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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 3, 1999
-----------------------------
LaRoche Industries Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 33-79532 13-3341472
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1100 Johnson Ferry Road Atlanta, Georgia 30342
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (404) 851-0300
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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Item 2. Acquisition or Disposition of Assets.
On June 3, 1999, Laroche Industries Inc., a Delaware corporation ("the
Company"), completed the sale of the manufacturing facilities, real estate and
related assets comprising its Aluminas business ("Aluminas") to UOP LLC for
approximately $30 million in cash plus working capital.
The sale, initially announced in February, 1999, did not include the
Company's 45% interest in Kaiser LaRoche Hydrate Partners ("KLHP") which was
sold separately to Kaiser Aluminum and Chemical Corporation on February 26,
1999. Excluding KLHP, the business that was sold had annual sales of
approximately $30 million and employed approximately 100 people. The Company's
share of annual income from KLHP was approximately $2 million.
On June 7, 1999, the Company, through its wholly-owned
subsidiary, LII Europe, acquired all the capital stock and equity interest of
ChlorAlp, the chlor-alkali operation in Pont-de-Claix, France in which the
Company previously held a 50% joint venture interest. The purchase price for the
remaining 50% interest was approximately $27,500,000, subject to final
adjustment.
The ChlorAlp facilities include a diaphragm chlorine and caustic soda
plant, a chlorine vaporization and distribution operation, a bleach production
facility, a brine extraction operation and a 60% interest in GIE CEVco, a high
efficiency 200MW co-generation power plant. The Company intends to continue the
operation of ChlorAlp substantially in the manner operated prior to the
acquisition. The Company funded the purchase largely with proceeds from the
Aluminas disposition.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired
The financial statements required by this Item 7(a) will be filed by an
amendment to this Current Report on Form 8-K no later than 60 days after the
date hereof.
(b) Pro Forma Financial Information.
The audited financial information of the Company as of February 28,
1999 and for the years ended February 28, 1999, 1998 and 1997 has been
previously filed with the Securities and Exchange Commission as part of the
Company's Annual Report on Form 10-K dated February 28, 1999 and is
incorporated herein by reference.
During November 1998, the Company adopted plans for the sale of its
Aluminas business and accounted for the financial results, net assets and cash
flows of the Aluminas business as a discontinued operation. Accordingly, all
financial information for current and prior periods was restated in the
Company's Annual Report on Form 10-K dated February 28, 1999 to separately
report the financial information of the Company's continuing operations from
that of Aluminas. As the pro forma financial information otherwise required by
this item is considered to have been previously reported, no additional
information has been provided related to the business disposed.
The pro forma financial statements required by this Item 7(b) for the
business acquired will be filed by an amendment to this Current Report on Form
8-K no later than 60 days after the date hereof.
(c) Exhibits.
Exhibit 99.1 Asset Purchase Agreement, dated May 28, 1999, by and between
Laroche Industries Inc. and UOP LLC.
Exhibit 99.2 Inventory Purchase Agreement, dated May 28, 1999, by and
between Laroche Industries Inc. and UOP LLC.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Laroche Industries INC.
(Registrant)
By: /s/ Gerald B. Curran
Vice President and Chief Financial Officer
Date: June 17, 1999
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EXHIBIT 99.1
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ASSET PURCHASE AGREEMENT
Between
UOP LLC ("UOP")
And
LAROCHE INDUSTRIES INC. (the "Company")
Dated as of May 28, 1999
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ASSET PURCHASE AGREEMENT
Table of Contents
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ARTICLE I
PURCHASE OF ASSETS;
ASSUMPTION OF CERTAIN LIABILITIES.................................................................................1
Section 1.1. Assets To Be Acquired......................................................................1
1.1.1. Equipment.................................................................2
1.1.2. Real Property.............................................................2
1.1.3. Certain Rights............................................................2
1.1.4. Leases....................................................................2
1.1.5. Contracts.................................................................2
1.1.6. Lists and Records.........................................................2
1.1.7. Computer Software.........................................................3
1.1.8. Patents and Know-How......................................................3
1.1.9. Trademarks and Copyrights.................................................3
1.1.10. Government Franchises....................................................3
1.1.11. Books of Account.........................................................4
1.1.12. General..................................................................4
Section 1.2. Excluded Assets............................................................................4
1.2.1. Cash and Accounts Receivable..............................................4
1.2.2. Affiliate Transactions....................................................4
1.2.3. Benefit Plans.............................................................4
1.2.4. Certain Agreements........................................................4
1.2.5. Inventory.................................................................4
1.2.6. Claims and Causes of Action...............................................4
Section 1.3. Assumed Liabilities........................................................................5
Section 1.4. Excluded Liabilities.......................................................................5
1.4.1. Litigation................................................................5
1.4.2. Other Guarantees..........................................................5
1.4.3. Employee Severance Payments...............................................5
1.4.4. Employee Claims...........................................................5
1.4.5. Employee Payroll and Benefits.............................................6
1.4.6. Taxes.....................................................................6
1.4.7. Product Liability Claims..................................................6
1.4.8. Environmental Claims......................................................6
1.4.9. General...................................................................6
Section 1.5. Non-Assignable Assets......................................................................6
ARTICLE II
THE CLOSING; PURCHASE PRICE.......................................................................................7
Section 2.1. The Closing. .............................................................................7
Section 2.2. Purchase Price.............................................................................8
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2.2.1. Amount, Holdbacks and Holdback Agreements.................................8
2.2.2. Allocation................................................................8
Section 2.3. Transferable Equity........................................................................8
2.3.1. Transferable Balance Sheet................................................8
2.3.2. Completion...............................................................10
2.3.3. Schedule of Net Fixed Assets.............................................10
Section 2.4. Post-Closing Adjustment of Purchase Price.................................................10
2.4.1. Closing Date Balance Sheet...............................................10
2.4.2. UOP's Review.............................................................11
2.4.3. Statements of Closing Transferable Equity and Purchase Price
Adjustment...............................................................11
2.4.4. Delivery of Statements...................................................11
2.4.5. Independent Review.......................................................12
2.4.6. Resolution...............................................................12
Section 2.5. Settlement of Purchase Price Adjustment...................................................12
2.5.1. Increase In Purchase Price...............................................13
2.5.2. Decrease In Purchase Price...............................................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY..........................................................................................................13
Section 3.1. Organization of the Company and the CRILAR JV.............................................13
Section 3.2. Qualification of the Company and the CRILAR JV............................................13
Section 3.3. Corporate Authorization...................................................................14
3.3.1. Authority................................................................14
3.3.2. No Breach or Violation...................................................14
Section 3.4. Financial Statements......................................................................14
3.4.1. Schedules and Accuracy...................................................14
3.4.2. No Undisclosed Liabilities...............................................15
3.4.3. Absence of Changes.......................................................15
3.4.4. Discharge of Liabilities.................................................16
Section 3.5. [INTENTIONALLY LEFT BLANK]..............................................................16
Section 3.6. Properties; Leases; Tangible Assets.......................................................16
3.6.1. Title....................................................................16
3.6.2. Use Restrictions.........................................................17
3.6.3. Condition................................................................17
3.6.4. Leases...................................................................17
Section 3.7. Complete Sale.............................................................................17
Section 3.8. Backlog...................................................................................18
3.8.1. Amount...................................................................18
3.8.2. Ordinary Course..........................................................18
Section 3.9. Intellectual Property.....................................................................18
3.9.1. Patents and Know-How.....................................................18
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3.9.2. Trademarks and Copyrights................................................19
Section 3.10. Material Contracts and Obligations.......................................................20
3.10.1. Identification..........................................................20
3.10.2. Full Force and Effect...................................................21
3.10.3. No Default..............................................................21
Section 3.11. Employees; Compensation; Labor...........................................................21
3.11.1. Employees and Compensation..............................................21
3.11.2. Certain Labor Matters...................................................22
3.11.3. Employee Benefit Plans; ERISA...........................................22
Section 3.12. Other Agreements.........................................................................24
Section 3.13. Litigation...............................................................................25
3.13.1. Litigation Pending or Threatened........................................25
3.13.2. This Transaction........................................................25
Section 3.14. Insurance................................................................................25
Section 3.15. Third Party Consents.....................................................................25
Section 3.16. Permits; Compliance; Reports; Clearances.................................................26
3.16.1. Necessary Permits.......................................................26
3.16.2. Compliance with Law.....................................................26
3.16.3. Reports.................................................................26
Section 3.17. Environmental Protection.................................................................26
3.17.1. Environmental Permits...................................................26
3.17.2. No Violation............................................................27
3.17.3. No Litigation or Proceedings............................................27
3.17.4. No Notice...............................................................27
3.17.5. No Basis For Liability..................................................27
3.17.6. No Expenditures.........................................................27
Section 3.18. Transactions with Affiliates.............................................................28
Section 3.19. Product Warranties.......................................................................28
3.19.1. Warranty Statements.....................................................28
3.19.2. Product Warranty Claims.................................................28
Section 3.20. Government Authorizations................................................................28
3.20.1. U.S. Authority..........................................................28
3.20.2. Foreign Authority.......................................................29
Section 3.21. Tax Matters..............................................................................29
3.21.1. Returns.................................................................29
Section 3.22. Brokers..................................................................................29
Section 3.23. Material Disclosures.....................................................................29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF UOP...........................................................................................................29
Section 4.1. Organization..............................................................................29
Section 4.2. Corporate Authorization...................................................................30
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4.2.1. Authority................................................................30
4.2.2. No Breach or Violation...................................................30
Section 4.3. Government Authorizations.................................................................30
4.3.1. U.S. Authority...........................................................30
4.3.2. Foreign Authority........................................................31
Section 4.4. Brokers...................................................................................31
ARTICLE V
COVENANTS........................................................................................................31
Section 5.1. Conduct of the Business...................................................................31
5.1.1. Affirmative Covenants....................................................31
5.1.2. Negative Covenants.......................................................32
Section 5.2. Access to Information.....................................................................33
5.2.1. Access...................................................................33
5.2.2. Customer Introductions...................................................33
5.2.3. Access After Closing.....................................................33
Section 5.3. Filings and Authorizations................................................................34
5.3.1. HSR Act Filings..........................................................34
5.3.2. General..................................................................34
Section 5.4. Administration of Accounts................................................................34
5.4.1. In Trust For UOP.........................................................34
5.4.2. In Trust For the Company.................................................34
5.4.3. Accounts Payable by the Company..........................................34
5.4.4. Accounts Receivable of the Company.......................................35
Section 5.5. Tax Matters...............................................................................35
5.5.1. The Company's Obligations................................................35
5.5.2. UOP's Obligations........................................................35
5.5.3. Tax on Transaction.......................................................35
5.5.4. Tax Controversies, Assistance and Cooperation............................36
Section 5.6. Employees.................................................................................38
5.6.1. Employment...............................................................38
5.6.2. Incentive Compensation...................................................38
5.6.3. Accrued Vacation.........................................................38
Section 5.7. Benefit Plans.............................................................................39
5.7.1. Pension Plans............................................................39
5.7.2. Plans....................................................................39
5.7.3. Welfare and Other Fringe Benefit Plans...................................39
Section 5.8. Post-Closing Warranty Services............................................................39
Section 5.9. Competition...............................................................................39
Section 5.10. The Company's Trade Names................................................................40
Section 5.11. Further Assurances.......................................................................40
Section 5.12. Soil and Groundwater Condition at Sites..................................................40
Section 5.13. Baton Rouge Plant........................................................................40
5.13.1. Commitment For Title Insurance..........................................41
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5.13.2. Survey..................................................................42
Section 5.14. Public Announcements.....................................................................43
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF UOP.......................................................................43
Section 6.1. Conditions................................................................................43
6.1.1. Representations and Warranties...........................................43
6.1.2. No Material Adverse Change...............................................43
6.1.3. Schedules Delivered......................................................44
6.1.4. No Adverse Facts Disclosed...............................................44
6.1.5. HSR Act Waiting Period...................................................44
6.1.6. Obtaining of Consents and Approvals......................................44
6.1.7. Novation Agreements......................................................45
6.1.8. Performance by the Company...............................................45
6.1.9. Absence of Litigation....................................................45
6.1.10. Officer's Certificate...................................................45
6.1.11. Opinion of the Company's Counsel........................................46
6.1.12. Delivery of Documents...................................................46
6.1.13. Employment..............................................................47
6.1.14. Approval by UOP Board...................................................47
Section 6.2. Waiver....................................................................................47
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY...............................................................47
Section 7.1. Conditions................................................................................47
7.1.1. Representations and Warranties...........................................47
7.1.2. HSR Act Waiting Period...................................................47
7.1.3. Performance by UOP.......................................................47
7.1.4. Absence of Litigation....................................................47
7.1.5. Officer's Certificate....................................................48
7.1.6. Obtaining of Consents and Approvals......................................48
7.1.7. Opinion of UOP's Counsel.................................................48
7.1.8. Delivery of Documents....................................................48
Section 7.2. Waiver....................................................................................49
ARTICLE VIII
INDEMNIFICATION..................................................................................................49
Section 8.1. Survival of Certain Provisions............................................................49
8.1.1. Survival of Representations and Warranties...............................49
8.1.2. Covenants and Indemnification Provisions.................................49
Section 8.2. General Indemnity.........................................................................49
8.2.1. Indemnification by the Company...........................................49
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8.2.2. Indemnification by UOP...................................................50
8.2.3. Limitations..............................................................50
8.2.4. No Limitation on Certain Claims..........................................51
8.2.5. Single Remedy............................................................51
Section 8.3. Defense of Third Party Claims.............................................................51
8.3.1. Notice...................................................................51
8.3.2. Defense of Claims........................................................51
8.3.3. Settlement...............................................................52
8.3.4. Cooperation..............................................................52
8.3.5. Apportionment............................................................52
ARTICLE IX.......................................................................................................52
TERMINATION......................................................................................................52
Section 9.1. Termination Events........................................................................52
9.1.1. Breach...................................................................52
9.1.2. Mutual Consent...........................................................52
9.1.3. Closing Date.............................................................52
Section 9.2. Effect of Termination.....................................................................53
ARTICLE X........................................................................................................53
MISCELLANEOUS....................................................................................................53
Section 10.1. Waiver of Bulk Sales Laws................................................................53
Section 10.2. Confidentiality..........................................................................53
Section 10.3. Expenses.................................................................................53
Section 10.4. Amendment................................................................................53
Section 10.5. Entire Agreement.........................................................................54
Section 10.6. Notices..................................................................................54
Section 10.7. Severability.............................................................................55
Section 10.8. Remedies.................................................................................55
Section 10.9. Waiver...................................................................................56
Section 10.10. Binding Effect; Assignment..............................................................56
Section 10.11. Successors and Assigns..................................................................56
10.11.1. Attachment of Obligations..............................................56
10.11.2. Survival...............................................................56
Section 10.12. No Third Party Beneficiaries............................................................56
Section 10.13. Counterparts............................................................................56
Section 10.14. Governing Law...........................................................................57
Section 10.15. Time of the Essence.....................................................................57
Section 10.16. Construction............................................................................57
10.16.1. Words..................................................................57
10.16.2. Cross-References.......................................................57
10.16.3. No Presumption.........................................................57
10.16.4. Exhibits and Schedules.................................................57
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10.16.5. Headings...............................................................57
EXECUTION AND DELIVERY...........................................................................................57
</TABLE>
<TABLE>
<CAPTION>
Exhibits Page Reference
<S> <C> <C>
Exhibit A-1 Asset Holdback Agreementss.2.2.1(a) 8
Exhibit A-2 Kaiser Holdback Agreementss.2.2.1(b) 8
Exhibit B CRILAR JV IRCss.754 Election 45
Exhibit C CRILAR JV Amendments 45
Exhibit D Recognition and Modified Assumption Agreement 45
Exhibit E First Amendment to Servitude Agreement 8 & 45
Exhibit F Amendment to Aristech License Agreement 45
Exhibit G Novation Agreement 45
Exhibit H The Company's Counsel Opinion 46
Exhibit I Bill of Sale 46
Exhibit J LII-UOP Services Agreement 47
Exhibit K Employees of the Division to accept employment with UOP 47
Exhibit L UOP's Counsel Opinion 48
Exhibit M Certificate of Assumption 49
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Disclosure Schedules
Schedule 1.1.1 Equipment
Schedule 1.1.2(a) Improvements
Schedule 1.1.2(b) Real Property
Schedule 1.1.3 Certain Rights
Schedule 1.1.4(a) List of all Leases
Schedule 1.1.4(b) List of Leases to be Assigned
Schedule 1.1.5(a) List of All Contracts
Schedule 1.1.5(b) List of Contracts to be Acquired
Schedule 1.1.8 Patents and Know-How
Schedule 1.1.9 Trademarks and Copyrights
Schedule 1.1.10 Franchises, Permits, Licenses
Schedule 1.2.2 Transaction with Affiliates
Schedule 1.2.4 Certain Other Agreements
Schedule 1.2.5 Inventory
Schedule 1.4.3 Contracts of Employment
Schedule 1.4.8 Certain Environmental Claims
Schedule 2.2.2 Allocation of Purchase Price
Schedule 2.3.1(a) Transferable Balance Sheet
Schedule 2.3.3(a)(i) Net Fixed Assets
Schedule 2.3.3(a)(ii) Procedures For Net Fixed Assets Schedule
Schedule 2.4.3(c) Agreed Upon Procedures
Schedule 3.2 Qualification of the Company
Schedule 3.4.1 Financial Statements
Schedule 3.4.2 Exceptions to Section 3.4.2
Schedule 3.4.3 Changes in Financial Statements
Schedule 3.4.3(g) Capital Projects Completed
Schedule 3.4.4 Discharge of Liabilities
Schedule 3.6.1(d) Encumbrances to Title
Schedule 3.6.3 Condition
Schedule 3.8.1 Backlog
Schedule 3.9.1(a)-(d) Ownership of Patents and Know-How
Schedule 3.9.2 Ownership of Trademarks and Copyrights
Schedule 3.10.1 Material Contracts and Obligations
Schedule 3.11.1(a) Employees
Schedule 3.11.1(b) Employment Policies
Schedule 3.11.2 Labor Matters
Schedule 3.11.3(a) Employee Contributions to Benefit Plans
Schedule 3.11.3(b) ERISA Plans
Schedule 3.11.3(c) Multiemployer ERISA Plans
Schedule 3.12 Other Agreements
Schedule 3.13.1 Litigation
Schedule 3.14 Insurance
Schedule 3.15 Third Party Consents
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Disclosure Schedules (continued)
Schedule 3.16.1 Licenses and Permits
Schedule 3.16.2 Compliance with Law
Schedule 3.16.3 Governmental Reports
Schedule 3.17.1 Environmental Protection
Schedule 3.19.1 Product Warranties
Schedule 3.19.2 Warranty Claims
Schedule 3.22 Brokers
Schedule 4.3.1 Governmental Authorizations for UOP
Schedule 5.1.2(e) Capital Expenditures in Excess of $100,000
Schedule 5.7.1 Pension Plans
Schedule 6.1.7 Consents to Assignment Required at Closing
Schedule 6.1.12(f) Form of Act of Cash Sale (i.e., Louisiana customary
form of warranty deed)
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GLOSSARY
<TABLE>
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Term Section Where Defined
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Agreement Preamble
Arbitration Section 10.8(b)
Assets Section 1.1
Assumed Liabilities Section 1.3
Claim Notice Section 8.3.1
Closing Section 2.1
Closing Date Section 2.1
Closing Date Balance Sheet Section 2.4.1
Closing Transferable Equity Section 2.4.3(a)
Code Section 5.7.2
Company Preamble
Computer Systems Section 3.9.1(e)
Company's Technology Section 3.10.1
Contracts Section 1.1.5
CRILAR JV Section 1.1.12
Division Preamble
Employees Section 3.11.1
Encumbrances Section 3.6.1
Environmental Laws Section 3.17.1
Equipment Section 1.1.1
ERISA Section 3.12.3(b)
ERISA Plans Section 3.12.3(b)
Excluded Assets Section 1.2
Excluded Liabilities Section 1.4
February Transferable Equity Section 2.3
February Trial Balance Sheet Section 2.3 (also Schedule 3.4.1)
Financial Statements Section 3.4.1
First Amendment to Servitude Agreement Section 2.2.1, Exhibit E-2
GAAP Section 2.3.1(a)
Holdback Amount ss.2.2.1(a) Section 2.2.1(a)
Holdback Amount ss.2.2.1(b) Section 2.2.1(b)
Holdback Agreement ss.2.2.1(a) (Asset) Section 2.2, Exhibit A-1
Holdback Agreement ss.2.2.1(b) (Kaiser) Section 2.2, Exibit A-2
HSR Act Section 3.20.1(a)
Indemnified Party Section 8.2.3(a)
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Glossary (continued)
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<CAPTION>
Term Section Where Defined
---- ---------------------
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Indemnitor Section 8.2.3(a)
Inventory Section 1.2.5
Kaiser Section 2.2.1
KLHP Section 1.2.4
Leases Section 3.6.4
Losses Section 8.2.1
Optimal Solution Section 10.8(c)
Other Agreements Section 3.12
Patents and Licenses Section 3.9.1
Plans Section 3.11.3(a)
Purchase Price Section 2.2
Purchase Price Adjustment Section 2.4.3(b)
Real Property Section 1.1.2
Resolving Firm Section 2.4.6
Returns Section 3.21.1
Reviewing Firm Section 2.4.5
Statement of Closing Transferable Equity Section 2.4.3(a)
Equity
Statement of February Transferable Equity Section 2.3
Equity
Statement of Purchase Price Adjustment Section 2.4.3(b)
Adjustment
Survey Section 5.13.1(c)
Taxes Section 3.21.1
Threshold Section 8.2.3(a)
Title Commitment Section 5.13.1
Title Company Section 5.13.1
Title Documents Section 5.13.1
Title Policy Section 5.13.1
Trademarks and Licenses Section 3.9.2
Transferable Equity Section 2.3
Transferable Balance Sheet Section 2.3
Transferred Employees Section 5.6.1(a)
Transition Period Section 5.10
Unpermitted Exceptions Section 5.13.1(g)
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (hereinafter "this Agreement") made as of this
28th day of May, 1999, between UOP LLC, a Delaware limited liability company
("UOP") and LaRoche Industries Inc., a Delaware corporation (the "Company").
W I T N E S S E T H
WHEREAS, upon the terms and subject to the conditions hereinafter set
forth, the Company desires to sell, assign, convey and transfer to UOP, and UOP
desires to purchase and acquire from the Company, substantially all of the
assets (other than the "Inventory" as defined in Section 1.2.5 hereof) and
properties employed in the research and development, manufacture and
distribution of activated aluminas, promoted aluminas, flash calcined powdered
aluminas, titanium dioxide catalysts, hydrotalcites, hybrid combinations of
zeolites and activated aluminas, and Versal(R) gel aluminas, including the
"CRILAR JV" (as hereinafter defined), produced at the Company's facility at 1200
Airline Highway, Baton Rouge, Louisiana or bought for resale and the related
William W. LaRoche Research Center, a research and development facility at the
same location (the "Alumina Business Division" or the "Division") of the
Company, and the Company desires to assign, transfer and novate and UOP desires
to assume certain obligations and liabilities of the Division; and
WHEREAS, the Company owns all of the right, title and interest in (or
has the right to use) the assets comprising the Division as hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements hereinafter set forth, and
each intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
PURCHASE OF ASSETS;
ASSUMPTION OF CERTAIN LIABILITIES
Section 1.1. Assets To Be Acquired. Subject to the terms and conditions
and in reliance upon the representations, warranties and agreements hereinafter
set forth, the Company hereby agrees to sell, assign, transfer, convey and
deliver to UOP or cause to be sold, assigned, transferred, conveyed and
delivered to UOP, and UOP hereby agrees to purchase from the Company, all of the
right, title and interest of the Company in and to those certain assets (other
than the Inventory), properties, rights, contracts, operations and businesses of
the Division of every kind and description, wherever located, whether tangible
or intangible, real, personal or mixed, which are directly or indirectly owned
by, leased by, or in the possession of either the Company or any of its
subsidiaries, and which are employed or intended to be employed or held in
connection with the alumina business of the Company or any of its subsidiaries
or are necessary for the continued operation of the Division, consistent with
past practice, whether or not reflected on the books and records of the Company
or any of its subsidiaries, other than the Excluded Assets (the "Assets"), free
and clear of all liens, claims, charges, security interests, restrictions and
other encumbrances of any kind or nature, except those set forth in the relevant
Schedules to this Agreement or otherwise specifically
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assumed pursuant to this Agreement, including without limitation the assets,
properties, rights, contracts and operations described as follows:
1.1.1. Equipment. All machinery, equipment (including but not
limited to computers and other office equipment), furniture, fixtures,
furnishings, tools, spare parts, vehicles, and other tangible assets or
properties employed or held for use in connection with or necessary for the
continued operation of the Division, whether or not reflected on the books and
records of the Company, including without limitation the items listed on
Schedule 1.1.1 delivered hereunder (the "Equipment");
1.1.2. Real Property. All real property which relates to the
Division is described in Schedule 1.1.2(a) delivered hereunder, together with
all of the buildings, structures and improvements thereon (as identified in the
Survey described in Section 5.13.1(c), fixtures contained therein (hereinafter
collectively referred to as the "Improvements") and appurtenances thereto and
easements and other rights relating thereto and those interests to be acquired
by UOP hereunder are reflected on the Survey attached as Schedule 1.1.2(b) (the
"Real Property");
1.1.3. Certain Rights. Except as disclosed in Schedule 1.1.3
and subject to Section 1.5 hereof, all rights of the Company under or pursuant
to all warranties, representations and guarantees made by suppliers,
manufacturers and contractors in connection with products or services purchased
by the Company or any of its subsidiaries for use by the Division, or affecting
Equipment or Real Property employed or held for use in connection with, or
necessary for the continued operation of, the Division, whether or not reflected
on the books and records of the Company;
1.1.4. Leases. Subject to Section 1.5 hereof, all rights and
interests of the Company in the leases of real and personal property including
but not limited to leasehold improvements, whether capitalized or operating
leases, used in or in connection with the operations of the Division, including
without limitation those leases of real and personal property set forth in
Schedule 1.1.5 delivered hereunder identified by parties, term and aggregate
consideration therefor, but excluding those leases details of which are set
forth in Schedule 1.2.4 delivered hereunder are listed in Schedule 1.1.4(a)
delivered hereunder and those rights and interests to be assigned to UOP
hereunder are listed in Schedule 1.1.4(b);
1.1.5. Contracts. Except for the Excluded Assets and subject
to Section 1.5 hereof, all contracts, agreements, arrangements, proposals, bids,
quotations, purchase orders and commitments, and sales orders and commitments,
of any kind, whether written or oral, including joint venture, teaming and
partnership agreements, which relate to the Division, Equipment or Inventory are
listed on Schedule 1.1.5(a) and those to be acquired by UOP hereunder are listed
on Schedule 1.1.5(b) (the "Contracts"), and each such Contract described in
Schedule 1.1.5(b) by contract number, proposal number or purchase order number
where appropriate, the contracting parties, subject matter and term, and if a
proposal, bid or quotation, a description of the terms thereof;
1.1.6. Lists and Records. All customer and vendor lists
relating to the Division, and all files and documents (including credit
information) relating to customers and vendors of the
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Division, and other business and financial records, files, books and documents
relating to the Division or Equipment or Inventory, including, but not limited
to, manuals and data, sales and advertising materials, sales and distribution
and purchase correspondence and records relating to trade association
memberships;
1.1.7. Computer Software. Except as provided in Schedule
3.9.1, all computer programs (including computer modeling programs, design and
operational software and computer source and object codes), and related
documentation, developed or used for accounting, marketing, engineering,
manufacturing or any other purpose, and which have been or are currently used,
or have been developed or are under development, by the Company relating to the
Division, except for the JD Edwards System, such systems to be licensed to UOP
hereunder as provided for in the LII-UOP Services Agreement attached hereto as
Exhibit K;
1.1.8. Patents and Know-How. Except as set forth in Schedule
3.9.1, all rights and interests of the Company in and to patents, patent
applications and docketed inventions owned by the Company, or licensed by the
Company from third parties, or owned or licensed by any affiliate of the
Company, relating to the Division, Equipment or Inventory, or used by the
Company in connection with or necessary for the continued operation of the
Division, whether or not reflected on the books and records of the Company,
including without limitation those that are listed on Schedule 1.1.8 delivered
hereunder, and all rights and interests of the Company in and to research and
development results, processes, trade secrets, know-how, formulae, inventions,
and manufacturing, engineering, quality control, testing, operational,
logistical, maintenance and other technical information and technology whether
owned by the Company, licensed by the Company from third parties, or owned or
licensed by any affiliate of the Company, or used by the Company in connection
with or necessary for the continued operation of the Division, whether or not
reflected on the books and records of the Company, and all notebooks,
engineering logbooks, records, reports and data relating thereto;
1.1.9. Trademarks and Copyrights. All rights, interests and
goodwill of the Company in and to trademarks, trade names and service marks, and
registrations and applications for such trademarks, trade names and service
marks relating to the Division (other than the name LaRoche or any similar
name), including without limitation those that are listed on Schedule 1.1.9
delivered hereunder, and all rights and interests of the Company in and to
copyrights, and registrations and applications for such copyrights relating to
the Division, including without limitation those that are listed on Schedule
1.1.9;
1.1.10. Government Franchises. All transferable municipal,
state and Federal franchises, permits, licenses and authorizations held or used
by the Company in connection with or necessary for the continued operation of
the Division consistent with past practice, whether or not reflected on the
books and records of the Company, including those described in Schedule 1.1.10
delivered hereunder (such Schedule also to describe such franchises, permits,
licenses and authorizations which are not transferable);
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1.1.11. Books of Account. A true and correct copy of all books
of account, records, files, invoices, supplier lists and other data associated
with, necessary to, or used or employed in connection with the Division have
been provided to UOP; and
1.1.12. General. Except for the Excluded Assets, all property,
real or personal, tangible or intangible of every kind and description used or
held for use in connection with or necessary for the continued operation of the
Division consistent with past practice, whether or not reflected on the books
and records of the Company, including any goodwill associated with the Division
including but not limited to all right, title and interest of the Company in and
to Crilar Alumina Company, L.L.C. (the "CRILAR JV").
Section 1.2. Excluded Assets. Notwithstanding anything to the contrary
contained in Section 1.1 herein, the Company is not agreeing to sell, assign,
transfer or convey, and UOP is not agreeing to accept or purchase any of the
following assets, rights and properties of the Company (the "Excluded Assets"):
1.2.1. Cash and Accounts Receivable. Cash and cash equivalents
and accounts receivable;
1.2.2. Affiliate Transactions. Any other agreements,
transactions, accounts, contracts or commitments not relating to the Division
and which are not reflected on the Closing Date Balance Sheet (as such term is
defined in Subsection 2.4.1 herein);
1.2.3. Benefit Plans. Pension or other employee benefit plans
or assets; and
1.2.4. Certain Agreements. The leases, contracts,
arrangements, agreements or commitments identified on Schedule 1.2.4 delivered
hereunder including the interest of the Company in Kaiser LaRoche Hydrate
Partners ("KLHP") and any agreements with: (a) Jacquie Tantet and (b) Joseph
Pettorino.
1.2.5. Inventory. All items of inventory, including without
limitation work-in-progress, finished goods, samples, spare parts, stores and
supplies, and raw materials, wherever located, and notwithstanding how
classified on the balance sheet of the Division, which are employed or held for
use in connection with or are necessary for the continued operation of the
Division, whether or not reflected on the books and records of the Alumina
Business of the Company or any of its subsidiaries and notwithstanding how
classified on the balance sheet of the Division (the "Inventory"), including
without limitation those items to be listed on Schedule 1.2.5, such Schedule to
be dated as of or as close as practicable to the Closing Date and to be
delivered as soon as practicable after Closing but in any event no later than
sixty (60) days after the Closing Date; and
1.2.6. Claims and Causes of Action. All claims and causes of
action of whatever nature against third parties, directly or indirectly,
relating to, based upon or arising from events, circumstances, omissions or
conditions existing or occurring on or before the Closing Date.
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Section 1.3. Assumed Liabilities. Subject to the terms and conditions
herein, and in reliance upon the representations, warranties and agreements
hereinafter set forth, UOP shall on the Closing Date assume, perform and in due
course pay and discharge the following obligations and liabilities of the
Division, (except for the Excluded Liabilities, hereinafter collectively
referred to as the "Assumed Liabilities"): Only those obligations of the
Division arising from events, circumstances, omissions or conditions occurring
on or after the Closing Date from Contracts not in breach and entered into in
the ordinary course of business.
