..........................................................6
2.6 Pension Plan Escrow...................................................................7
ARTICLE 3 CLOSING AND TERMINATION...........................................................7
3.1 Closing Date..........................................................................7
3.2 Termination of Agreement..............................................................7
3.3 Procedure Upon Termination............................................................8
3.4 Effect of Termination.................................................................8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF INVENSYS AND THE SELLERS........................8
4.1 Organization and Good Standing........................................................8
4.2 Authorization of Agreement............................................................9
4.3 Capitalization........................................................................9
4.4 Subsidiaries..........................................................................9
4.5 Corporate Records....................................................................10
4.6 Conflicts; Consents of Third Parties.................................................10
4.7 Ownership and Transfer of Shares.....................................................11
4.8 Financial Statements.................................................................11
4.9 No Undisclosed Liabilities...........................................................12
4.10 Absence of Certain Developments......................................................12
4.11 Certain Tax Matters..................................................................13
4.12 Real Property........................................................................16
4.13 Tangible Personal Property...........................................................16
4.14 Technology and Intellectual Property.................................................17
4.15 Material Contracts...................................................................18
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TABLE OF CONTENTS
(CONTINUED)
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4.16 Employee Benefits....................................................................19
4.17 Labor................................................................................22
4.18 Litigation...........................................................................22
4.19 Compliance with Laws; Governmental Authorizations....................................23
4.20 Environmental Matters................................................................24
4.21 Financial Advisors...................................................................24
4.22 Insurance............................................................................25
4.23 Certain Payments.....................................................................25
4.24 Relationships with Related Persons...................................................25
4.25 No Other Representations or Warranties...............................................25
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER......................................26
5.1 Organization and Good Standing.......................................................26
5.2 Authorization of Agreement...........................................................26
5.3 Conflicts; Consents of Third Parties.................................................26
5.4 Litigation...........................................................................27
5.5 Investment Intention.................................................................27
5.6 Financial Advisors...................................................................27
5.7 Sufficiency of Funds.................................................................27
ARTICLE 6 COVENANTS........................................................................27
6.1 Access to Management.................................................................27
6.2 Conduct of Business Pending the Closing..............................................28
6.3 Employee Matters.....................................................................29
6.4 Preservation of Records..............................................................32
6.5 Publicity............................................................................33
6.6 Schedule of Retiree Benefit Plan Participants........................................33
6.7 Use of Name..........................................................................33
6.8 Insurance............................................................................34
6.9 Reasonable Commercial Efforts........................................................34
6.10 HSR Act Compliance; Foreign Governmental Approvals...................................35
6.11 Contacts with Suppliers, Employees and Customers.....................................35
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TABLE OF CONTENTS
(CONTINUED)
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6.12 Invensys Commitments.................................................................35
6.13 Intellectual Property................................................................36
6.14 Notification.........................................................................36
6.15 Estoppel Certificates and Title Commitments..........................................36
6.16 Financial Statements.................................................................36
6.17 Transition Services Agreement........................................................37
ARTICLE 7 CONDITIONS TO CLOSING............................................................38
7.1 Condition Precedent to Obligations of Purchaser......................................38
7.2 Condition Precedent to Obligations of Sellers........................................38
7.3 Conditions to Each Party's Obligations...............................................39
ARTICLE 8 DOCUMENTS TO BE DELIVERED........................................................39
8.1 Documents to be Delivered by the Sellers.............................................39
8.2 Documents to be Delivered by the Purchaser...........................................40
ARTICLE 9 INDEMNIFICATION..................................................................41
9.1 General Indemnification..............................................................41
9.2 Limitations on Indemnification.......................................................42
9.3 Limitations on Indemnification for Environmental Losses..............................43
9.4 Survival of Representations and Warranties and Covenants.............................43
9.5 General Indemnification Procedures...................................................44
9.6 Tax Matters..........................................................................47
9.7 Indemnification for Products Liability and Product Recall............................53
9.8 Employee Liabilities.................................................................53
9.9 Exclusive Remedies...................................................................54
9.10 Adjustments for Insurance and Tax Benefits...........................................55
9.11 Treatment of Indemnity Payments......................................................55
ARTICLE 10 MISCELLANEOUS....................................................................55
10.1 Certain Definitions..................................................................55
10.2 Payment of Transfer Taxes............................................................65
10.3 Expenses.............................................................................65
10.4 Further Assurances...................................................................65
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TABLE OF CONTENTS
(CONTINUED)
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10.5 Governing Law........................................................................66
10.6 Submission to Jurisdiction; Consent to Service of Process............................66
10.7 Entire Agreement; Amendments and Waivers.............................................66
10.8 Table of Contents and Headings.......................................................66
10.9 Notices..............................................................................66
10.10 Severability.........................................................................67
10.11 Binding Effect; No Third Party Beneficiaries; Assignment.............................67
10.12 Counterparts.........................................................................68
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TABLE OF ANNEXES AND SCHEDULES
Schedules
Schedule 2.2 - Accounting Principles
Schedule 2.2.2.4 - ABO Calculation Assumptions
Schedule 2.5 - Scheduled Cash Shut-down Costs Budgeted For Elkhorn
and Ozark
Schedule 4.4 - Subsidiaries
Schedule 4.6.1 - Conflicts - Sellers
Schedule 4.6.2 - Required Consents and Approvals - Sellers
Schedule 4.8 - Recent Management Accounts
Schedule 4.9.1 - Undisclosed Liabilities
Schedule 4.9.2 - Liabilities Incurred Since the Most Recent
Management Accounts
Schedule 4.10 - Certain Developments
Schedule 4.10.8 - Capital Expenditure Budget
Schedule 4.11 - Tax Matters
Schedule 4.11.5 - Tax Returns List
Schedule 4.11.6 - Taxable Years/Contested Deficiencies
Schedule 4.12 - Company Properties
Schedule 4.13 - Tangible Personal Property
Schedule 4.14.1 - Registered Patents, Trademarks and Copyrights (and
Applications therefor) Included in Fasco Business
Intellectual Property
Schedule 4.14.2 - Third Party Owners of Fasco Business Intellectual
Property
Schedule 4.14.3 - Assignments, Transfers, Conveyances or Encumbrances
of Fasco Business Intellectual Property
Schedule 4.14.4 - Challenges to Validity and Enforceability of Fasco
Business Intellectual Property
Schedule 4.14.5 - Third Party Infringement on or Violation of Fasco
Business Intellectual Property
Schedule 4.14.6.1 - Intellectual Property/Technology Used and Not Owned
by the Fasco Business
Schedule 4.14.6.2 - Intellectual Property/Technology Used and Not Owned
by the Fasco Business Subject to Third-Party
Licenses
Schedule 4.14.7 - Fasco Business Royalty and Similar Payment
Obligations
Schedule 4.14.8 - Alleged Infringements of Third Party Trademark,
Copyright or Trade Secret Rights
Schedule 4.15 - Material Contracts
Schedule 4.16.1 - Employee Benefit Plans
Schedule 4.16.6 - Reportable Events to which Notice Must Be Given to
the PBGC
Schedule 4.17.1 - Labor
Schedule 4.18.1 - Litigation - Legal Proceedings
Schedule 4.18.2 - Litigation - Orders
Schedule 4.19.1 - Compliance with Laws
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Schedule 4.19.2 - Governmental Authorizations
Schedule 4.20 - Environmental Matters
Schedule 4.21 - Sellers' Financial Advisors
Schedule 4.24 - Relationships with Related Persons
Schedule 5.3.2 - Required Consents and Approvals - Purchaser
Schedule 5.6 - Purchaser's Financial Advisors
Schedule 5.7.2 - Sources of Purchaser's Financing
Schedule 6.2 - Conduct of the Business Pending the Closing
Schedule 6.12 - Invensys Commitments
Schedule 9.7 - Product Liability Claims
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Annexes
Annex A - Companies and Ownership of Shares
Annex B - Form of Non-Competition Agreement
Annex C - Form of Estoppel Certificate
Annex D - Procedures Used to Determine Knowledge of Sellers
Annex E - Form of Escrow Agreement
Annex F - Transition Services Agreement
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EXECUTION COPY
PROJECT POLE
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of November 27, 2002 (this
"Agreement"), by and among Tecumseh Products Company, a corporation organized
and existing under the laws of the State of Michigan (the "Purchaser"), BTR
Industries Limited, a corporation organized and existing under the laws of
England and Wales ("BTRI"), BTR (European Holdings) BV, a corporation organized
and existing under the laws of the Netherlands ("BTR Holdings"), CPN Holdings
Pty Limited, a corporation organized and existing under the laws of Australia
("CPN"), Invensys Controls Mexican Holding, L.L.C., a limited liability company
organized and existing under the laws of Mexico ("ICMH") and BTR (USA) Finance
Company, a Massachusetts business trust ("BTR Finance" and each of BTRI, BTR
Holdings, CPN and ICMH, a "Seller" and, collectively, the "Sellers"), and
Invensys plc, a corporation organized and existing under the laws of England and
Wales ("Invensys").
W I T N E S S E T H:
WHEREAS, the Sellers own all of the issued and outstanding
shares (collectively, the "Shares") of capital stock of the companies set forth
on Annex A (each a "Company" and, collectively, the "Companies"), except as
otherwise indicated thereon; and
WHEREAS, Invensys is the indirect owner of all of the issued
and outstanding capital stock of, or ownership interests in, each of the
Sellers; and
WHEREAS, the Sellers desire to sell to Purchaser, and
Purchaser desires to purchase from the Sellers, the Shares for the purchase
price and upon the terms and conditions hereinafter set forth; and
WHEREAS, certain terms used in this Agreement are defined in
Section 10.1;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the parties hereby agree
as follows:
ARTICLE 1
SALE AND PURCHASE OF SHARES
1.1 Sale and Purchase of Shares. Upon the terms and subject to
the conditions contained herein, on the Closing Date each Seller shall sell,
assign, transfer, convey and deliver to the Purchaser, and the Purchaser shall
purchase from each Seller, the Shares held by such Seller set forth next to such
Seller's name on Annex A hereto.
The purchase and sale of the Shares pursuant to this Agreement shall be
effective as of the close of the business on the Closing Date (the "Effective
Time").
ARTICLE 2
PURCHASE PRICE AND PAYMENT
2.1 Purchase Price.
2.1.1 The unadjusted purchase price for the Shares (the
"Initial Purchase Price") shall be an amount equal to Four Hundred Fifteen
Million Dollars ($415,000,000) adjusted for the Estimated External Cash/Debt
Balance, the Elkhorn and Ozark Adjustment and the Estimated Trade Working
Capital Adjustment. The Initial Purchase Price is subject to adjustment pursuant
to Section 2.2 (as adjusted, the "Final Purchase Price"). The Initial Purchase
Price and the Final Purchase Price shall be payable as provided in Section 2.3.
All amounts set forth in this Agreement shall be in United States Dollars,
unless otherwise stated.
2.1.2 The Sellers shall provide written notice of the
Estimated External Cash/Debt Balance, the Elkhorn and Ozark Adjustment, and the
Estimated Trade Working Capital Adjustment to the Purchaser at least five (5)
days prior to the Closing Date.
2.2 Adjustment of Initial Purchase Price.
2.2.1 Final Trade Working Capital, Final External Cash/Debt
Balance, Final Intercompany Payables, and Final Intercompany Receivables shall
be determined as set forth in this Section 2.2.1.
2.2.1.1 The Purchaser shall prepare and deliver to the
Sellers, within forty-five (45) days after the Closing, the Closing
Management Accounts, which shall be prepared in accordance with the
Accounting Principles.
2.2.1.2 The Purchaser also shall prepare and deliver to the
Sellers, within forty-five (45) days after the Closing, a post-Closing
purchase price adjustment statement (the "Adjustment Statement")
detailing Purchaser's determination of: (i) the Final Trade Working
Capital, (ii) the Final External Cash/Debt Balance, (iii) the Final
Intercompany Payables, and (iv) Final Intercompany Receivables. The
Adjustment Statement shall be prepared based upon the Closing
Management Accounts, adjusted as necessary in accordance with the
Accounting Principles, and including, but not limited to, the following
adjustments:
2.2.1.2.1 the Final External Cash/Debt Balance shall
be calculated converting the cash/debt balances of each Company or Subsidiary,
in respect of which the management accounts are not expressed in US dollars,
into US
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dollars at the closing mid-point US dollar spot rate shown in the Financial
Times published on the first Business Day following Closing; and
2.2.1.2.2 the Final Intercompany Payables and Final
Intercompany Receivables in respect of each Company or Subsidiary, the
management accounts of which are not expressed in US dollars, shall be converted
into US dollars at the closing mid-point US dollar spot rate shown in the
Financial Times published on the first Business Day following Closing.
Any adjustments to the Closing Management Accounts balance sheet other than
those described above shall, for the avoidance of doubt, be applied in a
mutually consistent manner to the calculation of: (i) the Final External
Cash/Debt Balance, (ii) the Final Trade Working Capital, (iii) Final
Intercompany Payables, (iv) Final Intercompany Receivables, and (v) the Pension
Plan Assets Adjustment. The Sellers shall give the Purchaser and its accountants
and other appropriate personnel such assistance, as the Purchaser or such
accountants or other personnel may reasonably request during normal business
hours in order to enable them to prepare the Adjustment Statement. The Purchaser
shall promptly deliver to the Sellers all such workpapers and other data used in
the preparation of the Closing Management Accounts as may reasonably be
requested by the Sellers.
2.2.1.3 The Adjustment Statement shall be final and binding on
the parties unless the Sellers shall, within thirty (30) days following
the delivery of the Adjustment Statement, deliver to the Purchaser
written notice of objection (the "Objection Notice") with respect to
the Adjustment Statement. The Objection Notice shall specify in
reasonable detail the disputed items on the Adjustment Statement and
describe in reasonable detail the basis for the disputed items,
including the data that forms the basis thereof, as well as the amount
in dispute.
2.2.1.4 If the Objection Notice is delivered, the parties
shall consult with each other with respect to the disputed items and
attempt in good faith to resolve the dispute. If the parties are unable
to reach agreement within thirty (30) days after delivery of the
Objection Notice, either the Purchaser or the Sellers may refer any
unresolved disputed items to an accounting firm of national reputation
selected by mutual agreement of the Purchaser and the Sellers, or if
the Purchaser and the Sellers are unable to so agree, Deloitte & Touche
LLP (the "Unrelated Accounting Firm"). The Unrelated Accounting Firm
shall be directed to render a written report as promptly as practicable
and, in any event, within thirty (30) days on the unresolved disputed
items and to resolve only those issues of dispute set forth in the
Objection Notice. The Unrelated Accounting Firm shall resolve such
issues of dispute in accordance with the Accounting Principles. The
resolution of the dispute by the Unrelated Accounting Firm shall be
final and binding on the parties. The fees and expenses of the
Unrelated Accounting Firm shall be borne equally by the Sellers and the
Purchaser.
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2.2.2 In order to determine the Final Purchase Price, the Initial Purchase Price
shall be adjusted in respect of (i) the Final Trade Working Capital, (ii) the
Final External Cash/Debt Balance, (iii) the Final Net Intercompany Amount, and
(iv) the Pension Plan Assets Adjustment as set forth in this Section 2.2.2:
2.2.2.1 Final Trade Working Capital Adjustment.
2.2.2.1.1 If the amount of Final Trade Working
Capital determined in accordance with Section 2.2.1 is less than the Baseline
Trade Working Capital and that difference is greater than One Hundred Fifty
Thousand Dollars ($150,000), the Initial Purchase Price shall be decreased by an
amount equal to the excess of the difference over One Hundred Fifty Thousand
Dollars ($150,000). For the avoidance of doubt, if the difference is less than
One Hundred Fifty Thousand Dollars ($150,000), no adjustment shall be made.
2.2.2.1.2 If the amount of the Final Trade Working
Capital is greater than the Baseline Trade Working Capital and that difference
is greater than One Hundred Fifty Thousand Dollars ($150,000), the Initial
Purchase Price shall be increased by an amount equal to excess of the difference
over One Hundred Fifty Thousand Dollars ($150,000). For the avoidance of doubt,
if the difference is less than One Hundred Fifty Thousand Dollars ($150,000), no
adjustment shall be made.
2.2.2.1.3 The Initial Purchase Price shall be further
adjusted to the extent the adjustment to the Initial Purchase Price to be made
pursuant to this Section 2.2.2.1 is more or less than the adjustment made in
Section 2.1.1 by virtue of application of the Estimated Trade Working Capital
Adjustment. The amount of such further adjustment to the Initial Purchase Price
is the "Final Trade Working Capital Adjustment."
2.2.2.2 Final External Cash/Debt Balance Adjustment.
2.2.2.2.1 If the amount of the Final External
Cash/Debt Balance determined in accordance with Section 2.2.1 is less than the
Estimated External Cash/Debt Balance, the Initial Purchase Price shall be
decreased by an amount equal to the difference.
2.2.2.2.2 If the amount of the Final External
Cash/Debt Balance determined in accordance with Section 2.2.1 is greater than
the Estimated External Cash/Debt Balance, the Initial Purchase Price shall be
increased by an amount equal to the difference.
2.2.2.3 Final Intercompany Amount Adjustment. Final
Intercompany Receivables and Final Intercompany Payables shall be
netted as of the Closing, and the resulting amount shall be referred to
herein as the "Final Net Intercompany Amount." If the Final Net
Intercompany Amount is a payable owing by the Company and the
Subsidiaries to Invensys and its Affiliates (other
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than the Company and the Subsidiaries), it shall be deducted from the
Initial Purchase Price and such amount shall be paid at Closing by
Purchaser in satisfaction of such payable. If the Final Net
Intercompany Amount results in a payable owing by Invensys or its
Affiliates (other than the Company and its Subsidiaries) to the Company
and Subsidiaries, it shall be added to the Initial Purchase Price and
such amount shall be paid at Closing by Sellers in satisfaction of such
receivable. The parties acknowledge that the netting of Final
Intercompany Receivables and Final Intercompany Payables, the payment
of the Final Net Intercompany Amount (whether a payable or a
receivable), and the resulting adjustment to the Initial Purchase
Price, will always be non-cash adjustments, and, by means of the
process referred to in this Section 2.2.2.3, as of the Closing, the
Final Intercompany Payables and Final Intercompany Receivables shall be
extinguished and released. All intercompany arrangements, except those
provided for in the Transition Services Agreement, shall be cancelled
as of the Closing.
2.2.2.4 Pension Plan Assets Adjustment.
2.2.2.4.1 In the event the fair market value of the
assets of Sellers' Salaried Trust transferred to Purchaser's Salaried Trust (as
finally determined pursuant to Section 6.3.7) equals or exceeds 85% of the ABO
(calculated according to the assumptions set forth on Schedule 2.2.2.4)
attributable to the Salaried Pension Transferees as of the Closing Date, the
Escrow Funds shall be released from the Pension Plan Escrow and the full amount
of such Escrow Funds shall be paid to Invensys (as agent for Sellers) together
with any interest accrued and allocated to Sellers in accordance with Section
2.6. If the value so determined equals 85% of the ABO, there shall be no
adjustment to the Initial Purchase Price. If the value so determined exceeds 85%
of the ABO, the Initial Purchase Price shall be increased by an amount equal to
such excess and such amount shall be paid to Invensys, as agent for Sellers, by
Purchaser in accordance with Section 2.3.4.
2.2.2.4.2 In the event that 85% of the ABO
attributable to the Salaried Pension Transferees as of the Closing Date exceeds
the fair market value of the assets of Sellers' Salaried Trust transferred to
Purchaser's Salaried Trust (as finally determined pursuant to Section 6.3.7),
the Initial Purchase Price shall be reduced by the amount of such excess and an
amount equal to such excess amount shall be released from the Pension Plan
Escrow (or the full amount of such Escrow Funds if such excess is equal to or
greater than such amount) and paid to Purchaser, together with any interest
accrued and allocated to Purchaser in accordance with Section 2.6. If the amount
of such excess equals the amount of the Escrow Funds, no further payments shall
be made. If the amount of such excess is greater than the amount of the Escrow
Funds, Invensys (as agent for the Sellers) shall pay any such difference to
Purchaser in accordance with Section 2.3.4. If the amount of such excess is less
than the amount of the Escrow Funds, an amount equal to such difference shall be
released from the Pension Plan Escrow and paid to Invensys (as agent for
Sellers) together with any interest accrued and allocated to Sellers in
accordance with Section 2.6. The amount of any adjustment to
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the Initial Purchase Price determined pursuant to either Section 2.2.2.4.1 or
this Section 2.2.2.4.2 shall be known as the "Pension Plan Assets Adjustment."
2.3 Payment of Initial and Final Purchase Price.
2.3.1 At the Closing, the Purchaser shall pay to Invensys (as
agent for the Sellers) an amount equal to the Initial Purchase Price, minus the
Escrow Funds, by wire transfer of immediately available funds to an account or
accounts designated by the Sellers in writing at least three (3) Business Days
prior to the Closing Date.
