EXHIBIT 2.3
AMENDMENT NO. 1
TO
LLC INTEREST SALE AND PURCHASE AGREEMENT
AMENDMENT NO. 1 TO LLC INTEREST SALE AND PURCHASE AGREEMENT ("Amendment No.
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1") dated as of September 30, 1998 among XXXXX CORNING, a Delaware corporation
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("Seller"), ADVANCED GLASSFIBER YARNS LLC (formerly, Lincoln Yarns, LLC), a
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Delaware limited liability company (the "Company"), and AGY HOLDINGS, INC., a
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Delaware corporation ("Buyer").
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W I T N E S S E T H
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WHEREAS, Seller, the Company and Glass Holdings, Inc. entered into a LLC
Interest Sale and Purchase Agreement dated as of July 31, 1998 (the "Purchase
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Agreement"), which Purchase Agreement was assigned by Glass Holdings, Inc. to
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Buyer by an Assignment and Assumption Agreement dated September 30, 1998; and
WHEREAS, Seller, the Company and Buyer desire to make certain amendments to
the Purchase Agreement, all as set forth below;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Defined Terms. Except as otherwise expressly provided herein, capitalized
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terms used herein which are defined in the Purchase Agreement, as amended
hereby, shall have the meanings specified for such terms in the Purchase
Agreement, as so amended.
2. Amendments to Purchase Agreement.
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(a) Section 1.2 of the Purchase Agreement shall be amended to read as
follows:
"The aggregate purchase price for the Buyer Interest shall be three
hundred thirty one million five hundred thousand Dollars
($331,500,000) in the aggregate, subject to adjustment as provided in
Section 1.4 (the "Purchase Price")."
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(b) Section 1.4 of the Purchase Agreement is hereby amended to read as
follows:
"1.4 Cash Payment for Change in Net Asset Value.
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(a) Calculation of the Cash Payment. The Company shall make a cash payment
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(the "NAV Payment") in the amount by which the Net Asset Value of the
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Company as of the Closing Date (the "Closing NAV"), as finally determined
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pursuant to Section 1.4(d) below, is greater or less than thirty one
million seven hundred thirty eight thousand dollars ($31,738,000)(the "Base
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NAV"). The calculation of the Base NAV is set forth on Schedule 1.4(a).
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If the Closing NAV is greater than the Base NAV, then the Company shall
make the NAV Payment to Jefferson Holdings, Inc. ("Jefferson"). If the
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Closing NAV is less than the Base NAV, then the Company shall make the NAV
Payment to Buyer. Such NAV Payment shall be paid as set forth in Sections
1.4(b) and (e) below.
(b) Estimated Adjustment. On the Closing Date, Seller shall deliver to
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Buyer a statement (the "Estimated Closing Statement") prepared in
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accordance with GAAP setting forth a calculation of Seller's good faith
estimate of the Closing NAV (the "Estimated Closing NAV"). If the
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Estimated Closing NAV as set forth on the Estimated Closing Statement is
in excess of the Base NAV, the Company shall make the NAV Payment to
Jefferson at Closing. If the Estimated Closing NAV as set forth on the
Estimated Closing Statement is less than the Base NAV, then the Company
shall make the NAV Payment to Buyer at Closing.
(c) Closing NAV. Within ninety (90) days after the Closing, Seller will
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prepare and deliver to Buyer a balance sheet of the Company as of the
Closing Date prepared in accordance with GAAP together with a statement
setting forth a calculation of the Closing NAV (the "Closing Statement").
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At the option of the Buyer, exercisable in writing on or before the Closing
Date, the Closing Statement shall be audited by PricewaterhouseCoopers LLP.
The cost of such audit shall be borne by the Company. Buyer shall
cooperate fully and shall cause the Company to provide Seller with all
assistance and access to books and records necessary for Seller to prepare
the Closing Statement. In connection therewith, Buyer and Seller will
jointly conduct a physical inventory of the Inventory as of the Closing
Date in accordance with the procedures to be mutually agreed by Buyer and
Seller acting reasonably and in good faith and, at Buyer's option, such
physical inventory will be observed by Buyer's auditors,
PricewaterhouseCoopers LLP, and, at Seller's option, such physical
inventory will be observed by Seller's auditors, Xxxxxx Xxxxxxxx LLP.
(d) Closing Calculation.