Section 1.4. Excluded Liabilities. The parties to this Agreement
expressly understand and agree that UOP shall not and does not hereby assume or
become liable for any obligations, liabilities, indebtedness, damages, claims,
judgments, penalties, fees, losses, costs or expenses of any kind of the Company
or of any subsidiary, whether due or to become due, asserted or unasserted,
accrued or unaccrued, liquidated or unliquidated, contingent, executory or
otherwise, howsoever or whenever arising including those relating to or arising
out of the Excluded Assets, which are not expressly assumed by UOP under Section
1.3 herein (the "Excluded Liabilities"). The Company shall retain and shall be
responsible for paying, performing and discharging when due all Excluded
Liabilities. The following is a non-exclusive listing of some of the liabilities
and obligations of the Company and its subsidiaries which UOP shall not assume
or agree to pay, perform or discharge, it being understood that such listing is
not intended to limit in any manner whatsoever the first sentence of this
Section 1.4:
1.4.1. Litigation. Any and all items of governmental, judicial
or adversarial proceedings (public or private), litigation, hearings,
arbitration, dispute or investigation against or involving the Company or any of
its subsidiaries, directly or indirectly, in existence as of the Closing Date
(as defined in Section 2.1 herein) or arising thereafter from events,
circumstances, omissions or conditions existing or occurring on or before the
Closing Date, whether such governmental, judicial or adversarial proceedings,
litigation, hearings, arbitration, dispute or investigations are instituted
before, on or after the Closing Date;
1.4.2. Other Guarantees. All documentary credits, standby
credits, guarantees, commitments or contingencies of any kind not appearing on
the Closing Date Balance Sheet (as that term is defined in Subsection 2.4.1
herein).
1.4.3. Employee Severance Payments. Subject to Section
5.6.1(b) hereof, any and all amounts claimed against UOP or the Company or any
of its subsidiaries by, or on behalf of, any Employee (as such term is defined
in Subsection 3.11.1 herein), relating to, based upon or arising from or in
connection with the contracts of employment or retention listed on Schedule
1.4.3, such contracts not having been entered in the ordinary course.
1.4.4. Employee Claims. Any and all costs and expenses
(including counsel fees, judgments and amounts paid in settlement) incurred or
to be incurred by the Company in connection with any and all litigations
instituted by or on behalf of any employees of the Company or any of its
subsidiaries against the Company or any of its subsidiaries and which relate to,
are based upon or arise from or in connection with the termination of any such
employee's employment, which termination occurs on or before the Closing Date;
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1.4.5. Employee Payroll and Benefits. Any and all liabilities
with respect to periods ending on or before the Closing Date and which relate to
payroll, vacation, pension, profit sharing, health, disability and life
insurance, workman's compensation or other employee benefit plans (including
liabilities arising from the under-funding of any such employee benefit plans)
maintained by the Company or any of its affiliates, including but not limited to
any liability arising from the Company's under-funding or termination of any
such plans or the termination or reduction in the level of any other employee
benefits of any kind or nature whatsoever in connection with the consummation of
the transactions contemplated by this Agreement or otherwise;
1.4.6. Taxes. Any and all Federal, state, local, foreign,
franchise, sales, transfer, excise, fees, expenses, penalties, assessments or
other tax liabilities imposed upon or with respect to the Company or any of its
subsidiaries, the Assets, or any part thereof, with respect to all periods
ending before, on or as of the Closing Date (other than with respect to payroll
and property taxes accrued during periods beginning on or before, and ending
after, the Closing Date for which adequate reserves have been included on the
Closing Date Balance Sheet as such term is defined in Subsection 2.4.1 herein),
or with respect to the sale or transfer of the Assets or the proceeds or gain
resulting therefrom;
1.4.7. Product Liability Claims. Any and all claims in
existence as of the Closing Date and any and all claims arising or accruing on
or after the Closing Date, with respect to sales, leases or bailments of
products which have been shipped and invoiced by the Division or any subsidiary
of the Company on or before the Closing Date;
1.4.8. Environmental Claims. Any and all claims, liabilities
and obligations, including without limitation any and all items of litigation,
investigation, cleanup, removal and remediation, which relate to, are based upon
or arise from or in connection with, Federal, state or local environmental laws,
rules or regulations, whether such claims, liabilities or obligations are made
by or arise from any Federal, state or local governmental agency or authority or
by private parties, without regard to whether UOP has conducted an environmental
audit, and whether such claims arise or accrue before, on or after the Closing
Date, which relate to, are based upon, arise from or in connection with events,
circumstances, omissions or conditions existing or occurring on or before the
Closing Date including but not limited to those identified in Schedule 1.4.8
also attached to the Asset Holdback Agreement ss.2.2.1(a) referred to in Section
2.2.1(a); and
1.4.9. General. Any and all debts, liabilities, obligations
and commitments arising after the Closing Date to the extent such debts,
liabilities, obligations or commitments relate to or arise from acts, events, or
omissions that occurred, or conditions or circumstances that existed, on or
before the Closing Date, whether or not any such act, event or omission,
condition or circumstance was lawful when it occurred or existed.
Section 1.5. Non-Assignable Assets. (a) Notwithstanding anything in
this Agreement to the contrary, this Agreement shall not constitute an agreement
to assign any Contract, if the attempted assignment thereof, without the consent
of a third party thereto, would constitute a breach of any obligation of the
Company or would in any way materially adversely affect the rights of UOP or the
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Company thereunder; provided, however, that if such consent is obtained, either
before or after the Closing Date, this Agreement shall constitute an agreement
to assign such Contract. If such consent is not obtained, or if an attempted
assignment thereof would be ineffective or would affect the rights of the
Company thereunder so that UOP would not in fact receive all such rights and UOP
elects to consummate the Closing notwithstanding the failure to satisfy the
conditions to Closing set forth in Article 6, the Company as required will, to
the extent not prohibited by or not in violation of any such Contract: (i)
reasonably cooperate with UOP in any commercially reasonable arrangement
reasonably acceptable to UOP and the Company that provides to UOP the benefits
(including the exercise of the Company's rights) under any such Contract,
including, without limitation, enforcement for the benefit of UOP of any and all
rights of the Company against a third party thereto arising out of the breach or
cancellation by such third party or otherwise, (ii) hold all moneys paid to the
Company thereunder on and after the Closing Date in trust for the account of
UOP, (iii) remit such money to UOP as promptly as possible; and (iv) as a
condition to the Company proceeding with its obligations under this Section 1.5
for any specific item, UOP shall be required, to the extent the Company so
requests, to indemnify the Company from any loss, damage or expense incurred by
the Company in connection with the Company's performance under this Section 1.5
except to the extent of the Company's willful misconduct or gross negligence.
Any transfer or assignment to UOP by the Company of any property or property
rights or any agreement which shall require the consent or approval of any third
party shall be made subject to such consent or approval being obtained.
(b) With respect to all or any part of the Company's rights, claims,
credits, causes of action or rights of set-off against third parties relating to
the Assets set forth in Section 1.1 hereof and included in the Transferrable
Balance Sheet that are not transferable, the Company as required by UOP will, to
the extent not prohibited by or not in violation of any applicable, governmental
law or regulation: (i) reasonably cooperate with UOP in any commercially
reasonable arrangement reasonably acceptable to UOP and the Company that
provides to UOP the benefits of the Company's rights, claims, credits, causes of
action or rights of set-off against third parties relating to the Division or
the Assets, including, without limitation, enforcement for the benefit of UOP of
any such rights, claims, credits, causes of action or rights of set-off, (ii)
hold, in trust for the account of UOP, all moneys paid to the Company on or
after the Closing Date with respect thereto or on account thereof and (iii)
remit such money to UOP as promptly as possible.
ARTICLE II
THE CLOSING; PURCHASE PRICE
Section 2.1. The Closing. The Closing of the sale and purchase of the
Assets (the "Closing") shall take place at the offices of Vedder, Price, Kaufman
& Kammholz, 222 N. LaSalle Street, Suite 2600, Chicago, Illinois 60601 at 10:00
a.m., local time, on the first business day after the satisfaction or waiver of
the conditions set forth in Articles VI and VII herein (anticipated to be
Wednesday, June 2, 1999), or at such place, date, and time as the parties may
agree (the "Closing Date"), but in any event no later than June 3, 1999.
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Section 2.2. Purchase Price.
2.2.1. Amount, Holdbacks and Holdback Agreements. At the
Closing UOP shall deliver or cause to be delivered, by bank wire transfer in
immediately available Federal funds to an account designated in writing by the
Company within three (3) business days prior to the Closing Date, the Purchase
Price (the "Purchase Price") less the "Holdbacks" (which shall be equal to (a) a
minimum of One Million Six Hundred Eighty-Seven Thousand Dollars ($1,687,000)
(the "APA Section 2.2.1(a) Amount") (as defined in the Asset Holdback Agreement
ss.2.2.1(a)) plus (b) Three Million One Hundred Thousand Dollars ($3,100,000)
(the "APA Section 2.2.1(b) Amount") to be retained as provided in the "Kaiser
Holdback Agreement" until the Company and Kaiser Aluminum and Chemical
Corporation ("Kaiser") execute and deliver to UOP the First Amendment to
Servitude Agreement substantially in the form attached hereto as Exhibit E (the
"First Amendment to Servitude Agreement") including the Easement Agreement
attached thereto as Exhibit C to be executed and delivered by Kaiser to UOP) to
be administered pursuant to the Asset and Kaiser Holdback Agreements attached
hereto as Exhibit A-1 and Exhibit A-2, respectively), which Purchase Price shall
be Twenty-One Million, Five Hundred Nine Thousand Four Hundred Thirty Five and
no/100 ($21,509,435.00). The Purchase Price shall be subject to a post-closing
adjustment as provided in Section 2.4 herein.
2.2.2. Allocation. UOP and the Company agree to allocate the
Purchase Price and any adjustments therein pursuant to Section 2.2 among the
Assets in accordance with United States Internal Revenue Code Section 1060 and
as set forth in Schedule 2.2.2 delivered hereunder. Prior to the Closing Date,
UOP and the Company shall mutually agree to this allocation and the information
which will be reported on US Internal Revenue Code Form 8594 or on such other
form or statement as may be required by law. UOP and the Company shall adhere to
such allocation for all purposes in any Federal and state income or franchise
tax return filed by them subsequent to the Closing Date, including the
determination by the Company of taxable gain or loss on the sale of Assets and
the determination by UOP of its tax basis with respect to the Assets.
Section 2.3. Transferable Equity. The Company has prepared: (a) a
balance sheet of the Division as of February 28, 1999 (the "February Trial
Balance Sheet"), (b) a balance sheet prepared in accordance with Subsection
2.3.1 herein to show the transferable equity in the Division as of February 28,
1999 (the "Transferable Balance Sheet"), and (c) a Statement of the February
Transferable Equity which shall be the Alumina Business of the Company's equity
reflected on the Transferable Balance Sheet.
2.3.1. Transferable Balance Sheet. The Transferable Balance
Sheet, delivered hereunder in Schedule 2.3.1(a), shall be prepared as follows:
(a) The Transferable Balance Sheet shall be prepared
in accordance with generally accepted accounting principles ("GAAP")
applied on a basis consistent with prior years, except as may be
provided in paragraph (b) of this Subsection 2.3.1, and shall be based
upon the February Trial Balance Sheet. The Transferable Balance Sheet
shall trace and reconcile any adjustments to the February Trial Balance
Sheet as may be necessary to prepare the Transferable Balance Sheet in
accordance with GAAP and this Subsection 2.3.1.
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(b) The Transferable Balance Sheet shall be prepared
in accordance with the following:
(i) (A) Except as provided in Section
2.3.1(b)(i)(B) hereof, all intercompany accounts between the
Division, or any divisions, units, affiliates or subsidiaries
of the Company have been eliminated; and
(B) The investment in the CRILAR JV
shall be recorded in accordance with U.S. GAAP consistent with
past practice;
(ii) There shall not be any amounts included
as liabilities or reserves with respect to any accounting,
legal, investment or other professional or advisory fees or
expenses relating to the transactions contemplated by this
Agreement;
(iii) There shall not be any amount recorded
in any asset account to the extent that the benefits
associated with the related asset cannot be transferred to or
realized by UOP, including, without limitation, any amounts
(A) intended to reflect potential prospective benefits of the
carryover of losses or of tax benefits or attributes of the
Company from periods prior to or ending on or as of the
Closing Date, (B) in respect of any insurance policy covering
any of the Assets if such insurance policy and the benefits
thereof will not be assigned or otherwise transferred to UOP
at the Closing, and (C) for an offsetting reserve or deferred
gain balance which offsets the CRILAR JV investment balance;
(iv) There shall not be any amounts included
as payables, liabilities or reserves which are not Assumed
Liabilities, inasmuch as such items are to be borne by the
Company under this Agreement, including without limitation (A)
liabilities relating to indebtedness for borrowed money or
negative cash balances; (B) liabilities relating to product
liability claims or any other litigation; (C) liabilities
relating to any environmental claims or potential claims,
including reserves for clean-up costs, or any of the items
pertaining to environmental compliance as discussed in Section
3.18 herein; (D) all costs or losses related to any disputes,
hearings, claims, investigations (whether governmental or
internal); and (E) liabilities relating to taxes for periods
ending on or prior to the Closing Date, other than unpaid
payroll and property taxes on the operations of the Company
properly accrued for any period ending after the Closing Date;
and
(v) There shall not be any amounts included
as liabilities or reserves for accrued but unpaid (A)
incentive compensation payments for any Employees (as such
term is defined in Subsection 3.12.1 herein) inasmuch as the
Company is to pay in full, pursuant to Subsection 5.6.2
herein, all such obligations to the Employees as soon as the
amounts of such obligations may be determined but in no event
later than when the Company makes similar payments to its
employees;
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and (B) any other accrued but unpaid obligations incurred by
the Company relating to the Plans (as such term is defined in
Section 3.12.3 herein), inasmuch as the Company retains all
obligations relating to the Plans as provided in Section 5.7
herein.
2.3.2. Completion. The preparation of the February Trial
Balance Sheet, and the preparation of and report on the Transferable Balance
Sheet and the Statement of February Transferable Equity pursuant to this Section
2.3 shall be completed and delivered to UOP prior to the Closing Date.
2.3.3. Schedule of Net Fixed Assets.
(a) Within sixty (60) days after Closing, the Company
shall provide UOP a schedule, certified true and correct by the
Company, of net fixed asset acquisitions (the "Net Fixed Asset
Schedule", Schedule 2.3.3(a)(i)) for the last seven (7) years, which
indicates acquisitions net of disposals totaling not less than $20
million. In addition, Ernst & Young LLP ("E&Y") shall have performed,
for the Net Fixed Asset Schedule, the procedures set forth in Schedule
2.3.3(a)(ii).
(b) In addition, within sixty (60) days after receipt
of the Net Fixed Assets Schedule, UOP shall, with the assistance of
PricewaterhouseCoopers LLP ("PWC") as necessary, have the opportunity
to review the records of the Division for up to the past seven (7)
years in order to confirm that the Division has purchased net of
disposals not less than $20 million of fixed assets.
Section 2.4. Post-Closing Adjustment of Purchase Price. The Purchase
Price shall be subject to adjustment following the Closing to reflect the
changes in the Transferable Equity of the Division between February 28, 1999,
and the close of business on the Closing Date, as provided in this Section 2.4
and Section 2.5 herein.
2.4.1. Closing Date Balance Sheet. Promptly following the
Closing and as soon thereafter as practicable (but in any event within 60 days
of Closing), the Company shall prepare, or cause to be prepared, with full
cooperation and assistance of UOP, a balance sheet of the Assets and Assumed
Liabilities as of the close of business on the Closing Date (the "Closing Date
Balance Sheet") as follows:
(a) The Closing Date Balance Sheet shall be based
upon and prepared in accordance with the same principles used to
prepare the Transferable Balance Sheet pursuant to Subsection 2.3.1
herein, except as may be provided in paragraph (b) of this Subsection
2.4.1.
(b) The Closing Date Balance Sheet shall also include
an adjustment for any differences noted between the Assets and Assumed
Liabilities and the assets and liabilities of the Division at Closing,
except that inventory shall be excluded and fixed assets will be deemed
to be in the amount as set forth in the February Trial Balance Sheet
and the February Transferable Balance Sheet, subject to the provisions
of Section 2.3.3 and subject to the
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requirement that the Company shall include a footnote on the Closing
Date Balance Sheet which sets forth capital expenditures of the
Division and the CRILAR JV from the February Trial Balance Sheet
through the Closing Date of not less than $500,000;
2.4.2. UOP's Review. With respect to preparation of the
Closing Date Balance Sheet pursuant to Subsection 2.4.1 herein, the Company
shall permit UOP and PWC or another independent accounting firm of nationally
recognized standing of UOP's choice, during the preparation or at any time
thereafter: (i) to review all working papers and computations prepared or used
by the Company in preparing the Closing Date Balance Sheet and in making any
adjustments thereto, (ii) to review all working papers and computations prepared
or used by any independent accounting firm retained by the Company to review or
assist in the preparation of the Closing Date Balance Sheet, (iii) to observe
and participate in the review of fixed assets of the Division pursuant to
Subsection 2.3.3 herein, and (iv) to review all books, records and other
relevant data of the Division. UOP shall pay the fees and expenses of any
accounting firm retained by it for the purpose of such review of the foregoing,
provided that the Company shall pay the fees and expenses of any accounting firm
that it retains at its discretion.
2.4.3. Statements of Closing Transferable Equity and Purchase
Price Adjustment. The Closing Date Balance Sheet shall be accompanied by the
following statements (including the "Agreed Upon Procedures Report" described in
Section 2.4.3(c) below) prepared by or caused to be prepared by the Company,
with full cooperation and assistance of UOP:
(a) A statement of the Closing Transferable Equity of
the Company, which shall be the amount of the Company's equity relating
to the Division appearing on the Closing Date Balance Sheet of the
Division (the "Closing Transferable Equity");
(b) A statement of the adjustment to the Purchase
Price, which shall be the difference between the Closing Transferable
Equity and the February Transferable Equity (such difference being the
"Purchase Price Adjustment"). The Statement of the Purchase Price
Adjustment shall trace and reconcile the amount of the Purchase Price
Adjustment to the amounts shown on the Closing Date Balance Sheet for
specific accounts of Assets and Assumed Liabilities; and
(c) The Company has engaged the Company's regular
independent accounting firm, Ernst & Young LLP, or another independent
accounting firm of recognized standing of the Company's choice, to
conduct agreed upon procedures, as defined and as set forth in Schedule
2.4.3(c), on the Division's property, plant and equipment and the
Division's investment in the CRILAR JV, as these items appear in the
Closing Date Balance Sheet of the Division.
2.4.4. Delivery of Statements. As soon as practicable after
Closing, but not later than sixty (60) days after Closing the Company shall
deliver the Closing Date Balance Sheet, and the accompanying Statement of
Closing Transferable Equity and Purchase Price Adjustment and the "Agreed Upon
Procedures Report" contemplated by Schedule 2.4.3(c), to UOP together with a
certificate of the Vice President and Chief Financial Officer of the Company to
the effect that the
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Closing Date Balance Sheet was prepared in accordance with GAAP on a basis
consistent with prior years, except as specifically provided in Subsection 2.4.1
herein.
2.4.5. Independent Review. UOP shall at its option cause PWC,
or another accounting firm of recognized standing of UOP's choice or
representatives of UOP's internal audit staff (the "Reviewing Firm"), to review
the Closing Date Balance Sheet, and the accompanying Statements of Closing
Transferable Equity and Purchase Price Adjustment. With respect to the foregoing
review:
(a) The parties expect the review of the Reviewing
Firm pursuant to this Subsection 2.4.5 will be completed within sixty
(60) days of the delivery date of the Closing Date Balance Sheet by the
Company to UOP.
(b) UOP shall permit the Company and any independent
accounting firm retained by the Company at the Company's expense for
this purpose, to review all working papers and computations used or
prepared by the Reviewing Firm.
(c) All fees and expenses of the Reviewing Firm shall
be paid by UOP.
2.4.6. Resolution. In the event that the Company and UOP are
unable to resolve any differences between them over the proposed Purchase Price
Adjustment within thirty (30) days thereafter, the Company and UOP shall jointly
and promptly refer such difference to KPMG Peat Marwick, Atlanta, Georgia (the
"Resolving Firm") to resolve any such differences and to prepare final
Statements of Closing Transferable Equity and Purchase Price Adjustment, which
Statements shall be final and binding upon the parties. With regard to the
foregoing resolution process:
(a) The Company and UOP shall each present their
differences in writing, with respect to the Closing Date Balance Sheet,
to the Resolving Firm (each party providing simultaneously to the other
party copies of all documents submitted to the Resolving Firm) within
ten (10) days of the retention of such firm by the Company and UOP.
(b) The Company and UOP shall comply promptly with
all reasonable requests of the Resolving Firm for access to
information, working papers, computations, books and records and the
like.
(c) The Resolving Firm shall not be retained to
conduct its own independent audit or review of the Closing Date Balance
Sheet, but rather shall be retained to resolve specific differences
between the Company and UOP as to the report of the Reviewing Firm and
within the range of such differences.
(d) All fees and expenses of the Resolving Firm shall
be borne and shared equally by the Company and UOP.
Section 2.5. Settlement of Purchase Price Adjustment. Within five (5)
business days of the final determination of any Purchase Price Adjustment
pursuant to Section 2.4 herein, UOP and the
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Company shall settle on any such adjustment as follows (and within two (2)
business days of the final determination of the Purchase Price Adjustment each
party hereto shall notify the other of the account referred to in Subsections
2.5.1 and 2.5.2 herein designated to receive any such Purchase Price Adjustment
and interest thereon pursuant to this Section 2.5):
2.5.1. Increase In Purchase Price. If the Purchase Price
Adjustment reflects a net increase in the Purchase Price in excess of One
Hundred Thousand Dollars ($100,000), UOP shall pay to the Company by bank wire
transfer in immediately available Federal funds to an account designated in
writing by the Company the sum of: (i) the Purchase Price Adjustment; and (ii)
interest on the Purchase Price Adjustment computed at a rate compounded per
annum equal to the prime commercial lending rate of Morgan Guaranty Trust
Company of New York in effect on the Closing Date from the Closing Date to the
date of settlement.
2.5.2. Decrease In Purchase Price. If the Purchase Price
Adjustment reflects a net decrease in the Purchase Price in excess of One
Hundred Thousand Dollars ($100,000), the Company shall pay to UOP by bank wire
transfer in immediately available Federal funds to an account designated in
writing by UOP the sum of: (i) the Purchase Price Adjustment; and (ii) interest
on the Purchase Price Adjustment computed at a rate compounded per annum equal
to the prime commercial lending rate of Morgan Guaranty Trust Company of New
York in effect on the Closing Date from the Closing Date to the date of
settlement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
The Company hereby represents and warrants to UOP as of the date hereof
and as of the Closing Date as follows:
Section 3.1. Organization of the Company and the CRILAR JV. The Company
is a corporation duly incorporated and the CRILAR JV is a limited liability
company duly formed, and each is validly existing and in good standing under the
laws of the State of Delaware, and each has the requisite corporate power and
authority to own, operate or lease the properties relating to, used or held in
connection with the Division in all material respects as the Company is now
conducting the business of the Division consistent with past practice, except
that for accounting purposes, the Division has been accounted for as a
discontinued operation since October, 1998.
Section 3.2. Qualification of the Company and the CRILAR JV. Each of
the Company and the CRILAR JV is duly qualified or licensed as a foreign
corporation or foreign LLC, as applicable, to do business, and is in good
standing, in each jurisdiction where the character of the Assets, or the nature
of its respective activities relating to the Division, makes such qualification
or license necessary, except those jurisdictions, if any, in which the failure
to so qualify would not have a material adverse effect on the Assets, or results
of operations or financial condition of the Division. Schedule 3.2 delivered
hereunder identifies: (i) each state in which the Company and the CRILAR
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JV are qualified to do business; and (ii) the name and address of the registered
agent of the Company and the CRILAR JV in each such state.
Section 3.3. Corporate Authorization.
3.3.1. Authority. The Company has (and on the Closing Date
will have) all requisite corporate power and authority to enter into and perform
this Agreement and to consummate the transactions contemplated hereby. This
Agreement is a valid and binding obligation of the Company and its subsidiaries
and is enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application referring to or affecting enforcement of creditor's rights, or by
general equitable principles.
3.3.2. No Breach or Violation. Execution, delivery and
performance of this Agreement by the Company and consummation of the
transactions contemplated hereby will not lead to or cause a violation, breach,
or default or result in the termination of, or accelerate the performance
required by, or result in the creation or imposition of any Encumbrance (as
defined in Section 3.6.1), whether by notice or lapse of time or both, or
otherwise conflict with any term or provision of the following:
(a) The Certificate of Incorporation and By-laws, as
amended of the Company and the Limited Liability Company Agreement of
the CRILAR JV (subject to execution of Exhibit C hereto in its current
form, or as amended, subject to approval in writing of such amendment
by UOP which may be withheld by UOP in its sole discretion);
(b) Any note, bond, mortgage, contract, indenture or
agreement to lease, license or other instrument or obligation to which
the Company or any of its subsidiaries is a party or is bound: (i)
where such violation, breach or default would have a material adverse
effect on the Assets, or results of operations or financial condition
of the Division; or (ii) as to which required consents, amendments or
waivers shall have been obtained by the Company prior to the Closing
for any such violation, breach or default; or
(c) Any court or administrative order, writ or
injunction or process, or any permit, license, or consent decree to
which the Company or any of its subsidiaries is a party or is bound:
(i) where such violation, breach or default would have a material
adverse effect on the Assets, or results of operations or financial
condition of the Division; or (ii) as to which required consents,
amendments or waivers shall have been obtained by the Company prior to
the Closing for any such violation, breach of default.
Section 3.4. Financial Statements.
3.4.1. Schedules and Accuracy. Attached hereto as Schedule
3.4.1 are the Division's unaudited (a) balance sheets and the related statements
of income as of and for the fiscal year ended February 28, 1999, and (b) the
February Trial Balance Sheet (collectively, the "Financial Statements"). The
Financial Statements present fairly, in all material respects, the financial
condition of the Division as of the date thereof and the results of operations
of the Division for the
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periods covered thereby; and except as set forth on Schedule 2.3 hereto, have
been prepared in accordance with generally accepted accounting principles
("GAAP"), applied on a basis consistent with prior years.
3.4.2. No Undisclosed Liabilities. Neither the Company nor any
of its subsidiaries has any liabilities or obligations which relate to the
Assets or the Assumed Liabilities of any nature, secured or unsecured (absolute,
accrued, or unaccrued, liquidated or unliquidated, executory contingent or
otherwise and whether due or to become due), which are not disclosed in Schedule
3.4.2 or notes to the Financial Statements or were not reflected in the
Financial Statements except for those liabilities and obligations of the Company
which relate to the Division or the Assets and were incurred since February 28,
1999 in the ordinary course of business.
3.4.3. Absence of Changes. Other than as set forth in Schedule
3.4.3 delivered hereunder, since February 28, 1999, there has not been:
(a) Any material adverse change in the Assets, or the
working capital, reserves, customer relations (which shall mean any
facts or circumstances negatively impacting the channels of
distribution and/or the top 25 customers of the Division including
notice of termination received by the Company prior to the Closing),
results of operations, raw material pricing, backlog or financial
condition of the Division or the CRILAR JV;
(b) Any material change in the contingent obligations
or liabilities of the Company which relate to the Division or the
CRILAR JV or Assets by way of guaranty, documentary credit, standby
credit, endorsement, indemnity, warranty or otherwise;
(c) Any waiver or cancellation by the Company or any
of its subsidiaries of valuable rights or of debts owed to them which,
taken as a whole, are material to the Assets, or results of operations
or financial condition of the Division or the CRILAR JV;
(d) Any increase in the rate or terms of compensation
payable, or potentially payable, by the Company to any managers or
employees of the Division or the CRILAR JV, except increases occurring
in the ordinary course of business in accordance with the Company's
customary practices (which shall include normal periodic performance
reviews and related compensation and benefit increases);
(e) Any material increase in the rate or terms of any
bonus, insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with any of the managers or employees of
the Division or the CRILAR JV except increases occurring in the
ordinary course of business in accordance with the Company's customary
practices (which shall include normal periodic performance reviews and
related compensation and benefit increases);
(f) Any loan to, or guarantees or assumption of any
loan or obligation on behalf of, any manager or employee of the
Division or the CRILAR JV except advances
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occurring in the ordinary course of business in accordance with the
Company's customary practices;
(g) Any amendment to any agreement, commitment, or
transaction (including without limitation any borrowing, lease, capital
expenditure or capital financing) by the Company or any of its
subsidiaries, material to the Assets or the Division or the CRILAR JV
or which, if such action were taken on the date hereof, would require
disclosure pursuant to this Agreement, except any amendment to any
agreements, commitments or transactions entered into in the ordinary
course of business or in accordance with the terms of this Agreement
and except for the capital projects identified by project and dollar
amount on Schedule 3.4.3(g) which have been initiated or completed for
the Division and the CRILAR JV since February 28, 1999; or
(h) Any material change by the Company in its
accounting methods or practices, assumptions or methods of calculating,
or any change by the Company or the CRILAR JV in their respective
accounting principles affecting the Assets or the Division.
3.4.4. Discharge of Liabilities. Other than as set forth in
Schedule 3.4.4 delivered hereunder, since the Financials Date and as of the
Closing Date: (i) neither the Division nor the CRILAR JV has paid, discharged or
satisfied any and all claims, liabilities or obligations (absolute, accrued,
contingent or otherwise) other than the payment, discharge or satisfaction in
the ordinary course of business and consistent with past practice ; and (ii)
neither the Division nor the CRILAR JV has terminated, amended or suffered the
termination or amendment of, or failed to perform all of its respective
obligations in all material respects under, any material lease, arrangement or
license.
Section 3.5. [INTENTIONALLY LEFT BLANK]
Section 3.6. Properties; Leases; Tangible Assets.
3.6.1. Title. The Company has good, valid and marketable title
to (and no other Real Property is necessary for the continued operation of the
Division and the CRILAR JV) or, in the case of leased properties, a good valid
and marketable leasehold in, all of the Assets which it purports to own,
including all assets (real, personal or mixed, tangible or intangible) reflected
on the Financial Statements, except those assets disposed of in the ordinary
course of business after the February 28, 1999. The title to each such property
and asset of the Division and the CRILAR JV is free and clear of all title
defects, objections, liens, mortgages, security interests, pledges, charges and
encumbrances, adverse claims, equities, or any other rights of others or other
adverse interests of any kind including without limitation, leases, chattel
mortgages, conditional sales contracts, collateral security arrangements and
other title or interest retention arrangements (collectively the
"Encumbrances"), and upon the transfer of the Assets to UOP hereunder, UOP shall
have good, valid and marketable title to the Assets, free and clear of any
Encumbrances, except as follows:
(a) The lien of current taxes not yet due and
payable, or of taxes the validity of which is being contested in good
faith by appropriate proceedings and as to which adequate reserves have
been established by the Company;
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(b) Any Encumbrances reflected on the Financial
Statements, with such changes in the amount thereof as may have
occurred in the ordinary course of business prior to the Closing Date
and which changes will not materially reduce or materially adversely
affect the value of such property and assets held by the Company, or
materially interfere with the use thereof by UOP immediately following
Closing;
(c) Such other imperfections of title or Encumbrances
which, as of the Closing Date, will not materially reduce the aggregate
value of the Assets or materially interfere with or materially
adversely affect the use thereof by UOP immediately following Closing;
and
(d) Any Encumbrances identified on Schedule 3.6.1(d)
delivered hereunder.
3.6.2. Use Restrictions. With respect to any real property
owned or leased by the Division or the CRILAR JV that is material to the Assets
or to the results of operations or financial condition of the Division or the
CRILAR JV, there exists no applicable zoning ordinance, building code, use or
occupancy restriction, or any violation of any such ordinance, code or
restriction, or any condemnation action or proceeding with respect thereto, that
materially detracts from the value of such real property as reflected on the
Financial Statements, or materially interferes with or materially adversely
affects the use thereof by UOP immediately following Closing.
3.6.3. Condition. Except as set forth in Schedule 3.6.3, all
tangible properties and assets of the Division and the CRILAR JV are
structurally sound with no material defects, and are in good operating condition
and repair and are adequate for the uses to which they are put; and none of such
tangible properties are in need of replacement, maintenance or repairs, except
for ordinary routine maintenance and repair.
3.6.4. Leases. Schedule 1.1.4(b) delivered hereunder sets
forth an accurate list of all leases (such Schedule 1.1.4(b) describing
separately those leases relating to real property and those leases relating to
personal property and indicating where appropriate those leases which have been
recorded for tax, protection of title or interest, or other purposes) pursuant
to which the Division or the CRILAR JV leases real or personal property (the
"Leases"). With respect to the Leases, there exist no defaults by the Company,
any of its subsidiaries, or defaults by any third party, that materially and
adversely affects the rights and privileges thereunder of the Company. Except as
set forth in Schedule 1.1.4(a), all such Leases may be assigned, transferred and
conveyed by the Company to UOP without penalty or any material change in terms
and no other leases are necessary for the unimpaired continued operation of the
Division and the CRILAR JV.
Section 3.7. Complete Sale. By consummation of the transactions
contemplated by this Agreement, the Company will have sold, assigned,
transferred and conveyed to UOP all of the properties and assets now held or
employed by the Division and the CRILAR JV (other than the Excluded Assets).
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Section 3.8. Backlog.
