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Exhibit 2.1
STOCK AND ASSET PURCHASE AGREEMENT
BY AND AMONG
SOCIETE EUROPEENNE DE PRODUITS REFRACTAIRES
THE CARBORUNDUM COMPANY LTD
CARBORUNDUM DO BRASIL LTDA
CARBORUNDUM DEUTSCHLAND GMBH
CARBORUNDUM AUSTRALIA PTY LTD ACN 004 838 233
(THE "SELLERS")
AND
UNIFRAX CORPORATION
UNIFRAX HOLDING CO
UNIFRAX AUSTRALIA PTY LTD. ACN 093 625 757
NAF BRAZIL LTDA
UNIFRAX GMBH
(THE "BUYERS")
DATED AS OF JULY 27, 2000
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ARTICLE 1. DEFINITIONS.......................................................................2
1.1 Definition Reference............................................................2
ARTICLE 2. PURCHASE AND SALE OF SHARES AND ASSETS............................................2
2.1 Purchase and Sale of Shares and Assets..........................................2
2.2 Purchase Price..................................................................5
2.2.1 Initial Purchase Price..................................................5
2.2.2 Notes...................................................................6
2.2.3 Price Adjustments.......................................................6
2.3 Allocation of Purchase Price....................................................9
2.3.1 Allocation of the Purchase Price........................................9
2.3.2 Allocation of the Final Burden or Benefit...............................9
2.4 Closing Statements..............................................................9
ARTICLE 3. CONDITIONS TO CLOSING............................................................12
3.1 Conditions to Buyers' Obligation...............................................12
3.1.1 Legal Action...........................................................12
3.1.2 Agreements Performed; Representations Accurate.........................12
3.1.3 Resignations and Releases..............................................12
3.1.4 Filings................................................................12
3.1.5 Consents...............................................................13
3.1.6 Sellers Releases.......................................................13
3.1.7 No Withdrawal Event....................................................13
3.1.8 Liens Released.........................................................13
3.1.9 Affiliates Liabilities and Debt Repayment..............................13
3.1.10 Termination of Specific Agreements.....................................13
3.1.11 Simultaneous closing of all transactions...............................13
3.1.12 Exchange Rate..........................................................14
3.1.16 Other..................................................................14
3.2 Conditions to the Obligation of the Sellers....................................14
3.2.1 Legal Action...........................................................14
3.2.2 Agreements Performed, Representations Accurate.........................14
3.2.3 Issuance of the Unifrax Holding Note and the Corporation Note..........15
3.2.4 Exchange Rate..........................................................15
3.2.5 Legal Opinion..........................................................15
3.2.6 Other..................................................................15
3.3 Reimbursement from Buyers in the event of a failure to consummate the
transactions as a result of a failure to obtain financing......................15
ARTICLE 4. CLOSING..........................................................................16
4.1 Closing Date...................................................................16
ARTICLE 5. REORGANIZATION PLAN..............................................................16
5.1 Actions to be taken............................................................16
5.2 Documents and Filings..........................................................17
ARTICLE 6 COVENANTS BY THE SELLERS..........................................................17
6.1 Conduct of Business............................................................17
6.2 Access.........................................................................18
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6.3 No Shop........................................................................18
6.4 Right of First Refusal.........................................................19
6.5 Excluded Liabilities...........................................................19
6.6 Financial Statements...........................................................19
6.7 Cash...........................................................................21
6.8 Non-competition Covenants......................................................21
6.9 Related Agreements.............................................................21
6.10 Public statements regarding Ceramic Fibers.....................................22
6.11 Debt at Closing................................................................22
6.12 Miscellaneous Due Diligence Items..............................................22
ARTICLE 7. COVENANTS BY THE BUYERS..........................................................22
7.1 Consents.......................................................................22
7.2 Indian Tender Offer............................................................23
ARTICLE 8. OTHER COVENANTS..................................................................23
8.1 Publicity......................................................................23
8.2 Expenses.......................................................................23
8.3 Tax Matters....................................................................23
8.3.1 Liability for Taxes and Related Matters................................23
8.3.2 Withholding Taxes......................................................26
8.3.3 Tax Elections..........................................................26
8.3.4 Time of Payment........................................................26
8.3.5 Assistance and Cooperation.............................................27
8.3.6 Commodity Taxes........................................................27
8.3.7 Reimbursement by Unifrax...............................................28
8.4 Satisfaction of Conditions.....................................................28
8.5 Update Information.............................................................28
8.6 Transferred employees..........................................................28
8.7 Non-transferred employees......................................................29
8.8 Pension Plans..................................................................29
8.9 Transfer of Permits and Third Party Consents...................................30
8.10 Information Systems............................................................31
ARTICLE 9. TERMINATION......................................................................31
9.1 Termination....................................................................31
9.1.1 Written Agreement......................................................31
9.1.2 Drop Dead Date.........................................................31
9.1.3 Material Breach of Sellers' Representations............................31
9.1.4 Material Breach of Buyers' Representations.............................32
9.2 Effect of Termination..........................................................32
ARTICLE 10. CONSTRUCTION....................................................................32
10.1 Definitions....................................................................32
10.2 Notices........................................................................40
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10.3 Binding Effect.................................................................41
10.4 Third Party Beneficiaries......................................................41
10.5 Headings.......................................................................41
10.6 Exhibits and Schedules.........................................................41
10.7 Governing Law..................................................................41
10.8 Waivers........................................................................42
10.9 Pronouns.......................................................................42
10.10 Amendment......................................................................42
10.11 Entire Agreement...............................................................42
INFORMATION SYSTEM SERVICES.................................................................52
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STOCK AND ASSET PURCHASE AGREEMENT
THIS STOCK AND ASSET PURCHASE AGREEMENT, dated as of July 27, 2000
(this "AGREEMENT") is by and among Unifrax Holding Co. ("Unifrax Holding"),
Unifrax Corporation ("UNIFRAX"), Unifrax Australia, NAF Brazil Ltda ("Unifrax
Brazil") and Unifrax GmbH (together with any designee of Unifrax, the "BUYERS"),
and SEPR, the Carborundum Company Ltd ("Carborundum Ltd"), Carborundum
Deutschland, Carborundum Australia, and Carborundum do Brasil.
A. SEPR owns all but 6 of the shares representing the share capital of
Carborundum France SA ("CARBORUNDUM FRANCE") (and will at Closing own 100% of
the shares representing such share capital) a company registered under the laws
of France which will at Closing own 100% of the shares representing the share
capital of Batistaff SA ("BATISTAFF"), a French societe anonyme and 100% of the
shares of Carborundum Belgium, a company registered under the laws of Belgium
("CARBORUNDUM BELGIUM"). As of the Closing Date and pursuant to the
Reorganization Plan, as hereinafter defined, Carborundum Ltd shall have
contributed to a newly-founded company incorporated under the laws of England
("NEWCO FIBERS ENGLAND"), all of its assets relating to the Ceramic Fiber
Business (as hereinafter defined) other than a license agreement with Morgan
Crucible P.L.C., including those pertaining to Carborundum Ltd's branch in
Spain, as well as its quota in Carborundum Italia, a company incorporated under
the laws of Italy ("CARBORUNDUM ITALIA") and 1,165,350 shares representing
58.9126% of the shares of capital stock of Orient Cerlane Ltd ("ORIENT"), a
company registered under the laws of India. Carborundum do Brasil owns all of
the issued and outstanding stock of CIT Carborundum do Venezuela, a company
incorporated under the laws of Venezuela ("CARBORUNDUM VENEZUELA"). As of the
Closing Date, and pursuant to the Reorganization Plan as hereinafter defined,
Carborundum do Brasil shall have contributed to a newly-formed company
registered under the laws of Brazil ("NEWCO FIBERS BRAZIL") all of its assets
relating to its Ceramic Fiber Business (as hereinafter defined) including those
pertaining to its branch in Argentina, but not including its shares in
Carborundum Venezuela.
SEPR, Carborundum do Brasil and Carborundum Ltd are collectively
designated herein as the "STOCK SELLERS" and individually as a "STOCK SELLER".
Carborundum France, NewCo Fibers England, Carborundum Italia, Carborundum
Belgium, Carborundum Venezuela, Batistaff, Orient and NewCo Fibers Brazil are
collectively designated herein as the "PURCHASED COMPANIES".
Each of Carborundum Deutschland and Carborundum Australia (collectively
the "ASSET SELLERS" and individually an "ASSET SELLER") is the owner of the
assets described opposite to its name in EXHIBIT A hereto (the "PURCHASED
ASSETS").
The Stock Sellers and the Asset Sellers are collectively designated
herein as "SELLERS" and each a "SELLER". The Purchased Companies and the Asset
Sellers are collectively designated herein as the "COMPANIES" and each a
"COMPANY".
B. Each of the Companies is involved in the manufacture, cutting,
processing and/or sale of insulating fibers (other than asbestos) operating in a
temperature regime of 1000(degree)C or higher excluding all fibers manufactured
by continuous filament processes and all non-oxide fibers (the "CERAMIC FIBER
BUSINESS"), although some, but not all, of the Companies carry out activities
unrelated to the Ceramic Fiber Business. Since the Buyers are only interested in
acquiring the Ceramic Fiber Business operated by the
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Companies, the parties have agreed that SEPR shall cause the Companies to
implement on or prior to the Closing the Reorganization Plan, as defined in
Article 5.
C. The Stock Sellers desire to sell to Unifrax or its designees and
Unifrax desires to acquire, or have its designees acquire, from the Stock
Sellers, all, but not less than all, of the shares (the "PURCHASED SHARES")
representing the share capital of Carborundum France, NewCo Fibers England,
Carborundum Venezuela and NewCo Fibers Brazil on the terms and subject to the
conditions set forth in this Agreement.
D. The Asset Sellers desire to sell to Unifrax Australia and Unifrax
GmbH (collectively the "ASSET BUYERS"), and the Asset Buyers desire to purchase
from the Asset Sellers, all, but not less than all, of the Purchased Assets, on
the terms and subject to the conditions set forth herein.
E. On the date hereof, Unifrax and SEPR will sign a Warranty Agreement
(the "WARRANTY AGREEMENT") providing for certain representations and warranties
in connection with the transactions contemplated hereby.
F. On the date hereof, VERTEC SA, the majority shareholder of SEPR,
will sign a Guaranty Agreement (the "GUARANTY AGREEMENT") relating to Sellers'
obligations under this Agreement and the Warranty Agreement.
Now therefore, Buyers and Sellers hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Definition Reference
Certain capitalized terms used herein are defined in SECTION 10.1.
ARTICLE 2.
PURCHASE AND SALE OF SHARES AND ASSETS
2.1 Purchase and Sale of Shares and Assets
Subject to the terms and conditions of this Agreement and of the
agreements and documents to be executed at the Closing and listed below, the
Sellers shall sell and the Buyers shall acquire all of the Purchased Shares and
the Purchased Assets. In furtherance of the foregoing, at the Closing:
(a) IN CONNECTION WITH THE PURCHASED SHARES: Each of the Stock
Sellers shall execute stock transfer forms and/or other documents, as indicated
below, and pursuant to such stock transfer forms or documents, Unifrax or its
designees shall purchase from the
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Stock Sellers, and each of the Stock Sellers shall sell to Unifrax or its
designees, the Purchased Shares; and
(b) Each of the Stock Sellers agrees to deliver to Unifrax or its
designees the following documents:
(i) as regards Carborundum France:
- duly executed stock transfer forms (ordres de
mouvement) pertaining to all of the shares
representing the share capital of Carborundum France,
in favor of Unifrax, or its designees,
(ii) as regards NewCo Fibers England:
- duly executed transfers of all of the outstanding
shares in NewCo Fibers England in favor of Unifrax
(or as it will direct) together with all relevant
share certificates (or in the case of any lost
certificate an indemnity satisfactory to Unifrax in
relation to it) and together also with such waivers
and consents as Unifrax may require to enable the
Unifrax or its nominees to be registered as the
holders of such shares;
- the duly stamped original Land Certificate of the
title number to be allocated by H.M. Land Registry in
relation to the Transferred Rainford Property, a
certified copy of the Rainford Transfer, a duly
stamped original copy of the Rainford Business
Transfer Agreement.
- the lease agreement dated the date hereof relating to
use by Newco Fibres England of certain parts of the
Rainford Property in the form attached as EXHIBIT
6.9(C) hereto; and the original Land Certificate of
the title number to be allocated by H.M. Land
Registry in relation to the property leased under
such agreement.
- a counterpart lease agreement dated the date hereof
relating to the use by Carborundum Ltd of certain
parts of the Transferred Rainford Property in the
form attached as EXHIBIT 6.9(D) hereto;
(iii) as regards NewCo Fibers Brazil, amendment to the company's
by-laws (contrato social) transferring all of the issued
shares (quotas) to Unifrax or its designee(s); a power of
attorney to represent Carborundum do Brasil for the purposes
of the filing and registration of such amendment.
(iv) as regards Carborundum Venezuela:
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- the shares certificate in favor of Unifrax or its
designee(s) of the outstanding shares duly signed by
the president of Carborundum Venezuela or his legal
representative.
- the duly completed shareholders books (libro de
accionistas) of Carborundum Venezuela reflecting the
transfer of the outstanding shares in favor of
Unifrax or its designee(s).
