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Exhibit 10.11
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HEINRICH VON METTENHEIM
CERTIFIED COPY
Deed No. 328/1995
BUSINESS PURCHASE AGREEMENT
between
"XXXXX" VERWALTUNGSGESELLSCHAFT mbH,
FIBERITE HOLDINGS, INC.
and
FIBERITE EUROPE GmbH,
DEUTSCHE ICI GmbH
DATED OCTOBER 6, 1995
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No. 328 of the Roll of Deeds for 1995 yM
DONE
in Frankfurt am Main on October 6, 1995
Before me the undersigned Notary
in the area of the Oberlandesgericht Frankfurt am Main
HEINRICH VON METTENHEIM
with my offices in Xxxxxxxx-xxx-Xxxxx-Xxxxxxx 00-00
X-00000, Xxxxxxxxx xx Xxxx
appeared today
(1) Xx. Xxxxxxxxx Xxxxxx, with his business address at Bockenheimer
Xxxxxxxxxxx 00-00, 00000 Xxxxxxxxx xx Xxxx, identified by his personal
identity card, acting according to his declaration not in his own
name and on his own behalf but on behalf of:
a) Fiberite Europe GmbH, Ostringen,
b) Deutsche ICI GmbH, Frankfurt am Main,
c) ICI Lacke Farben GmbH, Hilden,
on presentation of powers of attorney attached hereto;
(2) Xx. Xxxx Xxxxxxxx, with his business address at Xxxxxxxx 00, 00000
Xxxxxxxxx xx Xxxx, identified by his German driving license, acting,
according to his declaration, not in his own name and on his own behalf
but on behalf of
a) Fiberite Holdings, Inc., co DLJ Merchant Banking Inc., 0000
Xxxxxxxx, Xxx Xxxx, X.X. 00000 XXX,
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b) "XXXXX" Verwaltungsgesellschaft mbH. Frankfurt am Main. (in future
named: Fiberite Europe GmbH with place of business in Monchengladbach)
on presentation of telefax copies of powers of attorney attached hereto,
promising to deliver original powers of attorney subsequently.
The persons appearing requested that their declarations be made in the English
language. The officiating notary, who has a good command of the English
language, confirmed that the persons appearing have a good command of the
English language. The persons appearing waived their right to have an
interpreter present after having been informed of such right by the officiating
notary.
This having been done, the persons appearing declared, requesting that it be
notarised:
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BUSINESS PURCHASE AGREEMENT
BETWEEN
XXXXX VERWALTUNGSGESELLSCHAFT mbH
FIBERITE HOLDINGS, INC.
AND
FIBERITE EUROPE GMBH
DEUTSCHE ICI GmbH
Dated October 6, 1995
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BUSINESS PURCHASE AGREEMENT
BUSINESS PURCHASE AGREEMENT dated as of October 6, 1995, between Fiberite
Europe GmbH, registered in the commercial register of the Local Court Bruchsal
sub HR B 1075 ("Seller") and Deutsche ICI GmbH, registered in the commercial
register of the Local Court Frankfurt am Main sub HR B 36790 ("Seller's
Guarantor") on the one hand, and Xxxxx Verwallungsgesellschaft mbH, registered
in the commercial register of the Local Court Frankfurt am Main sub HR B 40230
("Purchaser") and Fiberite Holdings, Inc. ("Purchaser's Guarantor"), a Delaware
corporation, on the other hand.
WHEREAS, Purchaser desires to acquire from Seller, and Seller desires to sell
to Purchaser, the entire business currently conducted by Seller as a going
concern on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
and covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common
control with such Person. A Person shall not be deemed to be an
Affiliate of any other person solely as a result of being a director or
officer of such other Person.
"Ancillary Agreements" means the Transition Services Agreement and the
Real Property Transfer Agreement.
"Aviation Product" means "Aviation Product" as defined in Schedule
3.24.
"Balance Sheet" means the balance sheet set forth in the audited
financial statements of Seller dated December 31, 1994.
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"Balance Sheet Date" means December 31, 1994.
"Business" means the business of the design, manufacture, sale (including the
sale of products manufactured by Seller and of products purchased by Seller
from ICI Composites Inc.), servicing and support of advanced composite
materials as currently conducted by Seller.
"Business Day" means a day of the year on which banks are not required or
authorized to be closed in Frankfurt am Main.
"Closing" means the closing of the purchase and sale of the Business.
"Closing Date" means the date of this Agreement.
"Current Assets" means to the extent transferred to Purchaser accounts
receivable (including intercompany receivables with ICI Composites Inc.),
inventory (including raw materials, work in process, finished goods and
supplies), prepaid expenses ("Rechnungsabgrenzungsposten" -- including without
limitation annual bonuses such as the "Maigeld"), less related reserves, in
each case if and to the extent such assets are not part of the Excluded Assets.
"Current Liabilities" means to the extent transferred to Purchaser accounts
payable (including intercompany payables with ICI Composites Inc.), employee
accruals and other accrued expenses excluding income taxes; for the avoidance
of doubt, accounts payable in respect of which the Seller has issued cheques
prior to the Closing Date which are not presented for payment as of the Closing
Date shall be deemed to be accounts payable.
"Employee Plan" means any material compensation or benefit, plan, policy or
arrangement currently maintained or contributed to by Seller for its current or
former employees.
"GAAP" means German generally accepted accounting principles.
"ICI" means Imperial Chemical Industries PLC, a corporation organized under the
laws of England.
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"ICI Company" means ICI or any Affiliate of ICI (excluding Seller and ICI
Composites Inc).
"Included ICI Assets" means all assets owned by Deutsche ICI GmbH or any other
ICI Company and used by Deutsche ICI GmbH or any ICI Company exclusively or
principally for the provision of services to Seller (excluding all corporate
credit, telephone and similar cards held by Seller Employees where such cards
have been provided to Seller Employees in connection with any ICI Company and
excluding all computer and information technology rights and systems owned or
operated by Deutsche ICI GmbH or any other ICI Company for the benefit of
Seller and excluding any assets owned by Deutsche ICI-GmbH or any ICI Company
and utilized in the performance of the Ancillary Agreements) in the operation
of the Business as presently conducted, other than the Excluded Assets.
"Income Taxes" means any liability for taxes that arises in relation to a Tax
that is based upon, measured by, or calculated with respect to income, profits
or gross receipts (other than value added tax).
"Indemnifiable Taxes" means Taxes due and payable by Seller pertaining to any
taxable period (or portion thereof) ending on or prior to the Closing Date,
including any Tax resulting from any transaction pursuant to which the Excluded
Assets remain or become the property of the Seller or any Affiliate of the
Seller. With respect to a taxable period that begins before the Closing Date
and ends after the Closing Date, the portion of any Taxes attributable to such
period that will be treated as Taxes of a Pre-Closing Tax Period will be deemed
to be: (i) in the case of any Other Tax, the amount of such Other Tax for the
entire period multiplied by a fraction, the numerator of which is the number of
days in the period ending on the Closing Date and the denominator of which is
the number of days in the entire period and (ii) in the case of any Income
Taxes, the Income Tax for the entire taxable period, multiplied by a fraction,
the numerator of which is the hypothetical Income Tax for the Pre-Closing Tax
Period (determined on the basis of an interim closing of the books, without
annualisation) and the denominator of which is the sum of such numerator plus
the hypothetical Income Tax for the balance of the taxable period (determined
on the basis of such interim closing, without annualisation) The hypothetical
Tax for any period shall be zero (in case where no Tax is due) or a positive
amount. In-
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demnifiable Taxes shall in no event include any interest, any penalties or any
additions to Tax, or any interest on penalties or additions to Tax resulting
from any action or failure to act, following the Closing, on the part of
Purchaser except to the extent resulting from any act or omission of Seller. No
Tax shall be included in Indemnifiable Taxes to the extent the liability for
such Tax is reflected in the Financial Statements or in the Statement of
Working Capital.
"Intellectual Property" means inventions, patents and patent applications;
trademarks, trademark registrations and applications therefor; trade names,
symbols and logos; copyrights; service marks; service xxxx registrations and
applications therefor; know-how; and trade secrets.
"Manufacturing Facilities" means the manufacturing and office facilities owned
or leased by Seller located at Ostringen and Monchengladbach.
"Material Adverse Effect" means a material adverse effect on the financial
condition, business, assets or net worth or results of operations of Seller
taken as a whole.
"Occurrence" means "Occurrence" as defined in Schedule 3.24.
"Other Taxes" means any liability for Taxes that arises in relation to Taxes
that are not Income Taxes.
"Person" means an individual, corporation, partnership, association, trust or
other entity or organization, including a government or political subdivision or
an agency or instrumentality thereof.
"Post-Closing Tax Period" means any period (or portion thereof) ending after
the Closing Date.
"Pre-Closing Tax Period" means any period (or portion thereof) ending on or
before the Closing Date.
"Seller Employee Plan" means Employee Plan sponsored or maintained by Seller or
any ICI Company for the benefit of current or former employees of Seller.
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"Tax" or "Taxes" means (i) all federal, state, local, foreign and other taxes
and similar governmental charges or assessments (including without limitation
income tax, trade tax, property tax, transfer and sales tax imposed by any
governmental authority responsible for the imposition of any such tax, whether
attributable to statutory or non-statutory rules and including interest,
penalties, additions to tax, and interest on penalties or additions to Tax;
(ii) any liability of Seller for the payment of any amounts described in clause
(i) as a result of being a member of an affiliated group of corporations filing
a consolidated tax return for federal, state or local tax purposes, for periods
prior to the Closing Date, and (iii) any liability of Seller for amounts
described in clause (i) under any Tax sharing or Tax allocation agreement
entered into prior to the date hereof.
"Transition Services Agreement" means the transition services agreement dated
as of the Closing Date between ICI Lacke Farben GmbH, Hilden and Purchaser.
"Working Capital" means Current Assets less Current Liabilities.
(b) Each of the following terms is defined in the Section set forth opposite
such term:
Term Section
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Arbitrated Amount 2.9(d)
Audited Financial Statements 3.12
Authorizations 3.9(a)
Claim Costs 7.3
Collective Bargaining Agreement 3.16(a)
Contracts 2.1(a)(iii)
Cost Effective Cleanup 7.9(g)
Designated Representatives 7.9(e)
Environmental Law 3.9(1)
Excluded Assets 2.2
Files 5.11(a)
Financial Statements 3.12
Government Bid 3.11(a)(vi)
Government Contract 3.11(a)(vi)
Hazardous Materials 3.9(e)
ICI Letters 5.2(a)
Indemnified Party 7.4(a)
Indemnifying Party 7.4(a)
Independent Accounting Firm 2.9(d)
Material Agreement 3.11(a)(v)
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Necessity Test 7.9(i)(ii)
Liens 3.7(a)
On-Site Cleanup 7.9(b)
Off-Site Remediation Liabilities 7.9(a)
On-Site Remediation Liabilities 7.9(a)
Permits 3.5(a)
Permitted Liens 3.7(a)
Purchase Price 2.8
Purchaser's Amount 2.9(d)
Purchaser Indemnitees 7.3
Real Property 7.9(a)
Relevant Factors 7.9(i)(ii)
Retained Seller Information 5.7
Retained Business Information 5.8
Seller Employee 6.1
Seller Indemnitees 7.2
Seller's Accountants 2.9(a)
Seller's Amount 2.9(d)
Statement of Working Capital 2.9(a)
Tax Returns 3.14
Testing 7.9(i)
Third Party Claim 7.4(b)
Warranties 3.20
ARTICLE II
PURCHASE AND SALE; TRANSFER
2.1 Purchase and Sale; Transfer
(a) As hereinafter provided Seller hereby sells and transfers to
Purchaser as a going concern, with economic effect as of the Closing Date, the
Business including all assets - owned by the Seller on the date hereof - and
liabilities attributable thereto, other than Excluded Assets. The sale and
transfer shall include, without limitation, all right, title and interest of
Seller in, to and under:
(i) all tangible fixed assets used exclusively or
principally in the Business including, without limitation, (x)
all real property and leases of real property owned by Seller,
in each case together with all buildings, fixtures and
improvements erected thereon, including without
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limitation the items listed on Schedule 2.1(a)(i), and (y) all machinery,
equipment, furniture, office equipment, communication equipment, vehicles,
storage tanks and other tangible fixed assets used exclusively or principally
in the Business, including without limitation the items listed on Schedule
2.1(a)(i);
(ii) all Current Assets, namely (y) all accounts receivable (see Schedule
2.1(a)(ii)), and (z) all inventory and prepaid expenses, including without
limitation the items listed on Schedule 2.1(a)(ii);
(iii) all rights and obligations under all contracts, agreements (except for
the profit and loss sharing agreement between Seller and Deutsche ICI GmbH and
except as set forth in Schedule 2.1(a)(iii)), leases, licenses, commitments,
sales and purchase orders and other instruments, including without limitation
the items listed on Schedule 2.1(a)(iii) (collectively, the "Contracts");
(iv) all of Seller's rights and claims against third parties relating to the
business now and previously conducted by Seller, including, without limitation,
unliquidated rights under manufacturers' and vendors' warranties;
(v) all of Seller's rights to Intellectual Property owned by Seller or used
exclusively or principally in the Business;
(vi) all licences, permits or other governmental authorization affecting, or
relating in any way to, the Business, including without limitation the items
listed on Schedule 2.1(a)(vi) except for the items listed in Schedule 2.2(iv);
(vii) all books, records, files and papers or portions thereof relating
exclusively or principally to the Business;
(viii) all of Seller's rights to computer software, programs and data owned by
Seller or used exclusively or principally in the Business;
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(ix) the firm name "Fiberite Europe" and all other good-will
attributable exclusively or principally to the Business
in each case without the Excluded Assets;
(b) Seller and Purchaser hereby make all declarations and carry out
all acts which are necessary to effectuate the transactions
contemplated in Section 2.1(a) hereof. The transfer of the
Business shall thereby become effective as of the Closing Date.
