Exhibit 2.2
TRANSITION AGREEMENT
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This TRANSITION AGREEMENT (this "Agreement"), dated as of August 4, 2000,
is between and among PRESTOLITE ELECTRIC INCORPORATED, a Delaware corporation
(including its UK affiliates, "Prestolite"), and AMETEK, INC., a Delaware
corporation (including its UK affiliates, "AMETEK").
RECITALS
A. Prestolite and AMETEK have entered into an Asset Purchase Agreement
dated as of August 4, 2000 (the "Asset Purchase Agreement"), pursuant to which
AMETEK is acquiring substantially all of the assets of Prestolite's Electric
Vehicle Systems Division, which is comprised of the Material Handling Motor
Business Unit (the "MH Motor Business"), the Xxxxxxx XX Motor Business Unit (the
"Xxxxxxx Motor Business"), the Industrial Battery Charger Business Unit (the
"Battery Charger Business"), and the Switch Business Unit (the "Switch
Business") (collectively, the "Acquired Businesses") (the Material Handling
Motor Business Unit and the Xxxxxxx XX Motor Business Unit have been
collectively operated by Prestolite as the "DC Motor Business").
B. The United States operations of the MH Motor Business are conducted at
Prestolite's manufacturing facility located in Decatur, Alabama (the "Decatur
Facility") and at Prestolite's remanufacturing facility in Dearborn Heights,
Michigan (the "Dearborn Facility"), the United Kingdom operations of the MH
Motor Business are conducted at Prestolite's manufacturing facility located in
Leyland, England (the "Leyland Facility"), the Wagoner Motor Business is
conducted at Prestolite's facility located in Wagoner, Oklahoma (the "Xxxxxxx
Facility"), the Battery Charger Business is conducted at Prestolite's facility
in Troy, Ohio (the "Xxxx Facility"), the United States operations of the Switch
Business are conducted at the Decatur Facility, and the United Kingdom
operations of the Switch Business are conducted at Prestolite's manufacturing
facility located in Cardiff, Wales (the "Cardiff Facility"). (The Decatur
Facility, the Dearborn Facility, the Leyland Facility, the Wagoner Facility, the
Xxxx Facility and the Cardiff Facility are sometimes individually referred to
herein as a "Facility" and collectively as the "Facilities". The Decatur
Facility, the Dearborn Facility, the Wagoner Facility and the Xxxx Facility are
sometimes collectively referred to herein as the "US Facilities.")
C. Prestolite is retaining and will continue to operate its Heavy Duty
Systems Division and Automotive Systems Division (collectively, the "Retained
Businesses"). The operations of the Retained Businesses are conducted at, among
other locations, Prestolite's manufacturing facilities in Arcade, New York (the
"Arcade Facility") and Leyland, England (the "Leyland Facility") and aftermarket
distribution facility in Florence, Kentucky (the "Xxxxxxxx Facility").
D. The execution and delivery of this Agreement is a condition precedent
to the parties consummation of the transactions contemplated by the Asset
Purchase Agreement.
Now, therefore, Prestolite and AMETEK agree as follows:
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1. Defined Terms. Capitalized terms used but not otherwise defined in
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this Agreement shall have the meanings ascribed to such terms in the Asset
Purchase Agreement.
2. General Provisions
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2.1 Free Services. Except to the extent set forth below, all
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services under this Agreement are to be provided to AMETEK for no charge
through the date occurring 6 months after the Closing Date (the "6-Month
Date"). Certain other services at Decatur, as described below, are to be
provided at no charge through the first anniversary of the Closing Date
(the "Anniversary Date"). These services include, but are not limited to,
all employee costs and out-of-pocket expenses except to the extent not
normally occurring in the ordinary operation of the Business prior to the
Closing. There will be no refund associated with non-use by AMETEK of
services through the 6-Month Date.
2.2 Immediate Transition. Prestolite will provide reasonable support
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for the immediate transition of ownership at no charge other than
reimbursement of out-of-pocket costs.
2.3 Sales and Marketing. AMETEK and Prestolite acknowledge that
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salesmen to be employed by AMETEK currently have certain responsibilities
for the sale of product lines being retained by Prestolite (Heavy Duty
Systems products) and that Heavy Duty Systems salesmen currently have
certain responsibilities for the sale of product lines that are being
acquired by AMETEK. Prestolite and AMETEK will work together to assure an
orderly transition of these selling responsibilities at no charge to the
other. See also "Military Contract Administration" set forth in Section
10.3 below.
2.4 Notice Period. Except as outlined below for Leyland Facility
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rent and North American telecommunications charges, AMETEK will provide
thirty (30) days notice to cancel any items for which it is being charged.
2.5 Twelve-Month Limit. The rates listed below for services after
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the 6-Month Date cover the period through the Anniversary Date. Any
services provided after that time will be separately negotiated between
Prestolite and AMETEK.
2.6 Performance Standard. It is the intention of the parties that
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AMETEK be able to continue the operation of the Acquired Businesses to
satisfy the customers of the Business with not less than the level of
production and service provided by Prestolite to such customers immediately
prior to the Closing. To that end, (a) Prestolite agrees that the level of
services to be provided hereunder for the benefit of AMETEK shall be
substantially equivalent to the level of services provided to the Acquired
Businesses immediately prior to the Closing and (b) AMETEK agrees to make
the fixed assets of the Acquired Businesses reasonably available to
Prestolite for common purpose usage consistent with Prestolite's past
practice and in connection with Prestolite's provision of transition
services under the Agreement.
2.7 Cooperation. The parties agree to act in good faith and
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cooperatively in connection with the provision of support services
hereunder and in connection with determinations of whether the provision of
such services meets the terms of this Agreement.
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2.8 Payment. Except for reimbursement of amounts related to payroll,
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each party shall pay all amounts reasonably payable to the other party
within thirty (30) days of receipt of an invoice therefor. To the extent
reasonably possible, approval for out-of-pocket expenses will be received
in advance from AMETEK (which approval shall not be unreasonably withheld).
To the extent an invoice includes reimbursement for out-of-pocket expenses,
Prestolite shall provide reasonable documentation for these expenses.
3. United States MIS Services. Prestolite currently provides operational,
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systems integration and other information technology services (collectively, the
"US MIS Services") to the United States operations of the Acquired Businesses
and the Retained Businesses through its Corporate Data Center located in Ann
Arbor, Michigan (the "CDC"). The CDC provides the US MIS Services through ERP
software developed by the CDC using Oracle 7 which executes on an IBM 9672-R21
running IBM Vmv2r3 (the "Prestolite Oracle Enterprise System" or "POES"). Upon
the terms and conditions specified in this Section 2, Prestolite will provide
transitional US MIS Services to AMETEK.