(c) IN CONNECTION WITH THE PURCHASED ASSETS: Each of the Asset
Buyers and the Asset Sellers shall execute an asset purchase agreement ("ASSET
PURCHASE AGREEMENT") pertaining to the list of Purchased Assets as set forth
opposite its name in EXHIBIT A hereto and pursuant to such Asset Purchase
Agreements, the Asset Buyers shall purchase from the Asset Sellers, and the
Asset Sellers shall sell to the Asset Buyers, the Purchased Assets. Each Asset
Purchase Agreement shall be substantially in the form included in EXHIBIT 2.1(c)
hereto and shall provide for the transfer to the relevant Asset Buyers of the
contracts and agreements entered into by the relevant Asset Seller and listed in
the schedules to the Asset Purchase Agreement (the "TRANSFERRED AGREEMENTS"),
subject, in the case of the contracts and agreements listed in EXHIBIT 8.9(ii)
to the prior consent of the co-contracting party. It is expressly agreed that
(i) the Buyers shall have no obligations in respect of, and shall not assume,
any liabilities of the Asset Sellers other than the Trade Accounts Payable of
the Asset Sellers incurred in the ordinary course of their Ceramic Fiber
Business prior to the Closing Date and the liabilities that may arise after the
Closing Date from the continuation by the Buyers after such date of the
Transferred Agreements, and that, the Buyers shall not bear any other liability
or obligation of the Asset Sellers whether known or unknown, including, without
limitation to the foregoing, any capitalized lease obligations, bank
indebtedness, indebtedness of the Asset Sellers to their Affiliates, tax or
deferred tax liabilities (provided that, for VAT and similar taxes, only the net
amount by which the aggregate VAT payable of an Asset Seller exceeds the
aggregate VAT receivable of such Asset Seller shall constitute an Excluded
Liability), product warranty or product liability obligations, accrued vacation
pay, accrued compensation or bonuses of employees or officers and other accrued
liabilities, environmental liabilities, medical or other benefits to employees
or retirees, or other contingent liabilities of the Asset Sellers (the "EXCLUDED
LIABILITIES"), and that (ii) each Asset Buyer shall assume the liabilities
arising from the Trade Accounts Payable of the Asset Seller from whom it
purchased Purchased Assets and any liabilities arising after the Closing Date
from the continuation by the Buyers after such date of the Transferred
Agreements. For the avoidance of doubt, Excluded Liabilities shall not include
claims relating to the Purchased Assets, their compliance with Law, condition,
defects or deficiencies, but shall include all claims arising out of violations
of Environmental Laws or Environmental Permits or damages to the Environment. To
the extent that any laws applicable to the purchase of Purchased Assets provides
for the liability of any Asset Buyers with respect to any Excluded Liability or
if the Asset Buyers otherwise assume such Excluded Liabilities, the Sellers will
adjust the Purchase Price as provided in Section 2.2.3(c) or indemnify such
Asset Buyers for any losses, expenses or payments incurred or made by such Asset
Buyers with respect to such Excluded Liability.
(d) (i) Buyers shall deliver to SEPR acting as agent for the
Sellers the Cash Payment, as defined in SECTION 2.2 below and (ii) Unifrax shall
deliver to SEPR acting as agent for the Sellers the Corporation Note and
Subordination Agreements and Unifrax Holding shall deliver to SEPR, acting as
agent for the Sellers, the Pledge Agreement and Unifrax Holding Note, as defined
in SECTION 2.2 below.
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(e) Sellers shall deliver to Buyers (i) all records, books and
ledgers relating to the Purchased Companies up to the Closing Date (including
any electronic files relating thereto) which are not as of the Closing Date in
the possession of the Purchased Companies, and (ii) with respect to Asset
Sellers only, full and complete copies of the records, books and ledgers that
may relate to their Ceramic Fiber Business, provided however, that Sellers shall
not be obliged hereunder to deliver any record of the Asset Sellers that relates
exclusively to businesses other than the Ceramic Fiber Business, (iii) certified
copies of all shareholders or board resolutions of the Sellers or the Companies
required to authorize the execution and performance of any agreement
contemplated by this Agreement, and the completion of the transactions
contemplated by any of them, accepting the resignation of the directors or
officers and PricewaterhouseCoopers or their affiliates as statutory auditors of
the Purchased Companies (whenever they have been so appointed), and convening
the shareholders meetings required to appoint new directors, officers and
statutory auditors of the Purchased Companies to be held on the Closing Date,
(iv) letters of resignation of the Persons identified in EXHIBIT 2.1(e), subject
to the occurrence of the Closing, and (v) the original shareholders registries
(comptes d'actionnaires and registres des mouvements or similar registries under
applicable laws in the relevant jurisdiction) and, where applicable, share
certificates pertaining to all of the Purchased Shares which are not as of the
Closing Date in possession of the Purchased Companies, the original minute books
of the Purchased Companies entered up to date and duly executed in accordance
with applicable laws, and the common seal of NewCo Fibers England.
(f) Sellers, Buyers and their relevant Affiliates shall execute
the Related Agreements referred to at SECTION 6.9. SEPR and Unifrax shall, and
Buyers shall cause Unifrax Senior Lenders to, execute the Subordination
Agreements.
(g) Each of the parties shall deliver to the other party such
agreements, documents or instruments as are necessary to evidence the
satisfaction of the conditions precedent included at Article 3 to be satisfied
by such party.
(h) It is provided that the purchase and sale of shares and assets
pursuant to the agreements referred to in this Article 2 shall be deemed to
constitute for the purposes of this Agreement an indivisible and single
transaction to be completed at the same time on the Closing Date, except as may
otherwise be agreed upon by SEPR and Unifrax.
2.2 Purchase Price
The aggregate purchase price for the Purchased Shares and the Purchased
Assets shall be equal to fifty-eight million five hundred thousand US Dollars
(US$ 58,500,000), minus the aggregate amount of Debt of the Purchased Companies
(other than Orient) outstanding on the Closing Date (the "CLOSING DEBT") which,
for the avoidance of doubt, shall not include Trade Accounts Payable, to be paid
through the combination of an initial cash payment and two notes issued by
Unifrax (the "CORPORATION NOTE") in an amount of eight million US Dollars (US$
8,000,000) and Unifrax Holding in an amount of twenty million five hundred
thousand US Dollars (US$ 20,500,000) (the "UNIFRAX HOLDING NOTE") and subject to
the adjustments provided for in SECTION 2.2.3 (the "PURCHASE PRICE").
2.2.1 INITIAL PURCHASE PRICE
(a) In consideration for the Purchased Shares and the
Purchased Assets, at the Closing, Buyers shall pay or cause to be paid to SEPR,
as agent for the Sellers the
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aggregate sum (the "CASH PAYMENT") of thirty million US Dollars
(US$30,000,000.00) MINUS the Closing Debt.
(b) For the purposes of paragraph (a) above SEPR shall notify to
Unifrax the amount of such Closing Debt, on a Purchased Company by Purchased
Company basis, not later than 8 business days prior to the date of the Closing
(the "NOTIFIED CLOSING DEBT"). In the event that either (i) Unifrax agrees in
writing that the Notified Closing Debt corresponds to the Closing Debt or (ii)
Unifrax and SEPR agree in writing on another amount, in both instances no later
than 2 business days prior to the Closing Date, the amount so agreed upon shall
be the Closing Debt for the purposes of this Agreement, and, absent any manifest
error, shall be binding and final upon the parties hereto. In the event the
parties cannot agree on the amount of such Closing Debt, no later than 2
business days prior to the Closing Date, the Notified Closing Debt shall be
deducted from the amount of thirty millions dollars to be paid on the Closing
Date and the procedure and adjustments, if any, set forth in SECTION 2.2.3(a)
shall apply. The Purchase Price shall be allocated among the Sellers as provided
in Section 2.3.1 below.
(c) The Closing Debt shall be determined by applying US GAAP
(using such rules for allocation between the Ceramic Fiber Business and other
businesses as were used by Sellers and their Affiliates as of December 31, 1999,
as detailed in EXHIBIT 2.2.1(c)) and expressed in US Dollars, using for each
Purchased Company the relevant exchange rate published 2 business days prior to
the Closing Date in The Financial Times.
2.2.2 NOTES
The balance of the Purchase Price shall be paid by way of the
Corporation Note and of the Unifrax Holding Note which Unifrax and Unifrax
Holding respectively shall issue to SEPR (together the "NOTES"). The Unifrax
Holding Note (i) will be secured through the pledge by Unifrax Holding of an
aggregate US$ 20.5 million of newly issued non-voting preferred stock of Unifrax
pursuant to a pledge agreement entered into between Unifrax Holding and SEPR
(the "PLEDGE AGREEMENT") and (ii) may be guaranteed by guarantees which may be
issued from time to time by Unifrax (the "UNIFRAX GUARANTEES"). The amount of
the Unifrax Holding Note will be reduced in accordance with its terms. Subject
to the terms and conditions of the Unifrax Guarantees, Corporation Note and
Subordination Agreements, each of the Sellers hereby acknowledges that any claim
brought pursuant to the Unifrax Guarantees and the Corporation Note shall be
subordinated, on the terms and as provided in one or several subordination
agreements to be entered into by Unifrax, SEPR and certain existing creditors of
Unifrax (the "UNIFRAX SENIOR LENDERS") (such agreements being collectively
designated herein the "SUBORDINATION AGREEMENTS") and in accordance with the
provisions of the Unifrax Guarantee or the Corporation Note. The Pledge
Agreement, the Unifrax Guarantees, the Subordination Agreements, the Corporation
Note and the Unifrax Holding Note shall be substantially identical to the forms
appended on EXHIBIT 2.2.2(a) hereto. The aforementioned preferred stock shall be
issued pursuant to a Preferred Stock Subscription Agreement substantially
identical to the form appended as EXHIBIT 2.2.2(b) hereto; and the preference
and rights of such preferred stock shall be substantially as set forth in
EXHIBIT 2.2.2(c) hereto.
2.2.3 PRICE ADJUSTMENTS
(a) CLOSING DEBT ADJUSTMENT. In the event Unifrax and SEPR
fail to agree on the amount of the Closing Debt pursuant to the terms of SECTION
2.2.1(b) above, such
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amount shall be finally determined by an expert (the "AUDITOR") chosen from one
of the international firms of first rank (other than Ernst & Young and
PricewaterhouseCoopers), the mission of which will be, according to Article 1592
of the French Civil Code to determine the amount of the Closing Debt. Failing
agreement of the parties on such expert within 15 days after the Closing Date,
such Auditor shall be appointed by the President of the Commercial Court of
Paris acting upon the request of the most diligent party. Such Auditor shall
notify its decision to the parties within 30 days from its appointment, which
decision shall be binding on the parties. The Auditor shall only be required (i)
to decide those issues that are relevant to the determination of the Closing
Debt as to which the parties do not agree, and (ii) to determine accordingly the
amount of the Closing Debt (such amount, as determined by such Auditor is
hereinafter referred to as the "Audited Closing Debt"). The fees and expenses of
the Auditor shall be shared equally between the Sellers on the one hand and
Buyers of the Purchased Companies on the other hand.
In the event the Notified Closing Debt is greater than the Audited
Closing Debt, the positive difference between those two amounts shall be paid in
cash by Unifrax to SEPR within eight (8) days after the notification of the
Audited Closing Debt to the parties. In the event the Audited Closing Debt is
greater than the Notified Closing Debt, the positive difference between these
two amounts shall be paid in cash by SEPR to Unifrax within eight (8) days after
the notification of the Audited Closing Debt to the parties.
(b) WORKING CAPITAL ADJUSTMENT. To the extent the Working Capital
(as hereinafter defined) is less than US$ 21,931,000 (it being understood that
this amount corresponding to the Working Capital as of December 31, 1999
excluding Orient is not definitive and may be adjusted in good faith by the
parties prior to Closing but only as regards Trade Accounts Payable), SEPR
shall, within eight (8) days from the date of the agreement of the parties on
the Closing Statements (as hereinafter defined), or failing which, from the date
of final determination of the Working Capital pursuant to Section 2.4, pay in
cash to Unifrax an amount equal to such shortfall.
(c) ACCRUED LIABILITIES ADJUSTMENT. Within eight (8) days from the
date of agreement of the parties on the Closing Statements, (as hereinafter
defined) or failing which from the date of final determination of the Accrued
Liabilities pursuant to Section 2.4, SEPR shall pay in cash to Unifrax the
amount of the Accrued Liabilities. In the event any Accrued Liability gave rise
to an adjustment of the Purchase Price hereunder for an amount in excess of the
final amount of such Accrued Liability, then the amount of such excess shall be
refunded by Unifrax or its designees to SEPR or its designees. In the event the
parties do not agree on the amount of such refund, such amount shall be
determined by the Auditor, if said Auditor has been appointed pursuant to
Section 2.2.3(a), or failing which by an expert appointed in accordance with
Section 2.4.2 below.
(d) MATERIAL ADVERSE CHANGE ADJUSTMENTS. In the event a Material
Adverse Change relating to an Asset Seller or a Purchased Company other than
Orient occurs after the signature of this Agreement and prior to the Closing
Date, and
(i) such Material Adverse Change (x) does not constitute a
Withdrawal Event, as defined in Section 3.1.7 below, (y) causes a loss or
liability to the Ceramic Fiber Business in excess of US$ 400,000 and (z) results
from circumstances that the Sellers did not acknowledge give rise to
indemnification of Unifrax under the Warranty Agreement (including but not
limited to, Pre-Closing Liabilities or breach of representations or warranties),
or
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(ii) such Material Adverse Change constitutes a Withdrawal
Event but the Buyers have elected to close the transactions contemplated hereby,
then, SEPR shall pay in cash to Unifrax within eight (8) days from the Closing
Date an amount equal to the lower of the impact of such Material Adverse Change
on the Ceramic Fiber Business of the Companies, and US$ 5,000,000. Upon receipt
of this amount Unifrax and its Affiliates shall be deemed to waive, up to the
amount so received, any and all claims they may have against SEPR or any Seller,
whether for indemnification pursuant to the Warranty Agreement or otherwise,
with respect to the subject matter of the related Material Adverse Change. SEPR
and Unifrax will jointly determine reasonably and in good faith the impact of
any Material Adverse Change on the Ceramic Fiber Business of the Companies and
the resulting price adjustment, if any. In the event the parties do not agree on
such impact, such impact shall be determined by the Auditor, if said Auditor has
been appointed pursuant to Section 2.2.3(a) or failing which by an expert
appointed in accordance with Section 2.4.2(b) below. As regards any Material
Adverse Change resulting from a loss of customer(s), such impact shall be equal
to any gross margin impacts of such loss of customers over a one year period
from the date such loss of customer(s) is effective. In the event a Material
Adverse Change meets the conditions set forth at (x) and (y) in paragraph (i)
above, but the Sellers acknowledge that such Material Adverse Change gives rise
to indemnification pursuant to the provisions of the Warranty Agreement, such
Material Adverse Change shall not give rise to a price adjustment as provided
above, but to indemnification as per the Warranty Agreement and shall be counted
towards the Threshold Amount at Section 4.4(c) thereof.
In the event a Material Adverse Change gave rise to a price
adjustment as contemplated in this subsection, and, after such adjustment, the
impact of such Material Adverse Change proves to be lower than such adjustment
of the Purchase Price, then Unifrax or its designee shall refund to SEPR or its
designee the difference between such price adjustment and the impact of the
Material Adverse Change. In the event the parties do not agree on the amount to
be refunded, such amount shall be determined by the Auditor if the Auditor has
been appointed pursuant to Section 2.2.3(a) or failing which by an expert
appointed in accordance with Section 2.4.2 below.
