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Exhibit 10.1
AMENDMENT TO THE STOCK PURCHASE AGREEMENT
This AMENDMENT (the "Amendment"), dated October 17, 1997, amends the
Stock Purchase Agreement by and among XXXXX-XXXXXXX CHIMIE S.A. ("Seller"), LII
Europe S.A.R.L. ("Buyer"), XXXXXXX INDUSTRIES INC. ("Guarantor") and RHONE L
S.A.S. (now named ChlorAlp) ("Company"), in accordance with Section 11.2 of the
Stock Purchase Agreement. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Stock Purchase
Agreement.
W I T N E S S E T H:
WHEREAS, Seller contributed to the Company on September 1, 1997,
pursuant to the Transfer Agreement dated July 29, 1997, by means of a partial
asset contribution subject to the regime of article 817-1 of the French tax
code, a complete and autonomous branch of activity specializing in research,
design, manufacturing and marketing of chlorine, bleach soda, as well as brine
mining activity, made up of various assets and liabilities;
WHEREAS, Seller, Buyer, Guarantor and Company have entered into the
Stock Purchase Agreement; and
WHEREAS, Seller, Buyer, Guarantor and Company desire to amend the
Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and agreements
contained herein, the parties hereto agree as follows:
1. Amendment to Section 11.5 of the Stock Purchase Agreement.
Section 11.5 of the Stock Purchase Agreement shall be amended by
adding the following clauses:
"(d) In the event that the tax regime regarding registration duties shall
be challenged by any Governmental Entity on the basis of the
provisions ofarticles 719 and 720 of the French tax code, imposing a
tax reassessment on the Company or Buyer, Seller undertakes to
indemnify the Company or Buyer, as the case may be, for the amount of
registration duties effectively assessed, including penalties and late
payment interest [as well as reasonable attorney fees]. The amount
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of the indemnification shall be reduced by the value of any tax
benefit or tax savings realized or reasonably expected to be realized
as a result of the tax reassessment and the payment of any attorney
fees in connection therewith.
(e) The indemnification under paragraph (d) above shall survive until
December 31, 2007, corresponding to the tax authorities' statute of
limitation with respect to registration duties in application of
articles L. 180 and L. 186 of the French book of tax procedures.
(f) The indemnification given by Seller under paragraph (d) above shall
not apply if the tax reassessment arises out of the contribution or
transfer of the constructions in process (" immobilisations en
cours").
(g) Guarantor, Buyer and the Company agree to cooperate with Seller if any
Governmental Entity attempts such tax reassessment. Guarantor, Buyer,
the Company and Seller, prior to making any communication to any
Governmental Entity, shall agree on the terms of any such
communication. Guarantor, Buyer or the Company shall not settle or
compromise without the written consent of Seller, which consent shall
not be unreasonably withheld or delayed."
2. Confidentiality.
Guarantor, Buyer, the Company and Seller undertake to maintain the
terms of this Amendment in confidence and not to disclose or communicate its
terms to any third party, except that they may communicate this Amendment to
their respective advisers. Any holder of this Amendment is hereby also
instructed to keep confidential the terms of this Amendment.
3. Counterparts.
This Amendment may be executed in one or more counterparts, each of
which shall be considered one and the same instrument.
4. Governing Law.
This Amendment shall be governed and construed in accordance with
Section 11.4 of the Stock Purchase Agreement.
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5. Effect of Amendment.
5.1 Except as amended hereby, the terms and provisions of the Stock
Purchase Agreement shall remain in full force and effect.
5.2 This Amendment shall not apply to facts and circumstances covered by
the guarantee signed on August 1st, 1997 by Guarantor and Buyer, the provisions
of which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the day and year first above written.
XXXXX-XXXXXXX CHIMIE S.A. [with manuscript mention
By: Xxxxxx Xxxxxxx "bon pour garantie
/s/ Xxxxxx Xxxxxxx sans faculte de revocation"]
LII EUROPE S.A.R.L.
By: Xxxxxxxx Xxxxx
/s/ Xxxxxxxx Xxxxx
XXXXXXX INDUSTRIES INC.
By: Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
CHLORALP S.A.S.
By: Marc Polaud
/s/ Marc Polaud
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AMENDMENT TO THE
STOCK PURCHASE AGREEMENT
dated as of
October 17, 1997
Among
LII EUROPE S.A.R.L.
as Buyer
XXXXXXX INDUSTRIES INC.
as Guarantor
XXXXX-XXXXXXX CHIMIE S.A.
as Seller
And
CHLORALP S.A.S.
as the Issuer of the Shares
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AMENDMENT TO THE STOCK PURCHASE AGREEMENT
This AMENDMENT (the "Amendment"), dated October 17, 1997,
amends the Stock Purchase Agreement by and among XXXXX-XXXXXXX CHIMIE S.A.
("Seller"), LII Europe S.A.R.L. ("Buyer"), XXXXXXX INDUSTRIES INC.
("Guarantor") and RHONE L S.A.S. (now named CHLORALP S.A.S.) ("Company"), in
accordance with Section 11.2 of the Stock Purchase Agreement. Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Stock Purchase Agreement.
W I T N E S S E T H:
WHEREAS, Seller, Buyer, Guarantor and Company have entered into the
Stock Purchase Agreement; and
WHEREAS, Seller, Buyer, Guarantor and Company desire to amend the
Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and agreements
contained herein, the parties hereto agree as follows:
1. Article 1 shall be amended by deleting the existing text in
its entirety and substituting the following text:
"ARTICLE 1"
PURCHASE AND SALE OF SHARES
1.1 Sale of Shares. Subject to the terms and conditions hereof,
Seller agrees to sell, assign and transfer to Buyer and Buyer agrees to
purchase from Seller, on the Closing Date, 1,513,620 of the Shares,
representing 50% of the Shares.
1.2 Purchase Price and Payment. (a) The purchase price
("Purchase Price") for the Shares to be purchased hereunder shall be one
hundred twenty three million five hundred thirty two thousand eight hundred
seventy four French Francs (FF 123,532,874) (as calculated pursuant to Schedule
1.2) and shall be payable at Closing (as defined in Section 5.1). The Purchase
Price has been determined by mutual agreement on the basis of the valuation of
the Division as set forth in the Transfer Agreement, as adjusted, less a
discount of fifteen percent (15%) to reflect the sale of less than 100% of the
Shares
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and the shared control of the Company.
(b) Payment of the Purchase Price under this Agreement shall be
made to Seller by Buyer by Bank of France wire transfer (virement Banque de
France) in immediately available funds to an account of Seller designated by it
for such purpose.
(c) The Transfer and the CEV Transfer shall give rise to Transfer
Date Adjustments between Seller and the Company or CEVCO, as the case may be,
in accordance with Section 1.3 below. The Closing shall give rise to a Post-
Closing Adjustment between Seller and Buyer in accordance with Sections 1.4
below.
1.3 Adjustments as at the Transfer Date Between Seller and the
Company and Between Seller and CEVCO.
1.3.1 Base Statements. (a) Attached hereto as Schedule 1.3.1(a) is
a balance sheet of the Division which reflects, as of December 31, 1996
("Reference Date") but subject to mutually agreed adjustments, the values of
the respective line items and reference accounts which are set forth in the
Transfer Agreement ("Company Base Statement"). The Company Base Statement has
been prepared in accordance with Seller's Accounting Principles (as defined in
Section 2.1.4 hereafter).
(b) Attached hereto as Schedule 1.3.1(b) is a balance sheet of the
CEV business which reflects, as of the Reference Date but subject to mutually
agreed adjustments, the values of the respective line items and reference
accounts which are set forth in the CEV Transfer Agreement ("CEVCO Base
Statement"). The CEVCO Base Statement has been prepared in accordance with
Seller's Accounting Principles. As used herein, the term "Base Statements"
means the Company Base Statement and the CEVCO Base Statement.
1.3.2 Adjustment Assumptions. (a) The adjustments to be made under
this Section 1.3 shall be made only and exclusively in respect of: (i) the
working capital line items referred to under the heading Actif Circulant in
section 2.2 of the Transfer Agreement (exclusive of the cash portion thereof
used by the Company to pay the purchase price under the CEVCO Stock Purchase
Agreement) ("Company Cash and Inventory"); (ii) the liabilities referred to in
section 2.3 of the Transfer Agreement (i.e., the Transferred Liabilities as
defined in Section 4.1.3 hereafter); (iii) the working capital line items
referred to under the heading Actif Circulant in Section 2.1 of the CEV
Transfer Agreement ("CEVCO Cash and Inventory"); and (iv) the liabilities
referred to in Section 2.2 of the CEV Transfer Agreement (i.e., the CEV
Transferred Liabilities as defined in Section 4.1.4
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hereafter). These line items are set forth on Schedule 1.3.5.
(b) As used herein with reference to the Division or the CEV
Business, the term "Cash and Inventory" means the sum of cash and cash
equivalents (exclusive of the cash portion thereof used to pay the purchase
price under the CEVCO Stock Purchase Agreement), plus the value of inventory,
determined on the basis of Seller's Accounting Principles, where inventory
shall include only raw materials, work in process, consumable processing
supplies, specific spare parts, and finished goods.
1.3.3 Transfer Date Statements. As soon as practicable and, in any
event, not later than thirty (30) calendar days after the Closing Date, Seller
shall deliver to:
(a) the Company and Buyer a statement reviewed by
Seller's Auditor ("Company Transfer Date Statement "), setting forth
Seller's determination of (i) the amount of the Company Cash and
Inventory as of the Transfer Date; (ii) the amount of the Transferred
Liabilities as of the Transfer Date; and (iii) the amount of any
Transfer Date Adjustment Amount to be paid pursuant to Section 1.3.5
hereunder; and
(b) CEVCO and Buyer a statement reviewed by Seller's
Auditor (the "CEVCO Transfer Date Statement"), setting forth Seller's
determination of (i) the amount of CEVCO Cash and Inventory as of the
Transfer Date; (ii) the amount of the CEV Transferred Liabilities as
of the Transfer Date; and (iii) the amount of any Transfer Date
Adjustment Amount to be paid pursuant to Section 1.3.5 hereunder.
The Company Transfer Date Statement and the CEVCO Transfer Date Statement (each
a "Transfer Date Statement") shall be prepared on a basis consistent with the
Base Statements in accordance with Seller's Accounting Principles. Buyer's
Auditor, on behalf of Buyer, shall have access to all workpapers prepared by
Seller's Auditor and to accounting documents of Seller to the extent relating
exclusively to the Division in connection with its review of the Transfer Date
Statements. Seller's and Buyer's Auditors shall limit their review to the line
items referred to on Schedule 1.3.5.
1.3.4 Determination of any Transfer Date Adjustment Amounts. The
payment of the Transfer Date Adjustments between Seller and the Company and/or
between Seller and CEVCO as the case may be and the amount thereof, if any,
shall be determined as follows ("Transfer Date Adjustment Amounts"):
(i) If (A) the aggregate value of the Company Cash and
Inventory as shown on the Company Final Transfer
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Date Statement less the Transferred Liabilities as shown on the
Company Final Transfer Date Statement exceeds (B) the aggregate value
of the Company Cash and Inventory as shown on the Company Base
Statement less the Transferred Liabilities as shown on the Company
Base Statement, a Transfer Date Adjustment Amount equal to the amount
of such excess shall be due and payable by the Company to Seller in
accordance with section 4.2 of the Transfer Agreement.
(ii) If (A) the aggregate value of the Company Cash and
Inventory as shown on the Company Final Transfer Date Statement less
the Transferred Liabilities as shown on the Company Final Transfer
Date Statement is less than (B) the aggregate value of the Company
Cash and Inventory as shown on the Company Base Statement less the
Transferred Liabilities as shown on the Company Base Statement, a
Transfer Date Adjustment Amount equal to the amount of such difference
shall be due by Seller to the Company in accordance with section 4.2
of the Transfer Agreement.
(iii) If (A) the aggregate value of the CEVCO Cash and
Inventory as shown on the CEVCO Final Transfer Date Statement less the
CEV Transferred Liabilities as shown on the CEVCO Final Transfer Date
Statement exceeds (B) the aggregate value of the CEVCO Cash and
Inventory as shown on the CEVCO Base Statement less the CEV
Transferred Liabilities as shown on the CEVCO Base Statement, a
Transfer Date Adjustment Amount equal to the amount of such excess
shall be due and payable by CEVCO to Seller in accordance with Section
4.2 of the CEV Transfer Agreement.
(iv) If (A) the aggregate value of the CEVCO Cash and
Inventory as shown on the CEVCO Final Transfer Date Statement less the
CEV Transferred Liabilities as shown on the CEVCO Final Transfer Date
Statement is less than (B) the aggregate value of the CEVCO Cash and
Inventory as shown on the CEVCO Base Statement less the CEV
Transferred Liabilities as shown on the CEVCO Base Statement, a
Transfer Date Adjustment Amount equal to the amount of such difference
shall be due by Seller to CEVCO in accordance with Section 4.2 of the
CEV Transfer Agreement.
(v) For the avoidance of doubt, Schedule 1.3.5
hereto sets forth hypothetical determinations of the Transfer Date
Adjustment Amounts.
1.4 Post-Closing Adjustments Between Buyer and Seller.
1.4.1 Closing Statements. As soon as practicable and,
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in any event, not later than thirty (30) calendar days after the Closing Date,
Seller shall deliver to Buyer a statement reviewed by Seller's Auditor and
prepared on a consolidated basis ("Closing Statement"), setting forth Seller's
determination of the Net Profit or Loss at the Closing Date. "Net Profit or
Loss at the Closing Date" shall be determined on a consolidated basis after tax
comprising the Company and CEVCO (to the extent of 60% of CEVCO's profit or
loss) for the period from the Transfer Date to the Closing Date (or the
month-end immediately prior to the Closing Date if the Closing Date is not the
first business day of the month, in which event interest on the Purchase Price
shall be payable from the beginning of the month to the Closing Date at a rate
of PIBOR for one month deposits plus 100 basis points) and shall be calculated
and determined on a basis consistent with Seller's Accounting Principles
(provided that depreciation shall be calculated in accordance with historical
asset values and depreciation schedules without giving effect to the write-up
of assets effected pursuant to the Transfer). Buyer's Auditor, on behalf of
Buyer, shall have access to all workpapers prepared by Seller's Auditor and to
accounting documents of Seller to the extent relating exclusively to the
Division in connection with its review of the Closing Statement.
1.4.2 Determination of any Post-Closing Adjustment Amounts.
The payment of the post-closing adjustments between Seller and Buyer and the
amount thereof, if any, shall be determined as follows ("Post-Closing
Adjustment Amounts"):
(i) If the Net Profit or Loss at the Closing Date is
positive, a Post Closing Adjustment Amount equal to fifty percent
(50%) of the amount of such profit shall be due and payable by Buyer
to Seller.
(ii) If the Net Profit or Loss at the Closing Date is
negative, a Post-Closing Adjustment Amount equal to fifty percent
(50%) of the amount of such loss shall be due by Seller to Buyer.
1.5 Adjustment Procedures.
1.5.1 Disputes Regarding Statements. (a) Buyer shall have
twenty (20) business days after the delivery to Buyer of the Transfer Date
Statements or the Closing Statement, as the case may be (collectively
"Statements") in which to review the Statements and the workpapers referred to
above related thereto. Unless Buyer notifies Seller in writing within such
twenty-day periods of any objection to the Statements, specifying in reasonable
detail the items and amounts subject to such objection ("Disputed Items"), the
Statements (including the Adjustment
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Amounts, if any, shown thereon) shall be conclusive and binding on Buyer and
Seller. If within such twenty-day period, Buyer notifies Seller in writing of
any such objection, then Buyer and Seller shall use reasonable efforts for
fifteen (15) business days after the expiration of such initial twenty-day
period to resolve in good faith their differences and agree upon any
adjustments to the Statements (including any Adjustment Amounts shown thereon).
Any Disputed Items which are not resolved by the mutual agreement of Buyer and
Seller within such fifteen-day period shall be submitted for resolution to the
Paris, France office of Price Waterhouse or such other internationally
recognized accounting firm as is mutually acceptable to Buyer and Seller and
independent of each of them and failing such mutual agreement an
internationally recognized accounting firm independent of each of them
designated by the President of the Commercial Court of Paris statuant en refere
("Independent Accounting Firm"). Seller and Buyer shall instruct the
Independent Accounting Firm to limit its examination to the unresolved Disputed
Items, to resolve any unresolved Disputed Items affecting the Statements in
such manner as to preserve the conformity of the Statements with the
requirements described in Section 1.3.3 hereof and to use its best efforts to
make its determination thereon within twenty (20) business days after its
engagement hereunder. The Independent Accounting Firm shall hear both parties
and their advisers and shall in all respects enforce the "principe du
contradictoire". The resolution of any such previously unresolved Disputed
Items by such Independent Accounting Firm shall be made in a written notice
delivered to Buyer and Seller as promptly as practicable (which written notice
shall set forth the amount of any Adjustment Amounts as finally determined) and
shall be final, conclusive and binding upon Seller, Buyer, the Company and
CEVCO. Seller and Buyer each shall pay one-half of the fees and expenses
charged by the Independent Accounting Firm.
(b) Each Statement to which Buyer does not object as provided in
Section 1.3.7(a) hereof, or to which Seller and Buyer agree, or as otherwise
conclusively determined pursuant to Section 1.3.7(a) hereof (any such final
form of Statement being referred to herein as the respective "Final Statement")
shall be used in determining the Adjustment Amounts and any further
adjustments.
1.5.2 Payment. Within eight (8) business days after the lapse of
the twenty (20) business day period referred to in the first sentence of
Section 1.5.1, the estimated amount of any Adjustment Amounts excluding any
amount of any Disputed Items, shall be paid by bank wire transfer of the
required amount (in immediately available funds). The remaining unpaid amount
of any
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Adjustment Amounts, if any, shall be paid within eight (8) business days of the
resolution of all Disputed Items and determination of each Final Statement, by
bank wire transfer of the required amount (in immediately available funds).
The Adjustment Amounts shall be increased by interest at a rate of seven
percent (7%) per annum accruing from the expiration of the above-referenced
eight day period to the date of payment of such amounts. Such payment of late
interest shall not be deemed to constitute an agreement or waiver by any of the
parties hereto to delay the payment of any Adjustment Amounts.
2. Section 2.1.8 shall be amended by the addition of the
following paragraph 2.1.8(d):
"Seller does not, has not, nor has ever, owned any real property (or
rights with respect thereto) at or relating to the Saint Fons Facility (as
defined at Section 2.1.11(c) below)."
3. Section 2.1.11 shall be amended by the addition of the
following paragraph 2.1.11(c):
"The contract dated March 14, 1983, as amended, by and between Seller
and Atochem (" Atochem Contract") is the only agreement, contract,
understanding, arrangement or undertaking (whether written or oral) between
such parties with respect to the bleach production facilities located at Saint
Fons ("Saint Fons Facility"), and, other than the provisions of the Atochem
Contract, there exists no obligation of Seller or Company to indemnify Seller
or any other person with respect to the Saint Fons Facility."
4. Section 3.1.2 shall be amended by the addition of the
following text:
"In particular, Seller shall make, or, after the Transfer Date, shall
cause ChlorAlp to make, all maintenance capital expenditures (also referred to
as common capital expenditures) associated with the maintenance and operation
of the Pont de Claix chloralkali facility, the brine mine, pipelines and other
facilities of ChlorAlp at Hauterives, the St. Fons Facility and the CEVCO
Facility, which capital expenditures shall, in each case, be made by Seller at
the times and in accordance with established Seller procedures and in the
Ordinary Course of Business, said capital expenditures being adjusted for in
accordance with Schedule 1.2."
5. Section 3.1.6 shall be amended by deleting the existing
second sentence in its entirety and substituting the
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following second sentence:
"With respect to easements and servitudes that burden the brine
pipeline between Hauterives and Pont de Claix and/or the transferred portion of
the chlorine pipeline, and that do not run with the pipelines but require the
consent of the landowner, Seller shall exert its Best Efforts to obtain such
required consents in due course after Closing and shall hold harmless the
Company in the event the Company shall be held liable financially for breach of
such consent requirement or shall suffer an interruption of brine supply and/or
of chlorine sales as a result of the failure to obtain any such required
consent."
6. The following paragraphs shall be added as paragraphs (b) and
(c) to Section 3.1.7 (the existing paragraph becoming paragraph (a)):
"(b) On or prior to the Closing Date, Seller shall have sent to the
Commune of Champagnier a letter notifying the change of owner of the chlorine
pipeline.
(c) The parties acknowledge that the agreements identified in
Schedule 3.1.7(c) hereto shall not be transferred to the Company at the Closing
Date and for so long as the other parties under these agreements shall not have
entered into contracts with the Company providing for terms and conditions
similar to those provided by these agreements but limited in scope to the
Division, Seller shall (i) exert its Best Efforts to cause such other parties
to continue supplying the services to the Company and/or CEVCO, as the case may
be, in a manner consistent with past practice; (ii) provide alternative or
substitute arrangements effective as of the Closing Date providing the benefit
of such agreements to the Company in a manner reasonably satisfactory to Buyer;
and (iii) indemnify and hold harmless the Company and CEVCO from and against
the loss of the benefits under such agreements.
