PURCHASE AGREEMENT
BY AND AMONG
VISKASE COMPANIES, INC.,
VISKASE CORPORATION,
VISKASE HOLDING CORPORATION,
VISKASE SALES CORPORATION,
VISKASE EUROPE LIMITED,
VISKASE S.A.,
VISKASE LIMITED,
VISKASE CANADA INC.,
VISKASE CHILE EMBALAGENS, LTDA,
VISKASE IRELAND LIMITED
AND
BEMIS COMPANY, INC.
Dated as of July 7, 2000
<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS
Section 1.1. Definitions 1
ARTICLE II
PURCHASE AND SALE
Section 2.1. Transfer of Assets 10
Section 2.2. Excluded Assets 11
Section 2.3. Assumed Liabilities 12
Section 2.4. Excluded Liabilities 13
ARTICLE III
PURCHASE PRICE
Section 3.1. Purchase Price 13
Section 3.2. Purchase Price Adjustment 14
Section 3.3. Allocation of Purchase Price 15
Section 3.4. Escrow 16
ARTICLE IV
CLOSING
Section 4.1. Closing Date 16
Section 4.2. Payment on the Closing Date 16
Section 4.3. Buyer's Additional Closing Date Deliveries 16
Section 4.4. Sellers' Closing Date Deliveries 17
Section 4.5. Real Estate Conveyances 18
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
Section 5.1. Organization of Sellers 18
Section 5.2. Organization; Capital Structure of
the Companies; Power and Authority 19
Section 5.3. Subsidiary and Investments 19
Section 5.4. Authority of Seller; Conflicts 19
Section 5.5. Financial Statements 20
Section 5.6. Operations Since Financial Statements Date 20
Section 5.7. Taxes 21
Section 5.8. Governmental Permits 21
Section 5.9. Real Property 21
Section 5.10. Personal Property Leases 22
Section 5.11. Intellectual Property 22
Section 5.12. Title to Property 23
Section 5.13. No Violation, Litigation or Regulatory Action 23
Section 5.14. Contracts 23
Section 5.15. Status of Contracts 24
Section 5.16. Employee Benefits 24
Section 5.17. Environmental Matters 25
Section 5.18. Employee Relations and Agreements 27
Section 5.19. No Undisclosed Liabilities 28
Section 5.20. Insurance 28
Section 5.21. No Brokers 28
Section 5.22. Transactions with Affiliates 28
Section 5.23. Location of Inventory 29
Section 5.24. UCC Section 9-114 Filings 29
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 6.1. Organization of Buyer 29
Section 6.2. Authority of Buyer; Conflicts 29
Section 6.3. No Violation, Litigation or Regulatory Action 30
Section 6.4. Financing 30
Section 6.5. Investment Intent 30
Section 6.6. No Brokers 31
ARTICLE VII
ACTION PRIOR TO THE CLOSING DATE
Section 7.1. Access to Information 31
Section 7.2. Notifications 32
Section 7.3. Consents of Third Parties; Governmental
Approvals; Commercially Reasonable Efforts 32
Section 7.4. Operations Prior to the Closing Date 32
Section 7.5. Antitrust Law Compliance 33
Section 7.6. Intercompany Obligations 34
Section 7.7. Release of Guaranties 34
Section 7.8. Pre-Closing Structuring 34
Section 7.9. Canadian Plant 34
Section 7.10. UK Plant 34
Section 7.11. Foreign Inventory 34
ARTICLE VIII
ADDITIONAL AGREEMENTS
Section 8.1. Use of Names 35
Section 8.2. Tax Matters 35
Section 8.3. Employee Matters ! Employees of Asset Sellers,
Other Than UK 40
Section 8.4. Employee Matters ! Employees of Brazil and
Employees Employed at Swansea 43
Section 8.5. Securities Law Legends 45
Section 8.6. Insurance; Risk of Loss 45
Section 8.7. Collection; Post-Closing Remittances 46
Section 8.8. Post-Closing Assistance 46
Section 8.9. Non-Competition 47
Section 8.10. Casings License 48
Section 8.11. Covenant Not to Sue 48
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
Section 9.1. No Misrepresentation or Breach of Covenants
and Warranties 49
Section 9.2. No Restraint 49
Section 9.3. Governmental Approvals 49
Section 9.4. Title Policy 49
Section 9.5. Operating Systems 49
Section 9.6. Escrow Agreement 50
Section 9.7. Purchased Assets Free and Clear 50
Section 9.8. Swansea Consent 50
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
Section 10.1. No Misrepresentation or Breach of Covenants
and Warranties 50
Section 10.2. No Restraint 50
Section 10.3. Governmental Approvals 51
Section 10.4. Escrow Agreement 51
ARTICLE XI
INDEMNIFICATION
Section 11.1. Indemnification by Sellers 51
Section 11.2. Indemnification by Buyer 52
Section 11.3. Notice of Claims 53
Section 11.4. Determination of Amount 53
Section 11.5. Third Person Claims 54
Section 11.6. Limitations 55
Section 11.7. Mitigation 56
ARTICLE XII
TERMINATION
Section 12.1. Termination 57
Section 12.2. Notice of Termination 57
Section 12.3. Effect of Termination 57
Section 12.4. Non-Solicitation 57
ARTICLE XIII
GENERAL PROVISIONS
Section 13.1. Survival of Representations and Warranties 58
Section 13.2. Governing Law 58
Section 13.3. No Public Announcement 58
Section 13.4. Notices 58
Section 13.5. Successors and Assigns 59
Section 13.6. Access to Records after Closing 60
Section 13.7. Entire Agreement; Amendments 60
Section 13.8. Interpretation 60
Section 13.9. Waivers 61
Section 13.10. Expenses 61
Section 13.11. Partial Invalidity 61
Section 13.12. Execution in Counterparts 62
Section 13.13. Further Assurances 62
Section 13.14. Disclaimer of Warranties 62
Exhibits
--------
Exhibit A Bill of Sale and Instrument of Assignment
Exhibit B Instrument of Assumption
Exhibit C Buyer Services Agreement
Exhibit D Seller Transition Services Agreement
Exhibit E Reports on Title
Exhibit F Licensed Patents License Agreement
Exhibit G Opinion(s) of Counsel to Buyer
Exhibit H Opinion(s) of Counsel to Sellers
Exhibit I Escrow Agreement
Exhibit J Side License Agreement
<PAGE>
List of Schedules
-----------------
Schedules
---------
2.1(b) Transferred Land
2.1(d) Permits, Licenses, Etc.
2.1(i) Intellectual Property
2.2(a) Excluded Assets
2.3(d) Litigation and Claims
2.4 Excluded Liabilities
5.2 Organization; Capital Structure of
the Companies; Power and Authority
5.4 Conflicts
5.5 Financial Statements; Exceptions
5.6 Operations Since Financial Statements Date
5.7 Taxes
5.8 Governmental Permits
5.9 Real Property
5.10 Personal Property Leases
5.11(a) List of Intellectual Property
5.11(b) Software
5.11(c) Right, Title and Interest in Copyrights,
Patent Rights and Trademarks
5.11(d) Registrations of Copyrights, Patent Rights,
Trademarks and Software
5.11(e) Infringement of Copyrights, Patent Rights and Trademarks
5.11(f) Challenge to Copyrights, Patent Rights and Trademarks
5.12 Title to Property
5.13 Violation, Litigation or Regulatory Action
5.14 Contracts
5.15 Status of Contracts
5.16 Welfare and Pension Plans
5.17 Environmental Compliance
5.18(a) Employee List; Changes to Employee Compensation
5.18(b) Labor Contracts, Collective Bargaining Agreements
and Employment Agreements
5.18(c) Union Affiliations
5.18(d) Change of Control Payments
5.18(g)(i) List of UK Employees
5.18(g)(ii) UK Employees Notice of Termination
5.19 Undisclosed Liabilities
5.20 Insurance
5.22 Transactions with Affiliates
5.23 Inventory Locations
7.4 Operations Prior to Closing Date
7.7 Guaranties
8.3(a) Chicago Employees
8.3(j) Severance Policies
8.4(a) Brazil Employees
8.8 NUCEL Consultants
8.10 Casing Patents
8.11 Covenant Not To Sue
9.3 Government Approvals
<PAGE>
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of July 7, 2000, by and among
Viskase Companies, Inc., a Delaware corporation ("Parent"), Viskase
------
Corporation, a Pennsylvania corporation ("Viskase"), Viskase Holding
-------
Corporation, a Delaware corporation ("US Holdings"), Viskase Sales
-----------
Corporation, a Delaware corporation ("Sales"), Viskase Europe Limited,
-----
a company organized under the laws of the United Kingdom ("Europe"),
------
Viskase S.A., a company organized under the laws of France ("Viskase
-------
France"), Viskase Limited, a company organized under the laws of the
------
United Kingdom ("UK"), Viskase Canada, Inc., a company organized under
--
the laws of Ontario ("Canada"), Viskase Chile Embalagens, LTDA, a
------
company organized under the laws of Chile ("Chile") and Viskase Ireland
-----
Limited, a company organized under the laws of Ireland ("Ireland")
-------
(Parent, Viskase, US Holdings, Sales, Europe, Viskase France, UK,
Canada, Chile and Ireland are each referred to herein individually as
"Seller" and collectively as "Sellers"), and Bemis Company, Inc., a
------ -------
Missouri corporation ("Buyer").
-----
PRELIMINARY STATEMENT:
---------------------
WHEREAS, Sellers are, among other things, in the business of
producing, selling and distributing specialty plastic films;
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to
purchase from Sellers substantially all of the assets, properties and
business of Sellers primarily relating to the Business (as defined
herein); and
WHEREAS, those Sellers that are not Asset Sellers will receive
a substantial direct or indirect benefit from consummation of the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed among Sellers and
Buyer as follows:
ARTICLE I
---------
DEFINITIONS
-----------
Section 1.1. Definitions. In this Agreement, the following
-----------
terms have the meanings specified or referred to in this Section 1.1 and
-----------
shall be equally applicable to both the singular and plural forms. Any
agreement referred to below shall mean such agreement as amended,
supplemented and modified from time to time to the extent permitted by
the applicable provisions thereof and by this Agreement.
"Adjusted Valuation Date Statement" has the meaning
---------------------------------
specified in Section 3.2(d).
--------------
"Affected Employees" has the meaning specified in
------------------
Section 8.3(a).
--------------
"Affiliate" means, with respect to any Person, any other
---------
Person which directly or indirectly controls, is controlled by or is
under common control with such Person. For purposes of Section 8.9,
-----------
"Affiliate" shall not include any officer or director of Parent or
Buyer, as the case may be, or any stockholder which owns 10% or more of
the outstanding common stock of Parent or Buyer, as the case may be.
"Agreed Rate" means the fluctuating prime or corporate base
-----------
rate of interest published by and as in effect from time to time as
published in the Money Rates section of The Wall Street Journal.
-----------------------
"Allocation Schedule" has the meaning specified in Section
------------------- -------
3.3.
---
"ANC Defendants" means American National Can Company,
--------------
Pechiney Plastic Packaging, Inc. or Rexam PLC or their respective
Affiliates.
"Asset Sellers" means Viskase, Sales, UK, Canada, Chile and
-------------
Ireland.
"Assigned Contracts" has the meaning specified in Section
------------------ -------
2.1(f).
------
"Assumed Liabilities" has the meaning specified in Section
------------------- -------
2.3.
---
"Bill of Sale and Instrument of Assignment" means the Bill
-----------------------------------------
of Sale and Instrument of Assignment in the form of Exhibit A.
---------
"Brazil Transactions" means the transactions pursuant to
-------------------
which (i) Viskase Brazil will establish, and contribute to, Newco Brazil
all of Viskase Brazil's right, title and interest in and to the
Purchased Assets and Assumed Liabilities, together with an assignment of
SAP and related software used in the Business in Brazil (subject in each
case to receipt of the necessary consents); and (ii) Viskase Brazil will
spin-off the shares of Newco Brazil to its current shareholders.
"Business" means the business of producing, selling and
--------
distributing specialty plastic films and, for the avoidance of doubt,
does not include the Excluded Business.
"Business Agreements" has the meaning specified in Section
------------------- -------
5.15.
----
"Buyer" has the meaning specified in the first paragraph of
-----
this Agreement.
"Buyer Ancillary Agreements" means all agreements,
--------------------------
instruments and documents being or to be executed and delivered by Buyer
or its Affiliates under this Agreement or in connection herewith.
"Buyer Group Member" means (i) Buyer and its Affiliates,
------------------
(ii) directors, officers and employees of Buyer and its Affiliates and
(iii) the respective successors and assigns of the foregoing.
"Buyer Services Agreement" means the Services Agreement
------------------------
between Buyer and Sellers in the form of Exhibit C.
---------
"Canada" has the meaning specified in the first paragraph of
------
this Agreement.
"Canada Equipment" means equipment primarily used in the
----------------
Business (including equipment that is affixed) at Canada's Lindsay,
Ontario facility.
"Casing Patents" has the meaning specified in Section 8.10.
-------------- ------------
"Chicago Personal Property" means the personal property
-------------------------
located at Viskase's corporate headquarters in Bedford Park, Illinois
and Chicago, Illinois that is not used primarily in the Business.
"Chile" has the meaning specified in the first paragraph of
-----
this Agreement.
"Claim Notice" has the meaning specified in Section 11.3.
------------ ------------
"Closing" means the closing of the transfer of the Purchased
-------
Assets from Sellers to Buyer.
"Closing Date" has the meaning specified in Section 4.1.
------------ -----------
"Closing Purchase Price" has the meaning specified in
----------------------
Section 3.1.
-----------
"COBRA" has the meaning specified in Section 8.3.
----- -----------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Company" or "Companies" means Viskase, Sales, Viskase
------- ---------
Brazil, Chile, UK, Canada and Ireland, individually or collectively, but
when used in conjunction with Sellers, Company or Companies shall refer
only to Viskase Brazil.
"Competition Laws" shall mean all Requirements of Laws that
----------------
are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade,
including the HSR Act.
"Confidentiality Agreement" means that certain letter
-------------------------
agreement dated January 20, 2000, as amended by letter agreement dated
March 9, 2000, between Parent and Buyer and that certain confidentiality
and common interest agreement dated May 26, 2000 between Parent and
Buyer.
"Contaminant" means any waste, pollutant, hazardous or toxic
-----------
substance or waste, petroleum, petroleum-based substance or waste,
special waste defined in or regulated under Environmental Laws.
"Copyrights" means registered copyrights and pending
----------
applications to register the same.
"Court Order" means any judgment, order, award or decree of
-----------
any foreign, federal, state, local or other court or tribunal and any
award in any arbitration proceeding.
"Cryovac Assignment Fee" has the meaning specified in
----------------------
Section 2.4(f).
--------------
"Disclosure Letter" has the meaning set forth in Section
----------------- -------
13.8.
----
"EBITDA" means operating income before interest, taxes,
------
depreciation and amortization. "Operating income" shall equal net sales
less (i) cost of sales, (ii) selling, general and administrative
expenses and (iii) amortization of intangibles.
"Employment Laws" means any applicable Requirements of
---------------
Laws, permits, orders or published decisions relating to (i) any aspect
of employment or (ii) employee benefits.
"Encumbrance" means any lien, claim, charge, security
-----------
interest, mortgage, pledge, easement, conditional sale or other title
retention agreement, defect in title or other restrictions of a similar
kind.
"Environmental Claim" means any written notice by any person
-------------------
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal injuries,
or penalties) of Sellers with respect to the Business arising out of,
based on or resulting from (i) the presence, or Release into the
environment, of any Contaminant at any location, or (ii) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Encumbrance" means an Encumbrance in favor of
-------------------------
any Governmental Body for (i) any liability under any Environmental Law
or (ii) damages arising from, or costs incurred by such Governmental
Body in response to, a Release or threatened Release of a Contaminant
into the environment.
"Environmental Law" means all Requirements of Law relating
-----------------
to pollution or protection of occupational safety or the environment, or
the use, storage, handling, disposal or Release of Contaminants, as each
are in effect as of the date hereof.
"Environmental Matters" means any claim or liability
---------------------
relating to (i) the Release or threatened Release of a Contaminant or
(ii) liabilities arising under applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended.
"Escrow Account" has the meaning specified in Section 3.4.
-------------- -----------
"Escrow Agent" has the meaning specified in Section 3.4.
------------ ------------
"Escrow Agreement" has the meaning specified in Section 3.4.
---------------- -----------
"Escrow Amount" has the meaning specified in Section 4.2.
------------- -----------
"Escrow Fund" has the meaning specified in Section 3.4.
----------- ------------
"Europe" has the meaning specified in the first paragraph of
------
this Agreement.
"Excluded Assets" shall have the meaning specified in
---------------
Section 2.2.
-----------
"Excluded Business" means the business of producing, selling
-----------------
or distributing cellulosic, nylon and other casings, battery separators,
dialysis membranes, netting, and the business of producing, selling or
distributing polypropylene and polyethylene films currently conducted at
Newton-Aycliffe, England.
"Excluded Liabilities" shall have the meaning specified in
--------------------
Section 2.4.
-----------
"Excluded Taxes" has the meaning specified in Section
-------------- -------
8.2(a)(i).
---------
"Expenses" means any and all reasonable out-of-pocket
--------
expenses incurred in connection with defending or asserting any claim,
action, suit or proceeding incident to any matter indemnified against
hereunder (including reasonable fees and disbursements of legal
counsel).
"Final Purchase Price" has the meaning specified in
--------------------
Section 3.1.
-----------
"Financial Statements" means the unaudited pro forma balance
---------------------
sheet of the Business being acquired by Buyer as of the Financial
Statements Date, and the related unaudited pro forma Seller EBITDA
Statement for the year ended December 31, 1999, included in
Schedule 5.5.
------------
"Financial Statements Date" means December 31, 1999.
-------------------------
"Foreign Affected Employee" has the meaning specified in
-------------------------
Section 8.4(a).
--------------
"GAAP" means United States generally accepted accounting
----
principles, consistently applied by Sellers, in effect at the date of
the financial statement to which it refers, and in the case of the
balance sheet included in the Financial Statements, as modified to
reflect only Purchased Assets and Assumed Liabilities.
"Governmental Body" means any foreign, federal, state, local
-----------------
or other governmental authority or regulatory body.
"Governmental Permits" has the meaning specified in
--------------------
Section 5.8.
------------
"Guaranties" has the meaning specified in Section 7.7.
---------- -----------
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
-------
Act of 1976, as amended.
"Indemnified Party" has the meaning specified in
-----------------
Section 11.3.
------------
"Indemnitor" has the meaning specified in Section 11.3.
---------- ------------
"Instrument of Assumption" means the Instrument of
-------------------------
Assumption in the form of Exhibit B.
----------
"Intellectual Property" means Copyrights, Patent Rights,
---------------------
Trademarks and Trade Secrets.
"Ireland" has the meaning specified in the first paragraph
-------
of this Agreement.
"IRS" has the meaning set forth in Section 3.3.
--- -----------
"Knowledge of Buyer" means, as to a particular matter, the
------------------
current actual knowledge of any officer of Buyer.
"Knowledge of Sellers" means, as to a particular matter, the
--------------------
current actual knowledge of the following persons: F. Edward Gustafson,
Gordon S. Donovan, A Judson Burdick, Jean Luc Tillon and Kimberly K.
Duttlinger.
"Leased Properties" has the meaning set forth in Section
----------------- -------
5.9(a).
------
"Licensed Patents" shall mean United States Patent Nos.
----------------
4,863,769; 4,863,784; 4,976,898; 4,988,465; 5,059,481; 5,256,351;
5,256,428; and 5,439,717; including any continuations, continuations in
part, divisionals, reexaminations or reissues thereof in the United
States Patent and Trademark Office, and, counterpart foreign patents,
and foreign patent applications.
"Licensed Patents License Agreement" means the License
----------------------------------
Agreement in the form of Exhibit F.
---------
"Losses" means any and all out-of-pocket losses, costs,
------
settlement payments, awards, judgments, fines, penalties, damages,
expenses, deficiencies or other charges, it being understood that Losses
shall not include punitive, special or consequential or opportunity cost
damages of any kind or the loss of anticipated or future business or
profits.
"Mark" has the meaning set forth in Section 8.1.
---- -----------
"Material Adverse Effect" means a material adverse effect on
-----------------------
the assets, liabilities (including contingent liabilities but excluding
Excluded Liabilities), properties, customer relationships, results of
operations or financial condition of the Business taken as a whole,
other than changes (i) relating to generally applicable economic
conditions or the Companies' industry in general, (ii) resulting from
the public disclosure of the transactions contemplated by this Agreement
or (iii) resulting from the execution of this Agreement or the
consummation of the transactions contemplated hereby.
"Net Working Capital Amount" has the meaning set forth in
--------------------------
Section 3.2(a).
--------------
"Neutral Auditors" has the meaning set forth in Section
---------------- -------
3.2(d).
------
"Newco Brazil" means a company to be organized under the
------------
laws of Brazil.
"Newco Brazil Shares" means all of the issued and
-------------------
outstanding capital stock of Newco Brazil.
"Owned Real Property" has the meaning set forth in Section
------------------- -------
5.9.
---
"Parent" has the meaning specified in the first paragraph of
------
this Agreement.
"Patent Rights" means patents, patent applications,
-------------
continuations, continuations-in-part, divisions or reissues.
"Pension Plan" means any pension plan, as defined in Section
------------
3(2) of ERISA, applied without regard to the exceptions from coverage
contained in Sections 4(b)(4) or 4(b)(5) thereof.