To the extent that the following Sections 2.4 - 2.6 of this
Agreement provide for specific declarations and acts with regard
to specific assets, this shall serve only the purpose of
emphasis and clarity.
2.2 Excluded Assets
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Purchaser expressly understands and agrees that the following assets and
properties of Seller (the "Excluded Assets") shall be excluded from the
sale and transfer of the Business:
(i) all of Seller's cash and cash equivalents;
(ii) all intercompany balances between Deutsche ICI GmbH and Seller
in favour of Seller existing on or prior to the Closing Date;
(iii) Seller's loss compensation claim for the losses occurred in the
current fiscal year against Deutsche ICI GmbH under the profit and loss
sharing agreement;
(iv) all assets listed on Schedule 2.2(iv);
(v) all of Seller's bank accounts.
2.3 Included ICI Assets
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The parties acknowledge and will ensure that the Included ICI Assets
will with effect from the Closing become the property of Purchaser without
additional consideration. As regards the assets attributable exclusively or
principally to the services rendered by the foreign employees referred to in
Section 6.5 and 6.6 and owned by an ICI Company, Seller shall ensure that such
assets become the property of Purchaser without additional consideration. Lease
agreements
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and other agreements attributable exclusively or principally to the services of
such foreign employees shall transfer to Purchaser to the extent possible. The
parties agree to cooperate with each other and to take any action which is
reasonably necessary after the Closing in order to give effect to this Section.
For the avoidance of doubt, all assets owned or used by Deutsche ICI GmbH or
any ICI Company in the provision of services to Seller (including, without
limitation, all corporate credit, telephone and similar cards held by Seller
Employees where such cards have been provided to Seller Employees in connection
with any ICI Company and including all computer and Information technology
rights and systems owned or operated by Deutsche ICI GmbH or any ICI Company
for the benefit of Seller) other than Included ICI Assets shall not become the
property of Purchaser. Seller shall be responsible for any Taxes relating to
any transfers of assets pursuant to this Section.
2.4 Personal Property
(a) Seller and Purchaser agree that the title to all of the
personal property which shall be transferred pursuant to
Section 2.1(a) of this Agreement owned by Seller, shall pass
to Purchaser at the Closing Date.
(b) To the extent that the personal property referred to in Section
2.1(a) hereof is at Closing Date in the direct possession of
seller, the transfer of possession is replaced by the agreement
that Seller shall hold such assets in custody for Purchaser
(Section 930 German Civil Code), free of costs for Purchaser,
and that Purchaser shall be entitled to take direct possession
thereon at any time. If and to the extent Seller has only
indirect possession of such assets, Seller hereby assigns to
Purchaser its claim for repossession against such persons who
have direct possession (Section 931 German Civil Code).
2.5 Contracts
(a) Seller and Purchaser agree that the Contracts (except as set
forth in Schedule 2.1(a)(iii)) are transferred to Purchaser as
of the Closing Date.
(b) If any consent is required for any such transfer, and to the
extent such consent has not been
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obtained prior to the Closing, Seller and Purchaser will use all
reasonable efforts to obtain the consent of the other parties. If such
consent is not obtained, Seller and Purchaser will treat each other
internally as if the consent had been obtained. This includes Seller's
obligation to fulfill all rights and duties under the respective
Contract in its own name but for the account of Purchaser.
2.6 Real Property
As regards the declaration of transfer of the real property
(Auflassungserklarung), Seller and Purchaser shall enter into a separate
agreement before a German notary which shall form a part of this notarial
deed.
2.7 Assumption of Liabilities
(a) Unless expressly provided otherwise in this Agreement, Purchaser
hereby assumes all liabilities of Seller existing at the Closing Date
and/or thereafter and attributable to the Business including without
limitation all liabilities resulting from agreements entered into by
Seller for the Business.
(b) Recurrent payment obligations (salaries, lease payments and similar)
attributable to the period until the Closing Date shall be discharged
by Seller. As from the Closing Date the Purchaser shall assume such
obligations.
2.8 Purchase Price
(a) Subject to any adjustment as provided in Section 2.9., the aggregate
Purchase Price (the "Purchase Price") for the Business shall be DM 10
(ten) million.
(b) At the Closing Date Purchaser shall deliver (or cause to be delivered)
to Seller DM 10 (ten) million immediately available funds by wire
transfer to a bank account designated by Seller by notice delivered
to Purchaser not later than two Business Days prior to the Closing
Date.
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2.9 Preparation of Statement of Working Capital
(a) Statement of Working Capital. As soon as practicable,
but in any event within forty-five Business Days following the
Closing Date, Seller shall deliver to Purchaser a statement of
the Working Capital (the "Statement of Working Capital") as
of the close of business on the Closing Date, together with a
report thereon of KPMG, independent accountants for Seller
("Seller's Accountants"), to the effect that the amounts
reflected therein have, except as set forth in Schedule 2.9(a),
been prepared in accordance with the policies and procedures
used to prepare the 1994 Audited Financial Statements as
described in Section 3.12.
(b) Cooperation. Purchaser shall provide Seller and Seller's
Accountants full access to the books, records, facilities and
employees of Purchaser (which employees shall assist Seller's
Accountants in carrying out procedures necessary in preparing
the Statement of Working Capital) and shall cooperate fully
with Seller and Seller's Accountants, in each case to the
extent required by Seller and Seller's Accountants in order to
prepare the Statement of Working Capital and to investigate any
disputes or other matters relating thereto; provided, that any
such investigation shall be conducted in such a manner as not
to interfere unreasonably with the operation of Purchaser.
(c) [omitted].
(d) Disputes. Subject to this Section 2.9(d), the Statement of
Working Capital delivered by Seller to Purchaser shall be final,
binding and conclusive on the parties hereto. Within twenty
Business Days of Purchaser's receipt of the Statement of
Working Capital, Purchaser may dispute any amounts reflected
on the Statement of Working Capital by notifying Seller in
writing of each disputed item, specifying the amount thereof in
dispute and setting forth, in detail, the basis for such
dispute. During such twenty Business Day period, an independent
accounting firm to be nominated by Purchaser shall have
reasonable access to all working papers, supporting analyses,
computations, accounting records and general ledger reports
used by Seller or Seller's Accountants to prepare the
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Statement of Working Capital. Purchaser's notice shall also set forth
the amount it believes was the Working Capital of Seller as of the close
of business on the Business Day preceding the Closing Date ("Purchaser's
Amount"). In the event of such a dispute, Purchaser and Seller shall
attempt to reconcile their differences and any resolution by them as to
any disputed amounts shall be final, binding and conclusive on the
parties. If Purchaser and Seller are unable to reach a resolution within
twenty Business Days of Purchaser's written notice of dispute to Seller,
Purchaser and Seller shall submit the items remaining in dispute for
resolution to an independent accounting firm of national reputation
mutually appointed by Seller and Purchaser (the "Independent Accounting
Firm"), which shall, within twenty Business Days of such submission,
determine and report to Seller and Purchaser upon such remaining
disputed items and on the amount of Working Capital of Seller as of the
close of business on the Business Day preceding the Closing Date (the
"Arbitrated Amount"), which amount shall in no event be less than
Purchaser's Amount or greater than the amount of Working Capital set
forth on the statement of Working Capital delivered by Seller ("Seller's
Amount"). The report of the Independent Accounting Firm shall be final,
binding and conclusive on Seller and Purchaser. The fees and
disbursements of the Independent Accounting Firm shall be paid by
Purchaser and Seller in the following percentages: (i) in the case of
Seller, A divided by C, and (ii) in the case of Purchaser, B divided by
C, where (x) A equals the difference between Seller's Amount and the
Arbitrated Amount, (y) B equals the difference between the Arbitrated
Amount and Purchaser's Amount and (z) C equals the difference between
Seller's Amount and Purchaser's Amount.
(e) [omitted].
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants as of the Closing Date as follows:
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3.1 Organization and Authority of Seller.
(a) Seller is a corporation duly organized and validly existing
under the laws of Germany and has all necessary corporate power
and authority to enter into and perform this Agreement and to
consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller,
enforceable against it in accordance with its terms.
(b) Seller has all requisite corporate power and authority to own
its properties and assets and to carry on the Business.
(c) Seller is duly qualified to transact business and is in good
standing (where the concept of good standing applies) in each
state or jurisdiction in which it owns material assets or
transacts a material part of its business, except where the
failure to so qualify would not reasonably be expected to have a
Material Adverse Effect.
(d) Except as set forth in Schedule 3.1(d), Seller has made
available to Purchaser complete and correct copies of (i) the
Articles of Incorporation of Seller, as amended to the Closing
Date, certified by the commercial registry; (ii) [omitted] (iii)
[omitted] and (iv) [omitted]. Except as set forth in Schedule
3.1(d), such copies are true, correct and complete in all
material respects and, except as set forth in Schedule 3.1(d),
contain all amendments through the date of this Agreement.
(e) Seller is not the legal or beneficial owner of any equity
securities or other ownership interests of any corporation,
partnership, joint venture, trust, business association or other
legal entity.
3.2 No Conflict; Consents and Approvals.
(a) Except as set forth in Schedule 3.2(a), the execution, delivery
and performance of this Agreement by Seller does not (i)
conflict with or violate any law, rule, regulation, order,
judgment, injunction, decree, determination or award applicable
to Seller, (ii) conflict with or violate any law,
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rule, regulation, order, judgment, injunction, decree, determination or
award applicable to Seller, (iii) conflict with or violate the Articles of
Incorporation or by-laws of Seller, or (iv) require any material
pre-Closing consent, notice, authorization or approval under, result in any
breach of, or constitute a default (or event which with notice or lapse of
time, or both, would become a default) under, or result in a creation of
any lien or other encumbrance on any of the properties or assets of
Purchaser pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which
Seller or any of its Affiliates is a party or by which any of them or any
of their respective properties is bound or affected, except in the case of
Sections 3.2(a)(i) and (ii), for such conflicts, violations, breaches and
defaults, and for such consents and approvals the failure of which to
obtain, would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Except as set forth in Schedule 3.2(a),
there are no other agreements to which Seller and Guarantor or any other
ICI Company is a party or by which Seller Guarantor or any other ICI
Company is bound, regarding the transfer of any assets of the Business or
prohibiting such transfer outside the ordinary course of business.