(e) PURCHASED COMPANIES' PROFITS ADJUSTMENT. The Purchase Price
shall be increased by the amount, if any, of the pre-tax combined distributable
profits (net of losses, if any) of the Purchased Companies other than Orient for
the period from January 1, 2000 (except in the case of NewCo Fibers Brazil and
NewCo Fibers England as to each of which such period shall start on the date of
its incorporation) through the Closing Date (or, in the event the board of
directors or shareholders of the Purchased Companies have not yet decided the
amount of such distributable profits, by an amount determined by applying the
same laws and regulations as govern the determination of the amount of such
distributable profits) ("COMBINED PROFITS"), but only to the extent available
unencumbered cash at Closing Date in such Purchased Companies (other than
Orient) exceeds the aggregate amount of the Cash Requirement (as defined in
Section 6.7.1). The amount of such adjustment, if any, shall be paid in cash by
Unifrax to SEPR within eight (8) days from the agreement of the Parties on the
Closing Statements, or failing which, from the date of final determination of
the Combined Profits and cash at Closing pursuant to Article 2.4.
(f) CASH BALANCE ADJUSTMENT. The Purchase Price shall be decreased
by the amount, if any, by which the unencumbered cash of the Purchased Companies
(other than Orient) at Closing is less than US$ 300,000. Such amount, if any,
shall be paid in cash by
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SEPR to Unifrax within eight (8) days from the date of agreement of the parties
on the Closing Statements or failing which, from the date of final determination
of cash at Closing pursuant to Section 2.4.
(g) CAPEX ADJUSTMENT. To the extent that since January 1, 2000 the
Asset Sellers and the Purchased Companies have spent and paid less than US$
950,000 (or the equivalent thereof in local currencies) in connection with the
CAPEX specified in EXHIBIT 2.2.3(g), the Purchase Price shall be decreased by
the difference between US$ 950,000 and the amount effectively spent and paid
since January 1, 2000 in connection with such CAPEX.
(h) INTEREST. Any amount to be paid pursuant to this Section 2.2.3
shall bear interest at the LIBOR rate increased by 250 basis points from the
Closing Date until the date of payment.
(i) EXCHANGE RATE. Amounts to be paid pursuant to Subsections
2.2.3(a) to (e) shall be made in US Dollars, using the FRF/US Dollars exchange
rate published two days prior to the Closing Date in The Financial Times.
(j) ORIENT CERLANE: Notwithstanding any other provision of this
Agreement, no adjustment of the Purchase Price shall be made pursuant to this
Section 2.2.3 with respect to the Debt, Working Capital, Accrued Liabilities,
Material Adverse Change, CAPEX, profits and cash of Orient.
(k) UNIFRAX AS AGENT OF BUYERS. Any amounts paid by, or to
Unifrax, in connection with the adjustment of the Purchase Price, shall be paid,
or received by Unifrax as agent for the Buyers.
2.3 Allocation of Purchase Price
2.3.1 ALLOCATION OF THE PURCHASE PRICE
Each of Unifrax and SEPR shall allocate the unadjusted
Purchase Price as set forth in EXHIBIT 2.3.1.
2.3.2 ALLOCATION OF THE FINAL BURDEN OR BENEFIT
Each of Unifrax and SEPR shall allocate the final burden or
benefit, as the case may be, of the adjustments provided under subsections
2.2.3(a) through (f) to each of the Buyers or Sellers respectively, to the
extent that the Working Capital, profit, cash, Material Adverse Change, Debt or
Accrued Liability giving rise to the adjustment relates to any specific Asset
Seller or Purchased Company (including its subsidiaries), provided however that
the aggregate amount of all the adjustments thus allocated shall under no
circumstances be more or less than the amount of the Price Adjustment resulting
from Article 2.2.3.
2.4 Closing Statements
2.4.1 As soon as possible after the Closing, Unifrax shall
prepare and deliver, to SEPR, statements (together, the "CLOSING STATEMENTS")
setting forth the following:
(i) the combined amount (determined in accordance with EXHIBIT
2.4.1(i)) by which (x) the gross accounts receivable, gross inventories and
prepaid expenses as of the Closing Date of the Ceramic Fiber Business of the
Purchased Companies (other than Orient)
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and those transferred to the Asset Buyers as part of the Purchased Assets exceed
(y) the Trade Accounts Payable as of the Closing Date of the Ceramic Fiber
Business of the Purchased Companies (other than Orient) and those assumed by the
Asset Buyers in connection with the transfer of the Purchased Assets on a
combined basis (after cancellation of intra business payables and receivables
within the Ceramic Fiber Business) but excluding any amount included as Debt
(the "WORKING CAPITAL");
(ii) the combined amount of the following ("ACCRUED LIABILITIES"):
(x) all liabilities of the Purchased Companies (other than Orient) accrued on or
prior to the Closing Date and (y) any Excluded Liabilities of the Ceramic Fiber
Business of the Asset Sellers which the Asset Buyers are required to assume as a
matter of law or contract or which are expressly assumed or paid by the Asset
Buyers and which accrued on or prior to the Closing Date including in the case
of Carborundum Australia the LSL Entitlements, but excluding (1) any other
Excluded Liabilities, (2) the Trade Accounts Payable referred to in (i) above
(3) the liabilities included as Debt and (4) all liabilities of Orient. Subject
to subsections (1) through (4) above Accrued Liabilities shall include without
limitation, any tax or deferred tax liabilities (provided that, for VAT and
similar taxes, only the net amount by which the aggregate VAT payable of an
Asset Seller exceeds the aggregate VAT receivable of such Asset Seller shall
constitute an Excluded Liability), outstanding product warranty or product
liability claims, accrued vacation pay, accrued compensation and bonuses of
employees and officers, medical or other benefits to employees or retirees, but
shall not include any unmatured but estimated risks relating to customer
warranty claims and litigation as to which reserves have been recorded in the
accounts of the Asset Sellers or Purchased Companies, which shall be subject to
the provisions of section 4.1.2 (v) and (vi) of the Warranty Agreement; and
(iii) the amount of the Combined Profits, the amount of corporate
or income tax due by the Purchased Companies (other than Orient) on their
profits for the same period, as well as the aggregate amount of unencumbered
cash of the Purchased Companies (other than Orient) at the Closing Date.
(iv) the amount effectively spent and paid by the Companies in
connection with CAPEX mentioned in EXHIBIT 2.2.3(g).
For the purpose of (i), (ii) and (iv) above, the elements of the
Working Capital, Accrued Liabilities and CAPEX, taken into account in connection
with the Companies shall only be those relating to the Ceramic Fiber Business of
the Purchased Companies (other than Orient) and the Asset Sellers and those
liabilities to third parties for general overheads which the Ceramic Fiber
Business shares with other units of the Purchased Companies or the Asset
Sellers, which liabilities shall be allocated to the Ceramic Fiber Business in
accordance with past practice of Sellers and their Affiliates as of December 31,
1999, as detailed in EXHIBIT 2.2.1(c). It is further agreed that the Purchased
Companies shall be entitled to reverse reserves for unmatured but estimated
risks (I.E. customer warranty claims and litigation as scheduled in EXHIBIT
2.4.1(iii)) to be indemnified by SEPR pursuant to the Warranty Agreement, even
though such reversion would not have occurred in the ordinary course of business
of the Purchased Companies, and the corresponding profit shall be recorded in
the Closing Statements.
The Closing Statements shall be prepared in US dollars
according to US GAAP using such rules for allocation between the Ceramic Fiber
Business and other businesses as were used by Sellers and their Affiliates as of
December 31, 1999, as annexed
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in EXHIBIT 2.2.1(c) subject to SECTION 8.11. Any amount expressed in a currency
other than US Dollars shall be converted into US Dollars using the exchange rate
published two days prior to the Closing Date in The Financial Times. Unifrax
shall make its best efforts to deliver the Closing Statements to SEPR within 60
days from the Closing Date.
2.4.2(a) SEPR shall assist Unifrax, including without
limitation, by making available, and causing its Affiliates to make available,
to Unifrax all such information as Unifrax may reasonably request in order to
prepare the Closing Statements, including by granting to Unifrax and its
advisors access to books and records and facilities during normal business
hours.
2.4.2(b) After delivering the Closing Statements to SEPR,
Unifrax shall make available and cause its Affiliates to make available to SEPR
all such information as SEPR may reasonably request in order to assess the
Closing Statements, including by granting to SEPR and its advisors access to the
books, records and facilities during normal business hours. Within 30 days
following receipt by SEPR of the Closing Statements, SEPR shall notify Unifrax
of any dispute it has with respect to the preparation or content of the Closing
Statements. In the event of such notification of dispute, Unifrax and SEPR shall
negotiate in good faith to resolve such dispute. If Unifrax and SEPR are unable
to resolve such dispute within 30 calendar days after the commencement of such
dispute, it shall be finally determined by the Auditor, if said Auditor has been
appointed pursuant to SECTION 2.2.3(a) or failing which, by an expert chosen
from one of the international accounting firms of first rank (other than Ernst &
Young and PricewaterhouseCoopers). Failing agreement of the parties on such
expert within 15 days, such expert shall be appointed by the President of the
Commercial Court of Paris acting through summary proceedings upon the request of
the most diligent party. Such expert shall notify its decision to the parties
within 30 days from its appointment, which decision shall be binding on the
parties. The expert (or the Auditor, as the case may be) shall only be required
to decide those issues that are relevant to the determination of the Working
Capital or the Accrued Liabilities, the Combined Profits, the CAPEX mentioned in
Exhibit 2.2.3(g) and the cash balance adjustment to which the parties do not
agree, in accordance with this Agreement and US GAAP using such rules for
allocation between Ceramic Fiber Business and other businesses as were used by
Sellers and their Affiliates as of December 31, 1999, as detailed in EXHIBIT
2.2.1(c). In the event the parties do not agree on the impact of a Material
Adverse Change, as provided in Section 2.2.3(b), the expert (or the Auditor, as
the case may be) shall also be required to determine such impact. The fees and
expenses of such expert shall be shared equally between Unifrax and SEPR.
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ARTICLE 3.
CONDITIONS TO CLOSING
3.1 Conditions to Buyers' Obligation
The obligation of Buyers to consummate the transactions contemplated by
this Agreement is subject to the satisfaction of the following conditions at or
before the Closing (any one of which may be waived in whole or in part by Buyers
in writing):
3.1.1 LEGAL ACTION
No judgment, injunction, order or decree shall be in effect
that prohibits the transactions contemplated by the Transaction Documents or
(other than draft orders or decrees of which the ECFIA members have been made
aware as of the date of this Agreement) materially and adversely affects the
right of Buyers to own the Purchased Shares or the Purchased Assets (as the case
may be) or to operate the Ceramic Fiber Business of the Companies as presently
operated. Further, no action, suit, proceeding, hearing or investigation shall
be pending or threatened, which (i) seeks to prevent consummation of any of the
transactions contemplated by the Transaction Documents, (ii) seeks to cause any
of the transactions contemplated by the Transaction Documents to be rescinded
following consummation, or (iii) could affect the right of Buyers to own the
Purchased Shares or the Purchased Assets (as the case may be) or to operate the
Ceramic Fiber Business of the Companies as presently operated.
3.1.2 AGREEMENTS PERFORMED; REPRESENTATIONS ACCURATE
The Sellers shall have performed in all material respects all
of the obligations under this Agreement to be performed by them at or before the
Closing (including those obligations to be performed under the Reorganization
Plan prior to the Closing), and except as otherwise provided in the Warranty
Agreement the representations and warranties of the Sellers contained in the
Warranty Agreement shall be true and correct on the date hereof and shall be
true and correct in all material respects, subject to the additional disclosures
made in accordance with the terms of SECTION 8.5 hereof, on the Closing Date.
3.1.3 RESIGNATIONS AND RELEASES
Buyers shall have received the written resignation of each
director, officer and statutory auditor of each of the Carborundum France,
Batistaff, NewCo Fibers England, NewCo Fibers Brazil, Carborundum Belgium,
Carborundum Italia, and Carborundum Venezuela and each director and officer of
Orient appointed by Carborundum Ltd and/or NewCo Fibers England and each
director and officer of such Companies shall have executed and delivered a
release in the form attached hereto as EXHIBIT 3.1.3.
3.1.4 FILINGS
All filings and publications required to be made by Sellers or
the Purchased Companies in any jurisdiction in connection with the transactions
contemplated by this Agreement, the agreements referred to in Article 5 or the
Related Agreements shall have been made in accordance with applicable laws. All
applicable waiting periods (and any extensions
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thereof) under applicable laws pursuant to filings to be made by Sellers, Buyers
or the Purchased Companies shall have expired or otherwise been terminated
without any objection of the relevant authorities.
3.1.5 CONSENTS
Buyers shall have obtained all consents from Governmental
Authorities set forth in EXHIBIT 3.1.5(a) ("Regulatory Consents"). The Companies
shall have obtained all permits, authorizations or Consents from co-contracting
parties set forth in EXHIBIT 3.1.5(b) without the payment of any consideration
or the modification of any terms or conditions of any applicable Contract
(unless such payment or modification shall have been previously consented to in
writing by Buyers).
3.1.6 SELLERS RELEASES
Each Seller shall have executed and delivered a release in the
form attached hereto as EXHIBIT 3.1.6.
3.1.7 NO WITHDRAWAL EVENT
There shall not have been a Withdrawal Event, unless cured by
Sellers within fifteen (15) days from notification thereof by Buyer. For the
purposes of this Agreement and the Warranty Agreement, a "Withdrawal Event"
shall mean any Material Adverse Change having an impact on the Ceramic Fiber
Business of the Companies as reasonably estimated jointly by Unifrax and SEPR in
an amount exceeding five million US$ (US$ 5,000,000).
3.1.8 LIENS RELEASED
All Liens other than Permitted Liens on the property and
assets of each of the Ceramic Fiber Business of the Companies shall have been
released.
3.1.9 AFFILIATES LIABILITIES AND DEBT REPAYMENT
The Buyers shall have received evidence reasonably
satisfactory to them confirming that no amounts are due from the Purchased
Companies or the Asset Sellers (i) to any Seller or Affiliate of any Seller, and
(ii) pursuant to any Prohibited Debt (except for Prohibited Debt in an aggregate
amount for all Purchased Companies which does not exceed US$350,000).
3.1.10 TERMINATION OF SPECIFIC AGREEMENTS
The agreements listed in EXHIBIT 3.1.10 shall be terminated
not later than Closing.