3.8.1. Amount. Schedule 3.8.1 delivered hereunder sets forth
the backlog of the Division and the CRILAR JV, as of February 28, 1999, for
products and services to be provided by the Division and the CRILAR JV. Schedule
3.8.1 includes the name of each customer, the dollar amount of backlog, any
dollar amounts included which are unfunded by any customer in respect of
undelivered orders, a brief description of the products and services to be
provided, the proposed delivery dates therefor and any unexercised valid and
subsisting options in the backlog giving a brief description of the options and
the contracts to which they relate.
3.8.2. Ordinary Course. Except as set forth on Schedule 3.8.1,
all of the contracts constituting the backlog of the Division and the CRILAR JV
(i) have been entered into in the ordinary course of business at usual and
customary mark-ups where appropriate, such mark-ups consistent with the past
practices of the Division and the CRILAR JV, and (ii) would be capable of
performance by the Company, if it retained the Assets to be transferred and
Assumed Liabilities to be assumed hereunder, and made the planned capital
expenditures therefor, in accordance with the terms and conditions of each such
contract.
Section 3.9. Intellectual Property.
3.9.1. Patents and Know-How. Schedule 1.1.8 delivered
hereunder sets forth a complete and accurate list of each patent, patent
application and docketed invention, by date and germane case or docket number
and country of origin, and each license or licensing agreement, by date, term
and the parties thereto, for each patent, patent application, invention,
trade-secret, rights to know-how, processes, computer programs or use of
technology, held or employed by the Division and the CRILAR JV, relating to the
Assets or Inventory; each such patent, patent application, license or licensing
agreement listed thereon hereinafter termed the "Patents and Licenses". With
respect to the Patents and Licenses, and with respect to all other technology
including but not limited to research and development results, computer
programs, processes, trade secrets, know-how, formulae, inventions and
manufacturing, engineering, quality control, testing, operational, logistical,
maintenance and other technical information and technology held or employed by
the Division and the CRILAR JV, relating to the Assets or Inventory (the
"Company's Technology"):
(a) Except as disclosed in Schedule 3.9.1(a), the
Company or the CRILAR JV owns, free and clear of all liens, pledges or
other encumbrances, all right, title and interest in the Patents and
Licenses and in the Company's Technology, with all rights to make, use,
and sell the property embodied in or described in the Patents and
Licenses and in the Company's Technology. Except as disclosed in
Schedule 3.9.1(a), the Company does not have any reason to know that
the use of the Patents and Licenses and the Company's Technology
conflicts with, infringes upon or violates any patent, patent license,
patent application, trademark, tradename, trademark or tradename
registration, copyright, copyright registration, service mark, brand
mark or brand name or any pending application relating thereto, or any
trade secret, know-how, programs or processes of any third person, firm
or corporation;
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(b) Except as disclosed in Section 3.9.1(b), there
are no outstanding, or threatened, governmental, judicial or adversary
proceedings, hearings, arbitrations, disputes or other disagreements
and no notice of infringement has been served upon or otherwise come to
the knowledge of the Company with respect to any of the Patents and
Licenses or the Company's Technology;
(c) The Company either owns the entire right, title
and interest in, to and under, or has acquired in connection with the
acquisition of Equipment or Inventory an implied license to use, any
and all inventions, processes, computer programs, know-how, formulae,
trade secrets, patents, trademarks, tradenames, brandnames and
copyrights which are or will be utilized in the operation of the
Division and the CRILAR JV as it exists as of the date hereof. Except
as disclosed in Schedule 3.9.1(c), no other inventions, processes,
computer programs, know-how, formulae, trade secrets, patents,
trademarks, tradenames, brand names, copyrights, licenses or
applications are necessary for the continued operation of the Division
and the CRILAR JV and the Company hereby agrees, without application of
the $100,000 Threshold in Article 8.2.3, to indemnify and hold UOP
harmless from any loss, damage or expense including attorney's fees
resulting from any claim against UOP for infringement of: (i) the
Company's A-204-8 Product (manufactured and/or sold to others prior to
the Closing or sold to UOP at the Closing) by reason of U.S. Patent
5,316,998 (and/or foreign equivalent patents) and the divisional
applications 5,505,926 and 5,595,954 and (ii) the Company's A-204-1
Product (manufactured and or sold by the Company and/or UOP within five
(5) years after Closing) by reason of the Garcin U.S. Patent 5,288,849
and/or foreign equivalent patents; provided, however, that the
liability of the Company under this clause (ii) shall not (x) extend
beyond three (3) years from the Closing except for formal claims made
prior thereto by UOP or third parties, (y) exceed fifty percent (50%)
of the loss, damage or expense, and (z) exceed payments by the Company
to UOP under this clause (ii) in excess of Six Hundred Twenty Thousand
Dollars ($620,000) in the aggregate;
(d) Upon receipt of the consents identified in
Schedule 3.9.1(d) and the consummation of the Closing hereunder, UOP
will be vested with all rights, title and interest, and rights and
authority to use in connection with the Division and the CRILAR JV, all
of the Patents and Licenses and the Company's Technology, except as
disclosed in Schedule 3.9.1(a); and
(e) The Company has taken steps to upgrade the
Holiday and DCS computer systems at the Division's Baton Rouge
manufacturing plant. Such systems, as well as the J.D. Edwards system
and the plant's personal computers and Lotus Notes (for e-mail)
operated thereon (the "Computer Systems"), and the Computer Systems, to
the best knowledge of the Company after reasonable investigation, will
operate with year 2000 or later dates without material processing
deficiencies.
3.9.2. Trademarks and Copyrights. Schedule 1.1.9 delivered
hereunder sets forth a complete and accurate list of each trademark, trade name,
and trademark and tradename registration or application, and copyright
registration and application for copyright registration, by date and
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germane case or docket number and country of origin, and each license or
licensing agreement, by date and the parties thereto, for each trademark and
copyright license or license of application, held or employed by the Division
and the CRILAR JV, (each such trademark, copyright, application, and license or
licensing agreement hereafter termed the "Trademarks and Licenses"). With
respect to the Trademarks and Licenses, and except as set forth on Schedule
3.9.2 delivered hereunder:
(a) The Company owns, free and clear of all liens,
pledges or other encumbrances, all right, title and interest in the
Trademarks and Licenses. The Company does not have any reason to know
that the use of the Trademarks and Licenses conflicts with, infringes
upon or violates any patent, patent license, patent application,
trademark, trade name, trademark or trade name registration or
application, copyright, copyright registration or application, service
mark, brand mark or brand name or any pending application relating
thereto, of any third person, firm or corporation;
(b) There are no outstanding or threatened,
governmental, judicial or adversary proceedings, hearings,
arbitrations, disputes or other disagreements with respect to any of
the Trademarks and Licenses; and
(c) Upon the consummation of the Closing hereunder,
UOP will be vested with all rights, title and interest, and rights and
authority to use in connection with the Division, the CRILAR JV, all of
the Trademarks and Licenses.
Section 3.10. Material Contracts and Obligations.
3.10.1. Identification. Schedule 1.1.5(a) delivered hereunder
includes an accurate and complete list as of the date hereof and as of the
Closing Date, of all material contracts and obligations of the Division, the
CRILAR JV, the Company and any of its subsidiaries which relate to the Division,
the CRILAR JV or the Assets. Schedule 3.10.1 delivered hereunder identifies by
date and the parties thereto:
(a) All agreements and contracts between the Division
or the CRILAR JV and (i) their respective ten (10) largest suppliers
measured by dollar volume of purchases, and (ii) their respective five
(5) largest customers of the Alumina Business measured by dollar volume
of sales, for the twelve months ended as of February 28, 1999;
(b) All financing documents, loan, bond or debt
agreements (including notes, documentary credits, standby credits and
lines of credit), and agreements providing for the guarantee by the
Company or any of its subsidiaries of the obligations of any party, and
which relate to the Division, the CRILAR JV or the Assets;
(c) All distributorship, commission agent or
franchise agreements providing for the marketing and/or sale of the
products or services of the Division or the CRILAR JV;
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(d) All partnership agreements for the organization
of limited or general partnerships in which the Division or the CRILAR
JV is a partner, and all teaming agreements to which the Division or
the CRILAR JV is a party; and
(e) All employment or consulting contracts or similar
arrangements which relate to the Division or the CRILAR JV.
3.10.2. Full Force and Effect. Except as otherwise disclosed
thereon or as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application referring to or
affecting enforcement of creditors' rights, and by general equitable principles,
all agreements, contracts and obligations identified on Schedules 1.1.5(a) and
3.12 are valid and binding upon the Division or the CRILAR JV and, to the
knowledge of the Company, are valid and binding on each other party thereto.
3.10.3. No Default. (a) With respect to all contracts,
agreements and obligations identified on Schedules 1.1.5(a), 3.10.1 and 3.12,
except as otherwise disclosed thereon, neither the Company nor any other party
thereto is in material breach thereof or material default thereunder, and there
does not exist any event, condition or omission which would constitute such
material breach or material default (whether by lapse of time or notice or
both), except for such breaches, defaults and events as to which requisite
waivers or consents have been obtained, or which would not in the aggregate have
a material adverse effect on the Assets, or results of operations or financial
condition of the Division or the CRILAR JV; and
(b) Except as disclosed in Schedule 3.15, all contracts,
agreements and obligations described in Section 3.10.3(a) are freely assignable
to UOP without penalty or other adverse consequence and upon consummation of the
transactions contemplated by this Agreement shall continue in full force and
effect without penalty or other adverse consequence.
Section 3.11. Employees; Compensation; Labor.
3.11.1. Employees and Compensation. Schedule 3.11.1(a)
delivered hereunder lists (i) all persons who are employed by the Division and
the CRILAR JV (collectively, the "Employees"), together with their present rate
of compensation and the date upon which such compensation was last varied or
increased, title, original date of hire, date of participation in pension plan
and vacation benefits, and any agreed to current or future benefits or
compensation of such Employees; and (ii) all employment, consulting and
severance agreements, executive compensation plans, bonus plans, incentive
compensation plans, deferred compensation agreements, employee pensions plans or
retirement plans, employee profit sharing plans, employee stock purchase plans,
group life insurance, hospitalization insurance or other plans or arrangement of
each of the Division and the CRILAR JV providing for benefits for the Employees.
Set forth on Schedule 1.4.3(a) delivered hereunder is a true, correct and
complete description of the termination policies of the Division and the CRILAR
JV as in effect on the date hereof and as of the Closing Date. Set forth on
Schedule 3.11.1(b) is a list of all employment policies, procedures, manuals,
and other similar rules, regulations and bylaws of the Division and the CRILAR
JV regarding the general conduct, compensation, labor relations and employment
of the Employees.
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3.11.2. Certain Labor Matters. Except as set forth on Schedule
3.11.2 delivered hereunder:
(a) None of the Employees has formally indicated to
any director, officer or manager of the Company or the CRILAR JV or to
any Employee reporting directly to any officer of the Company or the
CRILAR JV, his or her intention to cancel or otherwise terminate his or
her relationship with the Company or the CRILAR JV or his or her
relationship with UOP if UOP elects to retain said Employee after
Closing;
(b) There is no union representing the interests of
any of the Employees and, to the best of knowledge of the Company,
there are no such Employees seeking or attempting to organize union
representation;
(c) There are neither pending nor threatened any
strikes, work stoppages, work disruptions or employment disruptions by
any of the Employees;
(d) There are neither pending nor, to the best
knowledge of the Company, threatened, suits, actions, administrative
proceedings, hearings, arbitrations or other proceedings between the
Company and any of the Employees;
(e) With respect to the Employees, during the past
five (5) years each of the Company and the CRILAR JV (i) has complied
in all material respects with all Federal, state and local laws and
regulations relating to the employment of labor, including any
provisions thereof relating to wages, hours, collective bargaining and
the payment of social security and similar taxes, (ii) is not liable
for any arrears of wages or any taxes or penalties for failure to
comply with any of the foregoing, (iii) has not committed any unfair
labor practices, and (iv) has complied in all material respects with
all applicable provisions of the Occupational Health and Safety Act of
1970 and regulations promulgated pursuant thereto;
(f) None of the Employees, within the three (3) year
period prior to the date hereof, has filed any complaint relating to
the Company's conduct of the Division or the CRILAR JV or employment of
the Employees with any governmental or regulatory authority or brought
any action in law or in equity with respect thereto; and
(g) Since January 1, 1998 the Company has not offered
continuing employment with the Company after the Closing Date to any
manager or employee whose primary duties were to the Division and/or
the CRILAR JV.
3.11.3. Employee Benefit Plans; ERISA.
(a) Schedule 3.11.3(a) delivered hereunder contains
an accurate and complete list of, and sets forth the annual amount of
employer contributions accrued, paid or payable for Employees, domestic
or foreign, during fiscal year 1998 pursuant to, each bonus, deferred
compensation, incentive compensation, severance or termination pay
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agreement, hospitalization or other medical, dental, retiree medical,
dental or other welfare benefit plan, stock purchase, stock option,
pension, life or other insurance, profit-sharing or retirement plan or
arrangement, and each other employee benefit plan or arrangement
maintained or contributed to by the Company or the CRILAR JV whether
formal or informal and whether legally binding or not (individually the
"Plan" and collectively the "Plans"). Neither the Company nor the
CRILAR JV has any plan or commitment, whether formal or informal and
whether legally binding or not, to create any such additional plan or
modify or change any existing Plan, except as described in Schedule
3.11.3(a) delivered hereunder. The Company has heretofore delivered to
UOP true and complete copies of (i) up to date documents governing all
such Plans and their related trusts and (ii) the actuarial reports and
accountants' reports prepared with respect to each Plan and (iii) the
Form 5500 filed with the Internal Revenue Service with respect to each
such Plan for the last three years.
(b) Schedule 3.11.3(b) delivered hereunder lists:
(i) each Plan that is an "employee pension
benefit plan," as such term is defined in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder ("ERISA")
which at any time covered any employee of the Division and/or
the CRILAR JV (each such Plan is hereinafter referred to as an
"ERISA Plan");
(ii) all ERISA Plans to which Title IV of ERISA
applies which have terminated and whose "date of termination"
(within the meaning of Section 4048 of ERISA) occurred after
September 1, 1974 or have otherwise ceased benefit accruals
since September 1, 1974, with a description of the actions, if
any, taken by the PBGC with respect thereto.
(c) Except as set forth in Schedule 3.11.3(c)
delivered hereunder:
(i) no ERISA Plan is a "multiemployer plan" as
that term is defined in Section 3(37) of ERISA;
(ii) neither the Company nor the CRILAR JV, any
ERISA Plan, any trust created thereunder, nor any trustee or
administrator thereof, has engaged in a transaction in
connection with which the Company, the CRILAR JV, any ERISA
Plan, any such trust, or any trustee or administrator thereof,
or any party dealing with any ERISA Plan or any such trust,
could be subject to either a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code of a material nature;
(iii) no liability to the PBGC under Title IV of
ERISA, other than liability for premiums to the PBGC, has been
incurred with respect to any ERISA Plan by the Company or the
CRILAR JV since the effective date of ERISA;
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(iv) the PBGC has not instituted proceedings to
terminate any ERISA Plan;
(v) no event has occurred, and there exists no
condition or set of circumstances as of the date of this
Agreement, which presents a material risk of the termination
of any ERISA Plan (other than the terminations reflected in
the aforementioned lists) which could result in any liability
on the part of the Company or the CRILAR JV to the PBGC, and
the occurrence of the reportable events and terminations
reflected in such lists will not adversely affect the
business, prospects, operations, properties or the conditions,
financial or otherwise of the Company or the CRILAR JV;
(vi) full payment has been made of all amounts
which the Company or the CRILAR JV is required to pay under
the terms of each ERISA Plan as a contribution to such ERISA
Plan as of the last day of the 1998 fiscal year of each such
ERISA Plan ended prior to the date of this Agreement, and no
ERISA Plan nor any trust established thereunder has incurred
any "accumulated funding deficiency" (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of
each ERISA Plan ended prior to the date of this Agreement;
(vii) with respect to each ERISA Plan which is
to be so qualified, the Company does not know of any fact,
condition or set of circumstances that would adversely affect
the qualified status of any such ERISA Plan;
(viii) except for current summary plan
descriptions, each ERISA Plan has been operated and
administered in all material respects in accordance with all
applicable laws, including but not limited to ERISA; and
(ix) there are no pending, or to the knowledge
of the Company, threatened or anticipated, material claims
against any ERISA Plan or any fiduciary thereof, by any
employee or beneficiary covered under any ERISA Plan, or
otherwise involving any ERISA Plan (other than routine claims
for benefits) and there are no pending, threatened or
anticipated claims by or on behalf of any ERISA Plan.
(d) the Schedules referred to in this Subsection
3.11.3 paragraphs (a)-(c) have been delivered by the Company to UOP
prior to execution and delivery of this Agreement.
Section 3.12. Other Agreements.
Schedule 3.12 delivered hereunder sets forth each
oral or written agreement, arrangement or commitment of a nature described in
clauses (i) through (viii) below to which the Division or the CRILAR JV is a
party or by which it is bound, and all amendments, modifications and supplements
thereto ("Other Agreements"). Except as set forth in Schedule 3.12, the neither
the
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Division nor the CRILAR JV is a party to any oral or written: (i) franchise or
sales agency agreement; (ii) mortgage, pledge, conditional sales contract,
security agreement, factoring agreement, or other similar agreement with respect
to any of the Assets; (iii) loan agreement, guarantee, subordination or similar
type of agreement; (iv) consulting agreement; (v) agreements or arrangements for
the sale of any of the Assets except in the ordinary course of business or
except as permitted pursuant to Subsection 5.1.2 paragraph (g) herein; (vi)
retainer arrangement with attorneys, accountants, actuaries, appraisers,
investment bankers or other professional advisors; or (vii) any other contract
or arrangement not made in the ordinary course of business. A complete and
correct copy of each written agreement and other instrument listed in Schedule
3.12 and a true and complete summary of the terms and conditions of each oral
agreement listed therein has been furnished to UOP.
Section 3.13. Litigation.
3.13.1. Litigation Pending or Threatened. Except as disclosed
in Schedule 3.13.1 hereto: (i) there are no claims, actions, suits, hearings,
arbitrations, disputes, proceedings (public or private) or governmental
investigations pending or, to the knowledge of the Company, threatened, against
or affecting the Division, the CRILAR JV or the Assets, at law or in equity,
before or by any Federal, state, municipal or other governmental or
non-governmental department, commission, board, bureau, agency, court or other
instrumentality, or by any private person or entity; (ii) there is no basis for
any such action, suit or proceeding which would, individually or in the
aggregate, have a material adverse effect on the Assets, or the results of
operations or financial condition of the Division or the CRILAR JV; and (iii)
there are no existing or, to the knowledge of the Company, threatened, orders,
judgments or decrees of any court or governmental agency materially affecting
any of the Assets, the Division or the CRILAR JV.
3.13.2. This Transaction. There are no legal, administrative,
arbitration or other proceedings or governmental investigations pending or, to
the knowledge of the Company, threatened, against the Division, the CRILAR JV or
the Assets which seeks to enjoin or rescind the transactions contemplated by
this Agreement or otherwise prevent the Company from complying with the terms
and provisions of this Agreement.
Section 3.14. Insurance. Schedule 3.14 includes a list of insurance
coverages applicable to the Company which also covers the Division.
Section 3.15. Third Party Consents. Schedule 3.15 hereto lists all
approvals, authorizations, certificates and consents of all third parties
(except for such approvals, authorizations, certificates and consents of
governmental bodies referred to in Section 3.20 herein) necessary or required to
effect the transfer to UOP of all the rights, powers and franchises of the
Division and the CRILAR JV, and upon receipt of the consents listed in Schedule
3.15 and the consummation of this Agreement, UOP will succeed to all the rights,
powers and franchises of the Division and the CRILAR JV and will be entitled to
hold and use the same to the full extent that each of the Division and the
CRILAR JV presently has the right to hold and use the same.
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Section 3.16. Permits; Compliance; Reports; Clearances.
3.16.1. Necessary Permits. Schedule 3.16.1 hereto sets forth
all approvals, authorizations, certificates, consents, licenses, orders and
permits (except for sales and use tax permits and franchise tax registrations)
of all governmental agencies, whether Federal, state or local, necessary to the
operation of the Division, the CRILAR JV and the Assets on, or for its owned and
leased, real and personal property in the manner currently operated by the
Company, including, without limitation, all permits and approvals for the
discharge of by-products and waste material into a public waste discharge system
(including those contemplated under the Servitude Agreement by and between
Kaiser Aluminum Corporation and the Company effective December 23, 1996), and
except as set forth on Schedule 3.16.1 hereto, all such approvals,
authorizations, certificates, consents, licenses, orders and permits are in full
force and effect and no approval, authorization, certificate, consent, license,
order or permit of the Division has been denied or revoked within the past five
(5) years.
3.16.2. Compliance with Law. Except as set forth on Schedule
3.16.2 hereto, the operation of the Division and the CRILAR JV or use and
ownership of the Assets does not violate or infringe in any material respect any
Federal law (including, without limitation, any that relate to health and
safety, environmental protection and pollution control, sale and distribution of
products and services, anti-competitive practices, collective bargaining, equal
opportunity and improper payments) or any foreign, state, local or other laws,
statutes, ordinances, regulations, or any order, writ, injunction or decree of
any court, commission, board, bureau, agency or instrumentality. Any single or
aggregate violation or infringement shall be deemed to be "material" under this
Subsection 3.16.2 if such violation or infringement leads to any losses (as such
term is defined in Subsection 8.2.1) for UOP equal to or greater than
Twenty-Five Thousand Dollars ($25,000).
3.16.3. Reports. Except as set forth on Schedule 3.16.3
delivered hereunder, all reports, documents and notices required to be filed,
maintained or furnished with or to all governmental regulatory authorities by
the Division, or by the Company on behalf of the Division, and for the CRILAR
JV, including, without limitation, all state and local governmental and
regulatory authorities of the Federal government, the States of Louisiana,
Delaware, Georgia and the County of Fulton, Georgia and East Baton Rouge Parish,
Louisiana, have been so filed, maintained or furnished. All such reports,
documents and notices are true and correct in all material respects and, to the
extent required to be kept in the public inspection files of each of the Company
and the CRILAR JV, are kept in such files.
Section 3.17. Environmental Protection.
3.17.1. Environmental Permits. Except as set forth in Schedule
3.17.1 delivered hereunder the Company has obtained all permits, licenses and
other authorizations related to the Division, the CRILAR JV and/or the Assets
and which are required under Federal, state, local and foreign laws relating to
pollution or protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise
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relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes or any regulation, code,
plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder (the "Environmental Laws"). Schedule
3.17.1 delivered hereunder sets forth (i) all such permits, licenses and other
authorizations issued under the Environmental Laws obtained by the Division
and/or the CRILAR JV and (ii) a description and good faith estimate by the
Company of the costs of all capital or other expenditures estimated in good
faith by the Company that may be necessary to maintain or qualify for each such
permit, license or other authorization.
3.17.2. No Violation. Except as set forth in Schedule 3.17.1,
the Division and the CRILAR JV are each in compliance in all material respects
with all terms and conditions of the required permits, licenses and
authorizations, and the Company also is in compliance in all material respects
with all other limitations, restrictions, conditions, standards, requirements,
schedules and timetables contained in the Environmental Laws. Any single or
aggregate omission or act of non-compliance shall be deemed to be "material"
under this Subsection 3.17.2 if such omission or act leads to any "losses" (as
such term is defined in subsection 8.2.1) for UOP equal to or greater than
Twenty-Five Thousand Dollars ($25,000).
3.17.3. No Litigation or Proceedings. Except as set forth in
Schedule 3.17.1, there is no pending civil or criminal litigation, notice of
violation or administrative proceeding relating in any way to the Environmental
Laws (it being understood that any such litigation, notice or proceeding
identified on Schedule 3.17.1 is an Excluded Liability as provided in Subsection
1.4.8 herein), including but not limited to notices, demand letters, claims,
litigations or proceedings based upon or relating to any federal, state or local
Environmental Law.
3.17.4. No Notice. Except as set forth in Schedule 3.17.1, the
Company does not have any reason to know of any threatened or potential civil or
criminal litigation, notice of violation or administrative action relating in
any way to the Environmental Laws and involving either the Division, the CRILAR
JV and/or the Assets.
3.17.5. No Basis For Liability. Except as set forth in
Schedule 3.17.1, there are no past, present or, to the knowledge of the Company,
future events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent continued compliance with
the Environmental Laws, or which may give rise to any common law or legal
liability, or otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study, or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical, or industrial,
toxic or hazardous substance or waste (including but not limited to refractory
brick), including, without limitation, any liability arising, or any claim,
action, demand, suit, proceeding, hearing, study or investigation which may be
brought under any Environmental Laws.
3.17.6. No Expenditures. Except as set forth in Schedule 1.4.8
and 3.17.1, the Company is not required to make any capital or other
expenditures to comply with any
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Environmental Law existing as of Closing, nor is there any reasonable basis on
which any governmental or regulatory body or agency could take any action that
would require any such capital or other expenditures.
Section 3.18. Transactions with Affiliates. Except as described in
Schedule 1.2.2 delivered hereunder, neither the Division nor the CRILAR JV is a
party to any contract, lease or commitment with any officer, director or
stockholder of the Company or any entity involving any such officer, director or
stockholder, and there are no loans with or amounts due and outstanding to the
Company or any of its subsidiaries by any such officer, director or stockholder
or any entity involving any such officer, director or stockholder.
Section 3.19. Product Warranties.
3.19.1. Warranty Statements. Schedule 3.19.1 delivered
hereunder sets forth true, correct and complete copies of the current standard
forms and statements of product warranties and guaranties adopted by the Company
with respect to any product or service provided by the Division and/or the
CRILAR JV prior to Closing. Except as set forth on Schedule 3.19.1, there have
not been any material deviations from such warranties and guaranties during such
period, and salesmen, employees and agents of the Division and/or the CRILAR JV
are not authorized to undertake obligations to any customer or other third
parties in excess of such written warranties or guaranties.
3.19.2. Product Warranty Claims. Schedule 3.19.2 delivered
hereunder lists all claims made orally and/or in writing to the Company in
existence as of the date hereof with respect to product warranties and
guaranties on products or services provided by the Division and/or the CRILAR JV
together with a brief description of the material facts relating to each such
claim.
Section 3.20. Government Authorizations.
3.20.1. U.S. Authority. Execution, delivery and performance of
this Agreement by the Company, and consummation of the transactions contemplated
hereby, will not require any consent, approval, authorization, or permit from,
or any filing with or notification to, any United States, state or local
governmental or regulatory authority except with respect to the following:
(a) The pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. ss.
18a, and the regulations promulgated pursuant thereto (the "HSR Act");
(b) Such consents, approvals, authorizations, permits
and filings identified on Schedule 3.20.1 delivered hereunder; and
(c) Such consents, approvals, authorizations, permits
and filings the failure to obtain or make would not have, in the
aggregate, a material adverse effect on the Assets, or results of
operations or financial condition of the Division or the CRILAR JV.
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3.20.2. Foreign Authority. Execution, delivery and performance
of this Agreement by the Company, and consummation of the transactions
contemplated hereby, will not require any consent, approval, authorization, or
permit from, or any filing with or notification to, any governmental or
regulatory authority outside the United States.
Section 3.21. Tax Matters.
3.21.1. Returns. All material tax returns, reports and forms
(collectively the "Returns") required to be filed on or before the Closing Date
by, or with respect to any activities of, the Company, with any domestic or
foreign taxing authority, have been or will be filed in accordance with all
applicable laws, are in all material respects (and, as to Returns not filed as
of the date hereof, will be) true, complete and correct, and all taxes, fees,
penalties, assessments, interest and other governmental charges (collectively
"Taxes") which were shown to be due on such Returns have been or will be paid
(either directly by the Company or indirectly through applicable tax sharing
arrangements) on or before their due dates.
Section 3.22. Brokers. Except as set forth in Schedule 3.22, the
Company has not paid or become obligated to pay any fee or commission to any
broker, finder, investment banker or other intermediary in connection with the
transactions contemplated by this Agreement. The Company shall be fully
responsible for any such fees, and UOP shall not have any liability whatsoever
therefor.
Section 3.23. Material Disclosures. No statement, representation or
warranty made by the Company in this Agreement, in any Exhibit hereto or
Schedule delivered hereunder, or in any certificate, statement, list, schedule
or other document furnished or to be furnished to UOP hereunder, contains any
untrue statement of a material fact, or fails to state a material fact necessary
to make the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF UOP
UOP hereby represents and warrants to the Company, as of the date
hereof, and as of the Closing Date, as follows:
Section 4.1. Organization. UOP is a limited liability company duly
formed under the laws of the state of Delaware, validly existing and in good
standing under the laws of the States of Delaware, Illinois and Louisiana, and
has the requisite corporate power and authority to own, operate or lease the
properties: (i) that UOP requires to carry on its businesses in all material
respects as such is now being conducted, and (ii) of the Division after
consummation by UOP of its acquisition pursuant to this Agreement.
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Section 4.2. Corporate Authorization.
4.2.1. Authority. UOP has all requisite corporate power and
authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement is a valid and binding
obligation of UOP, enforceable in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application referring to or affecting enforcement of creditor's
rights, or by general equitable principles.
4.2.2. No Breach or Violation. Execution, delivery and
performance of this Agreement by UOP and consummation of the transactions
contemplated hereby will not cause a breach or default or otherwise conflict
with any term or provision of the following:
(a) UOP's certificate of formation and limited
liability company agreement, as amended;
(b) Any note, bond, mortgage or indenture to which
UOP is a party or by which UOP is bound (i) where such violation,
breach, or default would have a material adverse effect on the
business, results of operations, or financial condition of UOP and its
subsidiaries, considered as a whole, or (ii) as to which required
consents, amendments or waivers shall have been obtained by UOP prior
to the Closing for any such violation, breach or default; or
(c) Any court or administrative order, writ or
injunction or process, or any consent decree to which UOP is a party or
by which UOP is bound (i) where such violation, breach or default would
have a material adverse effect on the business, results of operations
or financial condition of UOP and its subsidiaries, considered as a
whole, or (ii) as to which required consents, amendments or waivers
shall have been obtained by UOP prior to the Closing for any such
violation, breach or default.
Section 4.3. Government Authorizations.
4.3.1. U.S. Authority. Execution, delivery and performance of
this Agreement by UOP and consummation of the transaction contemplated hereby,
will not require any consent, approval, authorization, or permit from, or any
filing with or notification to, any United States, state or local governmental
or regulatory authority except with respect to the following:
(a) The pre-merger notification requirements of the
HSR Act;
(b) Such other consents, approvals, authorizations,
permits and filings identified on Schedule 4.3.1 delivered hereunder;
and
(c) Such other consents, approvals, authorizations,
permits and filings the failure to obtain or make would not have, in
the aggregate, a material adverse effect on UOP's ability to deliver
the Purchase Price at Closing.
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4.3.2. Foreign Authority. Execution, delivery and performance
of this Agreement by UOP, and consummation of the transaction contemplated
hereby, will not require any consent, approval, authorization, or permit from,
or any filing or notification to, any governmental or regulatory authority
outside the United States.
Section 4.4. Brokers. UOP has not paid or become obligated to pay any
fee or commission to any broker, finder, investment banker or other intermediary
in connection with the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS
Section 5.1. Conduct of the Business. Except as contemplated by this
Agreement or as otherwise agreed to in writing by UOP, during the period from
the date of this Agreement to the close of business on the Closing Date, the
Company will conduct the business of the Division and the CRILAR JV diligently
and substantially in the same manner as heretofore conducted and will maintain
the Assets in the ordinary course of business and consistent with the Company's
past practices.
5.1.1. Affirmative Covenants. The Company shall at all times
from the date hereof through the Closing Date:
(a) Use its reasonable best efforts to preserve and
protect the goodwill, rights, properties, assets and business
organization of the Division and the CRILAR JV;
(b) Use its reasonable best efforts to keep available
the services of the Employees and to maintain good employee
relationships;
(c) Use its reasonable best efforts to preserve and
protect the relationships of the Division and the CRILAR JV with
creditors, suppliers, customers, licensors, licensees, contractors,
distributors, the Government, lessors and lessees and others having
business relationships with it;
(d) Maintain the Assets in good and customary repair,
order and condition, reasonable wear and tear, damage by fire and other
casualty excepted, and promptly repair, restore or replace any Assets
which are damaged or destroyed by fire or other casualty, whether
insured or uninsured;
(e) Comply with all applicable Federal, state and
local laws, rules and regulations;
(f) File all tax returns required to be filed and
make timely payment of all taxes shown to be due on such returns;
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(g) Use its reasonable best efforts to obtain, prior
to the Closing Date, all consents, approvals and waivers, including all
such consents, approvals or waivers required to be obtained from the
government (whether Federal, state or local), its customers and
lessors, and consents of the other parties to any teaming agreements,
partnerships or other arrangements between the Company and any other
person or entity, necessary or required to vest in UOP all of the
Company's rights and title to, and interest in, the Assets in
conformity with the representations and warranties of the Company
herein;
(h) Promptly notify UOP in writing of any material
adverse change in the Assets, or the Company, including without
limitation any material adverse change in the results of operations or
financial condition of the Division or the CRILAR JV, or any material
adverse change with respect to the relationships of the Division or the
CRILAR JV and the Employees or its creditors, suppliers, customers,
licensors, licensees, lessors and lessees, and others having business
relationships with it;
(i) Promptly notify UOP in writing of the overt
threat, institution or receipt of any claim, action, suit, inquiry,
proceeding, notice of violation, demand letter, subpoena, government
audit or disallowance by or before any court or governmental or other
regulatory or administrative agency;
(j) Permit UOP, its servants or agents to drill
monitor wells on the Real Property being transferred to UOP hereunder,
and to conduct all other activities for the purposes of carrying out an
environmental audit and of monitoring from time to time the
environmental condition of the Assets; and
(k) Promptly supplement or amend and deliver to UOP
the Schedules that the Company is required to prepare hereunder with
respect to any matter arising hereafter which, if existing or occurring
as of the date of this Agreement, would have been required to have been
set forth and described in such Schedule. No supplement or amendment of
a Schedule made pursuant to this Subsection 5.1.1(k) shall be deemed to
cure any fraud or deliberate breach of any representation or warranty
made in this Agreement.