(b) The execution and delivery of this Agreement by Seller do not, and the
performance of this Agreement by Seller does not require any consent,
approval, authorization or other action by, or filing with or notification
to, any domestic or foreign governmental or regulatory authority or any
other person except for the filing with the Federal Cartel Authority which
has been made and approved as contemplated by Section 8.13 hereof and,
except where failure to obtain such consents, approvals, authorizations or
actions, or to make such filings or notifications, would not (i) prevent
Seller from performing any of its obligations under this Agreement or (ii)
otherwise prevent the consummation of the transactions contemplated herein
by Seller.
3.3 Litigation. Except as set forth in Schedule 3.3, there are no claims,
actions, suits or proceedings pending, or to the knowledge of each of Seller
and Guarantor
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threatened, nor to the knowledge of each of Seller and Guarantor
are there any investigations pending or threatened, against or
specifically affecting Seller or to which its respective properties
or assets are subject, before any court, arbitrator, or administrative,
governmental or regulatory authority or body, domestic or foreign,
that (i) challenge or otherwise put in issue the authority of Seller
to enter into or perform this Agreement, (ii) challenge or otherwise
put in issue the validity of this Agreement or any of the transactions
contemplated hereby or (iii) if adversely decided, would materially
adversely affect the ability of Seller to consummate the transactions
contemplated hereby or (iv) if adversely decided, would reasonably
be expected to have a Material Adverse Effect (other than with respect
to those matters described in Sections 3.3(i), (ii) and (iii)), and,
to the knowledge of each of Seller and Guarantor, there is no factual
basis upon which any such claim, action, suit or proceeding would
reasonably be likely to be asserted or commenced. Seller is not subject
to any order, judgment, injunction, decree, determination or award
which has or would reasonably be expected to have a Material Adverse
Effect.
3.4 [omitted].
3.5 Licences, Permits and Qualifications.
(a) Except as set forth in Schedule 3.5(a), Seller possess and,
upon consummation of the transaction contemplated herein,
Purchaser will possess all permits, licenses, orders and
approvals of foreign, federal, state or local governmental
or regulatory bodies that are required in order to permit
Seller to carry on the Business, except for those permits,
licenses, orders and approvals the failure of which to obtain
would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect (hereinafter referred
to as the "Permits"). Except as set forth in Schedule 3.5(a),
the Permits are in full force and effect and, to the knowledge
of each of Seller and Guarantor, no suspension or cancellation
of the Permits is threatened.
(b) To the knowledge of Seller, all products sold by Seller pursuant
to qualification requirements established by Seller's customers
were produced in a manner consistent with the requirements of
such
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qualification where the failure to do so, individually or in the
aggregate, would reasonably be expected to have a Material
Adverse Effect. To its knowledge, Seller held all necessary
qualifications for its products from its customers pursuant to
which sales were made to such customers during the periods
covered by the Financial Statements. Except as set forth in
Schedule 3.5(b), Seller has not, since July 1, 1990, received
any notification that any material qualifications for Seller's
commercially manufactured products as established by Seller's
customers have been revoked or terminated, and to the knowledge
of each of Seller and Guarantor, no such notification,
revocation or termination is threatened or contemplated.
3.6 Compliance with Laws. Seller is not in violation of any foreign,
federal, state or local law, statute, ordinance or regulation in effect
on or prior to the Closing Date, except for laws, statutes, ordinances
or regulations dealing with environmental, tax, employee benefits, and
labor and employment matters (which matters are exclusively the subject
of Sections 3.9, 3.14, 3.15 and 3.16, respectively) and except for such
violations which individually or in the aggregate would not reasonably
be expected to have a Material Adverse Effect.
3.7 Properties.
(a) Except for property (other than real property) and assets sold
since the Balance Sheet Date in the ordinary course of business
which, other than finished goods in inventory, did not in the
aggregate exceed property and assets having a fair market value
in excess of DM 75,000, and, except in the case of Intellectual
Property, which is exclusively the Subject of 3.10, and for
property acquired under retention of title clauses in the
ordinary course of business, Seller has good and valid title to
or rights in, or in the case of leased property has valid
leasehold interests in, all material personal property and
assets (whether tangible or intangible) reflected on the Balance
Sheet or acquired after the Balance Sheet Date. Seller has, and
upon consummation of the transaction contemplated herein and,
where necessary, registration, Purchaser will have good and
marketable, indefeasible, title to, or in the case of
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leased real property has valid leasehold interests in, all real property
reflected on the Balance Sheet or acquired after the Balance Sheet Date.
None of such property or assets (whether real or personal) is subject to
any liens, security interests, claims or other charges ("Liens"), except
(i) Liens for Taxes not yet due, (ii) mechanic's, materialman's and
landlord's and other statutory Liens of vendors not perfected or
recorded under law, (iii) Liens that do not materially detract from the
value or materially interfere with the present use of the assets to
which they apply and (iv) Liens disclosed in Schedule 3.7(a)
(collectively, "Permitted Liens").
(b) Schedule 3.7(b) sets forth (i) all real property owned by Seller, (ii)
all real property leased by Seller (and the annual rental for such
property), (iii) all personal property leased by Seller requiring annual
payments in excess of DM 25,000 (and the annual rental for such
property), and (iv) all personal property owned by the Seller with a
book value of DM 25,000 or more. Except as set forth in Schedule 3.7(b),
the property listed in Schedule 3.7(b) and all other personal property
owned or leased by Seller (all of which, in each case, is being
transferred to Purchaser) is all that is used to carry on the Business
as currently conducted. Seller currently conducts reasonable maintenance
in the ordinary course of business consistent with past practice with
respect to all machinery and equipment presently being utilized by it
in the manufacture of its products.
(c) Except as set forth in Schedule 3.7(c), the leases of real and personal
property described in Sec. 3.7(b) are in full force and effect, all
rentals or other payments due and payable thereunder prior to the date
hereof have been duly paid or adequate accruals therefor have been made
and are accurately reflected in the Financial Statements, and Seller is
in compliance with all material provisions of each such lease. To the
knowledge of each of Seller and Guarantor, no default or event of
default exists and no event which, with notice or lapse of time, or
both, would constitute a default or event of default has occurred and is
continuing, under the terms or provisions, express or implied, of any
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of such leases, nor has Seller received notice of any claim of such
default or event of default.
(d) There are no eminent domain proceedings pending or, to the knowledge
of each of Seller and Guarantor, threatened, against any property
owned by Seller or any material portion thereof which proceedings (if
resulting in a taking) would reasonably be expected to have a Material
Adverse Effect on the use of such property as currently used in the
operation of the Business.
(e) [omitted].
(f) Since July 1, 1990 Seller has not received any notice or has knowledge
of violations of any local zoning or land use or other similar
regulations in respect of the real property listed on Schedule 3.7(b)
which are in effect or remain unresolved.
3.8 Bank Accounts. [omitted].
3.9 Environmental Protection. Except as would not reasonably be expected to
have a Materially Adverse Effect or as referred to in Schedule 3.9 hereto:
(a) Seller has obtained all permits, licences and other authorizations
(hereinafter collectively referred to as "Authorizations") which are
required with respect to the current operation of the Business, it
assets and the use, ownership and operation of the Business, its
assets and the use, ownership and operation of the Manufacturing
Facilities and any real property under any Environmental Law and each
such Authorization is in full force and effect.
(b) Seller is in compliance with all terms and conditions of the
Authorizations specified in sub-section 3.9(a) above, and is also in
compliance with, and not subject to liability under, any Environmental
law (including, without limitation, compliance with standards,
schedules and time-tables therein having the force of law).
(c) There is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice of violation, proceeding, notice or demand
letter or request for information pending or, to the knowledge of each
of Seller and Guarantor, threatened, nor to the knowledge of Seller or
Guarantor is there any
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investigation pending or threatened, under any Environmental Law
against Seller or against any person or entity whose liability
for any such matter Seller has retained or assumed either by
agreement or by operation of law.
(d) [omitted]
(e) Since July 1, 1990, Seller has not received any notification
that any hazardous substances or any pollutant or contaminant or
any toxic substances, hazardous waste, hazardous constituents,
asbestos or asbestos containing material, petroleum, including
crude oil and any fractions thereof, or other waste, chemicals,
substances or materials subject to regulation under any
Environmental Law (collectively "Hazardous Materials") that
Seller has used, generated, stored, treated, handled,
transported or disposed of or arranged for transport for
disposal or treatment of, or arranged for disposal or treatment
of, has been found at any site at which any governmental agency
or private party is, to the knowledge of each of Seller and
Guarantor, conducting or planning to conduct an investigation or
other action pursuant to any Environmental Law.
(f) Since July 1, 1985, and except as may have occurred in
compliance with applicable law, there have been no releases
(i.e., any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) of Hazardous Materials by Seller on, at,
upon, into or from any of the real properties owned, leased,
operated or used by Seller or facilities thereon.
(g) There is no asbestos in, on, or at any real property or
facility or equipment owned, leased or operated by Seller.
(h) [omitted]
(i) No notice or other filing, or consent or approval is required
under any Environmental Law in connection with or as a result of
the transactions contemplated by this Agreement.
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(j) There are no underground storage tanks or related piping located
at, on or under any real properties owned, leased or operated by
Seller.
(k) Seller has delivered or otherwise made available for inspection
to Purchaser or its agents true, complete and correct copies of
any reports, studies, assessments, analyses, evaluations, test
or monitoring results in each case prepared by third parties
since July 1, 1990, possessed, available to or initiated by or
on behalf of Seller pertaining to Hazardous Materials in, on
beneath or adjacent to any of the Manufacturing Facilities or
real properties owned, leased, operated or used by Seller or
reading Seller's compliance with or liability under any
Environmental Law.
(l) For purposes of this Agreement, "Environmental Law" means any
applicable foreign, federal, state and local laws or
regulations, codes, ordinances, rules, orders, decrees or
judgments in effect on or prior to the Closing Date relating to
pollution or protection of public or employee health or the
environment, including without limitation, those relating to (i)
any releases or threats of releases of Hazardous Materials into
the environment (including, without limitation, ambient air,
indoor air, surface water, ground water, land surface or
subsurface) and (ii) underground or above ground storage tanks,
and related piping, and releases or threatened releases
therefrom.
3.10 INTELLECTUAL PROPERTY.
(a) Schedule 3.10(a) accurately sets forth or describes all domestic
and foreign patents, patent applications, patent licenses,
written know-how licenses, trade names, material secrecy
agreements, registered trademarks, registered copyrights,
registered service marks, trademarks and service xxxx
applications currently used or held for use in the Business.
(b) To Seller's knowledge, Seller owns and upon consummation of the
transactions contemplated herein Purchaser will own, all
licenses or has rights to use all Intellectual Property to the
extent used or held for use in connection with the Business and
transferable hereunder.
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(c) Except as set forth in Schedule 3.10 (c), in the last 7 years,
no claim has been asserted against Seller, and Seller and
Guarantor have no knowledge, that the conduct of the Business as
now operated conflicts with valid patents, patent rights,
licenses, trademarks, service marks, trademark rights, trade
names, trade name rights or copyrights of others in any way that
would reasonably be expected to have a Material Adverse Effect.
(d) Except as set forth in Schedule 3.10(d), to the knowledge of
each of Seller and Guarantor, no other entity's use of any
Intellectual Property infringes any rights in Intellectual
Property held by Seller.
3.11 Material Agreements and Bids; Breaches.
(a) Except as set forth in Schedule 3.11:
(i) Schedule 3.11(a)(i) hereto sets forth a complete and
correct list of all Material Agreements in effect on the date
hereof. All Material Agreements are valid and binding on the
parties thereto in accordance with their terms and are in full
force and effect in all material respects.
(ii) No show-cause notices, stop work orders, cure notices,
default terminations, written notices of default (claimed or
actual) or similar notices or negative determinations of
responsibility are in effect or remain unresolved against Seller
with respect to any Material Agreement.