"Permitted Encumbrances" means (a) liens for Taxes and other
----------------------
governmental charges and assessments which are not yet due and payable,
(b) liens of landlords and liens of carriers, warehousemen, mechanics
and materialmen and other like liens arising in the ordinary course of
business for sums not yet due and payable, (c) leases, services
agreements and other similar agreements which may constitute
Encumbrances and are identified on the Schedules to this Agreement, (d)
other Encumbrances or imperfections on property which are insignificant
in amount or do not materially detract from the value of or materially
impair the existing use of the property affected by such lien or
imperfection, (e) all matters and exceptions set forth in the Reports on
Title, (f) liens, charges, encumbrances or title exceptions or
imperfections with respect to the Owned Real Property created by or
resulting from the acts or omissions of Buyer or any of its affiliates,
employees, officers, directors, agents, representatives, contractors,
invitees or licenses, (g) liens, charges, encumbrances and/or title
exceptions or imperfections created by any of the documents to be
executed in connection with the Closing or this Agreement whether prior
to, at or after the Closing, and (h) all matters shown on or referenced
in the Surveys. Notwithstanding the foregoing, as of the Closing, the
items struck-through on the Reports of Title shall not be Permitted
Encumbrances for purposes of the foregoing definition.
"Person" means any individual, corporation, partnership,
------
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or Governmental Body.
"Policies" has the meaning specified in Section 8.3.
-------- -----------
"Purchased Assets" has the meaning specified in Section 2.1.
---------------- -----------
"Regulations" has the meaning specified in Section 7.10.
----------- ------------
"Release" means release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal or discharge of a Contaminant into the
environment.
"Remedial Action" means actions required under Environmental
---------------
Law to (i) clean up, remove, treat or in any other way address
Contaminants in the environment, (ii) prevent the threatened Release or
minimize the further Release of Contaminants or (iii) investigate and
determine if a remedial response is needed and to design such a response
and post-remedial investigation, monitoring, operation and maintenance
and care.
"Reports on Title" shall mean the reports on the attached to
----------------
Exhibit E.
---------
"Requirements of Law" means any foreign, federal, state and
-------------------
local laws, statutes, regulations, rules, codes or ordinances enacted,
adopted, issued or promulgated by any Governmental Body and common law.
"Resolution Period" has the meaning set forth in Section
----------------- -------
3.2(c).
------
"Sales" has the meaning specified in the first paragraph of
-----
the Agreement.
"SAVE Program" has the meaning specified in Section 8.3.
------------ -----------
"Sellers" has the meaning specified in the first paragraph
-------
of this Agreement.
"Seller Ancillary Agreements" means all agreements,
---------------------------
instruments and documents being or to be executed and delivered by
Sellers under this Agreement or in connection herewith.
"Seller EBITDA Statement" means the unaudited pro forma
-----------------------
statement of the EBITDA of the Business being acquired by Buyer.
"Seller Group Member" means (i) the Sellers and their
-------------------
Affiliates, (ii) directors, officers and employees of Sellers and their
Affiliates and (iii) the respective successors and assigns of the
foregoing.
"Seller's Group" shall mean any "affiliated group" (as
--------------
defined in Section 1504(a) of the Code without regard to the limitations
contained in Section 1504(b) of the Code) that includes any Seller.
"Sellers Transition Services Agreement" means the Transition
-------------------------------------
Services Agreement between Buyer and Sellers in the form of Exhibit D.
---------
"Side License Agreement" means the agreement in the form of
----------------------
Exhibit J.
----------
"Software" means computer software programs and software
--------
systems, including, without limitation, all databases, compilations,
tool sets, compilers, higher level "proprietary" languages, related
documentation and materials, whether in source code, object code or
human readable form; provided, however, that Software does not include
-------- -------
software that is available generally through consumer retail stores,
distribution networks or is otherwise subject to "shrink-wrap" license
agreements including, without limitation, any software pre-installed in
the ordinary course of business as a standard part of hardware purchased
by the Companies.
"Straddle Period" means any taxable year or period beginning
---------------
on or before and ending after the Closing Date.
"Surveys" shall mean (i) the ALTA/ACSM Land Title Survey of
-------
the Owned Real Property located in Pauls Valley, Garvin County,
Oklahoma, prepared by Hale & Associates Surveying, dated May 25, 1999
and (ii) the ALTA/ACSM Land Title Survey of the Owned Real Property
located in Centerville, Appanoos County, Iowa, prepared by Hall
Engineering Company, dated May 21, 1999.
"Swansea Facility" means the facility subject to that
----------------
certain Lease Agreement dated October 7, 1991 between UK and the Council
of Swansea.
"Tax" (and, with correlative meaning, "Taxes") means any
--- -----
federal, state, local or foreign income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum, ad valorem, value added,
transfer or excise tax, or any other tax, custom, duty, governmental fee
or other like assessment or charge of any kind whatsoever, together with
any interest or penalty, imposed by any governmental authority.
"Tax Package" has the meaning set forth in Section
----------- -------
8.2(b)(iii).
-----------
"Tax Return" means any return, report or similar statement
----------
required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim
for refund, amended return or declaration of estimated Tax.
"Title Company" means Chicago Title Insurance Company.
-------------
"Trademarks" means registered foreign, federal and state
----------
trademarks, service marks and trade names, and pending applications to
register the foregoing.
"Trade Secrets" means confidential ideas, trade secrets,
-------------
know-how, concepts, methods, processes, formulae, reports, data,
customer lists, mailing lists, business plans, or other proprietary
information that provides the owner with a competitive advantage.
"Transferred Improvements" shall have the meaning specified
------------------------
in Section 2.1(c).
-------------
"Transferred Land" shall have the meaning specified in
----------------
Section 2.1(b).
--------------
"Transferred Leasehold Interests" has the meaning specified
-------------------------------
in Section 2.1(f).
---------------
"Transferred Real Property" has the meaning specified in
-------------------------
Section 2.1(c).
---------------
"UK" has the meaning specified in the first paragraph of
--
this Agreement.
"UK Employees" has the meaning specified in Section 5.18(g).
------------ ---------------
"US Holdings" has the meaning specified in the first
-----------
paragraph of this Agreement.
"Valuation Date" means 11:59 p.m. on the business day
--------------
immediately preceding the Closing Date.
"Valuation Date Statement" has the meaning specified in
------------------------
Section 3.2(a).
--------------
"Viskase" has the meaning specified in the first paragraph
-------
of this Agreement.
"Viskase Brazil" means Viskase Brazil Embalagens Ltda., a
--------------
company organized under the laws of Brazil.
"Viskase Brazil Shares" means all of the issued and
---------------------
outstanding capital stock of Viskase Brazil.
"Welfare Plan" means any welfare plan, as defined in Section
------------
3(1) of ERISA, applied without regard to the exceptions from coverage
contained in Sections 4(b)(4) or 4(b)(5) thereof.
ARTICLE II
----------
PURCHASE AND SALE
-----------------
Section 2.1. Transfer of Assets. Subject to the Permitted
------------------
Encumbrances and the terms and conditions of this Agreement, including
Section 2.2, Sellers will sell, convey, assign, transfer and deliver to
-----------
Buyer, or one or more Affiliates designated in writing by Buyer, and
Buyer, or one or more Affiliates designated in writing by Buyer, will
purchase, assume and acquire from Sellers, all of each Seller's right,
title and interest in and to all of the assets used primarily in the
Business, including the following assets (but not including the Excluded
Assets) as they exist on the Closing Date (the following assets of
Sellers being the "Purchased Assets," it being understood that such term
----------------
includes the assets of Viskase Brazil to be contributed to Newco Brazil
on or before the Closing Date pursuant to the Brazil Transactions):
(a) Balance Sheet Assets. All of the assets reflected on
--------------------
the balance sheet included in Schedule 5.5, except for cash, accounts
------------
receivable, intercompany receivables and those assets disposed of or
converted into cash after the Financial Statements Date in the
ordinary course of business.
(b) Real Property Rights. Each parcel of real property
--------------------
described or depicted in Schedule 2.1(b) (the "Transferred Land").
--------------- ----------------
(c) Improvements, Buildings, Structures and Fixtures. The
------------------------------------------------
improvements, buildings, structures and fixtures that are located on
the Transferred Land or any portion thereof (collectively, the
"Transferred Improvements" and, together with the Transferred Land,
------------------------
the "Transferred Real Property").
-------------------------
(d) Permits, Licenses, Etc. The governmental
----------------------
authorizations, consents, approvals, permits, licenses or orders
including applications for any of the foregoing, described in Schedule
--------
2.1(d).
------
(e) Personal Property. The machinery, equipment, vehicles,
-----------------
furniture and other tangible personal property of the Companies which
is located on the Transferred Real Property on the Closing Date and
used primarily in connection with the Business and all inventories
(including all raw materials, supplies, work-in-process and other
materials) relating primarily to the Business wherever located (all of
which inventory will be included in the calculation set forth in
Section 3.2).
------------
(f) Other Assets. (1) The Business Agreements, (2) any
------------
other contracts and agreements relating to the Business entered into
in the ordinary course of business which are not required to be listed
on a Schedule hereto, (3) all purchase orders relating to the
Business which are unfulfilled or unpaid on the Closing Date, in each
case entered into in the ordinary course of business, (4) all other
contracts and agreements relating to the Business entered into after
the date hereof in the ordinary course of business, but, with respect
to (1) through (4), only to the extent relating to the Business and
(5) Sellers' rights as tenant or landlord under each of the Leased
Properties set forth in Schedule 5.9 (the "Transferred Leasehold
------------ ---------------------
Interests") and (6) Sellers' rights as landlord under leases or
---------
similar agreements with respect to any of the Owned Real Property
(collectively, the "Assigned Contracts").
------------------
(g) Newco Brazil Shares. All of the Newco Brazil Shares,
-------------------
free and clear of all Encumbrances.
(h) Records. The books, records, documents, drawings,
-------
reports, operating data and similar items of Sellers relating
primarily to the Business and all files and records relating to
Intellectual Property conveyed to Buyer.
(i) Intellectual Property. The Copyrights, Patent Rights
---------------------
and Trademarks listed in Schedule 2.1(i).
---------------
(j) Trade Secrets. All Trade Secrets and other proprietary
-------------
or confidential information relating primarily to the Business.
Section 2.2. Excluded Assets. Notwithstanding anything to
---------------
the contrary contained herein, nothing in this Agreement will
constitute or be construed as conferring on Buyer, and Buyer is not
acquiring, any right, title or interest in or to the following, all of
the following being specifically excluded from the sale of assets
contemplated by this Agreement (collectively, the "Excluded Assets"):
---------------
(a) the assets (including contracts) listed or described on Schedule
--------
2.2(a); (b) the Marks, the Licensed Patents, the SAP Software and any
------
other Software used at the Transferred Real Property not relating
primarily to the Business (except for transition rights as provided in
the Sellers Transition Services Agreement); (c) except as provided in
Section 8.3, the assets of the Pension Plans and Welfare Plans
-----------
maintained by the Asset Sellers; (d) any properties, assets, business,
operation, subsidiary or division of Sellers or any Affiliate of
Sellers, whether tangible or intangible, real, personal or mixed,
which is not related primarily to the Business; (e) any cash, cash
equivalents, bank deposits and marketable securities of Sellers and
all accounting or general ledger records of Sellers; (f) any
communications between Sellers and their counsel, including attorney-
client privileged or work product material, to the extent relating to
Excluded Liabilities; (g) any abatement or refund of any Tax for which
Sellers are liable pursuant to Section 8.2; (h) any rights, claims or
-----------
causes of action against any third parties relating to the Excluded
Assets or the Excluded Liabilities; (i) all contracts of insurance and
all rights thereunder; (j) all corporate records of Asset Sellers,
including corporate minute books and stock transfer books and
corporate seals; (k) without limiting the generality of clause (h),
any rights the Sellers may have, or amounts the Sellers may be
entitled to, against the ANC Defendants relating to the Licensed
Patents; (l) the Chicago Personal Property; (m) any intercompany
receivables and any other rights under any intercompany agreements
between Sellers and their Affiliates; (n) all accounts receivable
generated by the Business prior to the Closing Date; (o) any Trade
Secrets or Patent Rights relating to shirring and any equipment used
in shirring; (p) the parcel of real property located at 150 Colborne
Street East, Lindsay, Ontario, Canada, together with the improvements,
buildings, structures and fixtures (other than fixtures included in
the Canadian Equipment) that are located thereon; and (q) the capital
stock of Viskase (UK) Limited, a company organized under the laws of
the United Kingdom.
Section 2.3. Assumed Liabilities. On the Closing Date,
-------------------
Buyer will assume and be responsible and liable for (i) all
obligations and liabilities related to, arising from or associated
with ownership, occupancy, use or operation of the Purchased Assets
from and after the Closing (other than Excluded Liabilities) and (ii)
the following obligations and liabilities (collectively, "Assumed
-------
Liabilities"):
-----------
(a) Current and Long-Term Liabilities. All liabilities
---------------------------------
reflected in the Valuation Date Statement and, if outstanding, (i) all
interest-bearing debt and capitalized leases on the books of Sellers
reflected in the balance sheet included in the Financial Statements
(including any interest on such interest-bearing debt) and (ii)
operating leases of production equipment providing for annual lease
payments in excess of $100,000.
(b) Environmental Liabilities. Any liabilities and
-------------------------
obligations related to, associated with or arising out of (i) the
occupancy, operation, use or control of any of the Transferred Real
Property on or prior to the Closing Date or (ii) the operation of the
Business at the Transferred Real Property on or prior to the Closing
Date, in each case incurred or imposed by any Environmental Law
(including, without limitation, any Release of any Contaminant on, at
or from the Transferred Real Property, including, without limitation,
all facilities, improvements, structures and equipment thereon,
surface water thereon or adjacent thereto and soil or groundwater
thereunder, or migrating therefrom.
(c) Compliance Liabilities. Obligations to comply with,
----------------------
and all liabilities connected with or arising out of, the permits,
licenses, approvals and other items (including applications) listed in
Schedule 2.1(d) and other permits, licenses, exemptions, allowances
---------------
and approvals obtained in connection with the Purchased Assets, in
each case relating to the period from and after the Closing Date.
(d) Litigation and Claims. All liabilities in respect of
---------------------
the claims or proceedings described in Schedule 2.3(d) and all
---------------
warranty or return claims.
(e) Assigned Liabilities. Obligations and liabilities
--------------------
under the Assigned Contracts (but only to the extent relating to the
Business), in each case relating to the period from and after the
Closing Date.
(f) Employment Laws. Obligations and liabilities under the
---------------
Employment Laws to Transferred Employees relating to the period from
and after the Closing Date.
(g) Other Specified Liabilities. All other obligations and
---------------------------
liabilities allocated to Buyer in Article VIII of this Agreement.
------------
Section 2.4. Excluded Liabilities. Buyer shall not assume
--------------------
or be obligated to pay, perform or otherwise discharge any liabilities
or obligations of Sellers that are not Assumed Liabilities (all such
liabilities and obligations not being assumed being herein called the
"Excluded Liabilities") and, notwithstanding anything to the contrary
in Section 2.3, none of the following shall be Assumed Liabilities for
purposes of this Agreement:
(a) obligations and liabilities of Sellers in respect of
any Excluded Assets or other assets of Sellers which are not Purchased
Assets and any obligations and liabilities of Canada other than (i)
customer contracts, (ii) warranty and return claims and (iii) Assumed
Liabilities described in Section 2.3(a), if any;
--------------
(b) except as provided in Sections 8.3 and 8.4, liabilities
------------ ---
of the Asset Sellers' employee benefit arrangements and plans listed
in Schedule 5.16 or otherwise maintained or contributed to by the
-------------
Asset Sellers;
(c) any intercompany payables and other liabilities under
intercompany agreements between Sellers and their Affiliates;
(d) the matters identified in Schedule 2.4;
------------
(e) any costs and expenses incurred by Seller incident to
its negotiation and preparation of this Agreement and its performance
and compliance with the agreements and conditions contained herein;
(f) the one-time payment to Cryovac, Inc. (the "Cryovac
-------
Assignment Fee") required under Section 2 of the Agreement dated
--------------
January 17, 2000 relating to the Cross-License Agreement dated March
27, 1996 between Cryovac, Inc., (as assignee of W.R. Grace &
Co.-Conn., Inc.) and Viskase as a result of the transactions
contemplated hereby; and
(g) any liabilities and obligations incurred or imposed by
any Environmental Law as a result of any Release on or prior to the
Closing Date of any Contaminant on, at or from any real property or
facility owned by a third Person to which Contaminants generated by
the Business were sent for treatment or disposal prior to the Closing
Date.
ARTICLE III
-----------
PURCHASE PRICE
--------------
Section 3.1. Purchase Price. The aggregate purchase price
--------------
for the Purchased Assets shall be equal to $227,658,000 in cash minus
-----
the amount of (i) the interest-bearing debt and capitalized leases on
the books of Sellers (including amounts for buy-outs at the end of the
lease term), if any, and (ii) remaining payments under operating
leases of production equipment providing for annual lease payments in
excess of $100,000 (including amounts for buy-outs at the end of the
lease term), if any, which leases, in the case of (i) or (ii), are
being assumed by Buyer pursuant to Section 2.3(a) (the "Closing
-------------- -------
Purchase Price"), subject to adjustment following the Closing in
--------------
accordance with Section 3.2 (the "Final Purchase Price"). The Closing
----------- --------------------
Purchase Price shall be paid by Buyer pursuant to Section 4.2 hereof.
-----------
The Closing Purchase Price may also be adjusted pursuant to Section
-------
3.5.
---
Section 3.2. Purchase Price Adjustment. (a) As soon as
-------------------------
practicable, but in no event later than 60 days following the
Valuation Date, Sellers shall prepare a statement of adjusted working
capital of the Business as of the Valuation Date (including the notes
thereto, the "Valuation Date Statement"). The Valuation Date Statement
------------------------
shall present the net amount of the current assets of the Business
that are Purchased Assets less the current liabilities of the Business
that are Assumed Liabilities plus, from the Financial Statements Date
to the Valuation Date, the investment in fixed assets (other than
investments resulting from the purchase of (A) assets subject to
capitalized leases on the books of Sellers or (B) production equipment
under operating leases) less (i) the net proceeds from the disposal of
any fixed assets of the Business and (ii) the replacement cost of any
fixed assets of the Business included in the Purchased Assets that,
from the Financial Statements Date to the Valuation Date, are lost,
damaged beyond repair or destroyed (the "Net Working Capital Amount")
--------------------------
and shall be prepared with respect to such items on a basis consistent
with the Financial Statements. Notwithstanding the foregoing, the
Valuation Date Statement shall not include any interest-bearing debt,
any capitalized lease on the books of Sellers or any operating lease
of production equipment providing for annual lease payments in excess
of $100,000.
(b) During the preparation of the Valuation Date Statement
and the period of any dispute within the contemplation of this Section
3.2, Buyer shall (i) provide Sellers and Sellers' authorized
representatives with access to the books, records, facilities,
employees and accountants of the Business, (ii) provide Sellers as
promptly as practicable after the Closing Date (but in no event later
than 30 days after the Closing Date) with normal month-end closing
financial information for the period ending on the Valuation Date and
(iii) cooperate with Sellers and Sellers' authorized representatives,
including the provision on a timely basis of all information necessary
or useful in connection with Sellers' preparation of the Valuation
Date Statement.
(c) Sellers shall deliver a copy of the Valuation Date
Statement, together with the work papers used in the preparation
thereof, to Buyer promptly after it has been prepared and in no event
later than 60 days after the Closing Date. After receipt of the
Valuation Date Statement, Buyer shall have 60 days to review the
Valuation Date Statement, together with the work papers used in the
preparation thereof. Unless Buyer delivers written notice to Sellers
on or prior to the 60th day after Buyer's receipt of the Valuation
Date Statement specifying all disputed items and the basis therefor,
Buyer shall be deemed to have accepted and agreed to the Valuation
Date Statement. If Buyer so notifies Sellers of its objection to the
Valuation Date Statement, Sellers and Buyer shall, within 30 days
following such notice (the "Resolution Period"), attempt to resolve
-----------------
their differences and any resolution by them as to any disputed
amounts shall be final, binding and conclusive.
(d) At the conclusion of the Resolution Period, all amounts
remaining in dispute shall be submitted to Deloitte & Touche (the
"Neutral Auditors"). In the event that Deloitte & Touche is unwilling
-----------------
to serve as the Neutral Auditor hereunder and Buyer and Sellers are
unable to agree on a substitute therefor, Buyer or Sellers may request
the American Arbitration Association to appoint a nationally
recognized accounting firm to act as Neutral Auditor hereunder who
shall not have had a material relationship with Sellers or Buyer or
any of their Affiliates within the past two years. Each party agrees
to execute, if requested by the Neutral Auditors, a reasonable
engagement letter. All fees and expenses relating to the work, if any,
to be performed by the Neutral Auditors shall be borne equally by
Sellers and Buyer. The Neutral Auditors shall act as an arbitrator to
determine, based solely on presentations by Sellers and Buyer, and not
by independent review, only those issues still in dispute. The Neutral
Auditors' determination shall be made within 30 days of their
selection, whether or not such presentations by Sellers and Buyer have
been made within such period, and shall be set forth in a written
statement delivered to Sellers and Buyer and shall be final, binding
and conclusive. The term "Adjusted Valuation Date Statement," as
---------------------------------
hereinafter used, shall mean the definitive Valuation Date Statement
agreed to by Buyer and Sellers in accordance with Section 3.2(c) or
--------------
the definitive Valuation Date Statement resulting from the
determinations made by the Neutral Auditors in accordance with this
Section 3.2(d) (in addition to those items theretofore agreed to by
--------------
Sellers and Buyer), in each case prepared in the manner set forth in
the Section 3.2(a) hereof. The Net Working Capital Amount reflected on
--------------
the Adjusted Valuation Date Statement shall not be less than that
specified by Buyer in its notice to Sellers pursuant to subsection (c)
above nor more than that specified by Sellers on the Valuation Date
Statement.
(e) The Closing Purchase Price shall be increased or
decreased, as the case may be, dollar for dollar, to the extent the
Net Working Capital Amount reflected in the Adjusted Valuation Date
Statement is greater than or less than $7,304,000, as the case may be.
The amount of any increase to or reduction of the Closing Purchase
Price pursuant to this Section 3.2 shall bear interest from the
-----------
Closing Date through the date of payment at the Agreed Rate in effect
from time to time from the Closing Date to the date of such payment.