5.1.2. Negative Covenants. The Company will not do any of the
following, without the written consent of UOP which shall not be unreasonably
delayed or withheld, from the date hereof through the Closing Date:
(a) Incur or agree to incur any obligation or
liability (absolute or contingent) in connection with any of the
Assets, except liabilities incurred in the ordinary course of business
and liabilities arising out of, incurred in connection with, or related
to the consummation of this Agreement;
(b) Sell, transfer, assign, license or otherwise
dispose of, or encumber in any way, any of the Assets, excepting
disposition of the Assets in the ordinary course of
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business, or disposition of such properties or assets as are no longer
used or usable in the Division and/or the CRILAR JV;
(c) Materially amend, modify or terminate any of the
Leases, Contracts or Other Agreements;
(d) Except in the ordinary course of business, waive
or cancel any of its rights or claims relating to the Assets;
(e) Make or commit to any capital expenditure, or
group of related capital expenditures, in excess of One Hundred
Thousand Dollars ($100,000), except those identified on Schedule
5.1.2(e);
(f) Enter into, commit or propose to enter into any
contract, commitment or agreement with any customers or potential
customers or suppliers or potential suppliers, the estimated revenues
or estimated costs to the Division and/or the CRILAR JV from such
contract, commitment or agreement would exceed One Hundred Thousand
Dollars ($100,000) or last for a term of six (6) months or more; or
(g) Enter into or renew any lease of real property.
Section 5.2. Access to Information.
5.2.1. Access. From and after the date of this Agreement and
until the Closing Date, UOP and its agents and representatives shall have full
and complete access to all properties (whether real or personal), books and
records of the Company relating to the Division and the CRILAR JV (the
confidentiality of which UOP agrees to maintain) for purposes of conducting such
investigations, appraisals or audits at its own expense as UOP deems necessary
or advisable under the circumstances, and to discuss the Company, related
business affairs, and condition (financial or otherwise) of the Company and the
Assets with such persons, including but not limited to the directors, officers,
employees, accountants, landlords, counsel and creditors of the Company as UOP
considers necessary for the purposes of conducting such investigations,
appraisals or audits in connection with the transactions contemplated by this
Agreement.
5.2.2. Customer Introductions. The Company shall, upon request
of UOP, introduce UOP, or arrange for a personal introduction of UOP's
representatives, to customers of the Division and/or the CRILAR JV for the
purpose of insuring good customer relationships immediately following the
Closing.
5.2.3. Access After Closing. UOP shall make available to the
Company, its accountants, attorneys and other authorized representatives, upon
reasonable notice after Closing, the books and records of the Company obtained
from the Company pursuant to this Agreement, for inspection and copying. UOP
shall furnish to the Company, and the Company shall furnish to UOP, all
financial and tax return information as reasonably may be requested after the
Closing for the purpose of filing and/or defending tax returns of the Company or
UOP, or a subsequent purchaser
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of any of the Assets. UOP shall not destroy or discard any books or records of
the Company obtained from the Company pursuant to this Agreement without first
offering same to the Company within ten (10) years of the Closing; it being
understood that UOP shall not be liable to the Company for the inadvertent
destruction or loss of such books and records.
Section 5.3. Filings and Authorizations. The Company and UOP shall use
their best efforts, promptly after the date hereof, to comply with all Federal,
state, and local laws and regulations and to obtain all necessary governmental
authorizations, approvals, permits, licenses and waivers, with regard to the
transactions contemplated by this Agreement.
5.3.1. HSR Act Filings. The Company and UOP each shall
complete and file all reports and forms, and promptly respond to all second
requests or requests for additional information, as may be required by or
authorized under the HSR Act.
5.3.2. General.
(a) The Company and UOP shall each use their reasonable best
efforts to take all actions necessary, proper, or deemed by them advisable, to
fulfill promptly their obligations hereunder and to consummate the transactions
contemplated by this Agreement. The Company and UOP will coordinate and
cooperate with each other in exchanging such information and supplying such
reasonable assistance as may be requested by the other in connection with the
foregoing.
(b) From and after the Closing, UOP shall perform in good
faith its obligations under each of the Contracts that is assigned by the
Company and assumed by UOP hereunder, according to the terms thereof.
Section 5.4. Administration of Accounts.
5.4.1. In Trust For UOP. All payments and reimbursements made
in the ordinary course by any third party in the name of or to the Company in
connection with or arising out of the Assets and Assumed Liabilities after the
Closing Date shall be held by the Company in trust to the benefit of UOP and
immediately upon receipt by the Company of any such payment or reimbursements,
the Company shall pay over to UOP the amount of such payment or reimbursement.
5.4.2. In Trust For the Company. All payments and
reimbursements made in the ordinary course by any third party in the name of or
to UOP in connection with or arising out of the Excluded Assets and Excluded
Liabilities after the Closing Date shall be held by UOP in trust to the benefit
of the Company and, payment or reimbursement, UOP shall pay over to the Company,
the amount of such payment or reimbursement.
5.4.3. Accounts Payable by the Company. The Company shall pay
all of the accounts payable of the Division outstanding as of the Closing (a
most recent list of which shall be provided by the Company to UOP at the Closing
and updated to the Closing within fifteen (15) days thereafter) in accordance
with the payment terms of such payables.
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5.4.4. Accounts Receivable of the Company. To the extent that
any of the accounts receivable of the Company relating to the Division recorded
as of the Closing Date (a most recent list of which shall be provided by the
Company to UOP at the Closing and updated to the Closing within fifteen (15)
days thereafter) is or becomes in dispute, the Company agrees to consult with
UOP by written notice (providing sufficient information to UOP of the dispute)
and thereafter seek to remedy the dispute at least fifteen (15) business days
before taking any action to enforce collection of the disputed accounts
receivable.
Section 5.5. Tax Matters.
5.5.1. The Company's Obligations. The Company acknowledges its
legal obligations to pay Taxes relating to all items of income, loss, deduction
and credit attributable to the Company or relating to ownership of the Assets
with respect to any periods up to and including the Closing Date.
5.5.2. UOP's Obligations.
(a) UOP acknowledges its legal obligations to pay
Taxes relating to all items of income, loss, deduction and credit
relating to ownership of the Assets with respect to any periods after
the Closing Date.
(b) UOP shall take all such steps as are necessary
(with full cooperation and assistance of the Company) to record the
transactions contemplated hereunder by this Agreement, as necessary in
the opinion of UOP, with any Federal, state, local or foreign recording
office.
5.5.3. Tax on Transaction.
(a) The Company agrees to pay all taxes, assessments,
transfer, recording, or other fees and charges which may be imposed
with respect to the sale and purchase of the Assets under this
Agreement, including those imposed on UOP. For taxes such as sales and
use, excise, value added and similar type taxes, which require the
Company to collect from UOP, the Company will report and pay any tax
due. In addition, the Vice President and Chief Financial Officer or
other Senior Officer of the Company thereafter shall promptly deliver a
certificate to UOP stating that such sales and use, excise, value added
or other tax returns have been filed and tax remitted. With respect to
taxes, fees, assessments and other charges reported and paid directly
by UOP, the Company will reimburse UOP for those taxes, fees,
assessments or other charges within thirty (30) days of the submission
of proof of payment to the Company.
(b) With respect to any penalties and interest
arising with respect to the transfer of taxes, both parties agree that
the party whose actions or inactions resulted in the penalties and
interest will bear the burden of the penalty and interest. If both
parties are at fault, or a fault cannot be determined, the parties
agree to share the penalties and interest equally.
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5.5.4. Tax Controversies, Assistance and Cooperation.
(a) Notice. In the event any Tax Authority informs
either party of any notice of proposed audit, claim, assessment or any
other dispute concerning an amount of Taxes with which the other party
may incur liability hereunder, the party so informed shall promptly
notify the other party of such matter. Such notice shall contain
factual information (to the extent known) describing any asserted Tax
liability in reasonable detail and shall be accompanied by copies of
any notice or other documents received from any Tax Authority related
to this matter. If an indemnified party has knowledge of an asserted
Tax liability with respect to a matter for which that party is to be
indemnified hereunder and such party fails to provide the indemnifying
party prompt notice of such asserted Tax liability, and (i) if the
indemnifying party is precluded from contesting the asserted Tax
liability in any forum as a result of the failure to give prompt
notice, the indemnifying party shall have no obligation to indemnify
the indemnified party for Taxes, penalties or interest arising out of
such asserted Tax liability or (ii) if the indemnifying party is not
precluded from contesting the asserted Tax liability in any forum, but
such failure to provide prompt notice results in a monetary detriment
to the indemnifying party, then any amount which the indemnifying party
is otherwise required to pay to the indemnified party pursuant to this
Agreement, shall be reduced by the amount of the detriment.
(b) Control Rights. The party obligated by law to
file or report and pay the Taxes (Filing Party), shall control any
audits, disputes, administrative, judicial or other proceedings related
to those Taxes. Subject to the preceding sentence, (i) if the Filing
Party, is indemnified by the other party for the Taxes, the other party
will assume control and the Filing Party will act on behalf of the
other party and exercise reasonable care to preserve all the rights,
remedies and benefits allowed and (ii) should each party have a
responsibility for Taxes, each party shall be entitled to full
participation in that portion of the proceedings relating to the Taxes
with respect to which that party may incur a liability hereunder. For
purposes of this Section, the term "participation" shall include: (a)
participation in conferences, meetings or proceedings with any Tax
Authority, the subject matter of which includes an item for which such
party may have a liability hereunder, (b) participation in appearances
before any court or tribunal, the subject matter of which includes an
item for which such party may have a liability hereunder and (c) with
respect to the matters described in the preceding clauses (a) and (b),
participation in the submission and determination of the content of the
documentation, protests, memorandum of fact and law, briefs and the
conduct of oral arguments and presentations.
(c) Consent to Settlement. UOP and the Company shall
not agree to settle any Tax liability or compromise any claim with
respect to Taxes, which settlement or compromise may affect the
liability for Taxes, or right to a tax benefit of the other party,
without the consent of the other party. Such consent shall not be
unreasonably delayed or withheld.
(d) Assistance and Cooperation.
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(i) UOP and the Company agree to cooperate, and
cause their affiliates to cooperate, with each other and with
each other's agents, including accounting firms and legal
counsel, in connection with Tax matters related to the
business of the Division, including (i) preparation and filing
of Tax Returns, (ii) determining the liability and amount of
any Taxes due or the right to and the amount of any refund of
Taxes, (iii) examinations of Tax Returns, and (iv) any
administrative or judicial proceedings in respect to Taxes
assessed or proposed to be assessed. Such cooperation shall
include each party making all information and documents in its
possession relating to the business of the Division available
to the other party. The parties shall retain all Tax Returns,
schedules and workpapers, all material records and other
documents relating thereto, until the expiration of the
applicable statue of limitations (including, to the extent
notified by any party, any extensions thereof) of the period
to which such Tax Return and other documents and information
relate. Each of the parties agrees to make available to the
other party, as reasonably requested and as available,
personnel (including officers, directors, employees and
agents) involved in preparing, maintaining and interpreting
information and documents relevant to Taxes and personnel
reasonably required as witnesses for administrative or
judicial proceedings.
(ii) As part of the cooperation, UOP and the
Company each agrees to provide the other party with such
assistance as may reasonably be required in connection with
the preparation of any Tax Return, including the preparation
of the usual and customary Tax Return information packages.
(iii) With respect to the property tax
exemptions, issued by the State of Louisiana Board of Commerce
and Industry, related to the property to be transferred under
this Agreement, the Company agrees to cooperate and provide
assistance, as required, to effect a transfer of those
exemptions by transferring the Contracts for Exemption of Ad
Valorem Taxes.
(e) Tax Sharing Agreements. Any Tax Sharing
Agreements between the Company and any other party relating to the
Assets will terminate as of the Closing Date and will have no further
effect for any taxable year (whether past, current or future).
(f) Short Period for Subsidiaries. The Company will
include the taxable income or loss attributable to the Assets for all
periods through the Closing Date and pay any taxes attributable to such
income. The income attributable to the Assets will be apportioned
through the period up to and including the Closing Date and the period
after the Closing Date by closing the books of the Division and the
CRILAR JV as of the Closing Date.
(g) Clearance Certificates. On or prior to the
Closing Date, The Company will provide UOP, at UOP's request, with all
clearance certificates or similar documents, that may be required by
any governmental or taxing authority, in order to relieve UOP of any
obligations to withhold or escrow any portion of the Purchase Price.
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(h) Expenses. Each party shall bear their own
expenses, incurred in connection with audits and other administrative
and judicial proceedings, relating to Taxes for which such party and or
its affiliates are liable under this Agreement.
Section 5.6. Employees.
5.6.1. Employment.
(a) In respect of each Employee identified on
Schedule 3.11.1(a) delivered hereunder, who has been offered employment
by UOP on substantially the same or better terms and conditions as
currently provided by the Company, the Company agrees that such persons
shall not be offered a severance package by the Company as they shall
be deemed to have voluntarily resigned if they do not accept UOP's
offer of employment as outlined above; and for each Employee who has
accepted an offer of employment from UOP (hereinafter individually
referred to as a "Transferred Employee" and collectively as
"Transferred Employees"), the period of such employment shall begin
upon the Closing. UOP may change employee assignments or levels of
compensation, or may terminate such Employees, at any time following
the Closing without incurring any legal obligation to the Company or to
such Employees by reason of any provision in this Agreement or
otherwise relating to their prior employment by the Company.
(b) With respect to any Employee who does not become
a Transferred Employee, the Company shall be responsible for any
severance obligations; provided, however, should UOP employ within one
year of the Closing Date an Employee who did not become a Transferred
Employee and who received severance benefits from the Company, UOP
shall reimburse the Company for the cost of providing those severance
benefits.
(c) The Company shall be responsible for the workers'
compensation claims with respect to any Transferred Employee if the
incident or alleged incident giving rise to the claim occurred prior to
the Closing Date. UOP shall be responsible for any claims if the
incident or alleged incident occurred on or after the Closing Date.
5.6.2. Incentive Compensation. The Company shall pay incentive
compensation payments earned by any Employee to such Employee covered under the
Company's incentive compensation plan for the fiscal years 1998 and 1999, on a
pro-rated basis through the Closing Date, as soon as the amounts of such
obligations may be determined but in no event later than when the Company makes
similar payments to its employees.
5.6.3. Accrued Vacation. UOP shall grant each Employee who
accepts an offer of employment from UOP at Closing vacation days with credit for
past service with the Company (including the CRILAR JV) in accordance with the
vacation policies of UOP existing as of January 1, 1999, during the twelve month
period thereafter minus any vacation already taken by such Employee in calendar
year 1999 prior to the Closing Date.
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Section 5.7. Benefit Plans.
5.7.1. Pension Plans. Schedule 5.7.1 sets forth each pension
plan (as defined in Section 3(2) of ERISA maintained by the Company with respect
to the Employees. The Company shall retain all liabilities attributable to
accrued benefits under such plans and, as soon as practicable after the Closing
Date, shall provide UOP a listing of the vested benefits payable to each
Employee under the terms of such plan(s). UOP shall have no liability of any
kind with respect to any pension benefit attributable to, arising from, or
relating to, employment by the Company or the CRILAR JV prior to the Closing
Date and the Company hereby agrees to indemnify UOP against any and all claims
and expenses (including reasonable attorneys' and other fees) incurred by UOP
arising from or relating to employment with the Company or the CRILAR JV prior
to the Closing Date. UOP shall grant to Transferred Employees credit for past
service with the Company and the CRILAR JV for purposes of determining
eligibility to particpate and eligibility for benefits and vesting, but not for
accrual of benefits, under UOP's pension plans as defined in Section 3(2) of
ERISA.
5.7.2. Plans. The Company shall maintain all plans listed on
Schedules 3.11.3(a) and 3.11.3(b) through the Closing Date at the same level of
benefits as are presently provided.
5.7.3. Welfare and Other Fringe Benefit Plans. On the Closing
Date UOP will provide welfare and fringe benefit plans which will provide
welfare and fringe benefits for the Transferred Employees on a basis similar to
those available to other UOP Employees similarly situated and will treat service
with the Company as service with UOP for purposes of applying any waiting period
or pre-existing condition limitation. Notwithstanding the foregoing, the Company
shall, with respect to the Employees, continue to be responsible after the
Closing Date for any benefits or claims incurred on or prior to the Closing Date
which become payable under the terms of any of the Company's medical, dental,
hospitalization, disability, workmen's compensation, or life insurance plan,
coverage, obligation or practice affecting the Employees.
Section 5.8. Post-Closing Warranty Services. Following the Closing, UOP
shall notify the Company of any claims from customers of the Division and the
CRILAR JV for defective products shipped and invoiced by the Company prior to
the Closing, and the Company shall be responsible for resolving in good faith
and consistent with its past practice any such claim without cost or expense to
UOP. The Company will consult with UOP regarding its proposed resolution of such
claims for warranty service before resolving any such claim. The Company shall
indemnify UOP against any loss, damage or expense resulting from any such claims
for warranty services granted by this Section, subject to Article VIII (except
the $100,000 Threshold set forth in Section 8.2.3(a) shall not apply).
Section 5.9. Competition. Ancillary to this Agreement, the Company
shall neither: (i) compete with UOP with respect to the Division and/or the
CRILAR JV for any customers, contracts, franchises or rights to supply products
and services anywhere in the world for a period of five (5) years after the
Closing Date nor (ii) solicit the hiring nor hire any employees of the Division
or the CRILAR JV who become Transferred Employees hereunder for a period of two
(2) years after the Closing Date. A court of competent jurisdiction may award
UOP damages, injunctive relief, or both damages and injunctive relief for a
breach by the Company of its covenant not to compete, solicit
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or hire as provided in this Section 5.9. Should a court of competent
jurisdiction declare any provision of this Section 5.9 unenforceable due to any
unreasonable restriction of duration, territorial coverage, scope of activity or
otherwise, in lieu of declaring such provisions unenforceable the parties hereby
expressly authorize the court to the extent permissible by law, to revise or
reconstruct such provision in a manner sufficient to cause them to be
enforceable.
Section 5.10. The Company's Trade Names. UOP shall, as soon as is
reasonably practicable without incurring unreasonable expense, but in no event
more than eight (8) months from the Closing Date (the "Transition Period"),
remove signage, change promotional and advertising materials, and stationery and
packaging sent to third parties, and take such other action as is reasonable and
appropriate to indicate that there is no longer any relationship between the
Company and the Division, the CRILAR JV or the Assets, provided that nothing in
this Section 5.10 shall oblige UOP to take such action in respect of any
engineering or manufacturing drawings or prints. In addition, the Company hereby
grants UOP a royalty free non-exclusive license without right to sublicense
during the Transition Period to use the name LaRoche Industries Inc. for the
purpose of complying with this Section 5.10 provided that UOP shall indemnify
the Company, subject to Article VIII hereof (except the Threshold set forth in
Section 8.2.3(a) shall not apply), from any loss, damage or expense resulting
from the use by UOP of the name LaRoche as contemplated by this Section 5.10.
Section 5.11. Further Assurances. From time to time after the Closing,
the Company will, at its own expense, execute and deliver, or cause to be
executed and delivered, such documents to UOP as UOP may reasonably request, and
from time to time after the Closing, UOP will, at its own expense, execute and
deliver such documents to the Company as the Company may reasonably request, in
order to more effectively consummate the transactions contemplated by this
Agreement.
Section 5.12. Soil and Groundwater Condition at Sites. Notwithstanding
anything to the contrary contained in this Agreement, including any disclosure
contained in any Schedules delivered hereunder, relating to actual or potential
soil or groundwater contamination, the Company agrees that the Company has and
retains after the Closing liability to UOP as provided in this Section 5.12 and,
subject to Article VIII hereof (except that the Threshold and Purchase Price
limitations thereof shall not apply), shall indemnify, defend and hold UOP
harmless from and against any subsequent cost or expense UOP may be required by
any governmental authority or third party to incur in respect to any future
remediation of contaminated soil and/or groundwater and/or permit non-compliance
existing at Closing whether on or off any of the Real Property described in
Schedule 1.1.2 delivered hereunder and of the leases of real property described
in Schedule 1.1.5 delivered hereunder. In the event UOP is required by any
governmental authority or third party to remediate the site and UOP gives the
Company written notice of its intent to do so, or UOP otherwise suffers loss or
incurs costs (including response costs) expenses, or damages, the Company hereby
agrees to make UOP whole for such losses, costs (reasonably and necessarily
incurred) or damages. This covenant is supplemental to and not in lieu of any
other applicable right or remedy provided under this Agreement or in law or in
equity.
Section 5.13. Baton Rouge Plant. The Company has heretofore delivered
to UOP:
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5.13.1. Commitment For Title Insurance. A commitment ("Title
Commitment") to issue an ALTA Form B (1992) Owner's Title Insurance Policy by
First American Title Insurance Company having an "Effective Date" of January 25,
1999 and dated and executed on May 21, 1999 by Barrone Title Co., Inc., as its
agent (the "Title Company") in the amount of the fair market value of the Real
Property (irrevocable for at least six (6) months), showing title to the Real
Property and all access, ingress and egress and rights-of-way required hereunder
or used in connection with the Real Property in the Company, naming UOP as the
proposed insured, with title being subject only to the Permitted Exceptions (as
hereinafter defined) together with copies of all covenants, conditions,
easements and restrictions affecting the Real Property (the "Title Documents").
The Title Commitment shall contain an agreement by the Title Company, or shall
be supplemented with an agreement by the Title Company delivered to UOP no later
than five (5) days prior to the Closing Date, stating that the title insurance
policy which will be issued pursuant to the Title Commitment at the Closing
(hereinafter referred to as the "Title Policy") will provide full extended
coverage insurance which shall result in the deletion of the following general
exceptions: (i) liens for labor or materials, whether or not of record; (ii)
parties in possession; (iii) unrecorded easements; (iv) taxes or special
assessments not shown by the public records; and (v) exceptions which a correct
survey would disclose. The Title Policy shall contain a creditor's rights
endorsement and the following additional affirmative endorsements and such other
endorsements as are reasonably requested by UOP prior to the Closing:
(a) an endorsement insuring UOP that there are no
violations of any restrictive covenants, conditions or restrictions
affecting the Real Property, that there are no encroachments by the
Improvements onto any easements or any building lines or setbacks
affecting the Real Property, or onto any adjacent property, or any
encroachments onto the Real Property of existing improvements located
on adjoining land;
(b) an access endorsement insuring that Airline
Highway (U.S. Hwy. 190) is a public street and that there is direct and
unencumbered access to the same from the Real Property;
(c) a survey endorsement insuring that the Real
Property insured is legally described on a specifically mentioned
survey (the "Survey"; as hereinafter defined) and foundations in place
as of the date of the Survey are within the lot lines and applicable
setback lines, that the Improvements, unless otherwise noted, do not
encroach onto adjoining land or onto any easements, and that, unless
otherwise noted, there are no encroachments of improvements from
adjoining land onto the Real Property or any part thereof; and
(d) a zoning endorsement (ALTA 3.1 Zoning Endorsement
with parking and loading) insuring that the Real Property and the
Improvements are zoned for the present and contemplated building and
business thereon and insuring against loss or damage arising due to a
prohibition of said use or requiring removal of the Improvements due to
a violation of applicable laws or ordinances (in existence at the time
of the Closing) including but not limited to laws and ordinances (in
existence at the time of the Closing) relating to area of the Real
Property, floor area of the Improvements, setbacks, height, loading and
parking; and
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(e) an endorsement insuring the rights of UOP under
the Easement Agreement by and between Kaiser and UOP substantially in
the form of Exhibit C to the First Amendment to Servitude Agreement
attached hereto as Exhibit E.
If the Title Commitment or the Survey disclose exceptions or defects, other than
exceptions or defects caused by the acts or omissions of UOP, to which UOP
objects in writing within ten (10) business days after the date of this
Agreement which will not be removed by the Company at or prior to Closing (the
"Unpermitted Exceptions"), then as to any Unpermitted Exceptions that shall not
be waived or removed by the payment of funds (all or a portion of which may be
proceeds of the Purchase Price) at or prior to Closing, the Company shall have
ten (10) business days after written notification thereof by UOP: (i) to have
the Unpermitted Exceptions removed from the Title Commitment, or (ii) to have
the Title Company commit to insure against loss or damage that may be occasioned
by such Unpermitted Exceptions, and in such event, the Closing Date shall be ten
(10) days after delivery of the revised Title Commitment. Unpermitted Exceptions
to which UOP has not so objected shall be deemed "Permitted Exceptions". If the
Company fails to have any Unpermitted Exception removed or, in the alternative,
to obtain endorsements to the Title Policy as to such Unpermitted Exceptions
within the specified time, UOP shall elect, upon written notice to the Company
within ten (10) business days after the expiration of the Company's ten (10)
business day period, to take title to the Real Property at the Closing subject
to the Unpermitted Exceptions or to terminate this Agreement.
5.13.2. Survey. A current plat of survey of the Real Property
("Survey") made by a Louisiana licensed surveyor which shall include a
certificate of such surveyor addressed to (i) UOP, (ii) any lender to UOP, if
the Company has received notice thereof, and (iii) the Title Company that the
Survey has been made in compliance with the Minimum Standard Detail Requirements
and Classifications for ALTA/ACSM Land Title Surveys as adopted by the American
Land Title Association and the American Congress on Surveying & Mapping (the
"ALTA/ACSM Requirements"). For purposes herein, the ALTA/ACSM Requirements shall
be construed to mean and the Survey shall certify and indicate, the following:
(a) the legal description of the Real Property and
the easements described in Exhibit C to the First Amendment to
Servitude Agreement attached hereto as Exhibit E;
(b) the corners of the Real Property and that such
corners have been properly monumented;
(c) the perimeter boundaries of the Real Property and
the location of all set back lines on the Property;
(d) the approximate location of all improvements,
utility facilities, water mains, sewers and basins located on the Real
Property including encroachments of all of the foregoing onto adjacent
property or onto any servitudes;
(e) the location (excepting general servitudes
created in the Act of Cash Sale from Kaiser to the Company of the Real
Property and in the Lease dated as of
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September 1, 1995 by and between the Company and CRILAR Aluminum
Company, L.L.C.) of all easements benefitting or burdening the Real
Property and all other covenants, conditions and restrictions of record
shown on Schedule B of the Title Commitment which are able to be
located on the Survey;
(f) the approximate location of all roadways,
right-of-ways or streets through to the Real Property;
(g) access to the Real Property from public roads and
ways; and
(h) the location of any portion of the Real Property
located within the 100-Year Flood Plain as designed by the Federal
Emergency Management Agency (or other governmental or other agency
having jurisdiction over the Property).
The form of Survey shall be adequate to provide the form of title policy
specified in Section 5.13.1.
Section 5.14. Public Announcements. Except as required by law, the
Company and UOP will consult with each other before issuing any press release or
otherwise making any public statement with respect to this Agreement and the
transactions contemplated hereby, and shall not issue any such press release or
make any such public statement prior to such consultation without the prior
written consent of the other party which shall not be unreasonably delayed or
withheld.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF UOP
Section 6.1. Conditions. The obligations of UOP under this Agreement to
perform Articles I and II herein shall be subject to the fulfillment, to its
reasonable satisfaction, on or prior to the Closing Date, of all of the
following conditions precedent:
6.1.1. Representations and Warranties. All representations and
warranties of the Company contained in this Agreement and in all certificates,
schedules and other documents delivered by the Company to UOP or its
representatives pursuant to this Agreement and/or in connection with the
consummation of transactions contemplated hereby shall be true, complete and
accurate in all material respects as of the date when made and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date, except for changes
expressly permitted by this Agreement.
6.1.2. No Material Adverse Change. During the period from the
date hereof to the Closing Date, the Company shall not have sustained any
material loss or damage to the Assets, whether or not insured, which affects its
ability to conduct the operations of the Division and the CRILAR JV, nor shall
there have been any material adverse change in its business, financial
condition, assets, liabilities (absolute, contingent or otherwise), reserves or
operations or its ability to conduct the operations of the Division and the
CRILAR JV as such is presently conducted.
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6.1.3. Schedules Delivered. All Schedules to be delivered
prior to Closing to UOP by the Company hereunder shall have been so delivered
with time sufficient for UOP's review and in no event later than three (3)
business days prior to Closing, and each such Schedule shall be satisfactory in
form, and content, to UOP, such satisfaction to be determined at UOP's
reasonable discretion. To the extent the Company updates any such Schedule
immediately prior to Closing as required by Subsection 5.1.1, paragraph (k)
herein, each such update shall be satisfactory in form, and content, to UOP,
such satisfaction to be determined at UOP's reasonable discretion. With respect
to items on Schedules or updates to Schedules that may be quantified in monetary
terms, the parties agree that such items having an impact on the Purchase Price
or Purchase Price Adjustment equal to or greater than Fifty Thousand Dollars
($50,000), individually or in the aggregate, may be objected to by UOP within
the standard of reasonableness (sometimes hereinafter referred to as the
"Standard of Reasonableness") under this Subsection 6.1.3.
6.1.4. No Adverse Facts Disclosed.
(a) Neither any investigation of the Company by UOP
nor any disclosure Schedule, nor any other document delivered to UOP in
connection with this Agreement, shall have revealed any facts and
circumstances which would be reasonably expected to cause a material
adverse effect on the Assets, or the results of operations or the
financial condition of the Division or the CRILAR JV, or the assets,
liabilities (absolute, contingent or otherwise) or reserves, or UOP's
ability to conduct the business and operations of the Division or the
CRILAR JV as such are presently conducted;
(b) Within seven (7) days prior to Closing, UOP and
its representatives shall have the right to inspect the Baton Rouge
Plant (the "Plant") of the Division to verify the physical existence of
fixed assets required to operate the Plant and shall be satisfied in
its sole discretion, reasonably exercised, with the physical existence
of the fixed assets.
6.1.5. HSR Act Waiting Period. All waiting periods under the
HSR Act with respect to the purchase and sale of the Assets and the Division and
the interest of the Company in the CRILAR JV shall have been terminated or
expired.
6.1.6. Obtaining of Consents and Approvals. The Company shall
have executed and delivered to UOP, or shall have caused to be executed and
delivered, any consents, waivers, approvals, permits, licenses or authorizations
which, if not obtained on or prior to the Closing Date, would have a material
adverse effect on the Assets or on UOP's ability to conduct the operations of
the Division and the CRILAR JV immediately after the Closing including but not
limited to:
(i) The execution and delivery by the CRILAR JV
of a valid election under Internal Revenue Code Section 754
using the language provided in Exhibit B attached hereto;
(ii) The execution and delivery by the CRILAR JV
of amendments to the CRILAR JV in the form of Exhibit C
attached hereto;
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(iii) The execution and delivery by the
International Union of Operating Engineers, Local 216 of the
Recognition and Modified Assumption
Agreement in the form of Exhibit D attached hereto;
(iv) The execution and delivery by the Company
and Kaiser of the First Amendment to Servitude Agreement;
(v) The execution and delivery by Aristech of an
amendment to the Aristech License Agreement that any duty by
UOP to pay a royalty thereunder is dependent upon use by UOP
of the Aristech Technology in the form attached as Exhibit F;
and
(vi) The Asset and Kaiser Holdback Agreements
substantially in the form of Exhibits A-1 and A-2 attached
hereto.
6.1.7. Novation Agreements. The Company shall have furnished
at the Closing all Contracts, Patents and Licenses and Trademarks and Licenses,
to UOP any and all novation, transfer or other agreements, consents
(substantially in the form of Exhibit G hereto), approvals or waivers necessary
for the assignment, transfer or assumption of the Contracts as defined in
Section 1.1.5, Patents and Licenses as defined in Section 3.10.1 and Trademarks
and Licenses as defined in Section 3.10.2 herein. The Contracts, Patents and
Licenses and Trademarks and Licenses set forth on Schedule 6.1.7 shall have been
assigned to UOP and all necessary consents shall have been obtained.