(iii) With respect to all Government Contracts and Government
Bids (if any), there are no pending and to the knowledge of each
of Seller and Guarantor, there are no contemplated or threatened
(A) civil fraud or criminal investigations by any government
investigative agency, (B) suspension or debarment proceedings
(or equivalent proceedings) against Seller, (C) requests by a
government for a contract price adjustment based on a claim for
defective pricing in excess of DM 50,000 individually or DM
250,000 in the aggregate, (D) [omitted], or (E) claims against
any government or any third party in excess of DM 50,000
individually or DM 200,000 in the aggregate.
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(iv) [omitted]
(v) For purposes of this Agreement, "Material Agreement"
means any agreement (including, without limitation, any legally
binding purchase orders) or Government Contract which (A) has a
stated value, including options, greater than DM 150,000, (B) is
a contractual obligation of Seller greater than DM 150,000, or
(C) is a material lease.
(vi) For purposes of this Agreement, "Government Contract"
means any prime contract, subcontract, basic ordering agreement,
letter contract, purchase order or delivery order of any kind in
writing, including all amendments, modifications, and options
thereunder or relating thereto, in existence as of the date
hereof, between Seller and (A) any Government, (B) any prime
contractor of the respective Government, or (C) any
subcontractor to any contract described in clauses (A) or (B)
above. The term "Government Bid" shall mean any written
quotation, bid or proposal outstanding as of the date hereof
made by Seller that, if accepted or awarded, would lead to a
contract with (A) any Government, (B) any prime contractor of
the respective Government, or (C) any subcontractor to any
contract described in clauses (A) or (B) above.
(vii) With respect to any Government Contract which expired,
or was terminated, or for which final payment was made within
three (3) years prior to the date hereof, and except as set
forth in Schedule 3.11(a)(vii) hereto, to the knowledge of
Seller and Guarantor, there are no requests by the German
Government for a contract price adjustment based upon a claim of
defective pricing in excess of DM 150,000.
(viii) [omitted].
(b) Breaches. Except as set forth in Schedule 3.11(b)(l), Seller is
not in violation of its Articles of Incorporation or in default
in the performance or observance of any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit,
franchise, or of any provision of any judgment, decree, order,
statute, rule (including cost accounting standards), or
regulation applicable to or binding upon Seller which
individually, or in
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the aggregate, would reasonably be expected to have a Material
Adverse Effect. Except as set forth in Schedule 3.11(b)(2), no
notice of any alleged failure on Seller's part to perform any
obligation under any Material Agreement or of the proposed
termination or nonrenewal of any Material Agreement is in effect
or remains unresolved by reason of (i) alleged deficiencies in
products manufactured and/or sold by Seller, or (ii) Seller's
alleged failure to perform its contractual obligations on a
timely basis. There is no other actual or, to the knowledge of
each of Guarantor and Seller, alleged breach by Seller or, to
the knowledge of each of Seller and Guarantor, by any other
party thereto which would warrant termination or nonrenewal of a
Material Agreement.
3.12 Financial Statements. Attached hereto as Schedule 3.12 is a copy of the
balance sheet and profit and loss statement as contained in Exhibit 1
and 2 to the audited financial statements of the Seller for the period
ending on December 31, 1994. Furthermore, Purchaser has received copies
of the audited financial statements of Seller for the periods ending
December 31, 1993 and December 31, 1994 (the "Audited Financial
Statements") and a copy of the unaudited management accounts of Seller
for the period January 1995 through August 1995 (said Audited Financial
Statements and said management accounts collectively referred to as the
"Financial Statements"). The Audited Financial Statements present
fairly the financial positions of Seller as described therein and the
results of operations of Seller for the periods stated therein,
including, without limitation, the Working Capital, as of the dates
therein referred to, and in each case are presented in accordance with
Seller's normal accounting practices, which are in accordance with GAAP,
except as disclosed in Schedule 3.12(a) and the notes to the Financial
Statements, consistently applied throughout the periods of the Financial
Statements involved. Said management accounts have been prepared in
accordance with the policies and procedures consistently applied in the
preparation of the management accounts of Seller since 1991. Such
financial positions and results of operations are the same as those of
the Business.
3.13 Absence of Certain Changes or Events. Except as set forth in Schedule
3.13, since the Balance Sheet Date, the Business has been conducted in
the ordinary course
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consistent with past practice and there has been no event or series of events
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 3.13, since the
Balance Sheet Date, Seller has not:
(a) incurred any obligation, commitment or liability (fixed or
contingent), except trade or business obligations incurred in
the ordinary course of business, which trade or business
obligations individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect;
(b) transferred or granted any material rights under or with
respect to any Intellectual Property;
(c) (i) made or granted any general wage or salary increase (other
than in the ordinary course and consistent with past practice),
(ii) engaged any new officer or employee at an annual rate of
compensation in excess of DM 75,000 per annum, or (iii) entered
into, or increased the annual rate of compensation paid by
Seller pursuant to, any employment agreement or other
arrangement with any person which provides for an annual rate
of compensation or other payments which, together with all
other payments and benefits, would provide aggregate annual
compensation in excess of DM 75,000 and which may not be
terminated by Seller without any payment, other than pursuant
to the social plan ("Sozialplan-(KBV)") referred to in the list
of Employee Plans referred to in Schedule 3.15 (b), except by
notice of at least 30 days;
(d) increased the benefits in an existing Seller Employee Plan or
any commitment to adopt any additional Seller Employee Plan,
terminated or made any arrangement to terminate any Seller
Employee Plan; [rest omitted]
(e) made or entered into any contract or commitment to make capital
expenditures in excess of DM 75,000 individually or DM 500,000
in the aggregate; or
(f) made any transfer of property other than in the ordinary course
and consistent with past practice (other than cash, Excluded
Assets, and those items included in Schedule 3.13(f)), or
incurred or guaranteed any indebtedness, to or for the benefit
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of Deutsche ICI GmbH, Frankfurt am Main, or any other of
its Affiliates.
(g) suffered any Material Adverse Effect from damage,
destruction or casualty loss to any property of Seller.
3.14 Tax Matters.
(a) Seller or an ICI Company, has filed or Seller, to the
extent responsible for filing under Section 5.10 hereof,
will file or cause to be filed in a timely manner with
the applicable taxing authorities of Germany, German
states, localities, foreign countries and political
subdivisions of foreign countries all of Seller's Tax
returns, reports and other filings (other than those
returns, reports or other filings as they relate to
employee benefit plans) which are required to be filed
on or before the Closing Date (the "Tax Returns"). All
Taxes shown on the Tax Returns to be due and payable
have been paid by Seller or will, to the extent the
Purchaser assumes the relevant liability, be accrued as
a liability in the Statement of Working Capital.
(b) To the knowledge of each of Seller and Guarantor, except
as set forth in Schedule 3.14, with respect to Taxes (i)
Seller is not a party, directly or through a tax sharing
arrangement, to any pending action or proceeding by any
domestic or foreign governmental authority for
assessment or collection of Taxes and (ii) there is no
(A) current audit, or (B) administrative or court
proceeding currently pending with regard to any Tax or
Tax Returns of Seller by any taxing authority.
(c) [omitted]
(d) [omitted]
(e) Except as set forth in Schedule 3.14(e), Seller is not a
party to any agreement relating to the allocation or
sharing of Taxes under which Purchaser would have any
liability.
(f) [omitted].
3.15 Employee Benefits.
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(a) (i) Except as otherwise set forth in Schedule 3.15, all
material and legally binding obligations for salaries, vacation
pay and bonuses which were due and payable to the employees
(including the managing director, Xx. X. Xxxxx) of Seller on or
before the Closing Date have been paid or adequate accruals
therefor have been provided.
(ii) Schedule 3.15 sets forth, as of the date specified in
said Schedule, a materially correct and complete list of the
names of the employees of Seller and their salary or wage rates.
(b) Set forth in Schedule 3.15 is a correct and complete list of
each Seller Employee Plan. Except as set forth in Schedule 3.15,
Seller provided or made available to Purchaser the most recent
copy of each such Seller Employee Plan. To the extent any such
Seller Employee Plan is not in writing, a short summary of the
plan has been set forth in Schedule 3.15.
(c) [omitted]
(d) Except as set forth in Schedule 3.15, Seller previously has
provided to Purchaser the most recent summary plan description
of each Seller Employee Plan disseminated to employees of
Seller; [rest omitted].
(e) Except as set forth in Schedule 3.15, there is no obligation or
liability to provide post retirement welfare benefits to current
or future retirees of Seller.
(f) [omitted].
(g) Except as set forth in Schedule 3.15, with respect to any Seller
Employee Plan, there are:
(i) [omitted];
(ii) no pending or, to the knowledge of Seller, threatened
suits, claims, investigations or proceedings against a Seller
Employee Plan by a Seller Employee or former employee of Seller
(other than routine claims for benefits); and
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(iii) no claims or other matters currently pending, nor to the
knowledge of Seller are there any investigations or claims
threatened or pending, by, with or before any federal
governmental agency or labour court.
(h) All contributions, premiums and other payments required to be
paid (if any) prior to the Closing Date in relation to Seller
Employee Plans (including Seller's pension plan - "Versorgungs-
ordnung") under applicable law or the terms of such plans,
have been paid.
(i) Except as required by this Agreement or disclosed in Schedule
3.15, the execution, delivery and performance of this Agreement
will not result in any increase in the compensation or benefits
payable by Purchaser or otherwise payable to a Seller Employee
or the acceleration of the time of payment or vesting of any
such compensation or benefits.
(j) [omitted].
(k) [omitted].
(l) [omitted].
3.16 Labor and Employment Matters.
(a) Except as set forth in Schedule 3.16, Seller is not a party to
any collective bargaining agreement or other labor union
contract applicable to persons employed by it in connection with
the operation of the Business ("Collective Bargaining
Agreement"). Except as set forth in Schedule 3.16, there are no
strikes, slowdowns, work stoppages or lockouts, by or with
respect to any employees of Seller in connection with the
operation of the Business and, to the knowledge of each of
Seller and Guarantor, no such actions are threatened.
(b) Except as set forth in Schedule 3.16, Seller is in material
compliance with all federal and state laws respecting employment
and employment practices, terms and conditions of employment and
wages and hours and is not engaged in any unfair labor practice.
[Rest omitted]
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(c) No grievance which would reasonably be expected to have a
Material Adverse Effect nor any material arbitration proceeding
arising out of or under a Collective Bargaining Agreement is
pending.
(d) Except as set forth in Schedule 3.16(d), to the knowledge of
each of Seller and Guarantor, there are no trade union
organizing efforts currently under way at any facility.
(e) [omitted]
(f) Except as set forth in Schedule 3.16(e), there are no existing
material written labor settlement agreements (other than the
Collective Bargaining Agreements) or court orders which by
their terms affect all the members of a collective bargaining
unit.
3.17 INSURANCE. Immediately prior to the Closing Date, Seller, or an ICI
Company for the benefit of Seller, maintained policies of fire,
casualty, liability and other forms of insurance, a list of such
policies is provided as set forth in Schedule 3.17. No such policies and
other forms of insurance will be in place on or after the Closing Date.
3.18 MAINTENANCE OF BUSINESS WITH CUSTOMERS. Except as set forth in Schedule
3.18, and excluding change orders and contract modifications and
terminations having a value not exceeding DM 50,000 in any individual
case, since the Balance Sheet Date, there has been no termination,
cancellation or material limitation of, or any material modification or
change in, the business relationship of Seller with any customer or
group of customers whose purchases individually or in the aggregate
provided more than 7% of the gross revenues of the Business, or of any
supplier or group of suppliers whose provision of inventory or services
individually or in the aggregate constituted more than DM 125,000.
3.19 RELATED PARTY TRANSACTIONS. Except as set forth in Schedule 3.19, after
Closing, Purchaser will have no liabilities or obligations to Deutsche
ICI GmbH, Frankfurt am Main, or any other ICI Company, except as
otherwise contemplated by this Agreement and the Ancillary Agreements.