2.3.2 Within five (5) Business Days after the determination of
the Final Trade Working Capital and Final External Cash/Debt Balance in
accordance with Section 2.2, Invensys (as agent for the Sellers) shall pay to
the Purchaser, or the Purchaser shall pay to Invensys (as agents for the
Sellers), as the case may be, the net amount of any adjustment to the Initial
Purchase Price required pursuant to Sections 2.2.2.1 and 2.2.2.2 (the
"Adjustment Amount").
2.3.3 Payment of the Adjustment Amount shall be made by wire
transfer of immediately available funds to a single account designated in
writing at least five (5) Business Days prior to such payment by Invensys or the
Purchaser, as the case may be, and shall be accompanied by a payment of interest
determined by computing simple interest on the Adjustment Amount from the
Closing Date to the date of payment(s) at the rate of interest announced
publicly by JPMorgan Chase Bank from time to time as its "reference rate" (on
the basis of a 365-day year).
2.3.4 Any amounts payable to Purchaser or to Invensys (as
agent for Sellers) as the case may be, pursuant to Section 2.2.2.4 shall be made
by wire transfer on the date of the final determination of the fair market value
of the assets of Seller's Salaried Trust transferred to Purchaser's Salaried
Trust pursuant to Section 6.3.7.
2.4 Allocation of Final Purchase Price.
2.4.1 Sellers and Purchaser agree to allocate the Initial
Purchase Price among the Companies at or prior to the Closing. Within thirty
(30) days following the later of the determination of the Adjustment Amount or
the Pension Plan Assets Adjustment, Sellers and Purchaser shall agree upon a
revised purchase price allocation to reflect such adjustments in accordance with
the character of each such adjustment and in a manner that is consistent with
the allocation of the Initial Purchase Price.
2.4.2 Neither Sellers, Purchaser nor any of their respective
Affiliates shall file any Tax Return or other document or otherwise take, or
agree to take, any position on any Tax Return which is inconsistent with the
allocation determined pursuant to this Section 2.4, unless otherwise required by
Law.
2.5 Elkhorn and Ozark Adjustment. Schedule 2.5 lists the
scheduled cash shut-down costs expected to be incurred in connection with the
closure of the
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Elkhorn and Ozark facilities. The Initial Purchase Price payable at Closing
shall include a reduction equal to the sum of the amounts scheduled on Schedule
2.5 which have not been expended as of the Closing.
2.6 Pension Plan Escrow. At the Closing, the Sellers,
Invensys, and the Purchaser shall enter into an agreement substantially in the
form of the Escrow Agreement, with Wachovia Bank (or such other institution as
the parties otherwise agree) as escrow agent (the "Escrow Agent" ), pursuant to
which the Escrow Funds shall be deposited into an interest bearing account with
the Escrow Agent (the "Pension Plan Escrow") . Until the pension plan assets are
transferred to Purchaser's Salaried Trust as described in Section 6.3.7, and the
Pension Plan Assets Adjustment has been determined, the Escrow Funds will remain
on deposit with the Escrow Agent. Interest accruing on the Escrow Funds shall
belong to Sellers from the Closing Date until the earlier of (i) the date on
which the pension assets are transferred, or (ii) the date which is one hundred
twenty (120) days from the Closing Date. In the event that the pension plan
assets have not been transferred to Purchaser's Salaried Trust on or before one
hundred twenty (120) days from the Closing Date, interest on the Escrow Funds
accruing thereafter shall be payable upon distribution of the Escrow Funds to
Sellers and Purchaser in proportion to the allocation of the Escrow Funds
between the parties in accordance with Section 2.2.2.4. All fees and costs of
the Escrow Agent shall be borne equally by the Purchaser and the Sellers.
ARTICLE 3
CLOSING AND TERMINATION
3.1 Closing Date. The closing of the sale and purchase of the
Shares (the "Closing") shall take place at the offices of Weil, Gotshal & Xxxxxx
LLP, located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., New
York City time, on the third Business Day after the conditions to closing set
forth in Section 7.1, Section 7.2 and Section 7.3 (other than those to be
satisfied at the Closing, which shall be satisfied or waived at the Closing)
have been satisfied or waived by the party entitled to waive such condition, or
on such other date after such satisfaction or waiver and at such other time and
place upon which the Sellers and the Purchaser shall agree (which time and place
are designated as the "Closing Date").
3.2 Termination of Agreement. This Agreement may be terminated
prior to the Closing as follows:
3.2.1 At the election of either the Sellers or the Purchaser
on or after March 31, 2003, if the Closing shall not have occurred by the close
of business on such date, provided that the terminating party is not in default
of any of its obligations hereunder;
3.2.2 by mutual written consent of the Sellers and the
Purchaser;
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3.2.3 at the election of either the Sellers or the Purchaser
if there shall be in effect a final nonappealable Order of a Governmental Body
of competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby; it being agreed that the
parties hereto shall promptly appeal any appealable adverse determination (and
pursue such appeal with reasonable diligence); or
3.2.4 by the Purchaser or the Sellers, as the case may be, if
any condition in Article 7 to its or their obligations becomes impossible to
satisfy (other than through the failure of the party seeking termination to
comply with its obligations under this Agreement), and such condition has not
been waived by the party entitled to the benefit thereof.
3.3 Procedure Upon Termination. In the event the Purchaser or
the Sellers, or both, elect to terminate this Agreement pursuant to Section 3.2,
written notice thereof shall forthwith be given to the other party or parties,
and this Agreement shall terminate, and the purchase and sale of the Shares
hereunder shall be abandoned, without further action by the Purchaser or the
Sellers. If this Agreement is terminated as provided herein each party shall
redeliver all documents, work papers and other material of any other party
relating to the transactions contemplated hereby, whether so obtained before or
after the execution hereof, to the party furnishing the same.
3.4 Effect of Termination. In the event this Agreement is
validly terminated as provided herein, then each of the parties shall be
relieved of their duties and obligations arising under this Agreement after the
date of such termination and such termination shall be without liability to the
Purchaser, the Companies or any Seller; provided, however, that the obligations
of the parties set forth in Section 6.5 and Section 10.3 shall survive any such
termination and shall be enforceable hereunder; provided, further, that nothing
in this Section 3.4 shall relieve the Purchaser, any Seller or Invensys of any
liability for a breach of this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF INVENSYS AND THE SELLERS
The Sellers and Invensys hereby jointly and severally
represent and warrant to the Purchaser that:
4.1 Organization and Good Standing. Each Company and each
Seller is a corporation or other entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization as set
forth above or on Annex A and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now
conducted. Each Company is duly qualified to do business as a foreign
corporation under the laws of each jurisdiction in which it owns or leases real
property and each other jurisdiction in which the conduct of its business or the
ownership of its assets requires such qualification and where the failure to be
so qualified would have a material adverse effect on such Company.
8
4.2 Authorization of Agreement. Each Seller and Invensys has
all requisite power, authority and legal capacity to execute and deliver this
Agreement and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by such Seller or Invensys in
connection with the consummation of the transactions contemplated by this
Agreement (together with this Agreement, the "Seller Documents"), and to
consummate the transactions contemplated hereby and thereby. This Agreement has
been, and each of the other Seller Documents will be at or prior to the Closing,
duly and validly executed and delivered by Invensys and each Seller party
thereto and (assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes, and each of the other
Seller Documents when so executed and delivered will constitute, legal, valid
and binding obligations of Invensys and each Seller, enforceable against
Invensys and each Seller in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity.
4.3 Capitalization.
4.3.1 The (i) authorized capital stock, (ii) par value per
share, and (iii) number of issued and outstanding shares of capital stock of
each of the Companies and the owners of such shares are as set forth on Annex A.
No shares of capital stock of any Company are held by such Company as treasury
stock.
4.3.2 All of the Shares were duly authorized for issuance and
are validly issued, fully paid and non-assessable.
4.3.3 There is no existing option, warrant, call, right,
commitment or other agreement of any character to which Invensys or any Seller
or Company is a party requiring, and there are no securities of any Company
outstanding which upon conversion or exchange would require, the issuance, sale
or transfer of any additional shares of capital stock or other equity securities
of the respective Company or other securities convertible into, exchangeable for
or evidencing the right to subscribe for or purchase shares of capital stock or
other equity securities of such Company. None of Invensys, the Sellers or any
Company is a party to any voting trust or other voting agreement with respect to
any of the Shares or to any agreement relating to the issuance, sale,
redemption, transfer or other disposition of the capital stock of any Company.
4.4 Subsidiaries. Schedule 4.4 hereto sets forth the name of
each Subsidiary and, with respect to each Subsidiary, the jurisdiction in which
it is incorporated or organized, the number of shares of its authorized capital
stock, the number and class of shares thereof duly issued and outstanding, the
names of all stockholders or other equity owners and the number of shares of
stock owned by each stockholder or the amount of equity owned by each equity
owner. All of the outstanding shares of capital stock or equity interests of
each Subsidiary are validly issued, fully paid and non-assessable, and the
shares or other equity interests shown on Schedule 4.4 as being owned by any
Company are owned by such Company free and clear of any and all
9
Liens of any kind whatsoever. No shares of capital stock are held by any
Subsidiary as treasury stock. There is no existing option, warrant, call,
commitment or agreement to which any Subsidiary is a party requiring, and there
are no convertible securities of any Subsidiary outstanding which upon
conversion would require, the issuance of any additional shares of capital stock
or other equity interests of any Subsidiary or other securities convertible into
shares of capital stock or other equity interests of any Subsidiary or other
equity security of any Subsidiary. With respect to any Subsidiary which is shown
on Schedule 4.4 as having shares or other equity interests owned by a Person
other than a Company, each such Person has no rights as a shareholder or holder
of other equity interests in any Subsidiary, whether by contract, Subsidiary
charter document or otherwise, other than rights which are available to a
shareholder or holder of other equity interests existing by operation of
applicable Law. Each Subsidiary is a duly organized and validly existing
corporation or other entity in good standing under the laws of the jurisdiction
of its organization and is duly qualified to do business under the laws of (i)
each jurisdiction in which it owns or leases real property and (ii) each other
jurisdiction in the United States in which the conduct of its business or the
ownership of its assets requires such qualification and where the failure to be
so qualified would have a material adverse effect on the Subsidiary and each
such jurisdiction described in (i) and (ii) above is set forth on Schedule 4.4.
Each Subsidiary has all requisite corporate power and authority to own its
properties and carry on its business as presently conducted.
4.5 Corporate Records. The Sellers have made available to the
Purchaser true, correct and complete copies of the certificates of incorporation
and by-laws or comparable organizational documents of each Company and each
Subsidiary.
4.6 Conflicts; Consents of Third Parties.
4.6.1 Except as set forth on Schedule 4.6.1, none of the
execution and delivery by any Seller of this Agreement and the other Seller
Documents, the consummation of the transactions contemplated hereby, or
compliance by Invensys or any Seller with any of the provisions hereof or
thereof will (i) conflict with, or result in the breach of, any provision of the
certificate of incorporation or by-laws or comparable organizational documents
of Invensys or any Company, any Seller or any Subsidiary; (ii) conflict with,
violate, result in the breach or termination of, or constitute a default under
any note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which Invensys or any Seller, any Company or Subsidiary is a party
or by which any of them or any of their respective properties or assets is
bound; (iii) violate any statute, rule, regulation, or Material Order of any
Governmental Body by which Invensys or any Seller, Company or Subsidiary is
bound or give any Governmental Body the right to revoke, withdraw, suspend or
modify any material Government Authorization held by any Company or Subsidiary;
(iv) result in the creation of any Lien upon the properties or assets of any
Company or any Subsidiary; or (v) conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a default or
exercise any remedy under, or cancel, terminate or modify any Material Contract,
except in the case of (ii) above, for such violations, conflicts, breaches or
defaults as would not have a material adverse effect on any Company or
Subsidiary.
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4.6.2 Except as set forth on Schedule 4.6.2, no consent,
waiver, approval, Order, permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the
part of any Company or Subsidiary in connection with the execution and delivery
of this Agreement or the other Seller Documents, or the compliance by each
Seller or Company as the case may be, with any of the provisions hereof or
thereof, except such consents, waivers, approvals, Orders, permits and
authorizations which, if not obtained or made, would not have a material adverse
effect on any Company or Subsidiary.
4.7 Ownership and Transfer of Shares. Each Seller is the
record and beneficial owner of the Shares indicated as being owned by such
Seller on Annex A, free and clear of any and all Liens. Each Seller has the
corporate power and authority to sell, transfer, assign and deliver such Shares
as provided in this Agreement, and such delivery will convey to the Purchaser
title to such Shares, free and clear of any and all Liens.
4.8 Financial Statements. Sellers have delivered to Purchaser
(a) the audited combined balance sheets of the Fasco Business at March 31, 2001
and 2002 (the "Audited Balance Sheet") and the related combined statements of
operations, invested capital and cash flows for each of the fiscal years then
ended, including the notes thereto, together with the report thereon of Ernst &
Young LLP (collectively, the "Audited Financial Statements") and (b) the
unaudited combined balance sheet of the Fasco Business at September 30, 2002
(the "Interim Balance Sheet") and the related combined statements of operations
for the six (6) months then ended (collectively, the "Interim Financial
Statements"). The Audited Financial Statements and the Interim Financial
Statements are collectively referred to herein as the "Financial Statements".
The Audited Financial Statements have been prepared in accordance with generally
accepted accounting principles in the United States ("U.S. GAAP"). The Audited
Financial Statements fairly present, in all material respects, the financial
condition and results of operations of the Fasco Business, as of and for the
periods to which they relate. The Interim Financial Statements have been
prepared in accordance with U.S. GAAP and reasonably reflect in all material
respects the combined financial condition and results of operations of the Fasco
Business, except for the absence of notes. For the purposes hereof, March 31,
2002 is referred to as the "Audited Balance Sheet Date" and September 30, 2002
is referred to as the "Interim Balance Sheet Date". Schedule 4.8 presents
certain monthly financial reports and schedules generated from the books and
records of the Companies in relation to periods subsequent to the Interim
Balance Sheet Date (the "Recent Management Accounts") . The Recent Management
Accounts have been consistently prepared with past practice and with due care in
accordance with the Standard Accounting Principles. All transactions undertaken
by the Companies and Subsidiaries which relate to the period of the Recent
Management Accounts and which would be required by the Standard Accounting
Principles to be reflected and recorded in the Recent Management Accounts are
reflected and recorded in the Recent Management Accounts.
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4.9 No Undisclosed Liabilities.
4.9.1 Except as set forth on Schedule 4.9.1, as of the Audited
Balance Sheet Date, no Company and no Subsidiary had any indebtedness,
obligations or liabilities of any kind required by U.S. GAAP to be reflected in
the Audited Balance Sheet that were not fully reflected in the Audited Balance
Sheet and the notes thereto, and since the Audited Balance Sheet Date, no
Company and no Subsidiary has incurred any indebtedness, obligation or liability
other than in the ordinary course of business consistent with past practice.
4.9.2 To the Knowledge of Sellers, except as set forth on
Schedule 4.9.2, the Companies and the Subsidiaries have incurred no liabilities
of any kind (whether absolute, accrued, or contingent) since the most Recent
Management Accounts except for liabilities (i) to be adjusted, paid, settled or
cancelled pursuant to Sections 2.2 and 2.3 hereof, (ii) that are current
liabilities (other than those adjusted, paid, settled or cancelled pursuant to
Sections 2.2 and 2.3) incurred in the ordinary course of business, (iii) set
forth on any Schedule to this Agreement, (iv) reflected or reserved against in
the Recent Management Accounts as of a date subsequent to the Interim Balance
Sheet Date and provided to Purchaser by Sellers, (v) which would be subject to
the provisions of Sections 9.1.1.3, 9.1.1.4, 9.6.1.1 or 9.7 and (vi) incurred in
the ordinary course of business which are not material to the Fasco Business.
4.10 Absence of Certain Developments. Except as contemplated
by this Agreement or as permitted by Section 6.2 or set forth on Schedule 4.10,
since the Audited Balance Sheet Date:
4.10.1 there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property and assets of
the Companies or the Subsidiaries having a replacement cost of more than Four
Hundred Thousand Dollars ($400,000) in the aggregate;
4.10.2 there has not been any declaration, setting aside or
payment of any dividend or other distribution in respect of any shares of
capital stock of any Company or any repurchase, redemption or other acquisition
by any Seller or any Company or any Subsidiary of any outstanding shares of
capital stock or other securities of, or other ownership interest in, any
Company or any Subsidiary;
4.10.3 there has not been any material change by any Company
or any Subsidiary in accounting or Tax reporting principles, methods or
policies;
4.10.4 no Company and no Subsidiary has entered into any
transaction or Contract involving the expenditure of more than Two Hundred Fifty
Thousand Dollars ($250,000) or conducted its business other than in the ordinary
course of business consistent with past practice;
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4.10.5 no Company and no Subsidiary has made any material
loans, advances or capital contributions to, or investments in, or incurred any
liabilities or obligations on behalf of, any Person or paid any fees or expenses
to any Seller or any Affiliate of any Seller other than in the ordinary course
of business consistent with past practice;
4.10.6 no Company and no Subsidiary has mortgaged, pledged or
subjected to any Lien any material asset, or acquired any assets or sold,
assigned, transferred, conveyed, leased or otherwise disposed of any of its
assets for which the aggregate consideration paid or payable in any individual
transaction was in excess of Two Hundred Fifty Thousand Dollars ($250,000),
except for assets mortgaged, pledged, subjected to any Lien, acquired or sold,
assigned, transferred, conveyed, leased or otherwise disposed of in the ordinary
course of business consistent with past practice;
4.10.7 no Company and no Subsidiary has canceled or
compromised any debt or claim with a value, individually or in the aggregate,
exceeding Two Hundred Fifty Thousand Dollars ($250,000) or amended, canceled,
terminated, relinquished, waived or released any Contract or right involving the
expenditure of more than Two Hundred Fifty Thousand Dollars ($250,000);
4.10.8 no Company and no Subsidiary has made or committed to
make any capital expenditures or capital additions or betterments in excess of
Two Hundred Fifty Thousand Dollars ($250,000), other than in the ordinary course
of business or except as is consistent with the capital expenditure budget
attached hereto as Schedule 4.10.8 (the "Capital Expenditure Budget"); and
4.10.9 no Company and no Subsidiary has instituted or settled
any Legal Proceeding in which equitable relief was sought or in which claimed
damages exceeded Five Hundred Thousand Dollars ($500,000).