The amount of any reduction of the Closing Purchase Price pursuant to
this Section 3.2(e), together with interest thereon, shall be paid by
--------------
wire transfer in immediately available funds by the Escrow Agent from
the Escrow Account to the account specified by Buyer pursuant to the
terms of the Escrow Agreement, and the balance of the Escrow Fund, if
any, shall be paid by the Escrow Agent to the account specified by
Sellers pursuant to the Escrow Agreement. If the Escrow Fund is
insufficient to pay Buyer the amount of the reduction of the Closing
Purchase Price pursuant to this Section 3.2(e), then the balance of
--------------
such reduction of the Closing Purchase Price shall be paid by wire
transfer in immediately available funds by Sellers to the account
specified by Buyer. The amount of any increase to the Closing
Purchase Price pursuant to this Section 3.2(e), together with interest
--------------
thereon, shall be paid by wire transfer in immediately available funds
by Buyer to the account specified by Sellers. In the event of any
increase in the Closing Purchase Price pursuant to this Section
-------
3.2(e), then the Escrow Fund shall be paid by the Escrow Agent to the
------
account specified by Sellers pursuant to the Escrow Agreement. Such
payment or transfer, as the case may be, shall be made within five
business days after the Adjusted Valuation Date Statement is agreed to
by Buyer and Sellers or any remaining disputed items are ultimately
determined by the Neutral Auditors.
Section 3.3. Allocation of Purchase Price. Prior to the
----------------------------
date hereof, the parties have jointly prepared a schedule (the
"Allocation Schedule") allocating the Closing Purchase Price as
-------------------
determined pursuant to Sections 3.1 (including, for purposes of this
------------
Section 3.3, any other consideration paid to Sellers, including the
-----------
Assumed Liabilities) among the Purchased Assets. The Allocation
Schedule has been prepared in accordance with Section 1060 of the Code
and the regulations thereunder. Buyer and the Sellers each agree to
file Internal Revenue Service ("IRS") Form 8594, and all federal,
---
state, local and foreign Tax Returns, in accordance with the
Allocation Schedule. Buyer and the Sellers each agree to provide the
other promptly with any other information required to complete Form
8594.
Section 3.4. Escrow. At the Closing Date, an escrow
------
account (the "Escrow Account") shall be established with the Norwest
--------------
Bank Minnesota, N.A. (the "Escrow Agent") for the Escrow Amount in
------------
lieu of being paid directly to the Sellers. The Escrow Account shall
be established pursuant to an agreement among the parties hereto and
the Escrow Agent in substantially the form attached hereto as
Exhibit I (the "Escrow Agreement"). At the Closing Date, the Sellers
--------- ----------------
shall be deemed to have directed Buyer to wire transfer to the Escrow
Agent an amount equal to the Escrow Amount. The Escrow Amount so
delivered to the Escrow Agent and any other property or cash, and any
income earned with respect thereto, from time to time held by the
Escrow Agent pursuant to the terms of the Escrow Agreement is herein
referred to as the "Escrow Fund." The Escrow Fund shall be held by
-----------
the Escrow Agent in escrow subject to the terms and conditions of the
Escrow Agreement and shall apply to the purchase price adjustment set
forth in Section 3.2 hereof.
-----------
ARTICLE IV
CLOSING
-------
Section 4.1. Closing Date. The Closing shall be
------------
consummated on the later of (i) August 15, 2000 and (ii) the second
business day after the conditions set forth in Articles IX and X have
----------- -
been satisfied or waived, at the offices of Sidley & Austin, Bank One
Plaza, Chicago, Illinois, or at such other time and place as shall be
agreed upon by Buyer and Sellers. The time and date on which the
Closing is actually held is referred to herein as the "Closing Date."
------------
Section 4.2. Payment on the Closing Date. Subject to
---------------------------
fulfillment or waiver (where permissible) of the conditions set forth
in Article IX, at the Closing Buyer shall pay (a) Sellers an amount
----------
equal to the Closing Purchase Price, minus (i) $1,000,000, (ii) the
amount of the Cryovac Assignment Fee and (iii) the amount of the
withholding Tax in respect of the sale of the Newco Brazil Shares to
be borne by Sellers pursuant to Section 8.2(a)(vi), by wire transfer
------------------
of immediately available funds to the bank account or accounts
specified by Sellers, (b) the Escrow Agent, for the account of the
Escrow Account, an amount equal to $1,000,000 (the "Escrow Amount") by
-------------
wire transfer of immediately available funds to the bank account
specified by the Escrow Agent, to be held in escrow pursuant to
Section 3.4, (c) Cryovac, Inc. an amount equal to the Cryovac
-----------
Assignment Fee, as payment of such fee, by wire transfer of
immediately available funds, to the bank account specified by Cryovac,
Inc. and (d) the amount of any withholding Taxes required as a result
of the sale of the Newco Brazil Shares.
Section 4.3. Buyer's Additional Closing Date Deliveries.
------------------------------------------
Subject to fulfillment or waiver (where permissible) of the conditions
set forth in Article IX, at the Closing Buyer shall deliver to Sellers
----------
all of the following:
(a) Certificate of good standing of Buyer (or any Affiliate
of Buyer acquiring Purchased Assets hereunder) issued as of a recent
date by the jurisdiction under which Buyer (or any such Affiliate) was
formed;
(b) Certificate of the secretary or an assistant secretary
of Buyer (or any Affiliate of Buyer acquiring Purchased Assets
hereunder), dated the Closing Date, in form and substance reasonably
satisfactory to Sellers, as to (i) the charter and by-laws or similar
organizational documents of Buyer (or any such Affiliate); (ii) the
resolutions of the Board of Directors of Buyer (or any such Affiliate)
authorizing the execution and performance of this Agreement, any Buyer
Ancillary Agreements and the transactions contemplated hereby and
thereby; and (iii) incumbency and signatures of the officers of Buyer
executing this Agreement and any Buyer Ancillary Agreement;
(c) The certificate contemplated by Section 10.1, duly
------------
executed by a duly authorized officer of Buyer;
(d) The Instrument of Assumption duly executed by Buyer;
(e) The Buyer Services Agreement, the Sellers Transition
Services Agreement, the Licensed Patents License Agreement, the Side
License Agreement and the Escrow Agreement, in each case duly executed
by Buyer; and
(f) A legal opinion(s) of counsel to Buyer, substantially
in the form attached as Exhibit G .
---------
Section 4.4. Sellers' Closing Date Deliveries. Subject to
--------------------------------
fulfillment or waiver (where permissible) of the conditions set forth
in Article X, at the Closing Sellers shall deliver to Buyer all of the
---------
following:
(a) Certificate of good standing (or other equivalent
status) of each Seller and Newco Brazil, issued as of a recent date by
an authorized representative of the jurisdiction under which such
Seller or Newco Brazil was formed;
(b) Certificates of the secretary or an assistant secretary
of each Seller, dated the Closing Date, in form and substance
reasonably satisfactory to Buyer, as to (i) the charter and by-laws or
similar organizational documents of each Seller and Newco Brazil; (ii)
the resolutions of the Board of Directors of such Seller authorizing
the execution and performance of this Agreement, any Seller Ancillary
Agreement to which such Seller is a party and the transactions
contemplated hereby and thereby; and (iii) incumbency and signatures
of the officers of such Seller executing this Agreement and any Seller
Ancillary Agreement to which such Seller is a party;
(c) The certificate(s) or other evidences of ownership
representing all of the Newco Brazil Shares, duly endorsed to Buyer or
accompanied by duly executed stock powers or duly executed
assignments, as the case may be;
(d) The certificate contemplated by Section 9.1, duly
-----------
executed by duly authorized officers of each Seller;
(e) The Bill of Sale and Instrument of Assignment(s) duly
executed by Asset Sellers;
(f) Certificates of title or origin (or like documents)
with respect to any vehicles or other equipment included in the
Purchased Assets for which a certificate of title or origin is
required in order to transfer title;
(g) A special warranty deed or similar instrument with
respect to each of the parcels of the Transferred Real Property, duly
executed by Asset Sellers;
(h) Assignments of each of the Leased Properties which have
been obtained prior to Closing;
(i) Any real estate transfer Tax declarations required to
be executed or filed in connection with the transfer of the Purchased
Assets;
(j) The Buyer Services Agreement and the Sellers Transition
Services Agreement, duly executed by Sellers;
(k) The Licensed Patents License Agreement and the Side
License Agreement, in each case duly executed by Viskase;
(l) A legal opinion(s) of counsel to Sellers, substantially
in the form attached as Exhibit H; and
---------
(m) Such other bills of sale, assignment and other
instruments of transfer or conveyance as may be otherwise necessary to
evidence and effect the sale, assignment, transfer, conveyance and
delivery of the Purchased Assets.
Section 4.5. Real Estate Conveyances. The Owned Real
-----------------------
Property will be conveyed to Buyer and Sellers shall use their
commercially reasonable efforts to have the Leased Properties assigned
to Buyer, in accordance with standard local real estate practices,
except that Buyer shall pay all Taxes and other fees associated with
the transfer, recordation, registration and insurance or other
determination/confirmation of title to such real estate.
ARTICLE V
--------
REPRESENTATIONS AND WARRANTIES OF SELLERS
-----------------------------------------
As an inducement to Buyer to enter into this Agreement and
to consummate the transactions contemplated hereby, Sellers represent
and warrant to Buyer as follows:
Section 5.1. Organization of Sellers. Each Seller is a
-----------------------
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation.
Section 5.2. Organization; Capital Structure of the
--------------------------------------
Companies; Power and Authority. (a) Viskase Brazil is and, as of the
------------------------------
Closing, Newco Brazil will be a corporation duly organized, validly
existing and in good standing under the laws of Brazil. Each of the
Companies is (and, as of the Closing, Newco Brazil will be) duly
qualified to transact business and is in good standing in each
jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualifications
necessary, except where the failure to be so qualified or in good
standing would not reasonably be expected to have a Material Adverse
Effect. Each of the Companies has (and, as of the Closing, Newco
Brazil will have) the corporate power and corporate authority to own
or lease and operate its assets and to carry on the Business in the
manner that it was conducted immediately prior to the date of this
Agreement.
(b) The issued and outstanding capital stock of Viskase
Brazil is as set forth on Schedule 5.2. Except as set forth on
------------
Schedule 5.2, US Holdings, Europe and Viskase own all of the Viskase
------------
Brazil Shares free and clear of all Encumbrances. Immediately prior
to the Closing, US Holdings, Europe and Viskase will own all of the
outstanding Newco Brazil Shares free and clear of all Encumbrances.
All such capital stock is (or, in the case of Newco Brazil, will be)
duly authorized, validly issued and outstanding, fully paid and
nonassessable, and free of preemptive rights. Except for this
Agreement and as set forth on Schedule 5.2, there are no commitments
------------
to issue or sell any shares of capital stock or any securities or
obligations convertible into or exchangeable for, or giving any Person
any right to acquire from Sellers or the Companies, any shares of
capital stock of Newco Brazil, and no such securities or obligations
are outstanding.
Section 5.3. Subsidiary and Investments. Viskase Brazil
--------------------------
does not (and Newco Brazil will not), directly or indirectly, own, of
record or beneficially, any outstanding equity interests in any
corporation, partnership, joint venture or other entity.
Section 5.4. Authority of Seller; Conflicts. (a) Each
------------------------------
Seller has the corporate power and corporate authority to execute,
deliver and perform this Agreement and each of the Seller Ancillary
Agreements to which it is a party. The execution, delivery and
performance of this Agreement and the Seller Ancillary Agreements by
each Seller have been duly authorized and approved by such Seller and
do not require any further authorization or consent of such Seller or
its stockholders. This Agreement has been duly authorized, executed
and delivered by each Seller and (assuming the valid authorization,
execution and delivery of this Agreement by Buyer) is the legal, valid
and binding obligation of such Seller enforceable in accordance with
its terms, and each of the Seller Ancillary Agreements has been duly
authorized by each Seller and upon execution and delivery by such
Seller will be (assuming the valid authorization, execution and
delivery by Buyer, where Buyer is a party, or the other party or
parties thereto) a legal, valid and binding obligation of such Seller
enforceable in accordance with its terms, subject, in the case of the
Agreement and each of the Seller Ancillary Agreements, to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights and to general
equity principles.
(b) Except as set forth in Schedule 5.4, neither the
------------
execution and delivery of this Agreement or any of the Seller
Ancillary Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of
the terms, conditions and provisions hereof or thereof will:
(i) assuming the receipt of all necessary consents and
approvals and the filing of all necessary documents as
described in Section 5.4(b)(ii), result in a breach of the
terms, conditions or provisions of, or constitute a default, an
event of default or an event creating rights of acceleration,
termination or cancellation or a loss of rights under, or
result in the creation or imposition of any Encumbrance upon
any of the Purchased Assets or any of the assets of the
Companies, under (1) the charter or by-laws or other
organizational documents of Sellers or Viskase Brazil, (2) any
note, instrument, mortgage, lease, franchise or financial
obligation to which Sellers or Viskase Brazil is a party or by
which Sellers or Viskase Brazil is bound, (3) any Court Order
to which Sellers or Viskase Brazil is a party or by which
Sellers or Viskase Brazil is bound or (4) any Requirements of
Law affecting Sellers or Viskase Brazil, other than, in the
case of clauses (2), (3) and (4) above, any such breaches,
defaults, rights, loss of rights or Encumbrances that,
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect or would not prevent
the consummation of any of the transactions contemplated
hereby, or
(ii) require the approval, consent, authorization or act of,
or the making by Sellers or Viskase Brazil of any declaration,
filing or registration with, any Person, except (1) in
connection, or in compliance, with the provisions of the HSR
Act, (2) as required by foreign laws, (3) such consents,
approvals, filings and notices as may be required under any
Requirements of Law with respect to environmental matters
pertaining to any notification, disclosure or required approval
triggered by the transactions contemplated by this Agreement,
(4) such filings as may be required in connection with the
Taxes described in Section 8.2(a)(v), and (5) such approvals,
consents, authorizations, declarations, filings or
registrations the failure of which to be obtained or made would
not reasonably be expected to have a Material Adverse Effect or
would not prevent the consummation of any of the transactions
contemplated hereby.
Section 5.5. Financial Statements. Schedule 5.5 contains
-------------------- ------------
the pro forma unaudited balance sheet of the Business being acquired
by Buyer as of the Financial Statements Date and the pro forma
unaudited Seller EBITDA Statement of the Business for the year then
ended. Except as set forth therein or in Schedule 5.5, such balance
------------
sheet has been prepared in accordance with GAAP, and such balance
sheet presents fairly, in all material respects, the financial
position of the Business being acquired by Buyer as of the Financial
Statements Date. The Seller EBITDA Statement has been prepared from
the consolidated financial statements of Parent for the year ended
December 31, 1999. The information set forth in the Seller EBITDA
Statement has been prepared in accordance with Schedule 5.5 and,
------------
except as modified by Schedule 5.5, has been prepared in accordance
------------
with GAAP. The Seller EBITDA Statement fairly presents, in all
material respects, the results of operations of the Business being
acquired by Buyer, based upon the principles set forth in Schedule
--------
5.5.
---
Section 5.6. Operations Since Financial Statements Date.
------------------------------------------
Except as set forth in Schedule 5.6, since the Financial Statements
------------
Date, there have been no changes in the assets, results of operations
or financial condition of the Business which have had a Material
Adverse Effect. Except as set forth in Schedule 5.6, since the
------------
Financial Statements Date, the Companies have conducted the Business
only in the ordinary course.
Section 5.7. Taxes. Except as set forth on Schedule 5.7,
----- ------------
(i) Sellers and Viskase Brazil, with respect to the Business and the
Purchased Assets, have filed all material Tax Returns required to have
been filed on or before the date hereof; (ii) all Taxes shown to be
due on the Tax Returns referred to in clause (i) have been timely paid
and such Tax Returns are true and correct in all material respects,
(iii) neither Sellers nor Viskase Brazil have waived in writing any
statute of limitations in respect of Taxes with respect to the
Business and the Purchased Assets which waiver is currently in effect;
(iv) the Tax Returns referred to in clause (i) relating to federal and
state income Taxes have been examined by the IRS or the appropriate
state taxing authority or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has
expired; (v) no issues that have been raised in writing by the
relevant taxing authority in connection with the examination of the
Tax Returns referred to in clause (i) are currently pending; and (vi)
all deficiencies asserted in writing or assessments made in writing as
a result of any examination of the Tax Returns referred to in clause
(i) by a taxing authority have been paid in full. Notwithstanding
anything to the contrary in this Agreement, nothing in this Section
-------
5.7 shall cause Sellers to be liable for any Taxes for which Sellers
---
are not expressly liable pursuant to Section 8.2 (relating to Tax
-----------
matters).
Section 5.8. Governmental Permits. Except as set forth in
--------------------
Schedule 5.8, the Companies own, hold or possess all licenses,
------------
franchises, permits, privileges, immunities, approvals and other
authorizations from a Governmental Body that are necessary to entitle
them to own or lease, operate and use their assets and to carry on and
conduct the Business substantially as conducted immediately prior to
the date of this Agreement (herein collectively called "Governmental
------------
Permits"), except for such Governmental Permits as to which the
-------
failure to so own, hold or possess would not, individually and in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Each of the Companies has complied in all material respects with all
terms and conditions of the Governmental Permits.
Section 5.9. Real Property. (a) Schedule 5.9 contains a
------------- ------------
brief description of (i) each parcel of real property owned by any of
the Companies (which real property primarily relates to the Business)
(the "Owned Real Property") and of the Swansea Facility (showing the
-------------------
record title holder, location, the uses being made thereof and any
indebtedness secured by a mortgage or other Encumbrance thereon) and
of (ii) each option held by any of the Companies (with respect to the
Business) to acquire any real property. Schedule 5.9 sets forth a
------------
list of each material lease or similar agreement under which any of
the Companies (which real property relates primarily to the Business)
is (i) lessor with respect to the Owned Real Property or (ii) lessee
of, or holds or operates, any real property owned by any third Person
(the "Leased Properties").
-----------------
(b) The Sellers have delivered or made available to Buyer
copies of all title insurance policies, opinions, abstracts and
surveys in the possession of any of the Companies and relating to the
Owned Real Property. The Sellers have made available to Buyer true
and complete copies of all the leases, subleases and other occupancy
agreements (including amendments, extensions or other modifications
thereto) in respect of the Leased Properties or the Owned Real
Property, each of which is listed on Schedule 5.9. Except as
------------
described on Schedule 5.9, no consent, waiver, approval or
------------
authorization is required from the landlord under any of the Leased
Properties as a result of the execution of this Agreement or the
consummation of the transactions contemplated hereby.
(c) Except as set forth in Schedule 5.9, UK has a good and
-------------
valid leasehold interest in and to the Swansea Facility, subject to no
Encumbrances except for Permitted Encumbrances.
(d) There is no pending or, to the Knowledge of Sellers,
threatened condemnation proceeding affecting any portion of the Owned
Real Property or the Leased Properties. Other than the rights of
Buyer pursuant to this Agreement, there are no outstanding options,
rights of first offer or rights of first refusal to purchase the Owned
Real Property or any portion thereof or interest therein.
(e) None of the Companies uses any real property in
connection with any material operation of the Business other than the
Owned Real Property, the Leased Properties, the corporate headquarters
in Bedford Park, Illinois, Chicago, Illinois and Paris, France, the
facility in Lindsay, Ontario, the domestic and international
distribution/service facilities, warehouses and the facility in
Kentland, Indiana.
Section 5.10. Personal Property Leases. Schedule 5.10
------------------------ -------------
contains as of the date of this Agreement a list of each lease or
other agreement or right under which any Company (which lease or
agreement relates primarily to the Business) is lessee of, or holds or
operates, any machinery, equipment, vehicle or other tangible personal
property owned by a third Person, except those which are terminable by
the Companies without penalty on 60 days' or less notice or which
provide for annual rental payments of less than $100,000.
Section 5.11. Intellectual Property. (a) Schedule 5.11(a)
--------------------- ----------------
contains a list of all Copyrights, Patent Rights and Trademarks owned
by the Companies which are material to or used in the conduct of the
Business, as currently conducted.
(b) Schedule 5.11(b) contains a list of all Software
----------------
licensed by the Companies which is material to or used in the conduct
of the Business, as currently conducted.
(c) Except as disclosed in Schedule 5.11(c), the Companies
-----------------
either: (i) own the entire right, title and interest in and to the
Copyrights, Patent Rights, Trademarks and Software listed in Schedules
---------
5.11(a) and 5.11(b), free and clear of any Encumbrance; or (ii) to the
------- -------
Knowledge of Sellers, have a valid contractual right or license to use
the same in the conduct of the Business.
(d) Except as disclosed in Schedule 5.11(d), to the
----------------
Knowledge of Sellers: (i) all registrations for Copyrights, Patent
Rights and Trademarks identified in Schedule 5.11(a) are valid and in
----------------
force, and all applications to register any unregistered Copyrights,
Patent Rights and Trademarks so identified are pending and in good
standing, all without challenge of any kind; (ii) the Copyrights,
Patent Rights and Trademarks identified in Schedule 5.11(a) (other
----------------
than with respect to pending applications) owned by the Companies are
valid and in force; and (iii) the Companies have the right to bring
actions for infringement or unauthorized use of the Copyrights, Patent
Rights, Trademarks and Software listed in Schedules 5.11(a) and
-----------------
5.11(b).
-------
(e) Except as disclosed in Schedule 5.11(e), no written
----------------
notice of a claim of any infringement of any Intellectual Property of
any other Person has been made or asserted to the Companies in respect
of the conduct of the Business within the past two years.
(f) Except as disclosed in Schedule 5.11(f), no proceedings
-----------------
are pending or, to the Knowledge of Sellers, threatened against the
Companies which challenge the validity or ownership of any Copyright,
Patent Right or Trademark described in Schedule 5.11(a).