3.1 Basic Services. Commencing on the date hereof, and continuing
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until the Anniversary Date, Prestolite shall provide basic US MIS Services
for the Acquired Businesses at the Decatur Facility, the Dearborn Facility,
the Wagoner Facility and the Xxxx Facility. Such basic services to be
provided by Prestolite to AMETEK will include the following:
(a) End-User Desktop Support. Prestolite will operate and
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maintain the POES for use by AMETEK at the Facilities in a manner
consistent with the level of support provided to Prestolite plants
which are part of the Retained Businesses.
(b) New Hardware Additions. Prestolite will assist with
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establishing connectivity to the POES of new personal computers and
printers purchased and/or leased by AMETEK for use at the Facilities.
(c) User Training. Prestolite will maintain the current level of
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training of AMETEK end users in the proper execution of their
functional duties in the POES.
(d) Normal Operations. Prestolite will be responsible for day-
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to-day operations of the POES. Prestolite will provide MIS Services
hereunder in good faith, in a timely manner and in a manner consistent
with past practices applicable to the provision and performance of
operational services (including resource scheduling, backup/recovery,
problem management, problem resolution and other normal activities
associated with the operation of the network).
(e) Routine Maintenance. Prestolite will periodically install
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operating system software upgrades and routine maintenance upgrades
for the information system in a timely manner and in a manner
consistent with current practices.
(f) AMETEK As A Separate Plant. Prestolite will establish each
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of the US Facilities as a separate plant for operational data on the
POES, but "corporate" level data on the Prestolite network will remain
based upon
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Prestolite's standard definitions. Data for the MH Motor Business and
the Switch Business will be provided separately.
(g) Prestolite Fiscal Calendar. All reports generated by
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Prestolite for AMETEK shall be based upon Prestolite's fiscal calendar
(irrespective of whether Prestolite's fiscal calendar is the same as
or different than AMETEK's fiscal calendar).
After the 6-Month Date through and including the Anniversary Date, AMETEK shall
pay $2,000 per month per location (excluding Xxxxxxxx) primarily covering
telecommunications plus $500.00 per computer hour; provided, however, that
charges to AMETEK for basic US MIS Services during such period shall not exceed
$50,000 per month. So long as Xxxxxxxx remains a single location from an
information technology perspective, there will be no $2,000 per month charge to
AMETEK for this location. (See Section 5.1 for specific terms relating to
Xxxxxxxx).
3.2 Special Services. Prestolite agrees to provide AMETEK special
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services in the manner and at the rates that follow:
3.2.1 Programming Work Requests. AMETEK (through its
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information systems and services group) may prepare and submit written
programming work requests to the CDC. Such work requests will be
quoted for estimated completion date, estimated hours and then charged
at actual hours rounded to the nearest hour at $60.00 per hour.
AMETEK (through the Facilities) shall be limited to eighty (80) hours
of programming requests per month. While the CDC will not
unreasonably disapprove programming work requests, such requests may
be rejected if in conflict with Prestolite's developed software.
Services under this subsection are not Free Services.
3.2.2 Migration Requests. Prestolite will provide support in
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migrating Prestolite data to AMETEK's systems. Requests for migrating
data in Oracle format will be created within one (1) full business day
and shipped to any AMETEK designated site by overnight delivery
service. Requests for migrating data in non-Oracle formats may be
made by selecting the fields from the data base definition listings
and such request shall be created within three (3) business days and
shipped by overnight delivery. AMETEK shall pay to Prestolite $100.00
for each migration request. Services under this subsection are not
Free Services.
3.2.3 ODBC Connection. AMETEK will be allowed direct access to
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the POES for purposes of mapping data to a system designated by
AMETEK. AMETEK will also be allowed to extract data from POES for the
purpose of developing reports based on data in the current system to
the extent that there is no adverse impact to the overall performance
of POES.
3.2.4 Internet Access. Prestolite and AMETEK will work
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cooperatively to arrange Internet access for each Facility in such a
manner that the majority of AMETEK employees at each Facility shall
have access to the Internet separate from Prestolite's access point
(i.e. Netrex). Within 100 days after the Closing, AMETEK will provide
Internet access at each Facility at its own expense.
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3.2.5 E-mail Access. Prestolite and AMETEK will work
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cooperatively to arrange new e-mail names, domain names and an e-mail
server for AMETEK employees at each Facility and Prestolite will
forward mail received at Prestolite to the new account if requested.
3.2.6 Reimbursement of Travel Expenses. AMETEK shall be
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responsible for reimbursing Prestolite for any travel expenses
requested by AMETEK and incurred by Prestolite employees in support of
the current system or in order to assist AMETEK's conversion to a new
system. Services under this subsection are not Free Services. All
reimbursements for travel expenses will be consistent with AMETEK's
standard travel policy and subject to advance approval to the extent
reasonably practicable.
3.3 Software.
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3.3.1 Ownership of Developed Software. Prestolite shall own all
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right, title and interest in and to all current and future software
developed by Prestolite and used on the POES. AMETEK agrees that such
Prestolite developed software shall not be operated, directly or
indirectly, by persons other than bona fide employees of AMETEK or its
authorized agents and/or consultants. AMETEK agrees that only AMETEK
work related to the locations constituting part of the Acquired
Businesses shall be processed utilizing Prestolite developed software.
3.3.2 Developed Software Modifications. Prestolite reserves the
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right to at any time modify and/or revise any Prestolite developed
software so long as such modifications and/or revisions do not have a
materially adverse affect upon the operation of the software
functions. Notice of modifications to the system will be provided two
(2) weeks in advance to the extent possible and within a reasonable
period in any event.
3.4 Termination. AMETEK shall have the right to terminate this US
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MIS Service arrangement at will at any time upon not less than thirty (30)
days written notice for computer time and not less than sixty (60) days
written notice for telecommunications.
4. Account Assistance Services. To the extent requested by AMETEK,
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Prestolite will provide to AMETEK standard transition assistance for accounts
receivable/lockbox, accounts payable, and similar functions at no charge by
Prestolite for up to three (3) months. AMETEK may need to incur third party
charges for some functions such as payroll.
5. Xxxxxxxx Aftermarket Services.
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5.1 Initially, Xxxxxxxx will remain a single Prestolite location for
data processing purposes so that both AMETEK and Prestolite shipments can
be processed on a single picking ticket and invoiced on a single Prestolite
invoice. Should AMETEK desire greater segregation of its own activity,
Prestolite will accomplish that change at no charge, upon reasonable
notice.