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(i) Buyer shall be entitled to full access to the relevant records and
working papers prepared by or for Seller, and to Seller's employees
involved in such preparation, to aid in its review of the calculation of
the Closing NAV set forth on the Closing Statement. If Buyer believes that
the Closing NAV calculation (hereinafter the "Closing Calculation") has not
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been properly calculated in accordance with the calculation methodologies
set forth in this Section 1.4, it shall,
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within thirty (30) days after receipt of the Closing Calculation, give
written notice (the "Buyer's Objection") to Seller, setting forth the basis
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of the Buyer's Objection in reasonable detail and, to the extent
practicable, the adjustments to the Closing Calculation which Buyer
believes should be made. Failure to so notify Seller within such thirty
(30) day period shall constitute acceptance and approval of the Closing
Calculation. There shall be no adjustment to the Closing Calculation unless
the cumulative amount of Buyer's Objection equals or exceeds one million
dollars ($1,000,000.00) and provided that any individual item of adjustment
contained in Buyer's Objection which is less than fifty thousand dollars
($50,000.00) shall be excluded in its entirety. If Seller agrees that any
change proposed by Buyer is appropriate, the change shall be made to the
Closing Calculation, whereupon Buyer shall be deemed to have accepted and
approved the Closing Calculation with respect to such change and any other
non-disputed item of the Closing Calculation. If the proposed change is
disputed by Seller, then Seller and Buyer shall negotiate in good faith to
resolve such dispute as expeditiously as possible. If, after a period of
thirty (30) days following the date on which Buyer gives Seller notice of
any such proposed change, any such proposed change still remains disputed,
then:
(ii) KPMG Peat Marwick LLP (the "Neutral Accounting Firm") shall be
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engaged to resolve any remaining disputes. The Neutral Accounting Firm
shall act as an arbitrator to determine, based solely on presentations
submitted by Seller and Buyer, and not by independent review, only those
issues still in dispute. Each of Buyer and Seller shall have made its
complete submission to the Neutral Accounting Firm within ten (10) days
following the expiration of the thirty (30) day negotiation period
described in Section 1.4(d)(i). The failure by either party to make a
complete submission prior to the expiration of such ten (10) day period
shall be deemed a waiver of such party's right to make a submission or a
further submission to the Neutral Accounting Firm. The Neutral Accounting
Firm's determination, based upon the calculation methodologies set forth in
this Section 1.4, shall be made within thirty (30) days following the date
on which the dispute is submitted, shall be set forth in a written
statement delivered to Seller and Buyer, and shall be final, binding and
conclusive. The fees and any expenses of the Neutral Accounting Firm shall
be shared equally by Seller and Buyer. In the event a party does not comply
with the procedure and time requirements contained herein, the Neutral
Accounting Firm shall render a decision based solely on the evidence it has
which was timely filed by either of the parties.
(e) Payment of Cash NAV Payment. If the Closing NAV shown on the Closing
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Statement exceeds the Estimated Closing NAV, then the Company shall make
the NAV Payment to Jefferson, and if the Closing NAV shown on the Closing
Statement is less than the Estimated Closing NAV, then the Company shall
make the NAV Payment to Buyer. Payment of any NAV Payment pursuant to this
Section 1.4(e) shall be made by wire transfer to an account designated by
Jefferson or Buyer, as the
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case may be, in United States Dollars, in immediately available
federal funds within three (3) business days after the Closing
Calculation has been finally determined together with interest from
the Closing Date to the date of payment at the "base rate" of
Citibank, N.A. or any successor thereto in New York, New York in
effect on the Closing Date, based on a 360-day year."
(c) Schedule 1.4(a) of the Purchase Agreement is hereby amended to read as
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set forth on Exhibit A hereto.
(d) Section 2.20 of the Purchase Agreement is hereby amended to read as
follows:
"Section 2.20 Disclaimer of Warranty.
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SELLER MAKES NO WARRANTY WITH RESPECT TO THE VALUE, CONDITION OR,
SUBJECT TO SECTION 2.19, USE OF THE ASSETS OWNED OR USED BY THE
COMPANY, WHETHER EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE."
(e) Section 4.20 of the Purchase Agreement is hereby amended to insert the
words "to execute and deliver" after the words "Jefferson Holdings, Inc." in the
first line.
(f) Section 4.29 of the Purchase Agreement is hereby amended to read as
follows:
"4.29 Purchase of Assets from Seller's Subsidiaries. The parties
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acknowledge that, pursuant to agreements dated September 29, 1998, the
Company has purchased certain assets from, and has assumed certain
liabilities of, Xxxxx-Xxxxxxx (Japan) Ltd., OCC and NVOC (the
"Subsidiary Asset Purchase Agreements"). The parties agree that to
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the extent that there is any adjustment to the Purchase Price pursuant
to Section 2(b) of each of the Subsidiary Asset Purchase Agreements,
any payment required to be paid by the Company shall be paid by the
Seller, and any amount required to be paid to the Company shall be
paid to the Seller."
(g) Section 4.34(i) of the Purchase Agreement is hereby amended to read as
follows:
"(i) Stock Options. Each outstanding option to purchase Seller
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common stock held by Transferred Employees shall vest immediately upon
the Closing and expire on the earlier of (a) December 31, 1999 or (b)
the date on which the option expires by the terms of the applicable
option contract. The Company agrees to indemnify Seller for any costs
or other damages incurred by Seller in connection with the extension
of any option beyond six months following the Closing."