----------------
Section 5.12. Title to Property. Except as set forth on
-----------------
Schedule 5.12 and except for assets disposed of in the ordinary course
-------------
of business, the Companies have good and marketable title to (i) each
item of equipment and other tangible personal property owned by such
party relating primarily to the Business and (ii) any Owned Real
Property located outside the United States, free and clear of all
Encumbrances, except for Permitted Encumbrances.
Section 5.13. No Violation, Litigation or Regulatory
--------------------------------------
Action. Except as set forth in Schedule 5.13, with respect to the
------ -------------
Business:
(i) the Companies have complied in all material respects
with all applicable Requirements of Law and Court Orders;
(ii) as of the date hereof, there are no lawsuits, claims,
suits, proceedings or investigations pending or, to the
Knowledge of Sellers, threatened against the Companies; and
(iii) as of the date hereof, there is no action, suit or
proceeding pending or, to the Knowledge of Sellers, threatened
that questions the legality of the transactions contemplated by
this Agreement or any of the Seller Ancillary Agreements.
Notwithstanding the foregoing, the representation and
warranty in Section 5.13(i) does not apply to Taxes, governmental
---------------
permits, intellectual property rights, employee benefit matters and
environmental matters, which matters are covered in Sections 5.7, 5.8,
------------ ---
5.11, 5.16 and 5.17, respectively.
---- ---- ----
Section 5.14. Contracts. Except as set forth in Schedule
--------- --------
5.14 or any other Schedule hereto, as of the date of this Agreement,
----
the Companies are not a party to or bound by a contract, agreement or
commitment that relates primarily to the Business and is any of the
following:
(i) any contract for the future purchase or sale of real
property;
(ii) any contract for the purchase by the Companies of
services, supplies, components or equipment which is reasonably
expected to involve the payment of more than $250,000 in the
year ending December 31, 2000;
(iii) any contract (including purchase orders) for the sale
by the Companies of any services or products of the Business
which is reasonably expected to involve the payment of more
than $250,000 in the year ending December 31, 2000;
(iv) any loan agreements, promissory notes, indentures,
bonds, security agreements, guarantees or obligations for
borrowed money or other instruments involving indebtedness in
an amount in excess of $100,000 (except for such agreements or
instruments which shall not apply to Buyer or its Affiliates
upon Closing);
(v) any partnership, joint venture or other similar
agreement or arrangement;
(vi) any agreement that is material to the Intellectual
Property owned or used by the Companies in respect of the
Business; or
(vii) any agreement containing any covenant or provision
prohibiting the Companies from engaging in any line or type of
business (except for such agreements which shall not apply to
Buyer or its Affiliates upon Closing).
Section 5.15. Status of Contracts. Except as set forth in
-------------------
Schedule 5.15 or in any other Schedule hereto, each of the leases,
-------------
contracts, licenses and other agreements listed in Schedules 5.9,
-------------
5.10, 5.11 and 5.14 (collectively, the "Business Agreements") is in
---- ---- ---- -------------------
full force and effect. None of the Companies is in, or, to the
Knowledge of Sellers, alleged to be in, breach or default under any of
the Business Agreements, in any material respect.
Section 5.16. Employee Benefits. Set forth on Schedule
----------------- --------
5.16 is a list of all Pension Plans, Welfare Plans and any other
----
material employee benefit plans, including stock purchase, stock
option, bonus, incentive compensation and deferred compensation plans,
supplemental or executive benefit plans, non-qualified retirement
plans, severance or separation plans, and any other material employee
benefit plans, practices, policies or arrangements of any kind,
whether written or oral, which are maintained by any Seller for the
benefit of any of its officers or employees (including former
employees) employed in the Business, or under which any Seller has any
current or potential liability with respect to any employee or former
employee of the Business, (hereinafter collectively referred to as
"Plans"). Except as specifically disclosed on Schedule 5.16:
----- -------------
(a) Each Pension Plan and each Welfare Plan (and each
related trust, insurance contract or fund) is in compliance in form
and in operation in all material respects with all applicable
requirements of ERISA, the Code and any applicable state law or
regulation (except for the adoption of any required amendments for
which the remedial amendment period has not expired as of the Closing
Date). Each Pension Plan and each Welfare Plan has been administered
in all material respects in accordance with its plan documents and the
applicable laws and regulations, and there has been no material breach
of fiduciary duty, prohibited transaction or other event with respect
to a Plan which is reasonably likely to result in a material excise
tax or other material claim or liability against Sellers, any Plan or
any fiduciary of a Plan. The requirements of Code Section 4980B and
Parts 6 and 7 of Subtitle B of Title I of ERISA, including but not
limited to the provisions of said statutes relating to COBRA
continuation of health coverage, and any similar requirement under any
state or local law relating to continuation of employee welfare
benefits, have been satisfied in all material respects with respect to
each Welfare Plan that is subject to such requirements.
(b) Each Pension Plan listed in Schedule 5.16 which is
-------------
intended to be a "qualified plan" for purposes of the Code has
received a favorable determination letter from the Internal Revenue
Service regarding its qualified status, and nothing has occurred since
the date such determination letter was issued that would adversely
affect such qualified status.
(c) Each Pension Plan and each Welfare Plan is in
compliance in all material respects with the applicable requirements
for reporting and disclosure to participants under ERISA with respect
to that plan. Sellers have made available to Buyer with respect to
each Plan correct and complete copies of all current Plan documents
and summary plan descriptions.
(d) At no time during the six calendar years preceding the
calendar year which the Closing Date occurs has any Seller or any
entity which is or was aggregated with any Seller under Code Section
414 maintained or made any contributions to any multiemployer pension
plan which is subject to Title IV of ERISA.
(e) Buyer will not have any liability under ERISA Title IV
after the Closing Date with respect to any Pension Plan which is or
was maintained or contributed to by any Seller or by any entity that
is aggregated with a Seller under Code Section 414.
(f) No representation has been made to any Affected
Employee (as defined in Section 8.3) with respect to any Plan which
-----------
would entitle the employee to benefits greater than or in addition to
the benefits provided by the actual terms of the Plan, including,
without limitation, representations as to post-retirement health or
death benefits. Except as contemplated by this Agreement, no
representation or promise has been made to any such employee that any
new Plan is to be established.
(g) No material action, suit, proceeding, hearing or
investigation with respect to the administration of any Plan, the
investment of the assets of any Plan or any violation of a law or
regulation with respect to any Plan (other than routine claims for
benefits) is currently pending. To the Knowledge of Sellers, no such
action, suit, proceeding, hearing or investigation has been
threatened.
Section 5.17. Environmental Matters. (a) The Companies
---------------------
own, hold or possess all Governmental Permits which are necessary
under Environmental Laws to carry on and conduct the Business
substantially as currently conducted, except for such Governmental
Permits as to which the failure to so own, hold or possess would not
reasonably be expected to have a Material Adverse Effect, and all such
Governmental Permits are in full force and effect. Schedule 5.17 sets
-------------
forth a list and brief description of each such Governmental Permit as
of the date of this Agreement, except for such incidental licenses,
permits and other authorizations which would be readily obtainable by
any qualified applicant without undue burden in the event of any
lapse, termination, cancellation or forfeiture thereof.
(b) Except as disclosed on Schedule 5.17, (i) none of the
-------------
Companies is subject to any investigation by, order from or written
agreement with any Person (including without limitation any prior
owner or operator of the Owned Real Property or the Leased Properties)
relating primarily to the Business respecting (A) noncompliance with
any Environmental Law, (B) any material Remedial Action or (C) any
material claim of Losses or Expenses arising from the Release or
threatened Release of a Contaminant into the environment;
(ii) None of the Companies is subject to any judicial or
administrative proceeding, order, judgment, decree or
settlement alleging or addressing a violation of or liability
under any Environmental Law, which proceeding, order, judgment,
decree or settlement would reasonably be expected to have a
Material Adverse Effect;
(iii) To the Knowledge of Sellers, since January 1, 1996,
none of the Companies has received any written notice or claim
to the effect that it is or may be liable to any Person as a
result of the Release of a Contaminant into the environment
relating to the operation of the Business, which notice or
claim would reasonably be expected to have a Material Adverse
Effect; and
(iv) To the Knowledge of Seller, no Environmental
Encumbrance has attached to the Owned Real Property.
(c) Except as disclosed on Schedule 5.17, there are not
-------------
present in, on or under any of the Owned Real Property or the Leased
Properties any Contaminants in such form or quantities that would
reasonably be expected to give rise to any material liability or
obligation under any Environmental Law for any of the Companies.
(d) Except as disclosed on Schedule 5.17, none of the
-------------
Companies has, in connection with the Business, released, disposed of,
or arranged for the disposal of any Contaminants in any manner that
would reasonably be expected to give rise to any material liability.
(e) Except as disclosed on Schedule 5.17, the Business
-------------
of the Companies at each of the Owned Real Property and Leased
Properties complies in all material respects with all Environmental
Laws, licenses, permits and other authorizations.
(f) Except as disclosed on Schedule 5.17, all reports,
-------------
filings and applications required by any Environmental Law with
respect to the conduct of the Business at Owned Real Property or the
Leased Properties have been duly made except where any failure would
not reasonably be expected to give rise to any material liability.
(g) Except as disclosed on Schedule 5.17, there is no
-------------
asbestos contained in or forming a part of any building or structure
on any of the Owned Real Property or the Leased Properties that, in
its current condition, would reasonably be expected result in any
material liability for any of the Companies; no polychlorinated
biphenyls are used or stored at any of the Owned Real Property or the
Leased Properties or contained in any of the personal property
included in the Purchased Assets; and there are not now, nor to the
Knowledge of Sellers have there ever been, any aboveground or
underground storage tanks on, in or under any Owned Real Property and
none of the Companies own or operate any such storage tanks on any of
the Leased Properties.
(h) Except as disclosed on Schedule 5.17, none of the
-------------
Companies has at any time transported to, or disposed of in, any
landfill or other disposal facility any Contaminants, which
transportation or disposal would reasonably be expected to give rise
to any material liability.
(i) Except as disclosed on Schedule 5.17, there is no
-------------
Environmental Claim pending or, to the Knowledge of Sellers,
threatened against any of the Companies.
This Section 5.17 contains the sole representations and
------------
warranties made by Sellers with respect to Environmental Laws or any
other Environmental Matter; and no representation or warranty as to
Environmental Laws or any other Environmental Matter is intended, or
shall be implied, from any of the other provisions in this Agreement.
Section 5.18. Employee Relations and Agreements. (a)
---------------------------------
Schedule 5.18(a) contains a true and complete listing, as of a recent
----------------
date, of all employees of the Companies (with respect to the
Business), their annual base salary and date of hire. Since the
Financial Statements Date, except as disclosed on Schedule 5.18(a) or
----------------
as has occurred in the ordinary course of business and consistent as
to timing and amount with past practices, none of the Companies (with
respect to the Business) has: (i) increased the compensation payable
or to become payable to or for the benefit of any of its employees or
(ii) increased, augmented or improved benefits granted to or for the
benefit of its employees under any bonus, profit sharing, pension,
retirement, deferred compensation, insurance or other direct or
indirect benefit plan or arrangement.
(b)Except as set forth in Schedule 5.18(b), none of the
----------------
Companies (with respect to the Business) is a party to any labor
contract, collective bargaining agreement or employment agreement.
(c) Except as set forth in Schedule 5.18(c), no union or
----------------
similar organization represents employees of the Companies (with
respect to the Business) and, to the Knowledge of Sellers, no such
organization is attempting to organize such employees. To the
Knowledge of Sellers, no unfair labor practice charge, work stoppage,
picketing or other similar activity relating to labor matters of the
Business is currently pending.
(d) Except as set forth in Schedule 5.18(d), no director,
----------------
officer or employee of the Companies (with respect to the Business) is
a party to any employment or other agreement with the Companies that
entitles him or her to compensation or other consideration upon the
acquisition by any Person of control of the Business.
(e) Since January 1, 1999, Sellers have not engaged in any
plant closing or mass layoff related to any employee of the Business
which has resulted in liability under the Worker Adjustment and
Retraining Notification Act of 1988, or under any comparable law or
regulation of a foreign jurisdiction and, except as contemplated by
Section 7.9, have not issued any notice that any such action is to
-----------
occur in the future.
(f) Sellers are in compliance in all material respects with
all applicable requirements of the Immigration Reform and Control Act,
and have in their files properly completed, in all material respects,
copies of Form I-9 for all employees of the Business with respect to
whom that form is required. The original of all such Form I-9's and
all supporting documentation will be delivered to Buyer as soon as
practicable after the Closing Date.
(g) In respect of UK only:
(i) Schedule 5.18(g)(i) contains a true and complete
-------------------
listing of the names of all persons employed by UK (the "UK
--
Employees"), their annual base salary and date of hire.
---------
(ii) Since April 1, 2000 through the date hereof, except as
set forth in Schedule 5.18(g)(ii), no management level UK
---------------------
Employee has given formal notice terminating his or her
employment.
(iii) No negotiations for any increase in the renumeration
or benefits of any of the UK Employees are current or due to
take place within a period of 6 months after the Closing Date,
in each case other than in the ordinary course of business
consistent with past practice.
(iv) To the Knowledge of Sellers, none of the UK Employees
is involved in any industrial dispute with UK and, to the
Knowledge of Sellers, no such dispute has been threatened.
Section 5.19. No Undisclosed Liabilities. Except for (a)
--------------------------
liabilities incurred in the ordinary course of business, (b)
transaction expenses incurred in connection with this Agreement, (c)
liabilities which individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect on the
Business, or (d) liabilities set forth in Schedule 5.19 or in any
-------------
other Schedule hereto, as of the date hereof, the Companies have not
incurred any liabilities that would be required to be reflected or
reserved against in a consolidated balance sheet of the Business
prepared in accordance with GAAP. Notwithstanding the foregoing, no
representation and warranty is made pursuant to this Section 5.19 with
------------
respect to any matter that is specifically addressed by another
representation or warranty contained in this Article V.
---------
Section 5.20. Insurance. Sellers or the Companies
---------
currently maintain the insurance policies and coverages set forth in
Schedule 5.20. Except as set forth in Schedule 5.20 with respect to
------------- -------------
the Business, there are no outstanding claims under any insurance
policy or default with respect to provisions in any such policy which
claim or default individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect.
Section 5.21. No Brokers. Except for the fees payable to
----------
Donaldson, Lufkin & Jenrette Securities Corporation by Sellers (which
shall be paid by Sellers), no broker, finder or investment banker is
entitled to any fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of
Sellers or the Companies.
Section 5.22. Transactions with Affiliates. Except as set
----------------------------
forth in Schedule 5.22, since January 1, 1999, none of the Sellers or
-------------
Viskase Brazil has entered into any transaction, agreement,
arrangement or understanding with any Affiliates other than on an
arm's length basis.
Section 5.23. Location of Inventory. Other than inventory
---------------------
physically located in the states of Illinois, Iowa and Oklahoma and
other than as set forth in Schedule 5.23, none of the Sellers has any
-------------
inventory (as that term is defined in any applicable "bulk sale" or
similar law) located in the United States or its territories and
possessions, including without limitation any inventory on consignment
or otherwise located at the premises of any customer of any of the
Sellers. As of June 15, 2000, the inventory physically located in the
states of Illinois, Iowa and Oklahoma constitute in the aggregate not
less than 75% of the value of inventory of each Seller located in the
United States and included in the Business, as set forth on the
general ledgers of each of the Sellers located in the United States.
Section 5.24. UCC Section 9-114 Filings. With respect to
-------------------------
any inventory on consignment at the premises of any customer of
Sellers located in the United States, it is the customary practice of
Sellers to make filings under UCC Section 9-114 (or a comparable
provision of law in the applicable jurisdiction) with the appropriate
Governmental Body, and Sellers have furnished true and correct copies
of such filings to Buyer.
ARTICLE VI
----------
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
As an inducement to Sellers to enter into this Agreement and
to consummate the transactions contemplated hereby, Buyer hereby
represents and warrants to Sellers as follows:
Section 6.1. Organization of Buyer. Buyer is a corporation
---------------------
duly organized, validly existing and in good standing under the laws
of the State of Missouri. Buyer has the corporate power and corporate
authority to own or lease and operate its assets and to carry on its
businesses in the manner that they were conducted immediately prior to
the date of this Agreement.
Section 6.2. Authority of Buyer; Conflicts. (a) Buyer has
-----------------------------
the corporate power and corporate authority to execute, deliver and
perform this Agreement and each of the Buyer Ancillary Agreements.
The execution, delivery and performance of this Agreement and the
Buyer Ancillary Agreements by Buyer have been duly authorized and
approved by Buyer's board of directors and do not require any further
authorization or consent of Buyer or its stockholders. This Agreement
has been duly authorized, executed and delivered by Buyer and
(assuming the valid authorization, execution and delivery of this
Agreement by Sellers) is the legal, valid and binding agreement of
Buyer enforceable in accordance with its terms, and each of the Buyer
Ancillary Agreements has been duly authorized by Buyer and upon
execution and delivery by Buyer will be (assuming the valid
authorization, execution and delivery by Sellers, where a Seller is a
party, or the other party or parties thereto) a legal, valid and
binding obligation of Buyer enforceable in accordance with its terms,
subject, in the case of the Agreement and each of the Buyer Ancillary
Agreements, to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general application relating to or affecting
creditors' rights and to general equity principles.
(b) Neither the execution and delivery of this Agreement or
any of the Buyer Ancillary Agreements or the consummation of any of
the transactions contemplated hereby or thereby nor compliance with or
fulfillment of the terms, conditions and provisions hereof or thereof
will:
(i) assuming the receipt of all necessary consents and
approvals and the filing of all necessary documents as
described in Section 6.2(b)(ii), result in a breach of the
terms, conditions or provisions of, or constitute a default, an
event of default or an event creating rights of acceleration,
termination or cancellation or a loss of rights under (1) the
charter or By-laws of Buyer, (2) any note, instrument,
mortgage, lease, franchise or financial obligation to which
Buyer is a party or any of its properties is subject or by
which Buyer is bound, (3) any Court Order to which Buyer is a
party or by which it is bound or (4) any Requirements of Law
affecting Buyer, other than, in the case of clauses (2), (3)
and (4) above, any such breaches, defaults, rights or loss of
rights that, individually or in the aggregate, would not
materially impair the ability of Buyer to perform its
obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby, or
(ii) require the approval, consent, authorization or act of,
or the making by Buyer of any declaration, filing or
registration with, any Person, except for (1) in connection, or
in compliance, with the provisions of the HSR Act, (2) as
required by foreign laws, (3) such consents, approvals, filings
and notices as may be required under any Requirements of Law
with respect to environmental matters pertaining to any
notification, disclosure or required approval triggered by the
transactions contemplated by this Agreement, (4) such filings
as may be required in connection with the Taxes described in
Section 8.2(a)(v), and (5) such approvals, consents,
authorizations, declarations, filings or registrations the
failure of which to be obtained or made would not materially
impair the ability of Buyer to perform its obligations
hereunder or prevent the consummation of any of the
transactions contemplated hereby.
Section 6.3. No Violation, Litigation or Regulatory Action.
---------------------------------------------
(a) As of the date hereof, there are no lawsuits, claims,
suits, proceedings or investigations pending or, to the Knowledge of
Buyer, threatened against Buyer or its subsidiaries which are
reasonably expected to materially impair the ability of Buyer to
perform its obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby.
(b) As of the date hereof, there is no action, suit or
proceeding pending or, to the Knowledge of Buyer, threatened that
questions the legality of the transactions contemplated by this
Agreement or any of the Buyer Ancillary Agreements.
Section 6.4. Financing. Buyer has sufficient funds
----------
available for it to pay the Closing Purchase Price.
Section 6.5. Investment Intent. Buyer is acquiring the
-----------------
Shares as an investment for its own account and not with a view to the
distribution thereof. Buyer shall not sell, transfer, assign, pledge
or hypothecate any of the Shares in the absence of registration under,
or pursuant to an applicable exemption from, federal and applicable
state securities laws.
Section 6.6. No Brokers. Except for J.P. Morgan & Co.
----------
Incorporated (the fees of which shall be paid by Buyer), no broker,
finder or investment banker is entitled to any fee or commission in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of Buyer.
ARTICLE VII
-----------
ACTION PRIOR TO THE CLOSING DATE
--------------------------------
The respective parties hereto covenant and agree to take the
following actions between the date hereof and the Closing Date:
Section 7.1. Access to Information. Sellers shall afford
---------------------
to the officers, employees and authorized representatives of Buyer
(including, without limitation, independent public accountants,
attorneys, financial advisors and other consultants and advisors)
reasonable access during normal business hours, upon reasonable
advance notice, to the offices, properties, employees and business and
financial records (including computer files, retrieval programs and
similar documentation) of the Business to the extent Buyer shall
reasonably deem necessary or desirable and shall furnish to Buyer or
its authorized representatives such additional information concerning
the Business as shall be reasonably requested; provided, however, that
-------- -------
Sellers shall not be required to violate any obligation of
confidentiality to any Person who is not an Affiliate of Sellers or
Viskase Brazil to which Sellers or Viskase Brazil is subject or to
waive any privilege which any of them may possess in discharging their
obligations pursuant to this Section 7.1 (it being understood that
-----------
this limitation shall not apply in the case of any liabilities and
claims to be assumed by Buyer pursuant to Section 2.3(d)); and
--------------
provided further, however, that to the extent that any privilege
-------- ------- -------
applies in the case of other matters, that the respective Seller and
Buyer shall enter into a confidentiality and common interest
agreement, similar to the Confidentiality and Common Interest
Agreement dated as of May 26, 2000 between Buyer and Parent, relating
to such other matters. Notwithstanding the foregoing, it is
understood and agreed that all requests for access pursuant to this
Section 7.1 shall be submitted or directed exclusively to Gordon S.
-----------
Donovan and, without his prior approval (which shall not be
unreasonably withheld or delayed), Buyer shall not initiate, or cause
to be initiated, communication with any employee or customer of the
Companies with respect to the Business and a representative of Seller
shall be given reasonable advance notice and a reasonable opportunity
to participate in any such approved communication. Buyer agrees that
such investigation shall be conducted in such a manner as not to
interfere unreasonably with the operations of Viskase Brazil or
Sellers. If in the course of any investigation pursuant to this
Section 7.1, Buyer's officers, employees or authorized representatives
-----------
discover any breach of any representation or warranty contained in
this Agreement, or any circumstance or condition that upon Closing
would constitute such a breach, Buyer covenants that it will promptly
so inform Sellers.