3.1.11 SIMULTANEOUS CLOSING OF ALL TRANSACTIONS
Except as provided under SECTION 2.1(a), at Closing, Buyers
shall receive title to all, but not less than all, of the Purchased Shares and
the Purchased Assets subject to the terms and conditions of this Agreement and
of the exhibits and schedules hereto.
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3.1.12 EXCHANGE RATE
The average Exchange Rate of the US Dollar against the French
Franc as published in The Financial Times during the last ten days prior to the
Closing Date shall not be in excess of eight (8) French Francs for one (1) US
Dollar.
3.1.13 SUBORDINATION AGREEMENTS
SEPR will have executed the Subordination Agreements.
3.1.14 FINANCIAL STATEMENTS
PriceWaterhouseCoopers shall have issued a final
reconciliation of the Financial Statements referred to at Article 6.6 from
Companies Accounting Principles to US GAAP as per Article 6.6 in a form
reasonably acceptable to Buyers.
3.1.15 SAP LICENSE
SAP shall have executed a worldwide SAP License in a form
reasonably acceptable to Buyers.
3.1.16 OTHER
Buyers shall have received each other document required to be
delivered to Buyers hereunder.
3.2 Conditions to the Obligation of the Sellers
The obligation of Sellers to consummate the transactions contemplated
by this Agreement is subject to the satisfaction of the following conditions at
or before the Closing (any one of which may be waived in whole or in part by
Sellers in writing):
3.2.1 LEGAL ACTION
No judgment, injunction, order or decree shall be in effect
which prohibits the transactions contemplated by the Transaction Documents
(other than draft orders or decrees of which the ECFIA members have been made
aware as of the date of this Agreement). Further, no action, suit, proceeding,
hearing or investigation shall be pending or threatened which (i) seeks to
prevent consummation of any of the transactions contemplated by the Transaction
Documents, (ii) seeks to cause any of the transactions contemplated by the
Transaction Documents to be rescinded following consummation, or (iii) could
affect the right of Buyers to own directly and indirectly the Purchased Shares
or the Purchased Assets (as the case may be) or to operate the Ceramic Fiber
Business of each of the Companies as presently operated.
3.2.2 AGREEMENTS PERFORMED, REPRESENTATIONS ACCURATE
Buyers shall have performed in all material respects all of
the obligations under this Agreement to be performed by them at or before the
Closing. The representations and warranties of Buyers contained herein and in
the Warranty Agreement shall be true and correct in all material respects on the
date hereof and on the Closing Date.
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3.2.3 ISSUANCE OF THE UNIFRAX HOLDING NOTE AND THE
CORPORATION NOTE
Unifrax and Unifrax Holding shall have issued the Notes and
executed the Pledge Agreement. Unifrax shall have executed the Subordination
Agreements. The Unifrax Senior Lenders shall have executed the Subordination
Agreements. All approvals and consents required in connection with the Unifrax
Holding Note, the Pledge Agreement, the Subordination Agreements and the
Corporation Note shall have been obtained.
3.2.4 EXCHANGE RATE
The average Exchange Rate of the US Dollar against the French
Franc as published in The Financial Times during the last ten days prior to the
Closing Date shall not be less than 5.6 French Francs for 1 US Dollar.
3.2.5 LEGAL OPINION
Buyers shall have delivered to Sellers a legal opinion from
Jones Day Reavis & Pogue relating to the Notes and the other documents referred
to in Section 2.2.2 substantially in the form of EXHIBIT 3.2.5.
3.2.6 OTHER
Sellers shall have received each other document required to be
delivered to them hereunder.
3.3 Reimbursement from Buyers in the event of a failure to consummate the
transactions as a result of a failure to obtain financing
In the event all conditions set forth at Article 3.1 having
been satisfied or waived by the Buyers, Buyers, despite their best efforts to
secure bank financing for this transaction on the terms set forth in the
commitment letter annexed as SCHEDULE 3.6 to the Warranty Agreement, do not
secure such financing, Buyers shall be authorized not to complete this
transaction, but Unifrax shall then, as a sole compensation to Sellers,
reimburse SEPR for the costs incurred by SEPR and its Affiliates in carrying out
the split of the Ceramic Fiber Business and the refractories business operated
by the Companies in the United Kingdom, Brazil, Germany and Australia for an
amount equal to 50% of the costs incurred by SEPR and its Affiliates in this
respect; provided that in no event shall the amount of such reimbursement exceed
US$ 500,000; provided further that in the event Sellers sell all or a
substantial part of the Ceramic Fiber Business to any purchaser (including
Buyers or their Affiliates), other than Affiliates of Sellers within two years
from the date on which Unifrax makes such payment to SEPR, SEPR shall promptly
reimburse the amount of such payment to Unifrax.
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ARTICLE 4.
CLOSING
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4.1 Closing Date
Subject to the satisfaction or the waiver of the conditions set forth
herein, the consummation of the transactions contemplated hereby (the "CLOSING")
shall take place on October 3, 2000 at the offices of Jones, Day, Reavis &
Pogue, 32nd Floor, 599 Lexington Avenue, New York, or at such other place or on
such other date as the parties may mutually agree in writing. The date on which
the Closing occurs is referred herein as the "CLOSING DATE"; provided (but only
if the Closing occurs on October 3, 4, 5 or 6, 2000) that the term "Closing
Date" as used in Sections 2.2.3(b), (c) and (e) and 2.4 shall be deemed to be
September 30, 2000.
ARTICLE 5.
REORGANIZATION PLAN
5.1 Actions to be taken
(a) On or prior to the Closing Date, SEPR shall implement and
shall cause the Companies referred to below to have implemented all actions set
forth in EXHIBIT 5.1(a) (the contents of EXHIBIT 5.1(a) are referred to as the
"REORGANIZATION PLAN"), the purpose of which is inter alia to achieve the
following:
(i) SEPR shall have acquired the 6 shares of Carborundum France
not held by it on the date hereof;
(ii) Carborundum France shall have transferred to an Affiliate of
Sellers, other than the Purchased Companies, its interest in
(x) Motker, a company incorporated under the laws of Hungary
and (y) Carborundum Belgium, a company registered under the
laws of Belgium and registered under number 281 739, and shall
not retain any liability associated with such companies;
(iii) Carborundum France shall have acquired from Carborundum
Deutschland, and Carborundum Deutschland shall have sold to
Carborundum France, a quota representing 5% of the share
capital of Carborundum Italia; Carborundum France shall own
100% of the shares of Batistaff and Carborundum Belgium.
(iv) Carborundum Ltd shall have contributed to NewCo Fibers England
(x) its quota in Carborundum Italia and all its shares in
Orient and (y) all of its assets (but for the avoidance of
doubt, none of its liabilities other than Trade Accounts
Payable) relating to its Ceramic Fiber Business, with the
exception of the license agreement dated December 12 1997 (as
amended) with Morgan Crucible PLC. Carborundum Ltd shall have
transferred to NewCo Fibers England all of the relevant
Transferred Employees.
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(v) Carborundum Italia shall have transferred all of its assets
other than those relating to the Ceramic Fiber Business, and
shall have transferred or discharged all of its liabilities
other than Trade Accounts Payable (including all Debt),
whether or not relating to the Ceramic Fiber Business, to
Affiliates other than the Purchased Companies;
(vi) Carborundum do Brasil shall have (x) contributed to NewCo
Fibers Brazil all of its assets (but for the avoidance of
doubt, none of its liabilities other than Trade Accounts
Payable) relating to the Ceramic Fiber Business (except for
the shares of Carborundum Venezuela), except for a triangular
plot of vacant land located at the northern end of the Vinhedo
facility as indicated on the map included in EXHIBIT 5.1(a)
and (y) transferred to NewCo Fibers Brazil all of the relevant
Transferred Employees;
(b) Without prejudice to Section 3.3 above, all costs,
capital expenditures and expenses (including, but not limited to, taxes)
resulting from the Reorganization Plan, with the exception of those set forth in
EXHIBIT 5.1(b) which shall be borne by Buyers , shall be borne by the Sellers.
To the extent such costs or expenses are incurred by an Asset Seller, they shall
constitute Excluded Liabilities for the purposes of this Agreement. To the
extent they are incurred by the Purchased Companies and are unpaid on Closing
Date, they shall constitute Accrued Liabilities for the purposes of this
Agreement.
5.2 Documents and Filings
All of the Companies and each of the Buyers shall (i) enter into the
agreements, (ii) execute the documents, (iii) make the filings or perform all of
the formalities set forth opposite their respective names in EXHIBIT 5.1 either
prior to the Closing or after the Closing as agreed by the parties acting in
good faith, as specified in said EXHIBIT 5.1.
ARTICLE 6
COVENANTS BY THE SELLERS
6.1 Conduct of Business
From the date of this Agreement until the Closing, and, except as
contemplated (in particular under the Reorganization Plan) or authorized by this
Agreement, the Warranty Agreement or the Exhibits or Schedules thereto, or
except with Unifrax's prior written consent, the Sellers shall cause each of the
Purchased Companies and each of the other Companies to the extent related to
their respective Ceramic Fiber Business (i) to preserve intact its business
organization and tax status and keep available the services of its present
officers and employees (except for retirements, dismissals, resignations and
other terminations in the ordinary course of business), (ii) to preserve the
present relationships of each of the Companies with suppliers and other Persons
having significant business relations therewith, (iii) use its best efforts to
preserve relationships with customers, (iv) to conduct their businesses only in
the ordinary course consistent with past practice and (v) not to:
(a) enter into any transaction or permit any event (other than
accidental losses of, or damage to, assets or properties that are not within the
control of Sellers) to occur which would be inconsistent with SECTION 2.3.3 of
the Warranty Agreement;
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(b) transfer any employee to or from the Ceramic Fiber
Business;
(c) take or omit to take any action within the control of
each of the Companies (other than the completion of the transactions
contemplated hereby), which results in the cancellation or non-renewal of the
insurance policies listed on SCHEDULE 2.5.4 to the Warranty Agreement;
(d) attempt to obtain payment of any notes or accounts
receivable owed to any of the Companies prior to the due date thereof other than
in the ordinary course of business consistent with past practice;
(e) fail to pay when due any accounts payable or other
liabilities of any of the Companies except in the ordinary course of business
consistent with past practice;
(f) loan or advance (other than expenses to employees in the
ordinary course of business) any funds to, or Guarantee any Debt of, any Person;
(g) fail to replenish inventory and supplies in the ordinary
course of business consistent with past practice;
(h) pay any management or other fee or royalty to Sellers or
their Affiliates which is not consistent with past practice as regards its
nature, basis and amount;
(i) take any action, or omit to take any action, other than
in the ordinary course of business consistent with past practice, that would
cause any customer of the Ceramic Fiber Business of the Companies to cease being
a customer;
(j) agree, whether in writing or otherwise, to do any of the
foregoing.
6.2 Access
From the date of this Agreement until the Closing, Sellers shall
permit, and shall cause each of the Companies to permit, the representatives,
advisors and lenders of Buyers and Unifrax to have access at all reasonable
times, for reasonable cause related to the transactions contemplated in this
Agreement and, in a manner which minimizes disruption of each of the Companies'
business, to the normal business operations of each of the Companies, to all
premises (whether leased or otherwise occupied), properties, employees, books,
records (including tax records), accountants' working papers (whether internal
or outside accountants), Contracts and documents of or pertaining to each of the
Companies, and to the Purchased Assets and to any other facts, matters or
supporting documentation that Buyers may reasonably request; provided that
Buyers shall request the Sellers' consent to such access at least 48 hours in
advance (such consent not to be unreasonably withheld).
6.3 No Shop
From the date of this Agreement until the Closing, Sellers shall not,
and shall cause Compagnie de Saint-Gobain SA, its Affiliates and their
respective officers, employees, partners, agents or representatives not to
solicit, entertain, or consider proposals or indications of interest from or
have any conversations with or provide any information to any
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Person relating to any acquisition or purchase of the Purchased Shares or the
Purchased Assets or any portion of the assets included in the Ceramic Fiber
Business of any of the Companies or similar transaction or business combination
involving the Companies.
6.4 Right of First Refusal
In the event Carborundum Venture Inc. ("CVI"), a Delaware company with
its principal place of business at 1209 Orange Street, Wilmington, De, 19801,
USA desires to sell all or part of its interest in Toshiba Monofrax Co. Ltd., a
Japanese company with its principal place of business at Itoju Bldg, 4-4
Nihonbashi Hisamatsu-Cho, Chuo-Ku, Tokyo, 103 Japan (or any entity which would
be the successor or assignor of Toshiba Monofrax) to Morgan Crucible Company PLC
or any of its Affiliates, Sellers shall cause CVI to grant to Unifrax (or an
Affiliate thereof) a right of first refusal on such interest in accordance with
an agreement entered into by CVI and Unifrax on the date hereof in the form of
EXHIBIT 6.4 (the "TOSHIBA MONOFRAX RIGHT OF FIRST REFUSAL").
6.5 Excluded Liabilities
Each Asset Seller shall, on or prior to the Closing Date, discharge in
full when due all of its Excluded Liabilities that are due and payable on or
prior to the Closing Date. After the Closing Date, each Asset Seller shall
discharge in full all of its Excluded Liabilities on the date and in the amount
such Excluded Liabilities become due and payable.
6.6 Financial Statements
(a) Attached as EXHIBIT 6.6(a)(i) are the audited, combined
financial statements of the Ceramic Fiber Business of the
Companies, Carborundum do Brasil and Carborundum Ltd. of
December 31, 1998 and December 31, 1999, and for the twelve
month periods then ended, expressed in US dollars, including,
but not limited to, the combined balance sheets, combined
statements of income, combined statements of stockholders'
equity (or parent company investment, as applicable), combined
statements of cash flows, and the notes thereto, all prepared
in accordance with the Companies' Accounting Principles,
consistently applied and including a reconciliation from said
accounting principles to accounting principles generally
accepted in the United States ("US GAAP") (it being understood
that such reconciliation is in draft form as regards only the
accounting of the Saint Gobain employee stock purchase plan,
and is subject to completion as regards that issue prior to
the Closing Date), using the rules for allocation between the
Ceramic Fiber Business and other businesses as were used by
the Sellers and their Affiliates as of December 31, 1998 or
December 31, 1999, as the case may be (such rules being
annexed hereto as EXHIBIT 2.2.1(c) AND EXHIBIT 6.6(a)(ii)) and
meeting the requirements of the rules and regulations of the
U.S. Securities and Exchange Commission ("SEC") for financial
statements, audited by PricewaterhouseCoopers in accordance
with auditing standards generally accepted in the United
States.