4.11 Certain Tax Matters. Except as set forth on Schedule
4.11:
4.11.1 (i) all Tax Returns required to be filed by or on
behalf of any Company or any Subsidiary have been filed in a timely manner
(within any applicable extension periods), (ii) all such Tax Returns are correct
and complete in all material respects and all Taxes shown to be due on such Tax
Returns have been timely paid in full or will be timely paid in full by the due
date thereof, (iii) all Taxes have been timely paid in full or will be timely
paid in full by the due date thereof, except to the extent that failure to pay
such Taxes does not result in a material Loss, (iv) the Tax accounts reflected
in the Audited Financial Statements are adequate (as determined in accordance
with U.S. GAAP) to cover any Tax liability of the Companies and Subsidiaries as
of the Audited Balance Sheet Date, (v) no claim has been made (A) by any
authority in writing within the six (6) year period ending on the date of this
Agreement or (B) to the Knowledge of Sellers, in a jurisdiction where any of the
Companies or Subsidiaries does not file Tax Returns that it is or may be subject
to taxation by that jurisdiction, (vi) there are no Liens on any of the assets
of the Companies or Subsidiaries that arose in
13
connection with any failure (or alleged failure) to pay Taxes, (vii) there is no
dispute or claim concerning any tax liability of any of the Companies or
Subsidiaries either (A) raised by any authority in writing or (B) to the
Knowledge of Sellers, and (viii) none of the Companies or Subsidiaries is
currently the beneficiary of any extension of time within which to file any Tax
Return;
4.11.2 (i) none of the Companies or Subsidiaries has filed a
consent under Section 341(f) of the Code concerning collapsible corporations (or
any corresponding or similar provision of state, local or foreign Law), (ii) no
property of the Companies or Subsidiaries is "tax exempt use property" within
the meaning of Section 168(h) of the Code or "tax exempt bond financed property"
within the meaning of Section 168(g) of the Code (or any corresponding or
similar provisions of state, local or foreign Law) and (iii) no Company or
Subsidiary is a party to any lease made pursuant to Section 168(f)(8) of the
Internal Revenue Code of 1954 (or any corresponding or similar provision of
state, local or foreign Law);
4.11.3 BTR Finance is not a foreign person for purposes of
Section 1445 of the Code. None of the Companies organized in a jurisdiction
outside the United States currently has in effect an election described in
Section 897(i) of the Code (or any corresponding or similar provision under
state, local or foreign Law). No Company, Subsidiary or Seller is subject to
withholding under Code Section 1445 in connection with the transactions
undertaken in pursuance of this Agreement;
4.11.4 each of the Companies and Subsidiaries has complied in
all material respects with all applicable Laws relating to the payment and
withholding of Taxes and has duly and timely withheld from amounts paid to any
employee, independent contractor, creditor, stockholder or other third party
(including without limitation salaries, wages and other compensation, whether
monetary or non-monetary) and has paid over to the appropriate taxing
authorities all amounts required to be so withheld and paid over for all periods
under all applicable Laws;
4.11.5 Schedule 4.11 contains a complete and accurate list of,
and Sellers have made available to Purchaser complete copies of (i) all income
or franchise Tax Returns of the Companies or the Subsidiaries (or, in the case
of Tax Returns filed for an Affiliated Group, the portion of such consolidated
Tax Returns relating to the Companies or the Subsidiaries) relating to the
taxable periods ending after January 1, 1997 and (ii) the portions of any audit
report issued within the last five years relating to any Company or any
Subsidiary;
4.11.6 Schedule 4.11 lists the taxable years through which (i)
the relevant taxing authorities have examined the United States federal and
state income or franchise (or in the case of Michigan, single business) Tax
Returns of the Companies and Subsidiaries or (ii) the applicable statute of
limitations for such Tax Returns has expired. All deficiencies assessed in
writing against the Companies or Subsidiaries have been paid, reserved against
in the Audited Balance Sheet or, as described in Schedule 4.11, are being
contested in good faith in appropriate proceedings. No Seller, Company or
14
Subsidiary has given waivers or extensions (or is or could reasonably be
expected to be subject to a waiver or extension given by any other Person) of
any statute of limitations relating to the payment of Taxes of any Company or
Subsidiary or for which any Company or Subsidiary may be liable;
4.11.7 no Company or Subsidiary is a party to any tax sharing
or similar agreement or arrangement (whether or not written) pursuant to which
it will have any obligation to make any payments after the Closing;
4.11.8 none of the Companies or Subsidiaries will be required
to include any item of income or gain in, or exclude any item of deduction or
loss from, taxable income for any taxable period (or portion thereof) ending
after the Closing Date as a result of any: (i) change in method of accounting
for a taxable period ending on or prior to the Closing Date under Section 481(c)
of the Code (or any corresponding or similar provision of state, local or
foreign income tax Law); (ii) "closing agreement" as described in Section 7121
of the Code (or any corresponding or similar provision of state, local or
foreign income tax Law) executed on or prior to the Closing Date; or (iii)
installment sale made on or prior to the Closing Date;
4.11.9 there are no tax rulings, requests for rulings, or
closing agreements relating to any Company or any Subsidiary that could affect
the liability for Taxes of such entities for any period (or portion of a period)
after the Closing Date;
4.11.10 no power of attorney (that is currently in force) has
been granted by any Company or any Subsidiary with respect to any matter
relating to Taxes of any Company or any Subsidiary;
4.11.11 any adjustment of Taxes of any Company or any
Subsidiary made by the IRS in any examination which is required to be reported
to the appropriate state, local or foreign taxing authorities has been reported,
and any additional Taxes due with respect thereto have been paid;
4.11.12 no Company or Subsidiary has made, or is obligated to
make, any payment or is a party to any agreement that could obligate it to make
any payments that under Section 280G or Section 162(m) of the Code were or will
not be deductible for tax purposes;
4.11.13 each Company and each Subsidiary has, in accordance
with Treas. Reg. Section 1.6662-3(c), "adequately disclosed" on its Tax Returns
all positions taken therein that could give rise to a "substantial
understatement" of federal income Tax within the meaning of Section 6662 of the
Code, or as applicable, such disclosure would meet the conditions of any
provision analogous or similar to Treas. Reg. Section 1.6662-3(c) contained in
state, local or foreign Law in any taxing jurisdiction to which it is asserted
that such Company or Subsidiary is or could be subject;
15
4.11.14 neither the Companies nor the Subsidiaries has a
subsidiary investment that could reasonably be expected to be subject to the
loss disallowance rules of Temporary Treas. Reg. Section 1.337(d)-2T if such
entity's stock were sold separately as of the Closing Date; and
4.11.15 (i) none of the Companies or Subsidiaries has, within
the last six (6) years, been a member of an Affiliated Group filing a
consolidated United States federal income Tax Return (or similar return under
the provisions of state, local or foreign Law) other than a group the common
parent of which was Invensys, Inc. and (ii) within the Knowledge of Sellers, no
claim has been asserted against any Company or Subsidiary based upon liability
for the Taxes of another Person (other than any of the Companies or
Subsidiaries) (A) under Treas. Reg. Section 1.1502-6 (or corresponding or
similar provisions of state, local or foreign Law), (B) as a transferee or
successor or (C) by contract or otherwise.
4.12 Real Property. Schedule 4.12 sets forth a complete list
of (i) all real property and interests in real property owned by the Company or
any Subsidiary (individually, an "Owned Property" and collectively, the "Owned
Properties"), and (ii) all real property and interests in real property leased
by the Company or any Subsidiary as lessee or lessor (individually, a "Real
Property Lease" and the real properties specified in such leases, together with
the Owned Properties, being referred to herein individually as a "Company
Property" and collectively as the "Company Properties"). A Company or a
Subsidiary has good and marketable fee title to all Owned Property, free and
clear of all Liens of any nature whatsoever except Permitted Exceptions. A
Company or a Subsidiary has a valid and enforceable leasehold interest under
each of the Real Property Leases, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity) and, no Company or Subsidiary has received any written notice of any
default. Sellers have delivered to Purchaser (i) true, correct and complete
copies of the deeds, leases or other instruments (including all amendments,
modifications and extensions) by which the Companies or Subsidiaries acquired
the Real Property Leases and the non-North American Owned Properties, and (ii)
title commitments and ALTA surveys for each of the North American Owned
Properties, none of which are more than two hundred seventy (270) days old, as
of the date hereof. All of the Owned Properties are reflected on the Interim
Balance Sheet, and no Company Property is subject to any right-of-way, building
and use restriction, exception, variance, reservation or limitation of any
nature except Permitted Exceptions. All of the buildings, plants and structures
located on the Company Properties lie within the boundaries thereof and do not
encroach upon the property of, or otherwise conflict with the property rights
of, any other Person, except as shown on the plats of survey provided to
Purchaser.
4.13 Tangible Personal Property. Except as set forth on
Schedule 4.13, a Company or a Subsidiary: (i) owns or leases all tangible
personal property that is currently employed by it in, and material to, the
conduct of its business as presently conducted, free and clear of all Liens,
(ii) owns or leases all of the tangible personal
16
property reflected in the Interim Balance Sheet (except for tangible personal
property acquired or disposed of since the Interim Balance Sheet Date in the
ordinary course of business), and (iii) upon consummation of the transactions
contemplated by this Agreement, will be entitled to continue to use all such
tangible personal property.
4.14 Technology and Intellectual Property.
4.14.1 Schedule 4.14.1 lists all U.S. patents, registered
copyrights, registered trademarks and pending applications therefor included in
the Fasco Business Intellectual Property.
4.14.2 Except as shown in Schedule 4.14.2, the Companies and
the Subsidiaries are the sole and exclusive owners of the Fasco Business
Intellectual Property, and no other person or entity has any claim of ownership
with respect to the Fasco Business Intellectual Property.
4.14.3 Except as shown in Schedule 4.14.3, the Companies and
the Subsidiaries have not previously assigned, transferred, conveyed or
otherwise encumbered their right, title and interest in the Fasco Business
Intellectual Property.
4.14.4 Except as shown in Schedule 4.14.4 or as noted in
Schedule 4.14.1, the Fasco Business Intellectual Property is valid, subsisting,
and enforceable, and is not the subject of any challenge.
4.14.5 Except as shown in Schedule 4.14.5, to the Knowledge of
Sellers, no third party is currently violating or infringing upon any of the
Companies' or the Subsidiaries' rights in the Fasco Business Intellectual
Property.
4.14.6 The Companies or the Subsidiaries own or otherwise
possess (or at the time of Closing will possess) valid and enforceable rights to
use all Intellectual Property and Technology currently used in the businesses of
the Fasco Business as conducted up to and through the Closing Date. With respect
to Intellectual Property and Technology set forth in Schedule 4.14.6.1, each
relevant Company and Subsidiary has been granted, or prior to the Closing will
be granted, to the extent permissible, licenses or sublicenses sufficient for
the conduct of its business as conducted up to and through the Closing Date.
Schedule 4.14.6.2 lists all other license agreements granting to the relevant
Companies and Subsidiaries the right to use any Intellectual Property or
Technology other than software that is available through "shrink wrap" or
similar widely available commercial end user licenses.
4.14.7 Except as shown in Schedule 4.14.7, no Company and no
Subsidiary is under any obligation to pay any royalties or similar payments in
connection with any license to any Company or any Subsidiary.
17
4.14.8 Except as shown in Schedule 4.14.8, to the Knowledge of
Sellers, the businesses of the Fasco Business as they are currently conducted do
not violate or infringe the Intellectual Property rights of any third party.
4.15 Material Contracts. Schedule 4.15 sets forth all of the
following Contracts to which any Company or any Subsidiary is a party or by
which it is bound (collectively, the "Material Contracts"):
4.15.1 Contracts with any Seller or any Affiliate of any
Seller, which involve payments, in the aggregate, in excess of One Hundred
Thousand Dollars ($100,000);
4.15.2 Contracts entered into other than in the ordinary
course of business or for the grant to any Person of any preferential rights to
purchase any of its assets in each case for consideration in excess of Five
Hundred Thousand Dollars ($500,000);
4.15.3 joint venture or written partnership agreements with
any Person;
4.15.4 Contracts containing covenants that in any way restrict
the business activity of any Company or Subsidiary in any respect that would be
material to that Company or Subsidiary, or which limit the freedom of any
Company or Subsidiary to engage in any line of business or to compete with any
Person;
4.15.5 Contracts relating to the acquisition by any Company or
any Subsidiary of any operating business or the capital stock of any other
Person, in each case, for consideration in excess of Five Hundred Thousand
Dollars ($500,000);
4.15.6 Contracts relating to the borrowing of money involving
amounts in excess of Five Hundred Thousand Dollars ($500,000);
4.15.7 to the Knowledge of Sellers, all confidentiality
agreements which restrict the ability of a Company or a Subsidiary to disclose
any information to a third party;
4.15.8 each written warranty, guaranty or other similar
undertaking with respect to contractual performance extended by any Company or
Subsidiary other than in the ordinary course of business;
4.15.9 written contractual obligations by which any Company or
Subsidiary has agreed to pay or be responsible for the debts or obligations of
any other Person, except where any such payment would be Fifty Thousand Dollars
($50,000) or less or where the other party is a Company or a Subsidiary;
4.15.10 any other Contracts, other than Real Property Leases,
which involve the expenditure of more than Five Hundred Thousand Dollars
($500,000) in the aggregate that are not terminable by a Company or Subsidiary
without penalty on less than thirty (30) days' notice; and
18
4.15.11 each written amendment, supplement or modification to
any of the foregoing.
Except as set forth in Part One of Schedule 4.15:
(i) to the Knowledge of Sellers, no officer, director or
employee of any Company or Subsidiary is bound by any Contract that limits the
ability of such officer, director or employee to (A) engage in or continue any
conduct, activity, or practice relating to the business of any Company or
Subsidiary, or (B) assign to any Company or Subsidiary any rights to any
invention, improvement or discovery; and
(ii) no Company or Subsidiary owns, or has any Contract to
acquire, any equity securities or other securities of any Person (other than the
Companies or the Subsidiaries) or any direct or indirect equity or ownership
interest in any other business.
Except as set forth in Part Two of Schedule 4.15, all of the
Material Contracts are in full force and effect and are the legal, valid and
binding obligation of a Company and/or a Subsidiary, enforceable against it/them
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).
Except as set forth in Part Three of Schedule 4.15:
(i) to the Knowledge of Sellers each Company or Subsidiary is
in compliance with all applicable terms and requirements of each Material
Contract;
(ii) to the Knowledge of Sellers, each other Person that has
any obligation or liability under any Material Contract under which any Company
or Subsidiary has any rights is in compliance with all applicable terms and
requirements of such Material Contract;
(iii) no Company or Subsidiary has given to or received from
any other Person any written notice regarding any actual or alleged violation or
breach of, or default under, any Material Contract; and
(iv) there are no renegotiations of, or outstanding rights to
renegotiate, any material amounts paid or payable to any Company or Subsidiary
under current or completed Material Contracts with any Person and, to the
Knowledge of Sellers, no such Person has made written demand for such
renegotiation.
4.16 Employee Benefits.
4.16.1 Schedule 4.16.1.I sets forth a current, accurate and
complete list of all written and material unwritten pension, retirement, cash
balance, money purchase, savings, profit sharing, annuity, deferred
compensation, bonus, incentive (including,
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without limitation, cash, stock option, stock bonus, stock appreciation, phantom
stock, restricted stock and stock purchase), medical, dental, vision,
hospitalization, long-term care, prescription drug and other health, employee
assistance, cafeteria, flexible benefits, life insurance, short and long term
disability, vacation pay, severance pay, other welfare and fringe benefit and
similar plans, programs, understandings, arrangements or agreements, including,
without limitation, all employee benefit plans as defined in Section 3(3) of
ERISA (the "Plans"), sponsored or maintained for current or former employees,
officers, directors or consultants of any Company or any Subsidiary or to which
any Company or any Subsidiary is a party or required to contribute or has any
liability, whether direct or indirect, or actual or contingent (the "Invensys
Plans"). Schedule 4.16.1.II separately identifies each Plan sponsored by a
Company or a Subsidiary for current or former employees, officers, directors or
consultants of any Company or Subsidiary (the "Company Plans") and Schedule
4.16.1.III identifies each Company Plan that is maintained outside of the United
States primarily for the benefit of persons substantially all of whom are
non-resident aliens ("Non-U.S. Plans").
4.16.2 True, correct and complete copies of the following
documents, with respect to each of the Company Plans, if applicable, have been
made available or delivered to the Purchaser: (i) any plans and related trust
documents, and amendments thereto; (ii) the two most recent Forms 5500; (iii)
the last IRS determination letter, if applicable; (iv) the most recent actuarial
report; (v) summary plan descriptions; (vi) the two most recent Forms PBGC-1
and, (vii) with respect to any Company Plan that is maintained pursuant to a
collective bargaining agreement, all collective bargaining agreements pursuant
to which contributions are being made or obligations are owed to such plan and
all contracts with third-party administrators, actuaries, investment managers,
consultants and other independent contractors that relate to any such plan.
4.16.3 The Invensys Pension Plan and the Invensys 401(k) Plan
are qualified under Section 401 of the Code and the trusts maintained pursuant
thereto are exempt from federal income taxation under Section 501 of the Code,
and nothing has occurred with respect to the operation of either plan which is
reasonably likely to cause the loss of such qualification or exemption or the
imposition on any Company or any Subsidiary of any liability, penalty or tax
under ERISA or the Code.
4.16.4 Each Company Plan is in material compliance as to form
and operation, and in accordance with all applicable provisions of the Code and
ERISA and any other applicable federal and state laws, (including rules and
regulations thereunder) and such plans have been operated in compliance with
such laws and written plan documents.
4.16.5 No Company Plan is a "multiemployer pension plan" as
defined in Section 3(37) of ERISA. No Company Plan utilizes a funding vehicle
described in Section 501(c)(9) of the Code or is subject to the provisions of
Section 505 of the Code.
4.16.6 The Pension Benefit Guaranty Corporation ("PBGC") has
not instituted or threatened a proceeding to terminate or to appoint a trustee
to administer any Invensys Plan pursuant to Subtitle 1 of Title IV of ERISA, and
no condition or set of circumstances exists that presents a material risk of
termination of any
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Invensys Plan by the PBGC. Except as disclosed on Schedule 4.16.6, none of the
Invensys Plans have been the subject of, and no event has occurred or condition
exists that could be deemed, a reportable event (as defined in Section 4043 of
ERISA) as to which a notice would be required (without regard to regulatory
thresholds) to be filed with the PBGC. Each Seller, the Company and each
Subsidiary has paid in full all insurance premiums due to the PBGC with regard
to Invensys Plans for all applicable periods ending on or before the Closing
Date.
4.16.7 No Company or Subsidiary has incurred or will incur
with respect to any "employee benefit plan" as defined in Section (3)(3) of
ERISA any actual or contingent liability, including, but not limited to,
liability under Section 601 through 608 of ERISA and Section 4980B of the Code,
any withdrawal liability from any multiemployer pension plan, any termination or
withdrawal liability under Sections 4062, 4063 or 4064 of ERISA, any
"accumulated funding deficiency" as such term is defined in Section 302 of ERISA
and Section 412 of the Code (whether or not waived), any requirement to make any
contributions to any multiemployer plan, solely as a result of any Company or
Subsidiary being members of a "controlled group" of corporations, or treated as
a single employer with, Seller or Invensys within the meaning of Section 414(b),
414(c), 414(m) or 414(n) of the Code arising from or incurred with respect to
any period prior to the Closing Date.
4.16.8 Each Company Plan which is a group health plan within
the meaning of Section 5000 of the Code complies and in each case has complied
with the applicable requirements of Section 601 through 608 of ERISA and Section
4980B of the Code. Sellers will provide any COBRA notices or coverage required
as a result of the transaction contemplated by this Agreement.
4.16.9 There are no actions or claims pending (other than
routine claims for benefits) or, to the Knowledge of Sellers, threatened against
any Company Plan or against the assets of any Company Plan. Neither Sellers, the
Company nor any Subsidiary nor, to the Knowledge of Sellers, any other
"disqualified person" or "party in interest," within the meanings of Section
4975 of the Code or Section 3(14) of ERISA, respectively has engaged in any
"prohibited transaction," as such term is defined in Section 4975 of the Code or
Section 406 of ERISA, which could, following the Closing Date, subject any
Company Plan (or its related trust), Purchaser, Seller, the Company, any
Subsidiary, or any officer or employee of either, to any material tax or penalty
imposed under the Code or ERISA.
4.16.10 Except as required by Law or as disclosed on Schedule
4.16.10, the consummation of the transactions contemplated herein will not
accelerate the time of vesting, or the time of payment or increase the amount,
of compensation due any director, employee, officer, former employee or former
officer of a Company or a Subsidiary. There are no contracts or arrangements
providing for payments that could subject any Person to liability for tax under
Section 4999 of the Code.
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4.16.11 With respect to each Company Plan that is a Non-U.S.
Plan, all employer and employee contributions required by Law or by the terms of
such Non-U.S. Plan have been made, or, if applicable, accrued in accordance with
the Company's normal accounting practices and each Non-U.S. Plan required to be
registered has been registered and has been maintained in good standing with
applicable regulatory authorities.
4.17 Labor.
4.17.1 Except as set forth on Schedule 4.17.1, no Company or
Subsidiary is party to any labor or collective bargaining agreement and there
are no labor or collective bargaining agreements which pertain to employees of
the Company or any of its Subsidiaries. The Sellers have delivered or otherwise
made available to the Purchaser true, correct and complete copies of the labor
or collective bargaining agreements listed on Schedule 4.17.1, together with all
amendments, modifications or supplements thereto.
4.17.2 No labor organization or group of employees of any
Company or any Subsidiary has made in writing a pending demand for recognition,
and there are no representation proceedings or petitions seeking a
representation proceeding presently pending or, to the Knowledge of Sellers,
threatened to be brought or filed with the National Labor Relations Board or
other labor relations tribunal.
4.17.3 Except as set forth on Schedule 4.17.3, there are no
strikes, work stoppages, unfair labor practice charges, slowdowns or lockouts
or, to the Knowledge of Sellers, grievances or other labor disputes pending or
overtly threatened against or involving any Company or any Subsidiary except
individual grievances being processed and resolved in accordance with
established grievance procedures utilized by such Company or Subsidiary.
4.18 Litigation.
4.18.1 Except as set forth in Schedule 4.18.1, there is no
pending Legal Proceeding:
(i) where an express written claim for damages against a
Company or a Subsidiary exceeds One Million Dollars ($1,000,000) or there is an
express written claim against a Company or a Subsidiary for injunctive relief;
(ii) commenced against Invensys, a Seller, a Company or a
Subsidiary that challenges or seeks to prevent, delay or otherwise interfere
with any of the transactions contemplated hereby; or
(iii) that has been commenced by any Company or Subsidiary
which seeks Fifty Thousand Dollars ($50,000) or more in damages.
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To the Knowledge of Sellers, no such Legal Proceeding has been
threatened in writing by a Company or a Subsidiary or against a Company or a
Subsidiary. Sellers have made available to Purchaser copies of all pleadings
relating to each Legal Proceeding listed in Schedule 4.18.1.