Section 7.2. Notifications. Each of Buyer and Sellers
-------------
shall promptly notify the other of any action, suit or proceeding that
shall be instituted or threatened against such party to restrain,
prohibit or otherwise challenge the legality of any transaction
contemplated by this Agreement. Each party hereto shall promptly
notify the other of any lawsuit, claim, proceeding or investigation
that may be threatened, brought, asserted or commenced against Viskase
Brazil, Newco Brazil, Sellers or Buyer, as the case may be, that would
have been listed in Schedule 5.13 or Schedule 6.3, as the case may be,
------------- ------------
if such lawsuit, claim, proceeding or investigation had arisen prior
to the date hereof.
Section 7.3. Consents of Third Parties; Governmental
---------------------------------------
Approvals; Commercially Reasonable Efforts. (a) Sellers and Buyer
------------------------------------------
will act diligently and reasonably in attempting to secure, before the
Closing Date, the consent, approval or waiver, in form and substance
reasonably satisfactory to the other party, required to be obtained
from any party (other than a Governmental Body) to consummate the
transactions contemplated by this Agreement; provided, however, that
-------- -------
such action shall not include any requirement of Sellers or any of
their Affiliates (including Viskase Brazil and Newco Brazil) to expend
money, commence or participate in any litigation or offer or grant any
accommodation (financial or otherwise) to any third party.
(b) During the period prior to the Closing Date, Buyer
shall act diligently and reasonably, and Sellers, upon the request of
Buyer, shall use its reasonable efforts to cooperate with Buyer, in
attempting to secure any consents and approvals of any Governmental
Body required to be obtained by Buyer in order to permit the
consummation of the transactions contemplated by this Agreement.
(c) Subject to the terms and conditions of this Agreement,
each of the parties hereto shall use its commercially reasonable
efforts to consummate the transactions contemplated hereby as
expeditiously as practicable.
Section 7.4. Operations Prior to the Closing Date. (a)
------------------------------------
Each Asset Seller shall, and Sellers shall cause Viskase Brazil and
Newco Brazil to, use commercially reasonable efforts to operate and
carry on the Business in the ordinary course and substantially as
operated immediately prior to the date of this Agreement. Consistent
with the foregoing, each Asset Seller shall, and Sellers shall cause
Viskase Brazil and Newco Brazil to, use its commercially reasonable
efforts consistent with good business practice to preserve the
goodwill of the suppliers, contractors, licensors, employees,
customers and distributors of the Business.
(b) Notwithstanding Section 7.4(a), except as set forth on
--------------
Schedule 7.4, except as contemplated by this Agreement or except with
------------
the express written approval of Buyer (which Buyer agrees shall not be
unreasonably withheld or delayed), each Asset Seller shall not (with
respect to the Business), and Sellers shall cause Viskase Brazil and
Newco Brazil not to, in each case other than in the ordinary course of
business:
(i) make any material change in the Business or its
operations, except such changes as may be required to comply
with any applicable Requirements of Law;
(ii) make any capital expenditure or enter into any contract
or commitment therefor in excess of $500,000;
(iii) enter into any contract for the purchase of real
property or exercise any option to extend a lease listed in
Schedule 5.9;
------------
(iv) sell, lease (as lessor), transfer or otherwise dispose
of (including any transfers to any of its Affiliates), or
mortgage or pledge, or impose or suffer to be imposed any
Encumbrance on, any of the Purchased Assets, other than
inventory and minor amounts of personal property sold or
otherwise disposed of in the ordinary course of the Business
and other than Permitted Encumbrances;
(v) create, incur or assume, or agree to create, incur or
assume, any indebtedness for borrowed money (other than money
borrowed or advances from any of its Affiliates in the ordinary
course of business);
(vi) make, or agree to make, any payment or distribution of
assets (other than cash) to any of its Affiliates (other than
intercompany transactions in accordance with past practices);
(vii) institute any increase in any profit-sharing, bonus,
incentive, deferred compensation, insurance, pension,
retirement, medical, hospital, disability, welfare or other
employee benefit plan with respect to its employees, other than
as required by any such plan or Requirements of Law;
(viii) make any change in the compensation of its employees,
other than changes made in accordance with normal compensation
practices or pursuant to existing contractual commitments and
consistent with past compensation practices;
(ix) make any change in the accounting policies applied in
the preparation of the Financial Statements, unless such change
is required by GAAP; or
(x) issue any capital stock (or securities exchangeable,
convertible or exercisable for capital stock) of Newco Brazil
other than to Sellers.
Section 7.5. Antitrust Law Compliance. As promptly as
------------------------
practicable after the date hereof (and in any event within 10 business
days after the date hereof), Buyer and Sellers shall file all
notifications and other information required to be filed under the HSR
Act, or any rules and regulations promulgated thereunder, and, if
necessary, any other Competition Laws, with respect to the
transactions contemplated hereby. Each party warrants that all such
filings by it will be, as of the date filed, true and accurate in all
material respects and in material compliance with the requirements of
the Competition Laws and any such rules and regulations. The parties
agree to seek early termination with respect to the waiting period
under the HSR Act. Each of Buyer and Sellers agrees to make available
to the other such information as each of them may reasonably request
relative to its business, assets and property as may be required of
each of them to file any additional information requested by such
agencies under the Competition Laws and any such rules and
regulations.
Section 7.6. Intercompany Obligations. Sellers shall take
------------------------
such action as may be necessary so that, as of the Closing Date, there
shall be no intercompany obligations between the Companies and their
Affiliates relating to the Business.
Section 7.7. Release of Guaranties. With respect to any
---------------------
obligations of Sellers under any guaranties, letters of credit,
letters of comfort, bid bonds or performance bonds obtained or given
by Sellers relating to the Business set forth in Schedule 7.7 (the
-------------
"Guaranties"), Buyer shall use commercially reasonable efforts to
----------
cause Sellers to be fully released, in each case, effective as
promptly as practicable, in respect of all obligations of Sellers and
any Affiliate under any such Guaranties. If Buyer is unable to effect
such a substitution and release with respect to any Guaranty after
using reasonable efforts to do so, Buyer shall indemnify Sellers from
any Loss or Expense arising from such Guaranty. Without limiting the
foregoing, after the Closing, Buyer will not, and will not permit any
of is Affiliates to, renew, extend, amend or supplement any loan,
contract, lease or other obligation that is covered by a Guaranty
without providing Sellers with evidence satisfactory to Sellers that
Sellers' Guaranty has been released.
Section 7.8. Pre-Closing Structuring. Immediately prior to
-----------------------
or concurrently with the Closing, US Holdings, Europe, Viskase and
Buyer shall cause the Brazil Transactions to be consummated. US
Holdings, Europe and Viskase shall afford Buyer a reasonable
opportunity to review and comment on significant matters pertaining to
the Brazil Transactions, and Sellers agree not to take any action as
to which Buyer shall reasonably object.
Section 7.9. Canadian Plant. (a) From the Closing until 30
--------------
days after the Closing, upon reasonable notice, Sellers shall afford
representatives of Buyer reasonable access during normal business
hours to the plant in Lindsay, Ontario for the sole purpose of
removing the Purchased Assets. Buyer agrees to indemnify Sellers,
their Affiliates and their respective officers, employees, agents,
successors and assigns against and hold them harmless from all Losses
or Expenses incurred by them for damages caused by the removal of the
Purchased Assets from the plant in Lindsay, Ontario but will not
restore the premises to original condition.
(b) It is understood that Buyer does not contemplate making
offers to employees at the plant in Lindsay, Ontario. Viskase Canada
will comply with all of its obligations in respect of the employees at
such plant under applicable Requirements of Law, including notice and
severance requirements under the Ontario Employment Standards Act, any
employment agreements with such employees and any obligations pursuant
to any agreement with a union.
Section 7.10. UK Plant. Prior to Closing, each of UK and
--------
Buyer shall comply in all material respects with Regulation 10 of the
Transfer of Undertakings (Protection of Employment) Regulations 1981,
as amended (the "Regulations").
-----------
Section 7.11. Foreign Inventory. Except as otherwise
-----------------
provided in this Section 7.11, the parties agree that, prior to
------------
Closing, title to certain inventories of the Business held by foreign
subsidiaries on the books of Sellers will be transferred to UK and
included as Purchased Assets. Subject to the mutual agreement of the
parties, the parties may enter into a distribution arrangement on
commercially reasonable terms pursuant to which (i) Viskase SpA will
act as a distributor for Buyer, (ii) the inventories of the Business
held by Viskase SpA will be retained by Viskase SpA and treated as an
Excluded Asset for all purposes under this Agreement and (iii) the
non-competition provisions in Section 8.9(a) shall not apply to the
--------------
distribution activities of Viskase SpA.
ARTICLE VIII
------------
ADDITIONAL AGREEMENTS
---------------------
Section 8.1. Use of Names. (a) Sellers are not conveying
------------
ownership rights or granting Buyer or its Affiliates (including Newco
Brazil after the Closing) a license to use any of the tradenames or
trademarks of Sellers or any Affiliate of Sellers, including the
"Viskase" trademark (other than as provided in Section 8.1(b) and the
--------------
Trademarks identified on Schedule 5.11(a)) and, after the Closing,
----------------
Buyer and its Affiliates (including Newco Brazil after the Closing)
shall not use in any manner such names or marks of Sellers or any
Affiliate of Sellers or any word that is similar in sound or
appearance to such names or marks. In the event Buyer or any
Affiliate of Buyer violates any of its obligations under this Section
-------
8.1, Sellers and their Affiliates may proceed against it in law or in
---
equity for such damages or other relief as a court may deem
appropriate. Buyer acknowledges that a violation of this Section 8.1
-----------
may cause Sellers and their Affiliates irreparable harm which may not
be adequately compensated for by money damages. Buyer therefore
agrees that in the event of any actual or threatened violation of this
Section 8.1, Sellers and any of their Affiliates shall be entitled, in
-----------
addition to other remedies that they may have, to a temporary
restraining order and to preliminary and final injunctive relief
against Buyer or such Affiliate of Buyer to prevent any violations of
this Section 8.1, without the necessity of posting a bond.
-----------
(b) Sellers hereby grant to Buyer for 24 months following
the Closing Date with respect to inventory and packaging material in
stock as of the Closing Date and 60 days following the Closing Date
with respect to signage and stationery and 180 days after the Closing
Date with respect to promotional matters, each of which shall relate
primarily to the Business, a non-exclusive, non-transferable, fully-
paid and royalty-free license to use the "Viskase" name (the "Mark")
----
in connection with the transition of the names used by the Business to
new names. Notwithstanding the foregoing, Buyer and its Affiliates
(including Newco Brazil after the Closing) shall use commercially
reasonable efforts to change all references to the Mark as soon as
practicable following the Closing Date, and shall make clear in all
correspondence and communications made by Buyer that the Business is
no longer owned by Sellers.
Section 8.2. Tax Matters. (a) Liability for Taxes. (i)
----------- --------------------
Sellers shall be liable for and pay, and pursuant to Article XI (and
----------
subject to the limitations thereof) agree to indemnify and hold
harmless each Buyer Group Member from and against any and all Taxes
(A) imposed on Newco Brazil pursuant to Treas. Reg. Sec. 1.1502-6 or
similar provision of state, local or foreign law solely as a result of
Newco Brazil having been a member of a Seller's Group, (B) imposed on
Newco Brazil as a result of the Brazil Transactions, (C) imposed on
Newco Brazil, or for which Newco Brazil may otherwise be liable, or
(D) applicable to the Business and the Purchased Assets, in each case
attributable to any taxable year or period that ends on or before the
Closing Date and, with respect to any Straddle Period, the portion of
such Straddle Period ending on and including the Closing Date;
provided, however, with respect to Taxes other than income or
-------- -------
franchise Taxes of the Business, only to the extent that the amount of
such other Taxes exceeds the amount of such other Taxes that have been
provided for in the Valuation Date Statement, provided, further, that
-------- -------
Sellers shall not be liable for or pay, and do not agree to indemnify
and hold harmless each Buyer Group Member from and against, (I) any
Taxes that result from any actual or deemed election under Section 338
of the Code or any similar provisions of state, local or foreign law
as a result of the purchase of the Newco Brazil Shares or that result
from Buyer, any Affiliate of Buyer, or Newco Brazil engaging in any
activity or transaction that would cause the transactions contemplated
by this Agreement to be treated as a purchase or sale of assets of
Newco Brazil for federal, state, foreign or local Tax purposes and
(II) any Taxes imposed on Newco Brazil, or for which Newco Brazil may
otherwise be liable, as a result of transactions occurring on the
Closing Date that are properly allocable (based on, among other
relevant factors, factors set forth in Treas. Reg. Sec. 1.1502-
76(b)(1)(ii)(B)) to the portion of the Closing Date after the Closing
(Taxes described in this proviso, hereinafter "Excluded Taxes").
--------------
Buyer and Sellers agree that, with respect to any transaction
described in clause (II) of the preceding sentence, Newco Brazil and
all persons related to Newco Brazil under Section 267(b) of the Code
immediately after the Closing shall treat the transaction for all
federal income Tax purposes (in accordance with Treas. Reg.
Sec. 1.1502-76(b)(1)(ii)(B)), and (to the extent permitted) for other
income Tax purposes, as occurring at the beginning of the day
following the Closing Date. Sellers shall be entitled to any refund
of (or credit for) Taxes allocable to any taxable year or period that
ends on or before the Closing Date and, with respect to any Straddle
Period, the portion of such Straddle Period ending on and including
the Closing Date.
(ii) Buyer shall be liable for and pay, and pursuant to
Article XI (and subject to the limitations thereof) agrees to
indemnify and hold harmless each Seller Group Member from and
against, (A) any and all Taxes imposed on Newco Brazil, or for
which Newco Brazil may otherwise be liable and (B) all Taxes
applicable to the Business or the Purchased Assets, in each
case applicable to any taxable year or period that begins after
the Closing Date and, with respect to any Straddle Period, the
portion of such Straddle Period beginning after the Closing
Date and (C) Excluded Taxes. Except as otherwise provided
herein, Buyer shall be entitled to any refund of (or credit
for) Taxes allocable to any taxable year or period that begins
after the Closing Date and, with respect to any Straddle
Period, the portion of such Straddle Period beginning after the
Closing Date, to the extent the refund relates to any Taxes
imposed on Buyer.
(iii) For purposes of paragraphs (a)(i) and (a)(ii),
whenever it is necessary to determine the liability for Taxes
of Newco Brazil or with respect to the Business and the
Purchased Assets for a Straddle Period, the determination of
the Taxes of Newco Brazil or with respect to the Business and
the Purchased Assets for the portion of the Straddle Period
ending on and including, and the portion of the Straddle Period
beginning after, the Closing Date shall be determined by
assuming that the Straddle Period consisted of two taxable
years or periods, one which ended at the close of the Closing
Date and the other which began at the beginning of the day
following the Closing Date, and items of income, gain,
deduction, loss or credit of Newco Brazil or with respect to
the Business and the Purchased Assets for the Straddle Period
shall be allocated between such two taxable years or periods on
a "closing of the books basis" by assuming that the books of
Newco Brazil or the Purchased Assets were closed at the close
of the Closing Date, provided, however, that (I) transactions
-------- -------
occurring on the Closing Date that are properly allocable
(based on, among other relevant factors, factors set forth in
Treas. Reg. Sec. 1.1502-76(b)(1)(ii)(B) with respect to federal
law) to the portion of the Closing Date after the Closing shall
be allocated to the taxable year or period that is deemed to
begin at the beginning of the day following the Closing Date
and (II) exemptions, allowances or deductions that are
calculated on an annual basis, such as the deduction for
depreciation, shall be apportioned between such two taxable
years or periods on a daily basis. Notwithstanding the
foregoing provisions of this paragraph (a)(iii), if the
transactions contemplated by this Agreement result in the
reassessment of the value of any property owned by Newco Brazil
or of the Purchased Assets or assets of the Business for
property Tax purposes, or the imposition of any property Taxes
at a rate which is different than the rate that would have been
imposed if such transactions had not occurred, then (y) the
portion of such property Taxes for the portion of the Straddle
Period ending on and including the Closing Date shall be
determined on a daily basis, using the assessed value and Tax
rate that would have applied had such transactions not
occurred, and (z) the portion of such property Taxes for the
portion of such Straddle Period beginning after the Closing
Date shall be the total property Taxes for the Straddle Period
minus the amount described in clause (y) of this sentence.
(iv) If, as a result of any action, suit, investigation,
audit, claim, assessment or amended Tax Return, there is any
change after the Closing Date in an item of income, gain, loss,
deduction, credit or amount of Tax that results in an increase
in a Tax liability for which Sellers would otherwise be liable
pursuant to paragraph (a)(i) of this Section 8.2, and such
-----------
change results in a decrease in the Tax liability of Newco
Brazil, Buyer or any Affiliate or successor of any thereof for
any taxable year or period beginning after the Closing Date or
for the portion of any Straddle Period beginning after the
Closing Date, Sellers shall not be liable pursuant to such
paragraph (a)(i) with respect to such increase to the extent of
such decrease (and, to the extent such increase in Tax
liability is paid to a taxing authority by Sellers or any
Affiliate thereof, Buyer shall pay Sellers an amount equal to
such decrease).
(v) Except as provided in Section 4.5, notwithstanding
-----------
anything herein to the contrary, Buyer shall pay, and agrees to
indemnify and hold harmless each Seller Group Member from and
against any and all real property transfer or gains Taxes,
sales Taxes, use Taxes, stamp Taxes, stock transfer Taxes,
asset transfer Taxes, or other similar Taxes imposed on the
transactions contemplated by this Agreement on a purchaser
under Requirements of Law; provided, however, that with respect
-------- --------
to the sale of the Newco Brazil Shares, Buyer agrees to
reimburse Sellers for one-half of any applicable withholding
Taxes imposed on Sellers under Requirements of Law (it being
understood that Buyer shall not pay more than $750,000 under
this proviso). Buyer is agreeing to reimburse Sellers pursuant
to the foregoing proviso, but is not hereby otherwise assuming
any withholding Tax liability of Sellers.
(vi) Except as provided in Section 4.5, notwithstanding
-----------
anything herein to the contrary, Sellers shall pay, and agree
to indemnify and hold harmless each Buyer Group Member from and
against any and all real property transfer or gains Taxes,
sales Taxes, use Taxes, stamp Taxes, stock transfer Taxes,
asset transfer Taxes, or similar Taxes imposed on the
transactions contemplated by this Agreement on a seller under
Requirements of Law; provided, however, that with respect to
-------- -------
the sale of the Newco Brazil Shares, Buyer agrees to make the
payment as set forth in clause (v) above.
(b) Tax Returns. (i) Sellers shall timely file or cause
-----------
to be timely filed when due (taking into account all extensions
properly obtained) all Tax Returns that are (x) required to be filed
by or with respect to Newco Brazil for taxable years or periods ending
on or before the Closing Date (in the case of income, franchise and
similar Tax Returns required to be filed by or with respect to Newco
Brazil as well as Tax Returns required to be filed by or with respect
to Newco Brazil on a combined, consolidated or unitary basis with
Sellers or any Affiliate thereof) or (y) due on or before the Closing
Date (with respect to other Tax Returns), and in each case Sellers
shall remit or cause to be remitted any Taxes due in respect of such
Tax Returns, and Buyer shall timely file or cause to be timely filed
when due (taking into account all extensions properly obtained) all
other Tax Returns that are required to be filed by or with respect to
Newco Brazil and Buyer shall remit or cause to be remitted any Taxes
due in respect of such Tax Returns. With respect to Tax Returns to be
filed by Buyer pursuant to the preceding sentence that relate to
taxable years or periods ending on or before the Closing Date or that
relate to any Straddle Period (I) such Tax Returns shall be filed in a
manner consistent with past practice and no position shall be taken,
election made or method adopted that is inconsistent with positions
taken, elections made or methods used in prior periods in filing such
Tax Returns (including, without limitation, any such position,
election or method which would have the effect of accelerating income
to periods for which Sellers are liable or deferring deductions to
periods for which Buyer is liable) and (II) such Tax Returns shall be
submitted to Sellers not later than 30 days prior to the due date for
filing such Tax Returns (or, if such due date is within 45 days
following the Closing Date, as promptly as practicable following the
Closing Date) for review and approval by Sellers, which approval may
not be unreasonably withheld, but may in all cases be withheld if such
Tax Returns were not prepared in accordance with clause (I) of this
sentence. Sellers or Buyer shall pay the other party for the Taxes
for which Sellers or Buyer, respectively, is liable pursuant to
paragraph (a) of this Section 8.2 but which are payable with any Tax
-----------
Return to be filed by the other party pursuant to this paragraph (b)
upon the written request of the party entitled to payment, setting
forth in detail the computation of the amount owed by Sellers or
Buyer, as the case may be, but in no event earlier than 10 business
days prior to the due date for paying such Taxes.
(ii) None of Buyer or any Affiliate of Buyer shall (or shall
cause or permit Newco Brazil to) amend, refile or otherwise
modify (or grant an extension of any statute of limitation with
respect to) any Tax Return relating in whole or in part to
Newco Brazil or the Business or the Purchased Assets with
respect to any taxable year or period ending on or before the
Closing Date (or with respect to any Straddle Period) without
the prior written consent of Sellers, which consent may not be
unreasonably withheld.
(iii) Buyer shall promptly cause Newco Brazil to prepare
and provide to Sellers a package of Tax information materials,
including, without limitation, schedules and work papers (the
"Tax Package") required by Sellers to enable Sellers to prepare
-----------
and file all Tax Returns required to be prepared and filed by
it pursuant to paragraph (b)(i). The Tax Package shall be
completed in accordance with past practice, including past
practice as to providing such information and as to the method
of computation of separate taxable income or other relevant
measure of income of Newco Brazil. Buyer shall cause the Tax
Package to be delivered to Sellers within 90 days after the
Closing Date.