(b) As soon as possible following the date of this Agreement, but
in any case not later than 15 days prior to the Closing Date,
Sellers shall deliver to Unifrax the combined financial
statements of the Ceramic Fiber Business of the Companies,
Carborundum Ltd. and Carborundum do Brasil as at and for the
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period ended on the last day of the earliest calendar quarter
in 2000 that was closed not earlier than 120 days prior to the
Closing Date, together with combined financial statements as
at and for the period ended on the same day in 1999, expressed
in US dollars, including, but not limited to, the combined
balance sheets and related combined statements of income,
combined statements of stockholders' equity (or parent company
investment, as applicable), combined statements of cash flows,
all for the year-to-date periods then ended, including any
notes thereto (as required by US GAAP for interim financial
statements), all prepared in accordance with the Companies'
Accounting Principles, consistently applied and including a
reconciliation from said principles to US GAAP, using the
rules for allocation between the Ceramic Fiber Business and
other businesses as were used by the Sellers and their
Affiliates annexed hereto as EXHIBIT 2.2.1(c) and meeting the
requirements of the rules and regulations of the SEC for
interim financial statements.
(c) Unifrax shall reimburse to SEPR not later than December 31,
2000 fifty percent (50%) of the amounts paid to
PricewaterhouseCoopers for professional services rendered in
connection with auditing, in accordance with auditing
standards generally accepted in the United States, the
combined financial statements of the Ceramic Fiber Business of
the Companies referred to in Section 6.6(a) hereto and in
connection with assisting Sellers with the preparation of any
combined financial statements provided in connection with
Section 6.6 (b) hereto, subject to the presentation of
reasonable evidence that such amounts were actually paid;
PROVIDED HOWEVER that under no circumstances shall Unifrax
reimburse to SEPR more than two hundred and fifty thousand US$
(US$ 250,000) in connection with such services of
PricewaterhouseCoopers. Unless otherwise agreed by Buyers and
Sellers prior to Closing, any additional costs incurred in
connection with the preparation of the financial statements
contemplated herein shall be borne by the Sellers.
(d) As soon as possible following the date of this Agreement, but
in any case not later than 15 days prior to the Closing Date,
Sellers shall deliver to Unifrax (i) the unaudited statements
of income for the three months periods ending March 31, 2000
and June 30, 2000 for the Ceramic Fiber Business of
Carborundum Ltd., Carborundum France, Carborundum do Brasil,
Carborundum Deutschland GmbH and Carborundum Australia Pty
Ltd. These statements present fairly, in all material
respects, the results of operations of the Ceramic Fiber
Businesses of such companies for the periods indicated, and
have been prepared by the management of such companies in
accordance with the accounting principles of SEPR,
consistently applied; and (ii) the statement of income of
Orient for the three month periods ending March 31, 2000 and
June 30, 2000, as provided by the management of Orient.
(e) Within twenty (20) days after the end of each calendar month
prior to the Closing, each of the Companies will deliver to
Buyers copies of the internally prepared balance sheet and
income statements of the Companies as of the end of such
month, consistent with past practice, compared to business
plan and
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prior year, together with an English translation thereof to
the extent available to the Sellers.
6.7 Cash
6.7.1 Notwithstanding any provision to the contrary, Sellers
shall cause the Purchased Companies (other than Orient) to retain unencumbered
cash at the Closing Date in an amount (the "CASH REQUIREMENT") which shall not
be less than US$ 300,000 plus one-half of the dividend (such dividend expected
to be in the amount of approximately 17,498,000 Rupees) received by Carborundum
Ltd. or NewCo Fibers England between the date hereof and the Closing Date
relating to their shares in Orient (the "ORIENT DIVIDEND"). The parties agree
that the Orient Dividend shall be converted to US Dollars using the exchange
rate in the Financial Times as of the date of receipt of the Orient Dividend by
Carborundum Ltd. or NewCo Fibers England. Orient will at Closing Date have
unencumbered cash in an amount sufficient to cover all of its Debt (including
the sales tax deferment obligation) at Closing Date.
6.7.2 Sellers shall, within three business days of receipt,
remit by check or wire transfer or equivalent means to Buyers all the cash
pertaining to the Ceramic Fiber Business and received by the Sellers as of the
Closing Date and at any time thereafter, except cash which represents
compensation (in the form of insurance proceeds or payments under a manufacturer
warranty) for actual disbursements made by the Sellers or Companies prior to the
Closing Date.
6.7.3 In the event that Carborundum Ltd. receives the Orient
Dividend after the Closing, it shall pay the Orient Dividend to NewCo Fibers
England within three business days after receipt.
6.8 Non-competition Covenants
On the Closing Date, Sellers shall, and shall cause Spafi and Vertec
to, execute a non-competition agreement substantially in the form of EXHIBIT
6.8(a) hereto.
6.9 Related Agreements
The Sellers shall, and shall cause their relevant Affiliates to, enter
into the following agreements (the "RELATED AGREEMENTS") with the Buyers and the
Purchased Companies:
(a) On or prior to Closing:
- the non-competition agreement in the form of EXHIBIT 6.8(a)
hereto;
- a one year, royalty-free license to use the "CARBORUNDUM"
tradename, logo and trademark, in the form of EXHIBIT 6.9(a)
hereto;
- the General Services Agreement in the form of EXHIBIT 6.9(b)
hereto;
- a lease agreement relating to the use by Carborundum
Deutschland of certain parts of the real property of Unifrax
GmbH as provided in the form attached as EXHIBIT 6.9(e)(i)
hereto and an agreement relating to the transfer of rights
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under the Erbbaurechte held by Carborundum Deutschland in the
form attached as EXHIBIT 6.9(E)(ii) hereto;
- a lease agreement relating to the use by Carborundum Australia
of certain parts of the real property of Unifrax Australia as
provided in the form attached as EXHIBIT 6.9(F) hereto;
- a technical services agreement in the form of EXHIBIT 6.9(G)
hereto.
(b) On the date hereof:
- An Information System Services Agreement between Unifrax
Corporation and Saint Gobain Ceramiques Informatique et
Organisation;
- An Information System Services Agreement for Brazil between
Fibrasil Fibras Ceramicas Ltda and Carborundum do Brasil.
6.10 Public statements regarding Ceramic Fibers
From and after the date hereof, Sellers shall abstain from, and shall
cause Compagnie de Saint-Gobain, its Affiliates, and their respective directors,
officers, employees and representatives to abstain from, any public comment,
statement writing, speech or intervention at scientific, industrial or
environmental forums or conferences, relating to use of, or exposure to ceramic
fibers or expressing views on the risks associated with the manufacture or use
of ceramic fibers and shall defer any such inquiry to Unifrax , except as may be
mandated by applicable laws, in which case, Sellers and their Affiliates shall
consult with Unifrax in advance with respect to the contents of any such
statements, comment, writing, speech or intervention.
6.11 Debt at Closing
Seller shall cause the Purchased Companies not to be indebted to any
third parties on the Closing Date pursuant to any Prohibited Debt in an
aggregate amount greater than US$ 350,000 (or its equivalent in local
currencies).
6.12 Miscellaneous Due Diligence Items
Sellers shall cause the Companies to take appropriate steps at the
expense of Sellers prior to the Closing Date (or if otherwise decided on or
before the Closing Date by the parties acting in good faith, after the Closing
Date) to remedy the items identified in EXHIBIT 6.12 in accordance with the
provisions of such Exhibit.
ARTICLE 7.
COVENANTS BY THE BUYERS
7.1 Consents
The Buyers shall, promptly after the signature of this Agreement, take
all necessary actions to obtain the Consents to be obtained by Buyers (including
consents from the Unifrax
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Senior Lenders), including preparing and filing with, or causing to be prepared
and filed with the relevant antitrust authorities and investment control in each
jurisdiction in which the Companies are incorporated, any filing, notice or
application for consent as may be required in connection with the transactions
contemplated hereby pursuant to applicable Laws. The Sellers shall and shall
cause the Companies and their Affiliates to fully cooperate with the Buyers for
the purpose of the foregoing.
7.2 Indian Tender Offer
At the appropriate date as determined pursuant to applicable Laws,
Buyers shall cause NewCo Fibers England to initiate a tender offer on the shares
of Orient held by shareholders other than NewCo Fibers England and the Indian
Founders, in accordance with applicable laws and regulations.
ARTICLE 8.
OTHER COVENANTS
8.1 Publicity
All public announcements prior to the Closing relating to this
Agreement or the transactions contemplated hereby will be made only as may be
agreed upon by the parties or as required by Law.
8.2 Expenses
Except as otherwise specifically provided in this Agreement, whether or
not the transactions contemplated hereby are consummated, the parties hereto
shall each pay their own respective expenses, PROVIDED that (i) none of such
expenses shall be borne by the Purchased Companies after the Closing Date, (ii)
any such expenses borne by the Asset Sellers shall constitute Excluded
Liabilities, (iii) all applicable stamp, transfer, recording, deed and other
similar taxes and notary fees to be paid in connection with the purchase of the
Purchased Shares and the Purchased Assets by Buyers shall be shared in equal
parts by the relevant Buyers and Sellers (provided that Sellers shall bear all
capital gains and income related Taxes due by reason of the transactions
contemplated hereby), (iv) Unifrax shall reimburse to SEPR not later than
December 31, 2000 the amount referred to in SECTION 6.6(C), and (v) Unifrax
shall reimburse SEPR pursuant to Article 3.3 if applicable.
8.3 Tax Matters
8.3.1 LIABILITY FOR TAXES AND RELATED MATTERS
(i) Sellers shall be jointly and severally liable for the taxes imposed
on the Asset Sellers or on the Buyers with respect to the operation of the
Purchased Assets, the Purchased Companies, for any taxable year or period that
ends on or before the Closing Date, and with respect to any taxable year or
period beginning before and ending after the Closing Date, the portion of such
taxable year or period ending on and including the Closing Date ("INTERIM
PERIOD") (Interim Periods and any taxable year or period ending on or before the
Closing Date shall be referred to collectively hereafter as "PRE-CLOSING
PERIODS"). The Sellers shall be entitled to any refund of Taxes of the Companies
received in respect of such Pre-Closing
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Periods. Sellers shall be liable for all Taxes imposed on the Buyers or on the
Purchased Companies with respect to the operations of Carborundum Ltd or
Carborundum do Brasil at any time.
(ii) Buyers shall be liable for the Taxes imposed on the Asset Sellers
or on the Buyers with respect to the operation of the Purchased Assets for any
taxable year or period that begins after the Closing Date and, with respect to
any taxable year or period beginning before and ending after the Closing Date,
for the portion of such taxable year beginning after the Closing Date (each a
"POST-CLOSING PERIOD"). Buyers shall be entitled to any refund of Taxes received
for such Post-Closing Periods.
(iii) With regards to the Purchased Companies, and in keeping with
Sections 2.2.3(b), 2.2.3(c), 2.2.3(e) and 2.2.3(f), in order to apportion
appropriately any Taxes that are payable with respect to an Interim Period, the
portion of any such Tax that is allocable to the portion of the Interim Period
ending on the Closing Date shall be:
(x) in the case of Taxes that are either (1) based
upon or related to income or receipts, or (2) imposed in
connection with any sale, acquisition or other transfer or
assignment of property (real or personal, tangible or
intangible) (other than conveyances pursuant to this
Agreement, which are covered under SECTION 8.3.2), deemed
equal to the amount which would be payable if the taxable year
or period ended on the Closing Date (except that, solely for
purposes of determining the marginal tax rate applicable to
income or receipts during such period in a jurisdiction in
which such tax rate depends upon the level of income or
receipts, annualized income or receipts may be taken into
account, if appropriate, for an equitable sharing of such
Taxes);
(y) in the case of Taxes not described in
subparagraph (x) above that are imposed on a periodic basis,
deemed to be the amount of such Taxes for the entire relevant
period (or, in the case of such Taxes determined on an arrears
basis, the amount of such Taxes for the immediately preceding
period) multiplied by a fraction the numerator of which is the
number of calendar days in the Interim Period ending on the
Closing Date and the denominator of which is the number of
calendar days in the entire relevant period; and
(z) for purposes of determining such Taxes,
exemptions, reliefs, allowances or deductions that are
calculated on an annual basis, such as the deduction for
depreciation, shall be apportioned on a time basis.
(iv) Any payment by Buyers or the Sellers under this SECTION 8.3 will
be treated for all purposes as an indemnification of Sellers or Buyers, as
appropriate.
(v) If the Sellers become entitled to a refund or credit of Taxes of
the Purchased Companies for any period for which they are liable to indemnify
Buyers and such Taxes are attributable solely to the carryback of losses,
credits or similar items attributable to the Purchased Companies and from a
taxable year or period that begins after the Closing Date, the Sellers shall
promptly pay to Buyers the amount of such refund or credit together with any
interest received or otherwise credited thereon. In the event that any refund or
credit of Taxes for which a payment has been made is subsequently reduced or
disallowed, Buyers shall indemnify and hold harmless the Sellers for any tax
liability, including interest and penalties, assessed against the Sellers by
reason of such reduction or disallowance.
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(vi) Buyers shall notify the Sellers in writing within 7 days from
receipt by Buyers, any of their Affiliates or the Purchased Companies of notice
of any pending or threatened tax audits or assessments or notification of any
claim for taxation or notice of inquiry which may materially affect the tax
liabilities of the Purchased Companies, Carborundum Ltd and Carborundum do
Brasil for which the Sellers would be required to indemnify Buyers or the
Companies; provided, however, that a failure to give such notice will not affect
Buyers' or the Companies' rights to indemnification hereunder, except to the
extent, if any, that, but for such failure, the Sellers would have avoided the
Tax liability in question.