4.18.2 Except as set forth in Schedule 4.18.2:
(i) there is no Order to which any of the Companies or
Subsidiaries, or any of the assets owned or used by any of them, is subject
which (i) would require the payment of Fifty Thousand Dollars ($50,000) or more,
or (ii) would restrict the operation of the business of any Company or
Subsidiary as currently conducted (a "Material Order");
(ii) neither Invensys nor any Seller is subject to any Order
that relates to the Shares;
(iii) to the Knowledge of Sellers, no officer, director or
employee of any Company or Subsidiary is subject to any Order that prohibits
such officer, director, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of any Company or Subsidiary;
(iv) each Company and Subsidiary is in compliance with all of
the terms and requirements of each Material Order;
(v) to the Knowledge of Sellers, no event has occurred that
would constitute or result in (with or without notice or lapse of time) a
violation of or failure to comply with any term or requirement of any Material
Order; and
(vi) no Company or Subsidiary has received, at any time since
January 1, 2001, any written notice from any Governmental Body or any other
Person regarding any actual, alleged, possible, or potential violation of, or
failure to comply with, any term or requirement of any Material Order.
4.19 Compliance with Laws; Governmental Authorizations.
4.19.1 Except as shown on Schedule 4.19.1, each Company and
each Subsidiary is in compliance with all Laws applicable to the Company and the
Subsidiaries or to the conduct of the business or operations of the Companies
and the Subsidiaries or the use of their respective properties (including any
leased property) and assets, except for such non-compliances as would not,
individually or in the aggregate, have a material adverse effect on a Company or
Subsidiary, and all Governmental Authorizations which are required for each of
the Companies and the Subsidiaries to operate its business have been issued,
except for those the absence of which will not cause any Company or Subsidiary
to cease or materially alter any operations presently conducted by such Company
or Subsidiary.
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4.19.2 Schedule 14.9.2 contains a complete and accurate list
of each Governmental Authorization that is held by any Company or Subsidiary
which is material to the conduct of the business of any Company or Subsidiary.
Each Governmental Authorization listed in Schedule 4.19.2 is valid and in full
force and effect. Except as set forth in Schedule 4.19.2:
(i) to the Knowledge of Sellers, each Company or Subsidiary is
in compliance with all of the terms and requirements of each Governmental
Authorization identified in Schedule 4.19.2;
(ii) to the Knowledge of Sellers, no event has occurred that
will (with or without notice or lapse of time) (A) constitute or result directly
or indirectly in a violation of or failure to comply with any term or
requirement of any Governmental Authorization listed in Schedule 4.19.2, or (B)
result directly or indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification to, any Governmental
Authorization listed in Schedule 4.19.2; and
(iii) all applications required to have been filed for the
renewal of the Governmental Authorizations listed in Schedule 4.19.2 have been
duly filed with the appropriate Governmental Bodies, and all other filings
required to have been made with respect to such Governmental Authorizations have
been duly filed with the appropriate Governmental Bodies.
4.20 Environmental Matters. Except as disclosed on Schedule
4.20, (i) each Company and Subsidiary is in material compliance with all
Environmental Laws, which compliance includes obtaining, maintaining and
complying in all material respects with any and all permits required by
Environmental Laws; (ii) there are no claims or proceedings pending or, to the
Knowledge of Sellers, threatened against any Company or Subsidiary alleging the
violation of or non-compliance with Environmental Laws; and (iii) to the
Knowledge of Sellers, no facts, circumstances or conditions currently exist at
any Company Property that would reasonably be expected to result in a Company or
Subsidiary incurring liabilities under Environmental Laws or prevent continued
material compliance with applicable Environmental Laws. Schedule 4.20 lists and
identifies by site each Environmental Due Diligence Assessment prepared by URS
Corporation in connection with the transactions contemplated by this Agreement.
4.21 Financial Advisors. Except as set forth on Schedule 4.21,
no Person has acted, directly or indirectly, as a broker, finder or financial
advisor for the Sellers in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in
respect thereof. The Sellers shall be responsible for the fees or commissions of
any Person listed on Schedule 4.21.
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4.22 Insurance. Sellers have delivered to Purchaser:
(i) true and complete lists of all globally placed policies of
insurance to which any Company or Subsidiary is a party or under which any
Company or Subsidiary, or any director of any Company or Subsidiary, is covered;
(ii) true and complete descriptions of all pending
applications for global policies of insurance; and
(iii) any statement by the auditor of any Company's financial
statements with regard to the adequacy of such entity's coverage or of the
reserves for claims.
4.23 Certain Payments. Since January 1, 2000, no Company or
Subsidiary or director, officer, agent, or employee of any Company or Subsidiary
has directly or indirectly made any contribution, gift, bribe, rebate, payoff,
influence, payment, kickback, or other payment to any Person, private or public,
regardless of form whether in money, property, or services (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, or (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of any Company or Subsidiary, in
each case, with respect to clauses (i), (ii) and (iii), which was in violation
of any Law in effect as of the date of such event.
4.24 Relationships with Related Persons. Except as listed and
described on Schedule 4.24, none of the Sellers or Invensys, or any Affiliate of
any of them (other than a Company or Subsidiary) (i) has any interest in any
property (whether real, personal, or mixed and whether tangible or intangible)
used in the Fasco Business, or (ii) is a party to any Contract with, has any
claim or right against, or is a creditor of, any Company or Subsidiary.
4.25 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article 4, no Seller, Company,
Subsidiary, Affiliate of a Seller, or Invensys or any other Person makes any
representations or warranties, and the Sellers, the Companies and the
Subsidiaries hereby disclaim any other representations or warranties, whether
made by a Seller or any Affiliate of a Seller, or any of their respective
officers, directors, employees, agents or representatives, with respect to the
execution and delivery of this Agreement or any Seller Document, or the
transactions contemplated hereby, notwithstanding the delivery or disclosure to
Purchaser or its representatives of any documentation or other information with
respect to any one or more of the foregoing.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Sellers
that:
5.1 Organization and Good Standing. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Michigan.
5.2 Authorization of Agreement. The Purchaser has full
corporate power and authority to execute and deliver this Agreement and each
other agreement, document, instrument or certificate contemplated by this
Agreement or to be executed by the Purchaser in connection with the consummation
of the transactions contemplated hereby and thereby (together with this
Agreement, the "Purchaser Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Purchaser of this Agreement and each Purchaser Document has been duly authorized
by all necessary corporate action on behalf of the Purchaser. This Agreement has
been, and each Purchaser Document will be at or prior to the Closing, duly
executed and delivered by the Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement
constitutes, and each Purchaser Document when so executed and delivered will
constitute, legal, valid and binding obligations of the Purchaser, enforceable
against the Purchaser in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity.
5.3 Conflicts; Consents of Third Parties.
5.3.1 None of the execution and delivery by the Purchaser of
this Agreement and the other Purchaser Documents, the consummation of the
transactions contemplated hereby, or the compliance by the Purchaser with any of
the provisions hereof or thereof will (i) conflict with, or result in the breach
of, any provision of the certificate of incorporation or by-laws of the
Purchaser, (ii) conflict with, violate, result in the breach of, or constitute a
default under any note, bond, mortgage, indenture, license, agreement or other
obligation to which the Purchaser is a party or by which the Purchaser or its
properties or assets are bound or (iii) violate any statute, rule, regulation,
or Order of any Governmental Body by which the Purchaser is bound, except, in
the case of clause (ii), for such violations, breaches or defaults as would not,
individually or in the aggregate, have a material adverse effect on the ability
of the Purchaser to consummate the transactions contemplated by this Agreement.
5.3.2 Except as set forth on Schedule 5.3.2, no consent,
waiver, approval, Order, permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the
part of the Purchaser in
26
connection with the execution and delivery of this Agreement or the Purchaser
Documents or the compliance by Purchaser with any of the provisions hereof or
thereof.
5.4 Litigation. There are no Legal Proceedings pending or, to
the Knowledge of Purchaser, threatened, that are reasonably likely to prohibit
or adversely affect the ability of the Purchaser to enter into this Agreement or
consummate the transactions contemplated hereby.
5.5 Investment Intention. The Purchaser is acquiring the
Shares for its own account, for investment purposes only and not with a view to
the distribution (as such term is used in Section 2(11) of the Securities Act of
1933, as amended (the "Securities Act") thereof. Purchaser understands that the
Shares have not been registered under the Securities Act and cannot be sold
unless subsequently registered under the Securities Act or an exemption from
such registration is available.
5.6 Financial Advisors. Except as set forth in Schedule 5.6,
no Person has acted, directly or indirectly, as a broker, finder or financial
advisor for the Purchaser in connection with the transactions contemplated by
this Agreement and no Person is entitled to any fee or commission or like
payment in respect thereof. The Purchaser shall be responsible for the fees or
commissions of any Person listed on Schedule 5.6.
5.7 Sufficiency of Funds.
5.7.1 Purchaser (i) has, and at the Closing will have,
sufficient internal funds (giving effect to any unfunded committed financing)
available to pay the purchase price and any expenses incurred by Purchaser in
connection with the transactions contemplated by this Agreement and (ii) has,
and at the Closing will have, the resources and capabilities (financial or
otherwise) to perform its obligations hereunder and under the other Purchaser
Documents.
5.7.2 Schedule 5.7.2 sets forth each of the sources and
amounts of Purchaser's financing, and Purchaser has delivered or shall deliver
to Sellers, promptly upon its becoming available, any and all commitment letters
and all other letters and agreements in connection with such financing.
ARTICLE 6
COVENANTS
6.1 Access to Management. Sellers agree that, prior to the
Closing Date, Purchaser shall be permitted access, during normal business hours,
to such of the properties, books, Contracts, commitments, Tax Returns and other
records relating to the Tax attributes of the Companies and Subsidiaries, and
access to such officers, employees, consultants, agents, accountants, attorneys
and other representatives of the Companies and the Subsidiaries, as Purchaser
may reasonably request; provided, however, that Purchaser's access shall not
materially disrupt or interfere with the
27
operation of the business. Sellers shall furnish Purchaser with all financial
and operating data and other information concerning the affairs of the Companies
and Subsidiaries as Purchaser may reasonably request.
6.2 Conduct of Business Pending the Closing.
6.2.1 Prior to the Closing, except: (i) as set forth on
Schedule 6.2 hereto, (ii) as contemplated by this Agreement, (iii) as required
by applicable Law or (iv) with the prior written consent of the Purchaser, the
Sellers shall, and shall cause the Companies and the Subsidiaries to:
6.2.1.1 conduct the respective businesses of the Companies and
the Subsidiaries only in the ordinary course consistent with past
practice;
6.2.1.2 use reasonable commercial efforts to (i) preserve the
present business operations, organization (including, without
limitation, management, employees, agents and the sales force) and
goodwill of the Companies and the Subsidiaries and (ii) preserve the
present relationship with Persons having business dealings with the
Companies and the Subsidiaries, including, without limitation,
suppliers, customers, landlords and creditors;
6.2.2 Prior to the Closing, except as (i) set forth on
Schedule 6.2 hereto, (ii) contemplated by this Agreement, (iii) required by
applicable Law or (iv) with the prior written consent of the Purchaser, the
Sellers shall not, and shall cause the Companies and the Subsidiaries not to:
6.2.2.1 declare, set aside, make or pay any dividend or other
distribution in respect of the capital stock of the Companies or the
Subsidiaries or repurchase, redeem or otherwise acquire any outstanding
shares of the capital stock or other securities, or other ownership
interests in, the Companies or any Subsidiaries;
6.2.2.2 transfer, issue, sell or dispose of any shares of
capital stock or other securities of any Company or any Subsidiary or
grant options, warrants, calls or other rights to purchase or otherwise
acquire shares of the capital stock or other securities of any Company
or any Subsidiary;
6.2.2.3 effect any recapitalization, reclassification, stock
split or like change in the capitalization of any Company or any
Subsidiary;
6.2.2.4 amend the certificate of incorporation or by-laws (or
comparable instruments) of any Company or any Subsidiary;
6.2.2.5 except for trade payables and for indebtedness for
borrowed money incurred in the ordinary course of business and
consistent with past practice, borrow monies for any reason or draw
down on any line of credit or debt
28
obligation, or become the guarantor, surety, endorser or otherwise
liable for any debt, obligation or liability (contingent or otherwise)
of any other Person;
6.2.2.6 subject to any Lien (except for Liens that do not
materially impair the use of the property subject thereto in their
respective businesses as presently conducted and Permitted Exceptions)
any of the properties or assets (whether tangible or intangible) of any
Company or Subsidiary;
6.2.2.7 acquire any properties or assets or sell, assign,
transfer, convey, lease or otherwise dispose of any of the properties
or assets (except for fair consideration in the ordinary course of
business consistent with past practice) of any Company or Subsidiary
for which the aggregate consideration paid or payable in any individual
transaction is in excess of Five Hundred Thousand Dollars ($500,000);
6.2.2.8 permit any Company or any Subsidiary to enter into or
agree to enter into any merger or consolidation with any corporation or
other entity; or
6.2.2.9 agree to take any action prohibited by this Section
6.2.
6.3 Employee Matters.
6.3.1 Sellers shall or shall cause an Affiliate (other than
the Companies and the Subsidiaries) to employ prior to the Closing Date each
employee of any Company or any Subsidiary employed in the United States who was
absent from active employment on the Closing Date due to long term disability or
who is a former employee receiving severance benefits (an "Inactive Employee").
Such Inactive Employees shall be deemed to have transferred their employment
from the Companies and the Subsidiaries to the Sellers or any such Affiliate
prior to the close of business on the Closing Date. Sellers shall provide a
schedule listing such Inactive Employees as of the Closing Date on or prior to
the Closing Date. All Employees of the Companies and the Subsidiaries (other
than Inactive Employees) ("Employees") who are actively at work (including
Employees on vacation and on any Approved Absence, as defined below) as of the
Closing Date shall continue to be employed as of the Closing Date at their base
salary or wage rate in effect immediately prior to the Closing Date (or, as
applicable, immediately prior to his or her Approved Absence). All other
Employees of the Companies and the Subsidiaries employed in the United States
who are not actively at work on the Closing Date due to an approved leave of
absence (including active military service), short term disability (including
employees on workers' compensation) or a layoff with active recall rights in
place pursuant to the terms of applicable Company policy or labor agreement
("Approved Absence"), shall continue to be employed by the Companies and the
Subsidiaries as of the Closing Date. All Employees of the Companies and the
Subsidiaries employed outside the United States ("Non-U.S. Employees") shall
continue to be employed on and after the Closing Date on terms and conditions
required by and in accordance with the provisions of applicable foreign, federal
or state Law.
29
6.3.2 Purchaser agrees to provide, and shall cause the
Companies and the Subsidiaries to provide, each Employee with employee benefits
(including, without limitation, medical and dental benefits) that in the
aggregate are substantially similar to those benefits provided by Purchaser or
its Affiliates to its similarly situated employees and such other terms and
conditions of employment as may be required by applicable Law.
6.3.3 The Purchaser acknowledges that the Companies and the
Subsidiaries will have in effect on the Closing Date, the collective bargaining
agreements (including any benefit plans maintained pursuant to such collective
bargaining agreements) and the Company Plans listed in Schedule 4.16.1 and
Schedule 4.17.1 and statutory and social laws of foreign countries.
6.3.4 Purchaser agrees that, with respect to all of its
employee benefit plans, programs and arrangements covering or otherwise
benefiting any of the Employees on or after the Closing Date, service with the
Companies and the Subsidiaries shall be, to the extent permitted under
applicable Law, counted for purposes of eligibility to participate, vesting,
level of benefits with respect to vacation , and benefit accruals in any defined
benefit pension plan, to the same extent such service was counted under the
corresponding employee benefit plans, programs, or arrangements of the Companies
and the Subsidiaries prior to the Closing Date and, in the case of Non-U.S.
Employees, further to the extent and in the manner provided for under applicable
Law, except to the extent that such credit would result in duplication of
benefits for such period of service. With regard to severance arrangements,
Employees will be treated the same as similarly situated employees of the
Purchaser.
6.3.5 Purchaser shall provide welfare benefits of the type
described in Section 3(1) of ERISA and in accordance with this Section 6.3, as
of the Closing Date so as to ensure uninterrupted coverage of all Employees
employed in the United States ("U.S. Employees"). Such plans shall grant credit
for amounts paid by the U.S. Employees on or before the Closing Date by an
Employee or an Employee's covered dependent for purposes of satisfying
applicable deductible, coinsurance, and maximum out-of-pocket provisions if such
amounts are applicable to the same calendar year in which the Closing Date
occurs, in each case, under any applicable welfare plan of Purchaser or its
Affiliates, provided that such information is provided to Purchaser within
thirty (30) days following the Closing Date, and Purchaser shall waive any
pre-existing condition exclusions evidence of insurability provisions, waiting
period requirements or any similar provision.
6.3.6 Effective as of the Closing Date, the Purchaser shall
cover, or cause the Companies and the Subsidiaries to cover, the U.S. Employees
under one or more defined contribution plans and trusts intended to qualify
under Section 401(a) and Section 501(a) of the Code (the "Purchaser DC Plan").
Invensys shall transfer the account balances (including loans to U.S. Employees)
of U.S. Employees under the Invensys 401(k) plan which is a defined contribution
plan ("Seller DC Plan") to the Purchaser DC Plan. In connection with any
transfer, the Purchaser will allow each U.S.
30
Employee's outstanding loan and related promissory note, if any, under the
Seller DC Plan to be transferred to the Purchaser DC Plan. Sellers and Purchaser
shall reasonably cooperate in good faith to effect such transfers as soon as
practicable after the Closing Date.
6.3.7
6.3.7.1 Effective as of the Closing Date, the Purchaser shall
establish one (1) or more qualified defined benefit plans or shall
designate one (1) or more established defined benefit plans
("Purchaser's Salaried Plans") and a trust(s) to fund Purchaser's
Salaried Plans ("Purchaser's Salaried Trust") to assume the liabilities
attributable to the non-union, current U.S. Employees (and excluding
former and Inactive Employees) of the Fasco Business (collectively, the
"Salaried Pension Transferees") as of the Closing Date entitled to a
benefit under the Invensys Pension Plan applicable to such Salaried
Pension Transferees ("Assumed Salaried Pension Plan Liabilities").
6.3.7.2 As soon as possible, but no later than sixty (60) days
post-Closing, Purchaser shall provide Sellers with a current
determination letter(s) on the qualification under Sections 401(a) and
501(a) of the Code of all Purchaser's Salaried Plans.
6.3.7.3 Within one hundred twenty (120) days after the Closing
Date, but in no event prior to the confirmation that Purchaser's
Salaried Plans and the Invensys Pension Plan comply with Sections
401(a) and 501(a) of the Code, Invensys shall cause the transfer of
assets from the Sellers' qualified pension trust for the Invensys
Pension Plan (the "Sellers' Salaried Trust") to Purchaser's Salaried
Trust which shall comply with Section 414(l) of the Code and applicable
PBGC regulations and assumptions, as described in PBGC regulation
appendix B to Part 4044, Table I, as of the Closing Date.
6.3.7.4 The transfer, when made from the Sellers' Salaried
Trust to the Purchaser's Salaried Trust, shall be in cash and shall be
adjusted based on the actual rate of return of the Sellers' Salaried
Trust on the amount calculated under Section 6.3.7.2 or Section 6.3.7.3
above from the Closing Date to the actual date of transfer to the
Purchaser's Salaried Trust.
6.3.7.5 Upon the receipt of the assets by Purchaser's Salaried
Trust in accordance with this Section 6.3.7 and upon receipt by
Purchaser of all participant data reasonably necessary for Purchaser to
calculate benefits and administer the Purchaser's Salaried Plan (with
regard to such participants), the Purchaser and Purchaser's Salaried
Plans shall be solely responsible for the Assumed Salaried Pension Plan
Liabilities.
6.3.7.6 The Purchaser and the Sellers shall take such other
actions necessary or appropriate to accomplish the assumption of the
Assumed Salaried
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Pension Plan Liabilities including, without limitation, the timely
filing of IRS Forms 5310-A and the timely filing of any necessary PBGC
filings.
6.3.7.7 Any calculations of the amount to be transferred under
this Agreement by Sellers' actuary shall be subject to review by
Purchaser's actuary. If Purchaser's and Sellers' actuaries cannot agree
on the amount to be transferred, Purchaser and Sellers shall appoint a
third mutually acceptable actuary whose decision on the amount to be
transferred shall be binding on the parties. The Sellers and the
Purchaser shall furnish, or cause to be furnished, to such actuary all
information the actuary shall reasonably request for purposes of making
this determination. The Sellers and the Purchaser shall cause the
actuary to act promptly to resolve the issues in dispute. The fees and
expenses of such actuary shall be borne equally (i.e., on a 50/50
basis) by the Sellers and the Purchaser. Following determination of the
amount to be transferred under this Agreement, Purchaser and Invensys,
as agent for the Sellers, shall send to the Escrow Agent a certificate,
signed by each of Purchaser and Invensys, directing the Escrow Agent to
disburse the Escrow Funds to Purchaser and/or Invensys in amounts
determined in accordance with Section 2.2.2.4.