6.1.8. Performance by the Company. The Company shall have
performed and complied in all material respects with all agreements, covenants,
obligations and conditions required by this Agreement to be performed or
complied with by the Company on or before the Closing Date, and all Schedules
delivered by the Company hereunder shall be acceptable in form and content to
UOP and its counsel within the Standard of Reasonableness. In addition, the
Company and UOP shall have simultaneously with the Closing hereunder consummated
the transactions contemplated by the Inventory Purchase Agreement (the "IPA")
between UOP and the Company of even date herewith.
6.1.9. Absence of Litigation. There shall not be in effect any
order enjoining or restraining the transactions contemplated by this Agreement,
and there shall not be instituted or pending any action or proceeding before any
Federal, state or foreign court or governmental agency or other regulatory or
administrative agency or instrumentality (i) challenging the acquisition by UOP
of the Assets and the business of the Division or otherwise seeking to restrain
or prohibit consummation of the transactions contemplated by this Agreement, or
seeking to impose any material limitations on any provision of this Agreement,
or (ii) seeking to compel UOP or the Company to dispose of or hold separate a
material portion or the business of the Division or Assets as a result of the
transactions contemplated by this Agreement.
6.1.10. Officer's Certificate. UOP shall have received a
certificate, dated the Closing Date, executed on behalf of the Company by an
appropriate officer stating that the representations
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and warranties set forth in Article III hereof continue to be true and correct
in all material respects and that the conditions set forth in Sections 6.1.1
through 6.1.9 hereof have been satisfied.
6.1.11. Opinion of the Company's Counsel. The Company shall
have furnished UOP with a favorable opinion of Hunton & Williams, counsel for
the Company, dated the Closing Date, substantially in the form attached hereto
as Exhibit H.
6.1.12. Delivery of Documents. The execution and delivery to
UOP by the Company of the following, all dated as of the Closing Date:
(a) the Bill of Sale with respect to the Assets in
substantially the form attached hereto as Exhibit I;
(b) the Asset and Kaiser Holdback Agreements in
substantially the form attached hereto as Exhibits A-1 and A-2;
(c) such other conveyances, instruments of title,
assignments, consents, recordings, and other documents as may be, in
the reasonable opinion of UOP, necessary or proper to transfer to UOP
ownership of the Assets and rights being acquired by UOP hereunder
including (i) an Owners Title Insurance Policy dated the Closing Date,
on ALTA 1992 Owners form, with extended coverage endorsement
guaranteeing over the standard exceptions to title customarily
contained in such policies, covering the real estate owned by the
Company and described in the Title Commitment referred to in Section
5.13.1 hereof issued by First American Title Insurance Company insuring
the fee simple estate of the Company in such real estate in the amount
set forth in such policy subject only to the matters set forth in
paragraphs 5, 7 through 21 inclusive 22 (except for the option to
purchase the Real Property to be sold by the Company to UOP) and 23
through 30 inclusive, of Schedule B, Part II of the Title Commitment;
and (ii) a certificate signed by an appropriate officer of the Company
to the effect that nothing has occurred after the date of the survey
delivered pursuant to the provisions of Section 5.13.2 hereof and on or
prior to the Closing Date that would alter the accuracy of such survey;
(d) certified resolutions of the Board of Directors
of the Company duly authorizing the execution and delivery of this
Agreement and the performance by the Company of its obligations
hereunder;
(e) the LII-UOP Services Agreement in substantially
the form attached hereto as Exhibit J;
(f) Act of Cash Sale (i.e., the Louisiana customary
form for a warranty deed in the form attached hereto as Schedule
6.1.12(f)) of the Real Property executed in form for recordation; and
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(g) such other documents, instruments and
certificates as may be reasonably requested by UOP or its counsel to
effectuate the transactions contemplated by this Agreement.
6.1.13. Employment. Each of the employees of the Division
identified on Exhibit K hereto shall have accepted employment with UOP effective
upon Closing.
6.1.14. Approval by UOP Board. UOP shall have received
certified resolutions of the Board of Managers of UOP duly authorizing the
execution and delivery of this Agreement and the performance by UOP of its
obligations hereunder.
Section 6.2. Waiver. UOP may, at its sole discretion, waive in writing
fulfillment of any or all of the conditions set forth in Section 6.1 of this
Agreement, provided that such waiver granted by UOP pursuant to this Section 6.2
shall have no effect upon or as against any of the other conditions not so
waived.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
Section 7.1. Conditions. The obligations of the Company under this
Agreement to perform Articles I and II herein shall be subject to the
fulfillment, to its reasonable satisfaction, on or prior to the Closing Date, of
all of the following conditions precedent:
7.1.1. Representations and Warranties. The representations and
warranties of UOP contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made on and as of the
Closing Date.
7.1.2. HSR Act Waiting Period. All waiting periods under the
HSR Act with respect to the purchase and sale of the Assets and the Division
shall have been terminated or expired.
7.1.3. Performance by UOP. UOP shall have performed and
complied in all material respects with all agreements, covenants, obligations
and conditions required by this Agreement to be performed or complied with by
UOP on or before the Closing Date. In addition, the Company and UOP shall have
simultaneously with the Closing hereunder consummated the transactions
contemplated by the Inventory Purchase Agreement between UOP and the Company of
even date herewith.
7.1.4. Absence of Litigation. There shall not be in effect any
order enjoining or restraining the transactions contemplated by this Agreement
and there shall not be instituted or pending any action or proceeding before any
Federal, state or foreign court or governmental agency or other regulatory or
administrative agency or instrumentality (i) challenging the acquisition by UOP
of the Assets and the business of the Division or otherwise seeking to restrain
or prohibit consummation of the transactions contemplated by this Agreement, or
seeking to impose any
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material limitations on any provision of this Agreement, or (ii) seeking to
compel UOP or the Company to dispose of or hold separate a material portion of
the business of the Division or Assets as a result of the transactions
contemplated by this Agreement.
7.1.5. Officer's Certificate. The Company shall have received
a certificate, dated the Closing Date, executed on behalf of UOP by an
appropriate officer stating that the representations and warranties set forth in
Article IV hereof continue to be true and correct in all material respects and
that the conditions set forth in Sections 7.1.1 through 7.1.4 hereof have been
satisfied.
7.1.6. Obtaining of Consents and Approvals. The Company shall
have obtained or provided for: (a) all consents, waivers, approvals, permits,
licenses, authorizations and assignments required from third parties including
governmental and regulatory authorities which are necessary and material to the
consummation of the transactions contemplated by this Agreement and (b) the
approval by its Board of Directors and required lenders under its Credit
Agreement with Chase Manhattan Bank in order to authorize the execution and
delivery of this Agreement and the performance by the Company of its obligations
hereunder.
7.1.7. Opinion of UOP's Counsel. UOP shall have furnished the
Company with the favorable opinion of Vedder, Price, Kaufman & Kammholz, Counsel
for UOP dated as of the Closing Date, in substantially the form attached hereto
as Exhibit L.
7.1.8. Delivery of Documents. The execution and delivery to
the Company by UOP of the following, all dated as of the Closing Date:
(a) The Certificate of Assumption with respect to the
contracts, liabilities and obligations of the Company assumed by UOP
hereunder in substantially the form attached hereto as Exhibit M;
(b) The Asset and Kaiser Holdback Agreements in
substantially the form attached hereto as Exhibits A-1 and A-2;
(c) Certified resolutions of the Board of Managers of
UOP duly authorizing the execution and delivery of this Agreement and
the performance by UOP of its obligations hereunder;
(d) The LII-UOP Services Agreement in substantially
the form attached hereto as Exhibit J;
(e) The Easement Agreement attached as Exhibit C to
the First Amendment to the Servitude Agreement; and
(f) Such other documents, instruments and
certificates as may be reasonably requested by the Company or its
counsel to effectuate the transactions contemplated by this Agreement.
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Section 7.2. Waiver. The Company may, at its sole discretion, waive in
writing fulfillment of any or all of the conditions set forth in Section 7.1 of
this Agreement, provided that such waiver granted pursuant to this Section 7.2
shall not constitute a waiver by the Company of any other conditions not so
waived.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Survival of Certain Provisions.
8.1.1. Survival of Representations and Warranties. All
representations and warranties contained herein, in the disclosure schedules or
in any certificates or other documents delivered pursuant hereto, shall not be
deemed to be waived or otherwise affected by any prior knowledge of, or any
investigation made by or on behalf of, any party hereto. Each and every such
representation and warranty shall survive Closing and remain in full force and
effect until the second (2nd) anniversary of the Closing Date except in respect
of those representations and warranties made in connection with or arising out
of Subsections 3.6.1 (Title to the Assets), 3.16.2 (Compliance With Law),
Section 3.17 herein (Environmental Protection), and Section 5.12 (Soil and
Groundwater Condition at Sites) which shall survive Closing and remain in full
force and effect until expiration of any rights of UOP or any third party under
law or equity with respect thereto.
8.1.2. Covenants and Indemnification Provisions. Each covenant
provision and each indemnification provision contained herein shall survive
Closing and remain in full force and effect in accordance with its terms until
the obligations arising thereunder have been fully performed and discharged.
Section 8.2. General Indemnity.
8.2.1. Indemnification by the Company. After the Closing Date
the Company shall indemnify and hold UOP (and any wholly owned entity of UOP
taking title to the Assets) harmless on a dollar-for-dollar basis from and
against all losses, damages, reasonably foreseeable consequential damages,
liabilities, claims, demands, obligations, deficiencies, payments, judgments,
settlements, costs and expenses of any nature whatsoever (including without
limitation the costs and expenses of any and all investigations, actions, suits,
proceedings, demands, assessments, judgments, settlements and compromises
relating thereto, and reasonable attorneys' and others' fees in connection
therewith) (individually or in the aggregate "Losses") resulting from, arising
out of, or due to directly or indirectly from the following:
(a) Any inaccuracy or misrepresentation in, or breach
or non-fulfillment of, any representation or warranty of the Company,
or any breach or non-fulfillment of any covenant of the Company,
contained in this Agreement, in any Schedule delivered hereunder by the
Company or in any certificates or documents delivered by the Company
pursuant to this Agreement;
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(b) Any and all matters or items discussed, contained
or identified in the following disclosure Schedules delivered
hereunder: (i) Schedule 1.2.2 (Affiliate Transactions), (ii) Schedule
3.4.5 (Discharge of Liabilities), (iii) Schedule 3.13.1 (Litigation),
(iv) Schedule 3.16.2 (Compliance with Law), and (v) Schedule 3.17.1
(Environmental Protection);
(c) Any and all Excluded Liabilities including but
not limited to all liabilities specifically delineated in Section 1.4
(whether or not disclosed to UOP) including without limitation the
failure to discharge when and as due the Excluded Liabilities; and
(d) Any and all events, circumstances, actions or
omissions of the Company, its agents or affiliates, or any and all
conditions existing, on or prior to the Closing Date, (whether or not
disclosed to UOP) with respect to the Assets.
8.2.2. Indemnification by UOP. After the Closing Date UOP
shall indemnify and hold the Company harmless on a dollar-for-dollar basis from
and against any and all Losses resulting from, arising out of, or due directly
or indirectly from the following:
(a) Any inaccuracy or misrepresentation in, breach or
non-fulfillment of, any representation or warranty of UOP, or any
breach or nonfulfillment of any covenant of UOP, contained in this
Agreement, in any Schedule or Exhibit delivered hereunder by UOP, or in
any certificates or documents delivered by UOP pursuant to this
Agreement; and
(b) Any and all Assumed Liabilities.
8.2.3. Limitations. For purposes of this Section 8.2, and
except as provided in Subsection 8.2.4 herein:
(a) No indemnification shall be required in respect
of any such misrepresentation or breach unless the amount for which
indemnity would otherwise be due for any item, loss or claim
individually or in the aggregate equals or exceed One Hundred Thousand
Dollars ($100,000) (sometimes hereinafter referred to as the
"Threshold" or the "Threshold Provisions"), in which case the
indemnifying party (the "Indemnitor") shall be responsible only for
such indemnifiable amount in excess of the Threshold provided, however,
that the aggregate indemnifiable amounts shall not exceed the Purchase
Price. Any indemnifiable liability with respect to Losses resulting
from the matters set forth in Subsection 8.2.1(a)-(d) and Subsection
8.2.2(a) and (b) herein shall include actual and consequential damages
sustained by the indemnified party (the "Indemnified Party") by reason
of such matters, net of any tax benefits realized by the Indemnified
Party; and
(b) Neither the Company nor UOP shall be entitled to
make any claim for indemnification under this Section 8.2, with respect
to the breach of any particular representation and warranty contained
herein, after the date on which such representation and warranty ceases
to survive pursuant to Section 8.1 herein; provided, however, that, if
prior to the date on which such representation and warranty ceases to
survive, the Indemnitor shall
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have received written notification of a claim for indemnity hereunder
specifying in reasonable detail the basis of any such claim, and such
claim shall not have been finally resolved or disposed of at such date,
such claim shall continue as a basis for indemnity until it is finally
resolved or disposed of, subject to applicable statutes of limitation.
8.2.4. No Limitation on Certain Claims. The Threshold
Provisions of Subsection 8.2.3(a) herein shall not apply with respect to any
claims for breach of the representations and warranties of the Company contained
in Section 3.16 (Permits; Compliance; Reports; Clearances); Section 3.17
(Environmental Protection), or Section 3.21 (Tax Matters) herein, and UOP shall
be entitled to full and complete indemnification for such breach or default from
any losses arising therefrom, including, without limitation, from any actual and
reasonably foreseeable consequential damages sustained thereby but not in excess
of the Purchase Price.
8.2.5. Single Remedy. Neither party shall seek indemnification
for the same matter under both this Agreement and the IPA and the respective
Exhibits thereto. An election, in writing by an officer or duly authorized agent
of a party, to seek or request indemnification under this Agreement or the IPA
shall be deemed to be an irrevocable waiver by that party of any right to seek
compensation under the other agreement.
Section 8.3. Defense of Third Party Claims.
8.3.1. Notice. No right to indemnification hereunder shall be
available to an Indemnified Party with respect to a claim from any person not a
party to this Agreement unless such Indemnified Party shall have given to the
Indemnitor a written notice (a "Claim Notice") describing in reasonable detail
the facts giving rise to the claim for indemnification hereunder and enclosing a
copy of any papers served, promptly upon the Indemnified Party becoming aware of
such facts. In the case of a lawsuit being filed against any Indemnified Party,
"promptly" shall mean as soon as practicable but in no event later than the
earlier of: (a) ten 10 days before a responsive pleading is due or (b) thirty
(30) days after the Indemnified Party is served with notice of the suit. The
failure to notify the Indemnitor under this Subsection 8.3.1 shall not relieve
the Indemnitor of any liability that it may have to the Indemnified Party
otherwise than under this Article VIII unless such failure to notify shall have
resulted in the waiver of any affirmative defenses to any third party claims or
otherwise materially prejudiced the rights or ability of the Indemnitor to
defend the claim, whereupon such liability of the Indemnitor to the Indemnified
Party under this Article VIII shall be reduced only to the extent the Indemnitor
must pay any such third party claim by reason of the waiver of an affirmative
defense.
8.3.2. Defense of Claims. Upon receipt by the Indemnitor of a
Claim Notice, the Indemnitor shall have the right to direct or control the
administration and defense of the claim described therein. The Indemnified Party
shall have the right to approve the Indemnitor's selection of counsel with
respect to any such claim, such approval not to be delayed or withheld
unreasonably. The fees and expenses of the Indemnitor's counsel as well as the
fees and expenses of the Indemnified Party (incurred at the request of the
Indemnitor or required by the Indemnitee to enforce its rights hereunder) shall
be borne by the Indemnitor.
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8.3.3. Settlement. The Indemnified Party may not settle a
claim for which indemnification is sought without the prior written consent of
the Indemnitor and shall, as soon as practicable, give written notice to the
Indemnitor of any proposed settlement of any third party claim. The Indemnitor
shall have the right, in its sole discretion, to settle with money any claim for
which indemnification has been sought hereunder, but shall have no right to
settle any such claim by agreeing to, or committing to agree on behalf of the
Indemnified Party, any encumbrance, lien or pledge of the Assets, or any
restriction on the conduct or business relating to the Assets as such is then
being conducted. An Indemnified Party may refuse to accept a settlement proposed
by the Indemnitor, but in such event the Indemnitor shall not be obligated to
pay more than the amount for which the Indemnitor was willing to settle the
claim (and any other Losses associated with such settlement), and the
Indemnified Party shall be responsible for all Losses greater than such amount.
Except following the refusal by an Indemnified Party to accept a settlement
proposed by the Indemnitor, under the condition set forth in the preceding
sentence, no Indemnified Party may settle a claim for which indemnification has
been sought hereunder.
8.3.4. Cooperation. Any Indemnified Party shall make available
to any Indemnitor and its attorneys and accountants, all books, records and
documents relating to any claim hereunder and the parties shall render to each
other reasonable assistance in the defense of any claim hereunder which arises
as the result of claims made by persons not a party to this Agreement.
8.3.5. Apportionment. In the event a claim arises under this
Article VIII in respect of which both UOP and the Company are partially liable,
such liability shall be apportioned as between UOP and the Company by mutual
agreement or, in the event no such agreement can be reached, by a court or
competent jurisdiction.
ARTICLE IX
TERMINATION
Section 9.1. Termination Events. Subject to the provisions of Section
9.2, this Agreement may, by written notice given at or prior to the Closing in
the manner hereinafter provided, be terminated and abandoned only as follows:
9.1.1. Breach. By either the Company or UOP upon written
notice, if a material default or breach shall be made by the other, with respect
to the due and timely performance of any of the other party's respective
covenants and agreements contained herein, or with respect to the due compliance
with any of its respective representations and warranties contained in Article
III or IV, as applicable, and such default cannot be cured prior to Closing and
has not been waived;
9.1.2. Mutual Consent. By written mutual consent of the
Company and UOP; or
9.1.3. Closing Date. By written notice of either the Company
or UOP, if the Closing shall not have occurred on or before June 2, 1999, or
such later date as may be agreed upon by the parties; provided, however, that
the right to terminate this Agreement under this Subsection 9.1.3 shall not be
available to either of the respective parties whose failure to fulfill any
obligation under
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this Agreement has been the cause of, or resulted in, the failure of the Closing
to occur on or before such date.
Section 9.2. Effect of Termination. In the event this Agreement is
terminated pursuant to Section 9.1 herein, all further rights and obligations of
the parties hereunder shall terminate, except that the obligations set forth in
Sections 10.2 and 10.3 herein shall survive; it being specifically agreed that
if this Agreement is so terminated by either UOP or the Company because one or
more of the conditions to its obligations hereunder as set forth in Articles VI
(except for the condition set forth in Section 6.1.4(b) hereof) and VII herein
is not satisfied as a result of the other party's failure to comply with its
obligations under this Agreement, the rights of the terminating party to pursue
all legal remedies for breach of contract and damages shall survive such
termination.
ARTICLE X
MISCELLANEOUS
Section 10.1. Waiver of Bulk Sales Laws. Each of UOP and the Company
hereby waive compliance by either of them or their respective subsidiaries, in
connection with transactions contemplated by this Agreement, with any applicable
bulk sales laws with respect to or requiring notice to any of the Company's
creditors, in effect as of the Closing Date.
Section 10.2. Confidentiality. Except for such documents, reports,
information and data (including financial statements) which are or hereafter
become of a public nature, prior to Closing (and, if this Agreement is
terminated, for three years after the date hereof) UOP shall treat as
confidential and, except as otherwise required in connection with the
consummation of the transactions contemplated hereby, or except as compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, will not use, submit or disclose to, or
file with, others, or permit any person, firm, corporation or entity under its
control to use, submit or disclose to, or file with, others, any documents,
reports, information or data (including financial statements) concerning the
Company which UOP may obtain from the Company within 90 days of the date hereof;
and, except for such documents, reports and other written materials (including
financial statements) which are or hereafter become of a public nature, if this
Agreement is terminated, UOP shall return to the Company any and all such
documents, reports and other written materials (including financial statements)
concerning the Company or the Assets as the Company may reasonably request.
Section 10.3. Expenses. Except as otherwise provided in this Agreement,
each of the respective parties to this Agreement shall pay their own costs and
expenses (including all legal, accounting, broker, finder and investment banker
fees) relating to this Agreement, the negotiations leading up to this Agreement,
and the transactions contemplated by this Agreement.
Section 10.4. Amendment. This Agreement shall not be amended or
modified except by a writing duly executed by the Company and UOP.
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Section 10.5. Entire Agreement. This Agreement, including the Exhibits
hereto and the Schedules delivered hereunder, contain all of the terms,
conditions and representations and warranties agreed upon by the parties
relating to the subject matter of this Agreement and supersede all prior and
contemporaneous agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting such subject matter.
Section 10.6. Notices. All notices, requests, demands and other
communications made in connection with this Agreement shall be in writing and
shall be deemed to have been duly given on the date of delivery, if delivered by
hand or by facsimile to the persons identified below, or three (3) days after
mailing if mailed by certified or registered mail, postage prepaid, return
receipt requested, addressed as follows:
If to UOP:
UOP LLC
25 East Algonquin Road
P.O. Box 5017
Des Plaines, IL 60017
Fax: (847) 391-2883
Attention: Brian A. Loftus
Vice President and General Counsel
With a copy to:
Vedder, Price, Kaufman & Kammholz
222 N. LaSalle Street
Suite 2500
Chicago, IL 60601
Fax: (312) 609-5005
Attention: Richard L. Williams III
If to the Company:
LaRoche Industries Inc.
1100 Johnson Ferry Road, N.E.
Atlanta, Georgia 30342-1708
Fax: (404) 851-0324
Attention: Gerald B. Curran, Vice President
and Chief Financial Officer
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With a copy to:
LaRoche Industries Inc.
1100 Johnson Ferry Road, N.E.
Atlanta, Georgia 30342-1708
Fax: (404) 851-0430
Attention: Vice President and General Counsel
Such addresses may be changed, from time to time, by means of a notice given in
the manner provided in this Section.
Section 10.7. Severability. If any provision of this Agreement is held
to be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible. In any event all other provisions of this Agreement shall be
deemed valid and enforceable to the full extent possible.
Section 10.8. Remedies.
(a) The remedies provided herein are exclusive except in the
event of a claim for fraud and that the sole remedy of the parties shall be for
indemnification except that the parties shall also have (i) the remedy of
injunction for breach by the Company of its obligations under Section 5.9 hereof
and (ii) the remedy of rescission shall be available in the event of fraud,
provided that arbitration as contemplated by Section 10.8(b) hereof shall not
apply in the event of fraud, and all remedies available at law or in equity
shall be available in a fraud action. UOP agrees that the Federal or state court
in Atlanta, Georgia shall be the forum for any such action by UOP and the
Company agrees that the Federal or state court in Chicago, Illinois shall be the
forum for any fraud action by the Company;
(b) Claims for Indemnification under this Agreement for any
matter (other than those claims for fraud and claims for any matter set forth in
Section 2 of the Asset Holdback Agreement (Exhibit A-1, hereinafter in this
Section 10.8(b) and (c) called the "Asset Holdback Agreement") or which UOP has
determined and the Company has accepted as the "Optimal Solution", as defined in
Section 10.8(c) hereof, and those described in Section 10.8(a)(ii) hereof shall
be resolved in accordance with the procedures for arbitration set forth in
Section 3(e) of the Asset Holdback Agreement whether or not the Asset Holdback
Agreement is then in effect; and
(c) For purposes of this Agreement and the Asset Holdback
Agreement, the term "Optimal Solution" shall mean the lowest cost alternative to
achieve compliance (or for remediation) acceptable to the controlling
governmental entity (i.e., Federal or Louisiana Department of Environmental
Quality) which does not result in any increase in operational cost, deed
restrictions or other limitations adversely affecting the value of the business
or property in excess of $50,000 in the aggregate in any twelve (12) month
period. The Company agrees that UOP shall have the right notwithstanding the
preceding sentence to achieve compliance or to take remedial action which
exceeds the cost of the Optimal Solution for business or other reasons;
provided, however, that the
55
<PAGE> 68
liability of the Company hereunder shall be limited to the cost of the Optimal
Solution for any such compliance or remediation liability set forth under
Section 3.17 (Environmental Protection) and Section 5.12 (Soil and Groundwater
Conditions at Sites) of this Agreement, and UOP shall notify the Company of a
potential issue thereunder and thereafter shall provide to the Company a written
project plan for the Optimal Solution to be submitted to the applicable
regulatory authority (the "Project Plan") for agreement by the Company (which
agreement shall be deemed to have been given by the Company in the event that it
shall not have responded in writing to UOP regarding the Project Plan within
thirty (30) days of its notice thereof in accordance with this Agreement),
except that UOP shall not require the agreement of the Company with regard to
items identified in Exhibit I to the Asset Holdback Agreement. In addition, UOP
shall keep the Company informed of developments and negotiations with the
applicable regulatory authority and shall, as the spokesperson to the applicable
regulatory authority, invite a representative of the Company to attend and
observe in an advisory capacity to UOP any scheduled discussions or meetings
which may be held with the applicable regulatory authority regarding the
compliance or remedial action to be taken.
Section 10.9. Waiver. Waiver of any term or condition of this Agreement
by either of the respective parties shall only be effective if in writing and
shall not be construed as a waiver of any subsequent breach or failure of the
same term or condition, or a waiver of any other term or condition, of this
Agreement.
Section 10.10. Binding Effect; Assignment. No party to this Agreement
may assign or delegate, by operation of law or otherwise, all or any portion of
its rights, obligations or liabilities under this Agreement without the prior
written consent of the other party to this Agreement, which it may withhold in
its absolute discretion.
Section 10.11. Successors and Assigns.
10.11.1. Attachment of Obligations. Subject to the provisions
of Section 10.10 herein, the rights, liabilities and obligations of the parties
hereto arising under this Agreement shall (whether by operation of law or by
virtue of Section 10.11.1 of this Agreement) attach to the respective parties'
successors and assigns.
10.11.2. Survival. The provisions of this Section 10.11 shall
remain in full force and effect and shall survive for an indefinite period
without end.
Section 10.12. No Third Party Beneficiaries. Except as provided in this
Agreement, nothing in this Agreement shall confer any rights upon any person or
entity who or which is not a party to this Agreement.
Section 10.13. Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures to each counterpart
were upon a single instrument, and all such counterparts together shall be
deemed an original of this Agreement.
56
<PAGE> 69
Section 10.14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware and of the United
States without giving effect to the doctrine of conflicts of laws.
Section 10.15. Time of the Essence. Time shall be of the essence in the
performance of this Agreement.
Section 10.16. Construction.
10.16.1. Words. All references in this Agreement to the
singular shall include the plural, the plural shall include the singular where
applicable, and all references to gender shall include both genders and the
neuter. All references in this Agreement to days shall be calendar days unless
specified as business days. All accounting terms not otherwise identified herein
shall have the meanings assigned to them in accordance with GAAP consistently
applied.
10.16.2. Cross-References. References in this Agreement to any
Article shall include all Sections, Subsections, and Paragraphs in such Article;
reference in this Agreement to any Section shall include all Subsections and
Paragraphs in such Section; and references in this Agreement to any Subsection
shall include all Paragraphs in such Subsection. Words "herein," "hereof,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular paragraph or other subdivision unless the context
otherwise so admits.
10.16.3. No Presumption. In interpreting any provision of this
Agreement no presumption shall be drawn against the party drafting the
provision.
10.16.4. Exhibits and Schedules. Exhibits and Schedules
referred to herein are hereby incorporated into and made part of this Agreement.
10.16.5. Headings. The table of contents and the headings to
each Article, Section and Subsection herein are for the purposes of convenience
only and shall not be read or interpreted as having any meaning or effect.
EXECUTION AND DELIVERY
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with legal and binding effect as of the date and year first above
written.
UOP LLC THE COMPANY
LAROCHE INDUSTRIES INC.
By: /s/ C. A. Cabrera By: /s/ Gerald B. Curran
------------------------------- ------------------------------
Name: Carlos A. Cabrera Name: Gerald B. Curran
Title: Vice President Title: Vice President and
Chief Financial Officer
57
<PAGE> 70
"Exhibits and schedules omitted intentionally, but will be provided upon
request."