(c) Contest Provisions. (i) Buyer shall promptly notify
------------------
Sellers in writing upon receipt by Buyer, any of its Affiliates, or
Newco Brazil of notice of any pending or threatened federal, state,
local or foreign Tax audits, examinations or assessments which might
affect the Tax liabilities for which Sellers may be liable pursuant to
this Section 8.2.
-----------
(ii) Sellers shall have the sole right to represent Newco
Brazil's interests in any Tax audit or administrative or court
proceeding relating to taxable periods ending on or before the
Closing Date or otherwise relating to Taxes for which Sellers
may be liable pursuant to this Section 8.2, and to employ
-----------
counsel of their choice at their expense. Buyer shall be
entitled to participate at its expense in any such audit or
proceeding. In the case of a Straddle Period, Sellers shall be
entitled to participate at their expense in any Tax audit or
administrative or court proceeding relating (in whole or in
part) to Taxes attributable to the portion of such Straddle
Period ending on and including the Closing Date and, with the
written consent of Buyer, and at Sellers' sole expense, may
assume the entire control of such audit or proceeding. None of
Buyer, any of its Affiliates, or Newco Brazil may settle any
Tax claim for any Taxes for which Sellers may be liable
pursuant to paragraph (a) of this Section 8.2, without the
-----------
prior written consent of Sellers, which consent may not be
unreasonably withheld.
(d) Assistance and Cooperation. After the Closing Date,
--------------------------
each of Sellers and Buyer shall (and cause their respective Affiliates
to):
(i) assist the other party in preparing any Tax Returns
which such other party is responsible for preparing and filing
in accordance with paragraph (b) of this Section 8.2;
-----------
(ii) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of
Newco Brazil or with respect to the Business or the Purchased
Assets;
(iii) make available to the other and to any taxing
authority as reasonably requested all information, records, and
documents relating to Taxes of Newco Brazil, the Business and
the Purchased Assets;
(iv) provide timely notice to the other in writing of any
pending or threatened Tax audits or assessments of Newco Brazil
for taxable periods for which the other may have a liability
under this Section 8.2;
(v) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax
audit or information request with respect to any such taxable
period;
(vi) timely sign and deliver such certificates or forms as
may be necessary or appropriate to establish an exemption from
(or otherwise reduce), or file Tax Returns or other reports
with respect to, Taxes described in paragraphs (a)(v) and
(a)(vi) of this Section 8.2 (relating to sales, transfer and
-----------
similar Taxes); and
(vii) timely provide to the other powers of attorney or
similar authorizations necessary to carry out the purposes of
this Section 8.2.
-----------
(e) Election Under Section 338. Sellers and Buyer agree
--------------------------
that Buyer may, in its discretion, make any election under Section 338
of the Code or under any applicable similar provision of state or
foreign law with respect to Newco Brazil.
Section 8.3. Employee Matters ! Employees of Asset Sellers,
----------------------------------------------
Other Than UK. (a) Effective as of the Closing Date, each Asset
-------------
Seller shall terminate the employment of, and Buyer shall offer
employment to all of the employees working at the plants located at
Pauls Valley, Oklahoma and Centerville, Iowa. In addition, effective
as of the Closing Date, each Asset Seller shall terminate the
employment of, and Buyer shall offer employment to, virtually all
"Chicago" employees listed on Schedule 8.3(a) (any employees and
---------------
individuals who accept such offers of employment from Buyer and
actually commence work with Buyer shall be referred to herein as the
"Affected Employees"). Buyer may offer employment to certain of the
------------------
individuals listed on Schedule 8.3(a) for a transition period;
---------------
provided, however, that with respect to any individual that Buyer
-------- -------
offers employment for a transition period, Buyer may not condition the
offer of employment for a transition period on the individual's
relocation to any other job location (such individuals who accept
employment for a transition period shall be referred to herein as
"Transition Employees" and, unless otherwise specified, the term
"Affected Employee" shall include each Transition Employee).
(b) For a period commencing on the Closing Date and ending
no earlier than the first anniversary of the Closing Date, Buyer shall
take any action necessary so that each Affected Employee who continues
to be employed in the Business or otherwise by Buyer shall continue to
receive a level of employee benefits and base wages or salary, and
bonus, that, in the aggregate, is substantially similar to such
employee than the level of employee benefits and base wages or salary,
and bonus, paid or provided by the Asset Sellers to such Affected
Employee on the date of this Agreement; provided, however, that Buyer
-------- -------
shall in no event be required to offer retiree medical benefits to any
employee of Sellers (whether such benefits relate to pre-Closing or
post-Closing service). In addition, Buyer agrees to provide, as of
the Closing Date, insurance and other similar benefits as are
available to employees of Buyer in similar jobs. Sellers shall be
responsible for satisfying all requirements under Part 6 of Title I of
ERISA and Section 4980B of the Code ("COBRA") for continuation of
-----
coverage under all plans of group health coverage maintained by
Sellers that is required to be provided before, on or after the
Closing Date to (i) any "qualified beneficiary" whose "qualifying
event" (as such terms are defined in COBRA) occurred prior to the
Closing Date, including any such individual whose period for electing
COBRA coverage has not expired as of the Closing Date, and (ii) any
Affected Employee or dependent of an Affected Employee whose
"qualifying event" with respect to Sellers' plans occurs on the
Closing Date.
(c) Sellers shall give notice to all Affected Employees
employed by the Asset Sellers that the active participation of such
employees in the Pension Plans and Welfare Plans of Sellers shall
terminate on the Closing Date, as of which date such employees shall
be eligible to participate in Buyer's benefit programs. Except as
otherwise expressly provided in this Section 8.3, in no event shall
-----------
any Affected Employee be entitled to accrue any benefits under the
Pension or Welfare Plans of Sellers with respect to services rendered
or compensation paid after the Closing.
(d) Sellers shall take all actions necessary to cause each
Affected Employee to be 100 percent vested in said employee's benefit
under the SAVE Program for Employees of Viskase Corporation (the "SAVE
----
Program") as of the Closing Date, and shall make all contributions
-------
under the SAVE Program (including any matching or other employer
contributions) for all periods prior to the Closing Date as soon as
administratively feasible after the Closing Date. As soon as
practicable after the Closing Date (but in no event later than six
months after the Closing Date), Buyer shall take all necessary actions
so that each Affected Employee has the opportunity to elect a direct
rollover pursuant to Section 401(a)(31) of the Code of the employee's
benefit under the SAVE Program to any qualified defined contribution
plan maintained or established by Buyer in which the Affected Employee
is a participant on the date the direct rollover is to occur (or to
the plan designated by Buyer to accept the direct rollover in the
event the employee is a participant in more than one such plan). Any
such direct rollover shall be made in cash, except that the direct
rollover may include any outstanding loan to the employee from the
employee's accounts in the SAVE Program. Prior to any direct rollover
under this subsection, Buyer shall provide to Sellers the
certification required under the applicable IRS regulations relating
to rollover contributions regarding the qualified status of the plan
or plans of Buyer which will receive the direct rollovers, and Sellers
shall provide to Buyer the corresponding certification regarding the
qualified status of the SAVE Program.
(e) Buyer shall recognize all unused vacation of the
Affected Employees as of the Closing Date as shown on the Valuation
Date Statement, and Buyer shall provide such paid vacation. Buyer
shall recognize the bonus programs for Affected Employees existing as
of the Closing Date and shall pay to the Affected Employees the
bonuses they have accrued under such programs at the end of the bonus
determination period as shown on the Valuation Date Statement, or
earlier if so determined by Buyer.
(f) Affected Employees shall be credited for their length
of service with the Companies for all purposes (other than for
determining pension benefit accruals) under Buyer's benefit plans as
if such service had been rendered to Buyer.
(g) Buyer shall (i) waive all limitations as to preexisting
conditions, exclusions and waiting periods with respect to the
Affected Employees under any welfare or fringe benefit plan
(including, but not limited to, medical, dental and disability
coverage) in which such employees may be eligible to participate after
the Closing Date, and (ii) use its commercially reasonable efforts to
credit Affected Employees with any amounts paid under Sellers' Welfare
Plans prior to the Closing Date toward satisfaction of the applicable
deductible amounts, copayment minimums, coinsurance amounts and out of
pocket maximums under the corresponding Welfare Plans of Buyer to the
extent such amounts would be taken into account under the Welfare
Plans maintained by Buyer with respect to similarly situated
employees.
(h) Sellers shall remain responsible for all claims under
the applicable Welfare Plans of Sellers for health, accident and
sickness benefits that are deemed incurred by Affected Employees prior
to the Closing Date. Buyer shall be liable and responsible for all
claims incurred for health, accident and sickness benefits that are
deemed incurred by Affected Employees on or after the Closing Date.
For all purposes under such Welfare Plans, Affected Employees will be
deemed to have terminated employment with Sellers as of the Closing
Date. For purposes of this Agreement: (i) a claim for health
benefits (including, without limitation, claims for medical,
prescription drug, dental, and vision care expenses) will be deemed to
have been incurred on the date that health benefits services giving
rise to such claim are provided, (ii) a claim for short-term or long-
term disability benefits shall be deemed to have been incurred on the
date the claim for such benefits is made (subject to the terms of
Section 8.3(i)) and (iii) in the case of any claim for any other
--------------
accident benefits, a claim will be deemed to have been incurred upon
the occurrence of the event giving rise to such claims.
Notwithstanding the foregoing provisions of this paragraph, Buyer
shall have no liability for any such claim incurred by an Affected
Employee or a dependent of an Affected Employee on or after the
Closing Date if (i) such Affected Employee or dependent elected COBRA
coverage under Sellers' Welfare Plans before, on or after the Closing
Date and (ii) such claim is covered under that COBRA coverage.
(i) Sellers shall continue to be responsible for payment of
all short-term disability claims for any Covered Employee who is on
short-term disability at the Closing Date ("Disabled Employees"),
------------------
unless and until such Covered Employee actually commences work for
Buyer, at which time Buyer will be responsible for providing any
future short-term disability coverage. Buyer will offer employment to
persons on short-term disability at Pauls Valley, Oklahoma and
Centerville, Iowa and to those persons listed in Schedule 8.3(a) when
---------------
such persons are able to return to work. Such persons will become
"Affected Employees" for purposes of this Agreement once they are
employed by Buyer. Buyer will be responsible for providing long-term
disability coverage to any Covered Employee who commences work for
Buyer after Closing (to the same extent such coverage is available to
Buyer's other employees), except for Disabled Employees who move
directly to long-term disability coverage without reporting to work
with Buyer, and Sellers will be responsible for providing such long-
term disability coverage to such Disabled Employees.
(j) Attached hereto as Schedule 8.3(j) are copies of
---------------
Sellers' Severance Pay Policy, Severance Allowance Plan (Salaried) and
Severance Layoff Allowance Plan (Hourly) (the "Policies"). With
--------
respect to any person listed on Schedule 8.3(a) who is not offered
---------------
employment by Buyer (or who is offered employment with Buyer at a
lower salary than that in effect as of the Closing Date), Buyer agrees
to reimburse Sellers for any amounts paid by Sellers under the
Policies to any such person, as well as for any other costs incurred
by Sellers in satisfying all obligations under the Policies. Except
as otherwise provided herein, Sellers shall be liable for all
severance pay obligations (under the Policies or otherwise) to any
persons listed on Schedule 8.3(a) who are offered employment by Buyer
---------------
(under terms described in the first two sentences of Section 8.3(b)),
--------------
but who do not accept such offer or do not actually commence work for
Buyer. Any person offered permanent employment by Buyer may accept a
temporary position with Buyer in which case any severance owed to such
employee shall not be payable until such temporary position with Buyer
has ended (which severance shall be payable by Sellers); provided,
--------
however, that if any such person then accepts a permanent position
-------
with Buyer, Buyer will then become responsible for severance
obligations to such persons under the Policies. After the Closing
Date and for a period of twenty-four months thereafter, Buyer will be
responsible for, and pay, any severance liability of Sellers to any
Affected Employee whose employment with Buyer is terminated, provided
such persons are entitled to severance under the Severance Pay Policy
as a result of the occurrence of a "Change of Control" (as defined in
such Policy).
(k) Except as provided in the preceding paragraphs of this
Section or in the following sentence, Buyer shall be solely
responsible for (i) all liabilities, obligations and commitments
relating to all wages, salaries, bonuses and other forms of
compensation (including vacation pay) and related expenses incurred or
accrued on or after the Closing Date with respect to Affected
Employees, (ii) all employee benefits accrued after the Closing Date
under any and all plans, programs or arrangements maintained or
contributed to by Buyer for the benefit of Affected Employees and
(iii) all medical, dental and other health benefits or claims incurred
after the Closing Date (other than benefits or claims payable under
Sellers' Welfare Plans due to a COBRA election made by an Affected
Employee or a dependent of an Affected Employee). Sellers shall
remain liable for providing retiree welfare benefits to all Affected
Employees who, as of the Closing Date, satisfy the eligibility
requirements for retiree welfare benefits under the applicable terms
and conditions of Sellers' Welfare Plans as in effect on the Closing
Date and shall provide such benefits in accordance with the terms of
such plans. In no event shall Sellers be obligated to provide retiree
welfare benefits to Affected Employees who do not, as of the Closing
Date, satisfy the applicable eligibility requirements for retiree
welfare benefits under Sellers' Welfare Plans as in effect on the
Closing Date.
(l) Sellers shall be responsible for all liabilities or
obligations under the Worker Adjustment and Retraining Notification
Act and similar state, foreign and local rules, statutes and
ordinances resulting from Sellers' actions prior to the Closing.
Buyer shall be responsible for all liabilities or obligations under
the Worker Adjustment and Retraining Notification Act and similar
state, foreign and local rules, statutes and ordinances resulting from
the Closing or from Buyer's actions following the Closing.
(m) Except as otherwise provided in this Section or as
required by law, nothing in this Agreement shall be interpreted as
limiting the power of Buyer to amend or terminate any particular plan
maintained by Buyer or as requiring Buyer to continue the employment
of any specific person for any particular time; provided, however,
that no such termination or amendment may take away benefits or any
other payments already accrued as of the time of termination or
amendment without the consent of such person, except as allowed by
law.
(n) After the date hereof, Sellers shall not amend any of
the Policies to provide greater benefits to any persons for whom Buyer
is or may be obligated to provide severance under this Section 8.3.
-----------
(o) Buyer shall be responsible for, and shall indemnify and
hold harmless Sellers from and against, any and all Losses and
Expenses relating to or arising out of the liabilities assumed by
Buyer under this Section 8.3 or any failure by Buyer to comply with
-----------
the provisions of this Section 8.3.
-----------
Section 8.4. Employee Matters ! Employees of Brazil and
-------------------------------------------
Employees Employed at Swansea. (a) Buyer shall take any action
-----------------------------
necessary so that each person who immediately prior to the Closing
Date is an employee of Newco Brazil consisting solely of former
employees of Viskase Brazil listed on Schedule 8.4(a) who immediately
---------------
prior to the Closing Date are primarily engaged in the Business
(including each such employee who is on vacation, temporary layoff,
approved leave of absence, military leave, sick leave or short-term
disability) shall remain an employee of Newco Brazil, as the case may
be, immediately following the Closing Date. In addition, effective as
of the Closing Date, each Asset Seller shall terminate the employment
of, and Buyer shall offer employment to employees of UK listed on
Schedule 5.18(g)(i). (Persons described in the second preceding
--------------------
sentence and employees described in the preceding sentence who accept
such offers of employment shall be referred to herein as the "Foreign
-------
Affected Employees").
------------------
(b) Buyer shall also take any necessary action so that each
employee benefit plan maintained by, or required to be contributed to
by, Brazil or UK for Foreign Affected Employees shall be continued
immediately following the Closing Date and all service recognized
under each such plan shall continue to be recognized after the Closing
Date. Notwithstanding anything contained herein to the contrary, on
and after the Closing Date, Buyer shall continue to be bound to the
extent required by law by the provisions of each prior offer of
employment by Sellers to Foreign Affected Employees and by the
employment agreements, collective bargaining agreements, collective
employee agreements, customary practices and other employment-related
obligations applicable and relevant to Foreign Affected Employees, to
the extent required by local law or the provisions of those
agreements. Nothing herein shall prevent Buyer from modifying the
Foreign Affected Employees' terms and conditions of employment or
establishing new terms and conditions of employment to the extent such
actions are permitted by local law and the provisions of such
agreements; provided, however, that Buyer shall be responsible for all
claims, obligations and liabilities of any kind arising out of changes
made by Buyer after the Closing Date to employment agreements,
collective bargaining agreements, collective employee agreements,
customary practices and other employment-related obligations
applicable and related to Foreign Affected Employees.
(c) To the extent that Buyer is not obligated by any prior
offer of employment, any agreement, any customary practice or
otherwise by law to provide a specific level of compensation or
employee benefits to any Foreign Affected Employee, Buyer shall, for a
period commencing on the Closing Date and ending no earlier than the
first anniversary of the Closing Date, take any action necessary so
that each such Foreign Affected Employee who continues to be employed
in the Business or otherwise by Buyer shall continue to receive a
level of employee benefits and base wages or salary that, in the
aggregate, is no less favorable to such employee than the level of
employee benefits and base wages or salary paid or provided by the
Companies to such Foreign Affected Employee on the date of this
Agreement.
(d) Buyer shall be solely liable and responsible for all
obligations and commitments incurred after the Closing Date relating
to Affected Employees and Foreign Affected Employees who become
employed by Buyer.
(e) Buyer and Sellers acknowledge that this Agreement
constitutes a relevant transfer of the whole of the Sellers'
undertaking relating to the Business for the purposes of the
Regulations.
(f) In accordance with the Regulations, the contract of
employment of each of the UK Employees shall be automatically
transferred to Buyer (or a designated Affiliate of Buyer) with effect
from the Closing Date.
(g) If any contract of employment of any employee other
than a UK Employee has effect as if originally made between Buyer and
the employee concerned as a result of the Regulations:
(i) Buyer may, upon becoming aware of any such contract,
terminate it forthwith; and
(ii) Sellers shall indemnify and keep indemnified Buyer
against any costs, claims, liabilities and expenses of any
nature arising out of such termination and against sums payable
to or on behalf of such employee in respect of his employment
whether arising before or after the Closing Date.
(h) Except as provided for in the Valuation Date Statement,
Sellers shall be responsible for all emoluments and outgoings in
respect of the UK Employees (including without limitation all wages,
bonuses, commissions, PAYE, national insurance contributions, pension
contributions and otherwise) prior to the Closing Date and shall
indemnify and keep indemnified Buyer (or a designated Affiliate of
Buyer) against all liabilities, claims, demands and expenses in
respect of the same.
(i) Buyer shall be responsible for all emoluments and
outgoings in respect of the UK Employees (including without limitation
all wages, bonuses, commissions, PAYE, national insurance
contributions, pension contributions and otherwise) on and after the
Closing Date and shall indemnify and keep indemnified Sellers against
all liabilities, claims, demands and expenses in respect of the same.
Section 8.5. Securities Law Legends. Buyer agrees and
----------------------
understands that the Newco Brazil Shares have not been, and will not
be, registered under the securities laws of any state or country and
that the Newco Brazil Shares may be sold or disposed of only in one or
more transactions registered under applicable securities laws or as to
which an exemption from the registration requirements of applicable
securities laws is available. Buyer acknowledges and agrees that no
person has any right to require Sellers to cause the registration of
any of the Newco Brazil Shares. The certificates representing the
Newco Brazil Shares shall contain a legend to such effect.
Section 8.6. Insurance; Risk of Loss. Each Asset Seller
-----------------------
will, and Sellers will cause Viskase Brazil and Newco Brazil to, keep
insurance policies currently maintained by the Companies covering
their respective businesses, assets and current or former employees,
as the case may be, or suitable replacements therefor, in full force
and effect through the close of business on the Closing Date, and
Buyer shall become solely responsible for all insurance coverage and
related risk of loss based on events occurring after the Closing Date
with respect to the Business, the Purchased Assets and the Affected
Employees. To the extent that after the Closing any party hereto
requires any information regarding claim data, payroll or other
information in order to make filing with insurance carriers or self
insurance regulators from another party hereto, the other party or
parties will promptly supply such information.
Section 8.7. Collection; Post-Closing Remittances. (a)
------------------------------------
For a period of 180 days after the Closing Date (the "Collection
----------
Period"), at no cost to Sellers, Buyer shall use its commercially
------
reasonable efforts to collect the accounts and notes receivable of UK,
Ireland, Viskase Brazil and Chile (the "Receivables") generally in
-----------
accordance with the billing and collection practices presently applied
by such Companies in the collection of their accounts and notes
receivable, except that with respect to any particular Receivable,
Buyer shall be under no obligation to commence or not to commence
litigation to effect collection. Buyer shall use at least the same
standard of care for the collection of the Receivables that it uses in
its own business. In connection with the collections by Buyer, if a
payment is received from an account debtor who has not designated the
invoice being paid thereby, Buyer shall contact such account debtor to
determine the invoice being paid thereby and, if no invoice is
designated, then such payment shall be applied to a Receivable
relating to a sale prior to the Closing Date. Buyer agrees not to
knowingly take actions that are reasonably likely to diminish the
collectibility of the Receivables.
(b) Buyer shall remit all cash collections from the
Receivables to a bank account designated by Sellers on a weekly basis
on each Tuesday during the Collection Period.
(c) Buyer shall, on a weekly basis on each Tuesday during
the Collection Period, deliver to Sellers a written report
("Collection Report") of the following information with respect to the
-----------------
Receivables:
(i) The aggregate amount of the Receivables (and the number
of accounts comprising such Receivables);
(ii) The amount of cash collections of the Receivables
during the period relating to such Collection Report; and
(iii) Any material problems relating to the collection of
Receivables.