6.3.7.8 Effective on the Closing Date, the Purchaser shall
assume all liability for providing retiree health and life insurance
benefits to all Employees and all former employees of the Fasco
Business entitled to such benefits under any plan, program or
arrangement provided by the Sellers, the Companies or the Subsidiaries
as of the Closing Date.
6.3.7.9 Effective as of the Closing Date, Fasco Australia Pty
Limited and Fasco Motors Limited shall cease participating in any
pension plan or fund which is not sponsored by the Companies or
Subsidiaries and shall cease contributing on behalf of their respective
current and former employees to such plans. With respect to such plans,
Purchaser and Sellers agree to take all actions necessary or as
required by Law to effectuate the foregoing.
6.4 Preservation of Records. Subject to Section 9.6.4.2
(relating to the preservation of Tax records), the Sellers and the Purchaser
agree that each of them shall preserve and keep the records held by it relating
to the business of the Companies and the Subsidiaries for a period of five (5)
years from the Closing Date and shall make such records and personnel available
to the other as may be reasonably required by such party in connection with,
among other things, any insurance claims by, Legal Proceedings against or
governmental investigations of the Sellers or the Purchaser or any of their
Affiliates or in order to enable the Sellers or the Purchaser to comply with
their respective obligations under this Agreement and each other agreement,
document or instrument contemplated hereby or thereby. In the event the Sellers
or the Purchaser wishes to destroy such records within five (5) years of the
Closing Date, such party shall first give ninety (90) days prior written notice
to the other and such other party shall have the right at its option and
expense, upon prior written notice given to such party within that ninety (90)
day period, to take possession of the records.
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6.5 Publicity. Neither the Sellers nor the Purchaser shall
issue any press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the other party hereto, which approval will not be unreasonably withheld or
delayed, unless, based upon advice of their respective legal counsel, disclosure
is otherwise required by applicable Law or by the applicable rules of any stock
exchange or NASDAQ or other national market on which the Purchaser or the parent
company of the Sellers list securities, provided that, to the extent required by
applicable Law, the party intending to make such release shall use its
reasonable commercial efforts consistent with such applicable Law to consult
with the other party with respect to the text thereof. Sellers and Purchaser
will consult with each other concerning the means by which the Companies' and
Subsidiaries' employees, customers and suppliers, and others having dealings
with the Companies or the Subsidiaries, will be informed of the transactions
contemplated by this Agreement.
6.6 Schedule of Retiree Benefit Plan Participants. Prior to
the Closing Date, Sellers shall provide to Purchaser a schedule of all former
employees of the Fasco Business participating, as of a date no more than fifteen
(15) days prior to the Closing Date, in any retiree health or life insurance
plan, program or arrangement the liability for which is assumed by Purchaser
pursuant to Section 6.3.7.8. Within fifteen (15) days after the Closing Date,
Sellers shall provide to Purchaser a similar schedule indicating, as of the
Closing Date, any individuals added to the schedule due to their retirement
since the date of the schedule provided pursuant to the preceding sentence or
deleted from such preceding schedule.
6.7 Use of Name. Purchaser agrees that it shall cause the
Companies and the Subsidiaries to (i) as soon as practicable after the Closing
Date and in any event within thirty (30) Business Days following the Closing
Date, cease to make any use of the name "Invensys", "Xxxxx" or "BTR", or any
service marks, trademarks, trade names, identifying symbols, logos, emblems,
signs or insignia related thereto or containing or comprising the foregoing,
including any name or xxxx confusingly similar thereto (collectively, the
"Seller Marks"), (ii) immediately after the Closing, cease to hold itself out as
having any affiliation with any Seller or any of their Affiliates and (iii)
effective as of the Closing, in the case of any Company or any Subsidiary whose
name includes the name "Invensys", "Xxxxx" or "BTR", change its corporate name
to a name that does not include the name "Invensys", "Xxxxx" or "BTR" and make
any necessary legal filings with the appropriate Governmental Body to effect
such change. In furtherance thereof, as promptly as practicable but in no event
later than thirty (30) Business Days following the Closing Date, Purchaser shall
cause the Companies and their Affiliates to remove, strike over or otherwise
obliterate all Seller Marks from all materials owned by any Company or
Subsidiary, including, without limitation, any vehicles, business cards,
schedules, stationery, packaging materials, displays, signs, promotional
materials, manuals, forms, computer software and other materials; provided,
however, that the Company or the Subsidiary may during such thirty (30) day
period continue to use any such material containing a Seller Xxxx to the extent
that it is not practicable to remove or obliterate such Seller Xxxx.
Notwithstanding anything herein to the contrary, Purchaser shall retain
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any and all service marks, trademarks, identifying symbols, logos, emblems,
signs or insignia of each Company and Subsidiary to the extent that they do not
incorporate any of the Seller Marks.
6.8 Insurance.
6.8.1 Purchaser acknowledges and agrees that, upon Closing,
all insurance coverage provided in relation to the Fasco Business pursuant to
policies maintained by any Seller or its Affiliates (other than any Company or
Subsidiary) (whether such policies are maintained with third party insurers or
with Seller or its Affiliates (other than any Company or Subsidiary) shall cease
and no further coverage shall be available to any Company or Subsidiary as an
Affiliate under any such policies that are "claims made" basis policies but
(subject to the terms of any relevant policy) without prejudice to any accrued
claims which a Company or a Subsidiary or any Seller or Affiliate (in the latter
case in relation to the Fasco Business) may have at Closing, provided that the
Fasco Business shall retain the benefit of "occurrence" based policies of
insurance in relation to events occurring prior to Closing but in respect of
which no claim has yet arisen at the time of Closing.
6.8.2 Purchaser and Sellers agree that any claims made under
the insurance policies referred to in Section 6.8.1 in respect of the Fasco
Business shall be administered and collected by Sellers (or by a claims handler
appointed by Sellers) on behalf of Purchaser. Purchaser shall cooperate fully
with Sellers to enable Sellers to comply with the requirements of the relevant
insurer, and Purchaser shall provide such information and assistance as Sellers
may reasonably request in connection with any such claim. Any monies received by
Sellers as a result of such claims shall be paid over to Purchaser, net of all
reasonable costs and expenses of recovery (including, without limitation, all
reasonable handling and collection charges by any claims handler appointed by
Purchaser) and net of any deductible or self-insured retention amount.
6.8.3 In respect of all claims under the insurance policies
referred to in Section 6.8.1 notified to insurers at the date of this Agreement
and all claims subsequently brought under such insurance policies and relating
to the Fasco Business, Purchaser acknowledges that the coverage available under
such policies may be subject to a deductible or a self-insured retention amount
and that Purchaser will not be entitled to seek reimbursement of such deductible
or self-insured retention amount from Sellers. In no event will Purchaser have
any monetary obligation to Sellers with respect to such deductible or
self-insured retention amount.
6.9 Reasonable Commercial Efforts. Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees to use
its reasonable commercial efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including the following: (i) the taking of all
acts necessary to cause the conditions to Closing to be satisfied as
34
promptly as practicable, (ii) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Bodies and the
making of all necessary registrations and filings (if any, including filings
with Governmental Bodies) and the taking of all steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by any
Governmental Body, (iii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iv) the defending of any lawsuits or other Legal
Proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Body vacated or reversed, and (v) the execution and delivery of any
additional instruments necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement.
6.10 HSR Act Compliance; Foreign Governmental Approvals. Each
of Purchaser and Sellers will promptly, and in any event within five (5)
Business Days after execution of this Agreement, make all filings or submissions
as are required under the HSR Act and as soon thereafter as reasonably
practicable make all filings and submissions as are required to obtain all
Foreign Governmental Approvals. For the purposes of this Agreement, the term
"Foreign Governmental Approval" shall mean any consent or order of, with or to
any foreign Governmental Body set forth on Schedule 4.6.2 or Schedule 5.3.2.
Each of Purchaser and Sellers will promptly furnish to the other such necessary
information and reasonable assistance as the other may request in connection
with its preparation of any filing or submission which is necessary under the
HSR Act or to obtain any Foreign Governmental Approval. Each of Purchaser and
Sellers will promptly provide the other with copies of all written
communications (and memoranda setting forth the substance of all oral
communications) between each of them or their representatives, on the one hand,
and any Governmental Body, on the other hand, with respect to this Agreement or
the transactions contemplated hereby. Without limiting the generality of the
foregoing, each of Purchaser and Sellers will promptly notify the other of the
receipt and content of any inquiries or requests for additional information made
by any Governmental Body in connection therewith and shall promptly (i) comply
with any such inquiry or request and (ii) provide the other with a description
of the information provided to any Governmental Body with respect to any such
inquiry or request. In addition, each of Purchaser and Sellers will keep the
other apprised of the status of any such inquiry or request. Sellers and
Purchaser shall cooperate in seeking early termination of any applicable waiting
period under the HSR Act.
6.11 Contacts with Suppliers, Employees and Customers. Without
the consent of Sellers, which consent will not be unreasonably withheld,
Purchaser shall not contact any suppliers to, employees of, or customers of, any
Company or Subsidiary in connection with or pertaining to any subject matter of
this Agreement.
6.12 Invensys Commitments. Purchaser acknowledges and agrees
that, on or before the date that is ninety (90) days following the Closing Date,
it shall cause any Commitment made by Invensys and its Affiliates (other than a
Company or a Subsidiary) with respect to the activities (financial or otherwise)
of a Company or a
35
Subsidiary to be terminated or settled or replaced by an alternate Commitment
from a party other than Invensys or its Affiliates (excluding a Company or a
Subsidiary). For purposes of the foregoing, "Commitment" shall mean the
financial commitments or support, letters of credit, performance bonds, parent
company guarantees, bid bonds, bank guarantees or similar instruments set forth
on Schedule 6.12.
6.13 Intellectual Property. To the extent that Sellers
transfer any Intellectual Property or Technology that does not relate to the
Fasco Business or is necessary to the conduct of the business of Sellers or
their Affiliates (other than the Companies and the Subsidiaries) as conducted up
to and through the Closing Date, after written notice by a Seller to Purchaser
within six months following the Closing Date, Purchaser agrees to transfer that
Intellectual Property or Technology back to Sellers and/or their Affiliates or,
if that Intellectual Property or Technology is used in the Fasco Business, to
xxxxx Xxxxxxx and/or their Affiliates a perpetual, nonexclusive,
non-sublicensable, fully paid-up license to use that Intellectual Property or
Technology to the extent that Purchaser has the right to make such grant.
6.14 Notification. Between the date of this Agreement and the
Closing Date, each of the Sellers on the one hand and the Purchaser on the other
hand will use its best efforts to promptly notify the other party in writing if
a Seller or Purchaser becomes aware of any fact or condition that causes or
constitutes a breach of any of such party's representations and warranties under
this Agreement. Should any such fact or condition require any change in any
Schedule previously delivered by a party under this Agreement, such party will
promptly deliver to the other party a supplement to the subject Schedule(s)
specifying such change. During the same period, each of the Sellers on the one
hand and the Purchaser on the other hand will use its best efforts to promptly
notify the other party of the occurrence of any breach of any of its covenants
in this Section 6 or of the occurrence of any event that may make the
satisfaction of the conditions in Section 7 impossible or unlikely.
6.15 Estoppel Certificates and Title Commitments. Sellers
acknowledge and agree that from the date hereof through the Closing Date they
shall use their commercially reasonable efforts to obtain estoppel certificates
(a form of which is attached hereto as Annex C) from the landlords of each of
the Real Property Leases and updated title commitments with respect to each of
the North American Owned Properties.
6.16 Financial Statements.
6.16.1 Invensys acknowledges that it is Purchaser's
requirement to have available to Purchaser, on or before January 31, 2003, the
following financial statements:
6.16.1.1 audited combined balance sheets of the Fasco Business
at March 31, 2002 and 2001, and the related combined statements of
operations, invested capital and cash flows for each of the years ended
March 31, 2002, 2001 and 2000, together with an audit report of Ernst
and Young LLP thereon, in each
36
case prepared in accordance with U.S. GAAP, and with the accounting
requirements and the published rules and regulations of the SEC; and
6.16.1.2 an unaudited condensed combined balance sheet of the
Fasco Business at September 30, 2002, and the related combined
statements of operations, invested capital and cash flows for the six
month periods ended September 30, 2002 and 2001, together with a SAS 71
review report of Ernst and Young LLP ("E&Y") thereon, in each case
prepared in accordance with U.S. GAAP, and with the accounting
requirements and the published rules and regulations of the SEC,
provided, however, that if the Closing occurs on or after February 1,
2003, it is Purchaser's requirement to have available to Purchaser, not
later than February 28, 2003, an unaudited condensed combined balance
sheet of the Fasco Business at December 31, 2002, and the related
combined statements of operations, invested capital and cash flows for
the nine month periods ended December 31, 2002 and 2001, together with
a SAS 71 review report of E&Y thereon, in each case prepared in
accordance with U.S. GAAP, and with the accounting requirements and the
published rules and regulations of the SEC.
6.16.2 Prior to Closing, in order to assist Purchaser in
achieving its requirements described in Section 6.16.1 above, Invensys and
Sellers shall use their commercially reasonable best efforts to:
6.16.2.1 cause the management of the Companies and the
Subsidiaries to prepare the financial statements described in Section
6.16.1 above, reflecting required E&Y adjustments; and
6.16.2.2 provide E&Y with such access to (i) management of the
Companies and the Subsidiaries, (ii) other employees of Invensys and
its Affiliates and (iii) the books and records of the Companies and the
Subsidiaries as is necessary to permit E&Y to prepare the audit and
review reports described in Section 6.16.1 above.
6.16.3 In order to assist Purchaser in achieving its
requirements described in Section 6.16.1 above, Invensys and Sellers shall
provide to E&Y any management representation letters signed or to be signed by:
(i) the management of the Companies and the Subsidiaries (prior to Closing), and
(ii) the management of Invensys as requested by E&Y in connection with E&Y's
preparation of the audit and review reports described in 6.16.1.
6.16.4 Fees charged by E&Y to complete the required reviews
and prepare the reports described in Section 6.16.1.2 shall be borne by the
Purchaser.
6.17 Transition Services Agreement. Between the date of this
Agreement and the Closing Date, the parties hereto agree to prepare Schedule I
to the Transition Services Agreement, pursuant to which Invensys will provide
certain services to the Companies and Subsidiaries for a transitional period
after the Closing Date. The
37
parties acknowledge that the pricing of services to be included in Schedule I
shall be calculated on a marginal cost basis.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Condition Precedent to Obligations of Purchaser. The
obligation of the Purchaser to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of the
following conditions (which may be waived by the Purchaser in whole or in part
to the extent permitted by applicable Law):
7.1.1 The representations and warranties of Sellers in this
Agreement shall be true and correct at and as of the Closing Date with the same
force and effect as though made at and as of the Closing Date (it being
understood that, for purposes of determining the accuracy of such
representations and warranties: (i) to the extent that any representation or
warranty is made as of a specific date, such representation or warranty shall be
true and correct as of such date; (ii) any update to or modification to the
Seller's Schedules made after the date of this Agreement shall be disregarded;
and (iii) all materiality qualifications contained in such representations and
warranties shall be disregarded), provided, however, that in the event of a
breach of representation and warranty (except Sections 4.2 and 4.7), the
condition set forth in this Section 7.1 shall be deemed satisfied unless the
effect of all such breaches of representations and warranties (except a breach
of Section 4.2 or 4.7) taken together, results in a Company Material Adverse
Effect.
7.1.2 Each of the covenants and obligations that Sellers are
required to perform or comply with pursuant to this Agreement at or prior to the
Closing shall have been duly performed or complied with in all material
respects, except that the covenants and agreements contained in Section 6.2
shall be duly performed or complied with in all respects.
7.1.3 There shall not have occurred any Company Material
Adverse Effect or any event or circumstances that would result in a Company
Material Adverse Effect.
7.1.4 Sellers and Invensys shall be able to deliver to the
Purchaser all outstanding shares of stock in each of the Companies and the
Subsidiaries held in the name of Invensys or any Affiliate of Invensys, free and
clear of any and all Liens of any kind whatsoever.
7.2 Condition Precedent to Obligations of Sellers. The
obligation of the Sellers to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of the
following conditions (which may be waived by the Sellers in whole or in part to
the extent permitted by applicable Law):
38
7.2.1 The representations and warranties of Purchaser in this
Agreement (i) that are qualified as to materiality shall be true and correct in
all respects and (ii) that are not so qualified shall be true and correct in all
material respects, at and as of the Closing Date with the same force and effect
as though made at and as of the Closing Date (except to the extent that any
representation or warranty is made as of a specific date, in which case such
representation or warranty shall be true and correct as of such date).
7.2.2 Each of the covenants and obligations that Purchaser is
required to perform or comply with pursuant to this Agreement at or prior to the
Closing shall have been duly performed or complied with in all material
respects.
7.3 Conditions to Each Party's Obligations. The respective
obligations of each party to effect the transactions contemplated by this
Agreement are subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived by a party
in whole or in part to the extent permitted by applicable Law):
7.3.1 The consents, waivers, approvals or other authorizations
listed on Schedule 4.6.2 and Schedule 5.3.2 shall have been obtained or
otherwise satisfied and any other approvals of Governmental Bodies required to
consummate the transactions contemplated hereby shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired;
7.3.2 No Order issued by any court of competent jurisdiction
or other Governmental Body restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement shall be in
effect.
ARTICLE 8
DOCUMENTS TO BE DELIVERED
8.1 Documents to be Delivered by the Sellers. At the Closing,
the Sellers shall deliver, or cause to be delivered, to the Purchaser the
following:
8.1.1 stock certificates representing all of the Shares and
the shares described in Section 7.1.4, duly endorsed in blank or accompanied by
stock transfer powers and with all requisite stock transfer tax stamps attached;
8.1.2 (a) written resignations of each of the directors of
each Company and Subsidiary; and
(b) written resignations of those Company and Subsidiary
officers identified by Purchaser;
8.1.3 the Certificate of Non-Foreign Status;
39
8.1.4 a Non-Competition Agreement, duly executed by each
Seller and Invensys, in the form set forth in Annex B;
8.1.5 such other documents as Purchaser may reasonably request
for the purpose of (i) evidencing the accuracy of any of Sellers'
representations and warranties, (ii) evidencing the performance by each Seller
of, or the compliance by each Seller with, any covenant or obligations required
to be performed or complied with by such Seller, (iii) evidencing the
satisfaction of any condition referred to in Section 7, or (iv) otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement;
8.1.6 documents, agreements or instruments, in form and
substance satisfactory to Purchaser and its counsel, certifying to Purchaser
that all receivables factoring arrangements to which any Company or Subsidiary
is a party have been terminated, settled, or cancelled effective prior to or as
of the Closing Date;
8.1.7 a certificate from the applicable Sellers certifying to
Purchaser the dollar amounts that, as of the Closing Date, have not been
expended in connection with shut-down costs for the Ozark and Elkhorn facilities
and initially described on Schedule 2.5; and
8.1.8 the Escrow Agreement duly executed by each Seller and
Invensys, in the form set forth in Annex E; and
8.1.9 the Transition Services Agreement duly executed by each
Seller and Invensys, in the form set forth in Annex F.
8.2 Documents to be Delivered by the Purchaser. At the
Closing, the Purchaser shall deliver to the Sellers the following:
8.2.1 evidence of the wire transfers referred to in Section
2.3.1;
8.2.2 such other documents as Sellers may reasonably request
for the purpose of (i) evidencing the accuracy of any of Purchaser's
representations and warranties, (ii) evidencing the performance by Purchaser of,
or the compliance by Purchaser with, any covenant or obligation required to be
performed or complied with by Purchaser, (iii) evidencing the satisfaction of
any condition referred to in Section 7, or (iv) otherwise facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement;
8.2.3 the Escrow Agreement duly executed by Purchaser, in the
form set forth in Annex E; and
8.2.4 the Transition Services Agreement duly executed by
Purchaser, in the form set forth in Annex F.