<PAGE> 1
EXHIBIT 99.2
- --------------------------------------------------------------------------------
INVENTORY PURCHASE AGREEMENT
Between
UOP LLC ("UOP")
And
LAROCHE INDUSTRIES INC. (the "Company")
Dated as of May 28, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
INVENTORY PURCHASE AGREEMENT
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I
PURCHASE OF ASSETS;
ASSUMPTION OF CERTAIN LIABILITIES.................................................................................1
Section 1.1. Assets To Be Acquired......................................................................1
1.1.1. Inventory.................................................................2
1.1.2. Certain Rights............................................................2
Section 1.2. Excluded Assets............................................................................2
Section 1.3. Assumed Liabilities. .....................................................................2
Section 1.4. Excluded Liabilities. ....................................................................2
1.4.1. Taxes. ..................................................................2
1.4.2. Product Liability Claims. ...............................................3
1.4.3. Environmental Claims. ...................................................3
1.4.4. General. ................................................................3
ARTICLE II
THE CLOSING; PURCHASE PRICE.......................................................................................3
Section 2.1. The Closing. .............................................................................3
Section 2.2. Purchase Price.............................................................................3
2.2.1. Amount, Inventory Holdback and Inventory Holdback
Agreement........................................................3
2.2.2. Allocation................................................................4
Section 2.3. Transferable Equity........................................................................4
2.3.1. Transferable Balance Sheet................................................4
2.3.2. Completion................................................................5
Section 2.4. Post-Closing Adjustment of Purchase Price..................................................5
2.4.1. Closing Date Balance Sheet................................................5
2.4.2. UOP's Review. ...........................................................6
2.4.3. Statements of Closing Transferable Equity and Purchase Price
Adjustment.......................................................6
2.4.4. Delivery of Statements. .................................................7
2.4.5. Independent Review. .....................................................7
2.4.6. Resolution. .............................................................7
Section 2.5. Settlement of Purchase Price Adjustment. .................................................8
2.5.1. Increase In Purchase Price. .............................................8
2.5.2. Decrease In Purchase Price................................................8
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY....................................................................................................8
Section 3.1. Organization of the Company and the CRILAR JV. ...........................................8
Section 3.2. Qualification of the Company and the CRILAR JV. ..........................................8
Section 3.3. Corporate Authorization....................................................................9
3.3.1. Authority. ..............................................................9
3.3.2. No Breach or Violation. .................................................9
Section 3.4. Financial Statements......................................................................10
3.4.1. Schedules and Accuracy. .................................................10
3.4.2. No Undisclosed Liabilities...............................................10
3.4.3. Absence of Changes.......................................................10
3.4.4. Discharge of Liabilities.................................................11
Section 3.5. [INTENTIONALLY LEFT BLANK]..............................................................11
Section 3.6. Properties; Leases; Tangible Assets.......................................................11
3.6.1. Title....................................................................11
Section 3.7. Complete Sale.............................................................................12
Section 3.8. Backlog...................................................................................12
3.8.1. Amount...................................................................12
3.8.2. Ordinary Course..........................................................12
Section 3.9. Intellectual Property.....................................................................12
3.9.1. Patents and Know-How.....................................................12
Section 3.10. Litigation...............................................................................14
3.10.1. Litigation Pending or Threatened........................................14
3.10.2. This Transaction........................................................14
Section 3.11. Insurance................................................................................14
Section 3.12. Third Party Consents.....................................................................14
Section 3.13. Permits; Compliance; Reports; Clearances.................................................15
3.13.1. Necessary Permits.......................................................15
3.13.2. Compliance with Law.....................................................15
3.13.3. Reports.................................................................15
Section 3.14. Environmental Protection.................................................................15
3.14.1. Environmental Permits...................................................15
3.14.2. No Violation............................................................16
3.14.3. No Litigation or Proceedings............................................16
3.14.4. No Notice...............................................................16
3.14.5. No Basis For Liability..................................................16
3.14.6. No Expenditures.........................................................16
Section 3.15. Product Warranties.......................................................................17
3.15.1. Warranty Statements.....................................................17
3.15.2. Product Warranty Claims.................................................17
Section 3.16. Government Authorizations................................................................17
3.16.1. U.S. Authority..........................................................17
3.16.2. Foreign Authority.......................................................17
Section 3.17. Tax Matters..............................................................................18
3.17.1. Returns.................................................................18
</TABLE>
iii
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<TABLE>
<CAPTION>
<S> <C>
Section 3.18. Brokers..................................................................................18
Section 3.19. Material Disclosures.....................................................................18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF UOP...........................................................................................................18
Section 4.1. Organization..............................................................................18
Section 4.2. Corporate Authorization...................................................................18
4.2.1. Authority................................................................18
4.2.2. No Breach or Violation...................................................19
Section 4.3. Government Authorizations.................................................................19
4.3.1. U.S. Authority...........................................................19
4.3.2. Foreign Authority........................................................19
Section 4.4. Brokers...................................................................................20
ARTICLE V
COVENANTS........................................................................................................20
Section 5.1. Conduct of the Business...................................................................20
5.1.1. Affirmative Covenants....................................................20
5.1.2. Negative Covenants.......................................................21
Section 5.2. Access to Information.....................................................................22
5.2.1. Access...................................................................22
5.2.2. Customer Introductions...................................................22
5.2.3. Access After Closing.....................................................22
Section 5.3. Filings and Authorizations................................................................22
5.3.1. HSR Act Filings..........................................................22
5.3.2. General..................................................................23
Section 5.4. Administration of Accounts................................................................23
5.4.1. In Trust For UOP.........................................................23
5.4.2. In Trust For the Company.................................................23
5.4.3. Accounts Payable by the Company..........................................23
5.4.4. Accounts Receivable of the Company.......................................23
Section 5.5. Tax Matters...............................................................................23
5.5.1. The Company's Obligations................................................23
5.5.2. UOP's Obligations........................................................24
5.5.3. Tax on Transaction.......................................................24
5.5.4. Tax Controversies, Assistance and Cooperation............................24
Section 5.6. Post-Closing Warranty Services............................................................26
Section 5.7. The Company's Trade Names.................................................................27
Section 5.8. Further Assurances........................................................................27
Section 5.9. Public Announcements......................................................................27
</TABLE>
iv
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<TABLE>
<CAPTION>
<S> <C>
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF UOP.......................................................................27
Section 6.1. Conditions................................................................................27
6.1.1. Representations and Warranties...........................................27
6.1.2. No Material Adverse Change...............................................27
6.1.3. Schedules Delivered......................................................28
6.1.4. No Adverse Facts Disclosed...............................................28
6.1.5. HSR Act Waiting Period...................................................28
6.1.6. Obtaining of Consents and Approvals......................................28
6.1.7. Performance by the Company...............................................28
6.1.8. Absence of Litigation....................................................28
6.1.9. Officer's Certificate....................................................29
6.1.10. Delivery of Documents....................................................29
6.1.11. Approval by UOP Board....................................................29
Section 6.2. Waiver....................................................................................29
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY...............................................................30
Section 7.1. Conditions................................................................................30
7.1.1. Representations and Warranties...........................................30
7.1.2. HSR Act Waiting Period...................................................30
7.1.3. Performance by UOP.......................................................30
7.1.4. Absence of Litigation....................................................30
7.1.5. Officer's Certificate....................................................30
7.1.6. Obtaining of Consents and Approvals......................................30
7.1.7. Delivery of Documents....................................................31
Section 7.2. Waiver....................................................................................31
ARTICLE VIII
INDEMNIFICATION..................................................................................................31
Section 8.1. Survival of Certain Provisions............................................................31
8.1.1. Survival of Representations and Warranties...............................31
8.1.2. Covenants and Indemnification Provisions.................................31
Section 8.2. General Indemnity.........................................................................32
8.2.1. Indemnification by the Company...........................................32
8.2.2. Indemnification by UOP...................................................32
8.2.3. Limitations..............................................................32
8.2.4. No Limitation on Certain Claims..........................................33
8.2.5. Single Remedy............................................................33
Section 8.3. Defense of Third Party Claims.............................................................33
8.3.1. Notice...................................................................33
8.3.2. Defense of Claims........................................................34
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
8.3.3. Settlement...............................................................34
8.3.4. Cooperation..............................................................34
8.3.5. Apportionment............................................................34
ARTICLE IX.......................................................................................................35
TERMINATION......................................................................................................35
Section 9.1. Termination Events. .....................................................................35
9.1.1. Breach...................................................................35
9.1.2. Mutual Consent...........................................................35
9.1.3. Closing Date.............................................................35
Section 9.2. Effect of Termination.....................................................................35
ARTICLE X........................................................................................................35
MISCELLANEOUS....................................................................................................35
Section 10.1. Waiver of Bulk Sales Laws................................................................35
Section 10.2. Confidentiality..........................................................................35
Section 10.3. Expenses.................................................................................36
Section 10.4. Amendment................................................................................36
Section 10.5. Entire Agreement.........................................................................36
Section 10.6. Notices..................................................................................36
Section 10.7. Severability.............................................................................37
Section 10.8. Remedies.................................................................................37
Section 10.9. Waiver...................................................................................38
Section 10.10. Binding Effect; Assignment...............................................................38
Section 10.11. Successors and Assigns...................................................................38
10.11.1. Attachment of Obligations..............................................38
10.11.2. Survival...............................................................38
Section 10.12. No Third Party Beneficiaries.............................................................38
Section 10.13. Counterparts.............................................................................38
Section 10.14. Governing Law............................................................................38
Section 10.15. Time of the Essence......................................................................38
Section 10.16. Construction.............................................................................39
10.16.1. Words..................................................................39
10.16.2. Cross-References.......................................................39
10.16.3. No Presumption.........................................................39
10.16.4. Exhibits and Schedules.................................................39
10.16.5. Headings...............................................................39
EXECUTION AND DELIVERY...........................................................................................39
</TABLE>
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<TABLE>
<CAPTION>
Exhibits Page Reference
- -------- --------------
<S> <C>
Exhibit A Inventory Holdback Agreement 46
Exhibit B Bill of Sale 45
Exhibit C Certificate of Assumption 48
</TABLE>
vii
<PAGE> 8
Disclosure Schedules
Schedule 1.1.1 Inventory
Schedule 1.1.2 Certain Rights
Schedule 1.4.3 Certain Environmental Claims
Schedule 2.2.2 Allocation of Purchase Price
Schedule 2.3.1(a) Transferable Balance Sheet
Schedule 2.4.3(c) Agreed Upon Procedures
Schedule 3.2 Qualification of the Company
Schedule 3.4.1 Financial Statements
Schedule 3.4.2 Exceptions to Section 3.4.2
Schedule 3.4.3 Changes in Financial Statements
Schedule 3.4.4 Discharge of Liabilities
Schedule 3.6.1(d) Encumbrances to Title
Schedule 3.6.3 Condition
Schedule 3.8.1 Backlog
Schedule 3.9.1(a)-(d) Ownership of Patents and Know-How
Schedule 3.10.1 Litigation
Schedule 3.11 Insurance
Schedule 3.12 Third Party Consents
Schedule 3.13.1 Licenses and Permits
Schedule 3.13.2 Compliance with Law
Schedule 3.13.3 Governmental Reports
Schedule 3.14.1 Environmental Protection
Schedule 3.15.1 Product Warranties
Schedule 3.15.2 Warranty Claims
Schedule 3.18 Brokers
Schedule 4.3.1 Governmental Authorizations for UOP
Schedule 5.12(d) Capital Expenditures in Excess of $100,000
viii
<PAGE> 9
Glossary (continued)
GLOSSARY
<TABLE>
<CAPTION>
Term Section Where Defined
---- ---------------------
<S> <C>
Agreement Preamble
Alumina Business Division Preamble
Arbitration Section 10.8(b)
Assets Section 1.1
Assumed Liabilities Section 1.3
Claim Notice Section 8.3.1
Closing Section 2.1
Closing Date Section 2.1
Closing Date Balance Sheet Section 2.4.1
Closing Transferable Equity Section 2.4.3(a)
Code Section 5.7.2
Company Preamble
Computer Systems Section 3.9.1(e)
Company's Technology Section 3.9.1
CRILAR JV Section 2.3.1(b)
Division Preamble
Employees Section 3.11.1
Encumbrances Section 3.6.1
Environmental Laws Section 3.17.1
Excluded Assets Section 1.2
Excluded Liabilities Section 1.4
February Transferable Equity Section 2.3
February Trial Balance Sheet Section 2.3 (also Schedule 3.4.1)
Financial Statements Section 3.4.1
GAAP Section 2.3.1(a)
Holdback Amount (Inventory) Section 2.2.1
Holdback Agreement (Inventory) Section 2.2, Exhibit A
HSR Act Section 3.20.1(a)
Indemnified Party Section 8.2.3(a)
Indemnitor Section 8.2.3(a)
Inventory Section 1.2.5
Losses Section 8.2.1
Other Agreements Section 3.12
Patents and Licenses Section 3.9.1
</TABLE>
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<PAGE> 10
Glossary (continued)
<TABLE>
<CAPTION>
Term Section Where Defined
---- ---------------------
<S> <C>
Purchase Price Section 2.2
Purchase Price Adjustment Section 2.4.3(b)
Resolving Firm Section 2.4.6
Returns Section 3.17.1
Reviewing Firm Section 2.4.5
Statement of Closing Transferable Equity Section 2.4.3(a)
Statement of February Transferable Equity Section 2.3
Statement of Purchase Price Adjustment Section 2.4.3(b)
Taxes Section 3.21.1
Threshold Section 8.2.3(a)
Trademarks and Licenses Section 3.9.2
Transferable Equity Section 2.3
Transferable Balance Sheet Section 2.3
</TABLE>
x
<PAGE> 11
INVENTORY PURCHASE AGREEMENT
INVENTORY PURCHASE AGREEMENT (hereinafter "this Agreement") made as of
this 28th day of May, 1999, between UOP LLC, a Delaware limited liability
company ("UOP") and LaRoche Industries Inc., a Delaware corporation (the
"Company").
W I T N E S S E T H
WHEREAS, upon the terms and subject to the conditions hereinafter set
forth, the Company desires to sell, assign, convey and transfer to UOP, and UOP
desires to purchase and acquire from the Company, substantially all of the
inventory employed in the manufacture and distribution of activated aluminas,
promoted aluminas, flash calcined powdered aluminas, titanium dioxide catalysts,
hydrotalcites, hybrid combinations of zeolites and activated aluminas, and
Versal(R) gel aluminas produced at the Company's facility at 1200 Airline
Highway, Baton Rouge, Louisiana or bought for resale (hereinafter sometimes
referred to as the "Alumina Business Division" or the "Division") of the
Company, and the Company desires to assign, transfer and novate and UOP desires
to assume certain obligations and liabilities of the Division; and
WHEREAS, the Company owns (or has the right to use) all of the right,
title and interest in the "Inventory" (as hereinafter defined) of the Division
as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements hereinafter set forth, and
each intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
PURCHASE OF ASSETS;
ASSUMPTION OF CERTAIN LIABILITIES
Section 1.1. Assets To Be Acquired. Subject to the terms and conditions
and in reliance upon the representations, warranties and agreements hereinafter
set forth, the Company hereby agrees to sell, assign, transfer, convey and
deliver to UOP or cause to be sold, assigned, transferred, conveyed and
delivered to UOP, and UOP hereby agrees to purchase from the Company, all of the
right, title and interest of the Company in and to the Inventory of the Division
of every kind and description, wherever located, which are directly or
indirectly owned by, leased by, or in the possession of either the Company or
any of its subsidiaries, and which are employed or intended to be employed or
held in connection with the Alumina Business Division of the Company or any of
its subsidiaries or are necessary for the continued operation of the Division,
consistent with past practice, whether or not reflected on the books and records
of the Company or any of its subsidiaries, other than the Excluded Assets (the
"Assets"), free and clear of all liens, claims, charges, security interests,
restrictions and other encumbrances of any kind or nature, except those set
forth in the relevant Schedules to this Agreement or otherwise specifically
assumed pursuant to this Agreement, including without limitation the assets,
properties, rights, contracts and operations described as follows:
<PAGE> 12
1.1.1. Inventory. All items of inventory, including without
limitation work-in-progress, finished goods, samples, stores and supplies, and
raw materials, wherever located, and notwithstanding how classified on the
balance sheet of the Division, which are employed or held for use in connection
with or are necessary for the continued operation of the Division, whether or
not reflected on the books and records of the Alumina Business Division of the
Company or any of its subsidiaries and notwithstanding how classified on the
balance sheet of the Division (the "Inventory"), including without limitation
those items to be listed on Schedule 1.1.1, such Schedule to be dated as of or
as close as practicable to the Closing Date and to be delivered as soon as
practicable after Closing but in any event no later than sixty (60) days after
the Closing Date; and
1.1.2. Certain Rights. Except as disclosed in Schedule 1.1.3
and subject to Section 1.5 hereof, all rights of the Company under or pursuant
to all warranties, representations and guarantees made by suppliers,
manufacturers and contractors in connection with products or services purchased
by the Company or any of its subsidiaries for use by the Division, or affecting
the Inventory employed or held for use in connection with, or necessary for the
continued operation of, the Division, whether or not reflected on the books and
records of the Company;
Section 1.2. Excluded Assets. Notwithstanding anything to the contrary
contained in Section 1.1 herein, the Company is not agreeing to sell, assign,
transfer or convey, and UOP is not agreeing to accept or purchase any of the
following assets, rights and properties of the Company (the "Excluded Assets"):
All assets of the Company and its subsidiaries other than the Assets.
Section 1.3. Assumed Liabilities. Subject to the terms and conditions
herein, and in reliance upon the representations, warranties and agreements
hereinafter set forth, UOP shall on the Closing Date assume, perform and in due
course pay and discharge the following obligations and liabilities of the
Division, (except for the Excluded Liabilities, hereinafter collectively
referred to as the "Assumed Liabilities"): None.
Section 1.4. Excluded Liabilities. The parties to this Agreement
expressly understand and agree that UOP shall not and does not hereby assume or
become liable for any obligations, liabilities, indebtedness, damages, claims,
judgments, penalties, fees, losses, costs or expenses of any kind of the Company
or of any subsidiary, whether due or to become due, asserted or unasserted,
accrued or unaccrued, liquidated or unliquidated, contingent, executory or
otherwise, howsoever or whenever arising including those relating to or arising
out of the Excluded Assets, which are not expressly assumed by UOP under Section
1.3 herein (the "Excluded Liabilities"). The Company shall retain and shall be
responsible for paying, performing and discharging when due all Excluded
Liabilities. The following is a non-exclusive listing of some of the liabilities
and obligations of the Company and its subsidiaries which UOP shall not assume
or agree to pay, perform or discharge, it being understood that such listing is
not intended to limit in any manner whatsoever the first sentence of this
Section 1.4:
1.4.1. Taxes. Any and all Federal, state, local, foreign,
franchise, sales, transfer, excise, fees, expenses, penalties, assessments or
other tax liabilities imposed upon or with respect to the Company or any of its
subsidiaries, the Assets, or any part thereof, with respect to all periods
2
<PAGE> 13
ending before, on or as of the Closing Date or with respect to the sale or
transfer of the Assets or the proceeds or gain resulting therefrom;
1.4.2. Product Liability Claims. Any and all claims in
existence as of the Closing Date and any and all claims arising or accruing on
or after the Closing Date, with respect to sales, leases or bailments of
products which have been shipped and invoiced by the Division or any subsidiary
of the Company on or before the Closing Date;
1.4.3. Environmental Claims. Any and all claims, liabilities
and obligations, including without limitation any and all items of litigation,
investigation, cleanup, removal and remediation, which relate to, are based upon
or arise from or in connection with, Federal, state or local environmental laws,
rules or regulations, whether such claims, liabilities or obligations are made
by or arise from any Federal, state or local governmental agency or authority or
by private parties, without regard to whether UOP has conducted an environmental
audit, and whether such claims arise or accrue before, on or after the Closing
Date, which relate to, are based upon, arise from or in connection with events,
circumstances, omissions or conditions existing or occurring on or before the
Closing Date including but not limited to those identified in Schedule 1.4.3;
and
1.4.4. General. Any and all debts, liabilities, obligations
and commitments arising after the Closing Date to the extent such debts,
liabilities, obligations or commitments relate to or arise from acts, events, or
omissions that occurred, or conditions or circumstances that existed, on or
before the Closing Date, whether or not any such act, event or omission,
condition or circumstance was lawful when it occurred or existed.
ARTICLE II
THE CLOSING; PURCHASE PRICE
Section 2.1. The Closing. The Closing of the sale and purchase of the
Assets (the "Closing") shall take place at the offices of Vedder, Price, Kaufman
& Kammholz, 222 N. LaSalle Street, Suite 2500, Chicago, Illinois 60601 at 10:00
a.m., local time, on the first business day after the satisfaction or waiver of
the conditions set forth in Articles VI and VII herein anticipated to be
Wednesday, June 2, 1999, or at such place, date, and time as the parties may
agree (the "Closing Date"), but in any event no later than June 3, 1999.
Section 2.2. Purchase Price.
2.2.1. Amount, Inventory Holdback and Inventory Holdback
Agreement. At the Closing UOP shall deliver or cause to be delivered, by bank
wire transfer in immediately available Federal funds to an account designated in
writing by the Company within three (3) business days prior to the Closing Date,
the Purchase Price (the "Purchase Price") less the "Inventory Holdback" (which
shall be equal to Eight Hundred Forty Thousand Dollars ($840,000) to be
administered pursuant to the Inventory Holdback Agreement attached hereto as
Exhibit A), which Purchase Price shall be Eight Million Four Hundred Ninety
Thousand Five Hundred Sixty Five Dollars ($8,490,565). The Purchase Price shall
be subject to a post-closing adjustment as provided in Section 2.4 herein.
3
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2.2.2. Allocation. UOP and the Company agree to allocate the
Purchase Price and any adjustments therein pursuant to Section 2.2 among the
Assets in accordance with United States Internal Revenue Code Section 1060 and
as set forth in Schedule 2.2.2 delivered hereunder. Prior to the Closing Date,
UOP and the Company shall mutually agree to this allocation and the information
which will be reported on US Internal Revenue Code Form 8594 or on such other
form or statement as may be required by law. UOP and the Company shall adhere to
such allocation for all purposes in any Federal and state income or franchise
tax return filed by them subsequent to the Closing Date, including the
determination by the Company of taxable gain or loss on the sale of Assets and
the determination by UOP of its tax basis with respect to the Assets.
Section 2.3. Transferable Equity. The Company has prepared: (a) a
balance sheet of the Division as of February 28, 1999 (the "February Trial
Balance Sheet"), (b) a balance sheet prepared in accordance with Subsection
2.3.1 herein to show the transferable equity in the Division as of February 28,
1999 (the "Transferable Balance Sheet"), and (c) a Statement of the February
Transferable Equity which shall be the Alumina Business Division of the
Company's equity reflected on the Transferable Balance Sheet.
2.3.1. Transferable Balance Sheet. The Transferable Balance
Sheet, delivered hereunder in Schedule 2.3.1(a), shall be prepared as follows:
(a) The Transferable Balance Sheet shall be prepared
in accordance with generally accepted accounting principles ("GAAP")
applied on a basis consistent with prior years, except as may be
provided in paragraph (b) of this Subsection 2.3.1, and shall be based
upon the February Trial Balance Sheet. The Transferable Balance Sheet
shall trace and reconcile any adjustments to the February Trial Balance
Sheet as may be necessary to prepare the Transferable Balance Sheet in
accordance with GAAP and this Subsection 2.3.1.
(b) The Transferable Balance Sheet shall be prepared
in accordance with the following:
(i) (A) Except as provided in Section
2.3.1(b)(i)(B) hereof, all intercompany accounts between the
Division, or any divisions, units, affiliates or subsidiaries
of the Company have been eliminated; and
(B) The investment in Crilar Alumina
Company, L.L.C. (the "CRILAR JV") shall be recorded in
accordance with past practice;
(ii) There shall not be any amounts included
as liabilities or reserves with respect to any accounting,
legal, investment or other professional or advisory fees or
expenses relating to the transactions contemplated by this
Agreement;
(iii) There shall not be any amount recorded
in any asset account to the extent that the benefits
associated with the related asset cannot be transferred
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to or realized by UOP, including, without limitation, any
amounts (A) intended to reflect potential prospective benefits
of the carryover of losses or of tax benefits or attributes of
the Company from periods prior to or ending on or as of the
Closing Date, (B) in respect of any insurance policy covering
any of the Assets if such insurance policy and the benefits
thereof will not be assigned or otherwise transferred to UOP
at the Closing, and (C) for an offsetting reserve or deferred
gain balance which offsets the CRILAR JV investment balance;
(iv) There shall not be any amounts included
as payables, liabilities or reserves which are not Assumed
Liabilities, inasmuch as such items are to be borne by the
Company under this Agreement, including without limitation (A)
liabilities relating to indebtedness for borrowed money or
negative cash balances; (B) liabilities relating to product
liability claims or any other litigation; (C) liabilities
relating to any environmental claims or potential claims,
including reserves for clean-up costs, or any of the items
pertaining to environmental compliance as discussed in Section
3.18 herein; (D) all costs or losses related to any disputes,
hearings, claims, investigations (whether governmental or
internal); and (E) liabilities relating to taxes for periods
ending on or prior to the Closing Date, other than unpaid
payroll and property taxes on the operations of the Company
properly accrued for any period ending after the Closing Date;
and
(v) There shall not be any amounts included
as liabilities or reserves for accrued but unpaid (A)
incentive compensation payments for any Employees (as such
term is defined in Subsection 3.12.1 herein) inasmuch as the
Company is to pay in full, pursuant to Subsection 5.6.2
herein, all such obligations to the Employees as soon as the
amounts of such obligations may be determined but in no event
later than when the Company makes similar payments to its
employees; and (B) any other accrued but unpaid obligations
incurred by the Company relating to the Plans (as such term is
defined in Section 3.12.3 herein), inasmuch as the Company
retains all obligations relating to the Plans as provided in
Section 5.7 herein.
2.3.2. Completion. The preparation of the February Trial
Balance Sheet, and the preparation of and report on the Transferable Balance
Sheet and the Statement of February Transferable Equity pursuant to this Section
2.3 shall be completed and delivered to UOP prior to the Closing Date.
Section 2.4. Post-Closing Adjustment of Purchase Price. The Purchase
Price shall be subject to adjustment following the Closing to reflect the
changes in the Transferable Equity relating to the Inventory of the Division
between February 28, 1999, and the close of business on the Closing Date, as
provided in this Section 2.4 and Section 2.5 herein.
2.4.1. Closing Date Balance Sheet. Promptly following the
Closing and as soon thereafter as practicable (but in any event within 60 days
of Closing), the Company shall prepare, or cause to be prepared, with full
cooperation and assistance of UOP, a balance sheet of the Assets
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<PAGE> 16
and Assumed Liabilities as of the close of business on the Closing Date (the
"Closing Date Balance Sheet") as follows:
(a) The Closing Date Balance Sheet shall be based
upon and prepared in accordance with the principles used to prepare the
Transferable Balance Sheet pursuant to Subsection 2.3.1 herein, except
as may be provided in paragraph (b) of this Subsection 2.4.1.
(b) The Closing Date Balance Sheet shall also include
an adjustment for any differences noted between the Assets and Assumed
Liabilities and the assets and liabilities of the Division at Closing.
2.4.2. UOP's Review. With respect to preparation of the
Closing Date Balance Sheet pursuant to Subsection 2.4.1 herein, the Company
shall permit UOP and PWC or another independent accounting firm of nationally
recognized standing of UOP's choice, during the preparation or at any time
thereafter: (i) to review all working papers and computations prepared or used
by the Company in preparing the Closing Date Balance Sheet and in making any
adjustments thereto, (ii) to review all working papers and computations prepared
or used by any independent accounting firm retained by the Company to review or
assist in the preparation of the Closing Date Balance Sheet, and (iii) to review
all books, records and other relevant data of the Division. UOP shall pay the
fees and expenses of any accounting firm retained by it for the purpose of such
review of the foregoing, provided that the Company shall pay the fees and
expenses of any accounting firm that it retains at its discretion.
2.4.3. Statements of Closing Transferable Equity and Purchase
Price Adjustment. The Closing Date Balance Sheet shall be accompanied by the
following statements (including the "Agreed Upon Procedures Report" described in
Section 2.4.3(c) below) prepared by or caused to be prepared by the Company,
with full cooperation and assistance of UOP:
(a) A statement of the Closing Transferable Equity of
the Company, which shall be the amount of the Company's equity relating
to the Inventory of the Division appearing on the Closing Date Balance
Sheet of the Division (the "Closing Transferable Equity");
(b) A statement of the adjustment to the Purchase
Price, which shall be the difference between the Closing Transferable
Equity and the February Transferable Equity (such difference being the
"Purchase Price Adjustment"). The Statement of the Purchase Price
Adjustment shall trace and reconcile the amount of the Purchase Price
Adjustment to the amounts shown on the Closing Date Balance Sheet for
specific accounts of Assets and Assumed Liabilities; and
(c) The Company has engaged the Company's regular
independent accounting firm, Ernst & Young LLP ("E&Y"), or another
independent accounting firm of recognized standing of the Company's
choice, to conduct agreed upon procedures, as defined and as set forth
in Schedule 2.4.3(c), on the Inventory, as these items appear in the
Closing Date Balance Sheet of the Division.
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2.4.4. Delivery of Statements. As soon as practicable after
Closing, but not later than sixty (60) days after Closing the Company shall
deliver the Closing Date Balance Sheet, and the accompanying Statement of
Closing Transferable Equity and Purchase Price Adjustment and the "Agreed Upon
Procedures Report" contemplated by Schedule 2.4.3(c), to UOP together with a
certificate of the Vice President and Chief Financial Officer of the Company to
the effect that the Closing Date Balance Sheet was prepared in accordance with
GAAP on a basis consistent with prior years, except as specifically provided in
Subsection 2.4.1 and 2.4.3 herein.
2.4.5. Independent Review. UOP shall at its option cause PWC,
or another accounting firm of recognized standing of UOP's choice or
representatives of UOP's internal audit staff (the "Reviewing Firm"), to review
the Closing Date Balance Sheet, and the accompanying Statements of Closing
Transferable Equity and Purchase Price Adjustment. With respect to the foregoing
review:
(a) The parties expect the review of the Reviewing
Firm pursuant to this Subsection 2.4.5 will be completed within sixty
(60) days of the delivery date of the Closing Date Balance Sheet by the
Company to UOP.
(b) UOP shall permit the Company and any independent
accounting firm retained by the Company at the Company's expense for
this purpose, to review all working papers and computations used or
prepared by the Reviewing Firm.
(c) All fees and expenses of the Reviewing Firm shall
be paid by UOP.
2.4.6. Resolution. In the event that the Company and UOP are
unable to resolve any differences between them over the proposed Purchase Price
Adjustment within thirty (30) days thereafter, the Company and UOP shall jointly
and promptly refer such difference to KPMG Peat Marwick, Atlanta, Georgia (the
"Resolving Firm") to resolve any such differences and to prepare final
Statements of Closing Transferable Equity and Purchase Price Adjustment, which
Statements shall be final and binding upon the parties. With regard to the
foregoing resolution process:
(a) The Company and UOP shall each present their
differences in writing, with respect to the Closing Date Balance Sheet,
to the Resolving Firm (each party providing simultaneously to the other
party copies of all documents submitted to the Resolving Firm) within
ten (10) days of the retention of such firm by the Company and UOP.
(b) The Company and UOP shall comply promptly with
all reasonable requests of the Resolving Firm for access to
information, working papers, computations, books and records and the
like.
(c) The Resolving Firm shall not be retained to
conduct its own independent audit or review of the Closing Date Balance
Sheet, but rather shall be retained to resolve specific differences
between the Company and UOP as to the report of the Reviewing Firm and
within the range of such differences.
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<PAGE> 18
(d) All fees and expenses of the Resolving Firm shall
be borne and shared equally by the Company and UOP.
Section 2.5. Settlement of Purchase Price Adjustment. Within five (5)
business days of the final determination of any Purchase Price Adjustment
pursuant to Section 2.4 herein, UOP and the Company shall settle on any such
adjustment as follows (and within two (2) business days of the final
determination of the Purchase Price Adjustment each party hereto shall notify
the other of the account referred to in Subsections 2.5.1 and 2.5.2 herein
designated to receive any such Purchase Price Adjustment and interest thereon
pursuant to this Section 2.5):
2.5.1. Increase In Purchase Price. If the Purchase Price
Adjustment reflects a net increase in the Purchase Price in excess of One Dollar
($1.00), UOP shall pay to the Company by bank wire transfer in immediately
available Federal funds to an account designated in writing by the Company the
sum of: (i) the Purchase Price Adjustment; and (ii) interest on the Purchase
Price Adjustment computed at a rate compounded per annum equal to the prime
commercial lending rate of Morgan Guaranty Trust Company of New York in effect
on the Closing Date from the Closing Date to the date of settlement.
2.5.2. Decrease In Purchase Price. If the Purchase Price
Adjustment reflects a net decrease in the Purchase Price in excess of One Dollar
($1.00), the Company shall pay to UOP by bank wire transfer in immediately
available Federal funds to an account designated in writing by UOP the sum of:
(i) the Purchase Price Adjustment; and (ii) interest on the Purchase Price
Adjustment computed at a rate compounded per annum equal to the prime commercial
lending rate of Morgan Guaranty Trust Company of New York in effect on the
Closing Date from the Closing Date to the date of settlement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
The Company hereby represents and warrants to UOP as of the date hereof
and as of the Closing Date as follows:
Section 3.1. Organization of the Company and the CRILAR JV. The Company
is a corporation duly incorporated and the CRILAR JV is a limited liability
company validly formed, and each is validly existing and in good standing under
the laws of the State of Delaware, and each has the requisite corporate power
and authority to own, operate or lease the properties relating to, used or held
in connection with the Division in all material respects as the Company is now
conducting the business of the Division consistent with past practice, except
that for accounting purposes, the Division has been accounted for as a
discontinued operation since October, 1998.
Section 3.2. Qualification of the Company and the CRILAR JV. Each of
the Company and the CRILAR JV is duly qualified or licensed as a foreign
corporation or foreign LLC, as applicable, to do business, and is in good
standing, in each jurisdiction where the character of the Assets, or the
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nature of its respective activities relating to the Division, makes such
qualification or license necessary, except those jurisdictions, if any, in which
the failure to so qualify would not have a material adverse effect on the
Assets, or results of operations or financial condition of the Division.
Schedule 3.2 delivered hereunder identifies: (i) each state in which the Company
and the CRILAR JV are qualified to do business; and (ii) the name and address of
the registered agent of the Company and the CRILAR JV in each such state.
Section 3.3. Corporate Authorization.
3.3.1. Authority. The Company has (and on the Closing Date
will have) all requisite corporate power and authority to enter into and perform
this Agreement and to consummate the transactions contemplated hereby. This
Agreement is a valid and binding obligation of the Company and its subsidiaries
and is enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application referring to or affecting enforcement of creditor's rights, or by
general equitable principles.
3.3.2. No Breach or Violation. Execution, delivery and
performance of this Agreement by the Company and consummation of the
transactions contemplated hereby will not lead to or cause a violation, breach,
or default or result in the termination of, or accelerate the performance
required by, or result in the creation or imposition of any Encumbrance (as
defined in Section 3.6.1), whether by notice or lapse of time or both, or
otherwise conflict with any term or provision of the following:
(a) The Certificate of Incorporation and By-laws, as
amended of the Company and the Limited Liability Company Agreement of
the CRILAR JV (subject to execution of Exhibit C hereto in its current
form, or as amended, subject to approval in writing of such amendment
by UOP which may be withheld by UOP in its sole discretion);
(b) Any note, bond, mortgage, contract, indenture or
agreement to lease, license or other instrument or obligation to which
the Company or any of its subsidiaries is a party or is bound: (i)
where such violation, breach or default would have a material adverse
effect on the Assets, or results of operations or financial condition
of the Division; or (ii) as to which required consents, amendments or
waivers shall have been obtained by the Company prior to the Closing
for any such violation, breach or default; or
(c) Any court or administrative order, writ or
injunction or process, or any permit, license, or consent decree to
which the Company or any of its subsidiaries is a party or is bound:
(i) where such violation, breach or default would have a material
adverse effect on the Assets, or results of operations or financial
condition of the Division; or (ii) as to which required consents,
amendments or waivers shall have been obtained by the Company prior to
the Closing for any such violation, breach of default.
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Section 3.4. Financial Statements.
3.4.1. Schedules and Accuracy. Attached hereto as Schedule
3.4.1 are the Division's unaudited (a) balance sheets and the related statements
of income as of and for the fiscal year ended February 28, 1999, and (b) the
February Trial Balance Sheet (collectively, the "Financial Statements"). The
Financial Statements present fairly, in all material respects, the financial
condition of the Division as of the date thereof and the results of operations
of the Division for the periods covered thereby; and except as set forth on
Schedule 2.3 hereto, have been prepared in accordance with generally accepted
accounting principles ("GAAP"), applied on a basis consistent with prior years.
3.4.2. No Undisclosed Liabilities. Neither the Company nor any
of its subsidiaries has any liabilities or obligations which relate to the
Assets or the Assumed Liabilities of any nature, secured or unsecured (absolute,
accrued, or unaccrued, liquidated or unliquidated, executory contingent or
otherwise and whether due or to become due), which are not disclosed in Schedule
3.4.2 or notes to the Financial Statements or were not reserved for in the
Financial Statements except for those liabilities and obligations of the Company
which relate to the Division or the Assets and were incurred since February 28,
1999 in the ordinary course of business.