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(h) Section 4.38 of the Purchase Agreement is hereby amended to read as
follows:
"4.38 Post-Closing Distributions by the Company.
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Immediately upon the Closing, the parties shall cause the
Company to, and the Company shall, make a cash distribution in the
aggregate amount of three hundred ninety million Dollars
($390,000,000) to its members, pro rata in accordance with their then
respective ownership interests in the Company, and Buyer shall have
caused the Company to obtain any and all financing necessary to fund
such cash distribution (the "Company Financing") in accordance with
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the terms and conditions set forth in the Commitments. In addition,
the parties shall cause the Company to, and the Company shall, make
the NAV Payment in accordance with and in the form and manner
described in Section 1.4 of this Amendment No. 1."
(i) Schedule 7.1 of the Purchase Agreement is hereby amended to read as
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set forth on Exhibit B hereto.
(j) Section 10.10(a) of the Purchase Agreement is hereby amended to revise
the definitions of "Material Adverse Effect" and "Net Asset Value" to read as
follows:
" "Material Adverse Effect" has the meaning ascribed to it in Section
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2.2.
"Net Asset Value" means the sum of Total Current Assets less Current
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Liabilities as reflected in the Pro Forma Statement of Net Assets to
be sold as of 12/31/97 but excluding Trade Payables (which shall be
paid in full immediately prior to the Closing Date), with such amounts
determined in accordance with GAAP using the same assumptions
reflected in the 12/31/97 Historical Financial Statements and
methodology in calculating the Base NAV as set forth in Schedule
1.4(a)."
(k) Section 10.10(a) of the Purchase Agreement is hereby amended to add
the following new definitions in appropriate alphabetical order:
" "Jefferson" has the meaning ascribed to it in Section 1.4(a).
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"NAV Distribution" has the meaning ascribed to it in Section 1.4(a).
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"Subsidiary Asset Purchase Agreement" has the meaning ascribed to it
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in Section 4.29."
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(l) Section 10.10(a) of the Purchase Agreement is hereby amended to delete
the following definitions: "NVOC Assets," "NVOC Asset Purchase Agreement," "OCC
Assets" and "OCC Asset Purchase Agreement."
(m) The Purchase Agreement is hereby amended to delete Exhibits V and W
therefrom.
3. Condition to Effectiveness of Amendment No. 1.
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The amendments contained in this Amendment No. 1 are subject to and
conditioned upon the Closing occurring on or before September 30, 1998.
4. Representations and Warranties.
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(a) Seller represents and warrants to Buyer that:
(i) Each of Seller and the Company has the corporate power and
authority to execute and deliver this Amendment No. 1.
(ii) This Amendment No. 1 is the legal, valid and binding obligation
of Seller and the Company enforceable against each of them in accordance with
the terms hereof.
(b) Buyer represents and warrants to Seller that:
(i) Buyer has the corporate power and authority to execute and
deliver this Amendment No. 1.
(ii) This Amendment No. 1 is the legal, valid and binding obligation
of Buyer enforceable against it in accordance with the terms hereof.
5. Miscellaneous.
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(a) Amendment to Purchase Agreement. This Amendment No. 1 shall be
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construed, administered and applied in accordance with all of the terms and
provisions of the Purchase Agreement.
(b) Successors and Assigns. This Amendment No. 1 shall inure to the
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benefit of and be binding on the parties hereto and their respective successors
and permitted assigns.
(c) Effect of Amendment No. 1. The amendments hereunder shall be limited
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precisely as written and shall not constitute a waiver or modification of any
other covenants, terms or provisions of the Purchase Agreement, which shall
remain in full force and effect.
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(d) Amendment; Waiver. This Amendment No. 1 may be amended, supplemented
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or otherwise modified only by a written instrument executed by the parties
hereto. No waiver by either party of any of the provisions hereof shall be
effective unless explicitly set forth in writing and executed by the party so
waiving.
(e) Governing Law. This Amendment No. 1 shall be governed by, and
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construed in accordance with, the laws of the state of New York applicable to a
contract executed and performed in such State without giving effect to the
conflicts of laws principles thereof, except that matters herein strictly within
the purview of the matters covered by the Limited Liability Company Act of the
State of Delaware shall be governed by such Limited Liability Company Act.
(f) Counterparts. This Amendment No. 1 may be executed by the parties
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hereto in separate cou nterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same agreement, and all signatures need not appear on any one
counterpart.
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IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be duly
executed as of the date first above written.
XXXXX CORNING
By: /s/ Xxxxxxx X. Xxxx
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Name:
Title:
GLASS HOLDINGS, CORP.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: President
ADVANCED GLASSFIBER YARNS LLC
By: Xxxxx Corning, Member
By: /s/ Xxxxxxx X. Xxxx
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Name:
Title:
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