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ARTICLE 9
INDEMNIFICATION
9.1 General Indemnification.
9.1.1 Subject to Sections 9.2, 9.3 and 9.4, Invensys and each
Seller hereby agree to jointly and severally indemnify and hold the Purchaser,
the Companies, and their respective directors, officers, employees, Affiliates,
agents, successors and assigns (collectively, the "Purchaser Indemnified
Parties") harmless from and against:
9.1.1.1 any and all Losses based upon, attributable to or
resulting from the breach of any representation or warranty of any of
the Sellers or Invensys set forth in Article 4, other than those set
forth in Section 4.11, or the failure of any representation or warranty
contained in any certificate delivered by or on behalf of the Sellers
pursuant to this Agreement (without giving effect to any supplement to
the Schedules) to be true and correct;
9.1.1.2 any and all Losses based upon, attributable to or
resulting from the breach of any covenant or other agreement on the
part of the Sellers under this Agreement;
9.1.1.3 any Pre-Closing Environmental Liability;
9.1.1.4 any Predecessor Environmental Liability;
9.1.1.5 any matter disclosed in Schedule 4.17.3;
9.1.1.6 Losses based upon, attributable to or resulting from
matters related to motors manufactured by Xxx Xxxxx Gear Company for
use in medical lift chairs manufactured or assembled by Invacare
Corporation;
9.1.1.7 Losses based upon, attributable to or resulting from
Fasco Motors Limited being an "additional debtor" under a lease between
Invensys Canada Inc. and PHH Vehicle Management Services to the extent
such losses relate to vehicles other than vehicles used by Fasco Motors
Limited; and
9.1.1.8 any claim by any Person for brokerage or finder's fees
or commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with any
Seller, Invensys, or any Company or Subsidiary (or any Person acting on
their behalf) in connection with any of the transactions contemplated
by this Agreement.
9.1.2 Subject to Section 9.2 and Section 9.4, Purchaser hereby
agrees to indemnify and hold the Sellers and Invensys, and their respective
directors, officers, employees, Affiliates, agents, successors and assigns
(collectively, the "Seller Indemnified Parties") harmless from and against:
41
9.1.2.1 any and all Losses based upon, attributable to or
resulting from the breach of any representation or warranty of the
Purchaser set forth in Article 5, or the failure of any representation
or warranty contained in any certificate delivered by or on behalf of
the Purchaser pursuant to this Agreement (without giving effect to any
supplement to the Schedules), to be true and correct;
9.1.2.2 any and all Losses based upon, attributable to or
resulting from the breach of any covenant or other agreement on the
part of the Purchaser under this Agreement; and
9.1.2.3 any claim by any Person for brokerage or finder's fees
or commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with
Purchaser (or any Person acting on its behalf) in connection with any
of the transactions contemplated by this Agreement.
9.1.3 The provisions of this Section 9.1 and Section 9.5 shall
not apply to Taxes, which shall be governed by the provisions of Section 9.6.
9.2 Limitations on Indemnification.
9.2.1 Other than with respect to the representations and
warranties set forth in Sections 4.1, 4.2, 4.3, 4.7, 4.11, 4.20, 4.21 and 5.1,
5.2, 5.4 and 5.6, an indemnifying party shall not have any liability under
Section 9.1.1.1 or 0.0.0.0:
(i) with respect to any individual claim for the breach of a
representation and warranty, unless and until the Losses claimed exceed Fifteen
Thousand Dollars ($15,000) (the "De Minimis Amount");
(ii) unless and until the total amount of Losses to the
indemnified parties finally determined to arise thereunder based upon,
attributable to or resulting from the breach of all representations and
warranties, exceeds, in the aggregate Three Million Dollars ($3,000,000) (the
"Deductible"), disregarding any individual claim that does not exceed the De
Minimis Amount and then only to the extent that such Losses exceed the
Deductible; and
(iii) for any Losses in excess of Fifty Million Dollars
($50,000,000) (the "Cap") once the total amount of Losses to the indemnified
parties finally determined to arise thereunder based upon, attributable to or
resulting from the breach of all representations and warranties equals or
exceeds the Cap.
9.2.2 With respect to any claim for indemnification under
Section 9.1.1.3, or with respect to a breach of Section 4.20, an indemnifying
party shall not have any liability for Losses attributable thereto until such
Losses exceed Seven Hundred Fifty Thousand Dollars ("$750,000") (the
"Environmental Deductible") (excluding any Losses attributable to the Xxxxx
Rapids Environmental Condition, which shall not be subject to
42
the Environmental Deductible), provided, however, the indemnifying parties shall
not have any liability for Losses attributable to Pre-Closing Environmental
Liabilities or for breaches of Section 4.20 in excess of Fifty Million Dollars
($50,000,000) in the aggregate. For the avoidance of doubt, the Environmental
Deductible is not subject to the De Minimis Amount.
9.2.3 Claims for indemnification under Section 9.1.1.4, are
not subject to the Environmental Deductible or the De Minimis Amount; provided,
however, an indemnifying party shall not have any liability for Losses
attributable to Predecessor Environmental Liabilities in excess of Fifty Million
Dollars ($50,000,000) in the aggregate.
9.3 Limitations on Indemnification for Environmental Losses.
9.3.1 Sellers and Invensys shall have no obligation to
indemnify, defend and hold harmless the Purchaser Indemnified Parties from and
against any Losses arising in connection with a breach of the representation and
warranty set forth in Section 4.20 or under Section 9.1.1.3 for Pre-Closing
Environmental Liabilities ("Environmental Losses") to the extent that such
Environmental Losses: (a) result from: (i) any change in the use of real
property to non-industrial purposes, or (ii) an investigation of environmental
conditions at any Company Properties, involving physically invasive testing
procedures such as soil and groundwater sampling, undertaken by or for the
Purchaser Indemnified Parties, other than any such investigation (A)
affirmatively required under applicable Law, (B) required by any Order directed
to a Company or Subsidiary, (C) reasonably determined by Purchaser in good faith
to be necessary in connection with any bona fide construction or material
maintenance activity (including expansion of any facility) at any Company
Property where such construction, maintenance or repair does or would reasonably
be expected to require access to, or disturbance of, soil or groundwater or (D)
approved by Sellers in writing, which approval shall not be unreasonably
withheld, or (b) result from Remedial Actions that are inconsistent with the
standard of care set forth in Section 9.3.2.
9.3.2 Remedial Actions shall be conducted in a reasonable and
cost effective manner, to standards applicable for the site use of the subject
properties, and, to the extent applicable to that particular site, shall include
the use of risk-based cleanup standards, natural attenuation, and deed
restrictions or other actions as required by the enforcing Governmental Body to
obtain closure where appropriate and available; provided, that with respect to
Remedial Action at any Company Property the standards shall be those applicable
to industrial use.
9.4 Survival of Representations and Warranties and Covenants.
9.4.1 The representations and warranties of Purchaser and
Sellers and Invensys contained in this Agreement shall survive the Closing
solely for purposes of Article 9 and such representations and warranties shall
terminate at the close of business on the date that is twenty-one (21) months
after the Closing Date; provided, however, that
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(i) the representations and warranties contained in Section 4.7 shall survive
the Closing and remain in effect indefinitely, (ii) the representations and
warranties contained in Section 4.11 shall survive the Closing until the
expiration of six (6) months following the last day on which any Tax may be
validly assessed with due regard to any extension of time for assessment by the
IRS or any other Governmental Body against any Company, any Subsidiary, or any
of their respective assets, (iii) the representations and warranties contained
in Section 4.16 shall survive the Closing and any investigation by the parties
with respect thereto until the expiration of the applicable statute of
limitations (including extensions thereof) and (iv) the survival of the
representations and warranties contained in Section 4.20 shall be governed by
Section 9.4.3 below. Any claim for indemnification with respect to any of such
matters which is not asserted by notice given as herein provided relating
thereto within such specified period of survival may not be pursued and is
hereby irrevocably waived after such time. Any claim for indemnification of a
Loss asserted within such period of survival as herein provided will be timely
made for purposes hereof.
9.4.2 Unless a specified period is set forth in this Agreement
(in which event such specified period will control), the covenants in this
Agreement will survive the Closing and remain in effect indefinitely.
9.4.3 Any claim for indemnification under Section 9.1.1.3 with
respect to Losses attributable to Pre-Closing Environmental Liabilities or for a
breach of Section 4.20 which is not asserted by notice given as herein provided
within seven (7) years of the Closing Date may not be pursued and is hereby
irrevocably waived after such time. Any claim for indemnification of a Loss
asserted within such period of survival as herein provided will be timely made
for purposes hereof.
9.4.4 Any claim for indemnification under Section 9.1.1.4 with
respect to Losses attributable to Predecessor Environmental Liabilities which is
not asserted by notice given as herein provided within eight (8) years of the
Closing Date may not be pursued and is hereby irrevocably waived after such
time. Any claim for indemnification of a Loss asserted within such period of
survival as herein provided will be timely made for purposes hereof.
9.5 General Indemnification Procedures.
9.5.1 In the event that any Legal Proceedings shall be
instituted or any claim or demand, including a third party claim or demand
(including reasonable attorney fees) (collectively, with a Legal Proceeding, a
"Claim") shall be asserted by any Person in respect of which payment may be
sought under Section 9.1 (regardless of the De Minimis Amount or the Deductible
referred to above), the indemnified party shall reasonably and promptly cause
written notice of the assertion of any Claim of which it has knowledge which is
covered by this Article 9 to be forwarded to the indemnifying party. Such notice
shall identify specifically the basis under which indemnification is sought
pursuant to Section 9.1 and enclose true and correct copies of any written
document furnished to the indemnified party by the Person that instituted the
Claim. The
44
indemnifying party shall have the right, at its sole option and expense, to be
represented by counsel of its choice, which must be reasonably satisfactory to
the indemnified party, and to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses indemnified against hereunder.
If the indemnifying party elects to defend against, negotiate, settle or
otherwise deal with any Claim which relates to any Losses indemnified against
hereunder, it shall within ten (10) days (or sooner, if the nature of the Claim
so requires) notify the indemnified party of its intent to do so. If the
indemnifying party elects not to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses indemnified against hereunder,
fails to notify the indemnified party of its election as herein provided or
contests its obligation to indemnify the indemnified party for such Losses under
this Agreement, the indemnified party may defend against, negotiate, settle or
otherwise deal with such Claim. If the indemnified party defends any Claim, then
the indemnifying party shall reimburse the indemnified party for the reasonable
expenses of defending such Claim upon submission of periodic bills. If the
indemnifying party shall assume the defense of any Claim, the indemnified party
may participate, at his or its own expense, in the defense of such Claim;
provided, however, that such indemnified party shall be entitled to participate
in any such defense with separate counsel at the expense of the indemnifying
party: (i) if so requested by the indemnifying party to participate; (ii) if, in
the reasonable opinion of counsel to the indemnified party, a conflict or
potential conflict exists between the indemnified party and the indemnifying
party that would make such separate representation advisable; or (iii) if the
indemnifying party does not, in the reasonable opinion of the indemnified party,
based on the written advice of counsel, diligently conduct such defense; and
provided, further, that the indemnifying party shall not be required to pay for
more than one such counsel for all indemnified parties in connection with any
Claim. The parties hereto agree to cooperate fully with each other in connection
with the defense, negotiation or settlement of any such Claim. The indemnified
party shall promptly supply to the indemnifying party copies of all
correspondence and documents relating to or in connection with such Claim and
keep the indemnifying party fully informed of all developments relating to or in
connection with such Claim (including, without limitation, providing to the
indemnifying party on request updates and summaries as to the status thereof).
If the indemnifying party assumes the defense of a Claim, (i)
no compromise or settlement of such Claim may be effected by the indemnifying
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of Law or any violation of the rights of any Person
and no effect on any other Claims made against the indemnified party, and (B)
the sole relief provided is monetary damages that are paid in full by the
indemnifying party; and (ii) the indemnified party will have no liability with
respect to any compromise or settlement of such claims effected without its
consent, which shall not be unreasonably withheld.
Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a Claim may
adversely affect it or its Affiliates other than as a result of monetary
damages, the indemnified party may, by
45
notice to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Claim, but the indemnifying party will not be bound
by any determination of a Claim so defended or any compromise or settlement
effected without its consent (which may not be unreasonably withheld).
9.5.2 After any final judgment or award shall have been
rendered by a court, arbitration board or administrative agency of competent
jurisdiction and the expiration of the time in which to appeal therefrom, or a
settlement shall have been consummated, or the indemnified party and the
indemnifying party shall have arrived at a mutually binding agreement with
respect to a Claim hereunder, the indemnified party shall forward to the
indemnifying party notice of any sums due and owing by the indemnifying party
pursuant to this Agreement with respect to such matter and the indemnifying
party shall be required to pay all of the sums so due and owing to the
indemnified party by wire transfer of immediately available funds within 10
Business Days after the date of such notice.
9.5.3 The failure of the indemnified party to give reasonably
prompt notice of any Claim shall not release, waive or otherwise affect the
indemnifying party's obligations with respect thereto except to the extent that
the indemnifying party can demonstrate actual loss and prejudice as a result of
such failure.
9.5.4 Subject to the limitations set forth in Section 9.2 and
consistent with Article 9 of this Agreement, with respect to any Claim for
indemnification under Section 9.1.1.1 for breaches of the representations and
warranties set forth in Section 4.20, Section 9.1.1.3 and Section 9.1.1.4,
Sellers shall (a) manage and control the Remedial Action and resolution of any
claim arising out of or relating to the Xxxxx Rapids Environmental Condition and
(b) have the right, but not the obligation, to manage and control any claim
arising out of or relating to any Predecessor Environmental Liabilities under
Section 9.1.1.4 or any Remedial Action for which indemnification is provided
under Section 9.1.1.1, 9.1.1.3, or 9.1.1.4 of this Agreement. To this end,
Sellers shall have ten (10) days after receipt of notice of a claim for
potential Remedial Action from Purchaser to accept responsibility for such
Remedial Action. If a Seller has or takes responsibility for any Remedial
Action, Seller shall directly pay (or otherwise cause another party to make such
direct payment) any such environmental consultant, contractor or subcontractor
hired by Seller, and Purchaser shall provide such Seller and its environmental
consultants, contractors and subcontractors, after Seller has provided
reasonable notice to Purchaser, with reasonable access to the affected
properties for the purpose of implementing any such Remedial Action, and
Purchaser shall cooperate with Seller's activities, including signing necessary
documentation for the implementation, monitoring and completion of such Remedial
Action, provided that Sellers indemnify, defend and hold harmless Purchaser from
all Losses that result from such cooperation that are not attributable to the
gross negligence or willful misconduct of the Purchaser or the Companies. Seller
shall coordinate any Remedial Action at a Company Property with Purchaser and
shall ensure that any such remedy or Remedial Action does not unreasonably
interfere with Purchaser's use and operation of the property. The party
implementing the Remedial Action shall retain an environmental consultant
acceptable to
46
the other party which acceptance shall not be unreasonably withheld, denied or
conditioned; provided however, that with respect to the required Remedial Action
for the Xxxxx Rapids Environmental Condition, the parties agree that Xxxxx is
acceptable. Notwithstanding the foregoing, nothing herein shall prevent the
party not implementing the Remedial Action to retain an environmental
consultant, at its cost, to review any workplans or reports related thereto. The
party implementing the Remedial Action shall control any and all communication
with Governmental Bodies having jurisdiction over the Remedial Action; provided
the party implementing the Remedial Action shall provide the other party, if
applicable, its consultants, with the opportunity to review and comment on any
proposed plans for the Remedial Actions and shall incorporate such reasonable
comments to the extent consistent with Section 9.3.2 of this Agreement.
Notwithstanding the foregoing, the party implementing the Remedial Action shall
provide the other party with periodic reports, no less than quarterly, on the
progress of the Remedial Action and, to the extent the other party is
responsible for reimbursing the party implementing the Remedial Action, the
party implementing the Remedial Action shall keep the other party apprised of
the associated costs, provided, further that Seller shall maintain a record of
costs incurred with the indemnification hereunder and shall provide Purchaser
with notice, if and when the aggregate Losses covered hereunder exceed Forty
Millions Dollars ($40,000,000). Purchaser shall cooperate with Seller in
undertaking such Remedial Action and Purchaser shall use commercially reasonable
efforts to assist Seller in obtaining no further action determination or similar
determination from the applicable Governmental Body indicating that no
additional Remedial Action is required; provided Seller will reimburse Purchaser
for its reasonable out-of-pocket expenses in connection with providing such
cooperation and assistance.
9.5.5 Procedure for Indemnification -- Other Claims. A claim
for indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
9.6 Tax Matters.
9.6.1 Tax Indemnification.
9.6.1.1 Sellers and Invensys shall jointly and
severally indemnify the Purchaser Indemnified Parties and hold them harmless
from and against any Losses attributable to (i) Excluded Taxes, (ii) all
liability for Taxes attributable to a Seller Tax Act, (iii) a breach by any
Seller or Invensys of its obligations under this Agreement that relate to Taxes,
or (iv) a breach of the representations and warranties set forth in Section
4.11. Invensys shall cause the Sellers to reimburse Purchaser for Taxes of the
Companies or the Subsidiaries that are the responsibility of the Sellers and
Invensys pursuant to this Section 9.6 within fifteen (15) days after payment of
such Taxes by Purchaser, any Company or any Subsidiary and the receipt by
Sellers of a written description in reasonable detail from Purchaser of the
nature of such Taxes. Notwithstanding the foregoing, Sellers and Invensys shall
not indemnify and hold harmless Purchaser Indemnified Parties from any liability
for Taxes attributable to (a) any action taken after the Closing on the Closing
Date or after the Closing Date by
47
Purchaser, or any of its Affiliates (including the Companies and Subsidiaries)
or any transferee of Purchaser or any of its Affiliates (a "Purchaser Tax Act")
or (b) a breach by Purchaser of its obligations under this Agreement. For the
avoidance of doubt, any (x) action required by applicable Law or taken pursuant
to this Agreement, or (y) action attributable to a breach by any Seller or
Invensys of its obligations under this Agreement shall not constitute a
Purchaser Tax Act.
9.6.1.2 Purchaser shall, and shall cause the
Companies and Subsidiaries to, indemnify the Seller Indemnified Parties and hold
them harmless from (i) all liability for Taxes of the Companies and the
Subsidiaries for any taxable period ending after the Closing Date (except to the
extent such taxable period began before the Closing Date, in which case
Purchaser's indemnity will cover only that portion of any such Taxes that are
not for a Pre-Closing Tax Period) and (ii) all liability for Taxes attributable
to a Purchaser Tax Act or to a breach by Purchaser of its obligations under this
Agreement. Notwithstanding the foregoing, Purchaser (and the Companies and
Subsidiaries) shall not indemnify and hold harmless Seller Indemnified Parties
from any liability for Taxes attributable to (a) any action taken before the
Closing on the Closing Date or before the Closing Date by Sellers or any of
their Affiliates (including the Companies and Subsidiaries) (a "Seller Tax Act")
or (b) a breach by any Seller or Invensys of its obligations under this
Agreement.
9.6.1.3 For purposes of this Section 9.6, in the case
of any Taxes imposed on a periodic basis and payable for a taxable period that
includes (but does not end on) the Closing Date (a "Straddle Period"), the
portion of such Taxes that relate to a Pre-Closing Tax Period shall (x) in the
case of any Taxes other than Taxes based upon or related to income or receipts,
be deemed to be the amount of such Taxes for the entire taxable period
multiplied by the fraction the numerator of which is the number of days in the
Straddle Period ending on the Closing Date and the denominator of which is the
number of days in the entire Straddle Period, and (y) in the case of any Taxes
based upon or related to income or receipts, be deemed to be the amount which
would be payable if the relevant taxable period ended on the Closing Date,
provided that any credit, exemption, allowance or deduction that is calculated
on an annual basis (including, but not limited to, depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date and
the period after the Closing Date in proportion to the number of days in each
period.
9.6.2 Procedures Relating to Indemnification of Tax
Claims.
9.6.2.1 If one party is responsible for the payment
of Taxes pursuant to Section 9.6.1 (the "Tax Indemnifying Party"), and the other
party (the "Tax Indemnified Party") receives written notice of any deficiency,
proposed adjustment, assessment, audit, examination, suit, dispute or other
claim (a "Tax Claim") with respect to such Taxes, the Tax Indemnified Party
shall, as soon as commercially practicable, notify the Tax Indemnifying Party in
writing of such Tax Claim. If notice of a Tax Claim is not given to the Tax
Indemnifying Party as soon as commercially practicable, the Tax Indemnifying
Party shall not be liable to the Tax Indemnified Party (or any of its
48
Affiliates or any of their respective officers, directors, employees,
stockholders, agents or representatives) to the extent that the Tax Indemnifying
Party's position is actually prejudiced as a result thereof.
9.6.2.2 The Tax Indemnifying Party shall compromise,
defend or settle, at its own expense, any Tax Claim and shall have the right to
make all judgments and decisions in respect of such compromise, defense or
settlement of such Tax Claim. Without limiting the foregoing, the Tax
Indemnifying Party may pursue or forego any and all administrative proceedings
with any taxing authority with respect thereto, and may either pay the Taxes
claimed and xxx for a refund or contest the Tax Claim in any permissible manner
at its own expense; provided, however, that (i) in the case of a Tax Claim
relating solely to Taxes of a Company or Subsidiary for a Straddle Period,
Sellers and Purchaser shall jointly control all proceedings taken in connection
with any such Tax Claim, and (ii) if any Tax Claim could reasonably be expected
to have an adverse effect on (A) Purchaser, any Company, any Subsidiary or any
of their Affiliates in any taxable period beginning after the Closing Date, the
Tax Claim shall not be settled or resolved without Purchaser's prior written
consent, which consent shall not be unreasonably delayed or withheld or (B)
Sellers or any of their Affiliates in any taxable period ending on or before the
Closing Date, the Tax Claim shall not be settled or resolved without Sellers'
prior written consent, which consent shall not be unreasonably delayed or
withheld. The Tax Indemnifying Party shall, as soon as commercially practicable,
provide in writing and in reasonable detail the nature of such Tax Claims that
could reasonably be expected to have an adverse effect on the Tax Indemnified
Party.
