AMENDMENT NO. 1
TO
LLC INTEREST SALE AND PURCHASE AGREEMENT
AMENDMENT NO. 1 TO LLC INTEREST SALE AND PURCHASE AGREEMENT
("Amendment No. 1") dated as of September 30, 1998 among XXXXX CORNING, a
Delaware corporation ("Seller"), ADVANCED GLASSFIBER YARNS LLC (formerly,
Lincoln Yarns, LLC), a Delaware limited liability company (the "Company"),
and AGY HOLDINGS, INC., a Delaware corporation ("Buyer").
W I T N E S S E T H
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 Agreement"), which Purchase Agreement was assigned by Glass
Holdings, Inc. to 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 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.
(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")."
(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.
(a) Calculation of the Cash Payment. The Company shall make a
cash payment (the "NAV Payment") in the amount by which the Net
Asset Value of the Company as of the Closing Date (the "Closing
NAV"), as finally determined 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 NAV"). The
calculation of the Base NAV is set forth on Schedule 1.4(a). 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 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 Buyer a statement (the "Estimated Closing Statement")
prepared in accordance with GAAP setting forth a calculation of
Seller's good faith estimate of the Closing NAV (the "Estimated
Closing NAV"). If the 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 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"). 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.
(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 been
properly calculated in accordance with the calculation
methodologies set forth in this Section 1.4, it shall, within
thirty (30) days after receipt of the Closing Calculation, give
written notice (the "Buyer's Objection") to Seller, setting forth
the basis 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 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 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 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 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.
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 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 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
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."
(h) Section 4.38 of the Purchase Agreement is hereby amended to read
as follows:
"4.38 Post-Closing Distributions by the Company.
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 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 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 2.2.
"Net Asset Value" means the sum of Total Current Assets
less Current 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).
"NAV Distribution" has the meaning ascribed to it in Section
1.4(a).
"Subsidiary Asset Purchase Agreement" has the meaning ascribed to
it in Section 4.29."
(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.
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.
(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.
(a) Amendment to Purchase Agreement. This Amendment No. 1 shall be
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
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 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.
(d) Amendment; Waiver. This Amendment No. 1 may be amended,
supplemented 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
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 hereto in separate counterparts, 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.
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
Name: Xxxxxxx X. Xxxx
Title: Vice President
GLASS HOLDINGS CORP.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: President
ADVANCED GLASSFIBER YARNS LLC
By: Xxxxx Corning, Member
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Vice President