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3.20 Disclosure Schedules. Information fairly disclosed in a Schedule shall,
where the context permits, be an exception to, and a qualification of,
all of the representations and warranties made in this Article III (the
"Warranties"), whether or not the Schedule is identified as being an
exception to any of the Warranties in question and whether or not any of
the Warranties identifies a different Schedule as containing exceptions
to any of the Warranties in question.
3.21 No Other Representations. Except as expressly provided in this
Agreement all warranties and representations on the part of Seller, ICI
Composites, Inc. or any ICI Company whether express or implied,
statutory or otherwise are, to the extent permitted by law, hereby
expressly excluded and Purchaser hereby acknowledges to Seller that it
has not relied on any warranties, representations, statements as to
fact, undertakings or disclosures other than those expressly set out in
this Agreement (including the Schedules) and that no other warranties,
representations, undertakings or indemnities have been given by or on
behalf of Seller or any ICI Company.
3.22 Finder's Fees. Neither Seller nor any other ICI Company has retained
any finder, broker or financial advisor in connection with the
transactions contemplated by this Agreement. Seller hereby agrees to
indemnify and hold harmless Purchaser from and against any liability for
commissions or compensation in the nature of a finder's fee to any
broker or other person or firm (as well as the costs and expenses of
defending against such liability or asserted liability) for which Seller
or any of its employees or representatives may be responsible by reason
of this Agreement or the transactions contemplated hereby.
3.23 [omitted].
3.24 Aviation Legal Liability Insurance. Prior to the Closing (but not
earlier than July 1, 1985), Seller was covered under a policy or
policies of aviation legal liability insurance having policy wording
substantially identical to that described in the Sedgwick Cover Note
dated 26 June 1995 and the Sedgwick 1994/95 policy wording dated 2
October 1995 set forth in Schedule 3.24 and which provided for sums
insured of at least $150,000,000.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants as of the Closing Date as follows:
4.1 Organization and Authority of Purchaser. Purchaser is a corporation
duly organized and validly existing under the laws of Germany and has
all necessary corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by Purchaser and
constitutes a legal, valid and binding obligation of Purchaser
enforceable against Purchaser in accordance with its terms.
4.2 No Conflict. The execution, delivery and performance of this Agreement
by Purchaser do not and will not (i) conflict with or violate any
material law, rule, regulation, order, judgement, injunction, decree,
determination or award applicable to Purchaser (ii) violate or conflict
with the Articles of Incorporation or by-laws of Purchaser, or (iii)
require any material pre-Closing consent, notice, authorization or
approval under, result in any material breach of, or constitute a
material default (or event which with notice or lapse of time or both
would become a material default) under, or result in the creation of any
material lien or other encumbrance on any of the properties or assets of
Purchaser pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to
which Purchaser or any of its Affiliates is a party or by which any of
them, any of its or their respective properties is bound or affected,
which might have a material adverse effect on the consummation of the
transactions contemplated hereby.
4.3 Absence of Litigation. No claim, action, suit or proceeding is pending
or, to the knowledge of Purchaser, threatened, and to the knowledge of
Purchaser, no investigation is pending or threatened, which seeks to
delay or prevent the consummation of the transactions contemplated
hereby.
4.4 Consents and Approvals. The execution and delivery of this Agreement by
Purchaser do not, and the performance
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of this Agreement by Purchaser does not require any consent,
approval, authorization or other action by, or filing with or
notification to, any domestic or foreign governmental or
regulatory authority (excluding the notification with the
Federal Cartel Office), except where failure to obtain such
consents, approvals, authorizations or actions, or to make such
filings or notifications, would not (i) prevent Purchaser from
performing any of its material obligations under this Agreement,
or (ii) otherwise prevent the consummation of the transactions
contemplated therein by Purchaser.
4.5 Due Diligence Investigation. Purchaser acknowledges that it has
had the opportunity to review the due diligence materials
supplied or made available by Seller, including, without
limitation, the types of information described in Schedule 4.5.
4.6 Finder's Fees. Neither Purchaser nor any Affiliate of Purchaser
has retained any finder or broker other than Valufinder Group,
Inc. in connection with the transactions contemplated by this
Agreement. Purchaser hereby agrees to indemnify and hold
harmless Seller from and against any liability for commissions
or compensation in the nature of a finder's fee to any broker or
other person or firm including Valufinder Group, Inc. (as well
as the costs and expenses of defending against such liability or
asserted liability) for which Purchaser or any of its employees
or representatives may be responsible by reason of this
Agreement or the transactions contemplated hereby.
ARTICLE V
COVENANTS
5.1 Noncompetition.
(a) For a period commencing on the Closing Date and
continuing thereafter for five (5) years, Seller, ICI or
any ICI Company (excluding any ICI Company in Australia
or New Zealand with respect to polyester resins) shall
not use the trade name of Fiberite, and shall not engage
in the manufacture, sale, marketing or distribution of
any products manufactured, sold, marketed or distributed
by Seller on the Closing Date in any territory where
Seller has manufactured, sold, marketed or distrib-
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uted such products in the 12 month period immediately preceding
and including the Closing Date. The parties agree that if a
court of competent jurisdiction shall hold the foregoing
restriction on competition to be unreasonable, then such
restriction shall be construed to refer only to such period of
time or such geographical area as such court shall deem
reasonable.
(b) Nothing in Section 5.1(a) or in this Agreement shall prevent
Seller or any ICI Company from purchasing any corporation or
business a part of which has an interest in any products subject
to Section 5.1(a) unless more than 15% of the turnover of such
corporation or business in its last accounting year was
generated by its interest in such products. In the event that
Seller or any ICI Company purchases any corporation or business
which does have such interest in such products but such interest
did not account for 15% of its turnover (as calculated above)
then as soon as practicable after such purchase taking place,
Seller or the relevant ICI Company that has acquired such
corporation or business shall, if not prohibited by applicable
law, offer for sale to Purchaser the interest relating to any
such products as aforesaid and Seller (or the relevant ICI
Company) shall, if requested to do so by Purchaser, enter into
good faith exclusive negotiations with Purchaser for the sale of
such interest. In the event that Purchaser does not purchase
such interest from Seller (or the relevant ICI Company) then
Seller (or the relevant ICI Company) shall be free to keep the
said interest with the consent of Purchaser (such consent not to
be unreasonably withheld or delayed provided the negotiations
referred to above were conducted in good faith (including with
respect to price and other material terms)). In the
circumstances that such consent is reasonably withheld, then
Seller (or the relevant ICI Company) shall use reasonable
efforts to divest the said interest within 12 months of such
consent having been withheld. Prior to the consummation of any
sale of said interest to a third party at a price together with
other material terms in the aggregate more favorable than
offered to Purchaser pursuant hereto, Seller (or the relevant
ICI Company) shall make an irrevocable offer to Purchaser (which
may be accepted by the Purchaser within 60 days
37
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following such offer) to sell such interest to Purchaser or one
of its Affiliates on substantially identical terms. In the event
Purchaser fails to accept such offer within sixty days, or if so
accepted, the sale to Purchaser is not completed within sixty
days of such acceptance and Seller has negotiated in good faith
with Purchaser, Seller (or the relevant ICI Company) shall have
no further obligation to Purchaser hereunder.
(c) For the avoidance of doubt, nothing in this Section 5.1 shall be
deemed to apply to any ICI Company in Australia or New Zealand
with respect to polyester resins.
5.2 Use of ICI Name, Use of Fiberite Name.
(a) Purchaser acknowledges and agrees that ICI shall retain all
rights to use the letters "ICI" and all trademarks, trade names
and service marks that include the letters "ICI" (including
without limitations the ICI roundel) (collectively the "ICI
Letters"). Except as otherwise provided in this Section 5.2,
after the Closing neither Purchaser nor any of its Affiliates
will have any ownership interest in or use any trademark, trade
name or service xxxx that includes the ICI Letters.
(b) After the Closing, Purchaser shall have the right to sell
existing inventory and to use existing stocks of packaging,
labelling, containers, supplies, advertising materials,
technical data sheets and any similar materials bearing the ICI
Letters until the earlier of (i) the date existing stocks are
exhausted or (ii) six (6) months following the Closing Date.
After six (6) months following the Closing Date, Purchaser shall
relabel any such remaining inventory and stocks. The
obliteration of the ICI Letters shall be deemed compliance with
the covenant. For a period not to exceed six (6) months after
the Closing Date, Purchaser shall have the right to use the ICI
Letters in advertising that cannot be changed by its using
reasonable efforts.
(c) Purchaser shall use reasonable efforts to cease using the ICI
Letters on buildings, cars, trucks and other fixed assets as
soon as practicable but in no event shall Purchaser use, nor
shall Seller permit
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Purchaser to use, the ICI Letters later than three months after
the Closing Date.
(d) Within one month after the Closing Date Seller shall take
adequate action to ensure that its firm name shall no longer
include the words "Fiberite Europe", so as to enable Purchaser
to change its firm name to Fiberite Europe GmbH or any other
firm name containing the word "Fiberite". Seller shall notify
such action to the commercial register without undue delay.
5.3 Post-Closing Access to Tax and Other Records.
(a) Seller and Purchaser will provide each other with such
cooperation and information as either of them reasonably may
request of the other in filing any Tax Return, amended return or
claim for refund, determining a liability for Taxes or a right
to a refund of Taxes, or in conducting any audit or other
proceeding in respect of Taxes. Such cooperation and
information, however, shall not include providing copies of
income tax returns or portions thereof. Each party shall make
its employees available on a mutually convenient basis to
provide explanation of any documents or information provided
hereunder. Each party will retain all returns, schedules and
work papers and all material records or other documents in its
possession relating to Tax matters of Seller for the taxable
year ending after the Closing Date and for all previous years,
until the expiration of the statute of limitations of the
taxable years to which such returns and other documents relate
(and, to the extent notified by the other party in writing, any
extensions thereof).
(b) Each party will afford or cause to be afforded to the other
party and its agents reasonable access to the properties, books,
records (including but not limited to Tax (subject to Section
5.3(a) above) and environmental matters and in connection with
the assertion of claims respecting cancelled Government
Contracts), employees and auditors of such party to the extent
necessary to permit the other party to determine any matter
relating to the Business or its rights and obligations
hereunder. Purchaser shall through its employees provide to
Seller reasonable assistance in relation to the
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preparation of a merger balance sheet as of a date prior to the
Closing Date.
(c) Each party will hold, and will cause its officers, directors,
employees, accountants, counsel, consultants, professional
representatives, advisors (including without limitation, any
lenders and/or financial advisors to or shareholders of the
Purchaser) and agents to hold, in conference, unless compelled
to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information
concerning the other party's business provided to it pursuant to
this Section.
(d) Notwithstanding anything to the contrary in this Agreement,
Seller shall use its reasonable efforts to require that Seller's
Accountants deliver to Purchaser, and permit the use by
Purchaser of, reports and opinions of Seller's Accountants
relating to the Financial Statements and, if Seller's
Accountants refuse, Seller shall allow reasonably necessary
access to the books, records and workpapers required to enable
Purchaser's Accountants to audit the financial statements of
Seller for the three full fiscal years prior to the Closing
Date.
5.4 Sales and Transfer Taxes. Purchaser and Seller shall share equally all
sales, transfer and other Taxes incurred as a result of the consummation
of the transactions contemplated by this Agreement including without
limitation land transfer tax except for Taxes relating to the
transactions described in Section 2.3 hereof, which shall be payable by
the Seller.
5.5 Further Assurance. Each of the parties hereto shall execute, or cause
to be executed, such documents and other papers and take, or cause to be
taken, such further actions as may be reasonably required to carry out
the provisions hereof and the transactions contemplated hereby. Upon
the terms and subject to the conditions hereof, each of the parties
hereto shall use its reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all other things necessary,
proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and to
obtain in a timely
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manner all necessary waivers, consents and approvals and to effect all
necessary registrations and filings.
5.6 [omitted]
5.7 Retained Seller Information. Purchaser acknowledges that, on and after
the Closing, there may be information at the Manufacturing Facilities
which does not relate to the Business ("Retained Seller Information").