9.6.2.3 The Tax Indemnified Party and each of its
respective Affiliates shall cooperate with the Tax Indemnifying Party in
contesting any Tax Claim, which cooperation shall include the retention and
(upon the Tax Indemnifying Party's request) the provision to the Tax
Indemnifying Party of records and information which are reasonably relevant to
such Tax Claim, and making employees available on a mutually convenient basis to
provide additional information or explanation of any material provided hereunder
or to testify at proceedings relating to such Tax Claim.
9.6.2.4 In no case shall the Tax Indemnified Party,
any Company or Subsidiary or any of their respective officers, directors,
employees, stockholders, agents or representatives settle or otherwise
compromise any Tax Claim without the Tax Indemnifying Party's prior written
consent. Neither party shall settle a Tax Claim relating solely to Taxes of a
Company or Subsidiary for a Straddle Period without the other party's prior
written consent, which consent shall not be unreasonably delayed or withheld.
9.6.3 Responsibility for Preparation and Filing of
Tax Returns and Amendments.
9.6.3.1 Purchaser shall prepare or cause to be
prepared and file or caused to be filed any Tax Return of the Companies or
Subsidiaries for any Straddle Period and remit to the taxing authorities payment
for Taxes shown due on such Tax
49
Returns. Sellers shall pay Purchaser (within fifteen (15) days after the date on
which Purchaser remitted such payment) an amount equal to the Taxes that relate
to the portion of such Straddle Period ending on the Closing Date, as determined
under Section 9.6.1.3. All such Tax Returns shall be prepared on a basis
consistent with past practice. Purchaser shall furnish such Tax Returns to
Sellers for their approval (which approval shall not be unreasonably delayed or
withheld) at least twenty (20) days prior to the due date for filing such Tax
Returns.
9.6.3.2 With respect to the taxable periods beginning
after March 31, 2002, Sellers shall not, without the Purchaser's prior written
consent (which consent shall not be unreasonably delayed or withheld), (i) make
any Tax election not previously made with respect to the Companies or
Subsidiaries or adopt a new (or change a) method of accounting for Tax purposes
or (ii) take a position on any Tax Return for any such period that addresses an
issue (whether factual or legal) not previously addressed in prior Tax Returns
of the relevant Company or Subsidiary, in each case that relates solely to the
Companies or Subsidiaries.
9.6.3.3 Sellers shall prepare and Purchaser or
Sellers, as appropriate, shall file any Tax Return required to be filed for any
taxable period of the Companies or Subsidiaries that ends on or before the
Closing Date and remit to the taxing authorities payment for Taxes shown due on
such Tax Return. Sellers will include the income of the Companies and the
Subsidiaries that are members of the Affiliated Group of which Invensys, Inc. is
the common parent corporation (including any deferred income, as such term is
used in Treas. Reg. Section 1.1502-13, and any excess loss accounts taken into
income under Treas. Reg. Section 1.1502-19) on Invensys, Inc.'s consolidated
federal income Tax Returns for all periods through the Closing Date and pay any
income Taxes attributable to such income. All such Tax Returns shall be prepared
on a basis consistent with Section 9.6.3.2, past practice, and in compliance
with applicable Law. Sellers will not elect to retain any net operating loss
carryovers or capital loss carryovers (or any similar or comparable tax items
under state, local, or foreign Law) of the Companies or Subsidiaries. Purchaser
shall timely furnish tax workpapers to Sellers upon request in accordance with
the past custom and practice of the Companies and Subsidiaries. Where Purchaser
files such Tax Returns and remits to the taxing authorities payment for Taxes
shown due thereon, Sellers shall pay Purchaser (within fifteen (15) days after
the date on which Purchaser remitted such payment) an amount equal to the Taxes
shown due on such Tax Returns. Any Tax Return to be filed by Purchaser or a
Company or Subsidiary shall be furnished by Sellers to the Purchaser or the
appropriate Company or Subsidiary, as the case may be, for signature and filing
at least thirty (30) days prior to the due date for filing such Tax Return. The
Purchaser or applicable Company or Subsidiary, as the case may be, shall sign
and timely file any such Tax Return on a timely basis, provided, there is a
"reasonable basis" (within the meaning of Treas. Reg. Section 1.6662-3(b)(3), or
any similar or comparable provision of state, local, or foreign Law) for all
positions taken on such Tax Return. Purchaser and Sellers agree to cause the
Companies and the Subsidiaries to file all Tax Returns for the period including
the Closing Date on the basis that the relevant taxable period ended as of the
50
close of business on the Closing Date, unless the relevant taxing authority will
not accept a Tax Return filed on that basis.
9.6.3.4 Sellers shall be responsible for preparing
and filing any amended consolidated, combined or unitary Tax Returns for any
taxable years ending on or prior to the Closing Date. Where Sellers seek to file
an amended Tax Return with respect to a Company or Subsidiary in accordance with
this Section 9.6.3.4 in a jurisdiction in which separate Tax Returns are filed
by such Company or Subsidiary, Sellers shall furnish to the Purchaser, the
Company or the Subsidiary, as the case may be, such amended Tax Return and
Purchaser or such Company or Subsidiary shall, subject to the succeeding
sentence, sign and timely file any such amended Tax Return. Notwithstanding the
foregoing, if the outcome of filing any amended Tax Return could reasonably be
expected to have an adverse effect on Purchaser, any Company, any Subsidiary or
any of their Affiliates in any taxable period beginning after the Closing Date,
such amended Tax Return shall not be filed, whether by Sellers or Purchaser, as
the case may be, without Purchaser's prior written consent, which consent shall
not be unreasonably delayed or withheld. Purchaser may prepare and file amended
Tax Returns with respect to separate Tax Returns filed by the Companies or
Subsidiaries during any Pre-Closing Tax Period that contain a position for which
there was no "reasonable basis" (within the meaning of Treas. Reg. Section
1.6662-3(b)(3), or any similar or comparable provision of state, local or
foreign Law); provided, that no later than 20 days prior to the filing of such
amended Tax Returns, Purchaser shall furnish to Sellers a copy of such amended
Tax Return.
9.6.4 Cooperation.
9.6.4.1 Each of the Sellers, the Companies, the
Subsidiaries and the Purchaser shall reasonably cooperate, and shall cause their
respective Affiliates, officers, employees, agents, auditors and representatives
reasonably to cooperate, in preparing and filing all Tax Returns, including
maintaining and making available to each other all records necessary in
connection with Taxes and in resolving all disputes and audits with respect to
all taxable periods.
9.6.4.2 Such cooperation shall include the retention
and (upon the other party's request, at the other party's cost and expense, and
at the time and place mutually agreed upon by the parties) the provision of
records and information that are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder, to the extent such information and/or explanation
is readily available and within the control of the party to which such request
is made. The responsibility to retain records and information shall include the
responsibility to (i) retain such records and information as are required to be
retained by any applicable taxing authority and (ii) retain such records and
information in machine-readable format where appropriate (to the extent such
records and information are in such format as of the Closing Date) such that the
requesting party shall be able to readily access such records and information.
Purchaser and Sellers shall (i) retain all books and
51
records with respect to Tax matters pertinent to each of the Companies and
Subsidiaries relating to any taxable period beginning before the Closing Date
until the expiration of the statute of limitations (and, to the extent notified
by Purchaser or Sellers, any extensions thereof) of the respective taxable
periods, and to abide by all record retention arrangements entered into with any
taxing authority, and (ii) give the other party reasonable written notice prior
to transferring, destroying or discarding any such books and records and, if the
other party so requests, Purchaser, or Sellers, as the case may be, shall allow
the other party to take possession of such books and records at such other
party's sole cost and expense. Any information or explanation obtained pursuant
to this Section 9.6.4.2 shall be maintained in confidence, except (i) as may be
legally required in connection with claims for refund or in conducting or
defending any Tax audit or other proceeding or (ii) to the extent the disclosing
party provides written permission for such disclosure.
9.6.5 Refunds and Credits.
9.6.5.1 Any refunds or credits of Taxes or offsets of
Taxes otherwise due and payable by the Companies or the Subsidiaries for any
Pre-Closing Tax Period or that are Excluded Taxes shall be for the account of
Sellers; provided, that, if as a result of such refund, credit or offset,
Purchaser, any Company, any Subsidiary or any of their Affiliates suffer, in a
Post-Closing Tax Period, a decrease in a deduction, loss or Tax credit or an
increase in income, gains, or recapture of Tax credit which otherwise (but for
such refund, credit or offset) would have been reported by Purchaser, any
Company, any Subsidiary or any of their Affiliates, then Sellers shall pay
Purchaser the present value of the amount equal to the Tax benefits (but in no
case more than the amount of the refund, credit or offset) that Purchaser, any
Company, any Subsidiary or any of their Affiliates lost as a result of the
refund, credit or offset obtained for the account of Sellers. Any refunds,
credits or offsets of the Companies or the Subsidiaries for any taxable period
beginning after the Closing Date shall be for the account of the Purchaser. Any
refund, credit or offset of Taxes of the Companies or the Subsidiaries for any
Straddle Period shall be equitably apportioned between Sellers and Purchaser and
consistent with the previous two sentences. For purposes of this Section
9.6.5.1, in determining the present value of an amount of Tax benefits lost as a
result of a refund, credit or offset, a discount rate equal to the long-term
applicable federal rate (as defined in Code Section 1274(d)) for the month in
which such refund, credit or offset is realized shall be applied.
9.6.5.2 Purchaser shall cause each Company and
Subsidiary to elect, where permitted by applicable Law, to carry forward any Tax
Asset (as defined below) arising in a taxable period beginning after the Closing
Date that would, absent such election, be carried back to a Pre-Closing Tax
Period in which such Company or Subsidiary was included in a consolidated,
combined or unitary return with the Sellers or their Affiliates. Where no such
election is available, Purchaser shall be permitted to cause the Companies or
Subsidiaries to carry back to a Pre-Closing Tax Period a Tax Asset that arose in
a taxable period ending after the Closing Date and notwithstanding anything in
Section 9.6.5.1 to the contrary, Purchaser shall be entitled to any refunds
52
attributable to the carry back of such Tax Asset. For purposes of this Section
9.6.5.2, "Tax Asset" means any item of loss, deduction or credit incurred in one
taxable period that may be used to reduce Taxes in a previous or subsequent
taxable period, including by way of example and without limitation net operating
loss carryovers and carrybacks (as such terms are used in Code Section 172(b)),
capital loss carryovers and carrybacks (as such terms are used in Code Section
1212), and any corresponding or similar tax items arising under state, local or
foreign Law.
9.6.6 Certificate of Non-Foreign Status.
BTR Finance shall deliver to Purchaser at the Closing a
certificate of non-foreign status in accordance with Treas. Reg. Section
1.1445-2(b)(2) (the "Certificate of Non-Foreign Status").
9.7 Indemnification for Products Liability and Product Recall.
Each of the claims reflected on Schedule 9.7 represent product liability and
product recall claims with respect to which notification has been sent to an
insurance carrier (together with all claims made in writing by third parties to
Sellers between the date hereof and Closing with respect to product liabilities
or product recalls, the "Product Liability Claims"). Sellers and Invensys
acknowledge and agree that they shall retain all liabilities associated with
such Product Liability Claims and shall indemnify and hold the Purchaser
Indemnified Parties harmless for such Product Liability Claims in accordance
with Section 9.5 above. To the extent insurance coverage is available for any
such Product Liability Claim, but such insurance coverage includes a deductible
or self-insured retention amount, Purchaser and Sellers and Invensys acknowledge
and agree that Sellers and Invensys shall be responsible for the first One
Million Dollars ($1,000,000), in the aggregate, of such deductibles or
self-insured retention amounts. After Sellers and Invensys have assumed
responsibility for the first One Million Dollars ($1,000,000) in deductibles or
self-insured retention amounts, Purchaser and Sellers agree that each party
shall be responsible for fifty percent (50%) of any deductibles or self-insured
retention amounts applicable to all of such Product Liability Claims and that
Purchaser shall reimburse Seller for fifty percent (50%) of any such deductibles
or self-insured retention amounts. Notwithstanding the foregoing, the parties
acknowledge that Purchaser shall not be obligated to reimburse Sellers for any
amount under this Section 9.7 in excess of Five Million Dollars ($5,000,000).
9.8 Employee Liabilities.
9.8.1 Except as explicitly set forth in or otherwise
explicitly provided in this Agreement, Seller and its Affiliates (except the
Companies and Subsidiaries) shall be solely responsible after the Closing for,
and shall indemnify and hold Purchaser and its Affiliates (including the
Companies and Subsidiaries) harmless against, any and all obligations and
liabilities: (i) that have arisen or may arise in connection with or related to
any current or former employee of Seller or its Affiliates who is not considered
an Employee hereunder, (ii) related to the failure of Sellers or their
Affiliates to comply with any employee notification or consultation requirements
of applicable Law (unless such
53
failure is caused by the failure of the Purchaser or any of its Affiliates to
(a) reasonably cooperate with, or provide requested information to, the Sellers
in connection with its efforts to comply with such Law or (b) a failure by
Purchaser to comply with any employee notification or consultation requirements
of applicable Law), and (iii) in connection with claims with respect to an
Employee or former employee of the Companies or Subsidiaries for acts or
omissions occurring or arising during the period prior to the Closing during
which such individual was employed wholly or predominately by the Seller or one
of its Affiliates other than the Companies or Subsidiaries with respect to the
Seller or one of its Affiliates other than the Companies or Subsidiaries.
9.8.2 Except as explicitly set forth in or otherwise
explicitly provided in this Agreement, Purchaser and its Affiliates shall be
solely responsible after the Closing for, and shall indemnify and hold Sellers
and their Affiliates harmless against, any and all obligations and liabilities
related to the failure of Purchaser or its Affiliates to comply with any
employee notification or consultation requirements of applicable Law (unless
such failure is caused by the failure of the Sellers or any of their Affiliates
to (a) reasonably cooperate with, or provide requested information to, the
Purchaser in connection with its efforts to comply with such Law or (b) a
failure by Sellers to comply with any employee notification or consultation
requirements of applicable Law).
9.9 Exclusive Remedies.
9.9.1 Except as provided below, the parties hereto agree that
their respective remedies under Article 9 of this Agreement are their exclusive
remedies under this Agreement, including without limitation, any matter based on
the inaccuracy, untruth, incompleteness or breach of any representation or
warranty of any party hereto contained herein or based on the failure of any
covenant, agreement or undertaking herein, and the parties hereto hereby waive
any claims with respect to any other right of contribution or indemnity
available against any indemnifying party hereunder in such capacity on the basis
of common law, statute or otherwise beyond the express terms of this Agreement;
provided, however, that this exclusive remedy for damages does not preclude a
party from bringing an action for specific performance or other equitable remedy
to require a party to perform its obligations under this Agreement or any Seller
Document or Purchaser Document; and provided, further, that nothing contained in
this Agreement (including, without limitation, this Section 9.9.1) shall affect
or impair Purchaser's or Sellers' right to pursue any remedy in respect of a
breach of any covenant or agreement contained herein to be performed by Sellers
or Invensys or Purchaser after the Closing Date, and for the avoidance of doubt
no such remedy shall be subject to the limitations of Section 9.2.1; and
9.9.2 Notwithstanding any other provision of this Agreement,
the liability for indemnification of any indemnifying party under this Agreement
shall not exceed the actual damages of the party entitled to indemnification and
shall not otherwise include incidental, consequential, indirect, special,
punitive, exemplary or other similar damages, other than compensatory damages.
54
9.10 Adjustments for Insurance and Tax Benefits. Any
indemnification payable in accordance with Article 9 shall be net of any (i)
amounts actually recovered (after deducting related costs and expenses) or
recoverable by the indemnified party for the Losses for which such
indemnification payment is made under any insurance policy, warranty or
indemnity from any Person other than a party hereto, except, that the foregoing
shall not apply to any insurance proceeds recovered or recoverable under any
insurance policy obtained by Purchaser which covers in whole or in part Losses
arising under Environmental Laws, and (ii) Tax benefits realized by the
indemnified party in respect of any Losses for which such indemnification
payment is made.
9.11 Treatment of Indemnity Payments. Sellers and the
Purchaser agree that all indemnification payments made in accordance with
Article 9 will be treated by the parties as an adjustment to the Final Purchase
Price.
9.12 Right To Indemnification Not Affected By Knowledge. The
right to indemnification, payment of damages or other remedy based on or
resulting from a breach of representations, warranties, covenants, and
obligations contained in this Agreement will not be affected by any
investigation conducted with respect to, or any Knowledge of Purchaser or
Knowledge of Sellers acquired at any time by Purchaser with respect to Sellers
and Invensys, and Sellers and Invensys with respect to Purchaser, whether before
or after the execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
to Closing set forth in Article 7 based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification, payment of damages, or
other remedy based on such representations, warranties, covenants, and
obligations.
ARTICLE 10
MISCELLANEOUS
10.1 Certain Definitions.
For purposes of this Agreement, the following terms shall have
the meanings specified in this Section 10.1:
"Accounting Principles" shall mean the financial accounting
principles and practices ordinarily used in the preparation of the management
accounts of the Fasco Business (the "Standard Accounting Principles") as
modified and supplemented by the accounting principles set forth in Schedule 2.2
as specifically identified therein.
"Adjustment Amount" shall have the meaning set forth in
Section 2.3.2.
"Adjustment Statement" shall have the meaning set forth in
Section 2.2.1.2.
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"Affiliate" means, with respect to any Person, any other
Person controlling, controlled by or under common control with such Person.
"Affiliated Group" has the same meaning as the term described
in Code Section 1504(a).
"Agreement" shall have the meaning set forth in the first
paragraph hereof.
"Approved Absence" shall have the meaning set forth in Section
6.3.1.
"Assumed Salaried Pension Plan Liabilities" shall have the
meaning set forth in Section 6.3.7.1.
"Audited Balance Sheet" shall have the meaning set forth in
Section 4.8.
"Audited Balance Sheet Date" shall have the meaning set forth
in Section 4.8.
"Audited Financial Statements" shall have the meaning set
forth in Section 4.8.
"Baseline Trade Working Capital" shall mean Sixty Eight
Million Dollars ($68,000,000).
"BTR Finance" shall have the meaning set forth in the first
paragraph hereof.
"BTR Holdings" shall have the meaning set forth in the first
paragraph hereof.
"BTRI" shall have the meaning set forth in the first paragraph
hereof.
"Business Day" means any day of the year on which national
banking institutions in New York are open to the public for conducting business
and are not required or authorized to close.
"Cap" shall have the meaning set forth in Section 9.2.1(iii).
"Capital Expenditure Budget" shall have the meaning set forth
in Section 4.10.8.
"Certificate of Non-Foreign Status" shall have the meaning set
forth in Section 9.6.6.
"Claim" shall have the meaning set forth in Section 9.5.1.
"Closing" shall have the meaning set forth in Section 3.1.
56
"Closing Date" shall have the meaning set forth in Section
3.1.
"Closing Management Accounts" means the reports and schedules
identified in Schedule 2.2, generated from the books and records of the
Companies as at and for the period ending on the Effective Time, prepared in
accordance with the Accounting Principles and on the basis that the Effective
Time shall be treated as if it were a normal reporting period end.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commitment" shall have the meaning set forth in Section 6.12.
"Company" and "Companies" shall have the meanings set forth in
the first recital hereof.
"Company Material Adverse Effect" means a material adverse
effect on the assets, liabilities, business, financial condition or results of
operations of the Companies and the Subsidiaries (taken as a whole) other than
an effect resulting from an Excluded Matter. "Excluded Matters" means any one or
more of the following: (i) the effect of any change arising from or related to
any market in general in which the Companies or the Subsidiaries operate
(whether in the United States or internationally), the United States economy as
a whole, or the international economy; or (ii) any effect of the public
announcement of this Agreement, the transactions contemplated hereby or the
consummation of such transactions.
"Company Plans" shall have the meaning ascribed to such term
in Section 4.16.1.
"Company Property" and "Company Properties" shall have the
meaning ascribed to such term in Section 4.12.
"Contract" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, commitment or other arrangement or agreement.
"CPN" shall have the meaning set forth in the first paragraph
hereof.
"De Minimis Amount" shall have the meaning set forth in
Section 9.2.1.