5.2 Prestolite shall provide aftermarket warehousing and distribution
support for the Acquired Business. After the 6-Month Date, this support
will be provided at a
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cost of 6.2% of Xxxxxxxx sales of AMETEK product to external customers. To
the extent that AMETEK's support requirements at Xxxxxxxx change from the
current level, then both parties will, in good faith, renegotiate the 6.2%
support charge. To the extent AMETEK desires greater segregation of its
activity as described in 5.1 above, then the maximum incremental charge
resulting from such change will not exceed an increase of .5% to a total
charge of 6.7%. Such 6.2% charge includes the packaging (of the same type
and quality provided by Prestolite immediately prior to the Closing) of
commercial items. Prestolite will continue to procure and provide packaging
material (excluding military packaging) through the Anniversary Date.
AMETEK will cooperate in providing notice of packaging changes to minimize
packaging obsolescence. Should AMETEK relocate shipping activities away
from Xxxxxxxx, Prestolite will sell packaging material to AMETEK at
Prestolite's acquisition cost, and AMETEK will cooperate by purchasing
reasonable initial supplies from Prestolite.
5.3 Through the Anniversary Date, Xxxxxxxx will provide military
packaging at the costs incorporated in the Decatur 2000 standard
manufacturing costs. (Military packaging will not be provided free of
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charge through the 6-Month Date.)
5.4 Through the Anniversary Date, special request(s) including return
of AMETEK inventory to an AMETEK location, will be provided at $25 per
hourly labor hour. (These special services will not be provided free of
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charge through the 6-Month Date.)
6. Intercompany Activity and Pricing Services.
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6.1 Description. As of the date of this Agreement, certain business
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units, which constitute part of the Acquired Businesses, sell components or
other products to certain business units which constitute part of the
Retained Businesses, and certain business units which constitute part of
the Retained Businesses, sell components or other products to certain
business units which constitute part of the Acquired Businesses. Each of
Prestolite and AMETEK agrees to continue these existing supply arrangements
for the benefit of the applicable business unit (regardless of whether such
business unit continues to be owned by such party or is sold to a third
party) through the Anniversary Date.
6.2 Pricing. For the period commencing on the date of this Agreement
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and ending on the 6-Month Date, the pricing for each such supply
arrangement shall be 110% of Prestolite's "standard manufacturing cost" in
effect as of March 1, 2000. The foregoing charge will be effective to the
extent the volume does not exceed 150% of the prior year's rate of sales.
If such 150% rate is exceeded, the costs may be renegotiated.
6.3 Exclusions. This Section 6 does not cover 5-inch armatures or
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starter solenoids (such items covered in Section 11.3 below).
7. Decatur Rent. Through the 6-Month Date, Prestolite shall provide to
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AMETEK Decatur rent, including building insurance, real estate taxes and any
necessary repairs to the Decatur Facility, other than those necessitated by the
acts or omissions of AMETEK, in which case AMETEK shall be responsible for
making such repairs at its own expense. After the 6-Month Date through the
Anniversary Date, AMETEK will pay $0.25 per square foot per month occupied by it
in the Decatur Facility. However, if no manufacturing remains in the facility
the rent will be $100 per month per AMETEK person located in the Decatur
Facility.
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Through the Anniversary Date, so long as AMETEK is conducting manufacturing
operations at the Decatur Facility, AMETEK shall provide, at its expense,
janitorial services and compressor preventive maintenance. From the 6-Month
Date through the Anniversary Date, AMETEK shall provide general building
maintenance and minor building repairs in a manner consistent with Prestolite's
historical practices; provided, however, that with respect to such building
maintenance and repairs (I) AMETEK shall not be obligated to provide more than
40 hours per week of such services; (ii) to the extent that AMETEK provides such
services with respect to any portion of the Decatur Facility not included in the
premises being leased by AMETEK, Prestolite shall reimburse AMETEK for such
services at the rate of $25 hour and (iii) to the extent that Prestolite's
historical practice involved subcontracting one or more portions thereof to
third parties, Prestolite shall continue that practice and Prestolite shall
continue to pay such third parties. To the extent general maintenance expenses
cannot be segregated as envisioned in Section 7(ii), then such expenses shall be
pro-rated based upon square footage occupied. (For clarity, general building
maintenance and minor building repairs does not include maintenance support of
manufacturing (or manufacturing support) equipment owned by AMETEK, which
support AMETEK shall provide at its own expense without reimbursement from
Prestolite.)
With respect to utility costs, the parties agree that such costs shall
be allocated, in a commercially reasonable manner, so that (I) AMETEK is
allocated those costs attributable to its manufacturing operations at the
Decatur Facility and (ii) Prestolite is allocated those costs attributable to
its plating operations and any unused space at the Decatur Facility (provided
that heating and cooling costs shall be allocated so that AMETEK bears the
portion of the total heating and cooling costs that corresponds to the portion
of the Decatur Facility being used by AMETEK's manufacturing operations and
Prestolite bears the balance of such heating and cooling costs). Each party
shall pay directly and/or reimburse the other party for such utility costs as is
necessary to effectuate the foregoing allocation.
Prestolite intends to sell the Decatur Facility. AMETEK intends to have
all operations out of the facility by the Anniversary Date. Should that not
occur, ongoing rent will be negotiated between the parties on a month-to-month
basis.
8. Other Decatur Services.
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8.1 Prestolite will continue to operate the plating department at
Decatur through the Anniversary Date as necessary to support the Acquired
Business currently located in the Decatur Facility at no charge. Plating
support for manufacturing operations not acquired from Prestolite will be
separately negotiated. So long as AMETEK is conducting manufacturing
operations at the Decatur Facility, AMETEK shall provide, at its expense,
equipment maintenance for the plating operation consistent with
Prestolite's historical practices. Such services will be provided under
the direction and supervision of Prestolite and Prestolite shall be solely
responsible and will indemnify and hold harmless AMETEK against any and all
liabilities arising in connection with the provision of such services.
8.2 AMETEK acknowledges that the plating department provides only
plating of "in plant" parts manufactured by the Acquired Business currently
located in the Decatur Facility. Should plating support be required for
manufacturing operations that
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have moved outside the plant, AMETEK will be responsible for receiving,
packing and shipping activities necessary to support the plating operation.
8.3 Prestolite will be responsible for operating permits and
reporting requirements under those permits. Prestolite will manifest and
report the disposal of all waste generated at the Decatur facility,
including hazardous waste, under the Prestolite name and EPA identification
number.
8.4 Prestolite will provide plating services at a level and quality
equivalent to the level and quality in effect immediately prior to the
Closing which meets the existing Prestolite specifications for this
service.
8.5 (a) Through the Anniversary Date, Prestolite will continue to
employ a controller and a director of human resources in Decatur and make
their services available to AMETEK. Those individuals are intended to be
Xxxxxxx Xxxxx and Xxxxx Xxxxxx, but should either depart, a replacement
reasonably satisfactory to AMETEK will be provided.