3.4.3. Absence of Changes. Other than as set forth in Schedule
3.4.3 delivered hereunder, since February 28, 1999, there has not been:
(a) Any material adverse change in the Assets, or the
working capital, reserves, customer relations (which shall mean any
facts or circumstances negatively impacting the channels of
distribution and/or the top 25 customers of the Division including
notice of termination received by the Company prior to the Closing),
results of operations, raw material pricing, backlog or financial
condition of the Division or the CRILAR JV;
(b) Any material change in the contingent obligations
or liabilities of the Company which relate to the Division or the
CRILAR JV or Assets by way of guaranty, documentary credit, standby
credit, endorsement, indemnity, warranty or otherwise;
(c) Any waiver or cancellation by the Company or any
of its subsidiaries of valuable rights or of debts owed to them which,
taken as a whole, are material to the Assets, or results of operations
or financial condition of the Division or the CRILAR JV;
(d) Any increase in the rate or terms of compensation
payable, or potentially payable, by the Company to any managers or
employees of the Division or the CRILAR JV, except increases occurring
in the ordinary course of business in accordance with the Company's
customary practices (which shall include normal periodic performance
reviews and related compensation and benefit increases);
(e) Any material increase in the rate or terms of any
bonus, insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with any of the managers or employees of
the Division or the CRILAR JV except increases occurring
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in the ordinary course of business in accordance with the Company's
customary practices (which shall include normal periodic performance
reviews and related compensation and benefit increases);
(f) Any loan to, or guarantees or assumption of any
loan or obligation on behalf of, any manager or employee of the
Division or the CRILAR JV except advances occurring in the ordinary
course of business in accordance with the Company's customary
practices;
(g) Any amendment to any agreement, commitment, or
transaction (including without limitation any borrowing, lease, capital
expenditure or capital financing) by the Company or any of its
subsidiaries, material to the Assets or the Division or the CRILAR JV
or which, if such action were taken on the date hereof, would require
disclosure pursuant to this Agreement, except any amendment to any
agreements, commitments or transactions entered into in the ordinary
course of business or in accordance with the terms of this Agreement;
or
(h) Any material change by the Company in its
accounting methods or practices, assumptions or methods of calculating,
or any change by the Company or the CRILAR JV in their respective
accounting principles affecting the Assets or the Division.
3.4.4. Discharge of Liabilities. Other than as set forth in
Schedule 3.4.4 delivered hereunder, since the Financials Date and as of the
Closing Date: (i) neither the Division nor the CRILAR JV has paid, discharged or
satisfied any and all claims, liabilities or obligations (absolute, accrued,
contingent or otherwise) other than the payment, discharge or satisfaction in
the ordinary course of business and consistent with past practice ; and (ii)
neither the Division nor the CRILAR JV has terminated, amended or suffered the
termination or amendment of, or failed to perform all of its respective
obligations in all material respects under, any material lease, arrangement or
license.
Section 3.5. [INTENTIONALLY LEFT BLANK]
Section 3.6. Properties; Leases; Tangible Assets.
3.6.1. Title. The Company has good, valid and marketable title
to or, in the case of leased properties, if any, a good valid and marketable
leasehold in, all of the Assets which it purports to own, including all assets
(real, personal or mixed, tangible or intangible) reflected on the Financial
Statements, except those assets disposed of in the ordinary course of business
after February 28, 1999. The title to the Assets of the Division is free and
clear of all title defects, objections, liens, mortgages, security interests,
pledges, charges and encumbrances, adverse claims, equities, or any other rights
of others or other adverse interests of any kind including without limitation,
leases, chattel mortgages, conditional sales contracts, collateral security
arrangements and other title or interest retention arrangements (collectively
the "Encumbrances"), and upon the transfer of the Assets to UOP hereunder, UOP
shall have good, valid and marketable title to the Assets, free and clear of any
Encumbrances, except as follows:
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(a) The lien of current taxes not yet due and
payable, or of taxes the validity of which is being contested in good
faith by appropriate proceedings and as to which adequate reserves have
been established by the Company;
(b) Any Encumbrances reflected on the Financial
Statements, with such changes in the amount thereof as may have
occurred in the ordinary course of business prior to the Closing Date
and which changes will not materially reduce or materially adversely
affect the value of such property and assets held by the Company, or
materially interfere with the use thereof by UOP immediately following
Closing;
(c) Such other imperfections of title or Encumbrances
which, as of the Closing Date, will not materially reduce the aggregate
value of the Assets or materially interfere with or materially
adversely affect the use thereof by UOP immediately following Closing;
and
(d) Any Encumbrances identified on Schedule 3.6.1(d)
delivered hereunder.
Section 3.7. Complete Sale. By consummation of the transactions
contemplated by this Agreement, the Company will have sold, assigned,
transferred and conveyed to UOP all of the Inventory now held by the Division
and the CRILAR JV (other than the Excluded Assets).
Section 3.8. Backlog.
3.8.1. Amount. Schedule 3.8.1 delivered hereunder sets forth
the backlog of the Division and the CRILAR JV, as of February 28, 1999, for
products and services to be provided by the Division and the CRILAR JV. Schedule
3.8.1 includes the name of each customer, the dollar amount of backlog, any
dollar amounts included which are unfunded by any customer in respect of
undelivered orders, a brief description of the products and services to be
provided, the proposed delivery dates therefor and any unexercised valid and
subsisting options in the backlog giving a brief description of the options and
the contracts to which they relate.
3.8.2. Ordinary Course. Except as set forth on Schedule 3.8.1,
all of the contracts constituting the backlog of the Division and the CRILAR JV
(i) have been entered into in the ordinary course of business at usual and
customary mark-ups where appropriate, such mark-ups consistent with the past
practices of the Division and the CRILAR JV, and (ii) would be capable of
performance by the Company, if it retained the Assets to be transferred and
Assumed Liabilities to be assumed hereunder, and made the planned capital
expenditures therefor, in accordance with the terms and conditions of each such
contract.
Section 3.9. Intellectual Property.
3.9.1. Patents and Know-How. Schedule 3.9.1 delivered
hereunder sets forth a complete and accurate list of each patent, patent
application and docketed invention, by date and
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germane case or docket number and country of origin, and each license or
licensing agreement, by date, term and the parties thereto, for each patent,
patent application, invention, trade-secret, rights to know-how, processes,
computer programs or use of technology, held or employed by the Division and the
CRILAR JV, relating to the Assets or Inventory; each such patent, patent
application, license or licensing agreement listed thereon hereinafter termed
the "Patents and Licenses". With respect to the Patents and Licenses, and with
respect to all other technology including but not limited to research and
development results, computer programs, processes, trade secrets, know-how,
formulae, inventions and manufacturing, engineering, quality control, testing,
operational, logistical, maintenance and other technical information and
technology held or employed by the Division and the CRILAR JV, relating to the
Assets or Inventory (the "Company's Technology"):
(a) Except as disclosed in Schedule 3.9.1(a), the
Company or the CRILAR JV owns, free and clear of all liens, pledges or
other encumbrances, all right, title and interest in the Patents and
Licenses and in the Company's Technology, with all rights to make, use,
and sell the property embodied in or described in the Patents and
Licenses and in the Company's Technology. Except as disclosed in
Schedule 3.9.1(a), the Company does not have any reason to know that
the use of the Patents and Licenses and the Company's Technology
conflicts with, infringes upon or violates any patent, patent license,
patent application, trademark, tradename, trademark or tradename
registration, copyright, copyright registration, service mark, brand
mark or brand name or any pending application relating thereto, or any
trade secret, know-how, programs or processes of any third person, firm
or corporation;
(b) Except as disclosed in Section 3.9.1(b), there
are no outstanding, or threatened, governmental, judicial or adversary
proceedings, hearings, arbitrations, disputes or other disagreements
and no notice of infringement has been served upon or otherwise come to
the knowledge of the Company with respect to any of the Patents and
Licenses or the Company's Technology;
(c) The Company either owns the entire right, title
and interest in, to and under, or has acquired in connection with the
acquisition of Inventory an implied license to use, any and all
inventions, processes, computer programs, know-how, formulae, trade
secrets, patents, trademarks, tradenames, brandnames and copyrights
which are or will be utilized in the operation of the Division and the
CRILAR JV as it exists as of the date hereof. Except as disclosed in
Schedule 3.9.1(c), no other inventions, processes, computer programs,
know-how, formulae, trade secrets, patents, trademarks, tradenames,
brand names, copyrights, licenses or applications are necessary for the
continued operation of the Division and the CRILAR JV and the Company
hereby agrees, without application of the $100,000 Threshold in Article
8.2.3, to indemnify and hold UOP harmless from any loss, damage or
expense including attorney's fees resulting from any claim against UOP
for infringement of: (i) the Company's A-204-8 Product (manufactured
and/or sold to others prior to the Closing or sold to UOP at the
Closing) by reason of U.S. Patent 5,316,998 (and/or foreign equivalent
patents) and the divisional applications 5,505,926 and 5,595,954 and
(ii) Company's A-204-1 Product (manufactured and/or sold by the Company
and/or UOP within five (5) years after Closing) by reason of the Garcin
U.S. Patent 5,288,849 and/or foreign equivalent patents;
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provided, however, that the liability of the Company under this clause
(ii) shall not (x) extend beyond three (3) years from the Closing
except for formal claims made prior thereto by UOP or third parties,
(y) exceed fifty percent (50%) of the loss, damage or expense, and (z)
exceed payments by the Company to UOP under this clause (ii) in excess
of Six Hundred Twenty Thousand Dollars ($620,000) in the aggregate;
(d) Upon receipt of the consents identified in
Schedule 3.9.1(d) and the consummation of the Closing hereunder, UOP
will be vested with all rights, title and interest, and rights and
authority to use in connection with the Division and the CRILAR JV, all
of the Patents and Licenses and the Company's Technology, except as
disclosed in Schedule 3.9.1(a); and
(e) The Company has taken steps to upgrade the
Holiday and DCS computer systems at the Division's Baton Rouge
manufacturing plant. Such systems, as well as the J.D. Edwards system
and the plant's personal computers and Lotus Notes (for e-mail)
operated thereon (the "Computer Systems"), and the Computer Systems, to
the best knowledge of the Company after reasonable investigation, will
operate with year 2000 or later dates without material processing
deficiencies.
Section 3.10. Litigation.
3.10.1. Litigation Pending or Threatened. Except as disclosed
in Schedule 3.10.1 hereto: (i) there are no claims, actions, suits, hearings,
arbitrations, disputes, proceedings (public or private) or governmental
investigations pending or, to the knowledge of the Company, threatened, against
or affecting the Assets, at law or in equity, before or by any Federal, state,
municipal or other governmental or non-governmental department, commission,
board, bureau, agency, court or other instrumentality, or by any private person
or entity; (ii) there is no basis for any such action, suit or proceeding which
would, individually or in the aggregate, have a material adverse effect on the
Assets; and (iii) there are no existing or, to the knowledge of the Company,
threatened, orders, judgments or decrees of any court or governmental agency
materially affecting any of the Assets.
3.10.2. This Transaction. There are no legal, administrative,
arbitration or other proceedings or governmental investigations pending or, to
the knowledge of the Company, threatened, against the Division, the CRILAR JV or
the Assets which seeks to enjoin or rescind the transactions contemplated by
this Agreement or otherwise prevent the Company from complying with the terms
and provisions of this Agreement.
Section 3.11. Insurance. Schedule 3.11 includes a list of insurance
coverages applicable to the Company which also covers the Division.
Section 3.12. Third Party Consents. Schedule 3.12 hereto lists all
approvals, authorizations, certificates and consents of all third parties
(except for such approvals, authorizations, certificates and consents of
governmental bodies referred to in Section 3.16 herein) necessary or required to
effect the transfer to UOP of the Assets and upon receipt of the consents listed
in Schedule 3.12 and the consummation of this Agreement, UOP will succeed to all
of the Assets and will be entitled to
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hold and use the same to the full extent that each of the Division and the
CRILAR JV presently has the right to hold and use the same.
Section 3.13. Permits; Compliance; Reports; Clearances.
3.13.1. Necessary Permits. Schedule 3.13.1 hereto sets forth
all approvals, authorizations, certificates, consents, licenses, orders and
permits (except for sales and use tax permits and franchise tax registrations)
of all governmental agencies, whether Federal, state or local, necessary to the
operation of the Assets, including, without limitation, all permits and
approvals for the discharge of by-products and waste material into a public
waste discharge system (including those contemplated under the Servitude
Agreement by and between Kaiser Aluminum Corporation and the Company effective
December 23, 1996), and except as set forth on Schedule 3.13.1 hereto, all such
approvals, authorizations, certificates, consents, licenses, orders and permits
are in full force and effect and no approval, authorization, certificate,
consent, license, order or permit of the Division has been denied or revoked
within the past five (5) years.
3.13.2. Compliance with Law. Except as set forth on Schedule
3.13.2 hereto, the use and ownership of the Assets does not violate or infringe
in any material respect any Federal law (including, without limitation, any that
relate to health and safety, environmental protection and pollution control,
sale and distribution of products and services, anti-competitive practices,
collective bargaining, equal opportunity and improper payments) or any foreign,
state, local or other laws, statutes, ordinances, regulations, or any order,
writ, injunction or decree of any court, commission, board, bureau, agency or
instrumentality. Any single or aggregate violation or infringement shall be
deemed to be "material" under this Subsection 3.13.2 if such violation or
infringement leads to any losses (as such term is defined in Subsection 8.2.1)
for UOP equal to or greater than Twenty- Five Thousand Dollars ($25,000).
3.13.3. Reports. Except as set forth on Schedule 3.13.3
delivered hereunder, all reports, documents and notices required to be filed,
maintained or furnished with or to all governmental regulatory authorities by
the Division, or by the Company on behalf of the Division, and for the CRILAR
JV, including, without limitation, all state and local governmental and
regulatory authorities of the Federal government, the States of Louisiana,
Delaware, Georgia and the County of Fulton, Georgia and East Baton Rouge Parish,
Louisiana, have been so filed, maintained or furnished. All such reports,
documents and notices are true and correct in all material respects and, to the
extent required to be kept in the public inspection files of each of the Company
and the CRILAR JV, are kept in such files.
Section 3.14. Environmental Protection.
3.14.1. Environmental Permits. Except as set forth in Schedule
3.14.1 delivered hereunder the Company has obtained all permits, licenses and
other authorizations related to the Assets and which are required under Federal,
state, local and foreign laws relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water,
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ground water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes or any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder (the "Environmental Laws"). Schedule 3.16.1
delivered hereunder sets forth (i) all such permits, licenses and other
authorizations issued under the Environmental Laws obtained by the Division
and/or the CRILAR JV and (ii) a description and good faith estimate by the
Company of the costs of all capital or other expenditures estimated in good
faith by the Company that may be necessary to maintain or qualify for each such
permit, license or other authorization.
3.14.2. No Violation. Except as set forth in Schedule 3.14.1,
the Division and the CRILAR JV are each in compliance in all material respects
with all terms and conditions of the required permits, licenses and
authorizations, and the Company also is in compliance in all material respects
with all other limitations, restrictions, conditions, standards, requirements,
schedules and timetables contained in the Environmental Laws. Any single or
aggregate omission or act of non-compliance shall be deemed to be "material"
under this Subsection 3.14.2 if such omission or act leads to any "losses" (as
such term is defined in subsection 8.2.1) for UOP equal to or greater than
Twenty-Five Thousand Dollars ($25,000).
3.14.3. No Litigation or Proceedings. Except as set forth in
Schedule 3.14.1, there is no pending civil or criminal litigation, notice of
violation or administrative proceeding relating in any way to the Environmental
Laws (it being understood that any such litigation, notice or proceeding
identified on Schedule 3.14.1 is an Excluded Liability as provided in Subsection
1.4.3 herein), including but not limited to notices, demand letters, claims,
litigations or proceedings based upon or relating to any federal, state or local
Environmental Law.
3.14.4. No Notice. Except as set forth in Schedule 3.14.1, the
Company does not have any reason to know of any threatened or potential civil or
criminal litigation, notice of violation or administrative action relating in
any way to the Environmental Laws and involving the Assets.
3.14.5. No Basis For Liability. Except as set forth in
Schedule 3.14.1, there are no past, present or, to the knowledge of the Company,
future events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent continued compliance with
the Environmental Laws, or which may give rise to any common law or legal
liability, or otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study, or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical, or industrial,
toxic or hazardous substance or waste (including but not limited to refractory
brick), including, without limitation, any liability arising, or any claim,
action, demand, suit, proceeding, hearing, study or investigation which may be
brought under any Environmental Laws.
3.14.6. No Expenditures. Except as set forth in Schedule 1.4.3
and 3.14.1, the Company is not required to make any capital or other
expenditures to comply with any Environmental Law existing as of Closing, nor is
there any reasonable basis on which any
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governmental or regulatory body or agency could take any action that would
require any such capital or other expenditures.
Section 3.15. Product Warranties.
3.15.1. Warranty Statements. Schedule 3.15.1 delivered
hereunder sets forth true, correct and complete copies of the current standard
forms and statements of product warranties and guaranties adopted by the Company
with respect to any product or service provided by the Division and/or the
CRILAR JV prior to Closing. Except as set forth on Schedule 3.15.1, there have
not been any material deviations from such warranties and guaranties during such
period, and salesmen, employees and agents of the Division and/or the CRILAR JV
are not authorized to undertake obligations to any customer or other third
parties in excess of such written warranties or guaranties.
3.15.2. Product Warranty Claims. Schedule 3.15.2 delivered
hereunder lists all claims made orally and/or in writing to the Company in
existence as of the date hereof with respect to product warranties and
guaranties on products or services provided by the Division and/or the CRILAR JV
together with a brief description of the material facts relating to each such
claim.
Section 3.16. Government Authorizations.
3.16.1. U.S. Authority. Execution, delivery and performance of
this Agreement by the Company, and consummation of the transactions contemplated
hereby, will not require any consent, approval, authorization, or permit from,
or any filing with or notification to, any United States, state or local
governmental or regulatory authority except with respect to the following:
(a) The pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. ss.
18a, and the regulations promulgated pursuant thereto (the "HSR Act");
(b) Such consents, approvals, authorizations, permits
and filings identified on Schedule 3.16.1 delivered hereunder; and
(c) Such consents, approvals, authorizations, permits
and filings the failure to obtain or make would not have, in the
aggregate, a material adverse effect on the Assets.
3.16.2. Foreign Authority. Execution, delivery and performance
of this Agreement by the Company, and consummation of the transactions
contemplated hereby, will not require any consent, approval, authorization, or
permit from, or any filing with or notification to, any governmental or
regulatory authority outside the United States.
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Section 3.17. Tax Matters.
3.17.1. Returns. All material tax returns, reports and forms
(collectively the "Returns") required to be filed on or before the Closing Date
by, or with respect to any activities of, the Company, with any domestic or
foreign taxing authority, have been or will be filed in accordance with all
applicable laws, are in all material respects (and, as to Returns not filed as
of the date hereof, will be) true, complete and correct, and all taxes, fees,
penalties, assessments, interest and other governmental charges (collectively
"Taxes") which were shown to be due on such Returns have been or will be paid
(either directly by the Company or indirectly through applicable tax sharing
arrangements) on or before their due dates.
Section 3.18. Brokers. Except as set forth in Schedule 3.18, the
Company has not paid or become obligated to pay any fee or commission to any
broker, finder, investment banker or other intermediary in connection with the
transactions contemplated by this Agreement. The Company shall be fully
responsible for any such fees, and UOP shall not have any liability whatsoever
therefor.
Section 3.19. Material Disclosures. No statement, representation or
warranty made by the Company in this Agreement, in any Exhibit hereto or
Schedule delivered hereunder, or in any certificate, statement, list, schedule
or other document furnished or to be furnished to UOP hereunder, contains any
untrue statement of a material fact, or fails to state a material fact necessary
to make the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF UOP
UOP hereby represents and warrants to the Company, as of the date
hereof, and as of the Closing Date, as follows:
Section 4.1. Organization. UOP is a limited liability company duly
formed under the laws of the state of Delaware, validly existing and in good
standing under the laws of the States of Delaware, Illinois and Louisiana, and
has the requisite corporate power and authority to own, operate or lease the
properties: (i) that UOP requires to carry on its businesses in all material
respects as such is now being conducted, and (ii) of the Division after
consummation by UOP of its acquisition pursuant to this Agreement .
Section 4.2. Corporate Authorization.
4.2.1. Authority. UOP has all requisite corporate power and
authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement is a valid and binding
obligation of UOP, enforceable in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
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of general application referring to or affecting enforcement of creditor's
rights, or by general equitable principles.
4.2.2. No Breach or Violation. Execution, delivery and
performance of this Agreement by UOP and consummation of the transactions
contemplated hereby will not cause a breach or default or otherwise conflict
with any term or provision of the following:
(a) UOP's certificate of formation and limited
liability company agreement, as amended;
(b) Any note, bond, mortgage or indenture to which
UOP is a party or by which UOP is bound (i) where such violation,
breach, or default would have a material adverse effect on the
business, results of operations, or financial condition of UOP and its
subsidiaries, considered as a whole, or (ii) as to which required
consents, amendments or waivers shall have been obtained by UOP prior
to the Closing for any such violation, breach or default; or
(c) Any court or administrative order, writ or
injunction or process, or any consent decree to which UOP is a party or
by which UOP is bound (i) where such violation, breach or default would
have a material adverse effect on the business, results of operations
or financial condition of UOP and its subsidiaries, considered as a
whole, or (ii) as to which required consents, amendments or waivers
shall have been obtained by UOP prior to the Closing for any such
violation, breach or default.
Section 4.3. Government Authorizations.
4.3.1. U.S. Authority. Execution, delivery and performance of
this Agreement by UOP and consummation of the transaction contemplated hereby,
will not require any consent, approval, authorization, or permit from, or any
filing with or notification to, any United States, state or local governmental
or regulatory authority except with respect to the following:
(a) The pre-merger notification requirements of the
HSR Act;
(b) Such other consents, approvals, authorizations,
permits and filings identified on Schedule 4.3.1 delivered hereunder;
and
(c) Such other consents, approvals, authorizations,
permits and filings the failure to obtain or make would not have, in
the aggregate, a material adverse effect on UOP's ability to deliver
the Purchase Price at Closing.
4.3.2. Foreign Authority. Execution, delivery and performance
of this Agreement by UOP, and consummation of the transaction contemplated
hereby, will not require any consent, approval, authorization, or permit from,
or any filing or notification to, any governmental or regulatory authority
outside the United States.
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Section 4.4. Brokers. UOP has not paid or become obligated to pay any
fee or commission to any broker, finder, investment banker or other intermediary
in connection with the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS
Section 5.1. Conduct of the Business. Except as contemplated by this
Agreement or as otherwise agreed to in writing by UOP, during the period from
the date of this Agreement to the close of business on the Closing Date, the
Company will conduct the business of the Division and the CRILAR JV diligently
and substantially in the same manner as heretofore conducted and will maintain
the Assets in the ordinary course of business and consistent with the Company's
past practices.
5.1.1. Affirmative Covenants. The Company shall at all times
from the date hereof through the Closing Date:
(a) Use its reasonable best efforts to preserve and
protect the goodwill, rights, properties, assets and business
organization of the Division and the CRILAR JV;
(b) Use its reasonable best efforts to keep available
the services of the Employees and to maintain good employee
relationships;
(c) Use its reasonable best efforts to preserve and
protect the relationships of the Division and the CRILAR JV with
creditors, suppliers, customers, licensors, licensees, contractors,
distributors, the Government, lessors and lessees and others having
business relationships with it;
(d) Maintain the Assets in good and customary repair,
order and condition, reasonable wear and tear, damage by fire and other
casualty excepted, and promptly repair, restore or replace any Assets
which are damaged or destroyed by fire or other casualty, whether
insured or uninsured;
(e) Comply with all applicable Federal, state and
local laws, rules and regulations;
(f) File all tax returns required to be filed and
make timely payment of all taxes shown to be due on such returns;
(g) Use its reasonable best efforts to obtain, prior
to the Closing Date, all consents, approvals and waivers, including all
such consents, approvals or waivers required to be obtained from the
government (whether Federal, state or local), its customers and
lessors, and consents of the other parties to any teaming agreements,
partnerships or other arrangements between the Company and any other
person or entity, necessary or required
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to vest in UOP all of the Company's rights and title to, and interest
in, the Assets in conformity with the representations and warranties of
the Company herein;
(h) Promptly notify UOP in writing of any material
adverse change in the Assets, or the Company, including without
limitation any material adverse change in the results of operations or
financial condition of the Division or the CRILAR JV, or any material
adverse change with respect to the relationships of the Division or the
CRILAR JV or its creditors, suppliers, customers, licensors, licensees,
lessors and lessees, and others having business relationships with it;
(i) Promptly notify UOP in writing of the overt
threat, institution or receipt of any claim, action, suit, inquiry,
proceeding, notice of violation, demand letter, subpoena, government
audit or disallowance by or before any court or governmental or other
regulatory or administrative agency;
(j) Promptly supplement or amend and deliver to UOP
the Schedules that the Company is required to prepare hereunder with
respect to any matter arising hereafter which, if existing or occurring
as of the date of this Agreement, would have been required to have been
set forth and described in such Schedule. No supplement or amendment of
a Schedule made pursuant to this Subsection 5.1.1(j) shall be deemed to
cure any fraud or deliberate breach of any representation or warranty
made in this Agreement.
5.1.2. Negative Covenants. The Company will not do any of the
following, without the written consent of UOP which shall not be unreasonably
delayed or withheld, from the date hereof through the Closing Date:
(a) Incur or agree to incur any obligation or
liability (absolute or contingent) in connection with any of the
Assets, except liabilities incurred in the ordinary course of business
and liabilities arising out of, incurred in connection with, or related
to the consummation of this Agreement;
(b) Sell, transfer, assign, license or otherwise
dispose of, or encumber in any way, any of the Assets, excepting
disposition of the Assets in the ordinary course of business, or
disposition of such properties or assets as are no longer used or
usable in the Division and/or the CRILAR JV;
(c) Except in the ordinary course of business, waive
or cancel any of its rights or claims relating to the Assets;
(d) Make or commit to any capital expenditure, or
group of related capital expenditures, in excess of One Hundred
Thousand Dollars ($100,000), except those identified on Schedule
5.1.2(d); or
(e) Enter into, commit or propose to enter into any
contract, commitment or agreement with any customers or potential
customers or suppliers or potential suppliers,
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the estimated revenues or estimated costs to the Division and/or the
CRILAR JV from such contract, commitment or agreement would exceed One
Hundred Thousand Dollars ($100,000) or last for a term of six (6)
months or more; or
(f) Enter into or renew any lease of real property.
Section 5.2. Access to Information.
5.2.1. Access. From and after the date of this Agreement and
until the Closing Date, UOP and its agents and representatives shall have full
and complete access to all properties (whether real or personal), books and
records of the Company relating to the Division and the CRILAR JV (the
confidentiality of which UOP agrees to maintain) for purposes of conducting such
investigations, appraisals or audits at its own expense as UOP deems necessary
or advisable under the circumstances, and to discuss the Company, related
business affairs, and condition (financial or otherwise) of the Company and the
Assets with such persons, including but not limited to the directors, officers,
employees, accountants, landlords, counsel and creditors of the Company as UOP
considers necessary for the purposes of conducting such investigations,
appraisals or audits in connection with the transactions contemplated by this
Agreement.
5.2.2. Customer Introductions. The Company shall, upon request
of UOP, introduce UOP, or arrange for a personal introduction of UOP's
representatives, to customers of the Division and/or the CRILAR JV for the
purpose of insuring good customer relationships immediately following the
Closing.
5.2.3. Access After Closing. UOP shall make available to the
Company, its accountants, attorneys and other authorized representatives, upon
reasonable notice after Closing, the books and records of the Company obtained
from the Company pursuant to this Agreement, for inspection and copying. UOP
shall furnish to the Company, and the Company shall furnish to UOP, all
financial and tax return information as reasonably may be requested after the
Closing for the purpose of filing and/or defending tax returns of the Company or
UOP, or a subsequent purchaser of any of the Assets. UOP shall not destroy or
discard any books or records of the Company obtained from the Company pursuant
to this Agreement without first offering same to the Company within ten (10)
years of the Closing; it being understood that UOP shall not be liable to the
Company for the inadvertent destruction or loss of such books and records.
Section 5.3. Filings and Authorizations. The Company and UOP shall use
their best efforts, promptly after the date hereof, to comply with all Federal,
state, and local laws and regulations and to obtain all necessary governmental
authorizations, approvals, permits, licenses and waivers, with regard to the
transactions contemplated by this Agreement.
5.3.1. HSR Act Filings. The Company and UOP each shall
complete and file all reports and forms, and promptly respond to all second
requests or requests for additional information, as may be required by or
authorized under the HSR Act.
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5.3.2. General. The Company and UOP shall each use their
reasonable best efforts to take all actions necessary, proper, or deemed by them
advisable, to fulfill promptly their obligations hereunder and to consummate the
transactions contemplated by this Agreement. The Company and UOP will coordinate
and cooperate with each other in exchanging such information and supplying such
reasonable assistance as may be requested by the other in connection with the
foregoing.
Section 5.4. Administration of Accounts.
5.4.1. In Trust For UOP. All payments and reimbursements made
in the ordinary course by any third party in the name of or to the Company in
connection with or arising out of the Assets and Assumed Liabilities after the
Closing Date shall be held by the Company in trust to the benefit of UOP and
immediately upon receipt by the Company of any such payment or reimbursements,
the Company shall pay over to UOP the amount of such payment or reimbursement.
5.4.2. In Trust For the Company. All payments and
reimbursements made in the ordinary course by any third party in the name of or
to UOP in connection with or arising out of the Excluded Assets and Excluded
Liabilities after the Closing Date shall be held by UOP in trust to the benefit
of the Company and, payment or reimbursement, UOP shall pay over to the Company,
the amount of such payment or reimbursement.
5.4.3. Accounts Payable by the Company. The Company shall pay
all of the accounts payable of the Division outstanding as of the Closing (a
most recent list of which shall be provided by the Company to UOP at the Closing
and updated to the Closing within fifteen (15) days thereafter) in accordance
with the payment terms of such payables.
5.4.4. Accounts Receivable of the Company. To the extent that
any of the accounts receivable of the Company relating to the Division recorded
as of the Closing Date (a most recent list of which shall be provided by the
Company to UOP at the Closing and updated to the Closing within fifteen (15)
days thereafter) is or becomes in dispute, the Company agrees to consult with
UOP by written notice (providing sufficient information to UOP of the dispute)
and thereafter seek to remedy the dispute at least fifteen (15) business days
before taking any action to enforce collection of the disputed accounts
receivable.
Section 5.5. Tax Matters.
5.5.1. The Company's Obligations. The Company acknowledges its
legal obligations to pay Taxes relating to all items of income, loss, deduction
and credit attributable to the Company or relating to ownership of the Assets
with respect to any periods up to and including the Closing Date.
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5.5.2. UOP's Obligations.
(a) UOP acknowledges its legal obligations to pay
Taxes relating to all items of income, loss, deduction and credit
relating to ownership of the Assets with respect to any periods after
the Closing Date.
(b) UOP shall take all such steps as are necessary
(with full cooperation and assistance of the Company) to record the
transactions contemplated hereunder by this Agreement, as necessary in
the opinion of UOP, with any Federal, state, local or foreign recording
office.
5.5.3. Tax on Transaction.
(a) The Company agrees to pay all taxes, assessments,
transfer, recording, or other fees and charges which may be imposed
with respect to the sale and purchase of the Assets under this
Agreement, including those imposed on UOP. For taxes such as sales and
use, excise, value added and similar type taxes, which require the
Company to collect from UOP, the Company will report and pay any tax
due. In addition, the Vice President and Chief Financial Officer or
other Senior Officer of the Company thereafter shall promptly deliver a
certificate to UOP stating that such sales and use, excise, value added
or other tax returns have been filed and tax remitted. With respect to
taxes, fees, assessments and other charges reported and paid directly
by UOP, the Company will reimburse UOP for those taxes, fees,
assessments or other charges within thirty (30) days of the submission
of proof of payment to the Company.
(b) With respect to any penalties and interest
arising with respect to the transfer of taxes, both parties agree that
the party whose actions or inactions resulted in the penalties and
interest will bear the burden of the penalty and interest. If both
parties are at fault, or a fault cannot be determined, the parties
agree to share the penalties and interest equally.
5.5.4. Tax Controversies, Assistance and Cooperation.
(a) Notice. In the event any Tax Authority informs
either party of any notice of proposed audit, claim, assessment or any
other dispute concerning an amount of Taxes with which the other party
may incur liability hereunder, the party so informed shall promptly
notify the other party of such matter. Such notice shall contain
factual information (to the extent known) describing any asserted Tax
liability in reasonable detail and shall be accompanied by copies of
any notice or other documents received from any Tax Authority related
to this matter. If an indemnified party has knowledge of an asserted
Tax liability with respect to a matter for which that party is to be
indemnified hereunder and such party fails to provide the indemnifying
party prompt notice of such asserted Tax liability, and (i) if the
indemnifying party is precluded from contesting the asserted Tax
liability in any forum as a result of the failure to give prompt
notice, the indemnifying party shall have no obligation to indemnify
the indemnified party for Taxes, penalties or interest arising out of
such
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asserted Tax liability or (ii) if the indemnifying party is not
precluded from contesting the asserted Tax liability in any forum, but
such failure to provide prompt notice results in a monetary detriment
to the indemnifying party, then any amount which the indemnifying party
is otherwise required to pay to the indemnified party pursuant to this
Agreement, shall be reduced by the amount of the detriment.