"Deductible" shall have the meaning set forth in Section
9.2.1(ii).
"E&Y" shall have the meaning set forth in Section 6.16.1.2.
"Xxxxx Rapids Environmental Condition" means any obligation or
responsibility of Fasco D.C. Motors at Plant 1, located at 000 Xxxx Xxxxx Xxxxxx
in Xxxxx Rapids, MI ("Fasco Plant 1"), arising out of or related to the presence
or migration of chlorinated solvents in or to the groundwater to the extent such
solvents were released at, on or from the Fasco Plant 1 on or prior to the
Closing Date, and addressed in the
57
Remedial Action Plan, Version 2, dated June 15, 2001 and any supplemental
information associated therewith.
"Effective Time" shall have the meaning ascribed to such term
in Section 1.1.
"Employees" shall have the meaning set forth in Section 6.3.1.
"Environmental Deductible" shall have the meaning set forth in
Section 9.2.2.
"Environmental Law" means any applicable foreign, federal,
state, local, county, or municipal statute, rule, regulation, ordinance, rule of
common law or other legal requirement relating to the protection of the
environment and human health as it relates to protection of the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.Css.9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Xxx.xx. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.ss.6901 et seq.), the Clean Water Act
(33 U.S.C.ss.1251 et seq.), the Clean Air Act (42 U.S.C.ss.7401 et seq.), the
Toxic Substance Control Act (15 U.S.Css.2601 et seq.), the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.Css.136 et seq.), and the Occupational
Safety and Health Act (29 U.S.C.ss.651 et seq.) (but only to the extent it
relates to occupational exposure to toxic or hazardous substances, materials, or
wastes, pollutants or contaminants as defined in OSHA.) In connection with the
presence of, or any Remedial Action taken in relation to, a Hazardous Material
in the soil or any body of water, including, but not limited to, any ground
water, surface water or aquifer, "Environmental Law" shall include all
Environmental Laws, whether now or hereinafter in effect All other references to
"Environmental Laws" shall refer to Environmental Laws in effect on or prior to
the Closing Date, unless specifically defined otherwise.
"Environmental Losses" shall have the meaning set forth in
Section 9.3.1.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agent" shall have the meaning set forth in Section
2.6.
"Escrow Agreement" means the form of agreement attached hereto
as Annex E.
"Escrow Funds" shall mean Five Million Dollars ($5,000,000)
exclusive of interest.
"Estimated External Cash/Debt Balance" shall mean Sellers'
estimate of Final External Cash/Debt Balance to be provided to Purchaser
pursuant to Section 2.1.2 (which may be a positive or negative amount).
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"Estimated Trade Working Capital Adjustment" shall mean
Sellers' estimate of the amount to be determined pursuant to Section 2.2.2.1
(which may be a positive or a negative amount).
"Excluded Taxes" means any liability, obligation or
commitment, whether or not accrued, assessed or currently due and payable, for
any Taxes of the Companies or the Subsidiaries for any Pre-Closing Tax Period
including, but not limited to, Taxes that result (i) under Treasury Regulation
Section 1.1502-6(a) (or any similar provision of state, local or foreign law)
relating to Taxes of a Seller or any other corporation which has been affiliated
with such Seller (other than the Companies or Subsidiaries), (ii) from a
transferee or successor, or (iii) by contract or otherwise.
"Fasco Business" shall mean, collectively, all of the
Companies and all of the Subsidiaries on a consolidated basis, taken as a single
entity.
"Fasco Business Intellectual Property" shall mean all
Intellectual Property owned by the Companies and the Subsidiaries.
"Final External Cash/Debt Balance" means cash and cash
equivalents of the Fasco Business less the aggregate of all borrowings, accounts
receivable subject to factoring arrangements, finance leases, and indebtedness
of the Fasco Business for borrowed money, excluding Final Intercompany Payables
and Final Intercompany Receivables, expressed in United States Dollars as of the
Effective Time (which may be a positive or a negative amount).
"Final Intercompany Payables" means, in relation to each
Company or Subsidiary, the aggregate of all outstanding amounts owed by such
Company or Subsidiary to Invensys and its Affiliates (other than a Company or a
Subsidiary) as of the Effective Time.
"Final Intercompany Receivables" means, in respect of Invensys
and its Affiliates, the aggregate of all outstanding amounts owed by Invensys
and its Affiliates (other than a Company or a Subsidiary) to any Company or
Subsidiary as of the Effective Time.
"Final Net Intercompany Amount" shall have the meaning set
forth in Section 2.2.2.3.
"Final Purchase Price" shall have the meaning set forth in
Section 2.1.
"Final Trade Working Capital" shall have the meaning set forth
in Schedule 2.2.
"Final Trade Working Capital Adjustment" shall have the
meaning set forth in Section 2.2.2.1.3.
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"Financial Statements" shall have the meaning ascribed to such
term in Section 4.8.
"Foreign Governmental Approval" shall have the meaning set
forth in Section 6.10.
"Governmental Authorization" shall mean any approval, consent,
permit, waiver or other authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Law.
"Governmental Body" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether federal,
state, local or foreign, or any agency, instrumentality or authority thereof, or
any court or arbitrator (public or private).
"Hazardous Material" means any substance, material or waste
that is characterized, classified, regulated, or designated under any
Environmental Law as hazardous, toxic, pollutant, contaminant, explosive,
radioactive or words of similar meaning or effect, including without limitation,
petroleum and its by-products, nuclear fuel, asbestos, urea formaldehyde, and
polychlorinated biphenyls.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 as amended.
"ICMH" shall have the meaning set forth in the first paragraph
hereof.
"Inactive Employee" shall have the meaning set forth in
Section 6.3.1.
"Initial Purchase Price" shall have the meaning set forth in
Section 2.1.
"Intellectual Property" means all rights under patent,
copyright, trademark or trade secret law or any other statutory provision or
common law doctrine.
"Interim Balance Sheet" shall have the meaning set forth in
Section 4.8.
"Interim Balance Sheet Date" shall have the meaning set forth
in Section 4.8.
"Interim Financial Statements" shall have the meaning set
forth in Section 4.8.
"Invensys" shall have the meaning set forth in the first
paragraph hereof.
"Invensys Plans" shall have the meaning set forth in Section
4.16.1.
"IRS" means the United States Internal Revenue Service.
60
"Knowledge of Purchaser" means the actual knowledge of the
senior officers of the Purchaser or other employees of the Purchaser actively
involved in the transactions contemplated hereby.
"Knowledge of Sellers" means the actual knowledge of each of
Xxx Xxxxx, Xxx Xxxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxx Santa Xxxx, Xxxxxx Xxxxxx and Xxxxxxxx Xxxx. Annex D summarizes the
procedures followed by Sellers in ascertaining the knowledge of the individuals
listed in the preceding sentence.
"Law" means any federal, state, local or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
requirement.
"Legal Proceeding" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private), claims or governmental
proceedings.
"Lien" means any lien, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"Losses" means any and all losses, claims (including
third-party claims), expenses, damages, judgments, settlements, debts,
liabilities, penalties, fines, obligations, interest (including prejudgment
interest), costs and expenses (including court costs and reasonable attorneys'
fees and expenses and costs of investigation and remediation).
"Material Contracts" shall have the meaning set forth in
Section 4.15.
"Material Order" shall have the meaning set forth in Section
4.18.2(i).
"Non-U.S. Employees" shall have the meaning set forth in
Section 6.3.1.
"Non-U.S. Plans" shall have the meaning set forth in Section
4.16.1.
"Objection Notice" shall have the meaning set forth in Section
2.2.1.3.
"Order" means any order, injunction, judgment, decree, ruling,
writ, assessment or arbitration award.
"Owned Property" and "Owned Properties" shall have the meaning
set forth in Section 4.12.
"PBGC" shall have the meaning set forth in Section 4.16.6.
"Pension Plan Assets Adjustment" shall have the meaning set
forth in Section 2.2.2.4.
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"Pension Plan Escrow" shall have the meaning set forth in
Section 2.6.
"Permitted Exceptions" means (i) statutory liens for current
taxes, assessments or other governmental charges not yet delinquent or the
amount or validity of which is being contested in good faith by appropriate
proceedings, provided an appropriate reserve is established therefor; (ii)
mechanics', carriers', workers', repairers' and similar Liens arising or
incurred in the ordinary course of business that are not, individually or in the
aggregate, material to the business, operations and financial condition of the
Company, its Subsidiaries or any property so encumbered; (iii) zoning,
entitlement and other land use and environmental regulations by any Governmental
Body that affect legal title to the Owned Property, provided that such
regulations have not been violated; (iv) such other imperfections in title,
charges, easements, restrictions, encumbrances and matters which do not,
individually or in the aggregate, materially detract from the value of or
materially interfere with the present use of any Company Property subject
thereto or affected thereby; and (v) those matters shown on Schedule 4.12.
"Person" means any individual, partnership, joint venture,
trust, corporation, limited liability entity, unincorporated organization or
other entity (including a Governmental Body).
"Pre-Closing Environmental Liabilities" means any and all
Losses imposed pursuant to Environmental Laws arising out of, relating to or
attributable to the ownership, operation, leasing or occupancy of any Company
Properties, and any activities conducted thereon by any Person, at anytime,
including, without limitation, (i) the presence of Hazardous Materials at, on or
under such Company Properties at concentrations exceeding those allowed by
Environmental Laws (including the Xxxxx Rapids Environmental Condition) and (ii)
the use, treatment, transport or disposal of Hazardous Materials by the Company
or any Subsidiary or at or from any Company Property at anytime on or before the
Closing Date; provided, however, that Pre-Closing Environmental Liabilities
shall not include any Losses attributable to the presence of building materials
that contain Hazardous Materials, including lead based paint or asbestos
containing building materials, the presence of which complied with Environmental
Laws on the Closing Date.
"Pre-Closing Tax Period" means, with respect to the Companies
and Subsidiaries any Tax period (or portion thereof) ending on or before the
Closing Date.
"Predecessor Environmental Liabilities" means any and all
Losses imposed pursuant to Environmental Laws arising out of, relating to or
attributable to (1) any condition at any real property formerly owned, operated
or leased by the Companies or Subsidiaries or any predecessors thereof or (2)
any third-party property or transporter to which the Companies or Subsidiaries
or any predecessors thereof used for the transport, disposal or treatment of
Hazardous Materials prior to the Closing, but excluding any matters within the
definition of Pre-Closing Environmental Liabilities.
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"Product Liability Claims" shall have the meaning set forth in
Section 9.7.
"Products" means all current commercial products of the Fasco
Business.
"Purchaser" shall have the meaning set forth in the first
paragraph hereof.
"Purchaser DC Plan" shall have the meaning set forth in
Section 6.3.6.
"Purchaser Documents" shall have the meaning set forth in
Section 5.2.
"Purchaser Indemnified Parties" shall have the meaning set
forth in Section 9.1.1.
"Purchaser Salaried Plans" shall have the meaning set forth
in Section 6.3.7.1.
"Purchaser's Salaried Trust" shall have the meaning set forth
in Section 6.3.7.1.
"Purchaser Tax Act" shall have the meaning set forth in
Section 9.6.1.1.
"Real Property Lease" shall have the meaning set forth in
Section 4.12.
"Recent Management Accounts" shall have the meaning set forth
in Section 4.8.
"Remedial Action" means all actions affirmatively required by
an Order of a Governmental Body enforcing Environmental Laws to investigate,
clean up, remove, treat or otherwise address any Hazardous Material located at,
on or under real property, and shall be limited to the least stringent standards
applicable to the subject real estate.
"Salaried Pension Transferees" shall have the meaning set
forth in Section 6.3.7.1.
"Securities Act" shall have the meaning set forth in Section
5.5.
"Securities and Exchange Commission" or "SEC" means the United
States Securities and Exchange Commission.
"Seller" and "Sellers" shall have the meaning set forth in the
first paragraph hereof.
"Seller DC Plan" shall have the meaning set forth in Section
6.3.6.
"Seller Documents" shall have the meaning set forth in Section
4.2.
"Seller Indemnified Parties" shall have the meaning set forth
in Section 9.1.2.
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"Seller Marks" shall have the meaning ascribed to such term in
Section 6.7.
"Sellers' Salaried Trust" shall have the meaning set forth in
Section 6.3.7.3.
"Seller Tax Act" shall have the meaning set forth in Section
9.6.1.2.
"Shares" shall have the meaning set forth in the first recital
hereof.
"Software" means all computer programs embodied in Products or
used in the manufacture or testing of Products.
"Standard Accounting Principles" shall have the meaning set
forth in the definition of Accounting Principles.
"Straddle Period" shall have the meaning set forth in Section
9.6.1.3.
"Subsidiary" means any Person of which a majority of the
outstanding voting securities or other voting equity interests are owned,
directly or indirectly, by one or more of the Companies.
"Tax Asset" shall have the meaning set forth in Section
9.6.5.2.
"Tax Claim" shall have the meaning set forth in Section
9.6.2.1.
"Tax Indemnified Party" shall have the meaning set forth in
Section 9.6.2.1. "Tax Indemnifying Party" shall have the meaning set forth in
Section 9.6.2.1.
"Tax Returns" means all returns, declarations, reports,
estimates, information returns and statements required to be filed in respect of
any Taxes.
"Taxes" means (i) all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including, without
limitation, all income, gross receipts, capital, sales, use, ad valorem, value
added, environmental (including without limitation taxes under Code Section 59)
transfer, franchise, profits, windfall profits, inventory, capital stock,
alternative or add-on minimum, license, withholding, payroll, disability or
workers' compensation, employment, social security, unemployment, excise,
severance, stamp, registration, occupation, property (whether real, personal,
intangible or mixed) and estimated taxes, customs duties, fees, assessments and
charges of any kind whatsoever, (ii) all interest, penalties, fines, additions
to tax or additional amounts imposed by any taxing authority in connection with
any item described in clause (i), and (iii) "Tax" shall have the correlative
meaning any transferee liability in respect of any items described in clauses
(i) and/or (ii).
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"Technology" means, collectively, all designs, formulas,
algorithms, procedures, techniques, ideas, know-how, Software, tools,
inventions, creations, improvements, works of authorship other similar materials
relating to the Products, and all recordings, graphs, drawings, reports,
analyses, other writings, and any other embodiment of the above, in any form,
whether or not specifically listed herein, and all related technology used in,
incorporated in, embodied in or displayed by any of the foregoing, or used or
useful in the design, development, reproduction, maintenance or modification of
any of the foregoing.
"Transfer Taxes" means all sales, use, transfer, intangible,
recordation, documentary stamp or similar Taxes or charges, of any nature
whatsoever.
"Treasury Regulation" or "Treas. Reg." means the regulations
promulgated by the IRS under the Code.
"Unrelated Accounting Firm" shall have the meaning set forth
in Section 2.2.1.4.
"U.S. GAAP" shall have the meaning set forth in Section 4.8.
"U.S. Employees" shall have the meaning set forth in Section
6.3.5.
10.2 Payment of Transfer Taxes. The Purchaser, on the one
hand, and the Sellers and Invensys, on the other hand, shall pay or cause to be
paid, and shall indemnify, defend and hold harmless the other party for, 50% of
any and all Transfer Taxes attributable to the transactions contemplated by this
Agreement. Purchaser and Sellers shall use commercially reasonable efforts to
mitigate, reduce or eliminate Transfer Taxes that could arise from, or be due as
a result of, the transactions contemplated in this Agreement.
10.3 Expenses. Except as otherwise provided in this Agreement,
the Sellers and the Purchaser shall each bear their own expenses incurred in
connection with the negotiation, preparation, execution and performance of this
Agreement and each other agreement, document and instrument contemplated by this
Agreement and the consummation of the transactions contemplated hereby and
thereby, including all fees and expenses of representatives, agents and
advisors, it being understood that in no event shall the Companies or the
Subsidiaries bear any of such costs and expenses.
10.4 Further Assurances. Each Seller and the Purchaser agrees
to furnish upon request to each other such further information, to execute and
deliver such other documents or agreements, and to take such other action as may
be reasonably necessary or desirable for the implementation of this Agreement
and the documents referred to in this Agreement, and the consummation of the
transactions contemplated hereby.
65
10.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware regardless of the
laws that might otherwise govern under applicable principles of conflict of laws
thereof.
10.6 Submission to Jurisdiction; Consent to Service of
Process.
10.6.1 The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of any federal or state court located within the
State of Michigan over any dispute arising out of or relating to this Agreement
or any of the transactions contemplated hereby and each party hereby irrevocably
agrees that all claims in respect of such dispute or any suit, action, or
proceeding related thereto may be heard and determined in such courts. The
parties hereby irrevocably waive, to the fullest extent permitted by applicable
Law, any objection which they may now or hereafter have to the laying of venue
of any such dispute brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by Law.
10.6.2 Each of the parties hereto hereby consents to process
being served by any party to this Agreement in any suit, action or proceeding by
the mailing of a copy thereof in accordance with the provisions of Section 10.9.
10.7 Entire Agreement; Amendments and Waivers. This Agreement
(including the schedules and annexes hereto) represents the entire understanding
and agreement between the parties hereto with respect to the subject matter
hereof and can be amended, supplemented or changed, and any provision hereof can
be waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought. No action taken pursuant to this
Agreement, including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, covenant or agreement
contained herein. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. No
failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.
10.8 Table of Contents and Headings. The table of contents and
section headings of this Agreement are for reference purposes only and are to be
given no effect in the construction or interpretation of this Agreement.
10.9 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when (i) delivered
personally, (ii) mailed by certified or registered mail, return receipt
requested, or (iii) sent by FedEx
66
or other nationally recognized express carrier, fee prepaid to the parties (and
shall also be transmitted by facsimile to the Persons receiving copies thereof)
at the following addresses (or to such other address as a party may have
specified by notice given to the other party pursuant to this provision):
If to any Seller, to:
Invensys plc
Xxxxxxxx Xxxxx
Xxxxxx, XX0X 0XX
Xxxxxx Xxxxxxx
Attn: Corporate Secretary
Facsimile: (44) (000) 000-0000
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Purchaser, to:
Tecumseh Products Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Miller, Canfield, Paddock and Stone, P.L.C.
000 Xxxx Xxxx Xxxx Xxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.,
Facsimile: (000) 000-0000
10.10 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement shall remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.
10.11 Binding Effect; No Third Party Beneficiaries;
Assignment. This Agreement shall be binding upon and inure to the benefit of the
parties and their
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respective successors and permitted assigns. Nothing in this Agreement shall
create or be deemed to create any third party beneficiary rights in any person
or entity not a party to this Agreement. No assignment of this Agreement or of
any rights or obligations hereunder may be made by either the Sellers or the
Purchaser (by operation of law or otherwise) without the prior written consent
of the other parties hereto and any attempted assignment without the required
consents shall be void; provided, however, that the Purchaser may assign this
Agreement and any or all rights or obligations hereunder (including, without
limitation, the Purchaser's rights to purchase the Shares and the Purchaser's
rights to seek indemnification hereunder) to any Affiliate of the Purchaser.
Upon any such permitted assignment, the references in this Agreement to the
Purchaser shall also apply to any such assignee unless the context otherwise
requires.
10.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
[The Remainder of this Page Is Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first written above.
PURCHASER:
TECUMSEH PRODUCTS COMPANY
By: /s/ XXXX X. XXXXXXX
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
SELLERS:
BTR INDUSTRIES LIMITED
By: /s/ XXXXXXXX X'XXXXXXX
------------------------------------------
Name: Xxxxxxxx X'Xxxxxxx
----------------------------------------
Title: Attorney-in-Fact
---------------------------------------
BTR (EUROPEAN HOLDINGS) BV
By: /s/ XXXXXXXX X'XXXXXXX
------------------------------------------
Name: Xxxxxxxx X'Xxxxxxx
----------------------------------------
Title: Attorney-in-Fact
---------------------------------------
CPN HOLDINGS PTY LIMITED
By: /s/ XXXXXXXX X'XXXXXXX
-----------------------------------------
Name: Xxxxxxxx X'Xxxxxxx
---------------------------------------
Title: Attorney-in-Fact
--------------------------------------
INVENSYS CONTROLS MEXICAN HOLDING, L.L.C.
By: /s/ XXXXXXXX X'XXXXXXX
------------------------------------------
Name: Xxxxxxxx X'Xxxxxxx
----------------------------------------
Title: Attorney-in-Fact
---------------------------------------
BTR (USA) FINANCE COMPANY
By: /s/ XXXXXXXX X'XXXXXXX
------------------------------------------
Name: Xxxxxxxx X'Xxxxxxx
----------------------------------------
Title: Attorney-in-Fact
---------------------------------------
INVENSYS PLC
By: /s/ XXXXXXXX X'XXXXXXX
------------------------------------------
Name: Xxxxxxxx X'Xxxxxxx
----------------------------------------
Title: Attorney-in-Fact
---------------------------------------