(b) AMETEK shall be solely responsible for ensuring that all
administrative decisions to be implemented by Xxxxx and Xxxxxx comply
with all applicable laws. AMETEK shall indemnify and hold Prestolite,
Xxxxx and Xxxxxx harmless against any and all liabilities which may
arise out of the implementation by Xxxxx and/or Xxxxxx of any and all
administrative decisions made by AMETEK, except for any liability
associated with the plating operation.
(c) AMETEK acknowledges that Prestolite will be attempting to
sell the Decatur Facility and will use Xxxxxxx Xxxxx and Xxxxx Xxxxxx
as Prestolite's on-site representatives in conjunction with that sale.
To that end, they will provide tours and otherwise assist in the due
diligence process, but generally will not be involved in negotiation
and closing activities without AMETEK's permission (which shall not be
unreasonably withheld).
8.6 Prestolite will retain (on either an employment or consulting
basis) Xxxxxx Xxxxx through August 30, 2000. During this period,
approximately half his time will be spent in support of AMETEK. AMETEK
will arrange directly with Xxxxxx Xxxxx for any services after August 30,
2000 or in excess of half-time.
9. United Kingdom Services. Prestolite will provide to AMETEK United
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Kingdom services through the Anniversary Date upon the terms and conditions
specified below.
9.1 Management Information Services. (a) Prestolite will provide
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MIS equivalent to the services provided prior to the acquisition. After
the 6-Month Date through the Anniversary Date, these services will be
charged at (Pounds)5,500 per month, adjusted up or down for the number of
people in the UK being covered by these services. The baseline
(denominator) headcount for this purpose will be 131 employees (49 at
Cardiff and 82 at Leyland). Any person who is not on the payroll after the
fifteenth of the month will be excluded from that month in the numerator in
making this calculation.
(b) The services exclude major system or report enhancement, new
software, or additional equipment outside the ordinary operation of
the Acquired Businesses. Additional equipment or new software
purchased or leased at
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AMETEK's request will be reimbursed or paid for directly by AMETEK.
The manpower required for special migration requests or special
programming will be provided at (Pounds)40 per hour. Prestolite
reserves the right to limit such manpower to 60 hours per month.
(c) Prestolite reserves the right to at any time modify and/or
revise any Prestolite developed software so long as such modifications
and/or revisions do not have a materially adverse affect upon the
operation of the software functions. Notice of modifications to the
system will be provided two (2) weeks in advance to the extent
possible and within a reasonable period in any event.
(d) Prestolite and AMETEK will cooperate in good faith to ensure
that the Infoflow software licenses will continue to be available to
the parties so that these services may be provided by Prestolite
hereunder. Until the 6-Month Date, Prestolite will bear the cost
associated with such effort. Thereafter, AMETEK shall bear the cost.
9.2 Financial Services. Prestolite will provide operating financial
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services for the AMETEK operations at Cardiff and Leyland. These services
include payroll, including all aspects of payroll taxation, deductions and
administration, for hourly, weekly and monthly payroll, dealing with
national insurance, accounts payable, invoicing, accounts receivable, and
accounting for VAT.
These services do not include corporate taxation, or UK Statutory
Accounting. However, Prestolite will provide the necessary data to enable
Statutory Accounts to be prepared. Management accounts will be provided
based upon Prestolite's fiscal calendar (irrespective of whether
Prestolite's fiscal calendar is the same as or different than AMETEK's
fiscal calendar). Key financial data as designated by AMETEK's Monthly
Financial Highlights, will be provided by working day 5. Personnel
administration, advice and support will also be provided.
After the 6-Month Date through the Anniversary Date, these services
will be charged at a rate of (Pounds)7,000 per month, adjusted for the
number of people covered by these services in the UK with any person who is
not in the payroll after the 15th of the month not included in the
numerator. AMETEK must establish its own accounts for PAYE, and Social
Security, VAT, customs bond, etc. Should AMETEK hire a controller (degreed
accountant) or its own accounting clerks, the (Pounds)7,000 charge will be
reduced by (Pounds)3,000 for the controller and by (Pounds)1,500 for each
accounting clerk.
9.3 Office Services. Prestolite will provide Leyland telephone,
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postage and office cleaning services. After the 6-Month Date through the
Anniversary Date, these services will be charged at (Pounds)2,000 per
month, adjusted for the number of people employed by AMETEK at the Leyland
site in the UK (from a baseline of 82) with any person who is not on the
payroll after the 15th of the month not included in the numerator.
9.4 Leyland Engineering and Certain QA Staff Services. Prestolite
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will provide electrical and mechanical maintenance, gauge calibration and
support for ISO 9000 systems and procedures at the pre-acquisition level.
After the 6-Month Date through the Anniversary Date, these services will be
charged at (Pounds)2,500 per month, adjusted for the level of AMETEK hourly
personnel at Leyland (from a baseline
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denominator, of 62 employees) with any person who is not on the payroll
after the 15th of the month not included in the numerator.
9.5 General Leyland Manufacturing Support. Prestolite will provide
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waste disposal, maintenance spares (with a value below (Pounds)50 each),
use of equipment including material handling equipment, protective
clothing, cleaning, security systems, reception, use of canteen, etc.
After the 6-Month Date through the Anniversary Date, AMETEK will be charged
at (Pounds)4,201 per month, adjusted for the level of AMETEK hourly
personnel at Leyland (from a baseline of 62 employees) with any person who
is not on the payroll after the 15th of the month not included in the
numerator.
9.6 Leyland Utilities. Prestolite will provide utilities including
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gas, electricity, and water, but excluding property taxes and all
insurances for the Leyland Facility. After the 6-Month Date through the
Anniversary Date, AMETEK will be charged at (Pounds)8,028 per month
adjusted for the level of AMETEK hourly personnel at Leyland (from a
baseline of 62 employees) with any person who is not on the payroll after
the 15th of the month not included in the numerator.
9.7 Direct Charges. Costs currently posted as direct charges to DC
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motor operations or to Cardiff (i.e. cost required and incurred by the
Acquired Businesses that will be controlled fully by AMETEK after Closing)
will continue to be posted as direct charges and paid by AMETEK.
9.8 Leyland Rent. Prestolite will provide AMETEK with the use of the
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Leyland Facility. After the 6-Month Date through October 2, 2001, rent
will be charged directly, or Prestolite will be reimbursed for rent paid on
space occupied by AMETEK at a monthly cost of (Pounds)8,025. This cost
will be reduced by (Pounds)208 per month in the event of the cellar area
occupied by the DC motor operation being vacated. Six months notice is
required to vacate space or such shorter notice period as can be negotiated
with the landlord. AMETEK acknowledges the obligation to vacate the
Leyland Facility by October 2, 2001.