(d) During the period that Buyer is collecting Receivables
on behalf of Sellers, Buyer shall have the right and authority to
endorse, without recourse, the name of Sellers on any check or other
evidences of indebtedness received by Buyer on account of any
Receivable and shall promptly remit the amount of such Receivable to
Sellers in accordance with this Section 8.7. Without limiting the
------------
foregoing provisions of this Section 8.7, if, at any other time after
-----------
the Closing Date, Buyer or its Affiliates shall receive any remittance
from any account debtors with respect to any accounts or notes
receivables included in the Excluded Assets, then Buyer or its
Affiliates, as applicable, shall endorse such remittance to the order
of the appropriate Seller and forward it to such Seller promptly
following receipt thereof.
Section 8.8. Post-Closing Assistance. Following the
-----------------------
Closing:
(a) Buyer shall provide to Sellers and their
representatives and agents reasonable assistance in connection with
the ANC Litigation and Newsome Litigation (as those terms are defined
in the Licensed Patents License Agreement) and any Excluded
Liabilities, including those matters described in Schedule 2.4, upon
------------
reasonable notice (subject to reimbursement of costs and expenses),
including providing reasonable access to facilities for inspections or
obtaining information, reasonable access to documents for production
or use in the litigation, and/or reasonable access to employees and
officers, as necessary, for testimony at depositions and/or trial, and
reasonable assistance with the conduct of the litigation. Following
assignment of the Licensed Patents to Buyer, Seller agrees to provide
the same assistance to Buyer in connection with the Newsome
Litigation. The obligation to provide assistance pursuant to this
Section 8.8 shall continue notwithstanding any termination of the
-----------
Licensed Patents License Agreement.
(b) For a period of two (2) years following the Closing
Date, Buyer shall make available to Sellers former employees of
Sellers identified on Schedule 8.8 for consultation in connection with
------------
Sellers' NUCEL(R) technology. Such consultation shall be at times
mutually agreed to by the parties and shall not unreasonably interfere
with the principal duties of such employees.
(c) Sellers shall provide to Buyer and its representatives
and agents reasonable access to Seller's facilities, records and
documents and employees and officers, as reasonably requested by Buyer
from time to time in connection with any Assumed Liabilities,
including those matters described in Schedule 2.3(d).
---------------
(d) Each party hereto agrees to hold, and to cause its
Affiliates, employees, agents and representatives to hold, in strict
confidence all information (whether written or oral) obtained pursuant
to this Section 8.8 and such information shall not be disclosed or
-----------
released without the prior written consent of the party hereto that
has provided access to such confidential information.
(e) Sellers or Buyer, as the case may be, will provide
reasonable advance notice to such other party of any request for
assistance pursuant to this Section 8.8. In addition, Sellers or
-----------
Buyer, as the case may be, will reimburse such other party for any
reasonable direct out-of-pocket expenses (including 130% of any per
diem salary) incurred by such other party pursuant to this Section
-------
8.8.
---
Section 8.9. Non-Competition. (a) Sellers and their
---------------
Affiliates agree that they will not (directly or indirectly) enter
into, engage in, invest in or consult with any entity in the business
of manufacturing, selling or distributing specialty plastic films
("Competing Films Products") for a five year period after the Closing
------------------------
Date anywhere in the world. For a 30 month period after the Closing
Date, Sellers shall not recruit or otherwise solicit or induce any
Affected Employee or Foreign Affected Employee to terminate his or her
employment or other relationship with Buyer or its Affiliates.
Notwithstanding anything contained herein to the contrary, nothing in
this Agreement shall prevent Sellers or any of their Affiliates from
owning, directly or indirectly, up to 2% of any class of securities of
any entity traded on any securities exchange regardless of whether or
not such entity manufactures, distributes or sells Competing Films
Products or products which compete with the Competing Films Products.
In addition, notwithstanding anything contained herein to the
contrary, this Section 8.9(a) shall not prevent (i) the continued
--------------
operation by Sellers and their Affiliates of those products included
in the Excluded Business or (ii) the acquisition of any Seller or
Affiliates of any Seller by any entity engaged in the manufacture,
sale and distribution of Competing Films Products, and the subsequent
manufacture, sale or distribution of Competing Films Products by such
acquiring company and its Affiliates (other than Sellers).
(b) Buyer and its Affiliates agree that they will not
(directly or indirectly) enter into, engage in, invest in or consult
with any entity in the business of manufacturing, selling or
distributing nylon casings ("Competing Casings Products") for a five
--------------------------
year period after the Closing Date anywhere in the world. For a 30
month period after the Closing Date, Buyer shall not recruit or
otherwise solicit or induce any person who is an employee of the
Sellers or their Affiliates to terminate his or her employment or
other relationship with the Sellers or their Affiliates.
Notwithstanding anything contained herein to the contrary, nothing in
this Agreement shall prevent Buyer or any of its Affiliates from
owning, directly or indirectly, up to 2% of any class of securities of
any entity traded on any securities exchange regardless of whether or
not such entity manufactures, distributes or sells Competing Casings
Products or products which compete with the Competing Casings
Products. In addition, notwithstanding anything contained herein to
the contrary, this Section 8.9(b) shall not prevent the acquisition of
--------------
Buyer or its Affiliates by any entity engaged in the manufacture, sale
and distribution of Competing Casings Products, and the subsequent
manufacture, sale or distribution of Competing Casings Products by
such acquiring company and its Affiliates (other than Buyer or its
Affiliates).
Section 8.10. Casings License. From and after the Closing
---------------
Date, Buyer hereby grants, without representation or warranty, to
Sellers and their Affiliates a fully paid-up, royalty-free, non-
exclusive, perpetual right and license to make, have made, use or sell
any products the use, manufacture or sale of which is covered by the
patents set forth in Schedule 8.10 (the "Casing Patents"). Sellers
and any successor in interest of any Seller may sell, assign or
sublicense the Sellers' license under the Casing Patents granted
hereby, on the terms of and subject to the license granted hereunder,
only to any subsequent owner, lessee or operator of the Excluded
Business, provided that (i) such subsequent owner, lessee or operator
agrees in writing to be bound by the terms of this Section 8.10 and
(ii) written notice of the identity and address for notices of such
subsequent owner, lessee or operator is delivered to Buyer prior to
such sale, assignment or sublicense.
Section 8.11. Covenant Not to Sue. With respect to the
-------------------
patents listed on Schedule 8.11, Sellers agree not to assert against
-------------
Buyer or its Affiliates any claims for infringement based upon Buyer's
use, manufacture or sale of the products of the Business using the
same formulation used by Sellers on or before the Closing Date as
shown by the Product Standards and Procedures Specifications for such
products in existence on or before the Closing Date. Sellers will
agree to notify any subsequent purchaser or licensee of the patents
listed on Schedule 8.11 of the existence and terms of this covenant
-------------
and any such purchaser or licensee shall take whatever rights are
granted to it by Sellers subject to the terms of this Section 8.11.
-------------
ARTICLE IX
----------
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
--------------------------------------------
The obligations of Buyer under this Agreement shall, at the
option of Buyer (to the extent permissible under applicable law), be
subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
Section 9.1. No Misrepresentation or Breach of Covenants
-------------------------------------------
and Warranties. There shall not have been any breach in any material
--------------
respect by any Seller in the performance of any of its covenants and
agreements herein which shall not have been remedied or cured; each of
the representations and warranties of Sellers contained in this
Agreement (disregarding for purposes of this Section 9.1 any
-----------
qualifications with respect to materiality or Material Adverse Effect)
shall be true and correct on the Closing Date as though made on the
Closing Date (except to the extent that they expressly relate to an
earlier date), except for any failures to be true and correct which,
individually or in the aggregate, would not have a Material Adverse
Effect and except for changes therein specifically permitted by this
Agreement or resulting from any transaction expressly consented to in
writing by Buyer or any transaction permitted by this Agreement;
between the date hereof and the Closing Date, no Material Adverse
Effect shall have occurred; and there shall have been delivered to
Buyer a certificate to such effect, dated the Closing Date, signed on
behalf of each Seller by a duly authorized officer of such Seller.
Section 9.2. No Restraint. The waiting period under the
------------
HSR Act shall have expired or been terminated, and no injunction or
restraining order shall have been issued by any court of competent
jurisdiction or other Governmental Body and be in effect which
restrains or prohibits any material transaction contemplated hereby
and no Governmental Body shall have instituted an action or proceeding
which shall not have been previously dismissed seeking to restrain,
enjoin or prohibit the consummation of the transactions contemplated
by this Agreement or seeking damages or monetary penalties with
respect thereto.
Section 9.3. Governmental Approvals. The parties shall
----------------------
have received the approvals and actions of or by all Governmental
Bodies as set forth on Schedule 9.3, or which are otherwise necessary
------------
to prevent a Material Adverse Effect.
Section 9.4. Title Policy. The Title Company is committed
------------
(subject to Buyer's obligation to pay all costs and fees associated
therewith and subject to Sellers' receipt of the Closing Purchase
Price) to issue to Buyer an owner's policy of title insurance, as
evidenced by a title insurance binder that has been marked by an
authorized representative of the Title Company or other evidence
reasonably satisfactory to Buyer, naming Buyer as insured, showing
marketable title in the name of Buyer to the Owned Real Property
located in the United States, subject only to Permitted Encumbrances.
Section 9.5. Operating Systems. Sellers shall have
-----------------
reasonably demonstrated to Buyer that the information systems
(including SAP) at each of the plants which are material to the
conduct of the Business will be operational immediately after the
Closing through the Seller Transition Services Agreement or other
arrangements which allow operations in a commercially reasonable
manner.
Section 9.6. Escrow Agreement. The Escrow Agreement shall
----------------
have been duly executed by Sellers.
Section 9.7. Purchased Assets Free and Clear. The
-------------------------------
Purchased Assets shall be free and clear of any Encumbrance except for
Permitted Encumbrances and Encumbrances that will be extinguished at
Closing with the proceeds from the transactions contemplated hereby.
Section 9.8. Swansea Consent. The consent for the
---------------
assignment of the Lease Agreement dated October 7, 1991 between UK and
the Council of Swansea shall have been obtained.
Notwithstanding any knowledge by Buyer, its counsel or other
representatives of the failure of any conditions or the breach by
Sellers of any of the representations, warranties or agreements of
Sellers herein, in each case as a result of any update of the
Disclosure Letter after the date hereof or the certificate of Sellers
pursuant to Section 9.1 (the "Seller Additional Information"), Sellers
----------- -----------------------------
agree that Buyer shall not be deemed to have waived for any purpose
any rights or remedies it may have against Sellers under this
Agreement.
ARTICLE X
----------
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
----------------------------------------------
The obligations of Sellers under this Agreement shall, at
the option of Sellers (to the extent permissible under applicable
law), be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:
Section 10.1. No Misrepresentation or Breach of Covenants
-------------------------------------------
and Warranties. There shall not have been any breach in any material
--------------
respect by Buyer in the performance of any of its covenants and
agreements herein which shall not have been remedied or cured; each of
the representations and warranties of Buyer contained in this
Agreement shall be true and correct on the Closing Date as though made
on the Closing Date, except for changes therein specifically permitted
by this Agreement or resulting from any transaction expressly
consented to in writing by Sellers or any transaction contemplated by
this Agreement and other than breaches of representations and
warranties which, individually or in the aggregate, are not reasonably
expected to have a material adverse effect on Buyer's ability to
consummate the transactions contemplated hereby; and there shall have
been delivered to Sellers a certificate to such effect, dated the
Closing Date, signed on behalf of Buyer by a duly authorized officer
of Buyer.
Section 10.2. No Restraint. The waiting period under the
------------
HSR Act shall have expired or been terminated, and no injunction or
restraining order shall have been issued by any court of competent
jurisdiction or the Governmental Body and be in effect which restrains
or prohibits any material transaction contemplated hereby and no
Governmental Body shall have instituted an action or proceeding which
shall not have been previously dismissed seeking to restrain, enjoin
or prohibit the consummation of the transactions contemplated by this
Agreement or seeking damages or monetary penalties with respect
thereto.
Section 10.3. Governmental Approvals. The parties shall
----------------------
have received all approvals and actions of or by all Governmental
Bodies necessary to consummate the transactions contemplated hereby,
which are required to be obtained prior to the Closing by applicable
Requirements of Law.
Section 10.4. Escrow Agreement. The Escrow Agreement shall
----------------
have been executed by Buyer.
Notwithstanding any knowledge by Sellers, counsel to Sellers
or other representatives of the failure of any conditions or the
breach by Buyer of any of the representations, warranties or
agreements of Buyer herein, in each case as a result of any update of
the Schedules of Buyer after the date hereof or the certificate of
Buyer pursuant to Section 10.1 (the "Buyer Additional Information"),
------------ ----------------------------
Buyer agree that Sellers shall not be deemed to have waived for any
purpose any rights or remedies it may have against Buyer under this
Agreement.
ARTICLE XI
----------
INDEMNIFICATION
---------------
Section 11.1. Indemnification by Sellers. (a) From and
--------------------------
after the Closing, Sellers agree, jointly and severally, to indemnify
and hold harmless each Buyer Group Member from and against any and all
Losses and Expenses incurred by such Buyer Group Member in connection
with or arising from:
(i) any breach of any warranty or the inaccuracy of any
representation of Sellers contained or referred to in this
Agreement or the certificate delivered by or on behalf of
Sellers pursuant to Section 9.1;
-----------
(ii) any breach by Sellers of, or failure by Sellers to
perform, any of its covenants or obligations contained in this
Agreement (excluding matters described in clauses (iii) and
(iv) below);
(iii) any Excluded Liabilities specifically enumerated in
clauses (a) through (f) of Section 2.4; or
-----------
(iv) any Excluded Liabilities other than those described in
clause (iii);
provided, however, that Sellers shall be required to indemnify and
-------- -------
hold harmless under Section 11.1(a)(i) with respect to Losses and
------------------
Expenses incurred by Buyer Group Members only to the extent that:
(x) the aggregate amount of such Losses and Expenses
exceeds $2,500,000 ($250,000 in regard to the representations
and warranties contained in section 5.17) (it being understood
------------
that such one percent of the Final Purchase Price (and
$250,000) shall be deductibles for which Sellers shall bear no
indemnification responsibility); and
(y) the aggregate amount required to be paid by Sellers
pursuant to Section 11.1(a)(i) shall not exceed $50,000,000;
------------------
and
provided, further, that Sellers shall be required to indemnify and
-------- -------
hold harmless under Section 11.1(a)(iv) with respect to Losses and
-------------------
Expenses incurred by Buyer Group Members only to the extent that the
amount of Loss and Expense suffered by Buyer Group Members related to
each individual claim exceeds $10,000 (it being understood that such
$10,000 shall be a deductible for which Sellers shall bear no
indemnification responsibility); provided, further, that such $10,000
-------- --------
deductible shall cease to apply when all indemnified Losses and
Expenses suffered by Buyer Group Members as to all such claims under
this proviso exceed $100,000.
(b) The indemnification provided for in Section 11.1(a)
---------------
shall terminate one year after the Closing Date (two years in regard
to the representations and warranties contained in Section 5.17) (and
------------
no claims shall be made by any Buyer Group Member under
Section 11.1(a) thereafter), except that the indemnification by
---------------
Sellers shall continue as to:
(i) the obligations of Sellers with respect to Section
-------
11.1(a)(iv), which shall survive until the expiration of the
-----------
applicable statute of limitations for the underlying claim;
(ii) the covenants of Sellers set forth in Section 13.6,
------------
which shall survive for the period of time set forth therein;
(iii) the covenants of Sellers set forth in Article VIII
------------
and the obligations of Sellers with respect to Section
-------
11.1(a)(iii), which shall survive indefinitely; and
------------
(iv) any Losses or Expenses of which any Buyer Group
Member has validly given a Claim Notice to Sellers in
accordance with the requirements of Section 11.3 on or prior to
------------
the date such indemnification would otherwise terminate in
accordance with this Section 11.1, as to which the obligation
-------------
of Sellers shall continue solely with respect to the specific
matters in such Claim Notice until the liability of Sellers
shall have been determined pursuant to this Article XI, and
----------
Sellers shall have reimbursed all Buyer Group Members for the
full amount of such Losses and Expenses that are payable with
respect to such Claim Notice in accordance with this Article
-------
XI.
--
Section 11.2. Indemnification by Buyer. (a) Buyer agrees
-------------------------
to indemnify and hold harmless each Seller Group Member from and
against any and all Losses and Expenses incurred by such Seller Group
Member in connection with or arising from:
(i) any breach of any warranty or the inaccuracy of any
representation of Buyer contained or referred to in this
Agreement or the certificate delivered by or on behalf of Buyer
pursuant to Section 10.1;
------------
(ii) any breach by Buyer of, or failure by Buyer to
perform, any of its covenants and obligations contained in this
Agreement;
(iii) the conduct of the Business following the Closing
Date; or
(iv) the Assumed Liabilities.
(b) The indemnification provided for in Section 11.2(a)
---------------
shall terminate one year after the Closing Date (and no claims shall
be made by any Seller Group Member under Section 11.2(a) thereafter),
---------------
except that the indemnification by Buyer shall continue as to:
(i) the obligations of Buyer with respect to Sections
--------
11.2(a)(iii) and (iv) as to which no time limitation shall
------------ ----
apply;
(ii) the covenants of Buyer set forth in Section 13.6 which
------------
shall survive for the period of time set forth therein;
(iii) the covenants of Buyer set forth in Section 7.7 and
------------
Article VIII, which shall survive indefinitely; and
------------
(iv) any Losses or Expenses of which any Seller Group
Member has validly given a Claim Notice to Buyer in accordance
with the requirements of Section 11.3 on or prior to the date
------------
such indemnification would otherwise terminate in accordance
with this Section 11.2, as to which the obligation of Buyer
------------
shall continue solely with respect to the specific matters in
such Claim Notice until the liability of Buyer shall have been
determined pursuant to this Article XI, and Buyer shall have
----------
reimbursed all Seller Group Members for the full amount of such
Losses and Expenses that are payable with respect to such Claim
Notice in accordance with this Article XI.
----------
Section 11.3. Notice of Claims. Any Buyer Group Member or
----------------
Seller Group Member seeking indemnification hereunder (the
"Indemnified Party") shall give promptly to the party obligated to
-----------------
provide indemnification to such Indemnified Party (the "Indemnitor") a
----------
notice (a "Claim Notice") describing in reasonable detail the facts
------------
giving rise to the claim for indemnification hereunder and shall
include in such Claim Notice (if then known) the amount or the method
of computation of the amount of such claim, and a reference to the
provision of this Agreement or any other agreement, document or
instrument executed hereunder or in connection herewith upon which
such claim is based; provided, however, that a Claim Notice in respect
-------- -------
of any action at law or suit in equity by or against a third Person as
to which indemnification will be sought shall be given promptly after
the action or suit is commenced; provided, however, that failure to
-------- -------
give notice as provided in this Section 11.3 shall not relieve the
------------
Indemnitor of its obligations hereunder except to the extent it shall
have been prejudiced by such failure.
Section 11.4. Determination of Amount. (a) In calculating
-----------------------
any Loss or Expense there shall be deducted any insurance recovery
(excluding recoveries to the extent they are self-insured) in respect
thereof (and no right of subrogation shall accrue hereunder to any
insurer). Buyer and Sellers agree that, for purposes of computing the
amount of any indemnification payment under this Article XI, any such
----------
indemnification payment shall be treated as an adjustment to the Final
Purchase Price for all Tax purposes. Any such indemnification payment
hereunder with respect to any Loss or Expense shall be an amount which
is sufficient to compensate the Indemnified Party for the amount of
such Loss or Expense, after taking into account (i) any Tax benefit
which has been, or will be, provided to such Indemnified Party as a
result of such Loss or Expense (such Indemnified Party shall use
commercially reasonable efforts to obtain such Tax benefit, including
filing amended Tax Returns if necessary) and (ii) all increases in
federal, state, local, foreign or other Taxes payable by the
Indemnified Party as a result of the receipt of such payment (by
reason of such payment being included in income, resulting in a
reduction of tax basis, or otherwise increasing such Taxes payable by
the Indemnified Party at any time).
(b) After the giving of any Claim Notice pursuant to
Section 11.3, the amount of indemnification to which an Indemnified
------------
Party shall be entitled under this Article XI shall be determined: (i)
----------
by the written agreement between the Indemnified Party and the
Indemnitor; (ii) by a final judgment or decree of any court of
competent jurisdiction; or (iii) by any other means to which the
Indemnified Party and the Indemnitor shall agree. The judgment or
decree of a court shall be deemed final when the time for appeal, if
any, shall have expired and no appeal shall have been taken or when
all appeals taken shall have been finally determined. The Indemnified
Party shall have the burden of proof in establishing the amount of
Losses and Expenses suffered by it.
Section 11.5. Third Person Claims. (a) Any party seeking
-------------------
indemnification provided for under this Agreement in respect of,
arising out of or involving a claim or demand made by any third Person
against the Indemnified Party shall notify the Indemnitor in writing,
and in reasonable detail, of the third Person claim within 10 days
after receipt by such Indemnified Party of written notice of the third
Person claim. Thereafter, the Indemnified Party shall deliver to the
Indemnitor, within five business days after the Indemnified Party's
receipt thereof, copies of all notices and documents (including court
papers) received by the Indemnitor relating to the third Person claim.
Notwithstanding the foregoing, should a party be physically served
with a complaint with regard to a third Person claim, the Indemnified
Party shall notify the Indemnitor with a copy of the complaint within
five business days after receipt thereof and shall deliver to the
Indemnitor within seven business days after the receipt of such
complaint copies of notices and documents (including court papers)
received by the Indemnified Party relating to the third Person claim.
The failure to give notice as provided in this Section 11.5 shall not
------------
relieve the Indemnitor of its obligations hereunder except to the
extent it shall have been prejudiced by such failure.