The Sellers shall have the right to control the conduct of any audit or
claim or administrative or judicial proceeding relating to any Pre-Closing
Period (other than an Interim Period, the treatment of which is discussed in the
immediately succeeding paragraph), and to employ counsel of their choice at
their expense. Notwithstanding the foregoing, the Sellers shall not be entitled
to settle, either administratively or after the commencement of litigation, any
claim for Taxes which would adversely affect the liability for Taxes of Buyers
or the Purchased Companies for any period after the Closing Date (including, but
not limited to, the imposition of income tax deficiencies, the reduction of
asset basis or cost adjustments, the lengthening of any amortization or
depreciation periods, the denial of amortization or depreciation deductions, or
the reduction of loss or credit carryforwards) without the prior written consent
of Buyers. Such consent shall not be unreasonably withheld or delayed, and shall
not be necessary to the extent that the Sellers have indemnified the Buyers
against the effects of any such settlement. Buyers (and its representatives)
also may participate in any such audit or claim or administrative or judicial
proceeding at their own expense. If the Sellers do not within 7 days from
receipt of the Buyer's notice referred to in the first paragraph of this
subsection (vi), notify the Buyers that they will assume the conduct or defense
of any such audit or claim or proceeding, unless the effect of such audit or
claim or proceeding is exclusively on a Pre-Closing Period, Buyers (or their
representatives) may, at the Sellers' reasonable expense and without any effect
to theirs or the Companies' rights to indemnification, defend the same in such
manner as it may deem appropriate, including, but not limited to, settling such
audit or proceeding.
The Sellers shall be entitled to participate at their expense in the
defense of any audit, claim or administrative or judicial proceeding for taxes
for an Interim Period which may be the subject of indemnification by the Sellers
and, with the written consent of Buyers, which shall not be unreasonably
withheld or delayed (it being understood that it would be reasonable for Buyers
to withhold such consent if as part of the same defense proceeding, there exist
issues with respect to taxes which may not be the subject of indemnification by
the Sellers), and at their sole expense, may assume the entire defense of such
Tax claim; provided, however, that, notwithstanding the foregoing, the Sellers
shall not be entitled to settle or otherwise compromise, either administratively
or after the commencement of litigation, any such Tax claim without the prior
written consent of Buyers (which consent shall not be unreasonably withheld or
delayed) if the settlement or compromise would result in any additional
liability for Taxes of Buyers or the Purchased Companies for such Interim Period
or any period after the Closing Date (including, but not limited to, the
imposition of income tax deficiencies, the reduction of asset basis or cost
adjustments, the lengthening of any amortization or depreciation periods the
denial of amortization or depreciation deductions, or the reduction of loss or
credit carryforwards) which would not be fully indemnified by the Sellers.
Buyers and the Purchased Companies shall not agree to settle any tax claim for
the portion of the year or period ending on the Closing Date which may be the
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subject of indemnification by the Sellers without the prior written consent of
the Sellers, which consent shall not be unreasonably withheld or delayed.
Buyers shall control any and all audit, administrative and judicial
proceedings related to the Taxes of the Purchased Companies for periods after
the Interim Period.
(vii) Regardless of anything else in this Agreement, Sellers shall be
jointly and severally liable for any taxes imposed on NewCo Fibers England on or
before the Closing Date as a result of the application of section 179 of the
Taxation of Chargeable Gain Act 1992 of the United Kingdom to:
(a) the transfer of any assets to NewCo Fibers England on or prior
to Closing;
(b) Closing; or
(c) a combination of (b) and (c).
8.3.2 WITHHOLDING TAXES
To the extent, if any, that Buyers (or any of its assignees) are
required to withhold Taxes on account of the Sellers from the Purchase Price
under applicable law ("WITHHOLDING TAXES"), (x) Buyers (or such assignee) shall
withhold and pay such a Withholding Taxes to the appropriate Governmental
Authority at the time and in the manner prescribed by applicable law, (y) Buyers
(or such assignee) shall provide the applicable receipts, if any, evidencing (or
otherwise establishing to the satisfaction of the Sellers) the payment of such
Withholding Taxes and (z) Buyers shall be deemed to have paid the amount of such
Withholding Taxes as part of the Purchase Price due to the Sellers. Buyers
agrees not to make any assignment to any assignee the effect of which would be
to increase Withholding Taxes above those that would have been incurred had the
Buyers not made such assignment.
8.3.3 TAX ELECTIONS
From and after the date hereof, the Sellers shall not, without the
prior written consent of Buyers (which consent may not be unreasonably withheld
or delayed), make or revoke, or cause or permit to be made or revoked, any Tax
election, or adopt or change any method of accounting for Tax purposes, that
would reasonably be likely to have an effect that is materially adverse to any
Purchased Company.
8.3.4 TIME OF PAYMENT
Payments of any amounts due under this SECTION 8.3 in respect of Taxes
shall be made by the Sellers or Buyers at least ten (10) Business Days prior to
the date on which the taxes are due. If liability under this SECTION 8.3 is in
respect of other costs or expenses other than Taxes, payment by the Sellers of
any such amounts shall be made within ten (10) Business Days after the date that
the Sellers have been notified by Buyers in writing that the Sellers have a
liability for a determinable amount under this SECTION 8.3 and they are provided
with calculations or other materials supporting the Sellers' liability for such
amounts. This provision shall apply pari passu to payments required to be made
by the Buyers to the Sellers.
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8.3.5 ASSISTANCE AND COOPERATION
After the Closing Date, each of the Sellers and Buyers shall as may
reasonably be requested:
(i) assist the other party in preparing any Tax Returns or reports
which such other party is responsible for preparing and filing in accordance
with this SECTION 8.3;
(ii) cooperate fully in preparing for any audits of, or disputes with
taxing authorities regarding, any Tax Returns of the Purchased Companies,
Carborundum Ltd and Carborundum do Brasil (to the extent Buyers or the Purchased
Companies may be held responsible for Taxes due by Carborundum Ltd or
Carborundum do Brasil);
(iii) make available to the other and to any taxing authority to the
extent reasonably requested all information, records, and documents relating to
Taxes of the Purchased Companies, Carborundum Ltd and Carborundum do Brasil (to
the extent Buyers or the Purchased Companies may be held responsible for Taxes
due by Carborundum Ltd or Carborundum do Brasil);
(iv) provide timely notice to the other in writing of any pending or
threatened tax audits or assessments of the Purchased Companies, Carborundum Ltd
and Carborundum do Brasil, for Pre-Closing Periods (to the extent Buyers or the
Purchased Companies may be held responsible for Taxes due by Carborundum Ltd or
Carborundum do Brasil); and
(v) furnish the other with copies of all correspondence received from
any taxing authority in connection with any tax audit or information requested
with respect to any such taxable period of the Purchased Companies, Carborundum
Ltd and Carborundum do Brasil (to the extent Buyers or the Purchased Companies
may be held responsible for Taxes due by Carborundum Ltd or Carborundum do
Brasil).
Any information obtained under the provisions of this SECTION 8.3.5
shall be kept confidential except as may otherwise be necessary in connection
with the filing of Tax Returns or claims for refund or in conducting an audit or
other proceeding.
8.3.6 COMMODITY TAXES
8.3.6.1 PRICES AND OTHER SUMS EXCLUSIVE OF COMMODITY TAXES.
Unless otherwise expressly stated all prices, consideration or other sums
payable under or in accordance with this Agreement (including any payments
required to be made in relation to any warranty, indemnity or breach of this
Agreement) do not take account of any Commodity Tax which becomes payable by
virtue of the operation of the legislation which imposes the Commodity Tax.
8.3.6.2 SPECIAL RULE FOR REIMBURSABLE EXPENSES. If this
Agreement requires a party to pay for, reimburse or contribute to any expense,
loss or outgoing ("REIMBURSABLE EXPENSE") suffered or incurred by another
party, the amount required to be paid, reimbursed or contributed by the first
party will be the amount of the reimbursable expense net of input tax credit
and any similar credit or offset (if any) to which the other party is entitled
in respect of the reimbursable expense.
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8.3.6.3 LEGAL MINIMIZATION OF COMMODITY TAXES. The parties
agree to co-operate in doing all such things as may be necessary or reasonable
to reduce, to the maximum extent permitted by law, the incidence of Commodity
Tax in relation to any transfers made under this Agreement. The obligations of
a party under this SECTION 8.3.6 include, but are not limited to, ensuring
that, to the extent possible under applicable law, the transfer of assets under
SECTION 2.1 of this Agreement is treated as free or exempt from any Commodity
Tax under the legislation which imposes such Commodity Tax.
8.3.6.4 OTHER AGREEMENTS. The provisions of SECTIONS 8.3.6.1
TO 8.3.6.3 shall also apply to any payment made pursuant or in accordance with
the Warranty Agreement or any Related Agreement in the same manner as they
apply to payments made pursuant to, or in accordance with, this Agreement.
8.3.7 REIMBURSEMENT BY UNIFRAX
Unifrax agrees to reimburse SEPR for one-half of any Tax actually paid
by Sellers with respect to any dividend paid by Orient to Carborundum Ltd. or to
NewCo Fibers England between the date hereof and the Closing Date, after taking
into account any available foreign tax credits or other benefits.
8.4 Satisfaction of Conditions
Buyers and Sellers shall each use their reasonable efforts to
consummate the transactions contemplated hereby, including using their
reasonable efforts to cause each of the conditions set forth in Article 3 to be
satisfied at or before the Closing to the extent that such conditions are within
the control of such party. The provisions of this SECTION 8.4 shall not,
however, require any party to waive any condition.
8.5 Update Information
Prior to the Closing, SEPR may at any time and from time to time
deliver a certificate to Buyers listing any changes or supplements to the
representations and warranties made by it in the Warranty Agreement needed, to
its knowledge, to make such information materially correct and complete as of
the Closing provided that such certificates shall only pertain to facts, events
or circumstances that occur between the date hereof and the Closing Date. Such
certificate shall not relieve SEPR from its indemnification obligations pursuant
to Section 4.1.2 of the Warranty Agreement or from any indemnification provision
of this Agreement to the extent the circumstances thus described fall within the
scope of such provision and shall only relieve SEPR from its indemnification
obligation pursuant to Section 4.1.1 of the Warranty Agreement to the extent the
circumstances or facts described therein are not within the control of SEPR or
its Affiliates and it is not a Material Adverse Change. Any such certificate
must be delivered by SEPR no later than 5 business days prior to Closing.
8.6 Transferred employees
(a) The parties agree that the employment agreements of the
employees of each Asset Seller listed on EXHIBIT 8.6 (a) (the
"TRANSFERRED EMPLOYEES") will automatically be transferred to
the relevant Asset Buyers pursuant to the applicable statutory
provisions as of the Closing Date.
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(b) On or before August 15, 2000 Carborundum Deutschland and
Unifrax Germany shall each provide each Transferred Employee
employed by Carborundum Deutschland with a letter, return
receipt requested, in the form provided in EXHIBIT 8.6 (b)
informing such employee of the conditional transfer to Unifrax
Germany and his/her right to object to such transfer within
three weeks after receipt of the letter. Four weeks after the
date of the letters, Carborundum Deutschland shall provide
Buyers with a list of the names of all Transferred Employees
in Germany who have objected to their transfer and said list
shall be updated by Carborundum Deutschland every time another
German Transferred Employee objects to the transfer (the
"OBJECTING EMPLOYEES").
(c) During the period between the date hereof and the Closing
Date, Carborundum Australia and Unifrax Australia shall
cooperate in good faith to carry out the transfer of the
relevant Transferred Employees in a cost-efficient manner
consistent with local Laws.
No person other than the Transferred Employees shall be entitled to
claim any right to employment from the Companies or the Asset Buyers after the
Closing Date. Sellers shall indemnify and hold harmless the Buyers and the
Purchased Companies against any claim or action by the Transferred Employees in
respect of their employment prior to the Closing Date by the Companies and/or
the Sellers or their Affiliates, provided Buyers shall indemnify Sellers for any
claims by Transferred Employees based on the initiation by Buyers or the
Purchased Companies after the Closing Date of changes in the employee benefit
plans offered to the Transferred Employees as compared with those they enjoyed
prior to the Closing Date (other than any stock option or purchase plan
pertaining to shares in Compagnie de Saint-Gobain SA and other than any changes
made to the pension plans offered to Transferred Employees in Australia arising
from the failure for transfer value to be paid in accordance with the provisions
of Exhibit 8.8. Sellers will indemnify Buyers against any claims by the
Transferred Employees in Australia arising from failure of the transfer value
being made in accordance with the provisions of Exhibit 8.8).
8.7 Non-transferred employees
Notwithstanding any provision to the contrary, the parties agree that
the individuals listed in EXHIBIT 8.7 (together with their respective positions)
who are on the date hereof employed by the Companies shall remain in the
employment of Sellers or their Affiliates (the individuals listed on such
schedule, together with the employees of Carborundum Ltd and Carborundum do
Brasil and the Companies who are not Transferred Employees are collectively
referred to as the "NON-TRANSFERRED EMPLOYEES"). Sellers shall bear all
liabilities relating to the Non-Transferred Employees, whether arising before or
after the Closing Date, and Sellers shall indemnify and hold harmless the Buyers
and the Purchased Companies against any claim or action by the Non-Transferred
Employees in respect of their employment by the Companies and/or their
employment by Sellers or their Affiliates.
8.8 Pension Plans
EXHIBIT 8.8 sets forth the covenants of the parties regarding the
pension plans applicable to the employees of Carborundum Ltd, Carborundum do
Brasil, Carborundum Deutschland and Carborundum Australia, which covenants shall
be implemented by the parties in accordance with such EXHIBIT 8.8.
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8.9 Transfer of Permits and Third Party Consents
(i) The Sellers shall be responsible for ensuring that
following the implementation of the Reorganization Plan, the Ceramic Fiber
Business of NewCo Fibers England, NewCo Fibers Brazil and Carborundum Italia
benefits prior to the Closing Date from permits and authorizations identical in
all material respects to those which the Ceramic Fiber Business of Carborundum
Ltd, Carborundum do Brasil and Carborundum Italia enjoys on the date hereof and
that to the extent a third party consent is required in connection with transfer
of any material contract as listed in EXHIBIT 8.9(i) as part of the
Reorganization Plan relating to such Companies, such consent is obtained prior
to the Closing Date. The Buyers shall use their best efforts to cooperate with
the Sellers in order to take any steps (other than the payment of monies) that
need to be taken in order to achieve this result, as may be reasonably requested
by Sellers;
(ii) The Sellers shall ensure that, to the extent the consent
of any Governmental Authority or third party is required in connection with any
material Contract, permit or authorization of the Purchased Companies as listed
in EXHIBIT 8.9(ii) as a result of the change in control of the Purchased
Companies prior to the Closing Date, such consent is obtained prior to such
date. The Buyers shall use their best efforts in order to cooperate with the
Sellers in order to take any steps that need to be taken in order to achieve
this result, as may be reasonably requested by Sellers.