9.9 Insurances and Rates; Local property taxes. Payment of insurance
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and local property taxes will be arranged between the AMETEK and the
appropriate agency. Prestolite will reimburse AMETEK to the 6-Month Date
for amounts expensed, to a limit of no more than currently incurred.
9.10 Private Medical Insurance. Prestolite will continue to provide
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private medical insurance under its current insured plan to the 6-Month
Date.
9.11 Post Anniversary Date Charges. For the period from the
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Anniversary Date through October 2, 2001, Prestolite will provide the
services outlined in this Section 9 at rates approximating 110% of
Prestolite's cost to provide the services.
9.12 Performance Standard. It is the intention of the parties that
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AMETEK be able to continue the operation of the Acquired Businesses to
satisfy the customers of the Business with not less than the level of
production and service provided by Prestolite to such customers immediately
prior to the Closing. To that end, (a) Prestolite agrees that the level of
services to be provided hereunder for the benefit of AMETEK shall be
substantially equivalent to the level of services provided to the Acquired
Businesses
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immediately prior to the Closing and (b) AMETEK agrees to make the fixed
assets of the Acquired Businesses reasonably available to Prestolite for
common purpose usage consistent with Prestolite's past practice and in
connection with Prestolite's provision of transition services under the
Agreement.
9.13 Cooperation. The parties agree to act in good faith and
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cooperatively in connection with the provision of support services
hereunder and in connection with determinations of whether the provision of
such services meets the terms of this Agreement.
10. Other Items.
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10.1 Xxxxxx Xxxxxx Space. Through the 6-Month Date, AMETEK will
-------------------
provide Prestolite at no charge office space and reasonable office support
(telephone, copying machines, etc.) for Xxxxxx Xxxxxx and his secretary at
the Xxxx facility.
10.2 Xxxx Xxxxx Space. Through the 6-Month Date, Prestolite will
----------------
provide AMETEK at no charge office space and reasonable office support
(telephone, copying machines, etc.) for Xxxx Xxxxx at the Prestolite
headquarters facility in Ann Arbor, Michigan. AMETEK acknowledges that
Prestolite intends to move the location of that facility from Commonwealth
Boulevard to Green Road.
10.3 Military Contract Administration. The contract administration
--------------------------------
responsibility for military contracts is in the process of being moved by
Prestolite from its two-person department (Xxxx Xxxxxx and Xxxx Xxxxx) in
Xxx Arbor to Xxxx Xxxxx for switch products and to Arcade, NY, for starters
and alternators. Prestolite will provide reasonable support to allow the
transition of this activity to AMETEK including, at AMETEK's discretion, to
another facility of AMETEK. Prestolite will continue to support the
transition to AMETEK through the 6-Month Date with no charge to AMETEK for
the support provided. However, AMETEK will pay for travel and any other
out-of-pocket costs associated with relocation of the function for switch
products. Should AMETEK require this support after the 6-Month Date,
Prestolite and AMETEK will negotiate the provision of this support at that
time on an "as used" basis. AMETEK acknowledges that Prestolite intends to
relocate a portion of this function to its Arcade Facility.
10.4 PAL Consents. If, by the Closing Date, the parties have not
------------
obtained all third party consents and completed all other actions necessary
to effect an absolute and unconditional transfer to Purchaser of the assets
referred to in Section 1.2.1(I) of the Asset Purchase Agreement (the "PAL
Interests"), then the parties shall cooperate, in good faith, to obtain
such consents and complete such actions as promptly as practicable.
10.5 AMETEK Assistance to Prestolite. AMETEK will reasonably
-------------------------------
cooperate with Prestolite and will provide reasonable assistance in the
preparation of July, 2000, other interim 2000 and 2000 financial
statements. In this regard, the time of Transferred Employees who prepared
(or assisted in the preparation of such statements) will be provided by
AMETEK to Prestolite at no charge, except for out-of-pocket costs.
Page 11
11. Certain Payments.
----------------
11.1 PAL Interest Transfer. The parties acknowledge that if,
---------------------
notwithstanding their respective efforts pursuant to Section 10.4 above,
they are unable, within 9 months after the Closing Date, to obtain all
third party consents and complete all other actions necessary to effect an
absolute and unconditional transfer to Purchaser of the PAL Interests (the
"PAL Conditions"), then AMETEK may at its option, at any time until the PAL
Conditions have been satisfied, deem the PAL Interest an Excluded Asset
under the and Purchase Agreement, in which case the Purchase Price shall be
reduced by $3,000,000 (the "PAL Reduction Amount"). Of the PAL Reduction
Amount, AMETEK shall be entitled to claim $1,000,000 from the Escrow Fund
referred to in the Escrow Agreement; provided that such right shall in no
way limit Prestolite's liability to AMETEK for the entire PAL Reduction
Amount and, to the extent necessary, Purchaser may pursue any legal
remedies and proceedings against Prestolite (and its successors) that
AMETEK deems appropriate in order to collect any unpaid balance of the PAL
Reduction Amount.
11.2 Default by Prestolite.
---------------------
(a) The parties acknowledge and agree that the transition process
will be facilitated if AMETEK promptly notifies Prestolite of any
claimed service breaches by Prestolite hereunder and Prestolite
responds immediately. If AMETEK believes that Prestolite has failed
to provide, or cause to be provided, any service substantially in
accordance with the terms hereof, the following provisions shall be
applicable:
(i) AMETEK personnel affected by such service shall in a
timely manner (taking into account the nature of the alleged
deficiency) endeavor to informally contact (in person or by
telephone) their Prestolite counterparts in an effort to address
the alleged service deficiency. Such parties shall work in good
faith together with the facility management, if appropriate, to
resolve the claimed breach.
(ii) If the matter is resolved to AMETEK's satisfaction, or
the AMETEK personnel affected by such services fail to timely
contact their Prestolite counterparts as required by clause (I)
above, then this Section 11.2 shall no longer be applicable to
such claimed breach.
(iii) If the matter is not resolved, the affected parties
will refer the matter to Xxxxxx Xxxxxx or his successor (the
"Prestolite Designee") and Xx Xxxxxxxx or his successor (the
"AMETEK Designee"). Thereafter, the Prestolite Designee and the
AMETEK Designee shall be in contact with each other and shall
work in good faith to resolve the claimed breach.
(iv) If the matter is not resolved or a resolution thereof
is not diligently being pursued to AMETEK's satisfaction within
10 days after such matter was referred to the Prestolite Designee
and the AMETEK Designee then AMETEK may by written notice to
Prestolite (a "Service Default Notice") declare that a "Service
Default" has occurred.