(d) With respect to the agreements identified at Schedule 3.1.7(d)
hereto, Seller shall (i) exert its Best Efforts to obtain consents to the
transfer of such agreements from the other parties within a period of two
months after the Closing Date, (ii) provide alternative or substitute
arrangements effective as of the Closing Date providing the benefit of such
agreements to the Company and/or CEVCO, as the case may be, in a manner
reasonably satisfactory to Buyer and (iii) indemnify and hold harmless the
Company and CEVCO from and against the loss of the benefits under such
agreements."
(e) The indemnities provided in subparagraphs (c) and (d)
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of this Section 3.1.7 shall not be limited by any restrictions on amount or
rights to claim provided herein.
7. The following Section 3.4.8 shall be added to Article 3:
"3.4.8 PCBs. The Company, CEVCO and RPC shall maintain copies of
official and commercial documents concerning removal, recovery or disposal of
PCBs from the Pont de Claix Site and shall, on written request, make those
documents available to the other parties in the event of a dispute concerning
PCBS. A list of transformers and rectifiers potentially containing PCBs is
attached hereto at Schedule 3.4.8".
8. Article 4 shall be amended by the addition of a new Section
4.1.9:
"4.1.9 Saint Fons Facility. (a) Seller shall have used its Best
Efforts to cooperate with Buyer to obtain such additional information and to
make such additional inquiries and investigations with respect to the Saint
Fons Facility and the operations thereat as Buyer shall have reasonably
requested, and (b) such information and investigations shall not have disclosed
any facts which would have a significant effect on the liabilities to be
assumed by the Company pursuant hereto."
9. Section 6.4(a) shall be amended by the addition of the
following sentence at the end of such paragraph (a):
"Notwithstanding the foregoing, Indemnifiable Losses and Environmental
Indemnifiable Losses in respect of the matters identified at Schedule 6.1,
paragraph 7 shall be indemnifiable to the extent such losses, when aggregated
with all other indemnification obligations of Seller under Section 6.1 above,
do not exceed the Total Enterprise Value".
10. Section 7.3 shall be amended by the addition of the following
text at the end of such sentence:
"or in respect of the Saint Fons Facility".
11. Section 7.9 shall be amended by the addition of the following
sentence at the end of paragraph (a):
"The right of Buyer to make a claim for Environmental Indemnifiable
Losses in respect of the Saint Fons Facility shall survive the Closing Date for
a period of ten (10) years".
12. The first sentence of Section 11.2 shall be amended by
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adding the following text after the word "hereof" and before the words "and can
be amended" at the fifth line: "including but not limited to the letter of
understanding dated August 1, 1997."
13. Section 11.5 shall be amended by deleting the existing
paragraph (b) and substituting the following text:
"(b) All fees and expenses of Me. Peysson and Me. Bailly, costs of
notification to public authorities of the transfer of easements relating to the
Hauterives brine pipeline and the chlorine pipeline, costs of recording such
easements and transfer of Company and CEVCO volumes and all of the costs and
expenses of the geometre hired by the parties shall be borne as follows: (a)
up to an aggregate maximum amount of 600,000 French Francs shall be paid by the
Company and CEVCO; and (b) all such amounts in excess of 600,000 French Francs
shall be paid by Seller".
14. Section 11.10 shall be amended by deleting the existing text
in its entirety and substituting the following text:
"11.10 Counterparts. (a) Subject to paragraph (b) below, this
Agreement may be executed in four or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and
the same instrument.
(b) Schedules to this Agreement shall be executed in two
counterparts, one counterpart to be kept by Seller and one counterpart to be
kept by Buyer, it being understood that Guarantor shall have full access at any
time to the set of Schedules kept by Buyer and shall be entitled to make copies
thereof and that the Company shall have full access at any time to the set of
Schedules kept by Buyer or Seller or if not jointly controlled by Seller and
Buyer to the set kept by its controlling shareholder and shall be entitled to
make copies thereof."
15. The definitions shall be amended as follows:
"Post Closing Adjustment Amount" has the meaning specified in Section
1.4.2 of this Agreement.
"Total Enterprise Value" shall mean FF 446,665,586".
16. The Schedules shall be amended as follows:
The attached revised Schedules 1.2 and 1.3.1(a) shall be substituted
for existing Schedules 1.2 and 1.3.1(a).
The attached revised Schedule 1.3.5 shall be substituted for
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existing Schedule 1.3.5.
The coversheets of Schedules 2.1.7(a)(i)(c), 2.1.7(a)(ii) and
2.1.11(a)(v) signed at the date hereof shall supersede and replace the
respective coversheets signed on August 1, 1997.
New Schedule 3.1.7(c) and (d) (attached) shall be added to the
Schedules.
Schedule 6.1 shall be amended by the addition of the following
sentence at the end of paragraph 6: "The DRIRE discussions identified in
Schedule 2.1.6(d) (as to which Seller's liability shall not be limited by
Section 6.4(a)(i) or Section 6.4(b), the Albermarle claim identified in
Schedule 2.1.11(a)(ii) (as to which Seller's liability shall not be limited by
Section 6.4(b)) and the claim of Mme Rahon and son identified in Schedule
2.1.14 (as to which Seller's liability shall be limited both by Section
6.4(a)(i) and Section 6.4(b)) shall be covered by this paragraph 6."
Schedule 6.1 shall be amended by the addition of the following
paragraph 7:
"Seller shall indemnify and hold the Company and CEVCO harmless from
and against (x) any Environmental Indemnifiable Losses attributable to the
Saint Fons Facility prior to the Closing Date and (y) any other Indemnifiable
Losses attributable to any breach by Seller of its obligations under the
Atochem Contract prior to the Closing Date".
The parties agree that Schedule 7.4 containing copy of a portion of
the Survey (part II was missing) and initialled on August 1, 1997 is null and
void and shall be replaced by the complete Survey containing part II as
initialled as of the date hereof.
17. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be considered one and the same instrument.
18. Governing Law. This Amendment shall be governed and construed
in accordance with Section 11.4 of the Stock Purchase Agreement.
19. Effect of Amendment. Except as amended hereby, the terms and
provisions of the Stock Purchase Agreement shall remain in full force and
effect."
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the day and year first above written.
XXXXX-XXXXXXX CHIMIE S.A.
By: /s/ Xxxx SCETBON
-------------------------------
Title: Manager M&A
----------------------------
LII EUROPE S.A.R.L.
By: /s/ Xxxxxxxx XXXXX
-------------------------------
Title: Gerant
----------------------------
XXXXXXX INDUSTRIES INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Title: Vice President
----------------------------
[handwritten mention of Guarantor: "bon pour cautionnement solidaire sans
faculte de revocation - s/s _____ pour XxXxxxx Industries Inc."]
CHLORALP S.A.S.
By: /s/ Marc Polaud
-------------------------------
Title:
----------------------------
17
Schedule 1.2: Calculation of Purchase Price
Fixed Assets
ChlorAlp
Intangible (excluding mining permit
valued at 200,000) 120,000,000
Tangible 310,557,441
In Process 19,672,273
CEVCO @ 60%
Tangible 32,700,000
In Process 1,870,286
-----------
Total Fixed Assets 484,800,000
Other Assets and Liabilities
ChlorAlp
Loans to Employees(1) 28,784
Other Employee Related Advance (Apec)(1) 2,662,000
Inventories (1) 19,704,885
Loans to Employees (1) 71,031
Prepayment State Taxes (1) 614,825
----------
Sub-total 23,081,525
Pension Provision (1) (18,091,056)
Other Personnel Entitlements (1) (8,524,331)
Turnaround Provision (1) (7,425,472)
Atochem Debt (1) (23,690,381)
Accrued Charges (1) (912,000)
RPC invoices payable (10,672,761)
------------
Sub-total (69,316,001)
CEVCO @ 60%
Loans to Employees(1) 10,696
Other Employee Related Advance (Apec)(1) 486,000
Inventories (1) 8,064,944
Prepayment of Turbine Lease (1) 4,653,389
----------
Sub-total 13,215,029
Pension Provision (1) (2,595,544)
Other Personnel Entitlements (1) (1,383,771)
RPC invoices payable (67,780)
-----------
Sub-total (4,047,095)
Total Other Assets and Liabilities (37,066,542)
Other Adjustments to ChlorAlp Value (1,305,028)
Other Adjustments to CEVCO Value (12,844)
Initial ChlorAlp Cash 250,000
Total Enterprise Value "TEV" 446,665,586
RPC Transferred "Intragroup Indebtedness" (156,000,000)
-------------
Total Debt Assumed (156,000,000)
100% Equity Value ("Full Company Equity Value") 290,665,586
42.5% TEV (Total Payment by LII at Closing)
(Debt + Equity) 189,832,874
XxXxxxx pays to RP "Purchase Price" for Equity 123,532,874
XxXxxxx repays I/C Debt to ChlorAlp ("Refunded
Intragroup Indebtedness") 66,300,000
-----------
Total Payment by LII at Closing (Debt and
Equity) 189,832,874
Exercise Price for RPC Put Option 167,132,712
-----------
(1) Item subject to adjustment provisions in Section 1.3 of the Stock
Purchase Agreement.
18
Schedule 1.3.1(a): the Company Base Statement
Fixed Assets
ChlorAlp
Intangible (excluding mining permit
valued at 200,000) 120,000,000
Tangible 310,557,441
In Process 19,672,273
-----------
Total Fixed Assets 450,229,714
Other Assets and Liabilities
ChlorAlp
Cash 250,000
Loans to Employees (1) 28,784
Other Employee Related Advance (Apec) (1) 2,662,000
Inventories (1) 19,704,885
Loans to Employees (1) 71,031
Prepayment State Taxes (1) 614,825
-----------
Sub-total 23,331,525
Pension Provision (1) (18,091,056)
Other Personnel Entitlements (1) (8,524,331)
Turnaround Provision (1) (7,425,472)
Atochem Debt (1) (23,690,381)
Accrued Charges (1) (912,000)
------------
Sub-total (58,643,240)
Total Other Assets and Liabilities (35,311,715)
Total Assets and Liabilities 414,917,999
(1) Item subject to adjustment provisions in Section 1.3.5(i) and 1.3.5(ii) of
Stock Purchase Agreement.
In addition to the aforementioned assets and liabilities ChlorAlp owns
a 60% (43,806,000) share in CEVCO which is an asset that is not
adjustable under Sections 1.3.5(i) or 1.3.5(ii) as any necessary
adjustment thereto is covered by Sections 1.3.5(iii) and 1.3.5(iv).
19
Schedule 1.3.1(b): CEVCO Base Statement
(All values on 100% basis)
Fixed Assets
CEVCO
Tangible 54,500,000
In Process 3,117,143
----------
Total Fixed Assets 57,617,143
Other Assets and Liabilities
CEVCO
Loans to Employees(1) 17,827
Other Employee Related Advance (Apec)(1) 810,000
Inventories (1) 13,441,573
Prepayment of Turbine Lease (1) 7,755,648
----------
Sub-total 22,025,048
Pension Provision (1) (4,325,907)
Other Personnel Entitlements (1) (2,306,285)
-----------
Sub-total (6,632,192)
Total Other Assets and Liabilities 15,392,857
Total Assets and Liabilities 73,010,000
(1) Item subject to adjustment provisions in Section 1.3.5(iii) and
1.3.5(iv) fo the Stock Purchase Agreement.
20
Schedule 1.3.5 Transfer Date Adjustments - Company
Transfer Date Reference Date
------------- --------------
Company Cash and Inventory
--------------------------
Raw material, work in process, finished goods 8,000,000 8,442,589
Industrial supplies 11,000,000 11,262,296
----------- -----------
Total inventory 19,000,000 19,704,885
Loans to Employees 60,000 71,031
Other Employee Related Loans/Advances 28,000 2,690,784
TVA prepayment 600,000 614,825
----------- -----------
Total 19,688,000 23,081,525
-----
Transferred Liabilities
-----------------------
Pension provision 18,000,000 18,091,056
Atochem debt 19,788,000 23,690,381
Other personnel entitlements 8,000,000 8,524,331
Turnaround provision 7,000,000 7,425,472
Accrued charges 900,000 912,000
------------ -----------
Total 53,688,000 58,643,240
-----
Company Transfer Date Net Working Capital (34,000,000) (35,561,715)
Transfer Date Adjustment of FF 1,561,715 due by Company to Seller
-----------------------------------------------------------------
21
Schedule 1.3.5 Transfer Date Adjustments - CEVCO
Transfer Date Reference Date
------------- --------------
CEVCO Cash and Inventory
------------------------
Raw material, work in process, finished goods 10,000,000 10,595,865
Industrial supplies 1,983,000 2,845,708
---------- ----------
Total inventory 11,983,000 13,441,573
Loans to Employees 767,000 827,827
Prepayment (Turbine Lease) 7,850,000 7,755,648
---------- ----------
Total 20,600,000 22,025,048
-----
CEVCO Transferred Liabilities
-----------------------------
Pension provision 4,300,000 4,325,907
Other personnel entitlements 2,300,000 2,306,285
---------- ---------
Total 6,600,000 6,632,192
-----
CEVCO Transfer Date Net Working Capital 14,000,000 15,392,856
Transfer Date Adjustment of FF 1,392,856 due by Seller to CEVCO
---------------------------------------------------------------
22
--------------------------------------------------------------------------------
EXHIBIT_
STOCK PURCHASE AGREEMENT
dated as of
August 1, 1997
Among
LII EUROPE S.A.R.L.
as Buyer
XXXXXXX INDUSTRIES INC.
as Guarantor
XXXXX-XXXXXXX CHIMIE S.A.
as Seller
And
RHONE L S.A.S.
as the Issuer of the Shares
--------------------------------------------------------------------------------
23
TABLE OF CONTENTS
Page
----
ARTICLE 1
PURCHASE AND SALE OF SHARES .............................................. 3
---------------------------
ARTICLE 2
REPRESENTATIONS AND WARRANTIES ........................................... 8
------------------------------
ARTICLE 3
COVENANTS ............................................................... 25
---------
ARTICLE 4
CONDITIONS .............................................................. 32
----------
ARTICLE 5
CLOSING ................................................................. 35
-------
ARTICLE 6
INDEMNIFICATION ......................................................... 36
---------------
ARTICLE 7
ENVIRONMENTAL INDEMNIFICATION ........................................... 42
-----------------------------
ARTICLE 8
TERMINATION ............................................................. 48
-----------
ARTICLE 9
DEFINITIONS ............................................................. 49
-----------
ARTICLE 10
GUARANTY ................................................................ 56
--------
ARTICLE 11
MISCELLANEOUS ........................................................... 56
-------------
6
24
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ("this Agreement"), dated as of
August 1, 1997, among:
(i) LII Europe S.A.R.L., a societe a responsabilite
limitee organized under the laws of France, having a corporate capital
of FF 1,500,000, whose head office is located at 00, xxxxxx xx Xxxxxxxx
Xxxxxx, 00000 Xxxxxxxx, Xxxxxx, registered with the Registry of
Commerce and Companies of Nanterre under the number B 412 883 019,
represented by Xxxxxxxx Xxxxx ("Buyer");
(ii) XXXXXXX INDUSTRIES INC., a corporation organized
under the laws of the State of Delaware, United States of America,
whose principal executive office is located at 0000 Xxxxxxx Xxxxx Xxxx
X.X., Xxxxxxx, Xxxxxxx 00000-0000, U.S.A., which owns directly or
indirectly all of the outstanding shares of Buyer, represented by W.
Xxxxxx XxXxxxx, III ("Guarantor");
(iii) XXXXX-XXXXXXX CHIMIE S.A., a societe anonyme
organized under the laws of France, having a corporate capital of FF
2,703,447,200, whose head office is located at 00 xxxx Xxxx Xxxxxx,
00000 Xxxxxxxxxx Xxxxx, Xxxxxx, registered with the Registry of
Commerce and Companies of Nanterre under the number B 642 014 526,
represented by ______________ ("Seller"); and
(iv) RHONE L S.A.S., a societe par actions simplifiee
organized under the laws of France (and whose name will be changed on
or prior to Closing to ChlorAlp S.A.S.), having a corporate capital of
FF 250,000, whose head office is located at 00 xxxx Xxxx Xxxxxx, 00000
Xxxxxxxxxx Xxxxx, Xxxxxx, registered with the Registry of Commerce and
Companies of Nanterre under the number B 000 000 000, represented by
Xxxxxxx Xxxxx ("Company"):
Certain terms used in this Agreement are defined in Article 9 hereof.
25
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W I T N E S S E T H:
WHEREAS, Seller is the owner of 100% of the shares of the Company;
WHEREAS, Seller operates at its Pont de Claix, Hauterives and Saint Fons
facilities a business unit engaged principally in the manufacture of
chlor-alkali products operated by or on behalf of Seller and comprising assets,
liabilities, business, product lines and going concern value representing a
complete and autonomous branch of activity (herein referred to as the
"Division");
WHEREAS, on the Closing Date, Seller shall have transferred to the Company
the Transferred Assets and the Transferred Liabilities of the Division in
exchange for 3,024,740 newly issued shares, par value FF100, pursuant to a
capital increase (all of the shares of the Company collectively referred to as
the "Shares") in accordance with the terms hereof and by means of an apport
partiel d'actif ("Transfer") pursuant to a transfer agreement (traite d'apport
partiel d'actif) (herein referred to as the "Transfer Agreement", in the form
attached hereto as Exhibit I), entered into between Seller and the Company on
July 29, 1997;
WHEREAS, the Division is supplied at the Pont de Claix site with
electricity and steam produced by a Centrale Electricite Vapeur belonging to
Seller ("CEV");
WHEREAS, Seller is also supplied at the Pont de Claix site (the "Pont de
Claix Site") with electricity and steam produced by the CEV;
WHEREAS, CEVCO ("CEVCO") is a French Groupement d'Interet Economique,
without corporate capital, whose head office is located at 00, xxx Xxxxx Xxxx
xxx Xxxxxxxxx, 00000 Paris, and which is registered with the Registry of
Commerce and Companies of Paris under the number C 412 577 835;
WHEREAS, Seller and the Company are the sole members of CEVCO;
26
-3-
WHEREAS, on or prior to the Closing Date, Seller shall have caused the
transfer to CEVCO of the CEV Transferred Assets and the CEV Transferred
Liabilities of the CEV business in accordance with the terms hereof and by means
of an apport mixte ("CEV Transfer") pursuant to a transfer agreement (traite
d'apport) (herein referred to as the "CEV Transfer Agreement", in the form
attached hereto as Exhibit II), entered into between Seller and CEVCO on July
29, 1997;
WHEREAS, immediately subsequent to the transfer to CEVCO of the CEV
Transferred Assets and the CEV Transferred Liabilities pursuant to the CEV
Transfer Agreement, but prior to the Closing, CEVCO shall have constituted
capital in the amount of FF 73,010,000 divided into 730,100 interests ("CEVCO
Shares") and Seller shall have sold to the Company sixty percent (60%) of the
CEVCO Shares for cash in the amount of FF 43,806,000 pursuant to a stock
purchase agreement (herein referred to as the "CEVCO Stock Purchase Agreement",
substantially in the form attached hereto as Exhibit III);
WHEREAS, after giving effect to such sale pursuant to the CEVCO Stock
Purchase Agreement, the Company will own sixty percent (60%) of the CEVCO Shares
and Seller will own forty percent (40%) of the CEVCO Shares;
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, 50% of the Shares, for the purchase price and upon the terms and
conditions hereinafter set forth;
WHEREAS, in order to induce Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Guarantor is willing to enter
into this Agreement and to guarantee the obligations of Buyer pursuant to
Article 10 hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereto agree as follows:
ARTICLE 1
27
-4-
PURCHASE AND SALE OF SHARES
1.1 Sale of Shares. Subject to the terms and conditions hereof, Seller
agrees to sell, assign and transfer to Buyer and Buyer agrees to purchase from
Seller, on the Closing Date, 1,512,370 of the Shares, representing 50% of the
Shares.
1.2 Purchase Price and Payment. (a) The purchase price ("Purchase Price")
for the Shares to be purchased hereunder shall be one hundred twenty eight
million five hundred fifty one thousand four hundred fifty French Francs (FF
128,551,450) (as calculated pursuant to Schedule 1.2) and shall be payable at
Closing (as defined in Section 5.1). The Purchase Price has been determined by
mutual agreement on the basis of the valuation of the Division as set forth in
the Transfer Agreement, less a discount of fifteen percent (15%) to reflect the
sale of less than 100% of the Shares and the shared control of the Company.
(B) Payment of the Purchase Price under this Agreement shall be made to
Seller by Buyer by Bank of France wire transfer (virement Banque de France) in
immediately available funds to an account of Seller designated by it for such
purpose.