(iii) The Sellers shall, within 15 days from the date hereof,
provide the Buyers with a list of the permits or authorizations or third party
contractual consents in connection with material contracts that Carborundum
Australia and Carborundum Deutschland hold on the date hereof and that Asset
Buyers will need to obtain in order to continue after the Closing Date to
operate the Ceramic Fiber Business they purchase in the same manner as it was
operated prior to the Closing Date. The Sellers shall then prepare the documents
required in order to apply for such permits, authorizations or consents and
shall transmit them for signature by the Buyers. The Asset Buyers shall promptly
sign and file such documents with the appropriate Governmental Authorities or
third parties. Both parties shall cooperate in order to process such
applications and obtain such consents, permits or authorizations including,
without limitation, by providing the other party with all such information not
in such other party's possession as may be useful or necessary in connection
with the preparation of such application; the Asset Sellers recognize that Asset
Buyers do not have a presence in Australia and that day to day work in
connection with such tasks will need to be performed by the Asset Sellers.
However, no Seller shall be liable in any respect in connection with the
signature and filing of the relevant documents, correspondence or relations with
Governmental Authorities in connection therewith or any failure to obtain (or
delay in obtaining) any such consents, permits or authorizations.
(iv) To the extent consent to the transfer of any contract other than
the contracts referred to in EXHIBIT 8.9(i) and 8.9(ii) or listed on the list
referred to under paragraph (iii) above is required in connection with the
Reorganization Plan or the transactions contemplated under this Agreement, each
of the parties hereto will cooperate with the other party before and after the
Closing Date in order to obtain such consent and will execute any document or
agreement that may be reasonably required to that effect. In the event a sales
representative or distributor hired prior to the Closing Date by the Companies
in connection with both their Ceramic Fiber Business and their refractories
business does not accept the transfer, split or amendment of its agreement so as
to limit its scope to the Ceramic Fiber Business transferred to the Buyers,
Sellers shall not be responsible to the Buyers for the
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discontinuation of such agency or distribution agreement from the Closing Date,
provided however that Sellers shall be responsible pursuant to Article 4.1.2 of
the Warranty Agreement for any damages or indemnities to be paid to such sales
representative or distributor which shall constitute Pre-Closing Liabilities of
the Purchased Companies, or excluded Liabilities of the Asset Sellers, as
appropriate.
8.10 Information Systems
EXHIBIT 8.10 sets forth the covenants of the parties regarding
information system services.
8.11 Rules for allocation among Ceramic Fiber Business and other Businesses
Buyers shall be entitled to verify and audit (and shall use their best
efforts to do so within two months after the Closing Date), the rules of
allocation among Ceramic Fiber Business and other businesses of Sellers
contained in EXHIBITS 2.2.1(c), Sellers shall grant access to Buyers and their
auditors to information reasonably relevant for their purpose. To the extent
there exists any discrepancy between the contents of these annexes and the
allocation resulting from such audit, the parties shall seek to resolve this
discrepancy in good faith. In the event the parties do not succeed in resolving
such issue, such issue shall be resolved in accordance with Section 2.4.2(b).
The allocation resulting from this process shall be used in lieu of the
allocation contained in EXHIBIT 2.2.1(c) for the purpose (and only for the
purpose) of determining which Trade Accounts Payable shall be assumed by the
Buyers and which by Sellers and determining the Accrued Liabilities for which
the Sellers are responsible.
ARTICLE 9.
TERMINATION
9.1 Termination
This Agreement may be terminated prior to Closing:
9.1.1 WRITTEN AGREEMENT
By written agreement executed by Buyers and Sellers.
9.1.2 DROP DEAD DATE
By Buyers, on the one hand, or Sellers, on the other hand, at
any time after October 31, 2000 if the Closing shall not have taken place on or
before such date; PROVIDED, HOWEVER, that the right to terminate this Agreement
under this SECTION 9.1.2 shall not be available to any party whose failure to
fulfill any obligation hereunder has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date.
9.1.3 MATERIAL BREACH OF SELLERS' REPRESENTATIONS
By Buyers if Sellers commit a material breach of any of their
representations, warranties, covenants or agreements contained herein or in the
Warranty Agreement, unless
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such breach is cured by Sellers to the satisfaction of Buyers within 15 days
from the date of a notice to this effect delivered by Buyers to Sellers.
9.1.4 MATERIAL BREACH OF BUYERS' REPRESENTATIONS
By Sellers if Buyers commit a material breach of their
representations, warranties, covenants or agreements contained herein or in the
Warranty Agreement unless such breach is cured by Buyers to the satisfaction of
Sellers within 15 days from the date of a notice to this effect delivered by
Sellers to Buyers.
9.2 Effect of Termination
In the event that this Agreement is terminated under circumstances
where no party hereto has committed a breach under this Agreement or the
Warranty Agreement, none of the parties hereto shall have any liability or
obligation to any of the other parties hereto and the provisions of Section 8.2
shall apply. In the event that this Agreement is terminated under circumstances
where a party hereto has committed a breach under this Agreement or the Warranty
Agreement, the party in breach shall indemnify the other party for all
consequences of such breach and the termination of this Agreement.
Notwithstanding the foregoing, the provisions of SECTIONS 8.1, 8.2 AND THIS 9.2
shall survive any termination hereof.
ARTICLE 10.
CONSTRUCTION
10.1 Definitions
When used in this Agreement, the following terms in all of their tenses
and cases shall have the meanings assigned to them below or elsewhere in this
Agreement as indicated below:
Term Section
---- -------
Accrued Liabilities 2.4(ii)
Agreement Preamble
Asset Buyers Recitals
Asset Purchase Agreement 2.1(c)
Asset Seller Recitals
Audited Closing Debt 2.2.1(b)
Auditors 2.2.1(b)
Batistaff Recitals
Buyers Preamble
Carborundum Belgium Recitals
Carborundum France Recitals
Carborundum Italia Recitals
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Carborundum Ltd Recitals
Cash Payment 2.2.1(a)
Cash Requirement 6.7.1
Ceramic Fiber Business Recitals
Closing and Closing Date Article 4
Closing Debt 2.2
Closing Statements 2.4
Companies Recitals
Company Recitals
Corporation Note 2.2
CVI 6.4
Excluded Liabilities 2.1(c)
Guaranty Agreement Recitals
Interim Period 8.3.1
Non-Transferred Employees 8.7
Notes 2.2.2
Notified Closing Debt 2.2.1(b)
Objecting Employees 8.6
Orient Recitals
Orient Dividend 6.7.1
Payer 8.3.6.3
Permitted Assigns 10.3
Pledge Agreement 2.2.2
Pre-Closing Period 8.3.1
Post-Closing Period 8.3.1
Provider 8.3.6.3
Purchase Price 2.2
Purchased Assets Recitals
Purchased Companies Recitals
Purchased Shares Recitals
Regulatory Consents 3.1.5
Reimbursable Expense 8.3.6.4
Related Agreements 6.9
Reorganization Plan 5.1
SEC 6.6(a)
Sellers Recitals
Stock Seller Recitals
Subordination Agreement 2.2.2
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Toshiba Monofrax Right of First Refusal 6.4
Transferred Agreements 2.1(c)
Transferred Employees 8.6
Unifrax Preamble
Unifrax Guarantee 2.2.2
Unifrax Holding Note 2.2
Unifrax Senior Lenders 2.2.2
US GAAP 6.6(a)
Warranty Agreement Recitals
Withholding Taxes 8.3.2
Working Capital 2.4(i)
"Affiliate" of any Person means any person directly or
indirectly controlling, controlled by, or under common control with, any such
Person and any officer, director or controlling person of such Person.
"Antitrust Regulations" means The Council Regulation (EEC) No.
4064/89 (European Union) of December 21, 1989 on the control of concentrations
between undertakings, as amended; The Law No. 8,884/1994 (Brazil); The Law of
August 5, 1991 on the Protection of Economic Competition as amended by the laws
of April 26, 1999 (Belgium); The Ordinance N(degree) 86-1243 and Decree
N(degree) 86-1309 (France), as amended; The Act against Restrictions of
Competition of 1958 (Germany), as amended; The Law N(degree) 287 of October 10,
1990 (Italy); The Law N(degree) 16/1989, on the Defense of Competition (Spain),
as amended by Royal Decree Law 6/1999; The Fair Trading Act 1973 (UK), the Trade
Practices Act (Commonwealth of Australia) 1974, and any regulations and
guidelines issued under them.
"Business Combination" means, with respect to any Person, any
merger, consolidation or combination to which such Person is a party, any sale,
dividend, split or other disposition of capital stock or other ownership
interests of such Person, or any sale, dividend or other disposition of all or
substantially all of the assets and properties of such Person.
"Carborundum Deutschland" means Carborundum Deutschland GmbH a
company incorporated under the laws of Germany with its registered office at
Kappeler strasse 105, 40597 Dusseldorf.
"Carborundum Australia" means Carborundum Australia Pty Ltd,
ACN 004 838 233 a company incorporated in Victoria with its registered office at
336 Settlement Road, Thomastown, Victoria, Australia.
"Carborundum Belgium" means Carborundum Belgium SA, with its
registered office at W.T.C Tour 1, Boulevard E. Jacqmain, 162, Bte 38, B-1000
Bruxelles, R.C n(degree) 213 177.
"Carborundum do Brasil" means Carborundum do Brasil Ltd a
company incorporated under the laws of Brazil with its registered office at Av.
Independencia 7031,
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Vinhedo 13280-000-SP, Brazil, registered with the Ministry of Finance under
number 00-450-887/0001-10.
"Carborundum Ltd" means Carborundum Company Ltd with its
registered office at Mill Lane, Rainford St-Helens, Mersey Side WA 11 8LP,
United Kingdom. registration n(degree) 909697.
"Carborundum Venezuela" means CIT Carborundum do Venezuela a
company incorporated under the laws of Venezuela with its registered office at
Pago Segun Planilla, 0750679 Por B 14060.
"Commodity Taxes" means sales taxes, value-added taxes
("VAT"), and goods and Services taxes ("GST").
"Companies' Accounting Principles" means French GAAP adjusted
or completed to take into account the accounting practices, methodologies and
parameters (including, where applicable, consolidation rules and methods) used
by Compagnie de Saint-Gobain and its Affiliates as referred to in Saint Gobain's
annual report for fiscal year 1999.
"Consent" means any consent, permit, approval or authorization
of, notice to, designation, registration, declaration or filing with any Person.
"Contract" means any oral or written lease, pledge, mortgage,
instrument, note, license, commitment, agreement or other undertaking to which
any Person or its assets are bound, but shall exclude any purchase or sales
order of the Companies that is cancelable at will or that involves payment or
performance valued at not more than $25,000 or the equivalent thereof in the
relevant currency.
"Debt" of any Person means: (a) any liability of such Person
(i) for borrowed money (including the current portion thereof), or (ii) under
any reimbursement obligation relating to a letter of credit, bankers' acceptance
or similar facility, or (iii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation), or (iv) for the payment of
money relating to a lease that is required to be classified as a capitalized
lease obligation in accordance with US GAAP; or (v) all obligations secured by
any liens; (vi) under any interest or foreign currency swaps, other foreign
currency contracts or other derivatives; or (vii) any and all accrued interests,
success fees, prepayment premiums, make whole premiums or penalties and fees and
expenses actually incurred (including attorney's fees) associated with the
prepayment of any Debt; or (viii) to the extent not otherwise included in (i)
through (vii) preceding, for all or any part of the deferred purchase price of
property or services (including without limitation any earnout or similar
payments owed by any of the Companies after the Closing Date on account of any
acquisition by any of the Companies occurring prior to the Closing Date) but
excluding trade payables and accrued expenses except for accrued interest, or
(b) any liability of others described in the preceding clause (a) that such
Person has Guaranteed, that is recourse to such Person or any of its assets or
that is otherwise its legal liability or that is secured in whole or in part by
the assets of such Person. (Debt included in (a) and (b) above are collectively
referred to herein as "Prohibited Debt") or (c) all "cut" but uncashed checks
issued by the Companies that are outstanding on the Closing Date.
"Employee Benefit Plan" means any pension, retirement or post
retirement, savings, profit sharing, stock bonus, deferred compensation, bonus,
incentive compensation,
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stock option, restricted stock, stock purchase, stock appreciation right, salary
continuation, severance, post employment or termination pay, medical, hospital,
dental, cafeteria, flexible spending, dependent care, life or other insurance,
disability, fringe benefit, vacation pay, sick pay, holiday, unemployment,
employee loan, educational assistance or other employee benefit plans or
programs, agreements or arrangements, whether written or oral, covering current
or former employees, directors or agents of any of the Companies and maintained,
sponsored or contributed to by any of the Companies or with respect to which any
of the Companies may otherwise have any liability.
"Environment" means all or any of the following media: air
(which includes the air within any building or the air within any other man made
or natural structure above or below ground), water (including coastal and inland
waters, surface water and ground water) and land (including surface land,
sub-surface strata, seabed and river bed and natural and man made structures).
"Environmental Laws" means any national, federal, state or
local laws, statutes, statutory instruments and regulations, judgments or awards
of any statutory body or court relating to the protection, clean up or
restoration of the environment or to the safety and health, including, but not
limited to, any of the same relating to (a) generation, treatment, storage,
disposal or transportation of wastes, emission or discharges or protection of
the Environment from the same, (b) noise, (c) exposure to Hazardous Substances,
(d) regulation of the manufacture, processing, distribution in commerce or use
of chemical or mineral substances (including ceramic fibers) or (e) the use of
any of the premises owned, leased or used by any of the Companies as such laws,
rules, orders, regulations are in force on or prior to the Closing Date.
"Environmental Permits" means any and all permits required
pursuant to Environmental Laws in connection with, the use of any of the
premises owned, leased or used by any of the Companies, and any licenses,
authorizations, consents, or other approvals required for the conduct of the
Ceramic Fiber Business as conducted by the Companies on or prior to Closing.
"GAAP" means generally accepted accounting principles in the
relevant jurisdiction consistently applied.
"Governmental Authority" means any federal, state, local, or
foreign government or any subdivision, agency, instrumentality, authority,
department, commission, board or bureau thereof or any federal, state, local or
foreign court, tribunal or arbitrator.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing or otherwise
supporting in whole or in part the payment of any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation of such other Person (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligations of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); PROVIDED, HOWEVER, that the term Guarantee shall not include
endorsements for deposit
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or collection in the ordinary course of business. The term "Guarantee" used as
verb has a correlative meaning.