Purchaser agrees to allow Seller all reasonable access (upon the Seller
giving reasonable notice to the Purchaser) to the Retained Seller
Information. Furthermore, Purchaser agrees to maintain in confidence
and not to use any Retained Seller Information. To the extent that
Retained Seller Information is contained in books and records, Purchaser
agrees not to dispose of or destroy such books and records for a period
of at least four (4) years following the Closing Date unless it shall
have first notified Seller at least sixty (60) days before such
disposition or destruction and given Seller the opportunity (at the
expense of Seller) to remove and retain the books and records proposed
to be disposed of or destroyed. Nothing in this section shall require
Purchaser to maintain in confidence, or not to use, any information (a)
that is now publicly available, (b) that subsequently becomes publicly
available other than by action of the Purchaser, but only after it has
become publicly available, (c) that Purchaser obtains from a third party
not under any obligation to Seller or an Affiliate of Seller respecting
such information, but only after Purchaser so obtains such information,
or (d) that Purchaser, prior to the Closing Date, already has in its
possession.
5.8 Retained Business Information. Seller acknowledges that, on and after
the Closing, there may be information at the facilities of Deutsche ICI
GmbH and other ICI Companies which relates exclusively or principally to
the Business and which is material to the day to day operations of the
Business ("Retained Business Information"). Seller agrees to allow
Purchaser all reasonable access (upon the Purchaser giving reasonable
notice to the Seller) to the Retained Business Information.
Furthermore, Seller agrees to maintain in confidence and does not use
any Retained Business Information other than in relation to its other
businesses. To the extent that Retained Business Information is
contained in books and records, Seller agrees not to dispose of or
destroy such books and records for a period of at least four (4)
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years following the Closing Date or such longer period as is required by a
Material Agreement, a Government Contract or by law unless it shall have
first notified Purchaser at least sixty (60) days before such disposition
or destruction and given Purchaser the opportunity (at the expense of
Purchaser) to remove and retain the books and records proposed to be
disposed of or destroyed. Nothing in this section shall require Seller or
any ICI Company to maintain in confidence, or not to use, any information
(a) that is now publicly available, (b) that subsequently becomes publicly
available other than by action of Seller or any ICI Company, but only
after it has become publicly available or (c) that Seller or any ICI
Company obtains from a third party not under any obligation to Purchaser
or an Affiliate of Purchaser respecting such information, but only after
Seller or any ICI Company so obtains such information.
5.9 REFUNDS. Any refunds of Indemnifiable Taxes received by Purchaser shall be
paid over to Seller immediately upon receipt. Any Claim for a refund of an
Indemnifiable Tax shall be subject to Section 7.4(b).
5.10 FILING OF RETURNS. [omitted]
5.11 PROSECUTION, MAINTENANCE AND TURNOVER OF INTELLECTUAL PROPERTY FILES.
(a) Within two months after the Closing Date, or earlier if requested by
Purchaser, Seller will deliver to Purchaser the files relating to the
patents, patent applications, patent licenses, trademarks and
trademark applications, service marks and service xxxx applications
set forth in Schedule 5.11(a) (the "Files"). Purchaser will notify
Seller of a location for delivery of the Files as soon as reasonably
practicable after the Closing Date but in any event no later than one
month after the Closing Date, failing which, the Files will be
delivered to Purchaser at the address specified in Section 8.5
hereof. Prior to delivery of the Files, Seller will, to the extent
reasonably practicable, provide information contained in the Files as
requested by Purchaser for the purpose of enabling Purchaser to
docket maintenance fees, office actions and other items.
(b) After the Closing Date and until such time as Seller delivers the
Files to Purchaser or unless
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and to the extent Purchaser requests Seller not to take certain
actions or not to pay certain fees, Seller will use its
reasonable efforts to take any actions and pay any fees in order
to avoid lapse of the patents, trademarks and service marks. All
annuity fees and other fees paid by the Seller under this
Section after the Closing Date, shall be billed to and payable
by Purchaser, regardless of the portion of the lifetime of the
Intellectual Property rights for which such payments are made.
(c) Purchaser agrees that neither Seller nor ICI or any ICI Company,
including any of their employees and agents, shall be liable to
Purchaser or any of its Affiliates in connection with the
performance of any actions as contemplated by Section 5.11(b)
and Section 5.11(d) to the extent such actions did not involve
gross negligence or wilful misconduct on the part of any ICI
Company or employee thereof. Purchaser waives any claim (whether
in contract, tort, or other) that it may have against Seller and
each ICI Company as a result of Seller's actions as contemplated
by Section 5.11(b) and Section 5.11(d) other than claims based
on gross negligence or wilful misconduct. Purchaser shall
indemnify and hold Seller and each ICI Company harmless from any
costs, expenses, losses or liabilities, including reasonable
attorneys' fees, suffered or incurred by Seller and each ICI
Company as a result of Seller taking any actions as contemplated
by Section 5.11(b) and Section 5.11(d), other than as set forth
in the Transition Service Agreements.
(d) [omitted]
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ARTICLE VI
EMPLOYEE MATTERS
6.1 TRANSFER OF EMPLOYEES. Except as otherwise provided in this Article VI,
all employees of Seller listed in Schedule 6.1 (hereafter "Seller
Employee") will transfer and become employees of Purchaser as of the
Closing Date by operation of law pursuant to Section 613a German Civil
Code. Seller and purchaser will use all reasonable efforts to avoid
objection by any of the Seller Employees to the transfer of their
employments. All liabilities under the employment contracts of Seller
Employees who nevertheless object to the transfer of their employment
contracts shall be borne by Seller.
6.2 As of the Closing Date, Xx. Xxxx Xxxxx, the sole managing director of
Seller, shall resign as managing director of Seller and be appointed new
managing director of Purchaser. Accordingly, as of the Closing Date Xx.
Xxxxx'x service contract, pension arrangements and all other
arrangements with Seller shall transfer with the consent of Xx. Xxxxx to
Purchaser.
6.3 [omitted]
6.4 The Seller Employees Xx. Xxxxxxx Xxxxxxx and Xx. Xxxx Xxxxxx are
currently via a company Xxxxx (GB) Limited members of a pension fund in
the U.K. Seller and Purchaser agree that these two employees shall
transfer to Purchaser pursuant to Section 6.1. Seller and Purchaser
shall agree on a mutually acceptable procedure to ensure that such
employees' pension rights acquired under such membership will in
substance continue to be available to them also in case their membership
in such pension fund cannot be maintained.
6.5 Purchaser shall indemnify Seller against any and all claims raised by
Seller Employees attributable to the Business and relating to the period
commencing on the Closing Date.
6.5 NO THIRD-PARTY BENEFICIARIES. No provision of this Article VI shall
create any third-party beneficiary rights in any person or organization,
including, without limitation, employees or former employees (including
any
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beneficiary or dependent thereof) of Seller, Purchaser or any of their
respective Affiliates or other representatives of such employees or
former employees, or trustees, administrators, participants or
beneficiaries of any employee benefit plan.
ARTICLE VII
INDEMNIFICATION
7.1 SURVIVAL. The covenants, agreements, representations and warranties of
the parties hereto contained in this Agreement or in any certificate or
other writing delivered pursuant hereto or in connection herewith shall
survive the Closing until eighteen (18) months after the Closing Date;
provided that (i) the covenants and agreements contained in Section 5.1
shall survive for the period set forth therein, (ii) the representations
and warranties contained in Section 3.1 and Section 3.4, and the
representations, warranties, covenants and agreements contained in
Section 5.2 through 5.12 inclusive, Article VI, Article VII and Article
VIII shall survive indefinitely, or, as the case may be, for any lesser
period set forth therein, (iii) the representations and warranties
contained in Section 3.9 shall survive until the fifth anniversary of
the Closing Date, and (iv) the representations and warranties contained
in Section 3.14 shall survive through the 90th day following the last
day of the applicable statute of limitations without regard to any
extension or waiver executed by Purchaser after the Closing Date. Except
with respect to claims based on fraud, no claims for indemnification
with respect to a covenant, agreement, representation or warranty may be
made after the expiration of the relevant survival period referred to
herein. Notwithstanding the preceding sentences, any covenant,
agreement, representation or warranty in respect of which indemnity may
be sought under this Agreement shall survive the time at which it would
otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy or breach thereof giving rise to such right of indemnity
shall have been given in accordance with this Agreement to the party
against whom such indemnity may be sought prior to such time.
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7.2 INDEMNIFICATION BY PURCHASER. Purchaser agrees, subject to the other terms
and conditions of this Agreement, to indemnify and defend Seller and each
other ICI Company and their respective officers, directors, employees,
agents and permitted successors and permitted assigns (collectively
"Seller Indemnitees") against, and hold each of them harmless from, all
claims, demands, judgments, damages, penalties, fines, losses, liabilities
and expenses (including reasonable attorneys' and experts' fees and
expenses and all other necessary and reasonable costs of investigation and
defense of third party claims, but excluding internal expenses) incurred
by or asserted against any of said Seller Indemnitees arising out of or
resulting by reason of:
(a) the breach of any representation, warranty, covenant or agreement of
Purchaser herein,
(b) any liabilities of Seller or any of the Seller Indemnitees relating
to the Business for which Seller is not obligated to indemnify
Purchaser pursuant to Section 7.3.
(c) [omitted].
7.3 INDEMNIFICATION BY SELLER. Seller agrees, subject to the other terms and
conditions of this Agreement, including, without limitation the time
periods set forth in Section 7.1, to indemnify and defend Purchaser and
each Affiliate of Purchaser and their respective officers, directors,
employees, agents and permitted successors and permitted assigns
(collectively "Purchaser Indemnitees") against, and hold each of them
harmless from, all claims, demands, judgments, damages, penalties, fines,
losses, liabilities and expenses (including reasonable attorneys' and
experts' fees and expenses and all other necessary and reasonable costs of
investigation and defense of third party claims, but excluding internal
expenses) (collectively "Claim Costs") incurred by or asserted against any
of said Purchaser Indemnitees arising out of or resulting by reason of:
(a) the breach of any representation, warranty, covenant or agreement of
Seller herein,
(b) any Indemnifiable Tax,
(c) [omitted].
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(d) [omitted],
(e) any Tax liability resulting from any transaction pursuant to
Section 2.3 by which the Included ICI Assets become the property
of Purchaser,
(f) [omitted],
(g) (i) any claim asserted against any of the Purchaser Indemnitees by
a third party prior to the fifth anniversary of the Closing Date
pursuant to any Environmental Law to the extent any such claim is
attributable to an event, circumstance or condition relating to
the Manufacturing Facilities or any operations of Seller or any of
its predecessors-in-interest or any real property, facility, site
or assets owned, leased, operated or used by Seller or any of its
predecessors-in-interest at any time on or prior to the Closing
Date, or to any acts or omissions of Seller or any of its
predecessors-in-interest, including, without limitation, disposal
or arranging for disposal of Hazardous Materials at a third party
site, occurring or existing on or prior to the Closing Date, or
(ii) requirements of any Environmental Law (including, without
limitation, any failure to take reasonable steps to achieve
compliance with those requirements of Environmental Law which
exist on or prior to the Closing Date and which require compliance
on or prior to June 30, 1997) to the extent (x) any Claim Costs
are attributable to an event, circumstance or condition relating
to the Manufacturing Facilities or any operations of Seller or any
of its predecessors-in-interest or any real property, facility,
site or assets owned, leased, operated or used by Seller or any of
its predecessors-in-interest at any time on or prior to the
Closing Date, or to any acts or omissions of Sellers or any of its
predecessors-in-interest, and (y) Claim Costs in connection
therewith are incurred or asserted prior to the fifth anniversary
of the Closing Date.
(h) any liability resulting from any government action for defective
pricing under any Government Contract or adjustments to contract
pricing for differences in allowable and for allocable costs
resulting in net aggregate contract price adjustments in excess
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of DM 50,000 for all Government Contracts under which work was
performed prior to the Closing,
(i) [omitted].
(j) [omitted].
(k) [omitted].
(l) [omitted].
(m) [omitted].
(n) any claim asserted by a third party against any of the Purchaser
Indemnitees to the extent any such claim is attributable to an
Occurrence occurring prior to the Closing Date and since, but
not earlier than, July 1, 1985, and for which Seller carried
insurance, but only to the extent such insurance actually
provides coverage therefor, prior to the Closing Date, and
since, but not earlier than, July 1, 1985.
(o) [omitted].
(p) [omitted].
provided that (i) Seller shall not be liable under this Section
7.3 unless the aggregate amount of Claim Costs with respect to
all matters referred to in this Section 7.3 exceeds DM 54,000
and then only to the extent of such excess and (ii) Seller's
maximum liability under this Section 7.3 shall not exceed DM
5,100,000. If the amount of Claim Costs arising in respect of
any individual matter referred to in this Section 7.3 is less
than DM 2,000, then that amount shall not be included for the
purpose of calculating the aggregate amount referred to in
subparagraph (i) of this provision. Notwithstanding the
foregoing, Seller shall have no obligation to indemnify
Purchaser under this Section 7.3 (x) to the extent that any
Claim Costs are incurred or increased as a result of any law,
statute, ordinance, or regulation not in effect on or prior to
the Closing Date, or as a result of any change therein
thereafter, (y) to the extent that the facts, matters or
circumstances giving rise to such Claim Costs arise pursuant to
Section 7.3(a) and have been fairly disclosed in the Schedules
or in any document listed or specifically referred to therein,
or
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(z) to the extent any such Claim Costs are reflected in the Financial
Statements or in the Statement of Working Capital. Notwithstanding
anything to the contrary contained in this Agreement, no provision of
Section 7.3 following Section 7.3(p) hereof shall apply to (i) Section
7.3(b) (other than subparagraph (z)), Section 7.3(e) and Section 7.3(n)
hereof, and (ii) the failure of a party hereto to observe any of its
obligations under any covenant or agreement in this Agreement (other
than, with respect to this clause (ii), the provision that Seller's
maximum liability under this Section 7.3 shall not exceed DM 5,100,000).
For the avoidance of doubt, the inclusion of any facts, matters or
circumstances on any Schedule hereto shall not relieve Seller of its
obligations under Section 7.3(g) hereof and Section 7.3(p).
7.4 Procedures.
(a) Any party seeking indemnification under this Article VII (the
"Indemnified Party") shall promptly upon becoming aware of the
circumstances giving rise to the claim for indemnification,
notify the party against whom a claim for indemnification is
sought hereunder (the "Indemnifying Party") in writing, which
notice shall specify, in reasonable detail, the nature and
estimated amount, if determinable, of the claim. Such
notification shall be a condition precedent to any liability on
the part of the Indemnifying Party. Except as otherwise
provided herein, Purchaser and Seller shall appoint Seller or
one of Seller's Affiliates, selected by Seller, as attorney in
fact with exclusive authority to collect, settle, or pay any
amount due to or owed by Seller with respect to an Indemnifiable
Tax or for filing any return due or a claim for refund for an
Indemnifiable Tax. Such appointment of Seller or its Affiliate
as attorney in fact shall be pursuant to a power of attorney in
the form set forth in Schedule 7.4(a). Any audit, claim,
investigation, administrative proceeding, suit or other action
by a third party relating to any Indemnifiable Tax shall be
governed by this Section 7.4.
(b) If any third party shall assert a claim against the Indemnified
Party with respect to any matter (a "Third Party Claim") for
which the Indemnified
49
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Party intends to seek indemnification against the Indemnifying Party
under this Article VII, then the Indemnified Party shall promptly (and
in any case within ten (10) days of such claim having been asserted)
notify the Indemnifying Party thereof in writing (to include a
description thereof in reasonable detail), which notification shall be a
condition precedent to any obligation on the part of the Indemnifying
Party to indemnify the Indemnified Party under this Article VII;
provided, that no notice shall be required to be given with respect to
any proceedings pertaining to an Indemnifiable Tax which has been
assessed or, to Seller's knowledge, is the subject matter of a current
audit examination by a taxing authority. The following provisions shall
apply with respect to any such Third Party Claim:
(i) The Indemnifying Party shall have the right to assume the
defense of the third party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party (it being understood that if in
the Indemnified party's reasonable judgment a conflict of interest is
likely to exist between such Indemnified Party or the Indemnifying Party
or any of their respective Affiliates with respect to such counsel, such
Indemnified Party shall be entitled to require the Indemnifying Party to
select other counsel pursuant to this Section 7.4) at any time within 60
days after the Indemnified Party has given notice of the third Party
Claim; provided, however, that (A) the Indemnifying Party shall conduct
the defense of the Third Party Claim actively and diligently thereafter
in order to preserve its rights in this regard; (B) the Indemnified
Party shall have (w) the right to participate fully in the defense of
the Third Party Claim, including through separate counsel of its own
choosing at its sole cost and expense, (x) the right to receive
reasonable advance notice from the Indemnifying Party of any hearings or
proceedings, (y) the right, if possible, to review in advance and
comment on any pleadings, briefs or other documents to be filed and (z)
the opportunity to participate in any meetings concerning the strategy
to be adopted in opposing the Third Party Claim or any efforts to settle
the same; and (C) the Indemnified Party shall have the right at any time
to assume the sole right to defend or settle any Third Party Claim
50
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upon written waiver of its right to indemnity hereunder (in form and
substance reasonably satisfactory to the Indemnifying Party) with
respect to such Third Party Claim.
(ii) So long as the Indemnifying Party has assumed and is conducting
the defense of the Third Party Claim in accordance with Section
7.4(b)(i) above, (A) the Indemnifying Party shall not consent to the
entry of any judgment or enter into any settlement with respect to the
third Party Claim without the prior written consent of the Indemnified
Party (not to be unreasonably withheld or delayed) unless (x) the
judgment or proposed settlement involves only the payment of money
damages by the Indemnifying Party and does not impose an injunction or
other equitable relief upon the Indemnified Party, and includes the
giving by the claimant or the plaintiff to the Indemnified party of a
release from those liabilities which are the subject of the claim for
indemnification hereunder in form and substance reasonably satisfactory
to the Indemnified Party, or (y) in a matter relating to an
Indemnifiable Tax subject to this section 7(4)(b)(ii), is not reasonably
likely to materially adversely affect Seller's or Purchaser's liability
for Taxes in a Post-closing Tax Period, and (B) the Indemnified Party
shall not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior
written consent of the Indemnifying Party. With respect to any proposed
settlement for an Indemnifiable Tax subject to this Section 7(4)(b)(ii)
to which the Purchaser Indemnitee does not consent, Seller may pay the
amount of any such proposed settlement to the Purchaser Indemnitee and
upon such payment be released from any and all liability to Purchaser
Indemnitee with respect to such Indemnifiable Tax.
(iii) In the event the Indemnifying Party does not assume and conduct
the defense of the Third Party Claim in accordance with Section 7.4(b)
(i) above, however, (A) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with
respect to, the third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain
any consent from, the
51
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Indemnifying Party in connection therewith) and (B) the
Indemnifying Party shall remain obligated to indemnify the
Indemnified Party to the extent provided pursuant to this
Article VII.
(iv) The Indemnified Party will use all reasonable efforts to
make available to the Indemnifying Party those employees whose
assistance, testimony or presence is necessary to assist the
Indemnifying Party in evaluating and defending any such claim;
provided that the Indemnifying Party shall be responsible for
any out-of-pocket expenses (excluding wages, benefits, and other
direct or indirect costs of employment) associated with any
employees made available hereunder. The Indemnified Party, at
its expense, shall also make available to the Indemnifying Party
or its representatives on a timely basis all documents, records
and other materials in the possession of the Indemnified Party
reasonably required by the Indemnifying Party for its use in
defending any claim, and shall otherwise cooperate on a timely
basis with the Indemnifying Party in the defense of such claim.
(c) Notwithstanding anything herein to the contrary, the failure of
an Indemnified Party to notify the Indemnifying Party of any
claim of indemnification as required pursuant to Section 7.4(a)
or 7.4(b) shall not affect the indemnification obligations of
any party hereto, unless and only to the extent that the
Indemnifying Party is prejudiced thereby.
7.5 Third Party Reimbursement; Aviation Liability Insurance is (a) The
indemnities provided by this Article VII shall apply only to damages,
losses, liabilities and expenses for which the party seeking
indemnification cannot obtain reimbursement from third parties (other
than third party insurers), provided that the Indemnified Party shall
not be obligated to assert a claim against any such third party unless
the Indemnifying Party shall have agreed in form and substance
reasonably satisfactory to the Indemnified Party to reimburse the
Indemnified Party for all reasonable out-of-pocket costs, fees and
expenses incurred in connection therewith.
(b) Seller will ensure that no ICI Company will take any action or fail
to take any action, in each case, which would prohibit claims by such
ICI Company under the policies providing coverage of the type described
in
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Section 3.24 hereof which would impair its rights under such policies.
As soon as there is any indication that a claim relating to Seller under
any such policy could reasonably be expected to exceed the limits of
liability of any such policy or if any underwriter of such policy or
claims adjustor or party affiliated with any such underwriter or claims
adjustor indicates that coverage might not be afforded under a policy
relating to Seller, representatives of Seller and/or Purchaser shall be
notified immediately and shall be entitled to fully participate in any
and all further matters relating to such claim. Seller will ensure that
the relevant ICI Company will act in good faith with respect to seeking
coverage under such policies.
7.6 Mitigation. Each party will use reasonable efforts to mitigate any
liabilities and damages for which it may claim indemnification under
this Article VII. To the extent that the operations of Purchaser after
the Closing Date contribute to or aggravate any liabilities or damages
as to which indemnification is available under Section 7.3, Seller's
indemnification obligation will be reduced by the value of such
contribution or aggravation.
7.7 Limitation on Damages. Notwithstanding any other provision in this
Agreement, the liability of any party to another party arising with
respect to the matters addressed herein, regardless of the form of the
claim or cause of action (whether based in contract, infringement,
negligence, strict liability, other tort or otherwise), shall be limited
to actual damages, which shall in no event include any indirect,
consequential, incidental or punitive damages, whether arising under
contract, in tort, at law, or under other legal concepts, of such other
party; provided that, for purposes of this Agreement, actual damages
suffered by an Indemnified Party, shall include, only if and to the
extent arising from or related to a Third Party Claim, any such
indirect, consequential, incidental or punitive damages and Party is
liable to a third party. "Indirect" and "consequential" damages shall
include, but not be limited to, loss of anticipated profits, loss of
use, loss of revenue, cost of capital and loss or damage of property or
equipment.
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7.8 Purchase Price Adjustment. Any payments made as indemnification pursuant
to Section 7.2 or 7.3 shall be treated as an adjustment to the Purchase
Price.
7.9 Remediation Procedures.
(a) For purposes of this Section 7.9, "On-Site Remediation
Liabilities" means liabilities and obligations imposed under any
Environmental Law for the clean-up or remediation of conditions
existing at the Real Property prior to the Closing Date and for
which Seller is obligated to indemnify Purchaser pursuant to
Section 7.3 hereof; "Off-Site Remediation Liabilities" means
liabilities and obligations of Seller imposed under any
Environmental Law for the clean-up or remediation of conditions
existing at real property other than the Real Property prior to
the Closing Date and for which Seller is obligated to indemnify
Purchaser pursuant to Section 7.3 hereof; and "Real Property"
means the real property owned by Seller and included within the
Manufacturing Facilities.
(b) Purchaser shall, to the extent Purchaser has the legal right to
do so, make all reasonable efforts to:
(i) consult with Seller (x) prior (A) to entering into any
agreement with any third party, including but not limited to any
governmental entity, or (B) nature of and schedule for any
cleanup or remediation for which Purchaser has sought
indemnification respecting an On-Site Remediation Liability
under Section 7.3 of this Agreement ("On-Site Cleanup"), and (y)
prior to submitting to any third party any work plan or material
report for any On-Site Cleanup:
(ii) provide drafts to Seller for review and comment of material
documents for any On-Site Cleanup, including without limitation,
any work plan, testing results, compliance schedule, compliance
or consent order or agreement;
(iii) consult with Seller in due time period before notice of a
release of a hazardous substance is
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required or reasonably believed to be required by any
Environmental Law or governmental authority; and
(iv) provide prior notice to Seller of any reportable release of
any Hazardous Materials resulting from any On-Site Cleanup.