(C) There shall be no adjustment of the Purchase Price between Buyer and
Seller; instead, Buyer and Seller shall cause the Company and Seller, or CEVCO
and Seller, respectively, to make the adjustments described in Section 1.3 in
connection with the Transfer and the CEV Transfer. Similarly, there shall be no
adjustment of the purchase price between Seller and the Company payable under
the CEVCO Stock Purchase Agreement, because of the adjustments to be made
between Seller and CEVCO which are described in Section 1.3 in connection with
the CEV Transfer.
1.3 Adjustments Between Seller and the Company and Between Seller and
CEVCO.
1.3.1 Base Statements. (a) Attached hereto as Schedule 1.3.1(a) is
a balance sheet of the Division which
28
-5-
reflects, as of December 31, 1996 ("Reference Date") but subject to mutually
agreed adjustments, the values of the respective line items and reference
accounts which are set forth in the Transfer Agreement ("Company Base
Statement"). The Company Base Statement has been prepared in accordance with
Seller's Accounting Principles (as defined in Section 2.1.4 hereafter).
(b) Attached hereto as Schedule 1.3.1(b) is a balance sheet of the CEV
business which reflects, as of the Reference Date but subject to mutually agreed
adjustments, the values of the respective line items and reference accounts
which are set forth in the CEV Transfer Agreement ("CEVCO Base Statement"). The
CEVCO Base Statement has been prepared in accordance with Seller's Accounting
Principles. As used herein, the term "Base Statements" means the Company Base
Statement and the CEVCO Base Statement.
1.3.2 Adjustment Assumptions. (a) The adjustments to be made under
this Section 1.3 shall be made only and exclusively in respect of: (i) the
working capital line items referred to under the heading Actif Circulant in
section 2.2 of the Transfer Agreement (exclusive of the cash portion thereof
used by the Company to pay the purchase price under the CEVCO Stock Purchase
Agreement) ("Company Cash and Inventory"); (ii) the liabilities referred to in
section 2.3 of the Transfer Agreement (i.e., the Transferred Liabilities as
defined in Section 4.1.3 hereafter); (iii) the working capital line items
referred to under the heading Actif Circulant in Section 2.1 of the CEV Transfer
Agreement ("CEVCO Cash and Inventory"); and (iv) the liabilities referred to in
Section 2.2 of the CEV Transfer Agreement (i.e., the CEV Transferred Liabilities
as defined in Section 4.1.4 hereafter). These line items are set forth on
Schedule 1.3.5.
(b) As used herein with reference to the Division or the CEV Business,
the term "Cash and Inventory" means the sum of cash and cash equivalents
(exclusive of the cash portion thereof used to pay the purchase price under the
CEVCO Stock Purchase Agreement), plus the value of inventory, determined on the
basis of Seller's Accounting Principles, where inventory shall include only raw
materials, work in process, consumable processing supplies, specific spare
parts, and finished goods.
29
-6-
1.3.3 Closing Statements. As soon as practicable and, in any event,
not later than thirty (30) calendar days after the Closing, Seller shall deliver
to:
(a) the Company and Buyer a statement reviewed by Seller's Auditor
("Company Closing Statement"), setting forth Seller's determination of (i)
the amount of the Company Cash and Inventory as of the Closing Date; (ii)
the amount of the Transferred Liabilities as of the Closing Date; and
(iii) the amount of any Post-Closing Adjustment Amount to be paid pursuant
to Section 1.3.5 hereunder; and
(b) CEVCO and Buyer a statement reviewed by Seller's Auditor (the
"CEVCO Closing Statement"), setting forth Seller's determination of (i)
the amount of CEVCO Cash and Inventory as of the Closing Date; (ii) the
amount of the CEV Transferred Liabilities as of the Closing Date; and
(iii) the amount of any Post-Closing Adjustment Amount to be paid pursuant
to Section 1.3.5 hereunder.
The Company Closing Statement and the CEVCO Closing Statement (each a "Closing
Statement") shall be prepared on a basis consistent with the Base Statements in
accordance with Seller's Accounting Principles. Buyer's Auditor, on behalf of
Buyer, shall have access to all workpapers prepared by Seller's Auditor and to
accounting documents of Seller to the extent relating exclusively to the
Division in connection with its review of the Closing Statements. Seller's and
Buyer's Auditors shall limit their review to the line items referred to on
Schedule 1.3.5.
1.3.4 Disputes Regarding Closing Statements. (a) Buyer shall have
twenty (20) business days after the delivery to Buyer of the Closing Statements
in which to review the Closing Statements and the workpapers referred to above
related thereto. Unless Buyer notifies Seller in writing within such twenty-day
period of any objection to the Closing Statements, specifying in reasonable
detail the items and amounts subject to such objection ("Disputed Items"), the
Closing Statements (including the Post-Closing Adjustment Amounts, if any, shown
thereon) shall be conclusive and binding on Buyer and Seller.
30
-7-
If within such twenty-day period, Buyer notifies Seller in writing of any such
objection, then Buyer and Seller shall use reasonable efforts for fifteen (15)
business days after the xpiration of such initial twenty-day period to resolve
in good faith their differences and agree upon any adjustments to the Closing
Statements (including any Post-Closing Adjustment Amounts shown thereon). Any
Disputed Items which are not resolved by the mutual agreement of Buyer and
Seller within such fifteen-day period shall be submitted for resolution to the
Paris, France office of Price Waterhouse or such other internationally
recognized accounting firm as is mutually acceptable to Buyer and Seller and
independent of each of them and failing such mutual agreement an internationally
recognized accounting firm independent of each of them designated by the
President of the Commercial Court of Paris statuant en refere ("Independent
Accounting Firm"). Seller and Buyer shall instruct the Independent Accounting
Firm to limit its examination to the unresolved Disputed Items, to resolve any
unresolved Disputed Items affecting the Closing Statements in such manner as to
preserve the conformity of the Closing Statements with the requirements
described in Section 1.3.3 hereof and to use its best efforts to make its
determination thereon within twenty (20) business days after its engagement
hereunder. The Independent Accounting Firm shall hear both parties and their
advisers and shall in all respects enforce the "principe du contradictoire". The
resolution of any such previously unresolved Disputed Items by such Independent
Accounting Firm shall be made in a written notice delivered to Buyer and Seller
as promptly as practicable (which written notice shall set forth the amount of
any Post-Closing Adjustment Amounts as finally determined) and shall be final,
conclusive and binding upon Seller, Buyer, the Company and CEVCO. Seller and
Buyer each shall pay one-half of the fees and expenses charged by the
Independent Accounting Firm.
(b) Each Closing Statement to which Buyer does not object as provided in
Section 1.3.4(a) hereof, or to which Seller and Buyer agree, or as otherwise
conclusively determined pursuant to Section 1.3.4(a) hereof (any such final form
of Closing Statement being referred to herein as the "Company Final Closing
Statement" for the Company and the "CEVCO Final Closing Statement" for CEVCO,
and collectively the "Final Closing Statements") shall be used in determining
the Post-Closing
31
-8-
Adjustment Amounts and any further adjustments, which will be promptly paid by
Seller to the Company, or by the Company to Seller, and/or by Seller to CEVCO,
or by CEVCO to Seller, as the case may be.
1.3.5 Determination of any Post-Closing Adjustment Amounts. The
payment of the post-closing adjustments between Seller and the Company and/or
between Seller and CEVCO as the case may be and the amount thereof, if any,
shall be determined as follows ("Post-Closing Adjustment Amounts"):
(i) If (A) the aggregate value of the Company Cash and
Inventory as shown on the Company Final Closing Statement less the
Transferred Liabilities as shown on the Company Final Closing Statement
exceeds (B) the aggregate value of the Company Cash and Inventory as
shown on the Company Base Statement less the Transferred Liabilities as
shown on the Company Base Statement, a Post Closing Adjustment Amount
equal to the amount of such excess shall be due and payable by the
Company to Seller in accordance with section 4.2 of the Transfer
Agreement.
(ii) If (A) the aggregate value of the Company Cash and
Inventory as shown on the Company Final Closing Statement less the
Transferred Liabilities as shown on the Company Final Closing Statement
is less than (B) the aggregate value of the Company Cash and Inventory
as shown on the Company Base Statement less the Transferred Liabilities
as shown on the Company Base Statement, a Post-Closing Adjustment
Amount equal to the amount of such difference shall be due by Seller to
the Company in accordance with section 4.2 of the Transfer Agreement.
(iii) If (A) the aggregate value of the CEVCO Cash and
Inventory as shown on the CEVCO Final Closing Statement less the CEV
Transferred Liabilities as shown on the CEVCO Final Closing Statement
exceeds (B) the aggregate value of the CEVCO Cash and Inventory as
shown on the CEVCO Base Statement less the CEV Transferred Liabilities
as shown on the CEVCO Base Statement, a Post Closing Adjustment Amount
equal to the amount of such excess shall be due and payable by CEVCO to
Seller in accordance with Section 4.2 of the CEV Transfer Agreement.
32
-9-
(iv) If (A) the aggregate value of the CEVCO Cash and
Inventory as shown on the CEVCO Final Closing Statement less the CEV
Transferred Liabilities as shown on the CEVCO Final Closing Statement
is less than (B) the aggregate value of the CEVCO Cash and Inventory as
shown on the CEVCO Base Statement less the CEV Transferred Liabilities
as shown on the CEVCO Base Statement, a Post-Closing Adjustment Amount
equal to the amount of such difference shall be due by Seller to CEVCO
in accordance with Section 4.2 of the CEV Transfer Agreement.
(v) For the avoidance of doubt, Schedule 1.3.5 hereto
sets forth hypothetical determinations of the Post-Closing Adjustment
Amounts.
1.3.6 Payment. Within eight (8) business days after the lapse of
the twenty (20) business day period referred to in the first sentence of
Section 1.3.4, the estimated amount of any Post-Closing Adjustment Amounts
excluding any amount of any Disputed Items, shall be paid respectively to or by
Seller by or to the Company and/or CEVCO, as the case may be, by bank wire
transfer of the required amount (in immediately available funds). The remaining
unpaid amount of any Post-Closing Adjustment Amounts, if any, shall be paid to
or by Seller, as the case may be, within eight (8) business days of the
resolution of all Disputed Items and determination of each Final Closing
Statement, by bank wire transfer of the required amount (in immediately
available funds). The Post-Closing Adjustment Amounts shall be increased by
interest at a rate of seven percent (7%) per annum accruing from the expiration
of the above-referenced eight day period to the date of payment of such
amounts. Such payment of late interest shall not be deemed to constitute an
agreement or waiver by any of the parties hereto to delay the payment of any
Post-Closing Adjustment Amounts.
33
-10-
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
2.1.1 Corporate Status.
(a) Seller. Seller is a societe anonyme duly organized and validly
existing under the laws of France and has all requisite corporate power to own
its properties and carry on the business of the Division and the CEV business as
now being conducted.
(b) The Company. (i) The Company is a societe par actions
simplifiee duly organized and validly existing under the laws of France and at
the Closing will have the corporate power and authority to own the properties
and carry on the business of the Division as conducted by Seller. A copy of the
Company's statuts (articles and by-laws) as of the date hereof is annexed hereto
as Schedule 2.1.1(b)(i).
(ii) As of the date hereof, the Company has not conducted any
business and has no assets or liabilities, other than nominal liabilities
incident to its organization. As of the Closing Date, the Company will have (A)
no assets other than the Transferred Assets and the CEVCO Shares transferred to
it pursuant to the CEVCO Stock Purchase Agreement, and (B) no liabilities,
whether accrued, absolute, contingent or otherwise, including but not limited to
off balance sheet liabilities, other than the Transferred Liabilities.
(iii) The Transferred Assets (A) constitute all of the real property
(including, without limitation, buildings, plants and structures but excluding
any buildings, plants and structures outside the perimeter of the Conveyed Real
Property), movable property (including, without limitation, equipment),
intangible property, contract rights (including, without limitation, Material
Contracts and intellectual and industrial property) and other properties and
assets used exclusively or nearly exclusively in the conduct of the Division
prior to the
34
-11-
Closing, except that no representation is made as to the inclusion in the
Transferred Assets of any accounts receivable or cash assets, or as to the
sufficiency of any accounts receivable or cash assets which may be included in
the Transferred Assets for purposes of the working capital needs of the Company
after the Closing; and (B) are, taking into account the terms of the Related
Agreements, sufficient for the Company to continue to conduct the business of
the Division in the Ordinary Course of Business substantially as conducted by
Seller prior to Closing, subject to the availability to the Company of
sufficient working capital.
(c) CEVCO. (i) CEVCO is a groupement d'interet economique duly
organized and validly existing under the laws of France and at the Closing will
have the corporate power and authority to own the properties and carry on the
CEV business as conducted by Seller. A copy of CEVCO's contrat de groupement
(articles and by-laws) as of the date hereof is annexed hereto as Schedule
2.1.1(c)(i).
(ii) As of the date hereof, CEVCO has not conducted any business
and has no assets or liabilities, other than nominal liabilities incident to its
organization. As of the Closing Date, CEVCO will have (A) no assets other than
the CEV Transferred Assets, and (B) no liabilities, whether accrued, absolute,
contingent or otherwise, including but not limited to off balance sheet
liabilities, other than the CEV Transferred Liabilities.
(iii) The CEV Transferred Assets (A) constitute all of the real
property (including, without limitation, buildings, plants and structures but
excluding any buildings, plants and structures outside the perimeter of the
Conveyed Real Property), movable property (including, without limitation,
equipment), intangible property, contract rights (including without limitation,
Material Contracts and intellectual and industrial property) and other
properties and assets used exclusively or nearly exclusively in the conduct of
the CEV prior to the Closing except that no representation is made as to the
inclusion in the CEV Transferred Assets of any accounts receivable or cash
assets, or as to the sufficiency of any accounts receivable or cash assets which
may be included in the CEV Transferred Assets for purposes of the working
capital
35
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needs of CEVCO after the Closing; and (B) are, taking into account the terms of
the Related Agreements, sufficient for CEVCO to continue to conduct the business
of the CEV in the Ordinary Course of Business substantially as conducted by
Seller prior to Closing, subject to the availability to CEVCO of sufficient
working capital.
2.1.2 Share Capital. (a) Immediately prior to the Closing and to the
completion of the capital increase contemplated by the Transfer Agreement, the
share capital of the Company will be FF 250,000, consisting of 2,500 shares, par
value FF 100 per share. At Closing, (i) Seller will be the only record and
beneficial owner of the Shares, (ii) all of the Shares will be fully paid-up and
validly issued and will not be subject to any calls or assessments, (iii) there
will be no commitments providing for the issuance of any additional shares of
capital stock of the Company (with or without voting rights), or providing for
the issuance of securities convertible into shares of capital stock or providing
for the issuance of other securities except to the benefit of CIM, Compagnie
Industrielle et Miniere, such as contemplated by the Transfer Agreement, and
(iv) the Shares will not be subject to any contractual restrictions as to the
payment and distribution of dividends, other than such restrictions as may be
contained in the Shareholders Agreement.
(b) Immediately prior to the Closing and to the completion of the
capital increase contemplated by the CEV Transfer Agreement, the share capital
of CEVCO will be FF 73,010,000, consisting of 730,100 shares, par value FF 100
per share. At Closing, (i) Seller and the Company shall be the only record and
beneficial owners of the CEVCO Shares, (ii) Seller will be the record and
beneficial owner of 292,040 CEVCO Shares and the Company will be the record and
beneficial owner of 438,060 CEVCO Shares, (iii) all of the CEVCO Shares will be
fully paid-up and validly issued and will not be subject to any calls or
assessments, (iv) there will be no commitments providing for the issuance of any
additional shares of capital stock of CEVCO (with or without voting rights), or
providing for the issuance of securities convertible into shares of capital
stock or providing for the issuance of other securities, and (v) the CEVCO
Shares will not be subject to any contractual restrictions as to the payment and
distribution of
36
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dividends, other than such restrictions as may be agreed in writing between the
parties.
(C) For purpose of this Section "beneficial" shall mean having
all rights attached to the French legal ownerships of "nue-propriete et
usufruit".
2.1.3 Title. (a) At the Closing, Seller will have good and
marketable title to the Shares to be purchased hereunder and to all of the
rights afforded thereby, free of all options, privileges, guarantees, liens and
other Encumbrances (as defined in Article 9 hereafter).
(b) At the Closing, Seller and the Company will have good and
marketable title to all of the shares of CEVCO and to all of the rights afforded
thereby, free of all options, privileges, guarantees, liens and other
Encumbrances.
(c) At the Closing, the Company and/or CEVCO, as the case may be,
will have good and marketable title to the Conveyed Real Property, free and
clear of all Encumbrances other than Permitted Encumbrances.
(d) At the Closing, the Company and/or CEVCO, as the case may be,
will have good and marketable title to the Movable Property, free and clear of
all encumbrances other than Permitted Encumbrances.
(e) At the Closing, the Company and/or CEVCO, as the case may be,
will have good and marketable title to the Industrial Property, free and clear
of all encumbrances other than Permitted Encumbrances.
2.1.4 Financial Statements. Attached hereto at Schedule 2.1.4 are
(i) a profit and loss statement (compte de resultat) for the Division and the
CEV business for the period ending June 30, 1996 (the "June 30 Statements")
together with the report of Coopers & Xxxxxxx thereon, and (ii) the Base
Statements referred to in Article 1 hereof. The June 30 Statements and the Base
Statements have been, and the Closing Statements will be, prepared by Seller in
accordance with generally accepted accounting principles in effect in the United
States of America, consistently applied, subject to the
37
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modifications described in Schedule 2.1.4 hereto (such accounting principles, as
so modified, "Seller's Accounting Principles"). The June 30 Statements present
the results of operations of the Division and the CEV business for the six month
period ended such date in accordance with Seller's Accounting Principles. The
Base Statements do, and the Closing Statements will, fairly present, in
accordance with Seller's Accounting Principles and subject to the modifications
described in Schedule 2.1.4 hereto, the financial position of the Division and
the CEV business as of the respective dates specified therein.
2.1.5 Subsidiaries. Except as disclosed in Schedule 2.1.5 hereto,
the Company and CEVCO have no subsidiaries and do not directly or indirectly own
any capital stock of or other equity interests in any corporation, partnership,
or other person and the Company and CEVCO are not members of or participants in
any partnership, joint venture, groupement d'interet economique or similar
enterprise, other than the Company's interest in the CEVCO Shares acquired
pursuant to the CEVCO Stock Purchase Agreement.
2.1.6 Absence of Certain Changes and Events. Since June 30, 1996,
except as set forth in or contemplated by Schedule 2.1.6 hereto, or this
Agreement, none of the Company, Seller and CEVCO, with respect to the Division
or the CEV business as the case may be, has:
(a) conducted the business of the Division or the business of the
CEV other than in the Ordinary Course of Business;
(b) effected any payment or increase of any bonuses, salaries, or
other compensation to any stockholder, director, officer or employee, or
entered into any employment, severance, or similar Contract with any
director, officer or employee (other than in the Ordinary Course of
Business);
(c) effected the adoption of, or an increase in the payments to or
benefits under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or with
any
38
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employees of the Division or the CEV business (other than in the Ordinary
Course of Business);
(d) suffered any damage to or destruction or loss of any asset or
property of the Division or the CEV business, whether or not covered by
insurance, materially and adversely affecting the properties, assets,
business, financial condition, or prospects of the Division or the CEV
business;
(e) entered into, terminated, or received notice of termination of
(i) any license agreement; or (ii) any Contract or transaction involving a
total commitment by the Division or the CEV business of at least FF
500,000;
(f) made any sale, lease, or other disposition of any asset or
property (other than sales of finished products in the Ordinary Course of
Business), or mortgaged, pledged, or suffered the imposition of
Encumbrances (other than Permitted Encumbrances) on any asset or property
other than in the Ordinary Course of Business;
(g) cancelled or waived any material claims or rights;
(h) acquired the share capital of, or substantially all of the
assets of, any other business;
(i) received any notices that any material supplier or customer has
taken or has overtly threatened taking any steps which could disrupt the
business relationship of the Company with said supplier or customer;
(j) incurred any indebtedness (other than by way of Transferred
Liabilities);
(k) changed its maintenance practices in any material respect;
(l) changed Seller's Accounting Principles; or
39
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(m) entered into any Contract to do any of the foregoing.
2.1.7 Industrial Property. (a) Schedule 2.1.7(a) hereto contains:
(i) a list of each patent, patent application, registered copyright
and applications therefor, registered trademark and applications therefor,
registered trade name and design (collectively, "Intellectual Property"),
owned by Seller, any Affiliate of Seller, the Company or CEVCO and used in
the operation of the Division or the CEV business, as the case may be
(including application dates, registration numbers and expiration dates),
(B) a list of the trade secrets, including, without limitation, know-how,
process technology and other confidential information (collectively,
"Trade Secrets"), used by Seller or the Company or CEVCO in the operation
of the Division or the CEV business, as the case may be, other than any
such Intellectual Property or such Trade Secrets which are of only minimal
value or usefulness, and (C) a list of any license or other agreement
pursuant to which Seller or the Company or CEVCO has granted the right to
use any such Intellectual Property or Trade Secrets; and
(ii) a list of each license or other agreement pursuant to which
Seller or the Company or CEVCO has obtained the right to use any
Intellectual Property owned by any other person which is used by Seller or
the Company or CEVCO in the operation of the Division or the CEV business,
as the case may be, other than any such licenses or other agreements which
are of only minimal value or usefulness (collectively, "Licenses"). The
Intellectual Property owned by Seller or the Company or CEVCO and used in
the operation of the Division or the CEV business, licenses with respect
thereto, Trade Secrets used in the operation of the Division or the CEV
business, licenses with respect thereto, and Licenses, which are
in such Schedule, are herein collectively referred to as the
"Industrial Property").