Page 12
(v) If AMETEK shall deliver to Prestolite a Service Default
Notice in accordance with the terms of this Section 11.2(a), then
Prestolite shall indemnify and hold AMETEK harmless against, and
shall reimburse AMETEK for, any and all Liabilities reasonably
incurred by AMETEK as a result of such Service Default
(including, without limitation, the reasonable costs of
purchasing such service from a third party or replacing the
equipment reasonably required to perform such service with
reasonably equivalent used equipment). AMETEK will submit an
invoice for reimbursement to Prestolite. If the invoice is not
paid within 30 days of receipt, AMETEK may obtain reimbursement
by making a "Supplemental Claim" (as defined in the Escrow
Agreement) against the Escrow Account. Notwithstanding the
foregoing, Prestolite shall not be responsible for any such
Liability incurred as a result of a Service Default to the extent
that Prestolite's ability to prevent such Liability was
prejudiced by the failure of AMETEK to notify Prestolite or its
representatives in a timely manner of the condition that resulted
in such Service Default.
(vi) Notwithstanding the foregoing, if at any time in the
above described process, the nature of the service deficiency
reasonably requires AMETEK to take immediate action to resolve
the matter which includes the purchase of such service from a
third party or replacing equipment with reasonably equivalent
equipment, AMETEK shall have the right to proceed with the
corrective measure and be indemnified by Prestolite without
continuing to follow the procedural steps outlined above.
(b) If a Service Default shall be deemed to have occurred
pursuant to Section 11.2(a), then AMETEK shall be entitled to claim up
to the aggregate amount of $2,800,000 of the Escrow Fund (less the
aggregate of all amounts previously claimed by AMETEK for Service
Defaults) to compensate it for such Service Default; provided that no
more than $400,000 may be claimed with respect to a Service Default
under Section 8.4 hereof. AMETEK's right to claim any amount from the
Escrow Amount under this Section 11.2 shall in no way limit Seller's
liability to AMETEK for all Liabilities for which indemnification is
being provided pursuant to Section 11.2(a) above; provided, however,
that to the extent AMETEK receives such amount from the Escrow Fund,
Prestolite's indemnification obligation pursuant to Section 11.2(a)
above shall be deemed fully satisfied.
11.3 Asset Transfers.
---------------
(a) Solenoid Line. (i) Prestolite believes that all items
-------------
pertaining to the Solenoid Line (as defined in the Purchase Agreement)
have been relocated from the Arcade Facility to the Decatur Facility.
(Annex 11.3(a) attached hereto sets forth a list of Solenoid Line
--------------
items.) Prestolite agrees that it is responsible for delivering the
Solenoid Line to the Decatur Facility in good operating condition. To
secure Prestolite's performance of such obligation, the parties have
agreed that AMETEK shall withhold $1,000,000 of the Purchase Price
(the "Solenoid Holdback"), which shall be subject to distribution or
application in accordance with this Section 11.3(a). Within 10
business days after delivery is completed,
Page 13
Prestolite shall pay to AMETEK the excess, if any, of $30,000 over the
out-of-pocket costs incurred by Prestolite in carrying out the
delivery of the Solenoid Line.
(ii) AMETEK shall use commercially reasonable efforts to
cause the Solenoid Line to be promptly assembled; provided that
such assembly shall be completed by no later than August 30,
2000. Promptly after assembly of the Solenoid Line is complete,
AMETEK shall, in good faith and in the exercise of its reasonable
discretion, determine whether the Solenoid Line is "substantially
operational" (the "Solenoid Condition"). Prestolite and AMETEK
agree that production of 50 solenoids per shift with the line
manned by six people constitutes "substantially operational".
(iii) From and after the Closing Date, AMETEK and Prestolite
shall cooperate, in good faith, to cause the Solenoid Condition
to be satisfied.
(iv) If at any time and from time to time prior to the date
occurring 9 months after the Closing Date (the "9-Month Date"),
the failure to have satisfied the Solenoid Condition impairs
AMETEK's ability to fill customer orders for solenoids in a
commercially reasonable manner or, in AMETEK's reasonable
judgment, imminently threatens to impair such ability, then
AMETEK may take such action as it deems necessary to meet its
customer demands, including without limitation, procuring
inventory from third parties and/or purchasing equipment to
replace or repair all or part of the Solenoid Line. (To the
extent reasonably available, such replacement equipment shall be
reasonably equivalent used equipment.) The costs, damages,
expenses and liabilities incurred by AMETEK in taking such action
shall be reimbursed to AMETEK by Prestolite promptly after AMETEK
invoices Prestolite therefor. If Prestolite fails to provide
such reimbursement, then AMETEK shall be entitled to retain such
portion of the Solenoid Holdback as is necessary to compensate
AMETEK therefor.
(v) If the Solenoid Condition is not satisfied by the 9-
Month Date, then AMETEK shall be entitled to retain the entire
Solenoid Holdback. If costs, expenses, losses and damages
incurred by AMETEK as a result of the Solenoid Condition not
being satisfied by the 9-Month Date exceed the Solenoid Holdback,
then Prestolite shall be responsible for reimbursing AMETEK for
such excess.
(vi) Within three (3) business days after AMETEK has
determined that the Solenoid Condition has been satisfied, AMETEK
shall deposit in the Escrow Account any portion of the Solenoid
Holdback not retained by AMETEK pursuant to Section 11.3(a)(iv)
above.
(vii) AMETEK and Prestolite agree to work together in good
faith to share, in the manner described in Section 11.3(b) (vi),
available starter solenoid inventory to satisfy the collective
customer requirement
Page 14
during the start-up of solenoid production at Decatur, giving
preference to OE motor requirements.
(viii) Following satisfaction of the Solenoid Condition,
AMETEK agrees that through the 6-Month Date, it will sell
solenoid units to Prestolite at a price per unit equal to 110% of
the Decatur 2000 standard manufacturing cost per unit. However,
both AMETEK and Prestolite agree that the standard manufacturing
cost associated with this agreement is subject to verification as
a proxy for the current manufacturing cost. If such verification
shows the Decatur 2000 standard manufacturing cost to be higher
or lower by greater than 5%, both parties, in good faith, will
adjust the selling price to the current manufacturing cost. (In
this context, "current cost" is intended to mean the cost
achieved after the disruption and learning-curve inefficiencies
associated with relocation of the manufacturing process.)
Following the 6-Month Date, prices for solenoid units purchased
by Prestolite shall be as provided in the Supply Agreement.
(ix) Recognizing that government and military customers of
the Business may require that they purchase directly from the
solenoid manufacturer, the parties will cooperate, in good faith,
to facilitate the transfer of these customer relationships to
AMETEK.
(x) AMETEK agrees that so long as it owns the Solenoid Line,
it will provide solenoid units to the aftermarket for seven (7)
years or, if less, for such period as is reasonably necessary to
support the Business's aftermarket obligations with respect to
solenoid units. This obligation is contingent on Prestolite
continuing to source its starter solenoid production exclusively
with AMETEK during this period.
(xi) Prestolite agrees that Solenoid units acquired from
AMETEK under this Transition Agreement, and related Supply
Agreement are to be used only for internal consumption as a
component of the combined sale to its OEM customers. Under no
circumstances will solenoid units acquired under this Agreement
be sold by Prestolite into the aftermarket.
(b) Armature Line.
-------------
(i) The Armature Line is to be relocated from Prestolite's
Arcade, New York Facility to a facility designated by AMETEK.
(Annex 11.3(b) attached hereto sets forth a list of the Armature
---------------
Line items.) Prestolite is responsible for (A) training AMETEK's
designated personnel at Prestolite's Arcade Facility in the
assembly, process, maintenance and operation of the Armature Line
(AMETEK will bear all salary, benefits and travel costs for its
employees in connection with such training), (B) shipping the
Armature Line to AMETEK's designated facility in good operating
condition, (C) assembling the Armature Line at AMETEK's
designated facility so that it is able to achieve the operating
efficiency level specified in Section 11.1(b)(ix) below, and (D)
providing post-
Page 15
assembly training to AMETEK personnel in the operation and
maintenance of the Armature Line (the "Armature Conditions").
AMETEK will make a good faith effort to work with Prestolite in
its satisfaction of the Armature Conditions. To secure
Prestolite's performance of the foregoing obligations, the
parties have agreed that AMETEK shall withhold $750,000 of the
Purchase Price (the "Armature Holdback"), which shall be subject
to distribution or application in accordance with Section
11.3(b).
(ii) Prestolite's obligations under clauses (B), (C) and (D)
of Section 11.3(b)(ii) are subject to (x) AMETEK's acquisition of
a varnish oven in good operating condition, which shall be at
AMETEK's designated facility no later than March 31, 2001.
Additionally, AMETEK's designated facility will have not less
than 2,000 square feet of properly configured space within which
the Armature Line is to be installed. At any time after December
1, 2000, Prestolite will ship the Armature Line to AMETEK's
designated facility upon AMETEK's request.
(iii) To facilitate the transition of the Armature Line and
minimize any disruption associated with the armature requirements
of the Business, Prestolite will provide AMETEK a proposed
inventory build schedule for 5-inch armatures to be implemented
prior to shipment of the Armature Line. The parties shall then
confer and mutually agree upon a definitive build schedule that
Prestolite will implement prior to such shipment.
(iv) During the 30 day period preceding the expected
shipment date of the Armature Line, AMETEK personnel will inspect
the Armature Line and endeavor to verify that it is in good
operating condition.
(v) Until the Armature Line is delivered and operational,
Prestolite will supply 5-inch armatures to AMETEK at 100% of the
per unit Decatur 2000 standard manufacturing cost.
(vi) Following satisfaction of the Armature Conditions,
AMETEK agrees that, for the six months period thereafter, it will
sell 5-inch armatures to Prestolite at a price per unit equal to
110% of the Decatur 2000 standard manufacturing cost per unit.
However, both AMETEK and Prestolite agree that the standard
manufacturing cost associated with this agreement is subject to
verification as a proxy for the current manufacturing cost. If
such verification shows the Decatur 2000 standard manufacturing
cost to be higher or lower by greater than 5%, both parties, in
good faith, will adjust the selling price to the current
manufacturing cost. (In this context, "current cost" is intended
to mean the cost achieved after the disruption and learning-curve
inefficiencies associated with relocation of the manufacturing
process.) Thereafter, prices shall be as provided in the Supply
Agreement.
Page 16
(vii) Prestolite has agreed to provide a $50,000 allowance
to AMETEK to acquire a varnish oven. Within 3 days of the
Closing date, Prestolite will pay to AMETEK one-half of such
allowance. The balance of such allowance shall be paid by
Prestolite within fifteen (15) days after the Armature Line is
delivered to AMETEK's designated facility.
(viii) At the time the Armature Line is delivered to
AMETEK's designated facility, Prestolite shall deliver $50,000 of
5-inch armature inventory (based on the Decatur 2000 standard
manufacturing cost). If less than $50,000 of inventory is
delivered, Prestolite shall pay to AMETEK an amount equal to such
shortfall. In addition, the parties will confer regarding the
transfer of raw materials inventory associated with the Armature
Line. AMETEK will cooperate with Prestolite in taking usable
inventory associated with the Armature Line up to reasonably
usable 1-year supply.
(ix) Promptly after assembly of the Armature Line has been
completed, AMETEK shall test the operating efficiency of the
Armature Line to determine whether the Armature Line is capable
of operating at 100 units production per shift when staffed with
10 operators. If the Armature Line fails to operate at such
efficiency level, AMETEK shall promptly notify Prestolite thereof
and afford Prestolite an opportunity to cure such failure.
(x) To the extent AMETEK incurs any costs, expenses, losses
or damages as a result of Prestolite's failure to satisfy its
obligations under Section 11.3(b)(I) above, AMETEK shall invoice
Prestolite for such Liabilities and Prestolite shall promptly
reimburse AMETEK therefor. If Prestolite fails to provide such
reimbursement, then AMETEK shall be entitled to retain such
portion of the Armature Holdback as is necessary to compensate
AMETEK therefor. If Prestolite fails to satisfy such obligations
within 9 months following the date on which the Armature Line is
delivered to AMETEK's designated facility, then AMETEK shall be
entitled to retain the entire Armature Holdback. If such costs,
expenses, losses and damages incurred by AMETEK exceed the
Armature Holdback, then Prestolite shall be responsible for
reimbursing AMETEK for such excess.
(xi) Within three (3) business days after the Armature Line
has achieved the operating efficiency level specified in Section
11.3(b)(ix) above and AMETEK personnel have received all training
from Prestolite required to be provided under this Section
11.3(b), AMETEK shall deposit in the Escrow Account any portion
of the Armature Holdback not retained by AMETEK pursuant to
Section 11.3(b)(iv) above.
12. U.S. Human Resources (Payroll and Benefit Services)
--------------------------------------------------
12.1 Prestolite will provide payroll transition services as
described in this Section 12 through December 31, 2000 (and beyond, to
the extent required to complete the services required in Section
12.1(a)) for all Transferred Employees
Page 17
in the United States Facilities (the "US Transferred Employees").
AMETEK will set up a new account with Prestolite's current payroll
provider to cover the US Transferred Employees. Prestolite will
continue to process payroll information relating to the US Transferred
Employees through its Xxx Arbor location, including, without
limitation, all salary and wage adjustments, reimbursements and all
deductions, and will transfer such information to its current payroll
provider referencing AMETEK's account. Prestolite will also transfer
applicable information from the payroll to each of the health and
welfare benefit providers providing coverage to the US Transferred
Employees, as requested by such providers.
(a) Prestolite will prepare and provide to AMETEK all financial
reporting and reconciliations relating to payroll, including all
interim and year-end tax information for the period ending December
31, 2000.
(b) AMETEK will reimburse Prestolite for all pre-approved
compensation paid (and reimbursements made) to the US Transferred
Employees under this 12.1 and premium amounts paid by Prestolite on
behalf of AMETEK under Section 12.2.3 below to the extent related to
services provided, expenses incurred and benefit coverages provided on
and after the Closing Date. Such payments will be made by wire
transfer (or as otherwise specified by Prestolite) on a "same day"
basis.
12.2 Health and Welfare Benefits.
---------------------------
12.2.1 Effective as of the Closing Date, AMETEK will cover all
US Transferred Employees under its life, AD&D, short-term disability,
long-term disability and personal accident insurance plans, at
coverage levels and employee contributions rates substantially similar
in the aggregate to those currently applicable to the US Transferred
Employees.
12.2.2 Effective as of the Closing Date, AMETEK will assume the
medical and dental insurance contracts between Prestolite and its
providers to the extent such contracts cover US Transferred Employees
employed at the Decatur, Alabama and Wagoner, Oklahoma facilities.
12.2.3 Prestolite will continue coverage through December 31,
2000 of all US Transferred Employees located at Dearborn, Michigan and
Troy, Ohio Facilities and the five-person sales force under the
medical and dental insurance contracts currently covering such
employees, after which time AMETEK will cover such US Transferred
Employees under its medical and dental plans. AMETEK will reimburse
Prestolite for all costs premiums associated with such coverage (not
including administrative costs).
12.2.4 Effective the Closing Date and continuing during such
period as AMETEK manufactures out of the Decatur, Alabama Facility,
AMETEK will cover Xxxxx, Xxxxxx and Prestolite employees associated
with the plating operation under the AMETEK medical and dental plans
covering the US Transferred Employees at that Facility. Prestolite
shall reimburse AMETEK for all premiums (not including administrative
costs) associated with such coverage. However,
Page 18
their respective obligations will terminate at such time as AMETEK
ceases to utilize the plating services and the services of Xxxxx and
Xxxxxx. Prestolite will reimburse AMETEK for all premiums and
administrative costs of providing COBRA continuation coverage for its
Xxxxx, Xxxxxx and employees associated with the plating operation.
12.3 401(k) Savings Plan.
-------------------
(a) Prestolite will cease deducting employee contributions and
loan repayments to its 401(k) savings plan from the pay of the US
Transferred Employees effective as of the first AMETEK payroll period.
(b) As soon as administratively practical after the Closing Date,
the US Transferred Employees will become eligible to participate in
the AMETEK 401(k) Plan for Acquired Businesses. Prestolite will
cooperate with AMETEK in processing employee elections to make
deferral contributions as deductions from their pay and will provide
AMETEK and its plan administrator with such information as is required
to administer the AMETEK 401(k) Plan for such US Transferred
Employees.
13. Miscellaneous.
-------------
13.1 Notices. All notices, requests and other communications to
-------
either party hereunder shall be in writing (including facsimile
transmission) and shall be given,
if to Prestolite, to:
Prestolite Electric Incorporated
0000 Xxxxxxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Financial Officer
if to AMETEK, to:
AMETEK, Inc.
00 Xxxxx Xxxxxx Xxxx
Xxxxxxxx 0
Xxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Counsel
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior
to 5 p.m. in the place of receipt and such day is a business day in the
place of receipt. Otherwise, any such notice, request or communication
shall be deemed not to have been received until the next succeeding
business day in the place of receipt.
13.2 Amendments and Waivers. Any provision of this Agreement may be
----------------------
amended or waived if, but only if, such amendment or waiver is in writing
and is signed,
Page 19
in the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective.
No failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
13.3 Force Majeure. The parties shall be relieved of their
-------------
obligations hereunder if and to the extent that any of the following events
hinder, limit or make commercially impracticable the performance by either
party of any of its obligations hereunder: act of God, war, civil
commotion, riot, acts of public enemies, fire, explosion, lightning,
casualty, accident, flood, sabotage, national defense requirements, labor
trouble, strike, lockout or injunction, or any other event, whether or not
of the class or kind enumerated herein, beyond the control of either party
such as cannot reasonably be circumvented through commercially feasible
alternate sources or means. The party claiming relief hereunder shall
notify the other party in writing of the events causing delay or default in
performance. The party failing to fulfill its obligations shall take
commercially reasonable steps to remove or otherwise address the impediment
to action.
13.4 Successors and Assigns. The provisions of this Agreement shall
----------------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided, however, that no party may
assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of the other party
hereto. In connection with a proposed assignment and delegation by
Prestolite of its obligations hereunder to a third party, AMETEK may
reasonably condition its consent upon receipt of a written undertaking by
such assigns to assume Prestolite's obligations hereunder.
13.5 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the law of Michigan, without regard to the conflicts of
law rules of such jurisdiction.
13.6 Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
13.7 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof. No
representation, inducement, promise, understanding, condition or warranty
not set forth herein has been made or relied upon by either party hereto.
Neither this Agreement nor any provision hereof is intended to confer upon
any person other than the parties hereto any rights or remedies hereunder.
13.8 Independent Contractors. The parties hereto are independent
-----------------------
contractors. Nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, franchise or joint venture relationship
between the parties. Neither party shall incur any debts or make any
commitments for the other, except to the extent, if at all, specifically
provided herein.
Page 20
13.9 Severability. If any provision hereof is or becomes illegal,
------------
invalid, or unenforceable under the laws of a particular jurisdiction, such
provision shall be fully severable with respect to such laws; this
Agreement shall be construed and enforced in such jurisdiction as if such
provision had never comprised a part hereof; the remaining provisions
hereof shall remain in full force and effect in such jurisdiction and shall
not be affected by such provision or by its severance herefrom; and all of
the provisions hereof shall remain in full force and effect in all other
jurisdictions and shall not be affected by the severance of such provision
under the laws of such jurisdiction. Furthermore, in lieu of such provision
there shall be added automatically for purposes of such jurisdiction as
part of this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be legal, valid
and enforceable in such jurisdiction.
Page 21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PRESTOLITE ELECTRIC INCORPORATED,
a Delaware corporation
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President,
Chief Financial Officer and Secretary
By:
------------------------------------
Name: I. Xxxxxx Xxxxxx
Title: Vice President
AMETEK, INC.,
a Delaware corporation
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President and General Counsel
Page 22