(b) Control Rights. The party obligated by law to
file or report and pay the Taxes (Filing Party), shall control any
audits, disputes, administrative, judicial or other proceedings related
to those Taxes. Subject to the preceding sentence, (i) if the Filing
Party, is indemnified by the other party for the Taxes, the other party
will assume control and the Filing Party will act on behalf of the
other party and exercise reasonable care to preserve all the rights,
remedies and benefits allowed and (ii) should each party have a
responsibility for Taxes, each party shall be entitled to full
participation in that portion of the proceedings relating to the Taxes
with respect to which that party may incur a liability hereunder. For
purposes of this Section, the term "participation" shall include: (a)
participation in conferences, meetings or proceedings with any Tax
Authority, the subject matter of which includes an item for which such
party may have a liability hereunder, (b) participation in appearances
before any court or tribunal, the subject matter of which includes an
item for which such party may have a liability hereunder and (c) with
respect to the matters described in the preceding clauses (a) and (b),
participation in the submission and determination of the content of the
documentation, protests, memorandum of fact and law, briefs and the
conduct of oral arguments and presentations.
(c) Consent to Settlement. UOP and the Company shall
not agree to settle any Tax liability or compromise any claim with
respect to Taxes, which settlement or compromise may affect the
liability for Taxes, or right to a tax benefit of the other party,
without the consent of the other party. Such consent shall not be
unreasonably delayed or withheld.
(d) Assistance and Cooperation.
(i) UOP and the Company agree to cooperate,
and cause their affiliates to cooperate, with each other and
with each other's agents, including accounting firms and legal
counsel, in connection with Tax matters related to the
business of the Division, including (i) preparation and filing
of Tax Returns, (ii) determining the liability and amount of
any Taxes due or the right to and the amount of any refund of
Taxes, (iii) examinations of Tax Returns, and (iv) any
administrative or judicial proceedings in respect to Taxes
assessed or proposed to be assessed. Such cooperation shall
include each party making all information and documents in its
possession relating to the business of the Division available
to the other party. The parties shall retain all Tax Returns,
schedules and workpapers, all material records and other
documents relating thereto, until the expiration of the
applicable statue of limitations (including, to the extent
notified by any party, any extensions thereof) of the period
to which such Tax Return and other documents and information
relate. Each of the parties agrees to make available to the
other party, as reasonably
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requested and as available, personnel (including officers,
directors, employees and agents) involved in preparing,
maintaining and interpreting information and documents
relevant to Taxes and personnel reasonably required as
witnesses for administrative or judicial proceedings.
(ii) As part of the cooperation, UOP and the
Company each agrees to provide the other party with such
assistance as may reasonably be required in connection with
the preparation of any Tax Return, including the preparation
of the usual and customary Tax Return information packages.
(iii) With respect to the property tax
exemptions, issued by the State of Louisiana Board of Commerce
and Industry, related to the property to be transferred under
this Agreement, the Company agrees to cooperate and provide
assistance, as required, to effect a transfer of those
exemptions by transferring the Contracts for Exemption of Ad
Valorem Taxes.
(e) Tax Sharing Agreements. Any Tax Sharing
Agreements between the Company and any other party relating to the
Assets will terminate as of the Closing Date and will have no further
effect for any taxable year (whether past, current or future).
(f) Short Period for Subsidiaries. The Company will
include the taxable income or loss attributable to the Assets for all
periods through the Closing Date and pay any taxes attributable to such
income. The income attributable to the Assets will be apportioned
through the period up to and including the Closing Date and the period
after the Closing Date by closing the books of the Division and the
CRILAR JV as of the Closing Date.
(g) Clearance Certificates. On or prior to the
Closing Date, The Company will provide UOP, at UOP's request, with all
clearance certificates or similar documents, that may be required by
any governmental or taxing authority, in order to relieve UOP of any
obligations to withhold or escrow any portion of the Purchase Price.
(h) Expenses. Each party shall bear their own
expenses, incurred in connection with audits and other administrative
and judicial proceedings, relating to Taxes for which such party and or
its affiliates are liable under this Agreement.
Section 5.6. Post-Closing Warranty Services. Following the Closing, UOP
shall notify the Company of any claims from customers of the Division and the
CRILAR JV for defective products shipped and invoiced by the Company prior to
the Closing, and the Company shall be responsible for resolving in good faith
and consistent with its past practice any such claim without cost or expense to
UOP. The Company will consult with UOP regarding its proposed resolution of such
claims for warranty service before resolving any such claim. The Company shall
indemnify UOP against any loss, damage or expense resulting from any such claims
for warranty services granted by this Section, subject to Article VIII (except
the $100,000 Threshold set forth in Section 8.2.3(a) shall not apply).
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Section 5.7. The Company's Trade Names. UOP shall, as soon as its
reasonably practicable without incurring unreasonable expense, but in no event
more than eight (8) months from the Closing Date (the "Transition Period"),
remove signage, change promotional and advertising materials, and stationery and
packaging sent to third parties, and take such other action as is reasonable and
appropriate to indicate that there is no longer any relationship between the
Company and the Division, the CRILAR JV or the Assets, provided that nothing in
this Section 5.7 shall oblige UOP to take such action in respect of any
engineering or manufacturing drawings or prints. In addition, the Company hereby
grants UOP a royalty free non-exclusive license without right to sublicense
during the Transition Period to use the name LaRoche Industries Inc. for the
purpose of complying with this Section 5.7 provided that UOP shall indemnify the
Company, subject to Article VIII hereof except the Threshold set forth in
Section 8.2.3(a) which shall not apply, from any loss, damage or expense
resulting from the use by UOP of the name LaRoche as contemplated by this
Section 5.7.
Section 5.8. Further Assurances. From time to time after the Closing,
the Company will, at its own expense, execute and deliver, or cause to be
executed and delivered, such documents to UOP as UOP may reasonably request, and
from time to time after the Closing, UOP will, at its own expense, execute and
deliver such documents to the Company as the Company may reasonably request, in
order to more effectively consummate the transactions contemplated by this
Agreement.
Section 5.9. Public Announcements. Except as required by law, the
Company and UOP will consult with each other before issuing any press release or
otherwise making any public statement with respect to this Agreement and the
transactions contemplated hereby, and shall not issue any such press release or
make any such public statement prior to such consultation without the prior
written consent of the other party which shall not be unreasonably delayed or
withheld.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF UOP
Section 6.1. Conditions. The obligations of UOP under this Agreement to
perform Articles I and II herein shall be subject to the fulfillment, to its
reasonable satisfaction, on or prior to the Closing Date, of all of the
following conditions precedent:
6.1.1. Representations and Warranties. All representations and
warranties of the Company contained in this Agreement and in all certificates,
schedules and other documents delivered by the Company to UOP or its
representatives pursuant to this Agreement and/or in connection with the
consummation of transactions contemplated hereby shall be true, complete and
accurate in all material respects as of the date when made and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date, except for changes
expressly permitted by this Agreement.
6.1.2. No Material Adverse Change. During the period from the
date hereof to the Closing Date, the Company shall not have sustained any
material loss or damage to the Assets, whether or not insured, which affects its
ability to conduct the operations of the Division and the
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CRILAR JV, nor shall there have been any material adverse change in its
business, financial condition, assets, liabilities (absolute, contingent or
otherwise), reserves or operations or its ability to conduct the operations of
the Division and the CRILAR JV as such is presently conducted.
6.1.3. Schedules Delivered. All Schedules to be delivered
prior to Closing to UOP by the Company hereunder shall have been so delivered
with time sufficient for UOP's review and in no event later than three (3) days
prior to Closing, and each such Schedule shall be satisfactory in form, and
content, to UOP, such satisfaction to be determined at UOP's reasonable
discretion. To the extent the Company updates any such Schedule immediately
prior to Closing as required by Subsection 5.1.1, paragraph (k) herein, each
such update shall be satisfactory in form, and content, to UOP, such
satisfaction to be determined at UOP's reasonable discretion. With respect to
items on Schedules or updates to Schedules that may be quantified in monetary
terms, the parties agree that such items having an impact on the Purchase Price
or Purchase Price Adjustment equal to or greater than Fifty Thousand Dollars
($50,000), individually or in the aggregate, may be objected to by UOP within
the standard of reasonableness (sometimes hereinafter referred to as the
"Standard of Reasonableness") under this Subsection 6.1.3.
6.1.4. No Adverse Facts Disclosed. Neither any investigation
of the Company by UOP nor any disclosure Schedule, nor any other document
delivered to UOP in connection with this Agreement, shall have revealed any
facts and circumstances which would be reasonably expected to cause a material
adverse effect on the Assets or UOP's ability to conduct the business and
operations of the Division or the CRILAR JV as such are presently conducted;
6.1.5. HSR Act Waiting Period. All waiting periods under the
HSR Act with respect to the purchase and sale of the Assets and the Division and
the interest of the Company in the CRILAR JV shall have been terminated or
expired.
6.1.6. Obtaining of Consents and Approvals. The Company shall
have executed and delivered to UOP, or shall have caused to be executed and
delivered, any consents, waivers, approvals, permits, licenses or authorizations
which, if not obtained on or prior to the Closing Date, would have a material
adverse effect on the Assets or on UOP's ability to conduct the operations of
the Division and the CRILAR JV immediately after the Closing.
6.1.7. Performance by the Company. The Company shall have
performed and complied in all material respects with all agreements, covenants,
obligations and conditions required by this Agreement to be performed or
complied with by the Company on or before the Closing Date, and all Schedules
delivered by the Company hereunder shall be acceptable in form and content to
UOP and its counsel within the Standard of Reasonableness. In addition, the
Company and UOP shall have simultaneously with the Closing hereunder consummated
the transactions contemplated by the Asset Purchase Agreement (the "APA")
between UOP and the Company of even date herewith.
6.1.8. Absence of Litigation. There shall not be in effect any
order enjoining or restraining the transactions contemplated by this Agreement,
and there shall not be instituted or pending any action or proceeding before any
Federal, state or foreign court or governmental agency
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or other regulatory or administrative agency or instrumentality (i) challenging
the acquisition by UOP of the Assets and the business of the Division or
otherwise seeking to restrain or prohibit consummation of the transactions
contemplated by this Agreement, or seeking to impose any material limitations on
any provision of this Agreement, or (ii) seeking to compel UOP or the Company to
dispose of or hold separate a material portion or the business of the Division
or Assets as a result of the transactions contemplated by this Agreement.
6.1.9. Officer's Certificate. UOP shall have received a
certificate, dated the Closing Date, executed on behalf of the Company by an
appropriate officer stating that the representations and warranties set forth in
Article III hereof continue to be true and correct and that the conditions set
forth in Sections 6.1.1 through 6.1.8 hereof have been satisfied.
6.1.10. Delivery of Documents. The execution and delivery to
UOP by the Company of the following, all dated as of the Closing Date:
(a) the Bill of Sale with respect to the Assets in
substantially the form attached hereto as Exhibit B;
(b) the Inventory Holdback Agreement in substantially
the form attached hereto as Exhibit A;
(c) such other conveyances, instruments of title,
assignments, consents, recordings, and other documents as may be, in
the reasonable opinion of UOP, necessary or proper to transfer to UOP
ownership of the Assets and rights being acquired by UOP hereunder;
(d) certified resolutions of the Board of Directors
of the Company duly authorizing the execution and delivery of this
Agreement and the performance by the Company of its obligations
hereunder;
(e) such other documents, instruments and
certificates as may be reasonably requested by UOP or its counsel to
effectuate the transactions contemplated by this Agreement.
6.1.11. Approval by UOP Board. UOP shall have received
certified resolutions of the Board of Managers of UOP duly authorizing the
execution and delivery of this Agreement and the performance by UOP of its
obligations hereunder.
Section 6.2. Waiver. UOP may, at its sole discretion, waive in writing
fulfillment of any or all of the conditions set forth in Section 6.1 of this
Agreement, provided that such waiver granted by UOP pursuant to this Section 6.2
shall have no effect upon or as against any of the other conditions not so
waived.
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ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
Section 7.1. Conditions. The obligations of the Company under this
Agreement to perform Articles I and II herein shall be subject to the
fulfillment, to its reasonable satisfaction, on or prior to the Closing Date, of
all of the following conditions precedent:
7.1.1. Representations and Warranties. The representations and
warranties of UOP contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made on and as of the
Closing Date.
7.1.2. HSR Act Waiting Period. All waiting periods under the
HSR Act with respect to the purchase and sale of the Assets and the Division
shall have been terminated or expired.
7.1.3. Performance by UOP. UOP shall have performed and
complied in all material respects with all agreements, covenants, obligations
and conditions required by this Agreement to be performed or complied with by
UOP on or before the Closing Date. In addition, the Company and UOP shall have
simultaneously with the Closing hereunder consummated the transactions
contemplated by the Asset Purchase Agreement between UOP and the Company of even
date herewith.
7.1.4. Absence of Litigation. There shall not be in effect any
order enjoining or restraining the transactions contemplated by this Agreement
and there shall not be instituted or pending any action or proceeding before any
Federal, state or foreign court or governmental agency or other regulatory or
administrative agency or instrumentality (i) challenging the acquisition by UOP
of the Assets or otherwise seeking to restrain or prohibit consummation of the
transactions contemplated by this Agreement, or seeking to impose any material
limitations on any provision of this Agreement, or (ii) seeking to compel UOP or
the Company to dispose of or hold separate a material portion of the business of
the Division or Assets as a result of the transactions contemplated by this
Agreement.
7.1.5. Officer's Certificate. The Company shall have received
a certificate, dated the Closing Date, executed on behalf of UOP by an
appropriate officer stating that the representations and warranties set forth in
Article IV hereof continue to be true and correct and that the conditions set
forth in Sections 7.1.1 through 7.1.4 hereof have been satisfied.
7.1.6. Obtaining of Consents and Approvals. The Company shall
have obtained or provided for: (a) all consents, waivers, approvals, permits,
licenses, authorizations and assignments required from third parties including
governmental and regulatory authorities which are necessary and material to the
consummation of the transactions contemplated by this Agreement and (b) the
approval by its Board of Directors and required lenders under its Credit
Agreement with Chase Manhattan Bank in order to authorize the execution and
delivery of this Agreement and the performance by the Company of its obligations
hereunder.
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7.1.7. Delivery of Documents. The execution and delivery to
the Company by UOP of the following, all dated as of the Closing Date:
(a) The Certificate of Assumption with respect to the
contracts, liabilities and obligations of the Company assumed by UOP
hereunder in substantially the form attached hereto as Exhibit C;
(b) The Inventory Holdback Agreement in substantially
the form attached hereto as Exhibit A;
(c) Certified resolutions of the Board of Managers of
UOP duly authorizing the execution and delivery of this Agreement and
the performance by UOP of its obligations hereunder; and
(d) Such other documents, instruments and
certificates as may be reasonably requested by the Company or its
counsel to effectuate the transactions contemplated by this Agreement.
Section 7.2. Waiver. The Company may, at its sole discretion, waive in
writing fulfillment of any or all of the conditions set forth in Section 7.1 of
this Agreement, provided that such waiver granted pursuant to this Section 7.2
shall not constitute a waiver by the Company of any other conditions not so
waived.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Survival of Certain Provisions.
8.1.1. Survival of Representations and Warranties. All
representations and warranties contained herein, in the disclosure schedules or
in any certificates or other documents delivered pursuant hereto, shall not be
deemed to be waived or otherwise affected by any prior knowledge of, or any
investigation made by or on behalf of, any party hereto. Each and every such
representation and warranty shall survive Closing and remain in full force and
effect until the first (1st) anniversary of the Closing Date except in respect
of those representations and warranties made in connection with or arising out
of Subsections 3.6.1 (Title to the Assets), 3.13.2 (Compliance With Law) and
Section 3.14 herein (Environmental Protection) which shall survive Closing and
remain in full force and effect until expiration of any rights of UOP or any
third party under law or equity with respect thereto.
8.1.2. Covenants and Indemnification Provisions. Each covenant
provision and each indemnification provision contained herein shall survive
Closing and remain in full force and effect in accordance with its terms until
the obligations arising thereunder have been fully performed and discharged.
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Section 8.2. General Indemnity.
8.2.1. Indemnification by the Company. After the Closing Date
the Company shall indemnify and hold UOP (and any wholly owned entity of UOP
taking title to the Assets) harmless on a dollar-for-dollar basis from and
against all losses, damages, reasonably foreseeable consequential damages,
liabilities, claims, demands, obligations, deficiencies, payments, judgments,
settlements, costs and expenses of any nature whatsoever (including without
limitation the costs and expenses of any and all investigations, actions, suits,
proceedings, demands, assessments, judgments, settlements and compromises
relating thereto, and reasonable attorneys' and others' fees in connection
therewith) (individually or in the aggregate "Losses") resulting from, arising
out of, or due to directly or indirectly from the following:
(a) Any inaccuracy or misrepresentation in, or breach
or non-fulfillment of, any representation or warranty of the Company,
or any breach or non-fulfillment of any covenant of the Company,
contained in this Agreement, in any Schedule delivered hereunder by the
Company or in any certificates or documents delivered by the Company
pursuant to this Agreement;
(b) Any and all matters or items discussed, contained
or identified in the following disclosure Schedules delivered
hereunder: (i) Schedule 3.4.5 (Discharge of Liabilities), (ii) Schedule
3.10.1 (Litigation), (iii) Schedule 3.13.2 (Compliance with Law), and
(iv) Schedule 3.14.1 (Environmental Protection);
(c) Any and all Excluded Liabilities including but
not limited to all liabilities specifically delineated in Section 1.4
(whether or not disclosed to UOP) including without limitation the
failure to discharge when and as due the Excluded Liabilities; and
(d) Any and all events, circumstances, actions or
omissions of the Company, its agents or affiliates, or any and all
conditions existing, on or prior to the Closing Date, (whether or not
disclosed to UOP) with respect to the Assets.
8.2.2. Indemnification by UOP. After the Closing Date UOP
shall indemnify and hold the Company harmless on a dollar-for-dollar basis from
and against any and all Losses resulting from, arising out of, or due directly
or indirectly from the following:
(a) Any inaccuracy or misrepresentation in, breach or
non-fulfillment of, any representation or warranty of UOP, or any
breach or nonfulfillment of any covenant of UOP, contained in this
Agreement, in any Schedule or Exhibit delivered hereunder by UOP, or in
any certificates or documents delivered by UOP pursuant to this
Agreement; and
(b) Any and all Assumed Liabilities.
8.2.3. Limitations. For purposes of this Section 8.2, and
except as provided in Subsection 8.2.4 herein:
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(a) No indemnification shall be required in respect
of any such misrepresentation or breach unless the amount for which
indemnity would otherwise be due for any item, loss or claim
individually or in the aggregate equals or exceed One Hundred Thousand
Dollars ($100,000) (sometimes hereinafter referred to as the
"Threshold" or the "Threshold Provisions"), in which case the
indemnifying party (the "Indemnitor") shall be responsible only for
such indemnifiable amount in excess of the Threshold provided, however,
that the aggregate indemnifiable amounts shall not exceed the Purchase
Price. Any indemnifiable liability with respect to Losses resulting
from the matters set forth in Subsection 8.2.1(a)-(d) and Subsection
8.2.2(a) and (b) herein shall include actual and consequential damages
sustained by the indemnified party (the "Indemnified Party") by reason
of such matters, net of any tax benefits realized by the Indemnified
Party; and
(b) Neither the Company nor UOP shall be entitled to
make any claim for indemnification under this Section 8.2, with respect
to the breach of any particular representation and warranty contained
herein, after the date on which such representation and warranty ceases
to survive pursuant to Section 8.1 herein; provided, however, that, if
prior to the date on which such representation and warranty ceases to
survive, the Indemnitor shall have received written notification of a
claim for indemnity hereunder specifying in reasonable detail the basis
of any such claim, and such claim shall not have been finally resolved
or disposed of at such date, such claim shall continue as a basis for
indemnity until it is finally resolved or disposed of, subject to
applicable statutes of limitation.
8.2.4. No Limitation on Certain Claims. The Threshold
Provisions of Subsection 8.2.3(a) herein shall not apply with respect to any
claims for breach of the representations and warranties of the Company contained
in Section 3.16 (Permits; Compliance; Reports; Clearances); Section 3.17
(Environmental Protection), or Section 3.21 (Tax Matters) herein, and UOP shall
be entitled to full and complete indemnification for such breach or default from
any losses arising therefrom, including, without limitation, from any actual and
reasonably foreseeable consequential damages sustained thereby but not in excess
of the Purchase Price.
8.2.5. Single Remedy. Neither party shall seek indemnification
for the same matter under both this Agreement and the IPA and the respective
Exhibits thereto. An election, in writing by an officer or duly authorized agent
of a party, to seek or request indemnification under this Agreement or the IPA
shall be deemed to be an irrevocable waiver by that party of any right to seek
compensation under the other agreement.
Section 8.3. Defense of Third Party Claims.
8.3.1. Notice. No right to indemnification hereunder shall be
available to an Indemnified Party with respect to a claim from any person not a
party to this Agreement unless such Indemnified Party shall have given to the
Indemnitor a written notice (a "Claim Notice") describing in reasonable detail
the facts giving rise to the claim for indemnification hereunder and enclosing a
copy of any papers served, promptly upon the Indemnified Party becoming aware of
such facts. In the case of a lawsuit being filed against any Indemnified Party,
"promptly" shall mean as soon as practicable but in no event later than the
earlier of: (a) ten 10 days before a responsive pleading
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is due or (b) thirty (30) days after the Indemnified Party is served with notice
of the suit. The failure to notify the Indemnitor under this Subsection 8.3.1
shall not relieve the Indemnitor of any liability that it may have to the
Indemnified Party otherwise than under this Article VIII unless such failure to
notify shall have resulted in the waiver of any affirmative defenses to any
third party claims or otherwise materially prejudiced the rights or ability of
the Indemnitor to defend the claim, whereupon such liability of the Indemnitor
to the Indemnified Party under this Article VIII shall be reduced only to the
extent the Indemnitor must pay any such third party claim by reason of the
waiver of an affirmative defense.
8.3.2. Defense of Claims. Upon receipt by the Indemnitor of a
Claim Notice, the Indemnitor shall have the right to direct or control the
administration and defense of the claim described therein. The Indemnified Party
shall have the right to approve the Indemnitor's selection of counsel with
respect to any such claim, such approval not to be delayed or withheld
unreasonably. The fees and expenses of the Indemnitor's counsel as well as the
fees and expenses of the Indemnified Party (incurred at the request of the
Indemnitor or required by the Indemnitee to enforce its rights hereunder) shall
be borne by the Indemnitor.
8.3.3. Settlement. The Indemnified Party may not settle a
claim for which indemnification is sought without the prior written consent of
the Indemnitor and shall, as soon as practicable, give written notice to the
Indemnitor of any proposed settlement of any third party claim. The Indemnitor
shall have the right, in its sole discretion, to settle with money any claim for
which indemnification has been sought hereunder, but shall have no right to
settle any such claim by agreeing to, or committing to agree on behalf of the
Indemnified Party, any encumbrance, lien or pledge of the Assets, or any
restriction on the conduct or business relating to the Assets as such is then
being conducted. An Indemnified Party may refuse to accept a settlement proposed
by the Indemnitor, but in such event the Indemnitor shall not be obligated to
pay more than the amount for which the Indemnitor was willing to settle the
claim (and any other Losses associated with such settlement), and the
Indemnified Party shall be responsible for all Losses greater than such amount.
Except following the refusal by an Indemnified Party to accept a settlement
proposed by the Indemnitor, under the condition set forth in the preceding
sentence, no Indemnified Party may settle a claim for which indemnification has
been sought hereunder.
8.3.4. Cooperation. Any Indemnified Party shall make available
to any Indemnitor and its attorneys and accountants, all books, records and
documents relating to any claim hereunder and the parties shall render to each
other reasonable assistance in the defense of any claim hereunder which arises
as the result of claims made by persons not a party to this Agreement.
8.3.5. Apportionment. In the event a claim arises under this
Article VIII in respect of which both UOP and the Company are partially liable,
such liability shall be apportioned as between UOP and the Company by mutual
agreement or, in the event no such agreement can be reached, by a court or
competent jurisdiction.
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ARTICLE IX
TERMINATION
Section 9.1. Termination Events. Subject to the provisions of Section
9.2, this Agreement may, by written notice given at or prior to the Closing in
the manner hereinafter provided, be terminated and abandoned only as follows:
9.1.1. Breach. By either the Company or UOP upon written
notice, if a material default or breach shall be made by the other, with respect
to the due and timely performance of any of the other party's respective
covenants and agreements contained herein, or with respect to the due compliance
with any of its respective representations and warranties contained in Article
III or IV, as applicable, and such default cannot be cured prior to Closing and
has not been waived;
9.1.2. Mutual Consent. By written mutual consent of the
Company and UOP; or
9.1.3. Closing Date. By written notice of either the Company
or UOP, if the Closing shall not have occurred on or before June 2, 1999, or
such later date as may be agreed upon by the parties; provided, however, that
the right to terminate this Agreement under this Subsection 9.1.3 shall not be
available to either of the respective parties whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date.
Section 9.2. Effect of Termination. In the event this Agreement is
terminated pursuant to Section 9.1 herein, all further rights and obligations of
the parties hereunder shall terminate, except that the obligations set forth in
Sections 10.2 and 10.3 herein shall survive; it being specifically agreed that
if this Agreement is so terminated by either UOP or the Company because one or
more of the conditions to its obligations hereunder as set forth in Articles VI
and VII herein is not satisfied as a result of the other party's failure to
comply with its obligations under this Agreement, the rights of the terminating
party to pursue all legal remedies for breach of contract and damages shall
survive such termination.
ARTICLE X
MISCELLANEOUS
Section 10.1. Waiver of Bulk Sales Laws. Each of UOP and the Company
hereby waive compliance by either of them or their respective subsidiaries, in
connection with transactions contemplated by this Agreement, with any applicable
bulk sales laws with respect to or requiring notice to any of the Company's
creditors, in effect as of the Closing Date.
Section 10.2. Confidentiality. Except for such documents, reports,
information and data (including financial statements) which are or hereafter
become of a public nature, prior to Closing (and, if this Agreement is
terminated, for three years after the date hereof) UOP shall treat as
confidential and, except as otherwise required in connection with the
consummation of the
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transactions contemplated hereby, or except as compelled to disclose by judicial
or administrative process or, in the opinion of its counsel, by other
requirements of law, will not use, submit or disclose to, or file with, others,
or permit any person, firm, corporation or entity under its control to use,
submit or disclose to, or file with, others, any documents, reports, information
or data (including financial statements) concerning the Company which UOP may
obtain from the Company within 90 days of the date hereof; and, except for such
documents, reports and other written materials (including financial statements)
which are or hereafter become of a public nature, if this Agreement is
terminated, UOP shall return to the Company any and all such documents, reports
and other written materials (including financial statements) concerning the
Company or the Assets as the Company may reasonably request.
Section 10.3. Expenses. Except as otherwise provided in this Agreement,
each of the respective parties to this Agreement shall pay their own costs and
expenses (including all legal, accounting, broker, finder and investment banker
fees) relating to this Agreement, the negotiations leading up to this Agreement,
and the transactions contemplated by this Agreement.
Section 10.4. Amendment. This Agreement shall not be amended or
modified except by a writing duly executed by the Company and UOP.
Section 10.5. Entire Agreement. This Agreement, including the Exhibits
hereto and the Schedules delivered hereunder, contain all of the terms,
conditions and representations and warranties agreed upon by the parties
relating to the subject matter of this Agreement and supersede all prior and
contemporaneous agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting such subject matter.
Section 10.6. Notices. All notices, requests, demands and other
communications made in connection with this Agreement shall be in writing and
shall be deemed to have been duly given on the date of delivery, if delivered by
hand or by facsimile to the persons identified below, or three (3) days after
mailing if mailed by certified or registered mail, postage prepaid, return
receipt requested, addressed as follows:
If to UOP:
UOP LLC
25 East Algonquin Road
P.O. Box 5017
Des Plaines, IL 60017
Fax: (847) 391-2883
Attention: Brian A. Loftus
Vice President and General Counsel
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With a copy to:
Vedder, Price, Kaufman & Kammholz
222 N. LaSalle Street
Suite 2500
Chicago, IL 60601
Fax: (312) 609-5005
Attention: Richard L. Williams III
If to the Company:
LaRoche Industries Inc.
1100 Johnson Ferry Road, N.E.
Atlanta, Georgia 30342-1708
Fax: (404) 851-0324
Attention: Gerald B. Curran, Vice President and Chief
Financial Officer
With a copy to:
LaRoche Industries Inc.
1100 Johnson Ferry Road, N.E.
Atlanta, Georgia 30342-1708
Fax: (404) 851-0430
Attention: Vice President and General Counsel
Such addresses may be changed, from time to time, by means of a notice given in
the manner provided in this Section.
Section 10.7. Severability. If any provision of this Agreement is held
to be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible. In any event all other provisions of this Agreement shall be
deemed valid and enforceable to the full extent possible.
Section 10.8. Remedies.
(a) The remedies provided herein are exclusive and shall be
for indemnification except that the parties shall also have the remedy of
rescission in the event of fraud, provided that arbitration as contemplated by
Section 10.8(b) hereof shall not apply in the event of fraud, and all remedies
available at law or in equity shall be available in a fraud action. UOP agrees
that the Federal or state court in Atlanta, Georgia shall be the forum for any
such action by UOP and the Company agrees that the Federal or state court in
Chicago, Illinois shall be the forum for any fraud action by the Company;
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(b) Claims for Indemnification under this Agreement for any
matter (other than those claims for fraud) hereof shall be resolved in
accordance with the procedures for arbitration set forth in Section 3(e) of the
Inventory Holdback Agreement whether or not the Inventory Holdback Agreement is
then in effect; and
Section 10.9. Waiver. Waiver of any term or condition of this Agreement
by either of the respective parties shall only be effective if in writing and
shall not be construed as a waiver of any subsequent breach or failure of the
same term or condition, or a waiver of any other term or condition, of this
Agreement.
Section 10.10. Binding Effect; Assignment. No party to this Agreement
may assign or delegate, by operation of law or otherwise, all or any portion of
its rights, obligations or liabilities under this Agreement without the prior
written consent of the other party to this Agreement, which it may withhold in
its absolute discretion except.
Section 10.11. Successors and Assigns.
10.11.1. Attachment of Obligations. Subject to the provisions
of Section 10.10 herein, the rights, liabilities and obligations of the parties
hereto arising under this Agreement shall (whether by operation of law or by
virtue of Section 10.11.1 of this Agreement) attach to the respective parties'
successors and assigns.
10.11.2. Survival. The provisions of this Section 10.11 shall
remain in full force and effect and shall survive for an indefinite period
without end.
Section 10.12. No Third Party Beneficiaries. Except as provided in this
Agreement, nothing in this Agreement shall confer any rights upon any person or
entity who or which is not a party to this Agreement.
Section 10.13. Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures to each counterpart
were upon a single instrument, and all such counterparts together shall be
deemed an original of this Agreement.
Section 10.14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware and of the United
States without giving effect to the doctrine of conflicts of laws.
Section 10.15. Time of the Essence. Time shall be of the essence in the
performance of this Agreement.
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Section 10.16. Construction.
10.16.1. Words. All references in this Agreement to the
singular shall include the plural, the plural shall include the singular where
applicable, and all references to gender shall include both genders and the
neuter. All references in this Agreement to days shall be calendar days unless
specified as business days. All accounting terms not otherwise identified herein
shall have the meanings assigned to them in accordance with GAAP consistently
applied.
10.16.2. Cross-References. References in this Agreement to any
Article shall include all Sections, Subsections, and Paragraphs in such Article;
reference in this Agreement to any Section shall include all Subsections and
Paragraphs in such Section; and references in this Agreement to any Subsection
shall include all Paragraphs in such Subsection. Words "herein," "hereof,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular paragraph or other subdivision unless the context
otherwise so admits.
10.16.3. No Presumption. In interpreting any provision of this
Agreement no presumption shall be drawn against the party drafting the
provision.
10.16.4. Exhibits and Schedules. Exhibits and Schedules
referred to herein are hereby incorporated into and made part of this Agreement.
10.16.5. Headings. The table of contents and the headings to
each Article, Section and Subsection herein are for the purposes of convenience
only and shall not be read or interpreted as having any meaning or effect.
EXECUTION AND DELIVERY
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with legal and binding effect as of the date and year first above
written.
UOP LLC THE COMPANY
LAROCHE INDUSTRIES INC.
By: /s/ Carlos A. Cabrera By: /s/ Gerald B. Curran
--------------------------- ------------------------------------
Name: Carlos A. Cabrera Name: Gerald B. Curran
-------------------------
Title: Vice President Title: Vice President and Chief Financial
------------------------ Officer
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"Exhibits and schedules omitted intentionally, but will be provided upon
request."