"Hazardous Substance" means any toxic substance or waste,
pollutant, hazardous substance, contaminant, special waste, industrial substance
or waste, or any constituent of such substance or waste in any form which,
whether alone or in consideration with any other substance, is causing or which
is capable of causing harm or damage to the Environment or to human health or
welfare to any living organism, including any substance regulated or defined
pursuant to any Environmental Law.
"Health and Safety Law" means all or any laws (including EU
Directives, regulations and treaties) and all guidance notes, rules, orders and
regulations made or issued thereunder which relate to the health and safety of
those who work for any of the Companies whether as employees or otherwise, or
visitors to any of the premises owned, occupied or used by any of the Companies,
as such laws, rules, orders, regulations are in force on or prior to the Closing
Date.
"Indian Founders" means the following individuals or entities:
Mrs. Ganga Devi Rajgarhia, Mr. S.G. Rajgarhia, Mr. R.K. Rajgarhia, Ms. Anisha
Rajgarhia, Ms. Bhavna Rajgarhia, Mr. Shrivant Rajgarhia, Mr. Rajat Rajgarhia,
Mrs. Prabha Devi Rajgarhia, Mrs. Sulabha Rajgarhia, Mrs. Jayati Rajgarhia, Mr.
Sanjay Rajgarhia, Mr. P.K. Rajgarhia, Mr. Nawal Kishore Rajgarhia, Mr. Nilesh
Rajgarhia, M/s. Salora Plasts Mould (P) Ltd.
"Intellectual Property Rights" means all of the following
which are owned by, issued to or licensed to any of the Companies and which are
used in the business of any of the Companies, along with all income, royalties,
damages and payments due or payable at Closing or thereafter including, without
limitation, damages and payments for past or future infringements or
misappropriations thereof, the right to sue and recover for past or future
infringements or misappropriations thereof and any and all corresponding rights
that, now or hereafter, may be secured throughout the world: patents, patent
applications, patent disclosures, design rights, utility models and inventions
(whether or not patentable and whether or not reduced to practice) and any
reissue, continuation, continuation-in-part, revision, extension or
reexamination thereof; trademarks, service marks, trade dress, logos, trade
names and corporate names together with all goodwill associated therewith,
adaptations, derivations and combinations of the foregoing; copyrights and
copyrightable works; mask works; and all registrations, applications and
renewals for any of the foregoing; trade secrets; and all copies and tangible
embodiments of the foregoing (in whatever form or medium), in each case
including, without limitation, the items set forth on SCHEDULE 2.7.5 to the
Warranty Agreement.
"Law" means any federal, state, local or foreign law, statute,
ordinance, rule, order or regulation of any Governmental Authority.
"Lien" means any mortgage, pledge, hypothecation, lien,
easement, adverse claim, encumbrance, security interest, charge or any other
title defect or restriction of any kind.
"LSL Entitlements" means the amount of the long service leave
liability of Carborundum Australia for its employees, other than the
Non-Transferred Employees, as of the Closing Date determined in accordance with
the requirements of accounting standard AASB 1028 issued by the Australian
Accounting Standards Board.
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"Material Adverse Change" means an event or change affecting
the financial condition, results of operations, tangible and intangible assets
or future business prospects of the Ceramic Fiber Business of the Companies
which (i) does not result from the announcement of the transactions contemplated
in this Agreement, and (ii) could reasonably be expected to influence adversely
the investment decision of a reasonably prudent buyer (including, by way of
illustration but without limitation, any loss of major customers, strikes, or
labor unrest, withdrawal or limitation of material authorization or
environmental authorization that results in the shutdown or curtailment of
operations, major equipment failure, major fires or other major accidents or
natural catastrophes having a material impact on the operations of the
Companies); provided however that Material Adverse Change shall not be deemed to
comprise changes that result from general economic or political conditions.
"Motker" means Motker Kerlane Ceramic Fibers LLC, a company
incorporated under the laws of Hungary with its registered office at Timfold
ut 1, H 9201 Mosonmagyarovar, Hungary.
"NewCo Fibers Brazil" means NewCo Fibers Brazil, a newly
formed company incorporated under the laws of Brazil with its registered office
at Av. Independencias, 13280-000 Vinhedo-SP, Brazil.
"NewCo Fibers England" means Newco Fibers England, a newly
formed company incorporated under the laws of England, with its registered
office at Mill Lane, Rainford St Helens, Mersey Side WA 11 8LP, United Kingdom.
"Permitted Liens" means (i) Liens that are set forth on
EXHIBIT 10.1 to this Agreement, and (ii) Liens for Taxes, assessments, levies,
customs duties or other governmental charges not delinquent (subject to
applicable grace periods) or the validity of which is being contested in good
faith by appropriate proceedings and as to which adequate reserves have been
established in the Financial Statements (as defined in the Warranty Agreement).
"Person" means any individual, corporation, corporate body,
partnership, limited liability corporation, joint venture, trust, Governmental
Authority, unincorporated association or any other entity or organization.
"Rainford Business Transfer Agreement" means the transfer
agreement in the agreed terms by which the split described in Article 5 is
achieved.
"Rainford Property" means the property remaining within
registered title number MS210918 after the completion of the Rainford Transfer.
"Rainford Transfer" means a transfer of the Transferred
Rainford Property between Carborundum Ltd and NewCo Fibers England in the agreed
form.
"SEPR" means Societe Europeenne de Produits Refractaires, a
company incorporated under the laws of France with its registered office at Les
Miroirs, 18 Avenue d'Alsace, 92400 Courbevoie, France.
"Taxes" or "Tax" means income, gross receipts, property,
registration, stamp, sales, use, goods and services (GST), value added (VAT),
license, excise, production, franchise, employment, social security,
governmental pension or insurance, withholding or
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similar taxes or contributions, together with any interest, additions, or
penalties with respect thereto and any interest in respect of such additions or
penalties.
"Tax Return" means any return, report, declaration, statement,
certificate, schedule or other document required to be filed within, or provided
to any Governmental Authority in charge of collecting Taxes or entitled to
receive such documents in connection with any Tax.
"Trade Accounts Payable" means (i) all obligations for payment
for goods delivered by third party vendors which have been received and accepted
by the Companies prior to the Closing Date in connection with their Ceramic
Fiber Business, whether or not the Companies have received an invoice therefor
prior to the Closing Date and (ii) all obligations for payment for services from
third parties (not including employees but including utilities providers) which
have been received and accepted by the Companies prior to the Closing Date in
connection with their Ceramic Fiber Business and for which the Companies have
received an invoice from the supplier in the ordinary course of business prior
to the Closing Date. Trade Accounts Payable shall not include any expenses
resulting from, or incurred in connection with, the Reorganization Plan or the
transactions contemplated by this Agreement. In the event a Trade Accounts
Payable relates to both the Ceramic Fiber Business and the other businesses of
the Companies, the allocation of such Trade Account Payable among these
businesses shall be made according to the past practice of the Companies as
detailed in EXHIBIT 2.2.1(c) subject to Section 8.11;
"Transferred Rainford Property" means the land comprising the
part of the Rainford Site to be transferred to NewCo Fibers England by the
Rainford Transfer.
"Transaction Documents" means this Agreement, the Warranty
Agreement, the Related Agreements, and all other agreements, instruments and
certificates referenced herein or therein executed and delivered in connection
herewith and therewith, including without limitation each Exhibit to this
Agreement.
"Unifrax Australia" means Unifrax Australia Pty, Ltd, ACN 093
625 757, a company incorporated under the laws of Australia, with its principal
place of business at 326 Settlement Road, Thomastown Victoria 3074, Australia.
"Unifrax Brazil" means NAF Brazil Ltda, a company incorporated
under the laws of Brazil, with its registered office at Rua 2 n 18 A, Distrito
Industrial Nova Era, 13347-392 Indaiatuba, Sao Paulo, Brazil.
"Unifrax GmbH" means Unifrax GmbH, a company incorporated
under the laws of Germany, with its registered office at Haus-Martin
Schleierstrasse 30, D 47877, Willich Munchheide, Germany.
"Vertec" means Vertec SAS, a company incorporated under the
laws of France with a share capital of 128,144,000 Euros, its registered office
at Courbevoie, Les Miroirs, 18 avenue d'Alsace, registered with the Registry of
Commerce and Companies under number 316 699 594 RCS Nanterre.
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10.2 Notices
All notices shall be in writing and shall be deemed to have been given
three days after the registration if sent by registered mail, postage prepaid,
return receipt requested, or upon delivery by courier or upon confirmation of
receipt if sent by telecopy to the following addresses:
(a) If to Buyers to:
Unifrax Corporation
2351 Whirlpool Street
Niagara Falls
New York 14305-2413
USA
Attn: William P. Kelly
Telecopy Number: + 716 278 3903
With a copy to:
Jones, Day, Reavis & Pogue
120, rue du Faubourg Saint Honore
75008 Paris
Attn: Gael Saint Olive
Telecopy Number: (33) 1 56 59 39 38
(b) If to Sellers to:
SEPR
18 Avenue d'Alsace
92400 Courbevoie
France
Attn: Olivier Duval
Telecopy Number: (33) 1 47 62 37 80
With a copy to:
SEPR Legal Department
18 Avenue d'Alsace
92400 Courbevoie
France
Attn: Marie-Armelle Chupin
Telecopy Number: (33) 1 47 62 37 83
or to such other address or telecopy number as may have been designated in a
prior notice.
Each of the Buyers hereby appoints Unifrax as its agent for the purpose
of signing and sending any notice or communication relating to this Agreement on
its behalf and any notice or communication sent by Unifrax in this connection
shall be binding on all Buyers. Each of the Sellers hereby appoints SEPR as its
agent for the purpose of signing and sending any notice or communication
relating to this Agreement on its behalf and any notice or communication sent by
SEPR in this connection shall be binding on all Sellers. Such appointments may
only be revoked by a written notice addressed by the revoking party to all other
parties to this Agreement.
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10.3 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns. For the purposes
of this Agreement and the Transaction Documents, permitted assigns (the
"Permitted Assigns") shall include (i) any Affiliate of Unifrax, (ii) the banks
and financial institutions which grant credit to Unifrax or its subsidiaries,
(iii) any Person which purchases (together with its Affiliates, if appropriate)
fifty percent (50%) or more of the Ceramic Fiber Business to be purchased by
Buyers hereunder; such fifty percent (50%) threshold shall apply to the turnover
of the part of the Ceramic Fiber Business thus purchased by such person as
compared on the date of such purchase with the overall turnover of the Ceramic
Fiber Business transferred hereunder, and (iv) any purchaser which purchases
substantially all of the business, assets or shares of Unifrax Holding or
Unifrax. If Unifrax transfers only a portion of the Ceramic Fiber Business as
contemplated in subsection (iii) above and retains the remaining portion for
itself, then the amounts provided for in Article 4.4(c) and (d) of the Warranty
Agreement shall apply to the aggregate of the claims made by Unifrax and the
Permitted Assigns. No more than two successive assignments to Persons
contemplated in subsections (iii) or (iv) above shall be permitted. It is
however understood that, in the event of a sale or transfer by the last
Permitted Assign to a third party of all or part of the Ceramic Fiber Business
to be purchased by the Buyers hereunder, the last Permitted Assign shall
continue to be entitled to enforce the terms of this Agreement against Sellers
notwithstanding such sale or transfer.
10.4 Third Party Beneficiaries
Nothing in this Agreement is intended or shall be construed to confer
on any Person other than the parties and their successors and Permitted Assigns
any rights or benefits hereunder.
10.5 Headings
The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
10.6 Exhibits and Schedules
The Exhibits and the Schedules shall be deemed to be a part of this
Agreement.
10.7 Governing Law
This Agreement shall be governed by and construed under the laws of
France. Except as provided in this Agreement, all disputes arising in connection
shall be exclusively and finally settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by three arbitrators
appointed in accordance with the said rules. In the event multiple claimants or
multiple defendants fail to agree on the arbitrator they should appoint pursuant
to this clause, the International Court of Arbitration of the International
Chamber of Commerce shall appoint all of the members of the Tribunal. The
arbitration proceedings shall take place in Paris France and shall be conducted
in English. The foregoing notwithstanding, Sellers and Buyers may apply to any
Courts of competent jurisdiction for interim or conservatory measures. The
application of the Sellers or the Buyers to such Courts for such measures or for
the implementation of such measures ordered shall not affect the powers reserved
to the Arbitral Tribunal.
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10.8 Waivers
Compliance with the provisions of this Agreement may be waived only by
a written instrument specifically referring to this Agreement and signed by the
party waiving compliance. No course of dealing, nor any failure or delay in
exercising any right, shall be construed as a waiver, and no single or partial
exercise of a right shall preclude any other or further exercise of that or any
other right.
10.9 Pronouns
The use of a particular pronoun herein shall not be restrictive as to
gender or number but shall be interpreted in all cases as the context may
require.
10.10 Amendment
No amendment of this Agreement shall be binding unless made in a
written instrument which specifically refers to this Agreement and is signed by
Buyers and Sellers.
10.11 Entire Agreement
The Transaction Documents are the exclusive statement of the agreement
among the parties concerning the subject matter hereof. All negotiations,
disclosures, discussions and investigations relating to the subject matter of
this Agreement are merged into the Transaction Documents, and there are no
representations, warranties, covenants, understandings, or agreements, oral or
otherwise, relating to the subject matter of the Transaction Documents, other
than those included herein.
* * * *
Made in New York on July 27, 2000.
in three (3) original copies.
Buyers Sellers
Unifrax Corporation Societe Europeenne de
Produits Refractaires
/s/ Paul J. Viola /s/ Roland Lazard
------------------------------ --------------------------------
Paul J. Viola Roland Lazard
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Unifrax Holding Co. The Carborundum Company Ltd.
/s/ Mark D. Roos /s/ Oliver Dural
--------------------------- -----------------------------------
Mark D. Roos Oliver Dural
Unifrax Australia Pty, Ltd. Carborundum do Brasil Ltda
/s/ Mark D. Roos /s/ Sonia Sikorav
--------------------------- -----------------------------------
Mark D. Roos Sonia Sikorav
NAF Brazil Ltda Carborundum Deutschland GmbH
/s/ Paul J. Viola /s/ Sonia Sikorav
--------------------------- -----------------------------------
Paul J. Viola Sonia Sikorav
Unifrax GmbH Carborundum Australia Pty, Ltd.
/s/ Paul J. Viola /s/ Oliver Dural
--------------------------- -----------------------------------
Paul J. Viola Oliver Dural
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