(b) Except as set forth on Schedule 2.1.7(b) hereto, Seller has received no
notice, and has no knowledge, that (i)
40
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the ownership or use by Seller or the Company or CEVCO of any of the Industrial
Property used in the operation of the Division or the CEV business is subject to
any claim by any third party of infringement or other violation of third party
rights or (ii) the rights of Seller or the Company or CEVCO in any of the
Industrial Property used in the operation of the Division or the CEV business
are being infringed or violated by any third party.
2.1.8 Real Property. (a) Schedule 2.1.8 hereto contains (i) a brief
description of the real property (including fixtures, improvements and the real
property attributes of the brine and the chlorine pipelines) that is owned,
leased or otherwise held by Seller, the Company or CEVCO and used by any of them
in the operation of the Division or the CEV business, as the case may be
(herein, the "Real Property"), and (ii) a description of any leases under which
Seller, the Company or CEVCO hold any leasehold interests in any of the Real
Property. Save as otherwise disclosed on such Schedule 2.1.8, all Real Property
is in good operating condition and state of repair, ordinary wear and tear and
routine and periodic maintenance and repair excepted, and such Real Property has
been regularly maintained and repaired in accordance with Seller's historical
standards and practices.
(b) All Real Property reflected in the Base Statements as being owned is
owned free and clear of all Encumbrances except (i) utility and other easements,
minor encroachments and other title defects, statutory liens arising in the
Ordinary Course of Business by operation of law with respect to a liability not
yet due or delinquent and other limitations, restrictions, reservations and
encumbrances of record, none of which impairs in any material respect the
present or anticipated use, value or marketability of the property subject
thereto; and (ii) zoning laws, building use restrictions, variances and other
land use restrictions that do not impair in any material respect the present or
anticipated use, value or marketability of the property subject thereto. Upon
signature of the notarized deed (acte authentique) and the related notarial and
conveyancing documents, and upon completion of statutory publications in
connection therewith, the Company shall acquire good and marketable title to the
real property parcels or volumes identified in the Transfer Agreement and
defined in the
41
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notarized deed ("Conveyed Real Property"), free and clear of all Encumbrances
except those enumerated at clauses (i) and (ii) above (collectively "Permitted
Encumbrances").
(c) Except as disclosed in Schedule 2.1.8 hereto, (i) Seller has, and as of
the Closing the Company or CEVCO as the case may be will have, all easements and
rights of ingress and egress necessary for utilities and services and for all
operations conducted on the Real Property; and (ii) none of Seller, the Company
and CEVCO has received notice of violation of any zoning or real estate
regulation, ordinance or law applicable to the operations of the Division or the
CEV business and, to Seller's knowledge, there is no such violation, in any such
case that may impair in any material respect the present or anticipated use of
the Real Property subject thereto.
2.1.9 Movable Property. (a) Schedule 2.1.9(a) hereto contains (i) a
list, prepared as of a recent date, of all of the movable property which is used
in the operation of the Division or the CEV business, as the case may be, other
than (x) any such movable property which is obsolete or has been taken out of
service and/or is not necessary to such operations and (y) movable property not
comprised within the Transferred Assets but to be made available to the Company
or CEVCO after the Closing pursuant to the Related Agreements ("Movable
Property"), and (ii) a description of all leases or other agreements under which
any Movable Property is leased to Seller or the Company or CEVCO as the case may
be.
(b) Except as set forth on Schedule 2.1.9(b) hereto or as contemplated by
the Related Agreements, (i) all Movable Property which is used in the operation
of the Division or the CEV business, as the case may be, will be included in the
Transferred Assets or the CEV Transferred Assets, (ii) such Movable Property is
in good operating condition and state of repair, ordinary wear and tear and
routine and periodic maintenance and repair excepted, and (iii) such Movable
Property has been regularly maintained and repaired in accordance with Seller's
historical standards and practices.
(c) Schedule 2.1.9(c) hereto sets forth (i) the capital expenditure and
material maintenance schedules of the Division
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as of the date hereof and (ii) the status and actual expenditures with respect
to such items, as of the date hereof.
2.1.10 Title to Movable Property. At the Closing, the Company or
CEVCO as the case may be will have good and marketable title to all Movable
Property purported to be transferred to them as part of the Transferred Assets
or the CEV Transferred Assets, as the case may be, subject to no Encumbrances,
other than any described on Schedule 2.1.10.
2.1.11 Contracts and Commitments. (a) Schedule 2.1.11(a) hereto
contains a list, as of a recent date, of each of the following Contracts which
directly relates to the operation of the Division or to the operation of the CEV
business (collectively, "Material Contracts"):
(i) each Contract (as defined in Article 9 hereafter)
that involves performance of services or delivery of goods or materials
by Seller, the Company or CEVCO of an amount or value in excess of FF
1,000,000 per year;
(ii) each Contract that involves performance of services
or delivery of goods or materials to Seller, the Company or CEVCO of an
amount or value in excess of FF 1,000,000 per year;
(iii) each Contract that was not entered into in the
Ordinary Course of Business and that involves expenditures or receipts
of Seller, the Company or CEVCO in excess of FF 100,000 per year;
(iv) each employment termination or severance agreement
(other than pursuant to an Accord d'Entreprise), or consulting or
personal services agreement which has an aggregate future liability in
excess of FF 100,000 per year and does not contain the right for the
Company or CEVCO, as the case may be, to terminate such agreement
without penalty;
(v) each joint venture or partnership involving a
sharing of profits or losses by Seller, the Company or CEVCO with any
other Person;
43
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(vi) each Contract for capital expenditures in excess of
FF 100,000; and
(vii) each Contract containing secrecy, confidentiality or
non-competition covenants and affecting the business of the Company as
it is proposed to be conducted after the Closing Date.
(b) Except as set forth in Schedule 2.1.11(b) hereto, such Material
Contracts (i) are enforceable in all material respects by Seller and Seller has
performed all of its material obligations required to be performed thereunder,
(ii) are valid and binding in all material respects upon all parties thereto,
are in full force and effect and, to Seller's knowledge, no party thereto is in
breach of any provision thereof, (iii) will be transferred to the Company or
CEVCO, as the case may be, on the Closing Date, (iv) do not require the consent
or approval of the cocontractor under such Material Contracts in order to
permit the transfer thereof to the Company or CEVCO, as the case may be, (v) do
not contain any change of control provision, (vi) will be enforceable in all
material respects by the Company or CEVCO, as the case may be, and (vii)
constitute all Contracts that are material to the operation of the Division and
the CEV business.
2.1.12 Inventory. At the Closing, the inventory included in the
Transferred Assets and the CEV Transferred Assets will consist of a quality and
quantity usable and salable in the Ordinary Course of Business, except for
obsolete items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Company and CEVCO
Base Statements in accordance with Seller's Accounting Principles. All
inventories not written off have been priced at the lower of cost or net
realizable value in accordance with Seller's Accounting Principles. The
quantities of each category of inventory (whether raw materials, processing
supplies, work-in-process, spare-parts or finished goods) are reasonable for
sale or use in the Ordinary Course of Business and with respect to spare-parts
are at levels consistent with past practice.
44
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2.1.13 Powers of Attorney; Bank Accounts. Schedule 2.1.13 hereto
sets forth (i) the name of each person, corporation, firm, association or
business entity holding a proxy, general or special power of attorney, or other
similar instrument from Seller or the Company relating to the Division or from
Seller or CEVCO relating to the CEV business, and (ii) a brief description of
each bank or other financial institution at which the Company has an account
with respect to the Division or at which CEVCO has an account with respect to
the CEV business and the names of all persons having signature authority over
any such accounts.
2.1.14 Litigation. Except as set forth on Schedule 2.1.14 hereto,
(i) there is no material claim, action, lawsuit, arbitration, judicial or
administrative claim pending or, to the knowledge of Seller, threatened against
Seller or the Company or CEVCO or against the assets or business of the
Division or CEV business, and (ii) neither Seller nor the Company has received
notice that Seller or the Company or CEVCO is subject to any judgment, order or
decree entered in any lawsuit relating to the Division or the Company or CEVCO
or the CEV business or which questions the valid execution, delivery or
performance by Seller or the Company of their respective obligations hereunder
or under the Related Agreements, or their respective consummation of the
transactions contemplated hereby or thereby.
2.1.15 No Broker. Seller does not know of any broker, finder or
financial advisor other than Chase Investment Bank Limited or its Affiliates
(whose fees and expenses are Seller's sole responsibility) who is acting or has
acted on its behalf, or of any person, firm or corporation entitled to receive
any brokerage or finder's or financial advisory fee from Seller, in connection
with the transactions contemplated by this Agreement.
2.1.16 Governmental Permits; Compliance with Legal Requirements.
(a) Each of the permits and authorizations of any Governmental Entity necessary
to conduct the business of the Division and the CEV business as now conducted
("Governmental Permits") (other than the Environmental Permits as defined in
Section 2.1.17 below) is listed on Schedule 2.1.16(a), and is in full force and
effect.
45
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(b) Except as disclosed on Schedule 2.1.16(b) hereto,
(i) the operation and conduct by Seller of the Division and the
CEV business are and have been in compliance in all material respects
with all Legal Requirements applicable thereto and do not violate any
of the material terms and conditions of any such Governmental Permits;
(ii) no notices have been received by Seller from any Governmental
Entity relating to the termination or cancellation of any such
Governmental Permits and, to Seller's knowledge, no such termination or
cancellation is threatened; and
(iii) no written complaint, citation or notice of violation has been
received by Seller and to Seller's knowledge none is threatened from any
Governmental Entity alleging that Seller has violated any of the terms and
conditions of any such Governmental Permits or that Seller is not in
compliance with any Legal Requirements in connection with the conduct or
operation of the business of the Division or the CEV business, other than
(A) those which have been resolved or otherwise satisfied in the Ordinary
Course of Business since June 30, 1996 without any material adverse impact
upon the conduct of the business of the Division or the CEV business (and
identified in Schedule 2.1.16(b)), and (B) those which Seller reasonably
anticipates will be resolved or otherwise satisfied in the Ordinary Course
of Business without any material adverse impact upon the conduct of the
business of the Division or the CEV business (and identified in Schedule
2.1.16(b)).
(c) CIM (Compagnie Industrielle et Miniere), an RPC Affiliate, holds
title to the mining concession of Chatelard pursuant to a decree dated November
27, 1995 having authorized the transfer of the mining concession of Chatelard to
CIM.
(d) The representations contained in this Section 2.1.16 as they relate to
Environmental Laws are qualified by the
46
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representations and disclosures of Seller made pursuant to Section 2.1.17
hereunder.
2.1.17 Environmental Permits; Compliance with Environmental Laws.
(a) Schedule 2.1.17(a) hereto contains:
(i) a complete list of all Environmental Permits necessary to
conduct the business of the Division and the CEV business as now
conducted;
(ii) a complete list of all Hazardous Materials and Contaminants
that would be classified as dangerous substances or preparations under
Directive 67/548 of June 27, 1967 on Classification, Packaging and
Labeling of Dangerous Substances, as amended, and Directive 88/379 of June
7, 1988 on Classification, Packaging and Labeling of Dangerous
Preparations, as amended, used, generated or handled by Seller incident to
the manufacture of the Division's products or incident to the CEV
production activity;
(iii) a complete description of the current and historical waste
disposal practices of the Division and of the CEV business since January
1, 1987, including the names and addresses of owners or operators of each
location to which wastes have been or are sent for treatment, storage or
disposal;
(iv) copies of all environmental instructions with continuing
force and effect by any Governmental Entity received by Seller concerning
the Division or the CEV business;
(v) copies of all reports previously filed with Governmental
Entities by Seller since January 1, 1987 pertaining to operation permits
(autorisations d'exploiter), changes in activity or reports on Releases at
the Division and at the CEV business;
(vi) copies of all audit or investigation reports in the control
of Seller concerning releases of Contaminants or Hazardous Materials to
soil or groundwater at the Real Property;
47
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(vii) a complete list and description of the location of all
underground tanks, aboveground tanks, drums, sumps, pits or other areas
at the Real Property currently or, to the knowledge of Seller, previously
used to contain, store, treat, handle or dispose of Hazardous Materials
(aside from chlorine and natural gas) or Contaminants; and
(viii) a complete description of environmental risks and hazards
tied to the manufacture of the Division's products and to the CEV
business, of which Seller has knowledge, as defined by Article 8.1 of the
Law n degrees 76-663 of July 19, 1976 on regulated facilities
(installations classees), which description shall be deemed to include
the Survey (as defined in Section 7.4 hereof).
(b) Except as set forth in Schedule 2.1.17(b) hereto or in the Survey
attached hereto in Schedule 2.1.17(b):
(i) the operation and conduct by Seller of the Division and the
CEV business are, and since January 1, 1987, have been in compliance with
all Environmental Laws and do not and have not violated any of the
material terms and conditions of any Environmental Permits necessary to
conduct the business of the Division and the CEV business;
(ii) no notices have been received by Seller from any
Governmental Entity relating to the modification, termination or
cancellation of any such Environmental Permits and, to Seller's
knowledge, no such termination or cancellation is threatened; and
(iii) Seller has not received any written communication from a
Governmental Entity alleging that Seller is not in compliance with any
Environmental Laws applicable to the conduct by Seller of the business or
operations of the Division or the CEV, other than those which have been
resolved or otherwise satisfied in the Ordinary Course of Business
without any material adverse impact upon the conduct of the business of
the Division or the CEV business (and identified in Schedule 2.1.17(b)).
48
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(iv) to Seller's knowledge, no audit or investigation
has been conducted by any private party (including but not limited to
Seller) or any governmental agency concerning releases of Contaminants
or Hazardous Materials to soil or groundwater at the Real Property,
except as identified in Section 2.1.17(a)(vi) hereof; and
(v) except in compliance with Environmental Laws, no
prior owner or operator of the Real Property or the CEV business, has,
to Seller's knowledge, generated, manufactured, transported, treated,
stored, handled, disposed, transferred, or processed any Hazardous
Material or Contaminant at the Real Property, and Seller has no
knowledge of any release or threatened release of any Hazardous
Material or Contaminant at a facility other than the Real Property
that has migrated to or reasonably could migrate to the Real Property.
2.1.18 Employees; Employee Benefits. (a) Schedule 2.1.18(a)
hereto contains:
(i) a list identifying by age, seniority,
classification and annual salary or hourly compensation rate,
respectively the employees of the Division and the employees of the
CEV business as of the date of such list;
(ii) a summary of all modifications from June 30, 1996
in the general level of compensation paid to the Division's or the CEV
business employees;
(iii) a summary of the existing Accord d'Entreprise
applicable to such employees;
(iv) a description of each of the employee benefits
provided to employees of the Division and to the employees of the CEV
business, including but not limited to any pension or retirement
benefits, bonus, profit sharing, stock purchase or stock option plans,
company savings plans or employee funds of the Division or the Company
or the CEV business or CEVCO beyond mandatory French statutory or
regulatory obligations (collectively, "Benefit Plans").
49
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(b) Except as set forth in Schedule 2.1.18(b) hereto, (i) as of the
Closing, the Company and CEVCO will be in compliance in all material respects
with all statutory and regulatory requirements (and contractual requirements
applicable to any of its employees, or any group or classification of its
employees), including but not limited to safety and health ("securite, hygiene
et sante des salaries") with respect to the employees of the Division and the
CEV business, respectively; and (ii) as of the date of signature hereof, there
is no pending labor strike and, to Seller's knowledge, there is no threatened
labor strike and there has been no organized labor strike of any employees of
the Division or the CEV business within the three years preceding the date of
signature hereof, which has had, at the time considered, a material adverse
impact on the Division or the CEV business.
2.1.19 Taxes, Social Security and Customs. Seller, the Company and
CEVCO have filed with the appropriate Governmental Entities all tax returns, tax
reports, customs duties and social security reports required to be filed in
respect of the activities and employees of the Division, the Company, the CEV
business and CEVCO. Seller, the Company and CEVCO have paid all taxes, social
security charges and customs duties legally due for each of the periods
mentioned on the appropriate returns, or have effected appropriate reserves or
accrued liabilities on the relevant Closing Statement with respect to, or
claimed to be due thereon. None of Seller, the Company and CEVCO is a party to
any material action or proceeding by any Governmental Entity for assessment and
collection of taxes, social security charges or customs duties, nor has any of
them received notice of any claim for such assessment and collection of taxes,
social security charges or customs duties, in respect of the activities and
employees of the Division, the Company, the CEV business and CEVCO.
2.1.20 No Conflict; Governmental Approvals and Filings. The
execution, delivery and performance by Seller, the Company and CEVCO of their
respective obligations under the Transfer Agreement, the CEV Transfer Agreement,
the CEVCO Stock Purchase Agreement, this Agreement and the other documents
contemplated hereby and thereby to which Seller, the Company or CEVCO is or is
to become a party on or prior to the Closing Date, as the
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case may be, and the consummation of the transactions contemplated hereby and
thereby, do not:
(i) conflict with any of the terms or provisions of the
statuts of any such person;
(ii) except as disclosed on Schedule 2.1.11(b), result in a
breach in any material respect of any of the terms or provisions of, or
give rise to a right of termination of, any Material Contract; or
(iii) except as disclosed on Schedule 2.1.20, require any
consent or approval of any French Governmental Entity on the part of
Seller, the Company or CEVCO under any Legal Requirement.
2.1.21 Insurance. (a) Schedule 2.1.21(a) contains with respect to the
Division and the CEV business a description of insurance coverage (including
deductibles, self insurance and the like) and a list of material insurance
policies.
(b) All such material insurance policies are in full force and effect;
however, inasmuch as they have been subscribed at Seller's group level, they
will be automatically terminated at the time of the transfer of the Shares
purchased hereunder.
(c) Schedule 2.1.21(c) contains with respect to the Division and the CEV
business and insofar as the same relate to any of such material insurance
policies a description of all open claims as of a recent date, and a description
of any claim exceeding FF 100,000 made during the period from January 1, 1995
through December 31, 1996.
2.1.22 Customers and Suppliers. Except as disclosed on Schedule
2.1.22 or in Schedule 2.1.6, during the period from June 30, 1996 to the Closing
Date (as defined in Section 5.1 hereof), Seller has received no notice that any
of the suppliers or customers of the Division or the CEV business which is a
party to any Material Contract has terminated or contemplates terminating any
agreement or commercial relationship with Seller with respect to the Division or
the
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CEV business, which termination would result in a Material Adverse Change.
2.1.23 Products. To the knowledge of Seller, except as disclosed on
Schedule 2.1.23, (i) all chlorine, caustic soda and bleach products sold by the
Division during the nine (9) month period prior to Closing conformed to the
specifications applicable thereto and were, as of the date of sale, of
merchantable quality, free from patent or latent defects ("vices apparents ou
caches"), (ii) all chlorine, caustic soda and bleach products manufactured by
the Division prior to Closing conformed, as of the date of manufacture, to the
specifications relating thereto or were, as of the date of manufacture, free
from patent or latent defects, and (iii) there are no unresolved claims with
respect to any such matters involving a claim in excess of FF 100,000.
2.1.24 Certain Payments. To Sellers' knowledge, neither Seller, the
Company or CEVCO, nor any director, officer, agent or employee of Seller, the
Company or CEVCO, has with respect to the business of the Division or the CEV
business, directly or indirectly, (a) made any contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other similar payment to any
person in violation of any Legal Requirement that is presently in effect, or (b)
established or maintained any "off-the-books" fund or asset that under Seller's
Accounting Principles is required to be recorded in the books and records of
Seller, the Company or CEVCO, as the case may be, and was not so recorded.
2.1.25 Binding Effect. Each of the Transfer Agreement, the CEV
Transfer Agreement, the CEVCO Stock Purchase Agreement, each of the Related
Agreements and this Agreement, to which Seller, the Company or CEVCO, as the
case may be, is or is to become a party on or prior to the Closing Date, (i) is
within the corporate power and authority of Seller, the Company or CEVCO, as the
case may be, (ii) has been duly authorized by all necessary corporate action on
the part of Seller, the Company or CEVCO, as the case may be, and (iii) is or
will be upon the execution and delivery thereof a valid, binding and legal
agreement or obligation of Seller, the Company or CEVCO, as the case may be,
enforceable against it in accordance with its terms.