(b) In the event any legal proceeding shall be threatened
in writing or instituted or any claim or demand shall be asserted in
writing by any Person in respect of which payment may be sought by one
party hereto from the other party under the provisions of this Article
-------
XI, the Indemnified Party shall promptly cause written notice of the
--
assertion of any such claim of which it has knowledge which is covered
by this indemnity to be forwarded to the Indemnitor. Any notice of a
claim by reason of any of the representations, warranties or covenants
contained in this Agreement shall contain a reference to the provision
of this Agreement or any other agreement, document or instrument
executed hereunder or in connection herewith upon which such claim is
based, the facts giving rise to an alleged basis for the claim and the
amount of the liability asserted against the Indemnitor by reason of
the claim. In the event of the initiation of any legal proceeding
against the Indemnified Party by a third Person, the Indemnitor shall
have the sole and absolute right after the receipt of notice, at its
option and at its own expense, to be represented by counsel of its
choice (reasonably acceptable to the Indemnified Party) and to
control, defend against, negotiate, settle or otherwise deal with any
proceeding, claim, or demand which relates to any loss, liability or
damage indemnified against hereunder; provided, however, that the
-------- -------
Indemnified Party may participate in any such proceeding with counsel
of its choice and at its expense. The parties hereto agree to
cooperate fully with each other in connection with the defense,
negotiation or settlement of any such legal proceeding, claim or
demand. To the extent the Indemnitor elects not to defend such
proceeding, claim or demand, and the Indemnified Party defends against
or otherwise deals with any such proceeding, claim or demand, the
Indemnified Party may retain counsel, at the expense of the
Indemnitor, and control the defense of such proceeding. Neither the
Indemnitor nor the Indemnified Party may settle any such proceeding
which settlement obligates the other party to pay money, to perform
obligations or to admit liability without the consent of the other
party. After any final judgment or award shall have been rendered by
a court, arbitration board or administrative agency of competent
jurisdiction and the time in which to appeal therefrom has expired, or
a settlement shall have been consummated, or the Indemnified Party and
the Indemnitor shall arrive at a mutually binding agreement with
respect to each separate matter alleged to be indemnified by the
Indemnitor hereunder, the Indemnified Party shall forward to the
Indemnitor notice of any sums due and owing by it with respect to such
matter and the Indemnitor shall pay all of the sums so owing to the
Indemnified Party by wire transfer, certified or bank cashier's check
within 30 days after the date of such notice.
(c) Notwithstanding anything contained herein to the
contrary, Sellers shall have the exclusive right to assume the defense
of, or otherwise contest or settle any claim, action, suit,
investigation or proceeding which is an Excluded Liability. Buyer
agrees to cooperate and assist Sellers with all reasonable requests
(including, without limitation, making employees available for
interviews, depositions and trials) and to afford Sellers access to
any records, reports or other documents reasonably requested by
Sellers in connection with such claims, actions, suits or proceedings.
(d) To the extent of any inconsistency between this Section
-------
11.5 and Section 8.2(c) (relating to Tax contests), the provisions of
---- -------------
Section 8.2(c) shall control with respect to Tax contests.
-------------
Section 11.6. Limitations. (a) In any case where an
-----------
Indemnified Party recovers from third Persons any amount in respect of
a matter with respect to which an Indemnitor has indemnified it
pursuant to this Article XI, such Indemnified Party shall promptly pay
----------
over to the Indemnitor the amount so recovered (after deducting
therefrom the full amount of the expenses incurred by it in procuring
such recovery), but not in excess of the sum of (i) any amount
previously so paid by the Indemnitor to or on behalf of the
Indemnified Party in respect of such matter and (ii) any amount
expended by the Indemnitor in pursuing or defending any claim arising
out of such matter.
(b) Sellers shall not be required to indemnify and hold
harmless any Buyer Group Member pursuant to Section 11.1(a) to the
---------------
extent the matter in question was taken into account in the
computation of the Final Purchase Price pursuant to Section 3.2.
-----------
(c) In the event that Sellers are conducting any defense
against a third Person claim for which a Buyer Group Member has sought
indemnification pursuant to Section 11.1(a) , expenses incurred by
---------------
Sellers in connection therewith, including legal costs and expenses,
shall constitute Expenses for purposes of determining the maximum
aggregate amount to be paid by Sellers pursuant to Section 11.1(a).
---------------
(d) No party shall have any liability for any inaccuracy in
or breach of any representation, warranty or agreement by such party
if the other party or any of its officers, employees, counsel or other
representatives had actual knowledge on or before the Closing Date of
the facts as a result of which such representation, warranty or
agreement was inaccurate or breached.
(e) Except for remedies that cannot be waived as a matter
of law and injunctive and provisional relief (including, but not
limited to, specific performance), if the Closing occurs, this Article
-------
XI shall be the exclusive remedy for breaches of this Agreement
--
(including any covenant, obligation, representation or warranty
contained in this Agreement or in any certificate delivered pursuant
to this Agreement) or otherwise in respect of the sale of the
Purchased Assets contemplated hereby. The parties agree that their
respective rights and obligations in respect of Environmental Matters
as provided in this Agreement shall supersede any such rights and
obligations they may have under any existing or future law. Except
for any Losses or Expenses for which Sellers are required to indemnify
and hold harmless the Buyer Group members in accordance with Section
-------
11.1(a)(i), Buyer releases Sellers from any and all liability for
----------
Losses and Expenses relating to Environmental Matters arising in
connection with the Business or the Purchased Assets.
(f) Notwithstanding any other provision of this Agreement,
Sellers shall have no indemnification obligations with respect to any
breach of any representation or warranty contained in Section 5.17 to
------------
the extent that such breach was discovered or otherwise identified
through any voluntary investigation undertaken by Buyer or its
Affiliates, including any soil or groundwater sampling. Sellers and
Buyer agree that any demand or request by any governmental agency or
court (or by any third party asserting a claim against Buyer or
alleging liability on the part of Buyer) for any investigation or
remediation of any property, including any soil or groundwater
sampling, shall be deemed to be an involuntary investigation and
therefore not governed by the provisions of the preceding sentence
unless initiated by a voluntary request or disclosure by Buyer.
Section 11.7. Mitigation. Each of the parties agrees to
----------
take all reasonable steps to mitigate their respective Losses and
Expenses upon and after becoming aware of any event or condition which
could reasonably be expected to give rise to any Losses and Expenses
that are indemnifiable hereunder; provided, however, that no party
-------- -------
shall be obligated to expend money, commence or participate in any
litigation or offer or grant any accommodation (financial or
otherwise) to any third party.
ARTICLE XII
-----------
TERMINATION
-----------
Section 12.1. Termination. Anything contained in this
-----------
Agreement to the contrary notwithstanding, this Agreement may be
terminated at any time prior to the Closing Date:
(a) by the mutual consent of Buyer and Sellers;
(b) by Buyer in the event of any breach by Sellers of any
of Sellers' agreements, representations or warranties contained herein
which would result in a Material Adverse Effect and the failure of
Sellers to cure such breach within 30 days after receipt of notice
from Buyer requesting such breach to be cured;
(c) by Sellers in the event of any breach by Buyer of any
of Buyer's agreements, representations or warranties contained herein
which would have a material adverse effect on Buyer's ability to
consummate the transactions contemplated hereby and the failure of
Buyer to cure such breach within 30 days after receipt of notice from
Sellers requesting such breach to be cured;
(d) by Buyer or Sellers if any court of competent
jurisdiction in the United States or other United States Governmental
Body shall have issued a final and non-appealable order, decree or
ruling permanently restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby; or
(e) by Buyer or Sellers if the Closing shall not have
occurred on or before September 30, 2000 (or such later date as may be
agreed in writing to by Buyer and Sellers), unless the failure of such
consummation shall be due to the failure of the party seeking to
terminate this Agreement to comply in all material respects with the
agreements and covenants contained herein to be performed by such
party on or before the Closing Date.
Section 12.2. Notice of Termination. Any party desiring to
---------------------
terminate this Agreement pursuant to Section 12.1 shall give written
------------
notice of such termination to the other party to this Agreement.
Section 12.3. Effect of Termination. In the event that
---------------------
this Agreement shall be terminated pursuant to this Article XII, all
-----------
further obligations of the parties under this Agreement (other than
Sections 12.4 and 13.10) shall be terminated without further liability
------------- -----
of any party to the other; provided, however, that nothing herein
-------- -------
shall relieve any party from liability for its willful breach of this
Agreement.
Section 12.4. Non-Solicitation. If this Agreement is
----------------
terminated, neither Buyer nor any of its Affiliates will, for a period
of two years thereafter, without the prior written approval of
Sellers, directly or indirectly solicit, induce or attempt to persuade
any person who is an employee of the Companies on the date hereof or
at any time hereafter that precedes such termination, to terminate his
or her employment with the Companies. Without limiting the rights of
Sellers to pursue all other legal and equitable rights available for a
violation of this Section 12.4 by Buyer or its Affiliates, it is
------------
agreed that other remedies cannot fully compensate Sellers for such a
violation and that Sellers shall be entitled to injunctive relief to
prevent a violation or continuing violation hereof.
ARTICLE XIII
------------
GENERAL PROVISIONS
------------------
Section 13.1. Survival of Representations and Warranties.
------------------------------------------
All representations and warranties contained in this Agreement shall
survive the consummation of the transactions contemplated by this
Agreement through the period during which claims for indemnification
may be made for such representations and warranties pursuant to
Article XI (at which time such representations and warranties shall
----------
terminate).
Section 13.2. Governing Law. This Agreement shall be
-------------
governed by and construed in accordance with the internal laws (as
opposed to the conflicts of law provisions) of the State of Illinois
(without regard to the conflicts of law provisions thereof), except to
the extent that the application of substantive laws of the United
States or another jurisdiction is mandatory.
Section 13.3. No Public Announcement. Neither Buyer nor
----------------------
Sellers shall, without the approval of the other, make any press
release or other public announcement concerning the transactions
contemplated by this Agreement, except as and to the extent that any
such party shall be so obligated by law, in which case the other party
shall be advised and the parties shall use their reasonable efforts to
cause a mutually agreeable release or announcement to be issued;
provided, however, that the foregoing shall not preclude
-------- -------
communications or disclosures necessary to implement the provisions of
this Agreement or to comply with the accounting and the Securities and
Exchange Commission disclosure obligations or the rules of any stock
exchange; provided further, however, that the foregoing shall not
-------- -------
preclude conference calls or meetings with analysts and investors
following public announcement concerning the transactions contemplated
by this Agreement.
Section 13.4. Notices. All notices or other communications
-------
required or permitted hereunder shall be in writing and shall be
deemed given or delivered when delivered personally or when sent by
registered or certified mail or by private courier addressed as
follows:
If to Buyer, to:
Bemis Company, Inc.
222 South Ninth Street, Suite 2300
Minneapolis, MN 55402-4099
Attention: Chief Executive Officer
with a copy to:
Bemis Company, Inc.
222 South Ninth Street, Suite 2300
Minneapolis, MN 55402-4099
Attention: General Counsel
and
Faegre & Benson LLP
90 South 7th Street
Minneapolis, MN 55402
Attention: James E. Nicholson
If to Sellers, to:
Viskase Corporation
6855 W. 65th St.
Chicago, Illinois 60638
Attention: President; General Counsel
with a copy to:
Sidley & Austin
Bank One Plaza
10 S. Dearborn St.
Chicago, Illinois 60603
Attention: David Pritikin
or to such other address as such party may indicate by a notice
delivered to the other party hereto.
Section 13.5. Successors and Assigns. (a) The rights of
----------------------
any party under this Agreement shall not be assignable by such party
hereto prior to the Closing without the written consent of the other
parties except that the rights of Buyer hereunder may be assigned in
whole or in part prior to the Closing, without the consent of Sellers,
to one or more corporations or limited liability companies all of the
outstanding capital stock or equity interests of which is owned or
controlled by Buyer; provided that (i) such assignment shall not
result in Buyer or Sellers having to amend their respective
Notification and Report Form filed under the HSR Act in connection
with the transactions contemplated hereunder, (ii) the assignee shall
assume in writing all of Buyer's obligations to Sellers hereunder in
proportion to the extent of such assignment by Buyer of its rights
hereunder and (iii) Buyer shall not be released from any of its
obligations hereunder by reason of such assignment.
(b) Following the Closing, no party may assign any of its
rights hereunder to any third Person without the written consent of
the other parties, except that a party may assign its rights hereunder
to an Affiliate. Any assignment hereunder (whether before or after
the Closing) shall not relieve the assigning party of its obligations
hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted
assigns. Nothing in this Agreement, expressed or implied, is intended
or shall be construed to confer upon any Person other than the parties
and successors and assigns permitted by this Section 13.5 any right,
------------
remedy or claim under or by reason of this Agreement.
Section 13.6. Access to Records after Closing. (a) For a
-------------------------------
period of six years after the Closing Date, Sellers and their
representatives shall have reasonable access to all of the books and
records of the Business to the extent that such access may reasonably
be required by Sellers in connection with matters relating to or
affected by the operations of the Business prior to the Closing Date.
Such access shall be afforded by Buyer upon receipt of reasonable
advance notice and during normal business hours. Sellers shall be
solely responsible for any costs or expenses incurred by it pursuant
to this Section 13.6(a). If Buyer or its Affiliates (including Newco
---------------
Brazil after the Closing) shall desire to dispose of any of such books
and records prior to the expiration of such six-year period, Buyer
shall, prior to such disposition, give Sellers a reasonable
opportunity, at Sellers' expense, to segregate and remove such books
and records as Sellers may select.
(b) For a period of six years after the Closing Date, Buyer
and its representatives shall have reasonable access to all of the
books and records relating to the Business which Sellers or any of
their Affiliates may retain after the Closing Date. Such access shall
be afforded by Sellers and their Affiliates upon receipt of reasonable
advance notice and during normal business hours. Buyer shall be
solely responsible for any costs and expenses incurred by it pursuant
to this Section 13.6(b). If Sellers or any of its Affiliates shall
---------------
desire to dispose of any of such books and records prior to the
expiration of such six-year period, Sellers shall, prior to such
disposition, give Buyer a reasonable opportunity, at Buyer's expense,
to segregate and remove such books and records as Buyer may select.
Section 13.7. Entire Agreement; Amendments. This
----------------------------
Agreement, the Exhibits and Schedules referred to herein, the
documents delivered pursuant hereto and the Confidentiality Agreement
contain the entire understanding of the parties hereto with regard to
the subject matter contained herein or therein, and supersede all
other prior representations, warranties, agreements, understandings or
letters of intent between or among any of the parties hereto. This
Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of each of
the parties hereto.
Section 13.8. Interpretation. Articles, titles and
--------------
headings to sections herein are inserted for convenience of reference
only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement. The Schedules and Exhibits referred
to herein shall be construed with and as an integral part of this
Agreement to the same extent as if they were set forth verbatim
herein. The Schedules referred to herein are attached to that certain
letter of even date herewith from Sellers to Buyer (the "Disclosure
----------
Letter"). Disclosure of any fact or item in any Schedule hereto
------
referenced by a particular section in this Agreement shall be deemed
to have been disclosed with respect to every other section in this
Agreement if a reasonable person would reasonably ascertain that such
disclosure should reasonably apply to other sections in this
Agreement. Neither the specification of any dollar amount in any
representation or warranty contained in this Agreement nor the
inclusion of any specific item in any Schedule hereto is intended to
imply that such amount, or higher or lower amounts, or the item so
included or other items, are or are not material, and no party shall
use the fact of the setting forth of any such amount or the inclusion
of any such item in any dispute or controversy between the parties as
to whether any obligation, item or matter not described herein or
included in any Schedule is or is not material for purposes of this
Agreement. Unless this Agreement specifically provides otherwise,
neither the specification of any item or matter in any representation
or warranty contained in this Agreement nor the inclusion of any
specific item in any Schedule hereto is intended to imply that such
item or matter, or other items or matters, are or are not in the
ordinary course of business, and no party shall use the fact of the
setting forth or the inclusion of any such item or matter in any
dispute or controversy between the parties as to whether any
obligation, item or matter not described herein or included in any
Schedule is or is not in the ordinary course of business for purposes
of this Agreement. Sellers may, from time to time prior to or at the
Closing, by notice in accordance with the terms of this Agreement,
supplement, amend or create any Schedule, in order to add information
or correct previously supplied information. No such amendment shall
be evidence, in and of itself, that the representations and warranties
in the corresponding section are no longer true and correct in all
material respects. It is specifically agreed that such Schedules may
be amended to add immaterial, as well as material, items thereto. No
such supplemental, amended or additional Schedule shall be deemed to
cure any breach for purposes of Section 9.1, unless Buyer does not
-----------
object to such supplemental, amended or additional Schedule within
five business days after receipt thereof. If, however, the Closing
occurs, any such supplement, amendment or addition will be effective
to cure and correct for all other purposes any breach of any
representation, warranty or covenant which would have existed if
Sellers had not made such supplement, amendment or addition, and all
references to any Schedule hereto which is supplemented or amended as
provided in this Section 13.8 shall for all purposes after the Closing
------------
be deemed to be a reference to such Schedule as so supplemented or
amended.
Section 13.9. Waivers. Any term or provision of this
-------
Agreement may be waived, or the time for its performance may be
extended, by the party or parties entitled to the benefit thereof.
Any such waiver shall be validly and sufficiently authorized for the
purposes of this Agreement if, as to any party, it is authorized in
writing by an authorized representative of such party. The failure of
any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor
in any way to affect the validity of this Agreement or any part hereof
or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach.
Section 13.10. Expenses. Except as expressly set forth
--------
herein, each party hereto will pay all costs and expenses incident to
its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions
contained herein on its part to be performed or complied with,
including the fees, expenses and disbursements of its counsel and
independent public accountants.
Section 13.11. Partial Invalidity. Wherever possible, each
------------------
provision hereof shall be interpreted in such manner as to be
effective and valid under applicable law, but in case any one or more
of the provisions contained herein shall, for any reason, be held to
be invalid, illegal or unenforceable in any respect, such provision
shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the
remainder of such invalid, illegal or unenforceable provision or
provisions or any other provisions hereof, unless such a construction
would be unreasonable.
Section 13.12. Execution in Counterparts. This Agreement
-------------------------
may be executed in one or more counterparts, each of which shall be
considered an original instrument, but all of which shall be
considered one and the same agreement, and shall become binding when
one or more counterparts have been signed by each of the parties
hereto and delivered to Sellers and Buyer.
Section 13.13. Further Assurances. On and after the
------------------
Closing Date each party hereto shall take such other actions and
execute such other documents and instruments of conveyance and
transfer as may be reasonably requested by the other party hereto from
time to time to effectuate or confirm the transfer of the Purchased
Assets to Buyer in accordance with the terms of this Agreement.
Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any license,
certificate, approval, authorization, agreement, contract, lease,
easement or other commitment included in the Purchased Assets if an
attempted assignment thereof without the consent of a third party
thereto would constitute a breach thereof giving the third party a
right of termination. If any such consent shall not be obtained or if
any attempted assignment would be ineffective or would impair Buyer's
rights under the Purchased Asset in question so that Buyer would not
in effect acquire the benefit of all such rights, Sellers, to the
maximum extent permitted by law and the Purchased Asset (but excluding
any obligation of Sellers to offer or pay any consideration therefor),
shall act after the Closing Date as Buyer's agent in order to obtain
for it the benefits thereunder. Buyer and Sellers shall cooperate, to
the maximum extent permitted by law and the Purchased Asset (but
excluding any obligation of Sellers to offer or pay any consideration
therefor), with each other in any legal and reasonable arrangement
designed to provide such benefits to Buyer and to relieve Sellers from
any obligation, liability or burden associated therewith.
Section 13.14. Disclaimer of Warranties. Sellers make no
------------------------
representations or warranties with respect to any projections,
forecasts or forward-looking information provided to Buyer. There is
no assurance that any projected or forecasted results will be
achieved. EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE
REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT AND THE CERTIFICATE
DELIVERED BY SELLERS PURSUANT TO SECTION 4.4(d), SELLERS ARE SELLING
--------------
THE SHARES (AND THE BUSINESS AND ASSETS OF THE COMPANIES REPRESENTED
THEREBY) AND THE OTHER PURCHASED ASSETS ON AN "AS IS, WHERE IS" BASIS
AND SELLERS DISCLAIM ALL OTHER WARRANTIES, REPRESENTATIONS AND
GUARANTIES WHETHER EXPRESS OR IMPLIED. EXCEPT AS TO THOSE MATTERS
EXPRESSLY COVERED BY THE REPRESENTATIONS AND WARRANTIES IN THIS
AGREEMENT AND THE CERTIFICATE DELIVERED BY SELLERS PURSUANT TO SECTION
-------
4.4(d), SELLERS MAKE NO REPRESENTATION OR WARRANTY AS TO
------
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AND NO IMPLIED
WARRANTIES WHATSOEVER. Buyer acknowledges that neither Sellers nor
any of its representatives or any other Person has made any
representation or warranty, express or implied, as to the accuracy or
completeness of any memoranda, charts or summaries heretofore made
available by Sellers or their representatives to Buyer or any other
information which is not included in this Agreement or the Schedules
hereto, and neither Sellers nor any of its representatives or any
other Person will have or be subject to any liability to Buyer, any
Affiliate of Buyer or any other Person resulting from the distribution
of any such information to, or use of any such information by, Buyer,
any Affiliate of Buyer or any of their agents, consultants,
accountants, counsel or other representatives.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written.
VISKASE COMPANIES, INC.
By: ___________________________
Name:
Title:
VISKASE CORPORATION
By: ___________________________
Name:
Title:
VISKASE HOLDING CORPORATION
By: ___________________________
Name:
Title:
VISKASE SALES CORPORATION
By: ___________________________
Name:
Title:
VISKASE EUROPE LIMITED
By: ___________________________
Name:
Title:
VISKASE S.A.
By: ___________________________
Name:
Title:
VISKASE LIMITED
By: ___________________________
Name:
Title:
VISKASE CANADA INC.
By: ___________________________
Name:
Title:
VISKASE CHILE EMBALAGENS, LTDA
By: ___________________________
Name:
Title:
VISKASE IRELAND LIMITED
By: ___________________________
Name:
Title:
BEMIS COMPANY, INC.
By: ___________________________
Name:
Title:
