Document:

Exhibit 10.5

 

TRANSITION SERVICES AGREEMENT

 

This
TRANSITION SERVICES AGREEMENT (“Agreement”)
is entered into as of this 30th day of November 2004 by and
among Warner Electric Holding, Inc., a
Delaware corporation (“Seller”),
Colfax Corporation, a Delaware corporation and parent of Seller (“Colfax,” and together with Seller, the “Service
Providers”), and Altra Industrial Motion, Inc., a Delaware
corporation (“Buyer”).

 

R E C I T A L S:

 

A.                                   Pursuant
to that certain LLC Purchase Agreement of even date herewith among Seller,
Colfax and Buyer (the “Purchase Agreement”),
Seller is selling to Buyer and Buyer is purchasing from Seller all of the
limited liability company interests (the “LLC Interests”)
of Power Transmission Holding LLC, a Delaware limited liability company (“PT”).

 

B.                                     Pursuant
to the Purchase Agreement, the Service Providers have agreed for a limited
period of time to provide certain transitional supports services to Buyer in
connection with the operation of the Business following the closing of the sale
of the LLC Interests of PT to Buyer.

 

NOW,
THEREFORE, the Parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Unless
otherwise defined herein, for the purposes of this Agreement, capitalized terms
shall have the meaning ascribed to them in the Purchase Agreement and the
following terms shall have the definitions hereinafter specified:

 

1.1                                 “Actual Costs” means (a) with respect to any Services
provided by non-exempt employees of the Service Providers, the hourly rate of
compensation paid to the employee providing the Service multiplied by the
number of hours such employee performed the Services for the Buyer Parties
during the period, (b) with respect to any Services provided by exempt
employees of the Service Providers, the product of (i) the monthly salary of
the employee providing the Services, and (ii) a fraction, the numerator of
which is one (1) and the denominator of which is one hundred sixty-six (166)
and (iii) the number of hours the exempt employee performed the Services for
the Buyer Parties during the period, and (c) with respect to any Services
provided by a person other than an exempt or non-exempt employee of the Service
Providers, the actual out-of-pocket costs

 

 

paid to such person by
the Service Providers for the Services provided to the Buyer Parties during the
period.

 

1.2                                 “Parties” shall mean Seller, Colfax and
Buyer, collectively.

 

1.3                                 “Service” or “Services” shall mean those services described on Schedule A
hereto, including any exhibit(s).

 

ARTICLE 2

SERVICES

 

2.1                                 Statement
of Purpose.  In connection with the
transactions contemplated under the Purchase Agreement, Buyer is purchasing and
intends to operate the Business as an ongoing enterprise, but requires the
Service Providers to continue to provide certain services and personnel in
support thereof as set forth in this Agreement. 
It is the intention of the Parties in entering into the Purchase
Agreement and this Agreement to ensure a smooth transition from Seller to Buyer
in the ownership and operation of the Business with the least disruption to the
Business.  It is the intention of the
Parties that they will cooperate with each other in this regard and, where
possible and mutually desirable to do so, to terminate the provision of
Services hereunder at the earliest practicable date, and in no even later than
the conclusion of the term for each Service set forth on Schedule A.  The Parties recognize that certain Services
performed by the Service Providers may actually be performed by Affiliates of
such Persons and accordingly, for purposes of this Agreement, references to the
Service Providers shall include their respective Affiliates.

 

2.2                                 Provision
of Services.  Subject to and upon the
terms and conditions set forth in this Agreement, beginning on the Closing
Date, the Service Providers shall, at the request of Buyer, provide or cause to
be provided to Buyer the Services listed and described on Schedule A,
for the term of Service set forth on Schedule A as to any
particular Service.  In every case, all
of the aforesaid Services shall be provided in accordance with the terms,
limitations and conditions set forth herein and on Schedule A.  The fees to Buyer and the costs reimbursable
by Buyer to the Service Providers for the Services shall be as specified on Schedule A.

 

2.3                                 Quality
Level; Independent Contractor Status. 
Unless otherwise agreed by the Parties, the Services shall be provided
at a quality level and in a manner that is substantially the same as the
quality level and manner in which such Services were provided to the Business
prior to the date of this Agreement, and Buyer shall use the Services at the
same location(s) as the Business had used such Services prior to the Closing
Date.  The Service Providers shall act
under this Agreement solely as independent contractors and not as agents of
Buyer.  Buyer agrees to use commercially
reasonable efforts to transition use of the Services as soon as practically
possible after the Closing Date.  Buyer
shall have no obligation to utilize any or all of the Services

 

 

provided by the Service
Providers in accordance with this Agreement; provided, however,
that, in the event Buyer elects not to use a particular Service, it shall
promptly notify the Service Providers and the Service Providers shall have no
further obligations hereunder with respect to such Service.

 

2.4                                 Use
of Service Providers’ Employees/Provider Agreements.  To the extent that the Service Providers use
their own employees in connection with the provision of any Services hereunder,
the Service Providers may, in their discretion, replace, add, reduce or
otherwise change the number and identity of the employees providing such
Services at any time.  In the event that
any third party agreement to which any Service Provider is a party is in
conflict with the terms of this Agreement, the Service Providers shall promptly
notify Buyer of the nature and extent of such conflict.  Unless Buyer thereafter agrees to indemnify
the Service Providers for any breach or default under the third party agreement
attributable to the provision of services by the Service Providers under this
Agreement, the Service Providers shall have no obligation to continue to
provide such services under this Agreement.

 

2.5                                 Disclaimer
of Warranty.  EXCEPT AS OTHERWISE PROVIDED
HEREIN, THE SERVICES AND GOODS PROVIDED HEREUNDER ARE PROVIDED AS IS, WHERE IS
WITHOUT WARRANTY OF ANY KIND, INCLUDING WARRANTY OF MERCHANTIBILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE.

 

2.6                                 Payment.  Except as otherwise provided in Schedule A,
invoices will be rendered each month by Colfax to Buyer for Services delivered
by the Service Providers during the preceding month, and each such invoice
shall be payable net thirty (30) days after the date thereof.  Such invoices shall be substantiated by supporting
information and shall itemize in reasonable detail the basis for such
statement.  Invoices not paid within such
thirty (30) day period shall be subject to late charges for each month the
statement is overdue, calculated as the greater of the following:

 

(i)                                     in
the event the Service Provider is subject to a late charge by virtue of its
provision to Buyer of such service, such late charge; or

 

(ii)                                  the
then current prime rate as published in the “Money Rates” column of the Wall
Street Journal plus one percentage point;

 

provided that in any
event, the late charge shall be calculated to a rate no higher than that
allowed by applicable law; and provided further, that no late charges shall
apply to the portion of any invoice that is being contested in good faith by
Buyer.

 

 

ARTICLE 3

TERM

 

3.1                                 General.  The term of each Service is as set forth on Schedule A.  Unless otherwise specified on Schedule A,
Buyer may cancel any Service upon fifteen (15) days prior written notice,
subject to the requirement that Buyer pay to the Service Providers the actual
out-of-pocket costs associated with such cancellation.

 

3.2                                 Actions
on Termination.  Upon the termination
of a Service or Services with respect to which the Service Providers hold
books, records, files or any other documents owned by Buyer, the Service
Providers will return all of such books, records, files and any other documents
to Buyer as soon as reasonably practicable. 
Buyer shall bear the Service Provider’s reasonable costs and expenses
associated with the return of such documents. 
In addition, upon the termination of any of the Services which involved
the compilation of data on the Service Provider’s computer systems, the Service
Providers shall, as soon as reasonably practicable, deliver to Buyer on magnetic
media in readable format mutually acceptable to the Parties, which format shall
be capable of being read by a computer mutually acceptable to the Parties, all
data files maintained by the Service Providers to the extent that they contain
information related to the Business, together with printed file descriptions
sufficient to identify such data files and their contents and structure.

 

ARTICLE 4

FORCE MAJEURE/MAINTENANCE

 

4.1                                 Force
Majeure.  The Service Providers shall
not be liable for any interruption of Service, delay or failure to perform
under this Agreement when such interruption, delay or failure results from
causes beyond their reasonable control (provided that the Service Providers
have used their commercially reasonable efforts to avoid such interruption,
delay or failure) or from any act or failure to act of Buyer, or as the result
of strikes, lock-outs or other labor difficulties; acts of any government,
riot, insurrection or other hostilities; embargo, fuel or energy shortage,
fire, flood, acts of God, wrecks or transportation delays; or inability to
obtain necessary labor, materials or utilities. 
In such event, the Service Providers’ obligations hereunder shall be
postponed for such time as their performance is suspended or delayed on account
thereof.  The Service Providers will
promptly notify Buyer, either orally or in writing, upon learning of the
occurrence or pendency of such event of force majeure.  The Service Providers shall have the right to
establish priorities, in their sole reasonable discretion, as between the
Service Providers and Buyer, as to the provision of the Services in the event
of a force majeure.

 

4.2                                 Maintenance
of Facilities.  The Service Providers
shall have the right to shut down temporarily the operation of any facilities
providing any Service whenever in

 

 

their judgment such
action is necessary for purposes of maintenance or installation of upgrades or
new or additional services, facilities or software.  The Service Providers shall give Buyer as
much advance notice of any such shut down as is reasonably practicable.  Where feasible, this notice shall be given in
writing.  Where written notice is not
feasible, oral notice shall be given and promptly confirmed in writing.  In the event such shut down is non-scheduled
because it relates to an emergency, Buyer shall be notified that a shut down
has occurred or will occur as soon as reasonable practicable.  The Service Providers shall be relieved of
their obligations to provide Services during the period that their facilities
are so shut down but shall use reasonable efforts to minimize each period of
shutdown for such purpose.

 

ARTICLE 5

LIABILITIES

 

5.1                                 Limitation of Liability. 
Buyer agrees that neither the Service Providers nor their respective
officers, directors, stockholders, partners, members, managers, employees,
Affiliates, agents or representatives (collectively, the “Seller
Parties”) shall have any liability to Buyer or its officers,
directors, stockholders, partners, members, managers, employees, Affiliates,
agents or representatives (collectively, the “Buyer
Parties”) with respect to this Agreement or anything done in
connection herewith, including but not limited to the performance or breach
hereof, or from the sale, delivery, provision or use of any Service or
documentation or data provided under or covered by this Agreement, whether in
contract, tort (including negligence or strict liability) or otherwise, except
for any liability for losses, claims, damages, or expenses incurred by the
Buyer Parties as a result of the willful misconduct or gross negligence of the
Service Providers. NOTWITHSTANDING THE FOREGOING, THE SELLER PARTIES SHALL NOT
BE LIABLE UNDER ANY CIRCUMSTANCES FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES WHATSOEVER OR ANY LOST PROFITS, WHICH IN ANY WAY MAY
ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PROVISION OF OR FAILURE TO
PROVIDE ANY SERVICE HEREUNDER BY THE SERVICE PROVIDERS.

 

 

ARTICLE 6

TERMINATION

 

6.1                                 Breach
of Agreement.  If either of the
Service Providers, on the one hand, or Buyer, on the other hand, is in breach
of any of their respective obligations under this Agreement and such Party does
not cure such default within thirty (30) days after receiving written notice
thereof from the non-breaching Party, then the non-breaching Party (which in
the case of an uncured breach by Buyer shall be Colfax, and in the case of an
uncured breach by either of the Service Providers shall be Buyer) may terminate
this Agreement, including the provision of Services pursuant hereto,
immediately by providing written notice of termination.  In the event this Agreement is terminated by
Buyer pursuant to this Section 6.1, Colfax shall reimburse the Buyer
Parties for Excess Costs incurred in obtaining any replacement Services during
the period such Services are required to be provided by the Service Providers
pursuant to Schedule A. “Excess Costs” shall mean actual
out-of-pocket costs and expenses in excess of the costs and expenses for a
particular Service as set forth on Schedule A; provided that such
out-of-pocket costs and expenses are not in excess of customary charges for
such services.  In the event this
Agreement is terminated by Colfax pursuant to this Section 6.1, Buyer
shall reimburse Colfax for any costs it incurs as a result of ceasing the
provision of Services hereunder prior to the dates set forth on Schedule A.

 

6.2                                 Sums
Due.  In the event of a termination
of this Agreement, the Service Providers shall be entitled to all outstanding
amounts due from Buyer up to and including the effective date of termination
under Sections 2 and 3 hereof.

 

6.3                                 Effect
of Termination.  Termination or
expiration of this Agreement shall not act as a waiver of any breach of this
Agreement and shall not act as a release of any Party for any liability or
obligation incurred under this Agreement through the effective date of such
termination or expiration.

 

ARTICLE 7

MISCELLANEOUS

 

7.1                                 Notices.  Any notice, request, instruction, consent or
other document to be given hereunder by any Party hereto to another Party shall
be given in the same manner and to the same Persons provided in Section 11.03
of the Purchase Agreement.

 

7.2                                 Waiver.  Any of the terms or conditions of this
Agreement may be waived in writing at any time by the Party which is entitled
to the benefits thereof.  No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of such provision at any time in the future or a waiver of any other
provision hereof.

 

 

7.3                                 Assignment.  This Agreement may not be assigned by any
Party without the prior written consent of the other Parties.  Any purported assignment without such consent
shall be void and of no effect; provided, however,
that the Service Providers shall have the right to contract with a third party
to provide any of the Services hereunder without the prior written consent of
Buyer.

 

7.4                                 Enforceability.  If any provision of this Agreement as applied
to any Party or to any circumstance shall be adjudged by a court to be invalid
or unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances, or the
validity or enforceability of this Agreement. 
The Parties intend this Agreement to be enforced as written.  If any such provision, or part thereof,
however, is held to be unenforceable because of the duration thereof or the
area covered thereby, the Parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision, and/or to delete the specific words or phrases, and in its amended
form such provision shall then be enforceable and shall be enforced.  If any provision of this Agreement shall
otherwise finally be determined to be unlawful, then such provision shall be
deemed to be severed from this Agreement and every other provision of this
Agreement shall remain in full force and effect.

 

7.5                                 No
Third-Party Beneficiaries or Right to Rely. 
Notwithstanding anything to the contrary in this Agreement, nothing in
this Agreement is intended to or shall create for or grant to any third party
any rights.

 

7.6                                 Counterparts.  This Agreement may be executed in more than
one counterpart, each of which shall for all purposes be deemed to be an
original and all of which shall constitute one and the same agreement.  A signature to this Agreement delivered by
telecopy or other commercially reasonable electronic means shall be deemed
valid.

 

7.7                                 Governing
Law.  This Agreement shall in all
respects be interpreted, construed and governed by and in accordance with the
local laws of the State of Delaware, without regard to principles of conflict
of laws.

 

7.8                                 Dispute
Resolution.  The Parties agree that
any disagreement, dispute, controversy claim, including legal action, suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, shall be subject exclusively to the procedures set forth in Section 11.11
of the Purchase Agreement.

 

7.9                                 Entire
Agreement; Amendment.  This
Agreement, the Purchase Agreement and all schedules and exhibits hereto and
thereto constitute the sole understanding of the Parties with respect to the
matters contemplated hereby and thereby and supersedes and renders null and
void all other prior agreements and understandings between the Parties with
respect to such matters.  In the event of
a conflict between the terms and conditions set forth in this Agreement and the
terms and conditions of the Purchase Agreement, or the interpretation and
application thereof, the terms and

 

 

conditions set forth in
the Purchase Agreement shall prevail, govern and control in all aspects. No
amendment, modification or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing and duly executed
by the Party against whom such would apply.

 

IN
WITNESS WHEREOF, each Party by its duly authorized officer has caused this
Transition Services Agreement to be executed as of the date first above
written.

 

	
   

  	
  WARNER
  ELECTRIC HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COLFAX
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALTRA
  INDUSTRIAL MOTION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
											

 

 

Schedule A

Transition Services Agreement

 

	
  Service

  	
   

  	
  Description

  	
   

  	
  Term

  	
   

  	
  Pricing

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Transition Services

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I. Colfax Services to CPTG

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.
  Human Resources Support

  	
   

  	
   

  	
   

  	
   

  
	
  Health, Welfare
  and Fringe Benefits 

  	
   

  	
  Provide benefits
  administration (health insurance; long-term disability; flexible spending plan;
  workers compensation) during transition period.  See also Memorandum of Understanding dated November 18,
  2004 between Altra and Colfax concerning administration of the Flexible
  Spending Accounts.

  	
   

  	
  3 months post
  close

  	
   

  	
  Actual cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Retirement plan

  	
   

  	
  Provide benefits
  administration (all pension plans) including transition of plan assets as
  required by Section 5.04(d) of the LLC Purchase Agreement

  	
   

  	
  3 months post
  close

  	
   

  	
  Actual cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Benefit
  Transition Services

  	
   

  	
  Various Colfax
  personnel

  	
   

  	
  3 months post
  close

  	
   

  	
  $100 per hour per employee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.
  Accounting, Tax and Finance Support

  	
   

  	
   

  	
   

  	
   

  
	
  VP Finance
  duties

  	
   

  	
  a) Closing
  support

  	
   

  	
  3 months post
  close

  	
   

  	
  Actual cost

  
	
   

  	
   

  	
  b) Consulting
  services

  	
   

  	
  3 months post
  close

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  From 3-6 months
  post-closing, these services will be provide only up to a maximum of 10 hours
  per month.

  	
   

  	
  Actual cost

  

 

 

	
  Tax Support

  	
   

  	
  Bill Flexon to
  provide transition services including assistance to Wichita Falls (property
  & abatement).

  	
   

  	
  6 months post
  close

  	
   

  	
  Actual cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hyperion
  Administration

  	
   

  	
  Doug Sulanke to
  train Mike Baker (appointed CPTG Hyperion administrator; South Beloit is
  established as Hyperion’s home location)

  	
   

  	
  3 months post
  close

  	
   

  	
  None or travel
  costs

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payroll Support-Boston Gear LLC

  	
   

  	
  IMO Industries Inc., a wholly owned subsidiary of Colfax, will
  provide payroll services through December 31, 2004 on behalf of Boston
  Gear LLC and will (1)  pay the required
  employment taxes on behalf of Boston Gear LLC, (2) file employment-related
  tax return and (3) provide forms W-2 to Boston Gear LLC associates.  Buyer and Boston Gear LLC shall indemnify
  IMO Industries for any and all taxes, interest and penalties incurred in
  connection with IMO providing such services.

  	
   

  	
  Until December 31, 2004

  	
   

  	
  At actual cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.
  Asset Management Support

  	
   

  	
   

  	
   

  	
   

  
	
  Treasury duties

  	
   

  	
  Continue to
  maintain daily treasury functions

  	
   

  	
  6 months post
  close

  	
   

  	
  At actual cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.
  Information Technologies Support

  	
   

  	
   

  	
   

  	
   

  
	
  Colfax website

  	
   

  	
  Colfax to retain
  a link from the Colfaxcorp.com website to CPTG website

  	
   

  	
  1 year post
  close

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.
  Intellectual Property Support

  	
   

  	
   

  	
   

  	
   

  
	
  Colfax trade
  name

  	
   

  	
  Provide a
  license to use Colfax trade name

  	
   

  	
  1 year post
  close

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Colfax Logo

  	
   

  	
  Provide a
  license to use Colfax logo (“swoosh”)

  	
   

  	
  1 year post
  close

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.
  Other

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Shanghai
  Sourcing

  	
   

  	
  Provide
  transition services 

  	
   

  	
  6 months

  	
   

  	
  Actual Costs

  

 

 

	
  Office

  	
   

  	
  (project
  management and inspection)

  	
   

  	
  post close

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  China Consulting

  	
   

  	
  Consulting time
  from Dan Zisk to assist with China logistics

  	
   

  	
  3 months post
  close

  	
   

  	
  Actual Cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sourcing
  consulting

  	
   

  	
  Consulting time
  from Mike Dwyer to assist with global sourcing

  	
   

  	
  6 months post
  close

  	
   

  	
  Actual Cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CBS Materials

  	
   

  	
  Provide copies
  of all CBS materials

  	
   

  	
  Before close

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CBS Training and
  transition

  	
   

  	
  Mike Dwyer
  available on a contract basis to assist with transitioning corporate CBS
  activities to the PT group

  	
   

  	
  6 months post
  close

  	
   

  	
  Actual Cost

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II. CPTG Services to Colfax

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Roscoe and
  Bishop Auckland properties

  	
   

  	
  Roscoe and
  Bishop Auckland Maintenance

  	
   

  	
  TBD

  	
   

  	
  TBD

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III. Action Items

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All historical
  documentation

  	
   

  	
  Provide all CPTG
  related historical documentation, such as: all CPTG related audits, tax
  records, environmental records, legal records)

  	
   

  	
  Immediately
  after post close

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D-U-N-S number

  	
   

  	
  Provide new D-U-N-S
  number with all historical data included

  	
   

  	
  Before closing

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note:  we need to discuss whether all of these
  things will be done pre-close.  If so,
  they do not need to be included in this TSA.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BG and
  Ameridrives historical data transfer to Hyperion databases

  	
   

  	
  Doug Sulanke to
  assist with the transfer of BG and Ameridrives historical data to Warner
  Hyperion database and run parallel system with Richmond.

  	
   

  	
  Before closing

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank
  authorization Signatures

  	
   

  	
  Change bank
  authorization signatures post-close

  	
   

  	
  Before Closing

  	
   

  	
  None

  

 

 

	
  Lines and
  letters of credit and bank guarantees

  	
   

  	
  Assist with
  replacement of lines and letters of credit and bank guarantees

  	
   

  	
  Before closing

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Computer leases

  	
   

  	
  Assist with
  transition of computer leases (provide carved out audited financial
  statements to start negotiations with new vendors)

  	
   

  	
  Before closing

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phone leases

  	
   

  	
  Assist with
  transition of phone leases (provide carved out audited financial statements
  to start negotiations with new vendors)

  	
   

  	
  Before closing

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exchange and the
  Global address book

  	
   

  	
  Transfer
  Exchange and the Global Address Book

  	
   

  	
  Day one post
  close

  	
   

  	
  NoneExhibit 10.6

 

TRADEMARKS AND
TECHNOLOGY LICENSE AGREEMENT

 

 

This TRADEMARKS AND TECHNOLOGY LICENSE
AGREEMENT (this “Agreement”) is
entered into this 30th day of November, 2004 (“Effective
Date”) by and among Colfax Corporation, a Delaware corporation (“Colfax”), Altra Holdings, Inc., a Delaware corporation
(formerly known as CPT Acquisition Corp., a Delaware corporation) (“Altra Holdings”) and Altra Industrial Motion, Inc., a
Delaware corporation (formerly known as Power Transmission Holding, LLC, a
Delaware limited liability company) (“Altra Industrial Motion”).

 

RECITALS

 

A.                                   Pursuant
to that certain LLC Purchase Agreement of even date herewith among Colfax,
Colfax’s subsidiary, Warner Electric Holding, Inc. (“Seller”)
and Altra Holdings (the “Purchase Agreement”),
Seller is selling to Altra Holdings and Altra Holdings is purchasing from
Seller all of the limited liability company interests (the “LLC Interests”) of Power Transmission Holding, LLC, a
Delaware limited liability company (“PT”).

 

B.                                     Pursuant
to that certain Transition Services Agreement of even date herewith among
Seller, Colfax and Altra Holdings, Colfax and Seller have agreed for a limited
period of time to provide certain transitional support services to Altra
Holdings in connection with the operation of the Business (as defined in the
Purchase Agreement) following the closing of the sale of the LLC Interests of
PT to Altra Holdings (“Closing”).

 

C.                                     For
a defined transition period, Altra Industrial Motion and all direct and
indirect subsidiaries of Altra Industrial Motion existing as of the Effective
Date (such subsidiaries and Altra Industrial Motion, collectively the “Licensed Companies”) desire to continue to use the “Swoosh”
Marks, as set forth on the attached Schedule 1, and the marks COLFAX and
IMO (collectively the “Marks”), which
Marks, at Closing, were in use by the Licensed Companies in connection with the
operation of the Business alone, in combination with each other and as part of
composite marks, elements of which are now owned by the Licensed Companies.

 

D.            Colfax desires to grant the Licensed
Companies, and the Licensed Companies desire to receive, the right to continue
using the Marks during such transition period in connection with the operation
of the Business, upon the terms and conditions set forth herein.

 

E.                                      On
a perpetual and irrevocable basis, the Licensed Companies desire to continue to
use, and desire for their respective future subsidiaries to use, certain
business methods of Colfax generally known as of the Effective Date as the
Colfax Business System and further described in the attached Schedule 2
(the “CBS”), which, at Closing, was in use by
the Licensed Companies in connection with the operation of the Business.

 

F.                                      Colfax
desires to grant the Licensed Companies and their respective future
subsidiaries, and the Licensed Companies desire to receive, the perpetual and
irrevocable right to continue using the CBS in connection with the operation of
the Business and the right to use the CBS in connection with any other business
in which any of the Licensed Companies and/or their respective future
subsidiaries may become engaged, upon the terms and conditions set forth
herein.

 

 

NOW, THEREFORE,
the parties, intending to be legally bound, hereby agree as follows:

 

 

1.                                       Grant Of License in Marks. Colfax grants to the Licensed
Companies a royalty-free, fully paid-up, nonexclusive, nontransferable,
worldwide license to use the Marks in connection with the respective businesses
of the Licensed Companies as set forth in this Agreement only (a) in the
general manner that the Licensed Companies and PT used the Marks in connection
with their respective businesses at or prior to Closing and (b) for a period of
one (1) year after the date of Closing (the “Marks
License”).  The sole purpose
of this Marks License is to allow the Licensed Companies time to rebrand and
phase out of use of the Marks in connection with their respective businesses
and a reasonable transition for their customers.  The Licensed Companies are expressly
prohibited from sublicensing the Marks or, except as may be necessary in
connection with the Licensed Companies’ ordinary course of business, from
making any expanded use of the Marks.

 

2.                                       Grant
Of License in CBS. Colfax grants to the Licensed Companies and their respective
future subsidiaries a perpetual, irrevocable, royalty-free, fully paid-up,
nonexclusive, transferable, sublicenseable, worldwide license to (a) use the
CBS in connection with the respective businesses of the Licensed Companies and
the businesses of their respective future subsidiaries and (b) modify and
create derivative works of the CBS for use in connection with the respective
businesses of the Licensed Companies and the businesses of their respective
future subsidiaries (the “CBS License”).

 

3.                                       Ownership.

 

(a)                                  Marks
and CBS.  Altra Holdings and Altra
Industrial Motion (i) acknowledge that Colfax and certain of its remaining
subsidiaries and affiliates shall remain the sole owner(s) of the Marks and,
subject to Section 3.(b) below, the CBS and (ii) agree that Altra
Holdings, the Licensed Companies and, with respect to the CBS License, the
respective future subsidiaries of the Licensed Companies will do nothing
inconsistent with such ownership.  Altra
Holdings and Altra Industrial Motion further acknowledge that all use of the
Marks by the Licensed Companies shall inure to the benefit of and be on behalf
of the owner of the Mark.  Altra Holdings
and Altra Industrial Motion agree that nothing in this Agreement shall give
Altra Holdings, any of the Licensed Companies or any of the respective future
subsidiaries of the Licensed Companies any right, title or interest in the
Marks or the CBS, other than the Marks License and the CBS License and except
as set forth in Section 3.(b) below. 
Altra Holdings and Altra Industrial Motion agree that they will not
attack the title of Colfax and certain of its remaining subsidiaries and
affiliates to the Marks and the CBS or attack the validity of the Marks
License, the CBS License or this Agreement. 
COLFAX MAKES NO WARRANTIES OR REPRESENTATIONS REGARDING OWNERSHIP AND
NON-INFRINGEMENT OF THE MARKS AND THE CBS.

 

(b)                                 Modifications
and Derivative Works of the CBS. 
Colfax, Altra Holdings and Altra Industrial Motion agree that, subject
to Colfax’s and certain of its remaining subsidiaries’ and affiliates’
ownership in and to the CBS as set forth in Section 3.(a) above, the
Licensed Companies or its subsidiaries, as the case may be, shall own all
rights, title and interest in and to any modifications or derivative works of
the CBS made by or for any of the Licensed Companies or any of it subsidiaries.

 

2

 

4.                                       Quality
Standards for Use of the Marks. Altra Holdings and Altra Industrial Motion
agree that the quality of all services rendered and all products sold by the
Licensed Companies under the Marks shall be consistent with the quality and
quality control standards established by Colfax with respect to services
rendered and products sold by the Licensed Companies and PT under the Marks as
of Closing.  The parties agree that the
level of quality of goods and services provided by Colfax, the Licensed
Companies and PT under the Marks as of Closing meet Colfax’s quality control
standards.  Altra Holdings and Altra
Industrial Motion agree, at Colfax’s expense, to reasonably cooperate with
Colfax in facilitating Colfax’s reasonable control of such quality of goods and
services provided by the Licensed Companies under the Marks and to supply
Colfax with specimens of all uses of the Marks upon Colfax’s written request.

 

5.                                       Manner
of Use of Mark. Altra Holdings and Altra Industrial Motion agree to use the
Marks only in the form and manner and with appropriate legends as prescribed by
Colfax in writing, and not to use any other trademarks or service marks in
combination with the Marks so as to create a composite mark without prior
written approval of Colfax.  Altra
Holdings and Altra Industrial Motion shall use the Marks followed by the TM or
SM symbols where appropriate and practical.

 

6.                                       Infringement
Proceedings. Altra Holdings and Altra Industrial Motion agree to notify
Colfax of any unauthorized use of the Marks by others promptly as it comes to
Altra Holdings’ and Altra Industrial Motion’s attention.  Colfax shall have the sole right and
discretion to bring infringement or unfair competition proceedings involving
the Marks after conferring with Altra Holdings and Altra Industrial
Motion.  Altra Holdings and Altra
Industrial Motion shall reasonably cooperate with Colfax in any such proceedings
at Colfax’s expense.

 

7.                                       Term
and Termination. The Mark License shall continue in effect for one (1) year
from Closing unless earlier terminated by either party pursuant to this Section 7.  The CBS License shall continue in effect in
perpetuity and may not be terminated for any reason whatsoever.  The Licensed Companies may cease to use the
Marks and/or the CBS and/or terminate the Marks License and/or the CBS License
at any time with or without cause. 
Colfax shall have the right to terminate only the Marks License upon
thirty (30) days prior written notice to Altra Holdings and Altra Industrial
Motion (a) in the event Altra Holdings and Altra Industrial Motion seek
protection under any bankruptcy, receivership, trust deed, creditors arrangement,
composition or comparable proceeding, or (b) upon the appointment of any
receiver or trustees to take possession of the properties of Altra Holdings and
Altra Industrial Motion or upon the winding up of Altra Holdings and Altra
Industrial Motion (other than in connection with the acquisition of all or
substantially all of Altra Holdings’ and/or Altra Industrial Motion’s assets,
stock or business to which this Agreement relates (whether by sale,
acquisition, merger, operation of law or otherwise)) or (c) upon material
breach of any of the material provisions of this Agreement by Altra Holdings or
Altra Industrial Motion which breach is not cured within thirty (30) days after
Altra Holdings and Altra Industrial Motion receive written notice from Colfax
describing such breach.

 

8.                                       Effect
Of Termination. Upon termination or expiration of the Marks License, the
Acquired Parties agree (a) to immediately discontinue all use of the Marks and
any term

 

3

 

confusingly similar
thereto, (b) to destroy all printed material bearing any of the Marks, and (c)
that all rights in the Marks and the goodwill connected therewith shall remain
the property of Colfax or its affiliates. 
Sections 2, 3, 8, 9, 10, 11, 12 and 13 and the second sentence in Section 7
shall survive termination or expiration of this Agreement.

 

9.                                       Limitation
of Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE,
NO PARTY WILL BE LIABLE TO ANY OTHER PARTY OR ANY OTHER PERSON OR ENTITY WITH
RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY (A) INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR (B) LOST PROFITS OR LOST
BUSINESS, EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF THEIR
ESSENTIAL PURPOSE AND EVEN IF ANY PARTY HAS BEEN ADVISED OF THE POSSIBILITY OR
PROBABILITY OF SUCH DAMAGES.

 

10.                                 Assignment;
Successors and Permitted Assigns. 
This Agreement may not be assigned by any party without the prior
written consent of the other parties, except that a party may, without the
consent of any of the other parties, assign or transfer this Agreement and its
rights and obligations hereunder to a successor of all or substantially all of
such party’s assets, stock or business to which this Agreement relates (whether
by sale, acquisition, merger, operation of law or otherwise).  Any purported assignment in violation of this
Section 10 shall be void and of no effect. 
This Agreement shall be binding on, inure to the benefit of, and be
enforceable by the parties and their respective heirs, successors and valid
assigns.

 

11.                                 Dispute
Resolution.  The parties agree that
any disagreement, dispute, controversy, claim, including, without limitation,
legal action, suit or proceeding arising out of or relating to this Agreement,
shall be subject exclusively to the procedures set forth in Section 11.11
of the Purchase Agreement.

 

12.                                 Notices.  Any notice or other communication required or
permitted to be made or given to a party under this Agreement shall be deemed
sufficiently made or given on the date of delivery if delivered in person or by
overnight commercial courier service with tracking capabilities with costs
prepaid, or five (5) days after the date of mailing if sent by certified first
class U.S. mail, return receipt requested and postage prepaid, to the address
of the parties set forth below or such other address as may be given from time
to time under the terms of this notice provision.

 

	
  If
  to Colfax:

  	
   

  	
  If
  to Altra Holdings:

  
	
   

  	
   

  	
   

  
	
  Colfax
  Corporation

  	
   

  	
  Altra
  Holdings, Inc.

  
	
  993
  Lenox Drive

  	
   

  	
  14
  Hayward Street

  
	
  Suite
  200

  	
   

  	
  Quincy,
  MA 02171

  
	
  Laurenceville, NJ 08648

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Thomas M. O’Brien

  	
   

  	
  Attention: Michael L. Hurt

  

 

4

 

	
  If
  to Altra Industrial Motion:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Altra
  Industrial Motion, Inc.

  	
   

  	
   

  
	
  14
  Hayward Street

  	
   

  	
   

  
	
  Quincy,
  MA 02171

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Michael L. Hurt

  	
   

  	
   

  

 

13.                                 Miscellaneous.
This Agreement, the Transition Services Agreement, the Purchase Agreement and
all schedules and exhibits hereto and thereto constitute the sole understanding
of the parties with respect to the matters contemplated hereby and thereby and
supersedes and renders null and void all other prior agreements and
understandings between the parties with respect to such matters. In the event
of a conflict between the terms and conditions set forth in this Agreement and
the terms and conditions of the Purchase Agreement, or the interpretation and
application thereof, the terms and conditions set forth in the Purchase
Agreement shall prevail, govern and control in all aspects. No amendment,
modification or alteration of the terms or provisions of this Agreement shall
be binding unless the same shall be in writing and duly executed by all parties
hereto. If any provision of this Agreement is held to be illegal or
unenforceable, that provision shall be limited or eliminated to the minimum
extent necessary so that this Agreement shall otherwise remain in full force
and effect and enforceable. Headings and captions are for convenience only and
are not to be used in the interpretation of this Agreement. This Agreement
shall in all respects be interpreted, construed and governed by and in
accordance with the local laws of the State of Delaware, without regard to
principles of conflict of laws. This Agreement may be executed in more than one
counterpart, each of which shall for all purposes be deemed to be an original
and all of which shall constitute one and the same agreement. A signature to
this Agreement delivered by telecopy or other commercially reasonable
electronic means shall be deemed valid.

 

 

[THE REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 

5

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized representatives as of the day and year
above written.

 

 

	
  COLFAX
  CORPORATION

  	
   

  	
  ALTRA
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ALTRA
  INDUSTRIAL MOTION, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
								

 

6

 

SCHEDULE 1

 

Swoosh Mark

 

(shown as composite mark
with BOSTON GEAR)

 

 

 

7

 

SCHEDULE 2

 

Colfax Business System

 

Comprehensive business
management system related to manufacturing quality, delivery and cost, with
roots in the Toyota production system, adapted to the U.S. manufacturing
environment by Danaher Corporation, adapted and approved by Colfax Companies,
as further described at www.colfaxcorp.com/glossary/html

 

8

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