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2.1.26 Schedules. All information included in the Schedules hereto
was true and correct as of the date thereof, or if no date is indicated, as of
the date indicated therefor in this Agreement, or if not so indicated in this
Agreement, as of the date of this Agreement. A matter disclosed in one Schedule
may be referred to by cross reference to another Schedule; however, whether or
not any Schedule contains any cross reference to any matter disclosed in any
other Schedule, the disclosure of a matter in one Schedule shall constructively
be deemed to be a disclosure of such matter in all other Schedules.
2.2 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
2.2.1 Corporate Status. Buyer is a societe par actions simplifiee
duly organized and validly existing under the laws of France, and has all
requisite corporate power to own its properties and carry on its business as now
being conducted.
2.2.2 Litigation. There is no claim, action, lawsuit, arbitration,
judicial or administrative proceeding pending or, to the knowledge of Buyer,
threatened against Buyer, which questions the valid execution, delivery or
performance by Buyer of its obligations under this Agreement or any of the other
documents referred to herein, or the consummation by Buyer of the transactions
contemplated hereby.
2.2.3 No Broker. Buyer does not know of any broker, finder or
financial advisor other than Clinvest who is acting or has acted on its behalf,
or of any person, firm or corporation entitled to receive any brokerage or
finder's or financial advisory fee from Buyer, in connection with the
transactions contemplated by this Agreement.
2.2.4 No Conflict, Governmental Approvals and Filings. The
execution, delivery and performance by Buyer of its obligations under this
Agreement and the other documents contemplated hereby to which Buyer is or is to
become a party on or prior to the Closing Date, and the consummation of the
transactions contemplated hereby and thereby, do not (i)
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conflict with any of the terms or provisions of the statuts of Buyer; (ii)
result in a breach in any material respect of any of the terms or provisions of,
or give rise to a right of termination of, any material contract to which Buyer
is a party or by which any of its properties or assets is bound; or (iii) other
than the filing with the Direction du Tresor, require any consent, approval or
action of, filing with or notice to, any Governmental Entity on the part of
Buyer under any Legal Requirement.
2.2.5 Binding Effect. Each of this Agreement and the other documents
contemplated hereby to which Buyer is or is to become a party on or prior to the
Closing Date, (i) is within the corporate power and authority of Buyer, (ii) has
been duly authorized by all necessary corporate action on the part of Buyer, and
(iii) is or will be upon the execution and delivery thereof a valid, binding and
legal agreement or obligation of Buyer, enforceable against it in accordance
with its terms.
2.3 Representations and Warranties of Guarantor. Guarantor repesents
and warrants to Seller as follows:
2.3.1 Corporate Status. Guarantor is a corporation duly organized
and validly existing under the laws of the State of Delaware, United States of
America, and has all requisite corporate power to own its properties and carry
on its business as now being conducted.
2.3.2 Financial Statements. Guarantor has delivered to Seller its
audited consolidated financial statements contained in its Form 10-K Annual
Report for its fiscal year ended February 28, 1997, together with its condensed
unaudited consolidated financial statements for each fiscal quarter subsequent
thereto which have been filed by it with the United States Securities and
Exchange Commission on Form 10-Q. All such consolidated financial statements
fairly present the consolidated financial position of Guarantor and its
consolidated subsidiaries as at the dates, and their consolidated results of
operations and cash flows for the periods then ended, in conformity with
generally accepted accounting principles as in effect in the United States.
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2.3.3 No Material Adverse Change. Since the date of its most recent
audited consolidated financial statements referred to in Section 2.3.2, no event
has occurred which has resulted in a Material Adverse Change.
2.3.4 Financing Arrangements. Guarantor has furnished to Buyer and
Seller a true and complete copy of a binding commitment letter dated March 17,
1997, as extended, for a syndicated bank financing in the amount of U.S.$
160,000,000 (the "Proposed Financing").
2.3.5 Litigation. There is no claim, action, lawsuit, arbitration,
judicial or administrative proceeding pending or, to the knowledge of Guarantor,
threatened against Guarantor, which questions the valid execution, delivery or
performance by Guarantor of its obligations under this Agreement or any of the
other documents referred to herein, or the consummation by Guarantor of the
transactions contemplated hereby.
2.3.6 No Broker. Guarantor does not know of any broker, finder or
financial advisor other than Clinvest (or, in respect of the Noteholder Offer to
Purchase, Chase Securities Inc.) who is acting or has acted on its behalf, or of
any person, firm or corporation entitled to receive any brokerage or finder's or
financial advisory fee from Guarantor, in connection with the transactions
contemplated by this Agreement.
2.3.7 No Conflict, Governmental Approvals and Filings. The
execution, delivery and performance by Guarantor of its obligations under this
Agreement and the other documents contemplated hereby to which Guarantor is or
is to become a party on or prior to the Closing Date, and the consummation of
the transactions contemplated hereby and thereby, do not (i) conflict with any
of the terms or provisions of the certificate of incorporation or by-laws of
Guarantor; (ii) result in a breach in any material respect of any of the terms
or provisions of, or give rise to a right of termination of, any material
contract to which Guarantor is a party or by which any of its properties or
assets is bound; or (iii) require any consent, approval or action of, filing
with or notice to, any Governmental Entity on the part of Guarantor under any
Legal Requirement or US Legal Requirement.
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2.3.8 Binding Effect. Each of this Agreement and the other documents
contemplated hereby to which Guarantor is or is to become a party on or prior to
the Closing Date, (i) is within the corporate power and authority of Guarantor,
(ii) has been duly authorized by all necessary corporate action on the part of
Guarantor, and (iii) is or will be upon the execution and delivery thereof a
valid, binding and legal agreement or obligation of Guarantor, enforceable
against it in accordance with its terms.
ARTICLE 3
CONVENANTS
3.1 Covenants of Seller. Seller hereby covenants and agrees that:
3.1.1 Access to Information. From the date hereof to the Closing
Date, Seller will furnish to Buyer and its counsels and advisers all information
with respect to the affairs and business of the Division and the CEV business
which Buyer may reasonably request.
3.1.2 Business in Ordinary Course. (a) From the date hereof to the
Closing Date, Seller shall and shall cause the Company to carry on the business
of the Division in the Ordinary Course of Business in substantially the same
manner as heretofore conducted, including, without limitation, maintaining the
Division property as it has been maintained through the date hereof and, to the
extent relevant, in accordance with Schedule 2.1.9(c) and keeping the insurance
policies listed in Schedule 2.1.21(a) in force and effect without limiting their
scope and conditions, except as otherwise provided herein.
(b) From the date hereof to the Closing Date, Seller shall and shall cause
CEVCO to carry on the business of the CEV in the Ordinary Course of Business in
substantially the same manner as heretofore conducted, including, without
limitation, maintaining the CEV property as it has been maintained through
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the date hereof and, to the extent relevant, in accordance with Schedule
2.1.9(c) and keeping the insurance policies listed in Schedule 2.1.21(a) in
force and effect without limiting their scope and conditions, except as
otherwise provided herein.
3.1.3 Prohibited Actions. Between the date hereof and the Closing
Date, Seller will not undertake and shall ensure that neither the Company nor
CEVCO undertake any of the acts described in clauses (a) through (m) of Section
2.1.6 hereof, without the prior written consent of Buyer, which shall not be
unreasonably withheld or delayed. Failure of Buyer to respond in writing within
five business days of receipt of notice from Seller that it or the Company or
CEVCO proposes to take any of the actions described in the preceding sentence
and describing in reasonable detail the proposed action, shall be deemed to
constitute written consent thereto on the part of Buyer.
3.1.4 Best Efforts to Satisfy Conditions. Between the date of this
Agreement and the Closing Date, Seller will use its Best Efforts to cause all
conditions that are in part or in whole in its control contained in Article 4
hereof to be satisfied.
3.1.5 Employees. Seller shall bear any and all costs (including but
not limited to severance indemnities, paid vacations, notice period indemnities,
additional damages) associated with the termination of Seller's employees who
shall not have been transferred to the Company or CEVCO in the context of the
transaction contemplated hereby and who shall have successfully (by judicial
action or further to a settlement agreement with the Company and/or CEVCO)
claimed a right to such transfer pursuant to Article L122-12 of the French Labor
Code. Buyer shall inform Seller of any proposed settlement with an employee and
obtain Seller's prior approval, such approval not being unreasonably withheld.
3.1.6 Waivers of Liens and Consents. Seller shall, without expense
to Buyer, the Company or CEVCO, obtain lien waivers ("mainlevee pure et entiere,
simple et definitive") on or prior to Closing, of liens existing prior to the
Closing Date, from all creditors whose claims relates to any Transferred Asset
or CEV Transferred Asset. With respect to easements and servitudes that burden
the brine pipeline, and
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that do not run with the pipeline but require the consent of the landowner,
Seller shall exert reasonable efforts to obtain such required consents in due
course after Closing and shall hold harmless the Company in the event the
Company shall be held liable financially for breach of such consent requirement
or shall suffer an interruption of brine supply as a result of the failure to
obtain any such required consent.
3.1.7 Required Approval and Notice. Between the date hereof and th
Closing Date, and with respect to such filings and notices which are
contemplated hereby to be filed or given after the Closing Date, promptly after
the Closing Date, Seller will, at Seller's cost, make all filings and give all
notices required by Legal Requirements to be made by it in order to consummate
the transactions contemplated hereby.
3.2 Covenants of Buyer. Buyer hereby covenants and agrees that:
3.2.1 Access to Information. Following the Closing Date, upon
reasonable notice, Buyer and/or the Company and/or CEVCO will give, or cause to
be given, to Seller access, during normal business hours, to records relating to
the Division, the Company and CEVCO for periods prior to the Closing Date, and
will permit Seller to examine and copy such records to the extent reasonably
requested in connection with tax, social security and financial reporting
matters (including without limitation any tax return), audits, including tax
audits or similar proceedings, legal proceedings, governmental investigations
and other regulatory or business purposes involving or otherwise relating to the
Division or any Transferred Assets or Transferred Liabilities (or the income
therefrom or assets thereof) or to the CEV business or any CEV Transferred
Assets or CEV Transferred Liabilities (or the income therefrom or assets
thereof); provided, however, that such right is limited to matters, the origin
of which is prior to the Closing Date and that nothing herein will obligate any
party to take actions that would unreasonably disrupt the normal course of its
business, violate the terms of any contract to which it is a party or to which
it or any of its assets is subject or grant access to any of its proprietary,
confidential or classified information.
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3.2.2 Required Approval and Notice. (a) Buyer will on the date of
execution and delivery of this Agreement file with the French "Direction du
Tresor" the requisite notice of a foreign investment. No such notification or
report shall be filed by Buyer without the prior written approval of Seller,
which approval shall not be unreasonably withheld or delayed.
(b) Except as otherwise contemplated hereby or in any of the documents
contemplated hereby or in any of the documents contemplated thereby, between the
date hereof and the Closing Date, and with respect to any such filings and
notices which are contemplated hereby to be filed or given after the Closing
Date, promptly after the Closing Date, Buyer will, at Buyer's cost, make all
filings and give all notices required by Legal Requirements to be made by it in
order to consummate the transactions contemplated hereby.
3.2.3 Best Efforts to Satisfy Conditions. Between the date of this
Agreement and the Closing Date, Buyer will use its Best Efforts to cause all
conditions that are in part or in whole in its control contained in Article 4
hereof to be satisfied.
3.3 Covenants of Guarantor. Guarantor hereby covenants and agrees that:
3.3.1 Required Approval and Notice. Between the date hereof and the
Closing Date, and with respect to any such filings and notices which are
contemplated hereby to be filed or given after the Closing Date, promptly after
such Closing Date, Guarantor will, at Guarantor's cost, make all filings and
give all notices required by Legal Requirements or U.S. Legal Requirement to be
made by it in order to consummate the transactions contemplated hereby.
3.3.2 Best Efforts to Satisfy Conditions. Between the date of this
Agreement and the Closing Date, Guarantor will use its Best Efforts to cause all
conditions that are in part or in whole in its control contained in Article 4
hereof to be satisfied. In particular, but without limitation, Guarantor shall
exert its Best Efforts to complete the Noteholder Offer to Purchase not later
than September 30, 1997.
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3.3.3 Company Intragroup Indebtedness. At the Closing, Guarantor
shall either cause Buyer to purchase from Seller (and Seller shall assign to
Buyer) or shall cause Buyer to refinance the Company to enable the Company to
reimburse to Seller, 42.5% of the total intragroup indebtedness of one hundred
fifty six million French Francs (FF 156,000,000) ("Intragroup Indebtedness")
included in the Transferred Liabilities (said portion of sixty six million three
hundred thousand French Francs (FF 66,300,000), the "Refunded Intragroup
Indebtedness"). It is understood that interest on the Refunded Intragroup
Indebtedness and interest on the balance of the intragroup indebtedness owed to
Seller shall be calculated on the same basis. The terms and conditions of such
indebtedness of the Company to Seller and Buyer shall be governed by term loan
agreements to be entered into between Seller and the Company and Buyer and the
Company on the Closing Date.
3.4 Mutual Covenants. Each of Seller and Buyer and Guarantor and
Company, as the case may be) covenants and agrees as follows:
3.4.1 Publicity. (a) Seller and Buyer agree that, from the date
hereof through the Closing Date, no public release or announcement concerning
the transactions contemplated hereby shall be issued by either party without the
prior consent of the other party (which consent shall not be unreasonably
withheld or delayed), except as such release or announcement may be required by
law or the rules or regulations of any securities exchange; provided, however,
that Seller may make internal announcements to its employees regarding the
transactions contemplated hereby and that Buyer may inform its bankers in
connection with the financing of this transaction and may further provide such
information as may be required pursuant to the Noteholder Solicitation; in all
cases, the party required to make the release or announcement shall provide the
other party reasonable time to comment on such release or announcement in
advance of such issuance.
(b) Sellers and Buyer will in addition consult with each other concerning
the means by which the employees, customers, suppliers and others having
dealings with the Division and the CEV business will be informed of the
transactions contemplated
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hereby, provided that the consent required by paragraph (a) above shall have
been obtained.
3.4.2 Confidentiality. (a) Subject to Section 3.4.1 above, between
the date of this Agreement and the Closing Date, Buyer and Seller will maintain
in confidence, and will cause the directors, officers, employees, agents, and
advisors of Buyer and the Division and the CEV business to maintain in
confidence, and not use to the detriment of another party the contents of this
Agreement and the other documents referred to herein and any written, oral, or
other information obtained in confidence from another party in connection with
this Agreement or the transactions contemplated hereby, unless (i) such
information is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such party, (ii) the use of such information is necessary or appropriate in
making any filing or obtaining any consent or approval required for the
consummation of the transactions contemplated hereby, (iii) the disclosure of
such information is required by any Legal Requirements or U.S. Legal Requirement
or the rules and regulations of any national securities exchange, applicable to
such party or any of its Affiliates, (iv) in the case of Buyer and Guarantor,
such disclosure is made in connection with obtaining the Proposed Financing or
completing the Noteholder Offer to Purchase, and is made on a confidential
basis, to persons having an interest in such matters, and their respective
advisors and representatives, or (v) the furnishing or use of such information
is required by or necessary or appropriate in connection with legal or
arbitration proceedings.
(b) In the event that any of the parties hereto and/or any of their
respective subsidiaries and Affiliates shall be obliged, at any time prior to or
after the Closing, to disclose the contents of this Agreement or any of the
other documents referred to herein, or any other confidential information
referred to in Section 3.4.2(a), pursuant to the exception provided in clause
(v) of Section 3.4.2(a), such party shall use its Best Efforts to immediately
inform the other party thereof before disclosing any information to any third
party unless such party is prevented from so informing the other party by any
Legal Requirement or U.S. Legal Requirement.
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(c) If the transactions contemplated hereby are not consummated, each party
will return or destroy such written information provided by the other party as
such other party may reasonably request.
3.4.3 Records. Promptly after the Closing Date, Seller shall
transfer (i) to the Company all agreements, documents, books, records and files,
including records and files stored on computer disks or tapes or any other
storage medium (collectively, "Records"), if any, in the possession of Seller
relating exclusively to the business and operations of the Division, and (ii) to
CEVCO all Records, if any, in the possession of Seller relating exclusively to
the business and operations of the CEV business and/or CEVCO. Seller and Buyer
shall be entitled to make copies of such Records, provided that such Records
shall in all events be kept confidential.
3.4.4 Related Agreements. At or prior to the Closing, the parties
hereto shall, and/or, as the case may be, shall cause their Affiliates
(including but not limited to CEVCO) to, enter into each of the agreements
identified at Schedule 3.4.4, in form and substance mutually satisfactory to the
parties (collectively, together with such other agreements as may be executed
and delivered by the parties as of the date hereof or at the Closing, the
"Related Agreements").
3.4.5 Certain Industrial Property Matters. (a) Promptly after the
Closing Date, Seller shall, and, as the case may be, cause its Affiliates to,
undertake the requisite formalities concerning the assignment to the Company, of
such items of Industrial Property as are set forth on Annex 1 to the Transfer
Agreement and shall record these assignments at Seller's expense with the
appropriate authorities, said formalities to be completed not later than nine
(9) months after the Closing.
(b) Promptly after the Closing Date, Seller shall provide Buyer with all
supporting and background documentation, and all files and correspondence, that
relate to the items of Industrial Property set forth at Annex 1 to the Transfer
Agreement.
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(c) For a period of three (3) months following the Closing Date, and upon
the Company's or CEVCO's request, Seller agrees to continue to pay all
maintenance and renewal fees with respect to the items of Industrial Property
that are set forth on Annex 1 to the Transfer Agreement. Seller and Buyer shall
cause the Company or CEVCO, as the case may be, to reimburse Seller, or, upon
Seller's request, shall provide estimated advances with respect to, the actual
incurred cost of all such maintenance and renewal fees and other fees payable to
patent and trademark offices.
(d) From and after the Closing Date, the Company shall be responsible and
liable for the payment of any royalties and/or license or other payments due to
employees of Seller or Sellers' Affiliates identified at Schedule 3.4.5(d)
having the status of inventor under applicable French laws and regulations and
applicable conventions collectives and due in relation to the Industrial
Property transferred hereby or hereafter pursuant to the terms hereof.
3.4.6 Governmental Permits, Environmental Permits and Consents.
From and after the date hereof and, if the Closing shall occur, for as long as
Seller and Buyer shall remain shareholders of Company, Seller shall use its Best
Efforts, and upon Seller's request, Buyer shall fully cooperate with Seller and
use its Best Efforts to obtain:
(i) all contractual consents identified in Schedule 2.1.11(b) hereto;
(ii) all consents or approvals required for the transfer to the Company or
CEVCO, as the case may be, of the existing Governmental Permits and
Environmental Permits listed on Schedule 2.1.16(a) and Schedule 2.1.17(a),
or to obtain new licenses, permits or other authorizations issued in the
name of the Company or CEVCO, as the case may be, in substitution for the
Governmental Permits and Environmental Permits listed on Schedule
2.1.16(a) and Schedule 2.1.17(a); it being expressly specified that with
respect to the Hauterives mining concession, Seller shall, and shall cause
CIM, one of its Affiliates, to cooperate with the Company and, upon
Seller's request, Buyer shall cooperate with the Company, to obtain a
"Decret en Conseil
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d'Etat" authorizing the transfer to the Company and the registration in
the name of the Company of such mining concession.
3.4.7 Taxes. The parties shall allocate liability on a pro rata
temporis basis for the taxe professionnelle and the taxe fonciere relating to
the Division, the Company and CEVCO businesses for calendar year 1997. Seller
and Buyer shall cause the Company and CEVCO to refund to Seller the amount of
such taxes paid by Seller to the extent allocable to periods after the Closing
Date; provided, however that the amount of taxe professionnelle to be refunded
to Seller by the Company or CEVCO shall be reduced by an amount equal to the
difference between the pro rata amount of the taxe professionnelle recharged by
Seller to the Company and CEVCO and four percent (4%) of the value added (for
taxe professionnelle purposes), if lower, generated by the Company and CEVCO
from January 1, 1997 through the Closing Date.
ARTICLE 4
CONDITIONS
4.1 Conditions to Obligations of Buyer. The obligations of Buyer to
complete the purchase of the Shares to be purchased hereunder on the Closing
Date and to perform its other obligations hereunder to be performed at or prior
to the Closing are subject to the satisfaction at the Closing on the Closing
Date of the following conditions (any one or more of which and of Section 4.3
below may be waived in the sole discretion of Buyer):
4.1.1 Representations and Warranties True and Correct. Seller's
representations and warranties made in this Agreement shall be true and correct
as of the date hereof and as of the Closing Date in all material respects as if
made at and as of the Closing Date, except that any such representations and
warranties which are made expressly as of or with reference to a specified date
need only have been true and correct in all material respects on and as of such
specified date.
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4.1.2 Compliance with Agreement. Seller, the Company and CEVCO shall
have performed and complied in all material respects with all of their
obligations under this Agreement to be performed at or before the Closing on
the Closing Date.