(c) Purchaser shall promptly and at its own expense provide Seller
with final copies of all reports, workplans and other documents
received from or provided to any third party, including but not
limited to, any governmental authority.
(d) Any hazardous substances or any other materials removed in
connection with an On-Site Cleanup shall be deemed to have been
generated by Purchaser and Purchaser shall have responsibility
for ensuring that such hazardous substances and any other
materials are managed and disposed of in accordance with all
applicable federal, state and local laws, statutes, ordinances
and regulations and Seller shall have no liability arising
directly or indirectly from Purchaser's failure to do so or as a
result of the particular way in which Purchaser managed or
disposed of such hazardous substances and other materials unless
the method by which the hazardous substances or other materials
were managed or disposed of was required or insisted upon by
Seller.
(e) As promptly as possible following Seller's receipt of a notice
from Purchaser pursuant to Section 7.4 regarding a claim made by
or threatened against Purchaser by a third party, including but
not limited to any governmental authority for On-Site Cleanup,
Seller and Purchaser shall each designate one or more
representatives ("Designated Representatives") to represent them
in their dealings with each other respecting On-Site Cleanup
activities and notify each other of the name, title, address,
and telephone and facsimile numbers for each such Designated
Representative.
(f) If a legal proceeding, claim or demand shall be made or
threatened against Purchaser by a third party, including but not
limited to any governmental authority, which seeks both damages
and On-Site
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Cleanup, Seller shall manage and control such legal proceeding,
claim or demand and Purchaser shall, subject to the provisions
of this Section 7.9, manage and control any On-Site Cleanup
resulting therefrom.
(g) Purchaser shall conduct any On-Site Cleanup in accordance in all
material respects with any applicable Environmental Law and
governmental order, mandate or directive. Unless otherwise
agreed to by the Purchaser and Seller, and to the extent
permitted under such Environmental Law, order, mandate or
directive, Purchaser shall propose to and advocate to
governmental entities and conduct any On-Site Cleanup, with the
objective of accomplishing an On-Site Cleanup in a cost
effective manner which complies with applicable Environmental
Law taking into account the cost of commercially available
alternative cleanup technologies, the likelihood of success of
the chosen technology and whether the chosen technology will
accomplish cleanup in a reasonable period of time (hereinafter
referred to as the "Cost Effective Cleanup").
(h) Were notice of a release of a hazardous substance is required by
any applicable Environmental Law or any governmental authority
or where Purchaser has reasonable grounds to believe that such
notice is required by such Environmental Law or any governmental
authority, Purchaser shall make all reasonable efforts to
consult with Seller in the time period before the notice is
required or reasonably believed to be required by such
Environmental Law or governmental authority.
(i) In the event Purchaser proposes On-Site Cleanup, including but
not limited to soil or groundwater or other intrusive testing
("Testing"), resulting or arising from any claim or demand made
or threatened against Purchaser by any third party, including
but not limited to any governmental authority, then:
(i) Purchaser shall not perform Testing at the Real Property
unless required by such Environmental Law or unless Purchaser
has a reasonable basis to believe that there is soil or
groundwater contamination on any parcel of Real Property. In
the event that Purchaser desires to perform Testing, Purchaser
shall (unless a shorter time period is re-
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quired for Purchaser to comply with applicable Environmental
Laws) furnish Seller not less than ten (10) days prior written
notice of its election to do so and Purchaser and Seller agree
to confer with each other in good faith in regard to whether
Purchaser should perform such Testing. If the parties cannot
reach agreement on the issue of whether Purchaser should perform
Testing, either party may invoke the dispute resolution
procedures set forth in Section 7.9(k).
(ii) In the event that Purchaser proposes On-Site Cleanup under
this Section 7.9(i) and Seller believes that such cleanup (A)
would not be mandated by the applicable governmental authority
if the underlying environmental problems with respect to which
the On-Site Cleanup was proposed were disclosed to such
governmental authority (the "Necessity Test") based on cleanup
required by such governmental authority at similar sites, where
possible in the same jurisdiction, with contamination of similar
type, concentration and media and taking into account the
relevant site specific conditions at the parcel of Real Property
involved (the "Relevant Factors") or (B) is not a Cost Effective
Cleanup which would be acceptable to the applicable government
authority if it were to exercise jurisdiction over the parcel of
Real Property in question and were to take into account the
Relevant Factors, Seller or Purchaser may initiate the dispute
resolution procedures contained in Section 7.9(k).
(j) Purchaser shall not make any admission of liability with
respect to On-Site Remediation Liabilities or Off-Site
Remediation Liabilities or third party claims which would
reasonably be expected to give rise to damages indemnifiable by
the Seller without prior consultation with Seller. Disclosure of
facts in response to a governmental authority demand or request
for information under any Environmental Law shall not constitute
an admission of liability for the purposes of this Section
7.9(j). Notification of contamination or disclosure of acts in
response to a factual inquiry from a governmental authority or
private party and responses to discovery requests in court or
administrative proceedings shall not constitute an admission of
liability for purposes of this Section 7.9(j).
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(k) In the event of a dispute (excluding any dispute as to the
construction or interpretation of this Section 7.9 or to the
liability of the parties under this Agreement) respecting the
On-Site Cleanup arises among the Purchaser's and Seller's
Designated Representatives which cannot be resolved by such
Designated Representatives after timely (but not more than ten
(10) business days) diligent and good faith efforts, Purchaser
and Seller shall each submit the dispute for consideration and
resolution to their respective Managing Directors (or their
designees). In the event that the dispute remains unresolved
after timely (but not more than thirty (30) business days)
diligent and good faith efforts by such Managing Directors, the
Purchaser's decision shall control, provided, however, that any
such decision by the Purchaser shall be without prejudice to
any claim by the Seller that any amounts relating to such
dispute are not subject to indemnification by the Seller under
Section 7.3.
(l) Seller and Seller's Designated Representatives shall have the
right upon reasonable prior notice to enter the Real Property
during normal business hours and at other agreed upon times for
the purposes of (i) observing any On-Site Cleanup conducted by
Purchaser, and (ii) obtaining at Seller's sole cost and
expense, split or duplicate samples of Testing conducted for
any On-Site Cleanup. This subsection shall not limit
Purchaser's and Seller's obligations pursuant to Section 7.4.
(m) Nothing contained in this Section 7.9 shall restrict Purchaser
from taking any action where required by any Environmental Law,
or, without prejudice to any claim by Seller that any such
action is not subject to indemnification by Seller under
Section 7.3, where the failure to take such action would
reasonably be expected to result in a violation of any
Environmental Law.
(n) No failure by Purchaser to comply with the requirements of this
Section 7.9 shall limit or relieve Seller's indemnity
obligations hereunder except to the extent Seller is materially
prejudiced thereby.
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7.10 Exclusive Remedy. The indemnification obligations of Seller under this
Article VII shall be the sole and exclusive remedy for any claims by
Purchaser against Seller or any ICI Company arising out of or relating
to the purchase of the Business by Purchaser pursuant to this Agreement
and the transactions contemplated hereby (other than those contemplated
in the Ancillary Agreements) and the Purchaser hereby waives any and all
other rights or remedies (including without limitation any right of
rescission) in connection therewith.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendment. This Agreement may not be amended or modified except by an
instrument in writing signed by Seller and Purchaser.
8.2 Waiver of Compliance; Consents. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any
obligation, covenant, agreement or condition herein may be waived by the
party or parties entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party
hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this
Section 8.2.
8.3 Attorneys' Fees. In any action, suit or proceeding to enforce the
obligations of any party hereto, the prevailing party shall be entitled
(in addition to all other relief to which it may be entitled) to recover
all attorneys' fees and related expenses reasonably incurred by it in
the prosecution or defense of such action, suit or proceeding.
8.4 Expenses. Unless otherwise agreed between the parties, all costs and
expenses, including, without limitation, fees and disbursements of
counsel, financial advisors
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and accountants, incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing
shall have occurred. Notarization Costs shall be shared equally
by the parties.
8.5 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have
been duly given or made as of the date delivered or mailed if
delivered personally or by facsimile transmission or mailed by
registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at
such other address for a party as shall be specified by like
notice, except that notices of changes of address shall be
effective only upon receipt thereof):
(a) if to Seller and/or Seller's Guarantor:
Deutsche ICI GmbH
Xxxx-xxx-Xxxxxxx-Xxxxxxx 0
00000 Xxxxxxxxx xx Xxxx 50
Facsimile: 069 5870 297
Attn.: Geschaftsfuhrung
with a copy to:
President and General Counsel
ICI Americas Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: +xx 000 000 0000
(b) if to Purchaser and/or to Purchaser's Guarantor:
Xxxxx Verwaltungsgesellschaft mbH
Xxxxxxxxxxxxxxxx 0
00000 Xxxxxxxxx
Facsimile: 07253 91899
Attn.: Geschaftsfuhrung
Fiberite Holdings, Inc.
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile: 001 602 730 2390
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with a copy to:
Fiberite Holdings, Inc.
x/x XXX Merchant Banking, Inc.
0000 Xxxxxxxx
Xxx Xxxx, X.X. 00000
Xxxx.: Xxxxxxxx Xxxx
and
Xxxx Xxxxxxxx
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Facsimile: 001 212 269 5420
8.6 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is
not affected in any manner adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
8.8 Entire Agreement. This Agreement and the Ancillary Agreement constitute
the entire agreement and supersede all prior agreements and
undertakings, both written and oral, between Seller and Purchaser with
respect to the subject matter hereof and, except as otherwise expressly
provided herein, are not intended to confer upon any other person any
rights or remedies hereunder.
8.9 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided that no party may
assign, dele-
61
gate or otherwise transfer any of its rights, interests or obligations
under this Agreement without the consent of the other party hereto, such
consent not to be unreasonably withheld or delayed; provided further
that no such consent shall be required if (a) as a result of any and all
such assignments, only a single assignee would be entitled to
indemnification pursuant to Article VII, (b) such assignment would not
relieve the assigning party of its obligations under this Agreement and
the Ancillary Agreements, (c) the assignee agrees with the assigning
party to assume the assigning party's obligations under this Agreement
and the Ancillary Agreements, and (d) the assigning party notifies the
Seller prior to any such assignment, which notification shall include
the identity of the assignee, a description of terms of such assignment
and a certification by an officer of the Purchaser that the conditions
set forth in subparagraphs 8.9(a) and (b) have been satisfied.
Notwithstanding the foregoing, the Purchaser shall be entitled to assign
a security interest in its rights hereunder in connection with a
collateral assignment to one Person acting on behalf of one or more of
Purchaser's lenders.
8.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Germany, without regard to its conflicts of
law rules.
8.11 Counterparts. [omitted]
8.12 Guaranty.
(a) Purchaser's Guarantor hereby agrees to pay, perform and discharge all of
the covenants, agreements, obligations and liabilities of Purchaser
under this Agreement and the Ancillary Agreements to the extent such
covenants, agreements, obligations and liabilities are not paid,
performed or discharged by Purchaser in accordance with the terms hereof
and thereof.
(b) Seller's Guarantor hereby agrees to pay, perform and discharge all of
the covenants, agreements, obligations and liabilities of Seller and
other ICI Companies under this Agreement and the Ancillary Agreements to
the extent such covenants, agreements, obligations and liabilities are
not paid, performed or discharged by Seller in accordance with the terms
hereof and thereof.
62
8.13 Federal Cartel Office Clearance. The Federal Cartel Office, Berlin, has
cleared the transaction contemplated herein by letter of September 20,
1995.
8.14 Venue. Exclusive place of jurisdiction shall be Frankfurt am Main.