4.1.3 Transfer. Seller shall have transferred on the Closing Date to
the Company the Transferred Assets and the Transferred Liabilities of the
Division pursuant to the Transfer Agreement to be entered into between Seller
and the Company on the date hereof. The assets so transferred to the Company as
listed in the respective annexes thereto are referred to herein as the
"Transferred Assets" and the liabilities so transferred as listed in the
respective annexes thereto are referred to herein as the "Transferred
Liabilities".
4.1.4 CEV Transfer. Seller shall have transferred on the Closing Date
to CEVCO the CEV Transferred Assets and the CEV Transferred Liabilities
pursuant to the CEV Transfer Agreement to be entered into between Seller and
CEVCO on the date hereof. The assets so transferred to CEVCO as listed in the
respective annexes thereto are referred to herein as the "CEV Transferred
Assets" and the liabilities so transferred to CEVCO as listed in the respective
annexes thereto are referred to herein as the "CEV Transferred Liabilities".
4.1.5 Related Agreements. Each of the Related Agreements required to
be executed and delivered at or prior to the Closing shall have been duly
executed and delivered by Seller and each of its Affiliates which is to be a
party thereto and, subject to execution and delivery of any thereof to be
executed and delivered by Buyer or any of its Affiliates, shall be in full
force and effect. Seller, the Company and CEVCO shall have taken all actions
contemplated by the Shareholders Agreement to elect or appoint officers and
directors of the Company and CEVCO conforming to the board and officer
composition requirements of the Shareholders Agreement.
4.1.6 Key Employees. Those key employees of the Division identified in
writing by Buyer to Seller by letter dated the date hereof shall have agreed to
enter into employment agreements with the Company.
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4.1.7 Contractual Consents. The parties to the Material Contracts
identified at Schedule 4.1.7 hereto shall have consented to the assignment and
transfer of such respective Material Contracts to the Company or CEVCO, as the
case may be; provided, however, that Seller shall be entitled to cure any
failure to obtain a consent by undertaking to provide alternative or substitute
arrangements effective as of the Closing Date providing the benefit of such
Material Contracts to the Company or CEVCO, as the case may be, in a manner
reasonably satisfactory to Buyer.
4.1.8 Noteholder Offer to Purchase. Guarantor shall have completed the
Noteholder Offer to Purchase, or shall otherwise obtained consents, waivers
and/or releases from the Noteholders sufficient to permit Guarantor and Buyer
to complete the transactions contemplated hereby in conformity with the
indenture governing the U.S.$ 100,000,000 13% Senior Notes due 2004.
4.2 Conditions to Obligations of Seller. The obligations of Seller to
complete the sale of the Shares to be sold hereunder on the Closing Date and to
perform its other obligations hereunder to be performed at or prior to the
Closing are subject to the satisfaction at the Closing on the Closing Date of
the following conditions (any one or more of which and of Section 4.3 below may
be waived in the sole discretion of Seller):
4.2.1 Representations and Warranties True and Correct. Buyer's and
Guarantor's representations and warranties made in this Agreement shall be true
and correct in all material respects as of the date hereof and as of the
Closing Date as if made at and as of the Closing Date, except that any such
representations and warranties which are made expressly as of or with reference
to a specified date need only have been true and correct in all material
respects on and as of such specified date.
4.2.2 Compliance with Agreement. Buyer and Guarantor shall each have
performed and complied in all material respects with all of their respective
obligations under this Agreement to be performed at or before the Closing on
the Closing Date.
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4.2.3 Related Agreements. Each of the Related Agreements required to
be executed and delivered at or prior to the Closing shall have been duly
executed and delivered by Buyer and each of its Affiliates which is to be a
party thereto and, subject to execution and delivery of any thereof to be
executed and delivered by Seller or any of its Affiliates, shall be in full
force and effect. Buyer, the Company and CEVCO shall have taken all actions
contemplated by the Shareholders Agreement to elect or appoint officers and
directors of the Company and CEVCO conforming to the board and officer
composition requirements of the Shareholders Agreement.
4.2.4 Turbine Lease Counterguarantee. Guarantor shall have executed
and delivered to Seller a turbine lease counterguarantee or other credit
support with respect to the counterguarantee of a portion of Seller's guarantee
obligations incurred in connection with the assignment and transfer of rights
and obligations under the turbine lease between Seller and UFB Locabail
identified in Schedule 2.1.9(a)(ii) hereto, in form and substance satisfactory
to Seller ("Turbine Lease Counterguarantee").
4.3 Mutual Conditions.
4.3.1 Governmental Consents. All consents of Governmental Entities
that may be required to be obtained as a condition to closing the transactions
contemplated hereby in compliance with Legal Requirements shall have been
obtained.
4.3.2 No Injunction, etc. No action or proceeding shall have been
instituted by any Governmental Entity in any court or in or before any
governmental agency or other authority to enjoin, restrain, prohibit, or impose
any material restrictions upon the conduct of any business in connection with,
the consummation of the transactions contemplated hereby, which would legally
prevent Buyer and/or Seller from consummating such transactions or which would
make the consummation of such transactions commercially infeasible for either
Buyer or Seller.
4.3.3 Permis d'Exploitation. The aggregate capital expenditures
required to be incurred by the Company in order to obtain a new permis
d'exploitation for the Company shall not be
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projected to exceed forty five million French Francs (FF 45,000,000).
ARTICLE 5
CLOSING
5.1 Closing. The closing hereunder ("Closing") shall take place at the
offices of Seller's counsel, Xxxxx, Day, Xxxxxx & Xxxxx, 00 xxx xx Xxxxxxxx
Xxxxx Xxxxxx, 00000 Xxxxx, Xxxxxx, at 9:00 A.M. local time, on the business day
selected by the parties which is at the latest seven (7) business days after
the parties have indicated to each other that all conditions to Closing
contained in Article 4 have been or may be met within seven (7) business days,
and in any case not later than November 15, 1997, or at such other place and at
such other time and date as may be mutually agreed upon in writing by Buyer and
Seller ("Closing Date), and shall be immediately preceded by the closing of the
transactions contemplated by the CEVCO Stock Purchase Agreement.
5.2 Deliveries. At the Closing:
5.2.1 Seller's Deliveries. Seller shall deliver, or shall cause to be
delivered, to Buyer the following:
(a) Duly signed and completed stock powers ("ordres de
mouvement") in favor of Buyer or its designee(s) for all of the Shares
purchased hereunder.
(b) The stock transfer register (registre des mouvements de
titres) and the stockholder register (registre des comptes
d'actionnaires) of the Company.
(c) A certified copy of the minutes of all meetings of
shareholders and directors of the Company and of CEVCO held since
their formations, including the minutes of their shareholders'
meetings approving the Transfer Agreement and the CEV Transfer
Agreement and the transactions contemplated thereby.
(ii) A certified copy of the minutes or relevant
extracts thereof of all meetings of board of directors
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(and of shareholders if required) of Seller approving the Transfer
Agreement, the CEV Transfer Agreement, this Agreement and the
transactions contemplated hereby.
(d) An "extrait K-bis" of each of the Company and CEVCO dated
no earlier than three months prior to the Closing Date.
(e) Executed counterparts of each of the Related Agreements.
(f) A certificate of a duly authorized officer of Seller
dated the Closing Date attesting as to the fulfillment of the
conditions set forth at Sections 4.1.1 and 4.1.2 above as of the
Closing Date.
(g) Those contractual consents under Material Contracts
required pursuant to Section 4.1.7 hereof.
5.2.2 Buyer's Deliveries. Buyer shall deliver, or shall cause
to be delivered, to Seller the following:
(a) The payment of the Purchase Price by bank wire transfer
in immediately available funds as set forth at Section 1.2(b) hereof,
to the account previously designated by Seller to Buyer.
(b) Funds in the full amount of the Refunded Intragroup
Indebtedness.
(c) Certified copies of the resolutions of the Board of
Directors of Buyer authorizing the execution and delivery of this
Agreement and all other documents referred to herein to which Buyer is
to be a party on or prior to the Closing Date and the consummation of
the transactions contemplated hereby.
(d) Certified copies of the resolutions of the Board of
Directors of Guarantor authorizing the execution and delivery of this
Agreement and all other documents referred to herein to which
Guarantor is to be a party on or prior to the Closing Date and the
consummation of the transactions contemplated hereby.
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(e) An "extrait K-bis" of Buyer dated no earlier than three
months prior to the Closing Date.
(f) Executed counterparts of each of the Related Agreements.
(g) Copies of all documents incident to the Noteholder Offer
to Purchase and the completion of the Proposed Financing.
(h) Certificates of duly authorized officers of Buyer and
Guarantor dated the Closing Date attesting as to the fulfillment of
the conditions set forth at Sections 4.2.1 and 4.2.2 above as of the
Closing Date.
(i) The Turbine Lease Counterguarantee, duly executed by
Guarantor.
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification by Seller. Subject to the terms and conditions of
this Agreement (and, with respect to Environmental Indemnifiable Losses, as
defined in Section 7.3 below, subject to Article 7 hereof), Seller agrees to
indemnify and hold Buyer, the Company and CEVCO harmless from and against any
and all liabilities, obligations, damages, deficiencies, losses, claims,
actions, lawsuits, proceedings, judgments, demands, costs, penalties, and
expenses (including reasonable attorneys' fees) ("Indemnifiable Losses")
suffered or incurred by Buyer and/or the Company and/or CEVCO and arising or
resulting from:
(a) any breach of any representation or warranty of Seller
contained in Section 2.1 hereof, (except to the extent any such breach
is waived by Buyer pursuant to Section 4.1 hereof and except to the
extent Buyer had actual knowledge thereof prior to Closing and failed
to disclose such breach to Seller);
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(b) any breach by Seller of any covenant or obligation of
Seller contained in this Agreement;
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with Seller
(or any Person acting on its behalf) in connection with the
transactions contemplated hereby;
(d) those items specifically listed on Schedule 6.1; or
(e) any claim by (or by another Person on behalf of) any
current or former employee of the Division or the CEV business for
death, personal injury or related loss, expense, damage, liability or
disability, incurred as the result of exposure to asbestos or
asbestos-containing material during the course of such employment in
so far as the employee becomes aware of the injury within twenty (20)
years of Closing.
6.2 Indemnification by Buyer. Subject to the terms and conditions of
this Agreement (and, with respect to Environmental Indemnifiable Losses, as
defined in Section 7.3 below, subject to Article 7 hereof), Buyer agrees to
indemnify and hold Seller harmless from and against any and all Indemnifiable
Losses suffered or incurred by Seller and arising or resulting from:
(a) any breach of any representation or warranty of Buyer or
Guarantor contained in Section 2.2 or 2.3 hereof, except to the extent
any such breach is waived by Seller pursuant to Section 4.2 hereof;
(b) any breach by Buyer or Guarantor of any covenant or
obligation of Buyer or Guarantor contained in this Agreement; or
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been
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made by any such Person with Buyer or Guarantor (or any Person acting
on behalf of Buyer or Guarantor) in connection with the transactions
contemplated hereby.
6.3 When Payable. Indemnification under this Article 6 and Article 7
hereof shall be payable with respect to any claim concerning an Indemnifiable
Loss or an Environmental Indemnifiable Loss upon the occurrence of the earliest
of (a) any payment required to be made to any tax or other administrative
authority with respect to any claim from such authority, (b) the resolution of
such claim by mutual agreement between Seller and Buyer and/or the Company
and/or CEVCO, as the case may be, (c) the issuance of a jugement executoire par
provision provided however that if a final judgment subsequently reverses in
whole or in part the jugement executoire par provision, the Indemnified Party
shall promptly reimburse to the Indemnifying Party as and when cash is actually
received by the Indemnified Party from any claimant an amount equal to the
amount received by such Indemnified Party as a result of this final judgment up
to the amount paid by the Indemnifying Party as a result of such claim, (d) the
issuance of a final judgment, award, order or other ruling (which is not
subject to appeal or with respect to which the time for appeal has elapsed) by
a court or arbitral tribunal having jurisdiction over the parties and the
subject matter of such claim or to which such claim was submitted for
resolution by joint agreement between Seller and Buyer and/or the Company
and/or CEVCO, as the case may be, or (e) the final settlement of such claim
with a third party pursuant to mutual authorization by Seller and Buyer.
6.4 Limitations on Indemnification. (a) Neither (i) the aggregate
indemnification obligations of Seller under Section 6.1 above, nor (ii) the
aggregate indemnification obligations of Buyer under Section 6.2 above, shall
exceed fifty percent (50%) of the Total Enterprise Value.
(b) Notwithstanding any other provision of this Agreement: (i) no
claim in respect of any individual event or occurrence shall be deemed to give
rise to an Indemnifiable Loss (other than an Environmental Indemnifiable Loss,
as to which Section 7.8 shall apply) unless and until the liability, loss or
damage claimed exceeds fifty thousand French Francs (FF
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50,000), it being understood that individual events or occurrences of a
substantially similar nature that arise out of a single or directly related
origins, facts or circumstances shall be aggregated for purposes hereof as a
single Indemnifiable Loss; and (ii) neither Buyer (or the Company or CEVCO, as
the case may be) nor Seller shall be entitled to make a claim under Section 6.1
or Section 6.2 respectively unless and until the aggregate amount of claims for
Indemnifiable Losses (other than an Environmental Indemnifiable Loss, as to
which Section 7.8 shall apply)) under clause (i) above exceeds three million
French Francs (FF 3,000,000), in which event (subject to clause (i) above) such
party may assert its right to indemnification hereunder only to the extent of
the excess provided however, that breaches of Seller's covenants set forth at
Sections 3.1.5 and 3.1.6 shall not be subject to the limitations set forth at
paragraph (a) or clauses (b)(i) or (ii) above and provided further that for
purposes of paragraphs (b)(i) and (b)(ii) above and Section 7.8(a) below
Indemnifiable Losses and Environmental Losses shall be calculated without
regard to any associated insurance recovery.
(c) Any limitations on Seller's indemnification obligations set forth
in paragraphs (a) and (b) above or in Section 6.6 below shall not be deemed to
limit or qualify Seller's obligation to transfer the full amount of the
Transferred Assets and the CEV Transferred Assets pursuant to the Transfer
Agreement and the CEV Transfer Agreement respectively, and in the event of
breach of Seller's obligations pursuant to such agreements and to Section
2.1.1(b)(iii) and Section 2.1.1(c)(iii) hereof, Seller shall be under the
obligation of specific performance to transfer and convey to the Company or
CEVCO, as the case may be, such assets as should have been comprised within the
Transferred Assets or the CEV Transferred Assets, as the case may be.
6.5 Procedures Relating to Indemnification of Third Party Claims. (a)
A party ("Indemnified Party") shall use its Best Efforts to notify the party
obligated to provide indemnification under this Agreement ("Indemnifying
Party") of any claim for any indemnification provided for under this Agreement
(including claims for Environmental Indemnifiable Losses) in respect of,
arising out of or involving a claim or demand made by any person against the
Indemnified Party ("Third
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Party Claim"), in writing, in reasonable detail and promptly, and in any event
within thirty (30) business days of the date the Indemnified Party shall have
knowledge of the Third Party Claim. Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party, within ten (10) business days after the
Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the
Third Party Claim. The failure of an Indemnified Party so to notify an
Indemnifying Party or to deliver such copies shall not disqualify such
Indemnified Party from receiving indemnification from such Indemnifying Party
and shall not constitute a breach of this Agreement unless and to the extent
that such failure to notify materially and adversely affects the ability of the
Indemnifying Party to defend against any such Third Party Claim.
(b) If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges its obligation to indemnify the Indemnified
Party therefor, to assume, at its own expense, the defense thereof with counsel
selected by the Indemnifying Party; provided, however, that such counsel is not
reasonably objected to by the Indemnified Party. Should the Indemnifying Party
so elect to assume the defense of a Third Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party for legal expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof. If
the Indemnifying Party assumes such defense, the Indemnified Party shall have
the right to participate in the defense thereof and to employ counsel, at its
own expense, separate from the counsel employed by the Indemnifying Party, it
being understood that the Indemnifying Party shall be liable for the fees and
expenses of counsel employed by the Indemnified Party for any period during
which the Indemnifying Party has failed to assume the defense thereof (other
than during the period prior to the time the Indemnified Party shall have given
notice of the Third Party Claim as provided above).
(c) If the Indemnifying Party so elects to assume the defense of any
Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying
Party in the defense or
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prosecution thereof. Such cooperation shall include (upon the Indemnifying
Party's request) the retention and the provision to the Indemnifying Party of
records and information to the extent practicable which are reasonably relevant
to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Whether or not the Indemnifying Party shall have
assumed the defense of a Third Party Claim, the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third Party Claim without the Indemnifying Party's prior written consent (which
consent shall not be unreasonably withheld). If the Indemnifying Party shall
have assumed the defense of a Third Party Claim, the Indemnified Party shall
agree to any settlement, compromise or discharge of a Third Party Claim which
the Indemnifying Party may recommend and which by its terms obligates the
Indemnifying Party to pay the full amount of the liability in connection with
such Third Party Claim, which releases the Indemnified Party completely in
connection with such Third Party Claim and which would not otherwise adversely
affect the Indemnified Party.
(d) Should the Indemnifying Party elect not to assume the defense of
any Third Party Claim, it shall cooperate at its cost with the Indemnified
Party in the defense or prosecution thereof and shall supply the Indemnified
Party with all applicable information, records or documents it may have to
ensure the best defense of the Indemnified Party.
6.6 Survival of Indemnification. The right of either party to make a
claim for any Indemnifiable Loss under Section 6.1(a) or 6.2(a) shall survive
the Closing Date until the second anniversary of the Closing Date and any such
claim once made within such period shall survive and be indemnifiable in
accordance with the terms hereof, except that (i) claims for breach of Section
2.1.23 shall survive for nine (9) months after the Closing Date; (ii) claims
for Environmental Indemnifiable Losses shall be governed by Section 7.9 hereof;
(iii) claims for breach of Sections 2.1.3(a),(b) and (c) and Section 2.1.19
shall survive for the applicable statute of limitation period plus sixty (60)
days and (iv) claims for breaches of Sections 2.1.3(d) and (e) shall survive
the Closing Date until the tenth anniversary of the Closing Date and (v)
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claims with respect to the matters identified in Schedule 6.1 shall survive for
the respective periods set forth therein.
6.7 Miscellaneous Provisions. (a) The amount of any indemnity payable
hereunder on account of an Indemnifiable Loss or an Environmental Indemnifiable
Loss shall (subject to the second proviso at Section 6.4(b)) be reduced by any
insurance proceeds received by the Indemnified Party with respect thereto, and
further reduced by the value of any net tax benefit or tax savings realized or
reasonably determined to be realizable by the Indemnified Party as a result of
or related to the foregoing (including without limitation a tax deduction or
loss, basis adjustment and/or shifting of income, deductions, gains, loss
and/or credits), and increased by any tax incurred or reasonably expected to be
incurred by the Indemnified Party as a result of or related to the foregoing
(including without limitation any tax related to the inclusion, if required by
law, in gross income of insurance proceeds or a payment pursuant hereto) so
that the net indemnity received after tax corresponds to the Indemnifiable Loss
or Environmental Indemnifiable Loss after taxes. For the calculation of the
Indemnifiable Loss or Environmental Indemnifiable Loss, tax savings and tax
costs will be calculated so that the savings and costs will be optimized in an
equitable fashion.
(b) Any indemnity payment by Seller to Buyer, the Company and/or CEVCO
on account of an Indemnifiable Loss or an Environmental Indemnifiable Loss
shall be understood to constitute damages and not a reduction in the Purchase
Price. Such payment by Seller shall be made to the persons (as between the
Company, CEVCO and/or Buyer) that shall have actually suffered the
Indemnifiable Loss or the Environmental Indemnifiable Loss and to the extent
made to the Company or CEVCO, the Company or CEVCO shall be third party
beneficiaries of Buyer's rights and remedies in respect of the Indemnifiable
Loss or the Environmental Indemnifiable Loss (by way of example, in respect of
breaches of representations, warranties or covenants with regard to the
Division, the CEV business and/or the Company's business or CEVCO's business,
the Indemnifiable Loss or Environmental Indemnifiable Loss shall be paid to the
Company and/or CEVCO, as the case may be (and, to the extent Seller shall fail
to make such payment Buyer shall
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have a direct right of action against Seller), but any breach of
representations, warranties or covenants with regard to title to Shares
constitutes an Indemnifiable Loss directly and actually suffered by Buyer and
therefore shall be paid directly to Buyer), provided that, upon Buyer's
request, the payment of an Indemnifiable Loss or an Environmental Indemnifiable
Loss by Seller with respect to a Third Party Claim may be made directly to the
third party claimant.
ARTICLE 7
ENVIRONMENTAL INDEMNIFICATION
7.1 Environmental Indemnification by Seller. Subject to the terms and
conditions of this Agreement, Seller agrees to indemnify and hold (subject to
Section 6.7(b) hereof) Buyer and Company and/or CEVCO and their respective
officers, directors, employees, agents, successors and assigns harmless from
and against any and all Environmental Indemnifiable Losses (as defined at
Section 7.3 below) suffered or incurred by Buyer or Company and/or CEVCO
resulting from (a) any breach of representation or warranty of Seller contained
in Section 2.1.17 hereof, or (b) any Remedial Action (as defined at Section 7.3
below) for which responsibility is to be borne by Seller in accordance with
Section 7.5 hereof.
7.2 Environmental Indemnification by Buyer. Subject to the terms and
conditions of this Agreement, Buyer agrees to indemnify and hold (subject to
Section 6.7(b) hereof) Seller and Company and/or CEVCO and their respective
officers, directors, employees, agents, successors and assigns harmless from
and against any and all Environmental Indemnifiable Losses suffered or incurred
by Seller or Company and/or CEVCO resulting from any Remedial Action for which
responsibility is to be borne by Buyer in accordance with Section 7.5 hereof.
7.3 Environmental Indemnifiable Losses. "Environmental Indemnifiable
Losses" means any and all damages, costs, claims, losses, liabilities,
penalties, fines, judgments and expenses (including reasonable legal,
consulting and engineering fees and expenses) imposed by, under or pursuant to
Environmental
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Laws, and shall also include without limitation all costs and expenses related
to Remedial Action. "Remedial Action" means any and all actions required (a) by
a Governmental Entity or by applicable Environmental Laws, (b) on account of a
Third Party Claim, (c) to respond to an event materially adversely affecting
the conduct of any of Seller's, Company's and/or CEVCO's business or (d) to
respond to an imminent and/or substantial hazard to human health or to the
Environment, to investigate, monitor, clean up, contain, cure, neutralize,
remediate, remove or treat any Release and shall comprise any actions required
under relevant Environmental Laws or Legal Requirements in respect of brine
xxxxx at the Hauterives site.
7.4 Environmental Survey. Prior to the date hereof, Seller and Buyer
have jointly retained Dames & Xxxxx to perform an environmental assessment of
the Sites, including soil and groundwater sampling, in accordance with the
scope of work set forth at Schedule 7.4 hereto, in order to establish a
baseline with respect to the presence of certain Contaminants as of the Closing
Date (the "Survey"). A copy of the Survey is attached hereto as Schedule 7.4.
7.5 Responsibility for Remedial Action. Subject to Sections 7.1 and
7.2 hereof, (a) Seller shall bear responsibility for Remedial Action relating
to (i) Non-Listed Contaminants; and (ii) Listed Contaminants, up to the
concentrations set forth in Schedule 7.5, unless and to the extent attributable
to the operation of Seller's business after the Closing Date, in which case
Seller shall bear such responsibility. Buyer shall bear responsibility for
Remedial Action relating to Listed Contaminants for the concentrations
exceeding the concentrations set forth in Schedule 7.5, unless and to the
extent attributable to the operation of Seller's business after the Closing
Date, in which case Seller shall bear such responsibility. In the event that
Remedial Action is conducted for Common Contaminants that are attributable to
the conduct of both Company's (and/or CEVCO's) business and Seller's business
(other than through Seller's interests in Company or CEVCO), responsibility for
such Remedial Action shall be shared between Company and Seller in proportion
to the respective responsibility of Company's, CEVCO's and/or Seller's business
for such Release. Any dispute regarding the allocation of responsibility of
Listed Contaminants that cannot
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be resolved by good faith negotiation among the parties within thirty (30) days
after any party has delivered the other party written notice of the dispute,
shall be submitted to such independent environmental consultant as may be
mutually agreed between Buyer and Seller. Said consultant shall, in reliance
upon the conclusions of the Survey and any other information the consultant
chooses to rely on, including new information developed at the Sites through
additional investigation, make a determination as to the appropriate allocation
of responsibility for Remedial Action, based upon its evaluation of the
respective responsibilities of the parties as regards the relevant Releases
that are subject of the Remedial Action. If said consultant can not determine
the origin of the Release(s) of Listed Contaminants, and as a result, the
proportion of the respective responsibility of Company's, CEVCO's and/or
Seller's business for such Release(s), then responsibility for such Remedial
Action shall be shared equally between Company and Seller. If Seller and Buyer
can not agree on the choice of such consultant within a period of thirty (30)
days, or if the consultant mutually chosen by Seller and Buyer shall not accept
such mission, either party shall be entitled to request the designation of an
independent environmental consultant by the President of the Court of Commerce
of Nanterre. The fees and expenses of such consultant shall be shared equally
by Seller and Buyer.
(b) Notwithstanding anything herein to the contrary, any Environmental
Indemnifiable Losses (to the extent that such Environmental Indemnified Losses
relate to Remedial Action(s)) arising from or relating to the Sites
attributable to the operation of Company during joint ownership shall be
allocated in accordance with the portion of shares owned by Buyer and Seller.
(c) It is understood and agreed between the parties that if and to the
extent a Remedial Action is required pursuant to a change in Environmental Law
after the Closing Date, the portion of the Environmental Indemnifiable Loss
resulting from such change in Environmental Law shall be borne by Company.
(d) Buyer shall inform Seller promptly of (i) the results of all
non-routine measurements and sampling of Contaminants on the Sites as may be
undertaken by or on behalf of Buyer,
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Company, CEVCO or their Affiliates, (ii) any material Release, and (iii) any
changes in the use of raw materials and/or industrial procedures or processes,
at the Sites from and after the Closing Date to the extent such measurement,
Release or changes may be relevant to the allocation of responsibility between
Buyer and Seller under Section 7.5(a) hereof. Buyer, Company, CEVCO or their
Affiliates shall use its Best Efforts to keep Seller informed of any action
with relevant Governmental Entities or any building work or action that may
give rise to an enquiry, proceeding or claim with respect to an Environmental
Indemnifiable Loss unless Buyer, Company, CEVCO or their Affiliates shall have
previously consulted with Seller in such regard. To the extent such changes in
the use of raw materials or industrial procedures or processes are considered
by Buyer and Seller to be relevant to the allocation of responsibility between
Buyer and Seller under Section 7.5(a) hereof, either party may require that an
independent environmental consultant, to be mutually agreed upon by Buyer and
Seller, be retained to conduct a new environmental Site(s) assessment to
establish a new baseline for the allocation of responsibility between Buyer and
Seller pursuant to Section 7.5(a) hereof. If Seller and Buyer can not agree on
the choice of such consultant within a period of thirty (30) days, or if the
consultant mutually chosen by the Seller and Buyer shall not accept such
mission, either party shall be entitled to request the designation of an
independent environmental consultant by the President of the Court of Commerce
of Nanterre. The fees and expenses of the consultant shall be shared equally by
Seller and Buyer.
7.6 Procedures with Respect to Remedial Actions.
(a) Subject to the terms and conditions of Section 6.5 hereof, if a
Third Party Claim is made against an Indemnified Party with respect to an
Environmental Indemnifiable Loss, the Indemnifying Party shall be entitled to
discuss and negotiate with the relevant third party or Governmental Entity as
regards the Third Party Claim and in particular as regards any proposed
Remedial Action, it being understood that the Indemnified Party shall also have
the right to participate in such discussions and negotiations. To this effect,
the Indemnified Party shall promptly inform the Indemnifying Party of any
pending or threatened claim or enforcement action, and notify in advance
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and afford the Indemnifying Party the opportunity to participate in any
proposed meeting or discussion with such third party or Governmental Entity.
The Indemnified Party shall also provide to the Indemnifying Party all relevant
information and documents received from such third party or Governmental Entity
as required by Section 6.5 hereof.
(b) The Indemnifying Party shall be entitled to monitor or cause an
independent consultant of its choice to monitor the conduct of the Remedial
Actions. Before initiating any Remedial Action, the Indemnified Party shall
prepare, with the input of the Indemnifying Party, a written document
describing in detail the scope, nature, methodology and estimated cost of
Remedial Actions to be taken (the "Plan"). Preparation of the Plan shall be
deemed a Remedial Action. The Plan shall be prepared in accordance with
Environmental Laws and shall not unreasonably interfere with the conduct of
business of the Indemnified Party. Unless otherwise agreed between the parties,
the Indemnified Party shall be the entity in charge of the conduct of the
Remedial Actions. The Indemnifying Party shall not be liable to indemnify the
Indemnified Party for any and all Remedial Actions made outside the scope of
the Plan. Any dispute regarding the Plan that cannot be resolved by good faith
negotiation among the Indemnifying Party and the Indemnified Party shall be
submitted to such independent environmental consulting firm as may be mutually
agreed between the Indemnifying Party and Indemnified Party. The Indemnified
Party may commence implementation of the Plan prior to the resolution of any
dispute regarding the Plan and shall be indemnified in accordance with the
terms of this Article 7 for the costs incurred in implementing (i) the
nondisputed sections of the Plan and (ii) the disputed sections of the Plan to
the extent approved by the independent environmental consulting firm. If the
Indemnifying Party and Indemnified Party can not agree on the choice of such
independent environmental consulting firm within a period of thirty (30) days,
or if the independent environmental consulting firm mutually chosen by the
parties shall not accept such mission, either party shall be entitled to
request the designation of an independent environmental consulting firm by the
President of the Court of Commerce of Nanterre. The fees and expenses of such
independent environmental consulting firm shall be shared equally by the
Indemnifying Party and Indemnified Party.
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(c) In the event of an imminent hazard to human health or the
Environment, Company or Seller may initiate a Remedial Action without a Plan as
it deems appropriate under the circumstances. The party responding to the
imminent hazard shall promptly notify the other party of the hazard and its
response to the hazard. Such Remedial Action shall be subject to the
indemnification provisions of this Article 7, insofar as subsequently ratified
by the Indemnifying Party, or in the event of dispute, through the dispute
resolution procedures in Section 7.6(b) hereof. After the imminent hazard has
been abated, any follow-up Remedial Actions shall be performed pursuant to
Section 7.6(b) hereof.
7.7 Access. (a) Seller shall be entitled to visit the Real Property
and the Division at least four times a year at dates mutually agreed with
Buyer, during the period of survival of indemnification defined at Section 7.9
below.
(b) Until such time as Company has received, in its name, Classified
Installation Permits for its operating facilities, Seller and Buyer shall
ensure that the manager of Seller's facility at Pont de Claix ("directeur
d'etablissement") shall have reasonable access to Company's operating
facilities to ensure compliance with Environmental Laws, and this manager shall
have the responsibility and authority to make decisions with respect Company's
operations and give instructions to Company employees in the event of imminent
hazards to human health and the environment.
7.8 Limitations on Environmental Indemnification.
(a) Notwithstanding any other provision of this Agreement, neither
Seller nor Buyer shall be entitled to make a claim under Section 7.1 or 7.2
hereof, unless and until the aggregate amount of Environmental Indemnifiable
Losses suffered by Seller or Buyer respectively, or Company and/or CEVCO
exceeds three million French Francs (FF 3,000,000), in which event Seller and
Buyer may assert their rights to indemnification thereunder to the full amount
of the Environmental Indemnifiable Loss.
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(b) Subject to the provisions of Section 7.5 hereof, the aggregate
indemnification obligations of Seller for any Environmental Indemnifiable
Losses resulting from a Remedial Action relating to a Release of Division
Contaminants shall not exceed 50% of the Total Enterprise Value and Seller's
indemnification obligation for any such individual Remedial Action shall not
exceed the percentage of the amount of any such Environmental Indemnifiable
Loss set forth in Schedule 7.8(b) hereto. The indemnification obligations of
Seller for any Environmental Indemnifiable Losses resulting from a breach of
representation or warranty contained in Section 2.1.17 hereof shall not exceed
three hundred fifty million French Francs (FF 350,000,000). The indemnification
obligations of Seller for any Environmental Indemnifiable Losses resulting from
a Remedial Action relating to a Release of Non-Listed Contaminants or Common
Contaminants shall not be capped. Subject to the provisions of Section 7.5
hereof, the aggregate indemnification obligations of Buyer for any
Environmental Indemnifiable Losses resulting from a Remedial Action relating to
a Release of Division Contaminants shall not exceed 50% of the Total Enterprise
Value. The indemnification obligations of Buyer for any Environmental
Indemnifiable Losses resulting from a Remedial Action relating to a Release of
Common Contaminants shall not be capped.
7.9 Survival of Indemnification.
(a) The right of Buyer to make a claim for Environmental Indemnifiable
Losses resulting from a Remedial Action relating to Division Contaminants shall
survive the Closing Date for a period of ten (10) years. The right of Buyer to
make a claim for Environmental Indemnifiable Losses resulting from a breach of
representation or warranty contained in Section 2.1.17 hereof shall survive the
Closing Date for a period of five (5) years. The right of Buyer to make a claim
for Environmental Indemnifiable Losses resulting from a Remedial Action
relating to Non-Listed Contaminants or Common Contaminants shall survive the
Closing Date and shall have no termination date.
(b) The right of Seller to make a claim for Environmental
Indemnifiable Losses resulting from a Remedial Action relating to Division
Contaminants shall survive the Closing Date for a period of ten (10) years
(provided however, that Seller shall
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not be precluded after the expiration of such period from bringing any action
arising under general principles of law). The right of Seller to make a claim
for Environmental Indemnifiable Losses resulting from a Remedial Action
relating to Common Contaminants shall survive the Closing Date and shall have
no termination date.
(c) Claims for Environmental Indemnifiable Losses shall be made in
accordance with Section 6.5 (as regards Third Party Claims) or otherwise in
writing, in reasonable detail and promptly, and in any event within thirty (30)
business days of the date the Indemnified Party shall have knowledge of such
claim, provided that the failure of an Indemnified Party so to notify an
Indemnifying Party shall not disqualify such Indemnified Party from receiving
indemnification from such Indemnifying Party and shall not constitute a breach
of this Agreement unless and to the extent that such failure to notify
materially and adversely affects the ability of the Indemnifying Party to
defend against any such claim.
7.10 Indemnification by Company. For that period of time after the
Closing during which Seller shall remain sole permittee of the Classified
Installation Permit for the Pont de Claix facility, Company shall indemnify and
hold Seller and its officers, directors, employees, agents, successors and
assigns harmless from and against any and all Environmental Indemnifiable
Losses (as defined in Section 7.3 of this Agreement) suffered or incurred by
Seller as permittee of the Classified Installation Permit for the Pont de Claix
facility and arising or resulting solely from the acts of Company; provided,
however, that Company shall have no obligation to indemnify Seller insofar as
such Indemnifiable Losses are attributable to the actions or inactions of
Seller.
7.11 Saint Fons Facility. Subject to Section 7.8 hereof, Seller shall
indemnify and hold Buyer and Company and their respective officers, directors,
employees, agents, successors and assigns harmless from and against any and all
Environmental Indemnifiable Losses resulting or arising from the operation of
the Saint Fons facility prior to the Closing Date. The indemnification
obligation of Seller under this Section 7.11 shall have no termination date.
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ARTICLE 8
TERMINATION
8.1 Termination. This Agreement may, by notice given in writing prior
to or at the Closing, be terminated by (a) mutual written consent of the
parties hereto; or (b) by Buyer, if any of the conditions provided for in
Section 4.1 and Section 4.3 of this Agreement has not been satisfied by October
15, 1997, or if satisfaction of any such condition becomes impossible or
impracticable (other than through the failure of Buyer or Guarantor to comply
with its obligations under this Agreement), and Buyer has not waived such
condition by such date (in which case, and save as set forth in Section 8.3,
the sole remedy for Buyer and Guarantor shall be termination of this Agreement
without liability or indemnity); or (c) by Seller, if the condition to Buyer's
obligation provided for at Section 4.1.8 of this Agreement has not been
satisfied by September 30, 1997 or if any of the conditions provided for in
Section 4.2 and Section 4.3 of this Agreement has not been satisfied by October
15, 1997, or if satisfaction of any such condition becomes impossible or
impracticable (other than through the failure of Seller or the Company to
comply with its obligations under this Agreement), and Seller has not waived
such condition by such date (in which case, the sole remedy for Seller shall be
termination of this Agreement without liability or indemnity).
8.2 Consequences. If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Article 8: (a) this
Agreement shall become void and of no further force or effect, except for the
provisions of (i) Section 11.5(e) relating to certain expenses, (ii) Section
3.4.1 relating to publicity, (iii) Section 3.4.2 relating to confidentiality,
(iv) Sections 2.1.15, 2.2.3 and 2.3.7 relating to finder's fees and broker's
fees, (v) Article 10 relating to the guaranty of Buyer's obligations by
Guarantor and (vi) this Section 8.2; and (b) all confidential information
provided by either party to the other shall be returned to such first party or,
upon such first party's instruction, destroyed.
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8.3 Breach of Covenant. Notwithstanding the foregoing, nothing in this
Article 8 shall be deemed to release any party from any liability for any
willful breach by such party of any of its covenants set forth in this
Agreement.
ARTICLE 9
DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to below:
"Affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person. A person shall be deemed to control another person if such
person possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of the "controlled"
person, whether through ownership of voting securities, by contract,
or otherwise.
"Base Statements" has the meaning specified in Section
1.3.1(b) of this Agreement.
"Benefit Plans" has the meaning specified in Section
2.1.18(a) of this Agreement.
"Best Efforts" means the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances to
ensure that such result is achieved as expeditiously as possible;
provided, however, that an obligation to use Best Efforts under this
Agreement does not require the Person subject to that obligation to
take actions that would result in a material adverse change in the
benefits to such Person of this Agreement and the transactions
contemplated hereby.
"Business Day" or "business day" means any day other than a
Saturday, Sunday or a public bank holiday, or the equivalent, for
banks generally under the laws of the
00
-00-
Xxxxxxxx xx Xxxxxx, or for banks generally in the City of New York,
New York, U.S.A.
"Buyer" has the meaning specified in the introductory
paragraph of this Agreement.
"Buyer's Auditor" shall mean Ernst & Young.
"Cash and Inventory" has the meaning specified in Section
1.3.2(b) of this Agreement.
"CEV" has the meaning specified in the recitals of this
Agreement.
"CEVCO" has the meaning specified in the recitals of this
Agreement.
"CEVCO Base Statement" has the meaning specified in Section
1.3.1(b) of this Agreement.
"CEVCO Closing Statement" has the meaning specified in
Section 1.3.3(b) of this Agreement.
"CEVCO Purchase and Supply Agreement" has the meaning
specified in Schedule 3.4.4 of this Agreement.
"CEVCO Shares" has the meaning specified in the recitals of
this Agreement.
"CEVCO Stock Purchase Agreement" has the meaning specified in
the recitals of this Agreement.
"CEVCO Transfer" has the meaning specified in the recitals of
this Agreement.
"CEVCO Transfer Agreement" has the meaning specified in the
recitals of this Agreement.
"CEV Transferred Assets" has the meaning specified in Section
4.1.4 of this Agreement.
"CEV Transferred Liabilities" has the meaning specified in
Section 4.1.4 of this Agreement.
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"Closing Statement" has the meaning specified in Section
1.3.3 of this Agreement.
"Common Contaminant" means any Listed Contaminant which is
stored, processed, generated, manufactured, handled or otherwise used
by Seller's business (other than Company or CEVCO) and by Company or
CEVCO after the Closing Date at either the Pont de Claix site or the
Hauterives site, but only if such substance is stored, processed,
generated, manufactured, handled or otherwise used by both parties at
the same site.
"Company" has the meaning specified in the introductory
paragraph of this Agreement.
"Company Base Statement" has the meaning specified in Section
1.3.1(a) of this Agreement.
"Company Closing Statement" has the meaning specified in
Section 1.3.3(a) of this Agreement.
"Contaminants" means those substances, including Hazardous
Materials, whose Releases are regulated by, or form the basis of
liability under, any Environmental Laws.
"Contract" means any oral or written agreement, contract,
obligation, promise, or undertaking that is legally binding.
"Conveyed Real Property" has the meaning specified in Section
2.1.8(b) hereto.
"Disputed Items" has the meaning specified in Section 1.3.4
of this Agreement.
"Division" has the meaning specified in the recitals of this
Agreement.
"Division Contaminants" means those Listed Contaminants
stored, processed, generated,
1
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manufactured, handled or otherwise used by the Division prior to the
Closing Date and solely by Company after the Closing Date.
"Encumbrance" means any legally binding charge, claim,
condition, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other
attribute of ownership.
"enforceability", "binding and enforceable in accordance with
its terms" or terms of similar import, where they describe an
obligation of a party to any agreement, shall be deemed in all cases
to be subject to applicable bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect.
"Environmental Indemnifiable Losses" has the meaning
specified in Section 7.3 of this Agreement.
"Environmental Laws" means any and all treaties, laws,
regulations, orders, decrees, judgments, injunctions, permits,
approvals, authorizations or permissions in each case in force and
effect in France, applicable to the running of the business of the
Division, the CEV business, Company's business, CEVCO's business
and/or Seller's business, and relating to the protection of the
environment.
"Environmental Permits" means all permits and authorizations
of any Governmental Entity under any Environmental Laws as presently
in effect.
"Final Closing Statements" has the meaning specified in
Section 1.3.4(b) of this Agreement.
"Governmental Entity" or "Governmental Entities" means any
State authority or any court of competent jurisdiction, administrative
agency or commission or other authority or instrumentality, domestic
or foreign,
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including any court, administrative agency, commission or other organ
of the European Union.
"Governmental Permits" has the meaning specified in Section
2.1.16(a) of this Agreement.
"Guarantor" has the meaning specified in the introductory
paragraph of this Agreement.
"Hauterives Services and Supply Agreement" has the meaning
specified in Schedule 3.4.4 of this Agreement.
"Hazardous Materials" means all materials or substances
regulated as explosive, flammable, toxic, hazardous or radioactive
pursuant to any Environmental Laws.
"Indemnifiable Losses" has the meaning specified in Section
6.1 of this Agreement.
"Indemnified Party" has the meaning specified in Section 6.5
of this Agreement.
"Indemnifying Party" has the meaning specified in Section 6.5
of this Agreement.
"Independent Accounting Firm" has the meaning specified in
Section 1.3.4(a) of this Agreement.
"Industrial Property" has the meaning specified in Section
2.1.7(a) of this Agreement.
"Intellectual Property" has the meaning specified in Section
2.1.7(a) of this Agreement.
"Intragroup Indebtedness" means the sum of FF 156,000,000, as
defined in Schedule 3.3.3.
"June 30 Statements" has the meaning specified in Section
2.1.4 of this Agreement.
"knowledge"--an individual will be deemed to have "knowledge"
of a particular fact or other matter if:
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(a) such individual is actually aware of such fact
or other matter; or
(b) a prudent individual could be expected to
discover or otherwise become aware of such fact or other
matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other
matter.
A Person (other than an individual) will be deemed to have "knowledge"
of a particular fact or other matter if any individual who is serving,
or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has,
or at any time had, knowledge of such fact or other matter.
"Legal Requirement" means any and all treaties, laws,
regulations, orders, decrees, judgments, injunctions, permits,
approvals, authorizations or permissions in each case, as in force and
effect on the date hereof in France, applicable to the running of the
business of the Division or the CEV business, exclusive of
Environmental Laws.
"Licenses" has the meaning specified in Section 2.1.7(a) of
this Agreement.
"Listed Contaminants" means those Contaminants and Hazardous
Materials listed in Schedule 7.5.
"material", when used in connection with the Division or the
CEV business, shall mean material to the business of the Division or
the CEV business, respectively.
"Material Adverse Change" shall mean:
(a) with reference to Seller, the Company, CEVCO,
the Division or the CEV business, any change in the business
of the Division or the CEV business (which, for the purposes
hereof, shall be deemed not to comprise (i) changes that
result from general economic or political conditions or other
conditions affecting the chemical industry generally
(including
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prices of raw material and finished products); or (ii)
environmental conditions that may give rise to actual or
potential requirements of Remedial Action, as to which
Article 7 hereof shall apply) that is materially adverse to
the financial condition or results of operations of the
Division or the CEV business and that shall not have been
cured by Seller at or before the Closing Date; and
(b) with reference to any other person, any change
in the financial condition or results of operations of such
person, taken as a whole, which is materially adverse.
In determining the materiality of any changes for purposes of this
definition, reference shall be made to the most recent audited
financial statements of the person involved.
"Material Contracts" has the meaning specified in Section
2.1.11(a) of this Agreement.
"Movable Property" has the meaning specified in Section
2.1.9(a) of this Agreement.
"Non-Listed Contaminants" means those Contaminants and
Hazardous Materials other than the Listed Contaminants.
"Noteholder Offer to Purchase" means the offer to purchase to
be addressed by Guarantor to the holders of U.S.$100,000,000 aggregate
original principal amount of its 13% Senior Notes due 2004.
"Option Lease Agreement" has the meaning specified in
Schedule 3.4.4 of this Agreement.
"Ordinary Course of Business": an action taken by a Person
will be deemed to have been taken in the "Ordinary Course of Business"
only if:
(a) such action is consistent with the past
practices of such Person and is taken in the ordinary
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course of the normal day-to-day operations of such Person;
and
(b) such action is similar in nature and magnitude
to actions customarily taken, in the ordinary course of the
normal day-to-day operations of other Persons that are in the
same line of business as such Person.
"Permitted Encumbrances" has the meaning specified in Section
2.1.8(b) of this Agreement.
"Person" or "person" means any individual, corporation
(including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or
Governmental Entity.
"Proposed Financing" has the meaning specified in Section
2.3.4 of this Agreement.
"Purchase Price" has the meaning specified in Section 1.2(a)
of this Agreement.
"Post-Closing Adjustment Amounts" has the meaning specified
in Section 1.3.5 of this Agreement.
"Real Property" has the meaning specified in Section 2.1.8(a)
of this Agreement.
"Refunded Intragroup Indebtedness" means the sum of FF
66,300,000, as defined in Section 3.3.3.
"Release" means any spill, omission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching,
emanation, loss of confining or migration of any Contaminant or
Hazardous Material in, into, onto, or through the environment
(including ambient air, surface water, groundwater, soils, land
surface, subsurface strata, workplace, or structure).
"Records" has the meaning specified in Section 3.4.3 of this
Agreement.
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"Reference Date" has the meaning specified in Section
1.3.1(a) of this Agreement.
"Refunded Intragroup Indebtedness" has the meaning specified
in Section 3.3.3 of this Agreement.
"Related Agreements" has the meaning specified in Section
3.4.4 of this Agreement.
"Remedial Action" has the meaning specified in Section 7.3 of
this Agreement.
"Seller" has the meaning specified in the introductory
paragraph of this Agreement.
"Seller's Auditor" shall mean Coopers & Xxxxxxx.
"Seller's Accounting Principles" has the meaning specified in
Section 2.1.4 of this Agreement.
"Shareholder Agreement" has the meaning specified in Schedule
3.4.4 of this Agreement.
"Shares" has the meaning specified in the recitals of this
Agreement.
"Sites" means the Pont de Claix and Hauterives sites.
"Survey" has the meaning specified in Section 7.4 of this
Agreement.
"Third Party Claim" has the meaning specified in Section 6.5
of this Agreement.
"Total Enterprise Value" shall mean four hundred fifty eight
million four hundred seventy four thousand French Francs (FF
458,474,000).
"Trade Secrets" has the meaning specified in Section 2.1.7(a)
of this Agreement.
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"Transfer" has the meaning specified in the recitals of this
Agreement.
"Transfer Agreement" has the meaning specified in the
recitals of this Agreement.
"Transferred Assets" has the meaning specified in Section
4.1.3 of this Agreement.
"Transferred Liabilities" has the meaning specified in
Section 4.1.3 of this Agreement.
"Turbine Lease Counterguarantee" has the meaning specified in
Section 4.2.4 of this Agreement.
"U.S. Legal Requirement" means any and all federal, state,
local, municipal, foreign, international, multinational, or other
administrative order, constitution, treaty, law, ordinance, principle
of common law, regulation, statute or decree, judgement, injunction,
permit, approval, authorization or permission in force and effect on
the date hereof in the United States of America.
ARTICLE 10
GUARANTY
10.1 Guaranty of XxXxxxx Obligations. Guarantor hereby irrevocably
guarantees to Seller, as a primary obligor ("cautionnement solidaire sans
faculte de revocation; la caution renonce au benefice de discussion et de
division"), the due, punctual and complete payment and performance of all of
Buyer's obligations under this Agreement.
10.2 Costs of Enforcement. Guarantor agrees to reimburse Seller for
all reasonable costs and expenses (including legal fees and expenses) incurred
by it in connection with the legalization, registration and enforcement of this
guaranty.
10.3 Payment Currency. All payments under this guaranty shall be made
in French Francs.
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10.4 Obligations Survive Termination. The obligations of Guarantor
under this Article shall survive termination of this Agreement (a) as to any
obligations of Buyer which survive termination of this Agreement, and (b) as to
any obligations of Buyer which remained unsatisfied as of the termination of
this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or sent by courier service (with
document tracking capabilities), such as chronopost, DHL or Federal Express,
etc., to the parties at the following addresses or facsimile numbers:
(a) If to Buyer or Guarantor, to it at:
0000 Xxxxxxx Xxxxx Xxxx X.X.
Xxxxxxx, Xxxxxxx 00000-0000, X.X.X.
Attn.: Xxxxxx X. Xxxx, Esq.
Executive Director of Legal Affairs
Facsimile No.: 0 (000) 000-0000
and
Attn.: Xxxxxxx X. Xxxxxxx
Vice President
Facsimile No.: (1) (000) 000-0000
with a copy to:
Xxxxxxxx X. Cournot
C.L. & A.
0, xxx Xxxxxxx
00000 Xxxxx, XXXXXX
Facsimile No.: (33) (1) 53.81.53.30
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(b) If to Seller, to it at:
00 xxxx Xxxx Xxxxxx
00000 Xxxxxxxxxx Xxxxx, XXXXXX
Attn: Xxxx Scetbon
Facsimile No.: (33) (1) 47.68.22.50
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
00 xxx xx Xxxxxxxx Xxxxx-Xxxxxx
00000 Xxxxx, XXXXXX
Facsimile No.: (33) (1) 49.24.04.71
All such notices, requests and other communications will (i) such notices,
requests and( if delivered personally to the address as provided in or pursuant
to this Section, be deemed given upon delivery, (ii) if delivered by facsimile
transmission to the facsimile number as provided in or pursuant to this
Section, be deemed given upon sending, if promptly confirmed by mail, and (iii)
if delivered by courier in the manner described above to the address as
provided in or pursuant to this Section, be deemed given upon receipt (in each
case regardless of whether such notice, request or other communication is
received by any other person to whom a copy of such notice is to be delivered
pursuant to this Section). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.
11.2 Entire Agreement. This Agreement, the Schedules and the Exhibits
hereto represent the entire understanding and agreement and supersedes all
prior agreements, understandings or arrangements among the parties hereto with
respect to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the party against whom
enforcement of such amendment, supplement, modification or waiver is sought.
Buyer acknowledges that Seller has made no representation or warranty to Buyer,
and that Buyer has relied on no representation or warranty, other than those
specifically set forth herein.
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11.3 Article and Section Headings. The Article and Section headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
11.4 Applicable Law/Forum. This Agreement shall be governed by and
construed and enforced in accordance with the laws of France. All disputes
arising in connection with this Agreement shall be finally settled under the
Rules of Conciliation and Arbitration of the International Chamber of Commerce
by three or more arbitrators appointed in accordance with the said Rules (and
in accordance with French law requirements to ensure the adequate
representation of each party's interests). The arbitrators shall be fluent in
French and in English. The arbitration proceedings shall take place in Paris
and shall be conducted in French and/or English, each party being free to
determine the language it will use during the proceedings (i.e. hearings,
briefs, oral and written communications, etc. shall be fully accepted in the
French language or in the English language without translation from French to
English nor from English to French). More specifically, documentary exhibits in
the French language will be admissible without an English translation thereof
and documentary exhibits in the English language will be admissible without a
French translation thereof, provided that when used in the English version of
this Agreement, French language words or terms shall have their precise French
meanings.
11.5 Taxes and Governmental Charges; Expenses. (a) Transfer taxes in
accordance with the terms of Article 726-1(Degree) of the French Tax Code shall
be borne by the purchaser of the Shares (it being understood that transfers of
interests in CEVCO are subject to the fixed duty of FF 500 pursuant to Article
680 of the French Tax Code).
(b) All notarial costs and expenses in connection with any
transactions contemplated by this Agreement shall be borne by the parties
involved in accordance with the prevailing custom in France in similar
transactions as to the allocation to or among such parties of such costs and
expenses; provided, however that Seller shall bear the costs of recording the
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transfer of Conveyed Real Property to the extent such costs shall exceed FF
600,000 in the aggregate.
(c) Whether or not the transactions contemplated hereby are
consummated, each party will pay its own costs and expenses incurred in
connection with the preparation, negotiation, execution and administration of
this Agreement and the closing of any transactions contemplated by this
Agreement.
11.6 Waiver. Any party may, by written notice to another party: (a)
extend the time for the performance of any of the obligations or other actions
of such other party; (b) waive any inaccuracies in the representations of such
other party contained in this Agreement; or (c) waive compliance with any of
the agreements of such other party contained in this Agreement or waive or
consent to the modification of performance of any of the obligations of such
other party. No other action taken pursuant to this Agreement, including
without limitation, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance
with any representation, warranty, condition, or agreement contained herein.
11.7 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any Legal Requirement, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom, and (d) in lieu of such illegal,
invalid or unenforceable provision, there will be added automatically as a part
of this Agreement a legal, valid and enforceable provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible.
11.8 Payments and Computations; Judgment and Successor Currency. (a)
All amounts payable hereunder shall be payable in French Francs. All payments
to be made hereunder shall be
99
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made not later than 11:00 A.M. (Paris, France time) on the date due in same day
funds.
(b) If for the purpose of obtaining judgment in any court, it is
necessary to convert a sum due from any party in the currency expressed to be
payable (the "Specified Currency") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the party to whom such payment is to be made could purchase the
Specified Currency with such other currency at the main Paris, France office of
Banque de France on the Business Day following that on which final judgment is
given. The obligations of each party in respect of any amount due shall,
notwithstanding any judgment in a currency other than the Specified Currency,
be discharged only to the extent that on the Business Day following receipt by
the party to whom such amount is owed of any sum adjudged to be so due in such
other currency such party may in accordance with normal banking procedures
purchase the Specified Currency with such other currency; if the amount of the
Specified Currency so purchased is less than the amount originally due to such
party in the Specified Currency, the applicable party obligated to pay such
amount agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
party against such loss, and if the amount of the Specified Currency so
purchased exceeds the amount originally due to such party, such party agrees to
remit such excess to such obligor party.
(c) The term "French Francs" shall be deemed to comprise any successor
currency that shall hereafter be legal tender in France, converted in
accordance with the parity fixed between the French Franc and such successor
currency.
11.9 Language. All notices, communications, evidence, reports,
opinions and other documents given or to be given under this Agreement shall be
made in the French or English language, provided that when used in the English
version of this Agreement, French language words or terms shall have their
precise French meanings.
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11.10. Counterparts. This Agreement may be executed in four or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
11.11. Assignment. The rights and obligations under this Agreement
may not be assigned or delegated, in whole or in part, to any third party
without the prior written consent of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the day and year first above written.
XXXXX-XXXXXXX CHIMIE S.A.
By: /s/ Xxxx SCETBON
--------------------------------
Title: Manager M&A
LII EUROPE S.A.R.L.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Title:
--------------------------------
XXXXXXX INDUSTRIES INC.
By: /s/ W. Xxxxxx XxXxxxx
--------------------------------
Title: Chairman
--------------------------------
RHONE L S.A.S.
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RHONE L S.A.S.
By: /s/ Xxxxxxx XXXXX
--------------------------------
Title: President
--------------------------------
[handwritten mention of Guarantor: "bon pour cautionnement solidaire sans
faculte de revocation - s/s _____ pour XxXxxxx Industries Inc."]
102
LIST OF EXHIBITS
Exhibit I: Transfer Agreement.
Exhibit II: CEV Transfer Agreement.
Exhibit III: CEVCO Stock Purchase Agreement
103
Schedule 1.3.5 Post-Closing Adjustments - Company
------------------------ -------
Closing Date Reference Date
------------ --------------
Company Cash and Inventory
Raw material, work in
process, finished goods 8,000,000 8,442,589
Industrial supplies 11,000,000 11,262,296
---------- ----------
Total inventory 19,000,000 19,704,885
Loans to Employees 60,000 71,031
Other Employee Related Loans/
Advances 28,000 2,690,784
TVA prepayment 500,000 614,825
------- -------
Total 19,688,000 23,081,525
-----
Transferred Liabilities
Pension provision 18,000,000 18,091,056
Atochem debt 19,788,000 23,690,381
Other personnel entitlements 8,000,000 8,524,331
Turnaround provision 7,000,000 7,425,472
Accrued Charges 900,000 912,000
------- -------
Total 53,688,000 58,643,240
-----
(34,000,000) (35,561,715)
Post-Closing Adjustment of FF 1,561,715 due by Company to Seller
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Schedule 1.3.5 Post-Closing Adjustments - CEVCO
--------------------------------
Closing Date Reference Date
------------ --------------
CEVCO Cash and Inventory
Raw material, work in
process, finished goods 10,000,000 10,595,865
Industrial supplies 1,983,000 2,845,708
---------- ----------
Total inventory 11,983,000 13,441,573
Loans to Employees 767,000 827,827
Prepayment (Turbine Lease) 7,850,000 7,755,648
---------- ----------
Total 20,600,000 22,025,048
-----
CEVCO Transferred Liabilities
Pension provision 4,300,000 4,325,907
Other personnel entitlements 2,300,000 2,306,285
---------- ----------
Total 6,700,000 6,632,191
-----
14,000,000 15,392,856
Post-Closing Adjustment of FF 1,392,856 due by Seller to CEVCO
105
Schedule 6.1
Indemnifiable Disclosures
1. Seller shall indemnify and hold the Company harmless from and against any
Indemnifiable Losses incurred by the Company as a result of any failure to
complete the title formalities and procedures contemplated by the last sentence
of Section 2.1.8(b), subject to Section 6.6 (iii) hereof.
2. Seller shall indemnify and hold the Company harmless, subject to Section
6.4(a) and for a period of five (5) years from and after the Closing Date, from
and against Indemnifiable Losses incurred by the Company as a result of any
municipal order or injunction requiring the Company to effect improvements at
the Pont de Claix site, and based on the argument that the transfer of the
Conveyed Volume should have been effected by means of a lotissement in
accordance with French zoning and land regulation statutes. In determining the
amount of the resulting Indemnifiable Loss, the capital value of such
improvements shall be given due consideration. To the extent it can be
demonstrated that improvements would in all events have been required to be
undertaken by the Company or CEVCO within a three (3) year period after such
municipal order or injunction to comply with Environmental Laws or Legal
Requirements, the expenditures related to such improvements shall not be deemed
Indemnifiable Losses (a "but for test").
3. Seller shall indemnify and held the Buyer and the Company harmless from and
against any Indemnifiable Losses incurred by the Company or the Buyer as a
result of any claim by any Person arising under or in connection with the
Benefit Plans or any pension, retirement, bonus, profit sharing, stock
purchase, stock option, company savings or other benefit plans of Seller or any
of Seller's Affiliates, whether or not disclosed on Schedule 2.1.18(a) or (b)
or on Schedule 2.1.14 or on any of the other Schedules hereto, subject to
Section 6.6 (iii) hereof.
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4. Seller shall indemnify and held the Buyer and the Company harmless from and
against any Indemnifiable Losses incurred by the Company or the Buyer as a
result of any claim in respect of, in connection with, or arising from, any
taxes, imposts, assessments, charges or duties imposed or imposable upon
Seller, the Company, CEVCO, the Division or their respective Affiliates or any
of their respective businesses or assets, unless otherwise specifically agreed
to the contrary herein, whether or not set forth on any Schedule hereto,
subject to Section 6.6 (iii) hereof.
5. Seller shall indemnify and held the Buyer and the Company harmless from and
against any Indemnifiable Losses incurred by the Company or the Buyer as a
result of any claim arising or that may arise, by virtue of the transactions
contemplated hereby and by the Related Agreements, under applicable bulk sales
laws or other laws protecting creditors against the transfer of Division and
CEVCO assets (including inventory and goods), subject to Section 6.6 (iii)
hereof.
6. Seller shall indemnify and held the Buyer and the Company harmless from and
against any Indemnifiable Losses incurred by the Company or the Buyer as a
result of any claim, action, lawsuit, arbitration, judicial or administrative
claim pending or threatened against Seller or the Company or against the assets
or business of the Division or the CEV business or any judgment, order or
decree entered in any lawsuit relating to the Division or the Company or CEVCO
or the CEV business (collectively "Litigation") (a) which relates to or arises
out of the conduct of the Division or the CEV prior to the Closing Date or (b)
which questions the Related Documents or the transactions contemplated hereby
or the consummation thereof provided however that with respect to Litigation
under paragraph (a) above, the survival periods set forth in Section 6.6 hereof
shall apply and be determined in accordance with the subject matter of such
Litigation.
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Schedule 7.8(b)
Percentage of the Amount
of any Environmental Indemnifiable Loss Below
the Limit set forth in Schedule 7.5
===============================================================================
Year Percentage of the amount
of any Environmental
Indemnifiable Loss
-------------------------------------------------------------------------------
1 100%
-------------------------------------------------------------------------------
2 100%
-------------------------------------------------------------------------------
3 100%
-------------------------------------------------------------------------------
4 100%
-------------------------------------------------------------------------------
5 100%
-------------------------------------------------------------------------------
6 80%
-------------------------------------------------------------------------------
7 60%
-------------------------------------------------------------------------------
8 40%
-------------------------------------------------------------------------------
9 20%
-------------------------------------------------------------------------------
10 10%
===============================================================================
